Treasury Secretary Scott Bessent said the child savings accounts known as Trump Accounts will complement Social Security, improving retirement security for the youngest Americans.
“Depending on which age a beneficiary decides to take Social Security — 62, 65, 70 — on the other side of the ledger, if they have maintained their Trump accounts into retirement age, then they will also have a substantial nest egg that they can grow upon for their retirement needs,” Bessent said at an event on Monday, highlighting the Trump Accounts in Harrisburg, Pa.
As of Oct. 1, the Treasury Department shifted the accounts from a voluntary index-fund investment to automatic enrollment to ensure broader access to the child savings accounts.
Read more: How to open a Trump Account for your child: A step-by-step guide
Nearly 70 million children under 18 with a valid Social Security number now have Trump accounts established in their names. That’s up from 7 million signups last week. It’s now up to parents and guardians to claim their child’s account.
Parents can claim an account — and the $1,000 seed contribution for eligible children — by downloading the official Trump Accounts app, verifying their identity and relationship to the child, reviewing the child’s information, and accepting the account terms. Any child born during President Trump’s second term is eligible for the $1,000 seed money, though that payment won’t happen in auto-enrolled accounts until parents or guardians claim them.
Parents can contribute up to $5,000 a year. Employers can also contribute and let workers fund accounts.
Any child under 18 can also qualify for philanthropic contributions that will automatically appear in their account.
Bessent estimates that children in kindergarten who start with a couple of thousand dollars will see that money grow to $500,000 by the age of retirement.
“This is how we build an ownership economy in which all citizens are shareholders,” said Bessent.
Bessent also noted that roughly 350,000 foster children nationwide may be eligible for Trump Accounts, and the federal government will engage at “any level necessary, whether it’s the state, the county, or the municipality” to ensure these children are included. First Lady Melania Trump was the first to push this cause this summer.
With the shift in rules that went into effect last week, wealthy individuals can also now fund Trump accounts for others using individual stocks through their controlled charities. These programs can target specific groups of at least 5,000 children, categorized by age, geographic location, or both.
Gwynne Shotwell, president of SpaceX, this summer pledged more than 2 million shares to children between the ages of 11 and 17 who live in lower-income areas.
Government officials have indicated that more wealthy individuals are prepared to transfer multibillion-dollar equity portfolios under the revised guidelines. Once those transfers are finalized, equity shares will begin transferring directly into individual children’s funds.
Trump Accounts automatically transition into individual retirement accounts (IRAs) when children turn 18.
Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance, she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram.
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