Senator Ted Cruz Projects $700,000 Savings by Age 35 for Children Under New "Trump Accounts" Initiative

WASHINGTON D.C. – Senator Ted Cruz (R-TX) recently outlined the significant financial potential of the newly established "Trump Accounts," projecting that children could accumulate $700,000 in savings by age 35. The initiative, enacted as part of the "One Big Beautiful Bill Act of 2025," aims to foster widespread wealth creation and introduce a new generation to capital markets.

Cruz detailed the plan's mechanics, stating, "Take a little girl born next year—the accounts open, $1k is automatically seeded, her parents, her family, her employer puts $5,000 each year." Assuming a 7% annual growth rate, mirroring the S&P 500, he projected that the account could reach $170,000 by the child's 18th birthday.

The long-term vision emphasizes substantial growth, with the account potentially swelling to $700,000 by age 35 if contributions and market growth continue. Senator Cruz highlighted the transformative impact, particularly for less privileged families, remarking, "We're talking the kids of a single mom waiting tables who could have $700,000 saved by the time she is 35. That changes lives."

The "Trump Accounts" are private, tax-advantaged investment vehicles, initially conceived as the "Invest America Act" by Senator Cruz, building on Senator Cory Booker's (D-NJ) "Baby Bonds" concept. They provide a $1,000 federal seed investment for children born between January 1, 2025, and December 31, 2028. Family, friends, and employers can contribute up to $5,000 and $2,500 annually, respectively, with funds invested in low-cost index funds.

Philanthropic support has also bolstered the program, with Michael and Susan Dell pledging $6.25 billion to expand access for up to 25 million children, particularly those in lower-income communities. This significant private investment aims to extend the program's reach beyond the initial federal allocation.

While the accounts are designed to function similarly to retirement accounts, with withdrawals generally restricted until age 59½, exceptions exist for qualified expenses like higher education or first-time home purchases. The bipartisan effort, championed by both Cruz and Booker, seeks to empower every American child with a stake in the nation's economic future, cultivating financial literacy and promoting long-term savings.