1 00:00:33,250 --> 00:00:36,720 KT: Okay. Today is October 12 and this is a new 2 00:00:36,720 --> 00:00:37,920 KT: day because it's 3 00:00:37,920 --> 00:00:39,769 KT: Wednesday tell 4 00:00:39,770 --> 00:00:42,340 KT: everyone why we're changing out the show. Suze. 5 00:00:42,340 --> 00:00:44,960 Suze: Because I'm a Gemini and I can. And the only thing 6 00:00:44,960 --> 00:00:46,680 Suze: we're changing KT, 7 00:00:46,950 --> 00:00:51,060 Suze: is the day we do the show and drop the show. 8 00:00:51,070 --> 00:00:55,380 KT: So now you can all listen on Wednesday's and Saturday night, 9 00:00:55,470 --> 00:00:59,620 KT: Saturday night. Suze owned for 14 years with the Suze 10 00:00:59,620 --> 00:01:04,010 KT: Orman Show. And now, because everyone's writing to her about 11 00:01:04,010 --> 00:01:08,170 KT: her Suze Orman show available on freevee which is Amazon, 12 00:01:08,170 --> 00:01:09,240 KT: it's for free. 13 00:01:09,370 --> 00:01:13,110 KT: Everyone's excited. Like Suze, we're back with you Saturday night. 14 00:01:13,110 --> 00:01:14,759 KT: Date night with Suze. Yeah, 15 00:01:15,490 --> 00:01:18,880 Suze: Yes. So I decided well why not change the podcast to 16 00:01:18,880 --> 00:01:24,699 Suze: Saturday night as well as Wednesday night. All right, KT, 17 00:01:24,709 --> 00:01:31,370 Suze: this is Ask Suze and KT Anything. This is 2022. 18 00:01:31,380 --> 00:01:33,600 Suze: You know, KT, I always want people to know when 19 00:01:33,600 --> 00:01:34,870 Suze: we actually recorded the show. 20 00:01:35,180 --> 00:01:38,790 KT: Well, it's important because then the content and the information 21 00:01:38,920 --> 00:01:40,669 KT: is valid at that date. 22 00:01:40,990 --> 00:01:41,520 Suze: At that date. 23 00:01:41,720 --> 00:01:44,970 KT: So you can listen to these podcasts for you know, years. 24 00:01:44,970 --> 00:01:45,990 KT: You can listen to them. 25 00:01:46,000 --> 00:01:50,110 Suze: Yes, but if I'm giving financial advice as to buy this, 26 00:01:50,110 --> 00:01:54,030 Suze: sell that or whatever, please take the date in mind. 27 00:01:54,040 --> 00:01:56,380 KT: Alright, so we're going to get right to it. Suze. 28 00:01:56,380 --> 00:01:59,380 KT: I've got a lot of questions here. And the first 29 00:01:59,380 --> 00:02:01,330 KT: one actually isn't a question. 30 00:02:01,520 --> 00:02:05,570 KT: It's a "Hi Suze." Hope you and KT are doing well. 31 00:02:05,580 --> 00:02:09,290 KT: We spoke via email a couple of years ago when 32 00:02:09,290 --> 00:02:12,320 KT: I was really stuck and afraid of getting a divorce 33 00:02:12,320 --> 00:02:15,410 KT: and selling This is Jocelyn. 34 00:02:17,000 --> 00:02:17,660 KT: So 35 00:02:17,660 --> 00:02:20,210 KT: let me share this with everyone because I think they'll 36 00:02:20,220 --> 00:02:21,710 KT: find it very moving. 37 00:02:21,950 --> 00:02:24,959 KT: I just wanted to update you Suze that I sold 38 00:02:24,960 --> 00:02:28,030 KT: the house last year and the divorce was 39 00:02:28,030 --> 00:02:29,760 KT: finalized at the end 40 00:02:29,760 --> 00:02:30,799 KT: of August 41 00:02:30,810 --> 00:02:33,700 Suze: Because everybody, I just want to say before you go 42 00:02:33,700 --> 00:02:35,440 Suze: on KT. Really 43 00:02:36,150 --> 00:02:39,570 Suze: This is the month of October. This is not only 44 00:02:39,570 --> 00:02:44,950 Suze: breast cancer awareness month, but it is also domestic violence month. 45 00:02:45,560 --> 00:02:49,330 Suze: And so so there are many women and men that 46 00:02:49,330 --> 00:02:53,930 Suze: are in situations that are horrific that I deal with. 47 00:02:53,940 --> 00:02:56,910 Suze: And so this obviously is a good ending. Go on. 48 00:02:56,919 --> 00:03:01,500 KT: Okay. It's been a whirlwind of emotional and financial changes. 49 00:03:01,510 --> 00:03:05,239 KT: But thanks to you, Suze and my friends and family. 50 00:03:05,240 --> 00:03:09,220 KT: I got through it seriously. Your advice really helped me 51 00:03:09,230 --> 00:03:12,290 KT: and I wanted to say thank you for your support. 52 00:03:12,300 --> 00:03:15,930 KT: I haven't bought another place yet. So I'm renting I've 53 00:03:15,930 --> 00:03:18,420 KT: waited a year and sat on the money from the 54 00:03:18,419 --> 00:03:21,360 KT: house sale as you've suggested 55 00:03:21,530 --> 00:03:25,230 KT: others should do after a big life change now. I'm 56 00:03:25,230 --> 00:03:29,260 KT: free of a house and marriage that was keeping me 57 00:03:29,260 --> 00:03:32,970 KT: down in New York City. I'm considering moving out of 58 00:03:32,970 --> 00:03:36,720 KT: the city since I'm older. I'm also want to take 59 00:03:36,720 --> 00:03:39,590 KT: a look at the quality of my life where yet 60 00:03:39,600 --> 00:03:43,370 KT: I'm not sure I just reread your email and I'm 61 00:03:43,370 --> 00:03:48,210 KT: crying crying because I am free now crying also because 62 00:03:48,210 --> 00:03:51,280 KT: I'm reflecting on how scared I was back then 63 00:03:51,510 --> 00:03:54,520 KT: and how long it took me to cut the cord 64 00:03:54,520 --> 00:03:57,960 KT: and move on. Yes, I was scared to leave a 65 00:03:57,960 --> 00:04:02,130 KT: man and the what ifs of life. So this is 66 00:04:02,130 --> 00:04:05,160 KT: I want to read Suze, what she wrote that you 67 00:04:05,160 --> 00:04:08,760 KT: had said to her. I think quite some time ago 68 00:04:09,010 --> 00:04:14,340 KT: your thoughts create your destiny. So stop thinking thoughts of poverty, 69 00:04:14,350 --> 00:04:18,419 KT: sell the house, change your damn life, Cut it clean, 70 00:04:18,529 --> 00:04:21,630 KT: get him out of your life and get on with 71 00:04:21,630 --> 00:04:27,210 KT: creating and stop settling. And then Jocelyn wrote Suze, your 72 00:04:27,210 --> 00:04:30,429 KT: slap down of love was right on the money 73 00:04:30,750 --> 00:04:34,040 KT: And I see that clearly now I am ready to 74 00:04:34,040 --> 00:04:37,700 KT: start my life. Thank you so much Suze for all 75 00:04:37,700 --> 00:04:44,000 KT: you do to help us be safe, strong and secure Jocelyn. 