1 00:00:40,970 --> 00:00:45,560 Suze: July 28th 2024. Welcome everybody to the Women and Money 2 00:00:45,569 --> 00:00:50,130 Suze: podcast as well as everybody smart enough to listen. 3 00:00:52,060 --> 00:00:53,770 Suze: Well, how was your week last week? 4 00:00:54,650 --> 00:00:58,349 Suze: Were you watching the markets? Were you watching your technology stocks? 5 00:00:58,400 --> 00:01:01,790 Suze: Were you watching them go down, down, down, down 6 00:01:02,959 --> 00:01:07,458 Suze: and then kind of up? But the markets down big 7 00:01:07,930 --> 00:01:11,180 Suze: and then all of a sudden Friday ends up big. 8 00:01:12,069 --> 00:01:16,010 Suze: So we all got used to, in my opinion, 9 00:01:16,650 --> 00:01:22,080 Suze: to stocks, especially the technology stocks just going up and 10 00:01:22,089 --> 00:01:26,869 Suze: up and up and we were so afraid of missing out, right? 11 00:01:26,879 --> 00:01:27,910 Suze: So afraid. 12 00:01:29,190 --> 00:01:32,139 Suze: And you just wanted to jump in with everything you 13 00:01:32,150 --> 00:01:36,449 Suze: had because you wanted to be part of that. But 14 00:01:36,459 --> 00:01:40,559 Suze: as soon as they start to go down big time 15 00:01:40,639 --> 00:01:44,160 Suze: now you get afraid and now you don't do anything. 16 00:01:44,370 --> 00:01:52,529 Suze: That is why dollar cost averaging is absolutely so essential. 17 00:01:53,110 --> 00:01:56,050 Suze: I firmly believe from the bottom of my heart 18 00:01:56,389 --> 00:02:00,169 Suze: that the key to a successful investor 19 00:02:01,230 --> 00:02:07,169 Suze: is, they invest via dollar cost averaging. 20 00:02:07,959 --> 00:02:11,779 Suze: That doesn't mean that you only buy when a stock 21 00:02:11,788 --> 00:02:12,809 Suze: is going down. 22 00:02:13,679 --> 00:02:16,698 Suze: But it means that if you have a specific sum 23 00:02:16,710 --> 00:02:17,690 Suze: of money 24 00:02:18,440 --> 00:02:21,220 Suze: that you don't put it all in at once, you 25 00:02:21,229 --> 00:02:24,389 Suze: put a little bit in. If the stock continues to 26 00:02:24,399 --> 00:02:27,059 Suze: go up, maybe you put a little more in 27 00:02:27,699 --> 00:02:32,000 Suze: and a little more, but you leave enough out so 28 00:02:32,008 --> 00:02:36,929 Suze: that it would last you at least a year for investments. 29 00:02:37,179 --> 00:02:41,399 Suze: So if you had $12,000 to invest, maybe you would 30 00:02:41,410 --> 00:02:45,839 Suze: put $1000 in one month, maybe the next month, another 31 00:02:45,850 --> 00:02:49,809 Suze: 1000 then another 1000. But you wouldn't have to do 32 00:02:49,820 --> 00:02:51,508 Suze: it always on the same day. 33 00:02:52,699 --> 00:02:57,860 Suze: Or you have that money there and when things happen, 34 00:02:57,869 --> 00:03:01,559 Suze: like it happened a few days ago, that's when you 35 00:03:01,570 --> 00:03:06,398 Suze: go in and you buy, that's when you really love 36 00:03:06,410 --> 00:03:11,269 Suze: dollar cost averaging because it could bring the cost of 37 00:03:11,279 --> 00:03:15,009 Suze: what you have purchased down so that there's more of 38 00:03:15,020 --> 00:03:18,679 Suze: a chance of you making money in the future. 39 00:03:19,410 --> 00:03:20,059 Suze: But now 40 00:03:20,710 --> 00:03:23,690 Suze: most of you were writing me saying I need to sell, 41 00:03:23,699 --> 00:03:26,490 Suze: I want to sell, I can't take this anymore. Listen, 42 00:03:26,500 --> 00:03:29,059 Suze: if you can't take it and you're losing sleep at 43 00:03:29,070 --> 00:03:32,258 Suze: night over it, maybe you shouldn't be in it at 44 00:03:32,270 --> 00:03:32,960 Suze: all 45 00:03:33,880 --> 00:03:38,600 Suze: or maybe you should have faith in the investments that 46 00:03:38,610 --> 00:03:39,979 Suze: you do have 47 00:03:41,169 --> 00:03:44,029 Suze: so that you just don't even watch them. Maybe you've 48 00:03:44,039 --> 00:03:48,949 Suze: invested all the money that you possibly can into these investments. 49 00:03:49,100 --> 00:03:52,070 Suze: You don't have any more money to dollar cost average 50 00:03:52,080 --> 00:03:54,720 Suze: into it. Then what do you do? Then you just 51 00:03:54,729 --> 00:04:02,630 Suze: sit tight, just sit tight because good stocks will come back, 52 00:04:02,639 --> 00:04:05,270 Suze: might not come back for a year or so. But 53 00:04:05,279 --> 00:04:10,229 Suze: you just stick with it unless something has happened 54 00:04:11,559 --> 00:04:14,580 Suze: to make you think that isn't a good stock anymore 55 00:04:15,149 --> 00:04:17,659 Suze: that I just want to get out whatever it is, 56 00:04:18,010 --> 00:04:21,250 Suze: but you just stick with it. It was also in 57 00:04:21,260 --> 00:04:26,899 Suze: my opinion, a good lesson on why you can't put 100% 58 00:04:26,910 --> 00:04:31,010 Suze: of your money into technology stocks. 59 00:04:31,988 --> 00:04:36,149 Suze: You should be in defensive stocks in some pharmaceuticals. If 60 00:04:36,160 --> 00:04:40,130 Suze: you look at the seven ETFs that I mentioned in 61 00:04:40,140 --> 00:04:45,260 Suze: January and you looked at how they performed last week. 62 00:04:45,428 --> 00:04:49,339 Suze: They actually went up from 8% a month ago to 63 00:04:49,350 --> 00:04:55,529 Suze: finishing almost 13% up since January. That's a great return. 64 00:04:56,299 --> 00:05:00,140 Suze: But they were real estate, they were communications, they were everything. Now, 65 00:05:00,149 --> 00:05:03,428 Suze: if you go to the Women and Money app, you 66 00:05:03,440 --> 00:05:08,769 Suze: will see the ETFs t hat I recommended back then. 67 00:05:08,779 --> 00:05:12,678 Suze: Now I may change some of those. So those were 68 00:05:12,690 --> 00:05:16,079 Suze: the ones back then. But I want you to take 69 00:05:16,089 --> 00:05:19,589 Suze: note of the diversification and if you're in them, I 70 00:05:19,600 --> 00:05:21,609 Suze: want you to stay in them until I tell you 71 00:05:21,619 --> 00:05:24,720 Suze: not to. But do you see what I'm saying? 72 00:05:25,779 --> 00:05:28,789 Suze: We were not all in tech. In fact, I think 73 00:05:28,799 --> 00:05:31,159 Suze: only one ETF was about tech. 74 00:05:32,609 --> 00:05:35,029 Suze: The rest were all over the place and yet we 75 00:05:35,040 --> 00:05:38,250 Suze: still made money. And I can tell you for those 76 00:05:38,260 --> 00:05:42,790 Suze: people who invested in those seven ETFs, they weren't losing 77 00:05:42,799 --> 00:05:43,910 Suze: sleep over it. 78 00:05:44,649 --> 00:05:46,839 Suze: They felt secure. 79 00:05:47,529 --> 00:05:50,969 Suze: So please don't be one of these investors that I 80 00:05:50,980 --> 00:05:55,019 Suze: call an all or nothing investor. They put all their 81 00:05:55,029 --> 00:05:58,029 Suze: money into individual technology stocks 82 00:05:59,279 --> 00:06:03,100 Suze: and they brag about how much money they are making 83 00:06:03,109 --> 00:06:04,160 Suze: and on and on. 84 00:06:04,910 --> 00:06:07,238 Suze: They have no other investments. That's it. 85 00:06:07,950 --> 00:06:12,039 Suze: And then all of a sudden last week happens now, 86 00:06:12,410 --> 00:06:15,649 Suze: I'm not worried about it, but you know, it is 87 00:06:15,660 --> 00:06:19,339 Suze: possible that last week can happen again and it can 88 00:06:19,350 --> 00:06:22,209 Suze: last a long time. So it could take a long 89 00:06:22,220 --> 00:06:24,130 Suze: time for these stocks to recover. 90 00:06:24,950 --> 00:06:28,649 Suze: Then what are you doing in the meantime? So that's 91 00:06:28,660 --> 00:06:33,549 Suze: why you have to be invested, not necessarily diversified all 92 00:06:33,559 --> 00:06:37,969 Suze: across the board, but you have to be somewhat in 93 00:06:38,049 --> 00:06:43,320 Suze: different areas of the market that are also favorable besides 94 00:06:43,329 --> 00:06:46,849 Suze: just technology just same. 95 00:06:47,510 --> 00:06:48,290 Suze: All right, 96 00:06:48,970 --> 00:06:51,769 Suze: before I go on to Suze School, I just have 97 00:06:51,779 --> 00:06:52,429 Suze: to say, 98 00:06:53,200 --> 00:07:00,049 Suze: did you see Friday Night? The ending of the Olympics. 