Invest America Plan Offers Head Start for Children’s Financial Future

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A financial head start is one key way to support future generations as they navigate life ahead.

As part of the U.S. Government’s new Invest America plan, children born between January 1, 2025 and December 31, 2028 can receive a $1,000 seed investment kick-start through so-called “Trump Accounts” established by Congress earlier in 2025.

Through this plan, the Treasury Department will seed $1,000 into an account after a child obtains a Social Security number, that will remain private property under guardian control until the child is 18. The money is invested into tax deferred index funds, with income taxes due eventually upon withdrawal.

The law allows for an additional private family contribution in after-tax dollars of up to $5,000 per year. Employers of either the beneficiary or their guardian can contribute up to $2,500 towards this $5,000 annual cap.

These accounts have started to garner support from several U.S. companies. BlackRock, a global investment firm, has pledged to match the government contributions for all eligible U.S. employees. Similarly, Ray Dalio, former chairman of Bridgewater Associates, a global investment management firm and hedge fund based in Connecticut, said that his foundation will donate $250 each to about 300,000 accounts for children located in Connecticut. 

For families who choose to invest this additional contribution, it is estimated that their child could accumulate $191,000 before tax by the age of 18.

The beneficiary becomes eligible to draw from the account and use it for anything on January 1 of the year they turn 18. For example, someone who is turning 18 on December 20, 2044 is eligible to tap into the account holdings January 1, 2044 while they are still 17-years-old.

While the child is able to empty the account the year they turn 18, it is important to note that these accounts are designed to act more along the lines of an IRA.

Since the account has early distribution fees on withdrawals made before age 59 ½, financial planners feel it acts more as a jump start on retirement savings. The account can actually be converted into a Roth IRA at age 18 making it a way to provide decades of tax-free growth.

There are exceptions to the early withdrawal penalties if the child chooses to use the money for higher education, or up to $10,000 towards a first time home purchase occurring before the age of 59 1/2.

In order to set up a so-called Trump Account for a child, the parent or guardian will need to fill out a new IRS tax form, Form 4547, to attach to their tax return with the box checked to receive the $1,000 initial deposit.

The process is expected to switch to an online sign up portal in mid-2026. These accounts are expected to roll out some time in 2026 with the family able to start making contributions beginning in July of that year.

These accounts can even be further supplemented by a recent $6.25 billion donation from Michael and Susan Dell of Dell Technologies Inc. This gift will help increase the number of children who qualify for these accounts.

Their donation will deposit $250 into savings accounts for up to 25 million American children. This seed funding from the Dell family will go to nearly 80% of US children aged 10 and younger who were born before 2025 and live in ZIP codes where the median income is $150,000 or less. Additional opportunities may be made available for children over the age of 10 if there is funding left over after the initial sign ups.

These accounts and additional opportunities from the Dell family’s donation can help parents and grandparents set their child up with a nest to springboard into a long-term savings plan.