1 00:00:30,350 --> 00:00:34,869 Suze: April 2nd, 2025. Welcome everybody to the Women and Money 2 00:00:34,869 --> 00:00:38,949 Suze: podcast as well as everybody smart enough to listen. Yes, 3 00:00:39,029 --> 00:00:40,790 Suze: I know, I said April 2nd. 4 00:00:41,569 --> 00:00:44,909 Suze: And most of you are listening to this because the 5 00:00:44,909 --> 00:00:49,229 Suze: podcast normally drops on April 3rd, but because we will 6 00:00:49,229 --> 00:00:54,430 Suze: be traveling tomorrow, we recorded it a day earlier, and 7 00:00:54,430 --> 00:00:59,669 Suze: it's actually 9:37 a.m. and the reason that I'm telling 8 00:00:59,669 --> 00:01:02,650 Suze: you that, everybody, is that before we begin. 9 00:01:02,979 --> 00:01:07,330 Suze: The Ask KT and Suze Anything portion of the Women 10 00:01:07,330 --> 00:01:09,009 Suze: and Money podcast. Say hi to everybody, 11 00:01:09,599 --> 00:01:09,800 KT: Hi Everybody! 12 00:01:10,089 --> 00:01:14,809 Suze: Right, is that obviously today is the day that tariffs 13 00:01:14,809 --> 00:01:18,529 Suze: are going to be announced, and so many of you 14 00:01:18,529 --> 00:01:21,289 Suze: have been writing in to go, Suze, Suze, what's going 15 00:01:21,290 --> 00:01:24,209 Suze: to happen when he announces? Are there tariffs? Are there not? 16 00:01:25,220 --> 00:01:27,509 Suze: Take a pause. Take a breath. 17 00:01:28,519 --> 00:01:29,160 Suze: All right. 18 00:01:29,989 --> 00:01:33,610 Suze: President Trump has told you he's going to be announcing 19 00:01:33,610 --> 00:01:36,660 Suze: tariffs at the time that we are recording this, he 20 00:01:36,660 --> 00:01:38,300 Suze: hasn't announced yet. 21 00:01:38,940 --> 00:01:41,190 Suze: But let me just talk to you a little bit 22 00:01:41,190 --> 00:01:46,010 Suze: about the stock market regardless of what happens. Right now 23 00:01:46,010 --> 00:01:49,889 Suze: it is down because people think he is going to 24 00:01:49,889 --> 00:01:53,160 Suze: be announcing tariffs. And do you know how I talked 25 00:01:53,160 --> 00:01:57,639 Suze: to all of you about support and resistance levels? You 26 00:01:57,639 --> 00:01:59,370 Suze: need to know that this market is. 27 00:01:59,444 --> 00:02:03,334 Suze: Going to probably go on a roller coaster ride. It's 28 00:02:03,334 --> 00:02:07,074 Suze: already been on a roller coaster. Do you like roller coasters? 29 00:02:07,235 --> 00:02:07,775 Suze: I actually do. 30 00:02:07,875 --> 00:02:09,445 KT: Suze loves them. I don't. 31 00:02:09,395 --> 00:02:12,914 Suze: I love them so much. But anyway, so just be 32 00:02:12,913 --> 00:02:16,395 Suze: prepared for it as I'm recording this with KT. The 33 00:02:16,395 --> 00:02:21,195 Suze: Standard and Poor's 500 index is about 5,601. That is 34 00:02:21,195 --> 00:02:22,595 Suze: the level it is at. 35 00:02:23,320 --> 00:02:26,750 Suze: It's down 30 points so far on the day. A 36 00:02:26,750 --> 00:02:29,339 Suze: lot of you have been writing in and go, What 37 00:02:29,339 --> 00:02:33,149 Suze: is the next support level, the level that if it 38 00:02:33,149 --> 00:02:35,419 Suze: goes down to, it should bounce up. 39 00:02:35,889 --> 00:02:40,470 Suze: That level is 5480 for those of you who just 40 00:02:40,470 --> 00:02:44,309 Suze: want to know. If it breaks that level, it could 41 00:02:44,309 --> 00:02:51,269 Suze: absolutely go down another 5% to 5,367. OK, so it 42 00:02:51,270 --> 00:02:55,100 Suze: could go down, but I expect that it will hold 43 00:02:55,589 --> 00:02:59,750 Suze: at 5480 and it could then go up and its 44 00:02:59,750 --> 00:03:02,948 Suze: resistance will be 5,703. 45 00:03:03,758 --> 00:03:06,038 Suze: So for those of you who don't know what I'm 46 00:03:06,038 --> 00:03:10,630 Suze: talking about, a support level is when the market goes 47 00:03:10,630 --> 00:03:15,509 Suze: down to a certain point and the market supports it there. 48 00:03:16,270 --> 00:03:19,470 Suze: And you want it to hold there and if it 49 00:03:19,470 --> 00:03:23,550 Suze: breaks at that level, it then falls more. Resistance is 50 00:03:23,550 --> 00:03:27,020 Suze: it starts to go up and it hits a resistance level, 51 00:03:27,309 --> 00:03:30,320 Suze: and it's very hard to go through that. So the 52 00:03:30,320 --> 00:03:32,899 Suze: next week or two you're going to see bouncing all 53 00:03:32,899 --> 00:03:35,869 Suze: over the place. And for those of you who wrote 54 00:03:35,869 --> 00:03:39,850 Suze: in and wanted to know that now you know, all right, KT, 55 00:03:39,949 --> 00:03:40,949 Suze: how are you, my dear? 56 00:03:41,110 --> 00:03:43,789 KT: Kind of bouncing around. That's what I am. 57 00:03:44,199 --> 00:03:45,529 Suze: Should that have been your quizzy? 58 00:03:47,350 --> 00:03:51,990 KT: What is the resistance level? All right. So are we ready? 59 00:03:52,110 --> 00:03:54,820 Suze: What do you think my resistance level is with you? 60 00:03:55,509 --> 00:03:56,309 KT: 0. 61 00:03:57,029 --> 00:04:00,289 Suze: You don't think I have a resistance level with you? Never. 