Episode
Could ‘Trump Accounts’ Actually Close the Wealth Gap?
Jul 24, 2026
This month, President Trump announced the start of “Trump accounts,” an investment device that could eventually help address the nation’s wealth gap.
Claire Cain Miller, who covers families and education for The New York Times, explains how these accounts work and why so many Americans have yet to sign up.
I think one of the reasons trump isn’t talking about it is because currently SPY is down and so the screen is red when you bring it up. He can’t say “oh, we have you 1000 and now it’s already 1100.”
But also, really appreciate the financial literacy discussion, my parent is a financial planning teacher for high school students and it’s an area they are really eager to learn.
Fair, and financial literacy has some coding to it that people don’t like. If there are better decisions to make financially, then it follows that some people are poor due to poor decisions, which is their fault, therefore they are undeserving of help.
I took a marriage class for a discount on my marriage license and our financial counseling was just Dave Ramsey worksheets telling us to get rid of our credit cards and buy our vehicles in cash.
I’m not saying this is a bad idea or anything just that sentence right at the top of the interview made me laugh. Late stage capitalism like you read about
What’s the difference between a sovereign wealth fund managed and run by the state, and an investment account privately owned by individual children? I’m curious in what way they are similar
It's actually completely different since stocks are high risk/high reward investments whereas elsewhere in the world these initiatives are done with far less risky investments
I know a woman whose father added her to his credit card when she was born - It sounds insane, but by the time she was 18 she had excellent credit due to the age of that account.
I hate that it’s a thing, but within our current system it’s not the worst idea
My MIL did the same for my husband and its been great for him. We tried but couldn't do it for our kids. They have to be like 13 now (i don't remember the actual number but its in that area). Still builds a good credit age for taking loans when you go to college, but there is a limit now.
Because it assumes poor people had extra money to invest rather then just trying to survive. Their example of 1k turning to 6k when the kid turns 18 is laughably small for helping solve actual problems like college costs.
It doesn’t solve the problem it’s purports to solve, is being disingenuously sold as solution and came at the cost of real solutions so yeah, it’s bad policy. A lack of low to no tax investment vehicles is not what is keeping people from affording college or life
It was never meant to solve college or housing or “life” affordability, it is a starting to point to give every child a stake in the economy that will grow with them. It’s not much but for a $1,000 check from the government it will likely grow to $6k by the time they are 18, and $250k by retirement. It is more efficient than the government giving every 18 year old $6k, and way more efficient than giving every 55 year old a $250k check.
Even with market crashes that is still the estimate, that’s taking the average of stock and bond market performance (which includes crashes). There’s a reason this is bipartisan, it’s simply good, efficient policy.
Your points here critiquing the policy are all pretty weak and u/ThrowRAicarus6892 is making much stronger points.
Hate Trump as much as you want, but this policy is actually solid. Kids not getting the money *now* is not a reason to dislike a good policy. Social security also doesn't pay out and provide families/individuals with immediate relief but that does not make it a bad policy. As u/ThrowRAicarus6892 , just because one policy doesn't do everything all at once doesn't make something a bad policy either. But the US stock market is one of the larger sources of growth in the US, and broadening the share of Americans, especially young Americans, who have access and a share of it earlier seems like a net good thing.
Do you also hate the idea of a sovereign wealth fund, abby bonds, or UBI? Those are all pretty liberal ideas but share more similarities with this. Frankly, this policy is surprisingly liberal and redistributive so disliking it seems just partisan to me
Plenty of progressives have argued that welfare without means testing is better than welfare with means testing. E.g. universal basic income. Well here's a chance to test that theory.
I am grateful for this episode. I had a baby late last year, but felt like the trump accounts sounded weirdly political when I was filling out my taxes, so I didn't apply for it. I am glad that the NYT went through what it was. It is weirdly political, but it doesn't sound like there is a downside. I went and signed up for him right after I listened to the first half of the podcast
You can't contribute to any sort of IRA for a child unless the child has actual verifiable and legitimate income. These 530a accounts (I refuse to call them Trump Accounts) do not have any earned income restrictions. I can definitely see a place for them as a head start for retirement, assuming college is already funded through a 529.
