The U.S. government has introduced a new initiative aimed at providing financial support to future generations. Under the plan, $1,000 will be automatically deposited into the accounts of millions of American children born between January 1, 2025, and December 31, 2028.
This initiative is part of the One Big Beautiful Bill, signed into law by President Trump on July 4, 2025. The goal of this government program is to assist in setting up children for financial success by fostering long-term financial planning, education, and homeownership. According to The Sun, the payments are expected to be automatically distributed, offering families a direct financial boost.
What Is the Trump Account?
The Trump Account is designed to support the financial wellbeing of children born during a specific time frame. Each child will receive a $1,000 deposit upon birth, and both parents and their employers can contribute up to $5,000 per year to the account until the child turns 18.
The program was originally called “Money Accounts for Growth and Advancement” (MAGA) but was recently renamed to Trump Account.
The law aims to provide children with the opportunity to experience the benefits of compounded growth, setting them on a course for prosperity from an early age. The White House noted that,
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.
No Income Restrictions, Tax Benefits for Employers
There are no income restrictions for eligibility, meaning all children born in the U.S. during the eligible period can participate in the program, regardless of their family’s income level.
A Social Security number is the only requirement to set up an account for each child. Employers can also contribute to these accounts, adding up to $2,500 annually, without it being considered taxable income for parents or guardians.
However, contributions made by parents before a child turns 18 will not be eligible for tax deductions. The goal is to encourage long-term savings and investment, with the potential for substantial growth over time.
Long-Term Financial Growth for Children
The funds in the Trump Account will be invested in low-cost mutual funds or exchange-traded funds (ETFs), ensuring that the money grows over time.
The goal is to provide future generations with a financial foundation that could help cover the costs of higher education, a home, or other significant life expenses. Once the child reaches 18 years old, the funds in the account will be treated as a traditional IRA, subject to the typical contribution limits and tax requirements.
This means that the money will remain invested, growing potentially for decades—giving these children a significant head start compared to many Americans, who often do not start saving for retirement until their 30s.
How the Government Funds Can Be Used
The funds in the Trump Account can be used for various important milestones in a person’s life, including higher education, purchasing a first home, or other significant life events such as the birth of a child. These funds will provide a head start in life by investing in the child’s future.
Encouraging Long-Term Investing
Goldman Sachs’ CEO, David Solomon, voiced his support for the initiative, stating,
This initiative gets at the core of binding those future generations to the benefits and the potential of America’s great companies and markets – Solomon emphasized that
Early childhood investments have far-reaching benefits, and Goldman Sachs is proud to support this initiative. Our economy’s future vitality is dependent on young people understanding the power of investing for the long term.
