1 00:00:08,050 --> 00:00:10,529 KT: Good morning, Suze. Are we recording? 2 00:00:11,010 --> 00:00:13,079 Suze: Why are you asking me that? Tell them what we 3 00:00:13,079 --> 00:00:14,010 Suze: just did, KT. 4 00:00:14,170 --> 00:00:17,049 KT: We just did the best podcast on earth, and she 5 00:00:17,049 --> 00:00:18,920 KT: just looked at me and said, KT, you're gonna kill me. 6 00:00:18,930 --> 00:00:22,559 KT: And I said, Don't tell me. She didn't record it. 7 00:00:23,389 --> 00:00:23,930 KT: She didn't 8 00:00:23,930 --> 00:00:28,450 KT: push the button, baby. Push my button. Push the button. 9 00:00:28,569 --> 00:00:32,630 KT: She's pushing my buttons right now. OK, so today is 10 00:00:33,290 --> 00:00:35,528 KT: January 8th, 2026. 11 00:00:35,685 --> 00:00:40,574 KT: Ee just had an extraordinary great week and the one 12 00:00:40,575 --> 00:00:43,403 KT: thing that we did that we haven't done in 14 years was... 13 00:00:43,404 --> 00:00:46,784 Suze: Did you welcome everybody to the Women and Money podcast? 14 00:00:46,784 --> 00:00:48,924 KT: I did not, because I welcomed them three times already 15 00:00:48,924 --> 00:00:49,684 KT: this morning. 16 00:00:50,165 --> 00:00:53,724 Suze: So everybody, welcome to the Women and Money podcast, and 17 00:00:53,724 --> 00:00:57,244 Suze: Everybody Smart Enough to Listen, but not every host that's 18 00:00:57,244 --> 00:01:00,185 Suze: smart enough to push the record button. But anyway. 19 00:01:00,880 --> 00:01:04,360 Suze: Right? This is the Ask KT and Suze Anything edition, 20 00:01:04,470 --> 00:01:06,559 Suze: although I'm not sure she's gonna talk to me for 21 00:01:06,559 --> 00:01:09,800 Suze: a few minutes here, but if you want to write 22 00:01:09,800 --> 00:01:13,110 Suze: in and ask a question, write in to ask Suze, 23 00:01:13,160 --> 00:01:18,500 Suze: S U Z E podcast at gmail.com. And if you 24 00:01:18,839 --> 00:01:22,080 Suze: write in, keep it short, and KT picks it, oh, 25 00:01:22,199 --> 00:01:23,180 Suze: we will 26 00:01:24,050 --> 00:01:27,300 Suze: answer it on the podcast. What were you saying now, girlfriend? 27 00:01:27,660 --> 00:01:29,739 KT: So I was telling everyone that we really had a 28 00:01:29,739 --> 00:01:34,139 KT: great week despite Susie messing up the, the beginning of 29 00:01:34,139 --> 00:01:34,800 KT: this podcast. 30 00:01:34,900 --> 00:01:37,069 Suze: KT, it only a 45 minute podcast. 31 00:01:37,220 --> 00:01:38,279 KT: Oh my goodness. 32 00:01:38,339 --> 00:01:39,649 Suze: It was so good everybody, 33 00:01:39,860 --> 00:01:41,500 KT: It was so great. So I'm not gonna sing again. 34 00:01:41,580 --> 00:01:43,839 KT: I was singing and she cut me out. 35 00:01:44,599 --> 00:01:45,730 Suze: I didn't cut you out. 36 00:01:45,879 --> 00:01:48,269 Suze: So tell them what I was singing. You sing it. 37 00:01:48,559 --> 00:01:50,519 Suze: I'm not gonna sing it. You know I don't sing. 38 00:01:51,029 --> 00:01:52,269 KT: Yes, you can. Everyone can sing this. 39 00:01:53,220 --> 00:01:54,919 Suze: KT. They don't even have a clue what we're talking about. 40 00:01:55,080 --> 00:01:56,680 Suze: So tell them what we did. Go on. 41 00:01:56,680 --> 00:02:01,279 KT: We saw a great movie called (sings) Song Sung Blue.... 42 00:02:02,230 --> 00:02:04,129 KT: ...Everybody knows one... 43 00:02:04,139 --> 00:02:04,150 Suze: Yeah. 44 00:02:05,139 --> 00:02:09,698 KT: OK, we saw the new movie Song Sung Blue featuring my, 45 00:02:09,860 --> 00:02:15,100 KT: my big hero Hugh Jackman and now Kate Hudson. Kate Hudson, 46 00:02:15,190 --> 00:02:18,059 KT: who knew you could sing like that? Wow. 47 00:02:18,220 --> 00:02:20,008 Suze: She's great. She's up for, you know, she's up for... 48 00:02:20,619 --> 00:02:23,820 KT: Both of them should get Oscars, Golden Globes, you name it, 49 00:02:23,899 --> 00:02:26,419 KT: they should get them all. They were brilliant. 50 00:02:26,619 --> 00:02:29,000 Suze: So here's what's interesting, everybody. 51 00:02:29,699 --> 00:02:33,960 Suze: Is that I was telling KT in the previous podcast 52 00:02:33,960 --> 00:02:38,699 Suze: that never got recorded, right, is that I thought that 53 00:02:38,699 --> 00:02:41,359 Suze: maybe we should start telling people what we do during 54 00:02:41,360 --> 00:02:41,859 Suze: the week. 55 00:02:41,979 --> 00:02:44,288 KT: Wait, let's ask them, are you interested? 56 00:02:44,419 --> 00:02:46,538 Suze: They wrote me and told me that they loved the 57 00:02:46,538 --> 00:02:50,579 Suze: fact that we talked on Sunday, last Sunday about Landman 58 00:02:50,860 --> 00:02:53,419 Suze: and what we did on New Year's Eve. And now 59 00:02:53,419 --> 00:02:56,000 Suze: I've had at least 50 emails that I've read saying, 60 00:02:56,139 --> 00:02:56,940 Suze: oh my God, 61 00:02:57,258 --> 00:03:00,380 Suze: I immediately went and I watched Landman. It's on Paramount+ 62 00:03:01,220 --> 00:03:05,740 Suze: and fabulous, fabulous, Susie. I can't wait. I, it's the 63 00:03:05,740 --> 00:03:06,880 Suze: best thing I've ever seen. 64 00:03:07,220 --> 00:03:07,929 KT: It's really good, good. 65 00:03:08,580 --> 00:03:13,539 Suze: And here's what's so fascinating is after we went to 66 00:03:13,538 --> 00:03:17,100 Suze: the movie on Sunday, we went last Sunday, OK. 67 00:03:17,589 --> 00:03:20,910 Suze: We go to the movie and on Sunday is when 68 00:03:20,910 --> 00:03:26,229 Suze: the new episodes show of Landman. We come back. We're 69 00:03:26,229 --> 00:03:29,350 Suze: watching it and they go into this like bar and 70 00:03:29,350 --> 00:03:30,529 Suze: what happens KT? 71 00:03:30,529 --> 00:03:34,228 KT: Neil Diamond, they were playing Neil Diamond, Sweet Caroline, which 72 00:03:34,229 --> 00:03:38,750 KT: was really, really fun since we just watched. Well, we 73 00:03:38,750 --> 00:03:41,574 KT: can't give it away. We can't tell anyone about the movie. 