1 00:00:01,080 --> 00:00:01,700 Music: Music (in). 2 00:00:35,630 --> 00:00:36,880 KT: Good morning, Susie. 3 00:00:37,098 --> 00:00:38,879 Suze: Don't make me laugh before I even start. 4 00:00:38,889 --> 00:00:40,099 KT: Good morning Suze... 5 00:00:41,080 --> 00:00:44,958 Suze: July 6th, 2023. 6 00:00:45,799 --> 00:00:47,389 KT: Oh, it's Amy's birthday. 7 00:00:47,869 --> 00:00:49,110 Suze: But wait, KT. 8 00:00:50,380 --> 00:00:53,310 KT: Ok. And it's welcome to the Women and Money podcast. 9 00:00:53,319 --> 00:00:59,860 KT: Ask Suze anything via KT! and it's Amy's... 10 00:01:00,099 --> 00:01:04,019 Suze: It's gonna be one of those days... stop for one second. 11 00:01:04,160 --> 00:01:07,459 Suze: Welcome everybody to the Women and Money podcast as well 12 00:01:07,470 --> 00:01:12,000 Suze: as everybody smart enough to listen. Today is Ask KT 13 00:01:12,010 --> 00:01:17,459 Suze: and Suze Anything. And here's what's really important about today. 14 00:01:17,529 --> 00:01:23,550 Suze: It's Amy Feller's birthday. Now, why are we making such 15 00:01:23,559 --> 00:01:24,680 Suze: a big deal about that? 16 00:01:24,989 --> 00:01:27,000 KT: Because we have celebrated 17 00:01:27,300 --> 00:01:32,229 KT: my goodness, probably almost 20 years of birthdays with Amy. 18 00:01:32,290 --> 00:01:33,980 Suze: Amy Feller was the executive 19 00:01:33,989 --> 00:01:36,440 Suze: producer of the Suze Orman 20 00:01:36,449 --> 00:01:40,599 Suze: show and we've been through so much together and we 21 00:01:40,610 --> 00:01:43,389 Suze: are still really, really 22 00:01:43,504 --> 00:01:44,214 Suze: great friends. 23 00:01:44,525 --> 00:01:47,785 KT: She does not like to celebrate her birthday. She does 24 00:01:47,794 --> 00:01:50,584 KT: not like to be in the center of attention like 25 00:01:50,595 --> 00:01:55,364 KT: me and we wish you were here fishing with us, Amy. 26 00:01:55,614 --> 00:01:57,595 Suze: We love you, Amy. So, all right. 27 00:01:57,605 --> 00:01:59,235 KT: Have a great day. 28 00:02:00,220 --> 00:02:02,139 Suze: Ok. KT, where are we going today? 29 00:02:02,150 --> 00:02:05,489 KT: Ok. Well, our first question is from Joshua and it's, 30 00:02:05,500 --> 00:02:08,710 KT: this makes me sad. And this is right up your alley, Suze, 31 00:02:08,720 --> 00:02:11,589 KT: you are the expert of student loans. 32 00:02:13,119 --> 00:02:14,119 Suze: Actually Mark Kantrowitz is. But that's besides the point. 33 00:02:14,240 --> 00:02:15,270 KT: Well, you and Mark. So this is... 34 00:02:15,679 --> 00:02:17,990 Suze: No, I am not in the league of Mark just 35 00:02:18,000 --> 00:02:20,419 Suze: so you know he is over the top brilliant. 36 00:02:20,429 --> 00:02:23,490 KT: Ok, so this is a hi KT and Suze. 37 00:02:23,788 --> 00:02:28,820 KT: Suze, It's such a disappointment on the SCOTUS ruling regarding 38 00:02:28,830 --> 00:02:32,960 KT: student loans seems like a disappointment on all their rulings 39 00:02:32,970 --> 00:02:36,860 KT: as of recent, my question is relating to advice on 40 00:02:36,869 --> 00:02:40,619 KT: paying back the amount that was supposed to be forgiven. 41 00:02:40,940 --> 00:02:44,990 KT: I had $16,000 refunded back to me since that was 42 00:02:45,000 --> 00:02:49,360 KT: the amount I had paid during the COVID student loan freeze. 43 00:02:49,550 --> 00:02:52,669 KT: That amount was added back to my loan which still 44 00:02:52,679 --> 00:02:58,630 KT: had an existing $13,000. Thus my outstanding loan amount is 45 00:02:58,639 --> 00:03:00,449 KT: now 26,000. 46 00:03:00,880 --> 00:03:05,000 KT: But now that Biden's student loan forgiveness has been overturned. 47 00:03:05,070 --> 00:03:08,479 KT: I don't know if I should pay back the 16,000 48 00:03:08,490 --> 00:03:11,169 KT: that was sent back to me or hang on to 49 00:03:11,179 --> 00:03:13,789 KT: it or pay some of it back. I have the 50 00:03:13,800 --> 00:03:18,289 KT: money sitting in my Alliant ultimate opportunity savings account getting 51 00:03:18,300 --> 00:03:21,769 KT: a high interest rate, but my student loan interest rate 52 00:03:21,779 --> 00:03:25,350 KT: is 5.5% Suze, what should I do? 53 00:03:25,710 --> 00:03:28,539 Suze: I don't like to comment about what's happening in the 54 00:03:28,550 --> 00:03:31,220 Suze: United States right now with the Supreme Court, 55 00:03:31,979 --> 00:03:35,589 Suze: but especially for people like me and KT and the 56 00:03:35,600 --> 00:03:39,910 Suze: students out there and many other things, I just think 57 00:03:39,919 --> 00:03:43,270 Suze: it's a travesty. What can I tell you the ruling 58 00:03:43,279 --> 00:03:47,289 Suze: is the ruling. So now what do we do for 59 00:03:47,300 --> 00:03:49,190 Suze: those of you who don't know, 60 00:03:50,039 --> 00:03:53,289 Suze: you are going to have to start making student loan 61 00:03:53,300 --> 00:03:59,440 Suze: payments again. October 1st of this year, interest will start 62 00:03:59,449 --> 00:04:04,619 Suze: to accumulate as of September of this year. 63 00:04:05,009 --> 00:04:08,699 Suze: So there will not be any student loan forgiveness. You 64 00:04:08,710 --> 00:04:11,419 Suze: are going to have to pay it for those of 65 00:04:11,429 --> 00:04:13,860 Suze: you who have been on a moratorium and you haven't 66 00:04:13,869 --> 00:04:17,100 Suze: been paying your student loans because you haven't had to, 67 00:04:17,109 --> 00:04:21,000 Suze: you are now going to have to but in relationship 68 00:04:21,010 --> 00:04:22,299 Suze: to you, Joshua, 69 00:04:22,790 --> 00:04:27,500 Suze: I know, I know, however, you are at least lucky 70 00:04:27,510 --> 00:04:31,559 Suze: enough to get $16,000 that was sent back to you 71 00:04:31,579 --> 00:04:35,279 Suze: that has been sitting where it's been sitting in an 72 00:04:35,290 --> 00:04:39,329 Suze: account making interest at Alliant. So that's a gift to 73 00:04:39,339 --> 00:04:42,850 Suze: you and now we just start all over again. So 74 00:04:42,859 --> 00:04:46,109 Suze: what do you do? You take that $16,000 and you 75 00:04:46,119 --> 00:04:48,950 Suze: pay it directly back to your student loan since it's 76 00:04:48,959 --> 00:04:51,559 Suze: the highest interest rate, I'm sure out of anything that 77 00:04:51,570 --> 00:04:52,459 Suze: you are paying 78 00:04:52,690 --> 00:04:57,299 Suze: and therefore you just start over and therefore you're gonna 79 00:04:57,309 --> 00:05:02,779 Suze: go back to having only $13,000 of a student loan 80 00:05:02,790 --> 00:05:07,250 Suze: versus 26. And I think you'll feel better about that. 81 00:05:07,309 --> 00:05:10,600 Suze: You just have to do it, boyfriend. All right. 