1 00:00:08,079 --> 00:00:13,670 Suze: October 23rd, 2025. Welcome everybody to the Women and Money podcast, 2 00:00:13,960 --> 00:00:17,790 Suze: and everybody smart enough to listen. So... 3 00:00:18,700 --> 00:00:23,799 Suze: We have pre-recorded this because as you know, we, as 4 00:00:23,799 --> 00:00:26,069 Suze: you're listening to this, we are in Italy. 5 00:00:26,200 --> 00:00:32,110 KT: I think we're in Sienna having an incredible, incredible lunch. 6 00:00:32,959 --> 00:00:36,430 KT: Pasta with truffles and mm, delicious! 7 00:00:36,569 --> 00:00:38,519 Suze: You know, we're just having the time of our lives. 8 00:00:38,680 --> 00:00:40,080 KT: Yeah, we're painting up a storm. 9 00:00:40,560 --> 00:00:43,680 Suze: Anyway, so for your pleasure. 10 00:00:44,299 --> 00:00:49,630 Suze: We will now do a pre-recorded Ask KT and Suze Anything. 11 00:00:49,939 --> 00:00:53,970 Suze: Go for it, Mi Amor. Was that Spanish? 12 00:00:55,159 --> 00:00:55,229 KT: (KT sings a little of Amore) 13 00:01:01,099 --> 00:01:04,440 KT: I'm gonna sing for you. OK, so hi KT and Suze, 14 00:01:04,569 --> 00:01:05,550 KT: this is for KT. 15 00:01:06,879 --> 00:01:11,199 KT: Been enjoying your podcast and especially the Ask KT and 16 00:01:11,199 --> 00:01:16,199 KT: Suze anything part. My question's a bit complicated and sorry 17 00:01:16,199 --> 00:01:21,879 KT: for the long email. And here's her question. So Sarah said, Suze, 18 00:01:21,980 --> 00:01:27,039 KT: my mom passed in 2005. She created a trust before 19 00:01:27,040 --> 00:01:30,639 KT: she passed that made it so my sister and I 20 00:01:30,639 --> 00:01:32,000 KT: inherited her home. 21 00:01:32,599 --> 00:01:36,839 KT: With the provision that her husband, not our father, could 22 00:01:36,839 --> 00:01:40,319 KT: live in the house as long as he was able 23 00:01:40,319 --> 00:01:44,039 KT: to reimburse us for the amount of the mortgage payment 24 00:01:44,040 --> 00:01:44,910 KT: each month. 25 00:01:45,910 --> 00:01:51,699 KT: Fast forward 20 years later, her husband passed in 2024. 26 00:01:51,989 --> 00:01:56,709 KT: We sold the house this year for 1.1 million. At 27 00:01:56,709 --> 00:02:01,389 KT: the time of my mom's passing in 2005, we had 28 00:02:01,389 --> 00:02:04,790 KT: two real estate agents give us a written estimate of 29 00:02:04,790 --> 00:02:08,550 KT: the value of the house at about 900,000. 30 00:02:09,229 --> 00:02:12,070 KT: Since I want to make sure I am prepared and 31 00:02:12,070 --> 00:02:17,309 KT: not surprised by a tax bill for 2025, do we 32 00:02:17,309 --> 00:02:21,190 KT: report capital gains on the difference between the value at 33 00:02:21,190 --> 00:02:26,949 KT: her passing of 900,000 and the sale price of 1.1? 34 00:02:27,899 --> 00:02:32,258 Suze: There you go, KT. This is an email that I answered. 35 00:02:32,419 --> 00:02:33,539 KT: Oh, you spoke to Sarah. 36 00:02:33,619 --> 00:02:38,940 Suze: I answered her, right, to the best of my ability. However, 37 00:02:39,258 --> 00:02:43,059 Suze: for those of you who happen to have questions, write 38 00:02:43,059 --> 00:02:49,020 Suze: in to ask Suze podcast@gmail.com, and you never know when 39 00:02:49,020 --> 00:02:50,899 Suze: because I scroll them. 40 00:02:51,710 --> 00:02:56,649 Suze: And if one catches my eye for whatever reason, I 41 00:02:56,649 --> 00:03:02,860 Suze: will write you back the answer. Now in this particular situation, KT, 42 00:03:03,770 --> 00:03:07,070 Suze: here's what I didn't know, but I wrote her back. 43 00:03:08,330 --> 00:03:11,369 Suze: If the trust that her mother left. 44 00:03:12,360 --> 00:03:16,899 Suze: Used the words that I am leaving a life estate 45 00:03:17,479 --> 00:03:19,020 Suze: to my husband. 46 00:03:19,800 --> 00:03:23,750 Suze: Then the truth of the matter is Sarah would use 47 00:03:23,960 --> 00:03:30,079 Suze: the $1.1 million number, and that is what she then 48 00:03:30,080 --> 00:03:33,839 Suze: would owe taxes on, which would probably mean nothing. She'd 49 00:03:33,839 --> 00:03:37,399 Suze: probably get everything tax free at that point, no capital gain. 50 00:03:37,940 --> 00:03:41,839 Suze: Because her cost basis would be what it was when 51 00:03:41,839 --> 00:03:46,710 Suze: her mother's husband passed, not when her mother passed. 52 00:03:47,270 --> 00:03:47,800 KT: OK. 53 00:03:47,949 --> 00:03:50,509 Suze: All right, but it's got to say that in the trust. 54 00:03:50,550 --> 00:03:55,779 Suze: It's got to say life estate if it just says, 55 00:03:56,990 --> 00:04:01,139 Suze: take care of my husband. Make sure he pays for everything, 56 00:04:01,270 --> 00:04:04,898 Suze: blah blah blah, but doesn't specifically say that. 57 00:04:05,899 --> 00:04:09,699 Suze: Then chances are she's going to owe taxes from the 58 00:04:09,699 --> 00:04:14,169 Suze: 900,000 to what she sold it for the 1.1 million. 