A closer look at how the new investment program may shape the future of wealth-building in the U.S.
As part of President Donald Trump’s One Big Beautiful Bill Act, the U.S. Treasury is preparing to launch “Trump Accounts”—a new nationwide investment account for all children born 2025–2028. While details are still emerging, financial planners say the initiative could expand long-term savings, but its impact will depend heavily on execution.
📌 How Trump Accounts Work
- Launch target: July 4, 2026
- Eligibility: All U.S. children born 2025–2028 with a valid SSN
- Government “seed”: $1,000 per child, invested in low-cost index funds
- Contribution cap: Up to $5,000/year total; employers may contribute up to $2,500/year
- Tax: Investment grows tax-deferred; taxed upon withdrawal
- Converts into a traditional IRA at age 18
💸 Major Philanthropic Boost: $6.25 Billion from the Dells
Michael & Susan Dell pledged to add $250 each to 25 million eligible children—targeting ZIP codes with median incomes ≤ $150,000.
More donors are expected to participate, according to Treasury advisors.
📈 How Much Could These Accounts Grow?
Using long-term S&P 500 returns (~10.5% annually):
- $1,000 seed invested for 28 years → ~$16,000
- $1,000 seed + $100/month until age 18 → ~$180,000 by age 28
- Max contributions ($5,000/year) until age 18 → ~$698,000 by age 28
A meaningful boost—but achievable only if families consistently contribute.
📚 Financial Literacy Benefits
Experts say these accounts could help children learn:
- How index funds work
- Compound interest
- Long-term financial planning
But planners warn: behavior change requires more than tax-deferred growth. Lower-income families benefit most from automatic deposits and immediate incentives—not delayed tax benefits.
⚠️ Still Unanswered Questions
Key operational issues remain unclear:
- Impact on federal student aid (FAFSA)
- Compliance and investment rules for custodians
- Contribution tracking between families, employers, and donors
These will determine whether accounts feel “empowering” or “burdensome.”
📎 How to Enroll
- File IRS Form 4547
- Starting mid-2026: create an online account at trumpaccounts.gov
💬 Bottom Line
Trump Accounts may expand access to long-term investing for millions of American children — especially with philanthropic support — but true success depends on regular contributions, strong incentives, and simple administration.