1 00:00:30,020 --> 00:00:34,540 Suze: May 15, 2025. Welcome everybody to the Women and Money 2 00:00:34,540 --> 00:00:38,580 Suze: podcast as well as everybody smart enough to listen. Drum 3 00:00:38,580 --> 00:00:41,500 Suze: roll introducing the one and only 4 00:00:41,500 --> 00:00:46,430 KT: KT. Today is Ask Suze Anything starring KT. 5 00:00:47,549 --> 00:00:48,990 Suze: What else is today, KT 6 00:00:48,990 --> 00:00:53,389 KT: May 15th and we're going back to the island finally. 7 00:00:53,430 --> 00:00:57,349 Suze: We have been in Florida for one full month. 8 00:00:57,479 --> 00:00:58,270 KT: Yes, yes. 9 00:00:58,830 --> 00:01:01,619 Suze: One day we'll tell you why, but that's besides the point. 10 00:01:01,790 --> 00:01:06,139 Suze: But today we get to go back to our home 11 00:01:06,139 --> 00:01:10,500 Suze: in the island, so KT could not be more excited 12 00:01:10,629 --> 00:01:12,029 Suze: if she tried, right? 13 00:01:12,150 --> 00:01:12,750 KT: I'm very 14 00:01:12,934 --> 00:01:16,285 KT: happy because this is now coming into the season. I 15 00:01:16,285 --> 00:01:18,044 KT: love the most, which is summer. 16 00:01:18,245 --> 00:01:19,004 Suze: What do you love about it? 17 00:01:19,004 --> 00:01:25,775 KT: Hot, calm, beautiful, long days, early mornings, late, late nights... 18 00:01:26,004 --> 00:01:26,964 Suze: And hurricanes. 19 00:01:27,084 --> 00:01:29,444 KT: Well, that's at the end of the summer. That's called 20 00:01:29,444 --> 00:01:34,815 KT: hurricane season. This is just lazy summer floating around with 21 00:01:34,815 --> 00:01:38,554 KT: Suze in the ocean, very calm summer. 22 00:01:38,959 --> 00:01:42,970 Suze: All right, so today is Ask KT and Suze anything 23 00:01:42,970 --> 00:01:46,349 Suze: if you have a question that you would possibly like 24 00:01:46,349 --> 00:01:49,599 Suze: for us to answer it on the podcast, please write 25 00:01:49,599 --> 00:01:55,599 Suze: into ask Suze podcast@gmail.com. By the way, you're better off 26 00:01:55,599 --> 00:01:59,720 Suze: just writing into ask Suze podcast at gmail.com. 27 00:02:00,225 --> 00:02:03,166 Suze: Versus sending in a question on the Women and Money 28 00:02:03,166 --> 00:02:07,075 Suze: community app for some reason, don't ask me. Those don't 29 00:02:07,075 --> 00:02:10,305 Suze: necessarily always go through. So if you have a question, 30 00:02:10,595 --> 00:02:17,076 Suze: ask Suze podcast at gmail.com. KT, let's begin. 31 00:02:17,076 --> 00:02:18,315 KT: My first question, Suze... 32 00:02:18,716 --> 00:02:20,675 Suze: My voice is hoarse today, huh, is down. 33 00:02:20,802 --> 00:02:21,751 Suze: What is my voice today? 34 00:02:22,192 --> 00:02:25,591 KT: It's OK. It's getting a little better. Suze had lots 35 00:02:25,591 --> 00:02:29,192 KT: of procedures on her throat, so we're trying to get 36 00:02:29,192 --> 00:02:31,832 KT: rid of this cough you all know about. But today 37 00:02:31,832 --> 00:02:32,472 KT: is pretty good. 38 00:02:32,792 --> 00:02:34,472 Suze: Pretty good. But that's why we've been here for a month. 39 00:02:34,871 --> 00:02:35,712 KT: Yeah, not bad. All right,go on. 40 00:02:36,151 --> 00:02:39,632 KT: So I'll do most of the talking, right? This is from Whitney. 41 00:02:40,272 --> 00:02:41,421 Suze: I got news, everybody, 42 00:02:43,029 --> 00:02:47,869 Suze: even if my throat is 1,000%, Katy always does most 43 00:02:47,869 --> 00:02:49,500 Suze: of the talking anyway. Go on. 44 00:02:49,500 --> 00:02:53,110 KT: Yes, she does, and this is from Whitney. She said, Suze, 45 00:02:53,149 --> 00:02:56,250 KT: here's why I'm writing. I've just gone through a divorce, 46 00:02:56,279 --> 00:02:59,509 KT: and one of the major reasons I divorced him was 47 00:02:59,508 --> 00:03:03,589 KT: our different approaches to money. So true, right, Suze. 48 00:03:03,970 --> 00:03:08,788 KT: So she said, my ex-husband is an extremely prominent world 49 00:03:08,788 --> 00:03:12,589 KT: class scientist who is known throughout his field as just 50 00:03:12,589 --> 00:03:15,949 KT: about the best in the world. He can do the 51 00:03:15,949 --> 00:03:21,779 KT: most complicated mathematical computations that one can think of. However, 52 00:03:22,508 --> 00:03:25,829 KT: this is funny, when it comes to the simple arithmetic 53 00:03:25,830 --> 00:03:28,710 KT: of income minus expenses, he struggles. 