1 00:00:46,110 --> 00:00:49,310 KT: It's October 3rd, 2024. Believe it or not. 2 00:00:50,819 --> 00:00:54,479 KT: And this is the women and Money podcast. Ask Suze 3 00:00:54,490 --> 00:00:59,119 KT: and KT Anything and we're gonna answer all of your questions. 4 00:00:59,130 --> 00:01:03,520 KT: But before we begin, Suze has to say something really important. 5 00:01:03,880 --> 00:01:07,319 Suze: Happy Rush Hashanha, Happy New Year 6 00:01:07,720 --> 00:01:10,559 Suze: and again, we start a New Year for many. So 7 00:01:10,569 --> 00:01:14,830 Suze: let's all hope it's a great one. Now, even though 8 00:01:14,839 --> 00:01:19,900 Suze: this podcast is dropping on October 3rd, we have recorded 9 00:01:19,910 --> 00:01:26,080 Suze: this before October 3rd because currently on October 3rd, we 10 00:01:26,089 --> 00:01:29,819 Suze: are in Las Vegas where I am giving a talk 11 00:01:29,830 --> 00:01:34,019 Suze: to women of color. 3000 women and I sure hope 12 00:01:34,029 --> 00:01:35,550 Suze: I'm doing well, KT. 13 00:01:38,080 --> 00:01:41,259 Suze: Well, you know, it's the first time that I've given 14 00:01:41,269 --> 00:01:45,510 Suze: a talk to that many people in a long time. 15 00:01:45,519 --> 00:01:49,879 KT: So anything in Vegas is big. But what, what happens 16 00:01:49,889 --> 00:01:53,589 KT: in Vegas stays in Vegas. So let's get on with 17 00:01:53,599 --> 00:01:54,949 KT: this great podcast. 18 00:01:54,959 --> 00:01:58,459 Suze: So, before we begin, however, KT, if you, 19 00:01:58,580 --> 00:02:01,699 Suze: you wanna write in a question and if KT picks it, 20 00:02:01,709 --> 00:02:04,239 Suze: it will be on the podcast and you never know 21 00:02:04,250 --> 00:02:07,739 Suze: and I'll answer you directly, send it in to ask 22 00:02:07,750 --> 00:02:13,758 Suze: Suze Suze Podcast at gmail.com. Keep it short or make 23 00:02:13,770 --> 00:02:16,320 Suze: it unusual because KT likes... 24 00:02:16,330 --> 00:02:18,750 KT: I like to read the subject area 25 00:02:20,339 --> 00:02:23,119 KT: that will always catch my eye. So in the subject, 26 00:02:23,130 --> 00:02:26,080 KT: if you put something, you know, kind of fun or 27 00:02:26,089 --> 00:02:31,529 KT: unique or different or shocking, I usually go right to it. Ok. 28 00:02:31,538 --> 00:02:36,179 KT: First questions from Gina, she said, Suze, I am 56 29 00:02:36,190 --> 00:02:39,990 KT: and recently retired with a pension. So now I want 30 00:02:40,000 --> 00:02:45,250 KT: to start rolling over the 1.6 million pre tax 401k 31 00:02:45,300 --> 00:02:49,228 KT: to my Roth IRA over the next 10 years, 32 00:02:50,089 --> 00:02:55,039 KT: I also have 200,000 in a Roth 401k. I don't 33 00:02:55,050 --> 00:02:57,428 KT: want to use the money from my liquid savings to 34 00:02:57,440 --> 00:03:02,019 KT: cover the taxes. So my company's benefits person told me 35 00:03:02,029 --> 00:03:05,940 KT: I could do the following steps, do an in plan 36 00:03:05,949 --> 00:03:11,380 KT: rollover of funds from my 401k to my Roth 401k 37 00:03:11,880 --> 00:03:16,710 KT: about $100,000. I think she said then roll over my 38 00:03:16,720 --> 00:03:20,500 KT: Roth 401k into my Roth IRA. 39 00:03:21,169 --> 00:03:26,690 KT: Then I can do an immediate withdrawal from my 401k 40 00:03:26,699 --> 00:03:29,190 KT: for the amount that I think I will owe taxes 41 00:03:29,199 --> 00:03:34,789 KT: on meaning about 40,000 and ask my company to withhold 100% 42 00:03:34,800 --> 00:03:38,649 KT: of this amount if they withhold too much, I will 43 00:03:38,660 --> 00:03:43,630 KT: get a tax refund otherwise I may owe a little. Suze, 44 00:03:43,639 --> 00:03:45,910 KT: first of all, if you can remember this and figure 45 00:03:45,919 --> 00:03:50,059 KT: it out, Gina wants to know, does this approach make sense? 46 00:03:50,699 --> 00:03:55,240 KT: You should see her face. Can you remember any of that? 47 00:03:55,479 --> 00:03:59,520 Suze: Here's what's funny. I read this one and I answered 48 00:03:59,529 --> 00:04:03,720 Suze: Gina directly. So it's fascinating that you kind of picked 49 00:04:03,729 --> 00:04:06,759 Suze: it out as well. First of all, 50 00:04:07,460 --> 00:04:12,289 Suze: with the utmost of respect to your benefits person at 51 00:04:12,300 --> 00:04:17,160 Suze: the place that you used to work. Are you crazy? Really? 