The United States' new policy introduces children's investment accounts, sparking discussions across various sectors.

Recently, the U.S. government announced a new investment plan for children, establishing a $1,000 investment account for every child born in the U.S. with a Social Security number between January 1, 2025, and January 1, 2029. This plan aims to provide a certain economic foundation for the next generation of Americans.

Under this plan, every eligible newborn will be automatically enrolled, with initial funding provided by the U.S. Treasury. This proposal is currently under review in Congress, and funding sources may include government cuts from other expenditure programs and revenues from tariffs. In addition to the initial funding provided by the government, families and third parties can also contribute up to $5,000 annually to the children's account.

The use of this investment account has certain restrictions. Beneficiaries can withdraw 50% of the account balance after turning 18, and can withdraw the entire balance starting at 25, but it must be used for specific purposes such as small business loans and higher education. By age 30, account holders can fully access the entire balance for any purpose.

This account is designed as a tax-deferred account, primarily used to track the overall economic trends in the United States. As long as the funds are used according to regulations, the account earnings will be taxed at the long-term capital gains tax rate. If the funds are used for other purposes, the withdrawn portion will be taxed as income, and misuse of funds may also incur a 10% penalty.

To illustrate the potential returns of this type of long-term investment, an analysis pointed out that if $1,000 had been invested in a fund tracking the S&P 500 index 18 years ago, the present value including reinvested dividends would be about $5,590.

According to the latest data from the National Center for Health Statistics, with a birth population of 3.6 million in 2023, the government will invest approximately 3.6 billion dollars annually in this program.

However, this plan also faces some skepticism. Some financial advisors argue that compared to the existing 529 college savings plans and Roth individual retirement accounts, the newly launched account offers relatively limited tax benefits and may not be attractive enough.

In addition, experts pointed out that relying solely on the initial funding of 1,000 dollars provided by the government may not be sufficient to meet the significant expenses that children will face when they reach adulthood, such as paying for a down payment or continuing higher education. This means that additional financial support may be needed from the community and the government.

Nevertheless, this initiative has received some support from businesses. A certain technology company has committed to providing $1,000 in account funds for the newborns of its employees, matching the funds provided by the government. Several other large companies have also stated they will support this initiative, but specific details have not yet been announced.

Overall, while the intention of this new policy is good, there are still some controversies regarding the implementation details and long-term effects. Its ultimate impact remains to be further observed and evaluated.