1 00:00:08,199 --> 00:00:10,520 KT: So today's October 30th, right, 2 00:00:10,600 --> 00:00:11,000 Suze: Alright, so we 3 00:00:11,000 --> 00:00:15,189 Suze: will just be on the plane at this point coming back. 4 00:00:15,890 --> 00:00:16,840 KT: In time for trick or 5 00:00:16,840 --> 00:00:17,329 KT: treat. 6 00:00:17,479 --> 00:00:21,190 Suze: Oh, I knew it. I knew it. I knew she 7 00:00:21,190 --> 00:00:21,709 Suze: was gonna get... 8 00:00:21,709 --> 00:00:23,750 KT: In time for Halloween. 9 00:00:24,639 --> 00:00:26,120 Suze: KT, why do you love Halloween so much? 10 00:00:26,399 --> 00:00:28,079 KT: Always love that holiday. 11 00:00:28,079 --> 00:00:31,159 Suze: I know, but wait, we live in a place now 12 00:00:31,440 --> 00:00:35,110 Suze: where nobody goes trick or treating. No, really, I wanna know. 13 00:00:36,080 --> 00:00:40,159 KT: I think of the holiday of Halloween as my childhood. 14 00:00:40,520 --> 00:00:45,220 KT: And it's always fun to remember. I'll never forget being 15 00:00:45,220 --> 00:00:46,458 KT: a kid, one of six kids. 16 00:00:46,819 --> 00:00:48,619 Suze: All right, but, but do you have to remind me 17 00:00:48,619 --> 00:00:51,490 Suze: of it? Like, like for the whole month going up 18 00:00:51,490 --> 00:00:54,189 Suze: to Halloween, do you have to always talk about Halloween? OK, 19 00:00:54,540 --> 00:00:58,180 Suze: what's our first question? On, the Women and Money podcast 20 00:00:58,180 --> 00:01:01,020 Suze: and everybody's smart enough to listen. 21 00:01:01,240 --> 00:01:01,529 KT: This is 22 00:01:01,529 --> 00:01:03,889 KT: from Pamela Lynn in Chicago. 23 00:01:05,209 --> 00:01:06,739 Suze: Ask KT and Suze Anything edition. 24 00:01:07,459 --> 00:01:07,480 Suze: Go on, 25 00:01:10,410 --> 00:01:12,860 KT: Pamela Lynn said, I'm 55 26 00:01:12,860 --> 00:01:13,370 Suze: Do you all 27 00:01:13,370 --> 00:01:15,050 Suze: know my middle name is Suze Lynn. 28 00:01:16,059 --> 00:01:16,940 Suze: Do you know that? 29 00:01:17,099 --> 00:01:20,690 KT: Oh yeah, that's right. They don't know. Suze Lynn. 30 00:01:20,980 --> 00:01:22,739 Suze: I'm just gonna interrupt you this whole podcast. 31 00:01:22,790 --> 00:01:24,660 KT: OK, this is from Pamela Lynn. 32 00:01:25,540 --> 00:01:31,080 KT: I'm 55 and became disabled in 2019, but with the 33 00:01:31,080 --> 00:01:36,589 KT: rumors about upcoming Social Security benefit changes and the current 34 00:01:36,589 --> 00:01:42,800 KT: administration for 2026, I'm worried. I'm a single mom. I 35 00:01:42,800 --> 00:01:46,279 KT: used up all my savings and retirement money when I 36 00:01:46,279 --> 00:01:51,199 KT: got sick unexpectedly. I can't find any information 37 00:01:51,629 --> 00:01:55,260 KT: to prepare while I'm getting my other affairs in order 38 00:01:55,510 --> 00:01:59,989 KT: for my son, who is still finishing college 800 miles 39 00:01:59,989 --> 00:02:05,949 KT: away living with my disabled retired parents. Help please with 40 00:02:05,949 --> 00:02:11,309 KT: any advice. I'm rebuilding while living in an affordable woman 41 00:02:11,309 --> 00:02:12,860 KT: housing program. 42 00:02:13,110 --> 00:02:17,300 Suze: Oh boy. So girlfriend, listen to me. 43 00:02:19,220 --> 00:02:22,529 Suze: There comes a day in every mother's life. 44 00:02:23,270 --> 00:02:27,910 Suze: Maybe every father's life, every parent's life, where they have 45 00:02:27,910 --> 00:02:33,520 Suze: to care about themselves more than they care about their children, 46 00:02:33,869 --> 00:02:38,029 Suze: you know, I'm the one that created the saying put 47 00:02:38,029 --> 00:02:42,910 Suze: the financial oxygen mask on your face first, then your 48 00:02:42,910 --> 00:02:46,669 Suze: children's when you're in the air, because if something happens 49 00:02:46,669 --> 00:02:50,710 Suze: to you, who is going to take care of the children. 50 00:02:51,369 --> 00:02:54,389 Suze: And it seems like your main concern, 51 00:02:55,080 --> 00:03:00,070 Suze: is to make sure that your son is OK. I 52 00:03:00,070 --> 00:03:03,589 Suze: think what's very important here is you can build yourself 53 00:03:03,589 --> 00:03:08,029 Suze: back up. Maybe you want to put $100 away by 54 00:03:08,029 --> 00:03:13,309 Suze: going to Myalliant.com and starting the Ultimate Opportunity Savings account 55 00:03:13,309 --> 00:03:18,110 Suze: $100 every month for 12 months they give you $100. 56 00:03:18,190 --> 00:03:22,269 Suze: It's a start. It's a good return on your money. 57 00:03:23,070 --> 00:03:25,929 Suze: But I think what you really need to do is 58 00:03:25,929 --> 00:03:28,369 Suze: have a talk with your son. 59 00:03:29,250 --> 00:03:32,699 Suze: And say sweetheart, I love you more than life itself, 60 00:03:32,960 --> 00:03:36,149 Suze: but as you know, I've had a really rough time. 61 00:03:36,350 --> 00:03:38,830 Suze: I used up all my savings and everything when I 62 00:03:38,830 --> 00:03:43,520 Suze: was sick and on and on. And therefore we have 63 00:03:43,520 --> 00:03:46,520 Suze: to be a team. You have to learn now how 64 00:03:46,520 --> 00:03:49,880 Suze: to take care of yourself, and one day you may 65 00:03:49,880 --> 00:03:52,000 Suze: even have to take care of me. 66 00:03:52,720 --> 00:03:55,300 Suze: So I just want you to know that and be 67 00:03:55,300 --> 00:03:59,380 Suze: prepared