59 00:04:14,179 --> 00:04:17,940 Suze: Now obviously she can take off real estate commission, all 60 00:04:17,940 --> 00:04:21,809 Suze: kinds of things like that, but the key here, everybody 61 00:04:21,809 --> 00:04:22,779 Suze: is this. 62 00:04:23,678 --> 00:04:26,299 Suze: You have a home and you're living in it with 63 00:04:26,299 --> 00:04:27,369 Suze: your spouse. 64 00:04:28,100 --> 00:04:31,859 Suze: And if you die, you want that home to pass 65 00:04:31,859 --> 00:04:35,940 Suze: to your children because maybe the spouse is not 66 00:04:36,619 --> 00:04:41,209 Suze: the kid's father or mother, whatever it may be, make 67 00:04:41,209 --> 00:04:45,049 Suze: sure that if you own it in trust, that in 68 00:04:45,049 --> 00:04:48,559 Suze: the trust it says that you are leaving a life 69 00:04:48,559 --> 00:04:53,480 Suze: estate to your spouse or whoever you're leaving it to, 70 00:04:53,488 --> 00:04:56,880 Suze: it doesn't even have to be your spouse that way 71 00:04:56,880 --> 00:04:58,890 Suze: upon that person's death, 72 00:04:59,519 --> 00:05:03,359 Suze: your kids or your beneficiaries will get a step up 73 00:05:03,359 --> 00:05:06,950 Suze: in basis as to the value of that asset upon 74 00:05:06,950 --> 00:05:11,410 Suze: the death of that person that had the life estate. 75 00:05:11,678 --> 00:05:16,359 Suze: Just know that. So either way though, capital gains tax 76 00:05:16,359 --> 00:05:20,510 Suze: is not going to be that horrific on this property. 77 00:05:20,600 --> 00:05:21,479 Suze: All right, go on. 78 00:05:22,320 --> 00:05:26,589 KT: OK, next question is from Rhonda. Hi, Suze and KT. 79 00:05:27,100 --> 00:05:30,649 KT: I have a question on when to take Social Security. 80 00:05:31,019 --> 00:05:36,369 KT: My husband and I are retired. I'm 62 and he's 63. 81 00:05:36,660 --> 00:05:41,058 KT: We live comfortably with 2 million in investments and several 82 00:05:41,059 --> 00:05:43,380 KT: rental properties that are paid for. 83 00:05:43,920 --> 00:05:48,190 KT: And this is sad, Suze, she said our 17-year-old son 84 00:05:48,190 --> 00:05:52,899 KT: passed several years ago. This has resulted in my husband 85 00:05:52,899 --> 00:05:56,308 KT: drinking a lot, and he has been a smoker for 86 00:05:56,309 --> 00:06:01,109 KT: over 39 years. He's a good man but has suffered 87 00:06:01,109 --> 00:06:03,500 KT: from depression throughout his life. 88 00:06:03,859 --> 00:06:08,089 KT: I can imagine how depressed he's been since his son passed, Suze. 89 00:06:08,130 --> 00:06:09,049 Suze: You never get over that. 90 00:06:09,170 --> 00:06:13,380 KT: No, never, ever. He also has high blood pressure and 91 00:06:13,380 --> 00:06:18,649 KT: high cholesterol, which he takes medication for. We could easily 92 00:06:18,649 --> 00:06:22,808 KT: wait until we're both 70 to draw Social Security, but 93 00:06:22,809 --> 00:06:26,779 KT: given his health, I'm wondering if we should start to 94 00:06:26,779 --> 00:06:31,649 KT: draw mine early. It is about 1/3 of what his is. 95 00:06:32,190 --> 00:06:36,750 KT: So thank you all for both you do love and blessings, Rhonda. 96 00:06:38,059 --> 00:06:39,000 KT: What do you think? 97 00:06:39,540 --> 00:06:42,219 Suze: I know this is gonna sound strange, but first of all, 98 00:06:42,459 --> 00:06:46,519 Suze: always our condolences for the past loss, always, always, always. 99 00:06:47,540 --> 00:06:52,260 Suze: People just because they have high blood pressure, they drink, 100 00:06:52,440 --> 00:06:55,440 Suze: they smoke, they do all the things that you think 101 00:06:55,440 --> 00:06:56,269 Suze: should kill them. 102 00:06:58,019 --> 00:07:02,529 Suze: Sometimes they will live longer than you, believe it or not. 103 00:07:02,820 --> 00:07:06,579 Suze: So if I were you, given what you have, that 104 00:07:06,579 --> 00:07:10,059 Suze: you really don't need your Social Security, you have 2 105 00:07:10,059 --> 00:07:14,049 Suze: million in investments, several rental properties that are giving you income, 106 00:07:14,260 --> 00:07:20,890 Suze: you're fine financially speaking. I would withdraw my Social Security, 107 00:07:20,899 --> 00:07:23,739 Suze: but not before the age of 67. 