Michael Dell and his wife Susan have committed $6.25 billion to fund investment accounts for millions of American children. The huge investment will seed tax-advantaged “Trump Accounts” (Section 530A accounts) for kids who are too old to qualify for grants that are set to come from the U.S. Treasury. The “Trump Accounts” are part of President Donald Trump’s “One Big Beautiful Bill Act” and are set to launch in 2026.
“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 in an interview. “We know that when children have accounts like this, they’re much more likely to graduate from high school, from college, buy a home, start a business and less likely to be incarcerated.”
Under the new law, “Trump Accounts” are available to any American child under 18 with a Social Security number and their families can fund the accounts, which must be invested in an index fund that tracks the overall stock market. When the children turn 18, they can withdraw the funds to put toward their education, to buy a home or to start a business.
“These investment accounts are simple, secure, and structured to grow in value through market returns over time,” the Dell family said in a statement.
The Treasury Department is set to fund $1,000 for every “Trump Account” for all US citizen children born between January 2025 and January 2029.
The Dells’ charitable gift will go toward children ages 10 and under who were born before the cut-off for the Treasury’s funding. The Dells’ donation will fund $250 deposits for investment accounts for at least 25 million children.
“If there’s one investment that never stops growing, it’s investing in children. They are our future,” the Dells said in a statement. “From our years of experience in supporting education, health and financial stability programs, we know that this program will give young Americans more than a savings account. It will give them momentum. It will give them confidence and opportunity.”
The Dells have donated $2.9 billion to date, according to the Michael & Susan Dell Foundation, making this $6.25 billion pledge more than double the entirety of their previous giving.
Michael Dell, chief executive at Dell Technologies, is the world’s 11th richest individual with a net worth of $148 billion, according to the Bloomberg Billionaires Index.
The One Big Beautiful Bill Act permits “Trump Accounts” to be established for American children who have not reached age 18.
• An American child born after December 31, 2024 and before January 1, 2029 for whom a Trump Account is established will receive an initial $1,000 deposit from the U.S. government, with the potential for parents to contribute up to an additional $5,000 per year initially.
— Employers may make an annual contribution of up to $2,500 to a Trump Account and that contribution will not impact the employee’s taxable income.
• CEA estimates that, under a scenario of average returns on the U.S. stock market, Trump Account balance for a baby born in 2026 will be:
— $303,800 by age 18 and $1,091,900 by age 28 if maximum contributions are made.
— $5,800 by age 18 and $18,100 by age 28 if no contributions are made.
NBC News:
“Trump Accounts represent a potentially valuable tool for building up savings and tapping the power of compound growth for the young,” Charles Schwab tax planning director Hayden Adams recently wrote.
If a family could contribute and invest the maximum $5,000 per year in the accounts, and with a reasonable growth rate of about 6%, “by age 18, the child’s account would hold around $191,000 in assets.”
Once a child turns 18, the accounts are eligible to be converted to a traditional individual retirement account, “meaning it could continue to accumulate potential gains on a tax-free basis” for many years.
MacDailyNews Take: We laud Michael and Susan Dell for this investment in America’s future! This is money very well-invested (unlike Social Security) and it will pay untold dividends for millions of Americans. We hope other billionaire philanthropists – cough, Laurene Powell Jobs, cough – follow the Dell’s lead and invest in boosting Section 530A accounts for American children!
Social Security is a government-run retirement program funded by mandatory payroll taxes taken from Americans’ earnings. These mandated contributions are invested very inefficiently compared to what individuals could achieve on their own in private markets. If workers could instead invest that same money in a diversified stock-and-bond portfolio over a typical 40-year career, historical data suggest they would end up with substantially more wealth in retirement than the benefits Social Security currently provides for most people.
The U.S. stock market (S&P 500) has delivered roughly 7% real annual returns over the very long term (1926–present), and a balanced 60/40 stock/bond portfolio has averaged about 5–6%.
Studies that calculate the implied “rate of return” retirees get from Social Security (comparing lifetime contributions vs. lifetime benefits) show:
• For single men retiring today: ~1–2% real return
• For single women (longer life expectancy): slightly higher, ~2–3%
• For high earners (hit the wage cap most years): often negative or near zero
• For very low earners or certain family structures (e.g., one-earner couples): higher, sometimes 4–5%+ because of the progressive benefit formula and spousal/survivor benefits
Take a median-earning worker born in 1980, paying the full 12.4% payroll tax over 45 years: Total contributions (worker + employer share) ≈ $800,000–$1 million via Social Security in today’s dollars by retirement.
If the same $800,000–$1 million had instead been invested privately at a conservative 5% real return (60/40 portfolio), it would grow to ~$4–6 million by age 67, enough to buy a much higher inflation-protected annuity than Social Security provides.
Again, we laud Michael and Susan Dell for this investment in America’s future and hope other philanthropists follow the Dell’s lead and invest in boosting Section 530A accounts for American children!
Find out more about “Trump Accounts” here.
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