Trump Accounts: Can $1,000 at Birth Build Generational Wealth?

President Donald Trump rang the opening bell of the New York Stock Exchange and Nasdaq from the Oval Office on Monday, launching one of his administration’s biggest bets on the next generation.

“It’s going to go up—I think the market’s going to go through the roof,” he said as he formally rolled out Trump Accounts, a new investment vehicle that gives eligible children a $1,000 federal seed contribution to invest in stock indexes.

The accounts arrive as Trump has increasingly tied his economic performance to the stock market’s returns, even as millions of Americans remain outside the gains those returns can produce.

The program is meant to change that, according to Treasury Secretary Scott Bessent, who cast the program as a way to bring more Americans into an economy where wealth is increasingly tied to owning assets rather than merely earning wages.

“Thirty-eight percent of American families do not have any exposure to our great equity markets,” he said before the opening bell.

Trump Accounts aim to give children a stake in that economy before wealth has to arrive through a parent’s estate or a grandparent’s will. And as inheritances play a larger role in determining who can buy a home and build wealth, the accounts could offer more young Americans a financial foothold before adulthood’s highest costs begin to close in.

The $4,000, $44,000, and $600,000 divide

Bessent has put the upside in sweeping terms, claiming the government’s $1,000 deposit alone could grow to more than $600,000 by retirement age, assuming the S&P 500 continues to grow at its long-term average rate.

That would put one account roughly in the range of the retirement balances many Americans spend a lifetime trying to build, according to the Federal Reserve’s Survey of Consumer Finances.

But Bessent’s projection depends on decades of compounding, continued stock-market growth, and leaving the money untouched long after the beneficiary turns 18. And the same figure looks vastly different at the point when a recipient’s on-ramp to wealth first begins.

Hannah Jones, senior economist at Realtor.com®, modeled what three households might have by the time a child turns 18, assuming an 8% average annual return.

A child whose account receives only the federal seed money would have roughly $4,000. Add $1,000 a year, and the balance grows to about $44,000. Max out the $5,000 annual contribution limit, adjusted for inflation, and the account could approach $238,000.

Put another way: By adulthood, the child whose family maximizes contributions could have nearly 60 times the balance of a child who receives only the federal seed money—and more than five times that of a child whose family adds $1,000 a year.

“The free $1,000 matters, but it’s a rounding error next to what disciplined annual contributions and compounding can do,” Jones says. “Turning 18 with $4,000, $44,000, or $238,000 isn’t a difference in degree. It’s the difference between a nice bonus and a genuine launching pad.”

Will Trump Accounts narrow—or widen—the wealth gap?

Furthermore, the ability to build on that early start is already sharply divided. Just 4% of low-income parents reported using a 529 account to save for college, compared with 37% of higher-income parents, according to Sallie Mae data cited by Commonwealth.

It is just one measure of how unevenly families are already able to turn time into wealth for their children. For families already funding 529 plans or similar tools, Trump Accounts could offer another way to compound that advantage. For parents living paycheck to paycheck, the $1,000 could still be meaningful—but far harder to build on.

“A one-time seed, or just opening an account and donating to it once, is going to make these accounts more symbolic than transformational,” explains Evan Mills, a financial adviser at Scholar Advising. “The transformation comes from the ongoing contributions and letting it grow.”

That doesn’t make the federal deposit insignificant. But the program’s eventual effect on wealth inequality will hinge on whether outside contributions reach families without the spare income to make regular deposits themselves.

“The value here isn’t really the size of the contribution limit; it’s the time,” explains Mills. “A dollar invested at birth is not the same as a dollar invested at 25.”

Could Trump Accounts help young adults buy homes early?

Even with those caveats, Trump Accounts could have a significant impact on the future of generational wealth—namely in how it shows up in the housing market.

Households receiving an inheritance of at least $5,000 were roughly 2.5 times as likely to become homeowners as those who received none, according to research from Realtor.com. The effect was even larger for Black and Hispanic households, which were more than five times and seven times as likely, respectively, to become homeowners after receiving an inheritance of that size.

Trump Accounts are not the same as an inheritance, but the comparison points to the potential significance of even a relatively modest asset arriving at the start of adulthood.

For one recipient, that money could mean less student debt or a cushion against high-interest credit cards. For another, it could help cover the costs that often delay homeownership—like moving expenses, an emergency fund, or the first dollars set aside for a down payment.

Already, those pressures are dragging on the market and the economy. One-third of young adults lived with a parent in 2025, surpassing even the COVID-19 pandemic-era peak. Meanwhile, first-time buyers now make up just 21% of the market and have reached a record median age of 40.

Those delays have consequences that can follow someone for decades: Households that buy their first home by age 30 have a 22.5% higher net worth by age 50 (about $119,000 more) than households that wait until their 40s, according to research from Realtor.com.

Trump Accounts would not eliminate the forces keeping young adults from moving out, but the administration is betting that an asset set aside early could change the sequence.

“A generation reaching adulthood with more invested assets opens up options beyond housing,” says Jones. “Buying a home earlier is one possibility, but so is pursuing education without debt, starting a business with real seed capital, or simply having a cushion that reduces pressure to take the first available job.”

That optionality is what makes the accounts a broader generational-wealth experiment, rather than simply a savings program. But Jones says not to assume the benefits would be automatic.

“The trade-off is that this wealth is more tied to market timing than a savings account would be, since a downturn right as a cohort turns 18 could shrink balances substantially,” Jones says. “Whether the net effect is a more resilient generation or just a wealthier version of today’s wealth gap probably depends less on the accounts themselves than on how broadly they end up being used across income levels.”

The case for giving children a real asset

Even so, Trump Accounts’ most durable effect may be on a generation that grows up with a more hands-on financial education.

“I don’t think you can look at this and say every child is going to be wealthy at 18,” Mills says. “But if they enter adulthood with some type of financial ownership, these kids are going to have a very different mindset going into adulthood.

“Investing isn’t going to be something they’re intimidated by,” he adds. “They’re going to understand what savings look like and the benefits of compounding over the next 40 or 50 years. Investing becomes a default rather than something foreign.”

Robert R. Johnson, a finance professor at Creighton University, says that experience can matter in a way that classroom lessons often do not.

“There is an enormous difference between real investing and paper investing,” Johnson says. “You simply can’t mimic the experience of making or losing money in the real world as opposed to making or losing money in a paper account.”

Johnson argues that financial education needs to begin before young people make the decisions that can follow them for decades—particularly around debt.

“Teaching financial literacy in college is simply too late,” he says, because many students have already taken on burdensome loans by then.

By that measure, Trump Accounts could make the lesson more tangible. Instead of learning about money only in theory, children would have an asset of their own to watch over time—and learn firsthand how debt and returns can work for or against them.

Trump launched the accounts with a celebration of a rising market, but their true value won’t be clear for decades, when the first recipients reach adulthood. Only then will it be clear whether the program broadened the path into asset ownership—or simply gave families already positioned to invest another way to get ahead.