How Startup Insiders Are Using IRAs to Stash Their Wealth

Summary

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WSJ What’s News (July 22, 2026)

Episode: How Startup Insiders Are Using IRAs to Stash Their Wealth
Host: Danny Lewis (Wall Street Journal)
Guest Contributors: Teo Francis, Gavin Bade, Sam Federman

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Overview

This episode delves into how startup founders, hedge fund managers, and Silicon Valley insiders are leveraging Individual Retirement Accounts (IRAs)—intended for ordinary retirement savings—as potent tools to shield and accumulate immense wealth, sometimes to the tune of hundreds of millions or even billions of dollars. The discussion also covers shifting U.S. trade policy, consequential business headlines (including major tech earnings and oil prices), and the latest on the New York Mets’ disastrous financial season.

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Major Segments & Key Insights

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1. New Rounds of U.S. Tariffs & Shifting Trade Uncertainty

Timestamps: 00:34–04:23

• Context: The Trump administration is phasing out temporary tariffs implemented after a Supreme Court loss and orchestrates a mix of new tariffs under different legal authorities.

• Legal Tools: Section 301 (used for policing discriminatory practices, e.g., forced labor in supply chains) and Section 232 (national security).

• Uncertainty for Businesses:

  • Critical uncertainty over the stacking of different tariff regimes.
  • Companies hesitant to invest amid lack of clarity on future tariff liability.

• Quotes:

  • "That national emergency still persists and so our policy remains the same. The specific authorities this administration is using have changed, but the trade strategy has not."
    — Teo Francis (01:54)
  • "We don't have the final report on these new tariffs yet... if we do see the new set of tariffs come into place ... they're going to be based on concerns about forced labor. And that's actually quite clever, a lot of lawyers say, because who would argue against policing global supply chains for forced labor?"
    — Gavin Bade (02:12)
  • "The bottom line for them is that they say they would be investing more in the United States if they actually knew what their tariff bill was going to be a few years out."
    — Gavin Bade (03:35)

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2. Business Headlines: Tech Earnings, Oil Prices, and Market Wrap

Timestamps: 04:23–05:56

• AT&T: Revenue up 2% in Q2; shares jump 3.6%.
• Tesla: Revenue up 26% ($28B), but free cash flow falls for the first time in over two years due to heavy AI/robotics investments.
• Alphabet (Google’s Parent): 24% revenue growth; negative cash flow due to AI data center spending.
• IBM: Confirms disappointing results and lowers its outlook.
• Oil Prices: Geopolitical disruptions (Iran, Ukraine) drive up Brent above $4/gallon at the pump.
• Markets: Nasdaq drops; S&P and Dow mostly flat.

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3. Deep Dive: How Startup Insiders Supercharge Their IRAs

Timestamps: 06:31–09:50

• Phenomenon: Over 1,000 people had at least $25 million in IRAs by 2024, partly by loading them with private company shares that can appreciate massively.

• The Mechanism:

  • IRA Limits: Strict rules on annual contributions, but not on post-contribution asset growth.
  • Private Shares: Startup insiders (founders, directors, early employees) buy pre-IPO shares at pennies; when companies go public or get acquired, explosive growth funnels immense untaxed gains into IRAs.
  • Disclosure: Regulations sometimes reveal these tactics for public company insiders (examples include directors at Nvidia, Roblox, and a pharma CEO).

• Legality & Controversy:

  • The practice is legal, though IRS officials fear undervaluation abuses (hard to prove).
  • No current evidence of impropriety in the reported cases.

• Use of Roth IRA:

  • Even more attractive since Roth IRAs have no required minimum withdrawals and can be inherited by heirs tax-free.

• Quotes:

  • "There are limits, and those limits are about contributions, not about the total assets in the account. And so what happens to the money after that is not particularly strictly regulated."
    — Teo Francis (07:04)
  • "Tax officials are concerned about the potential for investors to undervalue the shares that they're buying early on... But proving that is very difficult."
    — Teo Francis (08:09)
  • "One of the big benefits of using the Roth IRA for this kind of strategy is that there aren't the same requirements to withdraw money as you get older... they can pass those accounts on to their heirs without the accounts first being depleted by these mandatory and taxable withdrawals."
    — Teo Francis (08:53)

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4. Legislative Response: Proposed IRA Restrictions

Timestamps: 09:16–09:50

• Proposed by: Sen. Ron Wyden (OR), Rep. Richard Neal (MA)

