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MUSIC: Music (in).

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Suze: June 22nd, 2023.

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KT: Good, good morning, Suze.

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Suze: Welcome everybody to the Women and Money podcast as well

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Suze: as everybody smart enough to listen. This is the Ask

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Suze: KT and Suze edition. This is where you write in

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Suze: a question and you do so by sending in your

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Suze: questions to ask

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Suze: Suze - Suze podcast at gmail dot com. That really is

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Suze: the best way to do it. So send in your

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Suze: questions there and if Miss Travis chooses it, then guess what?

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Suze: We answer it right here. Alight, KT, I just have

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Suze: to begin with something I am never ever, ever

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Suze: gotten so many responses about:

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Suze: I can control my popcorn.

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KT: Oh, that's a week ago. She hasn't had any, by the way, everyone.

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Suze: But people are writing me saying Suze Orman, you should

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Suze: be able to control yourself. There's nothing unhealthy about popcorn.

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Suze: It doesn't have that many calories. Just let me make

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Suze: a statement here.

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Suze: I'm an all or nothing kind of gal. I'm either

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Suze: all in or I'm really all out. Right. KT. Right.

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Suze: So the point is I wasn't just eating a cup

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Suze: of popcorn. I just wasn't eating two or three cups

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Suze: of popcorn.

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KT: She'd have a massive bowl in front of her on

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KT: her lap and then not share it. Ok, let's get to the,

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KT: let's get to the gist of this. So

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KT: my first question happens to be from Allison who has

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KT: a comment about popcorn. She said, hi, ladies, love you both. KT,

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KT: if you make the popcorn with coconut oil, it's really good.

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KT: I do mine in the skillet and my kids love it. Alison.

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KT: I'm not gonna try that because we are on a

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KT: popcorn ban in this household.

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Suze: But is that how you used to make it?

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KT: Yeah, that's how I make it. But I, I would

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KT: do it with avocado oil, coconut, coconut. But this Allison's

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KT: question is really complicated. So I need you, Suze ready.

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KT: The question is on 529 to Roth conversion. I'm wondering

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KT: if it's 35,000 for each 529  plan I have three.

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KT: So would that be 35,000 times three that I can

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KT: convert eventually or a flat 35,000 total?

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KT: And then it said I'd like to use the 529

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KT: contributions as a state tax write off for me the

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KT: money I contribute is not used for the kids' college.

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KT: So there you go.

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Suze: So you, you chose this...

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KT: Based on popcorn, but I have no idea what these

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KT: conversions are. The 529 the 35,000. I don't have a clue.

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KT: So you have to straighten this up for me and

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KT: for Alison.

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Suze: KT,

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Suze: the best way for me to straighten this up really

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Suze: is not in an Ask KT and Suze Anything podcast.

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Suze: It needs to be its own Suze school. So this

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Suze: coming Sunday, I will do Alison a Suze school just

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Suze: for you and everybody else who needs to know the

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Suze: answer to this question. And that's a lot of you...

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Suze: KT, will you stop picking out such complicated ones?

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KT: Well, I didn't understand what she was talking about so

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KT: I figure most people don't. Well, if I didn't get it,

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KT: no one's gonna get it. Suze, you're so smart. You

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KT: know the answer to everything.

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Suze: I do not, I sometimes get things

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Suze: absolutely wrong.

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KT: Except for directions.

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Suze: Here we go again, everybody now we're going from popcorn

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Suze: to Suze, not having a good sense of direction, which

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Suze: I don't.

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KT: She is not good with direction. She told me because

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KT: she lived in California for so long

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KT: that she's backwards on the east coast and...

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Suze: Will you just continue going on?

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KT: Alright. So we have another question here. This is from Georgie. Hello,

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KT: Suze and KT, thank you for all that you do

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KT: to educate people and allow them to become financially empowered.

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KT: I am 24. I'm in the third week of a

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KT: three month summer internship. My internship

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KT: offers a 401k with a 4% match. Fabulous. My question is,

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KT: should I enroll or not? I'm only in this internship

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KT: for three months and since the company is on a

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KT: hiring freeze, I'm not sure if I will be hired

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KT: on a full-time basis at the end of the summer.

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KT: Thanks in advance for your help. Definitely sign up.

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Suze: Yeah, this is why you should do it even if

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Suze: you're going to get laid off. So you put money

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Suze: into 401k, they're gonna match your contribution. That's free money.