52 00:04:17,170 --> 00:04:20,079 Suze: I don't know how else to say it. Let's just 53 00:04:20,089 --> 00:04:25,880 Suze: break this down. If you have money in a 401k, 54 00:04:25,890 --> 00:04:27,160 Suze: that's pre-tax. 55 00:04:27,709 --> 00:04:32,190 Suze: And then you do a rollover to your Roth 401k 56 00:04:32,290 --> 00:04:36,709 Suze: at work. First of all, that's not a roll over. 57 00:04:36,720 --> 00:04:38,488 Suze: That is a conversion 58 00:04:39,140 --> 00:04:43,269 Suze: and you are converting from a pre tax account to 59 00:04:43,279 --> 00:04:47,149 Suze: an after tax account. So guess what? My dear Gina, 60 00:04:47,329 --> 00:04:52,589 Suze: you owe income taxes at that point in time for 61 00:04:52,600 --> 00:04:59,000 Suze: that year's income tax. So that's absolutely crazy. If you 62 00:04:59,010 --> 00:05:02,839 Suze: were asking me, I would tell you just take $100,000 63 00:05:02,850 --> 00:05:03,720 Suze: out of your 64 00:05:03,809 --> 00:05:09,000 Suze: pre-tax 401k. Put it directly converting it into your Roth 65 00:05:09,010 --> 00:05:11,829 Suze: IRA and pay the taxes on it because there is 66 00:05:11,839 --> 00:05:15,070 Suze: no way for you to get around the taxes. But 67 00:05:15,079 --> 00:05:17,380 Suze: this person is having you roll over funds from a 68 00:05:17,390 --> 00:05:22,420 Suze: pre tax 401k to your Roth 401k, then roll it 69 00:05:22,428 --> 00:05:26,829 Suze: over from your Roth 401k to your Roth IRA. Like, 70 00:05:26,839 --> 00:05:28,350 Suze: what have you avoided there? 71 00:05:28,609 --> 00:05:32,238 Suze: Are you kidding? Me. So, no, you can't do this. 72 00:05:32,250 --> 00:05:36,190 Suze: And also if your Roth IRA hasn't been open for 73 00:05:36,200 --> 00:05:37,549 Suze: five years, 74 00:05:38,410 --> 00:05:42,399 Suze: any money coming from a Roth 401k to a Roth 75 00:05:42,410 --> 00:05:44,750 Suze: IRA and that's a rollover, 76 00:05:45,160 --> 00:05:47,390 Suze: the account would have to be open for five years 77 00:05:47,399 --> 00:05:49,970 Suze: or your earnings are gonna be taxable to you. So 78 00:05:49,980 --> 00:05:52,269 Suze: this is the stupidest thing I've ever heard in my 79 00:05:52,279 --> 00:05:55,299 Suze: life to put it mildly. If you wanna do it, 80 00:05:55,440 --> 00:05:58,000 Suze: you're gonna have to pay taxes on it in the 81 00:05:58,010 --> 00:06:02,100 Suze: year that you convert. So start converting now and just 82 00:06:02,109 --> 00:06:06,540 Suze: pay taxes from your savings or don't do it at all. 83 00:06:06,549 --> 00:06:08,350 Suze: Amazing KT. 84 00:06:08,519 --> 00:06:09,799 KT: I thought so too. 85 00:06:10,390 --> 00:06:12,599 KT: I mean, I could not follow that one. 86 00:06:12,678 --> 00:06:16,178 Suze: So that's another key. Everybody, if she can't follow what 87 00:06:16,190 --> 00:06:18,549 Suze: you're saying, oh, she'll pick it because she kind of 88 00:06:18,559 --> 00:06:20,760 Suze: likes when I get confused. All right. Go on. 89 00:06:21,500 --> 00:06:24,660 KT: This one is from Ling. She said, hi, Suze. I 90 00:06:24,670 --> 00:06:30,290 KT: purchased the must have documents in January of 2022. Since then. 91 00:06:30,470 --> 00:06:35,290 KT: I have recently opened a Roth 401k in 24 and 92 00:06:35,299 --> 00:06:36,589 KT: a Roth IRA. 93 00:06:36,940 --> 00:06:40,160 KT: I'm wondering if I should put my revocable trust as 94 00:06:40,170 --> 00:06:44,070 KT: the beneficiary for both the Roth IRA and the Roth 95 00:06:44,079 --> 00:06:49,760 KT: 401k retirement accounts. I'm divorced and currently have my two 96 00:06:49,769 --> 00:06:54,238 KT: adult daughters as the beneficiaries to both retirement accounts. Do 97 00:06:54,250 --> 00:06:57,540 KT: you think it's necessary to make my trust account the 98 00:06:57,549 --> 00:07:00,238 KT: beneficiary to both retirement accounts or should I 99 00:07:00,339 --> 00:07:03,040 KT: just leave it as it is with my daughters? 100 00:07:03,049 --> 00:07:08,760 Suze: Given that your daughters are the beneficiaries of your retirement accounts. 101 00:07:08,928 --> 00:07:12,640 Suze: I would just leave it that way. I would because 102 00:07:12,820 --> 00:07:16,260 Suze: the trust and everything can get a little bit complicated. 103 00:07:16,369 --> 00:07:19,709 Suze: They're no longer minors, they're adults. So you don't have 104 00:07:19,720 --> 00:07:22,010 Suze: to worry about that. If they were minors, I would 105 00:07:22,019 --> 00:07:23,559 Suze: give you a different answer. 106 00:07:23,940 --> 00:07:28,339 Suze: But given that they're adults, they're already the beneficiaries. If 107 00:07:28,350 --> 00:07:31,450 Suze: I were you, I would leave it just like they are. 108 00:07:31,459 --> 00:07:32,559 KT: That's what I thought. 109 00:07:34,190 --> 00:07:36,100 KT: That's what I was gonna say. Just leave it with 110 00:07:36,109 --> 00:07:40,410 KT: the girls. Next question is from Sue. Good news. I 111 00:07:40,420 --> 00:07:44,779 KT: found a life partner. We're both financially stable and have 112 00:07:44,790 --> 00:07:50,209 KT: been transparent about our debt, assets and investments. He is 113 00:07:50,220 --> 00:07:54,540 KT: 62 with a net worth of 1 to 1.5 million. 114 00:07:54,709 --> 00:07:58,589 KT: I am 59 with a net worth of 2.5 to 115 00:07:58,600 --> 00:08:02,029 KT: 3 million. I own a small house. It's valued at 116 00:08:02,040 --> 00:08:03,619 KT: about 300,000 117 00:08:03,880 --> 00:08:08,619 KT: with less than one year of mortgage payments left. Ready? 