1 00:00:01,289 --> 00:00:01,700 Music: Music In. 2 00:00:33,569 --> 00:00:40,520 Suze: April 27th, 2023. Welcome everybody to the Women and Money 3 00:00:40,529 --> 00:00:46,220 Suze: Podcast and Everybody Smart enough to listen, today is Ask 4 00:00:46,279 --> 00:00:48,098 Suze: KT and Suze Anything 5 00:00:48,380 --> 00:00:51,110 Suze: as I'm watching KT, what are you doing over there? 6 00:00:51,139 --> 00:00:53,568 KT: I have so many questions. 7 00:00:54,049 --> 00:00:55,349 Suze: You say that all the time. 8 00:00:55,389 --> 00:00:58,680 KT: But today we have like a lot and I think 9 00:00:58,689 --> 00:01:02,680 KT: I've been collecting but I, I made the, the opening 10 00:01:02,689 --> 00:01:06,309 KT: questions are short, but they're all very interesting. 11 00:01:06,580 --> 00:01:11,128 KT: Some of them are a little bit emotional rather than financial. 12 00:01:11,139 --> 00:01:12,309 KT: I like mixing them up. 13 00:01:12,319 --> 00:01:17,250 Suze: You do everybody in case you're wondering, how do you 14 00:01:17,430 --> 00:01:21,179 Suze: get to have your question answered on the Women and 15 00:01:21,190 --> 00:01:22,110 Suze: Money podcast? 16 00:01:22,120 --> 00:01:26,268 Suze: Send it to KT. It's very simple. Just send in 17 00:01:26,279 --> 00:01:27,610 Suze: your question to ask 18 00:01:27,684 --> 00:01:32,614 Suze: Suze S U Z E podcast at gmail dot com 19 00:01:32,705 --> 00:01:37,175 Suze: or better yet. You can also do that via the 20 00:01:37,184 --> 00:01:41,354 Suze: Women and Money community app. All you do is you 21 00:01:41,364 --> 00:01:44,565 Suze: go to Apple Apps or Google Play, download Women and 22 00:01:44,574 --> 00:01:47,694 Suze: Money app and you can send it in via there 23 00:01:47,705 --> 00:01:48,714 Suze: as well 24 00:01:49,199 --> 00:01:52,540 Suze: also, you know, KT we have a fabulous community on 25 00:01:52,550 --> 00:01:53,410 Suze: the women and money. 26 00:01:53,500 --> 00:01:57,440 KT: Yeah, they really respond to, I mean, on our anniversary, how 27 00:01:57,449 --> 00:02:01,760 KT: many wishes did we get, like 900 people? 28 00:02:01,790 --> 00:02:04,410 Suze: A lot of them, a lot of likes or whatever. And 29 00:02:04,550 --> 00:02:06,830 Suze: I saw you looking on there today 30 00:02:07,569 --> 00:02:10,020 Suze: and did you take a question from there? 31 00:02:10,220 --> 00:02:13,080 KT: Yeah, I did, Suze. I kind of was attracted to 32 00:02:13,089 --> 00:02:18,899 KT: the name Linboha. So Linboha, if you're listening, I'm going 33 00:02:18,910 --> 00:02:21,139 KT: to ask your question first. 34 00:02:22,320 --> 00:02:24,500 Suze: All right. So, but wait, you know what today is? 35 00:02:25,750 --> 00:02:30,380 KT: Yeah, Colo comes home, everybody. We're so excited. He's coming 36 00:02:30,389 --> 00:02:33,350 KT: in from Colombia this morning. As soon as we're done 37 00:02:33,360 --> 00:02:36,059 KT: with this podcast, we're going to go greet him with 38 00:02:36,070 --> 00:02:39,839 KT: a delicious cup of coffee. I call it, we call 39 00:02:39,850 --> 00:02:43,740 KT: it his shot, his shot. We give him a little espresso. 40 00:02:43,750 --> 00:02:47,089 KT: We have an espresso machine and he loves it. And 41 00:02:47,100 --> 00:02:49,329 KT: the morning when he walks by, we say Colo come 42 00:02:49,339 --> 00:02:52,759 KT: on in for a shot, a shot. All right. 43 00:02:53,160 --> 00:02:57,359 KT: Alright, ready. So first question, Susie is from Linboha. Hi, 44 00:02:57,369 --> 00:03:01,789 KT: Suze for gift I Bonds. Does the five year rule 45 00:03:01,800 --> 00:03:04,888 KT: start when gifted or redeemed? 46 00:03:04,960 --> 00:03:07,130 Suze: Do you know the answer to that? What is it? 47 00:03:07,139 --> 00:03:09,610 KT: It's when it's gifted when you open it. 48 00:03:10,309 --> 00:03:13,350 Suze: So everybody and just so you know KT, I answered this 49 00:03:13,360 --> 00:03:14,589 Suze: person directly. 50 00:03:14,758 --> 00:03:17,220 KT: So Linboha already has the answer? 51 00:03:17,229 --> 00:03:19,649 Suze: Yes. So you have to look under where it says 52 00:03:19,660 --> 00:03:23,918 Suze: replies and you see that I answered this person. Listen 53 00:03:24,008 --> 00:03:27,679 Suze: for those of you who have been purchasing I bonds 54 00:03:27,880 --> 00:03:31,800 Suze: and you purchased an I Bond by gifting it to 55 00:03:31,809 --> 00:03:32,720 Suze: somebody 56 00:03:33,070 --> 00:03:36,119 Suze: that is one way that you could have locked in 57 00:03:36,149 --> 00:03:42,039 Suze: the 7.12% interest or the 9.62% at the time and 58 00:03:42,050 --> 00:03:45,229 Suze: kept it in a gift box. And then when you 59 00:03:45,240 --> 00:03:50,100 Suze: were ready to actually gift it to and transfer it 60 00:03:50,110 --> 00:03:54,339 Suze: to the person who you bought it for. I did 61 00:03:54,350 --> 00:03:57,979 Suze: a whole podcast on gifting I Bonds. Still a wonderful 62 00:03:57,990 --> 00:04:00,339 Suze: thing to do if it's something that you want to do. 63 00:04:00,619 --> 00:04:05,449 Suze: But the five year time clock because remember when you 64 00:04:05,460 --> 00:04:09,240 Suze: buy an I Bond, the very first year you can't touch it. 65 00:04:09,470 --> 00:04:12,039 Suze: And then for the next four years, there is a 66 00:04:12,050 --> 00:04:16,779 Suze: three month interest penalty. That time clock starts the day 67 00:04:16,790 --> 00:04:20,040 Suze: that you purchased it for somebody else, even if you 68 00:04:20,049 --> 00:04:24,010 Suze: just kept it in your gift box in your, account. All right KT. 69 00:04:25,320 --> 00:04:29,209 KT: Suze, next question. Still on the same topic of I Bonds. 70 00:04:29,220 --> 00:04:33,450 KT: This is from Judy. Suze. I'm still confused. Should I 71 00:04:33,459 --> 00:04:34,890 KT: or should I not? 72 00:04:36,329 --> 00:04:42,540 Suze: Wait, wait, wait, stop everybody. So when KT did that thing, 73 00:04:42,549 --> 00:04:47,079 Suze: should I remodel or not? It was on Shakespeare and 74 00:04:47,089 --> 00:04:51,409 Suze: I know that I was teasing her and I was 75 00:04:51,420 --> 00:04:54,519 Suze: egging her on to maybe play with me with it 76 00:04:54,579 --> 00:04:56,779 Suze: because she forgot the or not. 77 00:04:57,029 --> 00:05:00,019 KT: Did you know when I studied Shakespeare when I was in school? 78 00:05:00,140 --> 00:05:01,979 KT: I loved Shakespeare. 