Michael and Susan Dell donate billions to encourage families to claim 'Trump Accounts'

Trump Accounts: A New Path to Financial Security for America's Children

BOTTOM LINE UP FRONT: Starting July 4, 2026, millions of American children will receive investment accounts seeded with up to $1,250 in free money—$1,000 from the federal government for newborns (2025-2028) and $250 from the Dell Foundation for 25 million additional children in middle- and lower-income communities. These accounts harness the remarkable power of compound growth over 18+ years, potentially transforming modest seed amounts into meaningful assets for education, homeownership, or business creation. While the accounts have limitations and won't replace immediate family support programs, they represent an unprecedented public-private partnership to give every child a financial foundation—particularly benefiting families who've historically lacked access to wealth-building opportunities.

The Promise: Free Money That Grows for Nearly Two Decades

Imagine your newborn receiving $1,000 that, left untouched, could grow to $5,000-$6,000 by their 18th birthday—enough to cover a semester at community college, contribute to a down payment, or fund career training. Add just $50 monthly in family contributions, and that same account could reach $25,000-$30,000. This is the transformative potential of Trump Accounts.

The Dell Gift: Historic Generosity

On December 3, 2025, Michael and Susan Dell announced a $6.25 billion pledge—likely the largest single charitable commitment to American children. The gift will provide $250 deposits for at least 25 million children ages 10 and under born before the Treasury funding cutoff, more than double the entirety of the Dells' previous $2.9 billion in lifetime giving.

"We believe that if every child can see a future worth saving for, this program will build something far greater than an account. It will build hope and opportunity and prosperity for generations to come," said Michael Dell, whose $148 billion net worth makes this gift a meaningful commitment to America's future.

Michael Dell told CBS Mornings: "We know that when a child has an account like this, even a modest sum, it really improves their outlook on life, and they are more likely to graduate from high school and college, and buy a home, start a business, start a family, become productive members of society."

How Trump Accounts Work: The Basics

Who Qualifies

Trump Accounts, created through the One Big Beautiful Bill Act signed July 4, 2025, provide tax-deferred investment accounts for American children that will track stock index funds and allow private contributions up to $5,000 annually.

Federal seed money ($1,000):

Children born January 1, 2025 through December 31, 2028
Must be U.S. citizens with Social Security numbers
Automatic enrollment (parents activate accounts starting July 4, 2026)

Dell Foundation money ($250):

Reaches up to 80 percent of children across 75 percent of the nation's ZIP codes where median household income is below $150,000
Children age 10 and under born before 2025
Includes children who won't receive Treasury seed money

Additional contributions:

Parents, guardians, relatives, and friends can contribute up to $5,000 annually
Employers can add up to $2,500 for employees' children, counting against the $5,000 yearly limit
Dell Technologies and other companies have pledged to match Treasury grants for employee children

Investment and Growth

Before age 18, contributions must be invested in low-cost mutual funds or exchange-traded funds tracking the S&P 500 or another index comprised primarily of U.S. companies. This ensures children benefit from America's economic growth through diversified stock market exposure.

The Power of Compound Growth: Real Numbers for Real Families

The true magic of Trump Accounts lies in time—something children have in abundance.

Example 1: Seed Money Only (Most Conservative)

Starting point: $1,000 federal deposit Additional contributions: $0 Time horizon: 18 years Assumed growth rate: 8% annually (below the S&P 500's historical ~10% average)

Result at age 18: $3,996

That's nearly $4,000 from money the child never had to earn—enough to cover books and supplies for four years of college, a reliable used car for work transportation, or startup inventory for a small business.

Example 2: Seed Money + Modest Family Contributions

Starting point: $1,000 federal deposit Family contributions: $50/month ($600/year) Time horizon: 18 years Assumed growth rate: 8% annually

Result at age 18: $27,671

This scenario is achievable for many middle-income families—roughly the cost of one meal out per week. The result? More than a year's tuition at many public universities or 20% down on a $138,000 home.

