Chart of the Day: 50-Year Trump Account

Today’s Chart of the Day comes from a conversation with a client about the new “Trump Accounts” for minors, which would automatically enroll every American child born from January 1, 2025, through December 31, 2028, in an investment account.  The account would be provided $1,000 to be invested in a tax deferred “diversified index of US stocks.”  

While the past is no predictor, the chart shows that $100 invested in the stock market 60 years ago (in 1996) is worth $40,000 today. If that amount was increased to the approved $1,000 under this new bill, the account would be worth $400,000 when that child turned 60.

Imagine the size of the account if the additional $5,000 per year allowed in the bill was also added in. At a 10% return, this would increase the amount to approximately $275,000 by the time the child turned 18. That's a great start on many adult expenses, such as a down payment on a home, education costs or starting a small business, which are a few of the approved uses of the funds.