54 00:03:29,945 --> 00:03:32,184 KT: Just goes to show that even if you are a 55 00:03:32,184 --> 00:03:39,154 KT: highly educated professor at a university sometimes common sense isn't 56 00:03:39,154 --> 00:03:39,865 KT: so 57 00:03:39,865 --> 00:03:40,395 KT: common. 58 00:03:40,505 --> 00:03:45,544 Suze: Now I actually gave that to KT to open up 59 00:03:45,544 --> 00:03:48,425 Suze: today's podcast. Do you wonder why KT? 60 00:03:49,505 --> 00:03:50,774 KT: I think it was funny. 61 00:03:50,945 --> 00:03:53,895 Suze: You think it was funny, but I know it's true. 62 00:03:54,225 --> 00:03:58,104 Suze: When I was actually seeing clients, had my own firm. 63 00:03:58,440 --> 00:04:06,360 Suze: And everything what absolutely puzzled me is that doctors, lawyers, neurosurgeons, 64 00:04:06,509 --> 00:04:09,830 Suze: you name it. They were so horrible with money I 65 00:04:09,830 --> 00:04:13,380 Suze: can't even tell you, and I almost got to the point, 66 00:04:13,630 --> 00:04:16,989 Suze: everybody seriously KT, that because I always had a waiting 67 00:04:16,988 --> 00:04:19,510 Suze: list of people wanting to see me, that one of 68 00:04:19,510 --> 00:04:21,920 Suze: the questions was, are you a doctor? 69 00:04:22,760 --> 00:04:23,529 KT: And then you wouldn't see them. 70 00:04:23,529 --> 00:04:25,730 Suze: And then really we would put them down to the 71 00:04:25,730 --> 00:04:28,570 Suze: bottom of the list because it was just so frustrating 72 00:04:28,570 --> 00:04:32,529 Suze: to me because number one they always thought what they 73 00:04:32,529 --> 00:04:35,320 Suze: thought was correct, even if it wasn't. 74 00:04:35,920 --> 00:04:39,869 Suze: And they didn't understand the simplest of things just like 75 00:04:39,869 --> 00:04:43,579 Suze: Whitney was saying. So the reason that I wanted that 76 00:04:44,149 --> 00:04:48,779 Suze: is because maybe you're in a relationship with somebody who 77 00:04:48,779 --> 00:04:54,539 Suze: is a brainiac, very high powered job, knows everything, very intellectual, 78 00:04:54,709 --> 00:04:58,940 Suze: who knows what that doesn't mean they're good with money. 79 00:04:59,420 --> 00:05:04,040 Suze: Because money is all about emotions and that's what we 80 00:05:04,040 --> 00:05:05,440 Suze: learned on last Sunday's podcast. 81 00:05:05,440 --> 00:05:07,959 KT: And a lot of common sense. 82 00:05:08,279 --> 00:05:10,839 Suze: I just want you to be aware if you're in 83 00:05:10,839 --> 00:05:14,160 Suze: a relationship with somebody who makes a lot of money, 84 00:05:14,279 --> 00:05:18,279 Suze: very high powered, regarded by everybody as this most brilliant 85 00:05:18,279 --> 00:05:19,149 Suze: person around, 86 00:05:19,635 --> 00:05:23,375 Suze: it does not mean that you should lose your power 87 00:05:23,665 --> 00:05:26,945 Suze: thinking that they're better at it than you cause chances 88 00:05:26,945 --> 00:05:29,575 Suze: are they are not. All right, KT. 89 00:05:29,863 --> 00:05:32,894 KT: OK, so Suze asked me to redo a question that 90 00:05:32,894 --> 00:05:37,225 KT: we actually had on last Thursday, but the information that 91 00:05:37,225 --> 00:05:39,904 KT: she gave to this question was inaccurate. 92 00:05:40,269 --> 00:05:43,880 KT: So we were redoing it and we've got a much 93 00:05:43,880 --> 00:05:48,279 KT: better and more succinct answer and guidance for all of 94 00:05:48,279 --> 00:05:52,230 KT: you and it's kind of sad this question. Hi, Suze, 95 00:05:52,519 --> 00:05:55,670 KT: my 60 year old sister recently passed away. 96 00:05:55,959 --> 00:06:02,000 KT: Her 401k is worth $281,000. My other sister and I 97 00:06:02,000 --> 00:06:07,839 KT: are the beneficiaries. I'm 62. My sister is 64. So 98 00:06:07,839 --> 00:06:10,558 KT: all these girls were in their 60s, and the young 99 00:06:10,559 --> 00:06:14,479 KT: one died. She said. We also have two other siblings 100 00:06:14,480 --> 00:06:18,670 KT: we wish to share it with. They are 59 and 64. 101 00:06:19,119 --> 00:06:20,750 KT: We're all still working. 102 00:06:21,119 --> 00:06:26,459 KT: The funds will be transferred to an inheritance 401k. What 103 00:06:26,459 --> 00:06:30,428 KT: is the best way to share with our other two siblings? 