1 00:00:07,639 --> 00:00:13,109 KT: Good morning everybody. It is August 28th, 2025, and we 2 00:00:13,109 --> 00:00:15,810 KT: would like to welcome you to the Women and Money 3 00:00:15,810 --> 00:00:18,989 KT: Ask KT and Suze Anything podcast. 4 00:00:19,229 --> 00:00:20,259 Suze: Oh, you did so good. 5 00:00:20,389 --> 00:00:23,799 KT: That was good, right? Before this one we did 5 takes, 6 00:00:23,829 --> 00:00:25,709 KT: and she said, no, no, no, KT, we have to 7 00:00:25,709 --> 00:00:28,350 KT: give them one. They're not gonna want to listen to 8 00:00:28,350 --> 00:00:33,500 KT: all your, your, your redos. OK. My first question is from... 9 00:00:34,139 --> 00:00:36,090 Suze: For some reason, everybody, she can't get it that she 10 00:00:36,090 --> 00:00:37,009 Suze: should say the date. 11 00:00:37,270 --> 00:00:39,639 KT: I never get the date first. I welcome you to 12 00:00:39,639 --> 00:00:40,650 KT: the Women and Money podcast. 13 00:00:41,330 --> 00:00:43,240 Suze: But KT, the date is really important. Know why? 14 00:00:43,330 --> 00:00:45,000 KT: Because it changes the information changes... 15 00:00:46,490 --> 00:00:49,880 Suze: and what I told you to do four years ago 16 00:00:49,880 --> 00:00:52,650 Suze: is not what I'm telling you to do now. So 17 00:00:52,650 --> 00:00:56,090 Suze: everybody pay attention to the date that you're listening to 18 00:00:56,090 --> 00:00:59,639 Suze: something and the date that you're listening to it, and 19 00:00:59,639 --> 00:01:00,720 Suze: then you'll know, 20 00:01:01,159 --> 00:01:02,159 Suze: how you should listen to it. 21 00:01:02,479 --> 00:01:10,039 KT: Hi, Suze, I'm 57, continuing my 39 plus year career. Wow, congratulations, Chrystal. 22 00:01:10,080 --> 00:01:10,910 Suze: What did she do? 23 00:01:11,199 --> 00:01:11,949 KT: I don't know. 24 00:01:12,400 --> 00:01:14,769 Suze: On something she must like something's been doing it for 25 00:01:14,769 --> 00:01:17,830 Suze: 40 years like me. I've been doing this 40 years 26 00:01:17,830 --> 00:01:19,190 Suze: and I love what I do. 27 00:01:19,470 --> 00:01:23,269 KT: So Crystal says I have a 401k and two Roth IRAs. 28 00:01:23,349 --> 00:01:27,220 KT: I have four and a half years left to pay on my mortgage. 29 00:01:27,510 --> 00:01:29,389 KT: My domestic partner and I... 30 00:01:29,389 --> 00:01:32,000 Suze: Did you notice how she just said "my mortgage?" 31 00:01:32,669 --> 00:01:35,139 KT: Yes. My domestic partner and I want to pay off 32 00:01:35,139 --> 00:01:38,870 KT: the mortgage now just in case something happens to one 33 00:01:38,870 --> 00:01:39,949 KT: of our jobs. 34 00:01:40,680 --> 00:01:41,470 KT: Yeah, I would do it, 35 00:01:41,680 --> 00:01:43,669 Suze: And what does that tell you that says that if 36 00:01:43,669 --> 00:01:46,870 Suze: they don't have income coming in, they don't have enough 37 00:01:46,870 --> 00:01:48,580 Suze: money to pay the mortgage. 38 00:01:48,910 --> 00:01:52,709 KT: She says, I have about 85,000 liquid of which 50,000 39 00:01:52,709 --> 00:01:54,739 KT: would go towards paying my half. 40 00:01:54,949 --> 00:01:56,550 Suze: Yeah, but she's 57. Go on. 41 00:01:57,069 --> 00:02:01,349 KT: OK, I would only have 35,000 liquid left, but I 42 00:02:01,349 --> 00:02:02,309 KT: would keep building 43 00:02:02,434 --> 00:02:06,135 KT: my emergency fund after paying off the mortgage, my interest 44 00:02:06,135 --> 00:02:08,413 KT: rate is 3.3%. 45 00:02:08,425 --> 00:02:12,154 Suze: Right now wait, stop, stop really. What this tells us, KT, 46 00:02:12,705 --> 00:02:16,264 Suze: is if her half would be $50,000 that means her 47 00:02:16,264 --> 00:02:22,024 Suze: partner's half would be $50,000. That means they owe $100,000 48 00:02:22,024 --> 00:02:24,065 Suze: left on this mortgage. 49 00:02:24,479 --> 00:02:28,289 Suze: And that mortgage is at 3.3%, which is going to 50 00:02:28,288 --> 00:02:32,570 Suze: be paid off in four and a half years anyway. Now this is 51 00:02:32,570 --> 00:02:35,320 Suze: all key what I'm saying to you. All right, go on. 52 00:02:35,529 --> 00:02:41,478 KT: I've been paying $750 extra on the principal every month. 53 00:02:41,610 --> 00:02:42,279 Suze: Notice as she said, 54 00:02:42,369 --> 00:02:43,130 Suze: "I have been." 55 00:02:43,369 --> 00:02:48,000 KT: Yes, yes, yes, for three years since my partner moved in. OK, 56 00:02:48,250 --> 00:02:51,758 KT: partner's only been there for a little bit. My guess 57 00:02:51,758 --> 00:02:51,970 KT: is 58 00:02:52,044 --> 00:02:54,755 KT: that you will tell me to keep doing that. We 59 00:02:54,755 --> 00:02:57,904 KT: are just eager to get out from under a mortgage 60 00:02:57,904 --> 00:03:00,134 KT: and we have no other bills. 