President Trump wants to give $1,000 to baby
All children born between 2025 and 2028 will be eligible for a Trump account with a $1,000 government deposit.
Two academic researchers want the Trump administration to automate the “Trump Account” so that every baby born between 2025 and 2028 automatically receives $1,000 in retirement savings.
About 6.6 million American children are enrolled in a new federal retirement savings program, and 1.4 million newborns will receive a $1,000 contribution from the government, the Treasury Department reported May 8.
These families joined the program ahead of its July 4 launch by filing the new IRS Form 4547 on the website trumpaccounts.gov or with their 2025 tax return.
But if enrollment were automatic, the Trump Account program could reach 73 million American children, researchers say.
“I think it’s a missed opportunity,” said Stephen Rohr, an assistant professor at the Brown School at Washington University in St. Louis. “These accounts have the potential to be transformative in how we help people in this country build wealth.”
In a May 4 op-ed in the Washington Post, co-authored with fellow WashU scholar Jin Huang, Rohr argues for automation of the Trump account.
The researchers said the Treasury Department is aware of their proposal.
“The U.S. Department of the Treasury is committed to maximizing the impact of Trump Accounts, facilitating the enrollment of all eligible children, and achieving the goal of ensuring every American child has a Trump Account,” the Treasury Department said in a statement.
What is a “Trump Account”?
The program promises to put $1,000 into a retirement savings account for every child born during the four years of Donald Trump’s second presidential term, essentially an IRA for children.
American children under the age of 18 born before 2025 are also eligible for Trump accounts, but without the seed money from the federal government.
The program is tailored to teach children about saving and investing and encourage them and their families to build assets for adulthood and retirement.
Critics have warned that the Trump account could become an expensive gift to the wealthy, employed by already well-invested parents as a way to pad their portfolios.
Past research has shown that low-income Americans are less likely to participate in retirement savings. For example, only about half of workers making between $15,000 and $30,000 a year participate in the Vanguard 401(k) program, compared to 95% of workers making more than $15,000 a year.
“Without automatic enrollment, without the ability to ensure low-income households open accounts and receive the $1,000, there is a risk that this program becomes another tax subsidy that primarily benefits wealthy households,” said Madeline Brown, senior policy associate at the Nonpartisan Urban Institute.
Why is automatic registration important?
Auto-enrollment is widely considered the ideal model for retirement savings programs. This is because potential savers are more likely to participate if they are required to make an effort to opt out.
According to AARP, 20 states have introduced automatic IRA programs as a safety net for employees who don’t have access to retirement savings. The state program provides retirement savings to these workers through automatic enrollment.
Under federal law, most new 401(k) plans starting in 2025 were required to automatically enroll employees, rather than leaving the decision up to employees.
In an editorial, WashU researchers cite Maine’s Alfond Grant program, which provides parents with a $500 grant for newborn babies. When the program switched from voluntary to automatic enrollment, participation rates increased from 40% to 100%.
“I think that’s the important message: We know how to do this,” said Huang, a social policy professor at the Brown School.
Based on CDC data, approximately 3.6 million Americans will be born in 2025. Of this group, 1.4 million people are currently registered with Trump accounts.
“So we need to understand who are the two-thirds of kids who didn’t claim $1,000,” said Brown of the Urban Institute.
Why aren’t more people claiming Trump’s account?
The Trump Account website touts the registration process as relatively easy. Submit Form 4547, a one-page document that asks for your date of birth, social security number, and other basic information. After following the instructions on the site and submitting the form, you will be contacted with instructions on how to complete your account setup.
But tax returns are rarely easy, and this one is new.
“This is new and unfamiliar, and people may just not have the knowledge to tackle it,” Rohr said. “The more paperwork you put on people, the more people you’re likely to lose in the process.”
Some new parents may not even know the Trump account exists. Anyone filing a 2025 tax return had the opportunity to file Form 4547, but millions of low-income Americans have not filed a tax return.
“The decision to tie enrollment in this program primarily to tax filings leaves behind the children who need it most,” Brown said.
Newborns aren’t the only ones who could miss out on free retirement savings.
In addition to the $1,000 federal contribution, philanthropists Michael and Susan Dell have pledged to donate $250 each to the first 25 million Trump Account applicants who are under the age of 10, born before 2025, live in a ZIP code, and have a median income of less than $150,000.
Numerous other pledges have been received from philanthropists and American businesses, potentially expanding the scope of the program.
It may sound unbelievable that anyone would give up free retirement savings. But small retirement accounts routinely slip through the cracks, getting lost or forgotten by people who change jobs.
“Our experience in the private sector with very small accounts is that a significant percentage of the population has never connected their accounts,” said J. Spencer Williams, founder and CEO of financial technology company Retirement Clearinghouse. “You end up with orphaned, orphaned accounts.”
Trump’s account won’t necessarily remain small. The program’s website estimates that even without additional donations, a $1,000 donation will grow to $6,000 by the time the newborn turns 18. By age 55, it will reach $243,000.
“We all pay for these accounts with our taxes,” said Monique Morrissey, senior economist at the Progressive Economic Policy Institute. “So even if you don’t like the idea of a Trump account, you should use it.”