74 00:03:41,574 --> 00:03:44,574 Suze: We're not... by you telling people that they sing Sweet 75 00:03:44,574 --> 00:03:47,175 Suze: Caroline in a Neil Diamond movie. I don't think is 76 00:03:47,175 --> 00:03:50,964 Suze: giving anything away, Ms. Travis, but Sweet Caroline does the 77 00:03:50,964 --> 00:03:53,975 Suze: song plays a big part in that movie and for 78 00:03:53,975 --> 00:03:58,014 Suze: us to come back and a few hours later turn 79 00:03:58,014 --> 00:04:01,294 Suze: on Landman, which we were so excited to do, so 80 00:04:01,294 --> 00:04:04,735 Suze: excited we actually watched it twice, believe it or not, um. 81 00:04:05,470 --> 00:04:07,500 Suze: And have them sing that song we went. Whoah!! 82 00:04:09,529 --> 00:04:14,610 Suze: All right, Ms. Travis, we're gonna now do the podcast again, everybody. 83 00:04:14,889 --> 00:04:19,250 Suze: And really, this podcast is gonna be answering the questions 84 00:04:19,250 --> 00:04:23,089 Suze: that a lot of you had about last Sunday's podcast. Now, 85 00:04:23,130 --> 00:04:28,428 Suze: listen to me. If you didn't listen to last Sunday's podcast, 86 00:04:28,649 --> 00:04:31,609 Suze: I really want you to listen to it. 87 00:04:32,459 --> 00:04:36,779 Suze: January 4th, 2026. I don't care when you're listening to 88 00:04:36,779 --> 00:04:40,540 Suze: this podcast, whether it's today, whether it's five months from now, 89 00:04:40,940 --> 00:04:43,539 Suze: you have got to go back and listen to the 90 00:04:43,540 --> 00:04:47,820 Suze: January 4th, 2026 podcast, cause what I tell you about 91 00:04:47,820 --> 00:04:53,760 Suze: in there, you really need to know and understand, because 92 00:04:53,779 --> 00:04:56,269 Suze: it is a little complicated. 93 00:04:57,149 --> 00:04:59,729 Suze: Many of you had questions, so we invited you all 94 00:04:59,730 --> 00:05:02,868 Suze: to write in your questions, and that's what we're gonna 95 00:05:02,869 --> 00:05:07,988 Suze: answer right now. All of these pertain to last Sunday's podcast. 96 00:05:08,149 --> 00:05:08,709 Suze: Go for it, girlfriend. 97 00:05:09,390 --> 00:05:12,669 KT: Well, I'm starting with Shelby. I love what Shelby has 98 00:05:12,670 --> 00:05:14,390 KT: to say to you, Miss Suze. 99 00:05:14,829 --> 00:05:17,679 KT: She said, thank you for all you do. I am 100 00:05:17,678 --> 00:05:21,799 KT: one of those who had zero savings, some credit card debt, 101 00:05:21,988 --> 00:05:26,510 KT: and no retirement when I was 40. Now at 62, 102 00:05:26,579 --> 00:05:30,760 KT: I own my own home. I have $3 million in 103 00:05:30,760 --> 00:05:38,238 KT: retirement savings, over $300,000 in emergency savings, and zero debt 104 00:05:38,238 --> 00:05:39,558 KT: except for my mortgage. 105 00:05:39,640 --> 00:05:41,500 Suze: Wait, can I just stop you right there? 106 00:05:42,390 --> 00:05:42,399 KT: Sure. 107 00:05:44,540 --> 00:05:47,089 Suze: She's giving, she just rolled her eyes at me, everybody 108 00:05:47,089 --> 00:05:52,290 Suze: again anyway, the reason I loved KT that you chose this, 109 00:05:52,609 --> 00:05:56,368 Suze: by the way, I answered Shelby directly because she just 110 00:05:56,369 --> 00:06:00,190 Suze: complimented me so how could I not? No, really, is 111 00:06:00,570 --> 00:06:05,109 Suze: many of you listen to this podcast and maybe you're younger, 112 00:06:05,529 --> 00:06:09,489 Suze: you're 25, 30 years of age, and you think I'm 113 00:06:09,488 --> 00:06:12,149 Suze: never gonna have money. This doesn't apply to me. 114 00:06:12,730 --> 00:06:16,140 Suze: So why should I even listen? It's because of people 115 00:06:16,140 --> 00:06:20,739 Suze: like Shelby and literally tens of thousands of people who 116 00:06:20,738 --> 00:06:25,380 Suze: have written over the years just like Shelby who went 117 00:06:25,380 --> 00:06:29,859 Suze: from nothing to seriously having a lot of money. So 118 00:06:29,859 --> 00:06:32,730 Suze: even if you don't need or can't use what I'm 119 00:06:32,730 --> 00:06:36,539 Suze: telling you about right now in your life, one day 120 00:06:36,540 --> 00:06:40,380 Suze: if you follow me, I promise you you will. All right, 121 00:06:40,500 --> 00:06:41,339 Suze: go on, KT. 122 00:06:41,834 --> 00:06:45,535 KT: So Shelby also goes on to say she has a will, 123 00:06:45,704 --> 00:06:50,974 KT: revocable trust, durable power of attorney, and a healthcare proxy. 124 00:06:52,144 --> 00:06:56,303 KT: She said it's all down to Susie's expert guidance. So 125 00:06:56,303 --> 00:06:59,065 KT: listen up, everyone. Here's her question. 126 00:06:59,359 --> 00:07:02,839 KT: I do have a question about the mega Roth conversion 127 00:07:03,079 --> 00:07:07,359 KT: and the pro rata rule. If my employer permits in-plan 128 00:07:07,359 --> 00:07:12,440 KT: conversions or rollovers, does the pro rata rule still apply? 129 00:07:12,679 --> 00:07:17,339 KT: I have a traditional IRA in addition to my employer 130 00:07:17,339 --> 00:07:23,200 KT: Roth 401k and catch-up accounts. So that's her question. Does 131 00:07:23,200 --> 00:07:24,140 KT: it apply? 132 00:07:24,679 --> 00:07:27,799 Suze: The reason KT, Shelby's asking that question, 133 00:07:28,390 --> 00:07:33,839 Suze: is because there's a backdoor Roth strategy. 134 00:07:34,769 --> 00:07:39,980 Suze: And then there is the mega backdoor Roth strategy for 135 00:07:39,980 --> 00:07:44,420 Suze: a 401k. So, everybody, just so you know, and you 136 00:07:44,420 --> 00:07:47,820 Suze: should listen to last Sunday's podcast, then you'll know why 137 00:07:47,820 --> 00:07:52,040 Suze: I'm telling you this now. To do a Roth IRA, 138 00:07:52,679 --> 00:07:55,630 Suze: which is an individual retirement account that you fund with 139 00:07:55,630 --> 00:07:59,260 Suze: after-tax dollars, which in my opinion is the absolute best 140 00:07:59,260 --> 00:08:03,829 Suze: retirement account bar none, and you can have a Roth 141 00:08:03,829 --> 00:08:10,959 Suze: IRA and an employer sponsored Roth plan as well, however. 