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Suze: September 4th, 2025. Welcome everybody to the Women and Money podcast, and...

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KT: Everyone smart enough to listen.

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Suze: You did it KT. For some reason, whenever we do

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Suze: an open, KT forgets to say, and everybody's smart enough

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Suze: to listen, and today is what KT?

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KT: September 4th.

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Suze: No, today is what?

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KT: Ask KT and Suze Anything

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Suze: Ding ding ding ding. You got that right. All right.

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KT: Do

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KT: you believe it's September?

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Suze: I do believe it's September and this is obviously a

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Suze: special day in our lives.

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KT: This is a special day. This was a day of having a

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KT: great honor and privilege 13 years ago. Tell them why.

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Suze: Yeah, because my mama passed today.

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Suze: 13 years ago when she was...

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KT: Took her journey, baby...

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Suze: She was 97 years of age and KT and myself

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Suze: and KT's twin sister Lynn and her husband Tom, we

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Suze: were there we...

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KT: we

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KT: bid her farewell in the most beautiful way.

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KT: And it was such an honor for any of you listening,

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KT: if you have the opportunity to be with a loved

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KT: one when they're taking their final journey, do it. Don't

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KT: be afraid. Don't be sad, just do it. It's such

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KT: an honor. It is.

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KT: It's such a blessing.

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Suze: My brother was afraid. My, my brother was afraid, and

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Suze: he lives with that sorrow to this day, anyway.

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Suze: All right, so you have a question.

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KT: I do. Let's start with Cindy. I like Cindy because

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KT: she's Cindy the dog walker.

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KT: She said, Hi, Suze and KT. Quick question. I'm a

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KT: longtime listener and reader of your books many years ago. Yeah,

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KT: for me, I purchased VTI on your recommendation. I still

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KT: own it, and I'm curious why you never mention that

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KT: ETF more. So tell her why you don't mention it,

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KT: or do you?

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Suze: Have you noticed that I stopped mentioning it?

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KT: No,

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Suze: Of course not. All right, so anyway, here's the truth, Cindy.

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Suze: I still love VTI, the Vanguard Total Stock market Index ETF,

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Suze: just that simple, but the reason I switched, and I

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Suze: really switched to VOO, which is also Vanguard, which has

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Suze: a little smaller expense ratio than the spiders, is that

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Suze: VTI versus VOO.

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Suze: They have the same exact top 10 holdings which happen

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Suze: to be Nvidia, Microsoft, Apple, Amazon, Meta, Broadcom, Alphabet, you

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Suze: know I love Google there, Tesla and Berkshire, right, however.

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Suze: Those top 10 holdings only make up 33% of VTI, 38%

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Suze: of VOO. Therefore, because I knew that those top 10

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Suze: holdings would be more aggressive and profitable in VOO than VTI,

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Suze: that is why I switched, however,

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Suze: VTI is still fabulous. No problem. OK, go on, KT.

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KT: OK, this next question is an interesting one because I,

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KT: I like to know the answer as well.

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Suze: She makes me laugh, everybody.

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KT: Hi, Suze and KT.

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Suze: Wait, wait, I just have to tell you every once

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Suze: in a while she's reading these and she looks at

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Suze: me and she says, I don't know

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Suze: the answer to this one and I go, KT, of

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Suze: course you don't. That's why it's ask KT and Suze.

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KT: Anything

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Suze: You ask KT. Susie answers. All right, go on.

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KT: Ok, so this question is a good one. It said, Hi,

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KT: Suze and KT. My spouse and I are ready to

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KT: withdraw $4500 a month from our combined

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KT: $1.5 million in 401ks and IRAs. She is 77. I

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KT: am 65. Most of our retirement savings is under my

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KT: name because she is a retired educator with a pension.

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KT: Does it matter in the long run whose account we

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KT: withdraw from?

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Suze: Hmm.

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Suze: Why are you looking at me like that?

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KT: Well, does it? Yeah, it does.

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Suze: All right, everybody, listen, Peggy, it's not necessarily which account

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Suze: does it matter that you withdraw from as much as

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Suze: what are you invested in within those accounts now, obviously.

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Suze: At 77 she's taking her RMDs, so you have to

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Suze: take into consideration required minimum distributions. How much does she

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Suze: have to take out every single year from her account,

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Suze: and then you can decide after that amount which account

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Suze: has the best investments for you to withdraw from. So

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Suze: for instance, if you're invested in good quality stocks like

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Suze: maybe some of the ones I just mentioned.

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Suze: And you're going for growth and you like them and

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Suze: you feel secure with them, why sell them now just

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Suze: to withdraw the money? So again after the RMDs, it

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Suze: really doesn't matter that much.