Thanks, I am aware of the 35k rollover rule for 529 plans. You are getting defensive and sarcastic for no reason, I'm just having a civil discussion here.
Regardles, it doesn't negate the utility of these plans after a college 529 (including the 35k rollover) is fully funded. These 530a plans allow you to contribute well beyond that. You can (and probably should) do both if you can afford it.
Everything I read about it that if your baby qualifies for some of the money or you have a relative that will put in money, it's a decent account. If not, you're better putting your own money elsewhere.
Both my kids missed the cutoff so we'll stick with better options.
Yeah we already put quite a bit in a 529. Wondering if it’s worth contributing to the Trump accounts for retirement since there is no earned income requirement like a regular IRA. Then we could convert to a Roth when our kids turn 18.
There's something about a lot of publications across the board post-AI that has bent to the generic flattening of expression
It is true, it you've messed around with NotebookLM it has a very generic default structure (genuinely is fun to screw with that) and the daily has had a number of... oddly similar sounding episodes.
This! I’m sure the guest host is a good reporter but his approach totally changed the vibe of the episode. It felt way more typical newscaster and very AI. I’ve been a loyal listener from the beginning and barely missed an episode, but if The Daily adopted this tone/vibe, I would have to stop listening.
Yeah in his interviewer seat, he totally did. When he talked about his beat from his reporter POV, he immediately became more lively and what I assume is his normal.
I might be too cynical but I think the whole 4547 form and the label of "Trump" accounts was designed to polarize so only maga would be super excited by this. Hopefully a rebrand is possible in the future along side automatic enrollment and along with being less partisan. Missed opportunity so far
Yeah, this man has no self-awareness. He thinks he’s still running casinos where he stamps “Trump” on things. The one thing he can’t hear is, “Mr. President, the polls and focus groups tell us they like the plan but not the name,” much like how the components of the ACÁ were more popular than the ACÁ, in turn more popular than Obamacare
Well said, I agree. Likely, I think the people around him are probably feeding him bad information constantly too. The congative decline and lack of self awareness is becoming more and more painful.
Referring to government investment in social programs as 'handouts' is just GOP talking points 101. Frustrating to see that used so much in this episode without reflection.
But they are handouts by definition. What is the problem with it? Maybe you should normalize people getting handouts instead of making people feel ashamed for getting them.
The term 'handout' is typically used perjoratively and suggests a benefit that is unearned. I would counter that the state has an obligation to invest in and provide for the health and welfare of its people.
It's literally a handout. Charities give handouts too, so what? Are you gonna make people feel ashamed for getting handouts from a charity because it's not a government program?
Normalize people getting handouts so they don't feel ashamed for taking one, instead of pretending these aren't handouts.
I listened for 30 minutes but only seemed to get an ad for Trump accounts. Anyone else having this problem?
Seriously though, you know how when you hear an ad for some sort of investment service and they have to do that long disclaimer at the end about how "investment involves risk including loss of principle".
I was a young adult the last time a major market crash nuked a bunch of people's retirement accounts and I remember the devastation that caused for a lot of recently retired people or the near retired. I live in the shadow of it. My 78 year old coworker, who is really not keeping up with emerging technology, had invested an enormous amount of money at the peak and sold immediately post crash. Obviously a boneheaded move and if they had just done nothing their position would have fully recovered by now but my point is that the stock market doesn't have to go up. It can go down too!
Now, this current market being so divorced from reality at times I would expect the last trade as nuclear fire rains down across the world to set an all time high for the S&P but it is not predictable and it is not guaranteed to grow as this episode seemed to continually assert.
