1 00:00:33,360 --> 00:00:36,319 KT: Good morning, Suze. How is that? How is that cup 2 00:00:36,330 --> 00:00:39,388 KT: of coffee? Did you tell everyone, I make you coffee 3 00:00:39,400 --> 00:00:40,028 KT: every morning. 4 00:00:40,069 --> 00:00:42,299 Suze: They know you make me coffee every morning, 5 00:00:42,310 --> 00:00:43,979 KT: But really early, 6 00:00:44,119 --> 00:00:49,450 Suze: We normally get up really, really early. But anyway, it 7 00:00:49,459 --> 00:00:54,779 Suze: is December 7th 2023. Welcome everybody to the Women and 8 00:00:54,790 --> 00:00:59,020 Suze: Money podcast and everyone's smart enough to listen. Today is 9 00:00:59,029 --> 00:00:59,610 Suze: the 10 00:01:00,750 --> 00:01:01,569 KT: KT 11 00:01:02,400 --> 00:01:08,050 KT: ask Suzie, anything with Katie as your host? And wait, wait, 12 00:01:08,059 --> 00:01:10,779 KT: today's a big day for all of our friends. We 13 00:01:10,790 --> 00:01:14,449 KT: have so many birthdays celebrating out there. We do. We 14 00:01:14,459 --> 00:01:18,610 KT: have mel in England, our beautiful bright Mel. We love 15 00:01:18,620 --> 00:01:21,860 KT: you so much and we wish her so 16 00:01:21,955 --> 00:01:26,694 KT: much good health. We also have Peter Roth, our friend 17 00:01:26,705 --> 00:01:27,294 KT: Peter 18 00:01:27,305 --> 00:01:30,083 Suze: Who was CEO of Warner brothers. 19 00:01:31,355 --> 00:01:35,625 KT: Dear Peter... and our friend Anneline here on the island. She's 20 00:01:35,635 --> 00:01:36,294 KT: from Norway. 21 00:01:36,305 --> 00:01:39,915 KT: She turns 80 today. Wow, she's wonderful. 22 00:01:39,944 --> 00:01:41,375 Suze: And I got news for you. 23 00:01:42,040 --> 00:01:46,080 Suze: To see her be on the treadmill or the elliptical 24 00:01:46,260 --> 00:01:48,819 Suze: or riding her bike. You would honest to God think 25 00:01:48,830 --> 00:01:52,879 Suze: she was 35 it's an amazing thing. Now, that's what 26 00:01:52,889 --> 00:01:53,379 Suze: it does. 27 00:01:53,620 --> 00:01:56,900 KT: Ok. Let's get started because I've got a whole host 28 00:01:56,910 --> 00:01:58,000 KT: of great questions. 29 00:01:58,724 --> 00:02:02,425 Suze: But before you start my love. for those of you who would like 30 00:02:02,434 --> 00:02:05,764 Suze: to possibly have your question answered on the Women and 31 00:02:05,775 --> 00:02:09,354 Suze: Money podcast. All you have to do is write it 32 00:02:09,365 --> 00:02:15,404 Suze: in to ask Suze Suze podcast at gmail.com. 33 00:02:15,710 --> 00:02:19,820 Suze: And if KT likes it and chooses it, guess what, 34 00:02:19,830 --> 00:02:25,119 Suze: we will answer it on this podcast. But be patient 35 00:02:25,250 --> 00:02:27,570 Suze: because even if you wrote in a while ago, you 36 00:02:27,580 --> 00:02:31,899 Suze: never know. We may still get to it. All right, KT. 37 00:02:31,910 --> 00:02:32,360 Suze: All right. 38 00:02:32,369 --> 00:02:34,398 KT: So the first one I've selected 39 00:02:35,490 --> 00:02:39,000 KT: kind of made me feel like you're not alone out there. Everybody, 40 00:02:39,008 --> 00:02:42,859 KT: this is from Nancy and Nancy said, hi, KT and 41 00:02:42,869 --> 00:02:46,199 KT: Suze O, and when she said, Suze O, I had an 42 00:02:46,210 --> 00:02:49,880 KT: inkling that she was a fan from the past and 43 00:02:49,889 --> 00:02:51,919 KT: she was, and she is. 44 00:02:51,990 --> 00:02:54,190 Suze: But the truth is KT every day I say, and 45 00:02:54,199 --> 00:02:57,220 Suze: this is Suze O, every time I just do it 46 00:02:57,229 --> 00:02:59,110 Suze: without you, I go Suze O, here. 47 00:02:59,410 --> 00:03:02,399 KT: But everyone called her Suze and, and listen to what 48 00:03:02,410 --> 00:03:05,649 KT: she said, I am an avid listener going back to 49 00:03:05,660 --> 00:03:07,990 KT: your talk radio days. 50 00:03:08,479 --> 00:03:11,049 KT: So, what, what any of you let me segue for 51 00:03:11,059 --> 00:03:13,710 KT: a minute, Suze and tell them we started with a 52 00:03:13,720 --> 00:03:17,770 KT: radio show we did and that radio show Suze would 53 00:03:17,779 --> 00:03:20,750 KT: get really mad at me. It was four o'clock every afternoon. 54 00:03:20,869 --> 00:03:24,410 Suze: Premiere Radio, I had a two or three hour, what 55 00:03:24,419 --> 00:03:28,369 Suze: was it? It was like three hours radio show from 56 00:03:28,380 --> 00:03:33,369 Suze: 4 to 7, 5 days a week. Besides everything else that 57 00:03:33,380 --> 00:03:34,288 Suze: I was doing, 58 00:03:35,429 --> 00:03:41,080 KT: And I would sit behind a glass screen that was 59 00:03:41,089 --> 00:03:43,910 KT: in the control room and Suze and, and where I 60 00:03:43,919 --> 00:03:45,580 KT: would sit and wait and watch 61 00:03:45,970 --> 00:03:48,559 KT: and at four o'clock, I would fall asleep in the 62 00:03:48,589 --> 00:03:52,190 KT: middle of her show and she would get so mad. 63 00:03:52,199 --> 00:03:54,429 KT: She looked through the glass and see me nodding off. 64 00:03:54,440 --> 00:03:56,770 KT: But it was fun. It was a great show. And 65 00:03:56,779 --> 00:04:00,289 KT: that's how we met our wonderful producer