1 00:00:45,970 --> 00:00:51,200 Suze: June 6th, 2024. I think I feel so old this morning. Anyway... 2 00:00:52,299 --> 00:00:52,610 KT: Wait, everyone 3 00:00:52,619 --> 00:00:55,810 Suze: it's the day after Suze's birthday and it's also your 4 00:00:55,819 --> 00:00:57,900 Suze: cousin Ethan's birthday today. 5 00:00:57,909 --> 00:01:00,459 Suze: Happy birthday, Ethan. 6 00:01:00,630 --> 00:01:01,500 KT: Ethan. I hope you 7 00:01:01,610 --> 00:01:05,139 KT: have as much fun as we did yesterday. But we're 8 00:01:05,150 --> 00:01:07,110 KT: not going to tell you what we did. 9 00:01:07,120 --> 00:01:10,268 Suze: We had a secret rendezvous. We went somewhere. 10 00:01:10,360 --> 00:01:11,220 KT: It was great, 11 00:01:11,309 --> 00:01:15,230 Suze: But we're not telling anybody where we went or what 12 00:01:15,239 --> 00:01:18,769 Suze: we did. That's between me and KT. 13 00:01:19,910 --> 00:01:21,209 Suze: So anyway... 14 00:01:21,349 --> 00:01:24,900 KT: Happy birthday to all the Geminis out there. She loves 15 00:01:24,910 --> 00:01:25,519 KT: her Geminis. 16 00:01:25,720 --> 00:01:28,910 Suze: I love everybody. Welcome everybody to the Women and Money 17 00:01:28,919 --> 00:01:32,980 Suze: podcast and everyone's smart enough to listen. This is what KT? 18 00:01:33,150 --> 00:01:35,899 KT: Ask KT and Suze Anything. 19 00:01:36,050 --> 00:01:37,580 Suze: And how did they do that, KT? 20 00:01:37,589 --> 00:01:43,519 KT: You go to ask Suze Podcast at gmail.com. That's Suze 21 00:01:44,010 --> 00:01:47,069 KT: and send in your question and keep it nice and 22 00:01:47,080 --> 00:01:50,769 KT: short because guess who picks it? I do. And if 23 00:01:50,779 --> 00:01:53,059 KT: it says K... like the one I'm about to read 24 00:01:53,069 --> 00:01:57,120 KT: says KT,KT,KT, pick me, pick me, pick me and I 25 00:01:57,129 --> 00:01:58,839 KT: am Andrea. I'm picking 26 00:01:59,779 --> 00:02:03,150 Suze: But you have to be more creative than that now that she told you that. So anyway, 27 00:02:03,160 --> 00:02:06,970 Suze: that's what you do. And I just wanna say hopefully 28 00:02:06,980 --> 00:02:12,279 Suze: yesterday on my birthday, you were able to enter that quiz, 29 00:02:12,288 --> 00:02:15,470 Suze: answer all the questions on my alliant.com. 30 00:02:15,690 --> 00:02:20,970 Suze: Now shortly the winner will be notified. All right, KT. 31 00:02:20,979 --> 00:02:25,089 KT: Ok, here we go. So Andrea, I am picking you dear, 32 00:02:25,100 --> 00:02:28,710 KT: Suze and KT. Thank you for all your excellent guidance 33 00:02:28,720 --> 00:02:34,160 KT: over the years, including the incredible Amazon Freevee episodes. You 34 00:02:34,169 --> 00:02:35,859 KT: changed so many lives for the, 35 00:02:35,913 --> 00:02:38,615 KT: the better. So those of you that don't know about 36 00:02:38,625 --> 00:02:43,735 KT: the Freevee episodes. This is all Suze Orman shows for, 37 00:02:43,744 --> 00:02:48,695 KT: I think there's maybe 600 unbelievable and so much fun 38 00:02:48,705 --> 00:02:52,695 KT: to watch and guess what the advice in many cases 39 00:02:52,705 --> 00:02:56,014 KT: is as good as gold. So look them up. It's free. 40 00:02:56,669 --> 00:03:00,059 KT: Now, here's the question: Suze, I'm looking for your thoughts 41 00:03:00,070 --> 00:03:03,050 KT: on what I should do with what is for me. 42 00:03:03,059 --> 00:03:07,168 KT: A ton of money. I sold some land last week 43 00:03:07,179 --> 00:03:12,500 KT: and received $77,000. Good for you. I have one year 44 00:03:12,508 --> 00:03:15,190 KT: before I need the money to purchase a property for 45 00:03:15,199 --> 00:03:19,209 KT: my outdoor classroom so I can continue teaching. 46 00:03:19,750 --> 00:03:24,789 KT: I have first right of refusal on an $87,000 property 47 00:03:24,800 --> 00:03:28,649 KT: which will go on the market next spring. My goal 48 00:03:28,660 --> 00:03:33,130 KT: is to use the 77,000 to earn. I suppose she 49 00:03:33,139 --> 00:03:37,690 KT: wants to invest it to earn an additional 10,000 over 50 00:03:37,699 --> 00:03:41,210 KT: the coming 12 months. So I can pay cash for 51 00:03:41,220 --> 00:03:42,330 KT: the new property. 52 00:03:42,699 --> 00:03:46,240 KT: Suze, I'm visualizing hard on this goal but would love 53 00:03:46,250 --> 00:03:50,919 KT: your input regarding the options. What do you recommend? And, 54 00:03:50,929 --> 00:03:54,660 KT: and here's what she, she signs off with. I love this. Andrea. 55 00:03:55,169 --> 00:03:58,759 KT: Thank you so much. Keep spreading your beautiful wings and 56 00:03:58,770 --> 00:04:03,199 KT: your joy. So, Andrea has a list of her, 57 00:04:03,839 --> 00:04:06,619 KT: uh, finances which I'm gonna give Suze to look at 58 00:04:06,630 --> 00:04:09,240 KT: quickly everybody and then she'll answer Andrea. 59 00:04:09,960 --> 00:04:14,050 Suze: Well, Andrea, I can tell you, KT is already looking 60 00:04:14,059 --> 00:04:16,630 Suze: at me like, make it work for her, Suze, make 61 00:04:16,640 --> 00:04:20,769 Suze: it work for her. So the first thing is, it's 62 00:04:20,779 --> 00:04:22,619 Suze: impossible really 63 00:04:22,940 --> 00:04:28,299 Suze: to take $77,000 and in one year earn an additional 64 00:04:28,309 --> 00:04:33,659 Suze: $10,000 because that's a whole lot of money. I mean, 65 00:04:33,670 --> 00:04:38,039 Suze: even if it were to earn 10% a year, that's 66 00:04:38,049 --> 00:04:41,600 Suze: $7700 and we would have to invest it in the 67 00:04:41,609 --> 00:04:44,799 Suze: stock market and hope we invested it correctly. But you 68 00:04:44,809 --> 00:04:50,118 Suze: can't invest money in the stock market that you need 69 00:04:50,130 --> 00:04:51,599 Suze: in one year. 70 00:04:51,899 --> 00:04:54,600 Suze: You can't invest money in the stock market that really 71 00:04:54,609 --> 00:04:58,799 Suze: you need in five years. So this is money that 72 00:04:58,809 --> 00:05:02,470 Suze: has to be put into a money market account or 73 00:05:02,480 --> 00:05:05,670 Suze: a one year certificate of deposit. If you were to 74 00:05:05,678 --> 00:05:09,279 Suze: even invest that 77,000 at 4% or even a little 75 00:05:09,290 --> 00:05:13,170 Suze: bit more. And then after taxes, that would be about $3000. 