76 00:04:44,010 --> 00:04:47,990 Suze: So that's very, so happy for you and KT, I 77 00:04:47,990 --> 00:04:52,339 Suze: love that you chose that especially for this month. I 78 00:04:52,339 --> 00:04:56,080 Suze: just want to say since KT chose that there is 79 00:04:56,080 --> 00:04:56,789 Suze: hope 80 00:04:57,060 --> 00:05:00,870 Suze: you can change your life. You don't have to stay 81 00:05:00,880 --> 00:05:06,720 Suze: in a situation where you are abused emotionally, physically financially 82 00:05:06,720 --> 00:05:08,130 Suze: in any way 83 00:05:08,580 --> 00:05:12,630 Suze: you deserve a better life than that. And the only 84 00:05:12,630 --> 00:05:15,150 Suze: way that's going to change is when you have the 85 00:05:15,150 --> 00:05:18,260 Suze: courage to do so. So I pray for all of 86 00:05:18,260 --> 00:05:21,000 Suze: you that you don't settle and that you do find 87 00:05:21,000 --> 00:05:24,440 Suze: a way out of any situation that you should not 88 00:05:24,450 --> 00:05:26,540 Suze: be in. That was sweet that you picked that out. 89 00:05:27,180 --> 00:05:32,409 KT: Right? Sometimes it's important to share what we hear back 90 00:05:32,410 --> 00:05:35,280 KT: from those people you've helped and helped so many 91 00:05:35,550 --> 00:05:38,289 KT: and and this one from Helen also put a smile 92 00:05:38,290 --> 00:05:40,089 KT: on my face listen to this... 93 00:05:40,089 --> 00:05:41,820 Suze: And that's not hard. You always have a smile on 94 00:05:41,820 --> 00:05:42,340 Suze: that little face. 95 00:05:43,350 --> 00:05:46,979 KT: This is really funny. I have a loaded mutual fund and 96 00:05:46,980 --> 00:05:47,640 KT: she wrote 97 00:05:48,490 --> 00:05:52,979 KT: I now understand thanks to you Suze what that means. 98 00:05:52,990 --> 00:05:56,460 KT: She said it has about $12,000 in it. Is there 99 00:05:56,460 --> 00:06:00,640 KT: a best way to close or withdraw this money? 100 00:06:00,640 --> 00:06:04,529 Suze: Now KT, do you know what a loaded mutual fund is? 101 00:06:04,540 --> 00:06:08,160 KT: Not really? Why don't you tell everybody? Because I know 102 00:06:08,160 --> 00:06:08,609 KT: I get it wrong. 103 00:06:09,050 --> 00:06:12,750 Suze: Oh don't say that. But anyway when you buy a 104 00:06:12,750 --> 00:06:13,900 Suze: mutual fund 105 00:06:14,420 --> 00:06:17,650 Suze: there are many different types of mutual funds that all 106 00:06:17,650 --> 00:06:21,339 Suze: of you can buy and a mutual fund is where 107 00:06:21,350 --> 00:06:25,370 Suze: you invest a particular sum of money into this fund 108 00:06:25,520 --> 00:06:29,510 Suze: and it's invested in a way where you mutually own 109 00:06:29,520 --> 00:06:34,109 Suze: a tiny bit of every stock that that fun happens 110 00:06:34,110 --> 00:06:37,929 Suze: to own. So it's a way for you to diversify money. 111 00:06:37,940 --> 00:06:41,430 Suze: Another way is through an exchange traded fund. 112 00:06:41,890 --> 00:06:44,560 Suze: But with mutual funds in particular 113 00:06:45,170 --> 00:06:49,990 Suze: they are sold either with a commission which means a load. 114 00:06:50,070 --> 00:06:54,460 Suze: So if you're investing $10,000 and the load is 5% 115 00:06:54,650 --> 00:06:59,770 Suze: immediately your money is going to be worth only $9500 116 00:06:59,779 --> 00:07:03,770 Suze: because $500 went to the broker who sold it to 117 00:07:03,770 --> 00:07:06,650 Suze: you the broker by the way, the financial advisor that 118 00:07:06,650 --> 00:07:10,420 Suze: has absolutely nothing to do with the performance of that fund. 119 00:07:10,420 --> 00:07:11,920 Suze: It's like a car salesman, 120 00:07:12,120 --> 00:07:14,960 Suze: They have nothing to do with the performance of the car. 121 00:07:15,060 --> 00:07:19,480 Suze: Neither does a financial advisor that sells you a mutual 122 00:07:19,480 --> 00:07:22,440 Suze: fund that has a load on it. That's just what 123 00:07:22,440 --> 00:07:25,160 Suze: they get paid to sell it to you for then 124 00:07:25,160 --> 00:07:28,270 Suze: there are no load funds where you can buy them 125 00:07:28,280 --> 00:07:31,830 Suze: and there is no fee to buy or sell that 126 00:07:31,830 --> 00:07:33,360 Suze: fund whatsoever 127 00:07:34,080 --> 00:07:37,300 Suze: so there are loaded and there are no loaded funds. Now, 128 00:07:37,300 --> 00:07:39,150 Suze: I can go more into detail but this isn't a 129 00:07:39,160 --> 00:07:44,680 Suze: Suze School on loaded funds but Helen, here's the problem. 130 00:07:44,690 --> 00:07:49,890 Suze: Once you have purchased a loaded mutual fund, you've already 131 00:07:49,890 --> 00:07:51,260 Suze: paid the load. 132 00:07:52,030 --> 00:07:55,510 Suze: So if you got out of the loaded mutual fund 133 00:07:55,510 --> 00:07:59,600 Suze: right now to buy a no load fund, I'm not 134 00:07:59,600 --> 00:08:03,130 Suze: sure that would make sense on any level because if 135 00:08:03,130 --> 00:08:07,140 Suze: this is money outside of a retirement account and now 136 00:08:07,140 --> 00:08:10,170 Suze: you're coming out of your loaded mutual fund to go 137 00:08:10,170 --> 00:08:12,990 Suze: into a no loaded fund, you may have capital gains 138 00:08:12,990 --> 00:08:16,119 Suze: tax to pay and it may not even be worth 139 00:08:16,120 --> 00:08:19,480 Suze: it at this point. If you already have purchased a 140 00:08:19,480 --> 00:08:20,920 Suze: loaded mutual fund, 141 00:08:21,270 --> 00:08:24,210 Suze: what you should be doing is looking at the performance 142 00:08:24,220 --> 00:08:29,450 Suze: of that fund. Now in comparison with other mutual funds 143 00:08:29,450 --> 00:08:33,230 Suze: that maybe you are interested in, you should also be 144 00:08:33,230 --> 00:08:37,500 Suze: looking at the expense ratio because it is the expense 145 00:08:37,500 --> 00:08:41,510 Suze: ratio and you can find all this information. Everybody right 146 00:08:41,520 --> 00:08:45,840 Suze: on CNBC dot com, Look up your mutual funds or 147 00:08:45,840 --> 00:08:50,430 Suze: you can go to Morningstar, you can find this information out. 148 00:08:50,570 --> 00:08:55,350 Suze: But if your expense ratio is really above like a 149 00:08:55,350 --> 00:08:58,800 Suze: quarter of a percent, a half a percent you may 150 00:08:58,800 --> 00:09:01,380 Suze: be paying too much just to even then stay in 151 00:09:01,380 --> 00:09:04,850 Suze: the fund. So do a little research. But just because 152 00:09:04,850 --> 00:09:07,830 Suze: you're in a loaded mutual fund doesn't mean now that 153 00:09:07,830 --> 00:09:09,110 Suze: you should sell it. 154 00:09:09,460 --> 00:09:13,580 KT: Okay. Suze, next question is from Erica. I've heard you 155 00:09:13,580 --> 00:09:17,870 KT: say 1000 times to do Roth accounts. 