Trump Accounts as a model for Social Security? What experts say

President Donald Trump is changing the way Americans can save through the creation of new investment accounts.

Soon-to-launch Trump Accounts will provide an initial $1,000 deposit to U.S. children who have a Social Security number and who were born between 2025 and 2028. By the time those children turn 18, those accounts could reach “at least $50,000 in value,” Trump has said, while additional contributions could bring those balances even higher.

Trump also recently signed an executive order to create a new website, TrumpIRA.gov, to enable adult workers without employer-sponsored plans to set aside money for retirement.

Social Security faces a looming projected depletion date that may trigger benefit cuts. Sen. Ted Cruz, R-Texas, recently said the new Trump Accounts for children could serve as a model for the more than 90-year-old benefits program.

“Conservatives in America for 50 years have been trying to do that — have been trying to do Social Security personal accounts,” Cruz said on May 4 at the Milken Institute Global Conference, according to a written transcript. “Here’s the dirty little secret. Trump Accounts are Social Security personal accounts.”

Those account balances, which Cruz said may climb into the millions with regular contributions over the decades from childhood, “will become Social Security personal accounts.”

The idea of creating personal Social Security accounts was pitched by President George W. Bush in 2004 and 2005. The plan, which called for allowing younger workers to voluntarily put a portion of their payroll taxes, failed due to a lack of public support.

In response to Cruz’s recent comments, Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, an advocacy group, said in a statement that “the people will not stand for privatization of their hard-earned benefits, and we in the advocacy community will continue to ensure that it never happens.”

The Trump administration has vowed in statements to “preserve and protect” Social Security and has not mentioned privatizing the program.

Cruz’s take on Social Security may be his alone, said Teresa Ghilarducci, a labor economist at the New School for Social Research who co-wrote research with National Economic Council Director Kevin Hassett on the need for private accounts for retirement.

“From everybody that I’ve talked to for the past four years about the creating these universal accounts, no one has breathed privatization,” Ghilarducci said.

There’s reason why — Social Security is the single most valued federal program, the Bipartisan Policy Center’s polling of voters has found, according to Emerson Sprick, director of retirement and labor policy at the Washington, D.C., think tank, which promotes bipartisanship.

Recent high returns in the markets have prompted questions about whether private investments could help address Social Security’s funding shortfall. Social Security’s trust funds are currently invested in special issues of the U.S. Treasury, which earned a 4.3% average interest rate on new issues in 2025, according to the Social Security Administration. In comparison, the S&P 500 index is up almost 24% over the last 12 months, as of Tuesday afternoon.

While allowing Social Security to invest in the markets could yield higher returns, it could also result in unforeseen losses when the markets drop.

“There’s not that desire to fundamentally restructure the program to transfer that risk onto the American people,” Sprick said of both policymakers and voters.

Currently, the payments Social Security beneficiaries receive are directly tied to the contributions they made while working, Sprick said.

Those benefits provide a “reliable level of baseline support” that lasts as long as beneficiaries live and is also adjusted annually for inflation, he said.

Social Security benefits typically replace about 40% of pre-retirement income, according to the AARP. Retirees need to make up the rest of the income on their own or downsize their lifestyle.

Workers who have 401(k)s, or other employer-sponsored retirement plans, can invest for retirement that way.

Yet about 41 million American workers ages 18 to 65 lack access to an employer-provided plan, according to the Trump administration. Those individuals can still invest in individual retirement accounts. But IRAs have limitations, according to Ghilarducci, including smaller contribution limits than 401(k)s, potentially higher fees and lack of diversification, as well as the ability to make withdrawals before retirement that can lead to lower balances.

Both the Trump Accounts and Trump IRAs can help resolve those barriers to saving, Ghilarducci said. Social Security reform will need to be addressed by lawmakers separately, she said.

“Having wealth is going to give people hope that they can retire,” Ghilarducci said. “I think it’s complementary to creating solvency in Social Security.”