99 00:07:00,760 --> 00:07:05,299 Suze: Now, it ended with Celine Dion 100 00:07:06,609 --> 00:07:09,839 Suze: singing a song by Edith Piaf. 101 00:07:10,630 --> 00:07:14,670 Suze: That was not an easy song to sing 102 00:07:16,470 --> 00:07:20,600 Suze: and I'm sure there wasn't a dry eye anywhere in 103 00:07:20,609 --> 00:07:25,940 Suze: that stadium or at home for those people who know 104 00:07:25,950 --> 00:07:29,970 Suze: what Celine has been through. And I suggest because I'm 105 00:07:29,980 --> 00:07:31,540 Suze: sure you all saw it. 106 00:07:32,640 --> 00:07:36,049 Suze: I suggest you all watch. I think it's on Amazon. 107 00:07:36,519 --> 00:07:39,299 Suze: I am Celine Dion. 108 00:07:40,329 --> 00:07:41,600 Suze: You should watch that 109 00:07:42,290 --> 00:07:44,920 Suze: because you should see. And this just came out about 110 00:07:44,929 --> 00:07:46,750 Suze: a month ago, this documentary 111 00:07:47,450 --> 00:07:51,790 Suze: you should see what she has been through 112 00:07:52,839 --> 00:07:55,190 Suze: over the past few years. 113 00:07:56,179 --> 00:07:58,279 Suze: She had this dream 114 00:07:59,149 --> 00:08:04,170 Suze: that she would perform again, even though she really couldn't singing, 115 00:08:04,230 --> 00:08:09,049 Suze: she could barely talk at times She would go into these, um, 116 00:08:09,059 --> 00:08:13,130 Suze: convulsions or whatever it was that made her body absolutely rigid. 117 00:08:14,109 --> 00:08:17,609 Suze: And it was just horrible to see really because you 118 00:08:17,619 --> 00:08:18,679 Suze: felt for her 119 00:08:19,839 --> 00:08:24,059 Suze: and to see her in a really relatively short period 120 00:08:24,070 --> 00:08:29,519 Suze: of time do something that I'm sure nobody thought, especially 121 00:08:29,529 --> 00:08:34,218 Suze: if you saw that documentary that nobody thought she would 122 00:08:34,229 --> 00:08:37,539 Suze: ever be able to do again. But you admired her 123 00:08:37,549 --> 00:08:39,510 Suze: because she would work out every day and she would 124 00:08:39,520 --> 00:08:43,260 Suze: try singing and she would just try and try and 125 00:08:43,270 --> 00:08:47,770 Suze: the Great Celine couldn't do it, couldn't do it. 126 00:08:48,190 --> 00:08:51,530 Suze: Well, I got news for you. She sure did it 127 00:08:51,929 --> 00:08:57,689 Suze: this last Friday night for the whole world to see. 128 00:08:58,489 --> 00:09:02,619 Suze: I can't even imagine what that felt like for her. 129 00:09:02,770 --> 00:09:04,349 Suze: I can't imagine. 130 00:09:05,799 --> 00:09:08,539 Suze: But it also makes me think 131 00:09:09,340 --> 00:09:11,439 Suze: here's a woman who had a dream 132 00:09:12,640 --> 00:09:17,859 Suze: and she wasn't going to stop until that dream became 133 00:09:17,869 --> 00:09:20,590 Suze: a reality. And it didn't matter if it didn't become 134 00:09:20,599 --> 00:09:23,890 Suze: a reality, at least she was trying. 135 00:09:24,859 --> 00:09:27,929 Suze: And I started to think how many of us have 136 00:09:27,940 --> 00:09:31,289 Suze: a dream or how many of us just kind of 137 00:09:31,299 --> 00:09:34,520 Suze: want to do something that's maybe a little difficult 138 00:09:35,679 --> 00:09:38,349 Suze: and maybe we try it once or we try it 139 00:09:38,359 --> 00:09:40,549 Suze: twice and then we just give up. 140 00:09:41,320 --> 00:09:47,559 Suze: We do not stick with it until that dream becomes 141 00:09:47,570 --> 00:09:49,020 Suze: a reality. 142 00:09:50,400 --> 00:09:52,179 Suze: And then I started to think 143 00:09:53,219 --> 00:09:56,039 Suze: what if we did stick with it and our dreams 144 00:09:56,049 --> 00:09:59,419 Suze: did become reality and they didn't have to be big dreams. 