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Suze: March 20th, 2025. Welcome everybody to the Women and Money

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Suze: podcast as well as everybody smart enough to listen.

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KT: You sound a lot better, Suze.

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Suze: Not a lot.

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KT: Not well, my first question is kind of funny because

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KT: it references your nasally voice. You sound a lot better,

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Suze: but you have

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Suze: to say this is the KT and Suze edition, right.

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KT: Oh, hey everybody, this is the KT...

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Suze: Do you think you'll ever get this?

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KT: No, this is the ask Suze anything and KT will

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KT: ask the question.

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Suze: And to do so, just go to this, this is,

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Suze: should we start over everybody, but

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KT: anyway, just keep going.

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Suze: All you need to know is this is the podcast

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Suze: where if you've written in a question to ask Suze

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Suze: SUZE podcast at gmail.com, and if KT chooses it, then

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Suze: we answer it on this podcast.

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Suze: But guess what else, KT?

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KT: Oh, let's tell them about our new fun YouTube channel.

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Suze: Yeah, so we,

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KT: Suze's been having so much fun, everybody.

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KT: So Suze and Amy, her executive producer of Donkey's Years

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KT: at the CNBC Suze Orman Show, have gotten together and

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KT: they collaborated and created the most fun Can I Afford

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KT: it game on YouTube on Suze's

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KT: channel.

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Suze: So the way that it works is that because a

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Suze: lot of you say you miss it, so you'll go there,

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Suze: go to YouTube, Y O U T U B E.com.

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Suze: Slash Suze Orman, S U Z E O R M

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Suze: A N, and you'll see it there's only like 4

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Suze: or 5 up there, but you'll see what we did.

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Suze: You will get to decide if I approved or I

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Suze: denied you push a little button and then we'll see

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Suze: if you're right or wrong. So check it out, everybody. It's,

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Suze: I think it's a lot of fun.

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KT: A lot of fun. I play.

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Suze: I think I look so cute. I can't tell you.

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KT: Yeah, tell us how you, if you like it, and we'll,

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KT: we'll keep doing it. It's great.

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Suze: All right,

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KT: All right. Are we ready? So my first question is

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KT: from William, and he said, Suze, I loved hearing you

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KT: get sassy with KT with that nasally voice of yours.

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KT: Hope you're feeling better.

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KT: And he's asking a question about the pro rata rule.

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KT: He said, You've talked about it a few times. I've

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KT: gone back and listened to old episodes. I try to

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KT: track down an answer, and I'm still so confused. And

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KT: he said, I think Suze, I made a big mistake.

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KT: I wanted to consolidate some old 401ks in 2024 and

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KT: decided I would be better off managing the money myself

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KT: in a Fidelity account.

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KT: So he combined a Roth IRA and a rollover IRA separately.

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KT: It was a mixture of Roth and non Roth contributions.

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KT: End of the day, he said, now of course I

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KT: want to do a backdoor Roth. I don't think it's

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KT: possible because of the pro rata rule.

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Suze: Wait, I'm very confused.

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KT: He is too. Take a, take a look. I want her to

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KT: read it, everybody, because this, he is

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KT: confused.

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Suze: So it was a mixture of Roth and non-Roth contributions. Oh,

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Suze: so the non Roth went into your Roth IRA and

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Suze: then the non-Roth went into a rollover IRA separately and

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Suze: now you want to do a back a back door.

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Suze: And the question is, should you, should he or

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KT: Can I don't think he can.

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Suze: But should he, KT, this is your quizzy right off the bat.

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KT: No, he's gonna have to pay taxes.

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Suze: Do you know how much in taxes?

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KT: No, I think for the one, no, I don't.

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Suze: Do you even know how to figure it out?

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KT: No.

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Suze: All right, so let's tell William what he needs to know.

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Suze: So what all of you need to know in terms

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Suze: of what am I talking about, there is this crazy

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Suze: tax rule that says if you have any pre-tax retirement accounts.

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Suze: An IRA, an IRA rollover, a SEP IRA, a simple IRA,

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Suze: anything with the initials IRA, which means individual retirement account,

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Suze: so that's in your name. If you have anything with

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Suze: those three letters, if you then decide to do a

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Suze: backdoor Roth IRA.

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Suze: You are going to have to pay taxes based on

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Suze: a pro rata rule, and let's just say, William, you

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Suze: wanted to contribute $7000 this year to your Roth and

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Suze: let's just say you have, we'll throw out a figure

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Suze: $14,676 whatever it is, in all of your IRAs that

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Suze: you have.

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Suze: What you need to do then is you need to

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Suze: add those two together $14,676 or whatever is really in

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Suze: your account, William, plus $7000 what you want to contribute,

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Suze: and that comes to $21,676.

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Suze: Then what you need to do is you need to

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Suze: divide the $7000.

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Suze: That you want to put into the back door Roth

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Suze: by the $21,676 and that comes out to 32.3% or

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Suze: if you then were to times $7000 by that amount,

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Suze: $4,739 would be taxable. So is it worth it for

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Suze: you to do that?