156 00:09:18,700 --> 00:09:19,570 KT: I've heard it 157 00:09:19,580 --> 00:09:21,300 KT: Many more than 1000. 158 00:09:21,670 --> 00:09:23,179 Suze: You really don't like Roth anymore. 159 00:09:23,190 --> 00:09:29,550 KT: No, it's just confusing. This whole Roth hope we do 160 00:09:29,550 --> 00:09:33,939 KT: take advantage of the backdoor Roth IRA option. Don't ask 161 00:09:33,940 --> 00:09:37,030 KT: me what that is, but you'll tell them again, we've 162 00:09:37,030 --> 00:09:39,340 KT: done many podcasts on the back doors. 163 00:09:39,640 --> 00:09:43,020 KT: We are fortunate and we are relatively high earners and 164 00:09:43,020 --> 00:09:43,850 KT: in high tax 165 00:09:43,850 --> 00:09:44,700 KT: brackets. 166 00:09:45,080 --> 00:09:48,130 KT: Suze. The question is, next year, should we switch to 167 00:09:48,130 --> 00:09:52,150 KT: the Roth 401K. Knowing we are in the highest tax 168 00:09:52,150 --> 00:09:54,079 KT: bracket we will ever be in. 169 00:09:54,929 --> 00:09:55,099 KT: It's 170 00:09:55,100 --> 00:09:56,040 KT: from Erica. 171 00:09:56,050 --> 00:09:57,040 Suze: That should have been your quizzie. 172 00:09:58,170 --> 00:10:01,090 KT: Um I would say go for it 173 00:10:01,100 --> 00:10:02,010 Suze: Yea girl! 174 00:10:02,020 --> 00:10:03,920 KT: Is that a Ding Ding Ding Ding? 175 00:10:03,929 --> 00:10:04,700 Suze: Ding Ding Ding 176 00:10:04,710 --> 00:10:05,570 Suze: baby. 177 00:10:05,580 --> 00:10:07,069 Suze: So Erica, 178 00:10:08,130 --> 00:10:11,819 Suze: I know you're in high income tax brackets and you 179 00:10:11,820 --> 00:10:15,600 Suze: think now is the time to put your money in 180 00:10:15,600 --> 00:10:19,410 Suze: a traditional 401k. So that you can in fact get 181 00:10:19,410 --> 00:10:22,980 Suze: a tax write off for it. But the problem is 182 00:10:22,990 --> 00:10:26,300 Suze: this later on in life you're going to have to 183 00:10:26,300 --> 00:10:27,980 Suze: start taking that money out 184 00:10:28,179 --> 00:10:31,390 Suze: and depending on how much money you have made within 185 00:10:31,390 --> 00:10:34,370 Suze: that 401k. That could be a lot of money and 186 00:10:34,370 --> 00:10:37,470 Suze: that could put you in a high income tax bracket 187 00:10:37,470 --> 00:10:41,189 Suze: later on number one. So here's what I would tell you. 188 00:10:41,200 --> 00:10:44,650 Suze: Forgo the tax write off now 189 00:10:45,250 --> 00:10:50,880 Suze: stocks are going down and down, Mutual funds are going 190 00:10:50,890 --> 00:10:55,630 Suze: down and down. So you are investing with after tax 191 00:10:55,630 --> 00:11:01,590 Suze: dollars right now because they're going down and down, chances 192 00:11:01,590 --> 00:11:05,580 Suze: are years from now. They will go up and up 193 00:11:05,590 --> 00:11:07,050 Suze: and up and up 194 00:11:07,640 --> 00:11:13,080 Suze: and therefore you probably are going to make a fortune 195 00:11:13,090 --> 00:11:15,929 Suze: and I want to see you make a fortune. That's 196 00:11:15,929 --> 00:11:19,930 Suze: absolutely tax free, not only to you but to your 197 00:11:19,929 --> 00:11:21,819 Suze: beneficiaries as well. 198 00:11:22,160 --> 00:11:26,500 Suze: Like just forgo the tax write off now to get 199 00:11:26,500 --> 00:11:31,210 Suze: total tax free income and the ability to take whatever 200 00:11:31,210 --> 00:11:33,850 Suze: money you want out tax free after the age of 201 00:11:33,850 --> 00:11:39,780 Suze: 59 a half. Just don't miss that opportunity Roth 401k, 202 00:11:39,790 --> 00:11:40,209 Suze: Roth 203 00:11:40,765 --> 00:11:44,885 Suze: 401k, Roth 401K. Next one, KT 204 00:11:46,775 --> 00:11:51,554 KT: Next question is from Norah Suze, I am retired and 205 00:11:51,554 --> 00:11:52,645 KT: I have $2 million 206 00:11:58,460 --> 00:12:02,319 KT: Between my social security annuities and rental income. I am 207 00:12:02,320 --> 00:12:06,559 KT: comfortable with my monthly income. I don't plan to use 208 00:12:06,559 --> 00:12:11,309 KT: my retirement account until I'm 72 which is about five 209 00:12:11,309 --> 00:12:12,550 KT: years from now. 210 00:12:13,770 --> 00:12:17,220 KT: Suze. The two million is now down by about half 211 00:12:17,220 --> 00:12:20,230 KT: a million dollars in less than a year. Should I 212 00:12:20,230 --> 00:12:22,239 KT: do anything differently? Be more 213 00:12:22,240 --> 00:12:23,689 KT: conservative? I 214 00:12:23,690 --> 00:12:27,170 KT: AM in a 60 / 40 position. As per my financial 215 00:12:27,170 --> 00:12:29,030 KT: advisors advice 216 00:12:29,410 --> 00:12:29,770 KT: your 217 00:12:29,770 --> 00:12:31,570 KT: thoughts would be much appreciated. 218 00:12:31,570 --> 00:12:35,530 Suze: So so in sync KT, because as you were just 219 00:12:35,530 --> 00:12:41,359 Suze: saying that whenever I see somebody asked me for my opinion, 220 00:12:41,370 --> 00:12:43,740 Suze: what that says to me Norah 221 00:12:44,040 --> 00:12:48,020 Suze: is you do not trust your financial advisor totally. 