NASHVILLE, Tenn. (WTVF) — The federal government is preparing to launch a new savings program that could provide a significant financial boost for American families.
The “Trump Accounts,” set to begin in July, will give virtually every child born during the years 2025 through 2028 a $1,000 investment to start building wealth from birth.
Click here for information on who qualifies to receive the $1,000 deposit and how it will work.
The accounts are designed to help families save for major life expenses like education, home purchases or starting a business.
"Time is one of the biggest assets you can have to let money grow and compound," said Carson Odom, a wealth advisor, CPA and CFP with Adams Wealth Partners in Nashville.
The power of compound growth over decades could transform that initial $1,000 deposit into substantial wealth.
Scripps News reports that withdrawals cannot be made from the accounts until Jan. 1 of the year the child turns 18.
At age 18, the accounts will essentially become a standard IRA, subject to withdrawal taxes.
Odom told me that leaving it as a retirement account could be a way to see the most return.
According to financial projections, even without adding any additional money, the original $1,000 could grow to approximately $500,000 by age 65.
"One $1,000 contribution turns into half a million dollars," Odom said.
The potential grows dramatically with regular contributions.
Adding $50 per month, or about $600 annually, could result in $3.4 million by retirement age.
The accounts allow contributions from various sources beyond the initial government deposit.
Family members, loved ones, parents’ employers and others can add up to $5,000 annually to accelerate the account's growth potential.
"Birthdays, Christmas gifts, even parents, employers, can make contributions in it to accelerate that future value," Odom said.
While the “Trump Accounts” offer flexibility for education, home buying or business ventures, Odom noted that 529 education savings plans may provide better tax advantages specifically for college expenses since that won’t be taxed for educational costs.
"You get a better tax advantage from a 529," Odom said.
However, leaving the “Trump Account” funds untouched for retirement could maximize long-term growth potential.
For families with children who won't qualify for the government's $1,000 deposit, philanthropists Michael and Susan Dell are contributing more than $6 billion to provide $250 deposits for children 10 and under.
Click here for more information on those accounts.
This program targets families in areas with median incomes below $150,000 annually, which essentially includes the entire Middle Tennessee area.
The "Trump Accounts" are scheduled to launch in July 2026.
This story was reported on-air by Robb Coles and has been converted to this platform with the assistance of AI. Coles verifies all reporting on all platforms for fairness and accuracy.
Do you have more information about this story? You can email me at robb.coles@newschannel5.com.
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