Suze: February 23, 2025. Welcome everybody to the Women and Money podcast,
Suze: as well as everybody smart enough to listen.
Suze: I would highly suggest, since today is Suze School for
Suze: you to take out your Suze notebooks. If you don't
Suze: have one, I most certainly would take out paper and
Suze: pen and write down the things that I'm going to
Suze: talk to you about today.
Suze: Let's first go to a Suze story.
Suze: I want you to put yourself in this situation.
Suze: You have worked for a company for the past 10, 15, 20,
Suze: 25 years, maybe even longer.
Suze: And you feel secure.
Suze: You're solid in that company. You've given them everything that
Suze: you have, and they've been good to you. They've provided
Suze: you with a paycheck, a retirement account, all kinds of
Suze: things that have allowed you to do what? Maybe buy
Suze: a home, maybe buy a car.
Suze: Be able to put money away in a 529 plan
Suze: for your children to send them to college or whatever
Suze: it may be.
Suze: And of course if you bought a home most likely
Suze: you still have a mortgage on that home or you
Suze: financed that car because very few people today honestly can
Suze: buy anything outright.
Suze: Even though you've been really trying hard to take my
Suze: advice and get yourself an 8 to 12 month emergency fund,
Suze: put money away, make sure if anything goes wrong you
Suze: have at least 8 to 12 months to get you by.
Suze: Because if you do lose your job, it could easily
Suze: take you 8 months to a year to get another one,
Suze: but even though you've been trying to do so.
Suze: You just have maybe managed to save a month or
Suze: two of must pay expenses.
Suze: You have some credit card debt, but really not a
Suze: whole lot.
Suze: And here you are happy because you are just getting by. Yes, yes,
Suze: it's true that the cost of food and everything, your
Suze: insurance policies, all of that have gone up, so it's
Suze: costing you more and more, making it even harder for
Suze: you to put money in an emergency savings account, but
Suze: you're still getting by. You're not behind on anything.
Suze: Maybe you have a spouse, but it's true that your
Suze: spouse is now working.
Suze: And it takes both of your salaries to just get by.
Suze: All right, everything's going along, and all of a sudden
Suze: you get an email that says you're fired.
Suze: You're like, what?
Suze: Not me, not one of the tens of thousands of
Suze: people who've just been fired. Really fired.
Suze: How am I gonna pay my mortgage payment? How am
Suze: I gonna pay my car payment? How am I gonna
Suze: feed my family? What are we gonna do? Oh my god, Suze,
Suze: cause you've been writing me, help me, help me, help me.
Suze: And I'm like, oh, here we go again.
Suze: And I say that because a few years ago I
Suze: remember doing a podcast when the federal government had shut
Suze: down and how were these people going to get by
Suze: without a paycheck, but then it was a little bit
Suze: different because they were still working for the government. We
Suze: knew they would be going back sooner than later, so
Suze: it wasn't quite the catastrophe as it is now when
Suze: you are not going to go back and have that
Suze: job anymore and in many of the places.
Suze: It's the only jobs that are available as to where
Suze: you live that pay any decent wage whatsoever.
Suze: But all of you need to know again that it's
Suze: not just the federal government that is cutting all of
Suze: these things, really the tariffs, everything that is going on,
Suze: you can see many major corporations are starting to have
Suze: layoffs as well.
Suze: If you think that the price of eggs and everything
Suze: might not affect the fact that your bakery or the
Suze: restaurant you work for or whatever may have to close
Suze: down cause they just can't afford the price of goods anymore.
Suze: Well, you might be facing a reality there.
Suze: So all of these possibilities absolutely affect you. It's not
Suze: just if you lose your job or whatever. What happens
Suze: if you're in an accident or you get sick and
Suze: you can't work.
Suze: So this podcast is for every single one of you listening,
Suze: and all I can do is beg you to take
Suze: it seriously that anything can happen to you at any time.
Suze: So you have got to take the steps today to
Suze: protect your tomorrows in case it happens. All right, everybody,
Suze: Suze School is now in session.
Suze: Let's just imagine that this has happened to you.
Suze: All right, what you really need to do is the
Suze: very first thing is you have to cut all your
Suze: expenses down to nil.
Suze: I know you've enjoyed going out to eat. You've enjoyed
Suze: going on cruises. You've enjoyed taking a vacation here and there.