145 00:09:59,429 --> 00:10:02,609 Suze: They could be little dreams. Maybe for some of you, 146 00:10:02,619 --> 00:10:06,049 Suze: it's a dream of, I have an eight month emergency fund. 147 00:10:06,849 --> 00:10:09,960 Suze: Maybe that's your dream or I'm totally out of credit 148 00:10:09,969 --> 00:10:15,349 Suze: card debt. Maybe that's your dream or I wanna invest 149 00:10:15,359 --> 00:10:17,900 Suze: and I wanna understand how to do it. And I 150 00:10:17,909 --> 00:10:21,349 Suze: wanna learn about this and that's your dream 151 00:10:22,400 --> 00:10:25,030 Suze: or whatever your dream may be. 152 00:10:25,820 --> 00:10:27,199 Suze: I want to buy a home, 153 00:10:27,989 --> 00:10:32,119 Suze: whatever it is. What are you doing 154 00:10:32,799 --> 00:10:35,729 Suze: to really make that dream a reality? 155 00:10:36,530 --> 00:10:40,450 Suze: Because all I know is I have never been so 156 00:10:40,460 --> 00:10:41,469 Suze: inspired 157 00:10:42,219 --> 00:10:46,039 Suze: as I was watching Celine Dion 158 00:10:47,710 --> 00:10:48,570 Suze: sing 159 00:10:49,349 --> 00:10:55,228 Suze: on Friday night. Oh my God. So I just wanted 160 00:10:55,239 --> 00:10:58,010 Suze: you all to think about that in your own life 161 00:10:58,059 --> 00:11:02,489 Suze: because truthfully, oh, I'm thinking about it in my own. 162 00:11:03,320 --> 00:11:05,950 Suze: You know, I still think sometimes I even give up 163 00:11:05,960 --> 00:11:09,820 Suze: way too soon of trying something. No, it hurts. No, 164 00:11:09,830 --> 00:11:13,770 Suze: I cough. I this and that I'm not gonna give 165 00:11:13,780 --> 00:11:14,929 Suze: up again. 166 00:11:16,109 --> 00:11:20,089 Suze: Are you ready to go to Suze School? 167 00:11:21,659 --> 00:11:24,520 Suze: Ok. This is a little bit of a technical one, 168 00:11:24,750 --> 00:11:29,159 Suze: but one that you really, really need to understand. 169 00:11:29,909 --> 00:11:35,320 Suze: On July 18th, the IRS believe it or not only 170 00:11:35,330 --> 00:11:39,770 Suze: took him four years. Anyway, the IRS finally answered the 171 00:11:39,780 --> 00:11:44,069 Suze: question regarding distributions 172 00:11:45,070 --> 00:11:51,280 Suze: that happened to affect the beneficiaries of anyone who inherited 173 00:11:51,460 --> 00:11:58,329 Suze: an IRA from someone who died in 2020 or later. 174 00:12:00,190 --> 00:12:03,849 Suze: So if somebody dies, now this affects you, but if 175 00:12:03,859 --> 00:12:10,830 Suze: somebody died 2020 or later and left you a retirement account, 176 00:12:10,840 --> 00:12:12,090 Suze: you inherited it, 177 00:12:12,869 --> 00:12:17,689 Suze: there has been total confusion over the rules and regulations 178 00:12:17,700 --> 00:12:19,130 Suze: on some parts of it. 179 00:12:20,059 --> 00:12:24,840 Suze: So again, this confusion has been going on for four 180 00:12:24,849 --> 00:12:31,969 Suze: years now. And finally, we have an answer from the IRS. 181 00:12:32,700 --> 00:12:34,619 Suze: So first of all, make sure you get out your 182 00:12:34,630 --> 00:12:37,520 Suze: little Suze notebooks because you're gonna start to need them. 183 00:12:38,369 --> 00:12:42,330 Suze: All right, let's just go back in time a little 184 00:12:42,340 --> 00:12:47,239 Suze: bit so that you can understand the confusion that has 185 00:12:47,250 --> 00:12:53,150 Suze: been caused when a law changes before 2020. If somebody 186 00:12:53,159 --> 00:12:53,869 Suze: died 187 00:12:54,799 --> 00:12:58,760 Suze: and you were a beneficiary, let's say you weren't the spouse, 188 00:12:58,770 --> 00:13:03,510 Suze: but you were a beneficiary of their retirement account. One 189 00:13:03,520 --> 00:13:06,500 Suze: of the ways that you were able to choose to 190 00:13:06,510 --> 00:13:08,419 Suze: withdraw the money 191 00:13:09,739 --> 00:13:15,359 Suze: from the retirement account was something called the life expectancy 192 00:13:15,369 --> 00:13:21,070 Suze: method or what was known as a stretch IRA. 193 00:13:22,090 --> 00:13:26,390 Suze: And the reason that most people other than a spouse 194 00:13:26,840 --> 00:13:31,909 Suze: chose to withdraw money under the stretch IRA methods is 195 00:13:31,919 --> 00:13:35,500 Suze: that most people years ago didn't have their money in 196 00:13:35,510 --> 00:13:39,868 Suze: Roth IRAs which could be withdrawn. In most cases tax free. 197 00:13:40,140 --> 00:13:44,429 Suze: Most people were inheriting and still inheriting to this day 198 00:13:44,440 --> 00:13:45,789 Suze: because you're not listening to me, 199 00:13:46,200 --> 00:13:50,830 Suze: they were inheriting traditional IRAs or retirement accounts where the 200 00:13:50,840 --> 00:13:55,900 Suze: distributions are taxable as ordinary income. 