104 00:06:30,500 --> 00:06:36,019 Suze: Yeah, now here's the thing. Notice that in this question, 105 00:06:36,510 --> 00:06:39,309 Suze: it says that the funds will be transferred to an 106 00:06:39,309 --> 00:06:41,329 Suze: inheritance 401k. 107 00:06:42,690 --> 00:06:46,410 Suze: All of you have to understand that the way a 108 00:06:46,410 --> 00:06:52,779 Suze: 401k is done in most corporations versus an inherited IRA 109 00:06:53,049 --> 00:06:57,809 Suze: is very, very different, so I answered as if the 110 00:06:57,809 --> 00:07:02,299 Suze: money was going to stay in a 401k that's inherited 111 00:07:02,299 --> 00:07:05,489 Suze: now many corporations listen to me closely, 112 00:07:06,000 --> 00:07:11,859 Suze: do not really honor the Secure 2.0 act where if 113 00:07:11,859 --> 00:07:15,910 Suze: you are an eligible beneficiary that you can then do 114 00:07:15,910 --> 00:07:20,109 Suze: what take it out over your life span. They would 115 00:07:20,109 --> 00:07:24,959 Suze: simply say in most corporations that you have 10 years 116 00:07:24,959 --> 00:07:30,609 Suze: to wipe an inherited 401k clean, and that's how I 117 00:07:30,609 --> 00:07:31,989 Suze: answered the question. 118 00:07:32,739 --> 00:07:35,100 Suze: What's important for all of you to know is if 119 00:07:35,100 --> 00:07:39,019 Suze: you're ever in a situation where you have money that 120 00:07:39,019 --> 00:07:44,579 Suze: you're inheriting from a 401k, you're far better off transferring 121 00:07:44,579 --> 00:07:48,100 Suze: it to an inherited IRA in your 122 00:07:48,179 --> 00:07:53,130 Suze: individual names and so the sisters that is what you 123 00:07:53,130 --> 00:07:57,078 Suze: should do now because it will be in an inherited 124 00:07:57,450 --> 00:08:03,609 Suze: IRA now you are what's called an eligible designated beneficiary. 125 00:08:04,260 --> 00:08:08,540 Suze: Which means that you can take this account over and 126 00:08:08,540 --> 00:08:14,779 Suze: stretch the withdrawals over your entire life expectancy, and why 127 00:08:14,779 --> 00:08:18,660 Suze: can you do that? Because you happen to be an 128 00:08:18,660 --> 00:08:23,019 Suze: individual that's not more than 10 years younger than the 129 00:08:23,019 --> 00:08:29,489 Suze: deceased IRA owner, which you're not. You're actually older than her. 130 00:08:30,209 --> 00:08:34,869 Suze: But it doesn't matter if you're older, you also qualify 131 00:08:34,869 --> 00:08:39,108 Suze: as an eligible designated beneficiary. So the correct answer to 132 00:08:39,109 --> 00:08:43,669 Suze: this question is if you do an inherited IRA in 133 00:08:43,669 --> 00:08:45,330 Suze: your individual names. 134 00:08:45,799 --> 00:08:50,829 Suze: You are an eligible designated beneficiary, and you can absolutely 135 00:08:50,830 --> 00:08:55,739 Suze: take it out over your life expectancies. You do not 136 00:08:55,739 --> 00:08:59,380 Suze: have to wipe it clean in 10 years at what KT? 137 00:08:59,429 --> 00:08:59,750 KT: How do 138 00:08:59,750 --> 00:09:00,700 KT: they share it? 139 00:09:00,869 --> 00:09:03,989 Suze: They share it now this becomes a little difficult because 140 00:09:03,989 --> 00:09:07,030 Suze: it depends how much do they want to share and 141 00:09:07,030 --> 00:09:11,109 Suze: because it's in a traditional inherited IRA. 142 00:09:11,489 --> 00:09:14,679 Suze: Any money they take out, they're gonna have to pay 143 00:09:14,679 --> 00:09:19,479 Suze: ordinary income taxes on it, so they're gonna have to 144 00:09:19,479 --> 00:09:22,270 Suze: decide do they want to take a lump sum out. 145 00:09:22,760 --> 00:09:26,109 Suze: And just give it to the sisters minus the tax 146 00:09:26,109 --> 00:09:28,510 Suze: that's going to be owed on it. Are they going 147 00:09:28,510 --> 00:09:31,260 Suze: to take it out in small little lump sum? 148 00:09:31,510 --> 00:09:31,780 KT: So 149 00:09:31,780 --> 00:09:34,549 KT: in essence they have to have a family meeting to 150 00:09:34,549 --> 00:09:36,709 KT: determine how they all wish to 151 00:09:36,710 --> 00:09:37,419 KT: share this. 152 00:09:37,510 --> 00:09:39,989 Suze: Yes, but if they share it, they need to make 153 00:09:39,989 --> 00:09:42,750 Suze: sure that it's equal and that the sisters 154 00:09:43,450 --> 00:09:47,159 Suze: also have to pay income tax on whatever is being shared. 155 00:09:47,159 --> 00:09:49,599 KT: Everyone shares the expenses as well. 156 00:09:50,039 --> 00:09:51,250 Suze: Yeah. OK, OK. All right. 157 00:09:51,330 --> 00:09:55,159 KT: Well, that's clear. So next question's from Gillian. She said, 158 00:09:55,250 --> 00:09:58,449 KT: hi Suze, I'm a federal worker stationed overseas. 