79 00:05:02,630 --> 00:05:04,239 KT: I was in art school in the... 80 00:05:05,500 --> 00:05:08,059 Suze: How come I am with you for 22 years and this is the first time I'm hearing about this? 81 00:05:08,160 --> 00:05:11,000 KT: Oh, you didn't know about me in Shakespeare. I have 82 00:05:11,019 --> 00:05:14,700 KT: books of the full works of Shakespeare in our locker 83 00:05:14,709 --> 00:05:16,079 KT: in our storage locker. 84 00:05:16,738 --> 00:05:21,029 KT: It's a big book. I should read the plays to you. 85 00:05:21,040 --> 00:05:23,630 KT: I love Shakespeare. So, so Judy wrote... 86 00:05:23,640 --> 00:05:29,760 Suze: Where did wait, where did How now Duke dead come from? 87 00:05:32,920 --> 00:05:37,149 KT: I don't like that one, Shakespeare. All right. So Judy wrote, 88 00:05:37,160 --> 00:05:40,750 KT: I'm still confused. Should I or should I not redeem 89 00:05:40,760 --> 00:05:45,409 KT: the I Bonds I bought at what you just mentioned 7.12% 90 00:05:45,420 --> 00:05:47,369 KT: and 9.62%. So she's asking you because she's confused. 91 00:05:51,279 --> 00:05:55,320 Suze: It's confusing because I'm not liking the new interest rates that I 92 00:05:55,329 --> 00:05:59,750 Suze: Bonds are offering. I think in the long run there 93 00:05:59,760 --> 00:06:05,000 Suze: could be better investments out there, but people are taking 94 00:06:05,010 --> 00:06:08,059 Suze: that to mean that I want you to redeem and 95 00:06:08,070 --> 00:06:10,529 Suze: get out of I Bonds. I do not, I do not, 96 00:06:10,540 --> 00:06:14,200 Suze: I do not listen to me if you purchased I 97 00:06:14,209 --> 00:06:15,808 Suze: bonds in the past, 98 00:06:16,428 --> 00:06:21,079 Suze: especially starting when they were at 7.12% about a year 99 00:06:21,089 --> 00:06:26,500 Suze: or so ago. At the 9.62% a while ago. I 100 00:06:26,510 --> 00:06:29,359 Suze: want you to just stay in there. You are not 101 00:06:29,369 --> 00:06:32,529 Suze: to redeem them. Do you hear me? Yes, your renewal 102 00:06:32,540 --> 00:06:37,019 Suze: will be the 6.89 when your six months was up, 103 00:06:37,029 --> 00:06:40,670 Suze: the annualized yield. Yes, your renewal will be after the 104 00:06:40,678 --> 00:06:44,179 Suze: 6.89 is up the 3.79, 105 00:06:44,450 --> 00:06:48,769 Suze: which comes out to be about 5.4%. Don't have a 106 00:06:48,779 --> 00:06:53,250 Suze: problem with that. But now you're into years that you 107 00:06:53,260 --> 00:06:56,928 Suze: have owned some of your I Bonds and it is 108 00:06:56,940 --> 00:06:59,979 Suze: possible if inflation continues down 109 00:07:00,369 --> 00:07:03,428 Suze: and you wait long enough, even though there's a three 110 00:07:03,440 --> 00:07:07,839 Suze: month interest penalty to get out, inflation may be low 111 00:07:07,850 --> 00:07:11,899 Suze: enough that the interest penalty is gonna be hardly anything. So, no, 112 00:07:11,910 --> 00:07:15,399 Suze: you are to keep them Judy and don't you touch them, 113 00:07:15,410 --> 00:07:19,459 Suze: they are worth their weight in gold. 114 00:07:19,940 --> 00:07:22,850 KT: Ok, next question, Suze is from Lynn. My husband and I 115 00:07:22,859 --> 00:07:26,779 KT: are turning 58. He wants to buy a boat and 116 00:07:26,790 --> 00:07:29,079 KT: cruise around during our retirement. 117 00:07:29,299 --> 00:07:33,429 KT: I think we should actually shop around for long term 118 00:07:33,440 --> 00:07:37,100 KT: care insurance. Suze, what do you think? And then, then 119 00:07:37,109 --> 00:07:39,220 KT: she wrote a little note that they're both in good 120 00:07:39,230 --> 00:07:40,309 KT: health right now. 121 00:07:40,320 --> 00:07:44,079 Suze: That should have been your quizzie. Listen, I can tell 122 00:07:44,089 --> 00:07:47,709 Suze: you because KT and I own a boat. When you 123 00:07:47,720 --> 00:07:52,739 Suze: look at a boat, it's breaking, something is breaking when 124 00:07:52,750 --> 00:07:54,410 Suze: you are just looking at it 125 00:07:54,829 --> 00:07:57,890 Suze: A boat really is a thing that you can enjoy 126 00:07:57,899 --> 00:08:01,299 Suze: cruising around on as long as it's not broken, as 127 00:08:01,309 --> 00:08:03,690 Suze: long as it doesn't need a repair. As long as 128 00:08:03,700 --> 00:08:07,850 Suze: a pump hasn't gone as long as something like that. However, 129 00:08:08,190 --> 00:08:13,359 Suze: if it is a choice between sinking your money into 130 00:08:13,369 --> 00:08:16,190 Suze: a boat, especially because boats are expensive right now because 131 00:08:16,200 --> 00:08:21,880 Suze: they are hard to get versus protecting everything that you have. 132 00:08:21,890 --> 00:08:25,980 Suze: So you can sail off into the sunset with long 133 00:08:25,989 --> 00:08:30,760 Suze: term care insurance, protecting your assets. Are you kidding me? 134 00:08:31,059 --> 00:08:36,190 Suze: Just knock some sense into that husband of yours? No way. 135 00:08:36,219 --> 00:08:38,330 Suze: Should he be buying a boat, if it is a 136 00:08:38,340 --> 00:08:40,270 Suze: choice between the two. 137 00:08:40,409 --> 00:08:43,159 KT: And what age is the best age to buy Long term care insurance? 138 00:08:43,210 --> 00:08:45,359 Suze: I'm telling you right now is the perfect age for 139 00:08:45,369 --> 00:08:46,380 Suze: them because 140 00:08:46,674 --> 00:08:50,945 Suze: premiums change at about 59 there's a big difference between 141 00:08:50,955 --> 00:08:53,645 Suze: buying it in your fifties and then buying it in 142 00:08:53,655 --> 00:09:00,434 Suze: your sixties. Phyllis Shelton is the nation's expert and many of, 143 00:09:00,445 --> 00:09:02,205 Suze: you know, because you write me, 144 00:09:02,479 --> 00:09:06,309 Suze: you contact her, you talk to her, she helps you 145 00:09:06,320 --> 00:09:08,809 Suze: or one of her people help you. They do not 146 00:09:08,820 --> 00:09:12,809 Suze: charge you. We have gotten so many thank you letters. 147 00:09:12,820 --> 00:09:16,210 Suze: It's not even funny. So go on to the Women 148 00:09:16,479 --> 00:09:20,130 Suze: and Money app and you will find under long term 149 00:09:20,140 --> 00:09:25,809 Suze: care how you contact her just that simple. She's so fabulous. 