1 00:00:33,380 --> 00:00:38,770 Suze: November 2nd 2023. Welcome everybody to the Women and Money 2 00:00:38,779 --> 00:00:44,250 Suze: podcast as well as everybody smart enough to listen. Today. 3 00:00:44,659 --> 00:00:46,809 Suze: Today is the ask 4 00:00:47,389 --> 00:00:53,369 KT: KT and Suze, I'm back. You have to tell everyone, I'm back. 5 00:00:53,380 --> 00:00:54,529 KT: I'm in the studio. 6 00:00:54,540 --> 00:00:58,049 Suze: Well, obviously they're hearing your voice, right? What's it feel 7 00:00:58,060 --> 00:00:59,049 Suze: like to be back? 8 00:00:59,060 --> 00:01:02,310 KT: Fabulous. Boy, I missed sitting here with you, Suze. 9 00:01:02,319 --> 00:01:06,369 Suze: You are so lying. I know she's lying. 10 00:01:06,449 --> 00:01:08,519 KT: Everybody, did you miss me? 11 00:01:08,839 --> 00:01:09,650 Suze: They did miss you. 12 00:01:09,669 --> 00:01:13,259 KT: They actually didn't because Suze did some of the best 13 00:01:13,269 --> 00:01:18,209 KT: podcast ever in the history of the Suze Orman podcast, 14 00:01:18,220 --> 00:01:22,059 KT: Women and Money podcast without me, but it's not only 15 00:01:22,069 --> 00:01:26,510 KT: November 2nd, tell them all about November 3rd with you 16 00:01:26,519 --> 00:01:27,848 KT: and Chris Wallace. 17 00:01:27,860 --> 00:01:29,669 Suze: What do you want me to say other 18 00:01:31,089 --> 00:01:33,290 Suze: as you know, because I told you a few days 19 00:01:33,300 --> 00:01:36,529 Suze: ago when I was in New York, I did about 20 00:01:36,540 --> 00:01:40,290 Suze: a 30 minute interview with Chris Wallace and you all 21 00:01:40,300 --> 00:01:44,069 Suze: can see it starting tomorrow on Max is where it 22 00:01:44,080 --> 00:01:47,900 Suze: will be streaming and I had a great time with him. 23 00:01:48,019 --> 00:01:51,760 KT: It was fun. Chris is funny. It was a great interview. 24 00:01:51,970 --> 00:01:55,760 Suze: I'm so glad you approved. All right, KT. 25 00:01:55,769 --> 00:01:59,550 KT: OK. So my first email is not a question. It's 26 00:01:59,559 --> 00:02:02,489 KT: actually a statement and I like to share these because 27 00:02:02,500 --> 00:02:06,589 KT: it helps all of you listening to realize what people 28 00:02:06,599 --> 00:02:09,788 KT: are learning from Suze over the years. And, and this 29 00:02:09,800 --> 00:02:11,000 KT: one was very moving. 30 00:02:11,610 --> 00:02:15,990 KT: Said many years ago I started my journey to financial wellness. 31 00:02:16,000 --> 00:02:22,779 KT: Thanks to Suze, I raised my four kids with financial intelligence. Yeah, 32 00:02:22,788 --> 00:02:23,809 KT: I like this. 33 00:02:23,839 --> 00:02:26,529 Suze: You know how I knew it was from Shelley because 34 00:02:26,538 --> 00:02:30,470 Suze: I answered her back. Right. Shelley has been somebody that 35 00:02:30,479 --> 00:02:33,350 Suze: over at least KT, even before you, 36 00:02:34,000 --> 00:02:35,959 Suze: I've been communicating with. 37 00:02:36,839 --> 00:02:40,389 KT: Well, when, when I read this, everyone will understand how 38 00:02:40,399 --> 00:02:41,869 KT: far back you and Shelley. 39 00:02:42,220 --> 00:02:43,490 Suze: So it's funny you picked it. 40 00:02:43,710 --> 00:02:45,699 KT: Yeah, I, I liked it a lot. It said during 41 00:02:45,710 --> 00:02:50,550 KT: my divorce settlement in 2022 small student loan payments of 42 00:02:50,559 --> 00:02:54,669 KT: 6000 for each of my two boys was overlooked in 43 00:02:54,679 --> 00:02:59,070 KT: the financial settlement because the payments were frozen. And so 44 00:02:59,080 --> 00:03:02,699 KT: the loans were forgotten. Fast forward to today. 45 00:03:03,050 --> 00:03:07,729 KT: And my two sons happily married with no other student loans. 46 00:03:07,960 --> 00:03:12,440 KT: We were recently notified that they need to repay the loans. 47 00:03:12,529 --> 00:03:16,190 KT: I was so upset and felt like I failed them. 48 00:03:16,199 --> 00:03:20,110 KT: Here's an excerpt from the conversation we had after I 49 00:03:20,119 --> 00:03:24,160 KT: apologized that we hadn't repaid the loans 50 00:03:24,345 --> 00:03:28,324 KT: Ready for this Suze? Mom, it's not your fault. You were 51 00:03:28,335 --> 00:03:32,244 KT: going through a lot. Thankfully, you raised us to never 52 00:03:32,255 --> 00:03:36,955 KT: get comfortable to have an emergency fund, save our money 53 00:03:36,964 --> 00:03:40,684 KT: and put people first. And we did. 54 00:03:41,490 --> 00:03:45,509 KT: Now, within an hour of being notified, they both made 55 00:03:45,520 --> 00:03:51,270 KT: $6000 payments and thanked me for raising them well. Suze, 56 00:03:51,279 --> 00:03:54,539 KT: I wanna thank you for everything you have done for 57 00:03:54,550 --> 00:03:57,990 KT: me and for so many other people who are better 58 00:03:58,000 --> 00:04:01,199 KT: off because of the work you do to help people 59 00:04:01,210 --> 00:04:08,199 KT: become financially intelligent, wishing you and KT all the best, Shelley. 