Trump Accounts introduce tax-deferred savings for children

The newly passed “Trump Accounts” allow families to contribute up to $5,000 annually into tax-deferred accounts for children under the age of 18. To encourage early investment, the federal government will provide a $1,000 seed contribution for children born between 2025 and 2028.

These accounts are designed to leverage the power of compound interest over several decades. For example, a family contributing $100 monthly for the first 50 months of a child's life could see that initial $5,000 grow to approximately $21,000 by age 18, and potentially reach nearly $457,000 by age 58 if left to compound without further contributions.