76 00:05:13,178 --> 00:05:17,579 Suze: So you would be at $80,000. But really, that's only 77 00:05:17,589 --> 00:05:20,320 Suze: $7000 short 78 00:05:20,890 --> 00:05:24,500 Suze: of your goal. So if you visualize really hard on 79 00:05:24,510 --> 00:05:29,320 Suze: that goal, you need to look at your other money, 80 00:05:29,519 --> 00:05:35,089 Suze: you have a fully funded Roth IRA for $43,000. So 81 00:05:35,100 --> 00:05:40,428 Suze: it's very probable that $7000 of that fully funded Roth 82 00:05:40,970 --> 00:05:44,988 Suze: was from your original contributions. So I would take it 83 00:05:45,000 --> 00:05:45,829 Suze: from there. 84 00:05:46,200 --> 00:05:51,010 Suze: You also have an investment account with $1700 if you want, 85 00:05:51,019 --> 00:05:53,808 Suze: depending on the tax situation there, you could take it 86 00:05:53,820 --> 00:05:58,618 Suze: from there. You have a $5000 CD with Alliant Credit 87 00:05:58,630 --> 00:06:02,890 Suze: Union and probably it was a one year certificate of 88 00:06:02,899 --> 00:06:06,160 Suze: deposit or something like that. So by the time you 89 00:06:06,170 --> 00:06:10,130 Suze: have to literally buy this property, you could take it 90 00:06:10,140 --> 00:06:11,079 Suze: from there. 91 00:06:11,510 --> 00:06:14,450 Suze: So the first thing you need to understand is that 92 00:06:14,459 --> 00:06:19,529 Suze: your goal really can become a reality and you have 93 00:06:19,540 --> 00:06:24,250 Suze: choices as to where you want to take that money from. 94 00:06:24,790 --> 00:06:28,670 Suze: So that's all you need to know. Can you write 95 00:06:28,678 --> 00:06:30,589 Suze: us in, in a year and let us know what you did. 96 00:06:30,600 --> 00:06:33,440 KT: Send us a picture of the classroom too. Send us 97 00:06:33,450 --> 00:06:35,320 KT: a photo of the outdoor classroom. 98 00:06:36,440 --> 00:06:38,130 Suze: There you go, girlfriend. No problem 99 00:06:38,619 --> 00:06:43,980 KT: Suze from Ed. If I convert traditional 403b funds to 100 00:06:43,988 --> 00:06:48,399 KT: Roth 403bs, does the pro rata rule apply? 101 00:06:48,410 --> 00:06:51,549 Suze: No. And for those of you who don't know what 102 00:06:51,559 --> 00:06:55,308 Suze: pro rata rule is, you better look it up. All right. 103 00:06:55,320 --> 00:06:55,779 Suze: Go on. 104 00:06:55,809 --> 00:06:59,640 KT: Ok. Next question is from Valentina. I like, I love 105 00:06:59,649 --> 00:07:03,920 KT: that name. Valentina. Hi, Suze and KT. I hope you're, well, 106 00:07:04,049 --> 00:07:04,849 KT: I've been trying... 107 00:07:05,579 --> 00:07:07,109 Suze: Are her hopes true? 108 00:07:07,809 --> 00:07:10,029 KT: Yeah, we're not well, we're great. 109 00:07:10,540 --> 00:07:11,350 Suze: We're great. 110 00:07:12,100 --> 00:07:16,880 KT: I've been trying to learn about 529s. I recently listened 111 00:07:16,890 --> 00:07:19,440 KT: to a Suze School episode on it and it was 112 00:07:19,450 --> 00:07:24,279 KT: very informative. Once I mentioned it to my husband, he 113 00:07:24,290 --> 00:07:27,239 KT: said our neighbor is ready for this. 114 00:07:28,709 --> 00:07:30,630 Suze: Oh, you know what I answered this, I was so upset. 115 00:07:32,010 --> 00:07:35,019 KT: Wait, let me... no one knows why you're upset till I finish. 116 00:07:35,820 --> 00:07:39,760 KT: He said our neighbor is selling life insurance, 117 00:07:40,100 --> 00:07:40,459 Suze: Notice the words "selling..." 118 00:07:41,100 --> 00:07:44,809 KT: And we should use that instead for college. Now listen 119 00:07:44,820 --> 00:07:49,290 KT: to Valentina so great. She said, Suze, I'm so confused. 120 00:07:49,380 --> 00:07:52,809 KT: I thought you had to die to get life insurance. 121 00:07:53,019 --> 00:07:57,410 KT: If you get a chance, could you please compare the two? Listen, 122 00:07:57,420 --> 00:07:59,959 KT: there's no comparison. Listen up everyone. 123 00:08:00,079 --> 00:08:02,470 Suze: So Valentina, as you know, 124 00:08:03,309 --> 00:08:06,989 Suze: everybody, I go through all the emails and if I 125 00:08:07,000 --> 00:08:10,820 Suze: see one where you are about to make a serious 126 00:08:10,829 --> 00:08:13,959 Suze: mistake now, I don't see everyone because there's too many. 127 00:08:14,040 --> 00:08:17,380 Suze: But if I see that you're gonna make a serious mistake. 128 00:08:17,390 --> 00:08:21,959 Suze: Oh I answer you right away. And as you know, Valentina, 129 00:08:21,970 --> 00:08:24,049 Suze: this I said this to you, but now I'm gonna 130 00:08:24,059 --> 00:08:29,859 Suze: let everybody hear what I said to you first of all, 131 00:08:29,869 --> 00:08:31,940 Suze: whenever you have a neighbor, 132 00:08:32,330 --> 00:08:38,630 Suze: a relative, a friend and they want to sell you something. 133 00:08:39,159 --> 00:08:41,728 Suze: You are not to do it. Because number one, if 134 00:08:41,739 --> 00:08:44,419 Suze: it doesn't work out there goes your friendship, there goes 135 00:08:44,429 --> 00:08:47,539 Suze: your relationship, period. All right. 136 00:08:47,979 --> 00:08:51,700 Suze: But the mere fact that your neighbor wants to sell 137 00:08:51,710 --> 00:08:55,890 Suze: you a life insurance policy that you should use instead 138 00:08:55,900 --> 00:09:00,719 Suze: of a 529 plan has to be the worst advice 139 00:09:00,729 --> 00:09:04,010 Suze: I have ever heard in my life. And as I 140 00:09:04,020 --> 00:09:08,440 Suze: told Valentina, you are to run, not walk and your 141 00:09:08,450 --> 00:09:12,320 Suze: husband needs to stay out of things because obviously he 142 00:09:12,330 --> 00:09:15,119 Suze: doesn't even have what it takes to know. That was 143 00:09:15,130 --> 00:09:15,760 Suze: horrible 144 00:09:15,859 --> 00:09:19,299 Suze: advice and should have said on the spot. No way. 145 00:09:19,309 --> 00:09:22,640 Suze: First of all, your neighbor, in my opinion, wants to 146 00:09:22,650 --> 00:09:26,150 Suze: sell you that life insurance