What $1,000 at Birth Could Grow Into with Trump Accounts

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The future just got more interesting for newborn Americans. On July 3, 2025, the U.S. government passed the One Big Beautiful Bill, making the $1,000 “Trump Account” official. Every child born between 2025 and 2028 will receive a government-seeded investment account — and if you play it right, that single deposit could grow into something meaningful.

Let’s break down what it means and how this ties to real money habits.

🏛️ What Passed: The Basics

• $1,000 per child born January 1st 2025, to December 31st 2028, seeded by the U.S. Treasury. No income restrictions to receive the amount.

  • The qualifying child born from 2025 to 2028, is a U.S. citizen, has a social security number (SSN), and at least one parent also has an SSN (Schubel, 2025).

• Money is placed in a tax-deferred investment account tied to the U.S. stock market (e.g., index fund)

• Parents, relatives, nonprofits, and employers can contribute up to:

  • $5,000 per year per child, until the child's 17th birthday in the calendar year.

  • Employers can contribute up to $2,500/year tax-free.

• Contributions begin in 2026, accounts grow tax-deferred, and fees are capped at 0.1% annually.

  
  

💰 How the Numbers Work

Let’s say no one adds a single penny beyond the $1,000 invested in a U.S. stock index fund at a 10% annual return, like the S&P 500 index. Since 1957, the annual average return of the S&P 500 index has been just over 10%, not adjusted for inflation (Maverick, 2025). Data accurate as of May 2025 when "S&P 500 Average Returns and Historical Performance" was published.

Assuming that the U.S. stock market keeps growing by that average, by age 30, the 'Trump Account' for a child born in 2025 could grow to ~$17,450 — untouched. Calculated using the Nerdwallet 'Investment Return Calculator' found here https://www.nerdwallet.com/calculator/investment-calculator .

Potential growth of a $1,000 seed government amount for a U.S. child born in 2025, and left in the account till 2055 (30 years), with a 10% annual average growth. Source image from NerdWallet, and data as of 13th Jul. 2025.

By the age of 65, that account could grow to over $490,000 by your child's retirement age (Sizemore, 2025). All without a single further penny. An investment multiplied over the decades can be a powerful wealth builder. This is without the effects of inflation, but money is money.

💡 LSH Habit Insight

What this teaches us isn’t just about policy. It’s about powerful money habits.

💡 “Time beats timing. Consistency trumps intensity.”

Whether you’re receiving $1,000 from the government or building your own investing strategy, starting early + contributing regularly is a long-term wealth builder. The habits of consistency, the habit of long-term investing, and the habit of opportunity are all in play.

✅ Withdrawal Rules for the Trump Account

The money cannot be withdrawn before 18. From then:

• Age 18: You can access and withdraw up to 50% for qualified expenses, e.g., education, first-time home, or small business loan (Schubel, 2025).

• Age 25: Full balance available for qualified use, and taxed at long-term capital gains

• Age 30: Withdrawals allowed for any purpose, taxed as long-term capital gains.

  
  

📌 Summary Table

Feature	Details
Seed contribution	$1,000 at birth (2025–2028)
Who can add	Parents/relatives/employers ($5K/year), employers ($2.5K tax-free)
Contribution period	Until the calendar year the child turns 17
Investment vehicle	U.S. stock index fund (0.1% fee cap)
Tax treatment	Tax-deferred growth; gains taxed at long-term capital gains
Withdrawal ages	18+ for qualified expenses (50%), 25+ for qualified expenses (100%), 30+ unrestricted purpose (100%)

🛠️ Start a Legacy Habit (Even If You’re Not Eligible)

• Trigger: Every payday

• Action: Move $25 to your long-term index fund

• Why: To normalize wealth building and compounding

Whether or not your child qualifies, the principle is the same:

Money grows best in quiet accounts, fed regularly and left alone.

🔔 Final Thought

As Charles Lewis Sizemore mentioned, "Only a fool turns down free money" (Sizemore, 2025). At the least, it seems that the Trump Account could lead to millions of U.S. newborns from 2025 to 2028 to have sizeable amounts available later in life.

Build early, build often. Whether with $1,000 or $100 per month invested, habits turn seeds into forests.

To your success.