Trump Accounts: New Child Savings Plan Could Grow to Over $1 Million

A new federal savings program could give American children a major financial head start. The initiative, known as “Trump Accounts,” was signed into law by President Donald Trump in July 2025. It provides a $1,000 government contribution for infants born between 2025 and 2028. The goal is to build long-term financial security through investment growth.

The accounts are set to launch next year. They function as a dedicated savings vehicle for enrolled children with Social Security numbers. According to White House projections, maximizing the plan could lead to a six-figure balance by adulthood.

How the New Child Investment Accounts Work

The structure of the program is straightforward. Every eligible newborn receives a $1,000 seed deposit from the government. Parents can then contribute an additional $5,000 per year to the account.

All funds are automatically invested in U.S. stock-market index funds. This includes broad market trackers like the S&P 500. The aim is to harness decades of compound growth.

The White House’s Council of Economic Advisers provided growth estimates. A child born in 2026 could see their account reach $303,800 by age 18. This assumes parents contribute the maximum $5,000 each year.

If parents do not add any extra money, the growth is more modest. The initial $1,000 might grow to about $5,800 by the child’s 18th birthday. The difference highlights the power of consistent parental contributions.

The Path to a Million-Dollar Balance

The most striking projection involves long-term growth. The White House analysis suggests a fully funded account could be worth nearly $1.1 million by age 28. This figure has captured significant public attention.

Achieving that top-tier result requires strict discipline. Parents must maximize their annual contributions for nearly three decades. They must also avoid early withdrawals, which would diminish the compounding effect.

At age 18, control of the account transfers to the young adult. The savings then convert into a traditional Individual Retirement Account (IRA). Withdrawals from a traditional IRA are subject to income tax.

There is a potential strategy to avoid future taxes. A conversion to a Roth IRA could make qualified withdrawals tax-free after age 59.5. However, the IRS has not yet confirmed this option will be available for these specific accounts.

The new Trump Accounts program presents a significant opportunity for generational wealth building. With consistent parental support, the Trump Accounts could transform a simple $1,000 gift into a life-changing sum. Its success will ultimately depend on market performance and family participation over the long term.

A quick knowledge drop for you:

Who is eligible for a Trump Account?

Infants born in the United States between 2025 and 2028 are eligible. The child must have a Social Security number to enroll in the program and receive the initial $1,000.

How much can parents contribute each year?

Parents or guardians can contribute up to $5,000 annually per child. This is in addition to the one-time $1,000 government seed deposit provided at birth.

What happens to the money when the child turns 18?

When the beneficiary turns 18, the account converts into a traditional IRA in their name. They gain control of the assets, but standard IRA tax rules for withdrawals then apply.

Can the money be used for college or a first home?

Once converted to an IRA at age 18, the funds follow IRA rules. This means penalties could apply for non-retirement withdrawals before age 59.5, with certain exceptions for first-time home purchases.

What if parents cannot afford the $5,000 annual contribution?

The account remains open and invested with any balance. The program is designed to work even with smaller, irregular contributions. Any amount saved can benefit from decades of potential market growth.