118 00:08:09,040 --> 00:08:12,769 KT: That will be our future forever or at least for 119 00:08:12,779 --> 00:08:17,450 KT: foreseeable future home together. We're both working with the plan 120 00:08:17,459 --> 00:08:22,649 KT: to retire three years from now. He makes about 160,000 121 00:08:22,839 --> 00:08:24,660 KT: and I earn about 120000 and... 122 00:08:24,920 --> 00:08:29,179 Suze: wait, wait, don't you find that interesting? She makes less 123 00:08:29,190 --> 00:08:33,760 Suze: than him, but she has almost double than he does 124 00:08:33,809 --> 00:08:37,358 Suze: in retirement. What does that tell you? Possibly? 125 00:08:37,369 --> 00:08:38,549 KT: She's a good saver. 126 00:08:38,609 --> 00:08:41,340 Suze: But what does that tell you about him? He's not 127 00:08:41,349 --> 00:08:42,690 Suze: that great of a saver. 128 00:08:42,890 --> 00:08:45,520 KT: We don't know if he had a lot of more expenses. 129 00:08:47,270 --> 00:08:50,020 KT: We don't know, give him the benefit. So we both 130 00:08:50,030 --> 00:08:53,859 KT: have two adult sons where we would want to bequeath 50% 131 00:08:53,869 --> 00:08:57,340 KT: of our own assets to those boys. Upon our death, 132 00:08:57,440 --> 00:09:03,380 KT: we're interested in owning the house together so that we 133 00:09:03,390 --> 00:09:06,340 KT: both have a vested interest in it. 134 00:09:06,619 --> 00:09:10,119 KT: Both benefit from any improvements made. Both have the ability 135 00:09:10,130 --> 00:09:13,559 KT: to continue to live. There should one of us pass away. 136 00:09:13,890 --> 00:09:17,059 KT: What would be a fair and simple way to co-own 137 00:09:17,440 --> 00:09:22,700 KT: the house? Now, wanna make this my pop quizzy, make 138 00:09:22,710 --> 00:09:23,419 KT: this my pop quizzy. 139 00:09:23,429 --> 00:09:24,919 Suze: Take a look at my face again. 140 00:09:25,630 --> 00:09:27,939 KT: Yeah, I'm looking at the face. I know the answer. 141 00:09:27,950 --> 00:09:31,440 KT: Everyone just don't do it. You don't need to co 142 00:09:31,450 --> 00:09:35,419 KT: own it, you own it. Sue keep it so simple. 143 00:09:35,450 --> 00:09:39,669 Suze: KT is absolutely correct here. Listen, I get that you 144 00:09:39,679 --> 00:09:43,859 Suze: have found your life partner, but until your life has 145 00:09:43,869 --> 00:09:47,229 Suze: gone all the way through its life, we don't know 146 00:09:47,239 --> 00:09:49,579 Suze: if you found your life partner or not. 147 00:09:50,119 --> 00:09:55,960 Suze: So therefore you are entering this relationship with a home 148 00:09:55,969 --> 00:09:59,299 Suze: that you own. You have one year from owning it 149 00:09:59,309 --> 00:10:04,340 Suze: outright and given that that is true. 150 00:10:05,700 --> 00:10:09,570 Suze: Boy. KT, you know what, this reminds me, this reminds 151 00:10:09,580 --> 00:10:10,640 Suze: me of you and me. 152 00:10:10,669 --> 00:10:15,559 KT: We, we've, we've heard this scenario many times we actually 153 00:10:15,570 --> 00:10:19,369 KT: lived it 25 almost 25 years ago. 154 00:10:19,380 --> 00:10:20,719 Suze: And tell them what we did. 155 00:10:20,729 --> 00:10:24,770 KT: So, Suze meets me. We both had homes in California. Mine, 156 00:10:24,780 --> 00:10:27,569 KT: San Francisco. Her on the other side of the bridge. 157 00:10:27,580 --> 00:10:31,369 KT: She moves in with me and she wants to renovate. 158 00:10:32,140 --> 00:10:35,119 KT: And I said, OK, let's renovate, but she was paying 159 00:10:35,130 --> 00:10:39,728 KT: for everything. Quite a few million dollars. Mind you. And 160 00:10:39,739 --> 00:10:43,239 KT: I said, let's put the home in both names. She said, no, 161 00:10:43,250 --> 00:10:46,950 KT: it's your home. I want you to be stable. I 162 00:10:46,960 --> 00:10:50,340 KT: wanna renovate it and I can, but it's your home. 163 00:10:50,700 --> 00:10:55,109 KT: And she never, ever put even a piece, even a 164 00:10:55,119 --> 00:10:58,609 KT: sliver or slice as they say of the title in 165 00:10:58,619 --> 00:10:59,280 KT: her name. 166 00:10:59,289 --> 00:11:01,159 Suze: So bottom line here. 167 00:11:01,460 --> 00:11:04,319 KT: That was true love everybody. That is true love 168 00:11:04,330 --> 00:11:06,989 Suze: What I would do if I were the two of you, 169 00:11:07,520 --> 00:11:09,859 Suze: I want you to keep this house in your name 170 00:11:09,869 --> 00:11:11,820 Suze: and I want you to promise me that you're gonna 171 00:11:11,830 --> 00:11:14,849 Suze: keep it in your name. The last thing you wanna 172 00:11:14,859 --> 00:11:18,900 Suze: do sue seriously is if you put it in his 173 00:11:18,909 --> 00:11:21,309 Suze: name as well and now you each own it and 174 00:11:21,320 --> 00:11:25,848 Suze: something happens, you're gonna lose half of your home, you're 175 00:11:25,859 --> 00:11:29,238 Suze: gonna lose it. You're in a situation now where you 176 00:11:29,250 --> 00:11:33,030 Suze: own it outright. If he wants to live in that home. 177 00:11:33,250 --> 00:11:36,739 Suze: All right, he gets the ability to live in that home, 178 00:11:37,219 --> 00:11:40,229 Suze: mortgage free. He doesn't have to pay for anything. You 179 00:11:40,239 --> 00:11:43,799 Suze: keep paying for everything in the home. He wants to 180 00:11:43,809 --> 00:11:46,890 Suze: pay you rent or something or contribute that way. Maintenance. 