159 00:09:58,590 --> 00:10:03,780 KT: I have two dependents, spouse and child. I am the 160 00:10:03,780 --> 00:10:07,728 KT: sole breadwinner. I used to feel like my job was stable, 161 00:10:07,820 --> 00:10:11,299 KT: but as you know, we are living in fear of 162 00:10:11,299 --> 00:10:13,830 KT: losing our jobs at any moment. 163 00:10:14,460 --> 00:10:17,340 KT: What a shame, right? No comment here, Suze. 164 00:10:17,380 --> 00:10:18,270 Suze: Stupid. 165 00:10:18,460 --> 00:10:22,859 KT: I know. Anyway, so Gillian said, I have significant debt 166 00:10:22,859 --> 00:10:25,419 KT: but still pay into my TSP. 167 00:10:25,739 --> 00:10:28,080 KT: And have a decent emergency fund. 168 00:10:28,460 --> 00:10:28,728 Suze: Now everybody 169 00:10:28,729 --> 00:10:33,400 Suze: at TSP is a thrift savings plan, which is essentially 170 00:10:33,400 --> 00:10:38,619 Suze: a 401k or 403B, but it's for federal employees alright, go on. 171 00:10:39,099 --> 00:10:42,780 KT: So her question is, should I stop paying into my 172 00:10:42,780 --> 00:10:47,500 KT: TSP and use both that money and the emergency fund 173 00:10:47,500 --> 00:10:49,530 KT: money to pay down debt? 174 00:10:50,179 --> 00:10:53,579 KT: Note, now this is important, she said. Doing this won't 175 00:10:53,580 --> 00:10:56,150 KT: even cover half of my debt. 176 00:10:56,539 --> 00:10:58,770 Suze: Now, KT, if you are going to answer that question, 177 00:10:58,979 --> 00:10:59,929 Suze: what would you say? 178 00:10:59,929 --> 00:11:01,419 KT: If I did a pop quizzy... 179 00:11:01,760 --> 00:11:05,510 KT: I would say um no I don't think she should 180 00:11:05,510 --> 00:11:09,549 KT: stop paying into the TSP and I definitely would not 181 00:11:09,549 --> 00:11:11,460 KT: use that emergency fund money. 182 00:11:11,830 --> 00:11:14,489 Suze: And why shouldn't she stop paying into the TSP? 183 00:11:14,489 --> 00:11:14,710 KT: Because 184 00:11:14,710 --> 00:11:17,559 KT: that's growing, and I think that what she has to 185 00:11:17,559 --> 00:11:22,309 KT: do is, is use other monies to pay down the debt. 186 00:11:23,340 --> 00:11:26,090 Suze: So, all right, so pretty good KT kind of ding 187 00:11:26,090 --> 00:11:28,010 Suze: ding ding. Listen to me. 188 00:11:28,299 --> 00:11:30,859 KT: Was that a little pop-up quiz because we weren't gonna 189 00:11:30,859 --> 00:11:31,059 KT: do 190 00:11:31,059 --> 00:11:31,580 KT: them anymore. 191 00:11:31,659 --> 00:11:32,837 Suze: I know a little pop up quizzy. 192 00:11:33,140 --> 00:11:34,969 KT: Do you all miss the quizzies, everybody? 193 00:11:35,099 --> 00:11:37,299 Suze: Don't ask us if they say yes, I'm gonna do 194 00:11:37,299 --> 00:11:40,408 Suze: it again. KT was always so nervous about these quizzies. 195 00:11:41,025 --> 00:11:41,304 KT: When the 196 00:11:41,304 --> 00:11:41,744 Suze: quizzy 197 00:11:41,744 --> 00:11:43,905 KT: time came up, I was like, let's hurry up and 198 00:11:43,905 --> 00:11:47,104 KT: finish this recording. I hated the quizzies because I didn't 199 00:11:47,104 --> 00:11:47,564 KT: get them right. 200 00:11:47,664 --> 00:11:51,025 Suze: And then I realized if KT hates anything, why the 201 00:11:51,025 --> 00:11:53,945 Suze: heck are we doing it? That just was stupid, so 202 00:11:53,945 --> 00:11:56,744 Suze: I stopped the quizzies. But here's the thing I want 203 00:11:56,744 --> 00:12:01,343 Suze: all of you to know the key answer to this question. 204 00:12:01,700 --> 00:12:07,728 Suze: Is... note doing this won't even cover half of my debts, 205 00:12:07,849 --> 00:12:11,478 Suze: so she can stop putting all this money towards her retirement, 206 00:12:11,690 --> 00:12:14,809 Suze: and it still will not help her with her debts. 207 00:12:14,969 --> 00:12:18,330 Suze: There is a rule of thumb, when you owe more 208 00:12:18,330 --> 00:12:24,890 Suze: money than you are worth, you are essentially bankrupt number one. Number two, 209 00:12:24,900 --> 00:12:27,809 Suze: and none of you ought to forget what I'm about 210 00:12:27,809 --> 00:12:29,848 Suze: to say. Your TSP. 211 00:12:30,400 --> 00:12:38,679 Suze: Your IRA, your 401k, your 403B are all protected against bankruptcy. 212 00:12:39,419 --> 00:12:42,359 Suze: So if you put a lot of money into your 213 00:12:42,359 --> 00:12:46,119 Suze: Roth IRA into your TSP, you built it and built 214 00:12:46,119 --> 00:12:47,260 Suze: it and built it. 215 00:12:48,690 --> 00:12:53,070 Suze: Guess what, if ever you needed to claim bankruptcy, that 216 00:12:53,070 --> 00:12:59,589 Suze: money would be safe and sound. Therefore, no, do not 217 00:12:59,590 --> 00:13:02,709 Suze: stop putting money in a place that's safe and sound. 218 00:13:02,789 --> 00:13:06,179 Suze: Now if you had said to me, if I did this, 219 00:13:06,390 --> 00:13:08,659 Suze: I'd be out of debt in like 6 months or 220 00:13:08,659 --> 00:13:12,270 Suze: 8 months, different answer. But given the fact that you 221 00:13:12,270 --> 00:13:14,869 Suze: have so much debt. 222 00:13:17,090 --> 00:13:20,280 Suze: I have a feeling that especially if you lose your job, 223 00:13:20,450 --> 00:13:24,330 Suze: you're the sole breadwinner, and on and on, uh, we 224 00:13:24,330 --> 00:13:27,010 Suze: may be heading for a situation that you just want 225 00:13:27,010 --> 00:13:31,059 Suze: to protect everything you possibly can. All right, go on. 226 00:13:31,059 --> 00:13:35,598 KT: This next question is my favorite because of the name Lupi. 227 00:13:37,159 --> 00:13:39,760 KT: This is from Lupi. I, I love that name. 228 00:13:39,840 --> 00:13:41,329 Suze: Her name's Lupi, 229 00:13:41,440 --> 00:13:43,989 KT: L U P I Lupi. Love that name. 230 00:13:44,239 --> 00:13:46,799 Suze: You know why she really loves that name? KT and 231 00:13:46,799 --> 00:13:50,830 Suze: I used to have a little favorite word, right, that, 232 00:13:50,919 --> 00:13:53,510 Suze: that when I was on TV that I would let 233 00:13:53,510 --> 00:13:55,880 Suze: her know I was thinking about her and it would 234 00:13:55,880 --> 00:13:56,419 Suze: be like do 235 00:13:57,344 --> 00:14:01,214 Suze: whatever it could be, but like some loopy loopy doopy 236 00:14:01,215 --> 00:14:02,905 Suze: and it was kind of like pulling my ear. 237 00:14:03,224 --> 00:14:03,424 KT: She'd say 238 00:14:03,424 --> 00:14:06,784 KT: like the markets are really doopy loopy today, KT and 239 00:14:06,784 --> 00:14:08,905 KT: I knew or she'd say today, and I knew it 240 00:14:08,905 --> 00:14:11,984 KT: was for me. All right, so, so this is from Lupi. 241 00:14:12,025 --> 00:14:16,044 KT: She said, Hi, Suze, thanks for sharing all of your knowledge. 242 00:14:16,784 --> 00:14:20,625 KT: I'll be 70 this summer and will begin taking SSI 243 00:14:20,625 --> 00:14:22,744 KT: the last 4 months of the year. 244 00:14:23,309 --> 00:14:27,570 KT: Filing jointly with my husband, I project our combined income 245 00:14:27,570 --> 00:14:32,280 KT: for 2025 will be less than that $60,000. 246 00:14:33,020 --> 00:14:37,570 KT: I'm contemplating converting a portion of my traditional IRA to 247 00:14:37,570 --> 00:14:40,969 KT: a Roth this year. My goal is to convert just 248 00:14:40,969 --> 00:14:44,369 KT: enough to keep us in the current tax bracket, which 249 00:14:44,369 --> 00:14:45,809 KT: should be 12%. 250 00:14:46,119 --> 00:14:49,390 KT: Is this a good idea to do the conversion in 251 00:14:49,390 --> 00:14:50,659 KT: this down market? 252 00:14:52,190 --> 00:14:54,429 Suze: As you're reading this, this market is not a down 253 00:14:54,429 --> 00:14:55,000 Suze: market anymore. 254 00:14:56,289 --> 00:14:59,539 KT: Not anymore. This email was sent a little while ago, 255 00:14:59,630 --> 00:15:01,340 KT: but it sure isn't the same 256 00:15:01,340 --> 00:15:01,659 KT: today. 257 00:15:01,710 --> 00:15:05,909 Suze: Now, first of all, it's true. So if her income 258 00:15:05,909 --> 00:15:12,750 Suze: is $60,000 her base income per year, that's approximately $30,000 259 00:15:12,750 --> 00:15:13,539 Suze: under 260 00:15:14,400 --> 00:15:16,150 Suze: what it would be for her to go to the 261 00:15:16,150 --> 00:15:21,049 Suze: next income tax bracket, which would be 22% by the way. 262 00:15:21,450 --> 00:15:27,859 Suze: So she has approximately $29,450 that she could convert. 263 00:15:28,530 --> 00:15:34,440 Suze: And still stay in the 12% tax bracket, so that's 264 00:15:34,440 --> 00:15:36,840 Suze: just something that she should look at if she wants 265 00:15:36,840 --> 00:15:39,909 Suze: to do it. What you should be doing right now 266 00:15:39,909 --> 00:15:43,880 Suze: because these markets have really gone up so and aren't 267 00:15:43,880 --> 00:15:46,960 Suze: you all thrilled that you stayed in, that you didn't 268 00:15:46,960 --> 00:15:50,640 Suze: get out, that you just kept dollar cost averaging, and 269 00:15:50,640 --> 00:15:55,880 Suze: now you have stocks like Palantair almost at $130. 