The official Trump Accounts app launched on Thursday and will be available on all major platforms.The program would deposit $1,000 into the individual accounts of children born between 2025 and 2028. It is designed to grow with investment earnings over time, similar to existing 529 plans and traditional individual retirement accounts, both of which are tax-advantaged savings plans.To qualify for the $1,000, a baby must be a U.S. citizen, have a Social Security number and be born between Jan. 1, 2025, and Dec. 31, 2028. Parents who have not signed up yet can register their child by filling out Form 4547 from the Internal Revenue Service.The program officially launches on July 4, when parents, guardians, and others who meet certain requirements can also start contributing to the accounts.How compound interest could grow a Trump Account for kidsInvesting in and owning stocks can be important in building wealth over time and preparing for a financially secure retirement. A recent survey by the Federal Reserve Bank of Philadelphia found that 57% of American adults do not personally own stocks. The two most common reasons are insufficient financial resources and a limited understanding of the stock market.Scott Laing, clinical assistant professor of finance at the University at Buffalo School of Management, said stocks are a relatively safe asset class over longer periods of time, and unlike regular savings accounts, money invested in stocks usually has a significantly larger return.This is called a “compounding effect,” where an asset’s earnings from either capital gains or interest are reinvested to generate additional earnings over time.Picture a snowball being rolled forward. As it picks up more snow, it grows faster, like an investment compounding at 10% a year. It grows because each pass adds new snow to the snow already accumulated.Since 1957, the S&P 500 has delivered an average annual return of more than 10%. Using that 10% average as a reference, a $1,000 seed investment could grow to about $5,600.But Laing said the actual value of this $5,600 investment could be about $3,600 after taxes and an early-withdrawal penalty. Trump Accounts convert to an IRA once the beneficiary turns 18, at which point the 10% penalty for early withdrawals before age 59 1/2 applies.How much would a Trump Account be worth if you had one when you were born?Although the accounts are new, the idea of investment accounts is not. To see what a $1,000 investment account could potentially have been worth if you started one when you were born, the Get the Facts Data team built the tool below. The tool assumes an annual 10% return, which is generally accepted as the historical average. Enter your birth year below to see how much the money would have grown.
The official Trump Accounts app launched on Thursday and will be available on all major platforms.
The program would deposit $1,000 into the individual accounts of children born between 2025 and 2028. It is designed to grow with investment earnings over time, similar to existing 529 plans and traditional individual retirement accounts, both of which are tax-advantaged savings plans.
To qualify for the $1,000, a baby must be a U.S. citizen, have a Social Security number and be born between Jan. 1, 2025, and Dec. 31, 2028.
Parents who have not signed up yet can register their child by filling out Form 4547 from the Internal Revenue Service.
The program officially launches on July 4, when parents, guardians, and others who meet certain requirements can also start contributing to the accounts.
How compound interest could grow a Trump Account for kids
Investing in and owning stocks can be important in building wealth over time and preparing for a financially secure retirement. A recent survey by the Federal Reserve Bank of Philadelphia found that 57% of American adults do not personally own stocks. The two most common reasons are insufficient financial resources and a limited understanding of the stock market.
Scott Laing, clinical assistant professor of finance at the University at Buffalo School of Management, said stocks are a relatively safe asset class over longer periods of time, and unlike regular savings accounts, money invested in stocks usually has a significantly larger return.
This is called a “compounding effect,” where an asset’s earnings from either capital gains or interest are reinvested to generate additional earnings over time.
Picture a snowball being rolled forward. As it picks up more snow, it grows faster, like an investment compounding at 10% a year. It grows because each pass adds new snow to the snow already accumulated.
Since 1957, the S&P 500 has delivered an average annual return of more than 10%. Using that 10% average as a reference, a $1,000 seed investment could grow to about $5,600.
But Laing said the actual value of this $5,600 investment could be about $3,600 after taxes and an early-withdrawal penalty. Trump Accounts convert to an IRA once the beneficiary turns 18, at which point the 10% penalty for early withdrawals before age 59 1/2 applies.
How much would a Trump account be worth if you had one when you were born?
Although the accounts are new, the idea of investment accounts are not.
To see what a $1,000 investment account could potentially have been worth if you started one when you were born, the Get the Facts Data team built the tool below.
The tool assumes an annual 10% of return, which is generally accepted a the historical average.
Enter your birth year below to see how much the money would have grown.
