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Speaker 1: Hello out there. You want to know what I find so funny? I find that the emails that you're sending in, you're telling me that you love the Ask Suze Anything podcasts. I don't know, I would've thought you would have loved the ones I do on Sunday where I tell stories or whatever. And you love those too. But you really, you are writing me saying you tune in every single Thursday morning so that you can hear answers to questions. And that's what we do here on the Women and Money podcast, Ask Suze Anything addition, which comes out every Thursday. Want to ask a question, and if it's chosen, I will answer it. Just send in your questions to AskSuzePodcast@gmail.com. All right, here's what I did today. I think it's so funny that I did this. I printed out so many, I just start printing. I would click print, click print, click print. And then what I did, you are going to laugh at me at this. I took them and I threw all the pages up, and the ones that landed on my desk, those are the ones that I'm going to answer today. See how whacked out I am? All right, this one is from DeVon. She says, hello, Suze. I have two mentally disabled sisters. We are in our thirties. I'm wondering what kind of financial advice you have for individuals who are disabled and family members? I heard there was a new U.S. federal regulation that may allow disabled people to have some sort of savings account, up to $100k, that will not affect their SSI, but I’m confused about the limitations. Can you tell me about it? All right, DeVon. So, I think what you are referring to here, and this is very important because many people are responsible for their siblings, or will be if they're not already, when their parents die. Or maybe as a parent, you are responsible for a child and that child is on SSI, Social Security Income. And if you leave that child a large amount of money, they will be disqualified from SSI, and that is something that you never want to happen. So, there is a big problem out there with how do you leave money to take care of your children that are on SSI, or your child, or your brother, or your sister, or your cousin, or a friend that happens to be on SSI? How do you leave them money without them being disqualified from SSI? Now, in most cases, the best way to do it is through a special needs trust, but that means you have to go find an attorney. That means that you are going to spend quite a bit of money on doing that. But if you're going to leave a large sum of money, that really is the absolute best way to do it.So I think what DeVon is talking about, is the ABLE account that was established, I think in 2014, right around there. And ABLE stands for “achieving a better life experience” because the government wanted to figure out a way, how do you leave some money to somebody that's on SSI, not disqualify them, but allow them to build up something if they ever want to buy a home or do something like that? So here's what you need to know, DeVon. The maximum contribution that anybody can put into an ABLE account is $15k a year. That money can be invested, obviously it can grow, it can do all kinds of things. However, a beneficiary can never have more than one ABLE account. And once it reaches $100k, that's when you need to be careful, because after that it is very possible that the income from it will disqualify your sisters from SSI. So, you want to be careful as to how much you actually do put into one of these and how much they grow. But for an amount like $15k, $20k, $30k, $50k it's absolutely fabulous, you should check it out for more details, however. Next one is from Maria. She says, I have credit card debt, but I'm also saving towards my 8-month goal. Should I contribute more towards paying off my credit card or more for my emergency funds? Please help, I don't own a home, but someday I wish I can. Yes, and someday I wish you can as well. I want you to first pay off your credit card debt and then save for your 8-month emergency fund. Do not do both at once. Obviously, if those are your only two choices, that's what I want you to do. And the reason I want you to do that, is I want you to get out of debt. And if anything goes wrong, you can use your credit cards to charge again if you have to. Now, remember, this only applies if you're talking about credit cards or emergency funds, credit cards or emergency funds. If you have a retirement plan that matches your contribution, that is your number one priority before the credit cards and before the emergency fund. Got that? This one is from Tanneys. Hi, Suze. I was wondering if you could give advice about using an HSA as a retirement vehicle, maxing out each year and letting the money grow since it has every tax benefit? Thank you.Tanneys, I kind of like that name. An HSA is a health savings account, and a health savings account is an account that you can save money in to pay for your health or qualified medical expenses. In most cases, it is attached to a high deductible health insurance program, and most of the time, it's through an employer. Why do they call it a high deductible plan? Because of this: In the year 2019 for an HSA to be eligible to be an HSA, it has to have the minimum deductible of $1350 if you are single and $2700 if you are a family. So, what does that mean to you? It means that you have to pay that out of your own pocket before the health insurance will kick in. Now, please notice I said it is the minimum. There are plans out there that have deductibles that are three or four or five times that sometimes. So, you just have to check and know what you're getting into. Now, where do you get the money to pay that deductible? It comes from, usually, your health savings account that's attached to that insurance plan. The government in 2019 will allow you, as a single, to put in the maximum this year of $3500, or for a family, $7k. Now, that $3500 and that $7k, that maximum, you can put in less, but you can't put in more. You get an income tax deduction for that contribution. Let's say that you have a great year and that your health plan covers certain things, and that you don't have any out-of-pocket expenses and that now you have health insurance, but you haven't had to use it. But you have contributed $3500 if you’re single or $7000 into this plan, and you got a deduction for it. Now, the next year comes and again you get to contribute that money and get a tax deduction. Here's the thing. As the amount of