Trump Accounts for Newborns: A Good Start, But Not the Whole Plan

By Black Hills Financial Planning | August 2025

By now, you’ve probably heard about the new Trump Account program. It’s been in the news and all over social media: starting in 2024, the federal government is giving $1,000 to every baby born in the U.S.—no application needed.

Naturally, this has sparked a lot of interest—and questions.
People are asking:

• Is this real?

• How much is $1,000 really worth?

• Can I contribute more?

• Is this something I should plan around?

Let’s walk through what this program actually does, where its limits are, and how you can take it a step further if you’re serious about planning for your child’s (or grandchild’s) future.

So, What Is the Trump Account?

The Trump Account is a federally backed savings initiative that gives each newborn U.S. citizen a $1,000 deposit into a government-managed account. The idea is to help jumpstart long-term savings from day one—and that’s something we can all get behind.

Here’s what we know so far:

• The account earns modest interest, currently around 2–3% per year

• The money is locked up until the child reaches adulthood

• It can only be used for approved purposes, like college, a first home, or retirement

• Parents can contribute more, but there are limits on how much each year

• Early withdrawals for unapproved uses come with penalties

In short: it’s a thoughtful step in the right direction—but it’s not a windfall or a financial safety net on its own.

What Could That $1,000 Be Worth?

Let’s say that $1,000 grows at a steady 2.5% annual interest and sits untouched for 60 years. How much does it become?

Roughly $4,300.

Helpful? Sure. Life-changing? Probably not.

And keep in mind, that’s assuming the funds are never touched and the interest rate holds. For families hoping to use that money for college, buying a home, or giving their child a real financial head start, it’s clear: $1,000 isn’t the whole plan—it’s just the beginning.

A Smart Way to Build on It: The Pathsetter℠ by F&G

If you like the idea of starting early, letting money grow over time, and giving your child more options down the road, then it makes sense to look at ways to complement the Trump Account—not replace it.

One option we often talk about with clients is the Pathsetter℠ Fixed Indexed Annuity offered by F&G. While annuities are often associated with retirement, Pathsetter is flexible enough to be used for long-term planning—including legacy planning for children or grandchildren.

Here’s what makes it worth considering:

• Potential for stronger growth than a basic savings account, with no exposure to market losses

• Tax-deferred earnings

• No upfront fees

• You can start with a small contribution and build over time

• Can be structured to provide income, lump-sum access, or even pass down as a financial legacy

In short, Pathsetter offers control, flexibility, and growth potential—three things the Trump Account doesn’t.

Why This Matters

We think it’s great that the federal government is stepping up with a program like this. It’s a clear acknowledgment that financial planning shouldn’t begin at age 40—it should start from birth.

But if you really want to give your child or grandchild a head start—one that could help them graduate debt-free, buy a home, or retire with confidence—then the Trump Account alone won’t get you there.

You don’t have to choose one or the other.
You can build on that $1,000 with a plan that’s tailored to your goals and your family’s future.

Let’s Build a Plan That Grows With Them

Whether you’re a new parent, grandparent, or just thinking about the next generation, we’d be happy to walk you through what’s possible.

Schedule a free consultation today!

We’ll help you understand how the Trump Account fits into the bigger picture—and show you how to build a plan around it that grows with your family.

Black Hills Financial Planning is not affiliated with F&G. All guarantees are backed by the issuing insurance company. Please consult a licensed financial advisor before making any investment decisions.