July 17, 2025 • 32 mins
On this Ask Suze & KT Anything episode, KT asks Suze questions from you about adding a partner’s name to credit cards and utilities, taxes on retirement accounts and financial advisor fees. Plus, helping relatives with money and so much more.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
KT (00:28):
Good morning, Suze.
Suze (00:29):
Here we go, everybody.
KT (00:31):
July 17th, 2025.
Suze (00:34):
Oh, she's she's on it. She's already on it.
KT (00:36):
It's July. It's my birthday month. I can't wait.
Suze (00:40):
All right, everybody, her birthday is Monday, 4 days from now,
and her twin sister arrives on the 20th for us
to go fishing and be with her. So this is
KT's birthday weekend coming up.
So we'll just have to see what happens on Sunday
or not anyway. So welcome everybody to the Ask KT
(01:05):
and Suze Anything podcast, and this is where you write
in to asksuze podcast@gmail.com. And if you don't know how
to spell my name by now, I'm not going to
tell you anymore.
You write in your question, and if KT chooses it,
we will answer it on the podcast and thousands of
(01:25):
people write in just so you know, so you never
know when we flip back, we go forward, whatever. You
got to listen every week to see if your question
is answered and then many of you know, like I
did last week, I answer you directly if I think
the situation warrants it.
Before we start, KT, let's remind everybody about the 12...
KT (01:50):
Oh, that's a great deal.
Suze (01:51):
Yes, certificate at Alliant Credit Union for 4.30 APY for
amounts under $75,000 for $75,000 or more, it's.
4.35 APY. Go to my Alliant A L L I
A N T.com and check it out. All right, now KT,
(02:11):
what do you got?
KT (02:12):
OK, Suze, this first question I really want everyone listening
to kind of weigh in and tell me what you think.
It's from a woman by the name of Diane, but,
but I don't know. It's not a question.
Suze (02:25):
You look like it's a statement.
KT (02:26):
It's more than that. It's um.
It's called oopsie, like oopsie. She feels like she made
a grave mistake, so let me share it with everyone.
She said, Hi, Suze and KT. I'm 66 years old.
My husband is 70. I have just realized, and I've
watched your show forever, listen to your and KT's podcasts
(02:47):
while I walk.
I realize I've neglected my husband's needs.
Suze (02:52):
Uh oh.
KT (02:53):
That's how it starts. I've always been the one in
charge of our finances, and I've done quite well, thanks
to you. I have an Excel sheet that tracks our finances.
I have hired our fee-only advisors. I've paid the bills.
I've applied and opened our credit card. We have one.
And department store cards. I have opened utilities, etc. Don't worry,
(03:18):
I sit him down once a month and make him
look at our finances even though he has no interest.
So Diane's referring to her husband.
But the way she's referring sounds like she, she's...
Suze (03:31):
Go on, just go
on.
KT (03:32):
I did not, however, put his name on anything. It
just never occurred to me. It wasn't until this year
when we went to Europe that I learned we should
have two credit cards in case we lost one.
As I dug deeper, I realized if something happened to me,
he would have no access to the utilities, my credit cards,
(03:54):
store cards, etc. I then checked his credit score, and
it was good. Why? Because he's he's a user on
my credit card. Mine is excellent.
So this is what it's sad, she said, please remind
your listeners to remember their partners. I don't even know
how to clean up this mess I've created.
(04:18):
So Diane thinks she's created a mess. I don't think
she's created a mess.
Suze (04:22):
She
hasn't created a mess yet.
KT (04:24):
All right, so tell, tell her how to...
Suze (04:26):
But she knows very well that if something happens to
her tomorrow, today, in a few hours from now, she
has left an extraordinary mess for her husband, who she
obviously loves. So how does she clean this up?
(04:47):
It's very, very easy, my friend. All you have to
do is apply for a credit card in your husband's name.
Put the utilities in both of your names if you want.
Make sure that you, I don't even care about the
credit cards at the department stores, but make sure that
(05:08):
he has a credit card in his own name.
Just start doing things so that he has access to
everything on your savings accounts. Make him pay on death.
But here's the thing. Rather than what are you going
to do in case you die to protect him? My
(05:30):
question is, what do you do to protect both of
you in case there is incapacity.
Let's say Diane, you can't pay the bills anymore because
you've been in a car accident. So here's the first
thing I want you both to do. You need to
get a living revocable trust, an advanced directive and durable
power of attorney for health care, a will and an
(05:53):
advanced directive, and a financial power of attorney. Where do
you get those? I would go to musthavedocs.com.
And that is where you can get $2500 worth of
state of the art documents good in all 50 states,
and you and your husband can do it together. So
(06:13):
it's only $99 again for $2500 worth of state of
the art documents. And by the way, everybody, you can
share the activation code with as many family members as
you want. This isn't a mess yet.
But one day it very well will be so.
(06:34):
What can you do? Straighten it out right now. Next question, KT.
KT (06:38):
Next question, Suze, is from Jennifer. She said, greetings, Suze and KT.
I heard a rumor that starting 2026, my state of
Michigan will no longer tax retirement income.
Suze (06:52):
Oh, that's nice. Good.
KT (06:54):
Is that true?
Suze (06:55):
I don't know to
tell you the truth.
KT (06:56):
It's a rumor. Can you please break this down for
me and Susie speaks so I can better understand.
She said for states that do not tax retirement income
like Florida and Texas, what does this mean for traditional
versus Roth recommendations? Nothing. As always, thank you. Ready for
the sign off, right, memory lane, Suze? Money moms Jennifer.
Suze (07:20):
Do you remember?
KT (07:21):
Yes, General Mills. Suze created this entire program called the Money Moms.
Suze (07:26):
Yes, do you remember that?
I'll never forget.
KT (07:29):
It was fantastic.