61 00:03:00,794 --> 00:03:00,964 Suze: So that's 62 00:03:00,964 --> 00:03:01,985 Suze: the first time she 63 00:03:01,985 --> 00:03:02,945 Suze: said "we." 64 00:03:02,994 --> 00:03:06,154 KT: We have no other bills, so I thought I would 65 00:03:06,154 --> 00:03:08,537 KT: just ask. So this is really you... 66 00:03:09,184 --> 00:03:13,883 Suze: Crystal, as I look into my crystal ball anyway, it's, 67 00:03:13,994 --> 00:03:18,633 Suze: it bothers me, right? And that the house obviously is 68 00:03:18,633 --> 00:03:19,475 Suze: in your name. 69 00:03:19,820 --> 00:03:24,149 Suze: The mortgage is in your name. Everything is in your name. 70 00:03:24,360 --> 00:03:26,758 Suze: Your partner has moved in with you, and the reason 71 00:03:26,758 --> 00:03:30,389 Suze: that you're able to pay extra money towards your mortgage 72 00:03:30,389 --> 00:03:34,008 Suze: is they are paying you in essence rent. For this, 73 00:03:34,199 --> 00:03:38,119 Suze: you have to be very careful because if all of 74 00:03:38,119 --> 00:03:41,839 Suze: a sudden your partner puts a lump sum of money 75 00:03:41,839 --> 00:03:45,470 Suze: like $50,000 into this. 76 00:03:46,039 --> 00:03:51,559 Suze: That very well could make this house in their opinion, theirs, 77 00:03:51,850 --> 00:03:55,559 Suze: and there's just something about it that I don't like. 78 00:03:55,729 --> 00:03:59,240 Suze: Your partner has only been living with you for three years. 79 00:03:59,369 --> 00:04:01,850 Suze: Now I don't know how long you've been with your partner. 80 00:04:02,300 --> 00:04:06,000 Suze: But I like when you own your own home when 81 00:04:06,000 --> 00:04:09,470 Suze: it's all yours that you're taking rent from your partner 82 00:04:09,470 --> 00:04:15,289 Suze: and that your partner really doesn't have a say in this. Now, 83 00:04:15,300 --> 00:04:19,919 Suze: obviously you were doing OK before your partner moved in 84 00:04:19,920 --> 00:04:23,279 Suze: and you were able to pay this mortgage. 85 00:04:23,769 --> 00:04:28,850 Suze: Rather than you taking money from your $85,000 that you 86 00:04:28,850 --> 00:04:32,839 Suze: have liquid, if you're afraid if something happens to you 87 00:04:33,089 --> 00:04:37,130 Suze: and you lose your job or whatever, why don't you 88 00:04:37,130 --> 00:04:41,640 Suze: just keep that money safe and sound in an account 89 00:04:42,130 --> 00:04:45,250 Suze: that if something happened you would be able to continue 90 00:04:45,250 --> 00:04:49,649 Suze: from it to still pay your mortgage because with only 91 00:04:49,649 --> 00:04:51,450 Suze: four and a half years left. 92 00:04:51,928 --> 00:04:56,510 Suze: You've already paid all the interest up front. You're paying principal, 93 00:04:56,920 --> 00:04:59,790 Suze: so it makes no sense for you to give up 94 00:05:00,119 --> 00:05:05,480 Suze: money that's probably making 4.55% where in a high yield 95 00:05:05,480 --> 00:05:10,640 Suze: savings account to pay off a 3.3% interest mortgage that 96 00:05:10,640 --> 00:05:13,558 Suze: really you've already paid that all up front doesn't make 97 00:05:13,559 --> 00:05:18,040 Suze: any sense whatsoever, so I don't want you to do it, however. 98 00:05:18,890 --> 00:05:24,799 Suze: Maybe to protect yourself, your partner should get a term 99 00:05:24,799 --> 00:05:28,649 Suze: insurance policy on him or her, and if they're around 100 00:05:28,649 --> 00:05:32,609 Suze: the same age as you, you know, even a $100,000 101 00:05:32,609 --> 00:05:36,928 Suze: term policy if something happened to them besides losing a job. 102 00:05:38,250 --> 00:05:42,769 Suze: It's only like $400 a year for 100,000. So maybe 103 00:05:42,769 --> 00:05:45,709 Suze: it's $300 a year at this age, if they're in 104 00:05:45,709 --> 00:05:48,149 Suze: good health, a non-smoker and everything like that. 105 00:05:48,619 --> 00:05:52,149 Suze: For their half, so they could do that, but no, 106 00:05:52,260 --> 00:05:55,100 Suze: I would not be doing this and do not make 107 00:05:55,100 --> 00:05:59,820 Suze: this both of your homes. This is your home. You're 108 00:05:59,820 --> 00:06:03,140 Suze: going to keep it in just your name. Their money 109 00:06:03,140 --> 00:06:05,970 Suze: that they pay goes for rent because they're living there 110 00:06:05,970 --> 00:06:09,700 Suze: and you keep it like that, girlfriend, trust me on 111 00:06:09,700 --> 00:06:11,289 Suze: this one. All right, go on, KT. 112 00:06:11,755 --> 00:06:16,825 KT: Trust her, Crystal. OK, yeah, because we've read these emails before. 