108 00:07:24,600 --> 00:07:28,799 Suze: So just withdraw it starting in a few years. You 109 00:07:28,799 --> 00:07:32,899 Suze: say you're 62, so that's five years from now. That's 110 00:07:32,899 --> 00:07:36,390 Suze: when I would withdraw it at your full retirement age, 111 00:07:36,600 --> 00:07:41,190 Suze: otherwise you're going to take a penalty because you're under 112 00:07:41,500 --> 00:07:44,959 Suze: full retirement age, and it's really not worth it. 113 00:07:45,320 --> 00:07:48,890 Suze: And obviously when he dies you're just going to take 114 00:07:48,890 --> 00:07:54,010 Suze: over his full Social Security, so hopefully he will make 115 00:07:54,010 --> 00:07:58,420 Suze: it till he's 70, and he should wait till he's 116 00:07:58,420 --> 00:08:01,940 Suze: 70 because you'll just take it over at that point 117 00:08:01,940 --> 00:08:04,420 Suze: in time, which will be a whole lot higher. 118 00:08:05,000 --> 00:08:09,029 Suze: So therefore that is the answer to your question. Ok. 119 00:08:09,160 --> 00:08:12,119 KT: Suze, I picked this next question cause it sounds a 120 00:08:12,119 --> 00:08:15,750 KT: little desperate. It said, Pick me, pick me, please, KT, 121 00:08:15,959 --> 00:08:19,869 KT: pick me. Hello, Suze and KT, I need some advice 122 00:08:19,869 --> 00:08:25,328 KT: on protecting myself financially. I live in a community property state. 123 00:08:25,720 --> 00:08:29,350 KT: My marriage of 14 years is circling the drain. 124 00:08:30,049 --> 00:08:34,169 KT: Last year I separated my income into a checking and 125 00:08:34,169 --> 00:08:38,598 KT: savings account that my husband does not have access to. 126 00:08:39,010 --> 00:08:41,409 KT: Since my name is still on a couple of his 127 00:08:41,409 --> 00:08:45,789 KT: credit cards used without my consent and on the joint 128 00:08:45,789 --> 00:08:50,130 KT: checking account, I am still getting hit financially when he 129 00:08:50,130 --> 00:08:54,809 KT: misses a credit card payment or overdraws the joint checking account. 130 00:08:55,090 --> 00:08:57,869 KT: He is now saying he wants all of the credit 131 00:08:57,869 --> 00:09:01,070 KT: card debt to go to collections because he doesn't have 132 00:09:01,070 --> 00:09:05,390 KT: any money to pay them. I am very discouraged. I've 133 00:09:05,390 --> 00:09:08,510 KT: been telling him for over a year that he needs 134 00:09:08,510 --> 00:09:12,468 KT: to find a job for consistent income and work out 135 00:09:12,469 --> 00:09:16,669 KT: paying off his debt. He claims his medical issues prevent 136 00:09:16,669 --> 00:09:21,799 KT: him from working, but he doesn't have debilitating medical issues. 137 00:09:22,369 --> 00:09:25,369 KT: Then she goes on to say, I am highly considering 138 00:09:25,369 --> 00:09:30,359 KT: filing for divorce, something he has periodically threatened to do 139 00:09:30,609 --> 00:09:34,489 KT: for the last 10 years, but I'm concerned about how 140 00:09:34,489 --> 00:09:39,640 KT: things will turn out. I feel very used and insecure financially. 141 00:09:39,969 --> 00:09:43,000 KT: The worry and stress of this is drawing so much 142 00:09:43,000 --> 00:09:45,729 KT: of my attention, and I'm exhausted. 143 00:09:46,159 --> 00:09:50,619 KT: Any advice you have for this situation would be greatly appreciated. 144 00:09:50,960 --> 00:09:52,799 Suze: Do we have her age anywhere in there? 145 00:09:52,960 --> 00:09:54,840 KT: No, unfortunately not. 146 00:09:55,000 --> 00:09:59,478 Suze: All right, so here's the thing, girlfriend, which is this your 147 00:09:59,479 --> 00:10:01,239 Suze: situation is not simple. 148 00:10:02,030 --> 00:10:07,239 Suze: And it's probably more complex than this email says, because 149 00:10:07,239 --> 00:10:11,719 Suze: this has been going on for a long, long time. 150 00:10:12,369 --> 00:10:16,530 Suze: So the real answer to this is, why have you stayed? 151 00:10:17,549 --> 00:10:21,599 Suze: More than me telling you what you should do, I 152 00:10:21,599 --> 00:10:26,570 Suze: need you to ask yourself, why haven't you done what 153 00:10:26,570 --> 00:10:29,579 Suze: you know you should do? You say in this email 154 00:10:29,580 --> 00:10:33,468 Suze: that you should divorce him. You're thinking about it. He 155 00:10:33,469 --> 00:10:37,409 Suze: threatens you with divorce. What is keeping the two of 156 00:10:37,409 --> 00:10:38,700 Suze: you together? 157 00:10:39,760 --> 00:10:44,080 Suze: Chances are you are afraid that if you divorce him 158 00:10:44,080 --> 00:10:47,549 Suze: at this point he's going to come after half your money, 159 00:10:47,640 --> 00:10:49,510 Suze: he's going to do this, he's going to do that, 160 00:10:49,520 --> 00:10:50,479 Suze: who knows what. 161 00:10:51,190 --> 00:10:54,770 Suze: But your fear of the unknown. 162 00:10:55,820 --> 00:10:59,460 Suze: Is keeping you from the truth of the known. 163 00:11:00,789 --> 00:11:02,380 Suze: Do you want me to say that again? 