Millions of babies to get $1,000 in their Trump Accounts on July 4

Key Points:

• The U.S. Department of the Treasury will launch Trump Accounts on July 4, 2025, depositing $1,000 in new accounts for approximately 1.5 million American babies born between 2025 and 2028, with accounts growing until age 18 and then converting into traditional IRAs.
• Around 5 million children under 18 who have signed up will have their Trump Accounts activated on Independence Day, though only newborns receive the $1,000 seed money; additionally, up to 25 million children aged 10 or younger in qualifying ZIP codes may get a $250 charitable gift from the Michael & Susan Dell Foundation.
• Parents and guardians can still sign up for Trump Accounts anytime before the child turns 18 via the online portal or app, with no initial contribution required but encouraged to maximize growth; the annual contribution limit from non-government sources is $5,000 per child, adjusted for inflation after 2027.
• Financial advisers suggest Trump Accounts are a useful complement to other savings plans like 529s but have limitations, such as restricted investment options and tax treatment similar to traditional IRAs, which may include taxes and penalties on withdrawals for non-qualified expenses.
• A strategic Roth IRA conversion loophole exists when the account converts at age 18, potentially allowing tax-free growth over a lifetime if conversions are timed to fall within the child's standard deduction bracket, making Trump Accounts potentially valuable for long-term tax-advantaged savings.