1 00:00:07,469 --> 00:00:11,658 Suze: September 18, 2025. Welcome everybody to... 2 00:00:11,829 --> 00:00:16,500 KT: The Women and Money podcast, and everyone's smart enough to listen. 3 00:00:16,590 --> 00:00:22,509 Suze: Ding ding ding ding ding. Anyway, it is September 18th, right? KT? 4 00:00:22,590 --> 00:00:24,419 Suze: Is there anything special on today? 5 00:00:24,590 --> 00:00:25,340 KT: I don't know. 6 00:00:25,469 --> 00:00:26,110 Suze: I don't think so. 7 00:00:26,229 --> 00:00:28,430 KT: But it's a nice number. It's a lucky number. It 8 00:00:28,430 --> 00:00:29,510 KT: adds up to 9. 9 00:00:29,590 --> 00:00:31,510 Suze: Do you all know that 9? 10 00:00:32,508 --> 00:00:35,308 KT: Is Suze's lucky number KT's is 8. 11 00:00:35,429 --> 00:00:37,668 Suze: Yeah, but I want you to think about this. September 12 00:00:37,668 --> 00:00:43,868 Suze: is a 9, 18 is a 9, and 2025 is 13 00:00:43,868 --> 00:00:44,778 Suze: a 9. 14 00:00:45,598 --> 00:00:46,049 KT: Yeah. 15 00:00:46,049 --> 00:00:46,540 Suze: So this is a 16 00:00:46,540 --> 00:00:47,040 KT: ...triple 9 day. 17 00:00:48,909 --> 00:00:55,340 Suze: So everybody, it is a lucky, lucky day, especially for money, 18 00:00:55,549 --> 00:00:59,630 Suze: just so you know. OK, there you go. But this 19 00:00:59,630 --> 00:01:03,750 Suze: is also special because it is Ask KT and Suze Anything, 20 00:01:04,029 --> 00:01:06,309 Suze: and KT is in the studio, and I know that 21 00:01:06,309 --> 00:01:09,620 Suze: makes you all or the majority of you anyway, so, 22 00:01:09,699 --> 00:01:10,870 Suze: so happy. 23 00:01:11,250 --> 00:01:11,269 Suze: KT... 24 00:01:12,569 --> 00:01:15,879 KT: Wait, tell everyone how to send a question to KT 25 00:01:15,879 --> 00:01:17,239 KT: so that I can pick it up, pick it out. 26 00:01:17,360 --> 00:01:21,800 Suze: But we have so many, but anyway, send your question 27 00:01:21,800 --> 00:01:25,470 Suze: into Ask Suze podcast@gmail.com. 28 00:01:26,209 --> 00:01:29,709 Suze: And if KT likes it, it will be read on 29 00:01:29,709 --> 00:01:35,419 Suze: this podcast and answered, but don't be surprised if I 30 00:01:35,419 --> 00:01:38,949 Suze: answer you directly, OK. 31 00:01:39,819 --> 00:01:40,750 KT: Are we ready? 32 00:01:40,900 --> 00:01:41,330 Suze: No. 33 00:01:41,660 --> 00:01:42,110 KT: OK. 34 00:01:42,180 --> 00:01:44,190 Suze: I'm not quite ready yet because 35 00:01:45,339 --> 00:01:50,410 Suze: so many people wrote in and said how surprised they were, 36 00:01:50,660 --> 00:01:52,419 Suze: how quiet you were. 37 00:01:53,879 --> 00:01:57,610 Suze: On Sunday. They were so disappointed when they didn't hear 38 00:01:57,610 --> 00:01:59,809 Suze: you because you said you were going to be there 39 00:02:00,019 --> 00:02:01,819 Suze: and then you pop in at the very end. 40 00:02:02,250 --> 00:02:08,399 KT: Because I was, I was condemned to silence. No, Suze 41 00:02:08,399 --> 00:02:11,380 KT: said the only way I can do my Sunday school, 42 00:02:11,419 --> 00:02:14,940 KT: which is about Roth and it's complicated, is if you 43 00:02:14,940 --> 00:02:18,220 KT: don't interrupt me. So I did not interrupt her. I 44 00:02:18,220 --> 00:02:18,529 KT: was as still 45 00:02:18,742 --> 00:02:22,932 KT: as a mouse. However, following that, we got lots and 46 00:02:22,931 --> 00:02:27,052 KT: lots of emails with questions that you all have about 47 00:02:27,052 --> 00:02:28,483 KT: that masterclass. 48 00:02:28,692 --> 00:02:32,692 Suze: So we thought, why not complete it today and make 49 00:02:32,692 --> 00:02:34,373 Suze: sure that none of you are 50 00:02:34,373 --> 00:02:35,242 Suze: confused. 51 00:02:35,522 --> 00:02:38,373 KT: All right, I have some really great questions here, but 52 00:02:38,373 --> 00:02:39,863 KT: here we go. Are you ready? 53 00:02:40,052 --> 00:02:40,652 Suze: I'm always ready. 54 00:02:40,651 --> 00:02:44,012 KT: All right, dear KT and Suze, thanks for the most 55 00:02:44,013 --> 00:02:44,483 KT: recent 56 00:02:44,615 --> 00:02:48,166 KT: Suze School on the five year rule of Roth. I 57 00:02:48,166 --> 00:02:51,796 KT: want to convert from a traditional IRA to a Roth. 58 00:02:52,085 --> 00:02:55,845 KT: I know I will pay taxes, but the only way 59 00:02:55,845 --> 00:02:58,835 KT: I could accomplish this at this stage of my life 60 00:02:59,085 --> 00:03:04,195 KT: is to have my financial planner withhold the taxes from 61 00:03:04,195 --> 00:03:06,565 KT: the sale and transfer the remaining. 62 00:03:06,645 --> 00:03:09,376 Suze: So you can stop right there, right there you can 63 00:03:09,376 --> 00:03:10,326 Suze: stop right there. 64 00:03:10,800 --> 00:03:12,820 Suze: So who's the name of this person? 65 00:03:12,899 --> 00:03:13,288 KT: Julie. 