Example 3: Seed Money + Maximum Family Contributions

Starting point: $1,000 federal deposit Family contributions: $5,000/year (maximum allowed) Time horizon: 18 years Assumed growth rate: 8% annually

Charles Schwab projects that at a 6% growth rate, a $1,000 initial investment plus $5,000 annual parental contributions would grow to around $191,000 by age 18, comprising about $108,000 in after-tax contributions and $83,000 in investment gains.

At an 8% growth rate, this reaches approximately $205,000—life-changing wealth for a young adult.

Example 4: Lower-Income Family With Dell Grant + Minimal Contributions

Starting point: $250 Dell Foundation deposit (child born 2020, lower-income ZIP code) Family contributions: $25/month ($300/year)—achievable even for modest-income families Time horizon: 8 years until child turns 18 (2028-2036) Assumed growth rate: 8% annually

Result at age 18: $3,732

Even modest engagement with the program yields meaningful results. This amount could cover vocational training certification, initial expenses for starting a trade business, or emergency funds during college.

The Longer-Term Picture

If the beneficiary keeps the account and makes no additional contributions after age 18, by the time they reach age 60, the account from Example 3 could be worth more than $2.2 million, demonstrating the extraordinary power of early investing combined with long-term compound growth.

Addressing the Wealth Gap: Demographics and Opportunity

The Racial Wealth Divide

America faces a stark wealth gap across racial and ethnic lines. According to Federal Reserve data, median white family wealth exceeds $188,000, while Black families hold $24,000 and Hispanic families $36,000. This gap perpetuates across generations because wealth enables investment in children's education, home purchases that appreciate, and financial cushions during emergencies.

Child savings accounts could theoretically reduce wealth inequality by encouraging low- and moderate-income households to save more, as wealth inequality can perpetuate itself between generations because children often inherit their parents' wealth and benefit from parental investment in wealth-building activities such as higher education.

Geographic Disparities

The Dell Foundation's focus on ZIP codes with median incomes below $150,000 deliberately targets communities where families have less access to wealth-building opportunities. This includes:

Rural communities where banking services may be limited
Urban neighborhoods with high poverty concentration
Native American reservations with structural barriers to wealth accumulation
Immigrant communities building financial foundations

The Dell investment is expected to reach up to 80 percent of children across 75 percent of the nation's ZIP codes.

What Research Shows About Equity

Even small amounts of assets have been shown to be related to increases in college graduation; a child who has designated school savings from $1 to $499 is over four and a half times more likely to graduate from college than a child with no savings account.

The mechanism isn't just financial—it's psychological and aspirational. When children know they have an account designated for their future, research shows they're more likely to:

Envision themselves in college or career training
Take college preparatory courses in high school
Discuss future plans with parents and counselors
Apply for financial aid and scholarships
Follow through on educational goals

Research suggests that child savings accounts can interrupt negative expectations, signaling to disadvantaged children that college is within the realm of their future possibilities, which results in improved educational outcomes on a variety of measures prior to, during, and following college.

Breaking Cycles: The Institutional Facilitation Effect

University of Kansas research found that young people with childhood savings accounts were twice as likely to maintain savings accounts into their twenties and four times more likely to have invested in stocks, accumulating an average of $2,000 compared to just $100 for those without early accounts.

This demonstrates how early exposure to financial institutions and investment creates lasting relationships with the formal financial system—relationships that higher-income families take for granted but that remain elusive for many working-class and lower-income Americans.

Learning from Success: The Maine Model

The closest precedent for Trump Accounts comes from a state that's made universal child savings accounts work for over a decade.

Created by shoe billionaire Harold Alfond before his 2007 death, the Alfond Scholarship Foundation provides every Maine resident baby with $500 for college, automatically awarded to all babies born as Maine residents starting in 2013.

As of September 2025, the program has invested over $90 million for the future education of more than 180,000 Maine children. An Alfond Grant for a 12-year-old child born in 2009 could now be worth nearly $1,500, demonstrating the power of compound growth even from modest seed amounts.

Maine's success shows that universal child savings programs can work at scale, encouraging families to think about their children's futures and engage with educational planning earlier.