150 00:09:25,820 --> 00:09:29,429 Suze: And by the way, we do not get a referral fee. 151 00:09:30,330 --> 00:09:34,030 KT: Suze. Next question is from Annie. My mom who is 152 00:09:34,039 --> 00:09:39,380 KT: 92 and failing recently told me that my sister... ready for 153 00:09:39,390 --> 00:09:43,880 KT: this one, convinced her to change her will and leave 154 00:09:43,890 --> 00:09:47,020 KT: everything to my sis instead of the two of us. 155 00:09:47,239 --> 00:09:51,059 KT: My mom is afraid to change it again and hurt 156 00:09:51,070 --> 00:09:53,219 KT: my sister's feelings. Oh, God. 157 00:09:53,840 --> 00:09:57,890 KT: I'm the one who takes care of my mom every day. Suze, 158 00:09:57,900 --> 00:09:59,090 KT: what should I do? 159 00:10:00,590 --> 00:10:04,059 KT: Oh, that's such a hard. No, these are these things happening. 160 00:10:04,489 --> 00:10:06,539 KT: Well, they happened to me. Do you remember this? 161 00:10:07,590 --> 00:10:14,580 Suze: That my nephew convinced my mother who he thought had 162 00:10:14,590 --> 00:10:17,349 Suze: a whole lot of money. He thought my mother had 163 00:10:17,359 --> 00:10:20,669 Suze: a lot of money because I wanted her to think 164 00:10:20,789 --> 00:10:24,579 Suze: that my daddy made enough money to support her. I 165 00:10:24,590 --> 00:10:27,820 Suze: never wanted her to feel bad that it was the 166 00:10:27,830 --> 00:10:32,299 Suze: daughter and I was spending money on her. So she 167 00:10:32,309 --> 00:10:35,900 Suze: thought that her husband was able to support her 168 00:10:36,530 --> 00:10:41,549 Suze: in her life after he died. And my nephew called 169 00:10:41,559 --> 00:10:46,150 Suze: my mother and said, can you... Granny, can you please 170 00:10:46,159 --> 00:10:50,229 Suze: change your trust to leave everything to me? But make 171 00:10:50,239 --> 00:10:54,609 Suze: sure that you don't tell Suze about it. And my 172 00:10:54,619 --> 00:10:59,909 Suze: mother told me... exact same story, KT. True story. My 173 00:10:59,919 --> 00:11:01,169 Suze: mother told me 174 00:11:02,150 --> 00:11:04,789 Suze: And I said mom, you can do anything you want 175 00:11:04,799 --> 00:11:07,599 Suze: since I knew there was nothing to be left. What 176 00:11:07,609 --> 00:11:10,859 Suze: a surprise upon her death. So believe it or not, 177 00:11:10,869 --> 00:11:13,500 Suze: I totally can relate to this one. 178 00:11:14,830 --> 00:11:16,309 KT: What do you think Annie should do? 179 00:11:16,400 --> 00:11:20,349 Suze: So, first of all, Annie, what amount of money... That's 180 00:11:20,359 --> 00:11:22,989 Suze: the reason I told this story that I just did. 181 00:11:23,119 --> 00:11:26,189 Suze: What amount of money are we talking about? 182 00:11:26,919 --> 00:11:30,909 Suze: Does your mommy have a lot? Does your sister really know? 183 00:11:30,940 --> 00:11:34,330 Suze: Is there really very little money? Are you gonna use 184 00:11:34,340 --> 00:11:37,270 Suze: up all the money to take care of her? So 185 00:11:37,280 --> 00:11:40,000 Suze: in the end there won't be anything. You have to 186 00:11:40,010 --> 00:11:44,390 Suze: think about that number one. Number two, you can't be 187 00:11:44,400 --> 00:11:49,609 Suze: mad at your mom. You can't be hurt because maybe 188 00:11:49,619 --> 00:11:51,489 Suze: your mother looks at you 189 00:11:51,739 --> 00:11:56,239 Suze: and goes, oh, Annie, you're fine. You have money or 190 00:11:56,250 --> 00:12:00,289 Suze: you're capable or whatever. And maybe she feels so sorry 191 00:12:00,299 --> 00:12:04,150 Suze: for your sister because maybe your sister is a loser, 192 00:12:04,159 --> 00:12:07,949 Suze: obviously because she asked your mother to do that. But 193 00:12:07,960 --> 00:12:11,190 Suze: she looks at your sister and feels really bad about 194 00:12:11,200 --> 00:12:15,400 Suze: something that maybe happened. We'll never know. There's no way 195 00:12:15,409 --> 00:12:18,598 Suze: that we're ever gonna know. But here's what I want 196 00:12:18,609 --> 00:12:19,409 Suze: to tell you 197 00:12:20,469 --> 00:12:23,380 Suze: the fact that you're able to take care of your 198 00:12:23,390 --> 00:12:24,919 Suze: mother every day 199 00:12:26,510 --> 00:12:32,380 Suze: and your mother knows that it's an incredible, incredible honor 200 00:12:32,669 --> 00:12:36,000 Suze: and really worth all the money in the world that 201 00:12:36,010 --> 00:12:37,400 Suze: you get to do that 202 00:12:38,030 --> 00:12:42,260 Suze: Don't make your mom feel bad just now, you know 203 00:12:42,270 --> 00:12:46,119 Suze: about your sister and maybe one day you can sit 204 00:12:46,130 --> 00:12:48,900 Suze: down with your sister and say, you know, mom told 205 00:12:48,909 --> 00:12:52,840 Suze: me what you did. Why did you do that? 206 00:12:53,270 --> 00:12:56,319 Suze: Maybe if you need the money as much as she does, 207 00:12:56,479 --> 00:12:59,719 Suze: that you can say I need that money too and 208 00:12:59,729 --> 00:13:03,939 Suze: talk about it with her, with your sister, not with 209 00:13:03,950 --> 00:13:07,679 Suze: the mother. But if you do not talk about this 210 00:13:07,690 --> 00:13:12,690 Suze: with your sister, you will harbor such resentment for the 211 00:13:12,700 --> 00:13:16,890 Suze: rest of your life. So if I were you, I 212 00:13:16,909 --> 00:13:20,718 Suze: would take this time to say sis, we need to talk. 213 00:13:23,280 --> 00:13:26,729 KT: Ok. This is from Lorna. Dear Suze and KT I hope you're both doing well. 214 00:13:26,739 --> 00:13:29,469 KT: My name is Lorna. I've been a fan since the 215 00:13:29,750 --> 00:13:33,750 KT: CNBC days. Wow. My husband and I would watch you 216 00:13:33,760 --> 00:13:38,330 KT: on Saturday nights and have never looked back. That means 217 00:13:38,340 --> 00:13:40,609 KT: that they loved everything you did. 218 00:13:41,520 --> 00:13:45,580 Suze: Hopefully all of you are watching the Suze Ormn show on 219 00:13:45,590 --> 00:13:52,789 Suze: Amazon's Freevee. So Freevee because all 600 episodes are there 220 00:13:53,130 --> 00:13:57,340 Suze: fabulous, fun to watch. Fun to relive the Can I 221 00:13:57,349 --> 00:14:00,559 Suze: afford it segments. And the best part about it is 222 00:14:00,570 --> 00:14:03,669 Suze: it's free. You don't have to pay to stream them. 223 00:14:03,679 --> 00:14:04,699 Suze: All right. 224 00:14:04,710 --> 00:14:08,108 KT: Ok. So here's what Lorna said. Years ago, my attorney 225 00:14:08,119 --> 00:14:14,419 KT: set up an irrevocable insurance trust to hold term life insurance, 226 00:14:14,429 --> 00:14:17,640 KT: if anything ever happened to us for our son, 227 00:14:17,900 --> 00:14:21,090 KT: We do have all the must have documents, although we 228 00:14:21,099 --> 00:14:24,940 KT: never set up the revocable trust and we are confused 229 00:14:24,950 --> 00:14:28,289 KT: as to what we should do. So here's my question. 