1 00:00:30,059 --> 00:00:34,209 Robert: April 10th, 2025. Welcome to the Women and Money podcast, 2 00:00:34,299 --> 00:00:37,700 Robert: as well as everyone smart enough to listen. Robert, the 3 00:00:37,700 --> 00:00:38,409 Robert: producer here. 4 00:00:39,360 --> 00:00:42,790 Robert: Suze and KT have decided to take some time off, 5 00:00:43,400 --> 00:00:45,680 Robert: and Suze wanted me to tell you that she knows 6 00:00:45,680 --> 00:00:48,689 Robert: you've been equipped with the right actions to take and 7 00:00:48,689 --> 00:00:52,080 Robert: not take right now, so she feels that she can 8 00:00:52,080 --> 00:00:54,200 Robert: attend to family matters. 9 00:00:55,330 --> 00:00:57,830 Robert: So today we're going to revisit part of an Ask 10 00:00:57,830 --> 00:01:02,069 Robert: KT and Suze Anything episode from last year, and we're 11 00:01:02,069 --> 00:01:06,569 Robert: gonna jump right in with KT asking a question from Marlene. 12 00:01:07,150 --> 00:01:08,179 Robert: Take it away, KT. 13 00:01:08,830 --> 00:01:13,869 KT: Suze, I'm 75 and very comfortable. I understand I can 14 00:01:13,870 --> 00:01:21,709 KT: gift my 50-year-old son $17,000. He has big student loans, 15 00:01:21,739 --> 00:01:23,949 KT: and I need a tax deduction. 16 00:01:24,480 --> 00:01:28,870 KT: Can I pay his bill and take the deduction, or 17 00:01:29,199 --> 00:01:34,230 KT: should I transfer money from my IRA to my Roth IRA? 18 00:01:34,440 --> 00:01:37,000 Suze: That's actually a complicated one. You thought that was a 19 00:01:37,000 --> 00:01:38,919 Suze: really easy question, didn't you? 20 00:01:39,190 --> 00:01:42,429 KT: No, I think the the first part might be pretty easy. 21 00:01:42,519 --> 00:01:43,550 Suze: Yeah, the first part... 22 00:01:44,080 --> 00:01:46,789 KT: If there's one part, then you can answer that. 23 00:01:46,879 --> 00:01:49,120 Suze: I can answer both, but it's not as simple as 24 00:01:49,120 --> 00:01:49,919 Suze: one might think. 25 00:01:50,319 --> 00:01:55,480 Suze: You can absolutely gift your son or anybody you want 26 00:01:55,480 --> 00:01:58,110 Suze: and as many people a year that you want. 27 00:01:59,010 --> 00:01:59,970 Suze: Currently 28 00:02:00,980 --> 00:02:03,930 Suze: $18,000 a year. 29 00:02:04,819 --> 00:02:08,339 Suze: However, it's not taxable to them and it's not a 30 00:02:08,339 --> 00:02:12,750 Suze: tax write off to you on any level. The fact 31 00:02:12,750 --> 00:02:17,330 Suze: that he has big student loans is a very, very 32 00:02:17,330 --> 00:02:21,660 Suze: different question that where you say, but I need a 33 00:02:21,660 --> 00:02:25,169 Suze: tax deduction, and can I pay his bills and take 34 00:02:25,460 --> 00:02:29,019 Suze: a tax deduction? No, you cannot do that. 35 00:02:30,190 --> 00:02:33,889 Suze: I don't want you to confuse the two, however. 36 00:02:34,690 --> 00:02:39,419 Suze: Because if you're very comfortable, does it make you uncomfortable 37 00:02:39,830 --> 00:02:44,669 Suze: when you see your son suffering under a lot of 38 00:02:44,669 --> 00:02:49,539 Suze: student loans at the age of 50? What must that 39 00:02:49,538 --> 00:02:54,979 Suze: make him feel like, cause probably most of his friends 40 00:02:54,979 --> 00:03:00,949 Suze: don't have student loans anymore. So the question isn't, can 41 00:03:00,949 --> 00:03:02,389 Suze: you pay that bill. 42 00:03:02,788 --> 00:03:08,059 Suze: And get a tax deduction. The question is, can you 43 00:03:08,059 --> 00:03:13,740 Suze: pay that bill and still be incredibly comfortable at the 44 00:03:13,740 --> 00:03:15,609 Suze: age of 75. 45 00:03:16,538 --> 00:03:22,190 Suze: And take that burden off of your son's back. 46 00:03:23,320 --> 00:03:28,029 Suze: And would that make him happier? Would that help him 47 00:03:28,029 --> 00:03:32,380 Suze: in any way? And if the answer to that is yes, 48 00:03:32,470 --> 00:03:36,350 Suze: it would, then that's probably what you should do, however. 