of many years 66 00:04:00,300 --> 00:04:02,678 KT: on the Suze Orman television show... 67 00:04:02,690 --> 00:04:06,949 Suze: Because I had this idea. Oh, I know. Let's take 68 00:04:06,960 --> 00:04:09,190 Suze: the radio show to TV. 69 00:04:09,789 --> 00:04:12,800 Suze: And somehow we got to do that. And that was 70 00:04:12,809 --> 00:04:16,618 Suze: the beginning of the Suze Orman Show. But we stopped 71 00:04:16,630 --> 00:04:20,220 Suze: doing radio and then just did TV. 72 00:04:20,238 --> 00:04:23,209 KT: Ok. So back to Nancy, she said, Suze, I'm so 73 00:04:23,220 --> 00:04:27,219 KT: glad I found you again on this podcast. I've read 74 00:04:27,230 --> 00:04:30,820 KT: your book about retirement plans for 50 plus. And I 75 00:04:30,829 --> 00:04:31,660 KT: thank you. 76 00:04:31,928 --> 00:04:36,659 KT: So my question is after all my research, Suze, what 77 00:04:36,670 --> 00:04:38,299 KT: are you talking about? 78 00:04:38,369 --> 00:04:39,808 Suze: Oh, that's why you chose this. 79 00:04:39,820 --> 00:04:42,190 KT: I chose this because it's funny. She says, I know 80 00:04:42,200 --> 00:04:44,540 KT: from you that I need to have a good mix 81 00:04:44,549 --> 00:04:47,428 KT: of stocks and bonds. But then I see terms like 82 00:04:47,440 --> 00:04:49,399 KT: mutual funds versus index funds 83 00:04:49,725 --> 00:04:54,084 KT: versus ETFs and then I look at my 401(k)s and 84 00:04:54,095 --> 00:04:58,385 KT: IRAs and I see things like Vanguard Trust, Equities, real estate, 85 00:04:58,394 --> 00:05:02,933 KT: fixed income, cash, money market. Oh, I can't even tell 86 00:05:02,945 --> 00:05:07,154 KT: by these terms. What mix of stocks or bonds I have. 87 00:05:07,303 --> 00:05:11,195 KT: Is there a secret handshake in the investment club? And 88 00:05:11,204 --> 00:05:13,505 KT: I don't know it. Which is which? 89 00:05:13,880 --> 00:05:17,660 KT: So Suze, let's set Nancy straight. You tell her and 90 00:05:17,670 --> 00:05:23,178 KT: by the way, her topic is types of investment terminology, 91 00:05:23,190 --> 00:05:26,119 KT: she can't figure out what this all means. Tell her 92 00:05:26,130 --> 00:05:26,779 KT: what to do. 93 00:05:26,790 --> 00:05:29,730 Suze: So thank you, KT for choosing this one. What do 94 00:05:29,738 --> 00:05:33,140 Suze: you want me to say to this person? No, truthfully, Nancy. 95 00:05:33,670 --> 00:05:36,979 Suze: And I say this with the utmost of respect. If 96 00:05:36,988 --> 00:05:39,920 Suze: you really, really, really want to know, 97 00:05:40,829 --> 00:05:43,380 Suze: then you can't give up and just saying, what are 98 00:05:43,390 --> 00:05:47,609 Suze: you talking about? What you can do is go on 99 00:05:47,619 --> 00:05:52,190 Suze: Google or any search website. And all you have to 100 00:05:52,200 --> 00:05:54,738 Suze: do is put in what's a mutual fund? 101 00:05:55,238 --> 00:05:58,700 Suze: What's an index fund? What's an ETF? 102 00:05:58,709 --> 00:05:59,738 KT: It's a glossary... 103 00:05:59,750 --> 00:06:05,719 KT: but more important, Nancy just listen closely if you listen 104 00:06:05,730 --> 00:06:10,238 KT: to Suze's explanations. You won't have to wonder what the 105 00:06:10,250 --> 00:06:14,420 KT: terms mean and what they are. Suze tells you better 106 00:06:14,428 --> 00:06:15,329 KT: than any glossary or Google 107 00:06:16,363 --> 00:06:20,683 Suze: But she needs to understand the difference between a stock, 108 00:06:20,695 --> 00:06:26,184 Suze: a bond, an ETF a mutual fund, equities versus real 109 00:06:26,195 --> 00:06:30,094 Suze: estate versus fixed income. She needs to understand the differences 110 00:06:30,105 --> 00:06:34,114 Suze: of all of those terms. And here's what I really 111 00:06:34,125 --> 00:06:35,484 Suze: want to tell you, Nancy. 112 00:06:35,920 --> 00:06:40,579 Suze: So many times you think you can't understand, you think 113 00:06:40,589 --> 00:06:43,500 Suze: that it's complicated, you think that there's no way that 114 00:06:43,510 --> 00:06:45,640 Suze: you can do this and that there is a secret 115 00:06:45,649 --> 00:06:50,779 Suze: investment club there isn't. I promise you, 116 00:06:51,200 --> 00:06:54,980 Suze: I promise you that if you keep listening and, or 117 00:06:54,988 --> 00:06:57,820 Suze: look up these terms, listen to what I tell you 118 00:06:57,829 --> 00:07:01,440 Suze: to do and things like that, you have what it 119 00:07:01,450 --> 00:07:03,779 Suze: takes and how do I know that? Because you've been 120 00:07:03,790 --> 00:07:07,420 Suze: smart enough to listen to me since the radio show days, 121 00:07:07,428 --> 00:07:12,690 Suze: which was 2001. So girlfriend just stick with me, 122 00:07:12,970 --> 00:07:17,959 Suze: but more important. Stick with yourself. All right. OK. 123 00:07:17,970 --> 00:07:21,679 KT: Next question is from Jim, Dear Suze and KT. I 124 00:07:21,690 --> 00:07:25,779 KT: listen to your show every Thursday and Sunday on my 125 00:07:25,790 --> 00:07:29,790 KT: walks and I love your podcast. Thanks, Jim. 126 00:07:30,200 --> 00:07:33,700 KT: My question is why can we not have our trust 127 00:07:33,709 --> 00:07:40,420 KT: be the beneficiary of an IRA account is with Charles Schwab. 