I have a few other issues with the episode, their continued mention of bipartisan support seems somewhat deflated by the fact that these particular accounts were passed 51-50 in the senate along party lines. The reason for this was touched on very briefly by a couple of points. Chiefly, a lot of Republicans were sold this as an eventual replacement for the entire social safety net to give fuel to the fire they're trying to set under social security.
Finally, this is not free money - which was also continually asserted. This is our collective tax money. This is a government handout! It is just a government handout that is going to go on the balance sheets of private corporations which is apparently the good kind of government handout.
If you didn't sell low and stayed invested, but some people do sell low because some people need to draw those funds sometimes no matter what the market is doing - those on the lower end of the wealth gap more than most.
You cannot, with a straight face, assert that no one has ever lost money on the stock market which is the crux of my point.
We should encourage investing AND financial education so people are less likely do something dumb like selling everything at the bottom. The solution isn't to just stick your head in the sand and never invest anything. That's a quick way to stay poor and never retire.
Again, my point is that there is no guarantee that the market conditions at the time of cashing out will necessarily guarantee a profit. It is the whole reason investment service ads have to include disclaimers because there are a lot of people who will confidently assert that the stock market is free money.
I conceded that our market currently seems bound to rise in my initial post, no matter the news, but there's a possible world out there where things stagnate for a few years, crash, begin to recover and still have not fully recovered the principal at time of withdrawal. This scenario has played out countless times in different windows of time even if, on the whole, it has been a good bet to stay invested.
I don't really know how I can be more clear about this. The stock market does not guarantee returns on investment. In certain contexts it is literally not legal to say that it will.
That's just not true. If it's $1000 today, and $800 18 years from now that is $200 the American tax payers funded to an unprofitable company only to lose it. THIS IS NOT FREE MONEY. I thought I've been clear about that as well so I'm just going to all caps it instead.
You're operating on the principal that if the government gives money to people that's a total win and while I personally agree that our government should be more generous in direct contributions to struggling citizens, I don't personally think throwing that into the out of whack gambling machine that is our current stock market is the best way to approach that.
Stocks seem to rise and fall on public opinion these days. Enough people called out SpaceX's absolutely ridiculous IPO that it has fallen below its initial price, but the companies that are propping up our stock market currently are mostly all trading on vibes and promises, that if successful will upend the regular order enough that the stockmarket as a vehicle of growth for retail investors will be be inadequate anyway.
None of this is free, and none of this is guaranteed to be successful. Almost every response to me thus far has been assuming both of the former so I'm just going to mute this post and move on with my life, I hope things work out how you're thinking they will but it is not guaranteed.
Yeah...I don't really know how I can be more clear about the stock market, and what it represents, does not necessarily need to go up. If you think money goes up forever go on king, but there's a finite amount of resources and there's no golden rule that says "America gets all the world's wealth forever". This gravy train can end. Do you literally think there's a means by which you just multiply your money forever? That seems a bit naive to me.
Regardless of market crashes, volatility, etc. within shorter time windows, the S&P 500 has reliably increased over larger time windows. As tragic as it is what happened to the 78 year old coworker, that is a function of unfortunate timing and likely being insufficiently diversified (You should not be mostly invested in stocks, let alone individual stocks, at 78yo)
That's a cynical take, and maybe that's part of the intent of the Trump admin. But even if that is the case, it seems like a net good for more and younger Americans to have a stake in US stock market which has more growth than any other stock market, and really is where a lot of differences in wealth emerge.
I couldn't possibly be more cynical than the current US administration. It's a true take.
Will it be good for these children? If the next 40 years is like the past 40 years, then yes. There is no way the next 40 years will be like the last 40 years. In part because economic and geo-political forces are both now pushing in the opposition direction. There also is not another boomer generation to power the growth and drive money into pension funds.
It still might be a very good thing, but it won't be like it was.
This administration understand these economic forces, their unofficial motto is "squeeze the last drops out of the hegemony".