60 00:04:08,229 --> 00:04:10,869 KT: But here's the, the key. Everybody, 61 00:04:11,300 --> 00:04:14,960 KT: her son said, mom, you taught us how to put 62 00:04:14,970 --> 00:04:19,649 KT: people first, which means that Shelley's been watching you, I 63 00:04:19,660 --> 00:04:20,690 KT: guess since the Suze Orman Show. 64 00:04:21,428 --> 00:04:26,190 Suze: I ended every single Suze Orman show on CNBC with 65 00:04:26,609 --> 00:04:29,459 Suze: "And remember there's only one thing that matters when it comes 66 00:04:29,470 --> 00:04:33,399 Suze: to your money and it is this people first then money, 67 00:04:33,410 --> 00:04:37,079 Suze: then things now you stay safe." That's exactly how I 68 00:04:37,089 --> 00:04:37,799 Suze: ended it. 69 00:04:38,209 --> 00:04:43,570 Suze: And Shelley obviously taught her Children well, now Katie, what 70 00:04:43,579 --> 00:04:44,570 Suze: questions do you have? 71 00:04:44,579 --> 00:04:47,459 KT: Ok. I've got a whole little assortment here, but I'm 72 00:04:47,470 --> 00:04:49,010 KT: going to start with a very short one. 73 00:04:49,589 --> 00:04:52,799 KT: So this is from Sharon. Hi, Suze and KT. What 74 00:04:52,809 --> 00:04:56,970 KT: are your thoughts on fixed rate? Annuities are annuities, a 75 00:04:56,980 --> 00:04:58,450 KT: good investment. 76 00:04:59,029 --> 00:05:01,890 Suze: So, as you know, annuity seem to be a keyword 77 00:05:01,899 --> 00:05:05,828 Suze: with me, but the truth of the matter is fixed 78 00:05:05,839 --> 00:05:11,570 Suze: annuities are essentially just like certificates of deposits where the 79 00:05:11,579 --> 00:05:12,799 Suze: insurance company 80 00:05:13,320 --> 00:05:18,178 Suze: guarantees you a specific interest rate for a specific period 81 00:05:18,190 --> 00:05:21,500 Suze: of time. I don't have a problem with them. 82 00:05:21,850 --> 00:05:25,589 Suze: You just have to know is the insurance company safe? 83 00:05:25,600 --> 00:05:30,308 Suze: Do they have a good rating? Are there surrender charges? 84 00:05:30,329 --> 00:05:35,589 Suze: And most importantly, do they guarantee you that interest rate 85 00:05:35,600 --> 00:05:40,470 Suze: for the entire time of the surrender charge? Because the 86 00:05:40,480 --> 00:05:43,500 Suze: last thing you want is a fixed annuity and a 87 00:05:43,510 --> 00:05:47,350 Suze: fixed annuity means the interest rate usually is fixed. 88 00:05:47,959 --> 00:05:50,980 Suze: But the last thing that you want is a fixed 89 00:05:50,988 --> 00:05:54,299 Suze: annuity where the interest rate is fixed for only one year. 90 00:05:54,790 --> 00:05:59,458 Suze: The surrender charge to get out of it is five years. 91 00:05:59,470 --> 00:06:02,140 Suze: They sucker you in with a high interest rate the 92 00:06:02,149 --> 00:06:06,828 Suze: first year and then lower you way down years 23, 4, 5,6 93 00:06:06,839 --> 00:06:09,500 Suze: or whatever it may be. So just make sure that 94 00:06:09,510 --> 00:06:15,049 Suze: the interest rate equals the amount of time of the 95 00:06:15,059 --> 00:06:16,660 Suze: surrender charge. 96 00:06:17,010 --> 00:06:19,480 Suze: Also, you should only do an annuity if you are 97 00:06:19,488 --> 00:06:24,149 Suze: 59.5 years of age or older, not younger than that. 98 00:06:24,160 --> 00:06:27,609 KT: So, Suze, why 59.5 or older for annuities? 99 00:06:27,630 --> 00:06:31,709 Suze: Because what's interesting is when you do an annuity KT 100 00:06:31,720 --> 00:06:35,029 Suze: which is a contract with an insurance company while the 101 00:06:35,040 --> 00:06:38,589 Suze: money's in there, you don't pay any taxes on it. 102 00:06:39,309 --> 00:06:43,739 Suze: So part of that means that you get to defer 103 00:06:43,750 --> 00:06:46,969 Suze: just like a retirement account, you get to defer the 104 00:06:46,980 --> 00:06:51,109 Suze: taxes on your interest. Most annuity companies allow you to 105 00:06:51,119 --> 00:06:55,420 Suze: take 10% out a year. But if you want to 106 00:06:55,428 --> 00:06:59,328 Suze: take out more than that and you're not at least 107 00:06:59,339 --> 00:07:03,669 Suze: 59.5 years of age, you're gonna pay a 10% penalty. 108 00:07:03,678 --> 00:07:07,399 KT: Ok. So my next question is from Velly again, a 109 00:07:07,410 --> 00:07:08,409 KT: short question. 110 00:07:08,928 --> 00:07:13,049 KT: I am 55. My husband is 64. I know Suze, 111 00:07:13,059 --> 00:07:17,109 KT: you recommend ETFs but those need to be done manually 112 00:07:17,119 --> 00:07:21,869 KT: by me. And I feel insecure doing that. I'd much 113 00:07:21,880 --> 00:07:25,209 KT: rather put the money in mutual funds, but I don't 114 00:07:25,220 --> 00:07:27,899 KT: know which mutual funds to pick. So, do you have 115 00:07:27,910 --> 00:07:28,959 KT: any advice for Velly? 