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Suze: What matters is what the accounts are invested in and

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Suze: therefore that's where the money should come from. All right.

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KT: OK, next question is from Deanna. Hi Suze, I'm from Utah.

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KT: My husband and I have a 529 plan for our

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KT: two grandchildren. What happens when we die? Where does this

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KT: money go? Can I pass the 529

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KT: plan on to my daughter who is the mother of

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KT: the two grandchildren.

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Suze: Yeah, you can, right, but what you do is you

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Suze: name your daughter or the mother of the grandchildren or

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Suze: whatever as a successor owner that way she will take

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Suze: over management if you die. Just that simple. All right, KT.

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KT: OK, next question from Audrey. She said, hi Suze and KT.

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KT: My husband and I are a blended family. We took

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KT: care of our wills a few years ago, but as

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KT: time goes on and I listen more and more to

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KT: your podcast, there are some things I would like to

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KT: change in our documents.

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Suze: Just like me!

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KT: Just like us. You're not alone, Audrey.

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KT: She said, I did purchase the must have documents, but

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KT: I don't know how to translate and transfer what I

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KT: currently have in my will into those documents. So let's

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KT: explain to her how that works.

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Suze: So what

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Suze: you have to do, Audrey, is that given that you

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Suze: created a will, possibly a trust, whatever it may be

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Suze: outside of the must-have documents to begin with.

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Suze: You cannot physically transfer them into the must-have documents where

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Suze: they automatically transfer over. You have to, with the must

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Suze: have documents, create new documents, and you probably should do

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Suze: that anyway just to make sure that what you wanted

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Suze: back then is what you want now because obviously you

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Suze: say you want to make some changes, so you would

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Suze: just start over because one thing interesting with the must-have

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Suze: documents is that you have to do all four must-have

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Suze: documents at one time so when you go on you'll

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Suze: see you answer all these questions and really not that many,

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Suze: and it will populate all four at once: the will,

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Suze: the living revocable trust, the advanced directive and durable power

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Suze: of attorney for health care, as well as the financial

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Suze: power of attorney. It will do all of those at

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Suze: once for you.

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Suze: So you might as well just do that and there

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Suze: you go, and those will be your new documents. Make

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Suze: sure you get them notarized and that you fund the trust,

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Suze: which means you transfer the name of your real estate

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Suze: or whatever into the name of the trust. All right, KT.

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KT: So Suze, tell everyone where to go to get the

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KT: must-have docs.

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Suze: Yeah, everybody listen to me. If you don't have the

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Suze: documents that I just talked about.

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Suze: I'm telling you you are without a shadow of a

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Suze: doubt making the absolute biggest mistake in your life, and

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Suze: believe it or not, the less money you have, the

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Suze: more you need those documents and I'm now strictly the

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Suze: educator of those documents. So what you would do is

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Suze: you would go to must have docs.com.

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Suze: And currently they are $99 and what's great about that

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Suze: is it's $2,500 worth of state of the art documents

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Suze: that you can share with any family member. It's not

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Suze: a big deal because the object of them isn't that

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Suze: every single one of you needs to buy one.

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Suze: It's that only one of you needs to step forward

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Suze: and make sure that not only have you protected yourself

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Suze: but you've protected all of your family members and maybe

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Suze: all of your friends if you want to as well.

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Suze: All right.

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KT: OK, my next question is from Estee. Hi Suze and KT.

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KT: I watched your TV show, Suze back in the day.

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Suze: You know what? Wait, wait, wait, wait, you can watch

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Suze: it again because they are premiering little by little on YouTube.

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Suze: So go to youtube.com/ Suze Orman. That is my personal

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Suze: and official YouTube channel and people are loving so much

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Suze: watching those shows all over again. All right, go on.

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KT: She said, I watched the TV show back in the day,

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KT: have been faithfully listening to you and KT. I take notes.

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KT: I read the Ultimate Retirement Guide twice.

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KT: Then she said, I may have missed this, but how

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KT: do you feel about reinvesting dividends three quarters of the

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KT: year and taking the cash in the fourth quarter for

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KT: annual living expenses and taxes instead of buying an annuity?

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KT: So that's what Estee's question is.

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Suze: Um, let me see this email...

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KT: And Estee, just so we all know, is, is about

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KT: 68 years old. So that's why I'm wondering an annuity.

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Suze: Here's the thing number one, I don't want you to

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Suze: do an annuity. That's number one, but number two, right,

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Suze: if you reinvest the dividends, that means you are reinvesting

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Suze: into the shares of the stock that you already own.