230 00:14:28,419 --> 00:14:33,590 KT: Should I keep my irrevocable insurance trust and replace it 231 00:14:33,599 --> 00:14:36,609 KT: with the revocable trust or keep both? Good question. 232 00:14:38,369 --> 00:14:41,049 Suze: That should have been your quiz. Right. Do you even 233 00:14:41,059 --> 00:14:43,549 Suze: know what an irrevocable Life insurance trust is? 234 00:14:46,119 --> 00:14:48,840 KT: I don't know what a life insurance trust is. You 235 00:14:48,950 --> 00:14:49,659 KT: can't change it... 236 00:14:49,869 --> 00:14:54,780 Suze: All right. So, you know the word irrevocable. All right, Sweetheart. 237 00:14:54,789 --> 00:14:55,760 Suze: I still love you. 238 00:14:55,880 --> 00:14:57,159 KT: So, what should she do? 239 00:14:57,380 --> 00:14:59,380 Suze: So, here's the thing, everybody. 240 00:15:00,070 --> 00:15:05,119 Suze: Life Insurance when you own it. And let's say it's 241 00:15:05,130 --> 00:15:09,070 Suze: in your name as the owner. Maybe you're the insured 242 00:15:09,080 --> 00:15:14,640 Suze: and your children, maybe they're the beneficiaries and you die. 243 00:15:14,989 --> 00:15:17,880 Suze: Then it is part of your estate 244 00:15:18,349 --> 00:15:21,340 Suze: and a lot of you have a whole lot of 245 00:15:21,349 --> 00:15:25,940 Suze: life insurance. So it depends on how much life insurance 246 00:15:25,950 --> 00:15:31,789 Suze: you happen to have and your other assets. Now, a spouse, 247 00:15:31,799 --> 00:15:35,650 Suze: two spouses can leave any amount of money to each 248 00:15:35,659 --> 00:15:39,559 Suze: other that they want. So, KT we could have 249 00:15:39,900 --> 00:15:43,330 Suze: a billion dollars, which I hope we do one day. 250 00:15:43,340 --> 00:15:47,869 Suze: But anyway, a billion dollars, I could leave it to you. 251 00:15:47,880 --> 00:15:51,340 Suze: You could leave it to me. No estate taxes whatsoever. 252 00:15:51,530 --> 00:15:56,530 Suze: But currently the maximum that one of you can leave 253 00:15:56,539 --> 00:16:04,130 Suze: to beneficiaries other than a spouse is about $12.9 million. 254 00:16:04,590 --> 00:16:08,479 Suze: So between you and your spouse, you can leave close 255 00:16:08,489 --> 00:16:14,400 Suze: to $25 million. That is a lot of money. However, 256 00:16:15,219 --> 00:16:22,039 Suze: in the year 2025 that is just two years from now. 257 00:16:22,049 --> 00:16:25,080 Suze: Take out your little Suze notebooks and write this down. 258 00:16:26,179 --> 00:16:28,250 Suze: The estate tax limit 259 00:16:29,070 --> 00:16:33,020 Suze: is going to sunset. That means the laws that allowed 260 00:16:33,030 --> 00:16:35,820 Suze: it to go up to where it is right now, 261 00:16:36,010 --> 00:16:40,109 Suze: go away. And it is possible that the estate tax 262 00:16:40,119 --> 00:16:46,520 Suze: limit will be under $6 million at that point in time. 263 00:16:47,590 --> 00:16:52,159 Suze: So if you had a life insurance policy, let's say 264 00:16:52,169 --> 00:16:55,140 Suze: you had term insurance, you were young and it was 265 00:16:55,150 --> 00:16:59,340 Suze: $2 million on each of you. That's $4 million and 266 00:16:59,349 --> 00:17:02,609 Suze: you have a home and you have all these other things. 267 00:17:02,619 --> 00:17:04,420 Suze: And let's say the two of you happened to be 268 00:17:04,430 --> 00:17:07,640 Suze: killed in a car crash or something like that happened 269 00:17:08,859 --> 00:17:12,579 Suze: And you left it to your children or beneficiaries, you 270 00:17:12,589 --> 00:17:15,109 Suze: would be over the estate tax limit 271 00:17:15,939 --> 00:17:21,209 Suze: because of the insurance. If you own insurance in an 272 00:17:21,219 --> 00:17:27,829 Suze: irrevocable life insurance trust, the owner is the trust, the 273 00:17:27,839 --> 00:17:32,180 Suze: beneficiary is the trust, which could be the children or 274 00:17:32,189 --> 00:17:35,310 Suze: whoever you want it to be, you would still be 275 00:17:35,319 --> 00:17:38,500 Suze: the insured. But if both of you died, it is 276 00:17:38,510 --> 00:17:41,609 Suze: not in your estate. 277 00:17:42,339 --> 00:17:45,699 Suze: So you could have a whole lot of life insurance, 278 00:17:45,709 --> 00:17:49,839 Suze: plus your assets held in a different trust like a 279 00:17:49,849 --> 00:17:51,170 Suze: revocable trust 280 00:17:51,869 --> 00:17:55,439 Suze: and there'd be no estate taxes on it at that point. 281 00:17:55,729 --> 00:17:59,359 Suze: So therefore, I would keep both of them. 282 00:18:00,010 --> 00:18:05,500 Suze: We'll see what happens in 2025 it's just something that 283 00:18:05,510 --> 00:18:08,099 Suze: you should all keep your eyes on. All right. 284 00:18:09,069 --> 00:18:10,609 KT: Do you think they're going to lower it? 285 00:18:10,859 --> 00:18:14,729 Suze: I have no idea what this Congress is going to 286 00:18:14,739 --> 00:18:16,739 Suze: do on any level. 287 00:18:17,130 --> 00:18:18,938 KT: Ok. Enough politics for me. 288 00:18:19,050 --> 00:18:22,560 Suze: Yeah, we do not tell, tell everybody the rule no 289 00:18:22,569 --> 00:18:28,500 Suze: politics in this house household ever. Ok. 290 00:18:28,930 --> 00:18:33,179 KT: This would not do us any good, no politics ever. 291 00:18:33,189 --> 00:18:36,290 KT: So, this is from Kimberly. Hi, Suze. I have a 292 00:18:36,300 --> 00:18:41,879 KT: Roth 401k through work who matches 100%. That's great. Kimberly. 293 00:18:41,890 --> 00:18:45,458 KT: Up to 6% which I'm taking full advantage of. 294 00:18:53,209 --> 00:18:58,000 KT: Do I also need to open a Roth contributory IRA personally? 