The Business and Economic Case

Why Corporate America Is Interested

Brad Gerstner, CEO of Altimeter Capital and founder of Invest America, said these accounts give American children the chance to benefit from U.S. stock market growth at an early age, noting that the legislation makes it far easier for corporations and philanthropists to make charitable contributions on a large scale.

The accounts align every American child with the success of U.S. companies. When Apple, Microsoft, Amazon, and thousands of other American businesses succeed, Trump Account holders benefit directly.

Speaker Mike Johnson explained: "If you have a 401(k), you understand the power of investing early for the future. Trump Accounts take that same principle and they apply it from the very beginning of Americans' lives—it's a bold, transformative policy that gives every eligible American child a financial head start from day one."

Current Stock Market Participation Gap

About 58% of U.S. households held stocks or bonds in 2022, according to the Securities and Exchange Commission. However, the wealthiest 1% owned nearly half the value of stocks, while the bottom 50% owned just 1%.

Trump Accounts automatically make millions of children—disproportionately from lower-income families—shareholders in American prosperity. Altimeter Capital CEO Brad Gerstner stated: "This is aligning every child in America with the upside of free markets and the benefits, and that is your Main Street agenda—it makes America an ownership society again because all of those kids will see the benefit of compounding interest."

Understanding the Account Structure

Tax Treatment: What Parents Need to Know

The tax structure differs from other savings vehicles:

Tax-deferred growth: Investments grow without annual tax on dividends or capital gains, allowing faster compound growth than taxable accounts.

Taxable withdrawals: Contributions from parents and relatives create basis in the account that isn't taxable when withdrawn, but employer contributions, the $1,000 federal contribution, charitable gifts, and all earnings are taxable at ordinary income rates upon withdrawal.

Example calculation: If your child's account holds $40,000 at age 18—$15,000 from family contributions (tax-free upon withdrawal) and $25,000 from government seed money, employer contributions, and investment gains—then 37.5% of any withdrawal would be tax-free and 62.5% would be taxable.

Withdrawal Rules and Flexibility

Before age 18: Withdrawals generally prohibited (protecting the account's long-term growth).

Age 18-59½: Withdrawals are subject to regular income tax and a 10 percent penalty, with exceptions including for college tuition (unlimited) and first-time home purchases (up to $10,000).

After age 59½: Withdrawals face only ordinary income tax, no penalty.

This structure ensures accounts remain available throughout the child's life while providing flexibility for major life events like education and homeownership.

Comparing Options: When Trump Accounts Make Sense

Trump Accounts vs. 529 Plans

529 plans remain superior for pure education savings because:

Earnings grow federally tax-free, and withdrawals for qualified education expenses are not subject to federal income tax, with over 30 states offering additional state tax deductions or credits for contributions
Maximum aggregate limits range from $235,000 to over $550,000 with no annual contribution caps
More flexible beneficiary changes within families

Trump Accounts offer advantages when:

You want the free $1,000-$1,250 seed money (no reason not to claim it)
Your child might not attend college (529 withdrawals for non-education face penalties)
You've maxed out 529 contributions and want additional tax-deferred savings
Your employer offers matching contributions

The Smart Strategy: Use Both

Most financial advisors suggest a layered approach:

Claim Trump Account seed money for all eligible children
Maximize 529 contributions if focused on education savings
Add to Trump Accounts if you've exhausted better options or want broader flexibility
Consider Roth IRAs for teenagers with earned income (tax-free withdrawals after 59½)

Employer and Community Contributions: The Multiplier Effect

The program's structure encourages contributions beyond family members.

Dell Technologies' pledge to match the $1,000 Treasury grants for employee children demonstrates how companies can use Trump Accounts as an employee benefit, and Dell said he has spoken to other major philanthropists and is optimistic that others will also pledge funds to these investment accounts.

Nonprofit 501(c)(3) organizations and state and local governments may also make tax-free contributions to Trump Accounts as long as those contributions are made on an equal basis to a general class of beneficiaries, such as all children living in a certain geographic area.