policy not to put your 147 00:09:26,159 --> 00:09:29,989 Suze: kids Valentina, through college, but to put his kids through 148 00:09:30,000 --> 00:09:33,479 Suze: college or to put more money in his retirement account 149 00:09:33,489 --> 00:09:38,559 Suze: or whatever it may be because those are big ticket 150 00:09:38,570 --> 00:09:43,599 Suze: items for a life insurance person to sell. Number one, 151 00:09:44,010 --> 00:09:46,570 Suze: the only reason they do that is that you put 152 00:09:46,580 --> 00:09:49,729 Suze: money into a life insurance policy can't be a term 153 00:09:49,739 --> 00:09:53,950 Suze: policy has to be a whole life variable or universal life. 154 00:09:53,960 --> 00:09:57,199 Suze: The commission on whatever you would put in is approximately 155 00:09:57,210 --> 00:10:01,739 Suze: the first year, 70 to 90%. Big deal of your 156 00:10:01,750 --> 00:10:06,070 Suze: first year premium. When you go to take money out, 157 00:10:06,460 --> 00:10:10,659 Suze: you take it out as a loan against the policy 158 00:10:11,070 --> 00:10:13,299 Suze: and therefore it's tax free. 159 00:10:13,669 --> 00:10:18,460 Suze: But if the policy happens to expire, you wanna surrender it. 160 00:10:18,469 --> 00:10:22,390 Suze: Whatever happens, that loan has to be paid back. If 161 00:10:22,400 --> 00:10:24,460 Suze: there isn't enough money in the po I could go 162 00:10:24,469 --> 00:10:26,849 Suze: on and on and on, you just need to know 163 00:10:26,859 --> 00:10:30,090 Suze: that is the worst idea possible and just don't do 164 00:10:30,099 --> 00:10:34,770 Suze: it in anybody who has anybody approach them with that suggestion. 165 00:10:35,429 --> 00:10:37,858 Suze: You know what I would tell them. What KT? 166 00:10:37,869 --> 00:10:41,309 KT: Do you want to also give her some, um, guidance 167 00:10:41,320 --> 00:10:43,900 KT: and tell her about your favorite 529 guide. 168 00:10:43,909 --> 00:10:47,309 Suze: Yeah. Just go to saving for college.com. That's where you 169 00:10:47,320 --> 00:10:49,719 Suze: should go. And that's where I already told her to do. 170 00:10:49,760 --> 00:10:54,229 Suze: Just go there and learn about 529 plans, savings plans, 171 00:10:54,239 --> 00:10:57,780 Suze: prepaid plans if you can afford to save for your kids' 172 00:10:57,789 --> 00:11:02,218 Suze: college education, which possibly you cannot to begin with. And 173 00:11:02,229 --> 00:11:04,020 Suze: you have to recognize that if you can or you 174 00:11:04,030 --> 00:11:04,439 Suze: can't 175 00:11:04,989 --> 00:11:08,289 Suze: do it through a 529 plan. All right. 176 00:11:08,299 --> 00:11:12,520 KT: Next question is from Deva. Dear Suze and KT. I 177 00:11:12,530 --> 00:11:17,530 KT: have a question about converting SEP Iras into a Roth, my 178 00:11:17,539 --> 00:11:21,299 KT: financial advisor guy... ready for this. Who is one of 179 00:11:21,309 --> 00:11:24,880 KT: those that I met at a dinner presentation you speak 180 00:11:24,890 --> 00:11:27,049 KT: of and she writes lol, I hope you got a 181 00:11:27,059 --> 00:11:27,849 KT: good dinner. 182 00:11:28,299 --> 00:11:30,219 Suze: Yeah, I hope you had a nice dinner. I hope 183 00:11:30,229 --> 00:11:33,340 Suze: he didn't serve you a plate of financial junk. But anyway, 184 00:11:33,349 --> 00:11:33,968 Suze: go on... 185 00:11:34,119 --> 00:11:40,520 KT: He suggested that I convert my SEP of $60,000 into 186 00:11:40,530 --> 00:11:45,679 KT: a Roth over two years, 30,000 each year. My question 187 00:11:45,690 --> 00:11:47,020 KT: is about the amount, 188 00:11:47,400 --> 00:11:50,059 KT: am I allowed to convert that much or does it 189 00:11:50,070 --> 00:11:53,400 KT: need to conform to the yearly max of what you 190 00:11:53,409 --> 00:11:54,789 KT: put into a Roth? 191 00:11:54,799 --> 00:11:57,830 Suze: No, you do not have to conform. You could still 192 00:11:57,840 --> 00:12:03,320 Suze: max out your Roth and still convert $3 million if 193 00:12:03,330 --> 00:12:08,309 Suze: you wanted to. However, maybe your financial advisor is a 194 00:12:08,320 --> 00:12:10,940 Suze: certified financial planner, is he? 195 00:12:11,289 --> 00:12:14,500 Suze: Because if he is, then also he might have had 196 00:12:14,510 --> 00:12:18,049 Suze: a little bit of training and understanding about the tax 197 00:12:18,059 --> 00:12:22,530 Suze: ramifications to you and could possibly really figure it out 198 00:12:22,539 --> 00:12:24,630 Suze: if this is a smart thing to you for you 199 00:12:24,640 --> 00:12:28,400 Suze: to do based on your income as well. I would 200 00:12:28,409 --> 00:12:32,530 Suze: never be converting that much money into a Roth because 201 00:12:32,539 --> 00:12:33,510 Suze: that is a lot 202 00:12:33,929 --> 00:12:40,309 Suze: until I consulted with a CPA, a tax person whoever 203 00:12:40,320 --> 00:12:44,049 Suze: you use and they figure it out according to what 204 00:12:44,200 --> 00:12:47,789 Suze: according to your income taxes. Number one, 205 00:12:48,429 --> 00:12:53,010 Suze: the question though really isn't, should you or shouldn't you 206 00:12:53,020 --> 00:12:54,570 Suze: or can you? 207 00:12:55,250 --> 00:12:57,689 Suze: The real question is, what are you going to invest 208 00:12:57,700 --> 00:13:01,049 Suze: in when you convert it? Where are you going to 209 00:13:01,059 --> 00:13:04,409 Suze: put that money? Because I would be telling you if 210 00:13:04,419 --> 00:13:08,299 Suze: you are going to be converting money into a Roth, 211 00:13:08,400 --> 00:13:13,049 Suze: where is that money con currently invested? Should you be 212 00:13:13,159 --> 00:13:17,510 Suze: just simply converting it in kind, meaning whatever 213 00:13:17,614 --> 00:13:21,955 Suze: you're invested in, within your se can you convert that 214 00:13:21,965 --> 00:13:25,954 Suze: exactly how it's invested to a Roth. I would wanna 215 00:13:25,965 --> 00:13:30,434 Suze: know a whole lot of things before I converted it 216 00:13:30,445 --> 00:13:34,454 Suze: with somebody you had dinner with. All right, that's all 217 00:13:34,465 --> 00:13:35,594 Suze: I wanna say there. 