295 00:18:58,010 --> 00:19:00,750 KT: Or just stick with my work 401k? 296 00:19:00,760 --> 00:19:04,510 Suze: Yeah. The reason Kimberly I would want you to also 297 00:19:04,520 --> 00:19:09,859 Suze: open up a contributory Roth is because it works very 298 00:19:09,869 --> 00:19:13,170 Suze: different than a Roth 401k. 299 00:19:13,439 --> 00:19:19,849 Suze: A contributory Roth where you can contribute up to $6500 300 00:19:19,859 --> 00:19:23,959 Suze: a year. If you're under 50 $7500 a year, if 301 00:19:23,969 --> 00:19:28,430 Suze: you are 50 or older is because any money that 302 00:19:28,439 --> 00:19:32,479 Suze: you originally put in to a Roth IRA, 303 00:19:33,180 --> 00:19:37,339 Suze: you can take out without any taxes or penalties regardless 304 00:19:37,349 --> 00:19:39,869 Suze: of your age or how long that money has been 305 00:19:39,880 --> 00:19:44,819 Suze: in there. That's number one, number two however, when you 306 00:19:44,829 --> 00:19:47,270 Suze: have a Roth 401k, 307 00:19:48,329 --> 00:19:50,420 Suze: yes, I know it may have been in there for 308 00:19:50,430 --> 00:19:55,780 Suze: eight years, 10 years, 20 years. But when you retire 309 00:19:55,959 --> 00:20:00,439 Suze: and then you take that Roth 401k and you roll 310 00:20:00,449 --> 00:20:05,150 Suze: it or transfer it to a Roth IRA. The time 311 00:20:05,160 --> 00:20:08,448 Suze: clock will start all over again, that five year time 312 00:20:08,459 --> 00:20:12,260 Suze: clock that I always talk about will start all over 313 00:20:12,270 --> 00:20:13,359 Suze: again 314 00:20:14,270 --> 00:20:19,109 Suze: unless you already have a Roth IRA in force. And 315 00:20:19,119 --> 00:20:22,859 Suze: then it just takes on the time limit of the 316 00:20:22,869 --> 00:20:25,119 Suze: Roth IRA that you started. 317 00:20:25,619 --> 00:20:29,729 Suze: So for many reasons, I would like you to also 318 00:20:29,739 --> 00:20:33,160 Suze: do a Roth IRA more things that you can invest 319 00:20:33,170 --> 00:20:39,000 Suze: in more diversification, more liquidity. And if you have enough money, 320 00:20:39,050 --> 00:20:42,889 Suze: you can max out the Roth 401k at work and 321 00:20:42,900 --> 00:20:47,369 Suze: your Roth IRA. Now you are saving a whole lot 322 00:20:47,380 --> 00:20:48,650 Suze: of money. Hey KT. 323 00:20:50,699 --> 00:20:55,930 KT: Ok. Next question. Hi, Suze and KT. I am 41. I 324 00:20:55,939 --> 00:21:00,520 KT: have two young boys, six year old and 20 month old. 325 00:21:00,560 --> 00:21:04,948 KT: I am a recent widow. I'm updating my beneficiaries to 326 00:21:04,959 --> 00:21:08,329 KT: both of my sons. But I think I recall you 327 00:21:08,339 --> 00:21:11,630 KT: mentioning in a podcast that if you're a single parent 328 00:21:11,689 --> 00:21:13,659 KT: who has young children, 329 00:21:14,089 --> 00:21:18,099 KT: you should also include an adult as a beneficiary so 330 00:21:18,109 --> 00:21:21,729 KT: they can receive the money right away in case something 331 00:21:21,739 --> 00:21:26,530 KT: happens to me. Otherwise they would wait until they're adults, right? 332 00:21:26,540 --> 00:21:28,379 Suze: 18, or 21 depending on the state. 333 00:21:29,219 --> 00:21:33,339 KT: Um, so she's asking, you know, should I have my 334 00:21:33,349 --> 00:21:34,429 KT: two boys 335 00:21:34,989 --> 00:21:39,270 KT: and an adult or just one adult as the beneficiary, 336 00:21:39,339 --> 00:21:41,560 KT: so they can give the money to the boys. 337 00:21:41,569 --> 00:21:46,609 Suze: No, no, no. Listen to me. You did not hear 338 00:21:46,619 --> 00:21:51,709 Suze: me ever say, leave a beneficiary to get all the 339 00:21:51,719 --> 00:21:55,819 Suze: money to then give it to your kids. You can't 340 00:21:55,829 --> 00:21:59,459 Suze: trust anybody. I don't care who that person is. I'll 341 00:21:59,469 --> 00:22:02,500 Suze: never forget there was a woman 342 00:22:02,729 --> 00:22:05,489 Suze: who I was very close with. She worked at a 343 00:22:05,500 --> 00:22:13,119 Suze: TV place and her husband died and the husband left 344 00:22:13,130 --> 00:22:16,310 Suze: the money for their kids. They had gotten divorced. Right. 345 00:22:16,319 --> 00:22:20,280 Suze: So ex-husband left the money for the kids with somebody 346 00:22:20,290 --> 00:22:22,339 Suze: else who ran away with all the money 347 00:22:23,140 --> 00:22:25,099 Suze: in the hopes that this person was going to take 348 00:22:25,109 --> 00:22:29,579 Suze: care of the kids. No, no, no. What you did 349 00:22:29,589 --> 00:22:33,180 Suze: hear me say is the following. You need to set 350 00:22:33,189 --> 00:22:38,790 Suze: up a living revocable trust. You would be the owner 351 00:22:38,800 --> 00:22:42,739 Suze: of the trust. You would be the trustee of the trust. 352 00:22:43,270 --> 00:22:49,530 Suze: So therefore you would have a successor trustee and leave 353 00:22:49,540 --> 00:22:54,839 Suze: specific instructions for that successor trustee 354 00:22:55,760 --> 00:22:59,250 Suze: as to what should be done with that money upon 355 00:22:59,260 --> 00:23:04,849 Suze: your death. And then it's all documented. You will also 356 00:23:04,859 --> 00:23:09,869 Suze: need a will because it's with a will that you 357 00:23:09,880 --> 00:23:14,989 Suze: assign who is going to be the guardian of those children. 358 00:23:15,160 --> 00:23:18,129 Suze: So that when you die, they're still very young who 359 00:23:18,140 --> 00:23:20,130 Suze: is going to take care of them. 360 00:23:20,439 --> 00:23:24,609 Suze: And that guardian is appointed via a will. If you 361 00:23:24,619 --> 00:23:29,129 Suze: do not appoint somebody when that will goes through or 362 00:23:29,140 --> 00:23:34,089 Suze: your estate goes through probate. A judge has the authority 363 00:23:34,099 --> 00:23:38,930 Suze: to appoint what's called a probate guardian. Anybody they want, 364 00:23:39,329 --> 00:23:41,709 Suze: so you don't want to see that happen. 365 00:23:41,939 --> 00:23:46,550 Suze: So that's exactly what you need to do. You know, 366 00:23:46,560 --> 00:23:50,540 Suze: you're still very vulnerable right now. Obviously, we have the 367 00:23:50,550 --> 00:23:55,089 Suze: must have documents that you can absolutely order by going 368 00:23:55,099 --> 00:23:58,849 Suze: to Suze, S U Z E, Suze Orman dot com 369 00:23:58,859 --> 00:24:03,329 Suze: slash offer and you can download them there and go 370 00:24:03,339 --> 00:24:04,130 Suze: through them. 371 00:24:04,329 --> 00:24:09,270 Suze: But maybe in your particular situation since you want to 372 00:24:09,280 --> 00:24:12,969 Suze: be really clear on everything that you do, maybe if 373 00:24:12,979 --> 00:24:16,739 Suze: you have the money, you should consult an attorney and 374 00:24:16,750 --> 00:24:21,219 Suze: make sure that the attorney sets it all up correctly 375 00:24:21,229 --> 00:24:24,959 Suze: for you. But you are not. And I repeat, you 376 00:24:24,969 --> 00:24:28,750 Suze: are not to leave the money for your children to 377 00:24:28,760 --> 00:24:30,859 Suze: a beneficiary because remember 378 00:24:31,369 --> 00:24:35,000 Suze: that person besides maybe not giving it to them can 379 00:24:35,010 --> 00:24:38,949 