164 00:11:03,299 --> 00:11:06,340 Suze: Your fear of the unknown. What's going to happen if 165 00:11:06,340 --> 00:11:07,739 Suze: you divorce, if you leave him. 166 00:11:08,460 --> 00:11:11,700 Suze: Is keeping you from the truth of the known. 167 00:11:12,380 --> 00:11:16,010 Suze: And the truth of the known is, he is a 168 00:11:16,010 --> 00:11:21,919 Suze: financial disaster. He is hurting you financially. You are stressed out. 169 00:11:22,090 --> 00:11:25,289 Suze: You are miserable. You know you want to divorce him. 170 00:11:26,450 --> 00:11:30,239 Suze: And you know you need to move on, and the 171 00:11:30,239 --> 00:11:32,799 Suze: only way for you to move on. 172 00:11:33,380 --> 00:11:34,789 Suze: In my opinion, 173 00:11:35,799 --> 00:11:41,150 Suze: is to face the known, stand in the truth, and 174 00:11:41,150 --> 00:11:46,429 Suze: do what you are afraid to do, which is divorce him. 175 00:11:47,390 --> 00:11:51,289 Suze: The sooner you can separate your finances from him. 176 00:11:51,979 --> 00:11:55,468 Suze: And then you know what you have, you know what 177 00:11:55,469 --> 00:11:59,630 Suze: you can do, you know everything that is yours from 178 00:11:59,630 --> 00:12:02,460 Suze: that point on and that you can build upon it. 179 00:12:03,429 --> 00:12:08,510 Suze: Then you won't be stressed. You won't be insecure, and 180 00:12:08,510 --> 00:12:14,150 Suze: you won't feel very used. Now, in this email you 181 00:12:14,150 --> 00:12:20,419 Suze: use the words I feel very used and insecure financially. 182 00:12:21,440 --> 00:12:22,579 Suze: Who's using you? 183 00:12:23,940 --> 00:12:26,809 Suze: Who is making you feel insecure. 184 00:12:28,049 --> 00:12:33,169 Suze: You're using yourself. You're using excuses to keep you in 185 00:12:33,169 --> 00:12:35,890 Suze: a situation that you know you need to leave. 186 00:12:36,710 --> 00:12:41,979 Suze: You feel insecure financially because you know you are not 187 00:12:41,979 --> 00:12:46,949 Suze: doing that what you need to do financially to separate 188 00:12:46,950 --> 00:12:49,820 Suze: everything from him. Hey, at the beginning of your email 189 00:12:49,820 --> 00:12:54,179 Suze: you say you separated your checking account, your money, all 190 00:12:54,179 --> 00:12:54,819 Suze: of that. 191 00:12:56,039 --> 00:13:03,358 Suze: You now need to take the final step and separate everything. 192 00:13:04,080 --> 00:13:05,190 Suze: Don't be afraid. 193 00:13:06,070 --> 00:13:11,179 Suze: I've talked to thousands of women who have written emails 194 00:13:11,179 --> 00:13:16,618 Suze: exactly like this one, and then years later I hear 195 00:13:16,619 --> 00:13:19,700 Suze: from them. Suze, that was the best thing I ever did. 196 00:13:19,780 --> 00:13:22,419 Suze: Oh my God, Suze, I finally own a home on 197 00:13:22,419 --> 00:13:26,419 Suze: my own. Oh Suze, I own property. I own this. 198 00:13:26,500 --> 00:13:30,210 Suze: I own that. Oh Suze, I've saved a million dollars 199 00:13:30,210 --> 00:13:32,419 Suze: in my Roth retirement account. 200 00:13:33,700 --> 00:13:37,260 Suze: Don't be afraid to do that which you know you 201 00:13:37,260 --> 00:13:41,299 Suze: should do. What's making you miserable right now isn't him. 202 00:13:42,169 --> 00:13:46,130 Suze: What's making you miserable right now is that you are 203 00:13:46,130 --> 00:13:49,690 Suze: lacking the courage to do that which you know you 204 00:13:49,690 --> 00:13:53,530 Suze: should do for yourself. Just saying. 205 00:13:54,679 --> 00:13:56,380 Suze: All right, KT, what do you got next? 206 00:13:56,380 --> 00:14:00,549 KT: OK, Suze, next question is from Mario. I love when 207 00:14:00,549 --> 00:14:02,179 KT: I get the men questions. 208 00:14:03,109 --> 00:14:05,699 Suze: KT, you love when you get any questions. 209 00:14:05,700 --> 00:14:08,510 KT: Yeah, but I like when we have the men smart 210 00:14:08,510 --> 00:14:14,109 KT: enough to listen participating. So how do Mario asked, how 211 00:14:14,109 --> 00:14:17,239 KT: do I get rid of a collection account which is 212 00:14:17,239 --> 00:14:21,809 KT: six years and nine months old? I'll tell him, pay it off. 213 00:14:22,309 --> 00:14:24,830 Suze: No, you get rid of it if you just simply 214 00:14:24,830 --> 00:14:27,900 Suze: wait three more months, it will go away. 215 00:14:28,369 --> 00:14:32,030 Suze: So something that is on a credit report such as 216 00:14:32,030 --> 00:14:37,229 Suze: a collection account stays on for seven years. At that 217 00:14:37,229 --> 00:14:41,549 Suze: point it comes off. So you have three more months 218 00:14:41,549 --> 00:14:43,150 Suze: to wait. Next question, KT. 219 00:14:43,270 --> 00:14:45,599 KT: All right, so next question, Suze. 220 00:14:46,830 --> 00:14:52,020 KT: This listener said, I have a Roth with about $850,000. 