dpThere are no income requirements or limits that would prevent families from enrolling their children. In addition to the $1,000 government seed funding, families can contribute up to $5,000 a year. Investments are restricted to index funds with very low expense fees.
As of mid-June, more than 6 million children have been registered for a Trump Account, according to Treasury data, of which 1.4 million qualify . Millions more eligible children have not been signed up.
Many applications came during the tax season when people completed Form 4547 (“the most aptly named tax document of all time,” in the words of Treasury Secretary Scott Bessent) or online at TrumpAccounts.gov.
Though the program was authorized only last year as part of the One Big Beautiful Bill Act — Republican’s major tax and spend legislation — the concept of legislation to build early wealth is not new.
Some state and local governments have pioneered similar programs on a smaller scale. But Trump Accounts represent the largest-scale experiment of its kind in the country, said Elaine Maag, a senior fellow at the Urban-Brookings Tax Policy Center. The financial companies managing the accounts — BNY and Robinhood — she added, stand to gain scores of new customers overnight.
“The grounding for the idea goes back to the early 90s, [with] bipartisan proposals over 20 years,” said Ray Boshara, who has advised both parties on such legislation dating to the early 2000s. “I would say now that the idea is bipartisan again because Democrats in Congress — [they’re] not thrilled about the name — but very happy to see this idea in law.”
Congressional Republicans who named the initiative after Trump followed a pattern established during his first term: making the president’s name synonymous with government initiatives distributing money directly to citizens.
Trump’s distinctive signature, for instance, was prominently displayed on pandemic-era stimulus checks. On the 2024 campaign trail, Trump promised $2,000 rebate checks from revenue generated by his higher tariffs(though those have yet to materialize). This spring, he vigorously promoted new tax breaks and large refund checks from the Internal Revenue Service.
The Trump branding, however, raised concern among some experts in the field that the association with such a controversial figure might dampen public enthusiasm for the accounts.
Boshara said he has “heard anecdotally that some families are not signing up for Trump Accounts because of the name.”
Kimberly Zimmerman Rand, a Boston-based financial coach who specializes in fiscal advice around major life events such as the birth of a child, said she would advise clients not to “let the name dissuade you from the opportunity.”
That’s the view Kevin Smee is taking.
Although the father of two from Leominster is a Democrat who thinks “Trump is probably one of the worst presidents we’ve ever had,” he’s strongly considering opening a Trump Account for his two-month-old daughter.
“I felt like I owed my daughter that much. If this is actually something beneficial, swallow your pride a bit and sign up for it,” Smee said. Left-leaning Americans like himself, he argued, “want [Trump] to succeed on doing stuff like this that actually benefits real people.”
The benefits in question are decidedly future-focused.
Once a child turns 18, the account will automatically transition into an individual retirement account, which penalizes most withdrawals before age 59½, unless they are used for exceptions such as a first-time home purchase, medical expenses, or higher education.
Rand said restrictions such as those beg questions about the practical utility of Trump Accounts for some families, since money is increasingly tight among young adults. Account holders gaining access to their accounts for the first time at age 18, she said, might be tempted to use the balance as spending money rather than a long-term investment asset.
“Maybe they want to buy a car or [rent an] apartment,” Rand said. “There are lots of monetary pulls on young adults’ finances.”
Michael Lind, co-founder of the centrist think tank New America, said Trump Accounts are so restricted because they have an ulterior purpose: laying the groundwork for a phase-out of Social Security benefits.
In fact, Bessent described Trump Accounts as “a backdoor way for privatizing Social Security,” at a Breitbart News event last year and posited that if the accounts grow into the hundreds of thousands of dollars, they would decrease the government’s Social Security burden.
Lind said government should focus on programs that improve incomes rather than “tax-favored private savings” that advantage well-off people with the disposable income to max out retirement accounts for their children.
The White House Council of Economic Advisers predicted a Trump Account maxed out at $5,000 each year, assuming moderate returns, could reach upwards of $300,000 by the time a child turns 18. In a model where no money is contributed other than the initial $1,000, however, the council predicted a return of little more than $5,000.
Because there are no asset restrictions on who can create a Trump Account, Maag said, the initiative “might, in fact, increase the wealth gap if we see more take up at the high-income level than [the] low-income level.”
According to Treasury data, 86 percent of children signed up for Trump Accounts come from families earning less than $200,000 a year. That figure actually signifies an overrepresentation of wealthy family sign-ups, Maag said, because the 2024 Census showed nearly 95 percent of all households with children under 18 make less than $200,000 a year.
Rand, meanwhile, pointed out the government is offering these accounts without providing financial education that would help low-wealth families especially take full advantage of the program.
“I’ve been doing this work for 30 years now, and what I find is education can only help a household go so far. An account can only help a household go so far. But an account plus education,” Rand said, “can really do a lot.”
Some nonprofits, such as Boston-based Commonwealth, are offering free support to low and moderate-income families looking for advice on getting the most out of their Trump Accounts.
While Boshara acknowledges additional improvements could be made to Trump Accounts with the goal of shrinking the wealth gap — automatic enrollment, for example, additional deposits from the government for low-wealth families, and extension beyond 2028 — the “game changer is getting low-income families into the stock market.”
Indeed, just 17 percent of Americans in the lowest 20th percentile of income have stock holdings of any kind, according to Federal Reserve Data.
Several major companies, such as Bank of America, Uber, and Chipotle, have pledged to match employee contributions to the accounts. Meanwhile, tech chief executive Michael Dell and his wife, Susan, are donating $6.25 billion to the accounts of children born between 2016 and 2024 who live in ZIP codes where the median household income is $150,000 or less. Other philanthropists, including billionaire investor Ray Dalio of Connecticut, have committed $250 to every account of similarly eligible children in their home states.
Boshara is encouraged that “what looks like an individual [investment] account, really is a community asset,” he said. “It’s sending that signal to these kids that we are all invested in your future.”
Julian E.J. Sorapuru can be reached at [email protected]. Follow him on X @JulianSorapuru.
