Suze Orman says take government and employer money in Trump accounts, then pause

Orman’s main advice

Yahoo Finance reports that Suze Orman drew a two-part line for the new children’s investment accounts the federal government has opened for nearly 70 million kids. In an Aug. 27 post on her website, titled "Who Should and Shouldn't Open a Trump Account," she said families should not pass up the free money available in the account, but should stop after that.

She wrote, "You should never turn down free money," referring to the government’s $1,000 deposit for an eligible child and the employer contribution allowed up to $2,500 a year. She also said, "In other words: until your financial life is in great shape, I don't want you to contribute to a Trump Account for a child. Period."

What Orman objected to

According to Yahoo Finance, Orman said she has no objection to the account itself. Her concern is what parents do after the government’s initial contribution arrives. The post is written in her first-person voice, and she described the $1,000 seed as money no one should decline.

Yahoo Finance noted that Orman is a personal finance author who previously said a Social Security agent was "100 million percent wrong" about a divorce benefit.

Conditions for adding your own money

Orman set out five circumstances in which she does not want parents or grandparents to add their own money beyond any free government or employer contributions. Those conditions are: an emergency fund that does not cover at least eight months of living expenses, credit card debt, student loan debt, car loans, or retirement savings that are not on track.

Under that standard, Yahoo Finance reported, someone with a car payment or revolving credit card debt would not yet be a candidate to make additional contributions.

Tax treatment and IRS guidance

Orman said the reason for her advice is the account’s tax setup. She wrote that contributions are made with after-tax money and will not be taxed again when withdrawn, but earnings taken out will be taxed as ordinary income.

Yahoo Finance said that matches IRS Notice 2025-68. Under that notice, contributions do not receive a deduction, nothing can be withdrawn during the growth period that lasts until the year the child turns 18, and after that the account generally follows traditional IRA rules, meaning amounts above the after-tax basis are taxable when withdrawn.