Suze: You enjoy going shopping, buying clothes, buying all this, going
Suze: to the movies, going everywhere. Those are not must pay expenses.
Suze: Those at this point in time when you're in this situation,
Suze: they all have to go. They're gone.
Suze: And I know you're gonna say, but Suze, I really
Suze: need to go to the gym. I need this massage
Suze: once a week. I need these things. No, you don't.
Suze: You want those things, and I understand how they play
Suze: in your mental health and everything. What's going to really
Suze: affect your mental health is when you can't afford to
Suze: pay your rent or your mortgage or anything like that.
Suze: Now I just want you to think about that for
Suze: a second. When all of you stop going out, eating out,
Suze: going on cruises, checking in here, doing that whatever it
Suze: may be.
Suze: That starts to affect the economy.
Suze: Which is why you've seen the markets go down because
Suze: people are afraid everybody. They don't understand tariffs. They don't
Suze: understand the ramifications of everything that is happening right now.
Suze: It's all happening so fast that it has scared them.
Suze: And when people are afraid, guess what? Fear is the
Suze: main internal obstacle to wealth, and that's when they start
Suze: selling and everything, but we'll get to that later on,
Suze: dealing with the market, Palantir, Walmart, and everything else that
Suze: has happened back to this reality for right now.
Suze: After you have cut all your expenses that are not
Suze: must pay expenses, I need you to take an inventory
Suze: of all your money.
Suze: How much do you have in an investment account? How
Suze: much do you have in a cash account? How much
Suze: do you have seriously in retirement accounts? And you're to
Suze: divide them between Roth retirement accounts and traditional retirement accounts.
Suze: How much do you have in a 529 plan? How
Suze: much do you have in an HSA savings account?
Suze: I need you to take an inventory of everything that
Suze: you have.
Suze: Where is your money?
Suze: Now I need you to take an inventory of your
Suze: must pay expenses and the income that you will be
Suze: having coming in, possibly from your spouse, possibly from rentals
Suze: that you have, whatever it may be. What is your shortfall?
Suze: How much income do you have coming in versus how
Suze: much are your expenses that you must pay?
Suze: And therefore, the difference between those two things is the
Suze: amount of money that we need to find for you.
Suze: The next decision comes from where can you take it
Suze: from and in what order.
Suze: So you have to look at everything you have and
Suze: you have to remember when I'm about to tell you.
Suze: Any money that you have in an IRA,
Suze: Roth or traditional, any money that you have in an
Suze: employer sponsored plan, a TSP for the federal government, a 401k,
Suze: a 403B, Roth or traditional,
Suze: is protected against bankruptcy.
Suze: So one of the biggest mistakes that you can make.
Suze: Especially if you don't have a lot of backup places
Suze: to get money.
Suze: Is to use the money in a retirement account to
Suze: just get by and if you don't have a lot
Suze: of money in that retirement account, possibly use it all up.
Suze: Still then not be able to pay your expenses and
Suze: then end up having to claim bankruptcy and now you
Suze: have nothing.
Suze: So you need to look at the amount of money
Suze: that you have in your retirement accounts versus the amount
Suze: of money that you need every single month to just
Suze: get by.
Suze: And how long will that money in the retirement account
Suze: last you?
Suze: If it's going to last you under 8 months, you
Suze: are not to take the money from there, do you
Suze: hear me? If it's going to last you 2 years,
Suze: 5 years, whatever, you have a lot of money in there, OK,
Suze: that may be a source of where you get the
Suze: money from, but you have to think about it carefully,
Suze: all right.
Suze: If you have money in a retirement account.
Suze: And that retirement account happens to be a traditional one
Suze: all pre-tax, because you did not listen to Miss Orman.
Suze: You did not go the Roth retirement account route. You
Suze: wanted your tax write off at the time.
Suze: All right, this is what you need to know.
Suze: If you are 59 and a half years of age or older
Suze: Any money you take out of a traditional retirement account pre-tax,
Suze: you will owe ordinary income tax on that money. You
Suze: will not owe, however, a 10% penalty.
Suze: In most cases, if you're under 59 and a half
Suze: and you withdraw money from a retirement account that's pre-taxed.
Suze: Of course, you will owe ordinary income tax, but you
Suze: may also owe a 10% penalty.
Suze: Unless your retirement account
Suze: is an employer retirement account. It is a TSP, a
Suze: 401k or a 403B. Listen closely.