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Suze: I don't know. Is it possible for you to take

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Suze: your rollover that you did and put it back into

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Suze: your 401k somehow or wherever you're working? If not, I

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Suze: have to tell you you're just better off doing an

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Suze: IRA with all pre-tax money.

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Suze: And then converting it and pay taxes on the whole thing.

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KT: Tell everyone I'm sitting here. What am I doing, Suze? My

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KT: head is spinning,

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Suze: But you have to know the formula, everybody, in terms

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Suze: of how much will you pay in.

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Suze: Taxes if in fact you have to do a backdoor

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Suze: roth and you have to do a backdoor roth if

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Suze: you're making more money on a modified adjusted gross income

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Suze: that's allowable for you to contribute to a Roth just

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Suze: that simple.

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KT: She says, just that simple for you. It's just that simple,

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KT: but not for the rest of us.

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Suze: Well here's your

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Suze: quizzy again.

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KT: Oh my goodness.

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Suze: What are those amounts, KT?

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KT: I don't have a clue. Come on, I don't have

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KT: a clue.

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KT: Well, I don't have a clue.

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Suze: No clue.

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KT: No, I would say the amounts would be the maximum

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KT: that I'm allowed to put in.

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Suze: For those of you who are single, if you make

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Suze: under $150,000 a year of modified adjusted gross income, you

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Suze: can contribute a full $7000 to a Roth. And if

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Suze: you're over that, if you're over 50 years of age,

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Suze: you can contribute 80. Once your income starts to go.

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Suze: Up the amount you can contribute goes down, and once

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Suze: you make over $165,000 you no longer can contribute to

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Suze: a Roth. Married filling jointly, it's 236 up to 246.

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Suze: So obviously if you make more than that, what you

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Suze: do to get into a Roth is you open up

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Suze: a non-deductible IRA and you simply convert to a

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Suze: but you can only do that if you do not

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Suze: have any other pre-tax IRAs. All right, KT.

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KT: Just that simple. OK. Next is from Amanda. Hi, Suze,

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KT: I'm 53 with $250,000 at this point. Since it's losing

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KT: money daily in a Roth and IRA would now be

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KT: the time to move the money to cash.

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KT: Then she says, I really can't afford to take much

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KT: more of a hit. Do I ride it out? She said,

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KT: I know one thing, Suze, you always say, don't let

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KT: fear make rash decisions.

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KT: So she's asking you, should she ride it out. Edward Jones,

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KT: by the way, is her portfolio manager, and they keep

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KT: telling her they're in good Fortune 500 companies, but she's,

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KT: if you read the whole thing, she's scared, she's full

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KT: of fear, and I think she should put it in

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KT: cash and forget about it for a while.

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Suze: If you really can't afford, my dear Amanda to take

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Suze: much more of a hit, that says to me this

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Suze: is money that may be never originally belonged in the

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Suze: stock market. Remember, money in the stock market is only

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Suze: money that you will not need for at least 5

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Suze: years or longer, because that's how long it usually takes

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Suze: to go from the top of a market to the

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Suze: bottom back up to the top.

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Suze: If this is making you lose sleep at night, and

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Suze: I don't know how much money you have lost cause

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Suze: you don't say that anywhere in here you just say

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Suze: it seems to be losing money daily. The question is really,

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Suze: if you gave them $250,000 sometime a year ago or whatever,

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Suze: has it gone up above the $250,000 and now let's

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Suze: say it went to $350 and now it's like at 325, 300, 275.

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Suze: The question is, are you now below what you initially invested?

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Suze: Or are you just losing money that was a profit?

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Suze: If you're just losing profit right now, I would tell

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Suze: you to absolutely stay there as long as you know

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Suze: they're in good quality stocks. However, if it's your principle

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Suze: that you are now losing, I would probably come out.

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Suze: Because either way you're going to lose sleep at night

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Suze: and you could take this money and you could put

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Suze: them in to treasuries or CDs and have it earn

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Suze: a nice 4 4.5% interest for you right around there

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Suze: and you could sleep at night. So it just depends.

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Suze: But I know I say don't let fear make rash

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Suze: decisions for you, but this seems to me that this

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Suze: isn't a rash decision. This is where you have been

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Suze: watching this go down over and over and over, right?

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Suze: So you have to do really...

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KT: What makes you sleep at night.

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Suze: What makes you sleep at night, and I hope that

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Suze: made sense to you, Amanda.

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KT: OK, my next question is from Leslie.

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KT: Love listening to the podcast and learning from you. A

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KT: few weeks ago you reminded us that you can take

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KT: out what you have contributed to a Roth IRA tax

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KT: free and without penalty. I'm a 37...

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Suze: I hear it coming now.

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KT: Wait.

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Suze: I hear it coming. She wants to take it out.

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Suze: Go on.

