On September 27, 2024, Dean Phillips, a Democratic Representative from Minnesota, unveiled an initiative aimed at reshaping the financial opportunities available to children across the United States.
The proposal focuses on creating index funds for children from economically disadvantaged families, providing them with a financial foundation from birth.
The plan proposes granting each American-born or naturalized child a $5,000 investment at birth. Managed by the Social Security Administration, these funds are expected to grow at an annual rate of approximately 10%.
By the time beneficiaries reach adulthood, the investment could yield around $25,000, offering a critical financial boost to cover essential expenses such as higher education, homeownership, or launching a business.
This initiative primarily targets low-income families, ensuring equal opportunities for children to overcome financial barriers. Funds would be accessible between the ages of 18 and 25, with unclaimed amounts reverting to the U.S. Treasury.
To ensure inclusivity, the plan waives high school diploma or GED requirements for individuals with disabilities. Beneficiaries can also monitor their investment performance through a dedicated mobile app, promoting financial literacy and engagement.
Additionally, the program offers a $10,000 bonus for young adults who participate in the Peace Corps or AmeriCorps, rewarding their contributions to public service.
If enacted, this initiative has the potential to significantly narrow economic disparities and provide young Americans with the resources needed to achieve financial independence.