money grows in your health savings account, you get to invest that money, and you can invest that money in mutual funds. So that money gets to grow and grow, and if you need any of that money for a health expense, you get to take it out, absolutely tax free. So what did you do? You got a tax deduction and you get to use it for a qualified medical expense, tax free. If you don't have to use it, it keeps growing. Now you get to invest it and you get to do that for years and years and years. Now you turn 65 years of age. Now, you can access any of the money that you have in the health savings account, and all you would have to do if you just took it out for any reason, is pay ordinary income tax on it. If, however, you left it in there and now you used it for a qualified medical expense, it would be again, tax free. So, the reason that Tanney is asking this question, is because you get a tax write off, you get to invest it, and you get to use it for a qualified medical expense, tax free. It's the only retirement vehicle out there that you get a tax deduction and get to withdraw it tax free for a qualified medical expense. Now, I probably confused the hell out of all of you there, but suffice to say, it's something many of you should look into, but not all of you. Because if you don't have that kind of money, along with paying for the health insurance premiums, along with everything else, this is not a plan for you. All right, so since that last question was a little complicated, let me go to an easier one here. This one is from Connie. She says, I want to thank you for elevating personal finance to a level of importance for so many women…and men. I love that. But here's her question. She says, generally, is it better for my husband and I to individually open Roth IRAs and contribute to each, and designate each other as beneficiaries? Or, better to open a joint Roth IRA and contribute together? If we contribute the max, either individually or jointly, does it matter?Well, the truth of the matter is, Connie, it matters, because he can't do what you want to do. IRA, whether it's a Roth or whether it's a traditional, stands for individual retirement account. It is impossible to have a joint retirement account anywhere. A retirement account, whether it's an IRA or a 401k or a 403b or a TSP is always held in the individual's name. So, you have to open up one, and your husband has to open up one, and then you both can contribute up to the point of the max, if you qualify. So just so you know, a retirement account is always in an individual's name, never held jointly.The next one is from Kelly, I kind of like this one. She says, when and for whom is whole life insurance a good idea? Kelly, on my top 10 hate list of investments is whole life insurance. So, if I was going to be flippant, I would say off the cuff, it's good for absolutely no one, in my opinion. However, there does come situations where somebody is ill or they've gotten ill or, you know, they have a good chance of getting ill, and they're going to need insurance for their entire life because there isn't going to be enough money. And they're not good savers, and they don't know what else to do, and insurance is their only option in their head. OK. But I have to tell you, nine out of 10 of the times, if you can just be disciplined, you are far better off buying term insurance for a period of time, whether it's 20 years or 30 years, and then that premium will be so far less than what whole life insurance is. And if you were to simply invest the difference between what the whole life policy would have cost you and the term policy will cost you, and you invested that and you were disciplined about that every single month, hopefully within 20 or 30 years, you would have accumulated as much money as the death benefit. And then you would just leave it there and let it grow and grow and keep it safe. And then you would be OK forever. Again, I'm just going to restate that life insurance was never meant to be a permanent need, it was never meant to be there for your whole life. Do you think that a life insurance policy or a life insurance company is going to pay you $100k death benefit if they haven't made $100k or $200k off of your premiums? Of course they're not. So, if they're making that much money off of you, if the insurance agents are making 45, 55, 75, 90% commissions off of your first-year premiums, don't you think that there is a lot of money for everybody else to make off of selling you whole life insurance, universal life insurance, variable life insurance? Again, insurance was only meant to be there during your younger years in case something happened to you that was unexpected, and then somebody who was dependent on you financially would be in trouble. The best way to cover that is through term insurance, good for a specific period of time or a term.Again, you can get term insurance for five years, 10 years, 15 years, 20 years, 25 years, 30 years. And it is a fraction of the cost of whole life insurance. Why is it a fraction of the costs? Because chances are, the policy is going to expire before you die. The term will be up before you die. So, the life insurance company knows they're not going to have to pay you the death benefit. But that's why, if you simply invest the difference or invest along with term, and make sure you're investing enough every month to have the death benefit that you want by the time the term is up. Now you're being smart with money, so I guess there are some cases where whole life insurance makes sense, but I just really have a hard time thinking of one. Now, I could go on and I can answer many more questions that are spread all over my desk right now, but I think at this moment in time I want to talk about the stock market. I just want to say something here. As I'm recording this, it is August 6th, 2019 and yesterday, the market went down 700 some odd points. Last week, it went 500, 600. The market is going up, the market is going down. So, a question that you might be thinking about now is, Suze, what should I be doing? I'm so afraid, the markets are going down, the markets… I don't know what to do. This is the reason that I have said to you, over and over again, that I want you to dollar cost average in to the stock market. Do you understand that as the market goes down, the shares that you want to buy get cheaper? When they get cheaper, your dollars buy more shares. When you have more shares, when the market goes back up again, you