221 00:14:52,239 --> 00:14:52,802 Suze: That's good! 222 00:14:52,802 --> 00:15:01,700 KT: A regular IRA with $775,000 and a regular investment account 223 00:15:01,950 --> 00:15:04,380 KT: with $1.2 million. 224 00:15:04,549 --> 00:15:05,989 Suze: That's my person. 225 00:15:06,349 --> 00:15:09,869 Suze: See, listen, I just have to say something. All of 226 00:15:09,869 --> 00:15:13,080 Suze: you out there may be wondering how do these people 227 00:15:13,080 --> 00:15:17,070 Suze: have so much money. You want to know how? They've 228 00:15:17,070 --> 00:15:21,099 Suze: been listening to me for 40 years. They've been doing 229 00:15:21,099 --> 00:15:24,260 Suze: everything I have told them to do, and now most 230 00:15:24,260 --> 00:15:25,630 Suze: of them honest to God, 231 00:15:25,880 --> 00:15:30,520 Suze: are multimillionaires. So what are you doing if you're brand new, 232 00:15:30,659 --> 00:15:34,270 Suze: you're gonna be listening and listening and listening and doing 233 00:15:34,270 --> 00:15:35,799 Suze: and doing and doing. 234 00:15:36,869 --> 00:15:40,200 KT: OK, so this, this, uh, listener says I take my 235 00:15:40,200 --> 00:15:46,669 KT: required RMDs and about $24,000 out of my regular account. 236 00:15:47,169 --> 00:15:51,150 KT: I would like to gift my kids the 19,000 allowed 237 00:15:51,150 --> 00:15:55,190 KT: every year and was wondering if taking it out of 238 00:15:55,190 --> 00:15:58,380 KT: my Roth would be the prudent thing to do. 239 00:15:58,950 --> 00:16:01,349 Suze: It would be prudent for you because you won't have 240 00:16:01,349 --> 00:16:02,630 Suze: to pay taxes on it. 241 00:16:02,969 --> 00:16:06,119 Suze: But if you want to be prudent for your kids, 242 00:16:06,849 --> 00:16:11,090 Suze: leave your Roth intact, take the money out of either 243 00:16:11,090 --> 00:16:15,770 Suze: your investment account or even your traditional IRA and just 244 00:16:15,770 --> 00:16:18,090 Suze: pay taxes on it because you're not in that high 245 00:16:18,090 --> 00:16:19,169 Suze: of a tax bracket. 246 00:16:19,570 --> 00:16:24,159 Suze: And let your money compound tax free because on your 247 00:16:24,159 --> 00:16:27,099 Suze: death all the money in the Roth goes to your 248 00:16:27,099 --> 00:16:32,080 Suze: kids tax free. The money in your regular IRA, it's 249 00:16:32,080 --> 00:16:34,840 Suze: going to be totally taxable to them. So if I 250 00:16:34,840 --> 00:16:36,719 Suze: were you, I would draw 251 00:16:36,869 --> 00:16:40,729 Suze: down the IRA more than anything else. Go on. 252 00:16:40,859 --> 00:16:45,219 KT: And now this is from Laura. Good afternoon, KT and Suze. 253 00:16:45,700 --> 00:16:51,260 KT: I'm 62. My 401k Roth retirement account at work was 254 00:16:51,260 --> 00:16:54,099 KT: opened in April 2022. 255 00:16:54,640 --> 00:16:57,359 KT: Would it be better to wait until I hit the 256 00:16:57,359 --> 00:17:02,000 KT: five year rule, or can I take my contributions and 257 00:17:02,000 --> 00:17:05,489 KT: roll that over into my existing Roth IRA? 258 00:17:05,500 --> 00:17:06,319 Suze: Pop quizzy, pop quizzy. 259 00:17:06,319 --> 00:17:10,829 KT: OK, ready, everybody. Laura's 62... 260 00:17:10,959 --> 00:17:11,430 Suze: Yes. 261 00:17:11,599 --> 00:17:14,280 KT: And 59 and a half was that lucky number. 262 00:17:14,790 --> 00:17:18,880 Suze: But that's just for the penalty. Taxes, however, the account 263 00:17:18,880 --> 00:17:22,439 Suze: has been open for five years. That's the question she's 264 00:17:22,439 --> 00:17:23,280 Suze: asking here. 265 00:17:23,650 --> 00:17:27,399 KT: So she's asking, can I take my contributions and roll 266 00:17:27,400 --> 00:17:31,619 KT: that over into my existing Roth IRA? 267 00:17:31,839 --> 00:17:36,109 Suze: Yes, but her 401k has only been open for how long, KT? 268 00:17:36,439 --> 00:17:37,760 KT: Since 2022. 269 00:17:37,800 --> 00:17:40,688 Suze: So that's three years, right, so... 270 00:17:40,689 --> 00:17:41,680 KT: Two more to go. 271 00:17:41,719 --> 00:17:45,709 Suze: So should she leave it there till all five years 272 00:17:45,709 --> 00:17:49,359 Suze: are met? This is her question, or should she roll 273 00:17:49,359 --> 00:17:51,560 Suze: it to her IRA Roth? 274 00:17:53,930 --> 00:17:53,939 KT: Hm. 275 00:17:56,550 --> 00:17:57,229 Suze: Tick tick tick... 276 00:17:57,229 --> 00:18:00,560 KT: I think, I think you have to wait for the 277 00:18:00,560 --> 00:18:02,949 KT: five year rule. (Suze makes the wrong answer sound) Oh wait, 278 00:18:03,030 --> 00:18:07,520 KT: you so you could wait. Oh yeah, they're both Roths. Sorry, sorry, mistake. 