Will Trump account holders have $100,000 at age 18? It’s not guaranteed

At his Feb. 24 State of the Union address, President Donald Trump promoted his newly launched "Trump accounts."

The accounts are seeded with a $1,000 head start from the federal government, and Trump said accountholders, with "modest additional contributions," could see their investment "grow to over $100,000 or more by the time they turn 18."

The White House said before the Super Bowl that 1 million people had already signed up in one week.

But this growth is not guaranteed over decades, and it almost certainly wouldn’t happen in 18 years. The estimate doesn’t factor in inflation, the risk of lower investment returns in the future, and the taxes upon withdrawal.

For the "Trump accounts," babies born between Jan. 1, 2025, and Dec. 31, 2028, will receive $1,000 from the federal government. Parents can make additional deposits but aren’t required to.

RELATED: Could $1,000 seed money in a Trump account multiply to $243,000? That’s without inflation and taxes 

An investment calculator maintained by the federal Securities and Exchange Commission shows that $1,000 could grow to about $6,000 after 18 years — far less than the $100,000 Trump cited.

Even if accountholders added a total of $9,000 during that time to that starting $1,000 — something many Americans couldn't afford to do — it would produce about $60,000 in 18 years, at a 10% rate of growth.

The historical annual average gain for the U.S. stock market is about 10%, but that rate of gain is not assured. Management fees also could eat into any gains.

Even a modest 2% inflation rate would take a big bite out of the final amount. 

Finally, the amount in the account would decline further upon withdrawal because of taxes.