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Billie Eilish eat your heart out..
A one-time payment of $250 is not a significant investment. But the Dell’s get a nice tax deduction for their $6.25 “contribution.”
Brent – Seriously – they donate $6.25 BILLION and that is your take on the gift?
The Dells are reported to be rich to the tune of $150 billion. They could afford to give away $75 billion (or twelve times as much) and make a a greater impact while still have $75 billion to live among the country’s one-percent of the wealthiest people in the country. And THAT is my take on their gift.
So the kids of millionaires and billionaires can get $1k if they live in the correct zip code? There should be an income limit on the parents.
Donations are nice, but the idea that 80%-90% of parents would even have any money to contribute to these accounts after their own contributions to their retirement or even a 529 (which offers better tax benefits than these) is unrealistic. 59% of Americans can’t even cover a $1,000 emergency cost if they had to (https://www.cbsnews.com/news/saving-money-emergency-expenses-2025/).
What will ultimately happen is the wealthiest families will be able to contribute to these and basically provide a tax free gift to their children, while the vast majority of Americans won’t benefit at all from this.
The idea is for people to start saving early. $250 plus the $1000 from US Treasury, invested in the market for 18 years will yield impressive results even with modest contributions.
William, if it were that easy, families would already be doing it with their own money. Getting a gift of $1,250 won’t change attitudes or behavior in personal finance.
A $1250 initial investment after 18 years considering an annual 8% return and adjusted for inflation of 3% would yield about $3K in the end.
So that is going to make it easier for the kid to by a home or go to college. I think not.
Excellent point. In a country where 59% of families can’t handle a $1,000 emergency expense, why are we prioritizing saving for children that can’t even touch those funds until they are 18? Again, the real benefit would just be to children of wealthy families.