Suze (07:30):
I know.
KT (07:31):
It's a newsletter she did, and General Mills actually distributed to all these women.
Suze (07:35):
Tell everybody what you did, how you got me on
the cover of a cereal
box.
KT (07:43):
Oh yeah, we have Suze on a cereal box from
General Mills. It was Total, I think it was Total.
I don't remember... not Wheaties. It wasn't Wheaties because that's
reserved for for athletes more or less, but.
Suze was on Total.
Suze (07:55):
Was it Total? Are you sure?
KT (07:56):
Yeah, great. It was a good ceral.
Suze (07:58):
Is that still here?
KT (07:59):
Yes. Yes.
Do you want me to post it on the, on
the wall? We can. Tell everyone how to get there.
Suze (08:06):
Go to the Women and Money community app, download it
for free on Apple Apps or Google Play, and you
can play with us. All right.
KT (08:15):
I'll post that that cereal box with Suze for Total.
But the Money Moms was great. It was, I loved
working with General Mills.
Suze (08:25):
What a good
company. So let me answer this. All of a sudden
KT just put this Michigan... away.
So Michigan, so the truth is I don't know if
they passed that or not for 2026, but I'm sure
that they did if you say that. But let's say
the rumor is true. OK. One thing I do know
(08:47):
is that Michigan in itself has a state income tax
currently at
4.25% and that's up from 4.05%, which it was in
24 and then it went up. It's now up at 4.25%.
All it means for you is that when you take
(09:07):
money out of a pre-taxed retirement account, you're only going
to owe federal income tax on it, not state. Just
that simple. Now that makes every single penny count. Remember
what I said for this year?
You need to make your money make more money, and
this is one way that your money will make more money. However,
(09:30):
your question, so what does it mean for a traditional
versus a Roth recommendation? There is nothing that's going to
get me off the Roth recommendation, nothing, nothing, nothing, because
the largest income tax that you pay really is on
the federal level.
So why would you want to pay the federal level
just because you have a traditional retirement account, because the
(09:52):
state of Michigan doesn't want to charge you any more
tax wrong. You're going to do Roth all the way.
Do you hear me, my dear Jennifer, and everybody
listening to me. If you are not doing a Roth
401k or a Roth IRA if you qualify or a
Roth back door if it makes sense for you, you
(10:13):
are making the biggest mistake in your life if you
ask me. All right, why are you looking at me
like that?
KT (10:19):
Because you're
getting all riled up about that, Roth
Suze (10:23):
Do you know why?
KT (10:24):
Yeah, because so many people don't do it. They don't
take advantage of this incredible gift.
Suze (10:29):
Just drives me crazy.
KT (10:31):
OK, don't be so crazy. You ready for my next one.
Suze (10:35):
I'm crazy over you.
KT (10:35):
So this is...
Suze (10:36):
And your birthday.
KT (10:38):
I, I think we're going to have a real fun day. OK,
so this is from Marilyn, and I like this.
Suze (10:44):
What day do we not have a really fun
day?
KT (10:47):
We have fun all the time, but on my birthday
it's gonna be exceptionally fun.
Because Lynn will be here and we're gonna teach her
how to really fish. Tell them why we have to
teach her how to fish really well.
Suze (10:59):
Because on August 1st, Ms. Travis and her sister Lynn.
And my BFF Margaret Nielsen and Maggie, her daughter, are
all going to British Columbia to go salmon fishing. Fabulous, right?
And you may be wondering why is Suze not going
(11:20):
cause I don't want to. All right, go on, KT, next.
KT (11:25):
OK, Suze, my next question is from Marilyn in San Francisco.
She's been listening to you forever. She's in the green. Her,
her accounts keep climbing. She's very, very happy,
Suze (11:36):
So that's what she means when she says that she's she's...
KT (11:38):
...in the green. She's not in the red.
Suze (11:39):
She's in the money.
KT (11:41):
Well, it should be in the black, right?
Suze (11:42):
She's in the black, I don't know why she wrote green
KT (11:43):
Well she wrote green. Well, well, she's anyway, so, so
here's her question.
She has a very low overhead now in San Francisco
because of everything she's learned from you, but she has
a nephew in Poland, and he's starting law school and
she wants to help him, and this is a special nephew.
It's the son of her brother who died by suicide,
(12:07):
so she really has a, you know, a desire to
help him. So she said, What would you recommend for
a fund
set up where I can invest for him and let
the account compound for
him.
Suze (12:19):
Yeah, so here's the thing. I don't know if he's
going to need financial aid. I don't know what who
pays for what when he's in college, but here's what
I would do if I were you truthfully. We always
want to help these youngins out, and we think, oh well,
let's put money away in their name just so that
(12:41):
they can have it when they get older.
But the problem is we don't know what their lives
turn out to be when they are older, so I
am recommending to you out of years and years of
experience make a side account that you know is for him,
where you put money into it, you invest into it,
(13:03):
you keep compounding it, and as he gets older later on.
If he's a good kid, he deserves help. He's everything
that you want for him. You know, you'll know and
then you'll just give it to him then just that simple.
Don't go putting it in his name right now, right?
And for those of you whose kids are going to
(13:24):
the school in the United States, if you did it
in a uniform gift to Minors Act account and they
need financial
aid, you're going to hurt them for financial aid, so
don't do it. 529 is far better. All right.
KT (13:37):
All right, good. So Suze, yet again I get another
email that also has very emotional ramifications around suicide as well.
So this is from Ana. She's 37 years old. She
has no children.
She has a question whether or not it's wise to
use some of the $82,000 from an inherited IRA to
(14:01):
pay off $41,000 worth of credit card debt. So,
she said she's learned from your show, it's equally important
to ask herself what's going on with me that I
would allow so much credit card debt to accumulate. So
here's the story, just in a nutshell, everyone.
