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Regulation and Compliance > Legislation

New Bill Creates $5,000 Investing Accounts for Every Child

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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.


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