Weekly Column: Helping Idaho's Next Generation Build Wealth

Actively teaching young people how to manage money from an early age is much like the power of compound interest—the knowledge builds upon itself. Young people armed with this education can build strong financial foundations and avoid crippling mistakes. They can be active participants in building their own financial success as they contribute to the economic growth of Idaho and the nation. In just over a week, on July 4, families can start contributing to Trump Accounts, established as part of the Working Families Tax Cuts.

The idea behind Trump Accounts was simple: give every American child a head start by creating long-term savings accounts that allow for private ownership, multiple funding pathways and direct investment spanning the economy. These tax-advantaged savings accounts will not only help the next generation build wealth beginning at birth, but provide early exposure to financial markets and money management, creating a culture of savings.

Who is eligible for a Trump Account? All Americans under age 18 with a valid Social Security number. U.S. children born between 2025 and 2028 are also eligible for a $1,000 government contribution to their account. This one-time contribution gives young Americans an ownership stake in the U.S. economy and promotes financial literacy. Taxpayers have already registered about 6 million children, with 1.4 million eligible for the $1,000 pilot program contribution. While the $1,000 seed money is exclusive to newborns, anyone below the age of 18 is eligible for a tax-advantaged Trump Account. The Administration also recently announced plans to help foster youth participate in Trump Accounts, with Idaho pledging to adopt policies that will allow all its youth the same access and opportunity.

How do Trump Accounts work? The account operates as a traditional individual retirement arrangement (IRA) with some special rules. Parents or guardians elect to create the accounts for their children when they file their taxes or on the Trump Accounts website. Eligible accounts receive an initial contribution from the U.S. Department of the Treasury, plus any applicable philanthropic donations. The $1,000 government contribution and contributions from state, local or tribal governments and 501(c)(3) organizations do not count against the $5,000 annual limit on contributions from families, friends and employers. The money will be invested in low-cost index funds that typically grow year after year. When the child turns 18, they can continue saving for retirement or make withdrawals from the account under traditional IRA rules.

The potential long-term growth of these accounts is significant. According to projections from the Treasury Department, if the maximum contribution is made each year through age 17, the account could grow to between $191,500 and $676,400, depending on investment performance. The account could grow to potentially $1.9 million by the age of 28 if fully funded and left untouched. Assuming lower projected returns, the account could still yield nearly $600,000 over the same period. If no contributions are made beyond the initial $1,000 from the federal government, the account could grow to between $3,000 and $13,800 over 18 years.

The Administration recently launched the Trump Accounts app to deliver a simple way for families to access the accounts and begin engaging with the program. More information can be found on the official website at trumpaccounts.gov.

Trump Accounts represent Republicans’ commitment to ensuring all Americans are enriched by our economy. Watching their accounts grow will teach children important financial lessons and empower them to pursue new opportunities as young adults. Through these initial $1,000 contributions, we are making a significant investment in the next generation. Empowering young Idahoans with sensible personal finance opportunities will set them up for a bright future.

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