1 00:00:34,770 --> 00:00:44,150 Suze: July 31, 2022. And yes, KT and I are back 2 00:00:44,159 --> 00:00:49,610 Suze: from the fishing trip and Thursday on Ask KT and 3 00:00:49,610 --> 00:00:54,360 Suze: Suze Anything. We will tell you all about it. But 4 00:00:54,370 --> 00:00:57,840 Suze: I did it. I fished it was the best thing 5 00:00:57,840 --> 00:01:01,860 Suze: I ever did and I'm just so, so happy I 6 00:01:01,860 --> 00:01:02,910 Suze: went for it. 7 00:01:03,260 --> 00:01:06,199 Suze: So that's your update for right now. 8 00:01:06,709 --> 00:01:10,190 Suze: But a lot happened in the week that we were gone. 9 00:01:10,920 --> 00:01:14,789 Suze: The Fed's raised interest rates again. So what does that 10 00:01:14,790 --> 00:01:17,990 Suze: mean to all of you? Well, it means a few 11 00:01:17,990 --> 00:01:21,270 Suze: things while you can expect higher interest rates on your 12 00:01:21,270 --> 00:01:26,410 Suze: credit cards? On loans, Not necessarily by the way, higher 13 00:01:26,420 --> 00:01:28,009 Suze: interest rates on home mortgages. 14 00:01:28,020 --> 00:01:32,600 Suze: Because really the interest rate on home mortgages are directly 15 00:01:32,600 --> 00:01:37,040 Suze: affected by what the 10 year Treasury note is doing. 16 00:01:37,050 --> 00:01:40,080 Suze: So we actually saw a little bit of a decline 17 00:01:40,170 --> 00:01:43,669 Suze: in mortgage interest rates. But you know what else you 18 00:01:43,670 --> 00:01:49,400 Suze: can expect everybody, you can expect higher interest rates on what, 19 00:01:49,600 --> 00:01:54,810 Suze: on your savings accounts, whether they are at banks or 20 00:01:54,820 --> 00:02:00,900 Suze: credit unions. Now, obviously, you know that this podcast, the 21 00:02:00,900 --> 00:02:05,450 Suze: women and money podcast is sponsored by the Alliant Credit Union. 22 00:02:05,460 --> 00:02:10,359 Suze: You also know that you can open up the ultimate 23 00:02:10,360 --> 00:02:16,829 Suze: opportunity savings account at Alliant by simply going to my 24 00:02:16,840 --> 00:02:19,109 Suze: Alliant dot com. 25 00:02:19,650 --> 00:02:24,340 Suze: And if you just deposit $100 at least and then 26 00:02:24,340 --> 00:02:28,430 Suze: you put in $100 every month thereafter at the end 27 00:02:28,440 --> 00:02:33,040 Suze: of 12 months they will give you $100 the way 28 00:02:33,040 --> 00:02:35,160 Suze: it works. Really you can listen to the end of 29 00:02:35,160 --> 00:02:38,350 Suze: this podcast and you will hear all about it. However, 30 00:02:38,360 --> 00:02:47,030 Suze: so many of you in fact over $400 million credit 31 00:02:47,030 --> 00:02:49,070 Suze: union since we started this. 32 00:02:49,440 --> 00:02:52,109 Suze: But the good news is I'm gonna let a little 33 00:02:52,110 --> 00:02:54,640 Suze: secret out. I hope they don't get mad at me 34 00:02:54,650 --> 00:02:59,740 Suze: is tomorrow August 1st. They are raising the interest rate 35 00:02:59,750 --> 00:03:06,700 Suze: again to 1.4%. Fabulous. Right. You know when we first 36 00:03:06,700 --> 00:03:11,410 Suze: started this, it was at .60%. And during the time 37 00:03:11,410 --> 00:03:14,010 Suze: we started it, it was one of the highest interest 38 00:03:14,010 --> 00:03:15,770 Suze: rates that you could find anywhere. 39 00:03:16,110 --> 00:03:20,290 Suze: And as the Feds continue to raise interest rates, Alliant 40 00:03:20,290 --> 00:03:23,530 Suze: Credit Union has stuck right by all of you and 41 00:03:23,530 --> 00:03:28,060 Suze: has gone up as well. So just saying you might 42 00:03:28,070 --> 00:03:33,950 Suze: want to check it out alright, obviously, even though the 43 00:03:33,950 --> 00:03:38,830 Suze: Fed's raised interest rates, the market went up fabulously last 44 00:03:38,830 --> 00:03:41,360 Suze: week and actually it's been going up for a while 45 00:03:41,360 --> 00:03:42,030 Suze: now 46 00:03:42,330 --> 00:03:45,160 Suze: But I don't want all of you to think this 47 00:03:45,160 --> 00:03:48,150 Suze: is it, it's going straight up from here like it 48 