This opens possibilities for:

Community foundations targeting local children
Religious organizations supporting congregation members
Civic groups investing in their communities
Native American tribes supporting tribal youth
Local governments supplementing state programs

Practical Steps for Parents

For Children Born 2025-2028 (Eligible for $1,000 Treasury Seed)

Step 1 (July 2026): Activate your child's account when the Treasury system launches. Watch for official guidance at treasury.gov.

Step 2: Set up small automatic contributions if financially feasible. Even $25/month compounds meaningfully over 18 years.

Step 3: Check if your employer offers matching or supplemental contributions.

Step 4: Inform grandparents and relatives about contribution opportunities for birthdays/holidays.

Step 5: Also establish a 529 plan for maximum education savings flexibility.

For Children 10 and Under in Lower-Income ZIP Codes (Eligible for $250 Dell Grant)

Step 1 (2026): Watch for information from the Dell Foundation about claiming the $250 grant.

Step 2: Activate the account even if you can't contribute immediately. The $250 will grow on its own.

Step 3: When financially able, start with micro-contributions. $10-25/month makes a real difference over time.

Step 4: Use account statements to talk with your child about saving, investing, and future possibilities.

For All Families

Talk about it: Use the account as a teaching tool. Show children their statements, explain how investing works, and discuss future dreams.

Stay informed: Many regulatory details remain pending from the Treasury Department and IRS, with rules expected before the July 2026 launch.

Be realistic: Trump Accounts are one tool, not a complete solution. Continue emergency savings, retirement planning, and current family needs.

Addressing Valid Concerns

"Won't This Just Benefit Wealthy Families?"

The deliberate structure addresses this concern:

All seed money goes to children regardless of family income
Dell Foundation specifically targets middle- and lower-income ZIP codes
Contribution limits ($5,000/year) prevent massive wealth transfers
Lower-income families receive the same compound growth advantages as wealthy families on seed money

The program won't eliminate wealth inequality, but it provides a foundation that currently doesn't exist for millions of children.

"What About Kids Who Need Help Now?"

This is a legitimate concern. In 2024, about 13% of children lived in poverty, and experts link high child poverty rates to lack of immediate supports like paid parental leave, affordable childcare, and nutrition assistance.

Investment accounts maturing in 18 years don't feed hungry children today or pay for doctor visits this month. However, they're not mutually exclusive with immediate support programs. Ray Boshara of the Aspen Institute views Trump Accounts as "a down payment on a big idea that deserves to be improved," suggesting the program can evolve alongside—not replace—current family support.

The ideal approach combines immediate support for children today with long-term wealth building for their futures.

"Is the Stock Market Too Risky for Children?"

Over 18+ year periods, diversified stock market investing has historically outperformed virtually all alternatives:

The S&P 500 has never produced a negative return over any 20-year period in history
Index funds (required for Trump Accounts) provide automatic diversification across hundreds of companies
Time horizon (18+ years) allows accounts to recover from inevitable market downturns
The alternative—holding cash—guarantees losses to inflation over two decades

For long-term investing starting at birth, broad stock market exposure through index funds remains the optimal approach.

The Policy Context: Room for Improvement

The program isn't perfect, and policymakers should consider enhancements:

Larger seed amounts for lowest-income families: Consider $2,000-$3,000 for families below poverty line.

State matching programs: Encourage states to supplement federal seed money.

Financial education requirements: Link accounts to age-appropriate financial literacy curriculum.

Simplified tax treatment: Consider making all withdrawals tax-free for qualified uses (education, home purchase, business startup).

Protection from creditors: Ensure accounts can't be seized for parental debts.

Ray Boshara suggests viewing Trump Accounts like Social Security and the Affordable Care Act—programs that started imperfectly but improved over time through bipartisan interest in refinement.

The Vision: An Ownership Society

Goldman Sachs CEO David Solomon stated: "This initiative gets at the core of binding those future generations to the benefits and the potential of America's great companies and markets. Early childhood investments have far-reaching benefits, and Goldman Sachs is proud to support this initiative—our economy's future vitality is dependent on young people understanding the power of investing for the long term."

