Newborns get $1,000
- Stephen H Akin
- 20 hours ago
- 3 min read
Introduced in the “One Big Beautiful Bill” (OBB), Trump accounts would allow parents, relatives, and others to contribute $5,000 annually for a child’s future educational, homeownership, and entrepreneurial expenses.
$1,000 "Trump account" is a federal initiative that would provide every eligible newborn in the United States with a government-funded investment account at birth. Here are the key details:
Eligibility: Every child born in the U.S. between January 1, 2025, and January 1, 2029 is eligible, provided the child and both parents have valid Social Security numbers.
Account Setup: The accounts would be automatically opened and funded by the U.S. Treasury—parents do not need to take action, though they may opt out if desired.
Initial Funding: Each account receives a one-time $1,000 government contribution.
Investment: The funds must be invested in a low-cost, diversified U.S. stock index fund or equivalent. Withdrawals are not permitted until the child turns 18.
Additional Contributions: Parents, relatives, and certain organizations can contribute up to $5,000 per year in after-tax dollars.
Qualified Uses: Once the beneficiary turns 18, funds can be used for higher education, post-secondary credentialing, buying a home, or starting a small business. Withdrawals for these purposes are taxed as capital gains; non-qualified withdrawals before age 30 incur ordinary income tax and a 10% penalty.
Tax Treatment: Growth in the account is tax-deferred until withdrawal.
Program Duration: This is currently a pilot program set to run for newborns during a four-year window.
The program is designed to give children a financial head start, with the goal of reducing wealth inequality and improving access to opportunities like education and homeownership.
However, some experts note that while the accounts are universal and automatic, the amount may not be enough to address deeper disparities in wealth accumulation, and there are concerns about unused funds and privacy.
The main differences between the Trump account pilot program and the broader proposed Trump account program center on eligibility, structure, and scope:
Feature | Pilot Program | Proposed (Broader) Program |
Eligibility Window | U.S. children born between January 1, 2025, and January 1, 2029 | Broader proposals sometimes reference earlier start dates or wider eligibility, but the legislative text currently aligns with the pilot window. |
Parental Requirements | Both parents must have valid, work-eligible Social Security numbers | Some broader proposals suggest relaxing this, but the pilot retains strict requirements. |
Account Opening | Accounts can be opened by parents/guardians; if not, the Treasury opens automatically | Similar automatic enrollment is proposed in the full program. |
Initial Funding | $1,000 federal seed money per eligible newborn, funded by taxpayers | Same initial $1,000 contribution in both versions. |
Additional Contributions | Parents, relatives, and others can contribute up to $5,000/year | Broader proposals sometimes include employer or nonprofit contributions, but the pilot limits these. |
Investment Options | Funds invested in low-cost, diversified U.S. stock index funds | Same investment structure in both versions. |
Withdrawal Rules | Withdrawals allowed at age 18 for qualified uses (education, home, business) | Same withdrawal rules in both versions. |
Tax Treatment | Tax-deferred growth; withdrawals taxed as capital gains for qualified uses | Same tax treatment in both versions. |
Program Duration | Defined as a temporary, four-year pilot | Broader proposals envision permanent or longer-term programs. |
Exclusions | Stricter eligibility excludes some vulnerable children (e.g., those without two parents with SSNs) | Broader proposals may aim for more inclusivity, but pilot is more restrictive. |
Key distinctions:
The pilot program is a temporary, four-year test with stricter eligibility (both parents must have SSNs), while the broader proposed program is envisioned as a permanent or longer-term policy with potentially more inclusive eligibility criteria.
The pilot’s automatic account creation by the Treasury is retained in both versions, but the pilot’s strict parental requirements may leave out more vulnerable children.
Both versions provide the same $1,000 initial funding and similar tax and withdrawal rules, but the pilot is more limited in scope and duration.
In summary, the pilot program is narrower, more restrictive, and time-limited, while the proposed broader program is intended to be more inclusive and permanent, though current legislative language closely follows the pilot’s framework.
Akin Investments, LLC has moved to 170 Meeting Street, Suite 110, Charleston, South Carolina 29401
Our updated firm brochure ADV Part 2 A & B. Akin Investments Clients and perspective clients may review the June 30, 2025 update of our firm brochure via the link below:
Akin Investments, LLC Firm Brochure Download the full document here
Schedule a free consultation and learn how we can help you.
Asset and Cash Management Solutions