201 00:13:56,799 --> 00:14:02,780 Suze: So before 2020 to lessen the tax burden rather than 202 00:14:02,789 --> 00:14:06,400 Suze: taking out large sums of money over a short period 203 00:14:06,409 --> 00:14:07,260 Suze: of time, 204 00:14:08,130 --> 00:14:11,820 Suze: if they were able to stretch the withdrawal over their 205 00:14:11,830 --> 00:14:13,260 Suze: life expectancy, 206 00:14:14,119 --> 00:14:17,968 Suze: that would help them with the tax burden tremendously. 207 00:14:18,940 --> 00:14:24,119 Suze: It was a great advantage to people other than a spouse. Now, 208 00:14:24,130 --> 00:14:27,000 Suze: you hear me say, other than a spouse and the 209 00:14:27,010 --> 00:14:32,559 Suze: reason is when a spouse, even today inherits an ira 210 00:14:32,570 --> 00:14:38,239 Suze: a retirement account from her deceased spouse, she can roll 211 00:14:38,250 --> 00:14:40,599 Suze: it over and take it on as her own. She 212 00:14:40,609 --> 00:14:43,840 Suze: can do all these things with it. That was true 213 00:14:43,849 --> 00:14:47,640 Suze: before 2020 it's still true to this day. 214 00:14:48,609 --> 00:14:53,500 Suze: So I just want you however, to make sure that 215 00:14:53,520 --> 00:14:58,650 Suze: you understand the terminology that you are about to hear 216 00:14:58,659 --> 00:15:04,409 Suze: me say. So you understand how these new rules apply 217 00:15:04,419 --> 00:15:07,849 Suze: to you as you're going to hear me say 218 00:15:08,469 --> 00:15:15,260 Suze: quite a few times terms like non EDB beneficiaries, which 219 00:15:15,270 --> 00:15:21,030 Suze: stands for non eligible designated beneficiaries. So you're going to 220 00:15:21,039 --> 00:15:24,109 Suze: hear me say that and I just want you to 221 00:15:24,119 --> 00:15:28,679 Suze: know what I'm talking about and how probably the majority 222 00:15:28,690 --> 00:15:32,270 Suze: of you out there are non EDBs. 223 00:15:33,690 --> 00:15:36,969 Suze: So these are like specific terms that are used to 224 00:15:36,979 --> 00:15:40,989 Suze: describe different types of beneficiaries that I'm about to tell 225 00:15:41,000 --> 00:15:45,789 Suze: you for an IRA. And if you could understand these terms, 226 00:15:46,179 --> 00:15:49,150 Suze: then you'll know which one applies to you when you 227 00:15:49,159 --> 00:15:52,630 Suze: inherit an IRA. So, are you ready 228 00:15:54,500 --> 00:15:56,130 Suze: Suze School... Anyway, 229 00:15:57,000 --> 00:16:01,340 Suze: a beneficiary is simply a person or an entity such 230 00:16:01,349 --> 00:16:05,039 Suze: as a trust or charity that is designated to receive 231 00:16:05,049 --> 00:16:09,760 Suze: the assets in an Ira after the owner's death, 232 00:16:10,710 --> 00:16:12,200 Suze: write that down 233 00:16:13,950 --> 00:16:22,840 Suze: an eligible designated beneficiary or an EDB again, eligible designated 234 00:16:22,849 --> 00:16:24,960 Suze: beneficiary or an EDB 235 00:16:26,809 --> 00:16:32,109 Suze: is a specific type of beneficiary who could take advantage 236 00:16:32,119 --> 00:16:38,250 Suze: of more favorable distribution rules when it comes to inherited IRAs, 237 00:16:38,320 --> 00:16:41,950 Suze: just that simple. Now, who is an EDB, 238 00:16:43,700 --> 00:16:48,750 Suze: an eligible designated beneficiary or an EDB can be a 239 00:16:48,760 --> 00:16:51,320 Suze: spouse of the original account owner, 240 00:16:52,109 --> 00:16:56,239 Suze: a beneficiary who is disabled or chronically ill. 241 00:16:57,119 --> 00:17:01,700 Suze: A beneficiary who is not more than 10 years younger 242 00:17:01,710 --> 00:17:04,020 Suze: than the original account owner 243 00:17:04,859 --> 00:17:10,448 Suze: and also minor children until they reach the age of 244 00:17:10,458 --> 00:17:14,259 Suze: majority or up to the age of 26 if they're 245 00:17:14,269 --> 00:17:16,379 Suze: still in school. 