62 00:04:00,619 --> 00:04:01,660 Suze: What does that mean? 63 00:04:03,940 --> 00:04:06,220 Suze: Does that mean that I just go off the wall 64 00:04:06,220 --> 00:04:06,690 Suze: no matter 65 00:04:06,690 --> 00:04:07,460 Suze: what 66 00:04:07,460 --> 00:04:08,520 KT: All the time. 67 00:04:08,940 --> 00:04:10,740 Suze: No, KT, that's not 68 00:04:10,740 --> 00:04:11,309 Suze: true. 69 00:04:11,660 --> 00:04:13,539 KT: We don't have resistance levels. 70 00:04:13,699 --> 00:04:14,820 Suze: We just keep going higher and 71 00:04:14,820 --> 00:04:15,100 Suze: higher. 72 00:04:15,220 --> 00:04:17,969 KT: Yeah, we just go up. We don't drop and we 73 00:04:17,970 --> 00:04:19,779 KT: don't worry about resistance 74 00:04:19,779 --> 00:04:20,000 KT: level. 75 00:04:20,260 --> 00:04:22,820 Suze: Oh, that's my girl. All right, OK, OK, you 76 00:04:22,820 --> 00:04:23,579 Suze: got good questions? 77 00:04:23,940 --> 00:04:26,660 KT: I have a first comment from Natalie, and I love this. 78 00:04:26,660 --> 00:04:30,130 Suze: Wait, I just want to say something before you ask questions, 79 00:04:30,220 --> 00:04:30,618 Suze: all right. 80 00:04:31,269 --> 00:04:34,540 Suze: As much as all of you care about the stock market, 81 00:04:34,988 --> 00:04:39,450 Suze: there are other things in your personal financial life that 82 00:04:39,450 --> 00:04:43,820 Suze: you need to pay attention to, which is usually what 83 00:04:43,820 --> 00:04:48,660 Suze: this particular podcast Ask KT and Suze Anything is about. 84 00:04:49,070 --> 00:04:51,989 Suze: So just don't focus on one thing. You have to 85 00:04:51,988 --> 00:04:55,339 Suze: focus on everything. All right, KT. 86 00:04:55,540 --> 00:04:57,469 KT: OK, but focus on this, everyone. 87 00:04:57,709 --> 00:05:00,850 KT: This is from Natalie. She said, Hi, Suze and KT. 88 00:05:01,100 --> 00:05:04,700 KT: I played your can I afford it games on Suze's 89 00:05:04,700 --> 00:05:08,250 KT: YouTube channel. Wait, so many of you don't know this, 90 00:05:08,339 --> 00:05:16,329 KT: but Suze's official YouTube channel, which is youTube.com/ Suze Orman, yes, 91 00:05:16,500 --> 00:05:20,099 KT: now offers a really fun can I afford it game 92 00:05:20,100 --> 00:05:20,299 KT: which 93 00:05:20,350 --> 00:05:24,690 KT: is part of the original Suze Orman show, which many 94 00:05:24,690 --> 00:05:28,410 KT: of you watched for decades. In any event, I want 95 00:05:28,410 --> 00:05:31,970 KT: you to go there and play this. Natalie writes super fun, 96 00:05:32,339 --> 00:05:36,868 KT: great jackets. She's mentioning Suze's wardrobe. If you can definitely 97 00:05:36,869 --> 00:05:40,649 KT: make more of these, please, but obviously you need to 98 00:05:40,649 --> 00:05:42,820 KT: come up with a KT avatar. 99 00:05:43,269 --> 00:05:45,950 KT: So I'm not going to tell you why she said 100 00:05:45,950 --> 00:05:50,440 KT: that until you go and actually play Suze's Can I 101 00:05:50,440 --> 00:05:51,299 KT: Afford game. 102 00:05:51,428 --> 00:05:53,670 Suze: Yeah, and there's other things there as well, and it 103 00:05:53,670 --> 00:05:56,869 Suze: seems to be quite popular. We just launched it a 104 00:05:56,869 --> 00:05:59,630 Suze: week or two ago. Can you believe that for all 105 00:05:59,630 --> 00:06:01,700 Suze: these years I couldn't get 106 00:06:01,744 --> 00:06:05,214 Suze: my own YouTube channel back. Somebody had it and we 107 00:06:05,214 --> 00:06:08,105 Suze: didn't even know who had it. Anyway, that's besides the point. 108 00:06:08,204 --> 00:06:09,464 Suze: All right, KT, ask away. 109 00:06:09,815 --> 00:06:13,704 KT: OK, first question here. It says my mother has a 110 00:06:13,704 --> 00:06:17,734 KT: 529 account for my son. My son is going to 111 00:06:17,734 --> 00:06:21,575 KT: graduate in May. This is from Teresa. So let me explain. 112 00:06:21,613 --> 00:06:23,534 KT: This is a little bit long, everybody. 113 00:06:24,010 --> 00:06:29,850 KT: There's approximately $7000 left in that 529 account. On one 114 00:06:29,850 --> 00:06:34,290 KT: of your podcasts, you mentioned that 529 accounts can be 115 00:06:34,290 --> 00:06:38,959 KT: moved into a Roth account. The 529 company confirmed this, 116 00:06:39,010 --> 00:06:42,209 KT: but said the funds wouldn't be accessible without a 117 00:06:42,399 --> 00:06:50,428 KT: penalty for 15 years. The IRS rules this isn't a quizzy. 118 00:06:50,470 --> 00:06:53,708 KT: Hold on. The IRS rules say that the Roth account 119 00:06:53,709 --> 00:06:57,100 KT: has to be open for 15 years to do this, 120 00:06:57,350 --> 00:07:01,789 KT: which isn't the same as what the 529 company said. Suze, 121 00:07:01,869 --> 00:07:04,459 KT: my son has a Roth that's been open for a year, 122 00:07:04,589 --> 00:07:08,910 KT: so what should we do with the leftover 529 money? 123 00:07:09,450 --> 00:07:11,839 KT: Then she said her mom is 81 years old. 124 00:07:12,089 --> 00:07:15,119 Suze: Teresa, listen to me. For your son to be able 125 00:07:15,119 --> 00:07:21,000 Suze: to transfer it to a Roth IRA. The 529 account 126 00:07:21,250 --> 00:07:24,839 Suze: has to have been opened for at least 15 years. 