1 00:00:30,620 --> 00:00:34,560 Suze: September 15th 2000 and what year? KT 2 00:00:34,570 --> 00:00:35,760 KT: 22 3 00:00:35,770 --> 00:00:36,570 Suze: Is it gonna be a good year? 4 00:00:37,840 --> 00:00:39,260 KT: It is a good year, 5 00:00:39,270 --> 00:00:40,769 Suze: KT this year is almost over. 6 00:00:41,620 --> 00:00:44,520 KT: But it's been it's been a really good year. 7 00:00:44,530 --> 00:00:47,400 Suze: You know the other day, by the way, welcome everybody 8 00:00:47,400 --> 00:00:49,330 Suze: to the Ask KT and 9 00:00:49,330 --> 00:00:50,150 KT: Suze 10 00:00:50,150 --> 00:00:57,139 Suze: podcast. the other day, KT and I watched Elvis, right, 11 00:00:57,140 --> 00:01:02,830 Suze: the movie and it shocked me. It absolutely shocked me 12 00:01:03,220 --> 00:01:06,450 Suze: at least the way that this video presentation or movie 13 00:01:06,450 --> 00:01:11,649 Suze: presentation tells the story how out of touch Elvis was 14 00:01:11,650 --> 00:01:13,050 Suze: with his money. 15 00:01:13,060 --> 00:01:17,400 KT: And financially abused. He was taken advantage of left, right 16 00:01:17,400 --> 00:01:17,510 KT: and 17 00:01:17,510 --> 00:01:19,090 KT: center. So 18 00:01:19,090 --> 00:01:20,559 KT: that part of it 19 00:01:20,840 --> 00:01:24,220 KT: was kind of maybe that was the whole, you know 20 00:01:24,220 --> 00:01:26,910 KT: the news that people didn't know about Elvis. 21 00:01:26,910 --> 00:01:30,310 Suze: Yeah, it was it's just amazing and it always makes 22 00:01:30,310 --> 00:01:34,700 Suze: me think of Prince and other people who were very wealthy. 23 00:01:34,709 --> 00:01:37,350 Suze: They died without a will, they died without a trust. 24 00:01:37,350 --> 00:01:38,729 Suze: They didn't have a clue of anything. 25 00:01:39,380 --> 00:01:42,740 KT: One of whom you knew personally was who Marlon Brando, 26 00:01:42,740 --> 00:01:43,800 Suze: can you guys believe that 27 00:01:43,800 --> 00:01:48,850 KT: Marlon Brando called Suze for financial help and she didn't 28 00:01:48,850 --> 00:01:50,150 KT: believe it was him. 29 00:01:52,260 --> 00:01:53,970 Suze: It took me a while to believe it and then 30 00:01:53,970 --> 00:01:59,990 Suze: it was, I did believe it but just amazing. So 31 00:02:00,000 --> 00:02:01,740 Suze: I don't know what made me want to say that 32 00:02:01,740 --> 00:02:04,140 Suze: to all of you except that it made me so sad. 33 00:02:04,150 --> 00:02:07,520 Suze: So this entire podcast 34 00:02:07,670 --> 00:02:11,920 Suze: is about making sure that you are secure. You are 35 00:02:11,919 --> 00:02:16,880 Suze: never financially abused. You know the answers to any question 36 00:02:16,889 --> 00:02:19,240 Suze: and if you don't know the answer to the question, 37 00:02:19,240 --> 00:02:22,720 Suze: especially when it comes to your money you can come 38 00:02:22,720 --> 00:02:28,700 Suze: right here or watch the Suze Orman Show on Freevee . 39 00:02:29,760 --> 00:02:30,350 KT: Alright 40 00:02:30,389 --> 00:02:31,560 Suze: Today is what KT? 41 00:02:31,570 --> 00:02:32,590 KT: What's that? 42 00:02:32,600 --> 00:02:37,160 Suze: Today is 23 days from today. 43 00:02:37,160 --> 00:02:39,430 KT: Everyone you have to do it. I know what you're 44 00:02:39,430 --> 00:02:43,250 KT: going to say, I know what you're... okay. You all 45 00:02:43,250 --> 00:02:51,160 KT: have to participate in the Alliant checking account checking for good. 46 00:02:51,169 --> 00:02:52,420 KT: I call it for good. 47 00:02:53,290 --> 00:02:53,700 Suze: Do good. 48 00:02:54,385 --> 00:02:54,825 KT: I did it. 49 00:02:55,465 --> 00:02:56,105 Suze: She did it. 50 00:02:56,595 --> 00:03:01,065 Suze: You have 23 days from today, the 51 00:03:02,285 --> 00:03:03,204 KT: 15th 52 00:03:03,215 --> 00:03:06,005 Suze: and then this offer goes away. 53 00:03:06,005 --> 00:03:08,044 KT: But tell them why we love it so much. 54 00:03:08,044 --> 00:03:11,345 Suze: We love it because all you have to do is 55 00:03:11,345 --> 00:03:15,915 Suze: go to my Alliant A. L. L. I. A N. T. 56 00:03:15,915 --> 00:03:21,515 Suze: Dot com slash good. You go there and you open 57 00:03:21,525 --> 00:03:22,145 Suze: up 58 00:03:22,410 --> 00:03:28,780 Suze: An online checking account you deposit $100 and even if 59 00:03:28,780 --> 00:03:33,770 Suze: you have the Ultimate Opportunity Savings Account that $100 can 60 00:03:33,770 --> 00:03:37,370 Suze: come from the Ultimate Opportunity Savings account by the way. 61 00:03:37,380 --> 00:03:43,120 Suze: And you deposited into this account and then just every 62 00:03:43,120 --> 00:03:47,850 Suze: month till the end of February 2023 63 00:03:48,180 --> 00:03:51,580 Suze: you do an electronic transfer from some account 64 00:03:51,590 --> 00:03:52,820 Suze: outside of 65 00:03:52,920 --> 00:03:58,119 Suze: Alliant. Any amount $5, does not matter at the end 66 00:03:58,130 --> 00:04:03,620 Suze: of February 2023. That is right around the corner. Everybody. 67 00:04:04,340 --> 00:04:09,110 Suze: Alliant credit union will give you $100. 68 00:04:09,430 --> 00:04:13,530 Suze: And then right after you open up the account about 69 00:04:13,540 --> 00:04:18,120 Suze: 2345 days later you will get an email from alliance 70 00:04:18,130 --> 00:04:24,660 Suze: where you get to choose one of three charities and 71 00:04:24,670 --> 00:04:30,670 Suze: alliance will send $100 to them as well. 72 00:04:30,940 --> 00:04:31,979 Suze: So I got... 73 00:04:31,980 --> 00:04:33,940 KT: I picked Alzheimer's for my grandma. 