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Suze: I don't care. In fact, if you're putting a lot

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Suze: in or a little, but it's still free money for you.

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Suze: They lay you off. You simply do an IRA rollover

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Suze: with it, including their 4% match

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Suze: and that's money then that you can have for your retirement.

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Suze: KT Go, girl, go.

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KT: Ok. Next is from Patty.

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Suze: What direction am I facing right now?

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KT: South.

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Suze: I am not facing south.

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KT: You're looking at me and you're facing absolutely facing south, Suze.

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Suze: I was going to say west. All right. Go on.

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KT: No. West is that way.

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Suze: That's what direction I'm facing.

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KT: No, you're looking at me and I'm sitting in the south seat

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KT: now, the reason KT knows her direction impeccably is because

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KT: my years in Hong Kong and watching everyone play mahjong

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KT: and if you ever want to know about that. Look

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KT: up mahjong and look up the four seats. They're based

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KT: on north east, west south.

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Suze: Can you just ask me a question?

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KT: So, I've read all your books, Suze. I listened to you

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KT: guys faithfully. You have helped so many of us. Thank

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KT: you from the bottom of my heart. Love you two together.

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KT: Great team. I am a 60 year old divorced woman

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KT: living with her 30 year old special needs child. I

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KT: plan on working till I'm 70. And do not plan on

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KT: taking RMDs until required. I have two years of emergency

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KT: savings and still adding.

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KT: I have all the must have documents and my house

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KT: is paid off and in my trust, I have no

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KT: debt whatsoever. So the question is Suze, how much should

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KT: I convert into the Roth IRA each year? Is there

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KT: a limit? And can I still invest the 7500 each

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KT: year if converting?

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Suze: So the real question here is, can you convert into

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Suze: a Roth IRA each year

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Suze: as well as invest the seven you know, the $7500

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Suze: each year while you're converting? And the answer is you

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Suze: absolutely can. One has nothing to do with the other.

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Suze: Just make sure that you know that the money that

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Suze: you convert into the Roth IRA each year that you

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Suze: will owe income tax on it. And there is no

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Suze: limit as to how much you can convert. So if

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Suze: I were you, I would sit down with a CPA,

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Suze: a tax person and figure out tax wise because you're

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Suze: still obviously working that. How much can you convert, given

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Suze: your income and everything without putting you into a higher

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Suze: income tax bracket? All right. Yeah, KT.

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KT: Ok, from Jean. Dear, Suze and KT, I'm 62 years old.

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KT: My husband and I recently built a house on my

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KT: grandparents original homestead.

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KT: We ran out of money and took out a home

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KT: equity loan from our credit union for 75,000 to finish

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KT: it up. The interest rate on the loan jumped from

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KT: 4.5 to 7.5%. Crazy. Right.

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Suze: Probably gonna go higher.

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KT: So my husband's 66 he has a pension that he

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KT: can start drawing on in the next couple of months.

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KT: He's got about 150,000 in the optional retirement account.

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KT: Would it make sense to use his optional retirement funds

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KT: and apply it to the loan in order to avoid

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KT: paying excessive interest?

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Suze: No, next question.

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Suze: What do you mean? Why? Right. So, but the interest

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Suze: rate jumped, I don't care. He takes out $150,000.

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Suze: Right. He's gonna owe taxes on all 150,000 in order

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Suze: to pay off a $75,000 loan. So he has money right,

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Suze: in an account that he's never paid taxes on. That

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Suze: is why I tell all of you to do a

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Suze: Roth retirement account because if that were the case here,

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Suze: I would say absolutely take out $75,000 from your Roth

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Suze: retirement account and pay that off because that's like guaranteeing

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Suze: you a 7.5% return on your money

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Suze: because that's the interest rate that they are paying. But

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Suze: that is not what they have. So, even though he

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Suze: can do it since he's retired, it will be totally taxable. So, no,

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Suze: just leave that $150,000 there and whatever money you have

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Suze: that you can put towards that, he absolutely do it.

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KT: All right, this is from Penelope.

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KT: Hi, Suze and KT. I'm 36 and recently bought your new book,

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KT: the ultimate retirement guide. Let me say loud and proud

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KT: that people under 50 should absolutely read this book.

