A Trump Account is a new type of investment account created under the One Big Beautiful Bill Act. The accounts will also come with a pilot program contribution of $1,000 for eligible children -- those born between 2025 and 2028, who have valid Social Security numbers and who are U.S. citizens.
While $1,000 may not seem like a lot of money, the big advantage for children is that they have many more investing years than adults do. They can keep that money invested for the long haul and let it compound over time.
But just how much could a $1,000 investment grow to be worth by the time kids grow up, and how much more might it be worth by the time they retire? Let's take a look.
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Here's how much a $1,000 Trump Account could be worth in the future
Trump Accounts are designed for long-term investing, and can invest primarily in mutual funds or exchange-traded funds (ETFs) that invest predominantly in U.S.-based companies. An ideal investment for a Trump Account could be the SPDR S&P 500 ETF (SPY 1.27%), which allows investors to track the S&P 500 index that includes the top stocks on U.S. exchanges.
The ETF is an excellent option for all types of investors, especially for children, where a long buy-and-hold strategy can make the most sense. For decades, the S&P 500 has averaged an annual return of around 10%. That means that, roughly every 7 years, you would expect your investment to double in value.
Assuming a $1,000 investment would continue to grow by approximately 10% each year, here's how big that balance might get in the long run.
| Year | Investment Balance |
|---|---|
| 0 | $1,000 |
| 3 | $1,331 |
| 6 | $1,772 |
| 9 | $2,358 |
| 12 | $3,138 |
| 15 | $4,177 |
| 18 | $5,560 |
Data source: Calculations by author.
By the end of year 18, the investment would be worth more than five times its original value. That's some impressive growth, but on a $1,000 balance that would only translate into a gain of around $4,560.
But what if you kept the money invested after that, and it grew well until the child's adult years and even into retirement? Here's how much larger the balance could grow.
| Year | Investment Balance |
|---|---|
| 25 | $10,835 |
| 30 | $17,449 |
| 35 | $28,102 |
| 40 | $45,259 |
| 45 | $72,890 |
| 50 | $117,391 |
| 55 | $189,059 |
| 60 | $304,482 |
| 65 | $490,371 |
Data source: Calculations by author.
As the balance grows (e.g., over $100,000), the effects of compounding really shine. The silver lining is that while a $1,000 investment may seem small, it can grow into a much larger sum over the long run.
It's important to note, however, that while the S&P 500 has averaged a gain of 10% for years, its returns can and will fluctuate over time; there are no guarantees it'll continue rising by around 10% in the future. The above calculations also don't factor in inflation, which will significantly erode purchasing power over such a long time frame.
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Investing in index funds makes sense for all investors
Even if you aren't able to invest a whole lot of money into the stock market today, investing any amount can still help you grow your savings over time. And the earlier you start, the larger the gains can become. The great thing about the SPDR S&P 500 ETF is that it has a low expense ratio of 0.09%, which means that fees will have a minimal effect on your investment. On a $1,000 investment, it would cost you just $0.90 per year.
Low-cost funds can make investing simple for virtually anyone. Simply putting money into an ETF like SPY and letting it sit is an easy, low-risk way to invest in the stock market. Whether you're a seasoned investor or new to investing, index funds can be pillars for your portfolio that can provide you with a great deal of stability over the long term. Routinely putting money into these types of investments can be an ideal way to safely grow your savings, setting yourself up for a much stronger financial future.