74 00:04:33,950 --> 00:04:35,619 Suze: I know you told me that. 75 00:04:35,630 --> 00:04:38,270 KT: So I I like this. This is one of the 76 00:04:38,270 --> 00:04:39,529 KT: best promotions ever. 77 00:04:40,560 --> 00:04:46,540 Suze: So it's Alzheimer's, Easter Seals, it's Cancer, cancer. So you 78 00:04:46,540 --> 00:04:48,940 Suze: choose which one of those three so you can do 79 00:04:48,940 --> 00:04:52,660 Suze: good for yourself and you can do good for others 80 00:04:52,660 --> 00:04:53,589 Suze: as well. 81 00:04:54,210 --> 00:04:57,430 Suze: You know you just need to do it. All right. 82 00:04:57,440 --> 00:05:00,980 KT: It ends October seven so that's 23 days from now. 83 00:05:00,990 --> 00:05:02,220 KT: Do it. Do it, do it. 84 00:05:02,220 --> 00:05:04,340 Suze: Alright let's go KT. 85 00:05:04,339 --> 00:05:08,270 KT: Okay. Suze my first question. So I've tried everyone to 86 00:05:08,270 --> 00:05:12,410 KT: make this more diversified with a different topic for every question. 87 00:05:12,720 --> 00:05:16,130 KT: This this podcast. So the first one is from Cathy 88 00:05:16,130 --> 00:05:20,670 KT: it said Suze. My question is regarding a withdrawal strategy 89 00:05:20,670 --> 00:05:21,839 KT: in retirement. 90 00:05:22,020 --> 00:05:25,940 KT: My husband and I have 401 Ks iras. We also 91 00:05:25,940 --> 00:05:29,440 KT: have a large amount of company stock. We only have 92 00:05:29,440 --> 00:05:33,260 KT: one small Roth each. We also have a 5 to 93 00:05:33,260 --> 00:05:35,460 KT: 7 year emergency fund. 94 00:05:35,800 --> 00:05:35,830 KT: I 95 00:05:35,839 --> 00:05:40,719 KT: wish I had listened to your advice regarding ROTHs. If 96 00:05:40,720 --> 00:05:42,570 KT: I had this question 97 00:05:42,700 --> 00:05:45,159 KT: would not be needed. 98 00:05:46,670 --> 00:05:46,860 KT: Here... 99 00:05:46,860 --> 00:05:51,750 KT: is the question. My husband and I retired in 2018. 100 00:05:51,760 --> 00:05:56,539 KT: We haven't taken anything out of our savings or retirement 101 00:05:56,540 --> 00:06:00,560 KT: accounts because the pension and social security that he has 102 00:06:00,570 --> 00:06:03,130 KT: has been enough. My husband 103 00:06:03,279 --> 00:06:06,880 KT: will be approaching R. M. D. S. In five years 104 00:06:06,880 --> 00:06:07,980 Suze: and what is an RMD KT? 105 00:06:08,779 --> 00:06:13,160 KT: Required minimum distributions. So they're both going to get this 106 00:06:13,160 --> 00:06:15,419 KT: in five or he gets it in five years from 107 00:06:15,420 --> 00:06:17,800 KT: now and she and a couple of years thereafter 108 00:06:18,110 --> 00:06:21,980 KT: we should be okay when my husband takes R. M. D. S. 109 00:06:21,980 --> 00:06:24,789 KT: But when I start to take the R. M. D. S. 110 00:06:24,790 --> 00:06:31,820 KT: And Social security, is this going to put us over? I. R. M. A. 111 00:06:31,830 --> 00:06:34,839 KT: What the heck is that? I don't know 112 00:06:34,850 --> 00:06:36,240 Suze: I'll tell you all about this. 113 00:06:36,240 --> 00:06:36,840 KT: I feel like... 114 00:06:37,230 --> 00:06:39,310 Suze: Every one of us needs to think about this but I 115 00:06:39,370 --> 00:06:42,059 Suze: have to possibly pay it. 116 00:06:42,310 --> 00:06:43,550 KT: I don't know what it is. 117 00:06:44,200 --> 00:06:45,220 Suze: You're paying it now. 118 00:06:47,020 --> 00:06:48,839 KT: I don't know what it is. So I want to 119 00:06:48,839 --> 00:06:51,470 KT: know what the heck I'm paying. I feel I should 120 00:06:51,470 --> 00:06:57,190 KT: have been drawing down our 401(k)s since 2018. I have 121 00:06:57,190 --> 00:06:59,930 KT: five years to start doing this now. But the markets 122 00:06:59,930 --> 00:07:06,419 KT: are down, help Suze and help KT know what an I. R. M. A. A. Means. 123 00:07:06,430 --> 00:07:07,780 Suze: So 124 00:07:08,890 --> 00:07:14,330 Suze: as you get older you get to absolutely enjoy something 125 00:07:14,340 --> 00:07:16,950 Suze: as Katie and I have been enjoying once you become 126 00:07:16,950 --> 00:07:22,400 Suze: 65 years of age, something called Medicare. And Medicare is 127 00:07:22,400 --> 00:07:29,010 Suze: Medicare A, Medicare B, and Medicare D. And Medicare B. 128 00:07:29,020 --> 00:07:33,100 Suze: And Medicare D. Is something that every one of us 129 00:07:33,100 --> 00:07:35,050 Suze: pays for KT. 130 00:07:35,250 --> 00:07:37,440 Suze: Like that's why I was just showing KT the other 131 00:07:37,440 --> 00:07:41,610 Suze: day that she got a social security check right put 132 00:07:41,620 --> 00:07:45,850 Suze: into her account and they had to subtract 500 133 00:07:46,540 --> 00:07:47,440 KT: 600 134 00:07:47,440 --> 00:07:51,930 Suze: dollars for her Medicare be part of it. 135 00:07:52,480 --> 00:07:56,530 Suze: So the more money you make, the more you have 136 00:07:56,530 --> 00:08:01,800 Suze: to pay and I. R. M. A. A. Stands for 137 00:08:01,810 --> 00:08:08,250 Suze: income related monthly adjustment amount. How much they... 138 00:08:08,590 --> 00:08:09,390 KT: Who came up with that name? 139 00:08:09,390 --> 00:08:11,410 Suze: The government! 