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Inflation Comparison — Trump Account vs Savings Account

See how inflation erodes a savings account while a Trump Account grows. Compare purchasing power over 5 to 30 years.

Savings Account vs Trump Account: The Inflation Gap

A savings account feels safe, but inflation slowly eats away at your money. Over 18 years, a "high-yield" savings account at 4% APY barely keeps pace with inflation. A Trump Account invested in S&P 500 index funds historically grows much faster than inflation.

This calculator shows the real difference in purchasing power — what your child's money can actually buy after accounting for rising prices. The gap between the two accounts widens dramatically over time.

Savings Account (4% APY)

$1,000 → ~$1,300 in purchasing power after 18 years

Barely beats 2.5% inflation

Trump Account (8% avg return)

$1,000 → ~$3,000 in purchasing power after 18 years

Significantly outpaces inflation

ℹ️ Why this matters for your child

A savings account earning 4% with 2.5% inflation gives a real return of about 1.5%. A Trump Account at 8% gives a real return of about 5.5%. Over 18 years, that difference compounds into 2-3x more purchasing power.

Adjust Your Scenario

$1,000
$500$5,000
18 years
5 years30 years
3%
1%5%

U.S. historical average: ~3%

0.5%
0.01%2%

National average savings rate: ~0.5%

8%
4%12%

S&P 500 historical average: ~10%

Savings Account

$643

Today's dollars

Trump Account

$2,347

Today's dollars

Savings Loses

$357

Purchasing power eroded

Real Advantage

$1,705

Investment wins by

Purchasing Power Over Time

Trump Account (S&P 500) Savings Account

Why this matters: A savings account earning 0.5% APY loses purchasing power every year when inflation is 3%. After 18 years, your $1,000 can buy less than it can today. In a Trump Account tracking the S&P 500, that same money grows to have $1,705 more in real purchasing power.

Frequently Asked Questions

Does inflation affect Trump Account growth?
Yes, but Trump Accounts are invested in S&P 500 index funds, which historically outpace inflation by a wide margin. The S&P 500 has averaged roughly 10% annually, while inflation averages 2-3%. Your real (inflation-adjusted) return is around 7-8%.
How much does inflation erode a savings account?
At 2.5% average inflation, $1,000 in a savings account earning 4% APY is worth only about $1,300 in purchasing power after 18 years. The same $1,000 in a Trump Account at 8% returns could be worth roughly $3,000 in today's dollars.
What inflation rate does the calculator use?
The default is 2.5% annual inflation, which is close to the Federal Reserve's target of 2%. You can adjust this in the calculator to see how different inflation scenarios affect the comparison.
Is a Trump Account better than a high-yield savings account?
Over 18 years, almost certainly yes. High-yield savings accounts currently offer 4-5% APY, but rates fluctuate. The S&P 500 has averaged roughly 10% over any 18-year period in its history. The trade-off is short-term volatility — stocks can drop in any given year, but over 18 years, equities have always outperformed savings accounts.
What about years when the stock market is down?
The S&P 500 has negative years, but over any 18-year period in its history, total returns have always been positive. Trump Accounts benefit from dollar-cost averaging — contributing regularly means you buy more shares when prices are low and fewer when prices are high.

See the full growth projection with the growth calculator, or compare Trump Accounts to other account types in our comparison guide.

Disclaimer: This calculator is for educational and illustrative purposes only. It does not constitute tax or financial advice. Actual returns will vary. Consult a qualified tax professional or financial advisor before making investment decisions.

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