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KT: No, no, no, she's really smart. I am a 37

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KT: year old mom of two little ones, and I'm going

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KT: to need a new car soon.

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KT: Now this is important. She needs the car sometime within

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KT: the next 5 years. She's trying to stretch it. I'd

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KT: like to purchase my vehicles in full to avoid paying

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KT: more in interest. I plan on starting to squirrel away

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KT: the money in a separate file with my HYS high

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KT: yield savings account, but if I can't save the entire amount

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KT: before I need a new car, would you recommend using

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KT: money from our savings? We have $20,000 plus $10 in

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KT: an emergency to do this, or from the Roth, which

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KT: she has $124k.

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KT: I, I can answer this.

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Suze: All right, quizzy, quizzy,

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KT: You don't... don't touch the Roth.

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Suze: And do what?

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KT: Oh, I don't know what to say. Out of these

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KT: two choices, KT says, don't go near the Roth.

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Suze: Don't go near the Roth, whatever you do, don't go

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Suze: near the Roth. It's fine with me if you have

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Suze: 20,000 there in your savings plus 10 in emergency. I'm

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Suze: fine with you taking that money to pay off your car. Why?

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Suze: Because if you need money...

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Suze: needed it because you've lost your job or in an accident,

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Suze: you have your Roth there that you could easily take

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Suze: out that $10,000 or whatever it is you could take

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Suze: it out then.

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Suze: But don't take it out from there or ever hopefully,

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Suze: because that's money that's compounding free for you, tax free.

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00:13:40,010 --> 00:13:43,369
Suze: So I would be taking it from the 20,000 or

231
00:13:43,369 --> 00:13:46,090
Suze: the 10,000 or whatever it is that you needed from.

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00:13:46,090 --> 00:13:49,059
KT: Stretch that car. Our car is how old Suze?

233
00:13:49,059 --> 00:13:49,929
Suze: Going on 13

234
00:13:49,929 --> 00:13:50,319
Suze: years.

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00:13:51,400 --> 00:13:55,069
KT: So Suze, my next question. Hi KT and Suze, I

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00:13:55,070 --> 00:13:58,950
KT: love you both so much. I've been a faithful listener

237
00:13:58,950 --> 00:14:05,699
KT: and fan before Suze was even on TV. Whoa, Susan's old.

238
00:14:05,989 --> 00:14:07,150
KT: Actually she is old.

239
00:14:09,539 --> 00:14:12,500
KT: I said thank you, thank you, thank you, Suze, for

240
00:14:12,500 --> 00:14:15,409
KT: everything you've taught me and thank you for your joviality

241
00:14:15,409 --> 00:14:19,179
KT: and sweet support KT. So the question is this...

242
00:14:19,340 --> 00:14:21,289
Suze: You are just so sweet, aren't you? She's the sweetest.

243
00:14:21,419 --> 00:14:24,929
KT: When does it make sense to drop a long-term care policy?

244
00:14:25,340 --> 00:14:28,179
KT: I can answer this one too. I am 4 years

245
00:14:28,179 --> 00:14:32,210
KT: into paying for it, but I'm now worth 1.4 million,

246
00:14:32,219 --> 00:14:34,780
KT: and I'm wondering if it's time for me to start

247
00:14:34,780 --> 00:14:35,419
KT: investing

248
00:14:35,669 --> 00:14:40,200
KT: the premium dollars myself and plan to self fund. Ready.

249
00:14:40,500 --> 00:14:45,400
KT: She's 60 years old. Excellent health, no partner or living children.

250
00:14:45,559 --> 00:14:50,200
KT: She owns her own home outright. No debt, stable employment,

251
00:14:50,369 --> 00:14:54,369
KT: and stable side hustle. This is from Susan.

252
00:14:55,460 --> 00:15:00,250
Suze: Susan, I know it's hard to keep paying that, thinking

253
00:15:00,250 --> 00:15:03,500
Suze: you're never going to need it, you know, whatever, but

254
00:15:03,500 --> 00:15:07,890
Suze: in your particular situation, if you can easily afford it.

255
00:15:08,500 --> 00:15:13,219
Suze: And maybe you can easily afford a projection of a 30%

256
00:15:13,590 --> 00:15:18,150
Suze: price increase and you still could easily afford it. I

257
00:15:18,150 --> 00:15:21,429
Suze: would so keep it I can't even tell you, but

258
00:15:21,429 --> 00:15:27,390
Suze: at 60, you know, you feel great, most likely that

259
00:15:27,390 --> 00:15:29,190
Suze: you can do anything and

260
00:15:29,750 --> 00:15:33,989
Suze: I'm sorry to say I personally have experienced that that's

261
00:15:33,989 --> 00:15:38,229
Suze: not exactly true. I, I've had many major things actually,

262
00:15:38,510 --> 00:15:42,710
Suze: everybody go wrong with me, and they always turned out right.

263
00:15:43,510 --> 00:15:44,780
KT: But we fixed her.