181 00:11:47,020 --> 00:11:51,839 Suze: All right. But you give him a life estate in 182 00:11:51,849 --> 00:11:56,390 Suze: that house, which means if you die, you put it 183 00:11:56,400 --> 00:12:00,440 Suze: in your kid or kid's name because I'm not clear 184 00:12:00,450 --> 00:12:03,169 Suze: from this if you have one or two sons, but 185 00:12:03,179 --> 00:12:05,669 Suze: you put it in your son's name, 186 00:12:06,260 --> 00:12:09,890 Suze: the life estate and he gets to live there and 187 00:12:09,900 --> 00:12:13,729 Suze: when he dies it goes to your son or sons. 188 00:12:13,739 --> 00:12:16,849 Suze: That's how you should do it. You do not want 189 00:12:16,859 --> 00:12:20,159 Suze: to bequeath 50% of that house to him 190 00:12:20,760 --> 00:12:24,770 Suze: because upon his death, then it goes to his kids 191 00:12:24,780 --> 00:12:28,619 Suze: and you in a strange way have disinherited your kid 192 00:12:28,869 --> 00:12:33,429 Suze: or kids. So therefore that's how you should do it. 193 00:12:33,559 --> 00:12:37,059 Suze: I would not under any circumstance at this point in 194 00:12:37,070 --> 00:12:40,780 Suze: time co-own that house with him. And if he really 195 00:12:40,789 --> 00:12:41,780 Suze: loved you, 196 00:12:42,330 --> 00:12:47,830 Suze: like, I love KT, he would wanna own half of it. 197 00:12:47,950 --> 00:12:50,939 Suze: So don't you be like KT who wanted to give 198 00:12:50,950 --> 00:12:53,210 Suze: me half of the house and wanted me to do 199 00:12:53,219 --> 00:12:57,030 Suze: this and wanted me to have that? No, it's yours 200 00:12:57,039 --> 00:12:59,239 Suze: and it's what you are going to keep for the 201 00:12:59,250 --> 00:13:02,130 Suze: rest of your life or as long as you want 202 00:13:02,140 --> 00:13:04,218 Suze: to do, you hear me? 203 00:13:04,780 --> 00:13:07,559 KT: So if they were married, what if they get married 204 00:13:07,570 --> 00:13:09,569 KT: in five years is still her house. 205 00:13:09,710 --> 00:13:11,150 Suze: It's still her house, she would do the must have 206 00:13:11,159 --> 00:13:14,770 Suze: documents and do what's called a separate property, trust, everything 207 00:13:14,780 --> 00:13:17,969 Suze: that is in her name, everything that she inherits that 208 00:13:17,979 --> 00:13:19,719 Suze: it's just in her name is 209 00:13:19,830 --> 00:13:24,380 Suze: always hers. So, prior to marriage, what hers is hers 210 00:13:24,390 --> 00:13:29,098 Suze: after they are married a whole another story and what 211 00:13:29,109 --> 00:13:32,359 Suze: hers is still hers. But any new things that they 212 00:13:32,369 --> 00:13:34,289 Suze: buy together, they'll split. 213 00:13:35,200 --> 00:13:40,750 KT: anyway. Congratulations on finding each other new partners. We're not 214 00:13:40,760 --> 00:13:45,210 KT: being negative here. We're just being wise. We've, we've read this, we, 215 00:13:45,219 --> 00:13:48,098 KT: we know this scenario. We know it can go south too. 216 00:13:48,280 --> 00:13:55,890 KT: So Suze's just protecting you. Enjoy your love. 217 00:13:56,479 --> 00:13:59,530 Suze: Your two Financial mama bears here. are being protective of you. 218 00:14:00,059 --> 00:14:03,239 KT: Enjoy the time together. Hi, Suze and Katie. I've been 219 00:14:03,250 --> 00:14:06,750 KT: living with my boyfriend in his home for the past 220 00:14:06,760 --> 00:14:11,950 KT: two years. Listen to this from Dee. We've been dating 221 00:14:11,960 --> 00:14:15,719 KT: for seven years. He has no interest in getting remarried again. 222 00:14:15,729 --> 00:14:17,619 KT: On the other hand, I would like to. 223 00:14:18,070 --> 00:14:23,000 KT: The relationship is going nowhere. I feel at this stage 224 00:14:23,010 --> 00:14:26,289 KT: in my life being only 52 I need to make 225 00:14:26,299 --> 00:14:29,289 KT: a move. I work a remote full time job. My 226 00:14:29,299 --> 00:14:31,570 KT: yearly salary, 62,000. 227 00:14:31,929 --> 00:14:33,539 KT: I have a 403 B. 228 00:14:33,580 --> 00:14:34,469 Suze: How much is in it? 229 00:14:34,520 --> 00:14:37,179 KT: 21,000. I have a savings. 230 00:14:37,510 --> 00:14:37,666 Suze: How much is in it? 231 00:14:37,890 --> 00:14:41,890 KT: 25,000. And recently I opened an IRA. 232 00:14:42,219 --> 00:14:42,690 Suze: How much is in it? 233 00:14:42,700 --> 00:14:49,450 KT: 1400. Besides that, she gets her ex-husband's pension of almost 234 00:14:49,460 --> 00:14:52,270 KT: $2000 a month. All right. 235 00:14:52,479 --> 00:14:54,679 Suze: But that probably ends when he dies. 236 00:14:54,960 --> 00:14:56,909 KT: Yea, when he dies. So I have no, 237 00:14:57,375 --> 00:15:00,234 KT: no credit card debt. She has a monthly car payment 238 00:15:00,414 --> 00:15:03,474 KT: of $450 a month. 239 00:15:03,505 --> 00:15:05,715 Suze: And how much does she still owe on the car? 240 00:15:05,724 --> 00:15:12,085 KT: 15,000. So yeah, then she has monthly expenses are utilities, 241 00:15:12,094 --> 00:15:16,385 KT: groceries and food for the dogs, more or less $1000 242 00:15:16,395 --> 00:15:20,594 KT: a month. She pays in expenses. Question: Suze. Can I 243 00:15:20,604 --> 00:15:22,674 KT: afford to buy a home? 244 00:15:24,450 --> 00:15:26,780 KT: I, I would say rent first. 