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Suze: And then you take the cash in the fourth quarter,

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Suze: you can do that as long as that dividend in

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Suze: the fourth quarter is enough for your annual living expenses.

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Suze: Does that make sense? So if you're going to do

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Suze: it that way and you know that you are invested

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Suze: in a stock that's dividend has been increasing over the

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Suze: past 10 years, I don't have a problem with that

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Suze: because remember dividends are not guaranteed. If the company gets

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Suze: in trouble, they could absolutely cut their dividend.

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Suze: And you don't want to be in that situation, but

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Suze: if you can live off of the fourth quarter dividend, fine,

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Suze: you can take that in cash, but it becomes very

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Suze: complicated because then you have to change from reinvesting to

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Suze: da da da. So just think about it, but I

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Suze: would not be doing an annuity no matter what. All right.

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KT: Good morning, Suze and KT.

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Suze: It is, is it not, KT?

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KT: Yes it is. My current relationship is not working out.

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Suze: What else is new? You know how many emails we

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Suze: get that start with that exact saying?

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KT: My current relationship is not working. You're not alone. You're not alone.

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KT: There's a whole lot we get like this, Susan, but

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KT: at least Suze, you and I are working out just right. So,

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KT: so Susan says we bought a house together. I own 25%

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KT: of the house. The house is worth about $520,000.

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Suze: Ok, so she owns about $130,000 worth of that house.

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KT: My plan is to move out and buy another house.

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KT: I will have the equity from the house, which he

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KT: will either pay to me or the house will be sold,

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KT: and I'll get it that way. Susan has $25,000 in

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KT: an emergency fund with no debt, about $345,000 in a

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KT: 401k Roth, and traditional IRA accounts.

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KT: She earns about $110,000 a year and does not plan

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KT: on retiring. I really do not want a mortgage at

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KT: this stage in my life. I'm 61, but will have

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KT: to take money out of my retirement in order to

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KT: buy my home mortgage free.

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KT: So, she said she can also buy it and take

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KT: a mortgage out means she no longer contributes to her

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KT: retirement and she wouldn't be debt free. Can you help me?

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KT: This is the real clincher, everybody. Susan said, I feel

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KT: very anxious and not secure at all.

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Suze: Ding ding ding pop quizzy.

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KT: Yeah, I'll tell you what I would do.

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Suze: Pop quizzy...

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Suze: everybody before KT answers because KT people have been writing

229
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Suze: and saying, please bring back the quizzy.

230
00:13:49,809 --> 00:13:49,849
KT: Oh, no way.

231
00:13:56,409 --> 00:13:58,799
Suze: Well, pop, here's the wait before you answer, everybody, how

232
00:13:58,799 --> 00:14:05,468
Suze: would you, seriously, answer this question? She's 61 years of age.

233
00:14:06,039 --> 00:14:11,309
Suze: She only has $25,000 in an emergency fund. No other debt.

234
00:14:11,479 --> 00:14:18,119
Suze: She has about $345,000 again in her retirement accounts. Think

235
00:14:18,119 --> 00:14:20,830
Suze: about that. She really doesn't want a

236
00:14:21,025 --> 00:14:24,625
Suze: mortgage so she would at the age again of 61

237
00:14:24,625 --> 00:14:27,224
Suze: have to take money out of her retirement accounts in

238
00:14:27,224 --> 00:14:31,895
Suze: order to buy the home mortgage free. She feels anxious.

239
00:14:32,385 --> 00:14:35,924
Suze: She could take a mortgage, but she doesn't want to. KT.

240
00:14:36,505 --> 00:14:37,825
Suze: How would you answer that?

241
00:14:37,825 --> 00:14:42,664
KT: Four letter word baby: rent. She's 61 years old. She's

242
00:14:42,664 --> 00:14:44,664
KT: just leaving a relationship.

243
00:14:45,169 --> 00:14:49,010
KT: It's emotional. They broke up. Don't go and make your

244
00:14:49,010 --> 00:14:53,169
KT: life stuck again. Just be free and rent for a

245
00:14:53,169 --> 00:14:56,809
KT: couple years. You can afford to rent with that kind

246
00:14:56,809 --> 00:15:01,130
KT: of a salary and still be free and rent simple.

247
00:15:01,375 --> 00:15:06,094
KT: One of the things that I often ask when we

248
00:15:06,094 --> 00:15:08,854
KT: read these and when I read, I the, the puzzle

249
00:15:08,854 --> 00:15:11,414
KT: needs to be put together with all the pieces and

250
00:15:11,414 --> 00:15:15,734
KT: you often send us a question but you don't tell

251
00:15:15,734 --> 00:15:18,815
KT: us where you live for instance. That would have a

252
00:15:18,815 --> 00:15:22,375
KT: great deal of bearing on, you know, whether you buy

253
00:15:22,375 --> 00:15:24,025
KT: and rent, so on and so forth.