Suze: And you are under the age of 59 and a half,
Suze: but you are 55 years of age or older in
Suze: the year that you lost your job or you left service.
Suze: Now what that means is, as you're listening to me,
Suze: you may be 54 right now.
Suze: But you will turn 55 before or on December 31st
Suze: of this year. If that is true,
Suze: any money that you withdraw from your employer sponsored account.
Suze: You will have to pay ordinary income tax on it,
Suze: but you will not have to pay the 10% penalty.
Suze: It only applies the 55 or older rule to money
Suze: that you have in an employer sponsored plan. So if
Suze: you take money that is in your TSP 401K or 403B.
Suze: And you do an IRA rollover with it.
Suze: And you are going to be 55 years of age
Suze: or older, you're not yet 59 and a half, but
Suze: between those ages, and you do an IRA rollover with it,
Suze: in most cases, you cannot touch that money.
Suze: Without the 10% penalty, now there are things that you
Suze: can do if you did that called separate and equal
Suze: periodic payments, but trust me, you do not want to
Suze: do that. All right, everybody, it is complicated. You could
Suze: possibly get yourself in trouble.
Suze: So it would be far easier for you just leave
Suze: the amount of money that you know you want to
Suze: access from an employer sponsored plan in the employer sponsored plan.
Suze: If you happen to have a lot of money in
Suze: your employer sponsored plan and you want to roll some
Suze: of it to an IRA rollover and you are going
Suze: to be 55 or older this year, OK.
Suze: But leave the amount of money that will at least
Suze: last you for a year or longer in the employer
Suze: sponsored plan. So that is a place that if you
Suze: do withdraw, you're only going to pay income tax on it.
Suze: But remember you've lost your job, so your income taxes
Suze: aren't going to be that high this year because even
Suze: if you are with spouse who's earning money, your income
Suze: has gone down considerably.
Suze: So just something for you to think about.
Suze: For those of you
Suze: who only have a little bit of money within those
Suze: retirement accounts whether it's your IRA or not before you
Suze: use any cash before you take money out of any
Suze: retirement account, I would like to see you. I know
Suze: you're going to think I've lost it here.
Suze: I'd like to see you put any expenses you can
Suze: on your credit card.
Suze: And only pay the minimum payment due when the bill
Suze: comes in.
Suze: Remember, credit cards can be discharged in bankruptcy if you
Suze: need to claim bankruptcy.
Suze: You do not want to take money from a retirement account,
Suze: because if you claim bankruptcy and you've taken it again,
Suze: I'm repeating this, that money's gone and you have nothing.
Suze: You want to maintain any cash that you have just
Suze: in case. So this is a case where Miss Orman
Suze: is saying, All right, let's just use your credit cards
Suze: for now and let's see how it goes.
Suze: Another place that even before you touch retirement accounts, regardless
Suze: of how much you have in retirement accounts where you
Suze: might want to get the money from would be if
Suze: you have an investment account. So besides your retirement accounts,
Suze: you opened up an account at a brokerage firm and
Suze: you've been buying stock or whatever it is, ETFs or
Suze: whatever that may be.
Suze: Especially because there isn't a 10% penalty there, there isn't
Suze: ordinary income tax there if you've owned your investments for
Suze: over a year, that would probably be one of the
Suze: first places I would go if you're lucky enough to
Suze: have an investment account to get money.
Suze: In choosing what you should do, I would be consulting
Suze: an accountant or a CPA to look at your situation,
Suze: look at your taxes, what you have going on, really,
Suze: and make your choice from there.
Suze: I know you're not going to like this next one
Suze: if you don't have any of that, but you happen
Suze: to put some money in a 529 plan for your kid.
Suze: And your kid is still years away from college or
Suze: even if they're not.
Suze: You could take money from the 529 plan and obviously
Suze: you're going to pay a 10% penalty on earnings from
Suze: that account and you're going to pay tax on the
Suze: earnings as well, but depending on what you have in
Suze: there and your current tax bracket because you don't have
Suze: income possibly coming in.
Suze: That might not be a bad idea and in fact
Suze: that probably would be a better idea really than draining
Suze: money from a retirement account.
Suze: A lot of you have cash in an HSA account,
Suze: a health savings account.
