The Council of Economic Advisors ("CEA") recently released a report discussing the new “Trump Accounts” created by the recent reconciliation legislation, the One Big Beautiful Bill Act ("OBBB"). 

The CEA report concludes that "…under a scenario of average returns on the U.S. stock market, Trump Account balance for a baby born in 2026 will be… $5,800 by age 18 and $18,100 by age 28 if no contributions are made" (other than the $1,000 from the federal government). This calculation assumes annual returns of 10.3% for the first 18 years and 10.9% for the next ten years, and it does not appear to factor in investment, administrative, or other account fees. 

Another interesting part of the report is that it takes the position that the $2,500 exclusion from gross income for employer contributions to Trump accounts is an annual limit, not an aggregate cap for all years. Specifically, the report states that “up to $2,500 per year can come from each parent’s employer.” Because the OBBB does not explicitly state that the $2,500 cap is an annual limit, some practitioners have raised this issue as a key open item needing clarification. Although the report isn’t necessarily authoritative when it comes to legal positions, the CEA presumably consulted with the Treasury Department before publishing this report. 

For more information on key OBBB benefits provisions impacting plan sponsors, see our alert. 

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