140 00:08:13,750 --> 00:08:16,770 KT: It's funny, they're so boring with their initials. 141 00:08:16,770 --> 00:08:21,180 Suze: I know Irma 142 00:08:21,480 --> 00:08:22,140 KT: and 143 00:08:22,150 --> 00:08:28,060 Suze: Irma is determined from your income tax returns from the 144 00:08:28,060 --> 00:08:32,179 Suze: two previous years. Don't ask me why why they don't 145 00:08:32,179 --> 00:08:35,010 Suze: do it yearly is beyond me. But they look back 146 00:08:35,010 --> 00:08:37,990 Suze: two years and depending on what your income is, two 147 00:08:37,990 --> 00:08:42,330 Suze: years ago, you either have to pay Irma or not. 148 00:08:42,559 --> 00:08:49,420 Suze: So KT, for 2022. This only involves people who make 149 00:08:49,429 --> 00:08:55,670 Suze: over $91,000 a year if they're single or $182,000 a 150 00:08:55,670 --> 00:09:00,089 Suze: year if they are married, filing jointly. So listen everybody, 151 00:09:00,100 --> 00:09:03,910 Suze: if you make under those amounts, this does not affect 152 00:09:03,910 --> 00:09:09,190 Suze: you at all. But if you make over those amounts, 153 00:09:09,210 --> 00:09:12,470 Suze: it can cost you big time 154 00:09:12,790 --> 00:09:15,420 Suze: on what they are going to charge you for your 155 00:09:15,420 --> 00:09:21,420 Suze: Medicare B and D premiums. So for instance, it could 156 00:09:21,420 --> 00:09:26,420 Suze: be anywhere for part B. From 100 and $70 a 157 00:09:26,420 --> 00:09:31,020 Suze: month more to $578 a month more. 158 00:09:31,500 --> 00:09:37,630 Suze: So depending on your income, that amount varies for part D. 159 00:09:37,830 --> 00:09:41,460 Suze: It will be anywhere from $12 a month more to 160 00:09:41,470 --> 00:09:45,130 Suze: $80 a month more and that's on top of the 161 00:09:45,130 --> 00:09:47,970 Suze: premium that you are already paying. 162 00:09:48,750 --> 00:09:49,290 Suze: So 163 00:09:49,300 --> 00:09:55,160 Suze: Cathy here's what you need to understand. Obviously you said 164 00:09:55,160 --> 00:09:57,920 Suze: that in about five years your husband will have to 165 00:09:57,920 --> 00:10:01,870 Suze: take required minimum distributions so that puts him at about 166 00:10:01,870 --> 00:10:05,179 Suze: 67 right now you 167 00:10:05,480 --> 00:10:09,680 Suze: are probably, you say a couple of years younger than him, right? 168 00:10:09,679 --> 00:10:14,170 Suze: So you're probably at 65 66 maybe you're gonna wait 169 00:10:14,179 --> 00:10:17,020 Suze: till 67 in a year or two to start your 170 00:10:17,020 --> 00:10:21,199 Suze: social security as well. But when both of you are 171 00:10:21,210 --> 00:10:24,620 Suze: on Medicare and obviously he is, 172 00:10:24,890 --> 00:10:25,460 KT: when you 173 00:10:25,460 --> 00:10:29,760 Suze: go to do a conversion meaning you convert amounts of 174 00:10:29,760 --> 00:10:36,219 Suze: money from your taxable retirement accounts into a Roth retirement 175 00:10:36,230 --> 00:10:40,130 Suze: account that counts towards income. 176 00:10:40,720 --> 00:10:44,370 Suze: So you have to just be careful about how you 177 00:10:44,370 --> 00:10:47,550 Suze: do it because it's still going to cost you, you're 178 00:10:47,550 --> 00:10:50,420 Suze: going to have to pay taxes and possibly that would 179 00:10:50,420 --> 00:10:53,350 Suze: put you in a place where you also have to 180 00:10:53,350 --> 00:10:58,160 Suze: pay more according to Irma. So if I were you, 181 00:10:58,170 --> 00:11:01,780 Suze: I would seriously sit down with a C. P. A. 182 00:11:01,790 --> 00:11:06,840 Suze: And really figure out what is the best strategy for you. 183 00:11:06,850 --> 00:11:08,190 Suze: However 184 00:11:08,660 --> 00:11:11,130 Suze: everybody else listening to this, 185 00:11:11,950 --> 00:11:14,689 Suze: the lesson that you have got to learn 186 00:11:15,490 --> 00:11:21,120 Suze: is you want retirement money in Roth retirement accounts, you 187 00:11:21,120 --> 00:11:25,550 Suze: want retirement money in a Roth 401k. A Roth 403 B. 188 00:11:25,559 --> 00:11:27,280 Suze: A Roth TSP 189 00:11:27,980 --> 00:11:33,329 Suze: a Roth IRA you want to stay away from traditional 190 00:11:33,340 --> 00:11:37,699 Suze: tax deductible retirement accounts because in the end 191 00:11:38,230 --> 00:11:42,020 Suze: If you are going to be somebody who earns over 192 00:11:42,020 --> 00:11:45,400 Suze: 90,000 a year or whatever the figure is and trust 193 00:11:45,400 --> 00:11:47,270 Suze: me they could lower that figure if they want to 194 00:11:47,270 --> 00:11:47,949 Suze: everybody 195 00:11:48,790 --> 00:11:52,500 Suze: you're going to have to then participate in what is 196 00:11:52,500 --> 00:11:56,370 Suze: called Irma. And what does Irma stand for, KT? 197 00:11:56,380 --> 00:12:03,810 KT: Oh my God, income related income related monthly adjustment amounts. 198 00:12:03,809 --> 00:12:06,270 KT: Most boring title on earth. 199 00:12:06,270 --> 00:12:10,330 Suze: She wrote it down good for KT . Next. 200 00:12:10,340 --> 00:12:13,230 KT: Okay this next one is from Brandy and the only 201 00:12:13,230 --> 00:12:15,699 KT: thing Brandy I wish you would have included is your 202 00:12:15,710 --> 00:12:17,740 KT: age but it's a good question 203 00:12:17,940 --> 00:12:21,620 KT: Says hello Suze and KT, this is a basic question. 