Most parents would love to hear that a one‑time $1,000 deposit could cover a big chunk of their kids’ retirement.

Scott Bessent is now telling parents exactly that.

“Assuming historical growth rates continue, a single $1,000 deposit into a Trump Account at birth should grow to an estimated amount of at least half a million dollars by the age of retirement,” Bessent says, according to a post shared from his Trump Accounts presentation and amplified on X by Collin Rugg.

Those are big, simple promises aimed straight at parents.

Once you get past the sound bite, the structure of the new accounts and the assumptions under the hood raise tougher questions for kids who will actually live with the results.

President Donald Trump launches “Trump Accounts” for kids.

The mechanics of Trump Accounts 

Trump Accounts are a new class of tax‑advantaged investment accounts created under President Donald Trump’s Working Families Tax Cuts package, according to the U.S. Treasury.

Every American child born between Jan. 1, 2025, and Dec. 31, 2028, is eligible for a $1,000 federal contribution into a Trump Account if a parent or guardian elects to open one.

Related: Wallstreet rolls out new ‘Trump accounts’

The accounts must be invested in mutual funds or exchange‑traded funds that track the S&P 500 or another qualifying U.S. equity index and charge no more than 0.10% in annual fees, according to Treasury and IRS guidance on permitted investments.

Funds generally cannot be withdrawn before Jan. 1 of the year the child turns 18, and after that, the account is treated much like a traditional IRA for tax purposes.

Any American under 18 can have a Trump Account, not just newborns, although the $1,000 seed payment is reserved for kids born in the 2025–2028 window.

Bessent’s political and investing pitch

Bessent is not just selling a savings product. He is trying to change how kids think about capitalism.

He says that “right now, 38% of American households have no exposure to equities,” according to a post from his official account on X. He also added that “thanks to President Trump and Trump Accounts, the next generation of Americans will experience a real‑time financial literacy lesson, allowing for everyone to hold a stake in our nation’s economic strength.”

He has tied that message directly to polling about socialism among younger Americans.

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Bessent says that roughly four in 10 young Americans have a favorable view of socialism and argues that the overlap with households that do not own stocks is “more than a polling coincidence,” according to an interview he gave that was summarized by Fortune and Yahoo Finance.

He calls Trump Accounts part of President Trump’s “enduring legacy” and pitches them as a way to “mint a new generation of capitalists” by turning non‑investors into shareholders, according to those reports.

That puts kids in the middle of a live political experiment: government‑seeded stock accounts meant to shift both net worth and ideology over time.

Related: Scott Bessent’s net worth in 2026: From hedge fund manager to Treasury chief

The math behind $1,000 growing to $500,000

To get from $1,000 at birth to $500,000 by retirement, you need decades of strong equity returns.

Turning $1,000 into $500,000 over about 65 years requires an annual return a bit over 10% before taxes and fees, based on standard compound‑interest math. That is close to the long‑run nominal return of the U.S. stock market over favorable historical windows, but it assumes the next 60 or 70 years look a lot like the better stretches of the past.

A Trump Account’s worth when a child turns 18 “will depend on investment performance,” and noted that disbursements will be taxable, so there is no guaranteed path to any fixed dollar amount, according to ABC News.

A report on preliminary rules said the accounts can only hold broad index funds with tightly capped fees and that contributions will not start flowing until July 2026, so balances will depend not only on returns but also on when families actually get money in, according to NAPA‑Net’s coverage of Treasury’s rollout.

Bessent has said that about 1 million people signed up for Trump Accounts in a single week, describing it as a surge of new applications following the program’s high‑profile rollout, according to latest remarks, cited in a clip posted by @EricLDaugh on X. 

So when you hear “$500,000,” you are really hearing an optimistic case based on historical averages and decades of uninterrupted compounding, not a contractual promise.

Who will get the biggest boost from Trump Accounts

On paper, every eligible newborn gets the same deal from Washington. In practice, families with more money and better benefits are set up to win bigger.

The IRS says parents and other “taxable entities” can contribute up to $5,000 a year into a Trump Account, with up to $2,500 of that coming from an employer and excluded from the parent’s taxable income. Contributions from charities, state governments, and other non‑taxable entities do not count toward the $5,000 annual cap, which opens the door for targeted philanthropy and state‑level add‑ons. 

Children born before 2025 are not eligible for the $1,000 Treasury seed but can still get accounts if parents contribute up to $2,500 a year, which effectively means older kids from families with more cash can also build meaningful balances, according to ABC News.

Economists and analysts have questioned whether giving every child a small index‑fund stake can really overcome wage stagnation, high rents, and concentrated stock wealth, even if headline participation ticks up, according to Fortune.

If you zoom out, the structure looks familiar. The federal $1,000 is universal within a narrow birth window. The big upside comes if your family and your future employers have the spare cash to put thousands of dollars a year into a tax‑advantaged stock account on top of everything else.

What this means for kids and parents

If you are deciding whether to open a Trump Account for your kid, you are not just weighing “free money.” You are choosing how much market risk and political baggage to attach to your child’s name.

The key facts look like this:

  • Newborns who are U.S. citizens and born between Jan. 1, 2025, and Dec. 31, 2028, can get a $1,000 federal deposit once a parent opens an account.
  • Any child under 18 can have a Trump Account, but only the 2025–2028 cohort gets the $1,000 from the government.
  • Money has to stay in low‑fee index‑tracking funds and cannot be touched before age 18 in most cases; withdrawals are taxed under rules similar to a traditional IRA.
  • Families, employers, and qualified organizations can add up to $5,000 a year in aggregate, with employer contributions up to $2,500 excluded from income and caps indexed to inflation after 2027.

If you treat the $1,000 as a bonus and the account as one more long‑term tool, Trump Accounts could give kids useful exposure to compounding.

If parents build their future around the idea that Washington just handed them a guaranteed $500,000, you are buying into a pitch that depends on markets, math, and politics all breaking the right way for decades.

Bessent says Trump Accounts will be “a real‑time financial literacy lesson” and that “everyone” will hold a stake in the nation’s economic strength. The lesson kids actually get may be more complicated.

Related: Bessent’s brief remark just raised big questions about 2025 refunds