127 00:07:25,130 --> 00:07:27,970 Suze: For those of you who are wondering what Teresa is 128 00:07:27,970 --> 00:07:31,779 Suze: talking about is that if you happen to have had 129 00:07:32,089 --> 00:07:34,890 Suze: a 529 account that has been opened for at least 130 00:07:34,890 --> 00:07:36,000 Suze: 15 years. 131 00:07:36,600 --> 00:07:40,309 Suze: And let's just say Teresa had had this account for 132 00:07:40,309 --> 00:07:45,220 Suze: 15 years, and the beneficiary of it was her son. 133 00:07:45,850 --> 00:07:49,839 Suze: And he had earned income in the year that he 134 00:07:49,839 --> 00:07:54,040 Suze: wanted to roll it over into the Roth. The Roth 135 00:07:54,040 --> 00:07:57,250 Suze: IRA has to be in the name of her son. 136 00:07:58,179 --> 00:08:01,410 Suze: And it has to be subject to the annual Roth 137 00:08:01,410 --> 00:08:07,410 Suze: IRA contribution limit for this year, which is $7000 since 138 00:08:07,410 --> 00:08:09,130 Suze: he is under 50. 139 00:08:09,559 --> 00:08:12,750 Suze: And just so you know, there's a lifetime limit of 140 00:08:12,750 --> 00:08:18,579 Suze: $35,000 that can be rolled over for this. So it's 141 00:08:18,579 --> 00:08:22,708 Suze: very tricky, everybody, and listen, contributions and earnings from the 142 00:08:22,709 --> 00:08:26,950 Suze: last 5 years that you've put into the 529 are 143 00:08:26,950 --> 00:08:30,820 Suze: not eligible to be rolled over, so they gave you 144 00:08:30,989 --> 00:08:31,869 Suze: a benefit. 145 00:08:32,164 --> 00:08:36,125 Suze: That it's just so hard to use. It's not even funny, 146 00:08:36,335 --> 00:08:38,814 Suze: so I doubt many of you will be able to 147 00:08:38,815 --> 00:08:41,895 Suze: be qualified for it. All right, KT, next, why are 148 00:08:41,895 --> 00:08:43,085 Suze: you looking like that? 149 00:08:43,625 --> 00:08:46,814 KT: Because I wish people, we, we need to video at 150 00:08:46,815 --> 00:08:50,214 KT: least one of our podcasts for we're sitting here with 151 00:08:50,215 --> 00:08:54,334 KT: our bathrobes on. It's late in the morning on the 2nd, 152 00:08:54,655 --> 00:08:58,695 KT: and Suze's so animated that her hands fly everywhere when 153 00:08:58,695 --> 00:09:00,093 KT: she's giving this advice. 154 00:09:00,479 --> 00:09:03,340 KT: And she often just barely misses the mic. 155 00:09:04,650 --> 00:09:07,330 KT: So I'm looking at her like trying to direct those 156 00:09:07,330 --> 00:09:12,130 KT: hands flying everywhere. She gets very, very excited and very 157 00:09:12,130 --> 00:09:12,599 KT: animated. 158 00:09:12,690 --> 00:09:16,260 Suze: Well, the reason that I get excited and animated, it's like... 159 00:09:16,260 --> 00:09:17,090 KT: You're frustrated. 160 00:09:17,169 --> 00:09:20,450 Suze: If you're going to give everybody a benefit, like being 161 00:09:20,450 --> 00:09:24,840 Suze: able to transfer money from a 529 plan into a Roth, 162 00:09:25,169 --> 00:09:28,199 Suze: make it so that it really applies to the majority 163 00:09:28,200 --> 00:09:31,210 Suze: of people. Don't make it so hard. 164 00:09:31,640 --> 00:09:36,459 Suze: That even the 529 plan company doesn't know how it works. All right. 165 00:09:36,460 --> 00:09:39,789 KT: All right. This is from Andrea. She said, I love 166 00:09:39,789 --> 00:09:41,608 KT: your podcast so much. 167 00:09:41,780 --> 00:09:42,330 Suze: Me too. 168 00:09:42,539 --> 00:09:47,099 KT: My financial adviser is advising me to buy municipal bond 169 00:09:47,099 --> 00:09:52,579 KT: ETFs and money market municipal bonds. Is this a safe 170 00:09:52,580 --> 00:09:55,140 KT: way to reduce federal income taxes? 171 00:09:56,140 --> 00:09:56,640 KT: Is it? 172 00:09:57,750 --> 00:09:58,320 Suze: You know. 173 00:09:59,369 --> 00:10:05,650 Suze: All of you have to weigh reducing income taxes against 174 00:10:05,650 --> 00:10:12,650 Suze: possible loss of principal. Any municipal investment, a bond or 175 00:10:12,650 --> 00:10:15,260 Suze: an ETF or mutual fund that is made up of 176 00:10:15,260 --> 00:10:22,770 Suze: municipal bonds, the interest on those bonds are absolutely federally 177 00:10:22,770 --> 00:10:23,729 Suze: tax free. 178 00:10:24,469 --> 00:10:27,809 Suze: But they also have to be bonds that are in 179 00:10:27,809 --> 00:10:30,130 Suze: the state that you live in if you live in 180 00:10:30,130 --> 00:10:35,159 Suze: a state that is taxable, so if you live in California, 181 00:10:35,369 --> 00:10:38,049 Suze: you would need an ETF or mutual fund that was 182 00:10:38,049 --> 00:10:43,880 Suze: made up of all municipal bonds of the state of California. 183 00:10:44,250 --> 00:10:47,210 Suze: I don't think that's a great way for you to 184 00:10:47,210 --> 00:10:53,049 Suze: save taxes because normally the interest rate on municipal bonds 185 00:10:53,049 --> 00:10:54,049 Suze: are lower. 