Despite Ackman’s critical attitude, there are legitimate barriers for opting into these accounts. Some families, particularly those of color or from immigrant communities, are likelier to skip out on the accounts due to mistrust of Trump, according to The New York Times. Enrolling into the accounts isn’t automatic, and requires filing a tax form. Last year, the Internal Revenue Service shared 47,000 taxpayer addresses with the Department of Homeland Security. It set off a legal challenge that led to a pair of federal judges ordering ICE to stop using the confidential information for immigration enforcement.
What to know about the Trump accounts
On July 4, the Trump administration launched “Trump Accounts” for children. Every child under 18 years of age is eligible to set up an account, as long as they have a Social Security number to demonstrate their U.S. citizenship. The Treasury Department is providing $1,000 into the accounts opened for children born between Jan. 1, 2025 and Dec. 31, 2028 — effectively the duration of Trump’s second term.
Employers may contribute up to $2,500 per year to the account with $5,000 being the annual maximum until the child turns 18. Dozens of major US companies and several philanthropists including Michael and Susan Dell have agreed to contribute cash to the accounts, according to a tracker from the Americans for Tax Reform, a conservative group advocating for lower taxes. About 24 state governments have also committed to seed Trump accounts for foster children.
The Trump administration has offered varying estimates for the growth of these accounts, which will be directed at low-cost index funds or ETFs. If individuals contribute $0 and let the accounts grow on their own, the final balance could be $6,000 once the child reaches age 18. In the event someone contributes $250 per year, that balance would swell to $19,000.
Treasury Secretary Scott Bessent said in a late July speech that nearly 7 million kids were enrolled into the accounts with 86% of them belonging to families earning less than $200,000.
“The daily movements of the market will now be personally meaningful to millions,” he said. “American families, left on the sidelines of Wall Street for too long, will finally understand what a piece of the action feels like.”
