Robert: April 10th, 2025. Welcome to the Women and Money podcast,
Robert: as well as everyone smart enough to listen. Robert, the
Robert: producer here.
Robert: Suze and KT have decided to take some time off,
Robert: and Suze wanted me to tell you that she knows
Robert: you've been equipped with the right actions to take and
Robert: not take right now, so she feels that she can
Robert: attend to family matters.
Robert: So today we're going to revisit part of an Ask
Robert: KT and Suze Anything episode from last year, and we're
Robert: gonna jump right in with KT asking a question from Marlene.
Robert: Take it away, KT.
KT: Suze, I'm 75 and very comfortable. I understand I can
KT: gift my 50-year-old son $17,000. He has big student loans,
KT: and I need a tax deduction.
KT: Can I pay his bill and take the deduction, or
KT: should I transfer money from my IRA to my Roth IRA?
Suze: That's actually a complicated one. You thought that was a
Suze: really easy question, didn't you?
KT: No, I think the the first part might be pretty easy.
Suze: Yeah, the first part...
KT: If there's one part, then you can answer that.
Suze: I can answer both, but it's not as simple as
Suze: one might think.
Suze: You can absolutely gift your son or anybody you want
Suze: and as many people a year that you want.
Suze: Currently
Suze: $18,000 a year.
Suze: However, it's not taxable to them and it's not a
Suze: tax write off to you on any level. The fact
Suze: that he has big student loans is a very, very
Suze: different question that where you say, but I need a
Suze: tax deduction, and can I pay his bills and take
Suze: a tax deduction? No, you cannot do that.
Suze: I don't want you to confuse the two, however.
Suze: Because if you're very comfortable, does it make you uncomfortable
Suze: when you see your son suffering under a lot of
Suze: student loans at the age of 50? What must that
Suze: make him feel like, cause probably most of his friends
Suze: don't have student loans anymore. So the question isn't, can
Suze: you pay that bill.
Suze: And get a tax deduction. The question is, can you
Suze: pay that bill and still be incredibly comfortable at the
Suze: age of 75.
Suze: And take that burden off of your son's back.
Suze: And would that make him happier? Would that help him
Suze: in any way? And if the answer to that is yes,
Suze: it would, then that's probably what you should do, however.
Suze: If it won't help him, if on some level he's
Suze: kind of a don't take this the wrong way, Marlene,
Suze: but he's kind of like a financial loser. He's just,
Suze: you know, not really doing the things he should be
Suze: doing and maybe still living at home with you, whatever
Suze: it may be. KT just gave me a look, everybody,
Suze: but it's me, so it's, it's true. There are many
Suze: kids that are financial losers, KT. There just are anyway.
Suze: Then would you just be wasting that money if you
Suze: were to pay off his bills, and would it just
Suze: have gone to waste on some level? You and you
Suze: alone have to decide that. As far as transferring your
Suze: money from your IRA to a Roth IRA, you are
Suze: the age of 75. You have required minimum distributions that
Suze: are coming out of your traditional IRA.
Suze: So just remember you have to take your RMDs before
Suze: you can convert any money to a Roth IRA at
Suze: the age of 75. Does it make sense to do it?
Suze: I'm not sure it does or it doesn't, but you
Suze: might want to contact your CPA and see what he
Suze: or she says. All right, KT KT.
Suze: I have a question for you.
Suze: You know the question I'm going to ask you. Why
Suze: does it bother you when I simply say maybe he's
Suze: a financial loser? Why does that bother you?
KT: Well, because that first answer.
KT: It was so nice to take the burden off his back.
KT: Would it make him happier? Would it make you happier?
KT: And then bam, you flip the coin and say, on
KT: the other hand, your son may be a real financial flake.
Suze: Yeah.
KT: Right?
Suze: So what's wrong with that?
KT: Well, nothing's wrong with it, but it was so nice
KT: in the beginning. I was so happy. I was happy
KT: for her and him.
Suze: If that had been true.
KT: Well, let's hope, let's hope the part A
KT: is the truth not part B? I hope the answer.
Suze: I hope that Marlene has the courage to stand in
Suze: her own truth, no matter which one of those things
Suze: it happens to be, because she's OK no matter what.
Suze: Next question,
KT: OK, this is from Peggy.
Suze: Let's see if I can upset KT again. All right.
KT: This thing she says embarrassed. Hi, Suze and KT.
Suze: That's what I do to Katy all the time.
KT: I've been watching and listening for over 10 years, but
KT: I'm getting ready now for retirement in the next 2 years.