for that, but our honesty and standing in our 68 00:03:59,380 --> 00:04:03,259 Suze: truth will be our strength to carry us in the 69 00:04:03,259 --> 00:04:06,380 Suze: future and be able to do whatever we need to 70 00:04:06,380 --> 00:04:11,940 Suze: do to make it happen. In regards to your comment, 71 00:04:12,820 --> 00:04:18,669 Suze: about the current administration, about what's going on and everything, listen, 72 00:04:18,940 --> 00:04:23,140 Suze: I've said it many, many times. The government can't save 73 00:04:23,140 --> 00:04:26,219 Suze: you because they can't even save themselves. It's not about 74 00:04:26,220 --> 00:04:29,980 Suze: this current administration, although I really understand how many of 75 00:04:29,980 --> 00:04:32,459 Suze: you want me to make it about that. 76 00:04:33,260 --> 00:04:38,279 Suze: It's about all the administrations having not taken care of 77 00:04:38,279 --> 00:04:41,799 Suze: the problem of Social Security that has been a problem 78 00:04:41,799 --> 00:04:45,720 Suze: for years and years and years, so we just have 79 00:04:45,720 --> 00:04:50,659 Suze: to plan for the fact that maybe it will be there, 80 00:04:50,760 --> 00:04:53,640 Suze: maybe it won't be there, but you're just gonna have 81 00:04:53,640 --> 00:04:56,678 Suze: to plan what would your life look like if it 82 00:04:56,678 --> 00:05:00,399 Suze: wasn't there and then if it's there, great, and if 83 00:05:00,399 --> 00:05:02,279 Suze: it's not there, great. 84 00:05:02,920 --> 00:05:06,809 Suze: So you have to be strong now and take all 85 00:05:06,809 --> 00:05:10,109 Suze: these matters into your own hand and don't look for 86 00:05:10,109 --> 00:05:15,200 Suze: any scapegoat or any reason as to why you can't 87 00:05:15,200 --> 00:05:17,519 Suze: make this happen. You know, KT, I have that saying. 88 00:05:17,559 --> 00:05:18,519 Suze: Do you know my saying? 89 00:05:19,238 --> 00:05:23,470 Suze: There isn't an excuse strong enough to keep you from 90 00:05:23,470 --> 00:05:26,869 Suze: being who you are meant to be. 91 00:05:27,750 --> 00:05:31,440 Suze: And that goes for every single person listening to the 92 00:05:31,440 --> 00:05:34,350 Suze: Women and Money podcast. Next question, KT. 93 00:05:34,720 --> 00:05:37,839 KT: All right, I like that saying too. This is from 94 00:05:37,839 --> 00:05:41,880 KT: Jody and Jody said, just a dude smart enough to 95 00:05:41,880 --> 00:05:45,049 KT: listen with a question. I like that. 96 00:05:45,470 --> 00:05:48,500 KT: So here's his question, Suze. I like how you think 97 00:05:48,500 --> 00:05:52,609 KT: of finance situations as a chess game. I've often felt 98 00:05:52,609 --> 00:05:56,820 KT: the same way. I try to remove myself emotionally from 99 00:05:56,820 --> 00:06:00,470 KT: my situation and just look at the facts, he said. 100 00:06:00,510 --> 00:06:04,669 KT: Here's my move. I'm just shy of age 64. I 101 00:06:04,670 --> 00:06:09,670 KT: have roughly 400,000 total in a Roth IRA plus an 102 00:06:09,670 --> 00:06:10,950 KT: emergency fund. 103 00:06:11,290 --> 00:06:15,209 KT: And my home is worth just under a million dollars, 104 00:06:15,269 --> 00:06:18,630 KT: but I'd like to think of it as my forever home. 105 00:06:19,399 --> 00:06:21,739 KT: Is it worth it to pay off my home to 106 00:06:21,738 --> 00:06:26,700 KT: the tune of $135,000? It would be so nice to 107 00:06:26,700 --> 00:06:30,420 KT: not have a mortgage payment, even though my mortgage is 108 00:06:30,420 --> 00:06:35,010 KT: under $1,000 a month, including tax and insurance. 109 00:06:35,600 --> 00:06:39,118 KT: Thank you both for the fun and money information, but 110 00:06:39,119 --> 00:06:42,510 KT: mostly for just giving a damn about all of us 111 00:06:42,510 --> 00:06:46,839 KT: less educated in the money world. All right, so what's 112 00:06:46,839 --> 00:06:48,579 KT: your chess move for Jody? 113 00:06:48,760 --> 00:06:52,760 Suze: So here's the thing, Jody, because KT just handed me 114 00:06:52,760 --> 00:06:53,910 Suze: your email. 115 00:06:54,470 --> 00:06:58,959 Suze: Even though you say that your mortgage is $1,000 a month, 116 00:06:59,420 --> 00:07:04,709 Suze: including tax and insurance, that if you paid off the 117 00:07:04,709 --> 00:07:09,869 Suze: mortgage of $135,000 your tax and your insurance would not 118 00:07:09,869 --> 00:07:14,500 Suze: go away. It would still be there. So how much 119 00:07:14,500 --> 00:07:20,109 Suze: of this $1,000 a month is probably just your mortgage payment? 120 00:07:20,500 --> 00:07:25,059 Suze: And given that you have a mortgage of about $135,000 121 00:07:25,309 --> 00:07:32,350 Suze: I would estimate that about $562 of that $1,000 is 122 00:07:32,350 --> 00:07:37,630 Suze: just your mortgage. So then the question becomes, are you 123 00:07:37,630 --> 00:07:42,940 Suze: ready for me to checkmate you boyfriend? Right? Is this 124 00:07:43,309 --> 00:07:47,589 Suze: that $135,000 is probably in your Roth. 125 00:07:48,720 --> 00:07:52,410 Suze: Therefore you would take it out of your Roth to 126 00:07:52,410 --> 00:07:56,519 Suze: pay off this mortgage if you left it in the 127 00:07:56,519 --> 00:08:02,309 Suze: Roth $135,000 and all it generated for you was 8%, 128 00:08:02,440 --> 00:08:06,320 Suze: which is so easy today. It's not even funny, especially 129 00:08:06,320 --> 00:08:09,910 Suze: if you're investing in some of the stocks we have mentioned. 