82 00:05:11,170 --> 00:05:13,600 KT: All right, Suze. Next is from Tori. 83 00:05:13,970 --> 00:05:18,299 KT: Help. It took me years to convince my parents to 84 00:05:18,309 --> 00:05:21,420 KT: put their home in a trust from the must have 85 00:05:21,428 --> 00:05:26,738 KT: documents and now my dad wants to remove it. His friend, 86 00:05:26,750 --> 00:05:30,950 KT: a former finance executive who knows a lot about this stuff. 87 00:05:30,959 --> 00:05:34,059 KT: She writes his words, not mine 88 00:05:34,279 --> 00:05:37,839 KT: is removing his own home from his trust because he 89 00:05:37,850 --> 00:05:41,809 KT: says the trust is not a tax advantage, therefore not 90 00:05:41,820 --> 00:05:45,488 KT: worth it to his family. Now, my dad is considering 91 00:05:45,500 --> 00:05:48,469 KT: doing the same and he has a tendency to make 92 00:05:48,480 --> 00:05:52,099 KT: rash decisions. I tried to explain to him that the 93 00:05:52,109 --> 00:05:57,209 KT: main benefit of having a trust is the incapacity clause, 94 00:05:57,428 --> 00:05:59,769 KT: but I also know it would help us avoid the 95 00:05:59,779 --> 00:06:00,988 KT: hassle of probate. 96 00:06:01,290 --> 00:06:05,100 KT: Now, she's from the state of Tennessee. Suze, probate takes 97 00:06:05,109 --> 00:06:08,229 KT: 6 to 12 months in that state. So Suze, how 98 00:06:08,238 --> 00:06:11,459 KT: can I convince him that removing it is a bad decision? 99 00:06:11,470 --> 00:06:15,229 KT: Can you explain the tax implications if my parents decide 100 00:06:15,299 --> 00:06:18,500 KT: to sell the house before they die as well as 101 00:06:18,510 --> 00:06:19,839 KT: the tax implications 102 00:06:20,279 --> 00:06:25,039 KT: if they die while they're still homeowners, financially speaking, with 103 00:06:25,049 --> 00:06:29,899 KT: the capital gain cost, exceed probate fees. Is there any 104 00:06:29,910 --> 00:06:33,779 KT: way to reduce the taxable gains, for reference, their home 105 00:06:33,790 --> 00:06:38,329 KT: has increased in value, by 400,000 since the purchase. 106 00:06:39,329 --> 00:06:45,359 Suze: So many questions here. This is the entire podcast. Everybody. Right. 107 00:06:45,570 --> 00:06:45,839 Suze: And 108 00:06:48,730 --> 00:06:54,269 Suze: just because somebody is a financial executive doesn't mean that 109 00:06:54,279 --> 00:06:59,570 Suze: they make wise financial moves. I personally have counseled so 110 00:06:59,579 --> 00:07:05,178 Suze: many people in the financial industry that have made serious mistakes. 111 00:07:05,190 --> 00:07:07,950 Suze: They didn't know this, they didn't know that. And the 112 00:07:07,959 --> 00:07:13,209 Suze: realm of personal finance, what you do personally, 113 00:07:13,739 --> 00:07:17,549 Suze: which is what my expertise is, is an area that 114 00:07:17,559 --> 00:07:21,828 Suze: nine out of 10 of the professional finance so-called people 115 00:07:21,839 --> 00:07:26,309 Suze: have no idea. Picking a mutual fund or a stock 116 00:07:26,320 --> 00:07:30,390 Suze: is very different. Then, should you have a Roth IRA? 117 00:07:30,399 --> 00:07:32,029 Suze: Should you have a trust? What do you do with 118 00:07:32,040 --> 00:07:34,450 Suze: the 529 all of that. 119 00:07:34,739 --> 00:07:39,750 Suze: So Tori maybe, you know, your father can listen to 120 00:07:39,760 --> 00:07:45,369 Suze: this podcast because dad here's the thing, let's say you've 121 00:07:45,380 --> 00:07:48,779 Suze: listened to somebody and they've said that there's no tax 122 00:07:48,790 --> 00:07:51,980 Suze: advantage to it. Well, of course, there's not, there never 123 00:07:51,989 --> 00:07:56,049 Suze: is a tax advantage when it comes to revocable living trust. 124 00:07:56,059 --> 00:07:58,690 Suze: That is not why you do it. 125 00:07:59,380 --> 00:08:03,010 Suze: But the fact of the matter is there's no disadvantage 126 00:08:03,019 --> 00:08:06,570 Suze: to it at all when it comes to taxes. Because 127 00:08:06,579 --> 00:08:10,250 Suze: when you have a living trust, you pay the exact 128 00:08:10,260 --> 00:08:14,209 Suze: same taxes as if it were you without a trust. 129 00:08:14,220 --> 00:08:16,410 Suze: So this so-called wizard that happens 130 00:08:16,494 --> 00:08:19,984 Suze: to be advising you is now going to take the 131 00:08:19,994 --> 00:08:23,445 Suze: steps and convince you to take the steps to take 132 00:08:23,454 --> 00:08:26,875 Suze: the house out of trust, do all of this for what, 133 00:08:26,885 --> 00:08:31,244 Suze: what do you gain nothing. What do you lose so much? 134 00:08:31,255 --> 00:08:33,505 Suze: I can't even begin to tell you. 135 00:08:34,210 --> 00:08:38,789 Suze: So, what you have to understand is that if you 136 00:08:38,799 --> 00:08:42,289 Suze: go to the trouble and you take this out of trust, 137 00:08:42,299 --> 00:08:49,559 Suze: who you are hurting seriously, are your children. Because given 138 00:08:49,570 --> 00:08:54,049 Suze: the fact that it's increased in value by $400,000 that 139 00:08:54,059 --> 00:08:58,250 Suze: means probably it's worth a million dollars now 140 00:08:58,570 --> 00:09:00,659 Suze: and they're gonna have to pay probate fees on a 141 00:09:00,669 --> 00:09:05,460 Suze: million dollars. Are you kidding me? Why would you want 142 00:09:05,469 --> 00:09:08,140 Suze: your Children to do that tax advantage? 