Tech entrepreneur Michael Dell and his wife Susan have pledged a donation of $250 to 25 million children in the United States, amounting to a total of $6.25 billion. This funding aims to support Trump-branded investment accounts, which were established by Congress as part of a recent tax and spending bill designed to incentivize families to save for their children’s future retirement. Eligible infants born between 2025 and 2028 will also receive a $1,000 government contribution under this program.
The Dells’ initiative focuses on children aged 10 and younger, aiming to enhance savings options for families, especially those with a median income below $150,000. They anticipate that nearly 80% of children within this age group in the U.S. will benefit from the donation. Michael Dell emphasized the importance of providing children with a financial head start in a social media announcement.
The Trump accounts can be established for children under 18 and must be invested in low-cost index funds that mirror the broader stock market. While parents can contribute up to $5,000 annually, the first donations by employers and charitable organizations are set to begin in July. The accounts will convert into retirement accounts when the child turns 18, with tax-free growth but subject to taxes upon withdrawal.
Although the Trump accounts have been met with skepticism by some critics, who argue that they may primarily benefit wealthier families, Treasury Secretary Scott Bessent defended the program as a means to provide savings alternatives. In response to the donation, former President Trump expressed his approval on social media.
As implementation details are still being defined, it remains unclear how effectively the program will meet its intended goals or what impact it will have on current savings options.
Source: https://www.bbc.com/news/articles/cyvgq184vgqo?at_medium=RSS&at_campaign=rss