218 00:13:36,260 --> 00:13:38,909 KT: So this is from Eileen. She said... 219 00:13:39,030 --> 00:13:40,960 Suze: Hopefully it was a steak dinner or something. 220 00:13:41,299 --> 00:13:42,239 Suze: All right. Go on. 221 00:13:42,619 --> 00:13:45,320 KT: From Eileen, Suze. I was one of your lucky "How 222 00:13:45,330 --> 00:13:47,760 KT: am I doing?" guests way back when... 223 00:13:47,979 --> 00:13:48,799 Suze: What is her name? 224 00:13:49,179 --> 00:13:49,919 KT: Eileen. 225 00:13:50,059 --> 00:13:52,200 Suze: Hi Eileen. Did I help her? 226 00:13:52,210 --> 00:13:56,919 KT: Well, wait, let me finish. You gave me amazing advice 227 00:13:56,929 --> 00:13:59,640 KT: to fix my only issue that kept me from a 228 00:13:59,650 --> 00:14:03,640 KT: top FICO score. Now, I have another question. 229 00:14:04,059 --> 00:14:07,229 KT: I own a single family home in L A with 230 00:14:07,239 --> 00:14:10,679 KT: my husband and brother. The house is held in the 231 00:14:10,690 --> 00:14:13,460 KT: name of my brothers. I think I answered this too 232 00:14:13,469 --> 00:14:16,329 KT: for her. The house is held in the names of 233 00:14:16,340 --> 00:14:20,429 KT: my brother's trust and my husband and my joint trust. 234 00:14:21,169 --> 00:14:24,450 KT: We've rented out the house for 14 years, but now 235 00:14:24,460 --> 00:14:27,150 KT: we wish to sell it. What should we do to 236 00:14:27,159 --> 00:14:29,349 KT: maximize our capital gains? 237 00:14:29,710 --> 00:14:33,150 Suze: So to maximize your capital gains. A few things are 238 00:14:33,159 --> 00:14:36,710 Suze: gonna be interesting here. Eileen, sweetheart. Is that a lot 239 00:14:36,719 --> 00:14:40,979 Suze: of times rental properties, your CPA or somebody will tell you, 240 00:14:40,989 --> 00:14:45,130 Suze: let's depreciate it over time. So you get a larger 241 00:14:45,140 --> 00:14:47,719 Suze: tax write off for it and everything. I don't know 242 00:14:47,729 --> 00:14:49,030 Suze: if you've done that 243 00:14:49,450 --> 00:14:52,390 Suze: because if you've done that and now you are going 244 00:14:52,400 --> 00:14:56,159 Suze: to sell it. The problem is you're gonna have to 245 00:14:56,169 --> 00:15:01,750 Suze: recapture all of those losses that you took. So therefore, 246 00:15:01,859 --> 00:15:04,359 Suze: you're gonna have to pay more in taxes when you 247 00:15:04,369 --> 00:15:07,909 Suze: sell it unless you do an exchange for another rental property, 248 00:15:07,919 --> 00:15:11,739 Suze: which I have a feeling you don't wanna do. Therefore, 249 00:15:11,760 --> 00:15:15,830 Suze: you just wanna make sure that you gather every single 250 00:15:15,840 --> 00:15:16,659 Suze: receipt 251 00:15:17,000 --> 00:15:20,919 Suze: that you have spent on that property. What did you 252 00:15:20,929 --> 00:15:23,900 Suze: do to improve it? Did you replace a roof? Did 253 00:15:23,909 --> 00:15:27,070 Suze: you get a new refrigerator? What did you do to 254 00:15:27,080 --> 00:15:29,859 Suze: increase your cost basis on that? 255 00:15:30,570 --> 00:15:32,229 Suze: You're the one who will, who will have to pay 256 00:15:32,239 --> 00:15:35,729 Suze: the agent, the commission to sell it. So whatever your 257 00:15:35,739 --> 00:15:39,239 Suze: bottom line is their net of everything, you're just gonna 258 00:15:39,250 --> 00:15:41,849 Suze: have to pay capital gains tax on and there's not 259 00:15:41,859 --> 00:15:45,299 Suze: a whole lot more than that and all three split it, 260 00:15:45,309 --> 00:15:47,789 Suze: they split it. All right. 261 00:15:47,799 --> 00:15:51,500 KT: Next question is from Sarah. KT, I love you on 262 00:15:51,510 --> 00:15:54,950 KT: the podcast. I'm right there with you getting the quizzy wrong. 263 00:15:57,489 --> 00:15:58,890 Suze: That's why she picked that one. 264 00:15:58,900 --> 00:16:02,289 KT: Come on, it is come on Sarah. We can do better. 265 00:16:02,299 --> 00:16:05,080 KT: You and I will get the next one right. So 266 00:16:05,090 --> 00:16:07,450 KT: here is my question. My parents have... 267 00:16:07,460 --> 00:16:09,369 Suze: Any bidders on that. Anyone take me up on a 268 00:16:09,380 --> 00:16:12,900 Suze: bid on that. Anybody saying yes, I'll take $5 saying that... 269 00:16:13,179 --> 00:16:15,830 KT: No gambling on Suze Orman's show. 270 00:16:16,169 --> 00:16:18,549 Suze: I hate gambling just so, you know. 271 00:16:19,599 --> 00:16:22,919 KT: She does. But I love roulette and... 272 00:16:22,929 --> 00:16:24,059 Suze: We fight about it. 273 00:16:24,070 --> 00:16:26,190 KT: I love that game. I love that game. 274 00:16:26,922 --> 00:16:28,603 KT: I never win. But I have so much fun. 275 00:16:28,893 --> 00:16:31,163 Suze: It kills me even if she loses $10. 276 00:16:31,172 --> 00:16:33,953 KT: All right, I have fun playing that game. Ok, here 277 00:16:33,963 --> 00:16:37,562 KT: is my question. My parents have told us they have put... 278 00:16:37,572 --> 00:16:40,682 Suze: I'm gonna get you for your birthday, A roulette game, 279 00:16:40,742 --> 00:16:44,362 Suze: a roulette reel that you can play right here and 280 00:16:44,372 --> 00:16:45,802 Suze: never lose any money again. 281 00:16:45,812 --> 00:16:46,203 KT: Really? 282 00:16:46,796 --> 00:16:49,955 KT: And when you're playing with other people, is it? You 283 00:16:49,966 --> 00:16:53,096 KT: all have to come on, you have to like, I 284 00:16:53,106 --> 00:16:56,366 KT: like that game. All right, ready. Here is my question. 285 00:16:56,375 --> 00:16:59,325 KT: My parents have told us that they have put everything 286 00:16:59,335 --> 00:17:03,375 KT: into a trust which upon their death will be split 287 00:17:03,385 --> 00:17:06,255 KT: evenly to my two siblings. And 288 00:17:07,060 --> 00:17:10,159 KT: they won't say more than that. So I don't know 289 00:17:10,170 --> 00:17:13,640 KT: what they have in the trust other than the house 290 00:17:13,880 --> 00:17:16,760 KT: a few weeks ago, my father told me it would 291 00:17:16,770 --> 00:17:20,680 KT: be a sizable amount when I said we would plan 292 00:17:20,689 --> 00:17:25,079 KT: to give everything to charity. He made me promise that 293 00:17:25,089 --> 00:17:28,339 KT: what he left me would go to my brother and 294 00:17:28,349 --> 00:17:31,000 KT: his kids before I died. 295 00:17:31,349 --> 00:17:35,069 KT: I do not agree. If the total is broken in thirds, 296 00:17:35,219 --> 00:17:38,750 KT: I should have to do what he's asking. What would 297 00:17:38,760 --> 00:17:39,930 KT: you tell him? 298 00:17:39,989 --> 00:17:41,849 Suze: I would tell him he's right. 