The program's ambition extends beyond individual accounts. It aims to create a generation of Americans who:

Understand compound growth and long-term investing
Have direct stakes in American economic success
Start adulthood with financial foundations rather than obstacles
View wealth-building as accessible, not exclusive to the already-wealthy

Uber CEO Dara Khosrowshahi captured this vision: "What if we could give that same powerful, real, tangible hope that comes from having a stake in your own future and a stake in the best companies in the world to every single child that's born in this country? That's the promise of the Invest in America Act. It's not just an account; it's a launchpad."

The Bottom Line: A Historic Opportunity

Trump Accounts represent the most ambitious universal child savings initiative in American history. Millions of children will receive free seed money that compounds over nearly two decades, with the potential to reach substantial sums by adulthood.

The program isn't perfect—tax treatment could be simpler, contribution limits could be higher, and it doesn't replace immediate family support needs. But it's a meaningful start toward democratizing wealth-building opportunities that have historically been available only to families with existing resources.

For parents, the choice is straightforward: Claim the free seed money for your eligible children. It costs nothing, carries no downside, and could grow into meaningful support for education, homeownership, or business creation. If you can contribute beyond seed money, run the numbers against 529 plans and other options—but don't let perfect be the enemy of good.

For policymakers and philanthropists, this is an invitation to improve and expand. The Dell family demonstrated that private wealth can complement public programs at unprecedented scale. Others should follow their lead.

For children, Trump Accounts offer something invaluable: hope. The knowledge that they have an account with their name on it, growing every day, invested in America's future because America is invested in theirs.

That's worth building on.

Sources and Formal Citations

Primary News Coverage:

Beaty, T. (2025, December 3). Michael and Susan Dell donate $6.25 billion to encourage families to claim 'Trump Accounts'. Associated Press. https://www.sandiegouniontribune.com/
(2025, December 2). Michael Dell pledges $6.25 billion to fund Trump Accounts for 25 million kids. CNBC. https://www.cnbc.com/2025/12/02/michael-susan-dell-trump-accounts.html
The White House. (2025, June 9). Trump Accounts will chart the path to prosperity for a generation of American kids. https://www.whitehouse.gov/articles/2025/06/trump-accounts-will-chart-path-to-prosperity-for-a-generation-of-american-kids/
(2025, December 2). Michael Dell gives $6.25 billion to launch 'Trump Accounts' for 25 million kids. Bloomberg. https://www.bloomberg.com/news/articles/2025-12-02/michael-dell-gives-6-25-billion-to-launch-trump-accounts-for-25-million-kids
Axios. (2025, December 2). Michael Dell to fund 25 million "Trump accounts" with $6.25 billion gift. https://www.axios.com/2025/12/02/trump-accounts-dell-donation-25-million-kids
(2025, December 2). Michael and Susan Dell donate $6.25 billion to fund 'Trump Accounts' for millions of American kids. CNN Business. https://www.cnn.com/2025/12/02/business/michael-susan-dell-donation-trump-accounts
(2025, December 2). Michael and Susan Dell to fund "Trump accounts" by giving $250 apiece to 25 million U.S. kids. CBS News. https://www.cbsnews.com/news/michael-dell-25-million-children-250-each-trump-accounts/
The Hill. (2025, December 2). Michael and Susan Dell depositing $250 in 25M children's investment accounts. https://thehill.com/homenews/administration/5629450-michael-susan-dell-trump-accounts-kids/

Government and Policy Sources:

House Ways and Means Committee. (2025, June 10). Trump Accounts provide greater financial security for the next generation of Americans. https://waysandmeans.house.gov/2025/06/10/trump-accounts-provide-greater-financial-security-for-the-next-generation-of-americans-just-like-their-namesake/
Tax Foundation. (2025, July 23). Trump Accounts explained. https://taxfoundation.org/blog/trump-accounts-could-be-better/
American Enterprise Institute. (2025, July 22). Beware widespread misinformation about the new "Trump Accounts." https://www.aei.org/economics/beware-widespread-misinformation-about-the-new-trump-accounts/
Congressional Research Service. Child savings accounts: Overview and analysis. R48554. https://www.congress.gov/crs-product/R48554