204 00:12:21,620 --> 00:12:27,150 KT: I know that Suze recommends to have about 20 to 25 individual 205 00:12:27,150 --> 00:12:31,130 KT: stocks but how many E. T. F. S. or index 206 00:12:31,130 --> 00:12:36,130 KT: funds should you have to be considered diversified? I'm just 207 00:12:36,130 --> 00:12:40,900 KT: starting out, I invest $50 every two weeks. I have 208 00:12:40,900 --> 00:12:44,610 KT: about $2000 already invested. 209 00:12:44,790 --> 00:12:48,720 KT: I was just wondering should I continue to buy more 210 00:12:48,720 --> 00:12:52,319 KT: shares of the stocks I have or should I keep 211 00:12:52,330 --> 00:12:56,650 KT: buying different stocks. Thanks for helping. So Suze, this is 212 00:12:56,650 --> 00:12:59,140 KT: a really sweet email but I don't know how old 213 00:12:59,140 --> 00:13:00,250 KT: Brandy is. 214 00:13:00,260 --> 00:13:02,199 Suze: You know it's funny KT because I was 215 00:13:02,450 --> 00:13:05,680 Suze: going through the emails and somebody by the name of 216 00:13:05,679 --> 00:13:09,160 Suze: Jill wrote in and said that a while ago, she 217 00:13:09,160 --> 00:13:13,230 Suze: had listened to, you know me saying about pioneer energy 218 00:13:13,230 --> 00:13:16,750 Suze: and all of those companies, should she just buy that 219 00:13:16,750 --> 00:13:18,900 Suze: or how does she diversify? And how do you get 220 00:13:18,900 --> 00:13:23,699 Suze: 20 stocks? The reason why I have asked all of 221 00:13:23,700 --> 00:13:24,560 Suze: you 222 00:13:24,730 --> 00:13:27,410 Suze: tell you normally if you don't have a lot of 223 00:13:27,410 --> 00:13:32,260 Suze: money to invest in exchange traded funds because that's how 224 00:13:32,260 --> 00:13:37,780 Suze: you get automatic diversification. The vanguard total stock market index E. T. F. 225 00:13:37,790 --> 00:13:41,400 Suze: You know, there's thousands of stocks within their. So in 226 00:13:41,400 --> 00:13:43,860 Suze: your question, you said how many E. T. S. or 227 00:13:43,870 --> 00:13:47,559 Suze: index funds should you have to be considered diversified? So 228 00:13:47,559 --> 00:13:50,459 Suze: you just need one E. T. F. To be diverse. 229 00:13:50,905 --> 00:13:54,684 Suze: If it's a vanguard Total stock market index fund or 230 00:13:54,684 --> 00:13:57,955 Suze: one of those ones that are exactly like an index 231 00:13:57,955 --> 00:14:02,035 Suze: fund that has 500 1000 shares in it, whatever it 232 00:14:02,035 --> 00:14:05,225 Suze: may be for those of you who are buying individual 233 00:14:05,225 --> 00:14:05,975 KT: stocks, 234 00:14:06,700 --> 00:14:10,530 Suze: maybe you want to participate in a few stocks that 235 00:14:10,530 --> 00:14:13,969 Suze: I mentioned. Do you just buy that stock or what 236 00:14:13,970 --> 00:14:18,579 Suze: do you do if you have an exchange traded fund 237 00:14:18,590 --> 00:14:19,420 Suze: already 238 00:14:19,970 --> 00:14:22,360 Suze: and then you want to buy one or two shares 239 00:14:22,370 --> 00:14:26,040 Suze: of an energy stock. Okay, I don't have a problem 240 00:14:26,040 --> 00:14:31,210 Suze: with that. You're still diversified. But if you don't have 241 00:14:31,380 --> 00:14:36,230 Suze: any exchange traded funds and now you want to just 242 00:14:36,230 --> 00:14:40,630 Suze: buy individual stocks. The reason that I've always suggested that 243 00:14:40,630 --> 00:14:44,330 Suze: I wanted you to be let's say with Fidelity or 244 00:14:44,330 --> 00:14:49,160 Suze: Schwab is because you could buy slices of stock. 245 00:14:49,520 --> 00:14:53,640 Suze: So if you're going a dollar cost average, let's just 246 00:14:53,640 --> 00:15:00,810 Suze: say $50 every two weeks. So $100 a month. You 247 00:15:00,810 --> 00:15:04,690 Suze: could easily within that month and you want to buy 248 00:15:04,700 --> 00:15:08,080 Suze: 20 to 25 individual stocks, which I do want you 249 00:15:08,080 --> 00:15:11,430 Suze: to buy all at once. You might want to put 250 00:15:11,430 --> 00:15:16,190 Suze: $3 in $15 in another $4 in another so that 251 00:15:16,190 --> 00:15:18,530 Suze: you have your diversification 252 00:15:18,970 --> 00:15:22,590 Suze: even though you have small amounts of money in each one. 253 00:15:22,600 --> 00:15:28,140 Suze: So I hope Brandy that answered your question. Next question, KT. 254 00:15:28,140 --> 00:15:33,450 KT: Okay. Next question is from Charlene. Ready? 255 00:15:33,460 --> 00:15:33,930 Suze: No 256 00:15:33,940 --> 00:15:35,370 KT: Help for a pie... 257 00:15:35,370 --> 00:15:37,370 Suze: I told you she doesn't even listen to me. I 258 00:15:37,370 --> 00:15:38,670 Suze: said no, I wasn't ready. 259 00:15:38,670 --> 00:15:39,900 KT: Okay, are you ready? 260 00:15:39,910 --> 00:15:40,430 Suze: No. 261 00:15:40,830 --> 00:15:41,650 KT: Why? Are you ready? 262 00:15:41,660 --> 00:15:43,220 Suze: Because you need to listen to me. 263 00:15:43,230 --> 00:15:44,550 KT: Okay, are you ready? 264 00:15:44,560 --> 00:15:45,740 Suze: Yes. Okay, 265 00:15:45,750 --> 00:15:47,470 KT: Charlene 266 00:15:47,670 --> 00:15:52,630 KT: Has a comment, helped for a pilot is her subject. Hi, 267 00:15:52,630 --> 00:15:57,200 KT: Suze and KT, my 21 year old son is following 268 00:15:57,200 --> 00:16:01,460 KT: his passion and is in training to be an airline pilot. 