| In the coming years, millions of babies born in the U.S. will be eligible to receive a $1,000 “Trump Account,” funded by the federal government. This pilot program is part of the president’s signature legislation, which introduces various changes to tax and spending programs. The money in these accounts will be set aside until the child turns at least 18 years old. The idea is that this initial investment will grow over time, as it will be invested in low-cost stock funds that track market indexes. The accounts have raised several questions, including how they will operate and how they compare to other savings strategies. Here’s an overview of the program:
👶 To be eligible, children must be born after Dec. 31, 2024, and before Jan. 1, 2029. They must also be a U.S. citizen with a Social Security number.
👶 Parents, relatives and others can contribute up to $5,000 annually to the accounts until the child turns 18. Employers can also chip in, though special rules apply to them.
👶 The money must go into an "eligible investment," like a mutual fund or an exchange-traded fund that mirrors an index, such as the S&P 500, according to the legislation.
👶 If no other money is contributed besides the $1,000 from the government, it could total just shy of $4,000 after 18 years at an 8% rate of return. If families contribute the maximum amount, at the same 8% rate and timing, the account could be worth over $190,000. | 