128 00:07:40,480 --> 00:07:43,920 KT: It gives me the option to fund the trust. So 129 00:07:43,929 --> 00:07:46,149 KT: that's what I did. But I've been told it's not 130 00:07:46,160 --> 00:07:49,049 KT: the right way to do it is he, can you 131 00:07:49,059 --> 00:07:50,220 KT: tell him the right way? 132 00:07:51,119 --> 00:07:56,829 Suze: So, Jim, it's a little confusing to answer this question 133 00:07:56,989 --> 00:08:01,399 Suze: because I'm not exactly sure when you say, why can't 134 00:08:01,410 --> 00:08:05,059 Suze: you have the trust be the beneficiary of an Ira account. 135 00:08:05,570 --> 00:08:07,940 Suze: There's no reason you can't, I don't know where you 136 00:08:07,950 --> 00:08:13,299 Suze: got that information from. So whoever is giving you information 137 00:08:13,309 --> 00:08:14,820 Suze: and they told you that 138 00:08:15,570 --> 00:08:21,149 Suze: stop listening to them because they're 100% wrong. A trust 139 00:08:21,160 --> 00:08:25,649 Suze: can't own an IRA, but a trust can most certainly 140 00:08:25,660 --> 00:08:30,950 Suze: be the beneficiary of an IRA account. So whoever told 141 00:08:30,959 --> 00:08:33,189 Suze: you that's not the right way to do it, 142 00:08:33,989 --> 00:08:39,729 Suze: they're probably 100% wrong. However, normally the best way to 143 00:08:39,739 --> 00:08:43,979 Suze: set up a beneficiary of any retirement account. If you 144 00:08:43,989 --> 00:08:47,539 Suze: have a trust is your spouse should be the primary 145 00:08:47,549 --> 00:08:53,969 Suze: beneficiary and the trust, the secondary beneficiary, the contingent beneficiary. 146 00:08:53,979 --> 00:08:57,549 Suze: If you're not married, then the trust can be the 147 00:08:57,559 --> 00:09:02,340 Suze: primary beneficiary. All right. Are you wondering why that is KT? 148 00:09:03,080 --> 00:09:05,580 KT: Why the trust can be the primary? 149 00:09:06,190 --> 00:09:08,218 Suze: Why aren't you wondering? 150 00:09:09,250 --> 00:09:12,260 KT: Why not. I listened to you and you said it can be. 151 00:09:12,270 --> 00:09:13,250 KT: So who cares? 152 00:09:14,669 --> 00:09:18,320 Suze: I'll ask you again. Are you wondering why the trust 153 00:09:18,330 --> 00:09:21,130 Suze: shouldn't be the primary beneficiary if you're married? 154 00:09:33,080 --> 00:09:33,270 KT: Why? 155 00:09:35,094 --> 00:09:35,145 Suze: (Laughter) 156 00:09:36,440 --> 00:09:37,690 Suze: Oh, 157 00:09:39,549 --> 00:09:40,380 KT: Is that right? 158 00:09:40,479 --> 00:09:42,589 Suze: That's, that's a good response. 159 00:09:47,880 --> 00:09:50,210 Suze: Are you listening? Can that be your quizzy? 160 00:09:51,179 --> 00:09:58,849 KT: Tell us stop laughing. This is serious business here. Are 161 00:09:58,969 --> 00:10:00,299 KT: you ready? 162 00:10:00,309 --> 00:10:00,959 Suze: No (laughing) 163 00:10:03,710 --> 00:10:07,510 Suze: It... I don't even care. Just know that it can't be. 164 00:10:07,520 --> 00:10:10,369 Suze: All right. Go on. Should be alright. 165 00:10:11,549 --> 00:10:13,260 KT: You got tears coming out of eyes, while laughing. 166 00:10:13,989 --> 00:10:17,619 Suze: If you could have seen her face when she said, why? 167 00:10:19,270 --> 00:10:21,659 KT: We should put this on TV. I'm telling you. 168 00:10:21,869 --> 00:10:26,319 Suze: I know we should. But you and I... 169 00:10:27,150 --> 00:10:31,020 KT: All of you that want to see Suze and I at like 3 or 4 in the morning with our coffee doing 170 00:10:31,030 --> 00:10:33,789 KT: our podcast. She's in her robe. I have on my 171 00:10:33,799 --> 00:10:38,549 KT: garden clothes already ask her to put us on television. 172 00:10:38,799 --> 00:10:39,869 KT: I'm happy to do it. 173 00:10:39,880 --> 00:10:44,108 Suze: She sees my hair this morning. What do you say, KT? 174 00:10:45,849 --> 00:10:49,380 KT: I said, hey, Suze, your hair looks great. You should 175 00:10:49,390 --> 00:10:53,469 KT: see it sticking out all over, all from both ends. 176 00:10:53,669 --> 00:10:56,109 Suze: So the, the thing is here... we're gonna have a podcast with just us laughing. 177 00:10:56,869 --> 00:11:00,728 KT: If they saw us laughing. If they saw us, I think they would 178 00:11:00,739 --> 00:11:01,309 KT: like it. 179 00:11:02,890 --> 00:11:04,700 KT: Why would they like it? 180 00:11:07,049 --> 00:11:13,039 KT: because it's so authentic. All right, ready? Next question's from Gabe. Hi, Suze. 181 00:11:13,049 --> 00:11:16,900 KT: Question for you. I am already retired and would like 182 00:11:16,909 --> 00:11:19,159 KT: to do some remodeling on my home. 183 00:11:19,570 --> 00:11:22,159 KT: If I was to take a withdrawal from my Roth 184 00:11:22,169 --> 00:11:27,229 KT: IRA account, would this be considered income or be taxed 185 00:11:27,239 --> 00:11:31,219 KT: on the amount withdrawn? Please advise Gabe. 186 00:11:31,479 --> 00:11:34,039 Suze: Obviously, this is gonna be a hard podcast everybody to 187 00:11:34,049 --> 00:11:37,409 Suze: get through because Miss Travis is just too cute this morning. 