254
00:15:25,619 --> 00:15:26,419
Suze: Ding ding ding ding

255
00:15:26,419 --> 00:15:27,159
KT: Rent, right?

256
00:15:27,380 --> 00:15:31,940
Suze: Yes, but for many different reasons. OK, all right, so

257
00:15:31,940 --> 00:15:36,219
Suze: first of all, what is my main law of money

258
00:15:36,219 --> 00:15:39,739
Suze: when it comes to you after you have suffered the

259
00:15:39,739 --> 00:15:43,820
Suze: loss of a loved one? You are to do absolutely

260
00:15:43,820 --> 00:15:47,780
Suze: nothing other than keep your money safe and sound for

261
00:15:47,780 --> 00:15:50,929
Suze: at least one to two years.

262
00:15:51,710 --> 00:15:55,669
Suze: Cause you're saying to me that your relationship is not

263
00:15:55,669 --> 00:16:00,030
Suze: working out. Don't tell me that that doesn't have an

264
00:16:00,030 --> 00:16:04,340
Suze: emotional impact on you, whether you like him or her,

265
00:16:04,390 --> 00:16:09,679
Suze: you dislike them or whatever, it has an emotional impact.

266
00:16:10,289 --> 00:16:13,570
Suze: Now you don't want to take money out of a

267
00:16:13,570 --> 00:16:16,450
Suze: retirement account. That is just the stupidest thing you could

268
00:16:16,450 --> 00:16:21,919
Suze: ever do simply to what? Buy another house. No way,

269
00:16:22,200 --> 00:16:24,179
Suze: not on our watch.

270
00:16:24,869 --> 00:16:29,840
Suze: You really shouldn't decide anything until you know how much

271
00:16:29,840 --> 00:16:32,919
Suze: money you are going to have. What is he going

272
00:16:32,919 --> 00:16:35,559
Suze: to actually be giving you if he buys you out,

273
00:16:35,760 --> 00:16:38,599
Suze: and if you sell it, remember there will be real

274
00:16:38,599 --> 00:16:41,909
Suze: estate commissions, all kinds of things. This is no longer

275
00:16:42,159 --> 00:16:43,960
Suze: a seller's market.

276
00:16:44,590 --> 00:16:50,190
Suze: Prices are going down and down. Therefore, just wait to

277
00:16:50,190 --> 00:16:53,500
Suze: see how much you really get when that is complete,

278
00:16:53,549 --> 00:16:55,349
Suze: one step at a time.

279
00:16:56,219 --> 00:16:59,020
Suze: Next, how do you know what to do? If you're

280
00:16:59,020 --> 00:17:02,650
Suze: about to do something and it makes you feel insecure

281
00:17:03,140 --> 00:17:09,099
Suze: right now you feel very anxious and not secure at all. Therefore,

282
00:17:09,140 --> 00:17:13,140
Suze: you are to do nothing. So before you do anything,

283
00:17:13,500 --> 00:17:17,089
Suze: check that little stomach of yours, and if it is nervous,

284
00:17:17,420 --> 00:17:22,339
Suze: that is yourself telling yourself, don't do it. Remember, once

285
00:17:22,339 --> 00:17:24,410
Suze: you do something, it's already done.

286
00:17:24,949 --> 00:17:27,030
Suze: If you haven't done it yet, you have a lot

287
00:17:27,030 --> 00:17:30,380
Suze: of time to do it. All right, there you go.

288
00:17:30,630 --> 00:17:31,469
KT: I was right.

289
00:17:31,550 --> 00:17:33,630
Suze: I gave you a ding ding ding ding ding ding

290
00:17:33,630 --> 00:17:34,979
Suze: ding ding ding ding ding.

291
00:17:35,390 --> 00:17:39,510
KT: OK, next question is from Melissa, she said. Suze, I'm

292
00:17:39,510 --> 00:17:42,349
KT: a single mom with a 16 year old son.

293
00:17:42,819 --> 00:17:46,650
KT: I'm also a landlord with just a few properties.

294
00:17:47,050 --> 00:17:48,010
Suze: Oh, just a few properties?

295
00:17:48,329 --> 00:17:52,250
KT: The question is, how do I protect my real estate

296
00:17:52,250 --> 00:17:55,199
KT: from the type of economy that we are currently in?