(14:22):
She said that um less than two years before her
dad's passing, her husband died of suicide, and in her
grief she started spending and traveling to find meaning again.
I bet. All right. Shortly after her husband passed, her
dad died from COVID in his 50s way too soon.
So again, she said she's just, you know, she got
(14:44):
herself into further debt.
And now she said, I've made changes, stopped eating out, shopping,
and traveling frequently. I dearly miss the most important men
in my life, and I owe it to them to
do better financially and mentally.
She said, I first heard you, Suze, on Oprah, and
I started contributing to a 401k Roth. Today it has $419,000. Wow,
(15:12):
she bought her first home 18 months ago. She makes
extra payments. She's on track to pay off a 30
year mortgage in 15 years. She makes $160,000 a year,
she said.
I'm aware of how emotionally freeing it would be to
have zero debt and get a fresh start by wiping
out the 41,000 credit card debt, and it's this very
(15:36):
emotion that makes me wonder whether using IRA funds is
similar to the emotional spending that got me into credit
card debt in the first place. She wants an outside
perspective from you.
What do you think?
Suze (15:52):
This one's really a hard one because of the emotional
connection that Ana has with this debt and what it
represents to her. Financially, if it was strictly a financial decision.
I wouldn't let her do it on any level, so
(16:12):
Ana listened to me.
You make $160,000 a year. You live in Southern California.
Between those two things you are going to be between
the state and federal taxes when you withdraw money from
your inherited IRA. You're going to have to take out
(16:33):
approximately 70, maybe $75,000.
Right, in order to leave you with $41,000 to pay
off in credit card debt because it's going to put
you in a higher tax bracket, and then that will
only leave you with $8400 in the inherited IRA.
(16:58):
And so financially speaking that makes absolutely no sense to
get rid of $41,000 of credit card debt. It's going
to cost you an additional $30,000 in taxes approximately to
do so makes absolutely no sense at all. Therefore, however,
(17:22):
you have to ask and answer the question to yourself,
Is that $31,000 worth getting rid of this emotional baggage,
cause it's that debt that represents to you the loss
of not only your husband and your father, but your
(17:44):
own self-worth. You lost yourself in that process.
So do you think that getting rid of that debt...
You will find yourself again and on some level maybe
even get that much closer to your deceased husband and
father in a strange way.
(18:07):
Only you can answer that question for me, strictly on
a financial level, your father, because I read your entire email,
died in 2021. You obviously have not taken any money
out of this inherited IRA all these years. You have
(18:29):
six years left to wipe this account clean. So if
you want, you can do it all at once right now,
get rid of the debt and done.
Or you could possibly
first look at your credit card debt and make sure
that the 41,000 is at a 0% interest rate because
(18:54):
it seems like you have money. You've been responsible with
your own money. I'm sure you've been on time with
your payments, so maybe you have a good FICO score,
and if you do, you could do a balance transfer
at a 0% interest rate for 21 months, just same.
Then every year for the next 6 years.
(19:16):
You could, let's just say, assuming a 7% annual growth rate,
you could take out maybe like $17,000 a year, so
it's not that big of a hit to your taxes
all at once. It might leave you with $10,000 after
taxes that you can, if you want, put towards the
(19:38):
credit card debt. So in 4 years it would be gone.
And then you've been smarter with your money. If you
did it that way, you're also making $160,000 a year.
It would seem to me that somewhere there.
There is enough money for you to every single month
(20:01):
put extra money towards your credit card.
More than possibly your mortgage or anything else if you're
doing that and get rid of that credit card debt
that way financially, just to recap, I would not take
it all out at once and pay it off emotionally.
Only you can decide if the emotional payoff will be
(20:26):
worth it. The fact that in the end of your
email you question that.
I think you know the answer to that is it's
not worth it cause you can look at that debt
not as a burden but as a gift that you
gave yourself to get through of the truly greatest losses
(20:48):
of your life.
And it gained a perspective for you as to what's
important now, so I personally would look at that debt
as a gift, not as a burden. So that's what
I would do. Next question, KT.
KT (21:05):
Hi Suze, this is, by the way from Cathy. Hi Suze.
I listened to your podcast on June 12th, and KT
read a question about which account advisory fees should be
paid from. You said all fees should be paid from
the non-retirement brokerage account if you're done properly.
Suze (21:27):
Correct.
KT (21:28):
Can you please help me understand why that is? So
here's what Cathy did. She went and and told her
financial adviser from Fidelity what you said, and the adviser
said she can take out the fee from any account
that she wishes, and taking it out of the pre-tax
could be better to lower her eventual RMD. So there
(21:52):
you go. She, she's totally confused, she said, Please, Suze.
Well, help me clarify this.
Suze (21:58):
I'm going to stick to my answer. Obviously every financial
adviser may have their own reason for saying whatever because
they know more about you.
But let's just talk about right now the pre-tax one
and the Roth one. You don't want to take money,
especially from the Roth, that's accumulating tax-free to pay the fees.
(22:21):
That makes no sense. You're losing out on compounding, and
the same is.
True with the pre-tax ones. So for Roth IRAs, you
are always to pay the advisory fees from outside or
from taxable funds to avoid the shrinkage of that account
(22:42):
because that doesn't even have RMDs on it.
Do you understand what I'm saying to you here? Why
would you pay it to reduce your RMDs when your
Roth doesn't have any RMDs? And as far as the
traditional IRA, you could pay it from either source, all right,
but paying it from a taxable account usually preserves more
(23:05):
long term value, especially if you have still a long
investment horizon.
And do not urgently need the money to reduce those
future RMDs. So all I can tell you is I'm
going to stick by what I'm saying, all right? So
that's just what I'm saying. I just, I just...
KT (23:27):
There you go.
