The One Big Beautiful Bill Act (OBBBA) is a comprehensive budget bill that passed Congress and was then signed into law by President Donald Trump on July 4.
It modifies federal tax policy, spending programs, and revenue provisions across multiple sectors, including business, energy, health care, and agriculture.
In an Aug. 17 podcast, personal finance bestselling author Suze Orman addressed one initiative in the law and some intriguing, but conflicting, information she was tracking down regarding how Individual Retirement Accounts (IRAs) are handled by it.
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She also described a story she came across told by an investor who said he sold his Walmart (WMT)  and Costco (COST)  stocks and invested the money in cutting-edge tech stocks.Â
Orman said she was upset by the move and explained why. We’ll get to that in a bit, but first we’ll discuss her IRA concern about the OBBBA.
Trump Accounts in the OBBBA leave Suze Orman with an IRA question
Trump Accounts are a new savings initiative created under the OBBBA. These accounts are designed to help children build long-term financial assets.Â
Every U.S. child born between 2025 and 2028 with a Social Security number qualifies for a one-time $1,000 federal deposit. Contributions of up to $5,000 annually can be made by parents, employers, and others until the child turns 18. Employer contributions are capped at $2,500 per year. Starting in 2028, these limits will adjust for inflation.
The Joint Committee on Taxation estimates that Trump Accounts will cost just over $15 billion through 2034, according to the Economic Policy Innovation Center.
In the “Suze Orman’s Women and Money” podcast, Orman explained that the more research she does on the Trump Accounts and how they move to IRAs when a child reaches adulthood, the more unsure she is whether they are a good idea.
Related: Tony Robbins sends warning message to Americans on IRAs, 401(k)s
“One of the reasons I think that is because I can’t get agreement as to how that money will be taxed when it’s withdrawn,” she said. “I gave you last week my version of how I really believed it was to be taxed. All these other people are starting to say, ‘no.'”
Orman refers to the fact that the accumulated money over time turns into an IRA at age 18.
“Any money that you pull out is going to be taxed as ordinary income, including the money that you put in every single year,” Orman said.Â
“Because I can’t get clarification on that from anywhere, I have to tell you, I probably am like, let’s put a hold on it for right now,” she continued. “Because in the long run, really, I’d rather see you do a Roth IRA for your child. But to do that, obviously, your child has to be working. So, you have to get around that.”
Orman suggests that, given the tax uncertainty around the IRA step, another option would be to simply open a regular investment account for the child.
“When I can’t get a specific answer and one professional tells me one thing and another tells me another, I just don’t do it,” Orman said.Â
Image source: Shutterstock
Walmart, Costco stocks — and what is “upsetting” Suze Orman
“Something is upsetting me,” Orman said.
She described how she was looking at some posts in the “Women and Money” app and saw that there was one person who seemed proud of some stock trades he had recently made.
“He sold stocks like Walmart and Costco and decided to put that money into stocks like Palantir (PLTR)  and whatever else it was,” she said. “I don’t remember what they put it into, but stocks that have been going up and up and up.”
Orman explained she discussed this with prominent investor Keith Fitz-Gerald.
“They can’t do that,” she said Fitz-Gerald told her. “Those are great stocks. Why would they get out of those stocks?”
More on personal finance:
- Scott Galloway sends strong message on retirement, Social Security
- Tony Robbins makes key statement on IRAs, 401(k)s
- Dave Ramsey sounds alarm on Medicare, Medicaid
Orman explained her view that investors should not put all of their money into stocks that are AI-oriented or chip companies that are currently star performers. Stressing she was not comparing these stocks to the dot-com bubble, she brought up the fate of many of those companies as an example of why it’s important to diversify.
“You need a portfolio that also has really great quality stocks like a Costco, like Walmart, and you would never sell those stocks to put them more into stocks that have been making you more money,” Orman said.
Related: Dave Ramsey has blunt words for Americans on Medicare, Medicaid
Key data on Trump Accounts, IRAs
Trump Accounts are effectively a combination of a traditional IRA, a Roth IRA, and an interest-bearing savings account, explains EPIC for America.Â
Key Trump Account provisions:
- $1,000 federal contribution per eligible child born 2025-2028
- Annual contribution cap: $5,000 total per child; $2,500 max from employers
- Contributions allowed until the year the child turns 18
- Starting in 2028, caps will be indexed for inflation
- No withdrawals allowed before age 18 (except in case of death)
- Accounts convert to IRAs at age 18, with standard tax treatment
- Estimated federal cost: $15.2 billion through 2034
- Over 95% of cost stems from the initial $1,000 federal deposit
Related: Scott Galloway has bold words for Americans on Social Security
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