264
00:15:44,909 --> 00:15:47,169
Suze: We fixed it, every single one of them, and there

265
00:15:47,169 --> 00:15:51,159
Suze: were many, trust me, but the truth of the matter is,

266
00:15:51,489 --> 00:15:53,559
Suze: if I didn't have KT,

267
00:15:54,859 --> 00:15:58,289
Suze: I don't know, especially the last operation I had 5

268
00:15:58,289 --> 00:16:01,369
Suze: years ago, how I would have gotten through it.

269
00:16:02,179 --> 00:16:05,979
Suze: And that's when the long term care would have come

270
00:16:05,979 --> 00:16:11,020
Suze: in handy, trust me, so you have to think that way.

271
00:16:11,229 --> 00:16:15,260
Suze: So if you can easily afford it, keep it. If

272
00:16:15,260 --> 00:16:18,820
Suze: you can't and you think you're gonna drop it anyway

273
00:16:18,820 --> 00:16:21,309
Suze: a year from now or 2 years from now or

274
00:16:21,309 --> 00:16:25,070
Suze: 3 years from now because it's a struggle, then drop

275
00:16:25,070 --> 00:16:28,640
Suze: it now because there's nothing worse with paying for it

276
00:16:28,640 --> 00:16:30,590
Suze: and paying for it and paying for it.

277
00:16:31,010 --> 00:16:34,530
Suze: And then all of a sudden, you decide you can't

278
00:16:34,530 --> 00:16:36,890
Suze: afford it anymore and now you wasted all that money.

279
00:16:37,729 --> 00:16:37,890
Suze: All

280
00:16:37,890 --> 00:16:38,400
Suze: right.

281
00:16:39,130 --> 00:16:42,729
KT: OK, so next question is from Scott. He said, my

282
00:16:42,729 --> 00:16:45,200
KT: husband works for IBEW.

283
00:16:45,849 --> 00:16:49,309
KT: I, I picked this because I, I like IBEW. It's

284
00:16:49,309 --> 00:16:53,299
KT: the International Brotherhood of Electrical Workers.

285
00:16:53,750 --> 00:16:55,190
Suze: Because of your uncle...

286
00:16:55,190 --> 00:16:58,190
KT: And my grandpa, they were all electricians.

287
00:16:58,349 --> 00:17:02,390
KT: The union provides legal service benefits, and they're in the

288
00:17:02,390 --> 00:17:04,949
KT: process of preparing a will, Suze.

289
00:17:05,135 --> 00:17:08,055
KT: I know you are pro revocable trust, but one of

290
00:17:08,055 --> 00:17:11,885
KT: the advisers said that a law was passed last year

291
00:17:11,885 --> 00:17:15,045
KT: that we can do a transfer on death deed with

292
00:17:15,045 --> 00:17:19,694
KT: our home to our two children instead. Can you please

293
00:17:19,694 --> 00:17:21,925
KT: tell me the pros and cons of both so I

294
00:17:21,925 --> 00:17:24,474
KT: can make a better informed decision?

295
00:17:24,964 --> 00:17:25,165
Suze: The

296
00:17:25,165 --> 00:17:26,765
Suze: only pro of it.

297
00:17:27,239 --> 00:17:30,859
Suze: If you never get sick, if you never become incapacitated

298
00:17:31,079 --> 00:17:34,650
Suze: and everything, and then you die and obviously you own

299
00:17:34,650 --> 00:17:38,339
Suze: it in joint tenancy with right of survivorship to your spouse,

300
00:17:38,800 --> 00:17:42,079
Suze: that at that point when the spouse dies, it goes

301
00:17:42,079 --> 00:17:44,719
Suze: to the kids. That's it, no probate, simple.

302
00:17:45,819 --> 00:17:49,569
Suze: But life isn't simple, my friend. A transfer on death

303
00:17:49,569 --> 00:17:53,770
Suze: deed doesn't help you. All of a sudden you own

304
00:17:53,770 --> 00:17:59,369
Suze: this home, you and your husband, and now one of

305
00:17:59,369 --> 00:18:03,130
Suze: you became incapacitated. You had a stroke. You had a

306
00:18:03,130 --> 00:18:06,599
Suze: car accident, and you needed to sell the house.

307
00:18:07,400 --> 00:18:11,500
Suze: But you own it in joint tenancy with right of survivorship.

308
00:18:11,790 --> 00:18:16,310
Suze: The question is, if your spouse is incapacitated, can you

309
00:18:16,310 --> 00:18:19,420
Suze: sell the house? And the answer to that question is no,

310
00:18:19,430 --> 00:18:25,270
Suze: you cannot because it takes two signatures on that deed

311
00:18:25,270 --> 00:18:30,000
Suze: to sell the house. And since your spouse now is incapacitated,

312
00:18:30,219 --> 00:18:32,698
Suze: you're going to have to go down to probate court.