Suze: also die. Something could happen to them if you leave 380 00:24:38,959 --> 00:24:40,989 Suze: it to that person, I just want to go on 381 00:24:41,000 --> 00:24:43,609 Suze: about this for a second because the other things that 382 00:24:43,619 --> 00:24:48,599 Suze: I've seen happen is that you've left it to your sister, 383 00:24:49,020 --> 00:24:52,430 Suze: your sister who absolutely loves your children more than life 384 00:24:52,439 --> 00:24:55,409 Suze: itself and will take care of them financially with the 385 00:24:55,420 --> 00:24:56,708 Suze: money that you left them. 386 00:24:57,290 --> 00:24:58,619 Suze: Your sister 387 00:24:59,219 --> 00:25:04,979 Suze: doesn't really have a will or anything. Your sister is 388 00:25:04,989 --> 00:25:08,260 Suze: then killed in a car crash and this money that 389 00:25:08,270 --> 00:25:10,859 Suze: she has for the benefit of your kids, but nobody 390 00:25:10,869 --> 00:25:16,150 Suze: knows that, but your sister, now goes to her children 391 00:25:16,160 --> 00:25:23,199 Suze: or her husband and they go your kids' inheritance. So, no, no, no, no, no. 392 00:25:23,209 --> 00:25:24,030 Suze: All right.  You look so sad. 393 00:25:26,719 --> 00:25:30,919 KT: No, because those are such, that's a real sad scenario. 394 00:25:30,930 --> 00:25:33,969 KT: She has two little boys, tiny baby. 395 00:25:34,790 --> 00:25:39,429 Suze: That's why a living revocable trust, really KT is so important. 396 00:25:39,660 --> 00:25:43,869 KT: People don't realize you can keep changing it through your lifetime. 397 00:25:44,109 --> 00:25:49,040 KT: As times and situations change, we change ours all the time. 398 00:25:49,050 --> 00:25:53,819 Suze: As a recent widow, just be careful. Just keep your 399 00:25:53,829 --> 00:25:56,209 Suze: money safe and sound right now. Yeah. 400 00:25:56,609 --> 00:26:00,719 KT: Ok. Hi, KT and Suze. Thank you for your podcast 401 00:26:00,729 --> 00:26:02,790 KT: and putting a smile on my face. 402 00:26:03,689 --> 00:26:07,719 KT: I like that, Diane. So I have a question. My 403 00:26:07,729 --> 00:26:12,540 KT: non working spouse has an old Roth IRA and traditional 404 00:26:12,550 --> 00:26:14,180 KT: IRA with an advisor. 405 00:26:14,410 --> 00:26:17,300 KT: As far as I can tell the A U M 406 00:26:17,310 --> 00:26:22,219 KT: fees are around 1.4%. That's the annual maintenance fee, right? The, 407 00:26:22,229 --> 00:26:27,619 KT: the fee for the advisor which basically negates the 6500 408 00:26:27,689 --> 00:26:34,000 KT: max contribution to his traditional IRA allowed annually. What are 409 00:26:34,010 --> 00:26:38,719 KT: the logistics of moving these IRAs to a Vanguard or 410 00:26:38,729 --> 00:26:40,040 KT: Fidelity account? 411 00:26:40,520 --> 00:26:43,639 KT: The advisor has made it difficult to leave but does 412 00:26:43,650 --> 00:26:48,489 KT: my spouse need to open an account at Vanguard first 413 00:26:48,500 --> 00:26:51,380 KT: then sign paperwork at both places? 414 00:26:51,760 --> 00:26:54,569 Suze: Yeah. So here's the thing, everybody, 415 00:26:55,390 --> 00:26:58,900 Suze: when you have a financial advisor that's making it difficult 416 00:26:58,910 --> 00:27:02,329 Suze: to leave. What all of you need to remember... This 417 00:27:02,339 --> 00:27:06,040 Suze: is your money, this is not your advisor's money. The 418 00:27:06,050 --> 00:27:10,219 Suze: advisor and the firm have no in most cases control 419 00:27:10,229 --> 00:27:15,188 Suze: over your money. A really good advisor would help you. 420 00:27:15,589 --> 00:27:18,569 Suze: Would help you because they would want you to feel comfortable. 421 00:27:18,579 --> 00:27:22,199 Suze: And if you want to leave, they would say, ok, 422 00:27:22,209 --> 00:27:25,000 Suze: and make it easy for you to leave. 423 00:27:25,400 --> 00:27:27,989 Suze: So that's another reason that you should be leaving this 424 00:27:28,000 --> 00:27:31,239 Suze: person just so, you know, you simply would go to 425 00:27:31,250 --> 00:27:34,819 Suze: Vanguard or fidelity or any institution that you want to 426 00:27:34,829 --> 00:27:37,159 Suze: open up an IRA with 427 00:27:37,569 --> 00:27:41,250 Suze: and it will be a transfer, it will go from 428 00:27:41,280 --> 00:27:45,760 Suze: the account that you have wherever it is directly to 429 00:27:45,810 --> 00:27:51,290 Suze: that account. Also, the company that you open it up with, 430 00:27:51,300 --> 00:27:54,599 Suze: tell them that your advisor is giving you trouble. Can 431 00:27:54,609 --> 00:27:58,670 Suze: they just contact that advisor? Nothing needs to be signed 432 00:27:58,680 --> 00:28:02,530 Suze: with that advisor or whatever and it will just go. 433 00:28:02,550 --> 00:28:04,688 Suze: Now to take your power, 434 00:28:05,250 --> 00:28:08,139 Suze: I would not be silent about this. I would call 435 00:28:08,150 --> 00:28:12,280 Suze: the advisor and I would say listen and listen closely. 436 00:28:12,579 --> 00:28:14,979 Suze: I don't like that you have been making it difficult 437 00:28:14,989 --> 00:28:18,760 Suze: for me. I am transferring my account. You are going 438 00:28:18,770 --> 00:28:22,109 Suze: to get paperwork from such and such and you better 439 00:28:22,119 --> 00:28:25,669 Suze: make this easy and fast or I am going to 440 00:28:25,680 --> 00:28:28,859 Suze: lodge a complaint against you. Do you hear me? 441 00:28:29,280 --> 00:28:34,339 Suze: You take your power, girlfriend, stop being afraid of somebody 442 00:28:34,349 --> 00:28:37,989 Suze: just because they have this title, a financial advisor. They 443 00:28:38,000 --> 00:28:42,060 Suze: are no different than any of you. Also, KT just 444 00:28:42,069 --> 00:28:45,920 Suze: handed me your email and the other part of the 445 00:28:45,930 --> 00:28:49,959 Suze: question that she didn't read is will your investments need 446 00:28:49,969 --> 00:28:51,069 Suze: to be sold 447 00:28:51,329 --> 00:28:55,650 Suze: and repurchased with the new broker? No, they will transfer 448 00:28:55,660 --> 00:29:00,930 Suze: by what's called in kind, meaning whatever you have in 449 00:29:00,939 --> 00:29:05,270 Suze: your account will transfer the exact same way that you 450 00:29:05,280 --> 00:29:08,089 Suze: have it. So in the new firm that you're with, 451 00:29:08,349 --> 00:29:12,130 Suze: you will own the exact same things that's called transfer 452 00:29:12,160 --> 00:29:14,270 Suze: in kind. All right, KT 453 00:29:14,819 --> 00:29:17,030 KT: OK. Next is from Angela 454 00:29:17,369 --> 00:29:21,979 KT: Dear Suze. I believe I have made a huge mistake 455 00:29:21,989 --> 00:29:26,900 KT: by getting involved with L I R P S. That 456 00:29:26,910 --> 00:29:29,729 KT: is life insurance retirement plans. Everybody. 