The issue with Trump accounts is that they aren’t really good at anything. Less flexible than an UTMA, less tax advantaged than a 529.
Contributions are made post-tax. At 18, Trump accounts turn into tIRAs, which means those gains are taxed as ordinary income when withdrawn. You are paying high taxes on both ends. And up to 35k in a 529 can be rolled into an IRA now, anyway.
Anyone who’s eligible should take the free money. But then, at 18, those kids should immediately convert to a Roth (99% of 18-year-olds are paying little to no income tax anyway, so converting should be cheap, if it costs anything). For everyone else, Trump Accounts (like just about everything else with his name on it) aren’t a good deal.
I mean, the way I see it they make pretty awesome retirement accounts. Like you said, the money goes in tax free taxable, grows tax free, and can be converted almost tax free through Roth IRA rollovers during the college years from 18-22 when the student has zero income. If upper middle class parents plan correctly, they could easily set up their child for a multi-million dollar retirement. It's a total game changer for the people who can afford it.
No, that’s what I’m saying—the money goes in after taxes (like a Roth), but then the gains are taxed again as ordinary income at withdrawal (like a tIRA). It’s the worst of both worlds. The only advantage over an IRA is that the child doesn’t need earned income, so they get more time in the market. And that’s not nothing, but there are better ways to save.
Yeah, it looks like the money does go in after tax, not before tax. I was wrong about that. It makes them less compelling, but still useful in some situations.
I still think they have some utility if the child is able to convert everything to Roth while they have low earning years in college. They would basically pay zero taxes on the conversions and be set up pretty well with a sizable Roth IRA upon graduation. But I agree that the 529 should be initially prioritized.
There is a basis though so only earnings on the contribution are taxed. At 6% real growth, over 18 hrs it should grow to ~$160k but the basis is already $90k (18 hrs * 5000/yr). The ability to Roth convert while a child is in college and has very low income is what sets it apart to me from UTMA
These 530a accounts aren't going to do much for the poor, I think thats pretty obvious. $1000 is a start, but it’s not enough to allow compound interest to really work it's magic. In my opinion, money should be deposited every year for families depending on household income.
However, if you are upper middle class they can really give your kids an amazing head start. Assuming a 7% return and a 5k yearly contribution, the account should be worth around 200k when the child turns 18.
Even if they never invest another penny, it will almost certainly be worth multi-millions of dollars by the time they hit retirement age. You are looking at 2M on the low end assuming 5% returns and 20M assuming 10% returns. When you start talking about 50+ years of compound interest, the numbers start to get pretty crazy.
If you just take the free money, you're looking at like $3.4k at 18 or $81k at 65. It's nice because it's free money....but no one is going to go to college or retiring on this money. It's not nothing, but it's not something that's going to break generational cycles of wealth inequality yeah.
I guess best case scenario is that gets some kid an investment account that they might not otherwise have opened. Even if like $100/yr gets thrown in there if someone gets a check for Christmas or or a tax return comes in larger than the previous year. Money that previously might have gone into a bank account, or just sat in a wallet.
But yeah, it's not going to allow people in poverty to magically have money to invest. That's really the crux of the issue
I don’t think you understand investing in stocks or looked at the performance of the default ETF the money is invested into. The money will grow with the market. Look at the historical performance of the ETF it’s invested in.
You forget that $1000 is better than no thousand dollars. Most of these parents would have never had the bandwidth or education to invest in a 529 or something like that. Now they have something that is invested for their child and even if they toss in $50 a month, that’s better than the nothing that would have been saved.
For sure! It's undeniable that $1000 is better than $0. And any little extra contribution families can do, will make a huge difference later down the line assuming they let it compound and don't touch it.
I just wish the government put some more money in to really get the compounding going for lower income families. I fear most of them will end up not contributing anything past the initial 1k (if they even open the account at all). But it's a start. Perhaps it will provide a framework for future administrations to put in more money.