KT: What is the purpose of moving my 401k and 403B
KT: into an IRA? I feel so knowledgeable because of you,
KT: but I am embarrassed to say I don't quite know
KT: how to retire. Did she, did she know you have
KT: a book on this?
Suze: I am so tempted to say, KT. I know we
Suze: normally wait till the end of the Ask KT and
Suze: Suze Anything podcast for your quizzy.
Suze: But guess what? Pop quizzy, KT.
KT: Right now?
Suze: Right now.
KT: On this?
Suze: On this question, everybody, how would you answer this question?
Suze: Why have I for years been saying to most of
Suze: you that once you decide to retire, you should look into,
Suze: if you have a traditional 401k or 403B or even
Suze: a Roth 401k or a Roth 403B, look at transferring
Suze: it or rolling it to an IRA or a Roth IRA.
Suze: Why KT?
KT: Well, when you, when you transfer the traditional into your Roth...
Suze: No, you would transfer a traditional 401k to a traditional IRA.
Suze: It's got to go from pre-tax to pre-tax or she's
Suze: gonna pay taxes on everything.
KT: But if it's a Roth,
Suze: No, don't get confused.
KT: I don't know.
Suze: No, that's it? You just don't know.
KT: Well, if she's retiring...
Suze: Wait, let's pretend it's you. You have money in a 401k.
Suze: You've been working. You haven't ever paid taxes on that money,
Suze: and now you have a choice of leaving it right
Suze: there if you want, or taking it and putting it
Suze: in Fidelity or Schwab in an IRA rollover.
Suze: I have been telling everybody to do that.
Suze: Why have I been telling everybody to do that? You
Suze: should see your face.
KT: Well, because when you get close to retirement, your tax, um,
KT: your tax liability is a lot less than when you're
KT: working and earning money. OK, why?
Suze: You really don't know?
KT: No.
Suze: Obviously, all right.
Suze: Everybody, especially Peggy, and thank you for this question, quizzy.
Suze: If you have your money at a 401k or a 403B,
Suze: which is usually a nonprofit KT, it is with your employer.
Suze: And normally a 401k plan or a 403b plan only
Suze: has a specific number of investments, and most of those
Suze: investments consist of only.
Suze: The company stock that maybe you're working for, but mutual funds,
Suze: maybe they have a variety of mutual funds, but that's it.
Suze: When you transfer it and put it into an IRA.
Suze: Now you can buy exchange traded funds, individual stocks. You
Suze: could buy certificates of deposits. You could buy treasuries. You
Suze: could buy so many different things, and you could probably
Suze: even buy the exact same things that the 401k is
Suze: invested in.
Suze: So the reason that I tell everybody to transfer it
Suze: when you leave is so that you can have more
Suze: diversification as you get older. Maybe you're gonna want to
Suze: put money into individual bonds.
Suze: You can't buy individual bonds within a 401k or 403B.
Suze: You can only buy bond funds, and everybody knows I
Suze: hate bond funds. So therefore I hope, Peggy, that has
Suze: answered your question, however.
Suze: Let's say you have a sizable sum of money within
Suze: the 401K or 403B. Let's just say that's true.
Suze: And you're comfortable with your investments. You feel secure there.
Suze: And now you don't want to transfer it because maybe
Suze: you have to cash it out even though in most
Suze: cases you won't have to. But let's just say you did.
Suze: And now you have $800,000 of cash sitting at a
Suze: discount brokerage firm like Fidelity or Schwab, and now you
Suze: have to invest it and you don't have a clue
Suze: how to do that, so you're scared to death.
Suze: If that's the situation, then hey, leave it in the
Suze: 401k or the 403b.
Suze: Do I get a ding ding ding on that?
KT: Ding ding ding ding ding ding ding. That was good, right?
Suze: Did you learn?
KT: Well, I didn't realize that the reason, the biggest reason
KT: is that you have a great deal of choice and diversification.
Suze: That's the only reason, girlfriend. All right, next question.
KT: OK, this is a great this.
KT: I read this question and I'm thinking to myself, wow,
KT: what would I do? What would Suze do?
Suze: What would Suze do?
KT: Good morning Suze...
Suze: Wait, one of my favorite things, right, is that sometimes
Suze: we'd be in a restaurant, everybody, or even a bookstore,
Suze: and I'd be standing in line to get a book
Suze: and people would be in front of me and they
Suze: had my book in their hand or on an airplane.
