Michael and 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 savings accounts, known as "Trump accounts," for children born in 2025 with $1,000.
The Dells are adding to this effort by committing to seed Invest America accounts with $250 for children up to age 10, born in 2024 and earlier, according to an announcement by the couple. Various news sources have subsequently reported that the funds will initially go to families who live in zip codes with a median family income of $150,000 or less.
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.
Employers can also contribute to the fund. 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.
"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."
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.
Invest America accounts are expected to become available next year after the U.S. Treasury and Internal Revenue Service issue official guidelines, including a list of approved financial institutions. Eligible accounts will likely need to be certified with the Social Security Administration.
Once the guidelines are issued, any family can open an account for children 18 and under and fund it with up to $5,000 per child a year. Anyone can contribute to the account -- other family members, friends, or employers. Philanthropists, charitable organizations, and state or local governments can also add funds to these accounts, which don't account toward the $5,000 cap, according to according to an Invest America fact sheet.
Invest America accounts opened with one of the approved providers will be invested in low-cost, diversified index funds that will be overseen by the U.S. Treasury, according to Invest America. The federal funds will be electronically deposited once parents activate their account, Invest America 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.
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.
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