University of Michigan economist Justin Wolfers calls Trump Accounts’ $271,000 age-18 forecast misleading; it assumes 10% annual returns and $5,000 yearly deposits. The White House stands by it; its site puts the $1,000 seed alone at about $6,000 by age 18.
Under Trump’s tax-and-spending law, legal U.S. citizens born from Jan. 1, 2025, through Dec. 31, 2028, qualify for the $1,000 federal seed if a family applies. Parents and employers can add up to $5,000 a year combined; employer deposits are capped at $2,500 and excluded from taxable income, while qualified charitable gifts to groups of children do not count toward the cap. The assumed 10% annual return is roughly the S&P 500’s long-run average before inflation. The government site also projects $13 million by age 55, assuming $7,000 annual deposits through the child’s 20s.
The White House says the Council of Economic Advisers outlined the assumptions and billionaire and corporate pledges will help working-class children. Wolfers argues tax benefits and large balances favor families able to save $5,000 yearly; New School economist Darrick Hamilton calls the program an “income transfer,” noting that most households in the bottom 80% of earners borrow rather than save. Treasury says 86% of accounts opened are tied to households earning under $200,000; it cites a one-time $250 Michael and Susan Dell Foundation deposit for each eligible child in ZIP codes with median household incomes of $150,000 or less.