279 00:18:07,949 --> 00:18:11,510 KT: It wasn't a 401k. It's a 401k Roth. So the 280 00:18:11,510 --> 00:18:15,659 KT: answer is yes, you can, because they're both Roths. 281 00:18:15,949 --> 00:18:17,239 Suze: No, because... 282 00:18:17,239 --> 00:18:18,140 KT: Is that why? 283 00:18:18,390 --> 00:18:22,670 Suze: No, when you take a 401k that's maybe even been 284 00:18:22,670 --> 00:18:23,739 Suze: there 10 years. 285 00:18:24,369 --> 00:18:30,520 Suze: When you roll it to a Roth IRA, that rollover 286 00:18:30,520 --> 00:18:35,729 Suze: takes on the time clock of your Roth IRA, right, 287 00:18:35,739 --> 00:18:39,979 Suze: so just so you know, so if her Roth 401k, KT, 288 00:18:40,439 --> 00:18:44,680 Suze: had been open for seven years, her Roth IRA for 289 00:18:44,680 --> 00:18:45,670 Suze: only one. 290 00:18:46,140 --> 00:18:50,199 Suze: And then she rolled it to her Roth IRA. Now 291 00:18:50,199 --> 00:18:53,469 Suze: all of it would only have a one year time clock. 292 00:18:53,640 --> 00:18:56,699 Suze: She would have lost all those years of her Roth 401k. 293 00:18:57,680 --> 00:18:58,349 KT: All right, good. 294 00:18:58,520 --> 00:18:59,000 Suze: All right. 295 00:18:59,550 --> 00:19:03,989 KT: So the next question's from Tina, she said, guidance needed, please. 296 00:19:04,319 --> 00:19:09,099 KT: I am 57, have two kids, 25 and 27. One 297 00:19:09,099 --> 00:19:13,920 KT: still at home. Both are employed and self-sufficient with no 298 00:19:13,920 --> 00:19:15,879 KT: student loan debt. That's great. 299 00:19:16,290 --> 00:19:20,199 KT: I live with my boyfriend of 17 years. We make 300 00:19:20,199 --> 00:19:23,639 KT: about the same income. The house is in his name 301 00:19:23,640 --> 00:19:27,438 KT: and paid off. I have no debt. I use one 302 00:19:27,439 --> 00:19:30,839 KT: credit card and pay it off each month. Here's where 303 00:19:30,839 --> 00:19:34,719 KT: I need your help. 11 years ago, I was sold 304 00:19:34,719 --> 00:19:37,959 KT: a whole life policy. Yes, I know that was a 305 00:19:37,959 --> 00:19:39,030 KT: bad decision. 306 00:19:39,410 --> 00:19:44,500 KT: The policy has a face amount of 250,000 and a 307 00:19:44,500 --> 00:19:50,369 KT: cash value of over 100,000. Final premium was paid last year. 308 00:19:50,619 --> 00:19:53,619 KT: Should I keep it or take all of the cash 309 00:19:53,619 --> 00:19:55,939 KT: value and surrender it? 310 00:19:56,114 --> 00:19:58,994 KT: I've already got a quote for a 20 year term, 311 00:19:59,344 --> 00:20:03,185 KT: same face amount as the whole life, so I know 312 00:20:03,185 --> 00:20:07,025 KT: if I decide insurance is needed I can get it 313 00:20:07,025 --> 00:20:10,834 KT: and would do so before I decide the fate of 314 00:20:10,834 --> 00:20:12,584 KT: the whole life policy. 315 00:20:12,959 --> 00:20:15,699 KT: There is no one in my life who has the 316 00:20:15,699 --> 00:20:18,930 KT: knowledge to help me. We both know the agent who 317 00:20:18,930 --> 00:20:21,579 KT: sold it to me is not going to be a 318 00:20:21,579 --> 00:20:26,770 KT: reliable source. Would you be able to share your opinions, Suze, please? 319 00:20:26,900 --> 00:20:29,689 Suze: You know, I always say that you normally don't ask 320 00:20:29,689 --> 00:20:32,599 Suze: a question that you don't know the answer to already. 321 00:20:32,939 --> 00:20:33,969 Suze: If it were me. 322 00:20:34,689 --> 00:20:37,140 Suze: And I knew my kids were going to be OK 323 00:20:37,140 --> 00:20:40,630 Suze: and everything. I would cash it out, just check and 324 00:20:40,630 --> 00:20:43,109 Suze: make sure no taxes are going to be owed. I'm 325 00:20:43,109 --> 00:20:46,469 Suze: sure you put more money in there than the cash value, 326 00:20:46,489 --> 00:20:49,310 Suze: so it should be tax free, and I would take 327 00:20:49,310 --> 00:20:52,780 Suze: that and I would invest it for your own future. 328 00:20:53,069 --> 00:20:55,729 Suze: And if you feel like you need insurance for the kids, 329 00:20:55,829 --> 00:20:58,310 Suze: I would do the term insurance. However... 