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KT: I've been aware of my finances and investing for the

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KT: past decade. So I consider myself somewhat knowledgeable, but all

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KT: I was really focused on was saving and investing as

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KT: much as possible for retirement. But no one, no one

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KT: ever told me the specifics of what actually happens in

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KT: those 50 plus years.

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KT: So all Penelope is saying there's no question here. She

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KT: feels comfortable confident because I feel like I understand what

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KT: will actually happen and what steps I need to take

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KT: once I retire. She said, Suze is such a gift.

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Suze: KT, since she ended with Suze is such a gift is

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Suze: her email address on there?

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Suze: Yes. Yes. All right. So I want you to send

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Suze: her a little gift from us, not a book, but

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Suze: I'll tell you. So, Penelope, KT will be emailing you.

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Suze: You will give her your address and we will be

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Suze: sending you a gift, alright.

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KT: I can't wait to know what the gift is.

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Suze: I have an idea. I know exactly what I want to give her.

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KT: Ok, next question from Julie in Oklahoma. Thanks for all

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KT: of your great advice. My spouse recently became eligible to

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KT: participate in a discounted stock purchase program from his employer.

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KT: He can choose a percentage of his salary to use

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KT: to purchase stock in the company for a 5% discount.

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KT: We are each saving 15% of our income towards retirement

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KT: maxing out our Roth and our employer matches. We're building

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KT: our emergency fund and currently have nine months saved. Should

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KT: we take advantage of the discounted employer stock program?

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Suze: What would you say to that?

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KT: I don't know.

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Suze: I love when you're just so honest.

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KT: I don't know. I don't know because I don't know

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KT: what the company's stock is if it's performing, if it's

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KT: even though it's a discount...

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Suze: But Julie's  husband would know because he works there. So everybody

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Suze: when you work for an employer

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Suze: and that employer offers you a discount stock purchase program,

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Suze: which means you can buy shares of their stock for

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Suze: usually between five and 15% of a discount as to

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Suze: what it's trading at the day that you buy it.

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Suze: So that's like KT an automatic 15% increase or 5%.

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Suze: It's like me saying to you, KT,

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Suze: we could go in and we can buy this item

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Suze: for five or 15% under what it's selling for right now.

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Suze: And it's an item that you like, you know, it's good,

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Suze: you know, it's gonna be worn for a long time.

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Suze: You would say. Of course,

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Suze: the same is true, Julie, with your husband's stock purchase program. So,

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Suze: as long as he feels like the company is doing well,

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Suze: their earnings are doing well, they're not having layoffs. They

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Suze: feel like everything's solid. He can tell he knows people

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Suze: who work for a company know how their company is doing. Absolutely.

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Suze: You should take advantage of that. Absolutely. All right, KT, next.

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KT: Next question is about a lion credit union.

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Suze: Uh oh...

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KT: Do you know Suze if they extended the $100 a

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KT: month offer?

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Suze: Well, the truth is, the $100 a month offer for

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00:14:11,950 --> 00:14:15,959
Suze: new people has never ever gone away. It's called the

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00:14:15,969 --> 00:14:18,539
Suze: Ultimate Opportunity savings account.

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00:14:18,760 --> 00:14:22,250
Suze: And that is where you put in $100 a month

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00:14:22,260 --> 00:14:26,260
Suze: every month for 12 consecutive months. And at the end

233
00:14:26,270 --> 00:14:30,299
Suze: of those 12 months, you get $100. Now, I have

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00:14:30,309 --> 00:14:32,479
Suze: to tell you if that's all you put in at

235
00:14:32,520 --> 00:14:36,169
Suze: the end of those 12 months, you get your $100. Obviously,

236
00:14:36,250 --> 00:14:40,950
Suze: it's NCUA insured, you get a 3.1% interest rate while

237
00:14:40,960 --> 00:14:43,469
Suze: it's in there as well. So

238
00:14:44,000 --> 00:14:47,789
Suze: you should know that that is still available. You just

239
00:14:47,799 --> 00:14:52,450
Suze: go to my alliant dot com and that is where

240
00:14:52,460 --> 00:14:55,780
Suze: you sign up. However, what you should know and I'll

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00:14:55,789 --> 00:14:59,500
Suze: just give you a little, little inside info that they

242
00:14:59,510 --> 00:15:02,789
Suze: haven't even announced yet. We're going to have an offer

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00:15:02,799 --> 00:15:06,809
Suze: kind of like that for your kids.