313
00:18:33,229 --> 00:18:36,150
Suze: You're going to get a conservatorship assigned to him. That's

314
00:18:36,150 --> 00:18:37,188
Suze: going to cost you money.

315
00:18:37,810 --> 00:18:40,640
Suze: And from that point on, every year you have to

316
00:18:40,640 --> 00:18:43,239
Suze: check back with the court to make sure that what

317
00:18:43,239 --> 00:18:45,359
Suze: you're doing with his half of the money,

318
00:18:46,349 --> 00:18:47,239
Suze: it is legit.

319
00:18:48,410 --> 00:18:53,040
Suze: A transfer on death deed doesn't help you in any way.

320
00:18:53,189 --> 00:18:56,198
Suze: Same thing as a will, a will, obviously you have

321
00:18:56,199 --> 00:18:59,319
Suze: to pay probate, but it doesn't help you in case

322
00:18:59,319 --> 00:19:03,229
Suze: of the what ifs of life. It doesn't help you

323
00:19:03,239 --> 00:19:06,109
Suze: if you need to sign checks for your spouse or

324
00:19:06,109 --> 00:19:07,879
Suze: do all kinds of things.

325
00:19:08,660 --> 00:19:14,890
Suze: Therefore, I would go to musthadocs.com. It'll cost you $99

326
00:19:15,099 --> 00:19:18,099
Suze: and you can get $2500 worth of state of the

327
00:19:18,099 --> 00:19:21,739
Suze: art documents good in every single state. I would check

328
00:19:21,739 --> 00:19:25,218
Suze: it out. Not only do you get a will and

329
00:19:25,219 --> 00:19:27,979
Suze: a trust, you get a durable power of attorney for

330
00:19:27,979 --> 00:19:31,729
Suze: health care and an advance directive and a financial power

331
00:19:31,729 --> 00:19:32,540
Suze: of attorney.

332
00:19:32,979 --> 00:19:36,099
Suze: So while it's true that they're giving him this thing,

333
00:19:36,219 --> 00:19:38,849
Suze: they're preparing a will which is fabulous.

334
00:19:39,650 --> 00:19:43,699
Suze: I will always tell you a will is not enough.

335
00:19:44,359 --> 00:19:47,150
Suze: And therefore I will believe it to the day that

336
00:19:47,150 --> 00:19:51,599
Suze: I die cause I've seen it too many times. What happens?

337
00:19:51,619 --> 00:19:55,989
KT: OK, OK. Next is from KP, she said, Suze, I'm

338
00:19:55,989 --> 00:19:59,510
KT: retiring later this year. Me and my 90 year old

339
00:19:59,510 --> 00:20:02,390
KT: mom want to move out of state to be closer

340
00:20:02,390 --> 00:20:05,709
KT: to my daughter. We plan to live together in our

341
00:20:05,709 --> 00:20:07,400
KT: new home. We're trying to

342
00:20:07,584 --> 00:20:10,584
KT: figure out who should pay for our new home and

343
00:20:10,584 --> 00:20:14,074
KT: how to hold the title. I currently own my home

344
00:20:14,074 --> 00:20:17,185
KT: outright and would like to use it as a rental

345
00:20:17,185 --> 00:20:22,265
KT: when we move. My mom is very financially secure, has

346
00:20:22,265 --> 00:20:26,564
KT: enough extra cash to easily purchase our new home outright.

347
00:20:26,864 --> 00:20:30,464
KT: I am her only living child and sole beneficiary.

348
00:20:30,939 --> 00:20:33,739
KT: My question, would it make more sense for her to

349
00:20:33,739 --> 00:20:37,380
KT: buy our new home in trust so that I would

350
00:20:37,380 --> 00:20:40,979
KT: inherit it when she passes? Should she give me the

351
00:20:40,979 --> 00:20:44,300
KT: funds or some of the funds so I can purchase

352
00:20:44,300 --> 00:20:47,459
KT: the house in my own name, or should I just

353
00:20:47,459 --> 00:20:51,410
KT: sell my current home and buy our new home myself?

354
00:20:51,640 --> 00:20:54,290
KT: I don't want a mortgage, and the only way I

355
00:20:54,290 --> 00:20:57,180
KT: can pay for our new home outright is if I

356
00:20:57,180 --> 00:20:58,579
KT: sell my current home.

357
00:20:59,000 --> 00:21:02,150
KT: My current house will rent for about 4000 a month.

358
00:21:02,400 --> 00:21:03,189
KT: Please help.

359
00:21:03,760 --> 00:21:07,609
KT: Um, KP sounds like she and her mom absolutely love

360
00:21:07,609 --> 00:21:10,770
KT: each other, and what I think that you need to

361
00:21:10,770 --> 00:21:13,729
KT: do is help her decide what's the best way to, to do this.

