When you see a parent today, tell them about this exciting news: They now have a new tool to prepare their children for financial success. Last year’s tax cuts law provides a free $1,000 investment account to all Americans born from 2025 through 2028. And for every child in Mississippi born from 2014 through 2024, there will be a $250 contribution.
As parents know, raising a child is hands-on work. But these accounts require only an initial setup. Parents plant the seeds, and they watch the investment accumulate. These accounts will grow along with the children, who can access the funds on their 18th birthday—giving these new adults a financial headstart to begin their education, buy a home, or start a business.
Opportunity for all American children
Congress created these accounts, dubbed “Trump Accounts,” in the 2025 Working Families Tax Cuts law. They are based on a simple premise: All children need to learn the fundamentals of money management, and they can save for adulthood at the same time.
All children are eligible, though only the age groups I listed above will receive the $1,000 and $250 starter funds. Parents can open an account for their child at any time. To start the process, they can complete IRS Form 4547 when filing their 2025 taxes, or they can complete a form after tax season at trumpaccounts.gov.
Over the years, children, parents, grandparents, or family friends can add to these funds. Businesses can even contribute, whether to the children of their employees or to their under-18 staff. Those investments would be made through a pre-tax paycheck deduction. And this program will be indexed to inflation, meaning it will develop along with the economy. Today, the annual contribution limit is $5,000. Beginning in 2028, that limit will match the inflation rate.
Give children stake in capitalism
In an era where many young people are exposed to negative ideas about capitalism, these accounts can demonstrate its enduring worth. The investments will be placed in low-cost index funds with minimum risk and long-term growth potential. Parents and children will be able to log into the Trump Accounts online and track the progress of their fund. And when they do so, they will see real monetary value.
The one-time, $1,000 investment could become $6,000 by the time a child turns 18. If parents supplement that initial $1,000 with $10 every month, the figure could result in as much as $11,000. The current $5,000 max contribution may be out of reach for some families, but it could yield a $271,000 balance by the time children become adults. Of course, those amounts would continue increasing past the 18th birthday if account holders do not withdraw funds.
Invest in rising generation
The $1,000 seed money comes from the federal government, but the $250 allotments come from a generous private donation. Michael and Susan Dell chose to make $250 available to families in zip codes with a median income of less than $150,000. They did so based on a desire to give back, and because of their own personal experience.
When Mr. Dell was eight years old, he had $8 in a savings account, and he got to watch it grow over time. I hope children today will be able to learn the same lessons about savings and patience. And when those children begin transitioning to adulthood, they will get a boost, helping them liftoff into an exciting new chapter of their lives.
The views expressed by contributors are their own and not the views of SuperTalk Mississippi Media.