49 00:03:37,000 --> 00:03:40,490 Suze: If it won't help him, if on some level he's 50 00:03:40,490 --> 00:03:43,410 Suze: kind of a don't take this the wrong way, Marlene, 51 00:03:43,649 --> 00:03:46,199 Suze: but he's kind of like a financial loser. He's just, 52 00:03:46,449 --> 00:03:48,809 Suze: you know, not really doing the things he should be 53 00:03:48,809 --> 00:03:51,330 Suze: doing and maybe still living at home with you, whatever 54 00:03:51,330 --> 00:03:54,940 Suze: it may be. KT just gave me a look, everybody, 55 00:03:55,229 --> 00:03:58,800 Suze: but it's me, so it's, it's true. There are many 56 00:03:58,800 --> 00:04:04,009 Suze: kids that are financial losers, KT. There just are anyway. 57 00:04:05,080 --> 00:04:07,960 Suze: Then would you just be wasting that money if you 58 00:04:07,960 --> 00:04:11,440 Suze: were to pay off his bills, and would it just 59 00:04:11,440 --> 00:04:15,000 Suze: have gone to waste on some level? You and you 60 00:04:15,000 --> 00:04:18,880 Suze: alone have to decide that. As far as transferring your 61 00:04:18,880 --> 00:04:23,799 Suze: money from your IRA to a Roth IRA, you are 62 00:04:23,799 --> 00:04:29,279 Suze: the age of 75. You have required minimum distributions that 63 00:04:29,279 --> 00:04:32,760 Suze: are coming out of your traditional IRA. 64 00:04:33,230 --> 00:04:39,599 Suze: So just remember you have to take your RMDs before 65 00:04:39,600 --> 00:04:45,399 Suze: you can convert any money to a Roth IRA at 66 00:04:45,399 --> 00:04:48,959 Suze: the age of 75. Does it make sense to do it? 67 00:04:49,200 --> 00:04:51,559 Suze: I'm not sure it does or it doesn't, but you 68 00:04:51,559 --> 00:04:54,880 Suze: might want to contact your CPA and see what he 69 00:04:54,880 --> 00:04:56,980 Suze: or she says. All right, KT KT. 70 00:04:58,760 --> 00:05:00,019 Suze: I have a question for you. 71 00:05:01,279 --> 00:05:04,118 Suze: You know the question I'm going to ask you. Why 72 00:05:04,119 --> 00:05:08,140 Suze: does it bother you when I simply say maybe he's 73 00:05:08,140 --> 00:05:10,959 Suze: a financial loser? Why does that bother you? 74 00:05:11,079 --> 00:05:13,350 KT: Well, because that first answer. 75 00:05:13,850 --> 00:05:17,160 KT: It was so nice to take the burden off his back. 76 00:05:17,238 --> 00:05:20,179 KT: Would it make him happier? Would it make you happier? 77 00:05:20,359 --> 00:05:23,519 KT: And then bam, you flip the coin and say, on 78 00:05:23,519 --> 00:05:27,589 KT: the other hand, your son may be a real financial flake. 79 00:05:27,839 --> 00:05:28,100 Suze: Yeah. 80 00:05:28,480 --> 00:05:28,809 KT: Right? 81 00:05:28,880 --> 00:05:29,839 Suze: So what's wrong with that? 82 00:05:29,959 --> 00:05:32,440 KT: Well, nothing's wrong with it, but it was so nice 83 00:05:32,440 --> 00:05:35,178 KT: in the beginning. I was so happy. I was happy 84 00:05:35,178 --> 00:05:36,149 KT: for her and him. 85 00:05:36,399 --> 00:05:37,640 Suze: If that had been true. 86 00:05:37,720 --> 00:05:41,000 KT: Well, let's hope, let's hope the part A 87 00:05:41,649 --> 00:05:46,178 KT: is the truth not part B? I hope the answer. 88 00:05:46,238 --> 00:05:49,720 Suze: I hope that Marlene has the courage to stand in 89 00:05:49,720 --> 00:05:53,149 Suze: her own truth, no matter which one of those things 90 00:05:53,149 --> 00:05:57,308 Suze: it happens to be, because she's OK no matter what. 91 00:05:57,470 --> 00:05:58,190 Suze: Next question, 92 00:05:58,279 --> 00:06:00,010 KT: OK, this is from Peggy. 93 00:06:00,109 --> 00:06:02,660 Suze: Let's see if I can upset KT again. All right. 94 00:06:03,570 --> 00:06:07,480 KT: This thing she says embarrassed. Hi, Suze and KT. 95 00:06:07,570 --> 00:06:09,540 Suze: That's what I do to Katy all the time. 96 00:06:09,730 --> 00:06:13,450 KT: I've been watching and listening for over 10 years, but 97 00:06:13,450 --> 00:06:16,928 KT: I'm getting ready now for retirement in the next 2 years. 