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Suze: December 20, 2024. Welcome everybody to the Women and Money podcast,

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KT: and everyone's smart enough to listen.

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Suze: Right on cue, girlfriend. So we're back one day late.

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Suze: Tell everybody why we're late.

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KT: The island power was just gone.

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Suze: For the entire day. They're putting in new cables, high

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Suze: voltage cables, because when you live on an island.

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Suze: That's old. All the wiring that was 50 years old

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Suze: was blowing on itself. So therefore,

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KT: now it's all new. Now we should have like really

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KT: fast internet, fast everything.

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Suze: Everything, it should work now, although I was told that

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Suze: they have to do one more island shutdown in February.

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Suze: But anyway, oh, we'll worry about that then. Now I

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Suze: just want to say something, KT.

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Suze: Because two days ago on Wednesday, it was a very

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Suze: big day. As I kept telling you, the markets are

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Suze: going down, KT and markets are going down. KT, these

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Suze: markets are going down. Look at this, look at this.

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Suze: And the other news also is, is the government going

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Suze: to shut down or not? And we'll know that sometime

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Suze: today or tonight or who knows what will happen. So therefore,

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Suze: on Sunday's podcast, I will be doing a Suze School

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Suze: on what happened, why it happened, and why do I

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Suze: think about it?

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KT: Wait, I'm going to tell everyone what I said to you,

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KT: she said, Oh my God, KT, the markets are crashing.

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KT: And I said, did you sell? And she said, You

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KT: know what, KT, it's a great time to buy.

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Suze: Yeah, it was all right.

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KT: All right, so ready? Are we ready to start?

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Suze: Right, so today is ask KT and Suze anything. This

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Suze: is where you write into As Suze podcast, S U

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Suze: Z E podcast at gmail.com. Ask a question and if

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Suze: KT chooses it, she'll ask it and I'll try to

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Suze: answer it.

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Suze: What, what are you looking at me like that for?

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KT: Nothing. You're a little jittery.

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Suze: I am jittery.

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KT: Because Santa Claus is coming.

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Suze: No, cause you just gave me a cup of coffee.

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KT: I did a little pick me up anyway, we'll go

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KT: morning pick me up. OK, ready. First question we have

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KT: is from Valerie. Suze, can you celebrate with me? I

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KT: like this question, she said. I just paid off my mortgage.

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KT: I have no debt and Fidelity projects I'm 150% funded

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KT: for retirement.

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KT: Ding ding ding ding

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Suze: Ding ding ding ding ding ding ding ding ding.

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KT: Thank you for your advice, education, and support. I do

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KT: the can I afford it exercise as a routine habit

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KT: to avoid regrets and separating my wants from needs. It's

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KT: a standard part of all the decisions I make, no

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KT: matter how small. I'm single, Bay Area homeowner at 59 and a

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KT: half years of age, yeah, for me.

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KT: So that's all I wanted to share, Suze. Valerie, let's

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KT: tell everyone to be a Bay Area, meaning San Francisco

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KT: homeowner at 59 and a half is something

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KT: else.

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Suze: And own it outright. That is a big deal, Valerie.

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Suze: We celebrate you, your achievement, and could not be happier

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Suze: for you if we tried.

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KT: Keep listening.

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KT: OK, next is from McKenzie. Suze, please help. OK, ready?

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KT: She said, we just made a huge mistake. We did

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KT: a rollover old employer 403B to a new employer Roth

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KT: 403B on December 2nd.

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Suze: How much, how much did they say?

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KT: $275,000. She said she canceled it, but they said they

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KT: couldn't cancel.

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KT: Now she's gone over the contribution limits for the year

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KT: by a lot. My understanding is we'll now be hit

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KT: with a 6% fee until we remove the money. Anything

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KT: they can do, Suze?

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Suze: Yeah, is first of all...

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KT: Tell people how to avoid this mistake.

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Suze: Yeah. How

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Suze: many times have I said be very, very careful because

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Suze: when you go from a pre-tax retirement account.

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Suze: To a Roth retirement account of any kind where you

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Suze: convert it, the amount of money that you convert in

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Suze: that year is totally taxable to you as ordinary income.

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Suze: What Mackenzie did here is she took $275,000 from an

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Suze: old employer 403B, rolled it into her Roth 403B, and

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Suze: now is going to owe ordinary income taxes on $275,000. Mackenzie,

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Suze: you're about to make another mistake.

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Suze: You did not go over the contribution limit, because this

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Suze: isn't a contributory Roth.

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Suze: This was a conversion where you literally converted from a

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Suze: pre-tax retirement account to an after-tax retirement account, so there

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Suze: is no money that you have to withdraw. You did

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Suze: not go over the contribution limit. That has nothing to

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Suze: do with what you did. So you're, you're tending to

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Suze: mix a lot of things up here, so I need

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Suze: for you to just slow down. What are you going

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Suze: to do?