269 00:16:01,820 --> 00:16:07,820 KT: He has a 48,000 private student loan with an interest rate. 270 00:16:07,820 --> 00:16:10,610 KT: Now at 8.82 271 00:16:11,370 --> 00:16:12,770 Suze: It may go higher. 272 00:16:12,780 --> 00:16:15,980 KT: He works a second job in retail, picks up side 273 00:16:15,980 --> 00:16:19,100 KT: work wherever he can, but still doesn't make enough money 274 00:16:19,350 --> 00:16:25,140 KT: To cover his $600 plus monthly loan repayments. He lives 275 00:16:25,140 --> 00:16:30,450 KT: away from home, pays his own rent, utilities, gas, insurance, food, etc. 276 00:16:30,460 --> 00:16:34,540 KT: But there's not enough to make ends meet any advice 277 00:16:34,550 --> 00:16:36,310 KT: on this type of loan. 278 00:16:37,060 --> 00:16:41,030 KT: Is it possible to refinance to a lower interest rate 279 00:16:41,030 --> 00:16:44,840 KT: or lower monthly repayment? He was trying to save some 280 00:16:44,840 --> 00:16:48,050 KT: money for emergencies but I told him it's better to 281 00:16:48,050 --> 00:16:52,300 KT: pay whatever he has on that loan and that we 282 00:16:52,300 --> 00:16:55,340 KT: meaning mom and dad would be his emergency fund. 283 00:16:55,690 --> 00:16:59,200 KT: Was this the right advice? Thank you so much for 284 00:16:59,200 --> 00:17:03,880 KT: reading this since immigrating to the U. S. 18 years ago. 285 00:17:03,880 --> 00:17:08,429 KT: I've learned so much about personal finance from you, Suze, 286 00:17:08,440 --> 00:17:13,220 KT: thank you. So Charlene. Suze's going to tell you, I 287 00:17:13,220 --> 00:17:16,300 KT: I just love that he's following his passion. But man, 288 00:17:16,300 --> 00:17:17,450 KT: it's a tough road 289 00:17:17,609 --> 00:17:21,460 Suze: Charlene. If your son has what it takes to be 290 00:17:21,460 --> 00:17:22,389 Suze: a pilot. 291 00:17:23,350 --> 00:17:23,560 Suze: Do 292 00:17:23,560 --> 00:17:26,950 Suze: you know how hard that is? Not everybody has what 293 00:17:26,950 --> 00:17:28,659 Suze: it takes to be a pilot. 294 00:17:30,000 --> 00:17:33,790 Suze: He has what it takes to work himself out of 295 00:17:33,790 --> 00:17:37,190 Suze: this situation. So what do I mean by that? The 296 00:17:37,190 --> 00:17:42,649 Suze: answer to this is not about refinancing alone, making lower payments. 297 00:17:42,660 --> 00:17:45,690 Suze: Finding a way to do that. Because you know if 298 00:17:45,690 --> 00:17:49,489 Suze: he refinances right now, interest rates are going to be 299 00:17:49,490 --> 00:17:52,899 Suze: any lower than they were when he originally did this. 300 00:17:52,920 --> 00:17:55,640 Suze: If he has to pay less on it, he's just 301 00:17:55,640 --> 00:17:58,890 Suze: going to be paying for longer and paying more interest. 302 00:17:59,100 --> 00:18:01,010 Suze: So there's two things here. 303 00:18:01,820 --> 00:18:04,500 Suze: Okay so he knows that the two of you, his 304 00:18:04,500 --> 00:18:08,919 Suze: mother and father will be his emergency fund. But he 305 00:18:08,920 --> 00:18:12,310 Suze: also seems to have the luxury. My love of being 306 00:18:12,310 --> 00:18:15,620 Suze: able to live on his own pay his own utilities, 307 00:18:15,710 --> 00:18:19,060 Suze: do everything like that seems to me that if he 308 00:18:19,060 --> 00:18:22,340 Suze: doesn't have enough money to make ends meet, he also 309 00:18:22,340 --> 00:18:24,710 Suze: doesn't have enough money to live by himself. 310 00:18:25,210 --> 00:18:28,600 Suze: That means he needs to get a roommate. Maybe he 311 00:18:28,600 --> 00:18:31,720 Suze: needs to get two roommates, Maybe he needs to move 312 00:18:31,720 --> 00:18:35,610 Suze: to another cheaper place with other kids really 313 00:18:36,230 --> 00:18:39,050 Suze: Because that is how he will save money. He is 314 00:18:39,050 --> 00:18:43,570 Suze: 21 years of age and given the rental markets today 315 00:18:43,580 --> 00:18:46,470 Suze: and what it cost to rent, what it costs for 316 00:18:46,470 --> 00:18:50,270 Suze: everything else. No wonder he doesn't have any money for 317 00:18:50,270 --> 00:18:53,880 Suze: anything else. So my advice is not to figure out 318 00:18:53,890 --> 00:18:56,689 Suze: how to readjust his loan and all of that. Although 319 00:18:56,690 --> 00:18:59,390 Suze: you can always look into that not to make sure 320 00:18:59,390 --> 00:19:02,630 Suze: that he knows that mom and dad are his emergency from. 321 00:19:02,869 --> 00:19:04,860 Suze: But it's to have a stern talk with him and 322 00:19:04,859 --> 00:19:05,810 Suze: say son, 323 00:19:05,970 --> 00:19:07,889 Suze: here's the flight plan 324 00:19:08,460 --> 00:19:12,820 Suze: right for you to take off financially speaking, you're going 325 00:19:12,820 --> 00:19:15,960 Suze: to have to land in a place that you can 326 00:19:15,960 --> 00:19:20,670 Suze: afford and living by yourself and everything else that you do. 327 00:19:21,250 --> 00:19:21,540 KT: You 328 00:19:21,540 --> 00:19:25,949 Suze: can't afford anymore. So therefore you're going to have to 329 00:19:25,950 --> 00:19:29,070 Suze: figure that out or you're gonna have to move home 330 00:19:29,080 --> 00:19:31,350 Suze: with mommy and daddy. 