186 00:10:55,190 --> 00:10:59,329 Suze: Than what the actual taxable yields on treasuries and certificates 187 00:10:59,330 --> 00:11:02,109 Suze: of deposits happen to be, like if you look at 188 00:11:02,109 --> 00:11:06,718 Suze: the yield on the 12 month CD at Alliant Credit Union, 189 00:11:06,750 --> 00:11:10,030 Suze: which is an incredible yield right now, I think you 190 00:11:10,030 --> 00:11:11,789 Suze: would find and you would do that by the way, 191 00:11:11,869 --> 00:11:15,979 Suze: by going to myalliant.com. I think you would find that 192 00:11:16,020 --> 00:11:19,710 Suze: that yield after taxes may be even higher 193 00:11:20,500 --> 00:11:25,020 Suze: than your ETF or mutual fund made up of municipal bonds. 194 00:11:25,710 --> 00:11:30,179 Suze: And remember an ETF or a mutual fund doesn't have 195 00:11:30,179 --> 00:11:33,940 Suze: a maturity date, so you have no guarantee of getting 196 00:11:33,940 --> 00:11:37,010 Suze: back the amount of money that you originally put in. 197 00:11:37,419 --> 00:11:41,939 Suze: So the fact that you're even asking this question tells 198 00:11:41,940 --> 00:11:45,659 Suze: me about your sophistication level, and truthfully I wouldn't be 199 00:11:45,659 --> 00:11:47,130 Suze: doing it if I were you. 200 00:11:48,650 --> 00:11:50,359 Suze: All right, what is that look for? 201 00:11:50,479 --> 00:11:50,700 KT: It took 202 00:11:50,700 --> 00:11:52,510 KT: a long time to get to a no. 203 00:11:54,200 --> 00:11:56,309 Suze: Am I being too verbose? 204 00:11:56,599 --> 00:11:56,809 KT: No, 205 00:11:57,039 --> 00:11:57,960 Suze: Is verbose the right word? 206 00:11:58,400 --> 00:12:01,919 KT: It's not verbose at all. Verbose is your actions, but 207 00:12:01,919 --> 00:12:05,479 KT: the amount of information, I would have taken the no 208 00:12:05,479 --> 00:12:07,109 KT: right up front and be happy with 209 00:12:07,109 --> 00:12:07,200 KT: it. 210 00:12:07,320 --> 00:12:09,640 Suze: But KT, don't you want these people to be educated 211 00:12:09,640 --> 00:12:11,210 Suze: as to how it works? 212 00:12:11,440 --> 00:12:12,440 KT: Not necessarily. 213 00:12:13,030 --> 00:12:13,869 Suze: Yeah, of course you don't. 214 00:12:14,880 --> 00:12:16,630 KT: Just give her the straight up no. 215 00:12:17,090 --> 00:12:18,159 Suze: This is, this 216 00:12:18,159 --> 00:12:19,039 KT: is from Nisha. 217 00:12:19,440 --> 00:12:22,750 KT: All right, this is a yes or no as well. Hi, Suze, 218 00:12:22,909 --> 00:12:25,630 KT: I'm still working, but wondering if I should take a 219 00:12:25,630 --> 00:12:30,579 KT: lump sum or monthly annuity when I retire next year. 220 00:12:30,880 --> 00:12:34,469 KT: I was sure to take an annuity, but now my 221 00:12:34,469 --> 00:12:38,190 KT: company's pension benefit has been sold and transferred to an 222 00:12:38,190 --> 00:12:42,549 KT: insurance company as a group annuity. Is it still safe 223 00:12:42,549 --> 00:12:46,099 KT: to take an annuity over a lump sum in this case? 224 00:12:46,349 --> 00:12:48,179 Suze: Yeah, but I need to know the amounts. What are 225 00:12:48,179 --> 00:12:48,549 Suze: the amounts? 226 00:12:48,840 --> 00:12:50,228 KT: So the choice is the lump sum 227 00:12:50,419 --> 00:12:59,250 KT: is 500,000 or the annuity is 3300 per month with 50% 228 00:12:59,250 --> 00:13:03,369 KT: survival benefit when I retire next year. That's from Nisha. 229 00:13:03,369 --> 00:13:07,280 Suze: So Nisha, the big mistake that all of you make 230 00:13:07,570 --> 00:13:13,179 Suze: is that you really think that upon your death, 231 00:13:13,890 --> 00:13:19,210 Suze: that your spouse will need 50% less than what they 232 00:13:19,210 --> 00:13:23,280 Suze: were getting when you were alive, and I can tell 233 00:13:23,280 --> 00:13:26,080 Suze: you over all the years that I've been doing this, 234 00:13:26,239 --> 00:13:29,650 Suze: that is not true because if both of you also 235 00:13:29,650 --> 00:13:34,530 Suze: qualify for Social Security upon your death, Nisha, if you 236 00:13:34,530 --> 00:13:36,010 Suze: happen to die first. 237 00:13:36,900 --> 00:13:40,440 Suze: Your spouse is going to lose half of your pension 238 00:13:40,440 --> 00:13:46,619 Suze: in this case and also your Social Security or your 239 00:13:46,619 --> 00:13:50,820 Suze: spouse's Social Security. One of those will go away whichever 240 00:13:50,820 --> 00:13:55,890 Suze: one is lower, so their income will go down dramatically. 241 00:13:56,419 --> 00:13:59,979 Suze: And when one spouse dies, I call it the loneliness 242 00:13:59,979 --> 00:14:03,900 Suze: factor where the spouse is lonely, so they actually spend 243 00:14:03,900 --> 00:14:04,820 Suze: more money. 244 00:14:05,530 --> 00:14:07,929 Suze: When one of you is alive than when both of 245 00:14:07,929 --> 00:14:10,770 Suze: you are alive because you go to visit your kids more, 246 00:14:10,849 --> 00:14:15,209 Suze: you go out to eat more, you're just lonely, so 247 00:14:15,210 --> 00:14:19,250 Suze: you have to take that into consideration now. The numbers 248 00:14:19,250 --> 00:14:25,250 Suze: that KT gave me that you could have a $500,000 249 00:14:25,250 --> 00:14:31,690 Suze: lump sum rollover or an an annuity of $3300 per month. 250 00:14:32,390 --> 00:14:36,909 Suze: Or approximately 1650 per month upon your death. 251 00:14:37,890 --> 00:14:43,049 Suze: So at 3300 per month, that's a 7.9% return on 252 00:14:43,049 --> 00:14:44,849 Suze: your money, which is a great return. 