66 00:03:13,300 --> 00:03:16,490 Suze: Julie, Julie, if that's the only way you can do it, 67 00:03:16,979 --> 00:03:19,589 Suze: and you know that's the only way you can do it, 68 00:03:19,729 --> 00:03:22,300 Suze: you don't have the money to convert. Don't do it. 69 00:03:22,419 --> 00:03:24,570 Suze: Don't do it. Don't do it. Next question, KT. 70 00:03:25,419 --> 00:03:25,842 KT: She's 52, just so you know. 71 00:03:25,842 --> 00:03:28,729 Suze: Don't do it, Julie. So for all of you, when 72 00:03:28,729 --> 00:03:31,779 Suze: you convert, you owe taxes on the money that you 73 00:03:31,779 --> 00:03:33,539 Suze: converted that year. 74 00:03:34,119 --> 00:03:37,880 Suze: If you don't have money outside of a retirement account 75 00:03:37,880 --> 00:03:42,429 Suze: to do so, don't do it because if they withhold 76 00:03:42,960 --> 00:03:45,910 Suze: the money for you to pay your taxes. 77 00:03:46,389 --> 00:03:50,259 Suze: There's going to be a 10% penalty on it because 78 00:03:50,259 --> 00:03:54,699 Suze: number one, you are not 59 and a half years of age. You're 79 00:03:54,699 --> 00:03:58,570 Suze: going to owe ordinary income tax on that money as well. 80 00:03:58,820 --> 00:04:03,259 Suze: It makes absolutely no sense whatsoever. All right, KT, go on. 81 00:04:03,419 --> 00:04:06,300 KT: OK, so next question is from Pam. She said, Dear 82 00:04:06,300 --> 00:04:10,610 KT: Suze and KT, after listening to last Sunday's Suze School, 83 00:04:10,820 --> 00:04:12,300 KT: I think I made a boo boo. 84 00:04:12,690 --> 00:04:17,750 KT: I have had a Roth for over 20 years. I'm 68, retired, 85 00:04:17,760 --> 00:04:21,399 KT: and decided it would work well to convert yearly for 86 00:04:21,399 --> 00:04:26,359 KT: the next five years, money from my traditional IRA into 87 00:04:26,359 --> 00:04:29,359 KT: a Roth. My boo boo was I opened a new 88 00:04:29,359 --> 00:04:33,600 KT: Roth instead of converting to the old. Now I realize 89 00:04:33,600 --> 00:04:37,279 KT: after the show I should have just converted into my 90 00:04:37,279 --> 00:04:40,880 KT: original Roth, which was well over five years old. My 91 00:04:40,880 --> 00:04:41,729 KT: question is, 92 00:04:42,290 --> 00:04:46,519 KT: can I now transfer the new Roth conversion into my 93 00:04:46,519 --> 00:04:49,470 KT: old Roth without causing any trouble? 94 00:04:49,980 --> 00:04:50,750 Suze: Pop quizzy. 95 00:04:50,950 --> 00:04:51,906 KT: Oh... 96 00:04:51,906 --> 00:04:56,720 Suze: You sat here the entire day on Sunday. You said... 97 00:04:56,720 --> 00:04:57,869 KT: Ok, yes. 98 00:04:58,000 --> 00:04:58,769 Suze: Yes, what? 99 00:04:58,880 --> 00:04:59,950 KT: Yes, you can. 100 00:05:00,238 --> 00:05:01,480 Suze: And does she need to? 101 00:05:03,070 --> 00:05:03,928 KT: No. 102 00:05:04,309 --> 00:05:04,799 Suze: Why? 103 00:05:06,579 --> 00:05:09,670 KT: Because the five year rule's passed. Way passed. 104 00:05:10,059 --> 00:05:10,950 Suze: And so? 105 00:05:14,769 --> 00:05:18,428 KT: That's not fair. Stop asking me. I answered it. I 106 00:05:18,428 --> 00:05:21,059 KT: said yes. So now you take over. 107 00:05:22,850 --> 00:05:24,450 KT: That's not fair. You take over. 108 00:05:24,700 --> 00:05:25,488 Suze: Oh, I see. 109 00:05:25,579 --> 00:05:28,769 KT: You keep asking me questions like I know all the answers. 110 00:05:28,859 --> 00:05:32,320 Suze: You said last Sunday all of you are my witness, right? 111 00:05:32,700 --> 00:05:35,480 Suze: But she sat there and she said, Now I know 112 00:05:35,480 --> 00:05:37,260 Suze: everything there is to know about Roths. 113 00:05:37,420 --> 00:05:39,660 KT: Most, mostly, mostly, but not all the spaces in between. 114 00:05:40,940 --> 00:05:43,299 Suze: All right, first of all, Pam. 115 00:05:44,459 --> 00:05:47,209 Suze: We'll tell all of you, if you happen to know Pam, 116 00:05:47,209 --> 00:05:49,299 Suze: that I actually answered her directly. 117 00:05:49,299 --> 00:05:54,140 KT: All right, so Pam, give us... tell us... write back in and 118 00:05:54,140 --> 00:05:55,260 KT: tell us the damn answer. 119 00:05:55,700 --> 00:05:58,140 Suze: So like I said, sometimes I answer and I felt 120 00:05:58,140 --> 00:06:02,299 Suze: so bad for her because she felt like she made 121 00:06:02,299 --> 00:06:04,549 Suze: a boo boo on the fact of the matter is 122 00:06:04,549 --> 00:06:07,618 Suze: she did not. KT, don't act... 123 00:06:07,799 --> 00:06:10,799 Suze: don't try to act smart now. Just don't do it. 124 00:06:10,980 --> 00:06:12,694 KT: I was right. I was right with my answer. 