98 00:06:17,450 --> 00:06:22,719 KT: What is the purpose of moving my 401k and 403B 99 00:06:23,209 --> 00:06:27,279 KT: into an IRA? I feel so knowledgeable because of you, 100 00:06:27,329 --> 00:06:30,640 KT: but I am embarrassed to say I don't quite know 101 00:06:30,970 --> 00:06:33,940 KT: how to retire. Did she, did she know you have 102 00:06:33,940 --> 00:06:35,399 KT: a book on this? 103 00:06:35,970 --> 00:06:40,010 Suze: I am so tempted to say, KT. I know we 104 00:06:40,010 --> 00:06:44,410 Suze: normally wait till the end of the Ask KT and 105 00:06:44,410 --> 00:06:47,049 Suze: Suze Anything podcast for your quizzy. 106 00:06:47,609 --> 00:06:52,149 Suze: But guess what? Pop quizzy, KT. 107 00:06:52,149 --> 00:06:52,779 KT: Right now? 108 00:06:52,988 --> 00:06:53,630 Suze: Right now. 109 00:06:53,630 --> 00:06:54,219 KT: On this? 110 00:06:54,309 --> 00:06:59,920 Suze: On this question, everybody, how would you answer this question? 111 00:07:00,380 --> 00:07:04,630 Suze: Why have I for years been saying to most of 112 00:07:04,630 --> 00:07:10,619 Suze: you that once you decide to retire, you should look into, 113 00:07:11,269 --> 00:07:15,940 Suze: if you have a traditional 401k or 403B or even 114 00:07:15,940 --> 00:07:21,109 Suze: a Roth 401k or a Roth 403B, look at transferring 115 00:07:21,109 --> 00:07:26,230 Suze: it or rolling it to an IRA or a Roth IRA. 116 00:07:26,230 --> 00:07:27,149 Suze: Why KT? 117 00:07:29,690 --> 00:07:35,470 KT: Well, when you, when you transfer the traditional into your Roth... 118 00:07:35,589 --> 00:07:40,760 Suze: No, you would transfer a traditional 401k to a traditional IRA. 119 00:07:41,149 --> 00:07:44,149 Suze: It's got to go from pre-tax to pre-tax or she's 120 00:07:44,149 --> 00:07:45,709 Suze: gonna pay taxes on everything. 121 00:07:46,500 --> 00:07:48,519 KT: But if it's a Roth, 122 00:07:48,799 --> 00:07:50,829 Suze: No, don't get confused. 123 00:07:50,920 --> 00:07:51,589 KT: I don't know. 124 00:07:53,350 --> 00:07:58,820 Suze: No, that's it? You just don't know. 125 00:07:59,149 --> 00:08:01,230 KT: Well, if she's retiring... 126 00:08:01,630 --> 00:08:06,769 Suze: Wait, let's pretend it's you. You have money in a 401k. 127 00:08:07,350 --> 00:08:11,380 Suze: You've been working. You haven't ever paid taxes on that money, 128 00:08:11,709 --> 00:08:14,339 Suze: and now you have a choice of leaving it right 129 00:08:14,339 --> 00:08:17,790 Suze: there if you want, or taking it and putting it 130 00:08:17,790 --> 00:08:22,518 Suze: in Fidelity or Schwab in an IRA rollover. 131 00:08:23,239 --> 00:08:26,459 Suze: I have been telling everybody to do that. 132 00:08:27,769 --> 00:08:30,769 Suze: Why have I been telling everybody to do that? You 133 00:08:30,769 --> 00:08:31,489 Suze: should see your face. 134 00:08:31,570 --> 00:08:35,449 KT: Well, because when you get close to retirement, your tax, um, 135 00:08:35,570 --> 00:08:39,080 KT: your tax liability is a lot less than when you're 136 00:08:39,809 --> 00:08:43,419 KT: working and earning money. OK, why? 137 00:08:43,969 --> 00:08:45,239 Suze: You really don't know? 138 00:08:45,409 --> 00:08:45,799 KT: No. 139 00:08:46,010 --> 00:08:47,210 Suze: Obviously, all right. 140 00:08:47,659 --> 00:08:53,000 Suze: Everybody, especially Peggy, and thank you for this question, quizzy. 141 00:08:53,130 --> 00:08:57,530 Suze: If you have your money at a 401k or a 403B, 142 00:08:57,570 --> 00:09:02,539 Suze: which is usually a nonprofit KT, it is with your employer. 