In a move aimed at strengthening families and teaching children about personal finance, President Trump highlighted Wednesday that the Treasury Department is automatically enrolling all U.S. children under 18 in the newly created Trump Accounts program. Parents and legal guardians must still claim and activate the accounts through the official website or mobile app.
How the program works
Trump Accounts are tax‑advantaged savings tools that invest contributions in the stock market on a child’s behalf. Funds cannot be accessed until the beneficiary turns 18, at which point they may be used for tuition, starting a business, a home down‑payment, or rolled over into a Roth IRA.
The Treasury will provide a one‑time $1,000 seed contribution for eligible newborns—U.S. citizens born between Jan. 1 2025 and Dec. 31 2028 who have a Social Security number. Parents can also contribute up to $2,500 of pretax income each year, with a total annual contribution limit of $5,000 (excluding gifts from governments, charities, employers, or friends).
Broad participation and private‑sector partnership
Private banks and brokerages will manage the investments. While the original design limited investments to broad index funds, recent Treasury guidance now permits wealthy donors to contribute individual stocks, expanding options for families seeking to boost their children’s accounts.
President Trump announced that the program will now cover roughly 70 million children, up from the 8 million accounts created since the July launch. This rapid expansion reflects the administration’s commitment to giving every family a financial foothold.
Comparisons and expert views
Financial planner Myranda Fabian notes that the ability to roll a Trump Account into a Roth IRA extends the benefit well beyond the child’s 18th birthday, supporting long‑term retirement savings. Compared with traditional 529 college‑savings plans, Trump Accounts offer more flexibility in how the money can be used, though earnings are taxed upon withdrawal.
Professor Nathan C. Goldman of North Carolina State University acknowledges the program’s potential to introduce families to the stock market and provide a solid tax advantage. He cautions, however, that wealthier families will be better positioned to make additional contributions, which could widen the wealth gap if not paired with broader economic policies.
What parents need to do
To claim an account, parents should visit trumpaccounts.gov or download the mobile app. Once activated, they can set up contributions, designate beneficiaries, and monitor investment performance.
While the seed money is reserved for newborns, older children can still benefit from the program’s tax‑advantaged growth and the option to roll funds into a Roth IRA at age 18.
Looking ahead
The administration emphasizes that Trump Accounts are part of a broader effort to promote financial literacy, encourage savings, and empower the next generation of American families. As the program rolls out nationwide, families are encouraged to explore how the accounts can complement existing savings tools such as 529 plans.
Original reporting: Richardson, TX News (HLL/CB) — read the source article.