245 00:15:26,799 --> 00:15:31,960 Suze: You would, would you. D, that's an interesting name. D 246 00:15:32,080 --> 00:15:34,669 Suze: because if I was gonna give you a grade, if 247 00:15:34,679 --> 00:15:37,820 Suze: you could afford to buy a house, it would be 248 00:15:37,830 --> 00:15:42,219 Suze: a D or an F and let me tell you why, girlfriend, 249 00:15:42,460 --> 00:15:46,780 Suze: you may have a yearly salary of $62,000 a year. 250 00:15:46,900 --> 00:15:53,039 Suze: But after taxes and everything, maybe just, maybe, you know, 251 00:15:53,049 --> 00:15:57,210 Suze: you're at $4000 a month if you're lucky and maybe 252 00:15:57,219 --> 00:16:01,549 Suze: even like $3700 a month when you take out the 253 00:16:01,559 --> 00:16:06,799 Suze: money for your 401k and everything else. You cannot include 254 00:16:07,229 --> 00:16:11,390 Suze: the almost $2000 a month from your ex because if 255 00:16:11,400 --> 00:16:14,580 Suze: your ex dies, he's in a car crash or something, 256 00:16:14,739 --> 00:16:19,929 Suze: you cannot count on that. Your monthly expenses, you say 257 00:16:20,400 --> 00:16:25,739 Suze: are 1000 a month. I doubted highly in this inflationary 258 00:16:25,750 --> 00:16:30,510 Suze: environment for buying groceries and food for the dogs. What 259 00:16:30,520 --> 00:16:35,619 Suze: about vet bills, all of those things, medical, dental, gasoline, 260 00:16:35,630 --> 00:16:39,179 Suze: none of those things you included in there. So probably 261 00:16:39,190 --> 00:16:45,469 Suze: your monthly expenses are about at least 2000 or $2500 262 00:16:45,479 --> 00:16:48,299 Suze: a month if you were going to be honest. 263 00:16:48,650 --> 00:16:52,479 Suze: So if we look at your $3500 a month, probably, 264 00:16:52,489 --> 00:16:55,390 Suze: which is what you're making, take home or even if 265 00:16:55,400 --> 00:17:04,310 Suze: it's 4000 minus the 2500, that's $1500 a month and 266 00:17:04,319 --> 00:17:08,458 Suze: you still have an additional $435 a month for your car. 267 00:17:08,469 --> 00:17:09,750 Suze: So you don't have anything. 268 00:17:10,380 --> 00:17:14,680 Suze: So therefore the bottom line is number one, you cannot 269 00:17:14,689 --> 00:17:18,919 Suze: afford it. Number two, you don't have the money. For what? 270 00:17:18,930 --> 00:17:23,270 Suze: For a down payment? You only have $25,000 in savings. 271 00:17:23,489 --> 00:17:27,560 Suze: That is not enough because you can't use your savings 272 00:17:27,569 --> 00:17:30,369 Suze: to put down as a down payment because you need 273 00:17:30,380 --> 00:17:33,560 Suze: not only your down payment, but you need savings, but 274 00:17:33,569 --> 00:17:36,958 Suze: here's the real danger sign. Here 275 00:17:37,680 --> 00:17:42,170 Suze: you are wanting to do something because he doesn't want 276 00:17:42,180 --> 00:17:44,739 Suze: to get married and there you are and you're not 277 00:17:44,750 --> 00:17:47,839 Suze: gonna wait anymore and you need to move on. So 278 00:17:47,849 --> 00:17:49,979 Suze: on some level, you are angry, 279 00:17:50,719 --> 00:17:53,680 Suze: you are angry in my opinion. So what do you 280 00:17:53,689 --> 00:17:56,349 Suze: wanna do? You wanna buy your own home? You wanna 281 00:17:56,359 --> 00:17:57,020 Suze: move on. 282 00:17:57,550 --> 00:18:01,219 Suze: Fear, shame and anger the three internal obstacles to wealth. 283 00:18:01,229 --> 00:18:04,020 Suze: If you do this, you will be making the biggest 284 00:18:04,030 --> 00:18:08,488 Suze: mistake of your life. Therefore, you are denied. You cannot 285 00:18:08,500 --> 00:18:11,619 Suze: afford to buy a home at this point in time 286 00:18:11,630 --> 00:18:16,698 Suze: financially as well as emotionally. Next question, KT. 287 00:18:16,780 --> 00:18:21,079 KT: Ok, Suze. Next question is from Heather, you recently addressed 288 00:18:21,089 --> 00:18:23,738 KT: a question concerning a one time tax 289 00:18:23,839 --> 00:18:28,380 KT: free roll over from an IRA to an HSA. You 290 00:18:28,390 --> 00:18:32,770 KT: advise the person to contact their HR director to understand 291 00:18:32,780 --> 00:18:36,349 KT: the details. Since I do not work for an employer 292 00:18:36,359 --> 00:18:40,869 KT: who offers any benefits, I have self funded an HSA 293 00:18:40,880 --> 00:18:47,540 KT: through Fidelity when my health insurance policy qualified. Unfortunately, my 294 00:18:47,550 --> 00:18:50,170 KT: current health care insurance provided 295 00:18:50,489 --> 00:18:55,448 KT: through the state does not qualify for HSA contributions. Can 296 00:18:55,459 --> 00:19:00,109 KT: I make the one time rollover from my traditional IRA 297 00:19:00,199 --> 00:19:04,180 KT: to the HSA account or does it have to be 298 00:19:04,189 --> 00:19:09,280 KT: an HSA account offered through an employer? Good question. 