Key facts
- President Trump's new 'Trump accounts' are tax-advantaged investment vehicles for children.
- The federal government will provide $1,000 in seed money for children born between 2025 and 2028.
- The Michael & Susan Dell Foundation is donating over $6 billion to supplement the accounts.
- Funds can be withdrawn penalty-free for education or home purchases.
- Enrollment requires parents to file IRS Form 4547, with online options anticipated later.
- The accounts' balances will not impact eligibility for government assistance programs.
President Donald Trump's administration has launched 'Trump accounts,' a new savings initiative designed to provide children with a financial head start. These tax-advantaged investment vehicles, officially known as 530A accounts, are set to begin enrollment on July 4, with federal seed money available for children born between 2025 and 2028.
The program has already attracted substantial private sector backing, notably a pledge of over $6 billion from the Michael and Susan Dell Foundation. This donation will provide $250 to children aged 10 and younger who meet specific income criteria. Other philanthropists, including Ray Dalio and Brad Gerstner, are also contributing to similar initiatives.
Funds deposited into Trump accounts can be invested in stock market indexes like the S&P 500 and are intended to grow until the child reaches 18. Withdrawals are permitted without penalty for qualifying expenses such as higher education or the purchase of a first home. The Treasury Department will manage the accounts, with parents having the option to transfer management to their own brokerage later.
Despite the program's aims, experts express concerns about the enrollment process. Parents must manually open accounts by filing IRS Form 4547, a step that could deter millions of lower- and moderate-income families. While online enrollment is expected by mid-next year, the current reliance on a tax form and the requirement of a Social Security number for eligibility raise questions about accessibility and equity.