Michael and Susan Dell have committed $6.25 billion to fund investment accounts, dubbed 'Trump accounts,' for 25 million U.S. children, aiming to support families and encourage saving from an early age. This initiative works in conjunction with a new federal government program.
Key Points
The article highlights the following key points: Michael and Susan Dell are donating $6.25 billion to fund investment accounts for 25 million U.S. children, the funds will seed tax-advantaged "Trump accounts" for kids too old to qualify for U.S. Treasury grants, and Michael Dell stated he heard the idea from hedge fund manager Brad Gerstner.
The Donation and its Purpose
Michael and Susan Dell are donating $6.25 billion to fund investment accounts for approximately 25 million American children. This is reportedly the largest donation ever for children. The purpose is to encourage families to start saving from an early age, and children who have these accounts are more likely to graduate high school and college, buy homes, start businesses, and less likely to be incarcerated.
Trump Accounts and Government Program
The Dells' commitment works alongside a new federal program. The program allows parents to open tax-advantaged investment accounts for children under 18. US citizens born from the beginning of 2025 through 2028 will get a federal grant of $1,000 to seed the Trump accounts. The Dells have committed to seeding Trump accounts with $250 for children born before 2025 to ZIP codes with an income under $150,000. Dell notes that the Dells want to help those not part of the federal program.
Inspiration for the Initiative
Michael Dell credits hedge fund manager Brad Gerstner with the idea of seeding investment accounts for children. Brad Gerstner, CEO of Altimeter Capital, founded Invest America to advocate for including the program in the One Big Beautiful Bill Act. Gerstner states the 'Trump accounts' enable US citizens to benefit from growth in US stock markets. Dell Technologies will match the 1,000 grants from the US Treasury for employees.
Trump Account Details and Future Prospects
Trump Accounts offer tax advantages for families with funds only being able to be invested in low-cost diversified funds tracking the U.S. Stock Index. Gerstner adds the initial amount of $250 or $1000 will encourage parents to add their own funds. Dell hopes other philanthropists will also pledge funds to these accounts.