457 00:29:31,260 --> 00:29:35,030 KT: One for me and one for my son. The concept 458 00:29:35,040 --> 00:29:37,329 KT: was presented to me as a way to pull out 459 00:29:37,339 --> 00:29:41,069 KT: money to pay off student loans when the time came. 460 00:29:41,310 --> 00:29:44,489 KT: My son was in high school when I started these. 461 00:29:44,500 --> 00:29:48,920 KT: He is now 24. I am 56 to date. I 462 00:29:48,930 --> 00:29:54,089 KT: have paid $39,000 and it has been a struggle if 463 00:29:54,099 --> 00:29:56,300 KT: I had simply put aside that money, I could have 464 00:29:56,310 --> 00:29:59,319 KT: paid off one of my son's student loans by now. 465 00:29:59,369 --> 00:30:03,359 KT: If I cancel, I will only recoup a very small 466 00:30:03,369 --> 00:30:06,099 KT: fraction of what I put in. I don't know what 467 00:30:06,109 --> 00:30:09,140 KT: to do. Take the loss and get out or keep 468 00:30:09,150 --> 00:30:10,020 KT: paying into it? 469 00:30:10,250 --> 00:30:13,199 KT: And then Angela wrote this Suze, which I want you 470 00:30:13,209 --> 00:30:15,939 KT: to tell her not to feel this way. She said, 471 00:30:15,959 --> 00:30:21,479 KT: I feel incredibly stupid, embarrassed and scared. I would appreciate 472 00:30:21,489 --> 00:30:25,439 KT: any advice you have. Listen, Angela, let me share something 473 00:30:25,449 --> 00:30:28,000 KT: with you. When I met Suze, I lived in Hong 474 00:30:28,010 --> 00:30:32,540 KT: Kong and I was sold a life... whole life insurance 475 00:30:32,550 --> 00:30:37,020 KT: policy as a means of having a retirement account when 476 00:30:37,030 --> 00:30:38,119 KT: the time came. 477 00:30:38,380 --> 00:30:41,238 KT: And I was, you know, relatively young when I bought 478 00:30:41,250 --> 00:30:44,430 KT: into it. The day I met Suze Orman, she made 479 00:30:44,439 --> 00:30:47,939 KT: me cancel it, sell out, take the loss and she 480 00:30:47,949 --> 00:30:50,589 KT: said for the amount of money, KT that you're putting 481 00:30:50,599 --> 00:30:53,660 KT: in every year, I'm going to show you what you 482 00:30:53,670 --> 00:30:57,640 KT: can invest in and recoup it even double that and 483 00:30:57,650 --> 00:30:58,430 KT: she did. 484 00:30:59,040 --> 00:31:00,859 Suze: So here's the thing, Angela... 485 00:31:00,869 --> 00:31:02,469 KT: Don't feel stupid, right. 486 00:31:02,479 --> 00:31:05,930 Suze: You shouldn't feel incredibly stupid, embarrassed and scared 487 00:31:06,209 --> 00:31:12,380 Suze: because millions of people I'm sure have been told that 488 00:31:12,390 --> 00:31:17,020 Suze: life insurance retirement plans are the way to go. Now, 489 00:31:17,030 --> 00:31:19,619 Suze: if you are extremely wealthy, 490 00:31:20,760 --> 00:31:24,310 Suze: and you're worried about estate taxes and things like that. Ok? 491 00:31:24,790 --> 00:31:29,160 Suze: But these L I R Ps e ssentially work under 492 00:31:29,170 --> 00:31:33,380 Suze: the guise that you put money in. They're tax deferred. 493 00:31:33,390 --> 00:31:35,810 Suze: And the way that you take money out is through 494 00:31:35,819 --> 00:31:36,890 Suze: a loan 495 00:31:37,510 --> 00:31:40,079 Suze: and you don't have to pay taxes on it because 496 00:31:40,089 --> 00:31:45,589 Suze: it's a loan. So you've put $39,000 in, I would 497 00:31:45,599 --> 00:31:50,089 Suze: not continue to fund this on any other level because 498 00:31:50,099 --> 00:31:53,489 Suze: it has been a struggle. But you are also not 499 00:31:53,500 --> 00:31:57,140 Suze: to live your life with, I could have, should have, 500 00:31:57,150 --> 00:31:59,880 Suze: would have, this is what you did. 501 00:32:00,750 --> 00:32:05,589 Suze: So the real question becomes... now, what do you do? 502 00:32:06,199 --> 00:32:10,650 Suze: Obviously you need to meet with this sales person. Notice 503 00:32:10,660 --> 00:32:13,369 Suze: I said sales person anyway, 504 00:32:13,979 --> 00:32:18,739 Suze: and you need to find out what happens if you 505 00:32:18,750 --> 00:32:24,010 Suze: just don't make any more contributions or pay any more 506 00:32:24,020 --> 00:32:29,550 Suze: premiums whatsoever. What happens? That's number one. Number two, 507 00:32:30,270 --> 00:32:33,369 Suze: if you decide that you want to take this money 508 00:32:33,380 --> 00:32:37,219 Suze: out and you want to take it out as a loan, 509 00:32:38,050 --> 00:32:42,010 Suze: you need to make sure that you understand how your 510 00:32:42,020 --> 00:32:47,469 Suze: policy works because most policies work this way. Listen carefully, 511 00:32:47,479 --> 00:32:48,209 Suze: everybody 512 00:32:49,040 --> 00:32:52,040 Suze: you put in a lot of money. Now you want 513 00:32:52,050 --> 00:32:55,709 Suze: to take out a lot of money as a loan, 514 00:32:56,209 --> 00:33:00,079 Suze: but a loan has interest on it. Even if it's 515 00:33:00,089 --> 00:33:02,969 Suze: what's called a net 0% loan, 516 00:33:04,000 --> 00:33:07,910 Suze: there is interest within the policy. You have to believe 517 00:33:07,920 --> 00:33:12,290 Suze: me on this. So you have to make sure that 518 00:33:12,300 --> 00:33:17,359 Suze: you leave enough money within this policy that it generates 519 00:33:17,369 --> 00:33:22,689 Suze: enough interest to pay the fees and the interest on 520 00:33:22,699 --> 00:33:26,270 Suze: this policy. Otherwise, if you don't, 521 00:33:27,300 --> 00:33:31,310 Suze: then the amount of money that you left in will 522 00:33:31,319 --> 00:33:35,410 Suze: get smaller and smaller as it pays for everything. And 523 00:33:35,420 --> 00:33:40,180 Suze: then what happens? It's gone and the policy then is gone. 524 00:33:40,630 --> 00:33:45,400 Suze: Once the policy is gone, it's no longer there. Now 525 00:33:45,410 --> 00:33:49,849 Suze: you very probably will owe income tax on the loan 526 00:33:49,859 --> 00:33:53,800 Suze: because now the loan really isn't a loan anymore because 527 00:33:53,810 --> 00:33:55,189 Suze: the policy is over 528 00:33:55,589 --> 00:34:00,510 Suze: Now that may have sounded complicated, but that is exactly 529 00:34:00,520 --> 00:34:05,729 Suze: how these policies work. So therefore, when you