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00:15:07,400 --> 00:15:11,909
Suze: So we're going to make finances a family affair. If

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00:15:11,919 --> 00:15:16,830
Suze: in fact, you've already done it though, Karen, you've already

246
00:15:16,840 --> 00:15:22,159
Suze: got your $100. No, you don't get another $100 just so,

247
00:15:22,169 --> 00:15:26,289
Suze: you know, but for people who have never done it. Fabulous.

248
00:15:26,299 --> 00:15:28,330
Suze: Fabulous program.

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00:15:28,640 --> 00:15:33,619
KT: All right, Suze. Next question is your favorite topic. Whole

250
00:15:33,630 --> 00:15:36,049
KT: life and term insurance.

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00:15:37,539 --> 00:15:40,030
Suze: You wanna hear? What happens? Can I just tell you

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00:15:40,039 --> 00:15:44,260
Suze: what happens? So, we answered last Thursday. I think it

253
00:15:44,270 --> 00:15:47,119
Suze: was a question from Lloyd. I think that was his

254
00:15:47,130 --> 00:15:50,570
Suze: name about how he bought this. He's now 80 years

255
00:15:50,580 --> 00:15:53,619
Suze: of age. It's the one that Colo talked to us

256
00:15:53,630 --> 00:15:58,450
Suze: about last week. You know, Columbia listens to every podcast

257
00:15:58,570 --> 00:16:00,750
Suze: and he came in and he said, I disagree with

258
00:16:00,760 --> 00:16:01,750
Suze: your answer.

259
00:16:02,369 --> 00:16:04,640
Suze: And I'm like, what are you talking about? He said

260
00:16:04,650 --> 00:16:06,830
Suze: I wouldn't have told the 80 year old that I

261
00:16:06,840 --> 00:16:09,460
Suze: would tell him of course, cancel it. But then go

262
00:16:09,469 --> 00:16:13,630
Suze: to Las Vegas have, have fun, forget about investing this money.

263
00:16:13,640 --> 00:16:15,489
Suze: Look how much money you already have. You don't need

264
00:16:15,500 --> 00:16:19,520
Suze: to save anymore. And I'm like he disagreed. He disagreed

265
00:16:19,530 --> 00:16:20,460
Suze: with me and I'm like...

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00:16:20,549 --> 00:16:22,859
KT: He said, Suze, he's 80 years old. Tell him to go,

267
00:16:22,869 --> 00:16:28,119
KT: have a good time. Go to Vegas, baby. Anyway. Hi, KT...

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00:16:28,609 --> 00:16:31,919
Suze: Wait, wait. But ever since that email was answered,

269
00:16:32,169 --> 00:16:37,219
Suze: I've gotten hundreds of questions like that. So, you chose them,

270
00:16:37,349 --> 00:16:41,330
Suze: see everybody. I read them all. KT gets to choose

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00:16:41,340 --> 00:16:42,390
Suze: the one she wants.

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00:16:42,400 --> 00:16:45,659
KT: So, I like this one. The question is this Susie

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00:16:45,669 --> 00:16:49,719
KT: from Audrey. I have a 20 year term life insurance

274
00:16:49,729 --> 00:16:52,460
KT: that runs through 2033

275
00:16:52,565 --> 00:16:54,534
KT: when I turned 67.

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00:16:54,544 --> 00:16:56,534
Suze: So that means she's 57 right now.

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00:16:56,674 --> 00:17:03,075
KT: It's for $150,000. I pay $33 a month, which I

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00:17:03,085 --> 00:17:04,375
KT: think is reasonable...

279
00:17:04,454 --> 00:17:05,375
Suze: More than reasonable.

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00:17:05,385 --> 00:17:08,573
KT: But before I started listening to you and learning about

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00:17:08,584 --> 00:17:12,814
KT: your dislike for whole life policies, I took the bait

282
00:17:14,078 --> 00:17:18,328
KT: and converted some of my term policy to whole life.

283
00:17:18,338 --> 00:17:21,207
KT: The draw for me was that I got a locked

284
00:17:21,288 --> 00:17:24,759
KT: in rate and no medical exam and it would carry

285
00:17:24,769 --> 00:17:26,239
KT: me past the age of 67.

