The Trump Newborn Account (“Trump Accounts”) created under the One Big Beautiful Bill that passed in 2025 created the foundation for a new and improved Social Security Retirement Plan for newborns as well. As discussed below, the Trump Accounts terminate on the 31st birthday of newborns and the funds are disbursed. If Congress extended the termination date to age 65, the Trump Accounts would provide each retiree with millions of dollars for a financially certain future.
How The Trump Accounts Currently Work
Every U.S. citizen child born between January 1, 2025 through December 31, 2028 qualifies for a Trump Account. The government automatically sets up the account and deposits $1,000 into a dedicated investment account. Parents, family or guardians can add $5,000 to the Trump Account until the child turns 18 years old. The money qualifies for investments in index funds. After age 18, qualified withdrawals are allowed for expenses like education, At age 31 the account terminates and the funds are disbursed to the Trump Account holder.
The Trump Account is a quantum leap forward for the US government in ensuring a better financial future for newborns. However, if the Life of the Trump Account ended at age 65 and a large portion of individuals’ Social Security taxes along with their payroll taxes were directed into the Trump Account, the retirement payments for those individuals would increase significantly over the current benefits and the balance in the Trump Account would outlast the holder’s lifetime!
Here is a simple example using the following assumptions. The initial funding of the Trump account is $1,000 and the parents contribute $1,000 annually for 18 years. At age 28, the individual Trump Account holder and the holder’s various employers contribute $7,000 per year for the next 37 years. Assuming a 6 percent annual return on the index funds, the Trump Account will grow to $1.47 million. I
If the balance is invested in a U.S. Treasury bond earning 5.5 percent and the account holder is allowed to take $80,000 out of the Trump Account each year, the balance on the account will remain constant until the holder dies. At a higher interest rate, like 6 percent, the balance in the account can grow indefinitely.
The possible benefits to the holder can include payments for long term care or end of life healthcare, thereby reducing the need for Medicare. In addition, the remaining balance at the end of the life of the holder could revert back to the U.S. government. Banks, instead of the Social Security Administration .could mange the funds under federal rules, thus eliminating the costs of running Social Security retirement programs. With a power of compounding, the Trump Accounts could likely become a source of income for the US government that replaces the current $7 trillion U.S. government liability.
