Parents wish the best for their kids, and saving for their future is just one way to set them up for success. But BlackRock CEO Larry Fink warns that for most adults, let alone parents, they’ll be lucky if they have half as much as what their kids may amass if President Donald Trump’s new 401k accounts come to fruition.
During Trump’s record-breaking, nearly two-hour-long State of the Union address, the president touted all sorts of economic statistics and pointed to areas of economic prosperity, all while increased government spending is causing the country to hemorrhage deeper into the largest national debt in history.
For a president whose signature bill calls for cutting government spending to increase tax breaks, the Trump administration is now offering a $1,000 in seed funding to any U.S. citizen born between Jan. 1, 2025 and Dec. 31, 2028 who opens a government-backed 401k account, dubbed “Trump Accounts.”
The accounts, expected to go live on July 5 of this year, will allow parents and guardians to set up and contribute up to $5,000 a year for each eligible child. To qualify, children must be under the age of 18, be U.S. citizens, and have a Social Security number.
Although the accounts can be used for anything from starting a business to making a down payment on a house or even saved for retirement, experts warn against treating these accounts like how typical 401Ks or Thrift Savings Plan (TSP) accounts work.