253 00:14:45,659 --> 00:14:48,619 Suze: Now if you have kids or anything like that. 254 00:14:49,260 --> 00:14:52,729 Suze: And it does go to your spouse upon your spouse's death. 255 00:14:52,809 --> 00:14:55,409 Suze: All that money is gone. So if both of you 256 00:14:55,409 --> 00:14:59,289 Suze: are killed in a car crash, it's immediately all gone. 257 00:15:00,280 --> 00:15:03,750 Suze: So I don't know, do you have kids? Do you not? 258 00:15:04,239 --> 00:15:11,679 Suze: If you die, then your spouse's return goes down to 3.96%. Obviously, 259 00:15:11,820 --> 00:15:13,559 Suze: if you rolled it over. 260 00:15:14,489 --> 00:15:18,239 Suze: And you invested it, you probably only would be getting 261 00:15:18,239 --> 00:15:22,119 Suze: maybe 3 or 4% on that money but still have 262 00:15:22,119 --> 00:15:26,440 Suze: access to the principal. So you're going to have to 263 00:15:26,440 --> 00:15:29,429 Suze: decide this one because I don't have enough information on it. 264 00:15:29,679 --> 00:15:32,280 Suze: But if you don't have any kids, if you know 265 00:15:32,280 --> 00:15:37,479 Suze: that your spouse will be absolutely OK with $1650 a 266 00:15:37,479 --> 00:15:38,919 Suze: month after your death. 267 00:15:39,909 --> 00:15:43,190 Suze: Because it's possible that your spouse could die before you 268 00:15:43,190 --> 00:15:47,309 Suze: as well, then the annuity might be a good choice. 269 00:15:47,429 --> 00:15:50,229 Suze: I just don't have enough information, but I've just given 270 00:15:50,229 --> 00:15:54,309 Suze: you the information that you need to think about in 271 00:15:54,309 --> 00:15:57,229 Suze: making this decision. All right, next, KT. 272 00:15:57,950 --> 00:16:00,869 Suze: Oh, I finally answered a question. She doesn't have a 273 00:16:00,869 --> 00:16:01,849 Suze: look on her face like, 274 00:16:01,989 --> 00:16:04,349 KT: Well, you know, I was just thinking about the friend 275 00:16:04,349 --> 00:16:07,770 KT: of ours that was in publishing who was not married, 276 00:16:07,950 --> 00:16:11,580 KT: did not have children, and for her, the annuity made 277 00:16:11,580 --> 00:16:13,669 KT: a great deal of sense. Remember? 278 00:16:13,849 --> 00:16:14,549 Suze: Yes, yes 279 00:16:14,549 --> 00:16:15,229 KT: That worked out. 280 00:16:15,520 --> 00:16:16,379 KT: Great, great for her... 281 00:16:16,590 --> 00:16:19,539 Suze: Great for her because she also did it at a 282 00:16:19,539 --> 00:16:23,039 Suze: time when interest rates were very high and her return 283 00:16:23,039 --> 00:16:28,760 Suze: was incredible. So sometimes everybody, it does make sense. You 284 00:16:28,760 --> 00:16:31,080 Suze: need to sit down with somebody and go through the 285 00:16:31,080 --> 00:16:32,669 Suze: pros and the cons of it. 286 00:16:33,440 --> 00:16:37,400 Suze: In your particular situation because every one of you is 287 00:16:37,400 --> 00:16:38,750 Suze: different 288 00:16:38,750 --> 00:16:40,309 Suze: decisions. 289 00:16:40,400 --> 00:16:44,599 KT: OK, next from Maria. I love your podcast and look 290 00:16:44,599 --> 00:16:49,440 KT: forward to listening every Sunday and Thursday. Thank you so much, Suze, 291 00:16:49,520 --> 00:16:55,510 KT: for all the information and guidance you provide. So for 2024, 292 00:16:55,760 --> 00:16:59,880 KT: due to my income, I cannot contribute to a Roth IRA. 293 00:17:00,659 --> 00:17:05,530 KT: My question is, should I convert the traditional IRA immediately 294 00:17:05,859 --> 00:17:09,530 KT: or the same day into a Roth IRA in order 295 00:17:09,530 --> 00:17:12,899 KT: to avoid accruing interest that I would need to pay 296 00:17:12,900 --> 00:17:16,300 KT: tax on? I've never done this before, so I'm not 297 00:17:16,300 --> 00:17:18,179 KT: sure how the timing works. 298 00:17:18,689 --> 00:17:24,199 Suze: So obviously she's doing a backdoor Roth, and it's not 299 00:17:24,199 --> 00:17:28,630 Suze: a traditional IRA. It is an IRA that she's doing 300 00:17:28,630 --> 00:17:36,160 Suze: a nondeductible contribution to, so she's putting in $7000 into that. 301 00:17:36,890 --> 00:17:39,438 Suze: She isn't going to take a tax deduction for it, 302 00:17:39,729 --> 00:17:43,209 Suze: and she's able then KT to convert it because it 303 00:17:43,209 --> 00:17:46,810 Suze: doesn't matter your income you can convert 100% of the 304 00:17:46,810 --> 00:17:50,199 Suze: money into a Roth and still qualify for that roth. 305 00:17:50,569 --> 00:17:54,729 Suze: So the question is, do you do it immediately? Listen, 306 00:17:54,920 --> 00:17:59,290 Suze: when you put it in the non-deductible IRA, just put 307 00:17:59,290 --> 00:18:01,790 Suze: it in an account that doesn't make any interest for 308 00:18:01,790 --> 00:18:02,839 Suze: a few days. 309 00:18:03,300 --> 00:18:06,729 Suze: And then when it feels right to you convert it 310 00:18:06,729 --> 00:18:10,770 Suze: to a back door broth. It's just that easy. It's 311 00:18:10,770 --> 00:18:12,810 Suze: not a big deal, my dear Maria. All right. 