299 00:17:42,589 --> 00:17:45,688 Suze: And Sarah, the reason I would say that your father 300 00:17:45,699 --> 00:17:47,170 Suze: has the ability 301 00:17:47,849 --> 00:17:50,630 Suze: to do whatever he wants with his money 302 00:17:51,349 --> 00:17:55,050 Suze: and he has generously left it to the three of you. 303 00:17:55,500 --> 00:17:57,969 Suze: And he has wishes for this money. 304 00:17:58,369 --> 00:18:03,159 Suze: He cares more about the kids, his kids, his kids 305 00:18:03,359 --> 00:18:06,149 Suze: and that if you were to die, he would want 306 00:18:06,160 --> 00:18:09,429 Suze: what he left you to go to his kids. Now, 307 00:18:09,439 --> 00:18:12,228 Suze: he can do that. By the way, he could put 308 00:18:12,239 --> 00:18:15,449 Suze: it in an irrevocable trust and make it mandatory that 309 00:18:15,459 --> 00:18:18,829 Suze: that happens, he can set it up. So you don't 310 00:18:18,839 --> 00:18:22,260 Suze: have a choice with what you do with that money. 311 00:18:22,969 --> 00:18:26,930 Suze: So as much as you want to leave it to charity, 312 00:18:27,849 --> 00:18:31,079 Suze: you have to respect the wishes of daddy. You just do. 313 00:18:32,170 --> 00:18:33,520 KT: Sarah, I agree with Suze. 314 00:18:33,670 --> 00:18:36,409 Suze: And also I just want to say you may think 315 00:18:36,420 --> 00:18:39,589 Suze: that you're doing really, really well right now and that 316 00:18:39,599 --> 00:18:42,329 Suze: you have all the money in the world and therefore 317 00:18:42,339 --> 00:18:46,400 Suze: what you get, you wanna leave to charity, but you 318 00:18:46,410 --> 00:18:50,510 Suze: never know what can happen. So you put it in 319 00:18:50,520 --> 00:18:52,030 Suze: a trust for yourself 320 00:18:52,390 --> 00:18:56,430 Suze: and you're young, this has just happened and now all 321 00:18:56,439 --> 00:18:59,119 Suze: of a sudden you're in a car accident and you're 322 00:18:59,130 --> 00:19:04,729 Suze: seriously injured and you need to use that money or 323 00:19:04,739 --> 00:19:07,410 Suze: the mere fact is you put it in a trust, 324 00:19:07,420 --> 00:19:10,969 Suze: leaving it to charity and you die in a car 325 00:19:10,979 --> 00:19:13,750 Suze: accident or you get ill and you die right away 326 00:19:13,790 --> 00:19:16,109 Suze: and now that money goes to charity and there really 327 00:19:16,119 --> 00:19:18,290 Suze: isn't enough for your family 328 00:19:18,599 --> 00:19:20,540 Suze: to live the way you want them to live because 329 00:19:20,550 --> 00:19:25,560 Suze: maybe your income then has been cut off. So I 330 00:19:25,569 --> 00:19:28,379 Suze: don't have a problem with you leaving maybe the interest 331 00:19:28,390 --> 00:19:33,349 Suze: on that money to charity or some of it to charity, 332 00:19:33,439 --> 00:19:38,199 Suze: but to leave it all to charity against your father's wishes. 333 00:19:38,449 --> 00:19:41,729 Suze: Be very careful girlfriend. Don't be surprised 334 00:19:42,359 --> 00:19:46,810 Suze: if he doesn't leave you that third at all. Do 335 00:19:46,819 --> 00:19:52,569 Suze: what your father is asking you, respect him, respect him and, 336 00:19:52,579 --> 00:19:57,060 Suze: and respect his money. It's his money, sweetheart. It's his money. 337 00:19:57,069 --> 00:19:58,010 Suze: It's his wish. 338 00:19:58,829 --> 00:20:01,050 KT: Ok. Next is from Josefina. 339 00:20:01,380 --> 00:20:04,920 KT: Hi, KT and Suze. I'm a long time follower of 340 00:20:04,930 --> 00:20:10,319 KT: your podcast and books. I've gotten into debt for multiple reasons, 341 00:20:10,329 --> 00:20:14,229 KT: but mostly after COVID and trying to keep my house, 342 00:20:14,239 --> 00:20:17,839 KT: which at this point is my biggest asset. This is 343 00:20:17,849 --> 00:20:20,689 KT: a little sad, Suze. She's 59 years old. She has 344 00:20:20,699 --> 00:20:24,640 KT: about 20,000 left in her retirement savings. 345 00:20:25,130 --> 00:20:27,630 KT: And at this point, she has a few CDs and 346 00:20:27,640 --> 00:20:34,410 KT: Roth IRA at Alliant . Her total debt is $40,000. I've 347 00:20:34,420 --> 00:20:37,719 KT: been thinking about getting a HELOC to pay for my 348 00:20:37,729 --> 00:20:39,510 KT: higher interest credit card. 349 00:20:39,540 --> 00:20:42,339 Suze: KT, just tell me again, what is her house worth? 350 00:20:42,579 --> 00:20:45,540 KT: Wait, here it comes. My house is valued in the 351 00:20:45,550 --> 00:20:45,739 KT: low 352 00:20:45,854 --> 00:20:50,665 KT: 400 thousands. So let's say it's 420. My loan is 353 00:20:50,675 --> 00:20:55,655 KT: about 155. She said, Suze, I'm a single parent, with 354 00:20:55,665 --> 00:20:58,135 KT: a 15 year old son. I've been trying to stay 355 00:20:58,145 --> 00:21:02,395 KT: in our home until he finishes high school at this rate. 356 00:21:02,405 --> 00:21:05,064 KT: I'm not sure how I'm gonna get out of this. 357 00:21:05,395 --> 00:21:06,504 KT: Please help. 358 00:21:06,839 --> 00:21:10,739 KT: Yeah, so sweet. She says, God bless you, Suze. She just, 359 00:21:10,750 --> 00:21:14,099 KT: by the way, um Josefina just started a new job 360 00:21:14,109 --> 00:21:18,150 KT: with benefits and she's trying really hard to have her 361 00:21:18,160 --> 00:21:21,760 KT: 401k and match and everything at work. So she's trying 362 00:21:21,770 --> 00:21:24,810 KT: her best to keep a home over her head with 363 00:21:24,819 --> 00:21:25,660 KT: her son. 364 00:21:26,109 --> 00:21:30,000 Suze: So Josefina, first of all, there is a rule of thumb, 365 00:21:30,589 --> 00:21:32,540 Suze: never transfer 366 00:21:32,829 --> 00:21:37,369 Suze: unsecured debt like credit card debt 367 00:21:38,319 --> 00:21:44,170 Suze: to secured debt like a equity line of credit or 368 00:21:44,180 --> 00:21:48,619 Suze: a HELOC in your home. Because if you forfeit on 369 00:21:48,630 --> 00:21:50,160 Suze: your credit card debt, 370 00:21:50,869 --> 00:21:55,448 Suze: they can't take anything from you. They just can't, it's 371 00:21:55,459 --> 00:21:59,430 Suze: unsecured debt. Now, can they try to garnish your wages? 