222 00:12:48,620 --> 00:12:49,480 KT: Yes 223 00:12:49,480 --> 00:12:54,150 Suze: but trust confidence you have to have total faith in 224 00:12:54,150 --> 00:12:57,819 Suze: the person who's managing your money because it is your 225 00:12:57,820 --> 00:13:01,530 Suze: money or your life, they're both identical. You know they're 226 00:13:01,530 --> 00:13:04,720 Suze: the most precious thing that keeps your life going that 227 00:13:04,720 --> 00:13:09,410 Suze: keeps your family going. So what concerns me here is 228 00:13:09,410 --> 00:13:12,990 Suze: that number one, you're down about 25% 229 00:13:13,330 --> 00:13:18,069 Suze: And you're down at a time where you're already in 230 00:13:18,070 --> 00:13:22,490 Suze: your 60s, you're five years away from 72. Why were 231 00:13:22,490 --> 00:13:27,470 Suze: you down so much? Your advisor had you 60% in 232 00:13:27,470 --> 00:13:33,110 Suze: stocks or bonds? I'm not exactly sure which one and 40% 233 00:13:33,120 --> 00:13:35,020 Suze: in stocks or bonds. 234 00:13:35,540 --> 00:13:38,319 Suze: Right because at this point he could have had you 235 00:13:38,320 --> 00:13:41,170 Suze: or she could have had you in 60% in bonds 236 00:13:41,240 --> 00:13:46,050 Suze: but a good financial advisor would have known over the 237 00:13:46,050 --> 00:13:48,040 Suze: past year or so 238 00:13:48,460 --> 00:13:53,010 Suze: that bonds were absolutely going to go down. Haven't you 239 00:13:53,010 --> 00:13:56,520 Suze: heard me say over the past year, get out of bonds, 240 00:13:56,520 --> 00:13:59,910 Suze: specifically get out of bond mutual funds, Get out of 241 00:13:59,910 --> 00:14:02,890 Suze: long term mutual funds that are made up of bonds. 242 00:14:02,900 --> 00:14:06,300 Suze: I was like, get out, get out, get out. This 243 00:14:06,300 --> 00:14:09,010 Suze: advisor did not get you out 244 00:14:09,390 --> 00:14:15,090 Suze: Because there is no way that you should be down 25% 245 00:14:15,100 --> 00:14:19,380 Suze: at this point. If you had true diversification, 246 00:14:19,740 --> 00:14:23,790 Suze: if the advisor really knew that you were maybe afraid 247 00:14:23,790 --> 00:14:26,040 Suze: and you wanted to keep your money safe, then the 248 00:14:26,040 --> 00:14:29,380 Suze: advisor would have probably sold because again you're in a 249 00:14:29,380 --> 00:14:34,290 Suze: retirement account, there's absolutely no tax ramifications for doing so 250 00:14:34,300 --> 00:14:38,760 Suze: and just kept your money safe and sound. But that's 251 00:14:38,760 --> 00:14:39,960 Suze: not what happened. 252 00:14:40,420 --> 00:14:44,130 Suze: So when you asked me, should I do anything differently? 253 00:14:44,140 --> 00:14:48,910 Suze: Be more conservative? Not at this point because now I've 254 00:14:48,910 --> 00:14:53,580 Suze: changed my mind where it's like, okay, now interest rates 255 00:14:53,580 --> 00:14:56,210 Suze: have gone up now isn't a bad time to start 256 00:14:56,210 --> 00:15:01,550 Suze: getting into bonds and bond funds Again, little by little 257 00:15:01,570 --> 00:15:05,130 Suze: what you might want to do differently is you might 258 00:15:05,130 --> 00:15:07,770 Suze: want to get a different financial advisor, 259 00:15:08,280 --> 00:15:12,750 Suze: somebody who you have total confidence in. But Norah, there's 260 00:15:12,750 --> 00:15:14,850 Suze: something that I'm picking up here 261 00:15:15,620 --> 00:15:21,170 Suze: that you're not quite settled with this person. Just something 262 00:15:21,180 --> 00:15:22,020 Suze: to think about. 263 00:15:22,020 --> 00:15:24,400 KT: Suze, the next question is from Danielle. 264 00:15:24,540 --> 00:15:29,670 KT: After several years of financial mismanagement, my best friend is 265 00:15:29,670 --> 00:15:33,780 KT: moving toward bankruptcy a few years ago I set her 266 00:15:33,780 --> 00:15:38,120 KT: up with a Roth IRA. She's been putting $40 per 267 00:15:38,120 --> 00:15:42,240 KT: month into the account in talking to her about her 268 00:15:42,240 --> 00:15:47,609 KT: bankruptcy plans. I'm concerned that her ira will somehow affect 269 00:15:47,840 --> 00:15:52,260 KT: her process of bankruptcy or worse will they force her 270 00:15:52,260 --> 00:15:55,120 KT: to settle some of her debt with what she has 271 00:15:55,120 --> 00:15:57,020 KT: saved in the IRA. 272 00:15:57,030 --> 00:15:58,620 Suze: The reason why... 273 00:15:59,780 --> 00:16:01,260 KT: Can they touch her IRA? 274 00:16:01,270 --> 00:16:02,350 Suze: No they cannot. 275 00:16:02,350 --> 00:16:03,840 KT: Yeah, I was going to say that should have been 276 00:16:03,840 --> 00:16:04,420 KT: my quizzie. 277 00:16:04,770 --> 00:16:05,500 Suze: Yeah, 278 00:16:05,750 --> 00:16:09,540 Suze: I knew you probably would have known that right everybody. 279 00:16:09,550 --> 00:16:13,720 Suze: The reason why you hear me saying all the time 280 00:16:13,760 --> 00:16:17,860 Suze: contribute to your 401k. Plan, especially up to the match 281 00:16:17,870 --> 00:16:21,300 Suze: contribute to a Roth IRA put as much money in 282 00:16:21,300 --> 00:16:23,660 Suze: retirement accounts as you can 283 00:16:23,980 --> 00:16:31,910 Suze: is because 401 Ks and IRAs are protected against the bankruptcy. 401ks. 284 00:16:32,140 --> 00:16:35,260 Suze: You could have $10 million in there and claim bankruptcy 285 00:16:35,260 --> 00:16:38,030 Suze: and they won't be able to touch it in IRA. 286 00:16:38,040 --> 00:16:41,890 Suze: It's up to about 1.1 million you could have in 287 00:16:41,890 --> 00:16:43,660 Suze: there and they can't touch it. 288 00:16:43,890 --> 00:16:47,990 Suze: So that's why it's so sad when you take money 289 00:16:48,000 --> 00:16:51,470 Suze: out of a retirement account to catch up on your 290 00:16:51,470 --> 00:16:55,200 Suze: bills and then you end up claiming bankruptcy and then 291 00:16:55,200 --> 00:16:58,890 Suze: you have nothing. So you are never to take money 292 00:16:58,900 --> 00:17:02,570 Suze: out of a retirement account to get yourself out of debt. 293 00:17:02,570 --> 00:17:04,190 Suze: Do you hear me? 294 00:17:04,200 --> 00:17:08,070 KT: Good. And Danielle, just from me, from KT, thank you 295 00:17:08,070 --> 00:17:10,520 KT: so much for your service in the navy. 296 00:17:11,160 --> 00:17:14,790 Suze: Oh, you're crying. I know why you're crying because we're 297 00:17:14,790 --> 00:17:17,840 Suze: in October and we're literally only a week away. 298 00:17:18,510 --> 00:17:21,240 KT: Days away from when we lost my dad. But so 299 00:17:21,240 --> 00:17:22,180 KT: many years ago. 300 00:17:22,190 --> 00:17:25,560 Suze: Yeah. 20. The year 2000 right is when he died, because I 301 00:17:25,560 --> 00:17:28,669 Suze: never got to meet him. But so little KT's a 302 00:17:28,670 --> 00:17:33,680 Suze: little sentimental when she thinks about her daddy. Yeah, 303 00:17:34,230 --> 00:17:39,090 KT: But look, Daniels from the Nurse corps that I love 304 00:17:39,090 --> 00:17:43,250 KT: that you are helping your friend. You're helping people stay 305 00:17:43,250 --> 00:17:47,680 KT: healthy safe. I love that. And you're serving your country. 