00:03:48,150 --> 00:03:52,880 Suze: did in March of 2020. I don't think so. I 49 00:03:52,880 --> 00:03:55,170 Suze: think you're going to see it go up. I think 50 00:03:55,170 --> 00:03:57,630 Suze: you're going to see it continue to go down back 51 00:03:57,640 --> 00:04:01,300 Suze: up again. But it's not all bad news right now 52 00:04:01,300 --> 00:04:04,590 Suze: when it comes to the market, the real thing and 53 00:04:04,590 --> 00:04:08,100 Suze: I've told you this before, you all have to watch, 54 00:04:08,110 --> 00:04:12,000 Suze: which will really dictate what happens to this market 55 00:04:12,450 --> 00:04:15,420 Suze: will be inflation 56 00:04:16,029 --> 00:04:20,070 Suze: And while inflation seems like in certain areas it's coming down, 57 00:04:20,110 --> 00:04:25,089 Suze: it's really not coming down fast enough in energy as 58 00:04:25,089 --> 00:04:29,280 Suze: well as food. So we just have to be careful 59 00:04:29,279 --> 00:04:33,340 Suze: here still but you'll continue to dollar cost average and 60 00:04:33,350 --> 00:04:36,770 Suze: everything over the long run will be fine in terms 61 00:04:36,770 --> 00:04:39,880 Suze: of Series, I Bonds my absolutely favorite 62 00:04:40,070 --> 00:04:43,930 Suze: favorite topic of all time for this year. It is 63 00:04:43,930 --> 00:04:48,920 Suze: not impossible that come November, you could see a 10, 64 00:04:48,920 --> 00:04:55,299 Suze: 11 or 12% renewal rate come November 1st. So let's 65 00:04:55,300 --> 00:04:58,650 Suze: just watch what's happening there And if you haven't taken 66 00:04:58,650 --> 00:05:02,640 Suze: advantage yet of Series I Bonds, I'm like really alright, 67 00:05:02,650 --> 00:05:05,089 Suze: I just have to divert here for a second. 68 00:05:06,140 --> 00:05:09,610 Suze: So we're at this lodge in British Columbia 69 00:05:10,190 --> 00:05:13,859 Suze: And it's fabulous. I mean it took us forever to 70 00:05:13,860 --> 00:05:17,779 Suze: get there like 13 hours. But you land on this 71 00:05:17,790 --> 00:05:22,690 Suze: little pod in the middle of nowhere, your helicopter lands 72 00:05:22,690 --> 00:05:24,690 Suze: there because it's the only way to get there is 73 00:05:24,690 --> 00:05:29,070 Suze: on a little helicopter and there's about 20 people in 74 00:05:29,080 --> 00:05:31,880 Suze: your lodge that all eat together 75 00:05:32,110 --> 00:05:39,330 Suze: and are together. Our party was myself, KT KT's sister, 76 00:05:39,339 --> 00:05:43,820 Suze: her husband are two nieces and nephews so there were 77 00:05:43,830 --> 00:05:47,349 Suze: six of us and four of our friends Scott and 78 00:05:47,350 --> 00:05:52,460 Suze: Katie Mitic and their two kids, Dylan and Tyler and 79 00:05:52,460 --> 00:05:55,380 Suze: so there were 10 of us and all of us 80 00:05:55,380 --> 00:05:58,279 Suze: go way back and love each other and there are 81 00:05:58,279 --> 00:06:00,849 Suze: 10 other people besides us 82 00:06:01,430 --> 00:06:06,870 Suze: Now. Those 10 people many of them were actually financial 83 00:06:06,870 --> 00:06:12,800 Suze: advisors from a very major financial firm. And I knew 84 00:06:12,800 --> 00:06:14,150 Suze: who they were 85 00:06:14,750 --> 00:06:18,020 Suze: and they obviously knew who I was. But we really 86 00:06:18,020 --> 00:06:21,679 Suze: didn't talk at all until the last day 87 00:06:22,250 --> 00:06:24,890 Suze: and I'm sitting there the last day and we're waiting 88 00:06:24,900 --> 00:06:29,020 Suze: because we can't get off the island because the fog 89 00:06:29,020 --> 00:06:32,670 Suze: now has come in and the helicopter can't land. So 90 00:06:32,670 --> 00:06:35,620 Suze: for three or four hours all of us just sat 91 00:06:35,620 --> 00:06:39,799 Suze: around in a room talking and little by little one 92 00:06:39,800 --> 00:06:42,070 Suze: by one they would come up to me and they 93 00:06:42,070 --> 00:06:44,360 Suze: would go Suze we love you. We didn't want to 94 00:06:44,360 --> 00:06:46,770 Suze: bother you. We just want you to know that we 95 00:06:46,770 --> 00:06:49,880 