125 00:06:12,988 --> 00:06:15,029 Suze: KT, but you don't know why you were right. And 126 00:06:15,029 --> 00:06:17,269 Suze: when you don't know why you've done something, you are 127 00:06:17,269 --> 00:06:21,630 Suze: not right, you are a guesser, not somebody anyway, forget 128 00:06:21,630 --> 00:06:26,380 Suze: about it. No, listen to me, everybody, seriously. Your first 129 00:06:26,380 --> 00:06:28,140 Suze: Roth that you open, 130 00:06:28,850 --> 00:06:34,799 Suze: the date of that first Roth follows you everywhere. So 131 00:06:34,799 --> 00:06:40,789 Suze: in this particular case, truthfully, Pam, because you are older 132 00:06:41,040 --> 00:06:46,399 Suze: than 59 and a half and because you had a 133 00:06:46,399 --> 00:06:50,399 Suze: Roth IRA opened for more than five years, you can 134 00:06:50,399 --> 00:06:54,200 Suze: convert all you want, pay the taxes on it, and 135 00:06:54,200 --> 00:06:57,200 Suze: take that money out any time you want. 136 00:06:57,880 --> 00:07:01,479 Suze: Because you have literally done two things. You've had a 137 00:07:01,480 --> 00:07:06,750 Suze: Roth for five years, and you're over 59 and a half years of age, 138 00:07:06,920 --> 00:07:10,910 Suze: so it doesn't matter. Just pay the taxes and all 139 00:07:10,910 --> 00:07:15,200 Suze: of that money is available to you whatsoever. So the 140 00:07:15,200 --> 00:07:16,549 Suze: truth of the matter is, 141 00:07:17,070 --> 00:07:21,369 Suze: you don't really need to keep a five year time 142 00:07:21,369 --> 00:07:25,529 Suze: clock cause that clock has already run because of your 143 00:07:25,529 --> 00:07:29,570 Suze: first Roth IRA that you opened 20 years ago. You 144 00:07:29,570 --> 00:07:33,519 Suze: do not have to ever use that Roth IRA again. 145 00:07:33,769 --> 00:07:37,089 Suze: You can open one new Roth, one new Roth, one 146 00:07:37,089 --> 00:07:40,769 Suze: new Roth, all conversions, and they're all dated back to 147 00:07:40,769 --> 00:07:43,600 Suze: the first one, so you didn't make a mistake. 148 00:07:44,059 --> 00:07:48,040 Suze: It could be easier, however, now just for you to 149 00:07:48,040 --> 00:07:51,500 Suze: transfer because it's not a conversion anymore, you might want 150 00:07:51,500 --> 00:07:55,859 Suze: to transfer all these accounts that you have into just 151 00:07:55,859 --> 00:07:57,950 Suze: one Roth IRA. 152 00:07:58,730 --> 00:08:00,790 Suze: And it doesn't have to be the first one that 153 00:08:00,790 --> 00:08:03,820 Suze: you opened, but you just might want to even transfer 154 00:08:03,820 --> 00:08:07,549 Suze: that one and all the ones that you opened into 155 00:08:07,549 --> 00:08:10,190 Suze: one Roth IRA now. 156 00:08:11,010 --> 00:08:14,399 Suze: And guess what, it might be a whole lot easier 157 00:08:14,399 --> 00:08:15,600 Suze: for you. All right, KT. 158 00:08:15,769 --> 00:08:19,829 KT: This is the next question is, is the same category 159 00:08:19,829 --> 00:08:23,359 KT: ready for this? This is Rebecca, she said. Suze, on 160 00:08:23,359 --> 00:08:27,040 KT: the ultimate Roth five year rule masterclass, you mentioned there 161 00:08:27,040 --> 00:08:29,429 KT: are two different kinds of Roth accounts. 162 00:08:29,679 --> 00:08:33,750 KT: A converted Roth and the other being a contribution Roth. 163 00:08:33,750 --> 00:08:34,390 Suze: Contributory, yes. 164 00:08:34,469 --> 00:08:39,510 KT: Contributory. So the question is, can a contributory Roth and 165 00:08:39,510 --> 00:08:43,010 KT: a converted Roth be held in the same account? 166 00:08:43,030 --> 00:08:47,369 Suze: Absolutely without any problem. So a lot of you feel like, 167 00:08:47,390 --> 00:08:50,270 Suze: oh my God, I have a Roth IRA now I'm 168 00:08:50,270 --> 00:08:53,069 Suze: going to do a rollover from a 401k and I 169 00:08:53,070 --> 00:08:56,510 Suze: need a separate account for that. And no, everything can 170 00:08:56,510 --> 00:08:58,869 Suze: go into one account. 171 00:08:59,500 --> 00:09:00,830 Suze: Absolutely. 172 00:09:01,130 --> 00:09:03,400 KT: So this next question from Anne. 173 00:09:03,960 --> 00:09:07,000 KT: This is interesting, Suze, because I, I think this is 174 00:09:07,000 --> 00:09:09,080 KT: a great question because I don't have a clue if 175 00:09:09,080 --> 00:09:09,950 KT: there's a limit. 