270 00:15:56,380 --> 00:15:59,330 Suze: Are you kidding me? Really, you all should be so 271 00:15:59,330 --> 00:16:02,969 Suze: happy right now. But then another month from now when 272 00:16:02,969 --> 00:16:07,400 Suze: it turns around, you're gonna be so depressed again. The 273 00:16:07,400 --> 00:16:10,440 Suze: lesson you have got to learn from all this is 274 00:16:10,770 --> 00:16:12,849 Suze: just stick with it. 275 00:16:13,380 --> 00:16:16,650 Suze: Just keep dollar cost averaging. Just stick with what's good 276 00:16:16,820 --> 00:16:20,299 Suze: and everything like that for you, my dear Lupi. What 277 00:16:20,299 --> 00:16:23,969 Suze: you should be doing seriously is take a look at 278 00:16:23,969 --> 00:16:29,530 Suze: your portfolio and anything that really hasn't skyrocketed that much. 279 00:16:29,859 --> 00:16:33,750 Suze: Why don't you just convert, even if it did skyrocket? 280 00:16:33,849 --> 00:16:34,179 Suze: It's 281 00:16:34,320 --> 00:16:38,150 Suze: possible that it's gonna continue to skyrocket. You know, it's 282 00:16:38,150 --> 00:16:42,270 Suze: projected now, Mr. Fitzgerald says that he thinks Palantair's gonna 283 00:16:42,270 --> 00:16:46,539 Suze: go to 200. Wow. So if you happen to own Palantair, 284 00:16:46,549 --> 00:16:50,200 Suze: for instance, you can't just wait till something goes down. 285 00:16:50,429 --> 00:16:52,869 Suze: You have to decide, I want to keep it. I'm 286 00:16:52,869 --> 00:16:55,309 Suze: just gonna convert it. So just start 287 00:16:55,409 --> 00:16:58,760 Suze: doing it now little by little so you stay in 288 00:16:58,760 --> 00:17:02,950 Suze: the 12% tax bracket and just get the money over there. 289 00:17:03,280 --> 00:17:06,879 Suze: It's no longer a down market and you just can't 290 00:17:06,880 --> 00:17:09,920 Suze: necessarily say I'm going to wait because it may not 291 00:17:09,920 --> 00:17:11,079 Suze: be a down market again, 292 00:17:11,319 --> 00:17:12,399 Suze: That it might be down for a 293 00:17:12,400 --> 00:17:13,540 KT: while, but who knows? 294 00:17:13,599 --> 00:17:16,150 Suze: That's right. So KT, tell everybody 295 00:17:16,989 --> 00:17:20,677 Suze: what you said to me yesterday after I said to you, Look, KT, 296 00:17:20,788 --> 00:17:23,019 Suze: we're back way up again in our portfolio. 297 00:17:23,029 --> 00:17:25,578 KT: I said, make sure we don't go back down again. 298 00:17:25,989 --> 00:17:26,788 Suze: So she and she was serious. 299 00:17:26,788 --> 00:17:29,268 KT: I was serious. I said, Great, how do you, how 300 00:17:29,269 --> 00:17:30,718 KT: do you stay up there, Suze? 301 00:17:30,869 --> 00:17:32,538 Suze: And I said, you probably don't. 302 00:17:32,828 --> 00:17:33,218 Suze: So 303 00:17:34,188 --> 00:17:37,509 Suze: everybody wants to always stay up there, but they don't 304 00:17:37,509 --> 00:17:38,697 Suze: like when it goes down. 305 00:17:38,828 --> 00:17:41,948 KT: For years she would come in and say, KT, your 306 00:17:41,948 --> 00:17:44,638 KT: Apple shares, for instance, your Apples are up like 307 00:17:45,260 --> 00:17:49,099 KT: 500 points or whatever and I'd say sell them that 308 00:17:49,099 --> 00:17:52,020 KT: my answer to every time she announced that I had 309 00:17:52,020 --> 00:17:55,579 KT: a gain I'd say sell it just like that and 310 00:17:55,579 --> 00:17:57,180 KT: she would laugh at me and walk out of the 311 00:17:57,180 --> 00:18:00,579 KT: room and I'm really glad she did because if I 312 00:18:00,579 --> 00:18:03,619 KT: kept doing that, I actually wouldn't get anywhere, quite honestly. 313 00:18:03,619 --> 00:18:06,089 Suze: And just so all of you know. 314 00:18:06,800 --> 00:18:10,819 Suze: I don't plan, I hope KT doesn't either, to sell 315 00:18:10,819 --> 00:18:16,310 Suze: anything that we have. I think they're all incredible investments. 316 00:18:16,469 --> 00:18:20,109 Suze: I think if the market goes down dramatically again, I 317 00:18:20,109 --> 00:18:24,390 Suze: will just buy more of what I already have, and 318 00:18:24,390 --> 00:18:27,469 Suze: so I'm thrilled when the market goes down. 319 00:18:28,030 --> 00:18:31,389 Suze: And I love seeing it go back up again, but 320 00:18:31,390 --> 00:18:36,180 Suze: overall the trend is really up right now, KT we're 321 00:18:36,180 --> 00:18:39,228 Suze: no longer in my opinion in this like bear market 322 00:18:39,229 --> 00:18:41,500 Suze: that's gonna go down, down, down, down, down. I think 323 00:18:41,500 --> 00:18:46,099 Suze: overall these markets are up at this point in time, 324 00:18:46,390 --> 00:18:49,589 Suze: so maybe Sunday I'll go over some areas of the market. 