New Bill Creates $5,000 Investing Accounts for Every Child
American Dream accounts would be invested in index funds and managed by the Social Security Administration.
New legislation, The American Dream Accounts Act of 2024, would establish within the Social Security Administration a $5,000 account for every American child, to be invested in an index fund and vest upon graduation from high school, GED or waiver for disability.
Introduced by Rep. Dean Phillips, D-Minn., the bill, H.R. 9881, assumes a 10% annual rate of return — comparable to the performance of the S&P 500 — and and would provide beneficiaries “a windfall of approximately $25,000″ to help grow a nest egg, place a down payment on a home, for education or living expenses, or to start a small business.
The bill directs the SSA commissioner to set up the $5,000 American Dream Account for every newborn and child naturalized before age 18, to be invested in an S&P 500 or comparable index fund and be managed by the Social Security Administration.
“Students will track the performance of their portfolios with a mobile application and the Department of Education will develop best practices for teaching financial management, investing, and entrepreneurship education in public schools,” according to a statement released by Phillips.
Reps. Juan Vargas, D-Calif., and Shri Thanedar, D-Mich., are original co-sponsors of the American Dream Accounts Act.
The American Dream Accounts Act “combines educational tools with ‘skin in the game’ as a means to help future generations develop the foundational and practical know-how about saving and investing, with the goal of using seed resources to further build wealth through options such as starting a business, ” added Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council.