116 00:07:29,089 --> 00:07:32,790 Suze: So Velly, what I don't quite understand is why you 117 00:07:32,799 --> 00:07:36,350 Suze: feel ok, picking a mutual fund on your own, 118 00:07:37,029 --> 00:07:41,130 Suze: but you don't feel OK about picking an exchange trade. 119 00:07:41,459 --> 00:07:45,890 KT: No, she's asking you which mutual funds should I pick? 120 00:07:46,260 --> 00:07:49,089 Suze: I'm asking you to tell you the truth. I don't 121 00:07:49,100 --> 00:07:53,529 Suze: like mutual funds as much as I like exchange traded funds. 122 00:07:53,540 --> 00:07:55,570 Suze: So listen to me closely, 123 00:07:55,869 --> 00:07:59,690 Suze: you could do the Vanguard Total Stock market index Mutual 124 00:07:59,700 --> 00:08:04,920 Suze: Fund or the ETF version of that would be the 125 00:08:04,929 --> 00:08:10,570 Suze: vanguard total index ETF symbol VTI, what is the difference 126 00:08:10,579 --> 00:08:12,010 Suze: between the two? 127 00:08:12,700 --> 00:08:16,720 Suze: Listen closely, take out your Suze notebooks for this seriously 128 00:08:17,190 --> 00:08:19,079 Suze: in exchange traded fund 129 00:08:20,019 --> 00:08:24,799 Suze: trades every day on the exchange, which means you can 130 00:08:24,809 --> 00:08:28,049 Suze: buy and sell it at any time you want when 131 00:08:28,059 --> 00:08:33,400 Suze: the markets are open a mutual fund, however, can only 132 00:08:33,409 --> 00:08:36,619 Suze: be bought or sold at the end of the day 133 00:08:36,630 --> 00:08:41,840 Suze: when the markets close. So just imagine this, it's first 134 00:08:41,849 --> 00:08:45,539 Suze: thing in the morning, you hear some horrific news, something 135 00:08:45,549 --> 00:08:46,760 Suze: just has happened 136 00:08:47,030 --> 00:08:50,169 Suze: and you really want to get out of the market, 137 00:08:50,179 --> 00:08:54,289 Suze: but your money is in mutual funds, you can't get out, 138 00:08:54,419 --> 00:08:57,049 Suze: you can place an order to sell, but you're going 139 00:08:57,059 --> 00:09:00,059 Suze: to get the closing price of whatever that mutual fund 140 00:09:00,070 --> 00:09:05,280 Suze: closed at that day. In exchange traded fund. You hear 141 00:09:05,289 --> 00:09:07,960 Suze: horrible news. You want to get out, you place your 142 00:09:07,969 --> 00:09:12,199 Suze: order to sell, bam, you are sold right then and there. 143 00:09:12,599 --> 00:09:13,210 Suze: So 144 00:09:13,619 --> 00:09:16,939 Suze: I like exchange traded funds. I think if you're not 145 00:09:16,950 --> 00:09:20,820 Suze: comfortable with picking an exchange traded fund on your own, 146 00:09:21,400 --> 00:09:24,989 Suze: you shouldn't be comfortable with picking a mutual fund either. 147 00:09:25,030 --> 00:09:30,380 Suze: So let's start getting comfortable with exchange traded funds where 148 00:09:30,390 --> 00:09:34,630 Suze: you can do it yourself. Not a big deal. Vanguard 149 00:09:34,640 --> 00:09:38,939 Suze: total stock market index, ETF any of those I like. 150 00:09:38,950 --> 00:09:39,599 Suze: All right. 151 00:09:40,049 --> 00:09:42,559 KT: Ok. So Suze, this next question 152 00:09:43,119 --> 00:09:47,819 KT: I chose because I think people will relate to this, sadly, 153 00:09:48,130 --> 00:09:52,039 KT: because of all the layoffs and changes within corporate America. 154 00:09:52,049 --> 00:09:55,329 KT: So it said Hi, Suze and KT. I'm new to 155 00:09:55,340 --> 00:09:58,809 KT: your podcast. I'm trying to absorb it all but a 156 00:09:58,820 --> 00:10:02,739 KT: little overwhelmed at times. So this is what Kathy is 157 00:10:02,750 --> 00:10:06,488 KT: her name. My husband will be 60 in January and 158 00:10:06,500 --> 00:10:07,619 KT: I am 58. 159 00:10:08,030 --> 00:10:12,179 KT: He was recently laid off from his job of 11 years. 160 00:10:12,340 --> 00:10:15,640 KT: He was planning on staying for another 6 to 7 161 00:10:15,650 --> 00:10:19,729 KT: years then retiring. But as we know, we need to 162 00:10:19,739 --> 00:10:25,109 KT: expect the unexpected. We have 146,000 in savings in a 163 00:10:25,119 --> 00:10:30,489 KT: money market. We have eight different 401(k)s from past jobs 164 00:10:30,500 --> 00:10:35,489 KT: and that's about 800,000. We also have 56,000 on our 165 00:10:35,500 --> 00:10:37,690 KT: mortgage at 5.5% 166 00:10:38,190 --> 00:10:42,169 KT: and they pay about $2000 a month. Now, Cathy says 167 00:10:42,179 --> 00:10:44,799 KT: I'm working in health care at the moment, but my 168 00:10:44,809 --> 00:10:49,789 KT: job is as needed. I could probably handle the expenses 169 00:10:49,799 --> 00:10:51,049 KT: minus the mortgage. 