The $1K 'Trump Account' for your child could grow up to 6 figures — but some parents are tearing up the check. Here's why

“Both my husband and I, our first reaction was like, Oh, this is a scam,” Eloise told The Atlantic.

Instead, she opened a separate, more traditional account with her child’s future in mind.

Financial expert Suze Orman has a slightly different perspective, saying Americans should accept the seed money and whatever sum your employer will match, but to stop there and never invest any of your own money into the account.

The White House does note, however, that full annual contributions that are left untouched could eventually reach six figures once the child turns 18.

If you do choose to fund the account over time, here’s what you should know.

Making the most of ‘Trump Accounts’

According to the One Big Beautiful Bill, babies born between 2025 and 2028 can be registered to get a Trump Account with $1,000 from the government. Parents can add up to $5,000 a year, and all of this money gets invested in U.S. stock-market index funds, such as the S&P 500.

According to projections from the White House’s Council of Economic Advisers, a baby born in 2026 whose parents max out contributions could see $303,800 by the time they turn 18 and $1.09 million by age 28, assuming average market returns. If parents skip additional contributions, the account still grows to $5,800 by 18 and $18,100 by 28.

When the child turns 18, the Trump Account converts to a traditional IRA, which means taxes are taken when the money is withdrawn.

There’s a potential workaround: a Roth IRA conversion. If done correctly, all future withdrawals could be completely tax-free after age 59.5. Normally, Roth conversions trigger taxes, but if the converted amount falls under the 0% income tax bracket, the tax hit could be zero. This conversion can only be done once the account owner turns 18.

Setting up your kids for financial independence

Though the Trump Accounts sound like a great way for families to get a head start for their kids, parents have several other strategies that can point their children in the right direction when it comes to saving money: