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Suze: October 9, 2025. Welcome everybody to the Women and Money podcast,

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Suze: as well as everybody smart enough to listen. This is...

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KT: Ask Suze and KT anything.

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Suze: And if you write in to ask Suze podcast at

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Suze: gmail.com and KT chooses it, oh, we will answer it

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Suze: on this podcast. 9 days, KT 9 days before we leave.

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KT: We go to Italy, but then we also have Halloween.

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Suze: I don't care about Halloween. We start with this Halloween stuff.

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KT: I'm gonna do the favorite candy...

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Suze: No, you did that last year. Your age is showing because

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Suze: you're wanting to repeat things we've already done. So, but

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Suze: in 9 days...

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KT: Viva Italiano. (Then KT sings a little Dean Martin).

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Suze: Is that Italian I guess that's Italian, huh? All right,

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Suze: go on.

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KT: I'm Italian.

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Suze: What do you have for me?

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KT: Now wait, before we start questions, I want to tell

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KT: everyone to check out your YouTube channel. Suze has an

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KT: official YouTube channel, and it's YouTube.com/ Suze Orman. Why do

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KT: I want you to go there? She's starting to post

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KT: these really cool live segments and little pieces of information.

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KT: She wants you to know they're very current.

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KT: They're great and along with that you get to see

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KT: some Suze Orman show and all kinds of things. Maybe

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KT: I'll come on and wait, wait, it's free.

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Suze: They know YouTube is free, KT.

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KT: But when you say subscribe, some people might think that they have to pay.

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Suze: They understand subscribe when it comes to YouTube. All right, everybody,

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Suze: you heard the boss. Now KT, let's go to questions.

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KT: OK, this is from Rachel.

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KT: Now Rachel um is sending this in. I like this

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KT: a lot and I like Rachel that who you are.

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KT: So let me share this with all of you.

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Suze: What, have you met her?

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KT: No, but listen, I've read...

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Suze: Do you have a correspondence with her.

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KT: No, but I'd like to know just to like her.

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Suze: You would like to know her?

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KT: Yeah. My name is Rachel. I'm 34 years old, the

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KT: oldest child of a Vietnamese immigrants, now an emergency and

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KT: intensive care physician. Congratulations, Rachel.

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KT: She said, I'm married to a fellow physician and a

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KT: new mom of a healthy and happy six month old boy.

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KT: That's great.

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Suze: That's why you want to get to know her?

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KT: No, no, no, I just like this, um, email. So

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KT: she said, though I consider myself a successful and very

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KT: blessed person, my parents were unable to teach me about

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KT: personal finance. I have listened to your podcast for the

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KT: past 3 years and learned immensely from it. You have

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KT: filled this void in my understanding

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KT: and empowered me to jumpstart securing my own family's financial future.

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Suze: Now before you get to her question, because there has

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Suze: to be a question in there, right?

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KT: Yes, it's up here.

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Suze: But did you mainly like this because of everything you

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Suze: just read to me?

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KT: I liked it because she's the oldest child of Vietnamese immigrants.

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KT: And I know many Vietnamese immigrants and I really have...

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Suze: So it touched your heart.

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KT: It touched my heart. Anyone from Asia touches my heart,

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KT: quite frankly.

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Suze: All right, that's because KT spent 20 years or more living in

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Suze: and working in Asia.

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KT: Love, love the Asian society.

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KT: She said, I want to jump start securing my family's

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KT: financial future and allowing me to be able to give

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KT: back to my parents. There you go, Suze, for that,

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KT: she said, I am eternally grateful. So here's the question.

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KT: My husband currently makes $80,000. He receives a match in

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KT: his traditional 403B.

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KT: This year we maxed out his traditional 403B and he

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KT: received $2,000 in employer contributions. Next July he will have

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KT: the option for a Roth 403B though without matching.

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KT: So for 2026, does it make sense to not contribute

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KT: to a traditional 403B with matching and instead max out

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KT: the Roth 403B for tax-free growth, though it would imply

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KT: leaving money on the table. That's her question.

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Suze: That took forever to get to her question. That's besides

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Suze: the point, but no,

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KT: But I wanted to share Rachel's, uh, story.

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Suze: Because we all do, everybody, we have a story and

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Suze: the Women and Money podcast is made up of thousands

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Suze: and thousands of stories.

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Suze: Stories of people who were living in their car, got

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Suze: divorced and didn't have a penny, came from different countries

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Suze: and ended up here. Never knew anything about money. Nobody

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Suze: could teach them about money. Their parents had no money.

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Suze: All kinds of stories. But the great thing in my opinion, KT,

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Suze: about the Women and Money podcast, those who listen,

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Suze: their stories end up exactly where I know they would

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Suze: want to be financially speaking, and that is the reason

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Suze: we keep doing this even though we don't have to

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Suze: be doing this. We do this because we love it

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Suze: and we want to, and we want you to have

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Suze: the best financial advice around. Rachel, yhy can't you have

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Suze: your cake and eat it too?

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Suze: You obviously said that your husband maxed out on his

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Suze: traditional 403B but only got $2,000. What that says to

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Suze: you is they only match up to a certain point

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Suze: of his pay.

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Suze: After that point, if I were you, I would stop

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Suze: contributing to the traditional 403B. You already got your match there,

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Suze: and then I would change to the Roth 403B. And

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Suze: later on you just transfer what's in your traditional 403B

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Suze: to your Roth 403B. Then you have your match.

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Suze: And you get to enjoy it too.

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KT: That, that's, I like the cake better. All right. Next

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KT: question is from Susan. She said, Hi, Suze. Husband and

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KT: I both retired. We're in our 70s, and live on

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KT: Social Security, his pension, and rent from three rental houses.

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KT: I'm about to sell one of those rentals that I've

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KT: had for 40 years. Proceeds from that sale after taxes

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KT: will be about $300,000.

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KT: Now here's the big question. How can I invest this

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KT: for monthly income to make up for the loss of

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KT: the rental income which after property taxes, insurance, and other expenses,

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KT: netted out to be about $1,100 a month? Is that possible?

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Suze: So, KT. You know how I often say I scroll

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Suze: through these, and every once in a while one catches

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Suze: my eye.

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KT: This one caught your eye.

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Suze: This one caught my both my eyes.

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KT: OK, that means that she answered her already.

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Suze: I did. I answered Susan directly.

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KT: Would you tell her?

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Suze: Right, so here's what it is, and I just answered

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Suze: her because her and her husband are both retired and

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Suze: they live on Social Security, his pension.

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Suze: Which obviously maybe when he dies will go away for her,

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Suze: don't know, and rent from their three rental houses and

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Suze: they're about to sell one that they've had for 40

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Suze: years so that touched my heart because this obviously is

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Suze: a really big move for Susan, however, everybody, when it

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Suze: comes to real estate, even though I know Susan said,

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Suze: that she's going to get about $300,000 and it needs

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Suze: to replace $1,100 a month from her rental. The truth is,

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Suze: in my opinion, you don't know for sure what you

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Suze: net when you have a rental.

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Suze: Because if all of a sudden something happens and you

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Suze: need new windows, you need a brand new roof, you

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Suze: need a new refrigerator, all of a sudden, and that

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Suze: could be $10,000 $20,000, or whatever, maybe for that year

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Suze: you aren't netting $13,500 a year. It is possible you

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Suze: are actually in deficit for that amount of time. So

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Suze: when it comes to rental income,

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Suze: you can't always just say this is what we net...always

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Suze: because it's not always, always so there's many things that

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Suze: I told Susan, KT that she could do obviously if

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Suze: she wanted to she could do a mix of treasuries,

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Suze: municipal bonds and CDs, and she could probably get in

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Suze: an average of about 4 to 5% range on that.

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Suze: Which would net her $13,500 a year or about $1,125

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Suze: a month, but then they're more long term and that's it.

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Suze: At this point I would like for Susan to also

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Suze: not to just have this income that she knows, but

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Suze: also have growth on her money as well if she

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Suze: would be willing to take a little bit less income.

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Suze: It would be very possible.

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Suze: For her to put all $300,000 in to utilities, REITs, ETFs,

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Suze: all kinds of things, and average 3 to 4% but

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Suze: also probably get growth, especially in the utility area, everybody,

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Suze: but that would only average her about $10,500 a year.

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Suze: That's about $875 a month. Good dividend paying stocks.

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Suze: That would give her the potential for growth or even ETFs.

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Suze: That would be the way I would go if I

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Suze: were her. But Susan, if you just want to replace

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Suze: what you have, you don't care about growth, you don't

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Suze: care about inflation or anything, then just lock in all

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Suze: 300,000 at about 4.5% in different quality bonds, treasuries, and

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Suze: things like that, right? She could also do an immediate annuity.

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Suze: But not my favorite because it might be all of

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Suze: a sudden she dies, then what happens to that income

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Suze: for the husband, but that could easily give her $1,400

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Suze: to $1,600 a month, right now.

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Suze: But I don't think it would be a joint and

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Suze: survivor annuity.

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KT: So, so it is possible that when she makes the sale,

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KT: she can replace that with invested income.

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Suze: Yes, and she could do a different thing. She could

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Suze: put 40%, let's say, in bonds and CDs, 40% in

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Suze: dividend paying stocks.

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KT: You know what I would do?

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Suze: What?

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KT: I'd sell all three of those houses. She had this

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KT: one for 40 years and your point about maintenance and

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KT: the what ifs.

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KT: Get rid of all three and invest all that money.

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Suze: She has to worry a little bit, I'm sure, about

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Suze: capital gains. So she knows what she's doing. That's not

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Suze: the point. But the bottom line is don't be afraid

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Suze: to sell real estate. All of you, thinking, how are

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Suze: you going to replace your rental income. There are a

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Suze: million ways to do so. All right, KT.

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KT: OK, next question is from Erica. I call this "Niño."

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Suze: Like our Colo, Niño... so wait, I just have to say...

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KT: We have to tell them the backstory of Nino.

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Suze: So KT kind of treats Colo like it's her favorite son.

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Suze: And of course it is because we don't have a son. So,

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Suze: so we're sitting there at the breakfast table, whatever it

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Suze: may be, and all of a sudden he comes in

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Suze: and she says, Oh please don't go on the ladder

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Suze: today and fix this. I'm afraid maybe you'll fall. Or no, Colo,

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Suze: don't do this. It's too hot outside, and I do

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Suze: this thing. I go, Oh well, Niño, Niño, it's your

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Suze: favorite little son, Niño even though it's...

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KT: So let me, let me read this one ready. So

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KT: this is Erica. I call her email "Niño."

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KT: My dearest Suze and Katy, Suze, I've followed your guidance

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KT: for most of my life, and I truly credit my

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KT: strong financial position to your sound advice over the years.

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KT: Listening to you and KT feels like spending time with

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KT: sisters I never had.

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KT: Comforting, wise, and always encouraging.

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Suze: I'm not sure our sisters would be thinking that right now,

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Suze: but anyway, that's besides the point. Go on.

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KT: I am a 20 year navy veteran and just retired

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KT: after an additional 20 years. Now that I'm entering this

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KT: next chapter, I'm thinking ahead, especially about my son's future.

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KT: When I got to that part, I said, Nino, I

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KT: have half a million dollars in cash, and I would

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KT: like to create a stream of income for him. He's

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KT: 40 years old. I know how you feel about annuities,

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KT: but I am struggling to find another way to ensure

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KT: he receives a dependable monthly check when he turns 60.

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KT: Do you have any suggestions or thoughts on how I

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KT: might achieve this goal in a better or more efficient way?

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KT: I'm not going to comment. Go ahead, Suze. You say it, Niño.

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00:14:02,619 --> 00:14:07,250
Suze: No, but Erica, here's the thing I just want to say.

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Suze: What you didn't say is how are you doing financially.

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Suze: You didn't say that upon my death,

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00:14:18,200 --> 00:14:22,580
Suze: I would like to leave him 500,000 if I still

234
00:14:22,580 --> 00:14:25,619
Suze: have it, cause will you or will you not? What

235
00:14:25,619 --> 00:14:27,020
Suze: if all of a sudden you have to be in

236
00:14:27,020 --> 00:14:31,159
Suze: a nursing home or an adult living facility or you get,

237
00:14:31,419 --> 00:14:33,580
Suze: who knows what can happen, or you want to hire

238
00:14:33,580 --> 00:14:38,099
Suze: somebody to come in to take care of you? Who knows?

239
00:14:38,340 --> 00:14:43,539
Suze: So assuming that you mean after you have died and

240
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Suze: don't you dare do this while you are still alive.

241
00:14:48,359 --> 00:14:49,669
Suze: Do you hear me?

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00:14:49,799 --> 00:14:51,690
KT: He's only 40, right?

243
00:14:51,799 --> 00:14:55,799
Suze: Yes, he's only 40, which means she's really not that

244
00:14:55,799 --> 00:15:00,840
Suze: old either, and she could easily live another 20 or

245
00:15:00,840 --> 00:15:04,830
Suze: 30 years, which means you are not to give him

246
00:15:04,830 --> 00:15:07,919
Suze: a penny at this point in time. It will not

247
00:15:07,919 --> 00:15:09,960
Suze: help him. It will hurt him.

248
00:15:10,760 --> 00:15:14,700
Suze: And therefore you just need to set up a living

249
00:15:14,700 --> 00:15:19,500
Suze: revocable trust where somebody is a trustee and that he

250
00:15:19,500 --> 00:15:24,969
Suze: only gets X dollars per month until the money's gone, just

251
00:15:25,140 --> 00:15:31,380
Suze: that simple. But please don't baby him at 40. I

252
00:15:31,380 --> 00:15:34,820
Suze: know I'm going over today, but there's really something that

253
00:15:34,820 --> 00:15:37,809
Suze: struck me that I want to say to all of you.

254
00:15:38,289 --> 00:15:42,239
Suze: And this has happened in many cases of where somebody

255
00:15:42,239 --> 00:15:44,429
Suze: I'll never forget on the Suze Orman show,

256
00:15:45,239 --> 00:15:49,559
Suze: this elderly woman now in her 80s, which is only

257
00:15:49,559 --> 00:15:52,330
Suze: five years away from me, but that's besides the point. OK,

258
00:15:52,599 --> 00:15:55,640
Suze: but no, but she was older, she was sick, she

259
00:15:55,640 --> 00:16:00,989
Suze: had cancer. Her 58 year old son still lived with her.

260
00:16:02,140 --> 00:16:05,770
Suze: To support him, she took out all the equity in

261
00:16:05,770 --> 00:16:11,369
Suze: her home. She had no money at all to leave him.

262
00:16:12,239 --> 00:16:15,630
Suze: And he lived with her and still smokes even though

263
00:16:15,630 --> 00:16:19,109
Suze: she has lung cancer, and her question to me was

264
00:16:19,109 --> 00:16:21,830
Suze: what can I do to make sure that he's OK.

265
00:16:23,179 --> 00:16:26,390
Suze: And my answer to her was "nothing."

266
00:16:27,250 --> 00:16:30,950
Suze: You shouldn't have ever babied him the way that you did,

267
00:16:31,200 --> 00:16:34,679
Suze: cause there's no equity in the house now. He can't

268
00:16:34,679 --> 00:16:37,479
Suze: afford to pay the mortgage that you still have, 'cause

269
00:16:37,479 --> 00:16:40,640
Suze: you took it all out. You don't have any money

270
00:16:40,640 --> 00:16:44,940
Suze: to give him, so at the age of 60 or so,

271
00:16:45,400 --> 00:16:47,190
Suze: he's going to be on the streets.

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00:16:48,140 --> 00:16:52,210
Suze: And there's nothing that I can do for him or

273
00:16:52,210 --> 00:16:56,039
Suze: you at this point in time, so you better tell him.

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00:16:56,210 --> 00:16:59,809
Suze: He better figure that out now, cause otherwise he's going

275
00:16:59,809 --> 00:17:04,649
Suze: to be in big trouble. Now, Erica, I'm not saying

276
00:17:04,650 --> 00:17:09,569
Suze: that's your son by any means, but everybody listening to

277
00:17:09,569 --> 00:17:14,329
Suze: me right now, don't baby your children. Don't make it

278
00:17:14,329 --> 00:17:18,010
Suze: easier on them than they even want.

279
00:17:19,098 --> 00:17:22,458
Suze: Let them grow up. Let them be responsible human beings.

280
00:17:22,659 --> 00:17:26,808
Suze: Let them generate their own money. Let them be independent

281
00:17:27,058 --> 00:17:29,927
Suze: and then give them a surprise maybe upon your death.

282
00:17:30,178 --> 00:17:34,898
Suze: But don't do it now. Erica, take what I just

283
00:17:34,898 --> 00:17:37,408
Suze: said to heart, all right, KT.

284
00:17:37,619 --> 00:17:40,259
KT: OK, next question, Suze is from Elena.

285
00:17:40,930 --> 00:17:44,170
KT: I'm 39, married, and a mom to a two year old,

286
00:17:44,349 --> 00:17:47,188
KT: and I'd love your advice on whether it makes sense

287
00:17:47,189 --> 00:17:50,589
KT: for us to pay off our home early. Here's where

288
00:17:50,589 --> 00:17:56,510
KT: we stand. We have a mortgage for $415,000. It's a

289
00:17:56,510 --> 00:18:02,030
KT: 30 year fixed at 3% scheduled to end 2051.

290
00:18:02,829 --> 00:18:04,390
KT: With child care costs...

291
00:18:04,390 --> 00:18:05,900
Suze: Won't be our problem in 2051.

292
00:18:07,479 --> 00:18:11,219
KT: With child care costs, we don't have much extra cash,

293
00:18:11,510 --> 00:18:14,510
KT: but we could put an extra 100 or 200 a

294
00:18:14,510 --> 00:18:18,109
KT: month toward the principal, which would shorten the loan by

295
00:18:18,109 --> 00:18:22,469
KT: two to three years. I'll admit some of this is emotional.

296
00:18:22,550 --> 00:18:25,510
KT: I have friends who paid off their homes early, and

297
00:18:25,510 --> 00:18:30,180
KT: it makes me second guess our path. Now there's quite

298
00:18:30,180 --> 00:18:31,709
KT: a bit of background.

299
00:18:32,229 --> 00:18:33,550
KT: Details here on...

300
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Suze: KT, I just have to ask this, right, because usually

301
00:18:36,959 --> 00:18:39,829
Suze: when they're asking me it's because somebody else is in

302
00:18:39,829 --> 00:18:41,949
Suze: the picture that isn't agreeing with them or she would

303
00:18:41,949 --> 00:18:45,780
Suze: just be doing it. Anywhere in that email because it's long.

304
00:18:46,189 --> 00:18:51,550
Suze: Does it say that her spouse doesn't agree with her?

305
00:18:51,709 --> 00:18:55,430
KT: Funny that you feel that because there is a challenge here,

306
00:18:55,550 --> 00:18:56,149
KT: she said.

307
00:18:56,569 --> 00:19:00,609
KT: My husband would rather put any extra money into the

308
00:19:00,609 --> 00:19:05,569
KT: stock market. I see his point. The returns can outpace

309
00:19:05,569 --> 00:19:10,040
KT: our 3% mortgage, but I still struggle with carrying debt

310
00:19:10,040 --> 00:19:10,919
KT: for so long.

311
00:19:10,969 --> 00:19:14,089
Suze: I knew it. I knew it. Well, I felt it

312
00:19:14,089 --> 00:19:17,130
Suze: because otherwise why would Elena be asking me if that's

313
00:19:17,130 --> 00:19:20,520
Suze: what she wanted to do? She would just do it.

314
00:19:20,819 --> 00:19:23,810
Suze: So I've done this long enough, everybody, that when somebody's

315
00:19:23,810 --> 00:19:24,729
Suze: asking me

316
00:19:25,280 --> 00:19:28,280
Suze: a very simple question because they know what they want

317
00:19:28,280 --> 00:19:31,438
Suze: to do. Somebody doesn't want them to do what they

318
00:19:31,439 --> 00:19:34,399
Suze: want to do, just that simple. That happens between me

319
00:19:34,400 --> 00:19:39,119
Suze: and KT all the time. Anyway, here's the thing, Elena.

320
00:19:39,770 --> 00:19:44,520
Suze: You're only 39. You say that there isn't really a

321
00:19:44,520 --> 00:19:48,709
Suze: whole lot more than a few $100 a month extra

322
00:19:49,030 --> 00:19:53,409
Suze: and that it's going to be many, many years, 2051

323
00:19:54,040 --> 00:19:58,359
Suze: before the house is paid off. I doubt highly that

324
00:19:58,359 --> 00:20:01,119
Suze: here you are, you're only 39. You have a two

325
00:20:01,119 --> 00:20:04,910
Suze: year old. I doubt highly that may be your only child.

326
00:20:05,479 --> 00:20:07,589
Suze: What if all of a sudden you have another child

327
00:20:07,589 --> 00:20:09,430
Suze: and then another child? You could.

328
00:20:10,089 --> 00:20:14,369
Suze: You really could, and that house is too small now

329
00:20:14,369 --> 00:20:17,770
Suze: or doesn't meet your needs, and you want to move.

330
00:20:18,099 --> 00:20:23,459
Suze: The house will continue to appreciate in value regardless of

331
00:20:23,459 --> 00:20:26,290
Suze: the mortgage that you have on it.

332
00:20:27,000 --> 00:20:29,880
Suze: So it's not about the 3% in the mortgage that

333
00:20:29,880 --> 00:20:32,520
Suze: you want to get rid of, which is how you're

334
00:20:32,520 --> 00:20:36,119
Suze: gonna make money. You make money in a home by

335
00:20:36,119 --> 00:20:42,109
Suze: it appreciating over the years, and that will happen. Therefore,

336
00:20:42,439 --> 00:20:44,560
Suze: if I were you and you don't have a lot

337
00:20:44,560 --> 00:20:47,680
Suze: of money to really make a difference here.

338
00:20:48,560 --> 00:20:51,709
Suze: I would listen to your husband, and I wouldn't be

339
00:20:51,709 --> 00:20:54,550
Suze: doing it, and I would be investing it and making

340
00:20:54,550 --> 00:20:58,310
Suze: sure that you have like a Roth IRA or whatever

341
00:20:58,310 --> 00:21:02,150
Suze: it may be and start doing it that way, where

342
00:21:02,150 --> 00:21:05,429
Suze: you increase your worth not only in your home but

343
00:21:05,430 --> 00:21:09,109
Suze: in your retirement and forget about owning it outright, at this age.

344
00:21:09,430 --> 00:21:14,660
KT: OK, Suze, this next email is right up your alley.

345
00:21:14,699 --> 00:21:16,380
KT: You ready? This is from Jewel.

346
00:21:17,219 --> 00:21:20,239
Suze: Here's what that means.

347
00:21:20,420 --> 00:21:21,849
KT: Get ready for a slapdown.

348
00:21:21,859 --> 00:21:23,579
Suze: It's gonna aggravate me.

349
00:21:23,699 --> 00:21:25,819
KT: It is get ready for a slapdown.

350
00:21:25,819 --> 00:21:27,300
Suze: She loves when I get aggravated.

351
00:21:28,175 --> 00:21:31,714
KT: So this is from Jewel, she said, I'm 94 years old and

352
00:21:31,714 --> 00:21:36,714
KT: I sold my house. I downsized and live independently in

353
00:21:36,714 --> 00:21:41,314
KT: a small townhouse. I don't need the proceeds but would

354
00:21:41,314 --> 00:21:45,125
KT: like to know where to invest it for safety and growth.

355
00:21:45,474 --> 00:21:46,794
KT: She's 94.

356
00:21:47,319 --> 00:21:50,669
KT: And then this is really sweet. She says my financial

357
00:21:50,670 --> 00:21:57,099
KT: adviser would like me to put the proceeds approximately $1.4 million.

358
00:21:57,199 --> 00:21:58,267
Suze: Oh wait, wait, let me guess.

359
00:21:58,267 --> 00:22:03,160
KT: Wait in an S&P indexed annuity. I don't feel comfortable

360
00:22:03,160 --> 00:22:07,109
KT: without your advice. The annuity protects 90%

361
00:22:07,469 --> 00:22:12,109
KT: of the principal and gives me 80% of the S&P

362
00:22:12,109 --> 00:22:20,030
KT: gain over a six year period. So on her 100th birthday...

363
00:22:20,150 --> 00:22:23,589
Suze: But you know what she didn't say there's that and

364
00:22:23,589 --> 00:22:26,939
Suze: how much 1.4 million,

365
00:22:27,459 --> 00:22:30,819
Suze: in one annuity, which you would never do, people, I'll

366
00:22:30,819 --> 00:22:35,556
Suze: tell you why in a second, right, would get in commission.

367
00:22:35,556 --> 00:22:35,933
KT: How much?

368
00:22:35,933 --> 00:22:36,579
Suze: I'm sure...

369
00:22:36,579 --> 00:22:38,651
KT: Just guess.

370
00:22:38,651 --> 00:22:40,066
Suze: 70,000 or more.

371
00:22:40,066 --> 00:22:43,780
KT: Wow in one piece of paper.

372
00:22:43,920 --> 00:22:49,270
Suze: One piece of paper. What's interesting, Jewel, is you yourself

373
00:22:49,270 --> 00:22:53,770
Suze: said I don't feel comfortable without your advice.

374
00:22:54,359 --> 00:22:57,229
Suze: Now let's pretend my advice wasn't here.

375
00:22:58,030 --> 00:23:03,560
Suze: The truth is you don't feel comfortable. Full stop.

376
00:23:04,689 --> 00:23:08,359
Suze: Doesn't matter about my advice. What if I told you,

377
00:23:08,369 --> 00:23:13,760
Suze: go ahead and do it, but maybe you still felt uncomfortable.

378
00:23:14,010 --> 00:23:18,449
Suze: It doesn't matter what I say. It doesn't matter what

379
00:23:18,449 --> 00:23:22,290
Suze: I tell you to do. The only thing that matters

380
00:23:22,290 --> 00:23:27,969
Suze: is you feel comfortable. You feel secure.

381
00:23:28,520 --> 00:23:34,430
Suze: Now in this particular instance, you run, don't walk away

382
00:23:34,430 --> 00:23:37,359
Suze: from this person. First of all, you would never put

383
00:23:37,359 --> 00:23:44,199
Suze: more than 250, maybe 300,000 in one annuity. And why

384
00:23:44,199 --> 00:23:48,199
Suze: is that? Because they're only protected... same thing with FDIC

385
00:23:48,199 --> 00:23:49,750
Suze: insurance and everything in a bank.

386
00:23:50,619 --> 00:23:55,079
Suze: Life insurance companies, annuity companies work the same way. So

387
00:23:55,079 --> 00:23:58,000
Suze: if anything happened to that company, oh, you would have

388
00:23:58,000 --> 00:24:04,319
Suze: approximately $1.1 million at risk. That's the first thing. Second,

389
00:24:05,479 --> 00:24:09,478
Suze: if you want to invest this money in the Standard

390
00:24:09,479 --> 00:24:13,599
Suze: and Poor's or an ETF like VOO, then go ahead

391
00:24:13,599 --> 00:24:19,790
Suze: and do that. Why? Because as that money grows, what

392
00:24:19,790 --> 00:24:23,069
Suze: would happen is, later on if you wanted to take

393
00:24:23,069 --> 00:24:25,520
Suze: it out, capital gains.

394
00:24:26,260 --> 00:24:29,339
Suze: But you die and really at 94 you have to

395
00:24:29,339 --> 00:24:34,569
Suze: be thinking about that, and it passes down to your beneficiaries.

396
00:24:34,660 --> 00:24:38,260
Suze: They would get a step up in cost basis on

397
00:24:38,260 --> 00:24:42,089
Suze: that money, so there would be no income tax to them.

398
00:24:42,579 --> 00:24:47,530
Suze: Your financial adviser should absolutely have said, do you have beneficiaries?

399
00:24:47,619 --> 00:24:49,619
Suze: Do you care about that? Do you want to leave

400
00:24:49,619 --> 00:24:52,349
Suze: money somewhere other than a nonprofit?

401
00:24:52,739 --> 00:24:56,000
Suze: And if the answer to that is yes, then he

402
00:24:56,000 --> 00:25:00,319
Suze: never would suggest such an investment, because the Standard and

403
00:25:00,319 --> 00:25:04,010
Suze: Poor's will probably go up. You would probably make money

404
00:25:04,010 --> 00:25:08,089
Suze: on this. However, upon your death, let's say you put

405
00:25:08,089 --> 00:25:13,050
Suze: in 1.4 million, it's now worth 1.7 million. It's now

406
00:25:13,050 --> 00:25:14,589
Suze: worth 2 million.

407
00:25:15,040 --> 00:25:19,669
Suze: Upon your death your kids are going to owe ordinary

408
00:25:19,670 --> 00:25:27,359
Suze: income taxes on $600,000. Are you crazy? So no, you

409
00:25:27,359 --> 00:25:28,550
Suze: are not to do this on any level.

410
00:25:29,250 --> 00:25:33,329
KT: Run, Jewel, run, run, run, run.

411
00:25:33,400 --> 00:25:34,479
Suze: Run, run, run.

412
00:25:35,489 --> 00:25:38,160
KT: All right, Suze, this is my last email and one

413
00:25:38,160 --> 00:25:41,079
KT: that I really think is going to set you off

414
00:25:41,079 --> 00:25:45,030
KT: yet again, but I want you to set everyone straight here.

415
00:25:45,239 --> 00:25:49,438
KT: This is from Mary. She said, Suze and KT. 10

416
00:25:49,439 --> 00:25:55,709
KT: years ago my husband, a financial adviser, told me that our finances were

417
00:25:55,709 --> 00:25:57,780
KT: none of my business.

418
00:25:57,989 --> 00:26:02,099
Suze: Please just pray. Let me pray that she divorced that idiot.

419
00:26:02,430 --> 00:26:07,550
KT: Ready? After 30 years of marriage, he left me to

420
00:26:07,550 --> 00:26:13,089
KT: start a new life with a woman in his office. Blindsided,

421
00:26:13,229 --> 00:26:17,069
KT: I was in a fog until COVID when I started

422
00:26:17,069 --> 00:26:21,550
KT: listening to your podcast and reading your books. Good for you, Mary.

423
00:26:21,900 --> 00:26:25,170
KT: And then she said, you literally changed the course of

424
00:26:25,170 --> 00:26:28,760
KT: my life, and I am eternally grateful.

425
00:26:29,550 --> 00:26:33,349
KT: That's the theme actually of this week's podcast Eternally grateful.

426
00:26:33,910 --> 00:26:35,849
Suze: KT, that should be the thing that'll be the title,

427
00:26:36,310 --> 00:26:40,599
Suze: the Women and Money podcast on our website. It will

428
00:26:40,599 --> 00:26:44,819
Suze: make you eternally grateful you listened. I love that.

429
00:26:44,969 --> 00:26:47,219
KT: So we'll we'll make that the title of this one.

430
00:26:47,550 --> 00:26:51,339
KT: I've scrimped and saved and now I feel secure in

431
00:26:51,339 --> 00:26:55,270
KT: my future, but one thing does frighten me. How do

432
00:26:55,270 --> 00:26:58,339
KT: you know your revocable trust is valid?

433
00:26:58,829 --> 00:27:02,750
KT: Ready? Now, everyone listened to this. Mary remember had a

434
00:27:02,750 --> 00:27:06,919
KT: husband who told her finances were none of her business.

435
00:27:07,349 --> 00:27:11,569
KT: So Mary's not naive. She just didn't know. So listen

436
00:27:11,569 --> 00:27:15,560
KT: to this question. A few years ago I funded my

437
00:27:15,560 --> 00:27:19,410
KT: revocable trust. She's 65, by the way. I funded my

438
00:27:19,410 --> 00:27:22,677
KT: revocable trust at my bank and Fidelity

439
00:27:22,677 --> 00:27:26,639
KT: and I was confident that I was all set.

440
00:27:26,729 --> 00:27:27,760
Suze: Danger, danger.

441
00:27:27,890 --> 00:27:33,449
KT: Yesterday I went with my 92-year-old mom to fund hers.

442
00:27:33,930 --> 00:27:38,300
KT: While both institutions said it would be easier not to

443
00:27:38,300 --> 00:27:41,968
KT: have a revocable trust, and she wrote, I know better

444
00:27:41,969 --> 00:27:46,489
KT: thank you. Why? Because Mary's been listening to Suze. The

445
00:27:46,489 --> 00:27:53,448
KT: bank said I would need an EIN number. Let's tell

446
00:27:53,449 --> 00:27:57,869
KT: everyone an EIN just, you know, it's an employee identification number.