297
00:17:55,609 --> 00:17:59,530
KT: How do I bulletproof myself from losing money? When you

298
00:17:59,530 --> 00:18:01,290
KT: find that answer, share it with all of us.

299
00:18:01,939 --> 00:18:04,619
KT: And then she said taxes are up, insurance is up

300
00:18:04,619 --> 00:18:07,459
KT: at the same time, so are the interest rates. I'm

301
00:18:07,459 --> 00:18:10,500
KT: waiting for interest rates to go down so I can

302
00:18:10,500 --> 00:18:15,260
KT: invest in another property outside of New York. These properties,

303
00:18:15,280 --> 00:18:19,938
KT: which are passive income, are my main source of income.

304
00:18:21,219 --> 00:18:23,078
Suze: Listen, here's the thing...

305
00:18:23,078 --> 00:18:24,379
KT: Make it a quizzy again.

306
00:18:26,150 --> 00:18:27,659
Suze: All right, ding ding ding, go for it.

307
00:18:27,750 --> 00:18:32,660
KT: Don't buy any more property right now at all.

308
00:18:33,510 --> 00:18:34,260
Suze: That's your advice.

309
00:18:34,390 --> 00:18:34,910
KT: Yeah.

310
00:18:35,270 --> 00:18:37,109
Suze: All right, that's her advice whether it's right or wrong.

311
00:18:37,189 --> 00:18:41,020
Suze: I can't tell you. However, let me just say something.

312
00:18:41,969 --> 00:18:46,550
Suze: I talk about investing obviously all the time and I

313
00:18:46,550 --> 00:18:54,280
Suze: talk about diversification. What concerns me is, your main source

314
00:18:54,280 --> 00:19:00,170
Suze: of passive income happens to be properties, and you're already

315
00:19:00,170 --> 00:19:04,890
Suze: asking how do you bulletproof yourself from losing money. When

316
00:19:04,890 --> 00:19:10,030
Suze: it comes to real estate it's very, very difficult to

317
00:19:10,030 --> 00:19:11,569
Suze: bulletproof yourself from losing

318
00:19:11,920 --> 00:19:16,790
Suze: money. Why? You cannot protect yourself against insurance going up.

319
00:19:17,040 --> 00:19:21,160
Suze: You cannot protect yourself against property taxes going up. You

320
00:19:21,160 --> 00:19:26,000
Suze: cannot protect yourself against the house needing repairs. You cannot

321
00:19:26,000 --> 00:19:29,079
Suze: protect yourself against renting to somebody who all of a

322
00:19:29,079 --> 00:19:32,000
Suze: sudden loses their job and they stop paying you and

323
00:19:32,000 --> 00:19:33,359
Suze: they won't leave.

324
00:19:33,780 --> 00:19:37,160
Suze: And now you may have mortgage payments with no income.

325
00:19:37,410 --> 00:19:43,930
Suze: You cannot adequately truthfully protect yourself against climate change and

326
00:19:43,930 --> 00:19:46,640
Suze: what Mother Nature may bring upon you.

327
00:19:47,420 --> 00:19:52,149
Suze: So there are all of these you can't do anything about.

328
00:19:52,619 --> 00:19:56,510
Suze: But what you can do is maybe think about, oh,

329
00:19:56,930 --> 00:20:00,969
Suze: do I have anything invested in dividend paying stocks? Do

330
00:20:00,969 --> 00:20:04,489
Suze: I have at least an eight month emergency fund maybe

331
00:20:04,489 --> 00:20:08,250
Suze: generating some income to me? Do I have any Treasury bill,

332
00:20:08,250 --> 00:20:12,369
Suze: bonds or notes that are pretty much guaranteed? What else

333
00:20:12,369 --> 00:20:17,209
Suze: do you have? But you're waiting for interest rates to

334
00:20:17,209 --> 00:20:21,409
Suze: go down so you could invest in another property.

335
00:20:22,369 --> 00:20:26,040
Suze: So the truth of the matter is I don't know.

336
00:20:26,250 --> 00:20:28,889
Suze: I'd like to hear that you were investing in something

337
00:20:28,890 --> 00:20:33,209
Suze: other than property, even if you did an REIT within

338
00:20:33,209 --> 00:20:37,369
Suze: a retirement account, but I don't know enough about you,

339
00:20:37,530 --> 00:20:41,650
Suze: but I can tell you this when it comes to

340
00:20:41,650 --> 00:20:42,530
Suze: real estate.

341
00:20:43,140 --> 00:20:48,349
Suze: It is very, very difficult to protect yourself, especially with

342
00:20:48,349 --> 00:20:52,510
Suze: the insurance market today. You best think about it.

