Child asset-building policies
Source: Crain's reporting
Trump Accounts
Allows parents and employers to contribute up to $5,000 per year to individual retirement accounts on behalf of children under the age of 18, regardless of their parents’ income.
Initial government endowment
Annual state/federal contributions
Financially progressive
Universal eligibility
Individual contributions
$1,000
$0
No
Yes
Yes
Connecticut Baby Bonds
Universal, financially progressive child trust funds. At a child’s birth, the government makes an initial deposit into an interest-bearing account, with additional deposits throughout childhood.
Initial government endowment
Annual state/federal contributions
Financially progressive
Universal eligibility
Individual contributions
$3,200
$0
Yes
No**
No
Child Development Accounts
Investment accounts designed to help parents save for their children’s post-secondary education. Subsidized through government contributions, matching incentives, and tax benefits.
Initial government endowment
Annual state/federal contributions
Financially progressive
Universal eligibility
Individual contributions
$1,000
$0
Yes
No
Yes
529 Plans
Tax-advantaged savings accounts that allow parents to set aside funds for their children’s college, trade school, graduate school, or private K-12 education.
Initial government endowment
Annual state/federal contributions
Financially progressive
Universal eligibility
Individual contributions
$0
$0
No
Yes
Yes
A range of policies are being used to provide financial stability and jump-start economic opportunity for children starting early in life. They all differ in their approaches and proposed outcomes.
**CT Baby Bonds cover all babies enrolled in Connecticut's Medicaid program.
Source: The Brookings Institution