331 00:19:32,160 --> 00:19:37,350 KT: WOW. Next question is from Diane and this is about 332 00:19:37,350 --> 00:19:41,420 KT: Roth conversions near or in retirement. One of my favorite 333 00:19:41,420 --> 00:19:45,980 KT: topics Hi Suze and KT, it's me here with a 334 00:19:45,980 --> 00:19:49,150 KT: question on one of your favorites Roths 335 00:19:50,090 --> 00:19:53,540 KT: I hear it discussed often that some decide to convert 336 00:19:53,540 --> 00:19:59,690 KT: traditional Ira funds to a Roth near or post retirement, 337 00:19:59,910 --> 00:20:04,330 KT: I've heard of some recommending to do this slowly. Does 338 00:20:04,330 --> 00:20:08,600 KT: this mean the pro rata rule does not apply in retirement. 339 00:20:08,609 --> 00:20:13,380 KT: What about the five year rule to access funds? Post conversion, 340 00:20:13,660 --> 00:20:18,020 KT: Could you please explain this process again Susie 341 00:20:18,260 --> 00:20:21,609 KT: and whether the rules change in retirement, I would appreciate 342 00:20:21,609 --> 00:20:23,260 KT: it very much Diane. 343 00:20:23,270 --> 00:20:28,950 Suze: No rules do not change in retirement girlfriend. So the 344 00:20:28,950 --> 00:20:32,550 Suze: reason that you hear me anyway say you always convert 345 00:20:32,550 --> 00:20:36,840 Suze: slowly is because any amount of money that you convert 346 00:20:36,859 --> 00:20:41,140 Suze: is taxable in that year that you convert and you 347 00:20:41,140 --> 00:20:44,200 Suze: don't want that amount of money that you convert to 348 00:20:44,200 --> 00:20:47,389 Suze: put you in a higher income tax bracket. 349 00:20:47,619 --> 00:20:50,630 Suze: I mean we already answered in the very first question 350 00:20:50,640 --> 00:20:54,450 Suze: how you have to be very careful about money that 351 00:20:54,450 --> 00:20:59,129 Suze: you convert because why it's taxable and then it might 352 00:20:59,130 --> 00:21:02,790 Suze: affect Irma, Irma is our new girlfriend. 353 00:21:02,790 --> 00:21:03,940 KT: I never heard about that 354 00:21:04,260 --> 00:21:08,360 Suze: Irma is our new girlfriend we have a new Irma in our life. 355 00:21:08,369 --> 00:21:12,180 Suze: All right, so you want to be careful about that, 356 00:21:12,190 --> 00:21:14,679 Suze: what you really need to do 357 00:21:15,010 --> 00:21:17,840 Suze: is you need to go back and maybe go on 358 00:21:17,840 --> 00:21:22,140 Suze: the women and money app and search podcast and listen 359 00:21:22,140 --> 00:21:25,840 Suze: to the master class that I did on the five 360 00:21:25,840 --> 00:21:30,150 Suze: year rule Roth conversions because none of this is simple 361 00:21:30,470 --> 00:21:33,629 Suze: but you want to really get it right and I 362 00:21:33,630 --> 00:21:37,379 Suze: got it so right on that podcast. So go and 363 00:21:37,380 --> 00:21:38,980 Suze: look it up. I think I gave one or two. 364 00:21:38,980 --> 00:21:40,600 Suze: I even did a quiz e on it 365 00:21:40,740 --> 00:21:43,800 Suze: like for all of you and it's something that you 366 00:21:43,800 --> 00:21:45,620 Suze: should find and listen to. 367 00:21:46,050 --> 00:21:49,340 KT: Okay, I need to have a list to tell people 368 00:21:49,340 --> 00:21:51,359 KT: which ones to go back and listen to with the 369 00:21:51,359 --> 00:21:55,619 KT: date for some easy access, especially on our Roth. That's 370 00:21:55,619 --> 00:21:57,330 KT: our most frequently asked. 371 00:21:57,950 --> 00:21:58,390 KT: We 372 00:21:58,390 --> 00:22:02,000 KT: should do a frequent, most frequent asked questions are most 373 00:22:02,000 --> 00:22:03,270 KT: frequent topics. 374 00:22:03,950 --> 00:22:05,840 KT: I'll figure out something everybody 375 00:22:07,880 --> 00:22:11,540 KT: you should see the face. Suze's giving me, I'll figure 376 00:22:11,540 --> 00:22:14,750 KT: out something easy and index a glossary. 377 00:22:15,260 --> 00:22:18,210 KT: Um, ask Suze, did you know 378 00:22:18,220 --> 00:22:22,040 Suze: KT! That's why we have the women and money app 379 00:22:22,040 --> 00:22:26,200 Suze: that you can access by going to google player apple 380 00:22:26,210 --> 00:22:31,740 Suze: apps on the front page. Their search Suze's podcast, click 381 00:22:31,750 --> 00:22:36,430 Suze: put in pro rata rule five year conversion and up 382 00:22:36,430 --> 00:22:38,330 Suze: will come all the podcasts. Just put 383 00:22:38,330 --> 00:22:39,820 KT: in Roth baby. 384 00:22:41,170 --> 00:22:46,300 KT: Okay, this next comment is Hi KT and Suze, I've 385 00:22:46,300 --> 00:22:49,670 KT: been a fan for over 20 years. You taught me 386 00:22:49,670 --> 00:22:53,080 KT: so much and helped me to have financial security with 387 00:22:53,080 --> 00:22:57,399 KT: many mistakes along the way. Recently I bought your must 388 00:22:57,400 --> 00:23:01,639 KT: have document program. How does it play the role in 389 00:23:01,640 --> 00:23:06,180 KT: tax saving in a living revocable trust or does it 390 00:23:06,180 --> 00:23:06,810 KT: not 391 00:23:07,230 --> 00:23:08,660 KT: love you both? 392 00:23:08,670 --> 00:23:10,550 Suze: That should have been your quiz. E 393 00:23:10,560 --> 00:23:11,770 KT: want me to try to answer 394 00:23:11,770 --> 00:23:12,040 Suze: it. 395 00:23:14,590 --> 00:23:17,220 KT: It doesn't pertain to tax saving. 