• The Proposal:

  • Cap tax-advantaged savings at $10M
  • Require that any amount over $10M be withdrawn at 50% per year (e.g., $12M account = $1M withdrawal in Year 1)

• Quote:

  • "...they would require those with accounts over $10 million to withdraw half the excess every year. So if your account is $12 million, you know you'd have to withdraw 1 million the first year."
    — Teo Francis (09:26)

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5. Other Key News Highlights

Timestamps: 09:59–13:21

• Trump’s Warnings to Iran: Promises infrastructure strikes if Iran attacks ships in Strait of Hormuz; shipping traffic drops.
• NY Rent Freeze Lawsuit: Small landlords challenge NYC’s rent freeze, arguing undue influence by Mayor Mandani; affects 1M rent-regulated apartments.
• Venezuela Trial: Former president Nicolás Maduro's criminal trial set for June; faces narco-terror and kidnapping charges after dramatic capture.

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6. The New York Mets: A Historic “Waste of Money” Season

Timestamps: 11:30–13:21

• Context: Mets’ roster built with the largest payroll in MLB history—yet results have been disastrous.

• By the Numbers:

  • $5.2 million spent per regular-season win (most expensive in MLB history, adjusted for inflation).
  • Chronic injuries and underperformance cited as primary factors.
  • Season record: 43 wins, 59 losses as of late July (fifth worst in the league).

• Quotes:

  • "The Mets... they’re spending $5.2 million for every regular season win. The second biggest waste of money would be the 2023 Mets. This season is going even worse."
    — Sam Federman (12:24)
  • "Baseball’s a funny game, and sometimes things just start to unravel very early."
    — Sam Federman (12:24)
  • "At least us Mets fans know what to say at this point in the season. Maybe next year."
    — Danny Lewis (13:13)

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Notable Quotes (with Timestamps)

• On Tariff Uncertainty:

  • "The bottom line for them is that they say they would be investing more in the United States if they actually knew what their tariff bill was going to be a few years out."
    — Gavin Bade (03:35)

• On IRA Loophole:

  • "There are limits, and those limits are about contributions, not about the total assets in the account."
    — Teo Francis (07:04)

• On Proposed Reforms:

  • "...require those with accounts over $10 million to withdraw half the excess every year."
    — Teo Francis (09:26)

• On Mets' Inefficiency:

  • "The Mets...they’re spending $5.2 million for every regular season win."
    — Sam Federman (12:24)

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Episode Flow and Style

The episode maintains the brisk, news-dense style typical of WSJ's "What's News," balancing wide-ranging business headlines with a focused, approachable deep dive into the tax and legal engineering behind “super IRAs.” Expert guests unpack the complexities without jargon, keeping the tone sharp, skeptical, and accessible for a business-savvy but non-specialist audience.

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Transcript

[ReliaQuest Announcer]

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[Danny Lewis]

Businesses are bracing for fresh trade uncertainty as the Trump administration readies a new round of tariffs. Plus how startup founders, hedge fund managers and Silicon Valley insiders found a hidden advantage to growing their wealth and its IRAs.

[Teo Francis]

For people who have multi billion dollar stakes in companies, these accounts may not be about retirement at all. They are an investment strategy supercharged by the tax benef.

[Danny Lewis]

One baseball team is officially the biggest waste of money the sport has ever seen. Let's go mets. It's Wednesday, July 22nd. I'm Danny Lewis for the Wall Street Journal, filling in for Alex Osola. This is the PM edition of what's News, the top headlines and business stories that move the world today. After months of relative calm, businesses are facing new trade uncertainty. The Trump Administration Put temporary 10% duties in place after losing their big tariffs case at the Supreme Court in February. Now those temporary tariffs have run out their 150 day clock and they're set to expire this Friday. But there's more to come. During testimony before the Senate finance committee today, U.S. trade Representative Jamison Greer said the administration is still committed to using tariffs as a core part of its trade policy.

[Teo Francis]

That national emergency still persists and so our policy remains the same. The specific authorities this administration is using have changed, but the trade strategy has not.

[Danny Lewis]

WSJ trade and Economic policy reporter Gavin Bade says the Trump administration has spent the past five months coming up with a replacement for these temporary tariffs.