306 00:17:47,680 --> 00:17:52,500 KT: Love that even more. Okay, moving on with happy thoughts. 307 00:17:52,530 --> 00:17:54,240 KT: This is from Heidi. 308 00:17:54,550 --> 00:17:59,250 KT: I just wanted to say Suze. I've changed diversification on 309 00:17:59,250 --> 00:18:04,530 KT: my 401K. And purchased my first ever Series I bonds. 310 00:18:04,720 --> 00:18:09,080 KT: I'm a little freaked and a lot proud and very excited. 311 00:18:09,320 --> 00:18:13,300 KT: Thanks for giving me the courage to trust you and 312 00:18:13,310 --> 00:18:17,700 KT: in myself a little bit more each day. I'm 62 313 00:18:17,710 --> 00:18:22,230 KT: about to be divorced, pissed off I didn't plan better earlier. 314 00:18:22,730 --> 00:18:24,379 KT: I'm the breadwinner but not a 315 00:18:24,380 --> 00:18:25,210 KT: saver. 316 00:18:25,430 --> 00:18:28,750 KT: But I bought some I bonds. Hell yeah. 317 00:18:30,170 --> 00:18:35,680 KT: Heidi sounds like quite the pistol. But no, but I 318 00:18:35,680 --> 00:18:38,390 KT: have a question because we've been, people have been writing 319 00:18:38,390 --> 00:18:41,180 KT: in about November is coming up and as you know, 320 00:18:41,180 --> 00:18:43,520 KT: that's when they set the new rates for I bonds. 321 00:18:43,530 --> 00:18:47,750 KT: I've been getting some questions in these emails and says Suze, 322 00:18:47,750 --> 00:18:49,770 KT: so what do you think the interest rates going to be? 323 00:18:49,770 --> 00:18:53,560 KT: Everyone's asking? And they're guessing all over the place 324 00:18:56,800 --> 00:18:56,950 Suze: The 325 00:18:56,950 --> 00:18:59,970 Suze: answer because just the other day, KT, I said I 326 00:18:59,970 --> 00:19:02,740 Suze: thought it was going to be about 6%. I literally 327 00:19:02,740 --> 00:19:03,390 Suze: think it could be 328 00:19:03,390 --> 00:19:05,030 KT: between yeah 329 00:19:05,040 --> 00:19:10,470 Suze: six, maybe 7.13. But we won't know until actually tomorrow. 330 00:19:11,180 --> 00:19:11,380 Suze: It's 331 00:19:11,380 --> 00:19:17,260 Suze: the twelfth today, October 13 - that is tomorrow. They will announce the 332 00:19:17,260 --> 00:19:21,330 Suze: CPIU and then we'll know for sure. The consumer price 333 00:19:21,340 --> 00:19:22,840 Suze: index for urban, 334 00:19:23,060 --> 00:19:26,399 Suze: right? We'll know for sure what it will be in November. 335 00:19:26,410 --> 00:19:28,930 Suze: But as I've been telling everybody, it is not going 336 00:19:28,930 --> 00:19:33,050 Suze: to be 9.62%. It's not going to be 12 point whatever. 337 00:19:33,050 --> 00:19:36,119 Suze: Somebody said it was going to be 12% a few 338 00:19:36,119 --> 00:19:39,270 Suze: months ago. And so now you're all thinking that I 339 00:19:39,270 --> 00:19:45,700 Suze: have just we'll know what it's going to be literally tomorrow. 340 00:19:45,710 --> 00:19:48,670 Suze: And then we'll tell everybody. Alright, but I expect it's 341 00:19:48,670 --> 00:19:49,490 Suze: going to be 342 00:19:49,680 --> 00:19:50,250 Suze: around 343 00:19:50,250 --> 00:19:51,220 Suze: six or seven 344 00:19:51,220 --> 00:19:53,940 Suze: Percent or could even be under 6%. We'll see. 345 00:19:54,460 --> 00:19:59,550 KT: Our next question is from James. Hi Suze and KT recently. 346 00:19:59,560 --> 00:20:04,000 KT: I saw that Robin Hood is offering a savings opportunity 347 00:20:04,000 --> 00:20:06,030 KT: that resembles high yield 348 00:20:06,050 --> 00:20:12,710 KT: savings account at a 3% return for $5 monthly fee? 349 00:20:12,720 --> 00:20:16,240 KT: They call it a cash sweep much for what you're 350 00:20:16,240 --> 00:20:18,620 KT: going to call this Suze. Do you think this is 351 00:20:18,619 --> 00:20:23,190 KT: a safe and secure option to place money into? Thank 352 00:20:23,190 --> 00:20:27,180 KT: you so much for the great podcast advice. Alright. So 353 00:20:27,180 --> 00:20:29,000 KT: tell James what that's about. 354 00:20:29,160 --> 00:20:34,030 Suze: I don't know. James 3% depends how much money you 355 00:20:34,030 --> 00:20:38,410 Suze: are putting in. So for instance, let's say you're depositing 356 00:20:38,410 --> 00:20:42,210 Suze: well guess $5000 and you're going to get 3% for 357 00:20:42,210 --> 00:20:46,610 Suze: the year. That's 100 and $50 of interest. But if 358 00:20:46,609 --> 00:20:55,210 Suze: they're charging you $5 a month that's $60 a year minus, 359 00:20:55,210 --> 00:20:58,500 Suze: then that's $60 from 150. You're only 360 00:20:58,520 --> 00:21:02,450 Suze: going to be making $90 a year. After all those 361 00:21:02,450 --> 00:21:05,190 Suze: fees you would be better off taking that money and 362 00:21:05,190 --> 00:21:09,850 Suze: putting it in. Alliant Credit Union at the current 2% 363 00:21:09,859 --> 00:21:15,359 Suze: because a year from now 2% on $5,000 would be $100. 364 00:21:15,359 --> 00:21:18,709 Suze: So you would actually be $10 a head and in 365 00:21:18,710 --> 00:21:24,859 Suze: a lot safer institution just so you know, so I 366 00:21:24,859 --> 00:21:27,850 Suze: wouldn't be doing it wrong. I just wouldn't touch it. 367 00:21:28,840 --> 00:21:30,010 KT: Okay. 368 00:21:30,740 --> 00:21:34,590 Suze: Why should I pay somebody KT to save my money? 369 00:21:34,600 --> 00:21:35,740 Suze: They should be paying me 370 00:21:38,150 --> 00:21:42,159 Suze: because Robin Hood needs money. I'm... just listen, I'm sorry 371 00:21:42,160 --> 00:21:43,970 Suze: Robin Hood, I'm just not a fan. 372 00:21:44,040 --> 00:21:44,889 KT: Alright. 