396 00:23:17,530 --> 00:23:21,760 KT: Ding Ding Ding Ding Ding Ding. It pertains to other saving. 397 00:23:21,770 --> 00:23:22,570 KT: Ding Ding, Ding, Ding 398 00:23:22,570 --> 00:23:24,750 Suze: Ding Ding, I'm so proud of you. But that's not 399 00:23:24,750 --> 00:23:27,960 Suze: your cuisine because you knew the answer. 400 00:23:28,040 --> 00:23:29,690 KT: I always knew the answer. 401 00:23:29,700 --> 00:23:34,440 Suze: Not always. But anyway, here's the bottom line everybody. The 402 00:23:34,440 --> 00:23:39,500 Suze: must have documents the will, the living revocable trust, the 403 00:23:39,500 --> 00:23:42,680 Suze: advanced directive and durable power of attorney for healthcare as 404 00:23:42,680 --> 00:23:44,619 Suze: well as the financial power of attorney. 405 00:23:44,869 --> 00:23:49,400 Suze: The document that's being asked about is the living revocable trust. 406 00:23:50,130 --> 00:23:53,739 Suze: Does that have anything to do with saving you money 407 00:23:53,750 --> 00:23:56,230 Suze: on taxes? It does not, 408 00:23:56,510 --> 00:24:00,230 Suze: it saves you going through probate. It saves you in 409 00:24:00,230 --> 00:24:03,330 Suze: case of an incapacity, it saves you in case you 410 00:24:03,330 --> 00:24:06,660 Suze: have minor Children having their money put in a blocked account. 411 00:24:06,690 --> 00:24:10,470 Suze: It saves you in so many ways. And again, I 412 00:24:10,470 --> 00:24:12,850 Suze: get that many of you just don't want to spend 413 00:24:12,850 --> 00:24:15,810 Suze: the money to get one. You still don't understand why 414 00:24:15,810 --> 00:24:19,010 Suze: you need them. Although if you watch the Suze Orman 415 00:24:19,010 --> 00:24:23,530 Suze: show on Freevee or now listen to past podcast right here. 416 00:24:23,760 --> 00:24:27,700 Suze: You would so understand it. One of the biggest mistakes 417 00:24:27,700 --> 00:24:30,220 Suze: you'll ever make is not having a living revocable trust. 418 00:24:30,230 --> 00:24:35,560 Suze: I promise you that is true. So if you want one, 419 00:24:35,700 --> 00:24:40,629 Suze: simply go to Suze Orman dot com slash offer it 420 00:24:40,640 --> 00:24:45,210 Suze: is $99 for those of you here on the podcast. 421 00:24:45,280 --> 00:24:48,020 Suze: If you go to my website Suze Orman dot com 422 00:24:48,030 --> 00:24:49,159 Suze: you will see 423 00:24:49,510 --> 00:24:55,830 Suze: That. It's $199. So it's a great deal. It's $2500 424 00:24:55,830 --> 00:24:58,520 Suze: worth of state of the art documents, good in all 425 00:24:58,520 --> 00:25:01,710 Suze: 50 states you can share it with up to nine 426 00:25:01,710 --> 00:25:06,490 Suze: other people and it's you just they are so fabulous. 427 00:25:06,500 --> 00:25:09,320 Suze: I can't even tell you. Alright, KT. 428 00:25:09,340 --> 00:25:13,040 KT: Okay Suze. I have one more question before quizzie time. 429 00:25:13,140 --> 00:25:17,050 KT: This is from Alison. This is a real estate question. 430 00:25:17,180 --> 00:25:21,110 KT: She said I adore you both. I'm 39. 431 00:25:22,530 --> 00:25:27,030 KT: And my question pertains to fixed mortgages. Is it better 432 00:25:27,030 --> 00:25:31,220 KT: to put more money than 20% down on a house 433 00:25:31,230 --> 00:25:35,140 KT: or is it better to take that additional money and 434 00:25:35,140 --> 00:25:39,790 KT: invest it in an E. T. F. Such as V. T. I. 435 00:25:39,800 --> 00:25:44,580 KT: Instead with mortgage rates at around 5% and growing. Where 436 00:25:44,580 --> 00:25:47,310 KT: are you financially hedging the best bet? 437 00:25:47,650 --> 00:25:52,120 KT: Thousands saved an interest from having a smaller mortgage or 438 00:25:52,310 --> 00:25:57,000 KT: thousands earned from growth in the stock market, Suze, What's 439 00:25:57,000 --> 00:25:59,730 KT: the smart money move? I think this would be a 440 00:25:59,730 --> 00:26:00,460 KT: great quizzie. 441 00:26:00,800 --> 00:26:02,200 Suze: Alright then answer 442 00:26:02,200 --> 00:26:03,449 KT: 39 years old... 443 00:26:03,640 --> 00:26:04,770 Suze: Would you answer her? 444 00:26:04,780 --> 00:26:07,189 KT: Definitely go for the mortgage? (Suze makes the "wrong answer" sound) 445 00:26:08,810 --> 00:26:12,570 KT: Why Suze? Is it because she's 39 and she should 446 00:26:12,570 --> 00:26:14,080 KT: take advantage of time. 447 00:26:14,090 --> 00:26:19,320 Suze: So the average person, KT from the age of 39 448 00:26:19,330 --> 00:26:22,470 Suze: till now. How many homes have you bought and sold 449 00:26:22,480 --> 00:26:24,950 Suze: or moved in and moved out of 450 00:26:24,960 --> 00:26:26,080 KT: Two or three. 451 00:26:26,369 --> 00:26:31,240 Suze: At least. The average person keeps a home for seven 452 00:26:31,250 --> 00:26:35,219 Suze: years and then still and then they move 453 00:26:35,760 --> 00:26:37,990 KT: put your money in the market 454 00:26:37,990 --> 00:26:42,730 Suze: right? So Alison the point is at 39 if you're 455 00:26:42,740 --> 00:26:48,320 Suze: already putting 20% down so you don't have to pay P. M. I. 456 00:26:48,320 --> 00:26:52,150 Suze: Which is private mortgage insurance. And let's say that you 457 00:26:52,150 --> 00:26:55,170 Suze: took out a 30 year fixed rate mortgage. Let's just 458 00:26:55,170 --> 00:26:56,340 Suze: say that's true. 459 00:26:57,300 --> 00:27:01,629 Suze: That brings you to 69. You know I want all 460 00:27:01,630 --> 00:27:04,120 Suze: of you to work till at least 70. 