447
00:27:58,209 --> 00:28:02,369
KT: She said, I need an EIN number to fund my

448
00:28:02,369 --> 00:28:03,530
KT: mother's trust.

449
00:28:03,890 --> 00:28:07,359
KT: I had never heard of this. Does that mean that

450
00:28:07,359 --> 00:28:11,280
KT: my trust is not valid? How would I know? We

451
00:28:11,280 --> 00:28:13,959
KT: went out to the car and we immediately went to

452
00:28:13,959 --> 00:28:18,829
KT: IRS.gov to get an EIN number for both of us,

453
00:28:19,160 --> 00:28:23,069
KT: brought them back into the bank. But Suze, is this correct,

454
00:28:23,079 --> 00:28:26,560
KT: or I am now making my trust invalid? I am

455
00:28:26,560 --> 00:28:27,910
KT: so confused.

456
00:28:29,089 --> 00:28:33,170
KT: So this, this is important. I want you to really

457
00:28:33,170 --> 00:28:35,969
KT: explain to everyone what Mary needs to do.

458
00:28:36,599 --> 00:28:40,839
Suze: I don't know, Mary, if you made it, that the

459
00:28:40,839 --> 00:28:45,869
Suze: bank would be the successor trustee upon your mother's death

460
00:28:46,079 --> 00:28:50,400
Suze: and run the money for her, all right, so if

461
00:28:50,400 --> 00:28:52,880
Suze: you did, some banks then,

462
00:28:53,729 --> 00:28:58,449
Suze: Will insist on an EIN for their own internal systems

463
00:28:58,449 --> 00:29:04,489
Suze: even though the IRS does not require it. So I

464
00:29:04,489 --> 00:29:08,239
Suze: don't know if that's why they wanted you to do so.

465
00:29:08,449 --> 00:29:13,369
Suze: Either way, it has not made it more complicated. So

466
00:29:13,369 --> 00:29:16,170
Suze: you have to know that a revocable trust is what's

467
00:29:16,170 --> 00:29:18,250
Suze: known as a grantor trust.

468
00:29:18,699 --> 00:29:23,089
Suze: And the IRS treats it as if that means no

469
00:29:23,089 --> 00:29:28,530
Suze: separate tax return, so no EIN is required. The only

470
00:29:28,530 --> 00:29:33,479
Suze: thing that is required is your Social Security number. That's it,

471
00:29:33,650 --> 00:29:39,219
Suze: which is the tax ID for the trust, just that simple. Again,

472
00:29:39,689 --> 00:29:42,569
Suze: when an EIN is required.

473
00:29:43,229 --> 00:29:47,150
Suze: After the grantor dies, that would be your mother. The

474
00:29:47,150 --> 00:29:52,229
Suze: trust becomes irrevocable, so I don't know if you wanted

475
00:29:52,229 --> 00:29:53,660
Suze: that as well.

476
00:29:54,410 --> 00:29:58,369
Suze: So the bank's request for your mother's trust wasn't about validity,

477
00:29:58,430 --> 00:30:03,170
Suze: my love. It was simply about their policy and by

478
00:30:03,170 --> 00:30:07,890
Suze: getting an EIN, you did not invalidate anything. You just

479
00:30:07,890 --> 00:30:11,969
Suze: gave the bank a number they're more comfortable with, just

480
00:30:11,969 --> 00:30:15,449
Suze: that simple. But everybody in most cases...

481
00:30:16,119 --> 00:30:19,290
Suze: We have a trust. We each have our own trust,

482
00:30:19,410 --> 00:30:24,079
Suze: a substantial trust, but we don't have an EIN, just saying,

483
00:30:24,119 --> 00:30:25,160
Suze: all right, KT.

484
00:30:25,790 --> 00:30:31,579
Suze: That brings us to the end of this wonderful, fabulous,

485
00:30:31,790 --> 00:30:33,069
KT: Eternally grateful podcast.

486
00:30:33,130 --> 00:30:34,219
Suze: I was waiting for

487
00:30:34,219 --> 00:30:35,589
Suze: you to say that I was

488
00:30:35,589 --> 00:30:37,290
Suze: setting her up and she did it.

489
00:30:37,699 --> 00:30:37,949
Suze: All right,

490
00:30:38,589 --> 00:30:41,260
Suze: everybody, until next week.

491
00:30:41,390 --> 00:30:45,719
KT: You just remember three things, everyone people first, then money,

492
00:30:45,819 --> 00:30:47,310
KT: then things, and..

493
00:30:47,310 --> 00:30:52,589
KT: You stay safe, healthy, and secure. See you soon. Bye