176 00:09:10,309 --> 00:09:13,520 Suze: That's very funny, everybody, KT doesn't have a clue. 177 00:09:13,880 --> 00:09:17,280 KT: If there's a limit, ready, everyone, listen, listen. When you do 178 00:09:17,280 --> 00:09:21,479 KT: a Roth conversion, are you allowed to put in more 179 00:09:21,479 --> 00:09:25,919 KT: than $8,000? Two people wrote to you, Suze, that they 180 00:09:25,919 --> 00:09:29,590 KT: put in $50,000 and $100,000 in one year. 181 00:09:30,590 --> 00:09:33,650 Suze: And you honest to God don't know the answer to that. 182 00:09:33,929 --> 00:09:38,570 Suze: I need you to think deeply for me. 183 00:09:38,890 --> 00:09:41,489 KT: I think you can put in any amount because you 184 00:09:41,489 --> 00:09:41,960 KT: pay 185 00:09:42,739 --> 00:09:44,039 KT: the taxes on it all. 186 00:09:44,090 --> 00:09:45,900 Suze: So why did you say you don't have a clue? 187 00:09:45,950 --> 00:09:48,409 KT: Well, it was interesting because for some reason there's all 188 00:09:48,409 --> 00:09:51,799 KT: these limits on many different things, but not on a Roth... 189 00:09:52,030 --> 00:09:52,270 Suze: No. 190 00:09:52,270 --> 00:09:55,849 KT: Not on the, not on a converted converted Roth. 191 00:09:56,010 --> 00:10:00,609 Suze: So contributory Roths are Roths everybody that you contribute to 192 00:10:00,609 --> 00:10:06,330 Suze: every year with after tax money, period. You're limited to 193 00:10:06,330 --> 00:10:08,679 Suze: the annual amount depending on your age. 194 00:10:09,159 --> 00:10:13,479 Suze: 7,000 if you're under 50, 8,000 if you're 50 or older. 195 00:10:13,690 --> 00:10:17,520 Suze: When you are converting, you can convert any amount of 196 00:10:17,520 --> 00:10:22,319 Suze: money that you want. Just know, whatever you convert, Oh, 197 00:10:22,369 --> 00:10:24,599 Suze: you are going to owe ordinary income taxes. 198 00:10:24,609 --> 00:10:27,329 KT: Pay taxes on it. So that's why she was confused. 199 00:10:27,390 --> 00:10:28,590 KT: So Anne, there... 200 00:10:28,590 --> 00:10:30,728 Suze: We don't know, you don't know why she was confused. 201 00:10:30,729 --> 00:10:32,809 KT: She was, because she said, Hey... 202 00:10:33,690 --> 00:10:36,364 Suze: KT stop it, go to the next question. 203 00:10:36,455 --> 00:10:39,223 KT: Ok, the next question is Scott. This is, I am 204 00:10:39,224 --> 00:10:41,905 KT: one of the men smart enough to listen, and I 205 00:10:41,905 --> 00:10:44,614 KT: really appreciate all the help you have given my wife 206 00:10:44,614 --> 00:10:48,464 KT: and me. Are the 5 year rules the same for 207 00:10:48,465 --> 00:10:54,864 KT: Roth 401k conversions as they are for the Roth IRA conversions? 208 00:10:55,025 --> 00:10:58,775 Suze: Here's the scoop, Scott. They are and they are not, 209 00:10:58,864 --> 00:11:00,794 Suze: and this is the reason why. 210 00:11:01,609 --> 00:11:05,319 Suze: You worked for a company for five years. You had 211 00:11:05,320 --> 00:11:09,319 Suze: their Roth 401k for all five years. You quit. You 212 00:11:09,320 --> 00:11:13,439 Suze: go to a new employer that has a Roth 401k, 213 00:11:13,719 --> 00:11:16,409 Suze: and you transfer from the old to the new. 214 00:11:16,950 --> 00:11:21,549 Suze: Your old time clock, the five years there comes with 215 00:11:21,549 --> 00:11:26,829 Suze: you to the new one, so your new employer's retirement 216 00:11:26,830 --> 00:11:31,140 Suze: account takes on the clock of your first one, just 217 00:11:31,140 --> 00:11:33,820 Suze: that simple, however, listen closely. 218 00:11:34,590 --> 00:11:40,718 Suze: When you go from a Roth 401k to a Roth IRA, 219 00:11:41,760 --> 00:11:46,429 Suze: the clock does not come with you. Even though you're 220 00:11:46,429 --> 00:11:51,739 Suze: transferring from a 401k that's a Roth to a Roth IRA. 221 00:11:51,789 --> 00:11:57,949 Suze: Both after tax, does not matter. The Roth IRA will 222 00:11:57,950 --> 00:12:02,669 Suze: replace the time clock of your Roth 401k, that is 223 00:12:02,770 --> 00:12:07,559 Suze: why you want to start a Roth IRA today. So 224 00:12:07,559 --> 00:12:10,559 Suze: that the time clock is running. So when you do 225 00:12:10,559 --> 00:12:15,049 Suze: finally go from a Roth 401k to a Roth IRA, 226 00:12:15,320 --> 00:12:18,760 Suze: you've taken on the time clock of the Roth IRA 227 00:12:18,760 --> 00:12:22,710 Suze: that has been opened. If there isn't one that's been opened, 228 00:12:23,000 --> 00:12:27,150 Suze: your 5 year time clock starts the day you transfer. 229 00:12:27,650 --> 00:12:31,650 Suze: One more thing, Scott, a Roth IRA you can take 230 00:12:31,650 --> 00:12:36,169 Suze: out your original contributions any time you want without taxes 231 00:12:36,169 --> 00:12:38,968 Suze: or penalties regardless of your age or how long the 232 00:12:38,969 --> 00:12:40,200 Suze: money has been in there. 