143 00:09:08,859 --> 00:09:13,689 Suze: That's what you're worried about. No, not on any level. 144 00:09:14,080 --> 00:09:17,140 Suze: What Tori is telling you is true. 145 00:09:18,059 --> 00:09:21,239 Suze: The house is in trust. Can you do me a favor? 146 00:09:21,250 --> 00:09:26,439 Suze: Can you just simply leave it there, Sir? Don't listen 147 00:09:26,450 --> 00:09:29,640 Suze: to somebody who doesn't know on any level what they 148 00:09:29,650 --> 00:09:33,150 Suze: are talking about. And if I sound aggravated right now, 149 00:09:33,159 --> 00:09:34,659 Suze: it's because I am 150 00:09:35,340 --> 00:09:38,270 Suze: because you are about to make one of the biggest 151 00:09:38,280 --> 00:09:42,210 Suze: mistakes you have ever made under the guise of somebody 152 00:09:42,219 --> 00:09:44,909 Suze: who you think knows what they are talking about. I 153 00:09:44,919 --> 00:09:48,429 Suze: don't know. My reputation is the personal finance expert of 154 00:09:48,440 --> 00:09:51,729 Suze: the world. I think you should listen to me. 155 00:09:51,969 --> 00:09:56,530 Suze: So hopefully Tori, this has convinced him from making one 156 00:09:56,539 --> 00:09:59,700 Suze: of the worst decisions in his life. You then go 157 00:09:59,710 --> 00:10:02,960 Suze: on to ask, can I explain the tax implications if 158 00:10:02,969 --> 00:10:06,909 Suze: my parents decide to sell the house before they die. Yeah. 159 00:10:07,109 --> 00:10:11,409 Suze: Whether it's in trust out of trust makes no difference 160 00:10:11,419 --> 00:10:19,460 Suze: at all. So they will get a $500,000 exemption, $250,000 161 00:10:19,469 --> 00:10:20,439 Suze: for each of them. 162 00:10:20,690 --> 00:10:24,478 Suze: So, therefore, if they sell the house while they're alive 163 00:10:24,489 --> 00:10:28,369 Suze: and it's only increased by $400,000 in value since they 164 00:10:28,380 --> 00:10:33,840 Suze: purchased it, there is no taxes that they will owe whatsoever. 165 00:10:33,919 --> 00:10:38,150 Suze: Got that. Now, you're asking what are the tax implications 166 00:10:38,159 --> 00:10:42,140 Suze: if they die while they are still homeowners? Nothing 167 00:10:42,700 --> 00:10:46,130 Suze: because here's what's gonna happen. You get to have the 168 00:10:46,140 --> 00:10:49,840 Suze: trust without going through probate. It will be yours in 169 00:10:49,849 --> 00:10:53,939 Suze: about two weeks after they die. You immediately get a 170 00:10:53,950 --> 00:10:57,630 Suze: step up in cost basis as to whatever the value 171 00:10:57,640 --> 00:11:00,710 Suze: is of the house when they die and if you 172 00:11:00,719 --> 00:11:04,549 Suze: turn around and sell the house, you have absolutely no 173 00:11:04,559 --> 00:11:08,690 Suze: taxes on it whatsoever if you do it at that time. 174 00:11:09,020 --> 00:11:13,929 Suze: So you're asking me financially speaking with the capital gains cost, 175 00:11:13,940 --> 00:11:17,409 Suze: exceed probate fees. There aren't going to be capital gains 176 00:11:17,419 --> 00:11:22,109 Suze: cost in either way. So, yeah, your probate fees are 177 00:11:22,119 --> 00:11:26,789 Suze: going to be exorbitant. My dear, one has nothing to 178 00:11:26,799 --> 00:11:30,539 Suze: do with the other. So when you say, is there 179 00:11:30,549 --> 00:11:34,140 Suze: any way to reduce the taxable gains? Yeah, just leave 180 00:11:34,150 --> 00:11:38,169 Suze: everything exactly like it is. 181 00:11:39,219 --> 00:11:42,559 KT: I hope you get your daddy to listen to that. 182 00:11:43,390 --> 00:11:47,650 Suze: Listen to everybody. You better check when you're getting advice 183 00:11:47,659 --> 00:11:50,890 Suze: from somebody who's in the quote financial area or a 184 00:11:50,900 --> 00:11:55,359 Suze: financial executive. What does that even mean? Right. You better 185 00:11:55,369 --> 00:12:00,478 Suze: check it twice. A living revocable trust is one of 186 00:12:00,489 --> 00:12:04,080 Suze: the best things in most cases, every single one of 187 00:12:04,090 --> 00:12:07,150 Suze: you could ever have. But then you know how to 188 00:12:07,159 --> 00:12:09,969 Suze: do it if you've been listening to this podcast. All right, KT, 189 00:12:10,130 --> 00:12:11,929 KT: Next question is from John. 190 00:12:12,570 --> 00:12:15,419 KT: I am over 62 and I want to take some 191 00:12:15,429 --> 00:12:19,940 KT: college classes. Can I open a 529 plan for me? 192 00:12:19,950 --> 00:12:24,209 KT: And then what I don't use, give to my beneficiaries 193 00:12:24,340 --> 00:12:28,140 KT: thinking fidelity is a good place to open one. Thanks 194 00:12:28,270 --> 00:12:29,159 KT: from John. 195 00:12:29,489 --> 00:12:33,819 Suze: So John, I answered you very quickly. Actually, I personally answered 196 00:12:33,830 --> 00:12:37,619 Suze: you and I said, yes, you can do this right. However, 197 00:12:37,640 --> 00:12:41,919 Suze: you can open, anybody can open a 529 plan 198 00:12:42,140 --> 00:12:46,689 Suze: for themselves and they can also, obviously they're the owner 199 00:12:46,700 --> 00:12:49,869 Suze: of it. They can also be the beneficiary of it, right. 