130 00:08:10,679 --> 00:08:16,079 Suze: That would give you $900 a month approximately in growth. 131 00:08:17,079 --> 00:08:20,920 Suze: Which is almost double what you're getting if you use 132 00:08:20,920 --> 00:08:26,079 Suze: it to just get rid of your $562 mortgage. 133 00:08:27,010 --> 00:08:33,020 Suze: So maybe I'm wrong. Maybe your mortgage is $600 $700, $800. 134 00:08:33,130 --> 00:08:37,770 Suze: I doubt highly it's $900 and your taxes and insurance 135 00:08:37,770 --> 00:08:42,520 Suze: are only $1,000. So bottom line answer, don't do it. 136 00:08:42,650 --> 00:08:46,390 Suze: Leave everything exactly how it is. All right, KT. 137 00:08:46,570 --> 00:08:49,250 KT: OK, next question is. 138 00:08:49,344 --> 00:08:50,885 Suze: The other mistake he made. 139 00:08:51,054 --> 00:08:51,664 KT: What's that? 140 00:08:51,854 --> 00:08:56,775 Suze: He's got an escrow account and an escrow account, everybody 141 00:08:56,775 --> 00:09:02,525 Suze: is you pay your mortgage plus your insurance plus your taxes, 142 00:09:02,854 --> 00:09:05,895 Suze: but you could pay your insurance and your taxes on 143 00:09:05,895 --> 00:09:06,775 Suze: your own. 144 00:09:07,210 --> 00:09:11,608 Suze: So while that money is sitting there, it's making interest 145 00:09:11,609 --> 00:09:15,280 Suze: for the bank, not for you or your mortgage company. 146 00:09:15,570 --> 00:09:20,119 Suze: So don't have escrow accounts, just pay your mortgage, pay 147 00:09:20,119 --> 00:09:25,010 Suze: your property taxes, pay your insurance all separately so you 148 00:09:25,010 --> 00:09:28,799 Suze: get to keep that money until your premium is due. 149 00:09:28,979 --> 00:09:29,659 Suze: All right, KT. 150 00:09:30,789 --> 00:09:33,770 KT: Um, next question is from Joanne. She said, Here's another 151 00:09:33,770 --> 00:09:37,090 KT: real estate. I own my home and I'm curious how 152 00:09:37,090 --> 00:09:42,409 KT: you feel about going without HO insurance, homeowners insurance. I 153 00:09:42,409 --> 00:09:46,968 KT: am capable of self-insuring for a full replacement value. I 154 00:09:46,969 --> 00:09:50,609 KT: have owned homes for 50 years, so Joanne's 68. 155 00:09:51,090 --> 00:09:52,130 KT: She said, I spent, 156 00:09:52,650 --> 00:09:52,849 Suze: Wait, she's 68 and she's owned homes... 157 00:09:53,690 --> 00:09:56,900 KT: She's owned homes for 50 years. So from the age 158 00:09:56,900 --> 00:10:02,439 KT: of 18 she started investing in properties and oh wait, 159 00:10:02,510 --> 00:10:05,809 KT: but listen, this is the catch. No, this is her catch, 160 00:10:05,849 --> 00:10:09,510 KT: she said, I've spent a lot on insurance and I've 161 00:10:09,510 --> 00:10:12,049 KT: never had a claim, but ready... 162 00:10:12,530 --> 00:10:17,709 KT: Joanne lives where? In North Myrtle Beach. Suze, Myrtle Beach, 163 00:10:17,770 --> 00:10:23,690 KT: just to give you big, big hurricane risk neighborhood just 164 00:10:23,690 --> 00:10:24,949 KT: like us in South Florida. 165 00:10:25,320 --> 00:10:28,609 Suze: Here's what I would tell you, Joanne, which is, the 166 00:10:28,609 --> 00:10:30,409 Suze: hurricanes of the past. 167 00:10:31,280 --> 00:10:36,349 Suze: The flooding of the past, even some fires of the past. 168 00:10:38,030 --> 00:10:43,239 Suze: Were not as violent and horrific and in places as 169 00:10:43,239 --> 00:10:46,979 Suze: they are today. So even though you have owned homes 170 00:10:46,979 --> 00:10:52,159 Suze: for 50 years and you have never had a claim 171 00:10:52,679 --> 00:10:57,380 Suze: doesn't mean that you're not going to. You have to really, 172 00:10:57,440 --> 00:11:01,140 Suze: really know that if next year. 173 00:11:01,780 --> 00:11:05,539 Suze: Another hurricane was to come through Myrtle Beach. Your entire 174 00:11:05,539 --> 00:11:09,219 Suze: home is gone. Everything in it is gone. 175 00:11:10,000 --> 00:11:13,429 Suze: Are you OK with that? If you're OK with that, 176 00:11:13,510 --> 00:11:19,750 Suze: then self insure. If you have any doubt whatsoever, you 177 00:11:19,750 --> 00:11:25,260 Suze: best keep the insurance. Because if you can afford to self-insure, 178 00:11:25,469 --> 00:11:30,099 Suze: you can also afford to have insurance on your property. 179 00:11:30,309 --> 00:11:32,390 Suze: So do you want to save a little bit every 180 00:11:32,390 --> 00:11:36,549 Suze: year or do you want to save a lot in 181 00:11:36,549 --> 00:11:37,909 Suze: case that year 182 00:11:38,760 --> 00:11:44,059 Suze: a natural disaster comes on board. Now I can tell you, KT, 183 00:11:44,539 --> 00:11:49,940 Suze: we self-insure. We just do, and the reason is that 184 00:11:49,940 --> 00:11:57,020 Suze: our insurance was so stupid. A 2,000 square foot condo, 185 00:11:58,219 --> 00:12:04,650 Suze: in Florida, $28,000 a year and if you make one 186 00:12:04,650 --> 00:12:09,919 Suze: claim they will get rid of us, period. No way. 187 00:12:10,049 --> 00:12:13,289 Suze: I'd rather just pay for it out of my own pocket. 