233 00:12:40,789 --> 00:12:45,190 Suze: Your Roth 401k does not work like that, so there 234 00:12:45,190 --> 00:12:49,750 Suze: is another difference there, which is why truthfully, after the 235 00:12:49,750 --> 00:12:53,349 Suze: point of the match in a Roth 401k, you're far 236 00:12:53,349 --> 00:12:56,409 Suze: better off taking that money and having a Roth IRA. 237 00:12:56,710 --> 00:12:59,669 Suze: Once you've maxed out your Roth IRA, go back 238 00:12:59,780 --> 00:13:03,130 Suze: to your Roth 401k unless you can fully max out 239 00:13:03,130 --> 00:13:05,520 Suze: both at the same time. Go on, KT. 240 00:13:05,809 --> 00:13:09,960 KT: Yeah, this next question is um similar to that as well. 241 00:13:10,409 --> 00:13:13,209 KT: This is from Janet. She said after listening to your 242 00:13:13,210 --> 00:13:18,020 KT: very helpful podcast on Roth's one thing I'm not totally 243 00:13:18,020 --> 00:13:21,729 KT: clear on my husband, aged 73. 244 00:13:22,099 --> 00:13:26,848 KT: And I, age 68, each have a Roth IRA from 245 00:13:26,849 --> 00:13:31,089 KT: contributions from our working years that date back much more 246 00:13:31,090 --> 00:13:34,959 KT: than five years ago. In recent years we've been doing 247 00:13:34,960 --> 00:13:39,250 KT: Roth conversions into a new Roth account for each of 248 00:13:39,250 --> 00:13:42,090 KT: us held at different brokerage houses. 249 00:13:42,659 --> 00:13:46,890 KT: Does the five year rule still no longer apply if 250 00:13:46,890 --> 00:13:52,179 KT: our Roth conversions are in totally different accounts than our 251 00:13:52,179 --> 00:13:54,590 KT: original Roth accounts or... 252 00:13:54,789 --> 00:13:58,479 KT: Do you have to do the conversion into the original 253 00:13:58,809 --> 00:14:02,329 KT: to have the five year rule no longer apply once 254 00:14:02,330 --> 00:14:04,439 KT: you are over 59 and a half? 255 00:14:04,770 --> 00:14:07,719 Suze: So, I obviously did not do a very good job 256 00:14:07,929 --> 00:14:12,169 Suze: on the masterclass because a lot of you seem to 257 00:14:12,169 --> 00:14:12,530 Suze: be 258 00:14:12,750 --> 00:14:17,179 Suze: confused. First of all, my dear Janet, your husband is 73, 259 00:14:17,390 --> 00:14:22,070 Suze: you are 68. You've had a Roth IRA opened way 260 00:14:22,070 --> 00:14:25,510 Suze: long ago. The five year rule doesn't even apply to 261 00:14:25,510 --> 00:14:29,590 Suze: you on any level whatsoever, so you don't need to 262 00:14:29,590 --> 00:14:30,549 Suze: worry about it. 263 00:14:30,849 --> 00:14:33,669 Suze: They don't have to be different accounts. They can be 264 00:14:33,669 --> 00:14:36,390 Suze: different accounts. They can be the same accounts. You shouldn't 265 00:14:36,390 --> 00:14:39,909 Suze: even think about it because of your age, and you 266 00:14:39,909 --> 00:14:44,559 Suze: had a Roth more than five years ago. Just that simple. 267 00:14:44,789 --> 00:14:48,270 Suze: It doesn't matter. You can do anything you want and 268 00:14:48,270 --> 00:14:49,989 Suze: you're going to be fine. 269 00:14:50,070 --> 00:14:53,830 KT: OK, so the magic takeaway, Suze is 59 and a half. 270 00:14:53,960 --> 00:14:54,099 Suze: Yes. 271 00:14:54,500 --> 00:14:54,789 KT: All right. 272 00:14:54,950 --> 00:14:58,750 Suze: And five years. Yes, yeah, after that it just doesn't 273 00:14:58,750 --> 00:14:59,549 Suze: even matter. 274 00:15:00,049 --> 00:15:02,710 Suze: It's like the five year rule doesn't apply. 275 00:15:03,239 --> 00:15:04,200 KT: OK, good, it's gone. 276 00:15:05,659 --> 00:15:09,640 KT: This is from Lynn, she said, I just received your 277 00:15:09,640 --> 00:15:14,250 KT: Ultimate Retirement Guide for 50+. I'm really wishing I had 278 00:15:14,250 --> 00:15:16,849 KT: used it years ago. We always hear that. 279 00:15:17,280 --> 00:15:23,109 KT: Now I need your advice, possibly changing my traditional IRA beneficiary. 280 00:15:23,359 --> 00:15:28,380 KT: I am 71. My husband is 90. My traditional IRA 281 00:15:28,380 --> 00:15:38,840 KT: balance is approximately $780,000. My husband's is $335,000. Is it 282 00:15:38,840 --> 00:15:44,390 KT: prudent for me to designate him my 100% beneficiary? 283 00:15:44,919 --> 00:15:47,750 KT: I am seeing in your distribution table that if I 284 00:15:47,750 --> 00:15:54,979 KT: pass before him, the combined RMD would be 91,000 this year. 285 00:15:55,510 --> 00:15:56,940 KT: So there you go. 286 00:15:57,510 --> 00:15:59,739 Suze: You should see KT's face reading this. 287 00:15:59,869 --> 00:16:02,500 KT: Well, so he's 90 years old. 288 00:16:02,969 --> 00:16:05,429 Suze: He's 90. You are 71. 289 00:16:06,210 --> 00:16:11,770 Suze: And really you could very well pass before him. You 290 00:16:11,770 --> 00:16:15,479 Suze: never know what can happen in life. In my opinion, 291 00:16:15,650 --> 00:16:21,210 Suze: all of you are just too freaked out about these RMDs. 292 00:16:21,409 --> 00:16:25,530 Suze: Stop it, everybody. Your job in life is to make 293 00:16:25,530 --> 00:16:30,330 Suze: sure that your husband is taken care of in whatever 294 00:16:30,330 --> 00:16:34,109 Suze: way he needs, and there are different rules when you 295 00:16:34,109 --> 00:16:34,760 Suze: leave 296 00:16:35,099 --> 00:16:39,890 Suze: a retirement account to a spouse versus when you leave 297 00:16:39,890 --> 00:16:44,489 Suze: it to a non-spouse and therefore you want to make 298 00:16:44,489 --> 00:16:47,729 Suze: sure that he has access to that money he can 299 00:16:47,729 --> 00:16:50,729 Suze: do anything he wants with that money. So if it 300 00:16:50,729 --> 00:16:52,799 Suze: were me in this situation. 