US Treasury automatically enrolled over 60 million children in Trump Accounts — Fortune
The US Treasury Department automatically enrolled more than 60 million children in the tax-advantaged Trump Accounts investment program. Together with accounts opened independently by families, their number reached nearly 70 million, Fortune reports.
US President Donald Trump said on October 7 that all eligible minors had been automatically added to the program. At the same time, parents or legal guardians must set up an account through the official Trump Accounts app to manage it, accept contributions from relatives and friends, and receive the government-provided initial contribution.
Who is eligible for the initial contribution
All children under 18 with a valid Social Security number have an account. However, the one-time government contribution of $1,000 is intended only for children who are US citizens and were born between January 1, 2025, and December 31, 2028. The account must also be set up for these funds to be credited.
Before the switch to automatic enrollment, the Treasury processed about 5.6 million applications — less than one-tenth of the estimated 73.4 million children eligible for the program. The publication also notes that some families that applied earlier were still waiting for the promised $1,000.
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Contributions and investments
Since the program launched on July 4, more than $4.5 billion has been deposited into the accounts, the White House said. Of this, $1.3 billion consisted of government initial contributions, more than $600 million came from families and friends, and $2.6 billion came from charitable donations. On average, this amounts to about $64 per each of the nearly 70 million accounts.
Relatives and friends can jointly transfer up to $5,000 per year, while employers can contribute up to $2,500 annually. The government initial contribution, as well as separate transfers from state and local authorities and nonprofit organizations, do not count toward this limit.
Most funds are invested in low-cost index funds. In July, the US Treasury also said it would accept large charitable donations in the form of publicly traded shares. Such contributions must be distributed among at least 5,000 accounts in a designated geographic area, and the shares cannot be sold for at least five years.
After the account holder turns 18, the account effectively becomes a traditional individual retirement account, or IRA. Withdrawals are taxed as ordinary income, and early withdrawals may incur penalties, except when the money is used for permitted purposes, including education or a first home.