286
00:17:26,298 --> 00:17:29,739
Suze: Now, before you go on anymore, how much you wanna

287
00:17:29,749 --> 00:17:35,369
Suze: bet me? Right. If she's paying $33 a month

288
00:17:36,060 --> 00:17:42,589
Suze: right now, is that correct, KT for $150,000 of term

289
00:17:42,599 --> 00:17:48,510
Suze: insurance that her conversion is gonna be at least five

290
00:17:48,520 --> 00:17:51,699
Suze: times that amount for a whole life. So it's gonna

291
00:17:51,709 --> 00:17:53,709
Suze: be 100 and 50 or 100 and 70...

292
00:17:53,739 --> 00:17:54,099
KT: 152 a month.

293
00:17:55,849 --> 00:17:58,810
Suze: And I will bet you any amount of money she

294
00:17:58,819 --> 00:18:02,609
Suze: doesn't get as much life insurance. So, do you understand

295
00:18:02,619 --> 00:18:07,339
Suze: what just happened here? Everybody. She's paying almost five times

296
00:18:07,349 --> 00:18:12,040
Suze: the amount of money for a $50,000 less in insurance. Sorry,

297
00:18:12,050 --> 00:18:13,020
Suze: KT go on.

298
00:18:13,449 --> 00:18:16,679
KT: No. So that's the question is now that I'm negatively

299
00:18:16,689 --> 00:18:23,909
KT: thinking about the $152 a month. Whole life policy worth 100,000.

300
00:18:23,920 --> 00:18:27,849
KT: What can I do with it? I am in good health. See,

301
00:18:27,859 --> 00:18:30,510
KT: she's sorry she did it. She's sorry she took the bait.

302
00:18:30,520 --> 00:18:33,670
Suze: So cancel it. If you're in good health, cancel it.

303
00:18:33,810 --> 00:18:36,030
Suze: And this is what I would have you do with

304
00:18:36,040 --> 00:18:40,959
Suze: the money. It's very simple. This insurance company knows

305
00:18:41,369 --> 00:18:44,560
Suze: that you probably since you are in good health, you

306
00:18:44,569 --> 00:18:48,000
Suze: are not going to die for at least 30 to

307
00:18:48,010 --> 00:18:54,129
Suze: 40 more years. Actuarily they have already figured out when

308
00:18:54,140 --> 00:18:57,339
Suze: you are going to die. Ok. So

309
00:18:58,079 --> 00:19:02,050
Suze: let's just take conservative, let's say it's only 30 years

310
00:19:02,060 --> 00:19:06,250
Suze: from now, even though it's probably more if you took

311
00:19:06,260 --> 00:19:09,719
Suze: that $152 a month right now

312
00:19:10,359 --> 00:19:14,250
Suze: and you put it in to the Roth IRA for

313
00:19:14,260 --> 00:19:16,629
Suze: your kids. Assuming that you want this money for the

314
00:19:16,640 --> 00:19:19,849
Suze: kids and the kids, let's just say are working and

315
00:19:19,859 --> 00:19:23,239
Suze: making money. Do you know in 30 years from now

316
00:19:23,250 --> 00:19:27,489
Suze: at just a 5% annual average rate of return? That

317
00:19:27,500 --> 00:19:28,969
Suze: is nothing.

318
00:19:29,479 --> 00:19:39,310
Suze: Right. You'd have 124,000, almost $125,000 in those accounts. That's

319
00:19:39,319 --> 00:19:44,589
Suze: $25,000 more than this death benefit is going to give you,

320
00:19:44,780 --> 00:19:48,989
Suze: let's say you get 8% on the money, which is

321
00:19:49,000 --> 00:19:53,469
Suze: not impossible on any level over the next 30 years,

322
00:19:53,479 --> 00:19:56,810
Suze: you would have $178,000 in there.

323
00:19:57,359 --> 00:19:59,609
Suze: So, do you understand?

324
00:20:00,339 --> 00:20:04,930
Suze: Right. Why? this makes absolutely no sense. You could leave

325
00:20:04,939 --> 00:20:10,228
Suze: a whole lot more money. 24% more. 78% more, maybe

326
00:20:10,239 --> 00:20:15,069
Suze: even 100% more to your kids. If you stop thinking

327
00:20:15,079 --> 00:20:18,489
Suze: that insurance is the way to do it

328
00:20:18,760 --> 00:20:24,409
Suze: because do you understand they're making the $178,000 over the

329
00:20:24,420 --> 00:20:28,479
Suze: next 30 years and you will only be getting 100,000.

