President Donald Trump’s administration announced a massive donation to fund an additional 25 million “Trump Accounts” for newborn Americans in coming years.
The program, originally included in Trump’s so-called “One Big Beautiful Bill” earlier this year, were renamed “Trump Accounts” according to the administration, and a donation of $6.25 billion from Michael and Susan Dell will expand access to the program.
“Think of it like an IRA for kids,” said Aristotle Markis of Goldstone Financial.
At an afternoon news conference Tuesday, Trump called the accounts a “jumpstart on the American dream.”
According to provisions of the program, American families will receive $1,000 to start a savings or investment account that you can add to as their kids grow.
“This is a pro-family initiative that will help millions of Americans harness the strength of our economy to lift up the next generation,” Trump said.
The accounts will be available to families of children born between Jan. 1, 2025, and Dec. 31, 2028.
They would include a $1,000 government deposit. Families and others could then add up to $5,000 each year until the child turns 18.
There would be no withdrawals without penalty until children turn 18. The money could then be used to pay for college or trade schools.
It could also be left untouched until retirement age when it would turn into a regular IRA. The accounts will be held in Treasury Department-approved financial institutions that invest them in low-cost funds that track American Stock indices, according to the administration.
Historically, such funds have averaged a 7% annual return. However, a recent analysis by the Tax Foundation found that if a family’s goal is to save for a child’s education, a 529 education savings account may be a better alternative.
Alex Muresianu, a senior policy analyst at the Tax Foundation looked at the Trump Accounts program before today’s announcement.
“They have some tax advantages, but relative to a brokerage account they are not particularly strongly tax advantaged,” he said.
The accounts will be set up automatically for all newborn American citizen with a Social Security Number. According to the president, parents can start claiming their “Trump Accounts” on July 4, 2026.
Overall, this program is expected to cost an estimated $15 billion through 2034.
The Tax Foundation found that the U.S. tax code already provides for “at least 11 different tax-advantaged savings vehicles, each with different rules, limitations and regulations.”
Markis cautioned parents to be careful with any investments designed to fund their children’s education. As those accounts grow, he said, a financial advisor can provide the help they need to navigate the tax laws and investment changes that help secure that investment.
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