188 00:12:13,369 --> 00:12:19,599 Suze: So we currently are self-insured on our boat except for liability, right, 189 00:12:19,929 --> 00:12:25,440 Suze: our home on the island and our condo in Florida, 190 00:12:25,650 --> 00:12:26,409 Suze: but again, 191 00:12:26,900 --> 00:12:31,130 Suze: it would not bother us on one level if any 192 00:12:31,130 --> 00:12:34,939 Suze: or all of them were taken. Just saying. All right, KT. 193 00:12:35,330 --> 00:12:39,690 KT: OK, next question is from Amy. Hello, Suze and KT. 194 00:12:40,289 --> 00:12:44,809 KT: I have a quick question regarding crypto. I have about 195 00:12:44,809 --> 00:12:50,400 KT: $10,000 invested in Bitcoin through PayPal, in which I buy 196 00:12:50,400 --> 00:12:51,840 KT: a little each week. 197 00:12:52,299 --> 00:12:57,059 KT: My question is, PayPal doesn't offer naming a beneficiary. 198 00:12:57,359 --> 00:13:00,960 KT: So would I just list the instructions for that account 199 00:13:00,960 --> 00:13:04,039 KT: in my will, or is there a better place or 200 00:13:04,039 --> 00:13:05,510 KT: way to buy crypto? 201 00:13:05,760 --> 00:13:09,679 Suze: Amy, Amy, Amy. So here's the truth. That is the 202 00:13:09,679 --> 00:13:15,440 Suze: real downfall of buying Bitcoin and crypto at PayPal. Why 203 00:13:15,440 --> 00:13:19,640 Suze: they don't have a designated beneficiary, and you can't do 204 00:13:19,640 --> 00:13:24,869 Suze: a trust with them or anything like that is beyond me. Therefore, 205 00:13:25,190 --> 00:13:29,489 Suze: there are other alternatives out there, so what I would do, 206 00:13:29,500 --> 00:13:32,859 Suze: and again I don't know fully about this firm yet, 207 00:13:32,900 --> 00:13:39,289 Suze: but I'm starting to like them a lot. It's called Public.com. 208 00:13:39,539 --> 00:13:43,340 Suze: Check them out. I like all of their offerings. I 209 00:13:43,340 --> 00:13:46,979 Suze: like how simple it is. I like that you could 210 00:13:46,979 --> 00:13:51,500 Suze: buy your bitcoin right there in your account that's in 211 00:13:51,500 --> 00:13:52,900 Suze: your individual name. 212 00:13:53,469 --> 00:13:57,000 Suze: And have a transfer on death account, a TOD account 213 00:13:57,000 --> 00:14:00,728 Suze: and name, let's say your son as the beneficiary or 214 00:14:00,729 --> 00:14:03,739 Suze: whoever you want to be the beneficiary. 215 00:14:04,260 --> 00:14:08,409 Suze: And then they would get all of that bitcoin upon 216 00:14:08,409 --> 00:14:13,159 Suze: your death. I don't know if they currently allow you 217 00:14:13,159 --> 00:14:16,409 Suze: to have a trust as a beneficiary, but if they 218 00:14:16,409 --> 00:14:19,289 Suze: don't right now, I'm sure this is something that they're 219 00:14:19,289 --> 00:14:23,760 Suze: probably working on as well as owning an account as 220 00:14:23,760 --> 00:14:24,650 Suze: a trust. 221 00:14:25,280 --> 00:14:30,059 Suze: But you can solve your problem now by taking your 222 00:14:30,059 --> 00:14:33,419 Suze: Bitcoin from PayPal. You may have to sell it, girlfriend, 223 00:14:33,500 --> 00:14:37,010 Suze: and pay whatever gains you have there and taking it 224 00:14:37,010 --> 00:14:40,809 Suze: and putting that money unless you could do a transfer 225 00:14:40,809 --> 00:14:46,500 Suze: of your Bitcoin from PayPal to Public.com if you like 226 00:14:46,500 --> 00:14:49,380 Suze: them and then go from there, but I think it 227 00:14:49,380 --> 00:14:50,780 Suze: solves your problem. 228 00:14:51,039 --> 00:14:58,979 Suze: By simply doing a TOD account, name them as your beneficiary. Therefore, 229 00:14:59,059 --> 00:15:02,989 Suze: it won't go through probate. If it went through your 230 00:15:02,989 --> 00:15:06,590 Suze: will because it didn't have a beneficiary, they would have 231 00:15:06,590 --> 00:15:09,859 Suze: to go through probate just so you know. 232 00:15:10,780 --> 00:15:14,099 KT: Next question is from Jill. Now, everybody, I'm gonna be 233 00:15:14,099 --> 00:15:17,859 KT: Suze for a moment. Take out your little Suze notebooks, 234 00:15:17,940 --> 00:15:21,330 KT: and I want you to remember these dates, especially if 235 00:15:21,330 --> 00:15:23,900 KT: you're like KT and Roth. Ready? 236 00:15:24,489 --> 00:15:29,169 KT: Hi, Suze and KT. Thank you for always keeping me educated. 237 00:15:29,419 --> 00:15:34,609 KT: I listened to your Roth five-year masterclass, as well as 238 00:15:34,609 --> 00:15:40,409 KT: the September 18th, '25 masterclass follow-up questions. 239 00:15:40,960 --> 00:15:44,979 KT: And I went back and listened to the February 18th, 240 00:15:44,989 --> 00:15:51,109 KT: '24 podcast on backdoor Roths and the pro rata rule. OK, 241 00:15:51,390 --> 00:15:58,429 KT: everyone got that date 9.18.25 and 2.18.24. And this is 242 00:15:58,429 --> 00:16:01,460 KT: why I want you to write it down. Jill says, 243 00:16:01,590 --> 00:16:05,909 KT: I still have questions, and I wrote, me too, Jill. 244 00:16:06,969 --> 00:16:11,239 KT: I've been contributing to a backdoor Roth for over 14 years. 245 00:16:11,570 --> 00:16:18,919 KT: My 2025 backdoor Roth contribution was made this year in April. Sadly, 246 00:16:19,210 --> 00:16:24,840 KT: my amazing dad passed away unexpectedly a few months ago. 247 00:16:25,130 --> 00:16:27,609 KT: I just found out I will be inheriting his 248 00:16:28,044 --> 00:16:30,005 KT: traditional IRA. 249 00:16:30,085 --> 00:16:31,054 Suze: I know where she's going. 250 00:16:31,155 --> 00:16:35,974 KT: Does the pro rata rule on backdoor Roth IRAs apply 251 00:16:35,974 --> 00:16:38,335 KT: to inherited IRAs? 252 00:16:38,474 --> 00:16:39,575 Suze: Pop quizzy? 