Suze: follow you and so on and so forth. And I 96 00:06:49,880 --> 00:06:50,900 Suze: said to them 97 00:06:51,400 --> 00:06:55,080 Suze: yes but are you all investing and telling your clients 98 00:06:55,089 --> 00:06:59,080 Suze: to invest in Series I Bonds and you know what? 99 00:06:59,089 --> 00:07:03,530 Suze: Every single one of them? I'm not just talking about 100 00:07:03,529 --> 00:07:06,570 Suze: one or two. Every single one of them that I 101 00:07:06,570 --> 00:07:10,640 Suze: talked to said to me. What are they? How do 102 00:07:10,640 --> 00:07:11,530 Suze: they work? 103 00:07:12,570 --> 00:07:15,950 Suze: Not one of them knew about Series I Bonds. Like 104 00:07:15,950 --> 00:07:19,040 Suze: are you kidding me? Are you just absolute kidding me? 105 00:07:19,050 --> 00:07:22,250 Suze: But the reason that I tell you this story is 106 00:07:22,250 --> 00:07:26,570 Suze: that so many times financial advisors that you go to 107 00:07:26,580 --> 00:07:31,920 Suze: really only concentrate on stocks and E. T. F. And 108 00:07:31,920 --> 00:07:35,290 Suze: mutual funds and ways to get your money to grow. 109 00:07:35,300 --> 00:07:39,040 Suze: Well I personally don't know a better way at this 110 00:07:39,040 --> 00:07:40,410 Suze: point in time with 111 00:07:40,435 --> 00:07:43,575 Suze: inflation being so high to get your money to grow 112 00:07:43,585 --> 00:07:47,465 Suze: other than Series I Bonds. So get with the plan 113 00:07:47,475 --> 00:07:52,465 Suze: everybody Series I Bonds. Treasury direct dot gov Listen to 114 00:07:52,465 --> 00:07:57,445 Suze: April 17th podcast, the May 12th update on it. And again, 115 00:07:57,445 --> 00:08:00,815 Suze: I think it was last Thursday's quizzie actually it was 116 00:08:00,815 --> 00:08:03,745 Suze: July 21st. I should know because that was KT's birthday 117 00:08:03,755 --> 00:08:08,300 Suze: quizzie on gifting I bonds. Are you kidding me? Okay. 118 00:08:08,630 --> 00:08:10,740 Suze: That's what I want to say. I just want to 119 00:08:10,740 --> 00:08:15,470 Suze: say one other thing which is I'm not loving XLE . 120 00:08:15,470 --> 00:08:18,290 Suze: I know I've told all of you in the past 121 00:08:18,290 --> 00:08:20,740 Suze: and when it was a whole lot cheaper if you 122 00:08:20,750 --> 00:08:23,360 Suze: want to just buy an E. T. F. That takes 123 00:08:23,360 --> 00:08:27,210 Suze: advantage of energy and oil do X. L. E. I'm 124 00:08:27,210 --> 00:08:31,120 Suze: not loving it as much as I still like Devon 125 00:08:31,460 --> 00:08:36,709 Suze: the individual stock D. V. N. That pays a fabulous dividend. 126 00:08:37,830 --> 00:08:40,920 Suze: All right, that's all I have to say about that. 127 00:08:41,650 --> 00:08:46,370 Suze: I want to talk. However, today Suze School, I wanted 128 00:08:46,370 --> 00:08:48,480 Suze: to be on inherited 129 00:08:49,150 --> 00:08:54,870 Suze: traditional IRAs or 401ks. And the reason that I want 130 00:08:54,870 --> 00:08:57,030 Suze: to do that is just the other day, 131 00:08:57,640 --> 00:09:02,319 Suze: I was looking through my emails to prepare for Thursday's 132 00:09:02,320 --> 00:09:06,120 Suze: Ask KT and Suze Anything and a woman wrote in 133 00:09:06,120 --> 00:09:06,990 Suze: and said Suze 134 00:09:07,940 --> 00:09:12,699 Suze: I inherited an IRA from my father, I think she 135 00:09:12,700 --> 00:09:17,340 Suze: said in the year 2013 and now I'm afraid because 136 00:09:17,340 --> 00:09:22,110 Suze: I hear the laws have changed for inherited IRAs am 137 00:09:22,110 --> 00:09:26,000 Suze: I okay or am I not now? She was fine. 138 00:09:26,000 --> 00:09:29,460 Suze: She didn't have to worry. But that made me realize, 139 00:09:29,470 --> 00:09:33,340 Suze: oh my God, there are many of you 140 00:09:33,809 --> 00:09:38,750 Suze: out there that really don't understand how the laws have 141 00:09:38,750 --> 00:09:45,650 Suze: changed since the end of 2019 on inherited IRAs or 142 00:09:46,230 --> 00:09:52,590 Suze: 401k S. Now I'm talking about traditional IRAs or 401ks . 