60 Million US Children Get Trump Accounts: What Parents Must Do to Claim the Money

More than 60 million US children have been automatically enrolled in Trump Accounts, but parents and authorised adults must take action before they can manage the accounts or allow others to contribute.

The Treasury Department says parents must verify their identity, confirm their relationship to the child, review the child's information, and accept the account terms through the official Trump Accounts app.

However, not every automatically enrolled child qualifies for the federal $1,000 seed contribution. The payment is available only to eligible US citizens born between 1 January 2025 and 31 December 2028, and the account must be claimed to receive it.

Parents Must Claim Automatically Enrolled Accounts

The Treasury announced automatic enrolment on 1 October, several months after Trump Accounts launched on 4 July. Before the change, families had to open accounts themselves. Fewer than eight million accounts had been opened by the summer.

Parents or guardians of automatically enrolled children must claim the account before they can manage it or allow family members, friends, and employers to contribute. The official Trump Accounts app is available for iOS and Android. Parents must verify their identity and relationship to the child, review the child's details, and follow the instructions to claim the account.

The Treasury expects automatic enrolment to create an additional two million accounts per birth-year cohort in future years. Madeline Brown, a senior policy associate at the Urban Institute, said the change could help prevent children from missing out on contributions or investment earnings because nobody had previously opened an account for them.

Who Qualifies for the $1,000

Trump Accounts are tax-advantaged investment accounts for eligible children under 18. The account belongs to the child, while an authorised adult can act as custodian. A child must have a valid Social Security number to qualify for an account. The $1,000 pilot contribution has separate requirements and is available to qualifying US citizens born between 1 January 2025 and 31 December 2028.

Children outside that birth-date range can still have Trump Accounts if they meet the programme's other eligibility requirements, but they do not qualify for the federal seed contribution. Therefore, the 60 million-plus figure for automatically enrolled children should not be interpreted as 60 million children receiving $1,000 from the government.

How Much Families Can Contribute

Parents, grandparents, friends, and other individuals can contribute after-tax money. Individual contributions are not tax-deductible. Employers can contribute pre-tax money to an employee's child's account, subject to a $2,500 annual limit per employee.

Family, friends, and employer contributions are generally subject to a combined annual limit of $5,000 per account. Government and nonprofit contributions do not count towards that limit. The Michael and Susan Dell Foundation has also pledged billions of dollars to support qualifying children through its programme.

How the Money Is Invested

Contributions are invested in low-cost, broadly diversified US stock index funds or exchange-traded funds. The default investment is the State Street SPDR Portfolio S&P 500 ETF, which tracks the S&P 500. Treasury says its expense ratio is 0.02%. Treasury has designated BNY as a financial agent to support the programme and serve as trustee for automatically enrolled accounts.

What Happens When the Child Turns 18

The amount available at 18 will depend on contributions and investment performance. Trump Accounts have special rules during a child's first 18 years and generally follow traditional IRA rules afterwards. Withdrawals before age 59 and a half can be subject to income tax and a 10% early withdrawal tax, although exceptions apply.

The penalty can be avoided for certain qualified expenses, including higher education, a first-time home purchase of up to $10,000, qualifying birth or adoption costs, emergency expenses of up to $1,000 a year and some medical expenses.

What Parents Should Do Now

Parents whose children have been automatically enrolled should claim the account and check that the child's information is correct. They should also review the contribution and investment rules before adding their own money. A 529 plan may offer advantages when education is the main objective, while a Roth IRA can have different benefits for retirement savings.

There are also questions about how Trump Account assets could affect eligibility for some federal benefits when a child becomes an adult. For parents, the key distinction is that more than 60 million children may now have Trump Accounts, but the $1,000 federal seed contribution is limited to qualifying US citizens born between 1 January 2025 and 31 December 2028.