113 00:06:17,115 --> 00:06:18,265 KT: Trust her, Crystal, 114 00:06:18,605 --> 00:06:20,536 Suze: But after the fact of what's gone wrong. 115 00:06:20,626 --> 00:06:20,905 KT: OK. 116 00:06:21,226 --> 00:06:22,536 Suze: I don't want anything to go wrong. 117 00:06:22,825 --> 00:06:26,036 KT: This next question is from Juan. Hi ladies, thank you 118 00:06:26,036 --> 00:06:30,294 KT: for your podcast. I started listening during the COVID shutdown, 119 00:06:30,545 --> 00:06:34,065 KT: and I found it very, very, very helpful. My husband 120 00:06:34,065 --> 00:06:34,985 KT: and I both turned 121 00:06:35,101 --> 00:06:39,231 KT: 60 this year we've been married for over 10 years. 122 00:06:39,511 --> 00:06:44,141 KT: We aspire to hold off collecting Social Security till we're 70. 123 00:06:44,351 --> 00:06:48,441 KT: Barring major health or market events. Our financial plan will 124 00:06:48,440 --> 00:06:52,791 KT: let us do this. My Social Security check is projected 125 00:06:52,791 --> 00:06:57,630 KT: to be 30% higher than my husband's. If I die 126 00:06:57,630 --> 00:06:58,312 KT: before him, 127 00:06:58,570 --> 00:07:02,510 KT: and I have not started collecting Social Security. Will he 128 00:07:02,510 --> 00:07:06,089 KT: be able to collect my higher Social Security? 129 00:07:06,269 --> 00:07:06,670 Suze: Yes. 130 00:07:07,589 --> 00:07:08,269 KT: Well, there you go. 131 00:07:08,839 --> 00:07:14,160 Suze: Yeah, very simple, different than a spousal Social Security claim. 132 00:07:14,690 --> 00:07:18,410 Suze: Where their spouse or ex-spouse has had to start claiming 133 00:07:18,410 --> 00:07:21,519 Suze: Social Security for you to get a percentage of it, 134 00:07:21,730 --> 00:07:26,640 Suze: a survivor benefit is very different. You do not need 135 00:07:26,640 --> 00:07:31,829 Suze: to be collecting it. In fact, let's just say at 67, 136 00:07:32,529 --> 00:07:38,399 Suze: your full retirement age really, your primary insurance amount is $2,500. 137 00:07:38,929 --> 00:07:41,589 Suze: Let's say you die at 69. 138 00:07:42,230 --> 00:07:46,429 Suze: He can collect that increase even though you didn't claim 139 00:07:46,429 --> 00:07:51,910 Suze: yet at 2,900. So yes, he can claim your Social Security. 140 00:07:52,029 --> 00:07:52,700 Suze: All right, KT. 141 00:07:52,950 --> 00:07:56,869 KT: OK, so next question's from Tim. Hi Suze and KT. 142 00:07:57,829 --> 00:08:02,019 KT: My wife is about to leave her current employer. She 143 00:08:02,019 --> 00:08:07,329 KT: has approximately 148,000 in a Roth 401k, 144 00:08:07,950 --> 00:08:12,160 KT: that will need to be moved to a rollover IRA. 145 00:08:12,570 --> 00:08:16,290 KT: She does not currently have a Roth IRA, but if 146 00:08:16,290 --> 00:08:18,890 KT: she were to open one at Fidelity prior to leaving 147 00:08:18,890 --> 00:08:23,209 KT: her employer, could the Roth 401k be rolled into the 148 00:08:23,209 --> 00:08:24,519 KT: Roth IRA? 149 00:08:25,010 --> 00:08:25,440 Suze: Yes, absolutely. However... 150 00:08:26,440 --> 00:08:28,489 KT: Are... wait, are her employer's contributions. 151 00:08:28,695 --> 00:08:33,473 KT: to her Roth also after tax or tax deferred, is 152 00:08:33,474 --> 00:08:34,315 KT: there a way to 153 00:08:34,315 --> 00:08:34,825 KT: tell? 154 00:08:35,065 --> 00:08:38,195 Suze: Yeah, I'm sure if she looks she will see that 155 00:08:38,195 --> 00:08:43,074 Suze: the match from her 401k contributions from her employer is 156 00:08:43,075 --> 00:08:46,434 Suze: in a pre-tax account, so that could go into an 157 00:08:46,434 --> 00:08:51,674 Suze: IRA and her other money could go into a Roth IRA. However, 158 00:08:51,969 --> 00:08:55,960 Suze: the five year clock will start the day that she 159 00:08:55,960 --> 00:09:00,960 Suze: converts there. If she opens a Roth IRA today, even 160 00:09:00,960 --> 00:09:04,559 Suze: with a dollar if she qualifies for one, then the 161 00:09:04,559 --> 00:09:08,679 Suze: 5 year clock has started, and the five year clock 162 00:09:08,679 --> 00:09:09,559 Suze: has run. 163 00:09:10,330 --> 00:09:14,330 Suze: And then she put her 401k Roth money into a 164 00:09:14,330 --> 00:09:17,280 Suze: Roth IRA. She would have met the five year rule. 165 00:09:17,570 --> 00:09:20,199 Suze: That is why I tell all of you open up 166 00:09:20,200 --> 00:09:23,789 Suze: a Roth IRA in your individual name. I don't care 167 00:09:23,789 --> 00:09:26,489 Suze: if you only fund it with a dollar, especially if 168 00:09:26,489 --> 00:09:32,409 Suze: you have money in a Roth 401k. Start the clock now, 169 00:09:32,489 --> 00:09:33,199 Suze: all right, KT. 170 00:09:33,409 --> 00:09:34,280 KT: So when they do 171 00:09:34,335 --> 00:09:37,405 KT: the rollover, there's no starting a clock 172 00:09:37,405 --> 00:09:37,645 KT: again. 