143 00:09:52,820 --> 00:09:56,700 Suze: Or 403 B. S. Or T. S. P. S. Traditional 144 00:09:56,700 --> 00:10:01,729 Suze: meaning they had never paid taxes on that money 145 00:10:02,200 --> 00:10:07,959 Suze: versus Roth retirement accounts where that is after tax money, 146 00:10:08,650 --> 00:10:14,670 Suze: they work very very different on this topic than traditional 147 00:10:14,679 --> 00:10:17,350 Suze: inherited retirement accounts. 148 00:10:18,230 --> 00:10:21,900 Suze: So I realized that it is probable that not only 149 00:10:21,900 --> 00:10:25,550 Suze: do you not know what recently has been happening, but 150 00:10:25,559 --> 00:10:27,800 Suze: I would bet my bottom dollar 151 00:10:28,670 --> 00:10:33,750 Suze: That your advisors don't know either because I was then 152 00:10:33,750 --> 00:10:38,810 Suze: going through the Internet and looking at certain financial firms 153 00:10:38,809 --> 00:10:45,329 Suze: websites and they have not updated the confusion about inherited 154 00:10:45,520 --> 00:10:51,920 Suze: retirement accounts from 2020 till today. 155 00:10:52,500 --> 00:10:57,120 Suze: And the reason that it's so confusing is that because 156 00:10:57,130 --> 00:11:05,100 Suze: the I. R. S. itself keeps changing the interpretation of 157 00:11:05,100 --> 00:11:10,700 Suze: the Secure Act that was passed at the end of 2019. 158 00:11:11,210 --> 00:11:17,650 Suze: Now there are approximately I think 275 pages of this 159 00:11:17,660 --> 00:11:18,410 Suze: act 160 00:11:19,010 --> 00:11:25,199 Suze: and they don't have a clue how to interpret what 161 00:11:25,210 --> 00:11:31,320 Suze: this act actually meant and means today. So stick with 162 00:11:31,320 --> 00:11:33,800 Suze: me here for a little bit so I can give 163 00:11:33,800 --> 00:11:35,240 Suze: you a history 164 00:11:35,910 --> 00:11:39,020 Suze: of what the confusion happens to be. 165 00:11:40,230 --> 00:11:43,300 Suze: When the act was first passed 166 00:11:44,330 --> 00:11:49,040 Suze: essentially it said or it was interpreted to say 167 00:11:49,610 --> 00:11:55,089 Suze: that anybody who died from 2020 on 168 00:11:55,760 --> 00:12:05,010 Suze: okay that when anybody other than a spouse inherited that I. R. A. 169 00:12:05,020 --> 00:12:11,260 Suze: They could no longer do a stretch distribution over the 170 00:12:11,260 --> 00:12:13,579 Suze: beneficiary's lifetime 171 00:12:14,870 --> 00:12:15,900 Suze: example, 172 00:12:17,250 --> 00:12:22,720 Suze: Prior to 2020 your father died let's just say he 173 00:12:22,720 --> 00:12:25,730 Suze: died in 2017 174 00:12:26,360 --> 00:12:30,640 Suze: and he left within a retirement account 175 00:12:31,210 --> 00:12:35,630 Suze: That he hadn't started to take distributions from yet. He 176 00:12:35,630 --> 00:12:42,990 Suze: left you $500,000 in that traditional retirement account and you 177 00:12:43,000 --> 00:12:44,469 Suze: are relatively young. 178 00:12:45,040 --> 00:12:50,820 Suze: You were 30 years of age and now you inherited that. Again. 179 00:12:50,820 --> 00:12:54,809 Suze: We're not talking about spouses, we're talking about anybody other 180 00:12:54,809 --> 00:13:00,260 Suze: than a spouse. So you inherited that you were able 181 00:13:00,270 --> 00:13:06,750 Suze: to stretch the distributions from that inherited I. R. A. 182 00:13:06,760 --> 00:13:11,580 Suze: over your entire lifespan if you wanted to. 183 00:13:12,309 --> 00:13:15,979 Suze: And the reason that you would have wanted to is 184 00:13:15,980 --> 00:13:20,309 Suze: because you then would not have to pay a lot 185 00:13:20,309 --> 00:13:25,209 Suze: of taxes because the distributions would be little every single 186 00:13:25,210 --> 00:13:29,609 Suze: year for the next maybe 50 years. So your tax 187 00:13:29,610 --> 00:13:33,100 Suze: bite on that would be relatively small 188 00:13:33,929 --> 00:13:37,170 Suze: and many people chose to do that. 189 00:13:38,030 --> 00:13:45,650 Suze: However starting with anybody who died in 2020 or after 190 00:13:46,559 --> 00:13:52,469 Suze: and they left their traditional retirement account to a beneficiary 191 00:13:52,480 --> 00:13:54,199 Suze: other than a spouse. 