188 00:11:37,419 --> 00:11:40,460 Suze: I can't even stand it. All right. So, Gabe, 189 00:11:40,755 --> 00:11:44,434 Suze: you say in here that you are already retired? So 190 00:11:44,445 --> 00:11:48,494 Suze: I am going to assume that you are 59.5 years 191 00:11:48,505 --> 00:11:52,005 Suze: of age or older. So if that is true and 192 00:11:52,015 --> 00:11:55,174 Suze: the account has already been open for at least five years, 193 00:11:55,195 --> 00:11:57,895 Suze: you can take any amount of money that you want 194 00:11:57,905 --> 00:12:03,174 Suze: out without any taxes or penalties whatsoever. If it hasn't 195 00:12:03,184 --> 00:12:06,335 Suze: been open for at least five years, 196 00:12:06,989 --> 00:12:11,169 Suze: anything above your original contribution, you are going to pay 197 00:12:11,179 --> 00:12:16,169 Suze: income tax on and if you're not 59.5, you're also 198 00:12:16,179 --> 00:12:18,579 Suze: gonna have to pay a 10% penalty. 199 00:12:18,590 --> 00:12:23,179 KT: All right, Suze. Next question really caught my eye because 200 00:12:23,190 --> 00:12:27,650 KT: it's called Gold Digger. Woah ready for this one? 201 00:12:28,270 --> 00:12:32,090 KT: My father in law who's a widower wants to marry 202 00:12:32,099 --> 00:12:37,000 KT: a woman who just arrived from a foreign country. His kids, 203 00:12:37,010 --> 00:12:41,950 KT: including my husband thinks she will inherit my father in 204 00:12:41,960 --> 00:12:46,450 KT: law's home that's paid for and be entitled to all 205 00:12:46,460 --> 00:12:48,409 KT: of his financial assets. 206 00:12:48,809 --> 00:12:53,010 KT: We feel she's looking to inherit all that he has. 207 00:12:53,020 --> 00:12:57,630 KT: He's 83 and she's in her late sixties. Is there 208 00:12:57,640 --> 00:13:02,070 KT: anything my husband and his brothers can do to prevent 209 00:13:02,080 --> 00:13:07,190 KT: her from inheriting anything from my father in law? It's a little tricky, this one. 210 00:13:08,034 --> 00:13:10,775 Suze: Well, it is and it isn't. The father in law 211 00:13:10,784 --> 00:13:13,265 Suze: has to have a say in it, doesn't he? It 212 00:13:13,275 --> 00:13:17,924 Suze: depends on how close your father in law is to 213 00:13:17,934 --> 00:13:23,515 Suze: his kids. So if he really wants to protect his 214 00:13:23,525 --> 00:13:27,645 Suze: kids more than this woman, then the easiest way to 215 00:13:27,655 --> 00:13:31,974 Suze: do so is to put the kid's name on the 216 00:13:31,984 --> 00:13:34,184 Suze: title of the house 217 00:13:34,690 --> 00:13:39,739 Suze: as joint tenants with right of survivorship. It's also his 218 00:13:39,750 --> 00:13:44,700 Suze: bank accounts and everything should be entitled with the kids 219 00:13:44,900 --> 00:13:50,218 Suze: because how you title an asset overrides the wishes of 220 00:13:50,229 --> 00:13:54,010 Suze: a will and, or a trust. So it does not 221 00:13:54,020 --> 00:13:59,020 Suze: matter what your will or trust says if you own 222 00:13:59,030 --> 00:14:02,659 Suze: a home and join tenancy with right of survivorship 223 00:14:02,989 --> 00:14:06,750 Suze: and your kids names are on there, it's going to 224 00:14:06,760 --> 00:14:09,989 Suze: go to your kids, even if your trust and will 225 00:14:10,000 --> 00:14:13,989 Suze: says it's to go to my wife. What KT? 226 00:14:14,109 --> 00:14:17,979 KT: I just have a question. Joint tenancy means you live 227 00:14:17,989 --> 00:14:18,739 KT: together in it. 228 00:14:18,750 --> 00:14:20,309 Suze: It does not. Absolutely. 229 00:14:21,390 --> 00:14:24,780 Suze: So your joint tenancy with right of survivorship, you can 230 00:14:24,789 --> 00:14:27,169 Suze: own it with anybody you want 231 00:14:27,869 --> 00:14:32,679 Suze: just that simple. So that's what I would do. However, 232 00:14:32,690 --> 00:14:37,309 Suze: if papa doesn't want to do that and he then 233 00:14:37,520 --> 00:14:40,640 Suze: owns it in his own name and he takes out 234 00:14:40,650 --> 00:14:42,030 Suze: a will and a trust 235 00:14:42,570 --> 00:14:46,570 Suze: that leaves it to her. It's gonna be very difficult 236 00:14:46,580 --> 00:14:49,200 Suze: for you to contest that. So I would go and 237 00:14:49,210 --> 00:14:52,570 Suze: be very honest with him and say dad, can we 238 00:14:52,580 --> 00:14:56,049 Suze: do this if you change your mind in the future? Ok. 239 00:14:56,099 --> 00:14:58,950 Suze: But can we do this just now to not only 240 00:14:58,960 --> 00:15:01,780 Suze: protect you but also to protect 241 00:15:02,179 --> 00:15:06,609 Suze: all of us? I would be very honest with him. Yeah. OK. 242 00:15:06,700 --> 00:15:07,979 Suze: What do you think he's gonna say? 243 00:15:08,000 --> 00:15:10,190 KT: So who knows? Love, love may... 244 00:15:10,309 --> 00:15:13,090 Suze: It's not love. You can't love somebody like that when 245 00:15:13,099 --> 00:15:16,489 Suze: you've just met them, right? It's lust. I'm telling you 246 00:15:17,080 --> 00:15:18,049 Suze: it's lust. 247 00:15:18,380 --> 00:15:20,890 KT: All right, lust is expensive. 