Trump Accounts for Children Launch July 4 with $1,000 Treasury Deposits for Babies Born 2025-2028

Trump Accounts, tax-advantaged investment accounts for children created under President Donald Trump’s tax law, officially launched July 4. Eligible babies born between 2025 and 2028 receive a one-time $1,000 seed deposit from the U.S. Treasury.

Families, friends, and others can collectively add up to $5,000 per year in after-tax dollars, with the limit indexed for inflation after 2027. The accounts function like a traditional IRA during the growth period from birth through the year before a child turns 18. They convert to a traditional IRA the day a child turns 18.

Withdrawals are taxed as ordinary income, and those before age 59½ can trigger a 10% penalty unless an exception applies. gov projects that a $250 annual contribution would grow to $19,000 by age 18 or $878,000 by age 55, assuming the S&P 500’s historical annual return of more than 10%.

The same site projects that a $5,000 annual contribution would grow to $271,000 by age 18 or $13 million by age 55 under the same assumption.

Fortune reported that Morningstar data shows U.S. stock market returns could average 6.3% per year over the next decade. Financial planners modeled outcomes with more conservative assumptions. Pam Krueger projected that maxing out contributions at a 7% annual return would grow to roughly $185,000 by age 18 and more than $1 million by age 45.

Mitch Hamer projected that maxing out contributions at a 7% return would reach $1 million at age 45 and $3 million at age 60 for his 5-year-old son. Matthew Chancey projected that a maxed account at a 7% return could reach $1.5 to $2 million by age 55, with only about $91,000 from family contributions. Adam Vega stated that most people are not too financially responsible when they turn 18.