Suze (23:28):
I
just don't get it. All right.
Why would you want to use money within a retirement account?
That compounds for you and grows there and grows there
to take out just to reduce your RMDs. I don't
think so anyway, go on.
And I would be converting, by the way, the money
(23:49):
that's in the traditional IRA to the Roth IRA to
do what? So you don't have any RMDs. What's an
RMD KT?
KT (23:59):
Required minimum distribution, baby,
Suze (24:01):
Ding ding ding ding ding.
All right,
KT (24:04):
This is from Alisa. Dear Suze and KT, I love
your show. I've written a few questions, but I've never
been chosen.
Suze (24:14):
Why did you choose her this time?
KT (24:15):
Because she said she, she wrote, Who's right, me or him?
So this is the kind of question I like, yeah.
I really need help on this one, so please help us.
My husband deposited $40,000 in a Roth called SOAEX, Spirit
of Energy Fund in 2017. Over the years he's collected dividends,
(24:37):
which he's very proud of, Suze, approximately $4000 a year.
It fluctuates a bit each year, but I'd say that's
the average. The last payment was half of normal.
The fund has been losing value since 2017. The value
of his money now is only $16,000. He's lost $24,000
(25:02):
in eight years. He still receives approximately the same amount
in dividends even though the fund has gone down.
So I can kind of see her husband's, you know, mentality, Suze.
In 8 years he got like $30,000 worth of dividends.
He thinks he should keep it because it's in a
(25:22):
dividend bearing account. He's calculating about a 10% return.
I think he should sell it because I don't think
it's going to go back up and at some point
it may become insolvent, right? Now she said the saddest
thing is that it is in a Roth that we
can't even use the losses to balance out other gains.
(25:44):
And now he, she said, he's so frugal and complains
when I spend money on the house or myself, but
here he is throwing away his money by the thousands.
What do you think we should do, sell it or
keep it? And is there any way to deduct the losses?
Suze (26:06):
Should I ask you what you would do?
KT (26:08):
You want to ask me?
Suze (26:09):
Is
there anybody else sitting here with me?
KT (26:12):
Um, if I were her, I'd say to him, Why
don't we make an agreement that if it keeps going down,
let's sell, done like give him a little bit of
a wiggle room and an option.
But he's down, you know, $24,000 in eight years, but
the dividend payments are greater than the loss.
Suze (26:33):
He's made $32,000 in dividends.
KT (26:36):
Not really, probably 30 because the last payment was half,
Suze (26:41):
It's like, here's the bottom line, right? S O A
E X S is a sinking ship, right? So it
stands for the Spirit of American Energy Fund.
And it's one of those sector funds, KT, that only
focuses on energy related stocks. So it's not like I
(27:04):
could say, oh, this stock company is this and da da,
you know, it's not like an individual stock company that
you can analyze really. So if you look at this
sector fund that only focuses on energy related stocks, these
funds can be extremely volatile.
And in this case it has been, so what I
(27:27):
would be saying there's $16,000 left. I would cut it
right here, believe it or not. I would sell because
especially if they're starting to cut the dividend back already.
That doesn't bode well for it. Can they deduct the loss?
They cannot, right? So because it's in the wrath. So
(27:50):
if it were me, I would tell my husband, right,
if he were sitting at my kitchen table. Listen, you've
already lost money, don't lose more. The past is the past.
Don't let sunk costs cloud your judgment because that's what's
happening here.
And if this fund keeps declining or becomes insolvent, they
(28:13):
will lose what's left. You know this is called a
yield trap. There is a name for it where you're
stuck in a stock because of the yield that it
pays you, and I've said many times on this podcast
that don't worry so much about the price of the stock,
you're in it for the dividend, the income, but once
(28:34):
a stock goes down as much as this stock has
gone down.
You're no longer in it just for the income, because
the income most likely is gonna go away. So I
would be selling it now.
He may not want to. He may very well say
I'm not, so you can say, All right, how about
(28:55):
if we compromise and sell half.
Let's take out half the money now and let's put
it in something like the ETF SMH within the retirement account.
You leave your money there. I'll leave my money in this,
and let's just see what happens as time goes on.
(29:17):
So at least that gives him some credit, and you
don't make him feel totally powerless over this and like
a loser because you have to also think for $16,000.
Be careful here. Be careful about pride. Be careful about
somebody who really, really feels already horrific about the fact
(29:39):
of how much money was lost in principle.
So, you know, people first, then money, then things. So
you have to just kind of do it gently. If
it were me, obviously, I would have cut the losses
and I would just done it, but
you might want to take the 50/50 approach. What do
you think, KT?
KT (29:58):
I listened to Suze Orman cut it, sell it, done.
Why don't you just tell your husband you asked Suze Orman,
and she said, it's a sinking ship, honey, get rid
of it. Jump.
Suze (30:10):
Yeah?
KT (30:10):
I would. That's all. Just tell them straight up.
Suze (30:13):
I might say keep it if they hadn't cut the
dividend in half, right? And given that they did.
That's not a good sign, girlfriend. It's just not a
good sign. All right, go on.
KT (30:25):
OK, Suze, last question, and it's probably one of my favorite.
It's short and it's about our friend Roth. Hi Suze,
this is from Maria. She said, Hi, Suze, I've been
following your amazing advice for 30+ years.
Ever since I discovered you on Oprah, I'm now 62
(30:46):
years old and looking at retiring soon. My question's pretty basic,
I think. Does dollar cost averaging still apply for Roth IRAs?
Suze (30:57):
You
betcha. You betcha. The answer to that is yes, yes, yes,
dollar cost averaging
applies to every single account that you have when you
are investing in the stock market. Just that simple. All right, KT,
then that is a wrap. So there's only one thing
(31:19):
that I want for you this year and every year
from now on.
