Tech CEO Michael Dell and his wife Susan pledged Tuesday to contribute $6.25 billion to so-called Trump accounts, a type of tax-advantaged savings account for children.
The commitment will expand access to seed money for children too old to qualify for the $1,000 grants that are set to come from the Department of the Treasury.
With the additional funds, some 25 million American children born before Jan. 1, 2025, who are 10 or under could each receive a $250 grant in a Trump account, according to Invest America, a nonprofit advocacy group partnered with the Dells.
“It’s designed to help families feel supported from the start and encourage them to keep saving as their children grow,” Michael Dell, founder and CEO of Dell Technologies, told CNBC.
How Trump accounts work
Under President Donald Trump’s “big beautiful bill,” which Congress passed in July, anyone can open a Trump account on behalf of a child age 18 or younger. Babies born in 2025 through 2028 will each receive a one-time $1,000 deposit in their account. There are no income requirements, and everyone is eligible for the government’s seed money, as long as the child is a U.S. citizen.
The grants stand to benefit millions of young Americans: For perspective, there were roughly 3.6 million U.S. births in 2024, up by about 1% from 2023, according to provisional data released in April by the Centers for Disease Control and Prevention’s National Center for Health Statistics.
Not unlike a 529 college savings plan, Trump accounts are meant to encourage early savings opportunities, with the potential for annual employer contributions as well as donations from state and local governments and nonprofit organizations.
Dell previously vowed to match the government’s seed money “dollar for dollar” for his employees’ kids during the “Invest America” roundtable event at the White House in June with Trump. Other CEOs at the event also committed to contribute to the savings account plans on behalf of their employees.
Trump account balances will be invested in a low-cost index fund, such as a mutual fund or exchange-traded fund. However, the asset management industry has expressed concerns about the legislation’s language that could limit ETFs and mutual fund options in these accounts. They have asked Treasury to broaden its interpretation.
“We are creating a private prosperity account for every child,” Brad Gerstner, CEO of Altimeter Capital, who helped spearhead the effort, said on “Squawk Box” Tuesday morning.
How to claim the grant money
Trump accounts are not yet available. But starting on July 4, 2026, parents and others will be able to contribute up to $5,000 a year in after-tax dollars up until the year before the beneficiary turns 18.
Families must complete Form 4547 to open a Trump account for their child, according to Ben Henry-Moreland, a certified financial planner with advisor platform Kitces.com. “In that case, the government will open up and fund this account on their behalf,” he said.
Withdrawals are not permitted until the beneficiary turns 18. At that point, the assets will be rolled into an individual retirement account. The beneficiary can use the funds for education expenses, job training, the down payment on a first home, or as capital to start a small business. They can also opt to leave the funds invested for retirement.
From a tax perspective, Trump accounts would function like an IRA. Earnings grow tax-deferred, and since Trump accounts include a mix of after-tax contributions, initial seed money and investment income, distributions are partially taxable.
However, experts say that details on the tax treatment of distributions need further clarification from the Treasury Department and Internal Revenue Service.
Many questions remain about Trump accounts, including which entities will manage the assets and details on how the accounts will convert to IRAs, among other issues.
The impact on low-income families
Experts say the one-time $250 Trump account deposit won’t significantly impact lower-income families.
“You need to start seeing more of these types of contributions to create meaningful amounts,” Henry-Moreland said.
Plus, a lot will depend on public education, he said.
The federal government “really needs to sell these [accounts] to those who wouldn’t necessarily contribute to these on their own,” he said. “This is going to require some amount of organized, coordinated effort.”
Further, whether the Treasury will automatically establish the accounts for all eligible participants could go a long way toward determining how many children — particularly from lower-income families — enroll and benefit from the grant money, according to a July analysis by the Aspen Institute, a nonprofit forum.
“We strongly encourage Treasury to prioritize enabling automatic enrollment in the implementation of the Trump Accounts program, as its success for young people from low- to moderate-income households hinges greatly on this particular choice,” the researchers wrote.
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