200 00:12:49,880 --> 00:12:54,819 Suze: But what you don't use can be transferred to a 201 00:12:54,830 --> 00:12:58,719 Suze: beneficiary who, who can then only use it for a 202 00:12:58,729 --> 00:13:03,000 Suze: college expense as well. I don't know. I think at 203 00:13:03,010 --> 00:13:07,569 Suze: the age of 62 seriously and you plan to possibly 204 00:13:07,580 --> 00:13:08,289 Suze: take some college 205 00:13:08,580 --> 00:13:12,799 Suze: classes, I personally would just simply do what pay for 206 00:13:12,809 --> 00:13:17,419 Suze: the college classes outright over. And if you want to 207 00:13:17,429 --> 00:13:21,039 Suze: leave money to beneficiaries, just leave it to them that way, 208 00:13:21,049 --> 00:13:24,520 Suze: not through a 5 29 plan. 209 00:13:25,179 --> 00:13:26,919 KT: Next is RJ. 210 00:13:27,340 --> 00:13:30,489 KT: It seems to me that the high interest rates are 211 00:13:30,500 --> 00:13:35,580 KT: available for short term CD S3 to 18 months if 212 00:13:35,590 --> 00:13:38,510 KT: I want to invest for 3 to 5 years, I 213 00:13:38,520 --> 00:13:45,199 KT: believe that MYGAs multiyear guaranteed annuities might be a way 214 00:13:45,210 --> 00:13:48,429 KT: to go. I know that I will basically tie up 215 00:13:48,440 --> 00:13:52,719 KT: the principal money because of a surrender charge schedule. What 216 00:13:52,729 --> 00:13:53,330 KT: about the 217 00:13:53,431 --> 00:13:56,940 KT: rating of the companies? Do I look for a plus 218 00:13:56,950 --> 00:13:59,241 KT: and up or lower is ok. 219 00:13:59,431 --> 00:14:01,930 Suze: All right. Listen to me, let me just answer this very quickly, 220 00:14:01,940 --> 00:14:04,401 Suze: which is don't do this. Can you just do me 221 00:14:04,410 --> 00:14:09,130 Suze: a favor? RJ? Why? Who gave you this idea? Multiyear 222 00:14:09,140 --> 00:14:12,231 Suze: guaranteed annuities are just simply annuities and you know, I 223 00:14:12,241 --> 00:14:15,210 Suze: don't have a problem with annuities if they're single premium 224 00:14:15,221 --> 00:14:19,190 Suze: deferred annuities, but a multiyear guaranteed annuity is where 225 00:14:19,521 --> 00:14:22,601 Suze: essentially it's a CD where it goes out multi years 226 00:14:22,611 --> 00:14:25,921 Suze: and they give you X interest rate on it fine. 227 00:14:25,932 --> 00:14:28,802 Suze: But there's also a surrender charge. They're also when you 228 00:14:28,812 --> 00:14:33,492 Suze: come out tax as ordinary income, the interest and it's not, listen, 229 00:14:33,502 --> 00:14:35,622 Suze: I can go on and on. Just do me a 230 00:14:35,632 --> 00:14:39,161 Suze: favor if you're looking for long term, if you want 231 00:14:39,171 --> 00:14:41,752 Suze: to invest for 3 to 5 years, get a 3 232 00:14:41,762 --> 00:14:44,932 Suze: to 5 year certificate of deposit or get a 3 233 00:14:44,942 --> 00:14:45,512 Suze: to 5 year 234 00:14:45,872 --> 00:14:49,833 Suze: treasury note. But can you just stay away from annuities? 235 00:14:49,843 --> 00:14:54,273 Suze: They make absolutely no sense in this situation, especially because 236 00:14:54,283 --> 00:14:59,302 Suze: they are not FDIC insured or NCU A insured. Are 237 00:14:59,312 --> 00:15:03,282 Suze: you kidding me? Don't do it. RJ KT. You see, 238 00:15:03,293 --> 00:15:04,643 Suze: I'm in such a mood now. All right. 239 00:15:04,653 --> 00:15:06,333 KT: Wait, this is good because I'm gonna get through a 240 00:15:06,343 --> 00:15:09,552 KT: lot of questions. This was from Jonathan first. Let me 241 00:15:09,562 --> 00:15:11,603 KT: give you some good news. He said, Suze, 242 00:15:11,703 --> 00:15:15,044 KT: thank you for the FreeVee Suzie Ormn shows. I love 243 00:15:15,054 --> 00:15:18,333 KT: watching them. So all of you, you can watch Suze's 244 00:15:18,343 --> 00:15:22,633 KT: shows on Amazon FreeVee. It's Fabulous. Just go there and 245 00:15:22,643 --> 00:15:23,674 KT: pick anyone you want. 246 00:15:23,684 --> 00:15:26,004 Suze: Now, we had all 600 shows and somehow we were 247 00:15:26,013 --> 00:15:29,463 Suze: smart enough to own all of them. So now you 248 00:15:29,473 --> 00:15:34,814 Suze: are able to see them on Amazon's FreeVee. V. bulous. Ok. 249 00:15:34,823 --> 00:15:37,693 KT: So Jonathan is 32 years old. He has 250 00:15:37,794 --> 00:15:42,844 KT: a will medical power of attorney with an incapacitation clause 251 00:15:43,085 --> 00:15:46,044 KT: and an advanced directive that he did a year ago 252 00:15:46,054 --> 00:15:50,484 KT: with an attorney. However, the question is I don't have 253 00:15:50,494 --> 00:15:54,044 KT: a revocable trust if I were to purchase the must 254 00:15:54,054 --> 00:15:58,205 KT: have documents with the revocable trust on Suze's website. Would 255 00:15:58,215 --> 00:16:02,724 KT: that null and void my previous will, Medical power of attorney? 256 00:16:02,734 --> 00:16:03,784 KT: So on and so forth. 257 00:16:03,885 --> 00:16:06,075 KT: All he wants is he needs the revocable trust. 258 00:16:06,546 --> 00:16:10,976 Suze: Now, you can just get the must have documents. Obviously, 259 00:16:10,986 --> 00:16:14,885 Suze: you can go to my community app, look under Suze 260 00:16:14,895 --> 00:16:20,255 Suze: shop or go to Suze Orman dot com slash offer. 261 00:16:20,265 --> 00:16:24,856 Suze: You can get them there. Obviously, they're offered through Hay House, 262 00:16:24,866 --> 00:16:29,895 Suze: but here's the thing. $99 2500 dollar value, 263 00:16:30,710 --> 00:16:36,239 Suze: the way that Hay House who created these structured it 264 00:16:36,250 --> 00:16:39,979 Suze: with the lawyers, they structured it so that when you 265 00:16:39,989 --> 00:16:44,960 Suze: did it, Jonathan, you did all four at once. So 266 00:16:44,969 --> 00:16:47,979 Suze: you can do all four, not gonna take you any 267 00:16:47,989 --> 00:16:50,460 Suze: more time as if you just did the trust and 268 00:16:50,530 --> 00:16:53,969 Suze: you can only use the trust. You don't have to 269 00:16:53,979 --> 00:16:58,090 Suze: get the other ones notarized and validated. Ok, so you 270 00:16:58,099 --> 00:17:01,219 Suze: can use the program. It'll give you all of it, 271 00:17:01,359 --> 00:17:05,169 Suze: but again, just do the trust fine. Just get the 272 00:17:05,180 --> 00:17:08,819 Suze: trust notarized and that's it and it will not invalidate 273 00:17:08,829 --> 00:17:10,180 Suze: your other documents. 