253 00:16:39,784 --> 00:16:41,645 KT: I think the answer is no. 254 00:16:41,895 --> 00:16:46,094 Suze: Come on, KT, seriously think about it. You know that 255 00:16:46,094 --> 00:16:48,614 Suze: when you have a traditional IRA, 256 00:16:49,669 --> 00:16:55,340 Suze: traditional IRA in your name and you then do a 257 00:16:55,340 --> 00:16:57,250 Suze: back door Roth. 258 00:16:59,789 --> 00:17:03,130 KT: But wait, here's the deal. It's inherited. 259 00:17:04,270 --> 00:17:06,858 Suze: Ding Ding Ding! I'm so proud of you. 260 00:17:06,858 --> 00:17:08,630 KT: No she from what you've told me in the past, 261 00:17:08,709 --> 00:17:13,030 KT: I remember it inherited means no, it's not applicable. But 262 00:17:13,030 --> 00:17:15,260 KT: then this next question, I don't know the answer. 263 00:17:15,689 --> 00:17:19,319 KT: Jill said, also as I pay taxes on the inherited 264 00:17:19,319 --> 00:17:23,359 KT: IRA over the next 10 years, can I put that 265 00:17:23,359 --> 00:17:28,239 KT: money in my Roth and continue making future backdoor Roth contributions? 266 00:17:29,160 --> 00:17:32,239 Suze: So I don't know how much you inherited from daddy. 267 00:17:33,130 --> 00:17:36,349 Suze: But I have a feeling that you'll probably be withdrawing 268 00:17:36,349 --> 00:17:40,829 Suze: more than $7,000 or $8,000 a year from there. So 269 00:17:40,829 --> 00:17:45,968 Suze: the question becomes if you have earned income to the 270 00:17:45,969 --> 00:17:48,889 Suze: amount that you are going to want to contribute to 271 00:17:48,890 --> 00:17:52,079 Suze: your back door Roth, yeah, you could use that money 272 00:17:52,410 --> 00:17:54,849 Suze: for that, but you have to have earned income. If 273 00:17:54,849 --> 00:17:58,180 Suze: you don't have earned income, you cannot. 274 00:17:58,680 --> 00:18:01,900 Suze: So you just can't use that money and count it 275 00:18:01,900 --> 00:18:04,819 Suze: as earned income. Chances are 276 00:18:05,219 --> 00:18:08,649 Suze: you might not have any earned income and so therefore, no, 277 00:18:08,719 --> 00:18:11,359 Suze: you can't do it and you can't convert money just 278 00:18:11,359 --> 00:18:16,479 Suze: so you know KT from an inherited traditional IRA to 279 00:18:16,479 --> 00:18:18,169 Suze: a Roth. You cannot do that. 280 00:18:18,170 --> 00:18:20,280 KT: Because you didn't earn it yourself. 281 00:18:20,359 --> 00:18:26,250 Suze: No, because it's not your IRA to convert. It's an 282 00:18:26,250 --> 00:18:28,800 Suze: inherited one, so you can't convert it. 283 00:18:29,640 --> 00:18:29,810 Suze: There you go. 284 00:18:29,810 --> 00:18:34,119 KT: All right. Next question is from Belle. Hi, Suze and KT. 285 00:18:34,250 --> 00:18:38,040 KT: Thank you for your wonderful podcast. I am a 24-year-old 286 00:18:38,040 --> 00:18:44,589 KT: earning $100,000 a year. Last year, a family friend convinced 287 00:18:44,589 --> 00:18:47,429 KT: me to start working with a financial advisor. 288 00:18:48,239 --> 00:18:48,292 Suze: Why? 289 00:18:48,292 --> 00:18:52,239 KT: Well, hold on. However, a year later, I don't think 290 00:18:52,239 --> 00:18:52,520 KT: I 291 00:18:52,569 --> 00:18:55,920 KT: make enough to have an advisor. Do you think I 292 00:18:55,920 --> 00:18:59,680 KT: should stick with my advisor, or should I invest on 293 00:18:59,680 --> 00:19:03,239 KT: my own? If the latter, how can I transfer the 294 00:19:03,239 --> 00:19:07,550 KT: money to a new investment account without fees? First of all, 295 00:19:07,760 --> 00:19:10,910 KT: you're 24 years old, Suze, tell Belle what to do. 296 00:19:11,119 --> 00:19:15,319 Suze: Belle, let's see if I can get the ding dongs 297 00:19:15,319 --> 00:19:16,109 Suze: out there. 298 00:19:16,770 --> 00:19:20,800 Suze: That are telling you what to do out of your 299 00:19:20,800 --> 00:19:24,800 Suze: mind and let's ring your "bell" so that you are 300 00:19:24,800 --> 00:19:25,630 Suze: a winner. 301 00:19:26,469 --> 00:19:31,510 Suze: A true winner. So you're telling me that you're 24 302 00:19:31,510 --> 00:19:37,040 Suze: years old, earning $100,000 a year. You did not tell me, Belle, 303 00:19:37,709 --> 00:19:40,780 Suze: how much money you are investing. 304 00:19:41,540 --> 00:19:45,188 Suze: What do you have left to invest? At $100,000 a 305 00:19:45,189 --> 00:19:50,369 Suze: year that you're earning, you absolutely qualify for a Roth IRA, 306 00:19:50,670 --> 00:19:55,109 Suze: and hopefully you're working for a company that is offering 307 00:19:55,109 --> 00:19:58,589 Suze: you a Roth 401k or a Roth 403B. 308 00:19:59,660 --> 00:20:03,839 Suze: So all your retirement contributions should be into a Roth, 309 00:20:03,910 --> 00:20:06,979 Suze: number one, for the rest of your life, by the way. 310 00:20:07,270 --> 00:20:11,160 Suze: And you should have both a Roth retirement account at 311 00:20:11,160 --> 00:20:15,010 Suze: work and a Roth IRA on your own. Now with 312 00:20:15,010 --> 00:20:18,169 Suze: that said, there isn't that much money that you're going 313 00:20:18,170 --> 00:20:22,170 Suze: to be putting into those two accounts. The Roth retirement 314 00:20:22,170 --> 00:20:25,599 Suze: account at work you don't need a financial advisor for. 315 00:20:25,849 --> 00:20:28,089 Suze: You're just going to be putting all that money probably 316 00:20:28,089 --> 00:20:32,479 Suze: into a Standard and Poor's 500 index fund within there. 