Will It Last?

⚠ Educational only — not financial, tax or legal advice. Results are estimates, not guarantees, and may contain errors; we accept no responsibility for them. Read the full disclaimer.

Kids’ investment account calculator

Every US child can now have a federal investment account: an IRA-type account invested in US stock index funds until they turn 18. Enter what your family (and an employer) might put in each year to see what it could grow to by 18, and by retirement if it stays invested. Free, no sign-up, and nothing you enter leaves your browser.

How the new children’s accounts work

  • Who can have one: any child with a Social Security number who doesn’t turn 18 before the end of the year the account is opened. Parents open it with IRS Form 4547 or the official online sign-up, and eligible children are being enrolled automatically.
  • Contributions: up to $5,000 a year from parents, relatives, friends and employers combined, until the year the child turns 17. The limit rises with inflation in later years. Contributions aren’t tax-deductible.
  • Employer money: an employer can put up to $2,500 a year into an employee’s child’s account, tax-free to the employee. It counts toward the yearly limit.
  • The federal deposit: the government puts a one-time $1,000 into the account of each US-citizen child born 2025–2028, if the parent requests it on Form 4547. It doesn’t count toward the yearly limit, and neither do contributions from state or local governments and charities.
  • Investments: until 18, the money must be in low-cost funds that track a broad US stock index (such as the S&P 500), charging no more than 0.1% a year.
  • Withdrawals: none until January 1 of the year the child turns 18. After that it’s treated much like a traditional IRA.

Why starting at birth matters so much

Money invested for a newborn has 18 years to grow before it can be touched, and many more if it’s left for retirement. In this calculator, the $1,000 deposit alone, invested in stocks with typical returns and nothing added, grows to many times its size by retirement age, in today’s dollars. Small yearly amounts add up the same way: the earliest dollars do the most work.

Stocks go up and down, so the calculator also shows a range across 1,000 simulated markets. Over 18 years and longer, the range is wide: plan around the typical result, not the best case.

Frequently asked questions

How is the money taxed when it comes out?

After the child turns 18, withdrawals follow traditional IRA rules. The part that came from family contributions (money already taxed) comes back tax-free. Earnings, employer contributions and the federal deposit are taxed as income when withdrawn, and withdrawals before 59½ generally owe a 10% penalty unless an exception applies, such as qualified college costs or a first home purchase. Left invested, it can grow for decades toward retirement.

How does this compare with a 529 plan or a custodial account?

A 529 plan grows tax-free for education and often comes with a state tax deduction. A custodial account (UGMA or UTMA) can be invested in anything and used for the child at any time, but it’s taxed each year and becomes the child’s at 18 or 21. This account is limited to US stock index funds and locked until 18, and it gets the federal deposit and employer contributions. Many families use more than one.

Does it affect financial aid?

Rules for how these accounts count in college financial aid are still being settled. Check with the school’s financial aid office and the latest federal guidance.

What if the rules change?

Treasury and the IRS are still issuing guidance. This page is reviewed against the IRS sources below; check them for the latest before you act.

Sources

Return assumptions are illustrative long-run averages for US stocks, not predictions. Last reviewed November 1, 2026.