142 00:08:11,769 --> 00:08:16,119 Suze: After you make more than the modified adjusted gross income limits, 143 00:08:16,290 --> 00:08:18,730 Suze: check Sunday and you'll find out what I'm talking about, 144 00:08:19,010 --> 00:08:24,049 Suze: you no longer qualify for a Roth IRA, but there 145 00:08:24,049 --> 00:08:27,600 Suze: is a way to go through the back door to 146 00:08:27,600 --> 00:08:30,519 Suze: get money into a Roth, even if you make too 147 00:08:30,519 --> 00:08:31,149 Suze: much money. 148 00:08:31,980 --> 00:08:34,580 Suze: It does not make any sense to do that, KT, 149 00:08:34,659 --> 00:08:38,099 Suze: if you have a traditional IRA, a pre-tax one, a 150 00:08:38,099 --> 00:08:42,210 Suze: pre-tax IRA rollover, a simple, a SEP IRA, because there's 151 00:08:42,210 --> 00:08:45,789 Suze: something known as the pro rata rule, which means you're 152 00:08:45,789 --> 00:08:48,760 Suze: gonna pay taxes on that money that you put into 153 00:08:48,760 --> 00:08:52,880 Suze: a backdoor Roth. So, you only do a backdoor Roth 154 00:08:53,109 --> 00:08:58,010 Suze: IRA if you do not have a traditional IRA, IRA rollover, 155 00:08:58,049 --> 00:08:58,880 Suze: or any of those. 156 00:08:59,700 --> 00:09:03,760 Suze: People are starting to think that that applies as well 157 00:09:04,179 --> 00:09:09,419 Suze: to their employer sponsored plan, and it does not. Individual 158 00:09:09,419 --> 00:09:14,260 Suze: retirement accounts have nothing to do with an employer account. 159 00:09:14,500 --> 00:09:19,780 Suze: There are no income limitations for a Roth 401k, 403B, 160 00:09:19,940 --> 00:09:21,900 Suze: or a TSP, none. 161 00:09:22,460 --> 00:09:25,900 Suze: So, you can put money in pre-tax, you can then 162 00:09:25,900 --> 00:09:29,809 Suze: convert it, you can do after-tax contributions. The pro rata 163 00:09:29,809 --> 00:09:34,859 Suze: rule does not apply when putting in money. It does 164 00:09:34,859 --> 00:09:38,340 Suze: not apply for what we were talking about. OK. 165 00:09:39,320 --> 00:09:42,669 KT: This question from Laura continues on what you just said. 166 00:09:42,989 --> 00:09:45,549 KT: She said, Suze, I just listened to your podcast where 167 00:09:45,549 --> 00:09:50,469 KT: you mentioned contributing after tax to a 401k using the 168 00:09:50,469 --> 00:09:55,229 KT: 415C rule. Is this a potential option for me if 169 00:09:55,229 --> 00:10:01,109 KT: I am 33 and not eligible for catch-up contributions? My 170 00:10:01,109 --> 00:10:05,900 KT: employer currently only offers a traditional 401k and not a 171 00:10:05,900 --> 00:10:07,090 KT: Roth option. 172 00:10:07,429 --> 00:10:10,250 KT: I would love to be able to contribute additional money 173 00:10:10,710 --> 00:10:14,869 KT: to my 401k after tax in this way. Thank you 174 00:10:14,869 --> 00:10:17,228 KT: very much. I've learned so much from you. So what 175 00:10:17,229 --> 00:10:18,218 KT: should Laura do? 176 00:10:18,539 --> 00:10:19,770 Suze: Laura, listen to me. 177 00:10:21,070 --> 00:10:25,780 Suze: In last Sunday's podcast, everybody, I talked about two things, 178 00:10:26,400 --> 00:10:31,760 Suze: the 415C after-tax contributions, where you can put up to 179 00:10:31,760 --> 00:10:36,559 Suze: 72,000 if you're under 50 or 80,000 if you are 180 00:10:36,559 --> 00:10:43,359 Suze: 50 or older into your 401k or 403B. I also 181 00:10:43,359 --> 00:10:47,979 Suze: talked about, however, if you are 50 years of age 182 00:10:47,979 --> 00:10:49,039 Suze: or older. 183 00:10:49,580 --> 00:10:54,339 Suze: You work for an employer and you made more than 184 00:10:54,340 --> 00:11:00,580 Suze: $150,000 in 2025 on your W-2 form. 185 00:11:01,640 --> 00:11:07,959 Suze: You then can only put your catchup contributions into a 186 00:11:07,960 --> 00:11:13,799 Suze: Roth 401k, a Roth 403B, or a Roth TSP. 187 00:11:14,739 --> 00:11:17,659 Suze: So, Laura, you're mixing up the two. 188 00:11:18,479 --> 00:11:21,599 Suze: Your age therefore has nothing to do with the fact 189 00:11:21,599 --> 00:11:26,960 Suze: that you're 33 has nothing to do with anything in 190 00:11:26,960 --> 00:11:30,880 Suze: terms of being able to put extra money into your 191 00:11:30,880 --> 00:11:35,400 Suze: 401k under the 415C rule, however... 192 00:11:36,690 --> 00:11:40,689 Suze: Listen closely now to me, everybody. If the employer that 193 00:11:40,690 --> 00:11:45,809 Suze: you work for does not offer a Roth 401k or 194 00:11:45,809 --> 00:11:50,049 Suze: a 403B, now, I'm not talking about TSPs here. 195 00:11:50,830 --> 00:11:58,609 Suze: Because they do not allow 415C contributions, so forget 415C 196 00:11:58,609 --> 00:12:03,349 Suze: contributions right now, if your plan is a TSP. So 197 00:12:03,349 --> 00:12:08,968 Suze: for 401ks and 403Bs, if your employer does not offer 198 00:12:09,150 --> 00:12:10,130 Suze: a Roth. 199 00:12:10,940 --> 00:12:16,820 Suze: Or they do not allow in plan transfers, which means 200 00:12:16,820 --> 00:12:20,059 Suze: in your 401k or 403B. 201 00:12:21,039 --> 00:12:22,840 Suze: You can do this, by the way, however, in a 202 00:12:22,840 --> 00:12:29,718 Suze: TSP where you're allowed to go from pre-tax to after tax. 203 00:12:30,760 --> 00:12:34,159 Suze: Then guess what, if they do not allow that. 204 00:12:35,099 --> 00:12:39,820 Suze: Then you do not want to do a 415C. You 205 00:12:39,820 --> 00:12:45,700 Suze: only wanna do it if your company allows an in-plan transfer. 206 00:12:46,390 --> 00:12:51,869 Suze: If it's with an after-tax contribution, otherwise you are far 207 00:12:51,869 --> 00:12:53,359 Suze: better off, Laura, 208 00:12:54,260 --> 00:12:57,669 Suze: if you simply do what? You either open up a 209 00:12:57,669 --> 00:12:58,989 Suze: Roth IRA. 210 00:13:00,010 --> 00:13:02,809 Suze: If you make too much money, you do a backdoor 211 00:13:02,809 --> 00:13:07,150 Suze: Roth IRA if you don't have a traditional IRA or 212 00:13:07,289 --> 00:13:11,489 Suze: you're better off putting extra money in an investment account 213 00:13:11,890 --> 00:13:18,829 Suze: rather than using 415C in the plan that you currently have. 214 00:13:19,489 --> 00:13:20,030 Suze: All right. 