173 00:09:37,724 --> 00:09:40,804 Suze: That's so if she's now, depending on her age, if 174 00:09:40,804 --> 00:09:44,244 Suze: she wants to take out money, the earnings, and everything, 175 00:09:44,445 --> 00:09:47,395 Suze: it's all tax free. She doesn't have to wait five years. 176 00:09:47,565 --> 00:09:47,853 Suze: All right. 177 00:09:48,484 --> 00:09:51,885 KT: OK, next is from Sharon. Hi Suze and KT. Thank 178 00:09:51,885 --> 00:09:55,284 KT: you for sharing your wisdom. Every time I listen, I 179 00:09:55,284 --> 00:09:59,853 KT: always learn something new from you and KT. So. 180 00:10:00,859 --> 00:10:03,429 KT: I have a question about the use of limited orders 181 00:10:03,429 --> 00:10:08,150 KT: when buying or selling a stock, especially in this volatile market. 182 00:10:08,789 --> 00:10:12,260 KT: I don't have the time to watch the market each day. 183 00:10:12,479 --> 00:10:15,229 KT: I realize I wouldn't catch the highs or lows of 184 00:10:15,229 --> 00:10:17,309 KT: the market this way, but that's hard 185 00:10:17,445 --> 00:10:20,794 KT: to do anyway, what are your thoughts on limited buys 186 00:10:20,794 --> 00:10:24,755 KT: and sells? She's an 83 year old still with a 187 00:10:24,755 --> 00:10:29,395 KT: lot to learn, so appreciate you both sharing your wisdom. OK, 188 00:10:29,474 --> 00:10:35,515 KT: this isn't both sharing wisdom. This is Suze sharing her wisdom, uh, Sharon, 189 00:10:35,525 --> 00:10:36,554 KT: this isn't a KT. 190 00:10:36,635 --> 00:10:38,275 Suze: You know what a limit order is KT? 191 00:10:38,515 --> 00:10:39,104 KT: No. 192 00:10:39,594 --> 00:10:41,194 Suze: Do you know what a market order is? 193 00:10:43,590 --> 00:10:44,359 Suze: Why are you looking at her email? 194 00:10:44,530 --> 00:10:47,880 KT: Well, I'm just trying to figure out a market order. 195 00:10:48,700 --> 00:10:49,140 KT: No. 196 00:10:49,539 --> 00:10:50,738 Suze: There you go. That's that, that's... 197 00:10:50,739 --> 00:10:53,530 KT: There you go. That's why this is a Suze wisdom, 198 00:10:53,619 --> 00:10:54,169 KT: not KT's. 199 00:10:54,900 --> 00:10:59,010 Suze: When you are buying or selling a share of stock, 200 00:10:59,659 --> 00:11:02,580 Suze: when you put in your order, if it's online or 201 00:11:02,580 --> 00:11:05,140 Suze: if you deal with a financial advisor, they'll ask you 202 00:11:05,140 --> 00:11:06,020 Suze: this question. 203 00:11:06,390 --> 00:11:10,059 Suze: Do you want it to be a market order? A 204 00:11:10,059 --> 00:11:14,380 Suze: market order simply is you put it in to buy 205 00:11:14,380 --> 00:11:17,260 Suze: or sell, and whatever the stock is trading in the 206 00:11:17,260 --> 00:11:21,979 Suze: market at that time, you get that price period, so 207 00:11:21,979 --> 00:11:24,260 Suze: it will automatically be filled. 208 00:11:24,900 --> 00:11:28,900 Suze: A limit order is you want to buy or sell 209 00:11:28,900 --> 00:11:33,460 Suze: it at a specific price, so you're limiting what you 210 00:11:33,460 --> 00:11:36,859 Suze: can buy or sell it at. The next question you're 211 00:11:36,859 --> 00:11:40,880 Suze: going to be asked is it a good till cancel 212 00:11:40,880 --> 00:11:45,450 Suze: order or a day only order? So you could put 213 00:11:45,450 --> 00:11:48,179 Suze: in a limit order to buy or sell a share 214 00:11:48,179 --> 00:11:50,419 Suze: of stock or all of your stock however you want 215 00:11:50,419 --> 00:11:52,739 Suze: to do it, and you can make it just for 216 00:11:52,739 --> 00:11:53,340 Suze: that day. 217 00:11:54,169 --> 00:11:56,719 Suze: You just want to see what happens that day, or 218 00:11:57,150 --> 00:12:00,190 Suze: in this case, Sharon doesn't want to watch it. She 219 00:12:00,190 --> 00:12:04,468 Suze: doesn't care, right? She's got better things to do, so 220 00:12:04,469 --> 00:12:08,919 Suze: therefore she