143 00:09:03,229 --> 00:09:09,880 Suze: And normally a 401k plan or a 403b plan only 144 00:09:09,880 --> 00:09:16,630 Suze: has a specific number of investments, and most of those 145 00:09:16,630 --> 00:09:19,270 Suze: investments consist of only. 146 00:09:19,929 --> 00:09:25,848 Suze: The company stock that maybe you're working for, but mutual funds, 147 00:09:25,859 --> 00:09:30,059 Suze: maybe they have a variety of mutual funds, but that's it. 148 00:09:31,340 --> 00:09:36,549 Suze: When you transfer it and put it into an IRA. 149 00:09:37,919 --> 00:09:42,000 Suze: Now you can buy exchange traded funds, individual stocks. You 150 00:09:42,000 --> 00:09:46,159 Suze: could buy certificates of deposits. You could buy treasuries. You 151 00:09:46,159 --> 00:09:50,559 Suze: could buy so many different things, and you could probably 152 00:09:50,559 --> 00:09:55,280 Suze: even buy the exact same things that the 401k is 153 00:09:55,280 --> 00:09:56,039 Suze: invested in. 154 00:09:56,840 --> 00:10:01,289 Suze: So the reason that I tell everybody to transfer it 155 00:10:01,289 --> 00:10:04,250 Suze: when you leave is so that you can have more 156 00:10:04,250 --> 00:10:09,049 Suze: diversification as you get older. Maybe you're gonna want to 157 00:10:09,049 --> 00:10:11,809 Suze: put money into individual bonds. 158 00:10:12,280 --> 00:10:16,729 Suze: You can't buy individual bonds within a 401k or 403B. 159 00:10:17,020 --> 00:10:20,978 Suze: You can only buy bond funds, and everybody knows I 160 00:10:20,979 --> 00:10:27,419 Suze: hate bond funds. So therefore I hope, Peggy, that has 161 00:10:27,419 --> 00:10:30,460 Suze: answered your question, however. 162 00:10:31,469 --> 00:10:34,709 Suze: Let's say you have a sizable sum of money within 163 00:10:34,710 --> 00:10:38,280 Suze: the 401K or 403B. Let's just say that's true. 164 00:10:39,179 --> 00:10:45,200 Suze: And you're comfortable with your investments. You feel secure there. 165 00:10:45,729 --> 00:10:48,690 Suze: And now you don't want to transfer it because maybe 166 00:10:48,690 --> 00:10:51,090 Suze: you have to cash it out even though in most 167 00:10:51,090 --> 00:10:53,599 Suze: cases you won't have to. But let's just say you did. 168 00:10:53,809 --> 00:10:58,210 Suze: And now you have $800,000 of cash sitting at a 169 00:10:58,210 --> 00:11:01,488 Suze: discount brokerage firm like Fidelity or Schwab, and now you 170 00:11:01,489 --> 00:11:04,640 Suze: have to invest it and you don't have a clue 171 00:11:04,640 --> 00:11:08,119 Suze: how to do that, so you're scared to death. 172 00:11:08,650 --> 00:11:11,968 Suze: If that's the situation, then hey, leave it in the 173 00:11:11,969 --> 00:11:14,968 Suze: 401k or the 403b. 174 00:11:16,130 --> 00:11:17,880 Suze: Do I get a ding ding ding on that? 175 00:11:17,880 --> 00:11:21,770 KT: Ding ding ding ding ding ding ding. That was good, right? 176 00:11:21,890 --> 00:11:22,380 Suze: Did you learn? 177 00:11:22,979 --> 00:11:27,250 KT: Well, I didn't realize that the reason, the biggest reason 178 00:11:27,250 --> 00:11:30,650 KT: is that you have a great deal of choice and diversification. 179 00:11:30,710 --> 00:11:34,479 Suze: That's the only reason, girlfriend. All right, next question. 180 00:11:34,690 --> 00:11:36,608 KT: OK, this is a great this. 181 00:11:37,500 --> 00:11:40,070 KT: I read this question and I'm thinking to myself, wow, 182 00:11:40,159 --> 00:11:42,909 KT: what would I do? What would Suze do? 183 00:11:42,989 --> 00:11:44,070 Suze: What would Suze do? 184 00:11:44,070 --> 00:11:45,929 KT: Good morning Suze... 185 00:11:46,190 --> 00:11:51,150 Suze: Wait, one of my favorite things, right, is that sometimes 186 00:11:51,150 --> 00:11:54,500 Suze: we'd be in a restaurant, everybody, or even a bookstore, 187 00:11:55,070 --> 00:11:58,299 Suze: and I'd be standing in line to get a book 188 00:11:58,590 --> 00:12:01,429 Suze: and people would be in front of me and they 189 00:12:01,429 --> 00:12:04,390 Suze: had my book in their hand or on an airplane. 