215 00:13:20,250 --> 00:13:23,750 KT: All right, this next question's from Walt, and, and this one. 216 00:13:24,010 --> 00:13:25,848 Suze: Wait, I just wanna clear up everything. 217 00:13:26,179 --> 00:13:29,109 Suze: And maybe do you have a question later on about TSP? 218 00:13:29,299 --> 00:13:29,859 KT: I do. 219 00:13:30,059 --> 00:13:32,780 Suze: All right, so everybody listen in a little bit because 220 00:13:32,780 --> 00:13:36,539 Suze: then I'll make sure you understand exactly what I was 221 00:13:36,539 --> 00:13:40,059 Suze: referring to with the TSP. Go on. 222 00:13:40,340 --> 00:13:43,419 KT: OK, this is from Walt. He said, Suze, I'm 77 223 00:13:43,419 --> 00:13:47,020 KT: years old and retired. I'm no longer working. 224 00:13:47,450 --> 00:13:53,520 KT: However, I'm getting payments from my 457B plan from Fidelity. 225 00:13:56,359 --> 00:14:01,140 KT: Of 75,000 for 2025 which comes on my W-2. Can 226 00:14:01,140 --> 00:14:05,940 KT: I use this money to cover a contribution to my 227 00:14:05,940 --> 00:14:10,044 KT: Roth for 2025 up to 8,000. 228 00:14:10,445 --> 00:14:14,885 Suze: So, here's the scoop, everybody. In order to contribute to 229 00:14:14,885 --> 00:14:20,205 Suze: an individual retirement account and or even an employer account, 230 00:14:20,445 --> 00:14:24,844 Suze: you have to have earned income, meaning you have a 231 00:14:24,844 --> 00:14:30,784 Suze: job and you get a paycheck. Somehow you earn money. 232 00:14:31,780 --> 00:14:36,460 Suze: He's getting his money from a 457 plan, KT, which 233 00:14:36,460 --> 00:14:38,200 Suze: is a pre-tax deferred plan. 234 00:14:39,119 --> 00:14:41,650 Suze: It was from money that he earned, but he never 235 00:14:41,650 --> 00:14:45,479 Suze: paid taxes on it, but he's not earning it now. 236 00:14:45,520 --> 00:14:49,349 Suze: It's coming out as income to him, which is why 237 00:14:49,349 --> 00:14:53,159 Suze: it's on a W-2. It does not count for a 238 00:14:53,159 --> 00:14:56,880 Suze: contribution to an IRA. Next question. 239 00:14:57,119 --> 00:14:59,750 KT: All right, this is from Kelly, Suze. If I make 240 00:14:59,750 --> 00:15:03,979 KT: over 150,000, do I have to put all my contribution 241 00:15:04,590 --> 00:15:05,859 KT: into a Roth? 242 00:15:07,669 --> 00:15:08,669 Suze: Is that the whole question? 243 00:15:09,159 --> 00:15:09,169 KT: Yeah. 244 00:15:09,270 --> 00:15:13,270 Suze: All right, here, everybody, this is where you're being confused again. 245 00:15:13,590 --> 00:15:16,070 Suze: By the way, do you all have out your Suze notebooks? Well, 246 00:15:16,150 --> 00:15:17,669 Suze: if you don't, two things. 247 00:15:19,140 --> 00:15:21,900 Suze: You can listen to this podcast and Sunday's podcast last 248 00:15:21,900 --> 00:15:24,859 Suze: Sunday over and over again. You can go on the 249 00:15:24,859 --> 00:15:29,940 Suze: Women and Money Community app by downloading it on Google 250 00:15:29,940 --> 00:15:34,219 Suze: Play or Apple Apps. It's free, 'cause on the wall there, 251 00:15:34,539 --> 00:15:39,219 Suze: I did a recap of everything on Sunday's podcast, so 252 00:15:39,219 --> 00:15:42,260 Suze: you can do any of those things and then understand 253 00:15:42,260 --> 00:15:43,440 Suze: it even more. 254 00:15:44,000 --> 00:15:48,760 Suze: But, where people are getting confused is this, starting in 255 00:15:48,760 --> 00:15:52,280 Suze: January of 2026. 256 00:15:53,489 --> 00:15:56,739 Suze: If you are working for an employer. 257 00:15:57,539 --> 00:16:00,750 Suze: And for that particular employer, 258 00:16:01,640 --> 00:16:07,400 Suze: you have earned more than $150,000 so you see that 259 00:16:07,400 --> 00:16:14,799 Suze: on your W-2 for 2025. So last year's W-2, it's 260 00:16:14,799 --> 00:16:19,979 Suze: what you earned in 2025. You can no longer make 261 00:16:20,299 --> 00:16:26,320 Suze: catch-up contributions and put it into a pre-tax 401k. You 262 00:16:26,320 --> 00:16:28,559 Suze: have got to put your catch-up. 263 00:16:29,440 --> 00:16:34,130 Suze: Which is $8,000 if you're 50 or older, so you 264 00:16:34,130 --> 00:16:36,729 Suze: get to catch up and put that in. 265 00:16:37,659 --> 00:16:42,429 Suze: Above the $24,500 that everybody's allowed. 266 00:16:43,659 --> 00:16:47,229 Suze: And if you're the ages of 60 to 63, that's 267 00:16:47,229 --> 00:16:53,609 Suze: $11,250 catch up, you have got to put those two 268 00:16:53,609 --> 00:17:00,289 Suze: catchup amounts, whichever one applies to you, into a Roth 401k, 403B, 269 00:17:00,390 --> 00:17:02,390 Suze: or TSP. 270 00:17:03,520 --> 00:17:06,819 Suze: So, you just have to know that. 271 00:17:07,800 --> 00:17:14,640 Suze: If your company does not have currently a Roth 401k 403B, 272 00:17:15,079 --> 00:17:16,079 Suze: guess what? 273 00:17:16,838 --> 00:17:20,708 Suze: They have to get one, and if they don't get one, 274 00:17:21,198 --> 00:17:26,119 Suze: you are not going to be allowed to make a 275 00:17:26,119 --> 00:17:27,619 Suze: catch-up contribution. 276 00:17:28,949 --> 00:17:35,550 Suze: If you are 50 or older, made $150,000 on last 277 00:17:35,550 --> 00:17:39,089 Suze: year's W-2, you're not going to be able to make 278 00:17:39,089 --> 00:17:43,900 Suze: a catch-up. Now, if you make $149,000 none of this 279 00:17:43,900 --> 00:17:47,579 Suze: applies to you. If you make anything like under $150,000 280 00:17:47,829 --> 00:17:51,109 Suze: none of this applies to you. But so many of 281 00:17:51,109 --> 00:17:55,449 Suze: you are making from your employer, 282 00:17:56,300 --> 00:18:01,459 Suze: 150,000 or more that's on your W-2 and you want 283 00:18:01,459 --> 00:18:05,760 Suze: to make a catch-up and you are 50 or older 284 00:18:05,900 --> 00:18:08,500 Suze: because you can only make catch-ups everybody if you're 50 285 00:18:08,500 --> 00:18:11,339 Suze: or older this does not apply to you if you 286 00:18:11,339 --> 00:18:16,300 Suze: are under 50, it has to go into a Roth. 287 00:18:17,189 --> 00:18:17,760 Suze: All right, there you go, KT. 288 00:18:17,880 --> 00:18:21,680 KT: Suze, I'm 61. Don't get mad at me, but my 289 00:18:21,680 --> 00:18:24,839 KT: employer doesn't have a Roth 401k. 290 00:18:25,160 --> 00:18:27,219 Suze: I'm not mad at you. I'm mad at your employer. 