The Trump government has officially declared a sweeping overhaul of its revolutionary “MAGA accounts” program, renamed “Trump Accounts” and intended to repay future generations of Americans. The historic legislation, signed into law as part of the One Big Beautiful Bill Act on July 4, 2025, will automatically give eligible newborn Americans $1,000 investment accounts.
The three key requirements for the $1,000 Benefit
To qualify for the $1,000 government incentive, children should have the following three requirements:
1. U.S. Citizenship at Birth
The child should be a natural-born U.S. citizen, with no exceptions for non-citizens or citizens-to-be who will become citizens later. This only counts natural-born Americans in the federal investment package.
2. Valid Social Security Number
The child and one of the parents should have a valid Social Security number. Married couples should provide both parents’ Social Security numbers to qualify to work in America.
3. Birth date between January 1, 2025 and December 31, 2028
The baby has to be born within the four-year eligibility period that was created specifically for President Trump’s re-election second term. The special time frame is designed to provide a one-time chance to approximately 14.4 million American children who will be born during this time frame.
Built for the next generation
The Trump Accounts are tax-deferred investment accounts that must be invested in low-cost, diversified U.S. stock index funds with an expense ratio of less than 0.1%. The investment strategy is meant to realize the power of compound growth for nearly two decades before one gets access to the funds.
Investment advisors estimate tremendous growth potential for the initial $1,000 investment. Based on an average 8% rate of return, the account would be about $4,000 by age 18, $8,000 by age 20, and possibly reach an estimated $574,000 by age 60 assuming no withdrawals are taken. For parents who contribute the maximum limit of $5,000 per year, accounts can reach close to $191,000 by the beneficiary’s 18th birthday.
Increased contribution opportunities
Apart from the original government seed contribution, the strategy provides several contribution paths aimed at optimizing long-term wealth build-up:
- Family contributions: Relatives and parents can contribute a maximum of $5,000 per year to age 18, with contribution limits indexed for inflation from 2027.
- Employer benefits: The employers may contribute up to $2,500 annually to the children of their employees in Trump Accounts, and this will not be part of the employee’s taxable income. Big firms like Dell, Goldman Sachs, and Uber have already supported the plan, with Dell planning to match $1,000 contributions to the children of its employees.
- Tax-exempt organizations: Private foundations and other tax-exempt organizations may give unlimited amounts over the general $5,000 maximum annually, providing further opportunities for wealthy families to accumulate family wealth.
The Trump Accounts plan is launched on July 4, 2026, and initial contributions will be accepted starting from that date. The Treasury Department will automatically open eligible children’s accounts, but parents can directly open accounts with participating banks.
Restrictions on withdrawals and benefits
The plan has strategically designed withdrawal conditions that will benefit long-term wealth accumulation:
- Age 18: Beneficiaries are able to withdraw 50% of the account value
- Age 25: Completed access to the account for qualified expenses such as education, first home, and small business investment
- Age 30: Complete access to all the funds without limitation
Eligible withdrawals are subject to the favorable long-term capital gain tax rate of 15-20%, while non-eligible withdrawals are subject to regular income tax rates with an additional 10% penalty.
With an emphasis on next generation’s financial security
The Trump Accounts initiative is a major departure from the standard government welfare programs in that it involves direct equity stakes in American capitalism for babies. The program was described by Senator Ted Cruz, the mastermind of the program, as one meant to provide every child “a stake in the American free enterprise system” and build “new capitalists” from birth.
The White House pointed out that the program will enable the next generation “to tap the strength of our economy to lift the next generation up” and give children “the chance to see the miracle of compounded growth” at an early age.
Long-term economic impact
Financial experts project that the program could fundamentally alter Americans’ relationship with investing and wealth building. Russell Investments Chairman and CEO Zach Buchwald noted that the initiative “can help Americans build financial security earlier and more confidently and, over time, ease the pressure on both the safety net and the federal budget”.
The program’s focus on broad-based stock index investing ensures that beneficiaries will share in the overall growth of American companies and the broader economy, potentially creating a generation of Americans with a vested interest in economic prosperity.
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