312 00:18:13,449 --> 00:18:15,609 KT: OK, this is from Jerri. She said, hi Suze and 313 00:18:15,609 --> 00:18:18,050 KT: KT love the work you both do to help us 314 00:18:18,050 --> 00:18:23,290 KT: all with all the cuts to government programs, potentially no 315 00:18:23,290 --> 00:18:26,959 KT: taxes on Social Security and Social Security running 316 00:18:27,104 --> 00:18:28,854 KT: out sooner than later. 317 00:18:29,194 --> 00:18:32,405 Suze: And that makes a lot of sense. Social Security's running out, 318 00:18:32,574 --> 00:18:35,454 Suze: so they're going to not tax Social Security, who only 319 00:18:35,454 --> 00:18:38,385 Suze: helps the rich, not the poor. I just don't understand it. 320 00:18:39,094 --> 00:18:41,765 KT: Wait a minute, calm down, calm down. I was wondering... 321 00:18:42,135 --> 00:18:43,324 Suze: Look at me waving my hands. 322 00:18:43,334 --> 00:18:46,895 KT: Oh, no, she's going crazy now. Anything we talk about 323 00:18:46,895 --> 00:18:49,974 KT: with these government programs makes Suze a little hot under 324 00:18:49,974 --> 00:18:53,574 KT: the collar. I was wondering if I should take mine 325 00:18:53,574 --> 00:18:56,454 KT: at 67 instead of waiting until 70. 326 00:18:56,800 --> 00:18:59,300 KT: We don't need the money right now, but would be 327 00:18:59,300 --> 00:19:01,819 KT: better off to take it and put it into something 328 00:19:01,819 --> 00:19:05,219 KT: safe in the event that Social Security runs out of 329 00:19:05,219 --> 00:19:09,219 KT: money or gets drastically cut. Should I put it in 330 00:19:09,219 --> 00:19:12,729 KT: CDs or high yield savings or treasuries? 331 00:19:13,084 --> 00:19:15,734 KT: What should she do? What about an Alliant CD? 332 00:19:16,344 --> 00:19:19,484 Suze: What you have to remember, Jerri, is that from the 333 00:19:19,484 --> 00:19:25,984 Suze: age of 67 to 70, your Social Security check increases 334 00:19:25,984 --> 00:19:30,665 Suze: not only by 8% a year, but also by the 335 00:19:30,665 --> 00:19:32,145 Suze: cost of inflation. 336 00:19:32,439 --> 00:19:36,449 Suze: And it the CPI, the Consumer price index, and it 337 00:19:36,449 --> 00:19:39,969 Suze: seems like inflation is going up. So you're not gonna 338 00:19:39,969 --> 00:19:44,050 Suze: be able to meet those returns by a CD or 339 00:19:44,050 --> 00:19:46,400 Suze: a treasury or anything that's safe. 340 00:19:46,810 --> 00:19:49,530 Suze: However, what is the goal of money? The goal of 341 00:19:49,530 --> 00:19:52,129 Suze: money is for you to feel secure, and if you 342 00:19:52,130 --> 00:19:55,959 Suze: feel more secure by taking your Social Security at full 343 00:19:55,959 --> 00:20:00,439 Suze: retirement age, then you should do exactly that. I do 344 00:20:00,439 --> 00:20:04,329 Suze: not have a crystal ball. I do not know what's 345 00:20:04,329 --> 00:20:07,650 Suze: going to happen with Social Security. I do not know 346 00:20:07,650 --> 00:20:10,410 Suze: what the government is going to do with it. I 347 00:20:10,410 --> 00:20:16,040 Suze: cannot imagine in my wildest dreams that this government 348 00:20:16,560 --> 00:20:19,188 Suze: would make it that you do not get your Social 349 00:20:19,189 --> 00:20:24,079 Suze: Security check at 70 under the current laws. I can 350 00:20:24,079 --> 00:20:29,589 Suze: imagine that for future recipients they change the full retirement 351 00:20:29,589 --> 00:20:32,400 Suze: age from 67 to 70. 352 00:20:33,020 --> 00:20:38,439 Suze: I just can't imagine it. I also cannot imagine that 353 00:20:38,439 --> 00:20:42,359 Suze: they're going to cut benefits. If they cut benefits, there 354 00:20:42,359 --> 00:20:46,040 Suze: will be the biggest revolt in the United States that 355 00:20:46,040 --> 00:20:50,599 Suze: there has ever been. So I just, I can't believe it. 356 00:20:51,359 --> 00:20:53,189 Suze: But then again, I can't believe a lot of things 357 00:20:53,189 --> 00:20:56,149 Suze: that are happening. So like I said, I don't have 358 00:20:56,150 --> 00:20:59,569 Suze: a crystal ball, so you have to do exactly what 359 00:20:59,569 --> 00:21:02,349 Suze: makes you feel secure. All right. 360 00:21:02,349 --> 00:21:04,708 KT: This is from Clay. Hi, Suze and... 361 00:21:04,709 --> 00:21:05,149 Suze: Did you do 362 00:21:05,150 --> 00:21:05,349 Suze: that 363 00:21:05,349 --> 00:21:06,709 Suze: because you like to play with clay? 364 00:21:07,849 --> 00:21:09,329 KT: Maybe, but I... 365 00:21:09,439 --> 00:21:12,770 Suze: Tell everybody how you're a sculptor. What a sculpture. What 366 00:21:12,770 --> 00:21:13,050 Suze: are you? 367 00:21:13,250 --> 00:21:16,079 KT: A sculptor, and I've been trying to do a portrait 368 00:21:16,079 --> 00:21:17,819 KT: of Suze for quite some time. 369 00:21:18,420 --> 00:21:20,280 Suze: Is it called a portrait or a bust? 370 00:21:20,530 --> 00:21:23,449 KT: It's a a bust, but it's a portrait. I'm trying 371 00:21:23,449 --> 00:21:25,579 KT: to do a head of Suze. 372 00:21:25,810 --> 00:21:28,439 Suze: Can you imagine trying to do my head anyway? Go on. 373 00:21:28,569 --> 00:21:31,379 KT: It's mostly a lot of hair right now, but, but 374 00:21:31,380 --> 00:21:32,010 KT: I'll get there. 