362
00:21:13,729 --> 00:21:17,688
Suze: Oh, this one's simple, KT, so simple. Listen, if mommy

363
00:21:17,689 --> 00:21:20,810
Suze: has the money and she doesn't care, let mommy pay

364
00:21:20,810 --> 00:21:25,369
Suze: for it outright, obviously in a living revocable trust with

365
00:21:25,369 --> 00:21:29,609
Suze: you as the successor beneficiary. She is the primary beneficiary.

366
00:21:29,920 --> 00:21:33,260
Suze: That it's held in trust for her benefit while she's alive,

367
00:21:33,709 --> 00:21:37,189
Suze: your benefit after she has died. The reason you want

368
00:21:37,189 --> 00:21:41,109
Suze: to do that is for a few reasons, truthfully. Let's

369
00:21:41,109 --> 00:21:43,650
Suze: say you buy it and it's $500,000. Let's just say

370
00:21:43,650 --> 00:21:45,979
Suze: that's what it is. And then all of a sudden

371
00:21:45,979 --> 00:21:52,390
Suze: it goes to 600,000, 700,000, 800,000, and then mama dies.

372
00:21:52,959 --> 00:21:55,880
Suze: Now it goes to you. You get a step up

373
00:21:55,880 --> 00:21:59,359
Suze: in cost basis on that house as if you had

374
00:21:59,359 --> 00:22:04,079
Suze: purchased it for $800,000. Then when you turn around and

375
00:22:04,079 --> 00:22:09,560
Suze: sell it, that's your cost basis plus you get $250,000

376
00:22:09,560 --> 00:22:14,520
Suze: exemption as well. So mamma should absolutely do it in

377
00:22:14,520 --> 00:22:20,680
Suze: her name, a living revocable trust with you and her beneficiaries.

378
00:22:20,699 --> 00:22:21,280
Suze: All right.

379
00:22:21,530 --> 00:22:24,510
Suze: In terms of selling your home, listen, if you have

380
00:22:24,510 --> 00:22:27,639
Suze: what it takes to be a landlord, which is a lot,

381
00:22:28,030 --> 00:22:31,390
Suze: just so you know, right, then keep your house and

382
00:22:31,390 --> 00:22:34,260
Suze: rent it out, but make sure you do the math

383
00:22:34,260 --> 00:22:37,750
Suze: on it. What would you get for that house after

384
00:22:37,750 --> 00:22:42,869
Suze: taxes and if invested at like 4%, how much would

385
00:22:42,869 --> 00:22:46,400
Suze: that come out to be every single year?

386
00:22:47,050 --> 00:22:50,708
Suze: And maybe you never know, you get more by selling

387
00:22:50,709 --> 00:22:54,510
Suze: it and investing it that way, or the equal amount

388
00:22:54,750 --> 00:22:57,099
Suze: as if you're getting it when you are renting it.

389
00:22:57,270 --> 00:22:59,020
Suze: So just check it out and then you'll know which

390
00:22:59,020 --> 00:22:59,939
Suze: one you should do.

391
00:23:00,430 --> 00:23:03,750
KT: Yeah, plus being a landlord out of state could be

392
00:23:03,750 --> 00:23:06,189
KT: a little tricky, yeah, complicated.

393
00:23:06,189 --> 00:23:07,948
Suze: Unless she has good tenants. All right, OK,

394
00:23:08,069 --> 00:23:12,560
KT: so next question is from Monina. I like that name Monina.

395
00:23:12,910 --> 00:23:13,398
Suze: You like every name.

396
00:23:13,398 --> 00:23:13,949
KT: No, this

397
00:23:13,949 --> 00:23:15,589
KT: is a great name Monina.

398
00:23:16,420 --> 00:23:17,890
KT: It's me again.

399
00:23:19,369 --> 00:23:22,819
KT: It's Monina again. I've written to you before and you

400
00:23:22,819 --> 00:23:25,969
KT: actually replied to my email about paying off my mortgage

401
00:23:25,969 --> 00:23:27,150
KT: with my savings.

402
00:23:27,219 --> 00:23:29,900
Suze: I do answer you personally every once in a while.

403
00:23:30,099 --> 00:23:33,219
KT: She said. I followed your advice and my home condo

404
00:23:33,219 --> 00:23:35,660
KT: is paid off. I am proud of that, but I'm

405
00:23:35,660 --> 00:23:39,339
KT: a little anxious about my savings. I'm slowly building my

406
00:23:39,339 --> 00:23:41,300
KT: emergency fund currently at 6 months

407
00:23:42,040 --> 00:23:45,939
KT: working towards 12 or more, what is a person to

408
00:23:45,939 --> 00:23:50,379
KT: do next once you've funded your revocable living trust, maxed

409
00:23:50,380 --> 00:23:55,930
KT: your 401k Roth contribution, received the max matching from my employer,

410
00:23:56,250 --> 00:23:59,969
KT: built your emergency fund, and carry no debt, but want

411
00:23:59,969 --> 00:24:03,659
KT: to continue to maximize my retirement fund.