[Gavin Bade]

These are under a different legal authority, what's called section 301. This is, you know, to police discriminatory practices from other countries. It's very commonly used and very legally durable. There's only one problem. We don't have the final report on those new tariffs yet. We might not actually see these new tariffs be completed before the temporary tariffs expire. So on Friday, if we do see the new set of tariffs come into place, what they're going to be based on is concerns about forced labor. This is slave labor servitude in global supply chains. And that's actually quite clever, a lot of lawyers say, because who would argue against policing global supply chains for forced labor? That's just one slice, however, of all of the tariff plans that are going on right now. We also have, you know, last night, Trump Post posted on Truth Social that they're going to put tariffs on generic pharmaceuticals. That's not gonna be until 2028. This is an about face from what the Trump administration said they were going to do. Then we have other tariffs that are coming down the pike. We just put new tariffs against Brazil in place today. That's under section 301 against supposed discrimination from the Brazilian government on our products. And then there's another Canada tariff threat as well. So after about five months of relative calm, trade agenda's really kicking up again.

[Danny Lewis]

Gavin says that in the short term, the top line US Tariffs might not change that much.

[Gavin Bade]

The Trump administration, they've said that they will try to rebuild a tariff wall that is akin to the tariffs that were thrown out by the Supreme Court. However, all of these actions are going to stack on top of each other. A country could get, you know, 10% for forced labor, but then there's another Section 301 report that we haven't even talked about out there on industrial overcapacity. But maybe that is one where a country gets another tariff on top of them. Then there's all of these different national security tariffs under section 232. So seeing about how all of these tariffs are going to stack on each other in the next few months is really the big uncertainty for firms. The bottom line for them is that they say they would be investing more in the United States if they actually knew what their tariff bill was going to be a few years out.

[Danny Lewis]

Some big earnings came out today at and T's revenue rose 2% in the second quarter. The telecommunications company says a key measure of cell phone plans grew by the highest amount in more than three years. Shares rose 3.6%. And three of the biggest tech companies reported earnings after markets closed. Tesla's revenue grew 26% to $28 billion, while its free cash flow fell for the first time in more than two years. It Elon Musk's company is spending more on its push into AI and robotics. Google parent company Alphabet posted 24% revenue growth. That's thanks to its booming cloud business. But the company's free cash flow turned negative. It's spending heavily on AI data centers. And IBM confirmed the disappointing results that it previewed last week and lowered its revenue outlook for the year. The company says it's in the, quote, early innings of a structural shift. To hear more analysis of today's tech earnings, stay tuned for tomorrow's show. Shipping disruptions caused by the Iran and Ukraine wars are driving oil prices higher. Brent crude, the international benchmark, is trading more than $20 above its early July lows. That's pushed gas prices at the pump above $4 a gallon. In the U.S. stock moves were more muted today. The Nasdaq dropped 0.6%, while the Dow and S and P were almost unchanged. Coming up, Trump is threatening to bomb Iran's power plants and bridges if it attacks ships in the Strait of Hormuz. That and more after the break.

[ReliaQuest Announcer]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense AI that detects, contains and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now, and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest.com that's R E L I A Q U E-S-T.com.

[Danny Lewis]

Individual retirement accounts IRAs were created to help working Americans save up for old age. But in recent years, the accounts have been supercharged in some surprising ways. As of 2024, more than 1,000 people had at least $25 million in their IRAs and are reaping the mother of all tax breaks. Here now to explain how this is happening is WSJ special writer Teo Francis. Teo, I thought there were some pretty strict limits on how much money you can contribute to an ira. How are people amassing so much money in these accounts?

[Teo Francis]

Well, there are limits, and those limits are about contributions, not about the total assets in the account. And so what happens to the money after that is not particularly strictly regulated. So if you are buying shares of companies that aren't public yet, which some IRAs and retirement plans let you do, then you can buy them cheap. Often these are pennies a share. As those shares grow in value, that investment can grow in value. So what we're seeing is really tech startup insiders, people on the board or founders of companies. One of the people we write about is a director at Nvidia. Another is a director at Roblox and the brother of the company's CEO. And then Another is the CEO of a pharmaceutical company that focuses on cancer drugs. What we're seeing is a glimpse of what these investors are doing because of disclosure rules around publicly traded companies, we don't get to see inside their full IRA or 401k.

[Danny Lewis]

Is this strategy legal?

[Teo Francis]

There's nothing that's necessarily illegal about it. If you put money into your retirement account and you invest it in some stocks that do really well, that could all be perfectly above board and legal. Tax officials are concerned about the potential for investors to undervalue the shares that they're buying early on. And if they do that, then they could also arguably get a much bigger stake in a company that's actually worth much more than what they've contributed. But proving that is very difficult. And certainly no one's alleged that that is the case with the people that we profiled in this story.