could make it good till cancel. So until 221 00:12:08,919 --> 00:12:13,789 Suze: she physically cancels it, that limit order is good and 222 00:12:13,789 --> 00:12:17,229 Suze: if the price of the stock hits her limit order, 223 00:12:17,270 --> 00:12:22,900 Suze: whatever amount she put in, it will automatically sell, so 224 00:12:22,900 --> 00:12:23,030 Suze: up 225 00:12:23,174 --> 00:12:26,194 Suze: to you if you want to do that or not, 226 00:12:26,465 --> 00:12:29,684 Suze: a lot of times if you put a limit order 227 00:12:29,684 --> 00:12:35,534 Suze: too close to the market of what's happening, the traders 228 00:12:35,534 --> 00:12:38,005 Suze: will just have it go down there, pick up your 229 00:12:38,005 --> 00:12:41,565 Suze: limit order, and then wipe it out because they know 230 00:12:41,565 --> 00:12:43,924 Suze: that they have orders showing the stock's going to be 231 00:12:43,924 --> 00:12:49,965 Suze: going up. So just be careful with limit orders, however. 232 00:12:50,650 --> 00:12:53,679 Suze: It doesn't hurt if you know you want to sell 233 00:12:53,679 --> 00:12:57,440 Suze: something to just glance on it or get an alert 234 00:12:57,440 --> 00:13:00,520 Suze: when a stock hits a certain price. Make sure that 235 00:13:00,520 --> 00:13:04,200 Suze: you get a text or an email saying, Oh, Sharon, 236 00:13:04,400 --> 00:13:06,960 Suze: the stock just hit this price. Maybe you need to 237 00:13:06,960 --> 00:13:08,599 Suze: do something. Pay attention. Pay attention. All right. 238 00:13:08,880 --> 00:13:12,919 KT: Do you remember, um, I remember my brother Johnny was 239 00:13:12,919 --> 00:13:15,119 KT: working on the Chicago exchange. 240 00:13:15,590 --> 00:13:18,809 KT: I'll never forget this. He went on vacation and he 241 00:13:18,809 --> 00:13:21,330 KT: was responsible for a great deal of money for one 242 00:13:21,330 --> 00:13:23,439 KT: of his clients, and he put it on a limit. 243 00:13:23,700 --> 00:13:27,569 KT: He did that, and we had that big crash, that 244 00:13:27,570 --> 00:13:33,489 KT: unforeseen huge crash. John became a hero overnight because he 245 00:13:33,489 --> 00:13:36,329 KT: put it on a limit, so that guy, that client 246 00:13:36,330 --> 00:13:38,330 KT: didn't lose anything. 247 00:13:39,020 --> 00:13:41,520 KT: And John was like this hero. Everyone thought, like, how 248 00:13:41,520 --> 00:13:44,049 KT: did you know? And he didn't. It just happened that 249 00:13:44,049 --> 00:13:45,718 KT: he went on vacation that week. 250 00:13:46,059 --> 00:13:48,890 Suze: Go on. All right, but a limit order can also 251 00:13:48,890 --> 00:13:49,718 Suze: work against you. 252 00:13:50,530 --> 00:13:51,770 KT: OK, next question. 253 00:13:51,809 --> 00:13:51,929 Suze: That 254 00:13:51,929 --> 00:13:54,689 Suze: was KT's very sweet way of being able to mention 255 00:13:54,690 --> 00:13:59,119 Suze: her brother Johnny, who she loves. She loves this boy 256 00:13:59,119 --> 00:14:01,169 Suze: so much even though he's no longer a boy, he 257 00:14:01,169 --> 00:14:02,289 Suze: just turned 60. 258 00:14:02,940 --> 00:14:05,329 Suze: God, she loves him. And guess what, everybody... 259 00:14:05,570 --> 00:14:06,659 KT: So do you. 260 00:14:06,770 --> 00:14:07,409 Suze: So do I. 261 00:14:07,859 --> 00:14:08,049 KT: All right, 262 00:14:08,530 --> 00:14:12,530 Suze: I want to hear something even more amazing. He seriously 263 00:14:12,530 --> 00:14:13,530 Suze: loves me. 264 00:14:14,109 --> 00:14:19,030 KT: The most, the most. Hey, Suze, I'm sure you've probably 265 00:14:19,030 --> 00:14:22,989 KT: answered this question before, but I've just started listening to 266 00:14:22,989 --> 00:14:28,580 KT: your podcast. I want to move my 401k into something 267 00:14:28,909 --> 00:14:32,789 KT: since I'm about to retire next year at 68. Where 268 00:14:32,789 --> 00:14:33,710 KT: should I move it? 269 00:14:34,799 --> 00:14:38,539 Suze: Well, you know, again, these questions are kind of all similar, KT, but... 270 00:14:39,109 --> 00:14:41,190 KT: I would put a roll, I would roll it over 271 00:14:41,190 --> 00:14:42,580 KT: to a Roth IRA. 272 00:14:42,809 --> 00:14:45,030 Suze: But she has a 401k. She didn't tell you she 273 00:14:45,030 --> 00:14:49,119 Suze: had a Roth 401(k). She said she has a 401(k). 274 00:14:49,630 --> 00:14:50,940 KT: Yeah, where should she move it? 275 00:14:51,070 --> 00:14:54,169 Suze: You don't say how much money you have in this 401(k). 