317 00:20:32,650 --> 00:20:33,250 Suze: That's it. 318 00:20:33,949 --> 00:20:37,109 Suze: Then the little money that you're doing as a Roth IRA, 319 00:20:37,189 --> 00:20:40,949 Suze: the $7,000 a year, well, that you should be doing 320 00:20:40,949 --> 00:20:46,469 Suze: into ETFs. Again, VTI, great ETF for you to do 321 00:20:46,469 --> 00:20:51,909 Suze: or buy slices of little stocks that we have been mentioning. 322 00:20:52,500 --> 00:20:57,020 Suze: Just that simple. So no, you do not need a 323 00:20:57,020 --> 00:21:01,500 Suze: financial adviser, and you shouldn't even want a financial advisor 324 00:21:01,500 --> 00:21:05,699 Suze: other than the absolute best financial advisor you will ever 325 00:21:05,699 --> 00:21:08,609 Suze: find in your entire life, and that is the one 326 00:21:08,609 --> 00:21:12,310 Suze: that you see when you look in the mirror, cause again, Belle, 327 00:21:12,560 --> 00:21:12,889 Suze: another 328 00:21:13,052 --> 00:21:16,123 Suze: favorite saying of mine is you are never powerful in 329 00:21:16,123 --> 00:21:18,863 Suze: life until you are powerful over your own money, how 330 00:21:18,863 --> 00:21:20,802 Suze: you think about it, how you feel about it, and 331 00:21:20,802 --> 00:21:23,883 Suze: how you invest it, and nobody cares about your money 332 00:21:23,883 --> 00:21:26,723 Suze: more than you do. And what happens to your money 333 00:21:26,723 --> 00:21:30,593 Suze: directly affects the quality of your life, not this so-called 334 00:21:30,593 --> 00:21:33,602 Suze: financial advisor's life. So you 335 00:21:33,755 --> 00:21:36,625 Suze: might just want to give some advice to your friend 336 00:21:36,625 --> 00:21:40,344 Suze: who told you that, what they should be doing cause 337 00:21:40,345 --> 00:21:43,504 Suze: I have no doubt they are making a mistake as 338 00:21:43,505 --> 00:21:46,225 Suze: well and what you have to do now is you 339 00:21:46,225 --> 00:21:48,735 Suze: have to decide where do you want to open up 340 00:21:48,734 --> 00:21:51,955 Suze: your Roth IRA or if you have an investment account, 341 00:21:52,345 --> 00:21:55,984 Suze: where do you want to open that up? Maybe Charles Schwab, 342 00:21:56,066 --> 00:21:58,745 Suze: maybe Public.com, maybe some place. 343 00:21:59,219 --> 00:22:02,589 Suze: And you simply open up the account that you want. 344 00:22:02,839 --> 00:22:07,680 Suze: They will contact your adviser or wherever your money happens 345 00:22:07,680 --> 00:22:11,040 Suze: to be, and they will initiate a transfer, and it 346 00:22:11,040 --> 00:22:15,040 Suze: will go from them directly into your account at where 347 00:22:15,040 --> 00:22:17,989 Suze: you opened it up. You never even have to talk 348 00:22:17,989 --> 00:22:24,079 Suze: or see that adviser again. If you don't want to, yes, KT, next. 349 00:22:24,079 --> 00:22:26,520 KT: All right, this is from KP. 350 00:22:27,089 --> 00:22:30,810 KT: Hi Suze, I'm 55, still working, and have been contributing 351 00:22:30,810 --> 00:22:35,958 KT: to my retirement plan through a Roth 401k for several years. 352 00:22:36,290 --> 00:22:40,569 KT: If I now open a Roth IRA as well, did 353 00:22:40,569 --> 00:22:45,280 KT: the five year clock begin when I opened my Roth 401k? Also, 354 00:22:45,530 --> 00:22:46,839 KT: do I need both? 355 00:22:47,010 --> 00:22:52,569 Suze: Listen to me closely, KP. The amount of time that 356 00:22:52,569 --> 00:22:56,160 Suze: your Roth 401k is open, 357 00:22:57,000 --> 00:23:02,359 Suze: means absolutely nothing in regards to the five year clock 358 00:23:02,359 --> 00:23:07,800 Suze: with a Roth IRA. The only thing that starts a 359 00:23:07,800 --> 00:23:14,439 Suze: Roth IRA time clock is a Roth IRA. So did 360 00:23:14,439 --> 00:23:18,829 Suze: the five year clock begin when I opened my Roth 401k? No, 361 00:23:18,839 --> 00:23:20,040 Suze: it did not. 362 00:23:20,640 --> 00:23:25,199 Suze: Not for a Roth IRA. So do you need both? Oh, 363 00:23:25,280 --> 00:23:28,560 Suze: you betcha you do. So you should open a Roth 364 00:23:28,560 --> 00:23:32,959 Suze: IRA today to start that clock because there will come 365 00:23:32,959 --> 00:23:35,680 Suze: a day when you want to take the money that's 366 00:23:35,680 --> 00:23:37,900 Suze: in your Roth 401k. 367 00:23:39,000 --> 00:23:43,319 Suze: And put it where? Into your Roth IRA. 368 00:23:43,670 --> 00:23:45,729 Suze: And if you do so when you're over the age 369 00:23:45,729 --> 00:23:49,930 Suze: of 59 and a half and that Roth IRA has been open for 370 00:23:49,930 --> 00:23:53,089 Suze: at least 5 years, your penalty for the five year 371 00:23:53,089 --> 00:23:57,089 Suze: time clock has been met, so you don't care at 372 00:23:57,089 --> 00:23:59,760 Suze: that point. All the money is yours. 373 00:23:59,969 --> 00:24:03,930 KT: So Suze, why does a Roth 401k even have a 374 00:24:03,930 --> 00:24:04,760 KT: time clock? 375 00:24:04,910 --> 00:24:08,569 Suze: Oh, you are so smart. That is such a great question. 376 00:24:08,650 --> 00:24:10,810 Suze: I can't even stand it seriously. 