248 00:15:21,840 --> 00:15:24,020 KT: OK. Ready. So next question 249 00:15:24,739 --> 00:15:27,909 KT: is from a woman who had a very long story 250 00:15:27,919 --> 00:15:30,559 KT: and I kind of shortened it for you for everybody. 251 00:15:30,570 --> 00:15:33,080 KT: But it was a very long story says, hi Suze. 252 00:15:33,090 --> 00:15:36,239 KT: When I got divorced many years ago, I found you 253 00:15:36,250 --> 00:15:39,849 KT: read all of your books, watched all of your shows 254 00:15:39,859 --> 00:15:44,109 KT: and you saved my life. You became my money guru. 255 00:15:44,119 --> 00:15:47,239 KT: And I thank you so much for this in those 256 00:15:47,250 --> 00:15:50,510 KT: dark divorce days. The only thing I was panicked about 257 00:15:50,520 --> 00:15:52,119 KT: was money. Nothing 258 00:15:52,210 --> 00:15:56,349 KT: else with you. As my guide, I started realizing I 259 00:15:56,359 --> 00:16:01,070 KT: had made all the classic mistakes growing up. My father 260 00:16:01,080 --> 00:16:04,570 KT: bought the paycheck home. My mother managed the books. Dad 261 00:16:04,580 --> 00:16:07,650 KT: stayed out of it. We were poor -ish. I say 262 00:16:07,659 --> 00:16:12,169 KT: that because my parents are also poor minded. They didn't 263 00:16:12,179 --> 00:16:15,109 KT: invest and the only thing that ever mattered to them 264 00:16:15,119 --> 00:16:19,530 KT: was the paycheck. Sad. Anyway, back to being me. 265 00:16:19,820 --> 00:16:23,359 KT: So after my divorce, I was able to buy my 266 00:16:23,369 --> 00:16:27,380 KT: ex out of the home. Years later, I eventually bought 267 00:16:27,390 --> 00:16:31,559 KT: another home and moved into that, selling the original home 268 00:16:31,570 --> 00:16:35,919 KT: and now I own my home outright. At 61 I 269 00:16:35,929 --> 00:16:39,909 KT: recently lost my job due to the COVID layoffs. My 270 00:16:39,919 --> 00:16:45,950 KT: question is I have $220,000 sitting in cash in a 271 00:16:45,960 --> 00:16:48,270 KT: Roth and traditional IRA. 272 00:16:49,090 --> 00:16:52,250 KT: Do you have any suggestions as to how I should 273 00:16:52,260 --> 00:16:53,349 KT: invest this? 274 00:16:53,789 --> 00:16:59,549 Suze: Here's the key though, before you invest it, it's really, 275 00:16:59,559 --> 00:17:04,270 Suze: really important that if you don't have income coming in. Right? 276 00:17:04,280 --> 00:17:08,030 Suze: Now you're 61 years of age, so you're still too 277 00:17:08,040 --> 00:17:14,488 Suze: young for social security. How are you going to support yourself? 278 00:17:14,968 --> 00:17:17,629 Suze: Are you going to sell the house that you're currently 279 00:17:17,638 --> 00:17:20,167 Suze: living in? And if you are, then where are you 280 00:17:20,178 --> 00:17:23,899 Suze: going to live? So you have to make some really 281 00:17:23,909 --> 00:17:28,909 Suze: important decisions before you even decide what to do with 282 00:17:28,917 --> 00:17:32,308 Suze: your money. The money that is in the Roth and 283 00:17:32,318 --> 00:17:33,869 Suze: traditional IRA, 284 00:17:34,520 --> 00:17:38,189 Suze: before you go ahead and you invest it right now, 285 00:17:38,209 --> 00:17:41,810 Suze: at least make sure that it's in a money market 286 00:17:41,819 --> 00:17:46,660 Suze: account within the Roth and the traditional Ira making you 287 00:17:46,670 --> 00:17:52,069 Suze: about 4.5 or 5% in interest. That's number one. But 288 00:17:52,079 --> 00:17:56,359 Suze: that will just be for short term because once you 289 00:17:56,369 --> 00:18:00,030 Suze: have decided, what is it that you need from this money? 290 00:18:00,390 --> 00:18:05,180 Suze: Is this money, your security, especially the Roth one so 291 00:18:05,189 --> 00:18:08,219 Suze: that you can take it out tax free to meet 292 00:18:08,229 --> 00:18:11,729 Suze: your bills or while you're not making a lot of money, 293 00:18:11,900 --> 00:18:14,969 Suze: why not take it out from the traditional IRA if 294 00:18:14,979 --> 00:18:16,189 Suze: you need to withdraw it 295 00:18:16,505 --> 00:18:18,665 Suze: because you're not gonna pay a lot of taxes on 296 00:18:18,675 --> 00:18:22,645 Suze: it while you're in such a low tax bracket, you 297 00:18:22,655 --> 00:18:25,844 Suze: also may start to make the decision as to how 298 00:18:25,854 --> 00:18:30,573 Suze: much money in the traditional IRA you could convert to 299 00:18:30,584 --> 00:18:35,694 Suze: the Roth IRA so that eventually it's all tax free. 300 00:18:35,704 --> 00:18:38,564 Suze: But you would see a tax person for that. 301 00:18:38,920 --> 00:18:42,280 Suze: But you need to get very very clear and this 302 00:18:42,290 --> 00:18:47,130 Suze: is for everybody. What do you want from your money? 