291 00:18:27,319 --> 00:18:31,500 KT: So I max out my traditional 401k plus make the 292 00:18:31,500 --> 00:18:34,589 KT: $11,250 catch-up. 293 00:18:34,719 --> 00:18:38,109 Suze: All right, so this person is either 60, 61, 62, 294 00:18:38,189 --> 00:18:38,949 Suze: or 63. Go on. 295 00:18:39,079 --> 00:18:40,920 KT: All right, so ready for this... 296 00:18:41,160 --> 00:18:41,930 Suze: Now he's freaked out. 297 00:18:42,020 --> 00:18:44,479 KT: Yeah, he went to his employer after he heard it. 298 00:18:44,810 --> 00:18:47,938 KT: On Monday and this is what the employer said listen 299 00:18:47,939 --> 00:18:51,419 KT: to this, this is what the employer said, they told 300 00:18:51,420 --> 00:18:54,139 KT: me I should just do what I always have done 301 00:18:54,140 --> 00:18:58,619 KT: and not worry about it. Is that true, Suze? That's 302 00:18:58,619 --> 00:19:01,219 KT: what the employer said. Just do what you've always done, Bob. 303 00:19:01,300 --> 00:19:02,319 KT: Don't worry about it. 304 00:19:03,619 --> 00:19:08,099 KT: Mhm. Look at her face, everybody. We got to videotape 305 00:19:08,099 --> 00:19:12,929 KT: these podcasts because you should see her face. She is steaming. 306 00:19:14,959 --> 00:19:15,479 KT: She has the knives coming out. 307 00:19:15,939 --> 00:19:19,540 Suze: The law is the law. And just because you have 308 00:19:19,540 --> 00:19:23,739 Suze: an idiot who works in the HR department or wherever 309 00:19:23,739 --> 00:19:26,780 Suze: you asked and they said that to you. 310 00:19:28,060 --> 00:19:32,889 Suze: Shame on them. In fact, why don't you simply go 311 00:19:32,890 --> 00:19:33,500 Suze: to them. 312 00:19:34,540 --> 00:19:38,800 Suze: Key up your podcast to this segment right here, this question, 313 00:19:39,180 --> 00:19:41,579 Suze: and play it for them or take it to your 314 00:19:41,579 --> 00:19:45,459 Suze: CFO or the CEO of your corporation and play it 315 00:19:45,459 --> 00:19:51,060 Suze: for them. They don't have a choice. If your employer, listen, 316 00:19:51,180 --> 00:19:54,099 Suze: the past few years you were able to get by 317 00:19:54,099 --> 00:19:56,380 Suze: because this law went into effect and they allowed you 318 00:19:56,380 --> 00:19:57,459 Suze: to slide 319 00:19:57,910 --> 00:20:04,390 Suze: until January 2026 and there was no more sliding, your 320 00:20:04,390 --> 00:20:09,550 Suze: corporation had no choice but to either get a 401k 321 00:20:09,550 --> 00:20:14,010 Suze: Roth or a 403B Roth. TSPs already have them, so 322 00:20:14,010 --> 00:20:15,770 Suze: that's why I'm not mentioning it here. 323 00:20:16,339 --> 00:20:20,839 Suze: Or say to the employees, you can no longer make 324 00:20:21,060 --> 00:20:28,040 Suze: a catch-up contribution. They are wrong, wrong, triple wrong, quadruple wrong, 325 00:20:28,459 --> 00:20:29,180 Suze: and there you go. 326 00:20:30,010 --> 00:20:32,900 KT: All right. The next question is from Marley. I, I'm not, 327 00:20:33,060 --> 00:20:34,939 KT: I'm not gonna look at her right now because she's 328 00:20:34,939 --> 00:20:35,790 KT: still a little red and steaming. 329 00:20:35,790 --> 00:20:38,629 Suze: Well, here's the thing, KT. Wait, can we just talk? 330 00:20:38,900 --> 00:20:40,869 KT: I know you hate when these people are... 331 00:20:41,260 --> 00:20:42,819 Suze: It's listen. 332 00:20:43,949 --> 00:20:47,910 Suze: The people that you work for, that you put, you, 333 00:20:47,989 --> 00:20:51,750 Suze: you make them money, you're great employees, you do everything 334 00:20:51,750 --> 00:20:54,149 Suze: you can so that you make a salary, but that 335 00:20:54,150 --> 00:20:56,389 Suze: they do great as well. In fact, many of you 336 00:20:56,819 --> 00:20:58,989 Suze: put their needs in front of your own needs in 337 00:20:58,989 --> 00:21:01,790 Suze: many ways. You take care of their money and their 338 00:21:01,790 --> 00:21:04,938 Suze: products better than your own. Are you kidding me? And 339 00:21:04,939 --> 00:21:07,630 Suze: then you go to somebody who needs to know the 340 00:21:07,630 --> 00:21:10,130 Suze: correct answers about your money. 341 00:21:10,780 --> 00:21:14,180 Suze: That they're lazy enough to not even say, wait, let 342 00:21:14,180 --> 00:21:18,530 Suze: me find out and I'll get back to you. It's OK, everybody, 343 00:21:18,540 --> 00:21:21,159 Suze: for somebody to say, I don't know, but I'll find out, 344 00:21:21,739 --> 00:21:24,839 Suze: rather than pretend like they know and it doesn't matter. 345 00:21:25,010 --> 00:21:28,699 Suze: I hate financial fakers, KT go on. 346 00:21:28,979 --> 00:21:32,839 KT: All right. Next question is from Marley. Marley said, Suze, 347 00:21:32,920 --> 00:21:36,198 KT: I'm only 47, but I'm one of the lucky ones 348 00:21:36,199 --> 00:21:41,948 KT: who've listened to you for over 20 years. I make $180,000. 349 00:21:42,000 --> 00:21:48,319 KT: I max out my Roth 403B with $24,500. My employer 350 00:21:48,319 --> 00:21:53,719 KT: matches $9,000 a year, but that goes into my traditional 403B. 351 00:21:54,199 --> 00:21:57,250 KT: And then I do an in plan conversion. 352 00:21:58,329 --> 00:21:58,530 Suze: Oh, you are so smart. 353 00:21:58,640 --> 00:22:01,410 KT: This is what she wants, wants Marley to do. I 354 00:22:01,410 --> 00:22:02,010 KT: do an in... 355 00:22:02,010 --> 00:22:03,369 Suze: Is Marley a woman? How do you know? We have 356 00:22:03,369 --> 00:22:04,979 Suze: a boyfriend who's a Marley. 