377 00:24:11,670 --> 00:24:17,810 Suze: Because sometimes people have a Roth 401k and now they've 378 00:24:17,810 --> 00:24:21,839 Suze: had it for like eight years at an old employer's place, 379 00:24:22,130 --> 00:24:26,050 Suze: and now they're moving to a new employer that has 380 00:24:26,050 --> 00:24:30,050 Suze: a Roth 401k and they want to transfer that money 381 00:24:30,050 --> 00:24:34,599 Suze: from their old 401k to their new 401k. Now their 382 00:24:34,599 --> 00:24:39,489 Suze: new 401k Roth takes on the time clock of the 383 00:24:39,489 --> 00:24:40,250 Suze: old one. 384 00:24:40,689 --> 00:24:43,609 Suze: So let's say they want to take money out of 385 00:24:43,609 --> 00:24:49,369 Suze: their Roth 401k. That's when the five year time clock hits. 386 00:24:49,569 --> 00:24:52,930 Suze: If it's still in a Roth 401k and maybe they 387 00:24:52,930 --> 00:24:57,359 Suze: leave it there forever, that's when the time clock matters. 388 00:24:57,890 --> 00:25:00,719 Suze: Because not everybody takes their money from their 401k. 389 00:25:01,084 --> 00:25:04,005 Suze: And as a Roth IRA with it. Next question. 390 00:25:04,084 --> 00:25:08,375 KT: Next question, Suze is from Vivian. Hello, Suze. I'm a single 391 00:25:08,375 --> 00:25:12,974 KT: woman turning 60 in November, and I've been thinking about 392 00:25:12,974 --> 00:25:17,415 KT: taking a trip for the first time alone and thinking 393 00:25:17,415 --> 00:25:21,094 KT: perhaps Hawaii to celebrate this milestone. 394 00:25:21,650 --> 00:25:25,209 KT: Over the years my circle of friends has shrunk. Most 395 00:25:25,209 --> 00:25:29,239 KT: are married with husbands, kids, grandkids, and over the years 396 00:25:29,239 --> 00:25:33,170 KT: people just grow apart, I guess. Anyhow, I have the 397 00:25:33,170 --> 00:25:36,449 KT: means to travel and stay in a luxury resort if 398 00:25:36,449 --> 00:25:39,369 KT: I choose to. My question is this. 399 00:25:39,819 --> 00:25:43,569 KT: A nice luxury stay in Hawaii could run me approximately 400 00:25:43,569 --> 00:25:49,229 KT: $5,500 for five days. I have savings, but as a 401 00:25:49,229 --> 00:25:54,329 KT: single woman, I'm hesitant to dip into my savings. I 402 00:25:54,329 --> 00:25:58,329 KT: could use that money for home improvement or continue to 403 00:25:58,329 --> 00:26:03,780 KT: keep saving toward my future emergency retirement some day. I 404 00:26:03,780 --> 00:26:05,250 KT: live in California, 405 00:26:05,709 --> 00:26:08,469 KT: so there's plenty to do here as they live on 406 00:26:08,469 --> 00:26:12,589 KT: the coast, but the thought of going somewhere different sounds 407 00:26:12,589 --> 00:26:18,640 KT: refreshing too. From a financial standpoint, what's the wisest decision? 408 00:26:19,209 --> 00:26:24,129 KT: I'm my only source of income, so it's completely on 409 00:26:24,130 --> 00:26:25,649 KT: me to fund this trip. 410 00:26:26,290 --> 00:26:30,449 Suze: All right, KT pop quizzy. Should she or should she 411 00:26:30,449 --> 00:26:31,089 Suze: not do this? 412 00:26:31,089 --> 00:26:34,119 KT: No, don't do it because you're not ready. She's not ready. 413 00:26:34,119 --> 00:26:37,119 Suze: She's ready emotionally. She absolutely is. 414 00:26:37,650 --> 00:26:40,130 KT: Financially, she said a financial... 415 00:26:41,050 --> 00:26:41,359 KT: You know, decision. 416 00:26:42,130 --> 00:26:43,869 Suze: Give me the reasons why you're denying her. 417 00:26:44,079 --> 00:26:46,479 KT: She said she might want to do some home improvement 418 00:26:46,479 --> 00:26:47,739 KT: on the house, use that money. 419 00:26:47,959 --> 00:26:49,760 Suze: But she said she has the means. 420 00:26:51,030 --> 00:26:53,579 KT: Don't do it. I don't think she should go. I 421 00:26:53,579 --> 00:26:56,829 KT: think she's going to feel guilty. She could get to Hawaii. 422 00:26:56,900 --> 00:26:59,569 KT: She should have lousy weather for a week, and then 423 00:26:59,569 --> 00:27:03,329 KT: she's going to say, I wasted $5,500. 424 00:27:03,819 --> 00:27:04,339 Suze: That's your reason? 425 00:27:04,380 --> 00:27:05,050 KT: You know what... 426 00:27:05,780 --> 00:27:07,160 Suze: Stop, stop, stop. 427 00:27:07,260 --> 00:27:08,170 KT: What do you think? 428 00:27:08,459 --> 00:27:12,329 Suze: You've got it right, but not for the right reasons. 429 00:27:13,280 --> 00:27:18,270 Suze: She's afraid. She's hesitant. OK, all of those words. However, 430 00:27:18,729 --> 00:27:22,430 Suze: she's her only source of income, but she said one 431 00:27:22,430 --> 00:27:26,919 Suze: thing that did it for me, right? I could use 432 00:27:26,920 --> 00:27:30,050 Suze: that money for a home improvement, OK, or 433 00:27:30,680 --> 00:27:37,329 Suze: continue to keep saving towards my future emergency retirement some day. 434 00:27:37,479 --> 00:27:39,469 Suze: She used the word emergency. 