An insert with information about Trump Accounts is now issued along with Social Security cards for newborns, making it easier for parents to claim an eligible child’s account.
It provides straightforward instructions for applicants to claim their account and receive a one-time $1,000 deposit from the government, according to an Oct. 20 statement from the Social Security Administration (SSA).
“Social Security is providing families with the tools to get started right away on this generational opportunity to build a strong financial foundation for their children’s future,” SSA Commissioner Frank J. Bisignano said in the statement.
The insert accompanies Social Security cards issued to newborns through the Enumeration at Birth program, which lets parents request a Social Security number as part of the birth registration.
Eligible children born between Jan. 1, 2025, and Dec. 31, 2028, may receive the one-time contribution.
The insert asks parents or guardians to download the Trump Accounts app from TrumpAccounts.gov, sign up for the program, and wait for communication from the Treasury Department to activate the account before receiving the $1,000.
A Trump Account is a savings and investing account designed to jump-start a child’s long-term financial wellness. It can be opened in the name of an individual under 18 with a valid Social Security number.
Family, friends, and parents’ employers can contribute up to $5,000 per year to the account, which is held in the child’s name under parental custodianship. At 18, the child gains full control of the account.
In its statement, the SSA said that nearly 70 million Trump Accounts have, so far, been opened in the name of eligible American children.
“Contributions have already been made to some unclaimed Trump Accounts by generous donors,” SSA said. “To date, 26 million accounts have already received contributions.”
Funds in Trump Accounts can only be invested in a mutual fund or an exchange-traded fund (ETF) tracking the returns of a qualified index, according to a proposed rule notice published by the IRS on Aug. 21 in the Federal Register. The proposal had a public comment period until Oct. 20.
A qualified index refers to the S&P 500 index or any other index composed of equity investments in mostly U.S. companies. Indexes that focus on specific industries or sectors cannot qualify for Trump Account investments.
In addition, the ETF or mutual fund must not have annual fees and expenses that exceed 0.1 percent of the balance in the Trump Account.
In an Aug. 20 statement, the Treasury said that investment fees and expenses can reduce account balances over time. As such, low-cost investment options ensure that Trump Accounts benefit from better compounded growth over several years.
“For a child investing over decades, even small differences in annual costs may have a meaningful effect on the amount available in adulthood,” Bisignano said at the time.
“By emphasizing low-cost index investing, the proposed rules seek to maximize the share of investment returns that remains in each child’s account.”
The Treasury previously announced that the State Street SPDR Portfolio S&P 500 ETF, a low-cost ETF tracking the S&P 500, would be the default investment for Trump Accounts. The department also offers four other low-cost ETFs that parents or guardians of account beneficiaries can choose.