412
00:24:04,020 --> 00:24:07,170
KT: Do I just wait till I'm 59 and a half years old

413
00:24:07,170 --> 00:24:10,959
KT: to convert? Is there no way around the pro rata rule?

414
00:24:11,170 --> 00:24:15,449
KT: I've enjoyed your Roth Quizzy Sunday so much. So there

415
00:24:15,449 --> 00:24:16,739
KT: you go, Monina.

416
00:24:17,010 --> 00:24:18,399
Suze: Monina, listen to me.

417
00:24:18,569 --> 00:24:20,409
KT: She sounds like she's doing great.

418
00:24:20,489 --> 00:24:23,239
Suze: It's so funny that so many of you write with

419
00:24:23,239 --> 00:24:27,810
Suze: this particular question where you feel like, hey, if you

420
00:24:27,810 --> 00:24:31,399
Suze: can't contribute to this retirement account or that retirement account,

421
00:24:31,569 --> 00:24:33,409
Suze: you have no other way to invest.

422
00:24:34,089 --> 00:24:37,399
Suze: And the truth of the matter is, the majority of

423
00:24:37,400 --> 00:24:43,270
Suze: our money, it's not in retirement accounts, they're in investment

424
00:24:43,270 --> 00:24:48,670
Suze: accounts where you're buying stock and buying bonds and buying

425
00:24:48,670 --> 00:24:53,520
Suze: this and buying that and it's fabulous. So you just

426
00:24:53,520 --> 00:24:57,079
Suze: simply start a regular account at any discount brokerage firm

427
00:24:57,079 --> 00:24:57,910
Suze: that you like.

428
00:24:58,579 --> 00:25:01,829
Suze: And when you buy something and let's say you buy

429
00:25:01,829 --> 00:25:04,589
Suze: an ETF and you're going to keep it for a

430
00:25:04,589 --> 00:25:09,069
Suze: long time while the money's in there, you're not paying

431
00:25:09,069 --> 00:25:11,949
Suze: taxes on it, so it will grow and it will

432
00:25:11,949 --> 00:25:15,430
Suze: grow and grow just like a retirement account, but in

433
00:25:15,430 --> 00:25:18,790
Suze: an investment account, when you do sell it, if it's

434
00:25:18,790 --> 00:25:21,979
Suze: after one year of holding it, you only pay capital gains.

435
00:25:22,109 --> 00:25:25,829
Suze: In a pre-tax IRA you're gonna pay ordinary income tax.

436
00:25:27,010 --> 00:25:30,560
Suze: I can actually make a case that an investment account

437
00:25:30,560 --> 00:25:34,199
Suze: in the long run might even be better than a

438
00:25:34,199 --> 00:25:37,959
Suze: pre-tax IRA, just so you know. All right.

439
00:25:38,199 --> 00:25:42,688
KT: OK. Last question, Suze, from Christian. Dear Suze and KT,

440
00:25:42,839 --> 00:25:45,920
KT: thank you for everything you do. I'm trying to build out.

441
00:25:45,920 --> 00:25:49,400
Suze: KT, when you read these and they say thank you

442
00:25:49,400 --> 00:25:51,229
Suze: and they love us, how does it make you feel?

443
00:25:51,650 --> 00:25:52,170
KT: Great.

444
00:25:52,739 --> 00:25:56,780
KT: Especially when they really, really love my contribution.

445
00:25:56,859 --> 00:25:57,810
Suze: Of course,

446
00:25:58,380 --> 00:26:01,420
Suze: of course. Well, what was wrong with me? Of course. All right.

447
00:26:01,420 --> 00:26:04,819
KT: Thank you for everything you do. I'm trying to build

448
00:26:04,819 --> 00:26:08,250
KT: out a piece of my portfolio that is focused solely

449
00:26:08,500 --> 00:26:12,540
KT: on dividends with the hope of covering my main living

450
00:26:12,540 --> 00:26:16,219
KT: expenses at some point. This is why I picked this one.

451
00:26:16,599 --> 00:26:21,739
KT: My friend sent me an article about Aristocrat and King stocks.

452
00:26:21,920 --> 00:26:24,560
KT: I don't have a clue what those are, Suze. That's

453
00:26:24,560 --> 00:26:27,640
KT: why I picked this question. I am unsure of where

454
00:26:27,640 --> 00:26:32,040
KT: to start. Would you focus on dividend Aristocrat or King stocks?

455
00:26:32,199 --> 00:26:36,760
KT: There are also dividend Aristocrat ETFs. So there you go.

456
00:26:36,839 --> 00:26:40,910
KT: She's 42. She has one year of emergency savings, no debt,

457
00:26:40,920 --> 00:26:44,119
KT: and 350,000 in retirement accounts.

458
00:26:44,699 --> 00:26:48,790
KT: So tell me what Aristocrat and King stocks are.

459
00:26:48,859 --> 00:26:49,060
Suze: An Aristocrat...

460
00:26:49,060 --> 00:26:50,909
KT: Sounds very regal.