246 00:17:17,578 --> 00:17:23,818 Suze: Now, once again, a spouse who is an eligible designated beneficiary, 247 00:17:24,109 --> 00:17:28,639 Suze: they have the most benefits of anyone out there, 248 00:17:29,510 --> 00:17:32,250 Suze: as I told you just a few seconds ago. 249 00:17:33,089 --> 00:17:38,989 Suze: But besides a spouse, if you are an eligible designated beneficiary, 250 00:17:39,650 --> 00:17:43,790 Suze: then the main benefit to you is that you can 251 00:17:43,800 --> 00:17:48,160 Suze: still do things such as a stretch IRA, which could 252 00:17:48,170 --> 00:17:53,670 Suze: help you tremendously on your taxes. So, if you meet 253 00:17:53,680 --> 00:17:56,430 Suze: any of those things that I just said 254 00:17:57,310 --> 00:18:03,579 Suze: when you inherit an IRA, you still get to do 255 00:18:03,599 --> 00:18:06,939 Suze: a stretch IRA. And if you're the spouse, you can 256 00:18:06,949 --> 00:18:10,579 Suze: do a whole lot of other things as well. All right, 257 00:18:11,589 --> 00:18:17,939 Suze: non eligible designated beneficiaries or a non EDB. It's just 258 00:18:17,949 --> 00:18:22,709 Suze: easier to say that which most of you probably are 259 00:18:22,719 --> 00:18:28,359 Suze: on some level is a beneficiary who does not meet 260 00:18:28,369 --> 00:18:34,629 Suze: the criteria to be an eligible designated beneficiary or an 261 00:18:34,640 --> 00:18:36,900 Suze: E Got that? 262 00:18:37,819 --> 00:18:41,239 Suze: You're just somebody who is not a spouse, you know, 263 00:18:41,250 --> 00:18:46,000 Suze: not critically ill, you're not those things, you're a daughter, 264 00:18:46,010 --> 00:18:50,948 Suze: you're maybe a sister may, who knows? Right. But that's 265 00:18:50,959 --> 00:18:54,170 Suze: a non eligible, designated beneficiary. 266 00:18:55,020 --> 00:18:56,589 Suze: Listen to me closely now 267 00:18:57,510 --> 00:19:04,079 Suze: for non EDBs eligible designated beneficiaries, the Secure Act 268 00:19:04,859 --> 00:19:12,319 Suze: that came into effect 2020. The Secure Act requires the 269 00:19:12,329 --> 00:19:18,079 Suze: entire account balance of an inherited IRA to be withdrawn 270 00:19:18,089 --> 00:19:24,119 Suze: within 10 years of the original account owner's death. 271 00:19:24,939 --> 00:19:27,800 Suze: So simply what they're saying to you is they have 272 00:19:27,810 --> 00:19:35,560 Suze: gotten rid of the stretch IRAs, that's simply what it says. Ok, 273 00:19:36,530 --> 00:19:41,379 Suze: you also just should know that a designated beneficiary is 274 00:19:41,390 --> 00:19:45,939 Suze: just simply a beneficiary who specifically is named on the 275 00:19:45,949 --> 00:19:52,410 Suze: IRA beneficiary designation form. And this can include both EDBs 276 00:19:53,199 --> 00:19:58,630 Suze: and non EDBs because being a designated beneficiary means nothing. 277 00:19:59,109 --> 00:20:02,920 Suze: What means something is if you're a non eligible, designated 278 00:20:02,930 --> 00:20:08,839 Suze: beneficiary or an eligible designated beneficiary, that makes all the 279 00:20:08,849 --> 00:20:11,160 Suze: difference in the world. 280 00:20:11,819 --> 00:20:16,469 Suze: All right. Have you had enough already? Maybe so. But 281 00:20:16,479 --> 00:20:19,919 Suze: now that you have that, let's fast forward to December 282 00:20:19,930 --> 00:20:24,679 Suze: 2019 when the Secure Act was passed, that put an 283 00:20:24,689 --> 00:20:30,979 Suze: end to the stretch provision for most non spouse beneficiaries 284 00:20:31,089 --> 00:20:34,719 Suze: or non EDBs Ok. 285 00:20:35,640 --> 00:20:42,189 Suze: The new regulations stated that for non eligible designated beneficiaries 286 00:20:42,270 --> 00:20:48,300 Suze: who inherited an IRA from someone who died 2020 