Suze: And I would hear them talking like they'd usually be
Suze: with a friend and they would always say, What do
Suze: you think Suze would do? What would Suze do?
KT: Well, here's a good one.
Suze: And then KT I would lean over and I go, Well,
Suze: I'll tell you what I would do, and they'd always
Suze: go "Ahh!"
KT: Yeah, that's her it's it's her. All right, ready? This
KT: is from Pat, and Pat said, Good morning, Suze.
Suze: It is.
KT: Here's our question. What should a person do when they
KT: find a large amount of money in the home of
KT: loved ones who have passed?
KT: Will the bank question a large deposit? I think the
KT: bank would be the safest place. Now what would Suze do?
Suze: Well, Suze, as many of you may know, actually read
Suze: a lot of these questions, and I wrote this person
Suze: back and I said, How much is a large sum
Suze: of money?
KT: Did they tell you?
Suze: Yes, and they wrote back and they said,
Suze: $200,000.
KT: Someone stashed cash.
Suze: Her father didn't really believe in debt. He didn't really
Suze: believe in banks, and little by little he would take
Suze: his paycheck and everything, and he would just stash it
Suze: in the house in cash. Wow. And now she has
Suze: found it.
Suze: So the question is what would Suze do?
Suze: First of all, you have to realize that $200,000 is
Suze: a lot of money.
Suze: And if you just let it sit there in cash,
Suze: you're missing out on about $10,000 a year currently in interest.
Suze: That's number one.
Suze: But number 2, the very first thing I would do
Suze: is if you have a lawyer
Suze: that was settling the estate for your father. Maybe he
Suze: had a home that needed to go through probate or whatever.
Suze: I would first consult with him or her and ask
Suze: for their opinion. Chances are what they are going to
Suze: tell you to do.
Suze: And if you don't have one, you might want to
Suze: find one and just consult with them, but would be
Suze: to find a bank, either the bank that your father
Suze: was dealing with, but maybe he didn't have a bank,
Suze: but maybe you have a bank where you have connections
Suze: with that bank.
Suze: Because if you ever deposit $10,000 or more at one time,
Suze: they're going to report it.
Suze: And they're gonna report it because that's a lot of
Suze: money if you deposit $200,000 at one time, oh, there
Suze: are gonna be a whole lot of questions, so you
Suze: should take the death certificate, his will or trust, showing
Suze: everybody that you're the beneficiary.
Suze: Of everything and that you found this money while getting
Suze: your father's house in order to sell or whatever reason
Suze: you were looking through this stuff.
Suze: And just come clean now. Maybe they'll make you pay
Suze: taxes on it. You never know. Maybe they'll say, oh, OK,
Suze: cause he never had a bank account or whatever. They'll
Suze: understand that and they'll just let you have it.
Suze: Right, but it should probably be if you go to
Suze: a bank that you open up an account not in
Suze: your name but in the estate of your father, so
Suze: it sits in that account.
Suze: So then it becomes part of the estate. That is
Suze: a very simplistic thing of what Suze would do. All right, KT,
Suze: next question.
KT: All right, this is from Lou. Suze, should we include
KT: our rental property that is paid for in our living trust?
KT: The property provides us an additional monthly income of $2,550.
Suze: One has nothing to do with the other.
KT: Listen to this. We were not going to include our
KT: primary home in the living trust.
Suze: Then why the heck do you even have a living trust?
KT: We are both 70 plus years old. So explain to
KT: Lou about why there's a trust.
Suze: The main reason that you want a trust.
Suze: Is so that your home, your rental property, things that
Suze: really don't have a transfer of title like a life
Suze: insurance policy, you have a beneficiary of that doesn't go
Suze: through probate. Your retirement accounts has a beneficiary doesn't go
Suze: through probate, right, and I'm not a fan, by the
Suze: way of having a trust be a beneficiary of a
Suze: retirement account, as I have told you many times, but
Suze: it's very difficult with a home.
Suze: The main way you avoid probate with a home is
Suze: you own the home, enjoying tenancy with right of survivorship,
Suze: but then when the person you left it to dies,
Suze: it doesn't go through probate.
Suze: And remember when a home goes through probate, it's not
Suze: how much you owe on the home, it's how much
Suze: it's worth. So for instance, if you have a $500,000
Suze: home and you still owe $250,000 on that home, all
Suze: $500,000 is going to go through probate, and depending on
Suze: what state you're in, probate can be really, really expensive,
Suze: so Lou.
Suze: You need to understand why do you have a trust.