372 00:21:59,439 --> 00:22:01,708 Suze: Can they try to sue you all of those things? 373 00:22:01,719 --> 00:22:05,948 Suze: They can will. They maybe, yes, maybe no, but they 374 00:22:05,959 --> 00:22:10,560 Suze: can't take anything from you. Girlfriend. Number one, if you 375 00:22:10,569 --> 00:22:14,310 Suze: transfer that to a home equity line of credit and 376 00:22:14,319 --> 00:22:18,000 Suze: now you can't afford your mortgage payment and 377 00:22:18,689 --> 00:22:23,910 Suze: this HELOC loan. Now we have some problems because now 378 00:22:23,920 --> 00:22:27,550 Suze: they can come after your home. So that is not 379 00:22:27,560 --> 00:22:32,079 Suze: what we want to do. You have a few choices here. 380 00:22:32,109 --> 00:22:38,688 Suze: One is to go to NFCC .org, got that 381 00:22:39,229 --> 00:22:44,369 Suze: and go there. And that is a nonprofit organization that 382 00:22:44,380 --> 00:22:47,609 Suze: you can sign up with and for about $10 a 383 00:22:47,619 --> 00:22:52,810 Suze: month or so, they look at your situation, they take 384 00:22:52,819 --> 00:22:58,229 Suze: over your credit card debt where they, they pay it 385 00:22:58,239 --> 00:23:05,729 Suze: for you and you pay them. However, because you're paying them, 386 00:23:06,420 --> 00:23:10,900 Suze: they're able to negotiate with the credit card companies usually 387 00:23:10,910 --> 00:23:13,989 Suze: and get a 0% interest rate 388 00:23:14,729 --> 00:23:20,409 Suze: on those credit cards because the credit card company rather 389 00:23:20,420 --> 00:23:22,949 Suze: get something back than nothing. So a lot of times 390 00:23:22,959 --> 00:23:25,969 Suze: they're even funded by the credit card companies, believe it 391 00:23:25,979 --> 00:23:26,468 Suze: or not, 392 00:23:26,699 --> 00:23:30,879 Suze: it will not hurt your FICO score, which I'm sure 393 00:23:30,890 --> 00:23:35,069 Suze: probably isn't that great anyway, and they usually give you 394 00:23:35,079 --> 00:23:39,968 Suze: a five year plan of how to pay them off. 395 00:23:39,979 --> 00:23:43,050 Suze: That is the very, very first thing I would be 396 00:23:43,060 --> 00:23:46,680 Suze: doing if I were you, I would not be taking 397 00:23:46,689 --> 00:23:52,119 Suze: out a HELOC under any circumstance. Number three. 398 00:23:53,079 --> 00:23:56,560 Suze: and maybe you'll like this one, but maybe you won't, 399 00:23:57,010 --> 00:24:01,780 Suze: you have $265,000 of equity in your home and you 400 00:24:01,790 --> 00:24:05,619 Suze: say that you're only trying to hold on to this 401 00:24:06,189 --> 00:24:11,459 Suze: until your child finishes high school and he's 15. So 402 00:24:11,469 --> 00:24:16,419 Suze: we're looking at two years maybe rather than trying to 403 00:24:16,430 --> 00:24:22,219 Suze: stay in the home simply for that reason. Maybe you sell. 404 00:24:22,229 --> 00:24:22,859 Suze: Now 405 00:24:23,709 --> 00:24:28,448 Suze: you see, is there something else that you could buy? Right? 406 00:24:28,459 --> 00:24:32,969 Suze: Or rent and you take $40,000 or whatever it will 407 00:24:32,979 --> 00:24:37,650 Suze: be from what you get, get out of credit card debt. Totally. 408 00:24:37,660 --> 00:24:41,609 Suze: Now it's gone and then you either rent for a 409 00:24:41,619 --> 00:24:45,609 Suze: little bit here or you buy something that is far 410 00:24:45,619 --> 00:24:50,229 Suze: more affordable, a tiny home or whatever. But that's a 411 00:24:50,239 --> 00:24:52,489 Suze: possibility as well. However, 412 00:24:53,109 --> 00:24:55,770 Suze: I need you to look closely at the ability now 413 00:24:55,780 --> 00:24:57,969 Suze: that you have a new job and you have more 414 00:24:57,979 --> 00:25:02,209 Suze: money coming in that if you work with NF... that's 415 00:25:02,219 --> 00:25:08,010 Suze: like in Frank or Francine. So NFCC.org, if you work 416 00:25:08,020 --> 00:25:11,869 Suze: with them and you can afford those payments and still 417 00:25:11,880 --> 00:25:14,929 Suze: put money away for your future, 418 00:25:15,849 --> 00:25:18,550 Suze: then, ok, maybe you can stay in your home and 419 00:25:18,560 --> 00:25:23,010 Suze: let the equity build up in there. But that is 420 00:25:23,020 --> 00:25:25,150 Suze: my suggestion. Ok, KT. 421 00:25:25,160 --> 00:25:25,560 KT: So no HELOC. 422 00:25:26,109 --> 00:25:29,280 Suze: No HELOC - Heck no. Heck no. Ok. 423 00:25:29,290 --> 00:25:32,150 KT: I have one more question for you. All right. All right. 424 00:25:32,569 --> 00:25:37,010 KT: This is from Michelle and it's interesting because I don't, 425 00:25:37,099 --> 00:25:39,359 KT: I don't know if we know the answer, but it's 426 00:25:39,369 --> 00:25:40,709 KT: an interesting thought, 427 00:25:41,119 --> 00:25:47,089 KT: future taxes on Roth accounts. Hello, Suze and KT. Thank 428 00:25:47,099 --> 00:25:49,579 KT: you for, we, we get these, these are like questions 429 00:25:49,589 --> 00:25:51,089 KT: that keep people up at night. 430 00:25:51,489 --> 00:25:54,339 KT: Thank you for all your great advice, especially on the 431 00:25:54,349 --> 00:25:59,109 KT: Roth accounts. We will be forever grateful. My husband and 432 00:25:59,119 --> 00:26:02,829 KT: I have been contributing to Roth IRAs since we learned 433 00:26:02,839 --> 00:26:06,910 KT: about them through you. Way back when, because of this, 434 00:26:06,920 --> 00:26:10,079 KT: we will be able to control our withdrawals and taxes. 435 00:26:10,180 --> 00:26:13,670 KT: We've saved more in Roth accounts than traditional. How 436 00:26:13,765 --> 00:26:15,734 KT: ever a friend... 