190 00:12:04,900 --> 00:12:08,770 Suze: And I would hear them talking like they'd usually be 191 00:12:08,770 --> 00:12:12,330 Suze: with a friend and they would always say, What do 192 00:12:12,330 --> 00:12:15,719 Suze: you think Suze would do? What would Suze do? 193 00:12:16,590 --> 00:12:17,450 KT: Well, here's a good one. 194 00:12:18,330 --> 00:12:21,049 Suze: And then KT I would lean over and I go, Well, 195 00:12:21,169 --> 00:12:23,209 Suze: I'll tell you what I would do, and they'd always 196 00:12:23,210 --> 00:12:23,510 Suze: go "Ahh!" 197 00:12:24,330 --> 00:12:27,640 KT: Yeah, that's her it's it's her. All right, ready? This 198 00:12:27,640 --> 00:12:30,520 KT: is from Pat, and Pat said, Good morning, Suze. 199 00:12:30,669 --> 00:12:31,190 Suze: It is. 200 00:12:31,359 --> 00:12:35,359 KT: Here's our question. What should a person do when they 201 00:12:35,359 --> 00:12:39,960 KT: find a large amount of money in the home of 202 00:12:39,960 --> 00:12:42,439 KT: loved ones who have passed? 203 00:12:43,150 --> 00:12:46,989 KT: Will the bank question a large deposit? I think the 204 00:12:46,989 --> 00:12:52,130 KT: bank would be the safest place. Now what would Suze do? 205 00:12:52,309 --> 00:12:57,468 Suze: Well, Suze, as many of you may know, actually read 206 00:12:57,469 --> 00:13:01,309 Suze: a lot of these questions, and I wrote this person 207 00:13:01,309 --> 00:13:05,468 Suze: back and I said, How much is a large sum 208 00:13:05,469 --> 00:13:05,950 Suze: of money? 209 00:13:06,030 --> 00:13:06,859 KT: Did they tell you? 210 00:13:06,950 --> 00:13:09,070 Suze: Yes, and they wrote back and they said, 211 00:13:09,659 --> 00:13:13,880 Suze: $200,000. 212 00:13:13,960 --> 00:13:15,549 KT: Someone stashed cash. 213 00:13:15,679 --> 00:13:20,190 Suze: Her father didn't really believe in debt. He didn't really 214 00:13:20,190 --> 00:13:23,669 Suze: believe in banks, and little by little he would take 215 00:13:23,669 --> 00:13:27,640 Suze: his paycheck and everything, and he would just stash it 216 00:13:27,640 --> 00:13:33,830 Suze: in the house in cash. Wow. And now she has 217 00:13:33,830 --> 00:13:34,590 Suze: found it. 218 00:13:35,270 --> 00:13:39,500 Suze: So the question is what would Suze do? 219 00:13:41,020 --> 00:13:45,099 Suze: First of all, you have to realize that $200,000 is 220 00:13:45,099 --> 00:13:46,099 Suze: a lot of money. 221 00:13:47,109 --> 00:13:50,478 Suze: And if you just let it sit there in cash, 222 00:13:51,090 --> 00:13:58,520 Suze: you're missing out on about $10,000 a year currently in interest. 223 00:13:59,010 --> 00:14:00,209 Suze: That's number one. 224 00:14:00,869 --> 00:14:04,900 Suze: But number 2, the very first thing I would do 225 00:14:04,900 --> 00:14:06,968 Suze: is if you have a lawyer 226 00:14:07,659 --> 00:14:12,349 Suze: that was settling the estate for your father. Maybe he 227 00:14:12,349 --> 00:14:15,760 Suze: had a home that needed to go through probate or whatever. 228 00:14:16,090 --> 00:14:20,849 Suze: I would first consult with him or her and ask 229 00:14:20,849 --> 00:14:25,250 Suze: for their opinion. Chances are what they are going to 230 00:14:25,250 --> 00:14:26,609 Suze: tell you to do. 231 00:14:27,489 --> 00:14:30,559 Suze: And if you don't have one, you might want to 232 00:14:30,559 --> 00:14:34,280 Suze: find one and just consult with them, but would be 233 00:14:34,280 --> 00:14:39,440 Suze: to find a bank, either the bank that your father 234 00:14:39,440 --> 00:14:42,469 Suze: was dealing with, but maybe he didn't have a bank, 235 00:14:42,719 --> 00:14:47,280 Suze: but maybe you have a bank where you have connections 236 00:14:47,280 --> 00:14:48,429 Suze: with that bank. 237 00:14:49,270 --> 00:14:55,539 Suze: Because if you ever deposit $10,000 or more at one time, 238 00:14:55,750 --> 00:14:57,109 Suze: they're going to report it. 239 00:14:57,729 --> 00:15:00,520 Suze: And they're gonna report it because that's a lot of 240 00:15:00,520 --> 00:15:07,159 Suze: money if you deposit $200,000 at one time, oh, there 241 00:15:07,159 --> 00:15:11,520 Suze: are gonna be a whole lot of questions, so you 242 00:15:11,520 --> 00:15:17,960 Suze: should take the death certificate, his will or trust, showing 243 00:15:17,960 --> 00:15:20,039 Suze: everybody that you're the beneficiary. 