192 00:13:54,720 --> 00:13:59,430 Suze: The Secure Act stated you could no longer stretch it 193 00:13:59,440 --> 00:14:06,929 Suze: over your lifespan, you had to withdraw in 10 years. 194 00:14:06,970 --> 00:14:10,890 Suze: That was the longest period of time that you could 195 00:14:10,890 --> 00:14:12,480 Suze: leave the money in there. 196 00:14:13,120 --> 00:14:18,400 Suze: Now when it was first interpreted, it was interpreted of, okay, 197 00:14:18,490 --> 00:14:23,440 Suze: I just inherited this traditional retirement account 198 00:14:24,090 --> 00:14:28,350 Suze: And I don't have to touch it for 10 years. 199 00:14:28,360 --> 00:14:32,060 Suze: But in the 10th year I have to withdraw it 200 00:14:32,070 --> 00:14:34,080 Suze: all and wipe it clean 201 00:14:34,910 --> 00:14:38,630 Suze: Now. Maybe you would choose to do that because just 202 00:14:38,630 --> 00:14:41,580 Suze: maybe you were, let's say 60 years of age when 203 00:14:41,580 --> 00:14:44,290 Suze: you inherited this retirement account 204 00:14:45,260 --> 00:14:48,380 Suze: And you knew that you were going to be retired 205 00:14:48,390 --> 00:14:51,730 Suze: at the age of 70 and your tax bracket wasn't 206 00:14:51,730 --> 00:14:54,840 Suze: going to be that large anymore and maybe you didn't 207 00:14:54,840 --> 00:14:58,490 Suze: inherit that large of an amount of money and you 208 00:14:58,490 --> 00:15:01,160 Suze: thought you were gonna wait for 10 years. And in 209 00:15:01,160 --> 00:15:04,750 Suze: the 10th year, wipe it clean and pay taxes at 210 00:15:04,750 --> 00:15:05,560 Suze: that time. 211 00:15:06,430 --> 00:15:11,150 Suze: And many people thought that obviously you could always take 212 00:15:11,150 --> 00:15:13,920 Suze: out as much as you want prior to that you 213 00:15:13,920 --> 00:15:16,290 Suze: could take it out in any way that you wanted. 214 00:15:16,300 --> 00:15:21,500 Suze: But the rule was that within 10 years it had 215 00:15:21,500 --> 00:15:24,630 Suze: to be wiped clean and you had the option of 216 00:15:24,630 --> 00:15:28,860 Suze: waiting to take anything out till the 10th year. 217 00:15:29,810 --> 00:15:33,400 Suze: So that's how it was originally interpreted 218 00:15:34,280 --> 00:15:38,970 Suze: Then in March approximately March of 2021. 219 00:15:39,990 --> 00:15:41,270 Suze: They changed that. 220 00:15:42,350 --> 00:15:50,330 Suze: They absolutely changed that for those of you who inherited I. R. A. S. 221 00:15:50,340 --> 00:15:54,410 Suze: Where the owner of that I. R. A. Had already 222 00:15:54,410 --> 00:15:59,990 Suze: started withdrawing required minimum distributions. 223 00:16:00,960 --> 00:16:06,280 Suze: And what they said was that no you cannot wait 224 00:16:06,290 --> 00:16:10,330 Suze: till the 10th year for you to withdraw all of 225 00:16:10,330 --> 00:16:12,660 Suze: that money. If that's how long you wanted to wait. 226 00:16:12,670 --> 00:16:18,560 Suze: You had to start the year after the owner died. 227 00:16:18,790 --> 00:16:24,920 Suze: To continue to take required minimum distributions based on your 228 00:16:24,930 --> 00:16:26,640 Suze: life expectancy. 229 00:16:27,350 --> 00:16:29,920 Suze: And that by the end of the 10th year the 230 00:16:29,920 --> 00:16:34,150 Suze: entire account had to be wiped clean. 231 00:16:35,730 --> 00:16:39,450 Suze: So if they died in the year just let's say 232 00:16:39,460 --> 00:16:47,930 Suze: 2020 in 2021 you would have had to start withdrawing 233 00:16:47,930 --> 00:16:49,430 Suze: contributions 234 00:16:50,410 --> 00:16:57,180 Suze: In 2021, 2020 to 2023 all the way up to 235 00:16:57,180 --> 00:16:58,970 Suze: the year 2031 236 00:16:59,550 --> 00:17:03,000 Suze: We're in the 10th year whatever was left that you 237 00:17:03,000 --> 00:17:07,850 Suze: hadn't distributed to yourself would have had to be wiped 238 00:17:07,859 --> 00:17:11,629 Suze: clean so that the account would be totally empty. 