373 00:21:44,900 --> 00:21:47,330 Suze: Never have been. Never will be go on. 374 00:21:47,340 --> 00:21:53,189 KT: Okay this is from Roberta. Dear Suze. I'm considering buying C. D. 375 00:21:53,190 --> 00:21:56,840 KT: S through my Vanguard brokerage account. I see there's an 376 00:21:56,850 --> 00:22:01,820 KT: option for Callable CDs that bear a higher interest rate, 377 00:22:01,830 --> 00:22:05,680 KT: wondering what your thoughts are about a call C. D. 378 00:22:05,690 --> 00:22:08,689 KT: Or a callable C. D. As she calls it. 379 00:22:08,700 --> 00:22:10,630 Suze: I'm not gonna ask you KT because I can see 380 00:22:10,630 --> 00:22:13,320 Suze: on your face you don't know about it. Nor should 381 00:22:13,320 --> 00:22:15,550 Suze: you really because whoever talks about 382 00:22:15,550 --> 00:22:19,379 KT: Is this is what it means? "C. D. - C. D.!!" 383 00:22:19,390 --> 00:22:20,520 Suze: Are you calling a C.D.? 384 00:22:20,520 --> 00:22:21,929 KT: CD. C. D. 385 00:22:21,930 --> 00:22:23,160 KT: C. D. Come back to 386 00:22:23,160 --> 00:22:23,600 KT: me? 387 00:22:24,500 --> 00:22:25,950 Suze: Well it's kind of like that, 388 00:22:26,000 --> 00:22:26,960 KT: Tell me what it means. 389 00:22:26,960 --> 00:22:31,190 Suze: No it's kind of like that a callable cd means 390 00:22:31,200 --> 00:22:33,740 Suze: that you can call it back to you. 391 00:22:34,100 --> 00:22:38,150 Suze: So if I issue you a certificate of deposit and 392 00:22:38,150 --> 00:22:40,510 Suze: I have the right to say you know what I 393 00:22:40,510 --> 00:22:44,210 Suze: don't want to pay you 4% anymore. I have the 394 00:22:44,210 --> 00:22:47,000 Suze: right to call that back from you, take it back 395 00:22:47,010 --> 00:22:50,480 Suze: from you. So I'm willing to give you a little 396 00:22:50,480 --> 00:22:55,250 Suze: more interest rate for the ability to take it back. 397 00:22:55,930 --> 00:22:59,830 Suze: And a regular certificate of deposit that isn't call a 398 00:22:59,830 --> 00:23:03,180 Suze: ble means they have to pay you possibly that three 399 00:23:03,180 --> 00:23:08,210 Suze: or 4% until that C. D. Actually matures. So if 400 00:23:08,220 --> 00:23:12,649 Suze: interest rates start to go down and there's a certificate 401 00:23:12,650 --> 00:23:16,100 Suze: of deposit out there that is paying you a higher 402 00:23:16,109 --> 00:23:20,260 Suze: interest rate than what new certificates of deposit have to 403 00:23:20,260 --> 00:23:22,890 Suze: pay they would call that from you. 404 00:23:23,300 --> 00:23:25,400 KT: Is it good to do it? 405 00:23:25,410 --> 00:23:28,880 Suze: It's good if you know interest rates are going to 406 00:23:28,880 --> 00:23:33,160 Suze: continue up and how often they have the ability to 407 00:23:33,160 --> 00:23:35,920 Suze: call it from you? The truth of the matter is 408 00:23:35,930 --> 00:23:39,740 Suze: rather than doing a callable cd for a little bit 409 00:23:39,740 --> 00:23:43,170 Suze: higher interest rate. My dear Roberta, you would probably be 410 00:23:43,170 --> 00:23:43,650 Suze: better off simply 411 00:23:44,040 --> 00:23:49,120 Suze: doing what? A Treasury bill or note where you could 412 00:23:49,119 --> 00:23:54,689 Suze: lock in for one year, 4% or two years, 4.15% 413 00:23:54,700 --> 00:23:55,940 Suze: or whatever it may be. 414 00:23:56,160 --> 00:23:57,240 KT: We just did that. 415 00:23:57,260 --> 00:23:58,380 Suze: We've been doing that. 416 00:23:58,650 --> 00:24:01,430 KT: Yeah, but we just did it big time again. 417 00:24:01,530 --> 00:24:02,439 Suze: I know she opened one of the statements... 418 00:24:03,200 --> 00:24:07,330 KT: Whoa! I said Suze. I said did you do that 419 00:24:07,330 --> 00:24:09,460 KT: for Me too? She said I did it for both 420 00:24:09,460 --> 00:24:10,480 KT: of us. Yeah, 421 00:24:10,690 --> 00:24:11,450 KT: but 422 00:24:11,450 --> 00:24:14,080 Suze: I told everybody, KT a little bit ago that I 423 00:24:14,080 --> 00:24:17,409 Suze: put a sizable sum of money into the two year treasury. 424 00:24:18,119 --> 00:24:21,060 Suze: Why not? I'm getting 4.15% 425 00:24:21,960 --> 00:24:24,290 Suze: but you know, guaranteed to me by the authority of 426 00:24:24,290 --> 00:24:25,820 Suze: the United States government 427 00:24:26,280 --> 00:24:26,399 KT: for 428 00:24:26,400 --> 00:24:28,909 Suze: two years. You know what I'll take it. 429 00:24:28,920 --> 00:24:30,710 KT: Okay, next question's from, 430 00:24:30,710 --> 00:24:32,380 Suze: Wait, wait. I just have to say this. Why will 431 00:24:32,380 --> 00:24:36,379 Suze: I take it? Because it makes me feel what? Secure 432 00:24:36,390 --> 00:24:39,960 Suze: and that's all that matters because that is the goal of money. 433 00:24:40,340 --> 00:24:42,500 KT: All right. Next question is from Patty. 434 00:24:42,890 --> 00:24:46,310 KT: Hi Suze. I need to make a decision about where 435 00:24:46,310 --> 00:24:50,230 KT: to invest my I. R. A. It's not making so 436 00:24:50,230 --> 00:24:54,170 KT: much money these days in Charles Schwab. I am divorced 437 00:24:54,180 --> 00:24:57,950 KT: 61 years old. I may need this money within 5 438 00:24:57,950 --> 00:25:02,919 KT: to 10 years. I'm thinking about Treasury bonds. So here's 439 00:25:02,920 --> 00:25:05,859 KT: another one that I remember. I told you I'm getting 440 00:25:05,859 --> 00:25:06,310 KT: these 441 00:25:06,680 --> 00:25:10,050 KT: Emails and even Patty. Why doesn't she just go and 442 00:25:10,050 --> 00:25:13,399 KT: talk to Charles Schwab about this? No, she's talking to 443 00:25:13,400 --> 00:25:14,520 KT: Suze first. 444 00:25:14,520 --> 00:25:19,159 Suze: Right. You just handed me the email. And what's interesting 445 00:25:19,160 --> 00:25:23,410 Suze: is Patty ends this question and she says, I know 446 00:25:23,410 --> 00:25:26,100 Suze: I will have to pay taxes if I take the 447 00:25:26,100 --> 00:25:30,170 Suze: money out to buy bonds, but it may be worth 448 00:25:30,180 --> 00:25:31,300 Suze: doing so 449 00:25:31,480 --> 00:25:37,590 Suze: Patty. Listen closely. You can leave your money right at 450 00:25:37,600 --> 00:25:41,930 Suze: Charles Schwab in the I. R. A. And you could 451 00:25:41,930 --> 00:25:47,480 Suze: buy Treasury bill bonds or notes within your I. R. A. 452 00:25:47,490 --> 00:25:48,650 Suze: At Charles 453 00:25:48,650 --> 00:25:50,379 Suze: Schwab. Right. 