303 00:18:47,339 --> 00:18:51,339 Suze: What do you need it to do for you? And 304 00:18:51,349 --> 00:18:54,819 Suze: as far as I can see in this particular situation, 305 00:18:54,989 --> 00:18:56,669 Suze: you probably need it 306 00:18:57,119 --> 00:19:01,319 Suze: to generate income for you. So if you're going to 307 00:19:01,329 --> 00:19:04,899 Suze: invest some of it, you might wanna listen to last 308 00:19:04,910 --> 00:19:09,459 Suze: week's podcast last Sunday where I talk about some dividend, 309 00:19:09,469 --> 00:19:14,349 Suze: paying stocks that I really like and just go slowly 310 00:19:14,359 --> 00:19:15,180 Suze: with it. 311 00:19:15,530 --> 00:19:19,790 Suze: But in the meantime, while you're figuring all of this out, 312 00:19:19,969 --> 00:19:23,550 Suze: if I were you, I would be putting it in 313 00:19:23,589 --> 00:19:26,449 Suze: a short term money market fund right now, like I said, 314 00:19:26,459 --> 00:19:27,869 Suze: paying four or 5% 315 00:19:28,150 --> 00:19:33,438 Suze: and possibly looking into longer term treasury bonds, 20 or 316 00:19:33,449 --> 00:19:37,198 Suze: 30 year treasury bonds um for some of it as 317 00:19:37,209 --> 00:19:40,170 Suze: well as dividend paying stocks and some money for growth. 318 00:19:40,180 --> 00:19:42,329 Suze: But you're going to keep a lot of it liquid 319 00:19:42,339 --> 00:19:45,810 Suze: until you know how you are going to be paying 320 00:19:45,819 --> 00:19:47,050 Suze: your bills. 321 00:19:49,479 --> 00:19:51,530 Suze: I say that KT because I so wish I could 322 00:19:51,540 --> 00:19:55,250 Suze: go right through this microphone into their home and go 323 00:19:55,300 --> 00:19:58,069 Suze: do this, do that, do that. But I can't because 324 00:19:58,079 --> 00:20:02,250 Suze: I don't know enough about her, her risk tolerance, all 325 00:20:02,260 --> 00:20:03,510 Suze: of that stuff. But 326 00:20:04,280 --> 00:20:06,229 Suze: you know, maybe we're just gonna have to do a 327 00:20:06,239 --> 00:20:09,489 Suze: program one day where people can sign up and where 328 00:20:09,500 --> 00:20:11,709 Suze: it tells them what to do with their money. Huh? 329 00:20:12,040 --> 00:20:14,760 Suze: Not a bad idea. What do you think should I do it. 330 00:20:14,770 --> 00:20:16,819 KT: They would love, people, would love that. 331 00:20:16,939 --> 00:20:20,609 Suze: If you would love me to do something like that. 332 00:20:20,910 --> 00:20:25,109 Suze: Write in on the community app and let me know, right, 333 00:20:25,119 --> 00:20:26,650 Suze: go on to the wall 334 00:20:27,040 --> 00:20:29,630 Suze: and I'll post a little thing that says, would you 335 00:20:29,640 --> 00:20:34,239 Suze: like me to start like an investment program for you? 336 00:20:34,969 --> 00:20:37,670 Suze: You know, or team up with somebody and do that 337 00:20:37,680 --> 00:20:41,390 Suze: or bring one to you from somebody? I respect 338 00:20:42,199 --> 00:20:45,359 Suze: well, you'll answer me yes or no. 339 00:20:45,369 --> 00:20:50,438 KT: Ok, next question says love the show. Thanks for all 340 00:20:50,449 --> 00:20:54,339 KT: the information and all you both do for women. I'm 341 00:20:54,349 --> 00:20:58,369 KT: retiring and I want to roll my 401k over into 342 00:20:58,380 --> 00:20:59,739 KT: a traditional account. 343 00:21:00,010 --> 00:21:03,239 KT: My money is with Fidelity. So I figure I'll keep 344 00:21:03,250 --> 00:21:06,770 KT: it there. I have a regular pre tax and a 345 00:21:06,780 --> 00:21:10,239 KT: Roth account when I roll the money over. Should I 346 00:21:10,250 --> 00:21:13,229 KT: put it in a money market account to begin with 347 00:21:13,439 --> 00:21:17,880 KT: and slowly purchase index funds and ETFs in order to 348 00:21:17,890 --> 00:21:22,430 KT: have a better dollar cost average or just put it 349 00:21:22,439 --> 00:21:24,550 KT: all in those funds to start. 350 00:21:24,969 --> 00:21:28,750 KT: Also, Suz won't need the money anytime soon. So there 351 00:21:28,760 --> 00:21:30,089 KT: you go. What should she do? 352 00:21:30,119 --> 00:21:33,510 Suze: See, here's another situation that I need to know more 353 00:21:33,520 --> 00:21:37,500 Suze: about you. Your needs, your income level, what do you 354 00:21:37,510 --> 00:21:43,099 Suze: want from this money? You have to answer that. However, 355 00:21:44,209 --> 00:21:47,939 Suze: you know, it's funny you can dollar cost average into something, 356 00:21:48,040 --> 00:21:50,728 Suze: but that doesn't always mean you're going to be buying 357 00:21:50,739 --> 00:21:54,739 Suze: it every month at a lower price. So sometimes if 358 00:21:54,750 --> 00:21:58,150 Suze: we find ourselves in a market like we have recently, 359 00:21:58,160 --> 00:22:00,699 Suze: that's been going up and up and up. If you 360 00:22:00,709 --> 00:22:03,958 Suze: dollar cost average, you're gonna buy it one month, that 361 00:22:03,969 --> 00:22:06,180 Suze: may be $10 a share in the next month at 362 00:22:06,189 --> 00:22:09,869 Suze: 20 you're gonna be averaging up, which isn't necessarily a 363 00:22:09,880 --> 00:22:11,829 Suze: great thing to be doing. 