357 00:22:05,050 --> 00:22:06,270 KT: This is a lady Marley. 358 00:22:06,410 --> 00:22:07,229 Suze: All right, go on. 359 00:22:07,489 --> 00:22:10,469 KT: I do an in-plan conversion and pay taxes on it. 360 00:22:10,689 --> 00:22:12,609 KT: I've been putting about $45,000 361 00:22:12,734 --> 00:22:18,255 KT: a year in an investment account at Robin Hood where 362 00:22:18,255 --> 00:22:22,214 KT: I have over $200,000 thanks to the stocks you told 363 00:22:22,214 --> 00:22:22,694 KT: me to buy, Suze. 364 00:22:23,775 --> 00:22:24,655 Suze: Some of them aren't doing so well... 365 00:22:24,655 --> 00:22:29,464 KT: What is the, what is the max after tax contributions 366 00:22:29,694 --> 00:22:37,554 KT: I can deposit via the 415C rule in the traditional 403B? 367 00:22:40,099 --> 00:22:46,420 Suze: So, Marley is so smart, because she's already doing in 368 00:22:46,420 --> 00:22:51,739 Suze: plan conversions of the $9,000 match that her employer gives her. 369 00:22:51,780 --> 00:22:54,699 Suze: You know, when an employer gives a match, although many 370 00:22:54,699 --> 00:22:57,579 Suze: of them starting to change this KT, a match is 371 00:22:57,579 --> 00:23:00,260 Suze: you put in $1 they give you 50 cents or 372 00:23:00,260 --> 00:23:03,089 Suze: $1 up to about 6% of your base pay, whatever 373 00:23:03,089 --> 00:23:06,520 Suze: it is, they all have different calculations there. 374 00:23:07,260 --> 00:23:11,380 Suze: It's in a pre-tax one, which is how they usually 375 00:23:11,380 --> 00:23:13,020 Suze: fund it so they can take it off as a 376 00:23:13,020 --> 00:23:17,459 Suze: tax write-off. Right. Then what happens is Marley takes that 377 00:23:17,459 --> 00:23:21,219 Suze: money and does an in plan, it's still there and 378 00:23:21,219 --> 00:23:24,459 Suze: puts it into the Roth account. Now she has to 379 00:23:24,459 --> 00:23:27,079 Suze: pay taxes on it, but she's willing to pay taxes 380 00:23:27,079 --> 00:23:29,859 Suze: on it now, so it grows all those years tax-free. 381 00:23:30,650 --> 00:23:32,209 Suze: But here's the thing. 382 00:23:33,239 --> 00:23:38,948 Suze: Marley puts $45,000 a year away. Listen to me, everybody now, 383 00:23:39,199 --> 00:23:42,879 Suze: into an investment account with Robin Hood. 384 00:23:43,589 --> 00:23:46,550 Suze: Because it's in the investment account. 385 00:23:47,479 --> 00:23:51,000 Suze: Obviously if she buys something, she sells something, she owes 386 00:23:51,000 --> 00:23:55,040 Suze: taxes on it, it grows maybe tax deferred, she's not 387 00:23:55,040 --> 00:23:58,079 Suze: paying taxes on until she sells it, but they're always 388 00:23:58,079 --> 00:24:01,239 Suze: going to have to pay capital gains tax or income 389 00:24:01,239 --> 00:24:04,520 Suze: tax on the money there. If Marley was able to 390 00:24:04,520 --> 00:24:08,208 Suze: take that money and rather than put it in Robinhood 391 00:24:08,209 --> 00:24:13,119 Suze: and she likes the investments, right, in her 403B. 392 00:24:13,910 --> 00:24:19,459 Suze: What she could do is now employ the 415C. How 393 00:24:19,459 --> 00:24:21,229 Suze: much can Marley put in? 394 00:24:21,930 --> 00:24:25,449 Suze: Ready? This Marley is how you would figure it out. 395 00:24:25,849 --> 00:24:33,510 Suze: You're already putting in $24,500 a year. To that figure 396 00:24:34,150 --> 00:24:40,729 Suze: you have to add the $9,000 of your employer's match. 397 00:24:41,010 --> 00:24:43,369 Suze: If you had profit sharing, if they put any other 398 00:24:43,369 --> 00:24:46,630 Suze: money in there, you would have to add that as well. 399 00:24:47,069 --> 00:24:51,609 Suze: So everything that goes into your 403B. 400 00:24:52,530 --> 00:24:57,579 Suze: You have to add up in your particular situation it's 401 00:24:57,579 --> 00:25:07,379 Suze: only $24,500 plus $9,000. That's a total of $33,500. You 402 00:25:07,380 --> 00:25:11,979 Suze: take that amount and you subtract it from the max 403 00:25:12,180 --> 00:25:15,920 Suze: of $72,000. 404 00:25:16,910 --> 00:25:20,000 Suze: And that will tell you how much you are allowed 405 00:25:20,000 --> 00:25:25,609 Suze: to put in with after-tax contributions under 415C, which in 406 00:25:25,609 --> 00:25:34,880 Suze: your case is $38,500. That is a whole lot of money. 407 00:25:34,989 --> 00:25:35,719 Suze: Think about it. 408 00:25:36,619 --> 00:25:43,260 Suze: Marley is going to be able to put $38,500 more... 409 00:25:43,650 --> 00:25:45,859 Suze: eventually it's gonna go right away because she'll do an in- 410 00:25:45,859 --> 00:25:52,099 Suze: plan conversion into her Roth 403B a year versus putting 411 00:25:52,099 --> 00:25:57,579 Suze: that money in a taxable investment account so she'll still 412 00:25:57,579 --> 00:26:00,760 Suze: be able to do $7,000 or whatever in Robin Hood, 413 00:26:01,069 --> 00:26:03,359 Suze: but now most of that's gonna be 414 00:26:03,670 --> 00:26:06,739 Suze: tax-free with tax-free growth. All right, KT, 415 00:26:07,199 --> 00:26:09,199 KT: That's a plan. That's a mega plan. 416 00:26:09,640 --> 00:26:12,520 Suze: But what, what, wait, do you understand now why they're 417 00:26:12,520 --> 00:26:15,659 Suze: calling it the mega back door? 418 00:26:15,729 --> 00:26:16,199 KT: That's a mega. 419 00:26:16,709 --> 00:26:18,040 KT: It's a mega amount of money, 420 00:26:18,199 --> 00:26:19,540 Suze: A lot of money. 421 00:26:20,099 --> 00:26:24,573 Suze: Marley's about to get, you know, thirty some odd thousand 422 00:26:24,573 --> 00:26:28,380 Suze: dollars into her 403B Roth, which is far more than 423 00:26:28,380 --> 00:26:32,000 Suze: if she did a backdoor Roth IRA. It would only 424 00:26:32,000 --> 00:26:35,439 Suze: be $7,500. Now, she could do both. 425 00:26:36,250 --> 00:26:38,060 Suze: But do you see what I'm saying? All right, anyway, 426 00:26:38,290 --> 00:26:38,800 Suze: go on. 427 00:26:39,219 --> 00:26:43,180 KT: All right, so next question is from George. George said, Suze, 428 00:26:43,300 --> 00:26:44,790 KT: I think you made a mistake. 