or later, 287 00:20:48,880 --> 00:20:52,880 Suze: they had a maximum of 10 years to wipe the 288 00:20:52,890 --> 00:20:58,310 Suze: inherited retirement account clean. Even if the retirement account was 289 00:20:58,319 --> 00:21:01,359 Suze: a Roth IRA. 290 00:21:02,670 --> 00:21:05,770 Suze: Now, I just want to say something here. That's not 291 00:21:05,780 --> 00:21:07,889 Suze: that difficult to understand, 292 00:21:08,560 --> 00:21:12,948 Suze: but you need to know that if you have 10 293 00:21:12,959 --> 00:21:18,790 Suze: years to wipe a traditional inherited IRA clean, you would 294 00:21:18,800 --> 00:21:21,500 Suze: not want to wait till the 10th year 295 00:21:22,290 --> 00:21:25,599 Suze: because even though you got deferral on that money, the 296 00:21:25,609 --> 00:21:28,329 Suze: growth of that for those 10 years, if you have 297 00:21:28,339 --> 00:21:31,510 Suze: to draw out a large lump sum in the 10th year, 298 00:21:31,670 --> 00:21:35,680 Suze: you're gonna be hit by big time taxes. So you 299 00:21:35,689 --> 00:21:39,349 Suze: would want to take it out year after year after 300 00:21:39,359 --> 00:21:44,650 Suze: year just to make sense unless you're smart and you've 301 00:21:44,660 --> 00:21:48,420 Suze: been listening to me and your family has been listening 302 00:21:48,430 --> 00:21:48,979 Suze: to me. 303 00:21:49,290 --> 00:21:55,468 Suze: And if you inherited a Roth IRA, then if you 304 00:21:55,479 --> 00:21:58,439 Suze: didn't need the money. You would just let it sit 305 00:21:58,449 --> 00:22:04,579 Suze: there until the 10th year, let it grow tax free 306 00:22:04,650 --> 00:22:07,339 Suze: and in the 10th year, you could take it all 307 00:22:07,349 --> 00:22:08,750 Suze: out tax free. 308 00:22:09,560 --> 00:22:11,300 Suze: Just something for you to think about. 309 00:22:12,250 --> 00:22:16,270 Suze: The confusion came when you inherited an IRA and the 310 00:22:16,280 --> 00:22:20,719 Suze: owner of the IRA died at or after the RMD 311 00:22:21,569 --> 00:22:26,790 Suze: date was to begin, what is the RMD date? Required 312 00:22:26,800 --> 00:22:29,389 Suze: minimum distributions 313 00:22:30,060 --> 00:22:33,310 Suze: and required minimum distributions 314 00:22:34,219 --> 00:22:37,839 Suze: are required to start where you take out money from 315 00:22:37,849 --> 00:22:38,869 Suze: your IRA 316 00:22:40,270 --> 00:22:46,540 Suze: April 1st, after the year that you currently turn 73 317 00:22:48,050 --> 00:22:51,800 Suze: or starting in a few years, 75 318 00:22:52,719 --> 00:22:55,419 Suze: few years ago, it was 72. 319 00:22:56,550 --> 00:23:01,689 Suze: So the question that was confusing everybody and the IRS 320 00:23:01,699 --> 00:23:03,810 Suze: could not give them an answer 321 00:23:04,560 --> 00:23:09,819 Suze: is starting in 2020. Did the beneficiary need to continue 322 00:23:09,829 --> 00:23:15,099 Suze: to take the RMDs or did they have 10 years 323 00:23:15,109 --> 00:23:18,979 Suze: from the date they inherited the account to withdraw all 324 00:23:18,989 --> 00:23:20,290 Suze: the money in there. 325 00:23:28,329 --> 00:23:35,829 Suze: So you had people who inherited an IRA from somebody 326 00:23:35,839 --> 00:23:40,300 Suze: who should have been taking required minimum distributions? 327 00:23:41,030 --> 00:23:45,890 Suze: And the question was, did the beneficiary need to continue 328 00:23:45,900 --> 00:23:50,540 Suze: to take those required minimum distributions or could they have 329 00:23:50,550 --> 00:23:54,530 Suze: 10 years from the date they inherited to simply wipe 330 00:23:54,540 --> 00:23:56,369 Suze: the account clean 331 00:23:57,239 --> 00:24:01,260 Suze: well, for all these years, the IRS has not been 332 00:24:01,270 --> 00:24:06,060 Suze: able to answer that question. So nobody knew what to 333 00:24:06,069 --> 00:24:09,420 Suze: do because nobody knew what to do. 334 00:24:10,280 --> 00:24:15,209 Suze: Those people were allowed, who didn't have an answer to 335 00:24:15,219 --> 00:24:22,699 Suze: that