435 00:27:39,880 --> 00:27:41,439 KT: She doesn't have an emergency fund. 436 00:27:41,520 --> 00:27:46,160 Suze: She doesn't have, I don't think, a one year emergency fund. 437 00:27:46,439 --> 00:27:47,310 KT: So don't do it. 438 00:27:47,479 --> 00:27:51,599 Suze: The words emotionally everybody that should have given you pause were, 439 00:27:51,599 --> 00:27:57,920 Suze: I'm hesitant to dip into my savings. But what's interesting again, KT. 440 00:27:58,599 --> 00:28:03,839 Suze: This is where my theory that most people never ask 441 00:28:03,839 --> 00:28:08,040 Suze: when you're asking permission to do something with money, not 442 00:28:08,040 --> 00:28:10,880 Suze: you're asking, does the five year rule work da da 443 00:28:10,880 --> 00:28:16,560 Suze: no when you're asking permission to spend money, you already 444 00:28:16,560 --> 00:28:20,550 Suze: know the answer to that question, or you would not 445 00:28:20,709 --> 00:28:25,449 Suze: ask me. You would know, and I want all of 446 00:28:25,449 --> 00:28:26,719 Suze: you to know. 447 00:28:27,150 --> 00:28:30,649 Suze: I want you to know your own thoughts. I want 448 00:28:30,650 --> 00:28:34,719 Suze: you to ask yourself the question. How does it make 449 00:28:34,719 --> 00:28:37,040 Suze: me feel? Does it make me feel a little bit afraid? 450 00:28:37,170 --> 00:28:40,209 Suze: Does it not? How does it make you feel? And 451 00:28:40,209 --> 00:28:44,760 Suze: if you have any hesitation whatsoever, don't do it, because remember, 452 00:28:44,969 --> 00:28:51,359 Suze: once you do something, it is all already done. Last question, KT. 453 00:28:51,680 --> 00:28:53,489 KT: OK, this is a short one. 454 00:28:54,359 --> 00:28:58,280 KT: This is from Irene, she said. Please advise Suze. Our 455 00:28:58,280 --> 00:29:05,910 KT: mortgage is 3.125% with a balance of $50,000 with seven 456 00:29:05,910 --> 00:29:09,760 KT: years left. My husband is 68 and still works. 457 00:29:09,844 --> 00:29:13,354 KT: I'm 65 and I still work. We have the money 458 00:29:13,354 --> 00:29:17,155 KT: to pay off our home in full. Just wondering if 459 00:29:17,155 --> 00:29:21,574 KT: paying it off is wise since the rate is so low. 460 00:29:21,875 --> 00:29:25,354 KT: Your input is valued. Ask me a pop quizzy. 461 00:29:26,489 --> 00:29:27,250 Suze: Pop quizzy. 462 00:29:27,250 --> 00:29:28,000 KT: Pay it off. 463 00:29:28,229 --> 00:29:28,650 Suze: Why? 464 00:29:29,119 --> 00:29:32,530 KT: Because I think Irene would never feel as good as 465 00:29:32,530 --> 00:29:37,280 KT: owning her home outright. They're still young enough, they're working, 466 00:29:37,410 --> 00:29:41,119 KT: and it's $50,000. I think they should do it instead 467 00:29:41,119 --> 00:29:43,719 KT: of paying off seven years. 468 00:29:44,069 --> 00:29:47,209 Suze: Irene, here's what I want you to do so you 469 00:29:47,209 --> 00:29:50,810 Suze: can answer this question on your own. I don't know 470 00:29:50,810 --> 00:29:53,770 Suze: what your mortgage payment is, but you do. Let's just 471 00:29:53,770 --> 00:29:57,849 Suze: say for fun. It's $1,000 a month. Let's just say 472 00:29:57,849 --> 00:30:01,890 Suze: that's true. That's $12,000 a year. 473 00:30:02,660 --> 00:30:06,829 Suze: The $50,000 that's in your account, 474 00:30:07,689 --> 00:30:13,550 Suze: would have to earn what to make $12,000 a year 475 00:30:14,280 --> 00:30:19,920 Suze: or $1,000 a month? It would have to earn 25% 476 00:30:19,920 --> 00:30:20,869 Suze: a year, 477 00:30:21,869 --> 00:30:28,579 Suze: to make that much money, so should you take $50,000 478 00:30:28,579 --> 00:30:35,290 Suze: out to pay off your mortgage and save yourself $12,000 479 00:30:35,290 --> 00:30:37,849 Suze: a year because in four years you would be able 480 00:30:37,849 --> 00:30:41,729 Suze: to replace that money in your account, then you should 481 00:30:41,729 --> 00:30:43,410 Suze: absolutely do it. 482 00:30:43,959 --> 00:30:47,609 Suze: So once again, this is not a case of the 483 00:30:47,609 --> 00:30:51,880 Suze: interest rate you even owning your home outright. It's also 484 00:30:51,880 --> 00:30:59,560 Suze: a case of true financial intelligence. If your mortgage payment 485 00:30:59,560 --> 00:31:02,890 Suze: was $100 a month and it's only going to save 486 00:31:02,890 --> 00:31:07,170 Suze: you $1,200 a year, then you're better off keeping your 487 00:31:07,170 --> 00:31:11,680 Suze: money invested, the $50,000, because it could easily make you 488 00:31:11,680 --> 00:31:13,410 Suze: $4,000 a year. 489 00:31:14,060 --> 00:31:17,369 Suze: So that's how you are going to figure out what 490 00:31:17,369 --> 00:31:21,130 Suze: you should do in your particular situation, KT. 491 00:31:21,859 --> 00:31:22,689 KT: That's a wrap. 492 00:31:22,819 --> 00:31:27,219 Suze: I'm sure that somewhere we're getting closer to the United 493 00:31:27,219 --> 00:31:31,119 Suze: States at this point in time as we are returning 494 00:31:31,449 --> 00:31:38,469 Suze: to Florida. So our next podcast will be us back 495 00:31:38,469 --> 00:31:39,859 Suze: in Florida. 496 00:31:40,459 --> 00:31:41,410 Suze: Are you excited about that, KT? 497 00:31:41,489 --> 00:31:43,290 KT: Yeah, I am excited. 498 00:31:43,489 --> 00:31:45,770 Suze: Do you think we had a good time? We'll have to see. 499 00:31:47,079 --> 00:31:50,250 KT: We'll be on diets, no Halloween candy for you, Suze. 500 00:31:50,400 --> 00:31:56,729 Suze: Oh, here we go. All right, everybody. So until November 2nd. 501 00:31:57,349 --> 00:32:01,500 Suze: When it will be a Suze School, just so you know, 502 00:32:01,819 --> 00:32:04,099 Suze: there's only one thing that we want you to remember 503 00:32:04,099 --> 00:32:09,739 Suze: in life, and that's this. Happy Halloween. All right, everybody, 504 00:32:09,869 --> 00:32:11,459 Suze: bye bye. See you soon.