Larry Fink, chief executive officer of BlackRock Inc., during the 2025 National Retirement Summit in Washington, DC. Photo: Al Drago/Bloomberg
Earlier this month, President Donald J. Trump invited top CEOs and lawmakers to discuss the “Trump Accounts” — a provision in the One Big Beautiful Bill that will create tax-deferred investment accounts for all newborn American children, at an “Invest in America” Roundtable at the White House. Now, one of the most influential CEOs, BlackRock's Larry Fink, said he supports the GOP’s proposal to create investment accounts for children at birth, now dubbed “MAGA accounts.”
While this may be a twist for the lifelong Democratic Party supporter, he has been pushing Washington for stronger policies to promote retirement planning – and earlier this year, he called for more private assets in 401(k), in his annual letter, asking investors, “If private assets perform so well, why aren't they in your 401(k)?”
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Trump Accounts, which will be seeded with a one-time government contribution of $1,000 and be private property of the child’s guardian, will track a stock index and allow for additional private contributions of up to $5,000 per year.
“Essentially, it's a 401(k) for a newborn baby," said White House Press Secretary Karoline Leavitt. "A child's relatives, their parents can contribute up to $5,000 [adjusted for inflation] per year of after-tax dollars annually to that account.” The account investments can be placed in a broad, low-cost fund that tracks the S&P 500, growing tax-deferred until the individual reaches age 18. Distributions after age 18 would be taxed at the capital gains rate.
"An investment account for every American at birth is a powerful investment in our country’s future. Ownership creates connection," Fink said in a statement to news platform Semafor on Monday, as BlackRock and the Bipartisan Policy Center were set to release a report with recommendations for policymakers and employers addressing potential shortfalls in retirement accounts for many Americans, Building a secure retirement: Collaborative solutions for America’s future.
The report endorses the Trump Account concept: “An initial investment of $1,000 at birth, with annual contributions of $500, can lead to an investablesum of $20,000 when an individual reaches age 18.2,48 In fact, initiating the investments at birthcan generate $9,000 more in savings by age 18than waiting until age 7 to begin investing,” states the report.
Additionally, the report suggests that policymakers should expand access to retirement plans both in workplaces and through private accounts to help secure Americans’ financial futures. “From expanding access to retirement plans and emergency savings, to innovating new guaranteed income solutions, to strengthening pensions, a collaborative approach between policymakers, employers, and financial institutions will be crucial,” states the report.
Related: BlackRock CEO calls for more private assets in 401(k) plans, in letter to investors
“The Trump Accounts would seed $1,000 for every American baby born starting in 2026,” the tax bill states, and would stake newborns born from Jan. 1, 2025 through Jan. 1, 2029, funded by the Treasury.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