325 00:18:49,839 --> 00:18:52,109 Suze: That I think are probably really good for all of 326 00:18:52,109 --> 00:18:55,379 Suze: you to be involved in in case you're not. 327 00:18:55,770 --> 00:18:58,030 KT: I think that would be a great idea. It's, it's 328 00:18:58,030 --> 00:18:59,188 KT: a good time to do that. 329 00:18:59,589 --> 00:18:59,900 Suze: Yeah, give me 330 00:18:59,900 --> 00:19:00,790 Suze: one more question. 331 00:19:00,869 --> 00:19:04,900 KT: OK, so I have one here from CP and she said, 332 00:19:04,930 --> 00:19:07,869 KT: this is Carol. She said, Hi, Suze. I had a 333 00:19:07,869 --> 00:19:12,228 KT: 401k from a previous employer that I rolled into a 334 00:19:12,229 --> 00:19:13,829 KT: traditional IRA. 335 00:19:14,859 --> 00:19:18,459 KT: I was then advised to contribute into the IRA, which 336 00:19:18,459 --> 00:19:22,050 KT: I have been doing for years. I just realized after 337 00:19:22,050 --> 00:19:27,179 KT: hearing some of your podcast that I was contributing after-tax 338 00:19:27,180 --> 00:19:33,050 KT: amounts to pre-tax IRA for which I'm not getting any deductions. 339 00:19:33,510 --> 00:19:34,530 KT: I mean that's crazy, right? 340 00:19:35,140 --> 00:19:37,180 Suze: Well, she could have been doing a Roth the whole 341 00:19:37,180 --> 00:19:39,339 Suze: time and getting tax-free growth. 342 00:19:39,500 --> 00:19:41,500 KT: So wait, let me finish telling you what she's doing. 343 00:19:41,579 --> 00:19:46,889 KT: I just stopped contributing to the IRA. I'm 52. I 344 00:19:46,890 --> 00:19:49,300 KT: can't withdraw from the IRA yet. 345 00:19:49,979 --> 00:19:54,339 KT: Question is, can I withdraw the after-tax contribution I made 346 00:19:54,339 --> 00:19:59,209 KT: in the IRA without paying tax on the total amount 347 00:19:59,209 --> 00:20:03,540 KT: and open a Roth IRA as you advise to open 348 00:20:03,540 --> 00:20:07,810 KT: a Roth for tax-free withdrawal? I need guidance on this, Suze. 349 00:20:07,859 --> 00:20:11,579 KT: I appreciate it. Thank you so much. So Carol 350 00:20:11,834 --> 00:20:12,574 KT: is a little bit confused. 351 00:20:12,574 --> 00:20:17,194 Suze: Yeah, so Carol, I'm so sorry that your financial adviser 352 00:20:17,625 --> 00:20:20,905 Suze: didn't take the time to just give you a little 353 00:20:20,905 --> 00:20:26,464 Suze: bit more guidance that said rather than contributing after tax 354 00:20:26,464 --> 00:20:30,344 Suze: dollars to your IRA that you already have, which simply 355 00:20:30,344 --> 00:20:35,024 Suze: means that you're putting more money in there, but the 356 00:20:35,025 --> 00:20:37,625 Suze: growth of that money is still gonna be taxed to 357 00:20:37,625 --> 00:20:40,545 Suze: you as ordinary income when you withdraw it. 358 00:20:41,550 --> 00:20:43,739 Suze: All he or she had to say to you is, 359 00:20:43,869 --> 00:20:46,680 Suze: why don't you just open up a Roth IRA, put 360 00:20:46,680 --> 00:20:50,349 Suze: the money in there obviously with after tax dollars, let 361 00:20:50,349 --> 00:20:54,579 Suze: it grow, and it will all be tax free. But no, 362 00:20:54,829 --> 00:20:57,948 Suze: they didn't take the time to say that. But here's 363 00:20:57,949 --> 00:21:03,510 Suze: what you need to understand now with a straight Roth IRA. 364 00:21:04,199 --> 00:21:07,010 Suze: You can take out any time you want, 365 00:21:08,380 --> 00:21:11,540 Suze: regardless of how long the account has been open or 366 00:21:11,540 --> 00:21:16,500 Suze: your age, your original contributions that you put in, so 367 00:21:16,500 --> 00:21:20,660 Suze: if you put in $7000 a year ago, $7000 this year, 368 00:21:20,739 --> 00:21:24,849 Suze: whatever it may be, you could take out the $14,000 369 00:21:25,219 --> 00:21:25,420 Suze: no 370 00:21:25,699 --> 00:21:30,469 Suze: taxes, penalties doesn't matter. It's the growth on that money 371 00:21:30,670 --> 00:21:35,629 Suze: that you cannot touch until you're 59.5 and the account's 372 00:21:35,630 --> 00:21:39,430 Suze: been open for at least 5 years. At that point 373 00:21:39,430 --> 00:21:43,069 