343
00:20:52,640 --> 00:20:53,739
KT: No bulletproof, right?

344
00:20:53,939 --> 00:20:54,319
Suze: Mhm.

345
00:20:55,989 --> 00:20:59,660
KT: OK, Suze, next question is from Mark. I really like this question.

346
00:20:59,949 --> 00:21:02,389
KT: He said, Suze, I'm 70 years old and I have

347
00:21:02,390 --> 00:21:05,939
KT: 1.5 million in a rolled over 401k.

348
00:21:06,520 --> 00:21:09,869
KT: I've been converting it into a Roth for the past

349
00:21:09,869 --> 00:21:13,869
KT: three years, and I'm wondering when is it a good

350
00:21:13,869 --> 00:21:17,879
KT: time to stop converting and just pay the grim reaper.

351
00:21:18,150 --> 00:21:22,589
KT: So Mark's question is how will the RMDs and converting

352
00:21:22,589 --> 00:21:24,619
KT: mix in the next few years?

353
00:21:24,949 --> 00:21:26,579
Suze: Yeah, so what, what I...

354
00:21:26,670 --> 00:21:28,149
KT: I would love to hear that too.

355
00:21:29,050 --> 00:21:29,709
Suze: Why?

356
00:21:29,969 --> 00:21:32,729
KT: Just curious because that's a great question. No one ever

357
00:21:32,729 --> 00:21:33,880
KT: asked that question.

358
00:21:34,150 --> 00:21:37,728
Suze: All right, Mark, here's what you first need to know,

359
00:21:37,739 --> 00:21:41,829
Suze: and everybody who is on RMDs or who will eventually

360
00:21:41,829 --> 00:21:46,209
Suze: be on RMDs, and you want to convert from a traditional,

361
00:21:46,290 --> 00:21:46,689
Suze: which is a

362
00:21:46,800 --> 00:21:50,959
Suze: pre-tax retirement account to a Roth, which is after tax.

363
00:21:51,160 --> 00:21:52,989
KT: Tell them what an RMD is.

364
00:21:52,989 --> 00:21:54,239
Suze: Required Minimum Distribution.

365
00:21:54,239 --> 00:21:55,780
KT: And it starts at what age?

366
00:21:55,859 --> 00:22:00,670
Suze: 73 currently and then very shortly it will be 75

367
00:22:00,670 --> 00:22:04,349
Suze: just so you know. However, here's what you have to

368
00:22:04,349 --> 00:22:07,670
Suze: understand you cannot convert,

369
00:22:08,239 --> 00:22:12,170
Suze: in the year that you have to take RMDs until

370
00:22:12,170 --> 00:22:16,500
Suze: you have taken your RMDs, and after you have taken

371
00:22:16,500 --> 00:22:21,020
Suze: your RMDs, then you can convert. So that's how that

372
00:22:21,020 --> 00:22:22,410
Suze: will work for you.

373
00:22:23,000 --> 00:22:26,180
Suze: How do you know if you should just stop converting

374
00:22:26,180 --> 00:22:31,660
Suze: and just paying the grim reaper? KT's laughing cause she

375
00:22:31,660 --> 00:22:34,609
Suze: knows how hard that was for me to say anyway,

376
00:22:34,859 --> 00:22:40,390
Suze: but here's how you know you would only convert if

377
00:22:40,390 --> 00:22:44,780
Suze: in fact you don't need the money that you are converting.

378
00:22:45,250 --> 00:22:48,920
Suze: You want to leave it in there for growth. You

379
00:22:48,920 --> 00:22:52,160
Suze: don't need to touch it for years, if ever you

380
00:22:52,160 --> 00:22:54,800
Suze: want to leave it to your beneficiaries and you want

381
00:22:54,800 --> 00:22:58,520
Suze: to leave it to them absolutely tax free. Then you

382
00:22:58,520 --> 00:23:02,640
Suze: would continue to convert. If in fact you know that

383
00:23:02,640 --> 00:23:06,510
Suze: you're going to be needing that money to live on,

384
00:23:07,040 --> 00:23:10,239
Suze: then you would maybe just take out what you want

385
00:23:10,239 --> 00:23:12,599
Suze: from your traditional IRA.

386
00:23:13,050 --> 00:23:16,719
Suze: And what would you do? Live on it and not

387
00:23:16,719 --> 00:23:20,599
Suze: convert it to a Roth, just that simple, cause remember

388
00:23:20,599 --> 00:23:24,160
Suze: there are still some rules in everything with a wroth

389
00:23:24,160 --> 00:23:27,359
Suze: and a Roth conversion, even at your age, believe it

390
00:23:27,359 --> 00:23:32,079
Suze: or not. So therefore that's how you would know. So Mark,

391
00:23:32,199 --> 00:23:34,920
Suze: it's just that simple. All right, KT.

