As a continuation of President Donald Trump’s pitch to Americans on affordability and the economy under his administration, the U.S. Treasury and White House are celebrating the upcoming launch of a program they view as a key milestone: “Trump Accounts.”
A provision of Trump’s tax legislation, Trump Accounts are meant to give $1,000 to every newborn, as long as their parents open an account. That money is then invested in the stock market by private firms, and the child can access the money when they turn 18.
A U.S. Treasury event recently brought together an assortment of politicians and celebrities — ranging from Texas Republican Senator Ted Cruz to rapper Nicki Minaj — to discuss the program and its potential economic impact. Proponents argue that Trump Accounts provide a pathway for children from low-income households to build wealth.
What is a Trump Account?
It’s a new savings tool where money is invested in the stock market on behalf of a child. The funds become accessible to the child at 18, specifically for education, business start-ups, or purchasing a home.
Upon account opening, the U.S. Treasury will contribute $1,000 for every newborn, with private banks managing these accounts, which focus on U.S. equity index funds and charge minimal fees.
Who qualifies for $1,000?
While the program strongly encourages parents of older children to open accounts, only newborns during the Trump administration will receive the $1,000 bonus. To qualify, a baby must be born between January 1, 2025, and December 31, 2028.
Additionally, there are avenues for older children to gain benefits through various philanthropic initiatives, including the notable $6.25 billion donation announced by billionaires Michael and Susan Dell.
How to open a Trump Account
Accounts won't be able to receive contributions until July 2026. Parents of eligible children can register using Form 4547 from the IRS, either when filing taxes or through an online portal later in the year.
The rationale behind the accounts
Supporters believe Trump Accounts promote stock market engagement and create wealth opportunities for impoverished children. They assert that such initiatives are crucial in a political climate where socialist ideologies are gaining traction.
Critique of the initiative
Detractors highlight that while Trump Accounts might help some, they fall short in addressing urgent needs for children in poverty during formative years. Critics warn that it could exacerbate wealth disparity, as affluent families would benefit more significantly from these savings opportunities. Overall, while the initiative seeks to bolster investment among the young, discussions surrounding its fairness and effectiveness continue.