Suze: That is the one place I would most likely tell
Suze: you not to take money from. That is because if
Suze: you're under the age of 65, not only will you
Suze: pay ordinary income tax on it since it's not going
Suze: to be for a qualified medical expense, but you're going
Suze: to pay a 20% penalty on it as well if
Suze: you're 65 or older.
Suze: All right, you're not gonna pay the 20% penalty, but
Suze: you will pay for non-qualified medical expenses ordinary income tax.
Suze: Those are some of your options.
Suze: Now for those of you
Suze: who were lucky enough to listen to me.
Suze: And you actually opened up a Roth TSP, a Roth 401k,
Suze: or a Roth 403B, and now you have lost your job.
Suze: Listen to me closely now. I just want you to
Suze: see an example of what you can do to help yourself.
Suze: Write this down, everybody. Let's just say you have $50,000
Suze: in your Roth TSP.
Suze: Alright, let's just say that's true cause that's for federal
Suze: employees and that's who's really dealing with this right now,
Suze: but it applies to everybody.
Suze: And that $50,000 is made up of $30,000 that you
Suze: put in.
Suze: $20,000 of earnings when you withdraw money from a Roth TSP,
Suze: it does not work like a Roth IRA. Any money
Suze: you originally contribute to a Roth IRA, you can take
Suze: out at any time without taxes or penalties regardless of
Suze: your age. In a Roth TSP, they don't do it
Suze: that way.
Suze: They do a combination and prorate how much of your
Suze: distribution is made up of your original contributions and of
Suze: your earnings. So let's just say
Suze: of this $50,000 that's in there where you put in
Suze: the original $30,000 and let's just say you want to
Suze: take out $20,000. The way that it would work is this.
Suze: You would divide 30,000 by 50,000 your original contributions, which
Suze: is 60%.
Suze: You would divide 20,000, which is your earnings, by 50,000,
Suze: the total that you have in the account, and that
Suze: would be 40%.
Suze: So you want to take out $20,000. 60% of that
Suze: is considered your contributions. You're not going to owe taxes,
Suze: penalty on it, nothing, $12,000. However, 40% of that $20,000
Suze: is going to be considered your earnings. That is $8000.
Suze: So if you take this from your Roth TSP.
Suze: And you are not 59 and a half years of age or older
Suze: or possibly 55 or older in the year you left service.
Suze: You are going to owe ordinary income taxes no matter
Suze: what on the $8000 and possibly a 10% penalty. However,
Suze: let's just say you were smart and you decided to
Suze: roll over all $50,000 into a Roth IRA.
Suze: Two things. If your Roth IRA has been opened for
Suze: 5 years or longer or however long it's been open,
Suze: the money that you're rolling in there takes on the
Suze: time period of that Roth IRA. Let's say you don't
Suze: have a Roth IRA and you are opening it for
Suze: the first time. When you roll it over,
Suze: all 50,000, 30,000 is going to be contributions, 20,000 is
Suze: going to be earnings.
Suze: You can take out without taxes or penalties anything up
Suze: to that $30,000. It's the $20,000 that has to stay
Suze: in that account for at least 5 years and until
Suze: you're 59 and half to access it without 10% penalty and taxes.
Suze: So in that case, if you wanted $20,000 you could
Suze: withdraw it
Suze: without any taxes or penalties versus the other situation, if
Suze: you took it from your Roth TSP, you are going
Suze: to owe ordinary income taxes on that $8000 plus possibly
Suze: a 10%.
Suze: penalty. So to save yourself that tax money and penalty
Suze: if you just simply do a Roth IRA rollover with
Suze: your Roth TSP 401k or 403B, you've lost your job now.
Suze: You want to save every penny you can. This is
Suze: something that you should look into doing. Obviously check it
Suze: with the CPA,
Suze: just to make sure that I'm correct, so there are
Suze: things that you can do what all of you should
Suze: be doing now. However, if you don't already have a
Suze: Roth IRA, if you qualify for it, you should open
Suze: a Roth IRA, even if you just deposit $1 in it.
Suze: Now the clock is ticking because if you did have
Suze: A Roth IRA that was open for 5 years and
Suze: you did this and you happen to be over 59
Suze: and half, oh, you could take all $50,000 out without
Suze: any taxes or penalties. What so ever think about it, everybody.
Suze: Last but not least, I just want to say something
Suze: now about the stock market.