299 00:19:09,500 --> 00:19:11,449 Suze: I actually answered her directly. 300 00:19:11,772 --> 00:19:13,642 KT: Well, Heather good question. 301 00:19:14,003 --> 00:19:18,012 Suze: But basically yes, you can make a one time rollover 302 00:19:18,022 --> 00:19:22,392 Suze: from your traditional IRA to your health savings account even 303 00:19:22,402 --> 00:19:25,652 Suze: if it's not, KT, offered through her employer. But as 304 00:19:25,662 --> 00:19:31,012 Suze: long as she has an HSA eligible high deductible health 305 00:19:31,022 --> 00:19:32,772 Suze: plan with it. 306 00:19:33,326 --> 00:19:36,176 Suze: So you need those two things at the time of 307 00:19:36,186 --> 00:19:39,786 Suze: the rollover as well as you follow the IRS guidelines 308 00:19:39,796 --> 00:19:43,196 Suze: and everything like that. So yes, you can do it. 309 00:19:43,205 --> 00:19:47,555 Suze: But remember your contribution limit, you can only roll over 310 00:19:47,566 --> 00:20:09,900 Suze: up to the annual HSA contribution limit and by the way, 311 00:20:09,910 --> 00:20:12,380 Suze: you just have to know, you have to maintain the 312 00:20:12,390 --> 00:20:15,819 Suze: HTHP coverage for 12 months following 313 00:20:16,170 --> 00:20:20,520 Suze: the month of the roll over contribution. If you lose 314 00:20:20,530 --> 00:20:24,030 Suze: that coverage during this testing period, you are going to 315 00:20:24,040 --> 00:20:28,069 Suze: be subject to income taxes and possible penalties and remember, 316 00:20:28,079 --> 00:20:31,560 Suze: you can only do it once in your lifetime. All right, KT. 317 00:20:31,770 --> 00:20:34,959 KT: Ok. This is from Simone. This is my last question, 318 00:20:35,449 --> 00:20:40,869 KT: Susie. My mom passed away August 30th. Sorry about that Simone. 319 00:20:41,719 --> 00:20:44,430 Suze: She all of you. She gets so sad. 320 00:20:44,439 --> 00:20:46,949 KT: I do. She was only 78. 321 00:20:47,189 --> 00:20:48,680 Suze: Your mama was 82. 322 00:20:48,719 --> 00:20:52,500 KT: Yeah. Well, guess what? We're not far from 78. She 323 00:20:52,510 --> 00:20:55,930 KT: had a lot of health issues, but I was hoping 324 00:20:55,939 --> 00:20:58,930 KT: we still had more time with her. It's been very 325 00:20:58,939 --> 00:21:00,430 KT: hard for us the last few 326 00:21:00,535 --> 00:21:05,084 KT: weeks. My mom's financial advisor just called and wants us 327 00:21:05,185 --> 00:21:10,275 KT: to transfer the annuities my mom had by the 1035 328 00:21:10,285 --> 00:21:15,155 KT: exchange into annuities for my siblings. And I, so we 329 00:21:15,165 --> 00:21:21,645 KT: aren't taxed. He said the annuities gained 146,000 with him, 330 00:21:21,704 --> 00:21:24,114 KT: but he thinks there may be an overall gain of 331 00:21:24,125 --> 00:21:29,034 KT: 300,000 since my mom had the annuities prior to him, 332 00:21:29,479 --> 00:21:33,649 KT: my siblings and I are the beneficiaries just from these 333 00:21:33,660 --> 00:21:40,500 KT: two annuities. We would inherit a little over $300,000 each. 334 00:21:41,040 --> 00:21:46,060 KT: The total portfolio my mom had with him is 1.8 million. 335 00:21:46,500 --> 00:21:48,609 KT: He wants to do a death claim now, while the 336 00:21:48,619 --> 00:21:53,300 KT: market's up and convert the inheritance into individual annuities for 337 00:21:53,310 --> 00:21:57,260 KT: the three of us, so he wants to keep the annuities. Wait. 338 00:21:57,650 --> 00:22:02,899 KT: So my mom, hold on, hold on. My mom had 339 00:22:02,910 --> 00:22:07,140 KT: funds with other advisers as well. She had more annuities, blah, blah, blah, blah. 340 00:22:07,150 --> 00:22:10,520 KT: But then here's what the the clincher is. Simone said 341 00:22:10,530 --> 00:22:15,359 KT: our estate lawyer last week said hold off on distributing 342 00:22:15,369 --> 00:22:20,739 KT: anything because he needs to calculate mom's death taxes. And 343 00:22:20,750 --> 00:22:24,419 KT: shockingly enough, some of my mom's things are going to 344 00:22:24,430 --> 00:22:25,780 KT: go through probate. 345 00:22:26,199 --> 00:22:29,659 KT: So what should we do about the annuities? 346 00:22:30,380 --> 00:22:32,050 KT: So I think listen to the lawyer. 347 00:22:32,109 --> 00:22:34,649 Suze: I think number one, you always listen to the lawyer, 348 00:22:34,660 --> 00:22:40,300 Suze: but number two, you can do a 1035 exchange any 349 00:22:40,310 --> 00:22:43,930 Suze: time you want. There's no rush in it. What is 350 00:22:43,939 --> 00:22:48,530 Suze: a 1035 exchange? It's when you have money in an annuity, 351 00:22:48,989 --> 00:22:51,728 Suze: it has grown in value. You're now out of the 352 00:22:51,739 --> 00:22:54,449 Suze: surrender period because you've held it for so long. 353 00:22:54,819 --> 00:22:59,520 Suze: And now most likely your broker wants to make another commission. 