Suze: then everything in there is tax free. 374 00:21:43,750 --> 00:21:48,040 Suze: You would think that that's how an IRA works that 375 00:21:48,040 --> 00:21:52,310 Suze: you put in after tax dollars, but it is not. 376 00:21:52,760 --> 00:21:57,000 Suze: It is very, very different. So whenever you make a 377 00:21:57,000 --> 00:22:03,280 Suze: non-deductible an after-tax contribution to a traditional IRA, 378 00:22:04,069 --> 00:22:09,670 Suze: you establish what the IRS calls a basis in that IRA, 379 00:22:09,989 --> 00:22:14,550 Suze: the amount in which you already paid taxes on. So 380 00:22:14,550 --> 00:22:16,750 Suze: first of all, do you know the amount that you 381 00:22:16,750 --> 00:22:20,939 Suze: have put in to that IRA and that is your basis. 382 00:22:21,214 --> 00:22:26,044 Suze: All future distributions listen to me closely now from that 383 00:22:26,045 --> 00:22:32,444 Suze: IRA are then treated under the pro rata rule, so 384 00:22:32,444 --> 00:22:38,645 Suze: you cannot simply pull out only your after-tax contributions, girlfriend. 385 00:22:39,125 --> 00:22:42,234 Suze: So here's what you have to have done hopefully. 386 00:22:43,199 --> 00:22:47,479 Suze: Did you file a form 8606 every single year? You 387 00:22:47,479 --> 00:22:52,040 Suze: needed to do so because it's right there that it 388 00:22:52,040 --> 00:22:57,669 Suze: keeps track of how much in a nondeductible contribution you made, 389 00:22:58,239 --> 00:23:03,800 Suze: so that's important because now you have choices ready. Why 390 00:23:03,800 --> 00:23:06,599 Suze: don't you just do a total conversion to a Roth 391 00:23:06,599 --> 00:23:09,310 Suze: IRA with everything that's in there. 392 00:23:09,849 --> 00:23:12,849 Suze: If there isn't that much money, you then get the 393 00:23:12,849 --> 00:23:15,800 Suze: after tax contribution that goes into a Roth. 394 00:23:16,569 --> 00:23:19,329 Suze: You then only owe taxes on the earnings and the 395 00:23:19,329 --> 00:23:23,319 Suze: part that was taxable in the IRA, but then everything 396 00:23:23,319 --> 00:23:29,089 Suze: is in a Roth IRA done just that simple. Now 397 00:23:29,089 --> 00:23:31,250 Suze: you may have too much money in there to do so, 398 00:23:31,260 --> 00:23:34,290 Suze: and it might affect your tax bracket, but if I 399 00:23:34,290 --> 00:23:39,290 Suze: were you, I would look at converting it to a 400 00:23:39,290 --> 00:23:43,489 Suze: Roth because it's such a mistake to leave after tax. 401 00:23:43,714 --> 00:23:49,905 Suze: Money growing taxable within your IRA. It is such a waste. 402 00:23:50,194 --> 00:23:52,994 Suze: So can you just see a CPA and get that 403 00:23:52,994 --> 00:23:56,555 Suze: to happen for yourself? All right, KT... 404 00:23:56,555 --> 00:23:57,305 KT: That was a wrap, Suze. 405 00:23:57,474 --> 00:24:01,305 Suze: That's a little bit of an early wrap because we 406 00:24:01,305 --> 00:24:03,824 Suze: are packing up to get on the plane to go 407 00:24:03,824 --> 00:24:06,554 Suze: back home. Do you think Colo remembers what we 408 00:24:06,555 --> 00:24:06,895 Suze: look like? 409 00:24:07,114 --> 00:24:10,635 KT: No, not at all, but he's very excited. 410 00:24:11,099 --> 00:24:14,329 KT: He's excited. He misses us, even if his wife was 411 00:24:14,329 --> 00:24:16,520 KT: with him. He so misses us. 412 00:24:16,650 --> 00:24:17,369 Suze: Are you sure? 413 00:24:17,569 --> 00:24:17,959 KT: Yes, 414 00:24:19,310 --> 00:24:23,859 Suze: We'll find out shortly. So until Sunday when we are 415 00:24:23,859 --> 00:24:28,209 Suze: back with Suze School, there's only one thing that we 416 00:24:28,209 --> 00:24:30,439 Suze: want you to remember when it comes to your money. 417 00:24:30,729 --> 00:24:31,609 Suze: What is it, KT? 418 00:24:31,810 --> 00:24:35,160 KT: Use lots of sunscreen. Stay safe. 419 00:24:36,280 --> 00:24:40,579 Suze: No, actually KT, have you been reading the reports on sunscreen? 420 00:24:40,650 --> 00:24:41,219 KT: No 421 00:24:41,219 --> 00:24:42,010 Suze: Horrible. 422 00:24:42,140 --> 00:24:45,699 KT: Oh, don't use lots of sunscreen. You just wear a 423 00:24:45,699 --> 00:24:46,979 KT: hat and stay out of the sun. 424 00:24:46,979 --> 00:24:52,161 Suze: Yeah, like we do. But anyway, just remember people first... 425 00:24:52,161 --> 00:24:52,790 KT: Thne money... 426 00:24:52,939 --> 00:24:55,969 Suze: Then things. Now you stay safe. Bye bye.