454 00:25:50,380 --> 00:25:52,790 Suze: You could do that there. You could do that in Fidelity. 455 00:25:52,800 --> 00:25:55,939 Suze: So you don't have to take money out to buy one. 456 00:25:55,950 --> 00:25:59,050 Suze: You don't have to pay taxes on it 457 00:25:59,380 --> 00:26:02,230 Suze: to take money out to buy one. You can do 458 00:26:02,230 --> 00:26:05,400 Suze: it within your I. R. A. And by the way, 459 00:26:05,400 --> 00:26:08,270 Suze: I just have to say this. Everybody that's the main 460 00:26:08,270 --> 00:26:14,200 Suze: difference between buying a Treasury at a brokerage firm versus 461 00:26:14,200 --> 00:26:18,710 Suze: buying a Treasury through Treasury direct dot gov. That's one 462 00:26:18,710 --> 00:26:22,350 Suze: of the differences at Treasury direct dot gov. You can't 463 00:26:22,359 --> 00:26:26,810 Suze: buy treasuries within a retirement account at a brokerage firm. 464 00:26:26,810 --> 00:26:28,840 Suze: You most certainly can. 465 00:26:29,000 --> 00:26:31,460 Suze: And you probably should. Alright, 466 00:26:31,930 --> 00:26:35,190 KT: Next question's from Tony. This is again from about my 467 00:26:35,190 --> 00:26:40,750 KT: friend Roth ready? I'm currently 56 years old. Is it true, 468 00:26:40,750 --> 00:26:46,010 KT: Suze that rollovers from a traditional IRA to a Roth 469 00:26:46,010 --> 00:26:51,190 KT: account are taxable as income but are not considered early 470 00:26:51,190 --> 00:26:57,919 KT: distributions and therefore will not incur the 10% additional tax penalty. 471 00:26:58,130 --> 00:27:01,420 KT: I hope this is true because the balance in my 472 00:27:01,420 --> 00:27:06,970 KT: traditional IRA is currently down 25% and I would love 473 00:27:06,970 --> 00:27:11,300 KT: to transfer some of those stocks into my Roth IRA 474 00:27:11,400 --> 00:27:15,119 KT: to take advantage of the market low. What do you think? 475 00:27:15,119 --> 00:27:16,180 KT: What should we tell her? 476 00:27:16,190 --> 00:27:18,190 Suze: This one's really simple Tony. 477 00:27:18,720 --> 00:27:22,130 Suze: You're not rolling over. You are converting and when you 478 00:27:22,130 --> 00:27:26,650 Suze: convert money, that's pre tax from an IRA to a 479 00:27:26,660 --> 00:27:30,890 Suze: Roth IRA, you only have to pay income tax on it. 480 00:27:30,900 --> 00:27:36,040 Suze: You do not pay the 10% penalty. Just that simple. 481 00:27:36,050 --> 00:27:37,770 Suze: Next question, KT. 482 00:27:37,780 --> 00:27:41,470 KT: It's not a next question. It's quizzie time. 483 00:27:41,480 --> 00:27:47,460 Suze: It's quizzie time already? Oh that was fast. So 484 00:27:47,950 --> 00:27:50,770 Suze: This quizzie is an interesting one 485 00:27:51,280 --> 00:27:54,530 Suze: right now for all of you who don't know what 486 00:27:54,540 --> 00:27:58,240 Suze: is quizzie time is, quizzie time. 487 00:28:00,250 --> 00:28:01,810 Suze: Why are you laughing? 488 00:28:02,100 --> 00:28:05,800 KT: It's when KT, most of the time gets it wrong. So 489 00:28:05,800 --> 00:28:08,810 KT: don't feel bad everybody, if you don't know the answer, 490 00:28:08,820 --> 00:28:13,300 KT: guess what, join KT club? The quizzie club, The 491 00:28:13,710 --> 00:28:17,910 Suze: quizzieclub. You're all quizzies . So quizzie time is where 492 00:28:17,920 --> 00:28:20,610 Suze: I not only ask KT a question, 493 00:28:20,890 --> 00:28:24,090 Suze: but I ask all of you the same question as 494 00:28:24,090 --> 00:28:27,600 Suze: well because part of the Women and Money Podcast is 495 00:28:27,600 --> 00:28:30,190 Suze: I want you to be able to think, I want 496 00:28:30,190 --> 00:28:33,639 Suze: you to be able to evaluate a situation because maybe 497 00:28:33,640 --> 00:28:37,650 Suze: one day you might be in that same situation and 498 00:28:37,650 --> 00:28:40,830 Suze: I want you to have the tools to be able 499 00:28:40,830 --> 00:28:44,520 Suze: to think about oh no this is what I should do, 500 00:28:44,520 --> 00:28:47,560 Suze: this is what I should not do and this is why. 501 00:28:48,240 --> 00:28:50,440 Suze: Alright are you ready? 502 00:28:50,450 --> 00:28:51,370 KT: I'm ready. Go 503 00:28:51,370 --> 00:28:57,140 Suze: for this is from Susan and Susan says hi Suze 504 00:28:57,140 --> 00:29:02,880 Suze: and KT thank you for providing sound financial advice and 505 00:29:02,880 --> 00:29:08,560 Suze: especially for remembering the many single older women that's easy 506 00:29:08,560 --> 00:29:11,270 Suze: to remember since we are older women 507 00:29:12,000 --> 00:29:13,320 KT: Speak for yourself, Suze! 508 00:29:13,870 --> 00:29:15,219 Suze: You don't feel old do you? 509 00:29:15,230 --> 00:29:17,440 KT: No! Never! 510 00:29:18,470 --> 00:29:24,050 Suze: Alright I'm ready to do my first Roth conversion but 511 00:29:24,050 --> 00:29:27,390 Suze: I have a question that I have not heard discussed 512 00:29:27,400 --> 00:29:32,870 Suze: on the podcast. I have a traditional IRA and a 513 00:29:32,870 --> 00:29:39,240 Suze: Roth IRA remember everybody a traditional IRA is money that 514 00:29:39,240 --> 00:29:40,570 Suze: you have invested 515 00:29:40,890 --> 00:29:45,240 Suze: with pre tax dollars. You have never paid taxes on 516 00:29:45,250 --> 00:29:50,290 Suze: those dollars and a Roth IRA which is you funded 517 00:29:50,290 --> 00:29:54,750 Suze: it with after tax dollars. So everything in there then 518 00:29:54,760 --> 00:29:56,190 Suze: is tax free, 519 00:29:57,050 --> 00:30:00,490 Suze: both with diversified holdings and cash. 520 00:30:01,160 --> 00:30:05,590 Suze: So KT in these retirement accounts, she not only owns 521 00:30:05,590 --> 00:30:10,200 Suze: stock but she also has cash invested just sitting there 522 00:30:10,210 --> 00:30:17,920 Suze: as well. I plan to convert $26,000. So the question 523 00:30:17,930 --> 00:30:24,590 Suze: everybody is Susan wants to take $26,000 from her traditional 524 00:30:24,600 --> 00:30:24,770 Suze: IRA 525 00:30:26,270 --> 00:30:30,790 Suze: Convert it to a Roth IRA and she will owe 526 00:30:30,790 --> 00:30:36,550 Suze: taxes on their $26,000. But here is her question, 527 00:30:37,220 --> 00:30:42,540 Suze: would it be better to convert cash or convert one 528 00:30:42,550 --> 00:30:47,960 Suze: of my holdings. Thank you for considering my question. I 529 00:30:47,960 --> 00:30:51,180 Suze: will follow whatever guidance you provide. 