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Suze: And hopefully you have the money to do so, you

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Suze: are going to pay ordinary income taxes on the $275,000

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Suze: as ordinary income.

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Suze: So

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Suze: it will probably...

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KT: Once and done, right?

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Suze: It's once and done and done. So now it's over there.

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Suze: Now you didn't tell us your age, so hopefully you're young,

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Suze: you'll be able to recoup that. And who knows, maybe

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Suze: in the long run it was the best thing that

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Suze: ever happened to you in the long run. All right, go on.

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KT: OK, next.

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KT: Question is from Susan. She said, Hi, Suze, I listened

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KT: to your Women and Money podcast and find them very

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KT: valuable and a great resource. Now I need to take action.

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KT: All of your podcasts start with the recommendation of opening

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KT: an account with the Alliant Credit Union.

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KT: This has honestly always been a bit of a turn

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KT: off for me - because ready for this, because it

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KT: comes across as an advertisement for some group who I

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KT: assume is a sponsor.

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Suze: That's true they are.

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KT: They are. Maybe I'm wrong, and perhaps opening such an

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KT: account is a

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KT: smart move.

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Suze: We'll find out. One second. Keep going.

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KT: And then she said, I already have a decent emergency

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KT: cash account and I still earn money.

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KT: Should I open the Alliant savings account or should I

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KT: perhaps put this money into an ETF mutual fund? I'm

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KT: 69 years old. Thank you, Susan.

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Suze: All right, KT, you chose this question. You answer Susan.

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KT: Susan, so yes, Alliant absolutely is the sponsor of the

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KT: Women and Money podcast, proud sponsor for the past 3 years.

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KT: We love Alliant, and let me tell you why. Everyone

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KT: wants to sponsor this podcast. I have to decline over

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KT: and over again many, many requests, but here's the deal

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KT: with Alliant. Suze asked Alliant to create something really unique

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KT: and special for her listeners, which is the ultimate opportunity

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KT: savings account, unheard of, and the return on.

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KT: This account is also unheard of. It's the best out there.

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KT: Suze's goal is to have a sponsor and a partner

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KT: that is there to help people and there for the

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KT: people and to really protect their money. So that, yeah,

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KT: we love Alliant.

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Suze: So, so

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Suze: we just want you to know that. So I'm sorry

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Suze: that it kind of makes you feel like whatever, but

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Suze: you shouldn't

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KT: And they're the only sponsor.

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Suze: That's right, and it's the only one we really want

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Suze: at this point in time.

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KT: So now she's asking what's best for her to open.

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Suze: So now here's how you know that we're also totally

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Suze: honest all the time. You're asking, should I open the

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Suze: Alliant savings account or should I perhaps put money into

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Suze: an ETF or mutual fund since I'm still earning money,

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Suze: I'm 69 years of age.

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Suze: Given that you have a decent emergency cash account and

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Suze: you're looking for growth because you're looking to buy an

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Suze: ETF or a mutual fund account, when that is your goal,

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Suze: what I would be doing if I were you is

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Suze: I would be opening up a Roth IRA at Fidelity

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Suze: or Schwab since you're earning money.

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Suze: And investing within the Roth IRA, that's what I would

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Suze: be doing if I were you.

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KT: OK, great. Next question Suze, is from Laurie. She sounds a

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KT: little perturbed. Why is it that a few...

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Suze: Wait, somebody else is perturbed?

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KT: Yes, ready for this one? Why is it that I

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KT: heard a few podcasts ago a woman who had a

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KT: Medicare Advantage plan.

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KT: That was discontinued was able to switch to an original

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KT: Medicare plan plus a Medicare supplement even though, right, even

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KT: though she had a health problem. I remember this one

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KT: too and now Laurie's saying I have a health problem too,

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KT: and I tried to switch from Medicare Advantage to Medicare

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KT: plus a new supplement.

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KT: But the Medicare supplement denied me.

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Suze: Yeah.

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KT: Why was that woman then she says, why was that

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KT: woman able to do it and not me? So can

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KT: you answer this? I don't know if you can answer this.

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KT: Does it have to do with their illness or what?

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KT: Oh, all right.

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Suze: Listen closely, everybody. The question that this woman is referring to,

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Suze: Laurie is referring to was from a woman like she

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Suze: said who had a Medicare Advantage plan that had been discontinued.

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Suze: Right, do you remember that, everybody, she even said that

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Suze: when a Medicare Advantage plan is discontinued.

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Suze: Then you're able to apply for Medicare, regular Medicare, plus

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Suze: a Medicare supplement, and they have to take you because

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Suze: the Medicare Advantage plan was discontinued.