276 00:14:54,830 --> 00:14:58,830 Suze: The only number you use here is the number 68. 277 00:14:59,489 --> 00:15:03,460 Suze: So for a long time, obviously you've gotten very used 278 00:15:03,460 --> 00:15:07,380 Suze: to how the 401k works, the investments in the 401k, 279 00:15:07,780 --> 00:15:10,619 Suze: and you probably feel very comfortable with it. 280 00:15:11,580 --> 00:15:16,169 Suze: When you roll it to let's say an IRA rollover, 281 00:15:16,739 --> 00:15:20,820 Suze: and it would be a traditional IRA rollover, why? Because 282 00:15:20,820 --> 00:15:23,219 Suze: you don't want to owe taxes on it when you 283 00:15:23,219 --> 00:15:28,049 Suze: do so, and it would be a custodian to custodian rollover. 284 00:15:28,340 --> 00:15:32,700 Suze: You want it to go directly from your employer sponsored 401(k) 285 00:15:33,059 --> 00:15:36,859 Suze: into your IRA rollover at a brokerage firm. 286 00:15:37,780 --> 00:15:41,099 Suze: When you do that, they have to liquidate everything that's 287 00:15:41,099 --> 00:15:44,700 Suze: in your 401(k), all the mutual funds and everything, and 288 00:15:44,700 --> 00:15:49,780 Suze: it's cash that will roll over. Now you're going to 289 00:15:49,780 --> 00:15:53,500 Suze: have to decide on your own how do you want 290 00:15:53,500 --> 00:15:57,059 Suze: to invest that money? Do you want to invest it 291 00:15:57,059 --> 00:15:59,489 Suze: all at once? Do you want a dollar cost average? 292 00:15:59,729 --> 00:16:03,200 Suze: So the question I turn back to you is how 293 00:16:03,200 --> 00:16:05,900 Suze: comfortable do you feel doing that? 294 00:16:06,669 --> 00:16:09,270 Suze: Because I can tell you if it's a large amount 295 00:16:09,270 --> 00:16:12,640 Suze: when you roll it over to a brokerage firm, oh, 296 00:16:12,679 --> 00:16:15,799 Suze: you're going to have some financial adviser saying I think 297 00:16:15,799 --> 00:16:17,830 Suze: you should do this, I think you should do that, 298 00:16:18,000 --> 00:16:20,919 Suze: let's buy an annuity, let's do this, let's do that. 299 00:16:21,159 --> 00:16:26,349 Suze: So just depending on your knowledge, your comfort level, because 300 00:16:26,349 --> 00:16:28,989 Suze: remember the goal of money is for you to be secure. 301 00:16:29,549 --> 00:16:33,599 Suze: And it may just be that you are secure with 302 00:16:33,599 --> 00:16:38,820 Suze: it in your 401(k) at your ex-employers where it happens 303 00:16:38,820 --> 00:16:41,940 Suze: to be invested. Maybe it's all invested in a Standard 304 00:16:41,940 --> 00:16:45,500 Suze: and Poor's 500 fund or something like that. So the 305 00:16:45,500 --> 00:16:50,059 Suze: question now reverts right back to you, girlfriend. Are you 306 00:16:50,059 --> 00:16:53,820 Suze: comfortable where it is, or do you feel secure enough 307 00:16:53,820 --> 00:16:57,289 Suze: for it to go to an IRA rollover. 308 00:16:57,750 --> 00:17:02,289 Suze: And invest it once it's at the IRA rollover little 309 00:17:02,289 --> 00:17:07,020 Suze: by little you could convert it to a Roth IRA 310 00:17:07,290 --> 00:17:09,839 Suze: so that as you get older you have more and 311 00:17:09,839 --> 00:17:13,729 Suze: more money in your Roth IRA and then you won't 312 00:17:13,729 --> 00:17:17,810 Suze: have to be subjected to required minimum distribution. What KT? 313 00:17:17,920 --> 00:17:21,910 KT: I have a question. Can she leave that for as 314 00:17:21,910 --> 00:17:23,189 KT: long as she wishes 315 00:17:23,189 --> 00:17:23,959 Suze: in her 401(k)... 316 00:17:24,119 --> 00:17:27,189 Suze: yeah, yeah, as long as it's $5000 or more, she 317 00:17:27,189 --> 00:17:32,349 Suze: can leave it at her ex-employer's 401(k) plan, which she 318 00:17:32,349 --> 00:17:36,469 Suze: may feel more comfortable with. Again, the goal of money 319 00:17:36,469 --> 00:17:40,500 Suze: is for you to be secure. So the question is also, 320 00:17:40,790 --> 00:17:42,150 Suze: you don't have to do it all. 321 00:17:42,810 --> 00:17:44,770 Suze: Maybe you take half of it and roll it to 322 00:17:44,770 --> 00:17:47,890 Suze: an IRA rollover and see how it feels, or a 323 00:17:47,890 --> 00:17:51,709 Suze: small amount of money, but just because you're not exactly 324 00:17:51,709 --> 00:17:54,399 Suze: sure and you're saying where should I move it. 325 00:17:55,030 --> 00:17:57,790 Suze: It makes me a little bit protective of you because 326 00:17:57,790 --> 00:18:00,218 Suze: if you don't even know where to move it, I 327 00:18:00,219 --> 00:18:02,180 Suze: don't know you would know what to do with it 328 00:18:02,180 --> 00:18:05,300 Suze: once you moved it. So probably I would be telling 329 00:18:05,300 --> 00:18:08,609 Suze: you to leave it exactly where it is until you know. 330 00:18:08,660 --> 00:18:09,379 KT: I would too. 331 00:18:09,540 --> 00:18:12,060 Suze: All right, well, there you go. All right, KT. 332 00:18:12,339 --> 00:18:16,419 KT: So next question is from Michelle. Michelle, my belle... 