Donald Trump's administration is proposing a new initiative to provide federal seed money to every newborn in America from 2025 through 2028. This program, dubbed the "Trump Account," requires parents to open a government-approved account tied to the stock market to receive the funds.
The initiative aims to address the disparity in wealth accumulation, noting that in 2022, only 58% of American households held stocks or bonds, while the wealthiest 1% owned nearly half of the total value of these assets. The Trump Account is designed to help break this pattern.
Program Details and Benefits
According to White House fact sheets, parents who adhere to the program's guidelines could potentially unlock up to $5,000 annually for their child. This amount is a combination of federal support, tax-free contributions, and third-party donations.
Eligibility for the program is based on a child's birth between January 1, 2025, and December 31, 2028, provided they have a Social Security number. Parents, regardless of their immigration status, are eligible to open a "Trump Account." However, the ability to deposit funds into these accounts will not be available until July 2026.
How Trump Accounts Function
Once a Trump Account is established, the initial $1,000 federal contribution will be directly invested in U.S. equity markets. These investments will be managed by federally approved private banks or brokerages, focusing on low-fee index funds.
Account managers are reportedly restricted to charging an annual fee of no more than 0.10%. The funds in the account are locked until the child reaches the age of 18. Permitted withdrawal purposes are limited to college tuition, starting a business, or a down payment on a first home. Funds cannot be withdrawn for everyday expenses like groceries or rent.
Parents also have the option to contribute up to $2,500 annually from their pretax income, similar to contributions made to a 401(k). The program allows for additional contributions beyond this amount from various sources. Employers, friends, extended family members, municipalities, and non-profit organizations can contribute to the account. These contributions do not count against the $5,000 yearly limit, meaning any extra support from local governments or foundations would be in addition to the $5,000 allowance.
Consolation for Existing Children and Registration Timeline
For children born before 2025, a separate initiative offers a modest benefit. Michael and Susan Dell have announced a $250 donation for children aged 10 or younger residing in areas with a median family income below $150,000. This donation is contingent on the child not receiving the $1,000 federal contribution from the Treasury. Parents must still open a Trump Account themselves for the child to receive the Dell contribution.
While the registration process is not yet fully operational, the necessary IRS Form 4547 has not been released online. Pre-registration is scheduled to commence in May 2025, with parents able to begin making deposits starting in July 2026.
The Trump White House has stated that a key objective of this program is to provide children from low-income families with the same investing exposure that wealthier families often provide their children through trust funds.