244 00:15:20,719 --> 00:15:25,830 Suze: Of everything and that you found this money while getting 245 00:15:25,830 --> 00:15:30,239 Suze: your father's house in order to sell or whatever reason 246 00:15:30,239 --> 00:15:32,150 Suze: you were looking through this stuff. 247 00:15:32,820 --> 00:15:37,489 Suze: And just come clean now. Maybe they'll make you pay 248 00:15:37,489 --> 00:15:42,640 Suze: taxes on it. You never know. Maybe they'll say, oh, OK, 249 00:15:42,849 --> 00:15:46,280 Suze: cause he never had a bank account or whatever. They'll 250 00:15:46,280 --> 00:15:48,479 Suze: understand that and they'll just let you have it. 251 00:15:49,539 --> 00:15:53,539 Suze: Right, but it should probably be if you go to 252 00:15:53,539 --> 00:15:57,299 Suze: a bank that you open up an account not in 253 00:15:57,299 --> 00:16:01,260 Suze: your name but in the estate of your father, so 254 00:16:01,260 --> 00:16:03,979 Suze: it sits in that account. 255 00:16:04,780 --> 00:16:09,520 Suze: So then it becomes part of the estate. That is 256 00:16:09,520 --> 00:16:15,059 Suze: a very simplistic thing of what Suze would do. All right, KT, 257 00:16:15,099 --> 00:16:16,010 Suze: next question. 258 00:16:16,789 --> 00:16:20,669 KT: All right, this is from Lou. Suze, should we include 259 00:16:20,669 --> 00:16:25,109 KT: our rental property that is paid for in our living trust? 260 00:16:25,570 --> 00:16:32,669 KT: The property provides us an additional monthly income of $2,550. 261 00:16:32,750 --> 00:16:34,020 Suze: One has nothing to do with the other. 262 00:16:34,309 --> 00:16:37,539 KT: Listen to this. We were not going to include our 263 00:16:37,539 --> 00:16:40,250 KT: primary home in the living trust. 264 00:16:40,349 --> 00:16:42,299 Suze: Then why the heck do you even have a living trust? 265 00:16:42,390 --> 00:16:47,429 KT: We are both 70 plus years old. So explain to 266 00:16:47,429 --> 00:16:49,250 KT: Lou about why there's a trust. 267 00:16:49,390 --> 00:16:52,309 Suze: The main reason that you want a trust. 268 00:16:53,070 --> 00:16:58,539 Suze: Is so that your home, your rental property, things that 269 00:16:58,539 --> 00:17:02,219 Suze: really don't have a transfer of title like a life 270 00:17:02,219 --> 00:17:05,739 Suze: insurance policy, you have a beneficiary of that doesn't go 271 00:17:05,739 --> 00:17:10,420 Suze: through probate. Your retirement accounts has a beneficiary doesn't go 272 00:17:10,420 --> 00:17:13,619 Suze: through probate, right, and I'm not a fan, by the 273 00:17:13,619 --> 00:17:16,139 Suze: way of having a trust be a beneficiary of a 274 00:17:16,140 --> 00:17:20,219 Suze: retirement account, as I have told you many times, but 275 00:17:20,219 --> 00:17:22,420 Suze: it's very difficult with a home. 276 00:17:22,989 --> 00:17:25,540 Suze: The main way you avoid probate with a home is 277 00:17:25,540 --> 00:17:29,329 Suze: you own the home, enjoying tenancy with right of survivorship, 278 00:17:29,579 --> 00:17:31,939 Suze: but then when the person you left it to dies, 279 00:17:32,060 --> 00:17:33,650 Suze: it doesn't go through probate. 280 00:17:34,319 --> 00:17:38,459 Suze: And remember when a home goes through probate, it's not 281 00:17:38,630 --> 00:17:41,310 Suze: how much you owe on the home, it's how much 282 00:17:41,310 --> 00:17:45,550 Suze: it's worth. So for instance, if you have a $500,000 283 00:17:45,550 --> 00:17:50,109 Suze: home and you still owe $250,000 on that home, all 284 00:17:50,109 --> 00:17:56,030 Suze: $500,000 is going to go through probate, and depending on 285 00:17:56,030 --> 00:18:01,189 Suze: what state you're in, probate can be really, really expensive, 286 00:18:01,229 --> 00:18:01,910 Suze: so Lou. 287 00:18:02,380 --> 00:18:07,339 Suze: You need to understand why do you have a trust. 