354 00:22:59,609 --> 00:23:03,069 Suze: So they convince you to do what's called a 1035 355 00:23:03,079 --> 00:23:05,810 Suze: exchange where you can go from one annuity that you're 356 00:23:05,819 --> 00:23:09,989 Suze: already out of the surrender period with to another brand 357 00:23:10,000 --> 00:23:14,959 Suze: new annuity that earns the broker another five or 7% 358 00:23:14,969 --> 00:23:20,359 Suze: commission on that amount. Your surrender period starts all over again. 359 00:23:20,660 --> 00:23:24,389 Suze: And that's really usually the only reason one does at 360 00:23:24,400 --> 00:23:30,510 Suze: 1035 exchange because a good annuity is always a good annuity. 361 00:23:30,520 --> 00:23:33,560 Suze: It's not like there's a better one most likely that 362 00:23:33,569 --> 00:23:38,719 Suze: you would do that with. That's number one, number two, 363 00:23:39,250 --> 00:23:43,310 Suze: besides this Simone besides me talking about this, do you 364 00:23:43,319 --> 00:23:48,399 Suze: all understand now why I don't like annuities? 365 00:23:48,859 --> 00:23:52,439 Suze: Because when you die and it goes down to your 366 00:23:52,449 --> 00:23:57,619 Suze: children or your beneficiaries, they are going to owe ordinary 367 00:23:57,630 --> 00:24:03,619 Suze: income taxes on any amount above your original deposit 368 00:24:04,280 --> 00:24:07,369 Suze: and they're kind of stuck now. So all this money 369 00:24:07,380 --> 00:24:10,550 Suze: that you see in this annuity is not what they're 370 00:24:10,560 --> 00:24:14,660 Suze: gonna get. So if it were me, I would be 371 00:24:14,670 --> 00:24:18,780 Suze: advising you pay the taxes now, while the taxes are 372 00:24:18,790 --> 00:24:20,379 Suze: still relatively low, 373 00:24:20,880 --> 00:24:24,129 Suze: if you want, you can leave the money in there 374 00:24:24,459 --> 00:24:28,979 Suze: and rather than taking all $300,000 of gain or whatever 375 00:24:28,989 --> 00:24:33,540 Suze: it is out at once, take $50,000 out this year, 376 00:24:33,550 --> 00:24:36,819 Suze: $50,000 out next year, whatever it may be 377 00:24:36,895 --> 00:24:41,224 Suze: be and spread it. So you're not paying so much 378 00:24:41,234 --> 00:24:43,795 Suze: in taxes because it's not that big of a hit. 379 00:24:43,925 --> 00:24:48,125 Suze: It's not like the money necessarily has to come out 380 00:24:48,135 --> 00:24:52,834 Suze: at once. Unless those are the rules of the annuity. 381 00:24:53,285 --> 00:24:56,555 Suze: If they are the rules of this particular annuity where 382 00:24:56,564 --> 00:24:58,854 Suze: you have to take the money out at once, I 383 00:24:58,864 --> 00:25:03,045 Suze: would just take the hit now rather than just postpone 384 00:25:03,055 --> 00:25:05,834 Suze: it and have it get bigger and bigger and bigger. 385 00:25:06,050 --> 00:25:09,659 Suze: I don't know your age and where you are right now, 386 00:25:09,670 --> 00:25:12,260 Suze: I don't know if you need the money or not. 387 00:25:12,500 --> 00:25:18,390 Suze: So I just wouldn't continue on this path. So it's, 388 00:25:18,400 --> 00:25:21,329 Suze: but I wouldn't be doing anything at this point until 389 00:25:21,339 --> 00:25:24,469 Suze: your lawyer and I would see a CPA, I would 390 00:25:24,479 --> 00:25:27,369 Suze: not be taking the advice of the financial advisor. I 391 00:25:27,380 --> 00:25:29,260 Suze: would be seeing a CPA 392 00:25:29,800 --> 00:25:33,520 Suze: who could look at your annuities and know exactly what 393 00:25:33,530 --> 00:25:37,479 Suze: your taxable situation is going to be. 394 00:25:38,380 --> 00:25:41,660 Suze: Alright. KT, Did you read that part? You did, didn't 395 00:25:41,670 --> 00:25:46,479 Suze: you mommy has many more annuities and the broker wants 396 00:25:46,489 --> 00:25:51,889 Suze: to put like 1.8 million more in what? In annuities? Like? 397 00:25:51,900 --> 00:25:56,359 Suze: Are you just kidding me with these annuities? Everybody? Stop it, 398 00:25:56,630 --> 00:26:00,829 Suze: stop it. Alright, KT, it's quizzy time. But even though 399 00:26:00,839 --> 00:26:04,198 Suze: I chose this, I want you to read it 400 00:26:05,760 --> 00:26:07,310 Suze: Somebody has a little crush on you. 401 00:26:07,319 --> 00:26:10,229 KT: Now, I know why. This is from John. KT, I 402 00:26:10,239 --> 00:26:16,310 KT: love listening on Thursdays because your Joli voile adds so much 403 00:26:16,319 --> 00:26:22,150 KT: to the podcast. I think your happy voice. Your happy life. 404 00:26:22,160 --> 00:26:25,359 KT: Thank you. I said, please don't let Suze think I'm 405 00:26:25,369 --> 00:26:29,369 KT: stupid for asking this. You never... a question is never stupid. 406 00:26:29,469 --> 00:26:31,479 Suze: When have I ever thought anybody was stupid 407 00:26:31,530 --> 00:26:34,239 KT: Yea, sometimes... You've, you've got you say to people? 408 00:26:34,660 --> 00:26:37,880 Suze: No, I say the advice they've been given is stupid. 409 00:26:37,890 --> 00:26:39,709 Suze: Not that they're stupid. 