Financial Services Analysis:

Charles Schwab. What to know about Trump Accounts. https://www.schwab.com/learn/story/trump-accounts
Morningstar. (2025, August 20). 10 things to know about the Trump savings account. https://www.morningstar.com/financial-advisors/10-things-know-about-trump-savings-account
Ed Slott and Company. (2025, July 16). How Trump Accounts work. https://irahelp.com/how-trump-accounts-work/
CNBC. (2025, July 18). 'Trump accounts' come with a $1,000 baby bonus. Then the rules get complicated, tax experts say. https://www.cnbc.com/2025/07/18/big-beautiful-bill-childrens-trump-account-rules-are-complicated.html
EPIC for America. (2025, August 6). Understanding Trump Accounts in the OBBB. https://epicforamerica.org/education-workforce-retirement/understanding-trump-accounts-in-the-obbb/

Child Savings Account Research:

Consumer Financial Protection Bureau. Children's savings account programs: Measuring program performance and outcomes. https://www.consumerfinance.gov/data-research/research-reports/childrens-savings-account-programs-measuring-program-performance-and-outcomes/
Prosperity Now. Quick guide to CSA research: An overview of evidence on children's savings accounts. https://prosperitynow.org/resources/quick-guide-csa-research-overview-evidence-childrens-savings-accounts
Friedline, T., et al. (2013). Savings accounts for children linked with later financial success. University of Kansas School of Social Welfare. https://news.ku.edu/news/article/2013/09/16/savings-accounts-children-linked-later-financial-success
Journal of the Society for Social Work and Research. (2023). Financial outcomes of interventions to improve financial capability through children's development accounts: A systematic review. Vol 14, No 2. https://www.journals.uchicago.edu/doi/10.1086/716103
Wikipedia. Children's savings accounts. https://en.wikipedia.org/wiki/Children's_Savings_Accounts
Urban Institute. (n.d.). A review of children's savings accounts. https://www.urban.org/sites/default/files/publication/44351/2000157-a-review-of-childrens-savings-accounts.pdf

529 Plan Information:

Saving for College. (2024, November). How much is your state's 529 plan tax deduction really worth? https://www.savingforcollege.com/article/how-much-is-your-state-s-529-plan-tax-deduction-really-worth
Internal Revenue Service. 529 plans: Questions and answers. https://www.irs.gov/newsroom/529-plans-questions-and-answers
Congressional Research Service. Tax-preferred college savings plans: An introduction to 529 plans. R42807. https://www.congress.gov/crs-product/R42807
Saving for College. (2024, December 23). 9 key benefits of 529 plans for tax-advantaged education savings. https://www.savingforcollege.com/intro-to-529s/name-the-top-7-benefits-of-529-plans

Maine Alfond Grant Program:

Alfond Scholarship Foundation. My Alfond Grant. https://www.myalfondgrant.org/
Alfond Scholarship Foundation. About the Alfond Grant. https://www.myalfondgrant.org/about-the-grant/
NextGen 529. Alfond Grant. https://www.nextgenforme.com/grants-for-maine-residents/alfond-grant/
Alfond Scholarship Foundation. About the Alfond Scholarship Foundation. https://www.myalfondgrant.org/about-the-alfond-scholarship-foundation/
Harold Alfond Foundation. (2020, October 6). Harold Alfond Foundation invests $500 million in Maine and its people. PR Newswire. https://www.prnewswire.com/news-releases/harold-alfond-foundation-invests-500-million-in-maine-and-its-people-301146800.html

Note: This analysis is current as of December 3, 2025. Trump Accounts are scheduled to launch July 4, 2026, and many regulatory details remain pending from the Treasury Department and IRS. Families should consult the official Treasury guidance when it becomes available and work with qualified tax and financial advisors before making contribution decisions.

For Updates:

U.S. Department of the Treasury: www.treasury.gov
Internal Revenue Service: www.irs.gov
Invest America Charitable Foundation: Information available through official announcements