392
00:23:35,050 --> 00:23:35,639
KT: OK.

393
00:23:36,420 --> 00:23:40,660
KT: Suze, next question is from Kelly, and Kelly asks, does

394
00:23:40,660 --> 00:23:44,459
KT: it make more sense to purchase an income annuity with

395
00:23:44,459 --> 00:23:50,660
KT: qualified or non-qualified money to shore up guaranteed income needs

396
00:23:50,660 --> 00:23:53,919
KT: to supplement my pension and Social Security?

397
00:23:54,180 --> 00:23:55,579
Suze: So that's simple. If you

398
00:23:55,694 --> 00:23:59,714
Suze: are going to buy an income annuity all right however,

399
00:23:59,964 --> 00:24:04,524
Suze: do it with non-qualified money meaning money outside of a

400
00:24:04,525 --> 00:24:10,323
Suze: retirement account, because remember in a retirement account, a pre-taxed

401
00:24:10,324 --> 00:24:14,964
Suze: retirement account, all right, which is qualified money.

402
00:24:15,400 --> 00:24:19,060
Suze: You are eventually going to have to pay RMDs, and

403
00:24:19,060 --> 00:24:23,479
Suze: then it becomes very confusing as to with an income annuity,

404
00:24:23,689 --> 00:24:25,948
Suze: what was the value of the balance of that income

405
00:24:25,949 --> 00:24:28,530
Suze: annuity at the end of the year prior to the

406
00:24:28,530 --> 00:24:31,770
Suze: year you're taking RMDs very confusing. So,

407
00:24:32,020 --> 00:24:35,869
Suze: do it with non-qualified money. Last question, KT.

408
00:24:36,439 --> 00:24:38,639
KT: This is from Amy and Amy is

409
00:24:38,640 --> 00:24:44,439
KT: 55.

410
00:24:44,459 --> 00:24:44,880
Suze: Yeah. What were we doing? Remember what we were doing at 55?

411
00:24:44,880 --> 00:24:46,060
KT: That was a great year.

412
00:24:47,380 --> 00:24:48,160
KT: They were so much fun.

413
00:24:48,949 --> 00:24:53,550
KT: She said, I have an old 401k balance of $69,000

414
00:24:53,550 --> 00:24:58,179
KT: that I just rolled over into a Schwab traditional IRA.

415
00:24:58,869 --> 00:25:02,150
KT: My plan was to convert little by little into my

416
00:25:02,150 --> 00:25:05,719
KT: Roth IRA, but when I was looking back at my

417
00:25:05,719 --> 00:25:10,020
KT: Suze notebook, I noticed something about the pro rata rule.

418
00:25:10,390 --> 00:25:12,150
KT: My notes were incomplete.

419
00:25:12,589 --> 00:25:15,949
KT: So now I'm wondering if I can still convert to

420
00:25:15,949 --> 00:25:20,188
KT: my Roth IRA. I do have another traditional IRA, and

421
00:25:20,189 --> 00:25:23,020
KT: I know that's what the pro rata rule refers to.

422
00:25:23,310 --> 00:25:24,750
KT: Please help me. So...

423
00:25:24,750 --> 00:25:28,390
Suze: Pop, pop quizzy, pop quizzy, can she or can she

424
00:25:28,390 --> 00:25:29,349
Suze: not KT?

425
00:25:30,089 --> 00:25:30,719
KT: Oh...

426
00:25:31,010 --> 00:25:35,359
Suze: Will she be subjected to the pro rata rule because

427
00:25:35,359 --> 00:25:39,140
Suze: she has, uh, uh, because she's, she's shaking her head

428
00:25:39,140 --> 00:25:39,689
Suze: up or down...

429
00:25:40,810 --> 00:25:41,770
KT: I'm asking Suze, help me!

430
00:25:41,770 --> 00:25:44,180
KT: Can she or can she not, right, wait, so go ahead,

431
00:25:44,410 --> 00:25:44,839
KT: keep going.

432
00:25:45,050 --> 00:25:49,609
Suze: So can she convert to a Roth given the fact

433
00:25:49,609 --> 00:25:53,849
Suze: that she has a traditional IRA? Is she going to

434
00:25:53,849 --> 00:25:57,290
Suze: be subjected to the pro rata rule?

435
00:25:57,369 --> 00:25:58,479
KT: I think you are. (Suze makes the 'wrong answer' noise).

