President Donald Trump hailed the creation of “Trump Accounts” at a Monday afternoon “Invest in America” roundtable event at the White House alongside top business leaders and lawmakers, calling it one of the “most important” components of his second term.
“This is a pro-family initiative that will help millions of Americans harness the strength of our economy to lift up the next generation.”
President Donald Trump
The new tax-deferred investment accounts—sort of a “401(k) for kids”—would be created thanks to a provision including the Invest in America Act in Trump’s “One Big Beautiful Bill” that passed the House and is currently being considered in the Senate.
In opening remarks during the roundtable, President Trump said the provision is “one of the most exciting parts” of the massive, signature legislation, and that this pilot program “will make it possible for countless American children to have a strong start in life at no cost to the American taxpayer—absolutely no cost. It’s going to have a huge impact.”
While estimates project that the Trump Accounts would cost taxpayers $3.6 billion in its current form of a government-funded $1,000 starting balance, based on the 3.6 million births in 2023, Trump said Monday that “they are fully funded through targeted reforms in the One Big Beautiful Bill, like the $1.7 trillion dollars in mandatory savings welfare reforms to stop waste and fraud, a 3.5% remittance tax and more.”
Trump Accounts, which would be private property of the child’s guardian, would track a stock index and allow for additional private contributions of up to $5,000 per year. “This will afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning,” said a White House press release issued Monday afternoon.
“This is a pro-family initiative that will help millions of Americans harness the strength of our economy to lift up the next generation, and they’ll really be getting a big jump on life especially if we get a little bit lucky with some of the numbers in the economies into the future,” Trump said at the roundtable.
Dell CEO Michael Dell, Goldman Sachs CEO David Solomon and Uber CEO Dara Khosrowshahi were among the business leaders attending the event, as was Brad Gerstner, Founder, Chairman, and CEO of Altimeter Capital, who is among those who spearheaded and promoted the Invest in America Act along with Sen. Ted Cruz (R-TX).
Dell said the establishment of the accounts are a simple yet powerful way to transform lives. “Decades of research has shown that giving children a financial head start profoundly impacts their long-term success. With these accounts, children will be much more likely to graduate from college, to start a business, to buy a home, and achieve lifelong financial stability,” Dell said.
He added that Dell Technologies will match the government contribution dollar-for-dollar for every child born to a Dell Technologies team member. Repeatedly calling them “Invest America Accounts” as they were originally proposed as part of the Invest in America Act introduced in the House and Senate in May, Dell said they would provide a powerful platform for philanthropic innovation, “aimed at helping children thrive, wherever they come from.”
“These Invest America Accounts will give every new American child a genuine opportunity to participate in history’s greatest engine of economic growth, the American economy,” Dell said.
“This initiative gets at the core of binding those future generations to the benefits and the potential of America’s great companies and markets. Early childhood investments have far-reaching benefits, and Goldman Sachs is proud to support his initiative,” said Goldman Sachs CEO David Solomon. “Our economy’s future vitality is dependent on young people understanding the power of investing for the long term.”
Speaker of the House Mike Johnson (R-LA) and House Ways & Means Committee Chair Jason Smith (R-MO) also attended Monday’s event.
“If you have a 401(k), you understand the power of investing early for the future. Trump Accounts take that same principle and they apply it from the very beginning of Americans’ lives,” Johnson said. “It’s a bold, transformative policy that gives every eligible American child a financial head start from day one. Trump Accounts are all about setting up the next generation for success.”
Smith added that the accounts will be a game-changer for new parents even before their newborn baby can walk or talk. “Their child will have money saved to one day learn a trade, start a business, or to buy a home,” Smith said. “Every child born under this policy will have a better shot at a future. It does not matter if they live on a city block or on a county road—this will make a significant difference to their lives.”
Every child starts with $1,000
Originally dubbed “MAGA Accounts,” which Republicans said stood for “Money Accounts for Growth and Advancement,” the provision got an 11th hour name change to “Trump Accounts” during a House Rules Committee meeting in May.
Assuming the provision survives any changes to the bill in the Senate and it goes on to pass and become law, the Trump Accounts will seed every child born in the U.S. between Jan. 1, 2025 and Jan. 1, 2029 with $1,000 funded by the Department of the Treasury. They would also allow family, friends and even employers to contribute up to $5,000 a year. Funds will be invested in a diversified fund that tracks a U.S. stock index such as the S&P 500.
Similar to a 529 college savings plan, the Trump Account provides a tax incentive to getting a jump start on saving. Earnings grow tax-deferred, and qualified withdrawals (including for education expenses or credentials, a down payment on a first home or as capital to start a small business) will be taxed at the long-term capital-gains rate.
The money in each child’s account would accumulate interest and value so by the time accountholders are eligible to receive distributions upon turning 18, they would have tens of thousands of dollars available to use on education, start a business or buy a home.
While there hasn’t been much in the way of opposition to the Trump Accounts provision specifically, one potential sticking point is that the program may disproportionately benefit wealthier families who can afford to contribute more, widening the wealth gap and limiting the program’s intended impact on promoting financial equity.
SEE ALSO:
• ‘Trump Accounts’ Christened as New Name for ‘MAGA Accounts’ in GOP Tax Bill
• ‘401(k) for Kids’ Included in New GOP Tax Proposal
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.