274 00:17:10,598 --> 00:17:14,779 KT: This is from Hiromi. Hi, KT and Susie and Robert. 275 00:17:15,828 --> 00:17:18,129 Suze: Robert. By the way, they want to see pictures of 276 00:17:18,138 --> 00:17:21,188 Suze: you at this, at these concerts that you're going to. 277 00:17:21,318 --> 00:17:23,728 Suze: So you best have some so I can post it 278 00:17:23,739 --> 00:17:24,629 Suze: on the community app.  All right. 279 00:17:25,538 --> 00:17:29,188 KT: My name is Hiromi. I have a quick question. I 280 00:17:29,198 --> 00:17:32,159 KT: am 57 years old. I lost my husband 281 00:17:32,334 --> 00:17:35,834 KT: years ago. We bought the house where I live now 282 00:17:35,844 --> 00:17:41,224 KT: 20 years ago for $400,000. The house is now worth 283 00:17:41,234 --> 00:17:45,425 KT: over 700,000. I didn't want to move the last 10 284 00:17:45,435 --> 00:17:49,675 KT: years after he passed. However, I missed the two years 285 00:17:49,685 --> 00:17:54,004 KT: of surviving spouse, capital gain tax exclusion. 286 00:17:54,239 --> 00:17:58,290 KT: Is there any way I can avoid capital gain tax? 287 00:17:58,300 --> 00:18:01,079 KT: Do I need to pay tax on the gain? 288 00:18:01,089 --> 00:18:03,989 Suze: You say in here because KT just handed me your 289 00:18:04,000 --> 00:18:11,959 Suze: email that the house is currently worth over $700,000 currently 290 00:18:12,310 --> 00:18:17,250 Suze: and that you bought it 20 years ago for 400,000. 291 00:18:17,829 --> 00:18:21,129 Suze: So Hiromi . What you need to understand is all right, 292 00:18:21,140 --> 00:18:22,510 Suze: you have 400,000. 293 00:18:22,949 --> 00:18:27,449 Suze: You add your 250,000 exemption that you can do, thats 294 00:18:27,869 --> 00:18:32,349 Suze: 650 I'm sure over the 20 years you have had 295 00:18:32,439 --> 00:18:35,579 Suze: improvements to the house, whether it's a new refrigerator, a 296 00:18:35,589 --> 00:18:39,139 Suze: new roof, whatever you can add that on to it, 297 00:18:39,739 --> 00:18:44,188 Suze: along with whatever commissions you pay to sell it. And 298 00:18:44,199 --> 00:18:46,849 Suze: I have a feeling you're not going to need to 299 00:18:46,859 --> 00:18:50,310 Suze: pay a whole lot of capital gains tax at all. 300 00:18:50,479 --> 00:18:54,609 Suze: If any, you also have to remember if you earn 301 00:18:54,619 --> 00:18:58,149 Suze: less than $44,000 a year, 302 00:18:58,680 --> 00:19:02,619 Suze: you don't pay any capital gains tax on any money 303 00:19:02,630 --> 00:19:05,800 Suze: that you have as a capital gain. It's just how 304 00:19:05,810 --> 00:19:08,380 Suze: it works. And so for those of you who also 305 00:19:08,390 --> 00:19:11,479 Suze: need to know what that meant that she went past 306 00:19:11,489 --> 00:19:15,219 Suze: the two year exclusion. If you have a spouse, you 307 00:19:15,229 --> 00:19:19,349 Suze: own a house with your spouse, your spouse dies, you 308 00:19:19,359 --> 00:19:23,060 Suze: have two years after your spouse has died to get 309 00:19:23,069 --> 00:19:25,839 Suze: that $250,000 of a credit 310 00:19:26,109 --> 00:19:29,209 Suze: when you sell. If you've lived in that house for 311 00:19:29,219 --> 00:19:31,909 Suze: two out of the past five years, as both of 312 00:19:31,920 --> 00:19:34,829 Suze: your primary residencies. All right. 313 00:19:35,540 --> 00:19:38,010 KT: Ok. Next question is from Cheryl. 314 00:19:38,290 --> 00:19:41,119 KT: Hello, Suze Rockstar Orman. That's really what she wrote. 315 00:19:42,390 --> 00:19:46,219 Suze: You know, if I could sing. Right. KT, 316 00:19:46,770 --> 00:19:48,489 KT: I would want to be a rock star 317 00:19:48,920 --> 00:19:53,989 Suze: I, I'm not joking. I would be a serious rock star. 318 00:19:54,000 --> 00:19:54,228 Suze: All right. 319 00:19:54,239 --> 00:19:56,969 KT: Go on. Hello, Suze. Rockstar Orman. I have been with 320 00:19:56,979 --> 00:20:00,130 KT: you for many, many years. You are the reason my 321 00:20:00,140 --> 00:20:04,459 KT: husband who's now retired and I paid our house off 322 00:20:04,595 --> 00:20:09,166 KT: different subject. Now, what do you think about gold IRSA 323 00:20:09,205 --> 00:20:12,355 KT: just learning about them and was curious what you, the 324 00:20:12,365 --> 00:20:14,446 KT: expert thought about them. 325 00:20:14,494 --> 00:20:18,984 Suze: I don't have a problem with you owning a gold 326 00:20:18,994 --> 00:20:23,235 Suze: stock or a gold ETF within your Ira for you 327 00:20:23,244 --> 00:20:28,546 Suze: to own actual, the commodity of gold within an IRA 328 00:20:28,556 --> 00:20:30,826 Suze: is absolutely something Cheryl. I 329 00:20:30,901 --> 00:20:34,651 Suze: don't want you to do when you own the actual commodity, 330 00:20:34,661 --> 00:20:37,271 Suze: there are storage fees. When you go to sell it, 331 00:20:37,281 --> 00:20:40,371 Suze: you have to have it re-asses it. It makes absolutely no 332 00:20:40,381 --> 00:20:44,901 Suze: sense rather than owning the actual metal. If you want 333 00:20:44,911 --> 00:20:49,281 Suze: to own gold, do a gold stock or an ETF 334 00:20:49,291 --> 00:20:55,962 Suze: that's in gold. Stay away from the actual precious metal itself. Yes. KT. Ok. 335 00:20:55,972 --> 00:20:57,131 KT: From Brooke. 336 00:20:57,479 --> 00:21:01,709 KT: Happy Summer. KT and Suze. I, I kind of went 337 00:21:01,719 --> 00:21:06,260 KT: to all the headlines. The salutations are really fun. This podcast. 