429 00:26:46,150 --> 00:26:47,949 KT: I love these questions. I read... 430 00:26:47,949 --> 00:26:51,379 Suze: Wait, stop, George. You better be right on this. 431 00:26:51,569 --> 00:26:51,839 KT: No, no, 432 00:26:52,170 --> 00:26:54,790 Suze: You better be right that I made a mistake because listen, 433 00:26:54,910 --> 00:26:58,430 Suze: I do make mistakes, and a lot of you write 434 00:26:58,430 --> 00:27:00,349 Suze: in and you say, Suze, I don't think you're right, 435 00:27:00,420 --> 00:27:02,910 Suze: da da da, and I, whatever, and it turns out 436 00:27:02,910 --> 00:27:05,659 Suze: you are right, and I admit it when you're right. 437 00:27:06,550 --> 00:27:08,550 Suze: So let's wait, should we bet? Is he right or wrong? 438 00:27:09,739 --> 00:27:10,540 KT: I think he's so wrong. 439 00:27:10,979 --> 00:27:11,689 Suze: All right, go on. 440 00:27:12,020 --> 00:27:15,060 KT: George said, Suze, I think you made a mistake. I 441 00:27:15,060 --> 00:27:22,829 KT: read the limit was $145,000 at the end of 2025 442 00:27:23,060 --> 00:27:28,140 KT: for a Roth catch-up, not $150,000 like you said. 443 00:27:28,810 --> 00:27:29,530 KT: Well, who's right? 444 00:27:29,530 --> 00:27:33,479 Suze: He probably is somebody who went on to either chat 445 00:27:33,479 --> 00:27:37,510 Suze: GPT or one of those things, and you listen, everybody, 446 00:27:37,599 --> 00:27:40,729 Suze: you have to be very, very careful when you are 447 00:27:40,729 --> 00:27:46,439 Suze: using any artificial intelligence to answer a question. Most of them, 448 00:27:46,489 --> 00:27:48,089 Suze: because I test it all the time. 449 00:27:48,760 --> 00:27:52,859 Suze: Most of them are using figures from last year, two 450 00:27:52,859 --> 00:27:56,880 Suze: years ago. They are not up to date. George, you 451 00:27:56,880 --> 00:27:58,459 Suze: are 100% wrong. 452 00:27:59,569 --> 00:28:05,810 Suze: The original amount was $145,000 indexed for inflation if we're 453 00:28:05,810 --> 00:28:09,800 Suze: gonna be accurate about this, George, but then they decided, uh, 454 00:28:10,130 --> 00:28:13,390 Suze: why should we index it for inflation that's too complicated. 455 00:28:13,609 --> 00:28:18,829 Suze: Let's just make it $150,000. So starting right now. 456 00:28:19,479 --> 00:28:29,000 Suze: January 2026, it is absolutely $150,000 of 2025 wages. If 457 00:28:29,000 --> 00:28:33,020 Suze: you are 50 or older, you are only allowed to 458 00:28:33,079 --> 00:28:35,680 Suze: do a Roth catch-up. Next, KT. 459 00:28:36,000 --> 00:28:40,359 KT: This one's really kind of fun. Suze. Charlotte wrote, can 460 00:28:40,359 --> 00:28:40,810 KT: I really 461 00:28:40,869 --> 00:28:44,849 KT: put in after tax money on top of my regular contributions? 462 00:28:45,079 --> 00:28:48,430 KT: My brother, who is a financial guy, said he did 463 00:28:48,430 --> 00:28:51,869 KT: not think any employer's retirement account allows it. 464 00:28:52,469 --> 00:28:56,469 Suze: Oh, I have a good idea for her brother. He 465 00:28:56,469 --> 00:28:59,550 Suze: should go work for the company that that guy who 466 00:28:59,550 --> 00:29:02,469 Suze: or that woman, whoever it was, right, went to their 467 00:29:02,709 --> 00:29:06,459 Suze: employer who said don't worry, just put in the 11,200 468 00:29:06,459 --> 00:29:10,109 Suze: or whatever they put in, OK, are you kidding me? 469 00:29:10,219 --> 00:29:13,160 Suze: That's it. Next question. I'm not even gonna insult my 470 00:29:13,160 --> 00:29:14,800 Suze: integrity by answering that. 471 00:29:15,130 --> 00:29:17,939 KT: Next question is from Tommy, and it's important. He said, 472 00:29:18,020 --> 00:29:22,300 KT: I have a Roth TSP. I hear they're about to 473 00:29:22,300 --> 00:29:27,819 KT: allow in plan conversion. I wanna do a 415C so 474 00:29:27,819 --> 00:29:30,739 KT: I can eventually do a mega backdoor Roth. 475 00:29:31,589 --> 00:29:34,219 Suze: KT, just so you know, you can say 415. It's all right. 476 00:29:34,579 --> 00:29:35,500 KT: I didn't know. 477 00:29:36,140 --> 00:29:37,400 Suze: It's all right, no problem. 478 00:29:37,579 --> 00:29:40,969 KT: Is that what everyone says, 415 or Four One Five? 479 00:29:41,219 --> 00:29:43,219 Suze: I think everybody does it however they want. 480 00:29:43,859 --> 00:29:45,859 KT: 415 is easier, easier to remember. 481 00:29:46,260 --> 00:29:48,739 Suze: All right, so 415C everybody. 482 00:29:49,219 --> 00:29:51,540 KT: All right, so what should Tommy do? Can first of all, can 483 00:29:51,540 --> 00:29:52,280 KT: he do it? 484 00:29:52,699 --> 00:29:57,180 Suze: Tommy, first of all, you need to know that in 485 00:29:57,180 --> 00:29:58,560 Suze: most cases. 486 00:29:58,939 --> 00:30:02,810 Suze: The thrift savings plan, which, by the way, everybody, is 487 00:30:02,810 --> 00:30:07,160 Suze: usually for federal workers, military. 488 00:30:07,660 --> 00:30:10,619 Suze: All military and what's so great is KT and I 489 00:30:10,619 --> 00:30:12,900 Suze: so love the armed forces, don't we? 490 00:30:13,459 --> 00:30:16,060 KT: Yea, we had, we visited so many bases. We love 491 00:30:16,060 --> 00:30:18,859 KT: the military and for those of you that don't know, 492 00:30:19,300 --> 00:30:24,839 KT: Susie was for many, many years the official personal finance educator... 