170 00:10:51,309 --> 00:10:53,969 KT: I know you would say to pay the mortgage off. 171 00:10:54,020 --> 00:10:58,059 KT: But with my husband's job situation, would this still be 172 00:10:58,070 --> 00:10:59,209 KT: the thing to do? 173 00:10:59,520 --> 00:11:02,069 Suze: So, first of all, what I want to say to 174 00:11:02,080 --> 00:11:06,609 Suze: you is I get Kathy that sometimes it can feel 175 00:11:06,619 --> 00:11:11,049 Suze: overwhelming some of the podcast that you may be listening to. 176 00:11:11,409 --> 00:11:14,830 Suze: But if you start essentially at the beginning and work 177 00:11:14,840 --> 00:11:17,929 Suze: your way through, I promise you 178 00:11:18,390 --> 00:11:21,859 Suze: you're not going to be overwhelmed, you're going to find 179 00:11:21,869 --> 00:11:24,570 Suze: that you have what it takes to do anything and 180 00:11:24,580 --> 00:11:29,530 Suze: everything with your money, little by little. So just stick 181 00:11:29,539 --> 00:11:32,119 Suze: with it and just listen to it. The great thing 182 00:11:32,130 --> 00:11:36,650 Suze: is there's almost 500 podcasts now, right. So it might 183 00:11:36,659 --> 00:11:40,169 Suze: take you a little while, but they're really not that long. 184 00:11:41,210 --> 00:11:46,309 Suze: Yes, I absolutely would tell you to pay off the 185 00:11:46,320 --> 00:11:50,729 Suze: mortgage with your husband's job situation without a shadow of 186 00:11:50,739 --> 00:11:55,380 Suze: a doubt. Listen, your monthly payment is because I'm looking 187 00:11:55,390 --> 00:11:59,909 Suze: at your email right now is $2100 a month on 188 00:11:59,919 --> 00:12:05,228 Suze: a $56,000 mortgage at 5.5%. 189 00:12:05,820 --> 00:12:09,270 Suze: Let's just say you have that 56,000, which you do 190 00:12:09,280 --> 00:12:12,609 Suze: because that's part of the 146,000 you have in savings 191 00:12:12,869 --> 00:12:18,849 Suze: is making 4.5 or 5%. That's two tho about $2200 192 00:12:18,859 --> 00:12:19,780 Suze: a year. 193 00:12:20,440 --> 00:12:26,239 Suze: That's taxable. So you are only earning in one year 194 00:12:26,250 --> 00:12:27,500 Suze: on this money 195 00:12:28,140 --> 00:12:33,159 Suze: what it costs you per month for a mortgage payment. 196 00:12:33,260 --> 00:12:41,340 Suze: So you are essentially paying $25,000 a year 197 00:12:41,710 --> 00:12:47,979 Suze: on a mortgage payment versus your $2240 a year in 198 00:12:47,989 --> 00:12:52,460 Suze: interest that you're making on that. So you betcha you 199 00:12:52,469 --> 00:12:55,840 Suze: should take that money as fast as you can and 200 00:12:55,849 --> 00:13:00,849 Suze: pay off that mortgage tomorrow. And then that reduces your 201 00:13:00,859 --> 00:13:05,718 Suze: expenses by $2100 a month, which you say in this 202 00:13:05,729 --> 00:13:08,359 Suze: email that you would probably be able to pay it 203 00:13:08,369 --> 00:13:08,929 Suze: off 204 00:13:09,840 --> 00:13:13,659 Suze: given what you do. And if there was no mortgage 205 00:13:13,669 --> 00:13:17,218 Suze: payment with what you have now, so without a shadow 206 00:13:17,229 --> 00:13:20,140 Suze: of a doubt, you should absolutely do that. Why are 207 00:13:20,150 --> 00:13:21,419 Suze: you looking at me like that. 208 00:13:21,429 --> 00:13:24,320 KT: I'm not just listening with great intent... 209 00:13:24,330 --> 00:13:24,950 Suze: ...because you forgot 210 00:13:25,130 --> 00:13:26,630 Suze: what my answers were like. 211 00:13:26,640 --> 00:13:28,719 KT: I haven't been in the studio with you in like 212 00:13:28,729 --> 00:13:29,750 KT: three weeks. 213 00:13:29,890 --> 00:13:30,880 Suze: Have you missed me? 214 00:13:31,210 --> 00:13:31,599 KT: Yeah. 215 00:13:31,609 --> 00:13:33,880 Suze: All right. Go on. Next question, KT. 216 00:13:34,409 --> 00:13:37,729 KT: So, Suze, this next one also about mortgages, but this 217 00:13:37,739 --> 00:13:42,260 KT: is from Annie about reverse mortgages. A few podcasts ago, 218 00:13:42,349 --> 00:13:45,239 KT: a woman who lived with her mom had a reverse 219 00:13:45,250 --> 00:13:48,760 KT: mortgage and you briefly told everyone why you don't like them. 220 00:13:49,609 --> 00:13:52,760 KT: So I live with my elderly mom as well. 221 00:13:53,140 --> 00:13:56,099 KT: So Suze, when my mom dies, how long will I 222 00:13:56,109 --> 00:13:59,440 KT: be able to stay in the house? And if the 223 00:13:59,450 --> 00:14:03,039 KT: reverse mortgage has grown to be worth more than the 224 00:14:03,049 --> 00:14:05,598 KT: house and if I want to stay here, do I 225 00:14:05,609 --> 00:14:08,919 KT: have to pay what the reverse mortgage is owed? 226 00:14:09,820 --> 00:14:15,150 Suze: Yeah, so complicated. I don't like reverse mortgages because these 227 00:14:15,159 --> 00:14:20,650 Suze: situations happen. So Annie, you will have generally speaking, you 228 00:14:20,659 --> 00:14:23,150 Suze: have up to one year 229 00:14:23,909 --> 00:14:28,289 Suze: to stay in that house. But however, the reverse mortgage 230 00:14:28,299 --> 00:14:31,080 Suze: or the loan servicer, which is what they now have 231 00:14:31,090 --> 00:14:31,770 Suze: become 232 00:14:32,349 --> 00:14:36,349 Suze: when your mommy dies, right? Is that there's usually an 233 00:14:36,359 --> 00:14:41,130 Suze: initial six months where they need