338 00:21:06,400 --> 00:21:10,949 KT: Happy Summer. My question is about leaving jobs and switching 339 00:21:10,959 --> 00:21:14,660 KT: retirement accounts. I left my school job where I had 340 00:21:14,670 --> 00:21:18,718 KT: a pension and Roth 403 B to start my own 341 00:21:18,926 --> 00:21:22,854 KT: private speech therapy practice. I wanted to roll over the 342 00:21:22,865 --> 00:21:27,635 KT: Roth 403 B into a Roth IRA. My question is, 343 00:21:27,725 --> 00:21:32,826 KT: can I still contribute $6500 to this plan if I'm 344 00:21:32,836 --> 00:21:37,776 KT: doing a rollover? Also, I'm assuming my pension money needs 345 00:21:37,786 --> 00:21:40,275 KT: to go into a traditional IRA 346 00:21:40,371 --> 00:21:46,732 KT: account. Is this correct? I'm 28 and moving to sunny Florida. 347 00:21:47,511 --> 00:21:51,121 Suze: So listen, Brooke and all of you that are listening 348 00:21:51,131 --> 00:21:55,432 Suze: right now. All of you seem to be confused thinking 349 00:21:55,571 --> 00:22:00,251 Suze: that if you convert money or roll over money into 350 00:22:00,261 --> 00:22:04,511 Suze: a Roth account, that means that you can't put any 351 00:22:04,521 --> 00:22:08,862 Suze: more money into it as a contribution wrong. 352 00:22:09,239 --> 00:22:13,290 Suze: It doesn't matter how much you convert or roll over, 353 00:22:13,319 --> 00:22:19,530 Suze: you still can absolutely put the $6500 as a maximum 354 00:22:19,550 --> 00:22:23,969 Suze: into the Roth IRA. And by the way, the rollover 355 00:22:23,979 --> 00:22:28,010 Suze: can be the same as your contributory Roth. Just so 356 00:22:28,020 --> 00:22:31,680 Suze: you know, your pension. Yes. Needs to go to a 357 00:22:31,689 --> 00:22:32,189 Suze: traditional 358 00:22:32,560 --> 00:22:36,180 Suze: IRA. Simply because you don't want to pay taxes on 359 00:22:36,189 --> 00:22:40,319 Suze: whatever the pension would be after. It's in the pension. 360 00:22:40,469 --> 00:22:44,780 Suze: If you want little by little, you can convert it 361 00:22:44,800 --> 00:22:48,619 Suze: to a Roth IRA. Now, in the email KT just 362 00:22:48,630 --> 00:22:51,948 Suze: gave me, it says you're only 28 years of age 363 00:22:51,959 --> 00:22:55,280 Suze: and moving to sunny Florida. Yeah, girlfriend smart. 364 00:22:55,589 --> 00:23:01,359 Suze: Right. So what you need to understand is start converting now, 365 00:23:01,369 --> 00:23:05,859 Suze: if you can convert the traditional IRA little money little money, 366 00:23:05,869 --> 00:23:09,000 Suze: little money every year. Oh my God. That money will 367 00:23:09,010 --> 00:23:11,780 Suze: start to grow tax free for you in every possible 368 00:23:11,790 --> 00:23:16,290 Suze: way and you will win the financial jackpot. You got 369 00:23:16,300 --> 00:23:17,189 Suze: any more for me. 370 00:23:17,599 --> 00:23:20,619 KT: This is from Angela. I really like this one 371 00:23:20,849 --> 00:23:23,489 KT: because there's one sentence in it that would give me the, 372 00:23:23,500 --> 00:23:25,880 KT: give me the answer that I think you're gonna give 373 00:23:25,890 --> 00:23:30,719 KT: her ready. Good morning, Suze and KT. My question is in 374 00:23:30,729 --> 00:23:33,939 KT: regard to cashing out mutual funds to pay off my 375 00:23:33,949 --> 00:23:38,520 KT: husband's student loan debt. The payoff amount of the student 376 00:23:38,530 --> 00:23:45,319 KT: loan is $129,000 with a 3.38% interest and a monthly 377 00:23:45,329 --> 00:23:48,199 KT: payment of $851. 378 00:23:48,439 --> 00:23:52,530 KT: It's his medical school debt that we've had for years. 379 00:23:52,540 --> 00:23:56,800 KT: Now listen to this everyone. He's 45 years old. He 380 00:23:56,810 --> 00:24:01,069 KT: has a successful medical practice and an annual salary of 381 00:24:01,079 --> 00:24:03,520 KT: about 275,000. 382 00:24:03,819 --> 00:24:07,489 KT: This is our last debt other than our home and 383 00:24:07,500 --> 00:24:10,469 KT: we have enough in the mutual funds to cash out 384 00:24:10,479 --> 00:24:14,050 KT: and pay it off. The part we're struggling with is 385 00:24:14,060 --> 00:24:17,869 KT: the taxable event this will create. Plus when we cash 386 00:24:17,880 --> 00:24:20,399 KT: out some of these funds, we may be selling at 387 00:24:20,410 --> 00:24:24,859 KT: a loss. We both love the thought and feeling of 388 00:24:24,869 --> 00:24:28,250 KT: being free from this student loan debt 389 00:24:28,479 --> 00:24:32,589 KT: and having one less monthly bill. But we're unsure of 390 00:24:32,599 --> 00:24:37,079 KT: how bad this can affect us taxwise. What should we do? Suze. 391 00:24:37,520 --> 00:24:39,829 KT: There you go. And then she has details about the 392 00:24:39,839 --> 00:24:42,599 KT: mutual fund. But what should she do? That last sentence 393 00:24:42,609 --> 00:24:44,329 KT: to me was the answer. 394 00:24:44,339 --> 00:24:47,969 Suze: She says that these mutual funds are in non retirement accounts. 395 00:24:48,310 --> 00:24:52,949 Suze: So is it possible Angela that some of the mutual 396 00:24:52,959 --> 00:24:56,369 Suze: funds that are down in value right now 397 00:24:57,219 --> 00:25:00,419 Suze: you would sell and take a tax loss on it 398 00:25:00,489 --> 00:25:04,310 Suze: to offset some of the mutual funds that you have 399 00:25:04,319 --> 00:25:08,939 Suze: a gain in. So let's just say you sold funds 400 00:25:08,949 --> 00:25:12,589 Suze: that you had a $50,000 gain in. But then you 401 00:25:12,599 --> 00:25:16,089 Suze: sold funds that you had a $50,000 loss in that 402 00:25:16,099 --> 00:25:18,520 Suze: would offset each other. So there would be no tax 403 00:25:18,530 --> 00:25:24,180 Suze: ramification to you whatsoever. How ever I don't care about 404 00:25:24,189 --> 00:25:25,369 Suze: the taxes right now. 405 00:25:25,670 --> 00:25:29,669 Suze: I care about that. You just continue to pay off 406 00:25:29,680 --> 00:25:34,879 Suze: this student loan at 3.38% interest. It's not that high 407 00:25:34,890 --> 00:25:38,520 Suze: of an interest rate right now because I think given 408 00:25:38,530 --> 00:25:40,839 Suze: that you're still both so young 409 00:25:41,619 --> 00:25:45,458 Suze: that the growth of the money in these mutual funds, 410 00:25:45,599 --> 00:25:50,859 Suze: if the money is invested correctly will so outweigh you 411 00:25:50,869 --> 00:25:56,859 Suze: getting rid of this $129,000 of debt at 3.38% interest. 