493 00:30:25,030 --> 00:30:29,920 Suze: ...for the armed forces and for the Army Reserve. However, 494 00:30:30,140 --> 00:30:33,390 Suze: so I do know their plans inside and out. 495 00:30:34,199 --> 00:30:42,099 Suze: However, for a TSP they do not allow 415 mega 496 00:30:42,099 --> 00:30:46,339 Suze: back door just so you know, they do not allow it. 497 00:30:46,920 --> 00:30:53,020 Suze: They do allow you, however, starting January 28th to do 498 00:30:53,160 --> 00:30:57,920 Suze: in plan conversions which they never allowed before. So if 499 00:30:57,920 --> 00:31:02,189 Suze: you happen to have money in a pre-tax TSP. 500 00:31:02,670 --> 00:31:06,579 Suze: And you now wanna convert it to a Roth TSP 501 00:31:06,579 --> 00:31:11,040 Suze: in-plan there, you now are allowed to do so, however, 502 00:31:11,520 --> 00:31:15,719 Suze: you just need to know you will pay ordinary income 503 00:31:15,719 --> 00:31:16,520 Suze: tax on it. 504 00:31:17,430 --> 00:31:21,000 Suze: However, there is a caveat to this, and there are 505 00:31:21,000 --> 00:31:25,880 Suze: many people in the armed forces that are still employed 506 00:31:25,880 --> 00:31:29,920 Suze: in the combat zone. And when you have somebody who's 507 00:31:29,920 --> 00:31:32,180 Suze: working in the combat zone. 508 00:31:33,089 --> 00:31:37,930 Suze: Their pay is actually tax exempt. I think the right 509 00:31:37,930 --> 00:31:40,949 Suze: initials for that is CZTE. 510 00:31:43,969 --> 00:31:50,719 Suze: So Combat Zone Tax Exempt. For them, they are allowed, 511 00:31:50,810 --> 00:31:58,250 Suze: ready for this? They are allowed after their normal contributions 24/5, 512 00:31:58,329 --> 00:32:00,449 Suze: whatever it is, the catch up, the whole thing. 513 00:32:01,140 --> 00:32:05,660 Suze: They are allowed to put in extra money up to 514 00:32:05,859 --> 00:32:11,780 Suze: the 415C limits of $72,000 or $80,000 if they're 50 515 00:32:11,780 --> 00:32:19,959 Suze: or older. It's not called a 415, but it is Combat Zone Tax Exempt. 516 00:32:20,339 --> 00:32:23,579 Suze: So what would happen is they would put it in 517 00:32:24,050 --> 00:32:26,180 Suze: their traditional TSP. 518 00:32:26,979 --> 00:32:31,390 Suze: And then after January 28th, they could do an in 519 00:32:31,390 --> 00:32:38,989 Suze: plan conversion to what? Their after-tax TSP if in fact 520 00:32:38,989 --> 00:32:45,630 Suze: they just leave it in their regular pre-tax TSP, their 521 00:32:45,630 --> 00:32:49,780 Suze: original contribution will always remain tax-free when they take it out, 522 00:32:50,030 --> 00:32:54,550 Suze: but then the growth on that money will be taxable. 523 00:32:55,209 --> 00:32:58,089 Suze: So if they could just get it over to the 524 00:32:58,089 --> 00:33:04,250 Suze: in-plan Roth TSP and also have a Roth IRA on 525 00:33:04,250 --> 00:33:08,160 Suze: the outside that later on in life when they're no 526 00:33:08,160 --> 00:33:12,250 Suze: longer in the armed forces, they could then take the money, 527 00:33:12,599 --> 00:33:16,170 Suze: transfer it to the Roth IRA, and 100% of it 528 00:33:16,170 --> 00:33:19,849 Suze: would be tax-free or if they leave it in the 529 00:33:19,849 --> 00:33:22,369 Suze: TSP and it's been in there for at least 5 530 00:33:22,369 --> 00:33:24,199 Suze: years and they're 59 and a half, 531 00:33:24,709 --> 00:33:26,589 Suze: they will be able to take all of it then 532 00:33:26,589 --> 00:33:28,829 Suze: at that point out tax free. 533 00:33:29,030 --> 00:33:29,839 KT: That's great. 534 00:33:29,989 --> 00:33:33,630 Suze: So they should just know that. So KT, did that 535 00:33:33,630 --> 00:33:34,489 Suze: help you at all? 536 00:33:34,660 --> 00:33:36,949 KT: Suze, I only have one last question and I guess 537 00:33:36,949 --> 00:33:39,910 KT: I was a little bit confused because we didn't really 538 00:33:39,910 --> 00:33:44,349 KT: address it. How long can you do this? I don't 539 00:33:44,349 --> 00:33:45,310 KT: think it applies to me. 540 00:33:45,310 --> 00:33:48,089 Suze: Now, listen, if you're still working for a 541 00:33:48,430 --> 00:33:53,349 Suze: corporation maybe you're a solo employer, meaning you have your 542 00:33:53,349 --> 00:33:57,430 Suze: own 401k, your own, your, you know, a husband and a, a, 543 00:33:57,589 --> 00:34:00,959 Suze: a spouse. Spouses can do this. Everybody can do this. 544 00:34:01,270 --> 00:34:03,189 Suze: You can get a fortune if you're making a lot 545 00:34:03,189 --> 00:34:04,829 Suze: of money into these accounts. 546 00:34:05,510 --> 00:34:10,350 Suze: However, once you're no longer working, you don't have income, 547 00:34:10,629 --> 00:34:14,949 Suze: or you're taking your required minimum distributions, or is, right, 548 00:34:15,020 --> 00:34:18,270 Suze: which is things like that, you probably wouldn't be doing 549 00:34:18,270 --> 00:34:22,669 Suze: this anymore. All right. However, the majority of people, believe 550 00:34:22,669 --> 00:34:23,389 Suze: it or not. 551 00:34:23,780 --> 00:34:28,020 Suze: That listen to this even if they're in their 60s, 70s, 552 00:34:28,270 --> 00:34:33,429 Suze: they are still working they have extra money, especially if 553 00:34:33,429 --> 00:34:37,949 Suze: you're out there and you are 30, 40, 50 you 554 00:34:37,949 --> 00:34:42,850 Suze: have extra money and you can do this. I'm telling you, 555 00:34:43,270 --> 00:34:46,429 Suze: do it, but you have to make sure again... 556 00:34:46,989 --> 00:34:52,388 Suze: who you work for has a Roth 401k or 403B 557 00:34:52,549 --> 00:34:59,089 Suze: and they allow in-plan conversions. All right, everybody? OK, KT 558 00:34:59,628 --> 00:35:00,928 Suze: take us out, girlfriend. 559 00:35:01,309 --> 00:35:03,509 KT: There's only one thing I want you to remember besides 560 00:35:03,509 --> 00:35:05,029 KT: that in-plan conversion. 561 00:35:06,110 --> 00:35:07,909 Suze: I thought you were gonna say something else. You know what, 562 00:35:07,949 --> 00:35:09,989 Suze: how I thought you were gonna say? There's only one 563 00:35:09,989 --> 00:35:12,759 Suze: thing I want you to remember, and it's this: Push 564 00:35:12,870 --> 00:35:17,229 Suze: the button to make sure that we're recording before we 565 00:35:17,229 --> 00:35:18,830 Suze: do an entire podcast. 566 00:35:18,979 --> 00:35:24,449 KT: On that note, everyone remember this people first, then money, 567 00:35:24,750 --> 00:35:25,610 KT: then things. 568 00:35:25,750 --> 00:35:28,610 Suze: Now you stay safe. Bye-bye.