239 00:17:12,340 --> 00:17:14,719 Suze: All right put a pin in that for a second. 240 00:17:14,730 --> 00:17:17,940 Suze: Now I know this may sound complicated but you have 241 00:17:17,940 --> 00:17:21,870 Suze: got to understand what I'm saying here and the reason 242 00:17:21,869 --> 00:17:26,260 Suze: that you've got to understand is because any amount that 243 00:17:26,260 --> 00:17:30,520 Suze: you need to take out of a retirement account and 244 00:17:30,520 --> 00:17:36,649 Suze: you don't there is a 50% penalty tax on that 245 00:17:36,690 --> 00:17:41,410 Suze: that's 50% penalty tax. 246 00:17:41,980 --> 00:17:45,220 Suze: So we have to be clear on what the law 247 00:17:45,230 --> 00:17:48,130 Suze: is and how does it affect you. 248 00:17:48,990 --> 00:17:49,760 Suze: Now... 249 00:17:50,930 --> 00:17:56,010 Suze: And I think it was May of 2021. They revised 250 00:17:56,010 --> 00:18:00,430 Suze: it again and they said no no we're interpreting it 251 00:18:00,470 --> 00:18:03,760 Suze: that you don't have to do that. And then they 252 00:18:03,770 --> 00:18:06,950 Suze: redid it again and said no you have to do 253 00:18:06,950 --> 00:18:12,220 Suze: it that way. So currently as I'm speaking to you 254 00:18:13,260 --> 00:18:20,030 Suze: which is July 31, 2022, the current interpretation of this 255 00:18:20,040 --> 00:18:26,290 Suze: law is you have to start taking distributions out the 256 00:18:26,290 --> 00:18:31,430 Suze: year after the person died whose IRA you inherited. 257 00:18:32,020 --> 00:18:39,149 Suze: If and only if that person started taking their RMDs 258 00:18:39,160 --> 00:18:44,470 Suze: by April 1st after the year they turned 72. 259 00:18:45,080 --> 00:18:50,430 Suze: So if the interpretation stands and they will not know 260 00:18:50,430 --> 00:18:52,490 Suze: until the end of this year. 261 00:18:53,010 --> 00:18:55,070 Suze: But if it stands, 262 00:18:55,790 --> 00:19:00,990 Suze: If you had somebody that died in 2020 263 00:19:01,810 --> 00:19:05,270 Suze: And they were taking RMDs at the time of death 264 00:19:05,280 --> 00:19:09,369 Suze: and they did not withdraw their RMD for 2020. 265 00:19:10,140 --> 00:19:15,690 Suze: And you did not take out that RMD in 2021 266 00:19:16,940 --> 00:19:22,820 Suze: You could very possibly o of 50% penalty on the 267 00:19:22,820 --> 00:19:27,460 Suze: amount of money that you should have taken out in 2021. 268 00:19:27,970 --> 00:19:33,379 Suze: Please know that spouses this includes you. But it usually 269 00:19:33,390 --> 00:19:37,720 Suze: only applies for your deceased spouse's year of death, but 270 00:19:37,720 --> 00:19:42,110 Suze: for everybody else here is what I want you to do. 271 00:19:42,880 --> 00:19:45,100 Suze: I want you to wait till the end of this 272 00:19:45,100 --> 00:19:50,240 Suze: year to see what the final interpretation is going to 273 00:19:50,240 --> 00:19:52,870 Suze: be of the Secure Act. 274 00:19:53,820 --> 00:19:57,649 Suze: If it comes out that you needed to take out 275 00:19:57,650 --> 00:20:01,440 Suze: money in 2021 and you did not, 276 00:20:02,220 --> 00:20:04,760 Suze: you are to go to your tax person 277 00:20:05,630 --> 00:20:09,940 Suze: And you are to file form 53 29 278 00:20:10,859 --> 00:20:14,810 Suze: And you are to take out two withdrawals, one for 279 00:20:14,810 --> 00:20:21,800 Suze: 2021 as well as one for 2022. And hopefully that 280 00:20:21,800 --> 00:20:23,460 Suze: will help you avoid 281 00:20:24,230 --> 00:20:28,090 Suze: the 50% penalty on what you should have taken out 282 00:20:28,100 --> 00:20:32,910 Suze: in 2021. Now I am hoping that the I. R. S. 283 00:20:32,910 --> 00:20:36,690 Suze: is smart enough to realize that there is more confusion 284 00:20:36,700 --> 00:20:40,980 Suze: on this matter than ever before and so they'll put 285 00:20:40,980 --> 00:20:44,229 Suze: in a safeguard for you and not penalize you 286 00:20:45,480 --> 00:20:49,480 Suze: Now maybe you want to just wait and see what 287 00:20:49,480 --> 00:20:52,760 Suze: