By Justine Wang
ANALYSIS — President Donald Trump has repeatedly said that so-called Trump accounts, new federal investment and savings accounts for children, “could grow to hundreds of thousands of dollars” by the time children turn 18. That’s only true if parents or other donors contribute thousands of dollars per year, per child, assuming that future returns are close to the historic stock market averages.
While touting the program, Trump has also repeatedly suggested that children from homes with “essentially no money” could become “very rich” with the Trump accounts. But financial experts say it’s unlikely that parents in low-income households would be able to afford to contribute enough for their children’s accounts to reach hundreds of thousands of dollars by the time they reach adulthood. “Think of it, children that are born without money, without any money. Great parents, they can have — everything can be great, but they have no money. They can become very wealthy children at 18,” Trump said on July 6.
Parents, relatives, friends, employers, state governments, philanthropic organizations and individuals can contribute to these accounts until a child turns 18, up to a total $5,000 annual combined limit per account.