436
00:25:59,540 --> 00:26:01,689
KT: Oh, you're not. All right, wait, but can I just

437
00:26:01,689 --> 00:26:08,290
KT: say something? Suze, on February 18, 2024, you did an

438
00:26:08,290 --> 00:26:11,729
KT: entire podcast about the pro rata rule

439
00:26:11,729 --> 00:26:12,810
Suze: And Roth IRAs.

440
00:26:13,209 --> 00:26:16,719
KT: So, so Amy, go back and listen to it.

441
00:26:17,130 --> 00:26:21,909
KT: And that's for everyone listening February 18th, 2024.

442
00:26:22,239 --> 00:26:26,079
Suze: All right, so but here's the scoop, Amy, you are confusing

443
00:26:26,079 --> 00:26:33,550
Suze: conversion with a backdoor Roth. The pro rata rule only

444
00:26:33,550 --> 00:26:39,680
Suze: relates to a back door Roth period. Which means you

445
00:26:39,680 --> 00:26:43,680
Suze: have too much income to get new money

446
00:26:44,459 --> 00:26:48,380
Suze: into a Roth IRA. So what do you do? You

447
00:26:48,380 --> 00:26:53,170
Suze: put money into a traditional IRA. You make it nondeductible,

448
00:26:53,380 --> 00:26:57,099
Suze: and then you convert it to a Roth, but you

449
00:26:57,099 --> 00:27:01,770
Suze: can only do that if you don't have any pre-tax

450
00:27:01,770 --> 00:27:06,900
Suze: retirement account outside of your employers. You are simply converting,

451
00:27:07,599 --> 00:27:12,199
Suze: from a pre-tax to a wrath, which means you are

452
00:27:12,199 --> 00:27:15,239
Suze: going to pay taxes on that money, and the 5

453
00:27:15,239 --> 00:27:19,359
Suze: year clock will start the day you convert, every time

454
00:27:19,359 --> 00:27:23,040
Suze: you convert. So no, it does not apply to you

455
00:27:23,040 --> 00:27:26,160
Suze: at all. But KT, I'm so proud of you. You

456
00:27:26,160 --> 00:27:27,209
Suze: went back and looked up that podcast.

457
00:27:27,680 --> 00:27:28,839
KT: I did, I did should have

458
00:27:29,076 --> 00:27:30,984
KT: listened to it and I would have gotten it.

459
00:27:32,475 --> 00:27:37,296
Suze: Anyway, all right, there you go. So until Sunday when

460
00:27:37,296 --> 00:27:41,076
Suze: I'm gonna do a different kind of Suze School.

461
00:27:41,196 --> 00:27:41,995
KT: Tell them what you're doing.

462
00:27:42,234 --> 00:27:45,515
Suze: So I was looking through some of the emails and

463
00:27:45,515 --> 00:27:48,515
Suze: Doctor E, so if you're listening, know this podcast is

464
00:27:48,515 --> 00:27:50,595
Suze: going to be about you, asked

465
00:27:50,722 --> 00:27:55,591
Suze: a question and I realized rather than letting KT ask

466
00:27:55,592 --> 00:27:58,791
Suze: it on Ask KT and Suze Anything, I'm going to

467
00:27:58,791 --> 00:28:02,751
Suze: turn this one into a Suze school and really teach

468
00:28:02,751 --> 00:28:07,702
Suze: you along with Doctor E what you need to know about...

469
00:28:07,911 --> 00:28:10,421
Suze: You're going to have to tune in and find out.

470
00:28:10,751 --> 00:28:12,271
Suze: So we are in September.

471
00:28:12,849 --> 00:28:16,949
Suze: And because we are now in September, I promised one

472
00:28:16,949 --> 00:28:21,719
Suze: of the listeners who wrote in that said, Suze, please

473
00:28:21,719 --> 00:28:26,760
Suze: go back to closing the podcast with your traditional way

474
00:28:26,760 --> 00:28:29,438
Suze: of doing it and I said for you, for the

475
00:28:29,439 --> 00:28:29,760
Suze: rest of

476
00:28:29,880 --> 00:28:33,569
Suze: the year, we will do that. So there's really only

477
00:28:33,569 --> 00:28:35,670
Suze: one thing we want you to remember when it comes

478
00:28:35,670 --> 00:28:38,069
Suze: to your money, and it is this:

479
00:28:38,069 --> 00:28:40,829
KT: People first, then money, then

480
00:28:40,829 --> 00:28:41,229
KT: things.

481
00:28:41,390 --> 00:28:46,020
Suze: Now you stay safe and secure. See you Sunday. Bye-bye.