364 00:22:12,160 --> 00:22:16,219 Suze: But what dollar cost averaging does do is it protects 365 00:22:16,229 --> 00:22:19,300 Suze: you in case the markets start to go down 366 00:22:20,010 --> 00:22:22,449 Suze: so that you don't invest all at once and get 367 00:22:22,459 --> 00:22:26,660 Suze: seriously hurt. So when you convert this money from a 368 00:22:26,670 --> 00:22:30,030 Suze: traditional IRA to your Roth, you make sure that you 369 00:22:30,040 --> 00:22:33,780 Suze: consult with a tax person and you only convert that, 370 00:22:33,969 --> 00:22:37,030 Suze: which won't put you in a higher tax bracket and 371 00:22:37,040 --> 00:22:41,459 Suze: kill you in taxes. So yeah, you would roll whatever 372 00:22:41,469 --> 00:22:44,189 Suze: amount is that you have over. You could possibly put 373 00:22:44,199 --> 00:22:45,550 Suze: it in a money market fund 374 00:22:45,770 --> 00:22:50,209 Suze: and little by little go into the ETFs that you want. 375 00:22:50,410 --> 00:22:54,530 Suze: But remember, you might be dollar cost averaging up and 376 00:22:54,540 --> 00:22:57,689 Suze: if that's ok with you, which it probably should be 377 00:22:57,800 --> 00:23:01,030 Suze: because what goes up usually does come down as well. 378 00:23:01,390 --> 00:23:05,280 Suze: That would be a great way to start, but I 379 00:23:05,290 --> 00:23:08,300 Suze: would not just put all of it into that into 380 00:23:08,310 --> 00:23:10,189 Suze: the funds to start. No way. 381 00:23:11,229 --> 00:23:13,680 KT: It's quizzy time. Everybody. 382 00:23:15,569 --> 00:23:17,780 Suze: Why are you so excited to have a quizzy? 383 00:23:18,099 --> 00:23:20,869 KT: Because it's quizzy time, everybody. 384 00:23:20,880 --> 00:23:21,939 Suze: Is that because you're hungry. 385 00:23:22,380 --> 00:23:27,319 KT: No. Come on. What's, where's my quizzy I haven't done 386 00:23:27,329 --> 00:23:30,139 KT: a quizzy. I'll tell you why. I'm excited. When's the 387 00:23:30,150 --> 00:23:34,569 KT: last time I did a quizz? Can you remember? Before Thanksgiving? 388 00:23:35,650 --> 00:23:39,020 KT: That was in November. That's the, that's the last time 389 00:23:39,030 --> 00:23:42,589 KT: I did a quizzy. Everyone. I'm sure all of you remember, 390 00:23:42,750 --> 00:23:46,209 KT: but Suze doesn't remember. So I am raring and ready 391 00:23:46,219 --> 00:23:48,890 KT: to go. All right. Ready for my quizzy? 392 00:23:48,959 --> 00:23:53,910 Suze: Quizzy time is I asked KT a question versus KT asking 393 00:23:53,920 --> 00:23:56,930 Suze: me the questions that you've written in to see if 394 00:23:56,939 --> 00:24:01,419 Suze: KT has learned anything from the podcast. And can she 395 00:24:01,430 --> 00:24:02,869 Suze: answer this correctly? 396 00:24:03,130 --> 00:24:05,949 Suze: And the goal of this is that it's your quizzy 397 00:24:05,959 --> 00:24:10,909 Suze: as well. You need to answer this question because it 398 00:24:10,920 --> 00:24:14,569 Suze: is a question. All of her quizzy questions I choose. 399 00:24:14,689 --> 00:24:17,979 Suze: It is a question that I have talked about on 400 00:24:17,989 --> 00:24:21,060 Suze: a previous podcast. So let's see. 401 00:24:21,479 --> 00:24:26,089 Suze: Are you a good listener or not? Hi, KT and Suze. 402 00:24:26,119 --> 00:24:29,849 Suze: I have a substantial amount of cash that is earning 403 00:24:29,859 --> 00:24:33,260 Suze: next to nothing in a low interest savings account. 404 00:24:34,140 --> 00:24:37,410 Suze: What is wrong with you, first of all? But that's 405 00:24:37,420 --> 00:24:42,540 Suze: besides the 0.5 plus interest sounds really good if I 406 00:24:42,550 --> 00:24:47,089 Suze: put 250,000 or more in a CD, by the way, 407 00:24:47,099 --> 00:24:49,959 Suze: you should be taking advantage of the 18 month certificate 408 00:24:49,969 --> 00:24:56,609 Suze: of deposit at 5.3 or 5.35% at Alliant Credit Union. Anyway, 409 00:24:56,819 --> 00:25:00,489 Suze: if I put 250,000 or more in a CD? 410 00:25:00,800 --> 00:25:05,660 Suze: And when the interest slash dividends hit, putting the balance 411 00:25:05,670 --> 00:25:12,079 Suze: over 250,000, would the earned money be covered? 412 00:25:12,089 --> 00:25:15,479 KT: When they say earn money, it means the FDIC and NCUA. 413 00:25:16,119 --> 00:25:20,329 KT: Would it be covered insurance wise? I have to, I 414 00:25:20,339 --> 00:25:22,420 KT: have to make an assumption here 415 00:25:22,810 --> 00:25:26,599 KT: that if I were the FDIC or the NCUA and 416 00:25:26,609 --> 00:25:30,500 KT: I'm encouraging people to have money in, you know, my 417 00:25:30,510 --> 00:25:33,629 KT: bank or credit union, then of course, it's got to 418 00:25:33,640 --> 00:25:37,609 KT: cover the earned money from that investment. 419 00:25:37,619 --> 00:25:38,910 Suze: Is that your final answer? 420 00:25:40,599 --> 00:25:42,119 KT: Yeah. Is it, is it... (Suze makes the wrong answer sound) 421 00:25:44,500 --> 00:25:47,160 KT: All right. So then I wouldn't keep that much in. 422 00:25:47,250 --> 00:25:54,160 Suze: Well or remember everybody while it is true that $250,000 423 00:25:54,170 --> 00:25:55,670 Suze: is the limit. 424 00:25:56,329 --> 00:26:00,380 Suze: That doesn't mean that you can't have different accounts. You 425 00:26:00,390 --> 00:26:04,109 Suze: could have an individual account, you could have a joint account, 426 00:26:04,119 --> 00:26:07,669 Suze: you could have a trust account and have $250,000 in 427 00:26:07,680 --> 00:26:12,910 Suze: each one. Or remember for every beneficiary after the first 428 00:26:12,920 --> 00:26:17,020 Suze: beneficiary that you name on your certificate of deposit, your 429 00:26:17,030 --> 00:26:18,170 Suze: pay on death account. 