For Adam Bergman, the benefits of the Trump Account are not limited to the money his two sons can accumulate over the decades. New accounts are an opportunity to teach them how investing works.
Bergman, the founder of IRA Financial, told CNBC that he was eager to open Trump accounts for his sons to help them benefit from the tax-advantaged growth available through these savings and investment accounts.
“It’s not just about the number of dollars you’ll have at the end of the day, but we hope we open people’s eyes and say, ‘Hey, this is what saving is. This is how it works,'” he said. “It’s a very powerful tool.”
How Trump accounts work
Bergman is one of millions of parents who are discovering whether — and to what extent — Trump’s accounts fit their family’s financial goals.
Before the official July 4 launch of Trump Accounts, families registered more than 6 million children, according to the Treasury Department. About 1.4 million of those enrolled are children born between 2025 and 2028, who are eligible for a $1,000 seed investment from the federal government.
Parents, grandparents and loved ones can contribute up to $5,000 a year to what are also known as 530A accounts. Employers can also make contributions of up to $2,500 per employee per year, which is limited to the $5,000 annual maximum contribution.
Funds in these accounts are generally not accessed before age 18, and the account is converted to a regular IRA.
For more details, see our guide to Trump Accounts.
‘If it’s free money, we’ll take it’
Will Matthews and his wife are expecting a child who will be able to receive this free seed money. The couple also set up Trump Accounts for their two young children. He said they expect each person to qualify for a $250 Dell Foundation donation to children 10 and under who live 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 accountant in Columbus, Ohio.
While he believes investing early helps improve a child’s financial education, Matthews said, it’s unlikely he and his wife will add more money to their children’s Trump Accounts beyond those grants.
“These accounts don’t have a lot of tax benefits which is crazy for me to put all my eggs in this basket,” he said.
Instead, he said, he focused on funding 529 savings accounts first to help pay for their college educations.
Experts said 529s, savings accounts and Roth IRAs could be worth considering in addition to or instead of the Trump Account, depending on your family’s goals and timeline.
Making ‘tax-free millionaires’
The Bergman family
Courtesy: The Bergman Family
Bergman said he plans to make the maximum Trump Account contribution of $5,000 a year to his sons before they turn 18. At that age, it becomes a traditional IRA for the owner to use as they see fit.
“I think it helps people want to invest,” said Aven, 15, Bergman’s oldest son. “It teaches you and you can see growth” in your portfolio.
Bergman and his wife, Jaclyn, are already encouraging Aven and his brother, Ever, 12, to convert their Trump accounts to Roth IRAs down the line. With a Roth IRA, investment growth and future retirement withdrawals are generally tax-free.
“We’re going to invest in it together,” said Adam Bergman. “They will be tax-free millionaires.”
Although he is more than forty years away from retiring from Aven, he said he believes that his early start will pay off.
“You have to be patient; it will go up,” he said. “Just be patient, and in the long run, you’ll make a lot of money.”
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