More than 6 million families have enrolled children in Trump Accounts, officially launching on July 4. These accounts, formally known as 530A accounts, are available to any U.S. child under age 18 with a Social Security number and include a one-time $1,000 federal seed contribution for children born from 2025 through 2028. Additional contributions are available from various sources, including tech CEO Michael Dell and his wife, and matching funds from companies such as SoFi and Charter Communications.
The Trump administration has promoted the accounts as wealth-building tools for American families at all income levels. The official TrumpAccounts.gov website projects that a single $1,000 investment could grow to $243,000 by age 55. However, research conducted by investment firm Morningstar for CNBC paints a more conservative picture. When accounting for factors such as return variability, family income, and investor behavior, Morningstar estimates that a 55-year-old with only a one-time $1,000 contribution could expect an average account balance of approximately $38,000.
According to Morningstar’s analysis, two key behaviors determine whether Trump Accounts function as effective long-term wealth builders. First, consistent ongoing contributions from families and employers significantly enhance outcomes. An account holder receiving $250 annually could expect $15,154 by age 18, compared to $3,324 with only the seed contribution. At the maximum $2,500 annual contribution level, accounts could reach $121,632 by age 18. Second, account holders must avoid “leakage”—early withdrawals for expenses such as education, vehicle purchases, or immediate financial needs. In some Morningstar scenarios, withdrawals at age 18 or 30 resulted in zero balances at age 55, despite consistent contributions.
The research indicates that higher-income households benefit disproportionately from Trump Accounts, as they are more likely to make substantial contributions and less likely to withdraw funds for immediate needs. Lower-income account holders face greater temptation to access funds for critical expenses, undermining long-term growth potential. A certified financial planner suggested that parents communicate projected long-term values to children at age 18, when accounts transfer to their control, emphasizing that early spending represents far greater opportunity costs than the immediate dollar amount withdrawn.
White House spokesman Kush Desai stated that regardless of leakage concerns, the accounts provide a meaningful financial head start to American youth. Morningstar’s research demonstrates that with consistent annual contributions of $1,000 and maintained account balances, a 55-year-old could expect an average balance approaching $850,000, illustrating the substantial wealth-building potential when withdrawal discipline is maintained.
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