[Danny Lewis]

How much of this is a retirement strategy for these people?

[Teo Francis]

One of the big benefits of using the Roth IRA for this kind of strategy is that there aren't the same requirements to withdraw money as you get older that you have in traditional IRAs. And that means that they can pass those accounts on to their heirs without the accounts first being depleted by these mandatory and taxable withdrawals.

[Danny Lewis]

Two Democratic lawmakers, Oregon Senator Ron Wyden and Massachusetts Representative Richard Neal, are proposing legislation to rein in what they say is a loophole. What would they like to do?

[Teo Francis]

They're saying if you're going to save more than about $10 million, you're going to, you're not going to get the same tax breaks that are in place to help ordinary middle class Americans save for retirement. They would require those with accounts over $10 million to withdraw half the excess every year. So if your account is $12 million, you know you'd have to withdraw 1 million the first year.

[Danny Lewis]

WSJ special writer Teo Francis, thanks for joining us.

[Teo Francis]

Thank you.

[Danny Lewis]

President Trump is threatening to destroy Iranian bridges and power plants if the country attacks ships traveling through the Strait of Hormuz. In a social media post, Trump said the US Will bomb infrastructure, including in and around Tehran, every time Iran shoots at a ship in the strait. The president's comments are the latest sign that the two countries might return to full scale war. Meanwhile, movement in the contested waterway has dwindled amid escalating tensions with just nine ships crossing the strait yesterday. That's according to commodities data agency Kepler. A group of five small New York landlords are suing over the city's rent freeze. It's the real estate industry's first legal challenge to Mayor Zoran Mandani's signature campaign issue. The lawsuit says the board that voted to freeze the rent, a group called the New York City Rent Guidelines Board, was influenced by Mamdani. It's supposed to be independent. The rent freeze applies to about a million rent regulated apartments. The Rent Guidelines Board declined to comment. The mayor's spokesperson says the board is an independent body. The criminal trial of the former president of Venezuela, Nicolas Maduro has a date. It's set for next June in Manhattan federal court. Prosecutors have accused Maduro of working with drug traffickers and narco terrorists. The indictment says Maduro and his wife ordered kidnappings and murders. Maduro was captured in a dramatic US Military operation in January. He and his wife have pleaded not guilty. And finally the 10 lifted to right toward the corner bench in a full

[Gavin Bade]

sprint over makes the catch. That's the ball game.

[Danny Lewis]

That's the Major League Baseball's broadcast of yesterday's shutout win by the New York Mets against the Milwaukee Brewers. The game was a glimmer of the season that long suffering Mets fans like me had have been hoping for this year. The Amazins started the baseball season with a roster packed with superstars and Major League Baseball's highest payroll. And yet when the Mets took the field earlier this afternoon, they had the fifth worst record in the league, making the 2026 Mets the biggest waste of money that baseball has ever seen. WSJ's Sam Federman joins us now to explain how this team has ended up with such a bad return on investment. Sam, since hedge fund billionaire Steve Cohen bought the mets in late 2020, he's thrown obscene amounts of money at turning into a winning franchise. Obviously that hasn't played out on the field, but how bad has this season been financially?

[Sam Federman]

We took all the payrolls since 2000 and adjusted them for inflation. And then we compared it to wins for 162 game season. And the Mets, they're spending $5.2 million for every regular season win. The second biggest waste of money would be the 2023 Mets. This season is going even worse. Baseball's a and sometimes things just start to unravel very early. And the Mets this year, they've dealt with a bunch of injuries. Polanco hasn't been healthy. Lindor hasn't been fully healthy. Soto got hurt early in the year. Lewis Robert was another guy that they traded for. He got hurt. And when those players have come back, they've underperformed. It's late July now and the Mets are still at the bottom 43 and 59.

[Danny Lewis]

Well, at least us Mets fans know what to say at this point in the season. Maybe next year. WCA's Sam Federman, thanks for joining us.

[Sam Federman]

Thank you so much for having me.

[Danny Lewis]

And that's what's news for this Wednesday afternoon. Today's show was produced by Anthony Bancy with supervising producer Tali Arbel. I'm Danny Lewis for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

[ReliaQuest Announcer]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense AI that detects, contains and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest. Com that's R E L I A Q U E S T Com.