If you’re a parent — or considering becoming one — you likely understand that it’s a pricey prospect.
Consider: The annual cost of raising a child is an estimated $23,821 — nearly $430,000 over 18 years — according to a 2024 SmartAsset study.
Saving and investing for these children is a good thing, and something many parents are already doing through existing options such as 529 college savings plans.
They now have another option in the form of the newly created so-called Trump Accounts.
Part of President Donald Trump’s “One Big Beautiful Bill Act,” the accounts are designed to promote saving for a child’s future. The program permits total annual contributions of up to $5,000 per child. What’s drawing the most attention, however, is a $1,000 taxpayer-funded deposit for every child born in 2025 through 2028 if parents open an account.
For now, the $1,000 deposit is a pilot that will expire at the end of 2028, but the reality is it will likely live on, as is the nature of such things.
Dubbed a “pro-family initiative,” the program received an additional shot in the arm thanks to a $6.25 billion private donation from computer mogul Michael Dell and his wife, Susan Dell. Their gift funds a $250 match for children 10 and under in ZIP codes with median family incomes less than $150,000, which essentially covers most parts of the country.
Trump said these accounts will “help millions of Americans harness the strength of our economy to lift up the next generation. And they’ll really be getting a big jump on life.”
On that score, he may be right if the program is administered well and Washington, D.C., puts in guardrails to keep Wall Street from leading recipients in directions they shouldn’t go.
The concept’s virtues include giving kids of all backgrounds a head start and teaching them the value of saving and investing.
Even if a family is only able to make modest contributions on top of that $1,000, by the time their child is 18 they would have access to a healthy nest egg to put toward buying a home, investing in their education or launching a business. And when people can get their financial lives started more easily, it’s possible they’ll be encouraged to have more children — a clear aim.
These accounts clearly are designed as a capitalist alternative to progressives’ universal basic income, a concept that’s gained popularity among our youth, many of whom enthusiastically voted in larger-than-usual numbers to elect Democratic Socialist Zohran Mamdani mayor of New York. Fair enough, as far as it goes. There’s a potential benefit to a firsthand education on the wonders of compound returns.
Where we bristle is that while Trump, Vice President JD Vance and their allies have been on a crusade to bolster the country’s declining birth rate, Trump Accounts will do nothing to address the real affordability crisis plaguing American families.
Simply stated, this policy alone won’t inspire families to have more babies. One of the biggest impediments to starting or adding to families is the costs when children are youngest.
Child care alone is an incredibly steep hurdle. A $1,000 “thank you” from the government for procreating, accessible 18 years down the line, doesn’t put food on the table now or purchase clothes for ever-growing kids or ensure they’re well cared for while mom and dad have to work.
It’s also worth noting that the $1,000 Trump Account deposit is a universal benefit: any U.S.-citizen child born between 2025 and 2028 qualifies if a parent opens an account, regardless of family income.