the final interpretation is at the end of this year. 288 00:20:52,770 --> 00:20:55,470 Suze: Hopefully I can let you know because maybe you don't 289 00:20:55,470 --> 00:20:57,150 Suze: want to take money out right now. 290 00:20:58,520 --> 00:21:02,950 Suze: Now, I get that this is confusing. So I just 291 00:21:02,950 --> 00:21:07,550 Suze: want to be perfectly clear and make sure you understand 292 00:21:07,550 --> 00:21:12,859 Suze: the difference between those that are inheriting a traditional retirement 293 00:21:12,859 --> 00:21:18,840 Suze: account that has not had RMD started and those that have. 294 00:21:18,970 --> 00:21:23,350 Suze: So let's just be clear for those of you who 295 00:21:23,350 --> 00:21:23,969 Suze: inherited 296 00:21:24,619 --> 00:21:29,790 Suze: a traditional retirement account in 2020 or later. Where the 297 00:21:29,800 --> 00:21:32,980 Suze: owner of the account who did not need to take 298 00:21:32,990 --> 00:21:37,930 Suze: RMDs . You have 10 years till you have to 299 00:21:37,930 --> 00:21:41,220 Suze: wipe the account clean. You can take it any way 300 00:21:41,220 --> 00:21:44,110 Suze: you want a little hair a little there or you 301 00:21:44,109 --> 00:21:45,980 Suze: can wait for 10 years. 302 00:21:46,550 --> 00:21:51,660 Suze: But for those of you who inherited a traditional retirement 303 00:21:51,660 --> 00:21:57,409 Suze: account in 2020 or later from someone who had started 304 00:21:57,410 --> 00:22:01,790 Suze: taking RMDS for they had reached the age of 72 305 00:22:02,270 --> 00:22:05,890 Suze: they started taking those RMDs by April 1st after they 306 00:22:05,890 --> 00:22:11,520 Suze: turned 72. If the current interpretation of the Secure Act 307 00:22:11,530 --> 00:22:12,480 Suze: holds 308 00:22:13,300 --> 00:22:19,600 Suze: you have to continue taking RMDS s tarting the year after 309 00:22:19,800 --> 00:22:27,080 Suze: the owner died for 10 years according to your life expectancy. 310 00:22:27,330 --> 00:22:30,959 Suze: And then in the 10th year December 31st of the 311 00:22:30,960 --> 00:22:35,550 Suze: 10th year you have to take out whatever money is 312 00:22:35,550 --> 00:22:37,260 Suze: left in that account. 313 00:22:38,160 --> 00:22:43,310 Suze: So let's just see what actually happens and how they're 314 00:22:43,310 --> 00:22:47,229 Suze: going to interpret it. You know this originally started with 315 00:22:47,230 --> 00:22:52,780 Suze: what was called the I. R. S. Publication 5 90-13. 316 00:22:52,790 --> 00:22:56,020 Suze: For those of you who want to just research things 317 00:22:56,020 --> 00:23:01,950 Suze: on your own. But it's really horrible. It's just horrible 318 00:23:02,140 --> 00:23:06,960 Suze: that they can't decide what does the law that they 319 00:23:06,960 --> 00:23:09,580 Suze: created actually mean. 320 00:23:10,410 --> 00:23:15,920 Suze: So that's what you need to know about inherited traditional 321 00:23:15,930 --> 00:23:20,480 Suze: retirement accounts for those of you who are smart enough 322 00:23:21,090 --> 00:23:24,170 Suze: not only to listen to the Women and Money podcast 323 00:23:24,480 --> 00:23:30,070 Suze: but to also only have done Roth 401 K's Roth 324 00:23:30,080 --> 00:23:36,070 Suze: iras whatever it may be when you die or if 325 00:23:36,070 --> 00:23:37,750 Suze: you have inherited 326 00:23:38,470 --> 00:23:44,500 Suze: after the year 2020, if you have inherited a retirement 327 00:23:44,500 --> 00:23:48,340 Suze: account that is a Roth, you do not have to 328 00:23:48,340 --> 00:23:56,350 Suze: worry about this because Roth IRAs don't have required minimum distributions. 329 00:23:56,359 --> 00:23:59,920 Suze: So this is not your problem. 330 00:24:01,180 --> 00:24:06,230 Suze: Just remember with an inherited Roth you can leave your 331 00:24:06,230 --> 00:24:10,950 Suze: money in there for 10 years and not have to 332 00:24:10,950 --> 00:24:11,740 Suze: worry about RMDs. 333 00:24:13,920 --> 00:24:17,400 Suze: But in 10 years after the death of the owner 334 00:24:17,830 --> 00:24:21,080 Suze: and again this is for everybody other than a spouse, 335 00:24:21,270 --> 00:24:25,650 Suze: you have to withdraw all of it, but that's okay 336 00:24:25,660 --> 00:24:30,139 Suze: for whatever you withdraw is tax free. So who cares? 