301 00:16:53,679 --> 00:16:57,900 Suze: I would absolutely leave it all to him. I would 302 00:16:57,900 --> 00:17:01,219 Suze: not think about the RMDs. The truth of the matter 303 00:17:01,219 --> 00:17:04,938 Suze: is he's probably going to need to take out that money, 304 00:17:05,589 --> 00:17:08,339 Suze: for a nurse, for somebody to take care of him, 305 00:17:08,540 --> 00:17:11,550 Suze: to maybe he goes into a skilled living facility or 306 00:17:11,550 --> 00:17:15,219 Suze: just an assisted living, he's going to need that money anyway. 307 00:17:15,579 --> 00:17:22,930 Suze: Leave it to him and don't worry about those stupid RMDs. 308 00:17:22,949 --> 00:17:26,349 KT: Next question, Suze, is from Steve, another smart man. 309 00:17:26,689 --> 00:17:29,760 KT: I'm Steve and I'm one of those people smart enough 310 00:17:29,760 --> 00:17:34,639 KT: to listen. I'm 60 and retired with a pension covering 311 00:17:34,640 --> 00:17:40,839 KT: current expenses. I have about 1.2 million in a traditional IRA. 312 00:17:41,250 --> 00:17:46,119 KT: And 300,000 in my Roth, both at the same institution. 313 00:17:46,449 --> 00:17:49,609 KT: I'm going to do some conversions from my traditional to 314 00:17:49,609 --> 00:17:55,569 KT: my Roth. My portfolio is about a 65/35 balance. Do 315 00:17:55,569 --> 00:18:01,489 KT: I keep the 65/35 balance on the conversions or convert 316 00:18:01,489 --> 00:18:07,089 KT: the 65 equities first so the future biggest growth happens 317 00:18:07,089 --> 00:18:09,560 KT: in my Roth? Steve. 318 00:18:11,079 --> 00:18:13,619 Suze: She's smiling again. How old is he? 319 00:18:13,819 --> 00:18:18,859 KT: 60. What's funny is that men's, you know how they 320 00:18:18,859 --> 00:18:21,660 KT: ask the question, 65/35. 321 00:18:22,630 --> 00:18:26,790 Suze: Well, no, it's 65 stocks, 35 bonds. Here's what I 322 00:18:26,790 --> 00:18:31,910 Suze: would tell you, Steve. Simple convert the equities first because 323 00:18:31,910 --> 00:18:35,510 Suze: they have a better chance of going far higher than 324 00:18:35,510 --> 00:18:38,150 Suze: bonds right now, even though that I do think bonds 325 00:18:38,150 --> 00:18:40,619 Suze: are going to continue to go up a little bit 326 00:18:40,829 --> 00:18:43,500 Suze: because interest rates are going to go down. So get 327 00:18:43,500 --> 00:18:47,880 Suze: the stocks out of there and into the Roth sooner 328 00:18:47,880 --> 00:18:48,540 Suze: than later. 329 00:18:49,030 --> 00:18:53,890 KT: Next question from Marie, and Marie has another RMD dilemma, 330 00:18:54,140 --> 00:18:54,579 KT: she said.... 331 00:18:54,859 --> 00:18:56,030 Suze: What's an RMD KT? 332 00:18:56,819 --> 00:18:58,140 KT: Required Minimum Distribution, baby! 333 00:18:58,219 --> 00:18:59,060 Suze: Ding ding, ding, ding. 334 00:18:59,060 --> 00:19:03,099 KT: So she said, Suze, first thank you for all the 335 00:19:03,099 --> 00:19:05,699 KT: advice and knowledge you so freely give to those of 336 00:19:05,699 --> 00:19:10,929 KT: us that need it. I'm 72, so the dreaded RMDs 337 00:19:10,930 --> 00:19:12,380 KT: are on the horizon. 338 00:19:12,890 --> 00:19:16,010 KT: Can I use the money from my RMD to open 339 00:19:16,010 --> 00:19:19,530 KT: a Roth for my adult children? This would get the 340 00:19:19,530 --> 00:19:22,400 KT: Roth clock started for them. Thank you, Marie. 341 00:19:22,689 --> 00:19:27,819 Suze: So Marie, listen to me. In fact, everybody listen to me. 342 00:19:28,369 --> 00:19:29,839 Suze: I hope that's true, don't you, KT? 343 00:19:29,969 --> 00:19:30,050 KT: Yes, they better listen. 344 00:19:30,130 --> 00:19:36,530 Suze: When you take out a required minimum distribution, you obviously 345 00:19:36,530 --> 00:19:39,329 Suze: have to pay income tax on it. 346 00:19:40,339 --> 00:19:43,810 Suze: And just that simple. After you've paid income tax, you 347 00:19:43,810 --> 00:19:48,329 Suze: can do anything you want with that money. So if 348 00:19:48,329 --> 00:19:51,609 Suze: you want to take that money and use it to 349 00:19:51,609 --> 00:19:57,130 Suze: fund your adult children's Roth IRAs, OK, but you have 350 00:19:57,130 --> 00:20:00,890 Suze: to make sure that they have earned income because if 351 00:20:00,890 --> 00:20:03,290 Suze: they don't have earned income. 