530 00:30:52,190 --> 00:30:56,830 Suze: So she has money, she has stocks ETFs, she has 531 00:30:56,830 --> 00:31:00,490 Suze: all kinds of things in this IRA. She wants to 532 00:31:00,500 --> 00:31:04,310 Suze: convert it from a pre tax situation to an after 533 00:31:04,310 --> 00:31:07,510 Suze: tax going to a Roth. She will owe taxes on 534 00:31:07,510 --> 00:31:11,160 Suze: that money. But she has a choice. Should she convert 535 00:31:11,160 --> 00:31:13,130 Suze: just cash right now 536 00:31:14,090 --> 00:31:18,670 Suze: that's probably making very little in her account or should 537 00:31:18,680 --> 00:31:23,090 Suze: she convert stock or E. T. F. Or something that 538 00:31:23,090 --> 00:31:27,430 Suze: she's invested in. Which one everybody think about it if 539 00:31:27,430 --> 00:31:30,730 Suze: this is you, what would you do, KT? 540 00:31:30,740 --> 00:31:33,510 KT: I think I would do the cash. I'll tell you 541 00:31:33,510 --> 00:31:40,160 KT: why since the stock values are probably down instead 542 00:31:40,160 --> 00:31:40,640 KT: of 543 00:31:41,090 --> 00:31:41,470 KT: the 544 00:31:41,470 --> 00:31:47,820 KT: Stock values being down and $26,000 worth of those positions. 545 00:31:47,830 --> 00:31:52,990 KT: I'd rather the cash is um I'd rather do the cash. 546 00:31:55,150 --> 00:31:56,640 KT: (Suze makes the wrong answer sound) Wait a minute why 547 00:31:56,650 --> 00:31:57,440 KT: She said 548 00:31:57,440 --> 00:31:58,680 KT: which one's easier. 549 00:31:58,690 --> 00:32:03,690 Suze: No she said which one should she do right there? Easy. 550 00:32:03,700 --> 00:32:07,520 Suze: The reason why Susan and everybody you are to be 551 00:32:07,520 --> 00:32:12,810 Suze: converting stocks E. T. F. Right now is because the 552 00:32:12,810 --> 00:32:17,830 Suze: price is so low they have gone down and therefore 553 00:32:17,830 --> 00:32:19,410 Suze: when you convert 554 00:32:19,600 --> 00:32:25,270 Suze: You won't owe as much taxes on those stocks. These 555 00:32:25,270 --> 00:32:29,920 Suze: stocks Susan that possibly you own may very well go 556 00:32:29,920 --> 00:32:34,350 Suze: up in value over the next 234 years. Whatever it 557 00:32:34,350 --> 00:32:38,910 Suze: may be then if you convert them you'll owe more 558 00:32:38,910 --> 00:32:42,940 Suze: taxes when they're at a higher value than you would 559 00:32:42,950 --> 00:32:44,140 Suze: right now. 560 00:32:44,390 --> 00:32:46,990 Suze: So one of the great things for those people who 561 00:32:46,990 --> 00:32:50,530 Suze: want to convert with the stock market having gone down 562 00:32:50,530 --> 00:32:54,370 Suze: and probably will go down a lot further after maybe 563 00:32:54,370 --> 00:32:56,750 Suze: a slight rise the next week or two 564 00:32:57,310 --> 00:33:00,890 Suze: is you can take advantage of the low stock prices 565 00:33:00,990 --> 00:33:02,730 Suze: convert now 566 00:33:03,270 --> 00:33:07,180 Suze: and therefore pay less income taxes than if you waited. 567 00:33:07,180 --> 00:33:10,490 Suze: And those prices went up a year or two from now. 568 00:33:10,500 --> 00:33:13,820 Suze: Cash is always going to be cash. So it's never 569 00:33:13,820 --> 00:33:17,390 Suze: going to cost you more or less when you convert 570 00:33:17,400 --> 00:33:22,420 Suze: you convert stocks E. T. S. And mutual funds when 571 00:33:22,420 --> 00:33:26,360 Suze: they are down when they are low over cash. 572 00:33:26,910 --> 00:33:29,330 Suze: So KT once again the only thing I have to 573 00:33:29,330 --> 00:33:29,890 Suze: say to you is (the wrong answer sound) 574 00:33:31,460 --> 00:33:32,910 Suze: She 575 00:33:32,910 --> 00:33:36,380 Suze: is so upset that she is wrong. 576 00:33:36,390 --> 00:33:37,940 KT: I was going to go with that. 577 00:33:38,650 --> 00:33:40,000 Suze: Then what stopped you? 578 00:33:41,150 --> 00:33:41,370 KT: I 579 00:33:41,370 --> 00:33:44,560 KT: think that I wasn't sure. So I went with cash. 580 00:33:44,570 --> 00:33:48,080 Suze: Whatever KT! All right... 581 00:33:48,090 --> 00:33:49,880 KT: Wednesday 582 00:33:49,890 --> 00:33:51,240 KT: Wednesday. Doesn't 583 00:33:51,240 --> 00:33:53,580 KT: it feel great that we're doing this like at a 584 00:33:53,580 --> 00:33:56,450 KT: normal hour instead of like at the crack of dawn. 585 00:33:56,460 --> 00:33:58,690 Suze: Yeah this also by the way one of the reasons 586 00:33:58,690 --> 00:34:01,940 Suze: we've changed is that I think we may start traveling 587 00:34:01,950 --> 00:34:06,800 Suze: a little bit and not be places necessarily on a 588 00:34:06,800 --> 00:34:09,170 Suze: Sunday or a Thursday or whatever. 589 00:34:09,460 --> 00:34:12,350 Suze: So this works far better for our schedule. I hope 590 00:34:12,350 --> 00:34:16,390 Suze: it works far better for years as well. But KT, 591 00:34:16,400 --> 00:34:21,049 Suze: what's the most important thing we want to tell? Everybody? 592 00:34:21,050 --> 00:34:24,529 KT: We want everyone to feel safe, 593 00:34:24,560 --> 00:34:25,509 Suze: strong 594 00:34:25,510 --> 00:34:25,900 KT: and secure 595 00:34:27,570 --> 00:34:28,670 Suze: Alright, everybody 596 00:34:29,160 --> 00:34:29,529 KT: Saturday night, 597 00:34:30,820 --> 00:34:31,110 KT: date 598 00:34:31,110 --> 00:34:33,050 KT: night with Suze, Saturday night. 599 00:34:33,050 --> 00:34:36,750 Suze: Alright, take care and see you soon. Bye bye.