337 00:24:30,540 --> 00:24:36,300 Suze: Just remember everybody that the five year rule still applies 338 00:24:36,310 --> 00:24:42,000 Suze: even to inherited Roths so educate yourself on how that 339 00:24:42,000 --> 00:24:46,050 Suze: five year rule works by listening to the February 6th 340 00:24:46,050 --> 00:24:49,550 Suze: podcast of 2022. 341 00:24:50,670 --> 00:24:56,070 Suze: So that's why I'm also bonkers, not just on Series 342 00:24:56,070 --> 00:24:59,860 Suze: I bonds but that's why I am bunkers on Roth 343 00:24:59,869 --> 00:25:03,710 Suze: retirement accounts because I have said to you over and 344 00:25:03,720 --> 00:25:08,500 Suze: over again: As the government gets into trouble and they 345 00:25:08,500 --> 00:25:11,879 Suze: are in financial trouble, they are having to save this 346 00:25:11,880 --> 00:25:14,310 Suze: and save that and fund a war and they're in 347 00:25:14,310 --> 00:25:17,230 Suze: deficits and they're doing all of these things 348 00:25:17,910 --> 00:25:21,140 Suze: and they owe so much money where do they get 349 00:25:21,140 --> 00:25:24,900 Suze: that money to pay back what they owe. Well they 350 00:25:24,900 --> 00:25:28,400 Suze: know how much money you have in retirement accounts. They 351 00:25:28,410 --> 00:25:33,610 Suze: change things like the inherited rules where they got rid 352 00:25:33,609 --> 00:25:37,080 Suze: of the stretch accounts so they could get money faster 353 00:25:37,520 --> 00:25:40,150 Suze: then they said that you could wait 10 years but 354 00:25:40,150 --> 00:25:45,170 Suze: now they're saying probably not on inherited IRAs with the 355 00:25:45,170 --> 00:25:48,360 Suze: RMDs . That had already started so that they can 356 00:25:48,359 --> 00:25:51,850 Suze: get money faster but when you are in a broth 357 00:25:51,850 --> 00:25:56,190 Suze: retirement account and they can't do anything that affects what's 358 00:25:56,200 --> 00:25:59,940 Suze: in your account because what you see is what you get. 359 00:25:59,950 --> 00:26:02,629 Suze: So can all of you again 360 00:26:02,880 --> 00:26:06,980 Suze: just think twice about why you would not be doing 361 00:26:06,990 --> 00:26:12,000 Suze: a Roth ira a Roth 401k. Or 403 B. A 362 00:26:12,000 --> 00:26:17,310 Suze: Roth Tsp. Are you kidding me everybody So 363 00:26:17,820 --> 00:26:20,830 Suze: that is the Suze School for today now you may 364 00:26:20,830 --> 00:26:25,370 Suze: need to listen to this over and over again. Fine 365 00:26:25,619 --> 00:26:27,680 Suze: I think I was pretty clear on it 366 00:26:28,540 --> 00:26:32,699 Suze: but you have to understand this because a lot of 367 00:26:32,700 --> 00:26:36,710 Suze: us are getting older A lot of us may inherit 368 00:26:36,710 --> 00:26:40,990 Suze: now from our parents that are definitely older 369 00:26:41,590 --> 00:26:44,720 Suze: and you just want to know whenever you inherit a 370 00:26:44,720 --> 00:26:50,639 Suze: traditional retirement account you know what the rules are so 371 00:26:50,640 --> 00:26:56,040 Suze: that you don't fall into a penalty situation. Alright everybody 372 00:26:56,050 --> 00:27:00,429 Suze: so until Thursday when Ms. Travis is going to join us, 373 00:27:00,440 --> 00:27:03,630 Suze: she is going to tell you everything about things that 374 00:27:03,630 --> 00:27:07,659 Suze: happened on this trip. I'm going to let her do that. 375 00:27:08,150 --> 00:27:11,290 Suze: But until then there's really only one thing that I 376 00:27:11,290 --> 00:27:13,650 Suze: want for all of you and that is for all 377 00:27:13,650 --> 00:27:19,030 Suze: of you to stay safe, strong, smart and secure. I 378 00:27:19,030 --> 00:27:22,550 Suze: want all four of those things for you. So until 379 00:27:22,550 --> 00:27:24,830 Suze: then take care. Bye bye.