to know. What is 234 00:14:41,140 --> 00:14:43,609 Suze: your plan for the house? Are you going to pay 235 00:14:43,619 --> 00:14:46,719 Suze: them back? Are you going to stay there? What's going 236 00:14:46,729 --> 00:14:49,070 Suze: to happen or are you going to sell it? All 237 00:14:49,080 --> 00:14:54,190 Suze: right now, the executor of your will or the administrator 238 00:14:54,200 --> 00:14:57,049 Suze: of the estate? Whatever it may be, or the trust 239 00:14:57,630 --> 00:15:06,190 Suze: usually has the opportunity to request 290 day extensions to 240 00:15:06,200 --> 00:15:10,150 Suze: make these decisions. All right. So that's just for you 241 00:15:10,159 --> 00:15:14,770 Suze: to know in terms of you have a reverse mortgage 242 00:15:14,900 --> 00:15:19,890 Suze: and obviously mommy took this out a long time ago 243 00:15:20,489 --> 00:15:26,190 Suze: and now she owes more to the reverse mortgage company 244 00:15:26,200 --> 00:15:29,609 Suze: based on the interest rate that was being charged than 245 00:15:29,619 --> 00:15:34,250 Suze: what the house happens to be worth. If that is 246 00:15:34,260 --> 00:15:38,830 Suze: the situation, you only have to pay back the reverse 247 00:15:38,840 --> 00:15:43,789 Suze: mortgage company, the fair market value of the home. 248 00:15:44,440 --> 00:15:49,760 Suze: It's just that simple. Ok, in the reverse situation where 249 00:15:49,770 --> 00:15:53,599 Suze: the home is worth more than what is owed on 250 00:15:53,609 --> 00:15:58,190 Suze: the reverse mortgage. If you sell the home, you only 251 00:15:58,200 --> 00:16:02,460 Suze: have to pay the mortgage company back what you owe them. 252 00:16:02,750 --> 00:16:05,760 Suze: So that's how it works. Next question, KT. 253 00:16:07,250 --> 00:16:09,289 KT: This is from Aunt Connie. 254 00:16:09,630 --> 00:16:14,479 KT: Hi Suze. What is a reputable debt consolidation company? My 255 00:16:14,489 --> 00:16:19,000 KT: niece can use. She has credit card debt. So for 256 00:16:19,010 --> 00:16:22,510 KT: all the nieces and nephews out there, listen to what 257 00:16:22,520 --> 00:16:23,719 KT: Suze has to say. 258 00:16:23,729 --> 00:16:27,359 Suze: Yeah, you have to be very, very careful here because 259 00:16:27,369 --> 00:16:33,359 Suze: there are many consolidation companies that tell you the following. 260 00:16:33,440 --> 00:16:34,130 Suze: All right, 261 00:16:35,479 --> 00:16:40,270 Suze: you have this credit card debt. Stop paying all the 262 00:16:40,280 --> 00:16:45,260 Suze: payments on the credit cards and ruin your FICO score. 263 00:16:45,830 --> 00:16:49,789 Suze: Then what they do is that you normally will pay 264 00:16:49,799 --> 00:16:54,349 Suze: them the money that you have normally paid the credit 265 00:16:54,359 --> 00:16:55,090 Suze: cards 266 00:16:55,770 --> 00:17:00,750 Suze: and once you have ruined your credit score, they then 267 00:17:00,760 --> 00:17:04,468 Suze: go to the credit card companies and they make an 268 00:17:04,479 --> 00:17:09,150 Suze: offer and they say, all right, you owe $10,000 they'll 269 00:17:09,160 --> 00:17:12,609 Suze: pay the credit card company $5000 to settle. 270 00:17:13,520 --> 00:17:17,560 Suze: And then you have to usually also pay this company 271 00:17:17,569 --> 00:17:22,569 Suze: a percent of what they negotiated the credit cards with. Now, 272 00:17:22,579 --> 00:17:28,938 Suze: that type of company is debt consolidators. You don't want 273 00:17:28,949 --> 00:17:35,380 Suze: a debt consolidator, you want a debt management company 274 00:17:35,650 --> 00:17:39,409 Suze: and the best place to go would be to NFCC 275 00:17:40,160 --> 00:17:44,670 Suze: dot org. And that stands for the National Foundation of 276 00:17:44,680 --> 00:17:49,489 Suze: Credit Counseling. And what they do is they work with you. 277 00:17:49,500 --> 00:17:55,000 Suze: They help pay off your debts faster. They're a nonprofit corporation. 278 00:17:55,239 --> 00:17:59,369 Suze: Usually they charge 10 or $15 a month. I believe 279 00:17:59,380 --> 00:18:00,750 Suze: it is to work with them. 280 00:18:01,209 --> 00:18:04,729 Suze: But what happens is they work with your credit card companies. 281 00:18:04,869 --> 00:18:08,260 Suze: They get the interest rate to go down hopefully to zero. 282 00:18:08,400 --> 00:18:13,130 Suze: You pay them and they pay the credit card companies 283 00:18:13,140 --> 00:18:15,069 Suze: for you every month. 284 00:18:15,439 --> 00:18:19,188 Suze: So check them out and that's who I would be using. 285 00:18:19,229 --> 00:18:24,400 Suze: Stay away from debt consolidators. Next KT. 286 00:18:24,630 --> 00:18:27,369 KT: This is from Kirby, Suze. I like this one a lot. 287 00:18:27,380 --> 00:18:31,180 KT: A professor once said there will come a time in 288 00:18:31,189 --> 00:18:33,989 KT: your career when you work for the benefit 289 00:18:34,089 --> 00:18:38,650 KT: fits more so than the money I'm there. I hate 290 00:18:38,660 --> 00:18:42,609 KT: my job. I want to leave but I'm 60 I 291 00:18:42,619 --> 00:18:46,810 KT: need the health insurance. Other than that. I'm totally debt 292 00:18:46,819 --> 00:18:51,379 KT: free is the health insurance marketplace. The answer for those 293 00:18:51,390 --> 00:18:52,709 KT: in my situation. 