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Suze: If KT, because she's looking at me, everybody, she's giving

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Suze: me a look like, what if you have a Medicare

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Suze: Advantage plan that isn't discontinued, but you want to switch

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Suze: from a Medicare Advantage plan that has not been discontinued

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Suze: to Medicare.

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Suze: The Medicare supplement plan does not have to take you

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Suze: if you have a health problem. That's why when you

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Suze: originally apply for Medicare.

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Suze: You have to be accepted no matter what's going on

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Suze: with you health wise to a Medicare supplement plan when

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Suze: you first apply for Medicare. But if you choose a

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Suze: Medicare Advantage plan over Medicare.

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Suze: And then you end your Medicare Advantage plan and want

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Suze: to go back to Medicare just like your sister did

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Suze: KT and remember she was having trouble now getting a

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Suze: Medicare supplement plan.

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Suze: That's because she voluntarily discontinued her Medicare advantage. Did that

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Suze: make sense now?

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KT: Yeah, now it makes sense, but I thought originally it

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KT: might have been because someone was had more of an

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KT: illness than another.

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Suze: No, it's when, when...

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KT: All I know is

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KT: all these plans are complicated.

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Suze: Oh, just like

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Suze: Roths.

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KT: Yes, now I have a Roth question coming up.

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Suze: Wait, wait, just answer this to me.

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Suze: If you had to choose one or the other, which

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Suze: one complicates you more, Medicare, Medicare Advantage, or Roth's?

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KT: Roth.

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Suze: Roth still?

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KT: Yeah, they still do, Suze. There's back door, front door, side door...

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Suze: All right. That's your normal thing with them. Go on.

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KT: All right. I have a ready for this.

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Suze: I think I am going to do a song by

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Suze: you back door, side door, front door, Roth. Come on, Suze. Anyway,

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Suze: go on.

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KT: That was pretty good.

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KT: So this is from Barbara. She said, not another Roth question,

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KT: trying to understand spousal Roths. I work on call only

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KT: and over the past several years have been called to

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KT: work less and less. My husband still works full time

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KT: with a salary of around $80,000. We have individual Roths

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KT: fully funded annually, but I would likely not

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KT: get to the $8000 in 2025. Barbara's asking, can my

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KT: husband fund me only if I make zero income or

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KT: can he cover the shortfall of my earnings?

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Suze: Should that be your quizzy?

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KT: That's a great question.

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Suze: Oh, quizzy time.

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KT: That's a great question. I, I think that he cannot.

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KT: I don't think he can he can cover her shortfall.

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Suze: Barbara's question, everybody is.

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Suze: You have to make at least $8000 a year -

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Suze: if you if you're 50 or older to put $8000

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Suze: into a Roth IRA. If all you make is $3000

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Suze: a year, that is the maximum that you could put

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Suze: in then. So it's $8000 or whatever you earned, whichever

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Suze: one is less, OK? Barbara's saying she's not going to

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Suze: make $8000 next year.

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Suze: Can her husband make up the difference so she can

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Suze: fully fund it? Can he or can he not? And KT,

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Suze: your answer is...

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KT: I don't think he's allowed to.

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Suze: (Suze makes the wrong answer sound) I got you. I

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Suze: got you.

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KT: I thought you can put in earned income.

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Suze: That's right, but she's married.

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KT: All right, so that's a loop. See what I mean, Suze.

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KT: Roth has so many different rules regulate. Who knows that?

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KT: Who knew the answer, everyone out there? Did any of

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KT: you get it right?

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KT: If you got it right, I want to know because

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KT: I did not know that.

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Suze: KT

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KT: Suze always said you need to fund your retirement with

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KT: earned income.

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Suze: Stop, stop now. Do you see how defensive she gets?

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Suze: She will go on about this for at least another

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Suze: hour after this podcast ends just so you know.

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KT: So tell us the rules.

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Suze: When a spouse is not working, it's called a non-spousal IRA.

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Suze: It could be a Roth IRA or a traditional IRA.

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Suze: Then the spouse that is working is allowed to fund

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Suze: their own and their spouses even if the spouse doesn't

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Suze: make any money. So yes, absolutely, your spouse will be

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Suze: able to fully fund it for you or make up

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Suze: the difference. It does not matter. All right,

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KT: That's another benefit of marriage.

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KT: Right.

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Suze: Wait, KT, I was, I'm so glad you said that.

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KT: OK.

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Suze: Right, it was, we were talking to a friend, remember

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Suze: we were talking to Kevin the other day, right? And

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Suze: I said, Kevin, because recently, about a year or two ago,

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Suze: he married his husband, and I said, Kevin, do you

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Suze: like being married?

