Social Security Program Simplifies Access to 'Trump Accounts' for Newborns
A new initiative integrates information about the 'Trump Account' with Social Security cards for newborns, aiming to streamline access for parents.
The Social Security Administration (SSA) has launched a new program, Enumeration at Birth (EAB), designed to provide new parents with easier access to a financial initiative for their children. The program now includes information about "Trump Accounts" alongside Social Security cards issued to newborns.
Parents will receive an insert with their child's Social Security card that provides instructions for claiming the child's Trump Account via an associated app. The Trump Accounts are intended for children born between January 1, 2025, and December 31, 2028, with eligible children receiving a one-time $1,000 contribution from the U.S. Department of the Treasury.
"Social Security is providing families with the tools to get started right away on this generational opportunity to build a strong financial foundation for their children’s future," said Commissioner Frank J. Bisignano in a press release. "By including this information with Social Security cards issued through the Enumeration at Birth process, we are giving parents the tools to activate their child’s Trump Account and take full advantage of this wealth-building opportunity."
The process for parents to set up an account involves three steps: downloading the Trump Accounts app and signing up via TrumpAccounts.gov; awaiting communication from the Department of the Treasury for account activation and confirmation of the $1,000 contribution for eligible children; and subsequently managing the account, with the option to make additional contributions within specified limits.
Trump Accounts are described as tax-advantaged investment accounts for children. Parents, guardians, or other authorized individuals can serve as custodians for these accounts. The administration reports that 70 million Trump Accounts are available, with 26 million already having received contributions. The accounts are structured to convert into retirement accounts when the child reaches 18 years of age.
These accounts are invested in low-cost exchange-traded funds (ETFs), including the State Street SPDR Portfolio S&P 500 ETF. Other selected ETFs include the iShares Core S&P 500 ETF (IVV), Vanguard Total Stock Market ETF (VTI), State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and iShares Core S&P total U.S. Stock Market ETF (ITOT).
Annual contributions from parents, family, and friends are capped at $5,000 after-tax. Employers also have the option to contribute up to $2,500 for an employee’s child or a dependent. Withdrawals are restricted until age 18, at which point they are subject to income tax.