The United States economy rewards those who save and invest early, leaving millions of Americans sprinting to catch up to a system that builds wealth over time. That disconnect has fueled a growing recognition that income alone does not create opportunity; ownership does.
The Trump administration’s Big Beautiful Bill, passed on July 4, 2025, includes an initiative aimed at narrowing the gap between those who invest early and those who start later. Invest America Accounts—also referred to as “Trump Accounts”—give every child a stake in the market from birth, establishing a foundation for long-term wealth building.
For children born between January 1, 2025, and December 31, 2028, federal seed money withdrawn from the treasury will be deposited into their accounts. Federal seed money is eligible for deposit beginning on July 4, 2026. The system is intentionally simple. Trump Accounts are universal, investment accounts available to every U.S. newborn and children under the age of 18 during Trump’s second term in office.
According to a recent report from IRS.gov, this pilot program will contribute an initial $1,000 deposit to children who are U.S. citizens, with a valid Social Security number, born between Jan. 1, 2025, and Dec. 31, 2028.
The funds are invested in a broad-based U.S. equity index fund, diversified across hundreds of American companies and professionally managed to grow over time. Families and philanthropists can also contribute, allowing accounts to compound as children mature.
For many parents, there is still confusion about precisely what a Trump Account actually is. “People hear “account for your child” and assume it’s like a 529 or a custodial brokerage account. It isn’t. A child doesn’t automatically own stocks at birth. What’s created is an account in the child’s name, but only initially funded with cash—and that’s held by Treasury Dept’s designated financial agent,” said Pam Krueger, founder and CEO of Wealthramp. The money is generally locked until age 18, after the child’s 18th birthday the account is tax-free when used towards education, starting a business or making a down payment for first time homebuyers. Think: 401(k) for babies, where the investment menu is limited to very broad index funds,” said Kreuger. The initiative gives children a tangible stake in their financial future while providing a foundation for long-term goals.Â
Those access rules are another source of uncertainty for families unfamiliar with investing. Krueger highlighted these potential worries, “Parents might also be confused or worry about who’s controlling it—who manages the account while the child is young? Will the child be able to spend the money as soon as they turn 18 to buy a car? How do fees, taxes, work—and what happens when the stock market goes down. This can be confusing to families who have never had money in the stock market.”Â
Growth in assets over time can come from many different contributors, from family members to private charities. Parents, employers and other individuals can contribute up to $5,000 per year, for each child. Additional investments can be made by philanthropists, charitable organizations, and state or local governments without a cap, and excluded from the $5,000 yearly cut off. The United States Treasury Department has begun rolling out the accounts, but contributions cannot be made to accounts until July 4, 2026.
Projected Financial Impact
The Milken Institute published a report in March of 2025, analyzing The Economic Impact of Invest America Accounts. The report’s findings are inspiring, noting that based on Monte Carlo simulations, these initial $1,000 investment is projected to grow on average to $8,000 in the first 20 years, reaching about $69,000 after 40 years, and about $574,000 after 60 years.
“If you get children who are invested in American companies, invested in the American dream, you’re more likely to have more positive outcomes,” said Michael Piwowar, executive vice president of Milken Institute Finance, and co-author of the report.
Understanding Wealth Inequality
The report from the Milken Institute highlights particular statistics that offer insight into unequal distribution of wealth in America. Particularly, the report looks at gains from free enterprise in the United States, providing key figures to show increased inequalities among both incomes and wealth overall. “The Census Bureau reports that in 2022 dollars, the real median household income of the top 10% increased from $155,000 in 1993 to $217,000 in 2022, a gain of $61,800 or 40%,” cites the Milken Institute’s The Economic Impact of Invest America Accounts.
“One of the striking charts that our chairman, Mike Milken puts up when he talks about wealth building is that if you compare developed countries, the United States has the largest average net worth,” said Michael Piwowar. He went on to explain that when that number is averaged among everyone, the U.S. has the largest net worth among all developing countries. Piwowar clarifies that in fact, “The problem is that number is skewed by high net worth rules. So, the average is taken up from that if you look at the median net worth, so the 50th percentile, so half the people above and half the people below were the lowest or one of the lowest in the world.” With that understanding, we are able to see that wealth building in the U.S. is not adequately inclusive to all citizens.
Building a Foundation for Every Child
At its core, Invest America Accounts are designed to give every child a financial starting point, regardless of family income or background. Even a modest initial contribution can create a meaningful foundation over time, especially when paired with the opportunity for additional support from families and private philanthropy. Recent commitments from major donors signal how these accounts could be expanded to reach households that have historically had little or no access to long-term savings. Because the funds are locked in during childhood, they are able to grow uninterrupted, giving account holders the option to let their investments compound well into adulthood. When the time comes, those assets could be used strategically, whether for education, a first home, launching a business, or left untouched to support retirement. “Having an account in a child’s name can make ownership, compounding, and long-term thinking feel real instead of intimidating. It shifts the mindset from ‘just getting by’ to planning ahead,” said Krueger. The broader goal is to create a system in which wealth-building is no longer limited to those who already have resources, but becomes a realistic possibility for everyone from the very beginning.Â
Potential Benefits for Lower Income Families
The Economic Impact of Invest America Accounts evaluates the likely economic impact of Invest America Accounts and outlines potential benefits for households across income levels. In the report, the Milken Institute “examines the economic literature on universal savings programs to assess the likely impact of wealth creation under the Invest America proposal based on our simulations.” The report’s comprehensive literature review finds that the accounts could offer the greatest benefits to children from low- to middle-income families. Having access to funds via these accounts, that can be used towards education, could potentially allow lower income families to afford college education, while otherwise not being able to afford to do so. The Economic Impact of Invest America Accounts states that “Extensive evidence shows that Americans with bachelor’s degrees earn much more than high school graduates,” this research is cited in The Economic Impact of Invest America Accounts from The National Center for Educational Statistics.