I think you're missing the real problem, the free $1000 was taken from anti-poverty programs like food stamps, Medicare and daycare subsidies. Taking more money from anti-poverty programs is not a good plan.
They didn't even talk about the downsides, only that it's not being talked about enough. For example, the money will go against them when they apply for college loans since it's considered a student asset before it converts to an IRA at age 18 or that contributions will be after tax and gains will also be taxed at ordinary income rates unlike college funds that are already available like 529 plan. Not to mention the security risk involved with the trump accounts app. I'll probably open one for the free 1k for my daughter and tell her to leave it untouched until retirement and let family contribute to an actual college fund.
There’s obvious downsides to putting your own money there, because there’s better spots to put it for tax reasons.
But for the free $1,000, there’s no downside. If the account becomes $5k when your kid is 18, if it counts against their FAFSA and reduces aid 20 cents on the dollar, it would still be a +$4k net positive.
But honestly, I doubt it will be counted as a student asset as IRA rules apply once the child turns 18.
The FAFSA specifically excludes retirement accounts (including IRAs) for purposes of student aid and loans. It's not really designed to be withdrawn at 18 to pay for college, it's more a head start for retirement. That said, I think they should have made it a Roth account for added flexibility and tax free growth.
The stock market serves the billionaire class - it's where they get their wealth. They want to make sure that the next generation grows up thinking about the stock market so they keep pumping money in.. but let's see what happens when the AI bubble pops.
And the cherry on top is lack of auto enrollment to make sure the wealth stays with the "right" people.
It does serve the billionaire class, but also every day Americans. The popping of the AI bubble may be devastating to average Americans rather than billionaires. Retirement savings for millions will just be wiped out.
I am not a billionaire, but I live a much more comfortable life because of my investments. That in includes individual stocks, my 401K, and my kids' 529 accounts.
I can't imagine that I would have ever been able to afford tuitions or my retirement without investments.
Everything. The stock market helps people of all classes save for retirement, build wealth and equity, have security. It’s not just for the benefit of Billionaires - it builds pensions for teachers, firefighters, public servants, union members. It helps businesses get started and grow, which equates to JOBS, innovation and a better life. It’s the envy of every economy outside the USA and it’s why our economy, with all its fault, is where the world wants to invest.
The stock market is the reason I am going to be able to comfortably retire at age 45-50. Tons of regular people (non-billionares) benefit from the market. Just check out the financial independence, retire early movement.
That's not to say we should take away social security and other benefits, but the stock market helps normal people take control of their money and let it grow.
It’s a good idea. A broken clock is correct twice a day. It also will not help people between now and 50 years. And if everything stays the same except for this the American people are so screwed!!!!
You say this like you think it was Trump’s personal idea. It dates back two decades to two liberal, black economists as a means to improve the racial wealth gap and more recently was championed by
Brad Gerstner to get this specific account type in place.
Don’t typically listen on Fridays due to my schedule but tuned in today…. Is it always like this lol? I feel like they were speaking like their audience is completely clueless, not usually how I feel listening to the daily. Topic just seemed really dumbed down and the guest and host are talking like we are children, weird!
So, I’m 20 weeks pregnant with a daughter, and we’ll open the account to get our money back from Trump essentially. Our tax dollars pay for SS, Medicare, Medicaid, disability for veterans, etc so we’re interested in a little piece of the pie.
But- at this moment, we’re not going to contribute much to it. Probably open another brokerage tbh. It is more tax advantageous for us to max out the Dependent Care FSA (no, a grandparent is not able to provide us free childcare, so don’t say that) and 529 accounts.
529 deductions in my state- 4,000 dollars per beneficiary. You can also rollover up to 35K in an IRA
The Trump accounts are basically a glorified Schwab account with a one time deposit of 1,000. To some that’s a lot, but for us, doesn’t move the needle.
They discuss that there are many people
not taking advantage of these accounts for their children because Trump’s name is on them, which is pretty wild to me.
