Families may soon save for their children’s future with new “Trump Accounts,” offering $1,000 deposits for eligible newborns.
SACRAMENTO, Calif. — Families may soon have a new way to start saving for their children’s future — with help from the federal government.
“Trump Accounts” are part of a bill signed into law this summer and are designed as tax-advantaged savings plans. They are like retirement accounts, but the money is off-limits until a child turns 18.
Babies born between 2025 and 2028 with a Social Security number will receive a $1,000 deposit from the federal government. Parents can add up to $5,000 a year, and according to the White House, employers can contribute up to $2,500 annually.
Derek Stimel, an economics professor at UC Davis, said children born before 2025 but still under 18 can also have a Trump Account, but those families won’t receive the $1,000 seed deposit.
“The current understanding is that next year, so July 2026, the government will open up accounts for people that have children in this age range, and they will deposit $1,000 into the Trump account on their behalf,” Stimel said.
Money in these accounts can be used for expenses such as college tuition, starting a business or buying a first home. The White House said funds must be invested in mutual funds or exchange-traded funds tied to the S&P 500 or another U.S. stock index.
Stimel said whether families should participate depends on their situation.
“One reason somebody might want to open up an account, even if they wouldn’t maybe otherwise do so, is if their employer is actually going to put in some money into this account for your child, because otherwise, then you might not get it,” he said.
There are also other types of accounts parents can consider, including 529 college savings plans.
Families with questions about Trump Accounts or other savings options can email Lora Painter at lpainter@abc10.com or find past Dollars and Sense coverage on ABC10.com and the ABC10+ streaming app.