And that is very simple. You are to make your money,
make more money. Stay safe, everybody, know we love you
and we'll see what happens on Sunday.
KT (31:36):
Bye bye.
Good morning, Suze.
Suze (00:29):
Here we go, everybody.
KT (00:31):
July 17th, 2025.
Suze (00:34):
Oh, she's she's on it. She's already on it.
KT (00:36):
It's July. It's my birthday month. I can't wait.
Suze (00:40):
All right, everybody, her birthday is Monday, 4 days from now,
and her twin sister arrives on the 20th for us
to go fishing and be with her. So this is
KT's birthday weekend coming up.
So we'll just have to see what happens on Sunday
or not anyway. So welcome everybody to the Ask KT
(01:05):
and Suze Anything podcast, and this is where you write
in to asksuze podcast@gmail.com. And if you don't know how
to spell my name by now, I'm not going to
tell you anymore.
You write in your question, and if KT chooses it,
we will answer it on the podcast and thousands of
(01:25):
people write in just so you know, so you never
know when we flip back, we go forward, whatever. You
got to listen every week to see if your question
is answered and then many of you know, like I
did last week, I answer you directly if I think
the situation warrants it.
Before we start, KT, let's remind everybody about the 12...
KT (01:50):
Oh, that's a great deal.
Suze (01:51):
Yes, certificate at Alliant Credit Union for 4.30 APY for
amounts under $75,000 for $75,000 or more, it's.
4.35 APY. Go to my Alliant A L L I
A N T.com and check it out. All right, now KT,
(02:11):
what do you got?
KT (02:12):
OK, Suze, this first question I really want everyone listening
to kind of weigh in and tell me what you think.
It's from a woman by the name of Diane, but,
but I don't know. It's not a question.
Suze (02:25):
You look like it's a statement.
KT (02:26):
It's more than that. It's um.
It's called oopsie, like oopsie. She feels like she made
a grave mistake, so let me share it with everyone.
She said, Hi, Suze and KT. I'm 66 years old.
My husband is 70. I have just realized, and I've
watched your show forever, listen to your and KT's podcasts
(02:47):
while I walk.
I realize I've neglected my husband's needs.
Suze (02:52):
Uh oh.
KT (02:53):
That's how it starts. I've always been the one in
charge of our finances, and I've done quite well, thanks
to you. I have an Excel sheet that tracks our finances.
I have hired our fee-only advisors. I've paid the bills.
I've applied and opened our credit card. We have one.
And department store cards. I have opened utilities, etc. Don't worry,
(03:18):
I sit him down once a month and make him
look at our finances even though he has no interest.
So Diane's referring to her husband.
But the way she's referring sounds like she, she's...
Suze (03:31):
Go on, just go
on.
KT (03:32):
I did not, however, put his name on anything. It
just never occurred to me. It wasn't until this year
when we went to Europe that I learned we should
have two credit cards in case we lost one.
As I dug deeper, I realized if something happened to me,
he would have no access to the utilities, my credit cards,
(03:54):
store cards, etc. I then checked his credit score, and
it was good. Why? Because he's he's a user on
my credit card. Mine is excellent.
So this is what it's sad, she said, please remind
your listeners to remember their partners. I don't even know
how to clean up this mess I've created.
(04:18):
So Diane thinks she's created a mess. I don't think
she's created a mess.
Suze (04:22):
She
hasn't created a mess yet.
KT (04:24):
All right, so tell, tell her how to...
Suze (04:26):
But she knows very well that if something happens to
her tomorrow, today, in a few hours from now, she
has left an extraordinary mess for her husband, who she
obviously loves. So how does she clean this up?
(04:47):
It's very, very easy, my friend. All you have to
do is apply for a credit card in your husband's name.
Put the utilities in both of your names if you want.
Make sure that you, I don't even care about the
credit cards at the department stores, but make sure that
(05:08):
he has a credit card in his own name.
Just start doing things so that he has access to
everything on your savings accounts. Make him pay on death.
But here's the thing. Rather than what are you going
to do in case you die to protect him? My
(05:30):
question is, what do you do to protect both of
you in case there is incapacity.
Let's say Diane, you can't pay the bills anymore because
you've been in a car accident. So here's the first
thing I want you both to do. You need to
get a living revocable trust, an advanced directive and durable
power of attorney for health care, a will and an
(05:53):
advanced directive, and a financial power of attorney. Where do
you get those? I would go to musthavedocs.com.
And that is where you can get $2500 worth of
state of the art documents good in all 50 states,
and you and your husband can do it together. So
(06:13):
it's only $99 again for $2500 worth of state of
the art documents. And by the way, everybody, you can
share the activation code with as many family members as
you want. This isn't a mess yet.
But one day it very well will be so.
(06:34):
What can you do? Straighten it out right now. Next question, KT.
KT (06:38):
Next question, Suze, is from Jennifer. She said, greetings, Suze and KT.
I heard a rumor that starting 2026, my state of
Michigan will no longer tax retirement income.
Suze (06:52):
Oh, that's nice. Good.
KT (06:54):
Is that true?
Suze (06:55):
I don't know to
tell you the truth.
KT (06:56):
It's a rumor. Can you please break this down for
me and Susie speaks so I can better understand.
She said for states that do not tax retirement income
like Florida and Texas, what does this mean for traditional
versus Roth recommendations? Nothing. As always, thank you. Ready for
the sign off, right, memory lane, Suze? Money moms Jennifer.
Suze (07:20):
Do you remember?
KT (07:21):
Yes, General Mills. Suze created this entire program called the Money Moms.
Suze (07:26):
Yes, do you remember that?
I'll never forget.
KT (07:29):
It was fantastic.
Suze (07:30):
I know.
KT (07:31):
It's a newsletter she did, and General Mills actually distributed to all these women.