461 00:27:05,020 --> 00:27:09,040 Suze: Probably longer as time goes on. So by the time 462 00:27:09,040 --> 00:27:15,370 Suze: you retire then absolutely you will have paid off this home. 463 00:27:15,960 --> 00:27:21,369 Suze: So the more you put down the less interest deduction 464 00:27:21,369 --> 00:27:25,730 Suze: you are going to make. Because the mortgage companies know 465 00:27:25,730 --> 00:27:29,120 Suze: that most likely you will sell your home within seven years, 466 00:27:29,300 --> 00:27:34,640 Suze: they want all that interest upfront before you move. That's 467 00:27:34,640 --> 00:27:38,680 Suze: why your mortgage write offs are higher in the beginning 468 00:27:38,680 --> 00:27:41,570 Suze: portion of your mortgage than at the end. 469 00:27:42,100 --> 00:27:46,710 Suze: So if you put more than 20% down, the value 470 00:27:46,710 --> 00:27:49,940 Suze: of the real estate goes up regardless. It's not gonna 471 00:27:49,940 --> 00:27:53,690 Suze: matter that way and you're gonna lose out on interest 472 00:27:53,690 --> 00:27:57,450 Suze: deduction and you're going to lose out on the possible 473 00:27:57,450 --> 00:28:03,750 Suze: growth of money. So I absolutely would not at 39. 474 00:28:03,770 --> 00:28:08,710 Suze: Put more money down. If you were 59 I would 475 00:28:08,710 --> 00:28:10,570 Suze: give you a different answer. 476 00:28:10,830 --> 00:28:14,030 Suze: But Katie that then was your quizzie. 477 00:28:15,240 --> 00:28:17,330 Suze: Like I'll have to keep the one I chose for 478 00:28:17,330 --> 00:28:18,429 Suze: you for a different time. 479 00:28:18,790 --> 00:28:21,659 KT: What's that quizzie you had for me? Was it hard? 480 00:28:21,670 --> 00:28:22,780 Suze: No? Alright 481 00:28:22,780 --> 00:28:24,210 KT: I'll save it right. 482 00:28:25,380 --> 00:28:27,800 Suze: I did it because you should have been able to an 483 00:28:27,810 --> 00:28:29,159 KT: I really want to 484 00:28:29,160 --> 00:28:31,149 KT: go for it and give it to me. Want me 485 00:28:31,150 --> 00:28:34,090 KT: to do a quick one everybody? Let's do two quizzie's. 486 00:28:34,510 --> 00:28:37,859 Suze: Alright. Is it true that any Roth conversion you make 487 00:28:37,869 --> 00:28:42,090 Suze: after 65 can negatively impact how much you have to 488 00:28:42,090 --> 00:28:44,780 Suze: pay for Medicare premiums? 489 00:28:45,950 --> 00:28:47,010 KT: I don't know. 490 00:28:47,020 --> 00:28:49,000 Suze: Come on I just 491 00:28:50,160 --> 00:28:53,180 KT: Yes yes yes yes 492 00:28:53,800 --> 00:28:54,470 KT: yes. 493 00:28:54,470 --> 00:28:55,900 Suze: So there you go. 494 00:28:55,910 --> 00:28:58,980 KT: There you go. That's a double quizzie and I got 495 00:28:58,980 --> 00:29:01,240 KT: it right. She just gave us the answer. 496 00:29:01,250 --> 00:29:04,060 Suze: If what KT they make how much 497 00:29:04,880 --> 00:29:06,900 Suze: over how much money per year? 498 00:29:07,860 --> 00:29:09,680 Suze: Look at her face, look at her face 499 00:29:10,810 --> 00:29:11,600 KT: over... 500 00:29:11,600 --> 00:29:13,840 Suze: $90,000 a year. If there's 501 00:29:15,260 --> 00:29:21,210 Suze: And 2,000 or if they're married finally jointly so it's 502 00:29:21,210 --> 00:29:24,670 Suze: not going to negatively affect all of you if you 503 00:29:24,680 --> 00:29:29,510 Suze: if it doesn't push you past the $90,000 limit. 504 00:29:29,890 --> 00:29:31,140 Suze: Alright so 505 00:29:31,480 --> 00:29:35,700 KT: two quizzies everyone I like that. I'm proud of myself. 506 00:29:35,710 --> 00:29:38,740 Suze: Good. Maybe I'll give you another one of three quizzies 507 00:29:38,740 --> 00:29:39,420 Suze: next time. 508 00:29:39,430 --> 00:29:42,640 KT: No no no I get very nervous everyone when it's 509 00:29:42,640 --> 00:29:46,870 KT: quizzie time. So I'm happy with with tackling. Alright. 510 00:29:46,880 --> 00:29:54,710 Suze: Alright. Everybody. 23 days left to do Alliant socially responsible 511 00:29:54,720 --> 00:29:58,690 Suze: checking account. Go to my alliant dot com slash good. 512 00:29:59,260 --> 00:30:02,050 Suze: And obviously if you want to be part of the 513 00:30:02,210 --> 00:30:07,650 Suze: Ask Suze and KT anything podcast, send in your questions to? 514 00:30:08,620 --> 00:30:11,370 Suze: Where do you know where they send them into KT? 515 00:30:11,380 --> 00:30:13,740 KT: Women and Money podcast? 516 00:30:13,750 --> 00:30:18,430 Suze: I'm gonna kill her... right to ask Suze podcast at 517 00:30:18,430 --> 00:30:23,200 Suze: gmail dot com. She's not kidding, you know, she's not 518 00:30:23,210 --> 00:30:26,210 Suze: kidding or go to the women and money podcast app 519 00:30:26,220 --> 00:30:27,590 Suze: and do it. There are 520 00:30:27,600 --> 00:30:31,420 Suze: All right everybody until Sunday. There's only one thing that 521 00:30:31,420 --> 00:30:34,080 Suze: we want you to remember. What is it case? Stay 522 00:30:34,080 --> 00:30:39,780 KT: safe. Strong and secure and we'll throw in a smart 523 00:30:39,780 --> 00:30:40,610 KT: for Suze. 524 00:30:40,620 --> 00:30:43,270 Suze: Alright see you soon. Bye bye.