How families are using Trump Accounts
According to Adam Bergman, the benefits of the Trump Account aren’t limited to the money his two sons can save over decades. New accounts are a chance to teach them how investing works.
Bergman, the founder of IRA Financial, told CNBC that he was eager to create Trump Accounts to help his sons benefit from the tax-advantaged growth provided by these savings and investment accounts.
“It’s not just about the number of dollars you have at the end of the day, but hopefully it will open people’s eyes and say, ‘Hey, this is savings. This is how it works,'” he said. “This is a very powerful tool.”
How do Trump Accounts work?
Bergman is one of millions of parents trying to figure out whether and to what extent Trump Accounts fit into their family’s financial goals.
Families sign up ahead of Trump Accounts’ official launch on July 4th More than 6 million children, according to the Treasury Department. About 1.4 million of those enrolled are babies born between 2025 and 2028 who are eligible to receive a $1,000 seed investment from the federal government.
Parents, grandparents, and loved ones can contribute up to $5,000 per year to accounts, also known as 530A accounts. Employers can also contribute up to $2,500 per worker per year, which counts toward a maximum annual contribution of $5,000.
Funds in these accounts generally cannot be accessed until age 18, and then the account converts to a traditional IRA.
Check out our Trump Accounts guide for more details.
‘If there is free money, we will take it’
Will Matthews and his wife are expecting a baby who could benefit from free seed money. The couple also created Trump Accounts for their two young children. He said they guessed each of them might be a good fit. Dell Foundation’s charitable contribution of $250 available to children ages 10 and under living in an eligible zip code.
“If it’s free money, we’ll take it,” said Matthews, who is self-employed and works as a senior auditor in Columbus, Ohio.
Matthews said he and his wife are unlikely to add more money to their children’s Trump Accounts beyond those donations, although he believes investing early helps improve a child’s financial education.
“There aren’t enough crazy tax benefits in these accounts that I would be enthusiastic about putting all my eggs in this basket,” he said.
Instead, he said he focused primarily on funding a 529 savings account to help with college educations.
Experts said 529s, custodial brokerage accounts and Roth IRAs may be worth considering in addition to or instead of a Trump Account, depending on your family’s goals and timeline.
Creating ‘tax-free millionaires’
Bergman family
Courtesy: Bergman family
Bergman, meanwhile, said she plans to contribute a maximum of $5,000 a year to the Trump Account before her sons turn 18. At that age, it becomes a traditional IRA that the account owner can use as they see fit.
“I think it helps people want to invest,” said Aven, 15, Bergman’s oldest son. This also teaches you that you can see growth in your portfolio.
Bergman and his wife, Jaclyn, are already encouraging Aven and his 12-year-old sister, Ever. They will convert Trump Accounts to Roth IRAs in the future. With a Roth IRA, investment growth and future retirement withdrawals are generally tax-free.
“We will invest in this together,” Bergman said. “They will be tax-free millionaires.”
Although Aven is more than 40 years away from retirement, he said he believes his early start will pay off.
“You have to be patient; it will go up,” he said. “Just be patient and you will make a lot of money over time.”
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