Suze (07:35):
Tell everybody what you did, how you got me on
the cover of a cereal
box.
KT (07:43):
Oh yeah, we have Suze on a cereal box from
General Mills. It was Total, I think it was Total.
I don't remember... not Wheaties. It wasn't Wheaties because that's
reserved for for athletes more or less, but.
Suze was on Total.
Suze (07:55):
Was it Total? Are you sure?
KT (07:56):
Yeah, great. It was a good ceral.
Suze (07:58):
Is that still here?
KT (07:59):
Yes. Yes.
Do you want me to post it on the, on
the wall? We can. Tell everyone how to get there.
Suze (08:06):
Go to the Women and Money community app, download it
for free on Apple Apps or Google Play, and you
can play with us. All right.
KT (08:15):
I'll post that that cereal box with Suze for Total.
But the Money Moms was great. It was, I loved
working with General Mills.
Suze (08:25):
What a good
company. So let me answer this. All of a sudden
KT just put this Michigan... away.
So Michigan, so the truth is I don't know if
they passed that or not for 2026, but I'm sure
that they did if you say that. But let's say
the rumor is true. OK. One thing I do know
(08:47):
is that Michigan in itself has a state income tax
currently at
4.25% and that's up from 4.05%, which it was in
24 and then it went up. It's now up at 4.25%.
All it means for you is that when you take
(09:07):
money out of a pre-taxed retirement account, you're only going
to owe federal income tax on it, not state. Just
that simple. Now that makes every single penny count. Remember
what I said for this year?
You need to make your money make more money, and
this is one way that your money will make more money. However,
(09:30):
your question, so what does it mean for a traditional
versus a Roth recommendation? There is nothing that's going to
get me off the Roth recommendation, nothing, nothing, nothing, because
the largest income tax that you pay really is on
the federal level.
So why would you want to pay the federal level
just because you have a traditional retirement account, because the
(09:52):
state of Michigan doesn't want to charge you any more
tax wrong. You're going to do Roth all the way.
Do you hear me, my dear Jennifer, and everybody
listening to me. If you are not doing a Roth
401k or a Roth IRA if you qualify or a
Roth back door if it makes sense for you, you
(10:13):
are making the biggest mistake in your life if you
ask me. All right, why are you looking at me
like that?
KT (10:19):
Because you're
getting all riled up about that, Roth
Suze (10:23):
Do you know why?
KT (10:24):
Yeah, because so many people don't do it. They don't
take advantage of this incredible gift.
Suze (10:29):
Just drives me crazy.
KT (10:31):
OK, don't be so crazy. You ready for my next one.
Suze (10:35):
I'm crazy over you.
KT (10:35):
So this is...
Suze (10:36):
And your birthday.
KT (10:38):
I, I think we're going to have a real fun day. OK,
so this is from Marilyn, and I like this.
Suze (10:44):
What day do we not have a really fun
day?
KT (10:47):
We have fun all the time, but on my birthday
it's gonna be exceptionally fun.
Because Lynn will be here and we're gonna teach her
how to really fish. Tell them why we have to
teach her how to fish really well.
Suze (10:59):
Because on August 1st, Ms. Travis and her sister Lynn.
And my BFF Margaret Nielsen and Maggie, her daughter, are
all going to British Columbia to go salmon fishing. Fabulous, right?
And you may be wondering why is Suze not going
(11:20):
cause I don't want to. All right, go on, KT, next.
KT (11:25):
OK, Suze, my next question is from Marilyn in San Francisco.
She's been listening to you forever. She's in the green. Her,
her accounts keep climbing. She's very, very happy,
Suze (11:36):
So that's what she means when she says that she's she's...
KT (11:38):
...in the green. She's not in the red.
Suze (11:39):
She's in the money.
KT (11:41):
Well, it should be in the black, right?
Suze (11:42):
She's in the black, I don't know why she wrote green
KT (11:43):
Well she wrote green. Well, well, she's anyway, so, so
here's her question.
She has a very low overhead now in San Francisco
because of everything she's learned from you, but she has
a nephew in Poland, and he's starting law school and
she wants to help him, and this is a special nephew.
It's the son of her brother who died by suicide,
(12:07):
so she really has a, you know, a desire to
help him. So she said, What would you recommend for
a fund
set up where I can invest for him and let
the account compound for
him.
Suze (12:19):
Yeah, so here's the thing. I don't know if he's
going to need financial aid. I don't know what who
pays for what when he's in college, but here's what
I would do if I were you truthfully. We always
want to help these youngins out, and we think, oh well,
let's put money away in their name just so that
(12:41):
they can have it when they get older.
But the problem is we don't know what their lives
turn out to be when they are older, so I
am recommending to you out of years and years of
experience make a side account that you know is for him,
where you put money into it, you invest into it,
(13:03):
you keep compounding it, and as he gets older later on.
If he's a good kid, he deserves help. He's everything
that you want for him. You know, you'll know and
then you'll just give it to him then just that simple.
Don't go putting it in his name right now, right?
And for those of you whose kids are going to
(13:24):
the school in the United States, if you did it
in a uniform gift to Minors Act account and they
need financial
aid, you're going to hurt them for financial aid, so
don't do it. 529 is far better. All right.
KT (13:37):
All right, good. So Suze, yet again I get another
email that also has very emotional ramifications around suicide as well.
So this is from Ana. She's 37 years old. She
has no children.
She has a question whether or not it's wise to
use some of the $82,000 from an inherited IRA to
(14:01):
pay off $41,000 worth of credit card debt. So,
she said she's learned from your show, it's equally important
to ask herself what's going on with me that I
would allow so much credit card debt to accumulate. So
here's the story, just in a nutshell, everyone.
(14:22):
She said that um less than two years before her
dad's passing, her husband died of suicide, and in her
grief she started spending and traveling to find meaning again.