question. They were allowed not to take RMDs out 336 00:24:23,020 --> 00:24:27,339 Suze: of an account that the IRS may rule, they needed 337 00:24:27,349 --> 00:24:28,500 Suze: to take them out. 338 00:24:29,760 --> 00:24:37,040 Suze: Well, guess what, the IRS ruled that you have to 339 00:24:37,050 --> 00:24:41,739 Suze: start taking RMDs out. It is final now 340 00:24:42,510 --> 00:24:50,170 Suze: and you have to start taking RMDs out by 2025 341 00:24:50,780 --> 00:24:55,000 Suze: is when you have to start taking out RMDs on 342 00:24:55,010 --> 00:24:59,810 Suze: that inherited IRA. So there were people 343 00:25:00,979 --> 00:25:04,780 Suze: that weren't taking those RMDs out for a matter of, 344 00:25:04,790 --> 00:25:06,319 Suze: let's say three years. 345 00:25:07,170 --> 00:25:12,750 Suze: But the IRS said, don't worry because the IRS is 346 00:25:12,760 --> 00:25:17,000 Suze: stated that there will be no penalty and no requirement 347 00:25:17,010 --> 00:25:20,989 Suze: to make up those missed distributions. 348 00:25:21,770 --> 00:25:24,160 Suze: So we all got a break there if we should 349 00:25:24,170 --> 00:25:29,469 Suze: have been taking them out and we didn't. However, here's 350 00:25:29,479 --> 00:25:33,429 Suze: what you need to know, let's say you inherited an 351 00:25:33,439 --> 00:25:38,619 Suze: IRA in 2021 that fell under the requirements that you 352 00:25:38,630 --> 00:25:44,020 Suze: had to take out the RMDs . But you didn't 353 00:25:45,280 --> 00:25:49,959 Suze: remember even though you're not going to be penalized for 354 00:25:49,969 --> 00:25:54,339 Suze: it and you have to start doing it starting 2025. 355 00:25:55,030 --> 00:26:03,420 Suze: You only have till 2031 to wipe that account clean. 356 00:26:04,859 --> 00:26:08,880 Suze: So you might actually be in this situation where you 357 00:26:08,890 --> 00:26:12,719 Suze: want to take out more than the R MD requirement 358 00:26:13,180 --> 00:26:16,189 Suze: so that you're not hit with a large tax bill 359 00:26:16,199 --> 00:26:22,540 Suze: in another six years. I hope that was clear to 360 00:26:22,550 --> 00:26:23,399 Suze: all of you. 361 00:26:24,630 --> 00:26:27,530 Suze: You might want to listen to this podcast over and 362 00:26:27,540 --> 00:26:28,448 Suze: over again 363 00:26:29,160 --> 00:26:33,510 Suze: just so you can be clear. But we now have 364 00:26:33,540 --> 00:26:39,500 Suze: the true regulations of what you can and cannot do 365 00:26:39,770 --> 00:26:47,250 Suze: with inherited IRAs for any owner of that IRA who 366 00:26:47,260 --> 00:26:50,458 Suze: died in 2020 or later. 367 00:26:50,930 --> 00:26:54,349 Suze: Now, listen, if you're confused or you have questions and 368 00:26:54,359 --> 00:26:58,079 Suze: you just want to know what other changes have happened 369 00:26:58,089 --> 00:27:02,400 Suze: within the Secure Act, just write to ask Suze Podcast 370 00:27:02,410 --> 00:27:07,469 Suze: at gmail.com. And if we get enough of them on Thursday, 371 00:27:07,479 --> 00:27:10,790 Suze: this will be funny with KT. But on Thursday, we 372 00:27:10,800 --> 00:27:14,629 Suze: will answer those questions because this is a topic that 373 00:27:14,640 --> 00:27:17,849 Suze: is very, very important. 374 00:27:18,729 --> 00:27:23,699 Suze: So again, make sure you watch, I am Celine Dion 375 00:27:23,709 --> 00:27:29,170 Suze: on Amazon and if you happen to miss her singing 376 00:27:29,180 --> 00:27:33,349 Suze: at the Olympics, youtube, it do something but watch it 377 00:27:33,680 --> 00:27:34,709 Suze: and you'll get 378 00:27:35,410 --> 00:27:39,449 Suze: why I'm still in such awe over it. All right. 379 00:27:39,459 --> 00:27:45,150 Suze: Everybody until Thursday when Miss KT will join us again, 380 00:27:45,420 --> 00:27:47,750 Suze: there's only one thing that I want you to remember 381 00:27:47,760 --> 00:27:53,420 Suze: and it is this people first, then money, then things 382 00:27:54,630 --> 00:28:01,869 Suze: and make your dreams come true. Why? Because you are unstoppable.