Trump Accounts create a 'legal backdoor' for Roth IRA wealth, tax attorney says

Families have signed up nearly 6 million children for Trump Accounts , set to launch next month. For some, claiming the initial grants — worth up to $1,000 — is the draw. But even kids who aren't eligible for the " free money " can leverage the accounts with a strategy typically used by older investors to kickstart future tax-free growth. Trump Accounts, also known as 530A accounts, are a new type of tax-advantaged savings and investment account for kids — and, based on the way they're structured, offer a way for these young investors to build savings in a Roth individual retirement account , according to financial planners. Roth IRAs are powerful savings vehicles in which investment growth and future withdrawals in retirement are generally tax-free, with some exceptions , experts said. Currently, someone can contribute to a Roth IRA only if they earn wages, a salary or other income — generally barring children from holding the accounts. Trump Accounts will offer another pathway, experts said. And the ability to get started at a younger age gives funds more time to grow, leveraging the power of compounding . "Trump Accounts create a legal backdoor into a Roth IRA that does not require a child to have earned income, something that was simply not possible before," said Adam Bergman, founder of IRA Financial and a tax attorney based in Miami. …