I bet. All right. Shortly after her husband passed, her
dad died from COVID in his 50s way too soon.
So again, she said she's just, you know, she got
(14:44):
herself into further debt.
And now she said, I've made changes, stopped eating out, shopping,
and traveling frequently. I dearly miss the most important men
in my life, and I owe it to them to
do better financially and mentally.
She said, I first heard you, Suze, on Oprah, and
I started contributing to a 401k Roth. Today it has $419,000. Wow,
(15:12):
she bought her first home 18 months ago. She makes
extra payments. She's on track to pay off a 30
year mortgage in 15 years. She makes $160,000 a year,
she said.
I'm aware of how emotionally freeing it would be to
have zero debt and get a fresh start by wiping
out the 41,000 credit card debt, and it's this very
(15:36):
emotion that makes me wonder whether using IRA funds is
similar to the emotional spending that got me into credit
card debt in the first place. She wants an outside
perspective from you.
What do you think?
Suze (15:52):
This one's really a hard one because of the emotional
connection that Ana has with this debt and what it
represents to her. Financially, if it was strictly a financial decision.
I wouldn't let her do it on any level, so
(16:12):
Ana listened to me.
You make $160,000 a year. You live in Southern California.
Between those two things you are going to be between
the state and federal taxes when you withdraw money from
your inherited IRA. You're going to have to take out
(16:33):
approximately 70, maybe $75,000.
Right, in order to leave you with $41,000 to pay
off in credit card debt because it's going to put
you in a higher tax bracket, and then that will
only leave you with $8400 in the inherited IRA.
(16:58):
And so financially speaking that makes absolutely no sense to
get rid of $41,000 of credit card debt. It's going
to cost you an additional $30,000 in taxes approximately to
do so makes absolutely no sense at all. Therefore, however,
(17:22):
you have to ask and answer the question to yourself,
Is that $31,000 worth getting rid of this emotional baggage,
cause it's that debt that represents to you the loss
of not only your husband and your father, but your
(17:44):
own self-worth. You lost yourself in that process.
So do you think that getting rid of that debt...
You will find yourself again and on some level maybe
even get that much closer to your deceased husband and
father in a strange way.
(18:07):
Only you can answer that question for me, strictly on
a financial level, your father, because I read your entire email,
died in 2021. You obviously have not taken any money
out of this inherited IRA all these years. You have
(18:29):
six years left to wipe this account clean. So if
you want, you can do it all at once right now,
get rid of the debt and done.
Or you could possibly
first look at your credit card debt and make sure
that the 41,000 is at a 0% interest rate because
(18:54):
it seems like you have money. You've been responsible with
your own money. I'm sure you've been on time with
your payments, so maybe you have a good FICO score,
and if you do, you could do a balance transfer
at a 0% interest rate for 21 months, just same.
Then every year for the next 6 years.
(19:16):
You could, let's just say, assuming a 7% annual growth rate,
you could take out maybe like $17,000 a year, so
it's not that big of a hit to your taxes
all at once. It might leave you with $10,000 after
taxes that you can, if you want, put towards the
(19:38):
credit card debt. So in 4 years it would be gone.
And then you've been smarter with your money. If you
did it that way, you're also making $160,000 a year.
It would seem to me that somewhere there.
There is enough money for you to every single month
(20:01):
put extra money towards your credit card.
More than possibly your mortgage or anything else if you're
doing that and get rid of that credit card debt
that way financially, just to recap, I would not take
it all out at once and pay it off emotionally.
Only you can decide if the emotional payoff will be
(20:26):
worth it. The fact that in the end of your
email you question that.
I think you know the answer to that is it's
not worth it cause you can look at that debt
not as a burden but as a gift that you
gave yourself to get through of the truly greatest losses
(20:48):
of your life.
And it gained a perspective for you as to what's
important now, so I personally would look at that debt
as a gift, not as a burden. So that's what
I would do. Next question, KT.
KT (21:05):
Hi Suze, this is, by the way from Cathy. Hi Suze.
I listened to your podcast on June 12th, and KT
read a question about which account advisory fees should be
paid from. You said all fees should be paid from
the non-retirement brokerage account if you're done properly.
Suze (21:27):
Correct.
KT (21:28):
Can you please help me understand why that is? So
here's what Cathy did. She went and and told her
financial adviser from Fidelity what you said, and the adviser
said she can take out the fee from any account
that she wishes, and taking it out of the pre-tax
could be better to lower her eventual RMD. So there
(21:52):
you go. She, she's totally confused, she said, Please, Suze.
Well, help me clarify this.
Suze (21:58):
I'm going to stick to my answer. Obviously every financial
adviser may have their own reason for saying whatever because
they know more about you.
But let's just talk about right now the pre-tax one
and the Roth one. You don't want to take money,
especially from the Roth, that's accumulating tax-free to pay the fees.
(22:21):
That makes no sense. You're losing out on compounding, and
the same is.
True with the pre-tax ones. So for Roth IRAs, you
are always to pay the advisory fees from outside or
from taxable funds to avoid the shrinkage of that account
(22:42):
because that doesn't even have RMDs on it.
Do you understand what I'm saying to you here? Why
would you pay it to reduce your RMDs when your
Roth doesn't have any RMDs? And as far as the
traditional IRA, you could pay it from either source, all right,
but paying it from a taxable account usually preserves more
(23:05):
long term value, especially if you have still a long
investment horizon.
And do not urgently need the money to reduce those
future RMDs. So all I can tell you is I'm
going to stick by what I'm saying, all right? So
that's just what I'm saying. I just, I just...
KT (23:27):
There you go.
Suze (23:28):
I
just don't get it. All right.
Why would you want to use money within a retirement account?
That compounds for you and grows there and grows there
to take out just to reduce your RMDs. I don't
think so anyway, go on.