412 00:25:56,989 --> 00:26:05,030 Suze: It's not a big deal at $275,000 salary and everything. 413 00:26:05,079 --> 00:26:07,159 Suze: If you want to start paying it off a little 414 00:26:07,170 --> 00:26:09,270 Suze: bit faster. Ok. 415 00:26:09,689 --> 00:26:12,819 Suze: But I would not be selling mutual funds, right. Now 416 00:26:12,829 --> 00:26:15,359 Suze: to do. So, if you had money that was just 417 00:26:15,369 --> 00:26:17,979 Suze: sitting around and it wasn't making a lot of money. 418 00:26:17,989 --> 00:26:20,699 Suze: It was just like in a savings account or whatever 419 00:26:20,709 --> 00:26:26,030 Suze: I say, do it, but not investment money. No, that's 420 00:26:26,040 --> 00:26:27,979 Suze: what I would tell you financially 421 00:26:28,670 --> 00:26:33,129 Suze: however emotionally if it is really bothering you and it 422 00:26:33,140 --> 00:26:36,680 Suze: is weighing on you and it is depressing you and 423 00:26:36,689 --> 00:26:40,239 Suze: it's making you feel insecure, go for it, girlfriend. But 424 00:26:40,250 --> 00:26:43,339 Suze: then see a tax person so they can tell you 425 00:26:43,349 --> 00:26:46,520 Suze: which you should sell so you can offset and get 426 00:26:46,530 --> 00:26:50,020 Suze: the least tax ramifications possible. 427 00:26:51,160 --> 00:26:53,069 KT: Ok. You got a quizzie for me? 428 00:26:53,079 --> 00:26:53,650 Suze: Is that everything? 429 00:26:55,329 --> 00:26:57,550 KT: That's it. You got a quiz for me? 430 00:26:57,560 --> 00:27:01,448 Suze: I have an interesting quizzie for everybody. All right, here 431 00:27:01,459 --> 00:27:04,739 Suze: we go. So for those of you who don't know 432 00:27:05,050 --> 00:27:08,939 Suze: a quizzie is where I ask KT a question and 433 00:27:08,949 --> 00:27:11,989 Suze: it's a question that I want all of you to 434 00:27:12,000 --> 00:27:16,040 Suze: be able to answer. And sometimes there are questions strictly 435 00:27:16,050 --> 00:27:17,030 Suze: about money. 436 00:27:17,420 --> 00:27:21,489 Suze: Sometimes there are questions about relationships. Sometimes there are questions 437 00:27:21,500 --> 00:27:25,989 Suze: about who knows what, but they're all related to money 438 00:27:26,390 --> 00:27:30,829 Suze: and truly the foundation of money. So, KT today's quizzie 439 00:27:31,510 --> 00:27:36,089 Suze: actually is from the wall. So you may have already 440 00:27:36,099 --> 00:27:38,479 Suze: read it just so you know. 441 00:27:39,180 --> 00:27:41,469 KT: If I did, I'll fess up and tell you all right. 442 00:27:41,520 --> 00:27:43,560 Suze: Now before I even read this to you, I just 443 00:27:43,569 --> 00:27:45,550 Suze: want to say something about the wall 444 00:27:45,829 --> 00:27:48,650 Suze: and that is, I love how all of you are 445 00:27:48,660 --> 00:27:51,899 Suze: helping one another and you're all answering one another. And 446 00:27:51,910 --> 00:27:54,079 Suze: if you don't know what I mean by the Wall, 447 00:27:54,089 --> 00:27:56,959 Suze: the Women and Money podcast has a women and money 448 00:27:56,969 --> 00:28:00,819 Suze: community app. You can download it for free by going 449 00:28:00,829 --> 00:28:05,349 Suze: to Apple Apps or Google Play. And on the wall there, 450 00:28:05,359 --> 00:28:09,060 Suze: we post things, the community writes and answers and helps 451 00:28:09,069 --> 00:28:12,719 Suze: one another. And it's really a fabulous community. But I 452 00:28:12,729 --> 00:28:14,079 Suze: just want to say 453 00:28:14,369 --> 00:28:18,660 Suze: if you get an answer from anybody other than me, 454 00:28:19,589 --> 00:28:23,810 Suze: you just have to check it out because I don't 455 00:28:23,819 --> 00:28:27,670 Suze: have time really to monitor all of the answers that 456 00:28:27,680 --> 00:28:31,010 Suze: everybody's giving you. And some people have been feeling a 457 00:28:31,020 --> 00:28:33,909 Suze: little bit like, oh my God should. Is this true? 458 00:28:33,920 --> 00:28:38,030 Suze: Is this not true? So just take everything with a 459 00:28:38,040 --> 00:28:41,589 Suze: grain of salt and check it with a true professional 460 00:28:41,599 --> 00:28:47,109 Suze: before you take action. The quizzie is this KT 461 00:28:47,719 --> 00:28:52,520 Suze: In one of the recent episodes, you advised someone not 462 00:28:52,869 --> 00:28:57,560 Suze: to cash out some of their pre tax 401k to 463 00:28:57,569 --> 00:29:00,849 Suze: pay off their HELOC because they would have to pay 464 00:29:00,859 --> 00:29:05,719 Suze: taxes on that money. My husband and I have Roth 465 00:29:05,729 --> 00:29:11,109 Suze: 401k s and are still 25ish years away from retirement. 466 00:29:11,680 --> 00:29:15,040 Suze: We have a HELOC that has gone and a HELOC 467 00:29:15,060 --> 00:29:17,250 Suze: everybody is a home equity line of credit, 468 00:29:17,530 --> 00:29:23,869 Suze: that has gone from 3.1% to 8.3%. KT's face. KT, 469 00:29:23,880 --> 00:29:26,589 Suze: do you remember me months ago? Saying pay off your 470 00:29:26,599 --> 00:29:27,979 Suze: home equity lines of credit. 471 00:29:27,989 --> 00:29:28,479 KT: You were 472 00:29:28,489 --> 00:29:33,800 KT: warning everybody that. But who knew it would go from 3.1 473 00:29:33,810 --> 00:29:35,560 KT: to 8.3. And 474 00:29:35,569 --> 00:29:36,369 Suze: believe it or not, it's, 475 00:29:37,324 --> 00:29:41,135 Suze: if they raise, if they raise the fed funds rate again, 476 00:29:41,145 --> 00:29:46,555 Suze: it will go even higher. All right. And it's about $45,000. Ok. 477 00:29:46,864 --> 00:29:51,564 Suze: We have a plan to pay it off by 2025. 