When Trump Accounts officially launch on July 4, every eligible child in the country will gain access to a federally seeded investment account.
Approximately 329,000 children are in foster care in the U.S., and many are considered financially vulnerable, according to the fiscal year 2024 Adoption and Foster Care Analysis (AFCARS) report cited by the National Adoption Council.
The accounts must be opened by an “authorized individual,” typically a legal guardian, parent, or other qualifying family member, under IRS rules governing Form 4547.
On June 11, First Lady Melania Trump and Treasury Secretary Scott Bessent unveiled Fostering the Future Accounts at the Treasury Department.
Under the new rules, state, territorial, and tribal child welfare agencies can serve as the authorized guardians to open accounts for foster children.
Those funds will be invested in low-cost U.S. equity index funds and will remain locked until the account holder reaches 18 years of age.
How child welfare agencies gained authority to open Trump Accounts
The structural barrier was embedded in the original Trump Accounts legislation, and it took an outside advocate to flag the problem directly.
Sixto Cancel, founder and CEO of child welfare advocacy group Think of Us, flagged the enrollment gap during the program’s early stages of development, according to CNN.
The One Big Beautiful Bill Act established Trump Accounts and required an authorized individual to elect each account on behalf of an eligible child.
For children with stable family structures, that requirement is straightforward, since a legal guardian, parent, adult sibling, or grandparent files IRS Form 4547, in that priority order, and the process moves forward.
For foster children, who often have a rotating cast of legal guardians, the requirement created an enrollment gap that existing federal rules could not resolve until the new Treasury guidance was issued on June 11, CNN reported.
Cancel brought the issue to the First Lady’s team, which coordinated with state governments and the Treasury for several months.
“To have that as a high schooler — to think, ‘I can use that to get an apartment’ — brings you a peace of mind that is unexplainable,” Cancel told CNN.
Foster care outcomes that shaped the Fostering the Future initiative
The financial stakes for children aging out of foster care are severe, and decades of research have documented the pattern with consistent findings.
More than 20,000 young adults age out of the foster care system each year, often leaving without financial support or a permanent family behind them, according to a November 2025 release from Rep. Zach Nunn (R-Iowa) announcing the Fostering the Future for American Children and Families Act.
One in five foster youth becomes homeless after aging out of the system, according to the National Foster Youth Institute.
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Bessent repeated the figure in his June 11 remarks at the Treasury Department, where he also noted that only about half of former foster youth secure gainful employment by age 24.
Just 3% to 4% of former foster youth obtain a four-year college degree, the National Foster Youth Institute reports, and many face chronic housing instability during the transition to independent adulthood.
Bessent told the audience at the June 11 event that the administration is building foster youth into the program from its first day of operation.
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What a $1,000 Trump Account seed deposit could become by age 18
The White House Council of Economic Advisers projects that a $1,000 deposit for a child born in 2026 will grow to $5,800 by age 18.
That same balance could reach approximately $18,100 by age 28 if the account holder and other contributors make no additional deposits along the way.
All funds in Trump Accounts are invested in low-cost U.S. equity index funds, with expense ratios capped at 0.10% under the program’s operating rules, the Federal Register stated.
It is meaningful to see fosters named in federal asset-building policy for the first time.
Individuals and employers can contribute up to $5,000 per child each year, with employers permitted to cover up to $2,500 of that combined total.
Qualifying charities, state governments, and local governments can also contribute to the accounts, and their contributions fall outside the $5,000 annual limit entirely.
Joel Dickson, Vanguard’s global head of Advised Strategies, has said there is “really no downside risk” to opening a Trump Account for eligible families, NAPA-Net reported.
“There is free money for you in Trump accounts that isn’t available in other accounts,” Dickson said, pointing to the $1,000 federal seed contribution, employer contributions, and charitable contributions as funding sources unavailable through any other savings vehicle.
Open questions that will determine the program’s national reach
The June 11 announcement set the framework, but several unresolved variables will determine whether foster children benefit from the new accounts at scale.
Only 23 governors have pledged to enroll foster children through their state agencies, and all 23 are Republican, the White House said.
The remaining states and U.S. territories have not committed, which leaves a significant share of the foster care population potentially excluded from the program.
A separate concern involves the $1,000 pilot deposit itself, because current rules appear to require a qualifying parent or foster parent to make the election.
Child welfare agencies can open accounts under the new guidance, but securing the $1,000 seed may still require a formal election from a qualifying parent or foster parent who anticipates claiming the child as a ‘qualifying child’ for the tax year, the IRS confirmed.
“The moment of greatest financial cliff for a foster is the day they age out, not retirement,” Akpata-Tanious said, according to The Imprint. “That structure does not cover rent, transportation, childcare, or emergencies, which is what fosters leaving care actually need.”
The First Lady urged all 50 governors and private sector leaders to step forward, calling on the nation to put foster youth above partisan divisions.
Whether those appeals translate into full national participation will ultimately determine whether the $1,000 deposit reaches the children who need it most.
Related: Trump accounts may be Trojan horse for Social Security reform