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Suze: And he said, Yeah, I really do. There's something about

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Suze: it that I like. And then I was thinking, KT,

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Suze: do I like being married?

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KT: We love being married.

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Suze: And...

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KT: Do you love being married?

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Suze: I love being married to you.

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KT: Yeah, that's what I mean.

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Suze: But what I was thinking is that it's not about

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Suze: loving being married.

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Suze: The truth of the matter is you love being married

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Suze: when you love the person that you married.

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Suze: Because there's a lot of people out there who are

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Suze: married who can't wait to not be married. Is that all?

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Suze: I don't even know why I'm telling you all this story.

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Suze: Forget about it. Next question, KT.

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KT: OK, so I have a question, and it's an anonymous one.

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KT: It said, good afternoon, Suze and KT. I have a

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KT: quick question, but I am praying that you answer it.

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KT: I work for the county and for the last 18

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KT: years I've been participating in my company matched 401k. Within

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KT: the last few months they've also added an additional Roth

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KT: 401k to the plan as well, so I've been doing

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KT: the minimum contribution in that plan.

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KT: In the in the new Roth, my question is, should

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KT: I roll over the traditional 401k into the Roth 401k

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KT: or just keep the two accounts? I'm hopeful that you

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KT: will answer my email. Thank you.

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Suze: Well, how would you answer that based on one that

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Suze: we just answered a few minutes ago?

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KT: I would do it.

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Suze: Oh Jesus,

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KT: No, wait, wait, wait, doesn't it matter your age and

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KT: everything and pay

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KT: taxes and

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Suze: I'm gonna, do you understand

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Suze: everybody?

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Suze: Did I just not say be very careful about rolling

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Suze: over money from a traditional 401k to a Roth 401k

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Suze: because you're gonna owe ordinary taxes what any amount of

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Suze: money that you transfer KT, you roll over. So should

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Suze: this person.

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Suze: Right, roll the money that's been in her traditional.

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KT: Just keep, just keep to make it easy.

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Suze: Is that what you would say again? (Suze makes the wrong answer sound again)

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KT: Yeah, just all right, wait, what is it? Should they

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KT: do it? Just keep both. So yeah, of fact, open

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KT: another open another Roth.

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Suze: Yea you

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Suze: could have a Roth IRA as well.

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KT: Yea go for gold.

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Suze: That true answer to this question is it depends how

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Suze: old you are, number one. Wait a second. Can you let me answer?

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KT: Make your life easy?

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Suze: I want you to just sit there and say nothing.

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KT: I say nothing.

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Suze: You promise me?

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KT: Nada.

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Suze: Come on.

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KT: No, I was gonna say it in Chinese.

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Suze: How would you say it in Chinese?

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Suze: How would you do that?

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KT: Keep reading.

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Suze: Come on, KT. KT, here's the question, everybody, here's all

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Suze: of your quizzies. Can KT sit here and say nothing

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Suze: for me to be able to answer this question, can you?

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KT: I'm zipping it up. Ready, zip.

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KT: Zip it up.

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Suze: Can you, KT.

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KT: We should have a video so they can see my

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KT: mouth zip.

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Suze: Oh God. So anyway, it really depends how old you

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Suze: are and close you are to retirement.

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Suze: Even if you were just let's say 10 years away

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Suze: or so, you would and could, if you want to

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Suze: convert little by little into your new Roth 401k so

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Suze: it doesn't affect your tax bracket, just that simple, but

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Suze: don't do it all at once, especially if there is

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Suze: a large amount in your traditional 401k

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Suze: and there should be since you've been working there for

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Suze: 18 years.

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KT: Suze, ready for one more question?

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KT: Oh, come on,

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KT: you got it in one more one more. OK. This

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KT: is from Mary. My three siblings and I inherited traditional

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KT: IRAs from my mom when she passed 6 months ago.

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KT: We understand we need to take RMDs, required minimum distribution.

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KT: Based on each of our life expectancies starting 2025.

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Suze: That is correct.

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KT: So the question they have is, do we need to

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KT: take her year of death RMD this year that she

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KT: had not taken?

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Suze: And the answer to that is yes, you do.

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Suze: So if Mom had already started taking required minimum distributions

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Suze: and she had not taken her RMDs for 2024, you

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Suze: have got to take it based on her life expectancy,

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Suze: all right, KT.

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Suze: That brings us to the end of another Ask KT

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Suze: and Suze Anything podcast. Take us out, girlfriend.

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KT: OK, so there's only 3 things we want you to remember,

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KT: and that is this: people first, then,

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Suze: then things. And if you do that, you stay safe

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Suze: and you stay healthy. You will be what KT?

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KT & Suze: Unstoppable.