461
00:26:50,910 --> 00:26:55,900
Suze: ...is a stock that has raised its dividend for 25

462
00:26:55,900 --> 00:27:00,979
Suze: years in a row. A King is a stock that

463
00:27:00,979 --> 00:27:05,819
Suze: has raised its dividend for 50 years in a row.

464
00:27:07,339 --> 00:27:10,459
Suze: If I were going to be investing at this point

465
00:27:10,459 --> 00:27:14,260
Suze: in time between one or the other, I would be

466
00:27:14,260 --> 00:27:18,619
Suze: investing in the Aristocrats because I just think you'll get

467
00:27:18,619 --> 00:27:21,709
Suze: a little bit higher dividend and possibly some more growth

468
00:27:22,020 --> 00:27:25,890
Suze: than you would from the Kings, but either way it's fine.

469
00:27:26,060 --> 00:27:30,020
Suze: There are dividend Aristocrat ETFs, one of them that I

470
00:27:30,020 --> 00:27:32,969
Suze: have recommended on this podcast for years now.

471
00:27:33,510 --> 00:27:40,119
Suze: Symbol is NOBL. It's about $102 a share, and it's

472
00:27:40,119 --> 00:27:45,689
Suze: the Standard and Poor's Pro Shares 500 dividend Aristocrats ETF.

473
00:27:46,280 --> 00:27:50,879
Suze: So all the stocks in there are Aristocrats. So that's

474
00:27:50,880 --> 00:27:53,198
Suze: one of them. There are many of them. Just do

475
00:27:53,199 --> 00:27:55,719
Suze: a search and they'll all come up, but that's the

476
00:27:55,719 --> 00:27:57,599
Suze: one that I've been investing in,

477
00:27:58,130 --> 00:28:02,229
Suze: if you want conservative, I like other dividend stocks that

478
00:28:02,229 --> 00:28:06,030
Suze: are not Aristocrats that are paying a higher dividend, but

479
00:28:06,030 --> 00:28:10,109
Suze: that's not your question. Although Pfizer would be the answer

480
00:28:10,109 --> 00:28:13,869
Suze: to that. Anyway, all right, everybody, that brings us to

481
00:28:13,869 --> 00:28:17,228
Suze: the end of today's. You don't get a quizzy because

482
00:28:17,229 --> 00:28:17,839
Suze: you had 3 or 4.

483
00:28:17,839 --> 00:28:19,699
KT: I did, yeah, I got them right,

484
00:28:20,229 --> 00:28:22,310
Suze: Ready. This is a quizzy ready, KT.

485
00:28:22,900 --> 00:28:27,030
Suze: If people want to go and see and play the

486
00:28:27,030 --> 00:28:29,150
Suze: can I afford a game that we have on my

487
00:28:29,150 --> 00:28:31,239
Suze: YouTube channel? What is the URL?

488
00:28:32,770 --> 00:28:33,880
Suze: Look at her little face.

489
00:28:34,329 --> 00:28:40,089
KT: The URL is go to youtube.com/suzeorman

490
00:28:40,530 --> 00:28:41,569
KT: ding ding ding ding ding

491
00:28:41,569 --> 00:28:42,530
Suze: ding ding ding

492
00:28:42,530 --> 00:28:46,180
KT: Because I love playing those games. They're fun.

493
00:28:46,410 --> 00:28:47,290
Suze: It's a fun thing.

494
00:28:47,449 --> 00:28:49,500
KT: Yeah, tell us if you like them. They're fun.

495
00:28:49,689 --> 00:28:55,170
Suze: So that's again YouTube, Y O U T U.com/ Suze

496
00:28:55,170 --> 00:28:56,569
Suze: S U Z E Orman.

497
00:28:57,109 --> 00:29:00,349
Suze: Go on, do it. They're free and then there's only

498
00:29:00,349 --> 00:29:02,989
Suze: a few of them, right? And then post on the

499
00:29:02,989 --> 00:29:05,949
Suze: board on the Women and Money app if you liked

500
00:29:05,949 --> 00:29:09,030
Suze: it or not, because you never know when I'll actually

501
00:29:09,030 --> 00:29:11,790
Suze: do one where you can call in and that little

502
00:29:11,790 --> 00:29:14,670
Suze: emoji that you're going to see will tell you if

503
00:29:14,670 --> 00:29:15,790
Suze: you're approved or denied.

504
00:29:15,895 --> 00:29:19,954
Suze: In real time, so let me know. All right, everybody,

505
00:29:20,364 --> 00:29:22,925
Suze: until Sunday. There's only one thing we want you to

506
00:29:22,925 --> 00:29:24,714
Suze: remember when it comes to your money. What is it,

507
00:29:24,724 --> 00:29:25,555
Suze: my little sweet?

508
00:29:26,084 --> 00:29:28,755
KT: People first, then money, then things.

509
00:29:29,165 --> 00:29:33,675
Suze: Yes, indeed. So all of you stay safe. Bye bye now.