333 00:18:16,540 --> 00:18:20,509 Suze: Here she goes... 334 00:18:20,509 --> 00:18:21,379 KT: I used to know the French words that go after that, but... 335 00:18:21,380 --> 00:18:22,219 Suze: Here's the thing that's 336 00:18:22,219 --> 00:18:24,290 Suze: so funny. KT thinks she can sing. 337 00:18:24,680 --> 00:18:27,020 KT: I can sing. I sing all the time. 338 00:18:27,209 --> 00:18:27,670 Suze: That's... 339 00:18:27,670 --> 00:18:30,349 KT: I don't have a great singing voice, but I love 340 00:18:30,349 --> 00:18:31,530 KT: to sing. I can sing. 341 00:18:31,709 --> 00:18:35,469 Suze: You know, there's a saying, not my saying, but sing 342 00:18:35,469 --> 00:18:38,989 Suze: like nobody can hear you, dance like nobody is watching. 343 00:18:38,989 --> 00:18:39,729 KT: I danced... 344 00:18:39,729 --> 00:18:42,920 Suze: And KT does both those things to the extreme. All right, 345 00:18:42,949 --> 00:18:43,438 Suze: go on. 346 00:18:43,589 --> 00:18:45,829 KT: Like no one's watching except Suze. 347 00:18:46,560 --> 00:18:49,910 KT: And sometimes she records it, which I get very angry, 348 00:18:50,109 --> 00:18:53,069 KT: and then posts it on the wall. All right, ready. 349 00:18:53,199 --> 00:18:55,760 KT: I know that you are not a fan of life 350 00:18:55,760 --> 00:18:59,839 KT: insurance policies, but I'm wondering if it makes sense for 351 00:18:59,839 --> 00:19:03,270 KT: tax purposes and income in my case. 352 00:19:03,390 --> 00:19:04,050 Suze: No, no, no. 353 00:19:04,050 --> 00:19:04,670 KT: You're already answering her. 354 00:19:05,290 --> 00:19:07,699 Suze: Because it never makes sense for tax purposes. 355 00:19:08,329 --> 00:19:11,969 KT: I am a 50-year-old single woman with no kids. I 356 00:19:11,969 --> 00:19:16,929 KT: have a paid off house and I have $2.3 million 357 00:19:16,930 --> 00:19:23,609 KT: in savings between brokerage, 401(k) IRA, and Roth IRA accounts. 358 00:19:24,109 --> 00:19:25,530 Suze: You know why she has so much money? 359 00:19:26,579 --> 00:19:27,819 KT: Yeah, single and no kids. 360 00:19:27,949 --> 00:19:28,150 Suze: That's 361 00:19:28,150 --> 00:19:29,910 Suze: right. That's the key. 362 00:19:30,140 --> 00:19:33,619 KT: All right, so about 700,000 is in my brokerage, which 363 00:19:33,619 --> 00:19:38,140 KT: is how I would fund the annuity policy. What should 364 00:19:38,140 --> 00:19:41,060 KT: I be aware of and look out for before getting 365 00:19:41,060 --> 00:19:42,688 KT: this type of annuity? 366 00:19:43,459 --> 00:19:44,688 Suze: She didn't say what type it is. 367 00:19:44,780 --> 00:19:47,780 KT: I think she means uh insurance annuity. 368 00:19:48,359 --> 00:19:51,199 KT: Suze, in your opinion, is it better to just buy 369 00:19:51,199 --> 00:19:54,270 KT: rental property for the same purpose? 370 00:19:55,329 --> 00:20:00,760 Suze: So the purpose obviously is avoiding taxes with it. See, 371 00:20:00,790 --> 00:20:02,300 Suze: here's what I don't understand Michelle. 372 00:20:02,300 --> 00:20:03,530 KT: Rental property 373 00:20:03,530 --> 00:20:07,139 Suze: And even rental property, right now she can do rental property. 374 00:20:07,219 --> 00:20:10,420 Suze: She could do an REIT. REITs are starting to come 375 00:20:10,420 --> 00:20:14,459 Suze: up nicely now, but they will pay you income that's taxable, Michelle. 376 00:20:15,339 --> 00:20:20,349 Suze: You have to understand that on no level do I 377 00:20:20,349 --> 00:20:24,109 Suze: want you to touch an annuity, to touch any type 378 00:20:24,109 --> 00:20:28,959 Suze: of life insurance policy or any insurance investment on any level. 