Unlocking a Six-Figure Future: Trump Accounts Offer Kids a $1.1 Million Boost
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A new savings plan, dubbed Trump Accounts, is set to launch next year, offering a head start on long-term financial security for children born between 2025 and 2028. The initiative, part of the One Big Beautiful Bill enacted in July 2025, provides an initial government contribution of $1,000 to help families get started. Parents can also contribute up to $5,000 annually, with all funds invested in U.S. stock-market index funds. According to forecasts, a child born in 2026 who receives the full $5,000 contribution each year could accumulate $303,800 by age 18 and a staggering $1.09 million by age 28, assuming average market performance. However, if no additional contributions are made, the account's value would be significantly lower, reaching $5,800 by age 18 and $18,100 by age 28. Once the child turns 18, the Trump Account transitions into a traditional IRA, subject to tax obligations upon withdrawal. Families may also consider a Roth IRA conversion, which could allow for tax-free withdrawals after age 59.5. While the IRS has not yet confirmed whether Roth conversions are permissible for Trump Accounts, families should be aware of this potential option. Can Trump Accounts really make it worth nearly $1.1 million? The answer lies in the power of consistent contributions and compound interest. By taking advantage of this new savings plan, families can give their children a valuable financial foundation for years to come.
