The Tricks and Traps of Trump Accounts
In similar types of accounts, administrative fees and commissions can be misleading, complex—and hidden. 529 plans, which are education-specific individual savings plans, can layer on monthly or quarterly flat maintenance fees, annual maintenance fees, enrollment fees, sales commissions, or administrative fees determined as a percentage of the plan’s assets. Index funds change their fees depending on the vehicle that they’re in, as well.
These fees can cut dramatically into account growth, particularly for smaller accounts. If an administrator were to charge a flat $25 annual administrative fee, for example, that could eat into 2.5 percent of growth on a $1,000 Trump Account. Meaning that if the fund only grows 3 percent annually, after the index fund’s fee, the administrator could take almost all of its growth.
IRA fees are so unregulated that employers cannot contribute to them in a compensation package, Teresa Ghilarducci, an economics professor at the New School, wrote in her 2024 book, Work Retire Repeat: The Uncertainty of Retirement in the New Economy.