How Much Money Trump’s Newborn Accounts Could Actually Grow To

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How Trump Accounts Work

Trump Accounts, created under the One Big Beautiful Bill Act (OBBBA), are new tax-advantaged savings vehicles aimed at helping children build wealth from birth. U.S. citizens with a Social Security number born between Jan. 1, 2025, and December 31, 2028, will receive a one-time $1,000 deposit from the U.S. Treasury, invested in a broad stock market index fund.

Children born outside that window can still have a Trump Account opened for them, but won’t receive the government seed money.

Parents can contribute up to $5,000 annually per account—whether or not their child is eligible for the seed money—and employers may add as much as $2,500 a year for an employee’s dependent. However, employer contributions will count toward the $5,000 total annual cap.

The child can’t withdraw funds until they turn 18. At that point, the account will convert to a Traditional IRA—offering tax-free growth and allowing penalty-free withdrawals for any purpose starting at age 59½. Certain exceptions apply to withdrawals at a younger age, including qualified educational expenses and up to $10,000 for a first-time home purchase. Otherwise, penalties and taxes will be triggered.

Trump Accounts aren’t yet available, and final rules on their taxation remain unsettled. While some reports suggest only the gains will be taxed as ordinary income, others suggest a friendlier capital gains treatment will apply. The IRS will need to issue official guidance before the full details are clarified.

How Much Your Baby’s Account Could Be Worth by Adulthood

To get a sense of what these Trump Accounts could be worth, we did the math. These are rough projections, since the full rules aren’t finalized and future investment returns can’t be predicted with certainty. In addition, OBBBA says the $5,000 annual contribution cap will be adjusted for inflation, but it doesn’t spell out exactly how the inflation adjustment will be calculated. That makes these numbers best viewed as general estimates.

With that in mind, we found that if you only take the $1,000 seed money, make no further contributions, and gain 10.1% on average annually (Investopedia’s calculation of the S&P 500’s average annual return, including reinvested dividends, since 1928), the account’s value would grow to about $5,652 by age 18. Using a more conservative 5% average annual return, the balance would be closer to $2,407.

If instead a parent—or a combination of parent and employer—adds the maximum $5,000 each year until the child turns 17, the results are much larger than simply letting the seed money grow on its own. At a 10.1% return, the account could reach about $235,929 by 18. Using a more conservative assumption of average annual gains of 5%, it would be about $143,068.

Who These Accounts Are Good For—And Who Should Skip Them

For families with a baby born between 2025 and 2028, opening a Trump Account is an easy decision. The government’s $1,000 seed deposit will be automatically added to your child’s account, and there’s no reason to turn down free money. Even with some investment restrictions and uncertainty over the final tax rules, letting that initial amount grow over time can give your child a modest nest egg at no cost to you.

These accounts can also make sense if your employer offers to contribute up to $2,500 a year, which counts toward the $5,000 annual cap. Since the program is new, it’s unclear how many companies will provide this perk, but it’s worth checking if your child, regardless of birth year, could qualify for an employer contribution.

For children born outside the seed-money years and without an employer contribution, a Trump Account is unlikely to be the best savings vehicle. Parents looking to save for college will get better tax benefits and more investment choices with a 529 plan. Meanwhile, a Roth IRA is, in most cases, a stronger option for a child with earned income, while a custodial brokerage account offers greater flexibility and potentially more favorable tax treatment.