288 00:18:07,869 --> 00:18:12,030 Suze: What are your reasons for not having your home and 289 00:18:12,030 --> 00:18:16,949 Suze: rental property within the trust. It doesn't affect your income 290 00:18:16,949 --> 00:18:21,430 Suze: taxes on any level. It's the exact same as if 291 00:18:21,430 --> 00:18:24,948 Suze: you have a trust like KT and I both have trusts. 292 00:18:25,569 --> 00:18:28,040 Suze: And we pay the same income tax whether we had 293 00:18:28,040 --> 00:18:32,040 Suze: a trust or we didn't have a trust. What happens, however, 294 00:18:32,199 --> 00:18:35,948 Suze: is what happens to that money when something happens to us. 295 00:18:36,560 --> 00:18:40,959 KT: It sounds like Lou didn't understand that he could have 296 00:18:40,959 --> 00:18:44,719 KT: both of these in his trust. It sounds like he want, 297 00:18:44,760 --> 00:18:47,399 KT: he was trying to tell us he decided not to 298 00:18:47,400 --> 00:18:50,040 KT: put his primary home in it, but just the should 299 00:18:50,040 --> 00:18:55,319 KT: absolutely put as many assets as you have about the probate. 300 00:18:55,780 --> 00:19:00,640 Suze: It's about incapacity. If something were to happen to you 301 00:19:00,640 --> 00:19:04,439 Suze: and you don't die, who pays your bills, Lou, who 302 00:19:04,439 --> 00:19:07,438 Suze: writes your checks? Who makes sure that the mortgage and 303 00:19:07,439 --> 00:19:09,520 Suze: the insurance and everything is paid. 304 00:19:10,290 --> 00:19:14,560 Suze: That's why you want a trust that has an incapacity clause, 305 00:19:14,810 --> 00:19:17,130 Suze: and for those of you who are asking. 306 00:19:17,660 --> 00:19:22,479 Suze: The must-have docs are back on sale. All you have 307 00:19:22,479 --> 00:19:26,800 Suze: to do is go to musthadocs.com, and you will find 308 00:19:26,800 --> 00:19:33,479 Suze: them $2500 worth of state of the art documents for $99. 309 00:19:33,640 --> 00:19:35,510 Suze: All right, KT, next question. 310 00:19:35,719 --> 00:19:38,949 KT: This is from Sarah Berg. I need to find dental 311 00:19:38,949 --> 00:19:40,400 KT: insurance soon due to 312 00:19:40,444 --> 00:19:44,435 KT: leaving my job. I know you love dental plans. Would 313 00:19:44,435 --> 00:19:48,074 KT: I want to have dental insurance and dental plan, or 314 00:19:48,074 --> 00:19:51,354 KT: just the dental plan? My teeth are in good shape, 315 00:19:51,395 --> 00:19:54,744 KT: but I'm 55, so who knows what's coming as far 316 00:19:54,744 --> 00:19:56,584 KT: as dental care needs. 317 00:19:56,714 --> 00:19:58,675 Suze: Well, I'll tell you what's coming, and Sarah, 318 00:19:58,755 --> 00:20:02,974 KT: I'll tell you tell you what's coming. We thousands of. 319 00:20:03,339 --> 00:20:07,510 KT: Dollars of dental work, but get the dental plan. Tell 320 00:20:07,510 --> 00:20:08,239 KT: her to get the... 321 00:20:08,469 --> 00:20:10,910 Suze: I would not be getting dental insurance if I were you. 322 00:20:10,989 --> 00:20:14,270 Suze: I am not a fan of dental insurance unless you 323 00:20:14,270 --> 00:20:17,379 Suze: work for a company that pays for it for you. 324 00:20:17,709 --> 00:20:22,849 Suze: I and KT and Colo and all of our friends 325 00:20:23,380 --> 00:20:25,869 Suze: and friends have something called a dental 326 00:20:26,265 --> 00:20:32,935 Suze: savings plan, go to dental plans.com. Look at it. Normally 327 00:20:33,385 --> 00:20:38,104 Suze: dental insurance could be $100 or $150 a month. Normally 328 00:20:38,104 --> 00:20:42,464 Suze: they have high deductibles and waiting periods with a dental 329 00:20:42,464 --> 00:20:46,224 Suze: savings plan. Maybe if it's just you, it will cost 330 00:20:46,224 --> 00:20:48,694 Suze: you $150 a year. 331 00:20:49,040 --> 00:20:54,050 Suze: And you can save anywhere from 10 to 60% on procedures, 332 00:20:54,189 --> 00:20:57,739 Suze: no waiting period, and no max out of how much 333 00:20:57,739 --> 00:21:03,660 Suze: you can use it. So again, dental plans.com. Next, KT. 334 00:21:03,839 --> 00:21:06,069 KT: OK, my final question, short and 335 00:21:06,219 --> 00:21:10,609 KT: sweet. Does the income I earn from interest or capital 336 00:21:10,609 --> 00:21:15,369 KT: gains from selling a stock held less than a year 337 00:21:15,369 --> 00:21:23,329 KT: count towards the 146,000 income before I have reduced Roth contributions? 