Will Trump Accounts deliver for American children?
Summary
President Donald Trump has launched Trump Accounts, a new savings plan for children under 18 in the U.S. The plan offers a $1,000 starter contribution for babies born between 2025 and 2028 and encourages long-term investing in low-cost index funds, but some experts say it may be too complex and not benefit all families equally.Key Facts
- Trump Accounts are available nationwide for children under 18 with a social security number.
- Babies born from 2025 to 2028 receive a $1,000 initial deposit in their account.
- Family, friends, and employers can add up to $5,000 per year per child.
- Money must be invested in a low-cost index fund and grows tax-free.
- Withdrawals before age 59½ face taxes and possible 10% penalties unless used for education, a first home, or emergencies.
- The program aims to increase stock ownership among children, especially from lower-income families.
- Experts warn the program may be complicated to use and some families might pay penalties if they withdraw funds early.
- About six million families signed up before the accounts officially launched on July 4, while many more children may be eligible.
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