330 00:20:59,930 --> 00:21:04,410 Suze: My concern isn't about this insurance policy, and it's not 331 00:21:04,410 --> 00:21:09,250 Suze: about your kids. It's about you. You live in a 332 00:21:09,250 --> 00:21:14,688 Suze: home with your boyfriend of 17 years. The house is 333 00:21:14,689 --> 00:21:18,469 Suze: in his name and is paid off. 334 00:21:19,310 --> 00:21:22,750 Suze: Can you tell me, but you can't cause you can't 335 00:21:22,750 --> 00:21:26,469 Suze: hear me now, but you will. But anyway, can you 336 00:21:26,469 --> 00:21:29,989 Suze: tell me what happens if he's killed in a car 337 00:21:29,989 --> 00:21:35,310 Suze: crash tomorrow? Does he have a trust? Has that house 338 00:21:35,310 --> 00:21:39,228 Suze: been left for you in trust, or does he simply 339 00:21:39,229 --> 00:21:42,219 Suze: even have a will that leaves it to you? 340 00:21:42,640 --> 00:21:44,770 Suze: And then it has to go through probate, and then 341 00:21:44,770 --> 00:21:46,770 Suze: you're going to have to pay a whole lot of 342 00:21:46,770 --> 00:21:49,550 Suze: money and wait for a long time to get that house. 343 00:21:50,420 --> 00:21:52,579 Suze: What if all of a sudden he's in a car 344 00:21:52,579 --> 00:21:57,500 Suze: accident and he's incapacitated, he's not dead, but you need 345 00:21:57,500 --> 00:22:00,380 Suze: to sell that house because you now need money to 346 00:22:00,380 --> 00:22:03,420 Suze: take care of him or whatever it is. You can't 347 00:22:03,420 --> 00:22:06,849 Suze: sell that house because why? You don't own that house. 348 00:22:07,380 --> 00:22:09,899 Suze: He can't sign for that house. 349 00:22:10,810 --> 00:22:14,698 Suze: So the real question is here, what have you done 350 00:22:14,699 --> 00:22:19,229 Suze: to take care of yourself if he doesn't have a 351 00:22:19,229 --> 00:22:21,379 Suze: living revocable trust and a will. 352 00:22:22,319 --> 00:22:25,229 Suze: Then what you need to do is you need to, today, 353 00:22:25,560 --> 00:22:31,750 Suze: go to musthavedocs.com and get the must-have docs for $99. 354 00:22:31,839 --> 00:22:34,869 Suze: $2,500 dollars worth of state of the art documents good 355 00:22:34,869 --> 00:22:39,319 Suze: in all 50 states. He should take that, put the 356 00:22:39,319 --> 00:22:42,760 Suze: house in trust just in his name with you as 357 00:22:42,760 --> 00:22:45,800 Suze: beneficiary and you as successor trustee. 358 00:22:46,189 --> 00:22:49,180 Suze: And if something were to happen to both you and 359 00:22:49,180 --> 00:22:51,419 Suze: him at the same time, what's going to happen to 360 00:22:51,420 --> 00:22:54,410 Suze: your kids? Where does that house go? 361 00:22:55,760 --> 00:23:01,660 Suze: Intestate succession, it goes to his nearest relatives if he 362 00:23:01,660 --> 00:23:05,099 Suze: doesn't have a will, which are not your kids and 363 00:23:05,099 --> 00:23:06,489 Suze: it's not even you. 364 00:23:07,430 --> 00:23:10,550 Suze: Because you're not married to him. You got to think 365 00:23:10,550 --> 00:23:13,859 Suze: about that more important than this life insurance policy, to 366 00:23:13,859 --> 00:23:15,739 Suze: tell you the truth, next KT. 367 00:23:17,849 --> 00:23:19,669 Suze: You are not expecting that. 368 00:23:19,920 --> 00:23:20,589 KT: I wasn't. 369 00:23:20,589 --> 00:23:22,139 Suze: Ms. Travis. I know you. 370 00:23:23,020 --> 00:23:26,969 Suze: Right, you were expecting that I was going to get 371 00:23:26,969 --> 00:23:30,760 Suze: so mad at her for the whole life policy, but 372 00:23:31,010 --> 00:23:33,189 Suze: that's not what I was upset about. Do you see? 373 00:23:33,770 --> 00:23:34,760 Suze: All right, go on. 374 00:23:34,969 --> 00:23:38,930 KT: All right. Next question is from Gwen. Gwen says, Suze, 375 00:23:39,089 --> 00:23:42,089 KT: I've been listening to your show on and off for 376 00:23:42,089 --> 00:23:44,849 KT: the past five years. Gwen, you should only listen to 377 00:23:44,849 --> 00:23:45,599 KT: the show on, not off. 378 00:23:47,640 --> 00:23:49,639 Suze: That does not necessarily endear you to me. 379 00:23:51,469 --> 00:23:53,150 KT: I've been listening to your show, you can get rid 380 00:23:53,150 --> 00:23:56,859 KT: of the off part for the past five years. She said, 381 00:23:56,869 --> 00:24:00,149 KT: I retired 4 years ago and I am 67 years 382 00:24:00,150 --> 00:24:03,550 KT: of age. I want to move the funds of the 383 00:24:03,550 --> 00:24:07,469 KT: traditional IRA to a Roth, but I was told that 384 00:24:07,469 --> 00:24:11,150 KT: I could not do it because I am retired. Is 385 00:24:11,150 --> 00:24:12,109 KT: this true? 386 00:24:13,510 --> 00:24:18,800 Suze: This is why you have got to listen every single show. 387 00:24:18,869 --> 00:24:19,649 KT: Yeah, not off. 388 00:24:20,339 --> 00:24:23,458 Suze: Right? Not off, because you would know whoever gave you 389 00:24:23,459 --> 00:24:28,339 Suze: this advice is an idiot, is an idiot, is 100% wrong, 390 00:24:28,430 --> 00:24:32,630 Suze: and is an idiot. So therefore, never ask this person 391 00:24:32,630 --> 00:24:36,819 Suze: for advice again. You could convert any time you want. 392 00:24:37,064 --> 00:24:41,145 Suze: It does not matter your income, no income, age, nothing 393 00:24:41,145 --> 00:24:44,625 Suze: from a traditional to a Roth any time. You have 394 00:24:44,625 --> 00:24:49,415 Suze: to have earned income to do a contributory Roth IRA 395 00:24:49,415 --> 00:24:52,425 Suze: or even a traditional IRA for that matter, where you 396 00:24:52,425 --> 00:24:56,854 Suze: put money in every year. Idiot. Was there another question? 