✅ What It Is:
A federal investment account created for every U.S.-born baby (2025–2028) with an initial $1,000 deposit from the government.
📅 Duration:
Covers children born between Jan. 1, 2025 – Dec. 31, 2028. Program ends Jan. 2029.
💵 Core Financial Features
- Initial Deposit: $1,000 per eligible baby (government-funded).
- Tax-Free Growth: No tax on contributions or earnings during accumulation.
- Voluntary Contributions:
- Parents/guardians can contribute up to $5,000/year per account.
- Contributions are tax-deferred until age 18.
- Investment Type: Funds invested in a stock market index, similar to 529 plans or Roth IRAs.
🔓 Withdrawal Rules
| Age | Access | Uses | Taxes | Penalties |
|---|---|---|---|---|
| 18 | 50% | Education, training, first home, business | Capital gains | None |
| 30 | 100% | Unrestricted | Taxed | None |
| <30 (unauthorized use) | Limited | Any | Taxed as ordinary income | 10% penalty |
🧮 Long-Term Potential
- Estimated Growth:
$1,000 invested from birth could grow to $574,000 over 60 years (Milken Institute estimate, assuming average market returns). - Annual Federal Cost:
Approx. $3.6 billion/year based on 3.6 million births/year.
👶 Eligibility
- Child must be born in the U.S.
- Must have a Social Security Number (SSN)
- At least one parent must:
- Have a valid SSN
- Be legally authorized to work in the U.S.
- Enrollment is automatic upon birth registration.
🏛️ Legislative Status
- Included in “One Big Beautiful Bill”
- Passed House (June 2025)
- Senate review ongoing
- Final approval expected by July 4, 2025
- High likelihood of passage with GOP control of both chambers