352 00:20:03,689 --> 00:20:07,260 Suze: You can't put any money into their Roth, and you 353 00:20:07,260 --> 00:20:11,369 Suze: can only put a maximum, let's just say they're under 50, 354 00:20:11,579 --> 00:20:16,250 Suze: a maximum of $7,000 a year each or 355 00:20:17,160 --> 00:20:22,589 Suze: whatever their earned income is, whichever is less. So if 356 00:20:22,589 --> 00:20:26,869 Suze: their earned income is only $3,500 a year, you can 357 00:20:26,869 --> 00:20:32,310 Suze: only put $3,500 a year into their Roth. So that's 358 00:20:32,310 --> 00:20:35,150 Suze: how it works, my dear Marie. OK, go on, KT. 359 00:20:35,310 --> 00:20:37,780 KT: So Suze, why do you think people are so afraid 360 00:20:37,780 --> 00:20:39,180 KT: of their RMDs? 361 00:20:39,415 --> 00:20:41,925 Suze: Because first of all, if they had listened to me 362 00:20:41,925 --> 00:20:45,625 Suze: years ago and you had done a Roth, everybody, you 363 00:20:45,625 --> 00:20:49,694 Suze: wouldn't have to take out RMDs. Even if you had 364 00:20:49,694 --> 00:20:53,854 Suze: a Roth 401k, you don't have to take out RMDs, 365 00:20:53,864 --> 00:20:59,344 Suze: and that's a new law. However, required minimum distribution means 366 00:20:59,344 --> 00:21:01,655 Suze: you have to take money out whether you need it 367 00:21:01,655 --> 00:21:03,694 Suze: or not and pay taxes on it. 368 00:21:04,079 --> 00:21:10,209 Suze: That money KT counts towards the taxation of Social Security 369 00:21:10,209 --> 00:21:14,219 Suze: and Medicare B premiums, so people don't want to have 370 00:21:14,219 --> 00:21:16,438 Suze: to take it out if they don't have to. Like 371 00:21:16,439 --> 00:21:18,939 Suze: we have to take it out and we don't need it, 372 00:21:19,500 --> 00:21:24,300 Suze: and it counts towards everything. However, that's why I'm just 373 00:21:24,300 --> 00:21:27,339 Suze: going to say it again. If you don't do a 374 00:21:27,339 --> 00:21:30,619 Suze: Roth retirement account on your own, an IRA. 375 00:21:31,160 --> 00:21:36,589 Suze: A Roth 401k TSP, you know, or 403B at work, 376 00:21:37,000 --> 00:21:40,270 Suze: you are making the biggest mistake in your life. Don't 377 00:21:40,520 --> 00:21:43,239 Suze: be stupid, everybody. OK, go on. 378 00:21:44,050 --> 00:21:47,270 Suze: And I say that KT, I just because everybody now 379 00:21:47,270 --> 00:21:50,270 Suze: writes and they say, why didn't I do this 20 380 00:21:50,270 --> 00:21:53,829 Suze: years ago? I never thought my contributions would add up 381 00:21:53,829 --> 00:21:58,430 Suze: to $1.2 million to $2 million and everything, of course 382 00:21:58,430 --> 00:22:01,790 Suze: you didn't, but I think it for you, so just 383 00:22:01,790 --> 00:22:04,910 Suze: listen to me, especially if you're younger out there. Go on. 384 00:22:05,829 --> 00:22:08,670 KT: This is from Katie. She said, I'm a new listener 385 00:22:08,670 --> 00:22:10,949 KT: to your program and I love it. 386 00:22:11,319 --> 00:22:15,849 KT: I'm finally understanding the Roth, I, I think she said, 387 00:22:16,099 --> 00:22:17,339 KT: but I have a question... 388 00:22:17,339 --> 00:22:20,140 Suze: Oh, you have something in common with KT. How nice. Go on. 389 00:22:20,380 --> 00:22:23,250 KT: But I have, that's not nice, but I have a 390 00:22:23,250 --> 00:22:24,260 KT: question after, 391 00:22:24,939 --> 00:22:25,040 Suze: It's true! 392 00:22:25,040 --> 00:22:28,569 KT: But I have a question after listening to your podcast 393 00:22:28,569 --> 00:22:32,859 KT: on Sunday. I opened a Roth IRA at a bank 394 00:22:32,859 --> 00:22:35,579 KT: several years ago with a one-time deposit. 395 00:22:36,010 --> 00:22:39,849 KT: I'm now over 59 and half, so I know I 396 00:22:39,849 --> 00:22:44,489 KT: can access the contribution penalty free if needed, which luckily 397 00:22:44,489 --> 00:22:48,369 KT: I doubt I need to do. My question is I'd 398 00:22:48,369 --> 00:22:52,719 KT: like to open another Roth at Vanguard and start contributing 399 00:22:52,719 --> 00:22:54,130 KT: on a regular basis. 400 00:22:54,829 --> 00:22:59,099 KT: Does my five year rule apply here for the new account, 401 00:22:59,310 --> 00:23:02,260 KT: or will the five year rule already be met? 402 00:23:02,430 --> 00:23:04,099 Suze: You've already met the five year rule. 403 00:23:04,430 --> 00:23:08,550 KT: So let's answer it. You're over 59 and a half. 404 00:23:08,680 --> 00:23:13,510 Suze: If you're over 59 and a half, everybody, and you 405 00:23:13,510 --> 00:23:17,800 Suze: have had a Roth IRA opened anywhere, 406 00:23:18,430 --> 00:23:22,790 Suze: for over five years, the five year rule no longer 407 00:23:22,790 --> 00:23:27,989 Suze: applies to you. However, Katie, get it, KT, when I 408 00:23:27,989 --> 00:23:30,430 Suze: said you have something in common because her name is 409 00:23:30,430 --> 00:23:31,488 Suze: Katie and you're KT. 410 00:23:31,579 --> 00:23:32,609 KT: It's not what you meant. 