Beyond education, The Economic Impact of Invest America Accounts also states that Invest America accounts can be used for the purpose of making a down payment for first-time homebuyers. This is especially impactful as the Milken Institute’s report shares that “studies have also found that home equity is the major asset of most American households. According to the data from the Federal Reserve cited in The Economic Impact of Invest America Accounts, “34% of U.S. householders do not own their homes, including 58% of those in the bottom 20% by income, 51% in the next income quintile, and 31% in the middle-income quintile.” Investing early could help young people overcome what the report identifies as the biggest barrier to home ownership: insufficient funds for a down payment.
Ownership Shapes Behavior
While the projected growth of Trump Accounts illustrates the long-term financial potential of the Invest America Initiative, a separate and more complex question concerns how early ownership may influence financial behavior well before those funds are ever accessed. Providing children with an investment account represents more than a fiscal policy choice; it introduces an early point of interaction with financial systems that can shape how children and their families understand money over time. Early participation in the U.S. economy may affect attitudes toward saving, planning, and risk, as well as perceptions of personal stake and responsibility. Whether and how these effects persist depends on how ownership is understood, reinforced, and supported throughout childhood, rather than an account balance alone.
However, those outcomes are not automatic. The impact of early asset ownership depends on how children and families understand what those assets represent, and whether that understanding is reinforced through education and real-world context. Annamaria Lusardi, Senior Fellow at the Stanford Institute for Economic Policy Research (SIEPR), and the Director of the Initiative for Financial Decision-Making said, “It is about socialization with money, being comfortable with the topic, so it becomes a normal part of life.” Normalizing ownership and financial transparency with children is a crucial part of the implementation of this initiative. It can shape people’s behavior in their future. “And by the way, children are very interested in money, and they have the right intuition about what money does. Ask a child what the purpose of money is and he/she will tell it is to achieve dreams,” Lusardi added. Lusardi reinforces that ownership alone is no magic, the combination of stake in the U.S. economy, coupled with educational tools and open communication about investing and growth of funds is what ultimately will make this initiative successful.
Lusardi’s research has shown that knowledge does in fact directly influence behavior. As a result of her research she says, “I am a big fan of improving knowledge, in particular among the young and having it in the school, starting with elementary education (as my native Italy recently mandated). Financial education is effective even when it is not paired with asset ownership, but the reverse is not true, give a child an asset without financial education and it may not lead to a good use.”
Implementing The Right Tools
As part of the bipartisan initiative that will provide these universal investment accounts, educational tools are one of the most integral aspects that will directly contribute to its effectiveness. Lusardi reiterates the importance of financial education for programs such as the Invest America program. “We have learned this lesson with adults too. In the past, there was a big emphasis on financial inclusion, which was focused on giving people access to financial instruments with no attention to whether people understood these financial instruments. It backfired. If it did not work for adults, it will work even less with children. Financial education is much needed, and young people are eager to learn! Believe the words of a long-term teacher,” she said.
The accounts will be available for contributions on July 4, 2026, until then providing access to financial literacy tools, and other opportunities to educate folks on these types of funds can happen in a number of ways. Piwowar explained the number of financial literacy tools that are available for free online. Upon opening an account, the provider will have the ability to also contribute to the educational proponent. “It can be provided with whatever financial firm is allocated that account, you know, whether it’s fidelity or State Street or pick, pick your favorite mutual fund provider, ETF provider on that it can be provided by the government,” said Piwowar. He added that perhaps even the Treasury will offer free educational information for families through some sort of financial literacy group of government officials. “There’s a number of financial literacy programs that are already out there now. They’re actually quite good,” Piwowar added.
This need for understanding and free access to educational tools will be the first step to ensuring the success of this initiative. “Without context, the account can become an asset that no one pays attention to—or worse, a source of confusion or even distrust when the market inevitably has a bad year. This is a benefit, and needs to be explained,” said Krueger.Â
According to Michael Piwowar, the Treasury Department is currently working on next steps to implementing the accounts. The barrier that the department must keep in mind, is the large number of families that may not be aware that the accounts are even offered. He stated that one of the biggest aspects of the initiative will be maximizing the speech around the initiative, ensuring that no one is left behind. “It’s just a matter of getting people to have the skin in the game, and for people to have a reason to actually pay attention to what’s going on there,” said Piwowar.
Family and Generational Effects
The Economic Impact of Invest America Accounts, highlights that the effects of these accounts extend beyond the individual child. As children grow, their families may also experience the ripple effect. For instance, an increased savings for siblings and a greater overall engagement with long-term financial planning.
Some critics have cautioned that without additional safeguards, programs like Invest America Accounts could disproportionately benefit children from higher-income families, who are more likely to receive supplemental contributions and financial guidance. Others argue that while universal accounts may narrow participation gaps, they are unlikely on their own to significantly reduce longstanding racial and income-based wealth disparities. “The risk is just misunderstanding what it’s designed to provide. These are stock market-based accounts, and if a parent does not understand volatility, taxes, or access rules, the whole experience can backfire,” said Krueger. Proponents counter that the accounts are intended as a starting point rather than a standalone solution. Â
Taken together, Invest America Accounts are designed to provide children with an early financial asset and, in some cases, accompanying education around saving and investing. Supporters argue that pairing account ownership with guidance could affect how families approach long-term financial planning and investment decisions, while critics note that outcomes will depend heavily on participation rates, financial literacy, and how the accounts are ultimately used. As the proposal moves forward, the initiative offers a test case for whether early asset ownership can influence financial behavior and expectations over time, beyond the account balances themselves.