294 00:18:53,280 --> 00:18:57,790 Suze: So here's the thing Kirby is that you are never 295 00:18:57,800 --> 00:19:01,390 Suze: stuck in a situation you are stuck in how you 296 00:19:01,400 --> 00:19:03,389 Suze: think about your situation. 297 00:19:04,069 --> 00:19:08,159 Suze: You are 60 needing health insurance at a time when 298 00:19:08,170 --> 00:19:14,329 Suze: most corporations can't find experienced help to help them right now, 299 00:19:14,670 --> 00:19:18,719 Suze: they're offering all kinds of incentives. Come work for me, 300 00:19:18,729 --> 00:19:23,729 Suze: come this because people don't wanna work today for some reason. 301 00:19:23,869 --> 00:19:28,010 Suze: So there is a massive unemployment thing going on with 302 00:19:28,020 --> 00:19:32,560 Suze: most companies. If you hate your job, 303 00:19:33,170 --> 00:19:37,800 Suze: don't tell me, especially since you're debt free. That means 304 00:19:37,810 --> 00:19:41,079 Suze: you must have some money to carry you that you 305 00:19:41,089 --> 00:19:46,260 Suze: can't go and find a job that you like. Obviously 306 00:19:46,270 --> 00:19:49,959 Suze: you could go to the health insurance marketplace. You can 307 00:19:49,969 --> 00:19:53,930 Suze: always also, if you did quit your job, they have 308 00:19:53,939 --> 00:19:56,639 Suze: to offer you insurance for about 18 months, but it 309 00:19:56,650 --> 00:19:59,739 Suze: will be expensive. But Kirby, you have 310 00:19:59,824 --> 00:20:04,064 Suze: to be more creative than this, but you don't stay 311 00:20:04,074 --> 00:20:07,744 Suze: in a job that you hate just because of insurance. 312 00:20:07,775 --> 00:20:10,805 Suze: You go out and find a job that you like 313 00:20:11,255 --> 00:20:17,055 Suze: that also offers you insurance. Just that simple. Yes, KT. 314 00:20:17,395 --> 00:20:18,554 KT: Hey, this is from... 315 00:20:18,564 --> 00:20:19,405 Suze: How am I doing, KT? 316 00:20:19,415 --> 00:20:22,224 KT: This is my last question from Natalie, 317 00:20:23,050 --> 00:20:26,869 KT: ready? Is this what makes me laugh? Hi Suze and KT. 318 00:20:26,880 --> 00:20:29,290 KT: I've been listening to your advice since I was a 319 00:20:29,300 --> 00:20:33,069 KT: teenager ready. My mom used to make me watch your 320 00:20:33,079 --> 00:20:38,630 KT: show to learn about money. I love that. Natalie. Now, 321 00:20:38,640 --> 00:20:42,930 KT: I love listening as I navigate middle adulthood and its 322 00:20:42,939 --> 00:20:46,989 KT: major complexities. See, Natalie, your mom was right. 323 00:20:47,430 --> 00:20:51,630 KT: My question is about why you recommend funding a Roth 324 00:20:51,640 --> 00:20:55,890 KT: at any income level. I thought at a higher income level, 325 00:20:55,900 --> 00:21:00,560 KT: it made more sense to max pre-tax retirement contributions 326 00:21:00,969 --> 00:21:04,879 KT: given we pay the highest marginal rate on a significant 327 00:21:04,890 --> 00:21:09,869 KT: portion of our income. Currently, when we withdraw money in retirement, 328 00:21:09,880 --> 00:21:14,379 KT: our taxable income will be substantially lower than it is now. 329 00:21:14,609 --> 00:21:18,280 KT: So there you go tell Natalie what your thoughts are. 330 00:21:18,300 --> 00:21:21,640 Suze: Natalie. How do you know what your income tax brackets 331 00:21:21,650 --> 00:21:23,439 Suze: are going to be when you retire? 332 00:21:23,839 --> 00:21:28,050 Suze: We are now in the United States of America facing 333 00:21:28,060 --> 00:21:32,219 Suze: a situation where we have so much debt, 334 00:21:32,829 --> 00:21:40,739 Suze: Social Security is not secure. Medicare is not secure. There's 335 00:21:40,750 --> 00:21:43,089 Suze: only a few ways that they're going to be able 336 00:21:43,099 --> 00:21:47,030 Suze: to solve this problem. And one of them may very 337 00:21:47,040 --> 00:21:52,869 Suze: well be raising income tax brackets. The one thing that 338 00:21:52,880 --> 00:21:57,719 Suze: the government knows for sure when you put money in 339 00:21:57,949 --> 00:21:59,520 Suze: a retirement account 340 00:22:00,170 --> 00:22:04,589 Suze: that you've never paid taxes on, they know for sure 341 00:22:04,630 --> 00:22:09,188 Suze: that currently by the age of 73 you have got 342 00:22:09,199 --> 00:22:14,339 Suze: to start withdrawing money from that retirement account. It's required 343 00:22:15,729 --> 00:22:20,150 Suze: according to whatever tax bracket you're in at that time 344 00:22:20,160 --> 00:22:22,670 Suze: is what the taxes you will pay. 345 