Social Security Chief Says Trump Accounts Could Change Retirement for Millions

Your child or grandchild could start building retirement savings before they even learn to walk. It might sound a little early to be thinking about a retirement plan, but that's the idea behind Trump Accounts, a new program designed to give young Americans a financial head start.

Social Security Commissioner Frank Bisignano has been encouraging families to take a closer look at these accounts, pointing to their potential to help future retirees. But there's an important detail parents should know before getting started, especially if they want to make the most of what's being offered.

Why Social Security is helping families with Trump Accounts

The Social Security Administration is now including information about Trump Accounts with Social Security cards mailed to newborns, helping parents learn how to claim an account for their child.

In an October 20 announcement, Commissioner Frank Bisignano said the agency was "giving parents the tools to activate their child's Trump Account" and take advantage of the program.

The information explains how families can claim an account and access any government contribution their child qualifies for.

What Trump Accounts could mean for future Social Security recipients

In an October 7 interview with Yahoo Finance, Bisignano described Trump Accounts as a complement to Social Security, giving young Americans another opportunity to build retirement savings through early investing.

Over time, the money families contribute could grow into an extra source of income for their children when they reach retirement age. And that additional savings could be especially helpful given Social Security's financial challenges.

The program's retirement trust fund is projected to run out of reserves in 2032, after which incoming taxes would cover about 78% of scheduled benefits unless Congress acts.

Trump Accounts won't fix Social Security's funding problems, but they could help future retirees build savings of their own to supplement their monthly benefits.

How to claim the $1,000 Trump Account contribution

Starting October 1, 2026, the Treasury began automatically opening Trump Accounts for eligible children. Within the first week, the White House reported that nearly 70 million accounts had been created, including more than 60 million opened automatically.

If your child or grandchild is a U.S. citizen born between 2025 and 2028 and has a valid Social Security number, they may qualify for a $1,000 government contribution.

However, parents or guardians still need to claim and activate the account, and they must submit IRS Form 4547 to request the $1,000 contribution.

You can claim the account through the Trump Accounts website or app. Form 4547 can be submitted there or through your IRS Individual Online Account. Once you've claimed the contribution, the money can begin growing through investments.

Parents and employers can help build a child's savings

Families can give their child's Trump Account an extra boost by contributing money of their own. Parents, relatives, and friends can contribute up to a combined $5,000 a year, while eligible employers can add up to $2,500 within that limit, generally without the contribution being treated as taxable income for the employee.

The government's initial $1,000 contribution doesn't count toward that limit, allowing families to add more savings over time. The money is invested in low-cost funds that track major U.S. stock indexes, such as the S&P 500, giving it decades to potentially grow as the child gets older. Of course, the account's value can also fall when the stock market declines.

A small monthly deposit could add up to hundreds of thousands

Starting with just $1,000 could give your child a financial boost later in life, thanks to compound growth. As the money earns investment returns, those gains can start earning returns of their own, helping the balance grow over time.

For example, a $1,000 deposit could grow to about $81,000 by age 65, assuming an average annual return of 7% and no additional contributions.

Adding even a small amount each month could increase that figure considerably. Here's what the account might be worth if you contributed until your child turned 18 and then left the money invested until age 65:

These figures assume a steady 7% annual return, so actual results will vary, and inflation, taxes, and fees will affect how much the money is eventually worth.

What happens to a Trump Account when your child turns 18

Starting the year your child turns 18, their Trump Account begins following many of the same rules as a traditional IRA. They'll have more control over the money, although withdrawing it before age 59½ could mean paying income taxes and an additional 10% penalty.

There are exceptions for certain expenses, including college tuition and a first home, so some early withdrawals may avoid the penalty. If helping your child pay for college is your main goal, a 529 plan may be a better fit because it offers tax benefits specifically for education.

Bottom line

Your child or grandchild may be decades away from retirement, but giving them a financial head start today could make life a little easier when they're older. Trump Accounts offer families that opportunity, starting with money from the government that eligible children can receive.

If your family qualifies, claiming the government's $1,000 contribution is a good place to start. From there, you can make the right moves by adding whatever fits your budget, without stretching your own finances.

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