Analysis
What Trump said
“could grow to hundreds of thousands of dollars by the time they [children] reach 18 or 21.”
Context
FactCheck.org explains that the federal "Trump accounts" receive a $1,000 government seed (and a $250 supplemental deposit for some children), allow up to $5,000 in private contributions per year, and are invested initially in an S&P 500 index ETF. The article cites a White House Council of Economic Advisers (CEA) mid-range scenario that assumes a 10.3% average annual return and the maximum $5,000 annual contribution (inflation-adjusted), producing an estimated $303,757 by age 18. Lower contribution levels or lower assumed returns produce much smaller balances.
Why this matters
The article confirms Trump’s statement can be accurate in specific circumstances: with large annual contributions (up to the $5,000 per-account annual limit) combined with optimistic stock market returns, CEA projections show balances in the hundreds of thousands by age 18. But the piece stresses that without substantial annual contributions — which many low-income families are unlikely to afford — the accounts would not reach those levels; with only the government seed and no additional contributions, the account would grow to only several thousand dollars by adulthood.