437 00:26:15,744 --> 00:26:16,544 Suze: Of course. 438 00:26:17,114 --> 00:26:21,104 KT: Who has... people stop listening to friends, just listen to Suze, 439 00:26:21,314 --> 00:26:23,724 KT: a friend who has worked with, uh, with the IRS 440 00:26:23,734 --> 00:26:25,823 KT: for a very long time says we need to be 441 00:26:25,834 --> 00:26:29,694 KT: careful since the government can change tax rules in the 442 00:26:29,704 --> 00:26:34,494 KT: future to eventually get at our Roth earnings to be taxed. 443 00:26:34,505 --> 00:26:38,744 KT: Is this true? Could the government change the rules to 444 00:26:38,755 --> 00:26:41,343 KT: get a share of our Roth earnings? 445 00:26:41,814 --> 00:26:42,744 Suze: All right. So 446 00:26:43,530 --> 00:26:48,000 Suze: Michelle, here's what I want to say about this. Anything 447 00:26:48,010 --> 00:26:51,859 Suze: is possible. There's no way for me to know. All right. 448 00:26:52,040 --> 00:26:54,069 Suze: But what is the downside here 449 00:26:54,719 --> 00:26:58,458 Suze: truthfully? What is the downside? So, is the downside that 450 00:26:58,469 --> 00:27:01,040 Suze: you don't put money in a Roth and you put 451 00:27:01,050 --> 00:27:04,339 Suze: money in a traditional IRA where you're gonna be taxed 452 00:27:04,349 --> 00:27:07,699 Suze: no matter what, no matter what the government does, they're 453 00:27:07,709 --> 00:27:10,709 Suze: gonna tax that money or do you continue to put 454 00:27:10,719 --> 00:27:14,159 Suze: money into the Roth? And maybe the worst case scenario 455 00:27:14,170 --> 00:27:16,849 Suze: is they tax you on your earnings as your friend 456 00:27:16,859 --> 00:27:21,459 Suze: probably said to you. And so therefore, so what, 457 00:27:22,439 --> 00:27:27,260 Suze: at least that's a littler tax than if you had 100% 458 00:27:27,270 --> 00:27:30,790 Suze: of the money in a retirement account taxed if you 459 00:27:30,800 --> 00:27:32,629 Suze: didn't do a Roth. However, 460 00:27:33,260 --> 00:27:37,680 Suze: I have, as I've said before, a really hard time 461 00:27:37,689 --> 00:27:42,839 Suze: thinking that they are going to do this. Why? Because 462 00:27:42,849 --> 00:27:47,880 Suze: in the latest version of Secure Act 2.0 that they 463 00:27:47,890 --> 00:27:53,160 Suze: did in December of 2022. What did they do? 464 00:27:53,910 --> 00:27:57,479 Suze: They made it possible. So for the first time, there 465 00:27:57,489 --> 00:28:01,819 Suze: could be a Roth 401k that an employer matches the 466 00:28:01,829 --> 00:28:05,349 Suze: first time you could have a SEP Roth. The first 467 00:28:05,359 --> 00:28:09,900 Suze: time that you could have a simple Roth, they instituted 468 00:28:09,910 --> 00:28:16,060 Suze: additional Roth plans for more people to put money into Roths. 469 00:28:16,069 --> 00:28:19,869 Suze: Why did they do that? Because they need the tax 470 00:28:19,880 --> 00:28:22,260 Suze: money right now. 471 00:28:22,949 --> 00:28:27,739 Suze: Not years from now. But right now, and I find 472 00:28:27,750 --> 00:28:32,680 Suze: it very hard to believe that maybe one day they'll 473 00:28:32,689 --> 00:28:37,459 Suze: change it. But they'll grandfather in those of you who 474 00:28:37,469 --> 00:28:41,979 Suze: already did it, they can't go back on it and 475 00:28:41,989 --> 00:28:47,599 Suze: not have a serious revolt. Now again, they can do anything. 476 00:28:47,939 --> 00:28:51,420 Suze: But what is the alternative? So, what did your friend 477 00:28:51,430 --> 00:28:54,310 Suze: at the IRS say to you? Oh, so right now 478 00:28:54,319 --> 00:28:56,660 Suze: you should just put money in a traditional ira, a 479 00:28:56,670 --> 00:29:03,089 Suze: traditional 401k and pay your taxes when you take it out. Really? Everybody. 480 00:29:03,369 --> 00:29:08,719 Suze: What do you have to lose? Nothing? Do not stop 481 00:29:08,729 --> 00:29:11,719 Suze: contributing to a Roth account. 482 00:29:12,589 --> 00:29:15,109 Suze: I hope your friend enjoys working for the IRS. But 483 00:29:15,119 --> 00:29:17,469 Suze: that's besides the point. All right. 484 00:29:17,479 --> 00:29:20,930 KT: So I'm looking at Suze and I'm putting my hand 485 00:29:20,939 --> 00:29:23,930 KT: over my heart, which is my signal for her on 486 00:29:23,939 --> 00:29:28,819 KT: the radio or on the podcast. Come from love. Be kind, 487 00:29:28,829 --> 00:29:29,890 KT: be calm. 488 00:29:30,040 --> 00:29:33,180 Suze: But no. Well, all right, KT, I want to say 489 00:29:33,189 --> 00:29:37,520 Suze: something here. It's very difficult for me 490 00:29:38,719 --> 00:29:45,160 Suze: to be calm about things like that. It is, it's 491 00:29:45,170 --> 00:29:49,619 Suze: difficult for me to be calm about somebody whose friend 492 00:29:49,630 --> 00:29:54,180 Suze: suggests to them that they buy a universal life index policy. 493 00:29:54,510 --> 00:29:58,939 Suze: It's hard for me to stay calm when I know 494 00:29:58,949 --> 00:30:02,530 Suze: that that advice is going to financially hurt somebody. 495 00:30:03,569 --> 00:30:06,520 Suze: It, it goes to the very core of why I've 496 00:30:06,530 --> 00:30:10,439 Suze: spent 40 years doing this, but that's why KT, it's 497 00:30:10,449 --> 00:30:13,319 Suze: so difficult for me. I get that. I take it 498 00:30:13,329 --> 00:30:16,699 Suze: to heart. Do you think I spend the hours I 499 00:30:16,709 --> 00:30:23,479 Suze: spend every day answering these emails for people to what end? 500 00:30:24,069 --> 00:30:26,630 Suze: I'm not making money off of them. I'm not getting 501 00:30:26,640 --> 00:30:30,599 Suze: their investments to what end to make, let them sleep 502 00:30:30,609 --> 00:30:32,349 Suze: at night to help and to make sure that they're 503 00:30:32,359 --> 00:30:36,819 Suze: ok that they're more than ok. So of course, I 504 00:30:36,829 --> 00:30:38,770 Suze: take it to heart. 505 00:30:39,869 --> 00:30:42,010 Suze: All right. Ready for your quizzy, Missy. 