How the Trump Accounts Work—and Who Is Eligible for Dell’s $6.25 Billion Gift

(Illustration by Barron’s; Dreamstime (1))

Key Points

• Michael and Susan Dell’s $6.25 billion gift will expand the Invest America program to 25 million more children.
• The Invest America program, approved earlier this year, funds tax-free ‘Trump Accounts’ with $1,000 for U.S. citizens born between 2025 and 2028.
• Trump Accounts will be available next year for U.S. citizens, investing in low-cost, diversified stock index funds with fees not exceeding 0.10%.

Michael and his wife Susan Dell’s $6.25 billion gift to children’s savings accounts will expand the federal government’s new Invest America program to 25 million more children.

The Invest America program, approved through federal tax and spending legislation earlier this year, was created to give children a head start on their financial future. The program will fund tax-free savings accounts, known as Trump Accounts, for U.S. citizens born between 2025 and 2028 with $1,000.

President Donald Trump on Tuesday at the White House thanked the Dells for their “extraordinary act of kindness and patriotism and charity,” as the administration issued details on how the accounts will work.

The Dells are adding to this effort by committing to seed Trump Accounts with $250 for children up to age 10, born in 2024 and earlier, according to an announcement by the couple. At the White House, Michael Dell said the gift “will cover most children 10 and under who are not part of the federal program, who live in zip codes where the median family income is $150,000.”

The gift “will give millions of children, middle class families, a stake in American prosperity, a benefit from the rising stock market, and a better shot at the American dream,” Trump said.

The funds are intended to encourage families to open these accounts, add to them with the help other friends and family members, and start saving for their children’s future. Despite bearing the president’s name, the Dells describe Invest America as a bipartisan, federally backed initiative.

Employers can also contribute to the accounts, “with the first $2,500 per employee per year excluded from the employee’s income,” the government said on Tuesday. Dell Technologies, the computer firm founded by Michael Dell, is matching the federal government’s $1,000 contribution for newborn children of its U.S. employees, according to the Dells’ Giving Tuesday announcement.

At the White House, the president said he expected “hundreds of major companies to announce plans to contribute to these accounts in the coming months,” and noted that he has also spoken with “a lot of his friends,” who have told him they will contribute “a lot of money.”

“This is not just about what one couple or one foundation or one company can do,” the Dells said in a statement. “It is about what becomes possible when families, employers, philanthropists, and communities all join together to create something transformative.”

Michael and Susan Dell Photo: Phillip Faraone / Getty Images for Breakthrough Prize

The gift—among the largest single gifts by a U.S. philanthropist—is consistent with the Dells longtime giving to children and young adults, which has largely been through support of educational initiatives. Michael Dell is among the world’s wealthiest, ranking No. 11 with a net worth of $148 billion as of Dec. 1, according to the Bloomberg Billionaires Index.

Trump Accounts will be available next year for U.S. citizens with a valid Social Security number. Initially, these accounts will be created and held with a financial agent designated by the U.S. Treasury, according to a fact sheet distributed by the administration on Tuesday.

“At a later date, parents or guardians will be able to transfer the full balance of a Trump Account to their preferred brokerage firm through a simple trustee-to-trustee rollover,” the fact sheet stated.

To open an account, a parent or guardian needs to use IRS Form 4547, which can be completed at any time. That form is also used to make an election for the $1,000 contribution from the U.S. Treasury. Once the election is made, the government will send details on how to activate the account through an “authentication process,” the government said, noting that a new website, trumpaccounts.gov, includes information and instructions about the form.

A parent or guardian can open an account for children 18 and under and fund it with up to $5,000 per child a year beginning July 4, 2026, according to the fact sheet. Once opened, other family members, friends, or employers can contribute to the account. Philanthropists, charitable organizations, and state or local governments can also add funds to these accounts, which don’t count toward the $5,000 cap, the government said.

The government’s $1,000 contribution also doesn’t count against the annual cap, the government said on Tuesday. It’s also available for qualifying children as long as the account is opened before they turn 18.

Trump Accounts must invest in low-cost, diversified stock index funds that will be overseen by the U.S. Treasury. Fees on the funds can’t exceed 0.10% and the funds are prohibited from using leverage, the government said.

The federal funds will be electronically deposited once parents activate their account, the government said. Similarly, the Dells’ contribution will be deposited in eligible accounts once they are activated through the U.S. Treasury, with priority going to younger children.

No funds can be withdrawn from the Trump accounts—which must be set up and managed by a parent or guardian—before a child turns 18 “except for rollovers, certain transfer to ABLE accounts [tax-advantaged savings accounts for individuals with disabilities], or distributions upon death,” according to the government fact sheet.

Funds in these accounts will be available for “early-adulthood needs” such as education or job training, starting a business, or buying a home, once a child turns 18. At that time, the accounts are automatically converted to traditional IRAs.

Write to Abby Schultz at abby.schultz@barrons.com