Trump’s ‘Big, Beautiful Bill’ proposal offers ‘MAGA accounts’ with $1K for newborns

NYP ^ | 05 13 2025 | Patrick Reilly

[yesthatjallen]

A draft of President Trump’s “Big, Beautiful Bill” includes a proposal to establish so-called “MAGA” savings accounts for children.

The pilot program — described as the “money account for growth and advancement” or “MAGA account” in the GOP bill released on Monday — would give every baby with a Social Security number born in the next few years $1,000.

That money will then accumulate interest and value through investments over time — and families and employees can contribute up to $5,000 in the children’ s accounts annually.

The goal would be that once the kids become adults they will have tens of thousands of dollars at hand for education, job training, starting a business or buying a home.

Texas Sen. Ted Cruz, who reportedly spearheaded efforts to have the proposal included in Trump’s massive tax-cut plan, likened it to a retirement fund for kids.

“This is essentially a 401k for every newborn in America, and just like with 401ks, employers have seen it is a very attractive benefit for their employees to match or help seed those savings accounts,” Cruz told Semafor on Monday.

Cruz said that the accounts would usher an entire new generation directly into the American economy, “What is powerful is enabling every child in America to have an investment account and a stake in the American free enterprise system,” he told Semafor.

SNIP

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TOPICS: News/Current Events
KEYWORDS: america; debt; deficit; giveaway; invest; newborns; trump; welfare

[9YearLurker]

We’re massively in debt and it’s not the job of Joe Taxpayer to start babies’ piggy banks.

[AnotherUnixGeek]

The “big, beautiful bill” should allow every working American to invest the money currently being taxed for Social Security into an S&P index fund which can’t be touched until retirement. Americans would end up with far more for retirement.

[Opinionated Blowhard]

Overall, I think Trump is doing great, but he has way too many of these types of gimmicks in his proposals.

[thegagline]

More of my money going towards other people’s children. The Republicans are now embracing, “It takes a village.” Ugh.

[txeagle]

Another .gov gimmick that will most certainly be abused, or raided, by future administrations and/or Congress’s. Just cut taxes and those that want to do it will do it for themselves.

[Dilbert San Diego]

I remember hearing years ago, many families bought savings bonds for their newborns. Then the bonds would grow in value as the kids grew up. This sounds similar. I question if this is a good idea for government to do.

[Tell It Right]

Just implement a TFSA (Tax Free Savings Account) like Canada has. It's basically their version of the Roth IRA, only without income rules. The limit is $7K per year.

But do one better than the TFSA and allow parents to start it before the kid turns 18. So you can put money into your kids' accounts (or your own account), at any age, with no income restrictions. It can have no tax break as you contribute (just like Roth IRA's and Roth 401K's and TFSA's in Canada), but no taxes on the gains (again, just like Roth accounts and TFSA). And you can withdraw at any time for any reason without penalty (unlike Roth accounts, but I believe TFSA allows withdrawals without penalties at any age without having to specify a reason).

So no gift from taxpayers to start it. But a bit of a tax holiday for all people of any wealth to invest some and build wealth without a tax hit.

[isthisnickcool]

Not “beautiful”, too little debt reduction and shrinkage of the federal government.

[C210N]

$1K for newborns ...

Compare with the $1M per newborn for their Cestui Que Vie Trust account...

[Magnum44]

Its not clear, but I dont think thats what this is (taking more of your money). I think its the beginning of a (needed) transition away from SS to individual retirement account contributions. Imagine if all your SS contributions had been put in a 401k instead of Al Gore’s ‘lock box’. You’d be so much better off in retirement than counting on SS. But we cant touch that 3rd rail, so this may be a way to get there in small increments.

[Drago]

Yeah, another welfare loss-leader bribe...we already have “529” plans:

https://www.fidelity.com/529-plans/what-is-a-529-plan

https://www.irs.gov/newsroom/529-plans-questions-and-answers

[Leaning Right]

For retirement, I like mutual funds that are designed to be aggressive (mostly stocks) when the person is young. The funds then automatically rebalance to safer mixtures as the person ages. No need to fuss around. Set it and forget it.

The trick is to keep contributing, and start and end in low-cost index funds.

Just my two cents.

[Responsibility2nd]

Exactly. It wouldn’t be long before that fund is raided for Social Security or Defense; Programs that account for more than a third of the US budget.

[adorno]

Instead of the $1,000 gift/giveaway,

why not allow the first $5,000 in earned interest be tax free, annually.

That would encourage people to save and invest in their future.

It would be the same kind of incentive as no taxes on tips, and no taxes on Social Security payments.

And it wouldn’t be a giveaway.

Besides, the $1,000 per newborn would not amount to that much in earnings after 18 years in a bank account, after inflation.

[Responsibility2nd]

Oh, and don’t forget 13% of federal spending goes to repayment on the debt.

We are so screwed.

Now. If this $1,000 per child permanently eliminates Social Security over time, then we can talk.

[posterchild]

An alternative available now is putting money into a UGMA (Uniform Gifts to Minors Act) account when they are young. They will only get taxed on earnings over some limit (iirc 2025 it is $1350). As they start working as teenagers move the equivalent of their earnings from UTMA into a Roth IRA each year. (I’m not a financial advisor nor to i pretend to be one)

[I want the USA back]

Trump is optimistic about the future. Dems are not. Trump wants Americans to make more Americans. Dems want more gangbangers, murderers, rapists and terrorists.

[adorno]

Imagine if all your SS contributions had been put in a 401k instead of Al Gore’s ‘lock box’. You’d be so much better off in retirement than counting on SS.

If SS were to be privatized, or the accumulation were to be YOURS, then, the government would not have that money to support the future generations of retirees.

As it stands now, no matter how much or how many hears you contributed to SS, the money is NOT YOURS to use as you wished, except as monthly payments by the government. IOW, you can't take the money that you have accumulated over the years.

The biggest 'benefit' to the government coffers is that, if you die early, all of the SS benefits you accumulated stays with the government. If you die before you get to collect even one month of your SS, the government keeps it all.

SS is basically a ponzi scheme, with the government managing your contributions, which were in reality a giveaway by earners to government.

If the amount of SS taxes you paid were not all paid back to you before you died, the remaining money belongs to government; you can't will it to your heirs.

[Magnum44]

I think you are agreeing with me that a transition needs to occur. The current ponzi scheme is broken. Its needs to be changed and putting the responsibility for your retirement back on you is the correct thing. It probably wont happen in my life time, but sooner or later there wont be a choice. SS will go broke at some point.

Its evil that ones retirement is controlled by a government official or bureaucrat. And one is foolish to rely solely on SS for retirement. But lots of fools are out there.