The Trump Account proposal – baby bonds by any other name – is inching closer to reality. Buried in the US president’s One Big Beautiful Bill, it would give every American newborn a $1,000 investment account, with contributions allowed up to $5,000 a year.
When the child turns 18, the money can be used for education, a first home, or starting a business, with full access granted at age 31.
Chief executives from Dell to Goldman Sachs met at the White House to back the plan, some pledging to match the initial deposit for employees’ children.
It’s a modest start, but one with potential. Bespoke Investment Group notes if you invested $1,000 in the S&P 500 50 years ago, it would now be worth nearly $350,000. Even for those born just before the 1987 crash, the sum would have grown to $40,000 – and as Bespoke noted, “there are a lot of 37-year-olds out there ... that wouldn’t mind having $40k in an investment account right now”.
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The Milken Institute estimates a typical $1,000 birth account would rise to $8,000 by age 20, $69,000 after 40 years, and could top $500,000 by retirement.
Beyond wealth-building, the aim is to encourage long-term thinking, financial literacy and wider stock ownership, and to give low-income families a toehold in wealth creation.
They contrast sharply with Ireland’s ETF regime, where deemed disposal rules mean you pay 41 per cent tax on gains every eight years – even if you haven’t sold. That stunts the very compounding these US proposals aim to harness. Ireland might learn from the US’s plan: start small, think long.