00:22:23,390 --> 00:22:26,010 Suze: So you are investing today 346 00:22:27,060 --> 00:22:30,079 Suze: in the known which is what your income tax bracket 347 00:22:30,089 --> 00:22:31,219 Suze: is today 348 00:22:31,869 --> 00:22:36,739 Suze: to withdraw it sometime in the future for the unknown 349 00:22:37,339 --> 00:22:40,729 Suze: because you don't know what that amount of money is 350 00:22:40,739 --> 00:22:43,619 Suze: going to be, that you're gonna owe taxes on. I 351 00:22:43,630 --> 00:22:46,290 Suze: have a lot of money which is invest in the 352 00:22:46,300 --> 00:22:53,810 Suze: known versus the unknown. What's interesting in a Roth 401k 353 00:22:53,819 --> 00:22:55,729 Suze: or a Roth Ira. 354 00:22:56,209 --> 00:23:01,729 Suze: There are not required minimum distributions. You don't ever have 355 00:23:01,739 --> 00:23:05,589 Suze: to start taking the money out. Even if you do, 356 00:23:05,770 --> 00:23:09,390 Suze: they will not count towards the income of your social 357 00:23:09,400 --> 00:23:13,829 Suze: security or the Medicare premiums that you are paying. 358 00:23:14,760 --> 00:23:19,479 Suze: There's a reason why that they limit the income of 359 00:23:19,489 --> 00:23:21,689 Suze: people who contribute to a Roth 360 00:23:22,410 --> 00:23:25,589 Suze: and it's a true advantage to be able to do 361 00:23:25,599 --> 00:23:29,849 Suze: a Roth. Therefore, I don't really care what income tax 362 00:23:29,859 --> 00:23:31,430 Suze: bracket you're in right now. 363 00:23:32,050 --> 00:23:36,349 Suze: Relatively speaking, we're still in the lowest income tax brackets 364 00:23:36,359 --> 00:23:40,639 Suze: of our lives. Don't think that it's not possible that 365 00:23:40,650 --> 00:23:44,349 Suze: years from now we could go from 39 back to 366 00:23:44,359 --> 00:23:49,459 Suze: 50 back to a 70% income tax bracket when I 367 00:23:49,469 --> 00:23:54,199 Suze: first started, income tax brackets were at 70% had come 368 00:23:54,209 --> 00:24:00,449 Suze: down from 90%. So, don't think that can't happen again. 369 00:24:00,459 --> 00:24:01,869 Suze: All right. So 370 00:24:02,329 --> 00:24:05,930 Suze: my advice to you, regardless of how much money you make, 371 00:24:06,010 --> 00:24:10,099 Suze: invest in the known, pay the taxes now and all 372 00:24:10,109 --> 00:24:13,349 Suze: of that money will be not only tax free for you, 373 00:24:14,589 --> 00:24:20,050 Suze: it will be tax free for your beneficiaries when you die. 374 00:24:20,060 --> 00:24:24,959 Suze: Think about that one girlfriend. All right, KT. It is 375 00:24:24,969 --> 00:24:29,579 Suze: time for your quizz. Ok. Are you ready for this? 376 00:24:30,699 --> 00:24:31,479 Suze: All right 377 00:24:32,430 --> 00:24:37,599 Suze: now, quizzie time. Look at KT's face. I know I 378 00:24:37,609 --> 00:24:42,310 Suze: tricked her KT today. I'll just tell you this. KT today. 379 00:24:42,319 --> 00:24:44,629 Suze: Said to me, Suze, can this be my quizzie? 380 00:24:45,290 --> 00:24:48,359 Suze: And it was this really short question that was so 381 00:24:48,369 --> 00:24:52,140 Suze: easy to answer. And I said, oh, not everyone knew 382 00:24:52,150 --> 00:24:55,550 Suze: the answer. No, but you did. I did, I knew 383 00:24:55,560 --> 00:25:00,329 Suze: I was gonna get it right finally. But so I said, sure, 384 00:25:00,339 --> 00:25:01,989 Suze: no problem KT. 385 00:25:02,180 --> 00:25:04,390 KT: And, but she just pulled out a paper that's a 386 00:25:04,400 --> 00:25:05,149 KT: lot longer. 387 00:25:07,449 --> 00:25:10,719 Suze: I abruptly threw that question away. 388 00:25:10,729 --> 00:25:12,180 KT: That was a good question. 389 00:25:12,349 --> 00:25:15,979 Suze: It wasn't a great question, right? Because everybody did know 390 00:25:15,989 --> 00:25:20,099 Suze: the answer to it already, Miss Travis. So this one 391 00:25:20,109 --> 00:25:21,780 Suze: is from Janice 392 00:25:22,099 --> 00:25:26,429 Suze: and everybody a quizzie is, you play along with KT, 393 00:25:26,829 --> 00:25:31,280 Suze: you really need to know how to answer this question. 394 00:25:31,290 --> 00:25:34,140 Suze: The goal of the Women and Money podcast is what 395 00:25:34,150 --> 00:25:38,280 Suze: for you to be able to answer every single question 396 00:25:38,500 --> 00:25:42,579 Suze: that KT asks, including the quiz. All right, 397 00:25:43,939 --> 00:25:45,060 KT: Good luck, everyone. 398 00:25:48,069 --> 00:25:51,979 Suze: Right. This is from Janice. Hi, Suze and KT. I 399 00:25:51,989 --> 00:25:58,670 Suze: have a question about life insurance. I am a 53 400 00:25:58,680 --> 00:26:02,959 Suze: year old female. My husband is 56 and we have 401 00:26:02,969 --> 00:26:07,719 Suze: two sons, a 20 year old and a 15 year old. 402 00:26:08,010 --> 00:26:14,140 Suze: I have a $500,000 whole life policy 403 00:26:15,000 --> 00:26:19,409 Suze: that costs $668 per month 404 00:26:20,239 --> 00:26:27,339 Suze: and a 300,000 term policy at $93 a month. 