338 00:21:24,500 --> 00:21:25,750 KT: That's from Wayne. 339 00:21:25,969 --> 00:21:27,550 Suze: Do you want another quizzy? 340 00:21:27,849 --> 00:21:30,890 KT: Well, all right, let me see. Hold on. All right, everybody, 341 00:21:30,969 --> 00:21:34,010 KT: let me see if I can redeem my lack of 342 00:21:34,010 --> 00:21:38,530 KT: knowledge here. So does the income I earn from interest 343 00:21:38,530 --> 00:21:41,169 KT: or capital gains from selling a stock held less than 344 00:21:41,170 --> 00:21:46,040 KT: a year count towards the 146 that I held less? 345 00:21:46,369 --> 00:21:49,250 KT: I think that the answer is whatever income you have 346 00:21:49,250 --> 00:21:52,899 KT: when you reach that limit, that's the limit. doesn't matter when. 347 00:21:52,969 --> 00:21:53,979 Suze: That's not the question. 348 00:21:55,790 --> 00:21:59,829 Suze: The question is, if this person has held a stock 349 00:21:59,829 --> 00:22:04,149 Suze: for less than a year, obviously it's outside of a 350 00:22:04,150 --> 00:22:06,310 Suze: retirement account and they sell it. 351 00:22:07,180 --> 00:22:09,649 Suze: Does that gain count 352 00:22:10,849 --> 00:22:17,530 Suze: towards the calculation of income where the max is 146 353 00:22:17,530 --> 00:22:19,000 Suze: for a single person. 354 00:22:21,390 --> 00:22:24,399 KT: Do you want me to answer it? I think it does. 355 00:22:25,819 --> 00:22:29,369 KT: I think it does. I think, yeah, all I know 356 00:22:29,369 --> 00:22:33,459 KT: is in in America, whatever money you make is your income, right? 357 00:22:33,890 --> 00:22:37,650 Suze: Not actually, however, but it is true when you sell 358 00:22:37,650 --> 00:22:42,239 Suze: a stock that you have held for less than one year, Wayne, 359 00:22:42,609 --> 00:22:46,530 Suze: that's taxed to you then as ordinary income. 360 00:22:47,660 --> 00:22:52,260 Suze: Right, so yes, it counts towards your income, even if 361 00:22:52,260 --> 00:22:56,698 Suze: it's a capital gain, the way they figure capital gains, 362 00:22:56,719 --> 00:23:00,180 Suze: it gets figured in with your income and all of that. 363 00:23:00,459 --> 00:23:03,790 Suze: So either way, it probably would, but definitely in this 364 00:23:03,790 --> 00:23:12,060 Suze: situation it will count towards that $146,000 of modified adjusted 365 00:23:12,060 --> 00:23:14,780 Suze: gross income. What are you eating? 366 00:23:15,719 --> 00:23:18,149 KT: It's a cough drop from my throat. 367 00:23:18,319 --> 00:23:19,160 Suze: Do you have a sore throat? 368 00:23:19,239 --> 00:23:21,349 KT: It's not sore, but it's a little dry. 369 00:23:21,599 --> 00:23:22,790 Suze: It's dry, huh? 370 00:23:22,839 --> 00:23:25,639 KT: Yeah, because I've been swimming in the ocean with Susie 371 00:23:25,640 --> 00:23:29,359 KT: every day till we got this bout of rain. But 372 00:23:29,359 --> 00:23:32,479 KT: like we better sign off. It's late. We're over our 373 00:23:32,479 --> 00:23:33,599 KT: limit here, everyone. 374 00:23:33,719 --> 00:23:36,739 Suze: Oh, actually, KT, we're the bosses, so we make the 375 00:23:36,739 --> 00:23:40,969 Suze: limit be whatever we want it to be. However, 376 00:23:41,520 --> 00:23:43,790 KT: There's really only one thing that we want you to 377 00:23:43,790 --> 00:23:46,619 KT: remember when it comes to your money. What is that, KT? 378 00:23:46,790 --> 00:23:53,349 KT: People first, then money, then things, and if you follow 379 00:23:53,349 --> 00:23:54,619 KT: that guideline, 380 00:23:54,630 --> 00:24:02,260 Suze: and if you stay safe, you will be what? Unstoppable.