379 00:20:29,170 --> 00:20:35,139 Suze: It makes no sense. Do you hear me? That's it, period. However, 380 00:20:35,670 --> 00:20:40,540 Suze: if you continue investing this money in dividend paying stocks 381 00:20:40,540 --> 00:20:45,380 Suze: and or growth stocks value stocks, you just keep investing it. 382 00:20:46,250 --> 00:20:50,810 Suze: Dollar cost averaging in your brokerage firm. You're not paying 383 00:20:50,810 --> 00:20:54,650 Suze: taxes on the growth of that money. You don't buy 384 00:20:54,650 --> 00:20:57,770 Suze: a stock just to own it for a year. And 385 00:20:57,770 --> 00:21:01,050 Suze: then later on in life, as this money has been 386 00:21:01,050 --> 00:21:04,239 Suze: growing up and up and up, if you decide to sell, 387 00:21:04,250 --> 00:21:06,479 Suze: so it's at the capital gains tax rate. 388 00:21:07,619 --> 00:21:12,780 Suze: Don't worry about taxes. You're saying you're wondering if it 389 00:21:12,780 --> 00:21:16,938 Suze: makes sense for tax purposes income in your case. Listen, 390 00:21:17,099 --> 00:21:19,660 Suze: do a municipal bond, do things like that, and not 391 00:21:19,660 --> 00:21:24,290 Suze: pay taxes on it. But no, the answer is very simple. 392 00:21:24,459 --> 00:21:29,050 Suze: You are not going to do this over my dead body, 393 00:21:29,219 --> 00:21:33,109 Suze: and as you can tell, my body is not dead. 394 00:21:33,300 --> 00:21:34,130 Suze: All right. 395 00:21:34,709 --> 00:21:40,349 KT: That was funny. OK, final question from Barbara. Dear Suze 396 00:21:40,349 --> 00:21:43,708 KT: and KT, when you talk about the benefits of a 397 00:21:43,709 --> 00:21:48,880 KT: revocable trust, you mention the incapacity clause. My husband and 398 00:21:48,880 --> 00:21:52,630 KT: I have a revocable trust, as well as the other 399 00:21:52,630 --> 00:21:56,218 KT: must have documents, but I was curious as to why 400 00:21:56,219 --> 00:22:01,988 KT: a financial power of attorney would not address the incapacity issue. 401 00:22:02,609 --> 00:22:05,060 KT: There you go. She wants you to make her more 402 00:22:05,060 --> 00:22:06,319 KT: financially secure. 403 00:22:07,130 --> 00:22:11,290 Suze: So here's the scoop, everybody, right? A revocable trust with 404 00:22:11,290 --> 00:22:17,640 Suze: an incapacity only governs the assets that are in a trust. 405 00:22:17,890 --> 00:22:22,439 Suze: There are assets like an IRA, an employer retirement plans, 406 00:22:22,449 --> 00:22:25,770 Suze: assets not titled in the trust that a power of 407 00:22:25,770 --> 00:22:31,239 Suze: attorney governs. It is just that simple, so you need both, 408 00:22:31,329 --> 00:22:32,010 Suze: but I will tell 409 00:22:32,109 --> 00:22:36,219 Suze: you this a power of attorney at a bank when 410 00:22:36,219 --> 00:22:40,939 Suze: you present it may give you problems because they don't 411 00:22:40,939 --> 00:22:43,660 Suze: like dealing with power of attorneys because they don't know 412 00:22:43,660 --> 00:22:46,420 Suze: is it null and void, what does it govern, all 413 00:22:46,420 --> 00:22:51,290 Suze: these things. So both of those documents are essential. 414 00:22:51,839 --> 00:22:53,379 KT: That is a wrap. 415 00:22:53,660 --> 00:22:54,750 Suze: It is? 416 00:22:55,020 --> 00:22:55,088 KT: Yes. 417 00:22:55,088 --> 00:22:57,140 Suze: Are you making these podcasts shorter and shorter? 418 00:22:57,140 --> 00:22:58,300 KT: A little bit. 419 00:22:58,719 --> 00:23:00,469 KT: Yeah, ask me why. 420 00:23:00,550 --> 00:23:00,742 Suze: Why? 421 00:23:00,742 --> 00:23:03,659 KT: People remember more information if there's less. 422 00:23:04,849 --> 00:23:08,099 KT: They do. I do. And if I can remember it, 423 00:23:08,109 --> 00:23:10,170 KT: if I can quote you on what to do with 424 00:23:10,170 --> 00:23:14,130 KT: a Roth because you didn't give me so many options 425 00:23:14,130 --> 00:23:18,680 KT: front door, back door, side door, under, then that's how 426 00:23:18,680 --> 00:23:20,959 KT: I learn. Less is more. 427 00:23:24,599 --> 00:23:28,359 Suze: You know, KT loves to back herself into a corner with me. 428 00:23:28,359 --> 00:23:30,119 KT: No corner, no corner. 429 00:23:30,359 --> 00:23:32,560 Suze: This is a corner that you backed yourself into. 430 00:23:32,800 --> 00:23:33,430 KT: OK, we're gonna say... 431 00:23:33,920 --> 00:23:36,520 KT: there's only one thing we want to remember... 432 00:23:36,520 --> 00:23:39,560 Suze: Because no matter how short or long or whatever, she 433 00:23:39,560 --> 00:23:41,079 Suze: still doesn't know anything about a Roth. 434 00:23:41,239 --> 00:23:43,800 KT: There's only one thing we want you to remember, and 435 00:23:43,800 --> 00:23:47,319 KT: it's this. We want your money to make more money. 436 00:23:47,750 --> 00:23:53,459 Suze: All right, everybody, until next time, you stay safe and healthy. 437 00:23:53,660 --> 00:23:54,800 KT: Bye bye.