make more money. Think about this. If you have 100 shares of something and the market goes up 10 points or what you own goes up 10 points, you made $1k. If you own 1000 shares of something, and the market goes up $10, you made $10k.You are able to recover from a loss far greater when you have more shares of what you're investing in, in the long run. Again, the reason that I tell you to buy a Standard and Poor's 500 index fund, anywhere you want, and to dollar-cost average into it, is because you’re number one, spreading your risk of investment over a whole slew of stocks. And, if you keep doing that month in and month out, month in and month out, and you don't stop investing, or worse, you sell and you just take all your money out, but you still have 20 or 30 or 40 years until you retire. That’s the biggest mistake you will ever make. Think about this: If you took your money out of the stock market back in 2008, and there you are, you're feeling so good about it, you feel like, see, I did great, the market's still going down. But did you get back in in 2009? Chances are you didn't because you were still feeling so great that you were out of the market. And therefore, you probably have missed the last 10 years of one of the greatest bull runs in the history of the stock market. So, nobody gets out and gets in at the right time, and if they do, it's just a matter of luck. Intelligent investing is dollar cost averaging, again, where you take your dollars and every month you invest it in what you are investing in, such as the Standard and Poor's 500 index funds or ETFs. And you just keep doing that month in and month out. If you did that, you should be so happy if you have 20, 30 years or even 10 years until you need this money, because then as the market goes down, you should be happy that it went down. You should be happy that the market starts to go down, because then when you're investing, your dollars buy more shares. The more shares you have when the market goes back up, the more money you make, and you are far better off doing it that way. So please, do not freak out about these markets going down. Now, if you're just invested in a few individual stocks and you do not have diversification, and you are not dollar cost averaging, you have got to make a decision. Did you buy these stocks for the long run to see where they would go over the long term? Or, did you buy them for a short-term gain and are you freaking out? That you're going to have to decide on your own.I can tell you that the stocks that I currently own, most of them pay me dividends. And so, I am still being paid a nice income while they go up and while they go down. So, I do not freak out about that portion of my portfolio. The stocks that I have in cannabis and in Bitcoins, and, well actually in Bitcoin itself, and everything else, when it goes down, does it make me a little nervous? Of course it does. But, I didn’t buy them for the short term, I purchased them for a long term and what I see in the future, and where I think they're going to be years from now. Remember Amazon? Remember Facebook? Remember all these stocks? Google, all of them. Netflix? You buy them for the long term. So, if you're buying individual stocks that are paying you nice dividends, you can afford to hold. Because the truth of the matter is, interest rates are going down and savings accounts, everything, is going down that way. So where are you going to get your income? People will be forced to go back again into the stock market. All of this is happening right now with the stock market because of things that are going on with China and tariffs and all this other stuff. This happened in May, where the market tanked. It came back in June. Will that happen again? I have no idea. But you need to be invested in such a way, where either you are doing one, dollar- cost averaging, and if you don't have a big diversified portfolio or even know how to do it, just do the Standard and Poor's 500 index mutual funds or ETFs. If you need income and you're invested in dividend paying stocks, and there's so many great ones out there, then if it goes down dramatically, who cares? It's still paying you a dividend as long as you invested in good quality stocks to begin with. And three, if you invested in stocks, individual stocks for the long run to see where they go because you have faith in them, in new technology, whatever it may be, then just stick by it if you know that the company is solid. And if you really love the company, when it goes down, OK, buy more. If it goes up and up, and you love the company, just buy more. But don't just sell out of everything and go to cash if you have at least 10, 20 or 30 years longer until you need this money. Now, as you know, I've been telling all of you, it's going to be rough out there. I think I warned you earlier that it's going to be a volatile year in 2019. Did I not? I also think it's going to be very volatile and things are going to happen in the beginning of 2020, somewhere around there, you know, February or so. So, you have to be invested in such a way that makes you feel secure. Remember, again, the goal of money is for you to be secure. So, if you also don't know what to do, then you're going to stay in your home, pay off the mortgage on your home. You don't know what to do, just put money somewhere that makes you, like I said, feel secure. And that may be what? Oh, I know. Paying off your debt, paying off your student loans, doing things like that. So, you know, I get that it's difficult right now, but just don't make it more difficult on yourselves. Do you hear me? All right, listen, for the next few Sundays coming up, every Sunday is going to be an interview for the month of August here, with a woman that I interviewed who was a survivor of abuse. I think it is important for you to hear these stories, I think it is important for you to hear the women themselves and what they have to say about it. Again, every one of them suffered financial abuse, they did not know about it. So Sunday, you will hear an interview between me and Rhonda, and I love Rhonda. I'm not going to tell you much about her right now, but she is a dynamo and someone who deserves to be heard. So, take a listen, OK? In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any loss, which may arise from accessing or reliance on the information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from use of the information. 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