Understanding Trump Accounts for Kids
George Kamel, a figure from Ramsey Solutions, shared his insights with FOX News Digital regarding the advantages and drawbacks of the newly launched Trump accounts, particularly for children’s investments.
When the government initiated $1,000 seed donations for eligible newborns, Kamel didn’t hesitate to enroll his young son. He expressed his joy about receiving a bit of financial relief from taxes but also provided a word of caution to other parents about the potential pitfalls hidden in the program’s tax implications.
“I utilized this opportunity because I have a 1-year-old and a 3-year-old. On July 4th, that $1,000 went into my son’s account, and I thought, ‘Wow! It’s nice to get some money back from the government that I’ve contributed to so much,'” Kamel reflected.
“If you grasp how compounding growth works, then this Trump account has its merits. But, honestly, the tax benefits aren’t all that impressive,” he added.
More on Social Security with Kamel
Launched in 2026, the Trump account program is part of a new tax law offering $1,000 to every eligible American infant whose parents participate. While there’s no obligation to contribute, parents can add up to $5,000 annually, which is then invested in a U.S. stock index fund.
As of the end of July, President Trump announced that over 7 million Trump accounts had been established since their inception.
“Consider this: If you start with $1,000 for free, and add nothing else, it could grow to nearly $500,000 by the time my child turns 65,” Kamel explained. He also suggested other investment routes for children’s futures, such as a 529 plan, which he believes is more tax efficient for educational expenses. “Using after-tax income means you can withdraw and grow funds tax-free. That’s the best option for education,” he advised. “A custodial Roth IRA is another good choice, but it requires earned income. The beauty of the Trump account is that you can start without that.”
For an 18-year-old, Kamel estimates that the account could be worth around $5,800 without additional contributions, potentially ballooning to about $200,000 by age 55 and even reaching around $5 million by age 65.
However, Kamel cautioned parents against hurriedly investing in their children’s futures while neglecting their own financial stability, including debts, emergency funds, and retirement savings.
“I appreciate the opportunity to discuss my Trump account, but the hard truth is that many Americans aren’t saving for their future, let alone their children’s. We advise against debt and stress the importance of having an emergency fund first. Once you can comfortably set aside 15% of your income for retirement, then it may be time to think about investing for your kids,” he stated.
“Many young adults today are compelled to support aging parents who didn’t prepare for retirement, which places immense pressure on them as they strive to care for their own families,” Kamel noted. “I want to avoid that scenario for my kids.”
Kamel emphasized the value of early education about financial growth, hoping to instill a mindset geared toward legacy building in younger generations. He aspires for his children to recognize the advantages given to them through financial education.