375 00:21:32,599 --> 00:21:35,300 KT: I really want to get my daughter her own Roth 376 00:21:35,300 --> 00:21:39,579 KT: IRA ASAP, but she's only 3 years old. 377 00:21:39,660 --> 00:21:40,920 Suze: So is she working? 378 00:21:40,920 --> 00:21:45,609 KT: Ready... Does enrolling her in a medical study count as 379 00:21:45,609 --> 00:21:46,899 KT: earned income? 380 00:21:47,229 --> 00:21:50,119 KT: So just to give everyone a background, the medical study 381 00:21:50,119 --> 00:21:54,780 KT: is through her pediatrician, and it involves simply monitoring her 382 00:21:54,780 --> 00:21:57,849 KT: after the little girl receives routine shots. 383 00:21:58,020 --> 00:21:58,910 Suze: And they pay her for that. 384 00:21:59,339 --> 00:22:03,589 KT: Yeah, so it's sponsored probably by a medical group anyway. 385 00:22:03,979 --> 00:22:04,979 KT: So that's with... 386 00:22:04,979 --> 00:22:05,150 Suze: Pop quizzy, pop quizzy. 387 00:22:07,140 --> 00:22:09,649 Suze: Does it qualify for a Roth as earned income? 388 00:22:09,949 --> 00:22:10,369 KT: No. 389 00:22:10,619 --> 00:22:11,050 Suze: Why? 390 00:22:11,380 --> 00:22:12,530 KT: Because she didn't earn it. 391 00:22:13,329 --> 00:22:17,698 Suze: Right. So it's taxable, right? KT, but not earned income, 392 00:22:18,060 --> 00:22:20,650 KT: It's not an earned. She didn't, she didn't work for it. 393 00:22:20,660 --> 00:22:21,569 KT: She's 3 years old. 394 00:22:22,099 --> 00:22:25,649 Suze: So no, KT happens to be right, ding ding ding dingy. 395 00:22:25,979 --> 00:22:26,979 Suze: Oh good. There's your 396 00:22:26,979 --> 00:22:27,420 Suze: quizzy. 397 00:22:28,910 --> 00:22:32,780 Suze: Earned income means you work for it. You can't go 398 00:22:32,780 --> 00:22:34,619 Suze: to like Vegas and win money. 399 00:22:35,930 --> 00:22:40,229 Suze: And even though that money is taxable, consider that earned income, 400 00:22:40,400 --> 00:22:43,280 Suze: even though you are pulling down a lever, or maybe 401 00:22:43,280 --> 00:22:43,839 Suze: you just push a button now. 402 00:22:43,839 --> 00:22:45,708 KT: Or throwing a pair of dice. 403 00:22:45,959 --> 00:22:49,510 Suze: Or maybe you don't do anything. But anyway, so no, you, 404 00:22:49,640 --> 00:22:52,709 Suze: it does not qualify as earned income. All right, 405 00:22:52,859 --> 00:22:54,599 KT: OK, so Suze, question from Kelly. 406 00:22:55,255 --> 00:23:00,214 KT: Our accountant has determined my husband can contribute 45,000 to 407 00:23:00,214 --> 00:23:05,375 KT: his SEP for this 2024 year. Would you still advise this? 408 00:23:05,484 --> 00:23:07,895 KT: Part of me wonders if we were better off putting 409 00:23:07,895 --> 00:23:12,074 KT: this in an investment account and not contributing to the 410 00:23:12,074 --> 00:23:13,444 KT: SEP any longer. 411 00:23:14,540 --> 00:23:16,339 Suze: Let me see that for a second, KT, and see 412 00:23:16,339 --> 00:23:19,300 Suze: what else she wrote, which is 413 00:23:21,219 --> 00:23:26,339 Suze: I see he also has $400,000 already 414 00:23:27,010 --> 00:23:28,698 Suze: in a SEP IRA. 415 00:23:29,680 --> 00:23:34,569 Suze: So if he were to do a backdoor Roth, he 416 00:23:34,569 --> 00:23:36,920 Suze: would have a pro rata rule. All right, I got it. 417 00:23:37,869 --> 00:23:39,819 Suze: All right, Kelly, you listen to me and listen to 418 00:23:39,819 --> 00:23:40,929 Suze: me closely now. 419 00:23:41,880 --> 00:23:45,270 Suze: You should absolutely do the SEP IRA. 420 00:23:46,189 --> 00:23:49,390 Suze: And you don't think about doing a back door Roth 421 00:23:49,390 --> 00:23:53,069 Suze: with him. You think about just simply taking an amount 422 00:23:53,069 --> 00:23:58,069 Suze: of money from the SEP IRA and converting it to 423 00:23:58,069 --> 00:24:03,020 Suze: a Roth. If you now put another $45,000 in there. 424 00:24:03,880 --> 00:24:06,729 Suze: And then you convert that all right, so you pay 425 00:24:06,729 --> 00:24:10,729 Suze: taxes on that, but you're getting larger amounts of money 426 00:24:10,729 --> 00:24:16,129 Suze: into your Roth IRA. That's how people get a whole 427 00:24:16,130 --> 00:24:20,569 Suze: lot of money into a Roth because you're not limited 428 00:24:20,569 --> 00:24:24,849 Suze: to the $7000 or the $8000 a year. You're not 429 00:24:24,849 --> 00:24:30,290 Suze: limited by income, so you eventually could get all of 430 00:24:30,290 --> 00:24:33,218 Suze: his money into a Roth IRA. 431 00:24:33,819 --> 00:24:38,949 Suze: Simply by converting it, talk to your accountant about that. 432 00:24:39,140 --> 00:24:41,449 Suze: All right, KT, OK you have time for a few more. 433 00:24:41,449 --> 00:24:44,688 KT: OK, I have one from Jennifer. I like this one. 434 00:24:45,060 --> 00:24:47,859 KT: Hi Susie and KT love your show. I feel like 435 00:24:47,859 --> 00:24:49,609 KT: you're my personal friends. 436 00:24:49,819 --> 00:24:50,609 Suze: We are. 437 00:24:50,609 --> 00:24:51,420 KT: We are, Jennifer. 438 00:24:51,540 --> 00:24:52,060 KT: We're your friends. 439 00:24:52,540 --> 00:24:53,130 Suze: Wanna go have lunch? 