And I would be converting, by the way, the money
(23:49):
that's in the traditional IRA to the Roth IRA to
do what? So you don't have any RMDs. What's an
RMD KT?
KT (23:59):
Required minimum distribution, baby,
Suze (24:01):
Ding ding ding ding ding.
All right,
KT (24:04):
This is from Alisa. Dear Suze and KT, I love
your show. I've written a few questions, but I've never
been chosen.
Suze (24:14):
Why did you choose her this time?
KT (24:15):
Because she said she, she wrote, Who's right, me or him?
So this is the kind of question I like, yeah.
I really need help on this one, so please help us.
My husband deposited $40,000 in a Roth called SOAEX, Spirit
of Energy Fund in 2017. Over the years he's collected dividends,
(24:37):
which he's very proud of, Suze, approximately $4000 a year.
It fluctuates a bit each year, but I'd say that's
the average. The last payment was half of normal.
The fund has been losing value since 2017. The value
of his money now is only $16,000. He's lost $24,000
(25:02):
in eight years. He still receives approximately the same amount
in dividends even though the fund has gone down.
So I can kind of see her husband's, you know, mentality, Suze.
In 8 years he got like $30,000 worth of dividends.
He thinks he should keep it because it's in a
(25:22):
dividend bearing account. He's calculating about a 10% return.
I think he should sell it because I don't think
it's going to go back up and at some point
it may become insolvent, right? Now she said the saddest
thing is that it is in a Roth that we
can't even use the losses to balance out other gains.
(25:44):
And now he, she said, he's so frugal and complains
when I spend money on the house or myself, but
here he is throwing away his money by the thousands.
What do you think we should do, sell it or
keep it? And is there any way to deduct the losses?
Suze (26:06):
Should I ask you what you would do?
KT (26:08):
You want to ask me?
Suze (26:09):
Is
there anybody else sitting here with me?
KT (26:12):
Um, if I were her, I'd say to him, Why
don't we make an agreement that if it keeps going down,
let's sell, done like give him a little bit of
a wiggle room and an option.
But he's down, you know, $24,000 in eight years, but
the dividend payments are greater than the loss.
Suze (26:33):
He's made $32,000 in dividends.
KT (26:36):
Not really, probably 30 because the last payment was half,
Suze (26:41):
It's like, here's the bottom line, right? S O A
E X S is a sinking ship, right? So it
stands for the Spirit of American Energy Fund.
And it's one of those sector funds, KT, that only
focuses on energy related stocks. So it's not like I
(27:04):
could say, oh, this stock company is this and da da,
you know, it's not like an individual stock company that
you can analyze really. So if you look at this
sector fund that only focuses on energy related stocks, these
funds can be extremely volatile.
And in this case it has been, so what I
(27:27):
would be saying there's $16,000 left. I would cut it
right here, believe it or not. I would sell because
especially if they're starting to cut the dividend back already.
That doesn't bode well for it. Can they deduct the loss?
They cannot, right? So because it's in the wrath. So
(27:50):
if it were me, I would tell my husband, right,
if he were sitting at my kitchen table. Listen, you've
already lost money, don't lose more. The past is the past.
Don't let sunk costs cloud your judgment because that's what's
happening here.
And if this fund keeps declining or becomes insolvent, they
(28:13):
will lose what's left. You know this is called a
yield trap. There is a name for it where you're
stuck in a stock because of the yield that it
pays you, and I've said many times on this podcast
that don't worry so much about the price of the stock,
you're in it for the dividend, the income, but once
(28:34):
a stock goes down as much as this stock has
gone down.
You're no longer in it just for the income, because
the income most likely is gonna go away. So I
would be selling it now.
He may not want to. He may very well say
I'm not, so you can say, All right, how about
(28:55):
if we compromise and sell half.
Let's take out half the money now and let's put
it in something like the ETF SMH within the retirement account.
You leave your money there. I'll leave my money in this,
and let's just see what happens as time goes on.
(29:17):
So at least that gives him some credit, and you
don't make him feel totally powerless over this and like
a loser because you have to also think for $16,000.
Be careful here. Be careful about pride. Be careful about
somebody who really, really feels already horrific about the fact
(29:39):
of how much money was lost in principle.
So, you know, people first, then money, then things. So
you have to just kind of do it gently. If
it were me, obviously, I would have cut the losses
and I would just done it, but
you might want to take the 50/50 approach. What do
you think, KT?
KT (29:58):
I listened to Suze Orman cut it, sell it, done.
Why don't you just tell your husband you asked Suze Orman,
and she said, it's a sinking ship, honey, get rid
of it. Jump.
Suze (30:10):
Yeah?
KT (30:10):
I would. That's all. Just tell them straight up.
Suze (30:13):
I might say keep it if they hadn't cut the
dividend in half, right? And given that they did.
That's not a good sign, girlfriend. It's just not a
good sign. All right, go on.
KT (30:25):
OK, Suze, last question, and it's probably one of my favorite.
It's short and it's about our friend Roth. Hi Suze,
this is from Maria. She said, Hi, Suze, I've been
following your amazing advice for 30+ years.
Ever since I discovered you on Oprah, I'm now 62
(30:46):
years old and looking at retiring soon. My question's pretty basic,
I think. Does dollar cost averaging still apply for Roth IRAs?
Suze (30:57):
You
betcha. You betcha. The answer to that is yes, yes, yes,
dollar cost averaging
applies to every single account that you have when you
are investing in the stock market. Just that simple. All right, KT,
then that is a wrap. So there's only one thing
(31:19):
that I want for you this year and every year
from now on.
And that is very simple. You are to make your money,
make more money. Stay safe, everybody, know we love you
and we'll see what happens on Sunday.
KT (31:36):
Bye bye.
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Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.