330
00:20:28,550 --> 00:20:32,819
Suze: That's why they do it to make money. You could

331
00:20:32,829 --> 00:20:35,688
Suze: do it on your own. Right. KT go on.

332
00:20:36,310 --> 00:20:39,949
KT: I wish people really just forgot about whole life insurance.

333
00:20:40,420 --> 00:20:42,448
KT: Ok. Ready next questions from Vicky...

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00:20:42,719 --> 00:20:46,560
Suze: Well there is sometimes it makes sense but very seldom.

335
00:20:47,319 --> 00:20:51,589
KT: Next questions from Vicky. Suze, would you say now is

336
00:20:51,599 --> 00:20:54,510
KT: a good time to move out of the G fund?

337
00:20:54,750 --> 00:20:56,329
KT: That's the government security investment fund, right Suze?

338
00:20:57,380 --> 00:21:00,380
Suze: She's obviously either in the military or the federal government...

339
00:21:00,959 --> 00:21:05,290
KT: Wait a minute... and to dollar cost average back into the C and

340
00:21:05,300 --> 00:21:07,198
KT: S funds each month.

341
00:21:07,359 --> 00:21:10,770
Suze: Absolutely. I would do that, Vicky. So just to explain

342
00:21:10,780 --> 00:21:15,010
Suze: to everybody, KT. The employer sponsored plan

343
00:21:15,530 --> 00:21:20,459
Suze: for government employees. The military is called the TSP plan,

344
00:21:20,469 --> 00:21:24,180
Suze: which is the Thrift Savings Plan. Now, the Thrift Savings

345
00:21:24,189 --> 00:21:28,930
Suze: Plan for years only had approximately five different types of

346
00:21:28,939 --> 00:21:32,790
Suze: mutual funds that you could invest in. Then they decided

347
00:21:32,800 --> 00:21:35,869
Suze: to offer you hundreds, which I'm not a fan of

348
00:21:35,880 --> 00:21:36,640
Suze: on any level.

349
00:21:37,233 --> 00:21:40,892
Suze: So really what Vicky is asking is that she currently

350
00:21:40,902 --> 00:21:44,561
Suze: has her money in the G Fund, which is KT said

351
00:21:44,571 --> 00:21:49,661
Suze: is the government securities investment fund, which means that the

352
00:21:49,672 --> 00:21:54,401
Suze: money is safe and sound. It's making a good interest rate.

353
00:21:54,422 --> 00:21:57,493
Suze: It's not attached to the stock market.

354
00:21:57,895 --> 00:22:01,125
Suze: What Vicky wants to know is, should she now start

355
00:22:01,135 --> 00:22:05,135
Suze: to dollar cost average into the C fund, which is

356
00:22:05,145 --> 00:22:07,985
Suze: the Common Stock Index fund, which is like the Standard

357
00:22:07,994 --> 00:22:12,015
Suze: and Poor's 500 index fund or the S fund, which

358
00:22:12,026 --> 00:22:16,426
Suze: is the small capitalization Stock Index Fund, which is like

359
00:22:16,436 --> 00:22:19,005
Suze: the Russell 2000 fund.

360
00:22:19,479 --> 00:22:22,719
Suze: So, absolutely, you should do that. But I have to

361
00:22:22,729 --> 00:22:27,489
Suze: tell you, I would be favoring the S fund over

362
00:22:27,500 --> 00:22:31,810
Suze: the C fund. So rather than splitting it 50 / 50

363
00:22:31,819 --> 00:22:36,359
Suze: I would probably do a 60 /40 split. Right, KT, what

364
00:22:36,369 --> 00:22:37,680
Suze: else you got for me?

365
00:22:37,959 --> 00:22:40,250
KT: So, the next question is from M.

366
00:22:40,670 --> 00:22:43,400
KT: Hi, Suze. By the way you rock.

367
00:22:43,410 --> 00:22:46,728
Suze: I do even, I don't know which way to throw

368
00:22:46,739 --> 00:22:48,569
Suze: a rock because I don't know the direction that I

369
00:22:48,579 --> 00:22:50,880
Suze: would be told to anyway, it doesn't matter. Go on.