Suze: What are your reasons for not having your home and
Suze: rental property within the trust. It doesn't affect your income
Suze: taxes on any level. It's the exact same as if
Suze: you have a trust like KT and I both have trusts.
Suze: And we pay the same income tax whether we had
Suze: a trust or we didn't have a trust. What happens, however,
Suze: is what happens to that money when something happens to us.
KT: It sounds like Lou didn't understand that he could have
KT: both of these in his trust. It sounds like he want,
KT: he was trying to tell us he decided not to
KT: put his primary home in it, but just the should
KT: absolutely put as many assets as you have about the probate.
Suze: It's about incapacity. If something were to happen to you
Suze: and you don't die, who pays your bills, Lou, who
Suze: writes your checks? Who makes sure that the mortgage and
Suze: the insurance and everything is paid.
Suze: That's why you want a trust that has an incapacity clause,
Suze: and for those of you who are asking.
Suze: The must-have docs are back on sale. All you have
Suze: to do is go to musthadocs.com, and you will find
Suze: them $2500 worth of state of the art documents for $99.
Suze: All right, KT, next question.
KT: This is from Sarah Berg. I need to find dental
KT: insurance soon due to
KT: leaving my job. I know you love dental plans. Would
KT: I want to have dental insurance and dental plan, or
KT: just the dental plan? My teeth are in good shape,
KT: but I'm 55, so who knows what's coming as far
KT: as dental care needs.
Suze: Well, I'll tell you what's coming, and Sarah,
KT: I'll tell you tell you what's coming. We thousands of.
KT: Dollars of dental work, but get the dental plan. Tell
KT: her to get the...
Suze: I would not be getting dental insurance if I were you.
Suze: I am not a fan of dental insurance unless you
Suze: work for a company that pays for it for you.
Suze: I and KT and Colo and all of our friends
Suze: and friends have something called a dental
Suze: savings plan, go to dental plans.com. Look at it. Normally
Suze: dental insurance could be $100 or $150 a month. Normally
Suze: they have high deductibles and waiting periods with a dental
Suze: savings plan. Maybe if it's just you, it will cost
Suze: you $150 a year.
Suze: And you can save anywhere from 10 to 60% on procedures,
Suze: no waiting period, and no max out of how much
Suze: you can use it. So again, dental plans.com. Next, KT.
KT: OK, my final question, short and
KT: sweet. Does the income I earn from interest or capital
KT: gains from selling a stock held less than a year
KT: count towards the 146,000 income before I have reduced Roth contributions?
KT: That's from Wayne.
Suze: Do you want another quizzy?
KT: Well, all right, let me see. Hold on. All right, everybody,
KT: let me see if I can redeem my lack of
KT: knowledge here. So does the income I earn from interest
KT: or capital gains from selling a stock held less than
KT: a year count towards the 146 that I held less?
KT: I think that the answer is whatever income you have
KT: when you reach that limit, that's the limit. doesn't matter when.
Suze: That's not the question.
Suze: The question is, if this person has held a stock
Suze: for less than a year, obviously it's outside of a
Suze: retirement account and they sell it.
Suze: Does that gain count
Suze: towards the calculation of income where the max is 146
Suze: for a single person.
KT: Do you want me to answer it? I think it does.
KT: I think it does. I think, yeah, all I know
KT: is in in America, whatever money you make is your income, right?
Suze: Not actually, however, but it is true when you sell
Suze: a stock that you have held for less than one year, Wayne,
Suze: that's taxed to you then as ordinary income.
Suze: Right, so yes, it counts towards your income, even if
Suze: it's a capital gain, the way they figure capital gains,
Suze: it gets figured in with your income and all of that.
Suze: So either way, it probably would, but definitely in this
Suze: situation it will count towards that $146,000 of modified adjusted
Suze: gross income. What are you eating?
KT: It's a cough drop from my throat.
Suze: Do you have a sore throat?
KT: It's not sore, but it's a little dry.
Suze: It's dry, huh?
KT: Yeah, because I've been swimming in the ocean with Susie
KT: every day till we got this bout of rain. But
KT: like we better sign off. It's late. We're over our
KT: limit here, everyone.
Suze: Oh, actually, KT, we're the bosses, so we make the
Suze: limit be whatever we want it to be. However,
KT: There's really only one thing that we want you to
KT: remember when it comes to your money. What is that, KT?
KT: People first, then money, then things, and if you follow
KT: that guideline,
Suze: and if you stay safe, you will be what? Unstoppable.