Explained — What are Trump Accounts? Eligibility, contributions, claim process, and how the savings grow

Trump Accounts are a new savings initiative under the One Big Beautiful Bill, designed to help American children build long-term wealth. These accounts can be created for any child under 18, with the program covering children born between January 1, 2025, and December 31, 2028.

Who is eligible?

Under the proposal, every American child born between January 1, 2025, and December 31, 2028 would be eligible for a Trump Account, provided a parent or guardian elects to open one.

Children under 18 who were born before January 1, 2025 can also participate, though this group will not receive the $1,000 government deposit.

How much can be contributed?

Parents can contribute up to $5,000 per year, with annual limits indexed to inflation.

Employer contributions

Employers can add up to $2,500 annually.

These employer contributions do not count as taxable income, creating an added incentive.

How the money is invested

All deposits must be invested in:

-S&P 500 index mutual funds, or

-Exchange-traded funds (ETFs) tracking US stock indices.

Funds cannot be withdrawn before age 18. After that, the account transitions to a traditional IRA, with standard IRA withdrawal rules.

Projected account balances

The Council of Economic Advisers (CEA) modeled future account values using historic S&P 500 returns over 18- and 28-year rolling periods.

Medium-return scenario for a child born in 2026:

-$303,800 at age 18 with maximum contributions

-$1,091,900 at age 28 with maximum contributions

-$5,800 at age 18 with no added contributions

-$18,100 at age 28 with no added contributions

Low-return scenario (max contributions):

-$187,400 at age 18

-$772,200 at age 28

High-return scenario (max contributions):

-$730,400 at age 18

-$1,904,300 at age 28

Why the balances grow so much?

The program relies on:

-Long-term compounding,

-Regular annual contributions,

-Historic US stock market performance,

-Locking funds until adulthood.

What happens after age 18?

At 18, beneficiaries can’t withdraw freely. Instead, the account functions like a traditional IRA:

-Withdrawals before retirement may trigger taxes/penalties.

-Contributions between age 18–28 follow IRA contribution limits (adjusted for inflation).