478 00:29:51,574 --> 00:29:53,834 Suze: But I'm wondering if it makes sense for us to 479 00:29:53,844 --> 00:29:57,734 Suze: pull money out of our Roth to pay this off 480 00:29:57,744 --> 00:30:02,175 Suze: now and then put the monthly HELOC payment back towards 481 00:30:02,185 --> 00:30:05,834 Suze: funding our 401k and emergency fund. 482 00:30:06,229 --> 00:30:10,829 Suze: Are we sabotaging our future retirement fund by taking that 483 00:30:10,839 --> 00:30:15,160 Suze: money out? Now? Thank you for all your advice. 484 00:30:15,170 --> 00:30:17,250 KT: Did, did they say how old they are? 485 00:30:17,270 --> 00:30:19,640 Suze: They're about 25 years away from retiring. 486 00:30:20,069 --> 00:30:23,800 KT: All right. Definitely pay off the HELOC is my advice 487 00:30:23,810 --> 00:30:25,160 KT: for sure. 488 00:30:25,810 --> 00:30:27,939 KT: Absolutely, Suze 489 00:30:29,219 --> 00:30:29,670 Suze: Is that... 490 00:30:30,760 --> 00:30:33,829 KT: That's my final answer. They have to get rid of this. They 491 00:30:33,839 --> 00:30:36,060 KT: have to get rid of it. They have 25 years 492 00:30:36,069 --> 00:30:39,099 KT: before they need to retire. They can, they can fill 493 00:30:39,109 --> 00:30:41,670 KT: that up again the Roth they need to, they need 494 00:30:41,680 --> 00:30:43,099 KT: to get rid of that loan. 495 00:30:45,010 --> 00:30:47,099 Suze: So, what would Suze Orman say? 496 00:30:47,109 --> 00:30:48,089 KT: Get rid of the HELOC. (Suze makes the wrong answer noise) 497 00:30:49,670 --> 00:30:55,099 KT: Oh, you're kidding me. I was almost 100% certain you 498 00:30:55,109 --> 00:30:56,329 KT: wanted to get rid of that HELOC. 499 00:30:57,209 --> 00:31:03,189 Suze: But here's what everybody needs to understand. Ok. First of all, 500 00:31:03,199 --> 00:31:06,609 Suze: the 8.3% on the HELOC 501 00:31:08,329 --> 00:31:13,229 Suze: could be tax deductible number one. And the reason that 502 00:31:13,239 --> 00:31:17,250 Suze: I say it could be tax deductible is that now 503 00:31:17,260 --> 00:31:20,760 Suze: you're only allowed to take interest off your taxes up 504 00:31:20,770 --> 00:31:27,260 Suze: to the maximum of $750,000 of your mortgage and, or 505 00:31:27,270 --> 00:31:31,060 Suze: a HELOC in there. So, if they totally, with the HELOC, 506 00:31:32,069 --> 00:31:37,680 Suze: have a mortgage that's $750,000 or less, that 8.3% would 507 00:31:37,689 --> 00:31:44,020 Suze: be tax deductible if and only if KT, that $45,000 508 00:31:44,030 --> 00:31:47,250 Suze: that they took out as a HELOC was used to 509 00:31:47,260 --> 00:31:50,459 Suze: repair their home, acquire another home or something to do 510 00:31:50,469 --> 00:31:54,060 Suze: with the real estate. So the 8.3% 511 00:31:54,390 --> 00:31:58,959 Suze: might be really a whole lot less than that. Just 512 00:31:58,969 --> 00:32:03,510 Suze: know you can have a million dollar mortgage, a $2 513 00:32:03,520 --> 00:32:08,979 Suze: million mortgage, whatever it may be. But up to $750,000 514 00:32:08,989 --> 00:32:12,189 Suze: of any mortgage that you have including a HELOC 515 00:32:13,579 --> 00:32:19,390 Suze: is tax deductible. Now, let's move on to taking money 516 00:32:19,400 --> 00:32:24,239 Suze: from a Roth 401k. There are truthfully many ways that 517 00:32:24,250 --> 00:32:27,989 Suze: you can do it. It's a Roth 401k so you 518 00:32:28,000 --> 00:32:32,719 Suze: can withdraw your money in many cases from it, tax 519 00:32:32,729 --> 00:32:35,910 Suze: free if you meet certain qualifications. Like, has it been 520 00:32:35,920 --> 00:32:39,109 Suze: in there for five years? Are you 59.5 years of 521 00:32:39,119 --> 00:32:41,670 Suze: age and older, whatever it may be? 522 00:32:42,239 --> 00:32:47,510 Suze: However, in your particular case given what you have going 523 00:32:47,959 --> 00:32:51,489 Suze: the best way for you to take money out of 524 00:32:51,500 --> 00:32:58,810 Suze: your Roth 401k is through a loan because it's a 401k. 525 00:32:58,819 --> 00:33:01,609 Suze: When you take out a loan first, you have to 526 00:33:01,619 --> 00:33:05,030 Suze: know this rule, write it down everybody 527 00:33:05,239 --> 00:33:09,560 Suze: the maximum you can take out from any 401k as 528 00:33:09,569 --> 00:33:16,329 Suze: a loan is $50,000 or 50% of the value of 529 00:33:16,339 --> 00:33:21,310 Suze: your 401k, whichever one is less. Also, when you just 530 00:33:21,319 --> 00:33:24,329 Suze: have a year and a half left to pay on 531 00:33:24,339 --> 00:33:28,010 Suze: a loan, you're far better off to see what happens 532 00:33:28,020 --> 00:33:30,630 Suze: because it's possible the markets could skyrocket 533 00:33:31,319 --> 00:33:36,650 Suze: and you can make far more money in a Roth 401k. 534 00:33:36,829 --> 00:33:41,170 Suze: Don't do it, don't do it, don't do it. All right 535 00:33:41,439 --> 00:33:43,060 Suze: take us out girlfriend. 536 00:33:43,430 --> 00:33:48,979 KT: So today on Amy's birthday, wherever we go, we will 537 00:33:48,989 --> 00:33:54,290 KT: create a more joyful, peaceful and loving world. 538 00:33:54,300 --> 00:33:56,689 Suze: She has the sweetest look on her face right now 539 00:33:56,699 --> 00:33:59,910 Suze: as she's saying that as if she really, really means it, believes it. 540 00:34:01,130 --> 00:34:03,040 KT: I don't mean it. I believe it with... 541 00:34:03,050 --> 00:34:06,310 Suze: all your heart. All right. And if you say that 542 00:34:06,319 --> 00:34:09,759 Suze: every day, you believe it every day and you say 543 00:34:09,770 --> 00:34:13,699 Suze: it with all your heart, we promise you you will 544 00:34:13,709 --> 00:34:16,739 Suze: be unstoppable. 545 00:34:22,659 --> 00:34:23,330 Music: Music (out).