397 00:24:57,905 --> 00:24:58,714 KT: From Gwen? 398 00:24:58,984 --> 00:24:59,420 Suze: Yeah. 399 00:24:59,420 --> 00:25:03,504 KT: Gwen's talking now about her grandchildren. She said the next 400 00:25:03,505 --> 00:25:04,784 KT: question is helping 401 00:25:05,229 --> 00:25:09,468 KT: my young grandchildren. Money you spend to assist with minor 402 00:25:09,469 --> 00:25:12,909 KT: grand school tuition. Can you write it off on your taxes? 403 00:25:13,709 --> 00:25:14,938 Suze: No. Next question, KT. 404 00:25:15,069 --> 00:25:15,859 KT: That's it. 405 00:25:16,310 --> 00:25:20,109 Suze: We're off of Gwen. I get it. That was a joke, Gwenny. 406 00:25:20,405 --> 00:25:22,264 Suze: Just joking with you. All right. 407 00:25:22,405 --> 00:25:26,824 KT: OK, Suze, we have one more question, and it's from CW. 408 00:25:26,824 --> 00:25:27,564 Suze: CW! 409 00:25:27,564 --> 00:25:35,354 KT: CW. Traditional IRA question. We only have traditional IRAs. Don't ask. 410 00:25:36,760 --> 00:25:39,709 KT: This is... CW didn't even want to put their full name. 411 00:25:40,000 --> 00:25:44,319 KT: We are 70 and 73, and my husband is subject 412 00:25:44,319 --> 00:25:49,119 KT: to a large RMD. My question: is it better to 413 00:25:49,119 --> 00:25:54,760 KT: do an in-kind withdrawal? For example, shares of a mutual 414 00:25:54,760 --> 00:25:59,790 KT: fund with a robust and consistent capital gain distribution or cash? 415 00:26:00,079 --> 00:26:03,560 KT: Many thanks for all that you and KT do. 416 00:26:04,219 --> 00:26:05,979 KT: There you go. That's your finale. 417 00:26:06,219 --> 00:26:07,889 Suze: KT. What is an in-kind contribution? 418 00:26:08,300 --> 00:26:09,760 KT: I don't know what that means. 419 00:26:10,020 --> 00:26:12,729 Suze: I'm so surprised. You should have said to me, what 420 00:26:12,729 --> 00:26:19,130 Suze: is an in-kind distribution, Suze? But anyway, I'll just tell everybody. 421 00:26:19,540 --> 00:26:22,660 Suze: So first of all, CW, here's the thing. 422 00:26:23,540 --> 00:26:29,050 Suze: Whether you take money out as an RMD in-kind meaning 423 00:26:29,050 --> 00:26:32,270 Suze: in the stock or the mutual fund shares that you 424 00:26:32,270 --> 00:26:36,959 Suze: actually own or in cash, both of those you are 425 00:26:36,959 --> 00:26:41,760 Suze: going to owe ordinary income tax on it. Now if 426 00:26:41,760 --> 00:26:45,520 Suze: you do an in-kind distribution. 427 00:26:46,150 --> 00:26:50,189 Suze: Of these mutual funds that have, here's the key, that 428 00:26:50,189 --> 00:26:54,989 Suze: have a consistent capital gains distribution meaning at the end 429 00:26:54,989 --> 00:26:59,030 Suze: of the year, KT they distribute to CW all of 430 00:26:59,030 --> 00:27:03,709 Suze: this money as a capital gain. You're going to owe 431 00:27:03,709 --> 00:27:08,540 Suze: taxes on that if you take it as an R&D, 432 00:27:08,709 --> 00:27:11,109 Suze: have it now in an investment account. 433 00:27:11,689 --> 00:27:14,010 Suze: So not only are you going to owe taxes on 434 00:27:14,010 --> 00:27:18,489 Suze: the capital gain distribution when you hold it, but if 435 00:27:18,489 --> 00:27:21,270 Suze: this goes up and up in value when you sell it, 436 00:27:21,290 --> 00:27:23,729 Suze: you're going to owe more taxes on it again. 437 00:27:24,560 --> 00:27:27,939 Suze: So if it were me, I would probably just take 438 00:27:27,939 --> 00:27:32,540 Suze: it in cash, but either way you're going to owe 439 00:27:32,540 --> 00:27:39,489 Suze: taxes on the original distribution for the RMD. All right, KT, 440 00:27:39,540 --> 00:27:41,709 Suze: that's a wrap. Take us out, girlfriend. 441 00:27:41,959 --> 00:27:44,780 KT: All right, there's only one thing we both want you 442 00:27:44,780 --> 00:27:47,780 KT: to remember, and that is this. I'm going to say 443 00:27:47,780 --> 00:27:48,829 KT: it in Italian. 444 00:27:49,459 --> 00:27:50,270 Suze: Oh, good luck. Go on. 445 00:27:51,689 --> 00:27:56,239 KT: I'll do it in English. People first, then I, then things. 446 00:27:56,540 --> 00:27:58,569 KT: Now you stay safe. 447 00:27:58,569 --> 00:27:58,930 Suze: All right, everybody, 448 00:28:01,369 --> 00:28:02,159 Suze: bye bye now.