440 00:24:53,420 --> 00:24:55,179 KT: Well, she's in Raleigh, North Carolina. 441 00:24:55,630 --> 00:24:56,359 Suze: Forget it. OK. 442 00:24:56,760 --> 00:24:57,239 Suze: All right. 443 00:24:57,579 --> 00:25:01,939 KT: So her dad passed away in 2022, leaving her. 444 00:25:02,064 --> 00:25:07,724 KT: with an inherited IRA worth $500,000 that's the current value. 445 00:25:07,974 --> 00:25:13,254 KT: It's a mix of individual stocks and good companies like Nvidia, QQQ, 446 00:25:13,295 --> 00:25:16,775 KT: and a dozen others. I've been taking only the minimum 447 00:25:16,775 --> 00:25:19,094 KT: distribution these past two years. 448 00:25:19,869 --> 00:25:24,619 KT: But all must be liquidated entirely within 8 years. If 449 00:25:24,619 --> 00:25:28,060 KT: I continue to pull the minimum each year, I'll have 450 00:25:28,060 --> 00:25:32,739 KT: a huge lump sum to withdraw in 2032 when I'm 451 00:25:32,739 --> 00:25:36,530 KT: 60 years old, which will be taxed as ordinary income. 452 00:25:36,780 --> 00:25:40,579 KT: So she's saying she's smart. No, she's smart. Would it 453 00:25:40,579 --> 00:25:44,938 KT: be better to take out disbursements evenly over these next years, 454 00:25:44,979 --> 00:25:47,140 KT: or should I continue taking minimums? 455 00:25:47,849 --> 00:25:51,890 Suze: Great. So yes, when you're in a situation where you 456 00:25:51,890 --> 00:25:58,569 Suze: inherit an IRA from a relative, not your spouse, you 457 00:25:58,569 --> 00:26:02,250 Suze: are a non-eligible designated beneficiary, and all of you should 458 00:26:02,250 --> 00:26:06,290 Suze: know what that means by now. You have 10 years 459 00:26:06,290 --> 00:26:10,359 Suze: to wipe that account clean, so you should take whatever 460 00:26:10,359 --> 00:26:13,489 Suze: amount is in there divided by 10. 461 00:26:13,880 --> 00:26:18,260 Suze: And take out that amount of money every single year 462 00:26:18,260 --> 00:26:21,938 Suze: so the account really is wiped clean by the end 463 00:26:21,939 --> 00:26:24,410 Suze: of the 10th year, otherwise you're going to be hit 464 00:26:24,410 --> 00:26:28,619 Suze: with a tremendous tax bracket but you should also work 465 00:26:28,619 --> 00:26:29,159 Suze: with a 466 00:26:29,209 --> 00:26:32,129 Suze: CPA, because maybe you'll be in a lower tax bracket 467 00:26:32,130 --> 00:26:34,920 Suze: in a few years, so you could take out more 468 00:26:34,920 --> 00:26:38,199 Suze: then than right now. So it's a little tricky, but 469 00:26:38,199 --> 00:26:41,660 Suze: don't just take out little amounts of money right now 470 00:26:41,660 --> 00:26:46,069 Suze: and get hit big in 10 years. All right, last one, KT. 471 00:26:46,280 --> 00:26:50,479 KT: OK, this is from Marcie. She said, Hi, Suze, I'm 62. 472 00:26:50,819 --> 00:26:54,369 KT: At my new job of only 6 months, I do 473 00:26:54,369 --> 00:26:59,520 KT: not pay into Social Security. Will my Social Security benefit 474 00:26:59,520 --> 00:27:03,920 KT: decrease as a result of my last working years being 475 00:27:03,920 --> 00:27:07,489 KT: at an employer that does not allow me to pay 476 00:27:07,489 --> 00:27:09,209 KT: into Social Security? 477 00:27:09,569 --> 00:27:12,199 Suze: Well, it depends, and because you don't tell us 478 00:27:12,750 --> 00:27:16,750 Suze: anything about this, Marcie, in terms of, listen, if you 479 00:27:16,750 --> 00:27:23,629 Suze: don't already have 35 years in, you know, Social Security 480 00:27:23,630 --> 00:27:27,948 Suze: and and jobs that have paid into Social Security, then yeah. 481 00:27:28,569 --> 00:27:32,889 Suze: These years that you're working that don't pay into Social 482 00:27:32,890 --> 00:27:37,810 Suze: Security will absolutely hurt you because when you do apply 483 00:27:37,810 --> 00:27:42,849 Suze: these years are going to be 0000. If you already 484 00:27:42,849 --> 00:27:46,800 Suze: have 35 years that you've paid into Social Security, these 485 00:27:46,800 --> 00:27:50,689 Suze: years will not hurt you. If you have not, then 486 00:27:50,689 --> 00:27:51,729 Suze: they will. 487 00:27:52,290 --> 00:27:54,550 Suze: All right, KT, is that a wrap? 488 00:27:54,760 --> 00:27:55,510 KT: That's a wrap. 489 00:27:55,680 --> 00:27:57,880 Suze: All right, everybody, so I can't wait to see what 490 00:27:57,880 --> 00:28:03,930 Suze: happens today with the tariffs and um and and I 491 00:28:03,930 --> 00:28:06,319 Suze: don't even know what to say anymore. All right, so 492 00:28:06,319 --> 00:28:07,189 Suze: KT take us out. 493 00:28:07,189 --> 00:28:11,760 KT: There's only one thing we want you to remember, and 494 00:28:11,760 --> 00:28:12,079 KT: it's 495 00:28:12,079 --> 00:28:12,589 KT: this. 496 00:28:13,189 --> 00:28:14,140 Suze: People first, 497 00:28:14,229 --> 00:28:14,819 KT: then money, 498 00:28:15,030 --> 00:28:16,179 Suze: then things, 499 00:28:16,430 --> 00:28:18,229 KT: and you stay 500 00:28:18,229 --> 00:28:23,310 Suze: safe, stay safe, stay strong and just stay on your 501 00:28:23,310 --> 00:28:27,938 Suze: own path, all right, everybody, see you soon bye bye now.