A tech billionaire and his wife said Tuesday they will put $6.25 billion into the individual investment accounts of 25 million children under the age of 10, sparking a wave of new questions about how these so-called “Trump accounts” will work.
The creation of these accounts was included as part of Donald Trump’s massive tax and spending bill, which he signed into law in July. Every child born between January 1, 2025 and December 31, 2028 can get a Trump account that includes an initial deposit of $1,000 from the administration. Then the money will be invested.
“The Trump accounts will be the first — I guess you could say — the first real trust fund for every American child, allowing family members, employers, corporations, generous donors to contribute money that will be invested and grown,” Trump said at a news conference at the White House, which focused on the $6.25 billion donation.
As part of the press conference Tuesday, the White House provided more details about the future of the Trump accounts. However, many details are scarce.
Who is eligible for a Trump account?
Anyone who has a Social Security number and is under the age of 18 can open a Trump account. However, the Trump accounts will not go live until July 4, 2026.
Parents and guardians are responsible for setting up and managing accounts.
Who can contribute to the Trump account? And how much can they give?
Children, parents or guardians, family members, friends and employers can contribute up to $5,000 per year per child. A $1,000 contribution from the U.S. government will not count toward that limit.
Philanthropies, charitable organizations, and some government entities — such as states or tribes — can also contribute without limits.
What about that $6.52 billion contribution?
That money, gifted by Michael Dell and his wife Susan, will go to children who live in ZIP codes where the median household income is less than $150,000 a year. Each eligible child is estimated to receive approximately $250.
What will happen to the money in Trump’s accounts?
It will be invested in a diversified, low-cost stock index fund that tracks the overall stock market. Private companies will manage those funds.
When can you withdraw money from Trump account?
Withdrawals are allowed only when the child turns 18. However, those withdrawals come with a big asterisk: At the time, the Trump account effectively worked like a traditional retirement account, meaning any withdrawals could result in hefty tax penalties.
The White House said Tuesday that there would be some exceptions to that rule, such as “higher education expenses or a first home purchase.” Brokerage firm Charles Schwab has created an explainer with more information about Trump’s accounts and taxes.
Will Trump’s accounts help lift more American children out of poverty?
Not immediately, if at all. The Trump administration’s tax and spending bill included sweeping cuts to programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP), or food stamps. Experts fear that, without the programs’ help, low-income families will be unable to support their children or help them succeed.
Critics have also argued that the Trump accounts are designed to encourage people to have more children, as the administration has reportedly toyed with various pro-natalist policies, such as giving $5,000 “baby bonuses” to women who give birth.
“As currently structured, these accounts will become yet another tax shelter for the richest people, while most American families, struggling to cover basic costs like food, child care and housing, will have difficulty finding additional money that can turn initial wealth into meaningful investments,” Amy Matsui, vice president of income protection and child care at the National Women’s Law Center, said in a statement before Tuesday’s press conference.
“Furthermore, the law prevents many children from immigrant families from benefiting at all.”
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