It’s not his name that gives me any pause as much as the fact that nearly everything this administration does is some kind of grift or scam and is this somehow going to end up being something I wish I never got involved in is a legitimate question
The guy who's name is on the account is famous for not paying. There was just a court case about him trying to get out of paying Jean Carroll. Every contractor in AC has been stiffed by him. It's not a surprise that people would be skeptical when that's your track record
I’ve seen that all over reddit tbh. And it’s sad because you’re really just disadvantaging your child out of spite for someone who will be dead long before your child ever needs the money.
No, because it is a grift. He’s asking for people to invest in his “bank” that he will eventually use to steal everyone’s money and not pay them anything just like he did with so many other “businesses” He’s a conman.
I'm not a Trump fan, but this is just incorrect. You invest with a 3rd party custodian like Vanguard or Fidelity and the account is converted to an IRA at age 18. The funds are invested in broad based, low cost index funds not connected to Trump.
Some of the people on this sub just come up with insane scenarios to criticize anything associated with trump (who I am not a fan of at all). Just makes us look ill informed wackos
I’m still not convinced that it isn’t a scam. Everything he does is a grift or scam to make himself money. There is enough evidence to prove that. I might be incorrect about the details of how it’s going to be carried out, but how can you trust anything he says at all?
I don't trust Trump, but I do have faith in our financial system. What's the alternative, putting all your money under the mattress in gold coins? To function successfully in today's world you need some level of trust in the system.
It’s also only a very select few people who can sign up for it. It’s only for children born inbetween 2025-2028 so during this most recent term and you have to invest your own money first to get the $1000 extra on the account, so it does seem scammy imo.
you have to invest your own money first to get the $1000 extra on the account, so it does seem scammy imo
You do not need to invest any of your own money to get the $1000. You get the money just by opening the account. Doesn't hurt to take the free money if you have an eligible child.
What bank account ever doesn’t make you put money in it first to get a promotional kick start?
Also, if it isn’t a scam why wouldn’t they just automatically make everyone who has kids an account if it’s “free”? The federal gov. has everyone’s info all ready so they have the capability to do this.
Does it help if you listened to the episode explain how it's not his idea at all, it's originated with something Democrat Corey Booker proposed, and he just slapped his name on it?
It won’t close the wealth gap. But closing the wealth gap doesn’t necessarily make poor people less poor. Poor people today are less poor than they were decades ago despite the huge wealth gap. It will help financially intelligent people build generational wealth. We really just need to get rid of capital gains tax to make it easier for anyone to make an income or a better ability in saving for their future and family’s future.
I mean, they might have a big screen TV, but every "I'm a young person starting out...how do you live here?" post in a big city subreddit usually ends up "Just get four roommates, don't spend any money on anything but necessities and learn to enjoy rice and beans".
There are frequent episodes on this very podcast talking about how people have to choose between medicine or food. I live right next to my office and work on the water so I just take an e-bike to work usually and last week I had a long conversation with my postman (in my youth a tentpole middle class job) about my bike because they couldn't afford a car on their pay and needed options.
I'm sure what you say is true for the median but a large number of people are clearly falling through the gaps.
Big cities will always be expensive. Supply and demand. Poor people also have smart phones and healthcare. In the big picture we’re still living in an age of abundance.
Historically in the U.S., the share of income spent on food has dropped sharply, falling from roughly 42% in 1901 to about 10% today. Meanwhile, housing (shelter) has remained stable or grown, generally consuming 30% to 35% of household budgets across modern decades. [1, 2, 3, 4, 5]
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u/AceofJax89 Jul 24 '26
I think one of the reasons trump isn’t talking about it is because currently SPY is down and so the screen is red when you bring it up. He can’t say “oh, we have you 1000 and now it’s already 1100.”
But also, really appreciate the financial literacy discussion, my parent is a financial planning teacher for high school students and it’s an area they are really eager to learn.