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Trump’s account is set to officially launch on July 4, aiming to support young individuals in building long-term financial stability through investments. However, experts express uncertainty about whether this will actually address the retirement savings gap faced by women.
Studies indicate that although women tend to save a higher percentage of their earnings compared to men, their 401(k) balances lag behind. According to the latest figures from Vanguard, the average balance for men at the end of 2025 was $194,597, while women averaged $146,476.
This disparity partly results from lower average earnings; men, for instance, earn approximately 81 cents to every dollar a woman makes. Furthermore, women often take extended breaks from the workforce to care for family members, as noted in a report by AARP and the National Alliance for Caregiving.
“While Trump accounts provide early investment opportunities and the advantages of compound interest, they may not fully address the underlying issues contributing to the gender gap in retirement savings,” remarked Anki Chen from Boston University’s Center for Retirement Research.
Conversely, Teresa Ghilarducci, an economics professor at The New School in New York, noted that these accounts might have a positive albeit indirect effect on women’s retirement savings.
She explained, “When kids have their own real assets, families feel less pressure to rely solely on the mother’s income for financial stability.”
Challenges for girls during childhood
As of mid-June, over 6 million children had registered for Trump accounts, also known as 530A accounts.
Starting July 4, various caregivers will be permitted to contribute up to $5,000 annually after taxes until the beneficiary is 18. Additionally, infants born between 2025 and 2028 will receive a $1,000 initial deposit from the Treasury Department.
Employers can also contribute up to $2,500 per year, part of the total $5,000 contribution limit. Certain charitable organizations and government entities may also donate funds that don’t count against this limit.
While Trump accounts may assist children in building long-term savings, they might not fully counteract the challenges girls encounter in terms of investing in their futures. A 2017 report by T. Rowe Price revealed that when it comes to setting aside money for college, 50% of parents with only boys do so, compared to just 39% of parents with only girls.
This study found that parents of boys were more inclined to cover the entire cost of college (17% vs. 8%) and less likely to consider affordable colleges to avoid loans. It appears they prioritize saving for their son’s education over their own retirement, as per the findings.
The $1,000 initial funds provided for newborns through Trump accounts, which are given regardless of gender, highlight that “every child deserves an asset,” according to Ghilarducci. Yet, underlying family dynamics can persist—and public initiatives might not alter ingrained biases.
In family life, [a retirement account] can serve as an emergency fund for children, parents, spouses, and households.
Teresa Ghilarducci
Professor of Economics at The New School
On the flip side, parents with children who have savings may be more reluctant to compromise their own financial security during a crisis.
“In family situations, [a retirement account] can act as a safety net for everyone,” Ghilarducci pointed out.
Women in a 2019 study by TIAA and MIT’s AgeLab expressed the difficulty of prioritizing their children’s education and well-being over their own retirement savings.
How children will utilize the money saved on their behalf remains uncertain. Trump accounts have distinct rules compared to individual retirement accounts, but the standard regulations for traditional IRAs typically take effect when the beneficiary turns 18.
This means that any withdrawals will be taxed at standard rates, and, aside from some exceptions, early withdrawals will incur a 10% penalty until the beneficiary reaches 59 1/2 years old.
These exceptions can include expenses related to higher education, up to $10,000 for buying a first home, $5,000 for childbirth or adoption, $1,000 annually for emergencies, medical expenses, and health insurance premiums during unemployment.