370
00:22:50,890 --> 00:22:55,469
KT: So she said, Suze, I'm 57. I'm disabled, divorced, hardly

371
00:22:55,479 --> 00:22:59,649
KT: making my bills. Only retirement I have is, is a

372
00:22:59,660 --> 00:23:04,760
KT: deferred annuity worth 20,000. I own my home which I

373
00:23:04,770 --> 00:23:07,900
KT: inherited and rent half of for income.

374
00:23:08,219 --> 00:23:11,209
KT: I'm also blessed to have a seasonal camp which I

375
00:23:11,219 --> 00:23:14,459
KT: rent out in the summer. My problem is my son

376
00:23:14,469 --> 00:23:19,829
KT: turned 18. So my income has decreased by $1000 a month.

377
00:23:19,839 --> 00:23:22,510
Suze: She no longer qualifies for social security for him.

378
00:23:22,599 --> 00:23:25,339
KT: Should I cash in the annuity to fix up the

379
00:23:25,349 --> 00:23:28,560
KT: cabin and rent it out year round or sell my

380
00:23:28,569 --> 00:23:32,310
KT: home and move into the cabin in Maine to retire

381
00:23:32,319 --> 00:23:33,810
KT: at a lower cost of living?

382
00:23:34,119 --> 00:23:37,790
Suze: Yeah. So Melody truthfully, you don't want to cash in

383
00:23:37,800 --> 00:23:41,280
Suze: the annuity because if you do, it was a deferred annuity.

384
00:23:41,290 --> 00:23:47,319
Suze: Chances are that $20,000 may be taxable to you. Number one, also,

385
00:23:47,329 --> 00:23:50,229
Suze: it's not like you have a whole lot of money.

386
00:23:50,280 --> 00:23:53,069
Suze: So all of a sudden, you know, you cash that

387
00:23:53,079 --> 00:23:55,229
Suze: in you then rent it out, then we go through

388
00:23:55,239 --> 00:23:57,750
Suze: a pandemic and then you can't rent it out and

389
00:23:57,760 --> 00:23:59,469
Suze: now you have no income. So

390
00:24:00,010 --> 00:24:03,140
Suze: to make this answer very short is you should not

391
00:24:03,150 --> 00:24:05,639
Suze: cash the annuity to fix up the cabin or to

392
00:24:05,650 --> 00:24:08,459
Suze: rent it out year round for income. You should sell

393
00:24:08,469 --> 00:24:11,179
Suze: your home and move into the cabin in Maine to

394
00:24:11,189 --> 00:24:16,060
Suze: retire at a lower cost of living. Ok, KT!

395
00:24:16,219 --> 00:24:18,560
KT: I'm prepared for a quizzie everyone.

396
00:24:18,969 --> 00:24:20,790
KT: And if you don't know what that is, she's gonna

397
00:24:20,800 --> 00:24:21,859
KT: tell you right now.

398
00:24:21,930 --> 00:24:25,010
Suze: And don't think I didn't catch her looking through to

399
00:24:25,020 --> 00:24:28,260
Suze: see where my quizzies were kept. I've now hidden them

400
00:24:28,270 --> 00:24:32,579
Suze: from her since I know she goes through them. This

401
00:24:32,589 --> 00:24:36,699
Suze: is from Sheila. Sheila obviously has been watching the PBS

402
00:24:36,709 --> 00:24:39,880
Suze: special that they have been playing over and over and

403
00:24:39,890 --> 00:24:43,800
Suze: over again for the past three years and why it's

404
00:24:43,810 --> 00:24:44,040
Suze: still

405
00:24:44,140 --> 00:24:49,359
Suze: their number one producing pledge show at this point. I'm

406
00:24:49,369 --> 00:24:56,089
Suze: sure I have raised over $300 million for public television. Anyway,

407
00:24:56,530 --> 00:25:02,030
Suze: during the PBS special, Suze said that the original investment

408
00:25:02,040 --> 00:25:06,829
Suze: or deposit of an IRA is not taxable and that

409
00:25:06,839 --> 00:25:09,188
Suze: can be withdrawn at any time.

410
00:25:09,510 --> 00:25:12,219
Suze: I was cooking at the time that I was listening

411
00:25:12,229 --> 00:25:15,688
Suze: to the special and attempted to play it back what

412
00:25:15,699 --> 00:25:19,699
Suze: Suze said, but I was unable to rewind it. I've

413
00:25:19,709 --> 00:25:23,959
Suze: been left very confused about whether Suze was referring to

414
00:25:23,969 --> 00:25:30,359
Suze: a traditional IRA or a Roth IRA. So quizzie time

415
00:25:30,369 --> 00:25:32,939
Suze: everybody is when I ask KT a question,

416
00:25:33,510 --> 00:25:37,260
Suze: hopefully she answers it correctly. But I want you to

417
00:25:37,270 --> 00:25:41,239
Suze: think about the answer to this question as well.