410 00:26:39,839 --> 00:26:44,520 KT: There's never a stupid question. So this is the question: 411 00:26:44,530 --> 00:26:48,189 KT: if we invest and not speculate because no one can 412 00:26:48,199 --> 00:26:51,910 KT: beat the market S and P 500 or Dow, then 413 00:26:51,920 --> 00:26:55,260 KT: why don't we just dollar cost average all of our 414 00:26:55,270 --> 00:27:00,439 KT: money into Dow Jones and, or the SP 500 ETFs. 415 00:27:01,150 --> 00:27:02,119 KT: Bye bye. 416 00:27:02,140 --> 00:27:03,790 Suze: And what would you say? 417 00:27:04,199 --> 00:27:06,540 KT: Oh, so I have to answer this. 418 00:27:07,589 --> 00:27:08,409 KT: Hm. 419 00:27:09,079 --> 00:27:10,919 KT: Yeah, I think that's a good idea. 420 00:27:11,989 --> 00:27:13,329 Suze: So you would say... 421 00:27:13,699 --> 00:27:16,698 KT: Why don't we just dollar cost average all of our 422 00:27:16,709 --> 00:27:19,660 KT: money into the Dow Jones and, or S and P 423 00:27:19,670 --> 00:27:21,569 KT: 500 ETF. 424 00:27:21,579 --> 00:27:24,130 Suze: But why did it say right before that? Because nobody 425 00:27:24,140 --> 00:27:25,109 Suze: can beat the market. 426 00:27:25,119 --> 00:27:27,579 KT: It says because no one can beat the market. So 427 00:27:27,589 --> 00:27:32,030 KT: instead of speculating, why don't you just keep dollar cost averaging? 428 00:27:32,040 --> 00:27:33,359 KT: I think that's a great idea. 429 00:27:33,469 --> 00:27:36,290 KT: If you don't want, no one can beat the market. 430 00:27:36,310 --> 00:27:39,359 KT: How do you know? Because I don't think you should try. 431 00:27:39,780 --> 00:27:43,810 Suze: Keith Fitzgerald has been beating the markets big time. Many 432 00:27:43,819 --> 00:27:47,930 Suze: investors have been beating the markets, big time. Many mutual 433 00:27:47,939 --> 00:27:51,229 Suze: funds or ETFs have been beating the market. 434 00:27:52,660 --> 00:27:55,130 KT: John, let's ask Suze, what would you do? 435 00:27:56,790 --> 00:28:00,569 Suze: I would do what I do do. And it's listen, John, 436 00:28:00,660 --> 00:28:03,449 Suze: if you just want to get normal market returns... 437 00:28:03,459 --> 00:28:04,329 KT: And be safe 438 00:28:04,339 --> 00:28:06,889 Suze: And be safe as safe as one can be. 439 00:28:07,050 --> 00:28:07,680 KT: And secure. 440 00:28:08,449 --> 00:28:10,920 Suze: Can one be safe and secure in the market, KT? 441 00:28:11,130 --> 00:28:13,180 KT: You can't beat it and you can never have a 442 00:28:13,189 --> 00:28:15,449 KT: guarantee of safe and secure. 443 00:28:15,560 --> 00:28:19,109 Suze: So then you wouldn't say safe and secure if you 444 00:28:19,119 --> 00:28:21,989 Suze: just want average returns 445 00:28:22,479 --> 00:28:26,479 Suze: and you just want diversification and that's the way you 446 00:28:26,489 --> 00:28:31,489 Suze: wanna go. Absolutely nothing at all wrong with the S 447 00:28:31,500 --> 00:28:35,329 Suze: and P 500. The Vanguard Total Stock Market Index, Dow 448 00:28:35,339 --> 00:28:38,339 Suze: Jones Industrial average. I don't have a problem with that. 449 00:28:38,839 --> 00:28:43,619 Suze: However, I do think given certain areas right now of 450 00:28:43,630 --> 00:28:49,650 Suze: investing besides those things you should own like the QQQs, 451 00:28:49,660 --> 00:28:54,079 Suze: you should own the SMH, you should own things or 452 00:28:54,089 --> 00:28:54,540 Suze: individual 453 00:28:54,729 --> 00:28:59,180 Suze: stocks that are really part of what's happening far more 454 00:28:59,189 --> 00:29:03,449 Suze: than just averaging in, into the Standard and Poors 500 455 00:29:03,459 --> 00:29:07,739 Suze: index or whatever you want to like that. So I 456 00:29:07,750 --> 00:29:10,239 Suze: do think there's a better way today 457 00:29:11,209 --> 00:29:14,540 Suze: doing it rather than just doing that. But hey, if 458 00:29:14,550 --> 00:29:18,439 Suze: that's what you wanna do, go for it, boyfriend, you 459 00:29:18,449 --> 00:29:21,430 Suze: have nothing to lose and really everything to gain as 460 00:29:21,439 --> 00:29:25,849 Suze: long as you are investing dollar cost averaging being part 461 00:29:25,859 --> 00:29:29,540 Suze: of the market in whatever way you feel secure, you 462 00:29:29,550 --> 00:29:33,030 Suze: should do that. All right, KT. I don't know if 463 00:29:33,040 --> 00:29:34,949 Suze: I'm ding ding dinging you or (Suze makes the wrong answer noise). 464 00:29:35,579 --> 00:29:36,680 Suze: I'm not sure. 465 00:29:36,819 --> 00:29:39,619 KT: I think that my my answer was a good one 466 00:29:39,630 --> 00:29:42,900 KT: for John that if he feels safe just doing a 467 00:29:42,910 --> 00:29:45,180 KT: dollar cost average. Nothing wrong with that. 468 00:29:45,459 --> 00:29:48,589 Suze: Ding ding, ding, ding, ding. Yeah, baby. All right. Take 469 00:29:48,599 --> 00:29:49,880 Suze: us out KT. 470 00:29:49,900 --> 00:29:54,089 KT: There's only three things I want you to remember and 471 00:29:54,099 --> 00:29:56,199 KT: so does Suze. And they are 472 00:29:56,790 --> 00:29:59,969 KT: people first, then money, then things. 473 00:29:59,979 --> 00:30:01,540 Suze: And if they do that what happens? 474 00:30:01,630 --> 00:30:04,459 KT: You will be unstoppable. 475 00:30:04,589 --> 00:30:07,420 Suze: Yeah. See you on Sunday. Bye bye.