430 00:26:18,410 --> 00:26:24,919 Suze: If you have two beneficiaries or three beneficiaries or four beneficiaries, 431 00:26:25,119 --> 00:26:29,010 Suze: you can get an extra $250,000. So if you, let's 432 00:26:29,020 --> 00:26:34,729 Suze: say you have three beneficiaries on your POD account, then 433 00:26:34,739 --> 00:26:39,969 Suze: you would have, ok, $500,000 of FDIC insurance. 434 00:26:39,979 --> 00:26:44,219 KT: So the insurance for both FDIC and NCU A which 435 00:26:44,229 --> 00:26:47,630 KT: is credit unions is for the account, 436 00:26:48,199 --> 00:26:53,149 KT: not the individual. So as an individual and I'm banking 437 00:26:53,160 --> 00:26:58,260 KT: at Alliant, my credit union, I can have multiple accounts 438 00:26:58,829 --> 00:27:04,400 KT: and they can absolutely surpass 250 they're all covered them 439 00:27:04,410 --> 00:27:05,390 KT: each one. 440 00:27:05,400 --> 00:27:08,488 Suze: But you have to be very, very careful that you 441 00:27:08,500 --> 00:27:11,989 Suze: as a, as an individual. KT you don't open up 442 00:27:12,000 --> 00:27:14,790 Suze: three accounts at Alliant Credit Union. 443 00:27:15,329 --> 00:27:18,270 Suze: Right. It has to be one account in your individual name. 444 00:27:18,400 --> 00:27:21,050 Suze: You could have another account with me, let's say, as 445 00:27:21,060 --> 00:27:24,198 Suze: a trust account or a joint account or whatever it 446 00:27:24,209 --> 00:27:28,280 Suze: may be. But really, Karen, um the person who wrote 447 00:27:28,290 --> 00:27:32,438 Suze: in on this, what really concerns me is that you've 448 00:27:32,449 --> 00:27:36,630 Suze: had so much money just sitting in a regular bank 449 00:27:36,640 --> 00:27:40,129 Suze: account for those of you out there that are like 450 00:27:40,140 --> 00:27:40,630 Suze: Karen 451 00:27:41,489 --> 00:27:45,939 Suze: and you're letting your money sit at a bank paying 452 00:27:45,949 --> 00:27:51,270 Suze: you 0.8% or 0.5%. Why in the world would you 453 00:27:51,280 --> 00:27:57,189 Suze: be doing that on $250,000 over the past year, you 454 00:27:57,199 --> 00:28:04,948 Suze: easily could have earned $12,500 on that $250,000. So it's 455 00:28:04,959 --> 00:28:09,339 Suze: like you just doing what? Throwing that money away? Are 456 00:28:09,349 --> 00:28:10,339 Suze: you kidding me? 457 00:28:10,660 --> 00:28:14,020 Suze: So again, you all know that I'm a tremendous advocate 458 00:28:14,130 --> 00:28:19,479 Suze: of the 18 month certificate of deposit at 5.3% for 459 00:28:19,489 --> 00:28:27,040 Suze: deposits under 75,000 or 5.35% for deposits of 75,000 or 460 00:28:27,050 --> 00:28:27,619 Suze: more 461 00:28:28,199 --> 00:28:32,829 Suze: at Alliant Credit Union. Fabulous rate. Far higher than a 462 00:28:32,839 --> 00:28:40,469 Suze: two year treasury note. Go to my Alliant - alliant.com. 463 00:28:40,589 --> 00:28:42,319 Suze: Check it out. 464 00:28:42,550 --> 00:28:48,719 KT: So, so Suze December 7th is also a very significant day. 465 00:28:49,930 --> 00:28:52,020 Suze: Are you going to quiz me on what today is? 466 00:28:52,030 --> 00:28:55,109 KT: You should know what, you know what else today is? 467 00:28:55,119 --> 00:28:57,709 KT: It's Colo's favorite holiday. 468 00:29:01,880 --> 00:29:05,619 KT: It's Hanukkah and the candles are ready. We set, by 469 00:29:05,630 --> 00:29:09,579 KT: the way, everyone, Suze and I love to celebrate everything 470 00:29:09,920 --> 00:29:14,489 KT: and Hanukkah's super early this year. It's usually closer to Christmas, 471 00:29:14,729 --> 00:29:19,260 KT: but we've got her grandma Goldy's menorah polished and ready. 472 00:29:19,270 --> 00:29:22,699 KT: Colo and I get that thing ready every year and 473 00:29:22,709 --> 00:29:25,579 KT: he polishes it up really nice. It's brass and it's 474 00:29:25,589 --> 00:29:28,260 KT: very old. We put the candles in 475 00:29:28,550 --> 00:29:32,859 KT: and at sunset tonight, Suze will sing, we'll say our prayers, 476 00:29:32,869 --> 00:29:33,900 KT: we'll say our prayers... 477 00:29:33,910 --> 00:29:38,479 Suze: For everybody out there who's going through a lot of 478 00:29:38,489 --> 00:29:42,560 Suze: hardship right now. And then in just 18 days we 479 00:29:42,569 --> 00:29:48,369 Suze: celebrate Christmas, right? So whatever holiday you happen to be 480 00:29:48,380 --> 00:29:52,770 Suze: celebrating with whatever religion you happen to be. We really 481 00:29:52,780 --> 00:29:55,280 Suze: hope that wherever any of you go, 482 00:29:55,839 --> 00:30:00,859 Suze: that what you get to experience is a world that 483 00:30:00,869 --> 00:30:06,300 Suze: is more peaceful, more joyful and full of love. That 484 00:30:06,479 --> 00:30:11,189 Suze: is our wish for all of you. And when that 485 00:30:11,199 --> 00:30:18,979 Suze: really happens in this world, this entire world will be unstoppable.