In short, qualifying parents can scoop up $1K for their kids
The list of items bearing the prefix “Trump” now includes a type of savings account. “Trump Accounts” were originally included in the One Big Beautiful Bill Act, as a tool to help parents save for kids’ college, home purchases, and retirement. On Giving Tuesday, the initiative was boosted by a $6.25 billion donation from Michael and Susan Dell.
In short, qualifying parents can scoop up $1K for their kids (or, if they don’t qualify, but live in a zip code with a median income below $150K, such as Lakewood), $250 for kids under 11 from the Dells, and lock it all in a savings account until the child turns 18. They can add up to $5,000 per year of post-tax money — $2,500 of which can be tax-free gifts from their employer. (Nvidia, Uber, Dell, and T-Mobile have already said they will match employee contributions.)
The money will be invested in mutual funds and stable stocks, expected to grow at 6% annually. (Earnings will be taxed upon withdrawal by the beneficiary at their tax rate.) The account then converts to an IRA, saving pre-tax money until retirement at age 59½.
The upshot? According to Charles Schwab, with contributions and reasonable investment growth, the accounts will be worth $191,000 by the time the child turns 18, and $2.2 million when he is ready to retire at 60.
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