sit down 530 00:34:05,739 --> 00:34:07,560 Suze: and talk to this person, 531 00:34:08,489 --> 00:34:12,310 Suze: you have to make sure that you understand what your 532 00:34:12,320 --> 00:34:13,719 Suze: choices are 533 00:34:14,629 --> 00:34:18,409 Suze: to either get your money out but never have the 534 00:34:18,419 --> 00:34:20,000 Suze: policy expire 535 00:34:20,850 --> 00:34:24,139 Suze: and, or leave it like it is and see what 536 00:34:24,149 --> 00:34:25,419 Suze: happens to the money 537 00:34:26,129 --> 00:34:30,489 Suze: or you take it out and that is it, you 538 00:34:30,500 --> 00:34:35,040 Suze: just close it out and it's gone. All right now 539 00:34:35,050 --> 00:34:36,879 Suze: you know. KT, I have... 540 00:34:37,229 --> 00:34:42,229 KT: What time is it, Suze? That went fast, right? Thursdays 541 00:34:42,239 --> 00:34:44,049 KT: always go fast for me. 542 00:34:44,719 --> 00:34:48,850 KT: I don't know why. Maybe I'm excited because Colo's coming home. 543 00:34:48,860 --> 00:34:51,718 Suze: I was gonna say, or it would have been sweet 544 00:34:51,729 --> 00:34:53,629 Suze: if you said because I get to sit here in 545 00:34:53,639 --> 00:34:56,709 Suze: the studio and look at you and the faces you 546 00:34:56,719 --> 00:34:59,959 Suze: make and I just love spending time with you. But 547 00:34:59,969 --> 00:35:03,219 Suze: then we spend almost 24 hours a day together. So 548 00:35:03,229 --> 00:35:06,050 Suze: I guess it's not a big treat. All right, sweetheart. 549 00:35:06,719 --> 00:35:10,610 Suze: Quizzie time is simply where I ask KT and all 550 00:35:10,620 --> 00:35:13,310 Suze: of you a question. Think about it 551 00:35:13,879 --> 00:35:16,449 Suze: and see if you know how to answer it because 552 00:35:16,459 --> 00:35:20,969 Suze: these are questions that you really should know how to answer. 553 00:35:21,719 --> 00:35:25,949 Suze: This is from Kristen. She says we've only opened Roth 554 00:35:25,959 --> 00:35:31,229 Suze: IRAs but received a traditional IRA from my hubby's mom. 555 00:35:31,239 --> 00:35:39,729 Suze: On her passing. It's $33,000. Should we convert it right away? 556 00:35:40,429 --> 00:35:45,060 Suze: Half now and half next year or leave it there? 557 00:35:45,179 --> 00:35:50,360 Suze: The hubby is 52. Think about it. So she just 558 00:35:50,370 --> 00:35:58,479 Suze: has inherited with her hubby, $33,000 from hubby's mom 559 00:35:59,290 --> 00:36:05,699 Suze: that had $33,000 in a traditional IRA. 560 00:36:06,449 --> 00:36:10,760 Suze: They've now inherited it and they want to convert it 561 00:36:11,959 --> 00:36:16,449 Suze: to their Roth IRAs and their questions are, should we 562 00:36:16,459 --> 00:36:20,609 Suze: convert it right away? Half now and half next year 563 00:36:20,620 --> 00:36:21,729 Suze: or leave it there? 564 00:36:23,989 --> 00:36:25,129 KT: And how old is he? 565 00:36:25,270 --> 00:36:32,050 Suze: 52? Da da, da, da, da da. 566 00:36:32,060 --> 00:36:34,540 KT: I would do, I think I would do half now 567 00:36:34,550 --> 00:36:35,560 KT: and half later. 568 00:36:36,489 --> 00:36:37,840 Suze: Final answer? 569 00:36:37,850 --> 00:36:38,779 KT: Maybe. 570 00:36:39,209 --> 00:36:40,739 Suze: What do you mean maybe? 571 00:36:40,750 --> 00:36:42,909 KT: But is there... can you, is there a, um, a 572 00:36:42,919 --> 00:36:47,639 KT: time limit on how much time you have? No. Is 573 00:36:47,649 --> 00:36:50,510 KT: there a time limit? Ok. I got it wrong. 574 00:36:51,030 --> 00:36:53,939 Suze: Very easy. You can't convert it at all 575 00:36:54,300 --> 00:37:00,779 Suze: When you inherit a traditional IRA. Well, this is what 576 00:37:00,790 --> 00:37:05,600 Suze: Kristen wanted to know when you inherit an IRA. You 577 00:37:05,610 --> 00:37:10,500 Suze: cannot transfer it to a Roth at all. It goes 578 00:37:10,510 --> 00:37:16,310 Suze: into a traditional inherited account in your hubby's name. And 579 00:37:16,320 --> 00:37:20,089 Suze: depending how old mommy was when she died, 580 00:37:20,590 --> 00:37:26,089 Suze: you will have essentially 10 years max to wipe this 581 00:37:26,100 --> 00:37:28,810 Suze: account clean. All right. 582 00:37:29,389 --> 00:37:31,959 KT: So you 10, within 10 years, you have to take 583 00:37:31,969 --> 00:37:32,899 KT: that money out. 584 00:37:32,909 --> 00:37:34,939 Suze: Yeah. And you can, you should be taking it out 585 00:37:34,949 --> 00:37:35,719 Suze: yearly 586 00:37:35,989 --> 00:37:38,049 Suze: and when you take it out, you're gonna owe income 587 00:37:38,060 --> 00:37:40,580 Suze: taxes on it. So why then put it in a 588 00:37:40,590 --> 00:37:43,259 Suze: Roth to begin with. I mean, you can, if you 589 00:37:43,270 --> 00:37:45,729 Suze: want to take that money and put it into a 590 00:37:45,739 --> 00:37:49,959 Suze: contributory Roth as you take it out and pay taxes 591 00:37:49,969 --> 00:37:50,580 Suze: on it 592 00:37:51,149 --> 00:37:55,569 Suze: as part of your contribution to your Roth IRA. But 593 00:37:55,580 --> 00:37:58,199 Suze: you cannot convert it on any level. 594 00:37:58,899 --> 00:37:58,929 KT: Oh, I didn't know that. 595 00:37:59,149 --> 00:38:02,310 Suze: Well, of course, you didn't do all of you get 596 00:38:02,320 --> 00:38:05,840 Suze: surprised when she says I didn't know that I'm not 597 00:38:05,850 --> 00:38:10,959 Suze: being sarcastic or mean with KT because the truth of 598 00:38:10,969 --> 00:38:16,159 Suze: the matter is 99% of you got that one wrong. 599 00:38:16,169 --> 00:38:17,259 Suze: I know it. So KT 600 00:38:18,159 --> 00:38:20,510 Suze: you don't have to feel bad about that at all. 601 00:38:20,520 --> 00:38:21,409 Suze: All right. 602 00:38:22,080 --> 00:38:26,250 Suze: So until Sunday's Suze School where I will tell all 603 00:38:26,260 --> 00:38:29,489 Suze: of you why I think there's a good chance oil 604 00:38:29,500 --> 00:38:32,908 Suze: could go back up. There's only one thing that we 605 00:38:32,919 --> 00:38:37,129 Suze: want you to say every single day. And it is 606 00:38:37,139 --> 00:38:38,469 Suze: as follows 607 00:38:38,550 --> 00:38:42,560 Suze: today, wherever I go, I will create... 608 00:38:42,570 --> 00:38:46,439 KT: A more peaceful, joyful and loving world. 609 00:38:46,449 --> 00:38:52,370 Suze: And again, if you do that, you will become unstoppable. 610 00:38:52,379 --> 00:38:53,859 Suze: Talk to you soon. Bye. 611 00:38:59,639 --> 00:39:00,979 Music: Music Out.