405 00:26:28,140 --> 00:26:33,229 Suze: Our house and two vehicles are not paid off those total. 406 00:26:33,239 --> 00:26:40,909 Suze: Approximately $300,000. Recently, I have been thinking of canceling the 407 00:26:40,920 --> 00:26:46,020 Suze: whole life policy. We have approximately 1 million in investments 408 00:26:46,160 --> 00:26:52,629 Suze: to include retirement funds. What should I do? Thank you, Janice. 409 00:26:53,420 --> 00:26:58,040 Suze: What are you looking at the age of the their 410 00:26:58,050 --> 00:27:04,930 Suze: 56 husband? She is 53 their son, they have two sons, 411 00:27:04,939 --> 00:27:08,569 Suze: a 20 year old in college and a 15 year old. 412 00:27:08,729 --> 00:27:11,329 KT: And so the 15 year old. Alright. Um 413 00:27:12,810 --> 00:27:16,579 KT: This is a hard one. Get rid of the whole life. 414 00:27:17,369 --> 00:27:20,119 Suze: Ding, ding, ding, ding, ding, ding, ding, ding. But what 415 00:27:20,130 --> 00:27:21,780 Suze: were you about to say? Why was it? 416 00:27:21,790 --> 00:27:24,218 KT: It was difficult because I was looking at all of 417 00:27:24,229 --> 00:27:27,209 KT: the amount of debt they still have that they're carrying 418 00:27:27,520 --> 00:27:31,399 KT: and one of the things that is the 15 year old, 419 00:27:31,729 --> 00:27:35,290 KT: there's no way that the whole life makes any sense. 420 00:27:35,699 --> 00:27:38,619 KT: You all you need is term everybody. 421 00:27:38,949 --> 00:27:41,869 Suze: So thank you KT, ding, ding, ding, ding, ding. 422 00:27:43,130 --> 00:27:46,208 Suze: Logically I want you to think about this everybody. She's 423 00:27:46,219 --> 00:27:50,569 Suze: paying $668 per month 424 00:27:51,400 --> 00:27:55,609 Suze: for a $500,000 whole life policy. 425 00:27:56,530 --> 00:28:06,760 Suze: She's paying $93 per month for a $300,000 term policy. 426 00:28:07,010 --> 00:28:11,479 Suze: So even if she doubled the term to 600,000. If 427 00:28:11,489 --> 00:28:14,780 Suze: she had, when she bought it, she'd be paying 100 428 00:28:14,790 --> 00:28:20,619 Suze: and $86 a month for $600,000 of terms. You see 429 00:28:20,630 --> 00:28:21,790 Suze: the difference there. 430 00:28:22,250 --> 00:28:26,359 Suze: Insurance is never meant in my opinion, to be a 431 00:28:26,369 --> 00:28:31,250 Suze: permanent need. It's only meant to be there when those 432 00:28:31,260 --> 00:28:34,959 Suze: who are financially dependent upon you. If something were to 433 00:28:34,969 --> 00:28:39,569 Suze: happen to, you need the money. Janice, you only need 434 00:28:39,579 --> 00:28:46,540 Suze: to carry term insurance until your two sons truthfully are 435 00:28:46,550 --> 00:28:51,410 Suze: number one, about 23 to 25 years of age. So 436 00:28:51,770 --> 00:28:55,469 Suze: that will be true in about another three years for 437 00:28:55,479 --> 00:29:00,469 Suze: your older son and really another eight years for your 438 00:29:00,479 --> 00:29:07,369 Suze: younger sum. So therefore the $300,000 term hopefully goes that long, 439 00:29:07,530 --> 00:29:12,750 Suze: even at your ages, you're still relatively young. Get yourself 440 00:29:12,760 --> 00:29:17,189 Suze: another like five or 10 year term policy. Once that's 441 00:29:17,199 --> 00:29:18,900 Suze: in place, drop the 442 00:29:19,015 --> 00:29:22,655 Suze: whole life, there should be a cash value to that 443 00:29:22,665 --> 00:29:26,275 Suze: whole life policy and then you can take that cash 444 00:29:26,285 --> 00:29:30,635 Suze: value and put it towards what your car payment and 445 00:29:30,645 --> 00:29:35,714 Suze: possibly your mortgage. That is what you should do. 446 00:29:36,319 --> 00:29:38,180 Suze: All right, KT, how was that? 447 00:29:38,369 --> 00:29:41,540 KT: It was great. That was good. Do you like having me back? 448 00:29:42,680 --> 00:29:47,869 Suze: Oh, of course. I like having you back. I love 449 00:29:47,880 --> 00:29:52,670 Suze: doing the Ask KT and Suze anything with you. So don't forget if 450 00:29:52,680 --> 00:29:57,300 Suze: you happen to have Max right? Streaming. Tune in to 451 00:29:57,310 --> 00:30:00,880 Suze: see me on. Look who's talking to Chris Wallace. 452 00:30:01,469 --> 00:30:03,420 KT: It's a great interview, right? 453 00:30:03,430 --> 00:30:06,760 Suze: And Sunday, I will be back with a Suze School. 454 00:30:06,770 --> 00:30:11,459 Suze: But KT, are you ready? Because we want each and 455 00:30:11,469 --> 00:30:16,449 Suze: every one of you to say every single day today 456 00:30:16,709 --> 00:30:17,050 Suze: wherever I 457 00:30:17,780 --> 00:30:25,209 KT: go I will create a more peaceful, joyful, and loving world. 458 00:30:25,459 --> 00:30:25,699 KT: And 459 00:30:25,709 --> 00:30:32,130 Suze: if you do that, you will be unstoppable. See you Sunday. 460 00:30:32,140 --> 00:30:32,849 Suze: Bye bye.