418
00:25:42,099 --> 00:25:46,290
Suze: Can you take out your original contributions that you put

419
00:25:46,300 --> 00:25:50,550
Suze: into a retirement account if it is a Roth or

420
00:25:50,560 --> 00:25:55,189
Suze: if it is a traditional IRA? Which one was I

421
00:25:55,199 --> 00:25:58,949
Suze: talking about on the PBS special?

422
00:26:00,189 --> 00:26:02,729
KT: Probably the Roth. But I think you can take the

423
00:26:02,739 --> 00:26:07,069
KT: original out of both. But you can't take out the

424
00:26:07,079 --> 00:26:08,560
KT: income that it's earned.

425
00:26:08,910 --> 00:26:13,280
Suze: You were right, if you just stopped, you were right. If

426
00:26:13,290 --> 00:26:17,459
Suze: you stop there, you were so wrong about the other.

427
00:26:21,030 --> 00:26:24,300
Suze: Ding, ding, ding, ding, ding (and then Suze makes the wrong answer noise). Sometimes you need to just stop.

428
00:26:24,310 --> 00:26:26,380
KT: All right, you should have, you should have given me

429
00:26:26,390 --> 00:26:26,829
KT: the sign... like stop.

430
00:26:27,569 --> 00:26:31,109
Suze: No, my job is not to save you. Your job

431
00:26:31,119 --> 00:26:33,910
Suze: is to learn all of this stuff. She's giving me

432
00:26:33,920 --> 00:26:36,679
Suze: a wrap. So what you need to know Sheila, it's

433
00:26:36,689 --> 00:26:41,119
Suze: very simple. Any money that you put in a Roth IRA,

434
00:26:41,290 --> 00:26:46,379
Suze: you can take out at any time without taxes or penalties,

435
00:26:46,640 --> 00:26:50,390
Suze: regardless of your age and how long the money has

436
00:26:50,400 --> 00:26:53,948
Suze: been in there. It's simply the earnings that have to

437
00:26:53,959 --> 00:26:57,170
Suze: stay in there for at least five years and until

438
00:26:57,180 --> 00:27:00,910
Suze: you are at least 59.5 years of age in a

439
00:27:00,920 --> 00:27:05,130
Suze: traditional IRA. If you take money out any time before

440
00:27:05,140 --> 00:27:09,489
Suze: the age of 59.5, whether it's your contribution or not,

441
00:27:09,500 --> 00:27:12,170
Suze: any money, you will pay

442
00:27:12,709 --> 00:27:16,698
Suze: a 10% penalty if you're not 59.5. And absolutely, in

443
00:27:16,709 --> 00:27:21,030
Suze: all cases, you will pay ordinary income taxes. And why

444
00:27:21,040 --> 00:27:25,640
Suze: is that? Because a traditional IRA is funded with pre

445
00:27:25,829 --> 00:27:29,290
Suze: tax dollars, you have never paid taxes on it. A

446
00:27:29,400 --> 00:27:33,560
Suze: Roth IRA is funded with after tax dollars. So that

447
00:27:33,569 --> 00:27:35,869
Suze: is the big difference. KT...

448
00:27:35,959 --> 00:27:36,739
KT: That's a wrap Suze.

449
00:27:36,949 --> 00:27:38,500
Suze: So take us out girlfriend.

450
00:27:38,510 --> 00:27:41,469
KT: Right. So today, wherever I go,

451
00:27:41,800 --> 00:27:46,930
KT: I will create a more peaceful, joyful and loving world.

452
00:27:46,939 --> 00:27:49,550
Suze: Even if you don't know what direction I'm going?

453
00:27:49,560 --> 00:27:51,290
KT: It's only the right direction.

454
00:27:51,300 --> 00:27:55,890
Suze: That's my girl. And if you say that every single day,

455
00:27:55,900 --> 00:28:01,310
Suze: we promise you, you will be unstoppable.

456
00:28:06,489 --> 00:28:07,489
MUSIC: Music (out).