411 00:23:32,869 --> 00:23:33,300 Suze: It's what... ok, well. 412 00:23:33,310 --> 00:23:35,010 KT: So not what you meant... 413 00:23:35,310 --> 00:23:36,540 Suze: But you all know what I meant. 414 00:23:37,099 --> 00:23:37,880 KT: Uh huh. 415 00:23:38,050 --> 00:23:41,609 Suze: Is that, listen, you say that you opened up a 416 00:23:41,609 --> 00:23:44,369 Suze: Roth IRA at a bank several years ago with a 417 00:23:44,369 --> 00:23:49,050 Suze: one time deposit. If I were you, I would absolutely, if 418 00:23:49,050 --> 00:23:54,130 Suze: you're opening up a new Roth IRA at Vanguard, can 419 00:23:54,130 --> 00:23:55,839 Suze: you just transfer, 420 00:23:56,339 --> 00:23:59,869 Suze: your Roth IRA at the bank into Vanguard? I think 421 00:23:59,869 --> 00:24:02,839 Suze: you'll have a far better return on your money in 422 00:24:02,839 --> 00:24:04,319 Suze: the long run. All right, go on. 423 00:24:04,479 --> 00:24:07,119 KT: So one of the listeners sent three questions. Can I 424 00:24:07,119 --> 00:24:09,319 KT: ask all three, and we'll see if you can get 425 00:24:09,319 --> 00:24:12,000 KT: through them before we run out of time? So, does 426 00:24:12,000 --> 00:24:14,839 KT: it make sense for me to continue down the path 427 00:24:14,839 --> 00:24:19,560 KT: to max out on the traditional 401k, or should I 428 00:24:19,560 --> 00:24:21,890 KT: convert to a Roth 401k? 429 00:24:21,890 --> 00:24:25,089 Suze: Absolutely convert to a Roth. Do not be, you know 430 00:24:25,089 --> 00:24:27,689 Suze: what I said before, the S word. OK, go on. 431 00:24:27,689 --> 00:24:28,599 KT: Stupid. 432 00:24:30,030 --> 00:24:32,640 Suze: That's the first time I've ever heard her say that word. 433 00:24:32,729 --> 00:24:37,810 KT: If the Roth 401k is a recommendation, when converting, what 434 00:24:37,810 --> 00:24:40,849 KT: percentage should I try to convert per year? 435 00:24:40,849 --> 00:24:45,979 Suze: Whatever amount of money makes sense tax-wise, check with your 436 00:24:45,979 --> 00:24:49,739 Suze: CPA so that you don't go into a higher income 437 00:24:49,739 --> 00:24:50,649 Suze: tax bracket. Next. 438 00:24:50,780 --> 00:24:54,569 KT: All right, Suze, this is the last question from this listener, 439 00:24:54,650 --> 00:24:57,660 KT: and then this is a wrap. Can I continue to 440 00:24:57,660 --> 00:25:02,699 KT: contribute the $7,000 per year to my backdoor Roth IRA 441 00:25:02,699 --> 00:25:05,389 KT: if I have a Roth 401k? 442 00:25:05,660 --> 00:25:07,250 Suze: Pop quizzy. 443 00:25:08,000 --> 00:25:08,699 KT: Oh. 444 00:25:09,589 --> 00:25:10,750 KT: Yeah, you can. 445 00:25:11,680 --> 00:25:12,869 Suze: Why do you say "oh?" 446 00:25:12,880 --> 00:25:15,280 KT: I just, because every time I hear the word quizzy, 447 00:25:15,339 --> 00:25:17,760 KT: I'm like, Oh, KT, don't get it wrong, don't get 448 00:25:17,760 --> 00:25:18,040 KT: it wrong. 449 00:25:18,239 --> 00:25:21,699 Suze: Ding ding ding ding ding ding. KT, don't be so 450 00:25:21,699 --> 00:25:22,750 Suze: afraid of being wrong. 451 00:25:23,420 --> 00:25:25,040 KT: That is a wrap. You would. 452 00:25:25,280 --> 00:25:25,399 Suze: No. 453 00:25:25,560 --> 00:25:29,630 KT: I'm not afraid. I'm not afraid. I'm like, come on already. 454 00:25:31,079 --> 00:25:36,050 Suze: OK, no problem. All right, everybody, until Sunday with Suze 455 00:25:36,050 --> 00:25:39,079 Suze: School that I have no idea what it's going to be. 456 00:25:39,290 --> 00:25:42,170 KT: But it's going to be a whole lot easier than 457 00:25:42,170 --> 00:25:43,169 KT: last Sunday. 458 00:25:44,410 --> 00:25:47,889 Suze: I think that masterclass, even though it doesn't seem like 459 00:25:47,890 --> 00:25:50,569 Suze: it given so many questions that have come in, it's 460 00:25:50,569 --> 00:25:52,889 Suze: a great, great masterclass. 461 00:25:52,969 --> 00:25:54,489 KT: Maybe you should do real estate. 462 00:25:55,619 --> 00:25:56,579 Suze: On what? 463 00:25:56,579 --> 00:25:57,379 KT: On Sunday school. 464 00:25:57,380 --> 00:26:01,380 Suze: I'll think about it. All right, but until then there's 465 00:26:01,380 --> 00:26:03,458 Suze: only one thing that we want you to remember, and 466 00:26:03,459 --> 00:26:04,375 Suze: it's this: 467 00:26:04,375 --> 00:26:07,170 Suze: People first, then money, then things. 468 00:26:07,579 --> 00:26:12,129 Suze: Stay safe, stay healthy, stay secure, and we'll see you soon. 469 00:26:12,459 --> 00:26:13,050 Suze: Bye bye.