Suze Orman Says ‘I Get The Allure’ of Trump Accounts — Take The $1,000 But Don’t Contribute A Dime If You Have Debt

A child’s financial future is worth investing in, but not if it means mom and dad are still paying off credit cards at the kitchen table. Personal finance expert Suze Orman has a two-part rule for Trump Accounts. Take the free money, then keep the wallet closed until the household finances are in good shape.

In an August blog post titled "Who Should and Shouldn’t Open a Trump Account," Orman said she is "always in favor of starting early to save for retirement." But she cautioned parents and grandparents against putting their own money into the new investment accounts before securing their own financial futures.

Free Money Is Worth Claiming

Orman sees two situations where opening a Trump Account makes sense.

Children born in 2025, 2026, 2027 or 2028 who are U.S. citizens and meet the program’s requirements can qualify for a one-time $1,000 federal contribution when the required election is made. "That’s free money no one should pass up," she wrote.

Employer contributions offer another opportunity. Companies can contribute up to $2,500 annually per employee for Trump Accounts, without requiring employees to contribute their own money.

"Again, you should never turn down free money," Orman wrote.

The annual limit for regular contributions is $5,000, including employer contributions. The federal government’s $1,000 seed contribution does not count toward that limit.

Debt Changes The Equation

The free money is one thing. Adding personal cash is another.

"I get how fantastic it seems: there is nothing more you want than to give your child an amazing jumpstart on building a retirement nest egg. I get the allure," Orman wrote.

But she does not want parents or grandparents contributing their own money beyond free government or employer contributions if any of these conditions apply.

• Emergency savings cover less than eight months of living expenses.
• Credit card debt remains unpaid.
• Student loan debt is still outstanding.
• Car loans are weighing on the budget.
• Personal retirement savings are off track.

"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," Orman wrote. "You owe your child the security of knowing they will not need to step in and support you 20, 30, 40 years from now."

The reasoning is straightforward. Building a child’s nest egg should not come at the expense of the parent’s ability to handle emergencies, repay debt or retire independently.

Working Teens May Have A Better Option

For teenagers with earned income, Orman prefers a Roth IRA for their own retirement savings.

A Roth IRA requires earned income, so it is only an option for a child who has a paying job. But the tax treatment can make it more attractive over the long run.

Orman described the Roth IRA advantage as "no tax owed on contributions withdrawn, and no tax on earnings withdrawn in retirement."

Trump Accounts work differently. Contributions are made with after-tax money, meaning those contributions are not taxed again when withdrawn. However, Orman said that "100% of earnings withdrawn will be taxed as ordinary income."

That could make a Roth IRA a better home for a working teenager’s own savings, provided the child qualifies and follows the Roth’s withdrawal rules.

Secure The Household First

Trump Accounts offer a way to start investing for a child early, potentially giving decades of growth time to work in the account’s favor. But Orman’s advice puts the household’s financial stability ahead of the urge to maximize a child’s balance.

The priority is to claim the eligible $1,000 government contribution and any available employer money, then focus on emergency savings, debt and retirement before adding personal funds.

Eligible children under 18 with Social Security numbers can have Trump Accounts, but automatic account creation does not mean every child qualifies for the federal seed contribution. Parents or guardians generally must claim an account to manage it or add money, and the $1,000 contribution requires a separate election using IRS Form 4547.

For families carrying debt or falling behind on retirement, the best gift may not be another deposit into a child’s account. It may be making sure the parents can stand on their own financially decades down the road.

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