Suze: What's aggravating me is that we've been talking about Palantir forever. Walmart, Amazon,
Suze: all these stocks that we have been talking about.
Suze: That you have watched going up and up and up
Suze: and up and up and you were like, oh, I
Suze: missed it. I can't believe it. It's, it's gone. Take
Suze: Palantir it's at 120, 124, and you're watching it and
Suze: before you know it you look at it and it's
Suze: like 95, 98, 100, 110 wherever it closed.
Suze: And now you are upset. At first you are upset
Suze: that you didn't get in. Now you're upset if you
Suze: own it.
Suze: That it's gone down now you are upset because you
Suze: didn't catch it at the bottom of 95. Some of
Suze: your responses on the Women and Money community app, which
Suze: you can download, by the way, everybody at Apple Apps
Suze: and Google Play. I missed it. I put in the order.
Suze: I didn't get it. What is wrong with all of you?
Suze: I'm very serious about this. You are never ever going
Suze: to buy at the bottom.
Suze: And you are never ever going to sell at the
Suze: top unless you are lucky.
Suze: Like so many of you were upset.
Suze: When you didn't buy Palantir at 6, that's the lowest
Suze: I think it's been really since 2022, but you were
Suze: upset that you didn't buy it at 6. You were
Suze: upset you didn't buy it at 7. Then it went
Suze: to 14, and then it went up and that goes up,
Suze: goes down. You cannot be
Suze: an investor who has regrets, you have to be a
Suze: strong-minded investor. And the first question you have to ask
Suze: yourself is, Do you like the company? Do you like
Suze: what they are doing? Do they have a product that
Suze: is needed? Are they at the forefront of creation and
Suze: what's going on in this world?
Suze: Is it something that will grow and grow over time?
Suze: Are their earnings good? Is their management good? Do you
Suze: like the company? And if you like the company and
Suze: the stock has already gone up dramatically, which in this
Suze: case it did.
Suze: You're upset that you didn't sell at the top. You're
Suze: upset that, oh my God, you didn't buy like I
Suze: said before at 95. Listen, this stock could easily go
Suze: back down to 70, could go to 80. Your job
Suze: is to buy little by little, no matter what it does.
Suze: Yes, I bought it at 98. I also bought some
Suze: at 113 before I bought it at 98.
Suze: So as it's going down, I bought some, then I
Suze: bought a little more. If it goes down even more,
Suze: I will do so. So it's a stock that I
Suze: want to own. It is a stock that I have
Suze: faith in, and if it goes down, I'm thrilled cause
Suze: I get to buy more. So I don't care if
Suze: you're buying 1 share, a half a share, you're buying
Suze: slices of shares.
Suze: So if you don't have a lot of money and
Suze: you want to participate in this stock, then divide whatever
Suze: money you have and invest $10 a month, $5 a month,
Suze: it does not matter.
Suze: But do not get mad cause you missed it.
Suze: You missed what everybody? You don't know that it's at
Suze: its lowest point right now. After it went to 95,
Suze: it went back up to 105. Then here we are again,
Suze: and now it's back at 101. Really, everybody, really, when
Suze: a stock goes up straight as Palantir did, you have
Suze: to expect that it's going to fall back down. Nothing
Suze: goes straight up.
Suze: So really, I need you to be financial grownups here.
Suze: The goal of money is for you to be secure,
Suze: and if it is making you too nervous, then sell
Suze: it and do something else with your money. That's just
Suze: that simple or sell half or just hold on to
Suze: what you already have. But don't play this game of oh,
Suze: I bought it at 98.
Suze: I'm going to buy more. When I said that and
Suze: I posted that, it's because if it did go down,
Suze: I would be thrilled, and I got news for you
Suze: if it went up a little, I would still buy more.
Suze: So you have got to have conviction in what you
Suze: are buying and not ask each other's opinion in terms
Suze: of what they are doing. You have to know what
Suze: you're doing.
Suze: All right.
Suze: That's what I think. I still have total faith in Palantir,
Suze: total faith in Walmart, total faith in Pfizer, total faith
Suze: in the stocks and the ETFs that I've talked to
Suze: you about, and it's just that simple. All right, everybody,
Suze: until Thursday when KT joins us again, there's only one
Suze: thing that I want you to remember when it comes
Suze: to your money, and it is this people first, then money,
Suze: then things. Now you stay safe. Bye-bye.