506 00:30:43,619 --> 00:30:44,810 KT: I hope it's a nice one. 507 00:30:45,609 --> 00:30:49,219 Suze: This one's from Marisol. Do all of you just enjoy 508 00:30:49,229 --> 00:30:53,439 Suze: hearing KT and I banter? I know Robert does. Anyway, 509 00:30:53,599 --> 00:30:56,339 Suze: dear Suze. And you all know by now what a 510 00:30:56,349 --> 00:31:01,739 Suze: quizzy is. Can you answer this yourself everybody dear, Suze. 511 00:31:02,400 --> 00:31:09,219 Suze: My question is if I keep rolling over money from 512 00:31:09,229 --> 00:31:12,260 Suze: a traditional IRA to a Roth, 513 00:31:12,900 --> 00:31:18,239 Suze: will that income be considered ordinary income? 514 00:31:19,459 --> 00:31:24,209 Suze: Even though it's going in into a Roth RA, I 515 00:31:24,219 --> 00:31:28,680 Suze: am planning to do that for 10 years after that. 516 00:31:28,689 --> 00:31:34,599 Suze: Will it be re evaluated for part D on Medicare? 517 00:31:36,069 --> 00:31:37,770 Suze: Did that make sense to you, KT? 518 00:31:37,780 --> 00:31:39,770 KT: I, I know the answer already. 519 00:31:40,020 --> 00:31:42,969 Suze: You do? All right. Well, let everybody think about it 520 00:31:42,979 --> 00:31:46,449 Suze: just to be clear with all of you, right? Which 521 00:31:46,459 --> 00:31:47,329 Suze: is 522 00:31:48,329 --> 00:31:54,469 Suze: this person is moving money from a traditional IRA to 523 00:31:54,479 --> 00:31:59,250 Suze: a Roth wants to know will that be considered ordinary income? 524 00:31:59,640 --> 00:32:05,209 Suze: And therefore, will it affect her Medicare B premiums number 525 00:32:05,219 --> 00:32:10,550 Suze: one even though it's going into a Roth IRA because 526 00:32:10,560 --> 00:32:15,069 Suze: she is planning to do this for 10 years and 527 00:32:15,079 --> 00:32:16,109 Suze: after that, 528 00:32:16,810 --> 00:32:19,439 Suze: will it be re evaluated 529 00:32:21,020 --> 00:32:25,439 Suze: for Medicare B premiums? Did that make sense to you? 530 00:32:25,650 --> 00:32:26,770 KT: I have the answer. 531 00:32:26,780 --> 00:32:28,489 Suze: All right. Go on. 532 00:32:29,109 --> 00:32:32,869 KT: The answer is yes, it is gonna be considered income. 533 00:32:32,880 --> 00:32:34,219 Suze: What kind of income? 534 00:32:34,390 --> 00:32:34,900 KT: What do you mean? 535 00:32:34,910 --> 00:32:37,829 Suze: What kind of capital gains or ordinary income? 536 00:32:37,859 --> 00:32:38,609 KT: Ordinary. 537 00:32:38,959 --> 00:32:42,010 Suze: So taxable at whatever her tax rate is. So it's 538 00:32:42,020 --> 00:32:45,969 Suze: ordinary income, it's taxable and yes, it will be a value. 539 00:32:46,244 --> 00:32:50,665 Suze: Now, I don't know if it's evaluated every year or 540 00:32:50,675 --> 00:32:54,574 Suze: the year that you take Medicare. It is absolutely evaluated 541 00:32:54,584 --> 00:32:59,775 Suze: every year because you would pay taxes on your Medicare 542 00:32:59,785 --> 00:33:02,834 Suze: part B premium based. 543 00:33:04,560 --> 00:33:08,979 Suze: You. I'm gonna kill you today. You pay taxes. Everybody 544 00:33:09,079 --> 00:33:10,920 Suze: on your. What are you laughing at? 545 00:33:13,109 --> 00:33:14,729 Suze: Aren't you laughing? What are you laughing? 546 00:33:14,739 --> 00:33:17,319 KT: Because I, when I get my statements, I say Suze, 547 00:33:17,329 --> 00:33:20,949 KT: they took so much money out of my Medicare, they 548 00:33:20,959 --> 00:33:24,430 KT: take almost four or 500 they make like $500 a month. Yeah, 549 00:33:24,439 --> 00:33:26,790 KT: that's what I pay everybody. So I know the answer 550 00:33:26,800 --> 00:33:27,339 KT: to this. 551 00:33:27,790 --> 00:33:30,770 Suze: But that's because you make so much money, right? So 552 00:33:30,780 --> 00:33:35,489 Suze: you're paying absolutely had the highest possible Medicare B premium. 553 00:33:35,500 --> 00:33:39,660 Suze: And so am I. But anyway, what was I saying, 554 00:33:39,670 --> 00:33:42,209 Suze: KT when you so rudely started to laugh, 555 00:33:43,739 --> 00:33:46,670 Suze: do you even remember where I was? You were saying that, 556 00:33:46,680 --> 00:33:51,800 Suze: you know everybody, why they evaluate you every year? All right. 557 00:33:51,949 --> 00:33:53,890 Suze: I'm not sure that's what I was saying to everybody. 558 00:33:53,900 --> 00:33:55,599 Suze: But let's just see if I can pick up from 559 00:33:55,609 --> 00:34:00,239 Suze: where I was. She always interrupts me anyway, what you 560 00:34:00,250 --> 00:34:04,339 Suze: have to really understand. First of all, Marisol, besides the 561 00:34:04,349 --> 00:34:06,930 Suze: fact that it's gonna be taxed as ordinary income, 562 00:34:07,209 --> 00:34:11,989 Suze: you are also converting money, you're not rolling it, you're 563 00:34:12,000 --> 00:34:16,040 Suze: not transferring it. You are converting it from a pre 564 00:34:16,050 --> 00:34:20,330 Suze: tax situation to a tax free situation. So every year 565 00:34:20,340 --> 00:34:25,330 Suze: you do that, the five year holding period starts all 566 00:34:25,340 --> 00:34:28,120 Suze: over again just so you know that. So you also 567 00:34:28,129 --> 00:34:31,699 Suze: have to consider that and after 10 years when you 568 00:34:31,709 --> 00:34:33,299 Suze: are done doing this, 569 00:34:33,590 --> 00:34:36,949 Suze: based on how much income you have from other sources 570 00:34:36,959 --> 00:34:41,080 Suze: as well is what will determine what your Medicare B 571 00:34:41,090 --> 00:34:43,649 Suze: premium will be, 572 00:34:45,610 --> 00:34:50,560 Suze: right? We made it through that one, we made it through. Right KT. 573 00:34:50,770 --> 00:34:52,050 Suze: You want to take us out. 574 00:34:52,250 --> 00:34:55,520 KT: Remember everyone, there's only one thing that you have to 575 00:34:55,530 --> 00:34:56,399 KT: keep in mind. 576 00:34:56,429 --> 00:34:57,580 Suze: What is that KT? 577 00:34:57,590 --> 00:35:01,229 KT: People first, then money, then things. 578 00:35:01,239 --> 00:35:02,899 Suze: Then what happens, KT? 579 00:35:02,909 --> 00:35:05,750 KT: You will be unstoppable. 580 00:35:05,760 --> 00:35:09,138 Suze: That's my girl. See you all soon. Bye bye.