June 29, 2025 • 31 mins
On this Sunday edition of Ask Suze & KT Anything, KT asks Suze questions from you about paying off a HELOC, rolling over a 401(k) and where you should keep your Must Have Docs. Plus, why it’s important to get to the root of a problem, especially when family is involved.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:30):
June 29, 2025. Welcome everybody to the Women and Money podcast,
and everybody smart enough to listen. No, today is not
Suze School.
KT (00:41):
It's ask... KT's here, so it's Ask KT and Suze Anything Sunday.
Suze (00:45):
Because God forbid you should go more than a week
or two
Without hearing KT, who you just all adore, I hope
you all do. But anyway, so we switched Thursday to
be Suze School a few days ago, and you should
all listen to that.
KT (01:01):
It was a good one. I'm glad you switched.
Suze (01:04):
And now here we are. I just want to inform
you all right now, obviously...
Next Thursday is July 3rd, but we're gonna be doing
the podcast on July 2nd instead, so tune in one
day early because I have a very special just for
(01:24):
all of you on this podcast from Alliant Credit Union,
and you do not want to miss it.
KT (01:31):
Oh yea, don't miss it.
Suze (01:33):
You're really gonna want to tune in because I don't
know how long it will last. That is July 2nd.
All right, KT, I just have to say because people
are yelling at me, well, how do we write in
a question? So because we haven't said it.
For some reason I just forget to do it sometimes.
If you wanna ask a question.
(01:56):
Go to ask Suze S U Z E podcast at gmail.com.
Send it in and if KT chooses it, we will
answer it on the podcast, but you have to listen
every week to see if your question was answered. All right, KT.
KT (02:15):
So Suze, first question is from Gloria. Hi Suze, I
have a question...
Suze (02:20):
That's a great name
KT (02:22):
Yeah, that was a great song, wasn't it.
I have a I have a savings account that gives
me 3.75% monthly...
Suze (02:32):
I doubt it, but go on.
KT (02:32):
...with $88,000 in that account. I have a home equity
line of credit that I owe $43,000 on.
And I'm paying $500 a month in charges. Should I
take some money out of my savings account to pay
that off?
Suze (02:52):
All right, everybody, I want you to listen to me
very carefully. Did you notice anything in Gloria's email that
made absolutely no sense whatsoever?
Uh huh, no responses. Listen, Gloria, it is impossible that
(03:12):
you are making 3.75% monthly on your $88,000. That would
mean that you are being paid 45% a year in interest.
You're making 3.75% APR. That is what you are making
(03:33):
over the entire year.
Therefore, you should absolutely take $43,000 out of that savings
account and do what with it? Pay off your home
equity line of credit. All right, next, KT,
KT (03:49):
OK, from Jeff, this is very sweet.
Hey, Suze and KT, thank you for continuing to give
us guidance when you could clearly just stop and enjoy
your retirement years.
Suze (04:02):
Yeah, I've been talking to KT about that lately, haven't I?
KT (04:05):
Your advice has been life changing. I dread the day
you decide to call it quits. She's not going to quit, Jeff,
as long as I'm around, she'll never quit.
Suze (04:16):
Go on.
KT (04:17):
My husband retired early at the age of 57 and
has a 401k, both Roth and regular, because our company
didn't offer the Roth in the beginning. Our financial adviser
has suggested we roll it over to him. After seeing
financial institutions fail around 2008. Now that was a long
(04:40):
time ago.
I'm hesitant to put all our eggs in one basket.
I believe our balances are larger, more than a million,
than brokerage account insurance is allowed, but I'm not exactly
sure how this works. The fees are also higher with
the financial adviser, but he's been worth his weight in
(05:00):
gold with other
accounts he manages. Which is great, Jeff. Our financial advisors
with Morgan Stanley. Should we go ahead and roll over
the 401k to him in both the traditional and Roth,
or should we keep them where they are? All right, what's,
what's your advice to Jeff?
Suze (05:20):
So here's the thing, Jeff, you're 57, and you retired
at the age of 57, OK.
There is a rule called 72T that if you leave
service in the year that you turn 55 or later,
you can access any money you want in your 401k
(05:44):
without any penalties whatsoever. Obviously you would have to pay
taxes on it, but you could access some of that
money right now. If you roll it over to your
financial adviser,
you cannot touch that money until you are 59.5 years
(06:06):
of age. Now, do you already have a Roth IRA
with that financial advisor, because if not, your 401k Roth
is going to have to start the five year period
all over again, so you're not going to be able
to access that either without penalty and possibly taxes. Therefore,
(06:29):
I would think about this. You also don't have to
be an all or nothing investor.
You feel comfortable with the money obviously in your 401k.
It's doing great hopefully in your 401k. The question that
you have to ask and answer with this financial advisor
(06:50):
if you roll it over to him.
Is it true that he will be able to make
you more in his opinion that will cover the management
fee than you would make simply leaving it in the 401k?
You also could leave some of the money in the
(07:10):
traditional 401k.
Just so that you can access it if you need
to without the penalty, just something to think about because
you lose that if you roll it over. So up
to you. One last thing, even though I know Miss
Travis thinks it's too much information, I always think, you
(07:31):
know what, you need to know everything you need to
know when it comes to your money. Remember,
your husband may still be working. One day you may
decide to go back to work and earn even more money.
And if you're making more than the modified adjusted gross
income limits for Roth IRAs, you will not be able
(07:52):
to contribute to it unless you do a backdoor Roth.
But you won't be able to do a backdoor Roth
if you have an IRA. You will be able to
do it if you have a traditional 401k.
Just saying, KT don't look at me like that.
KT (08:09):
I've got a front door Roth. OK. All right, Sherry,
Suze (08:13):
She so hates I go long.
KT (08:16):
No, no, no, it's not, it's not too long. Actually
there's some questions in here where I want to have
conversations with you. It's the Roth and everyone knows that
it's confusing. So I think the least amount of information.
to put under your hat with the wrath the best.
Suze (08:36):
But KT, you've got to know
KT (08:37):
these things. I know, but you can know them one
at a time, not all in one question.
Suze (08:42):
He
needs to know it because he's about to do an
IRA rollover with his broker, and if he does, he'll
never be able to do a backdoor roll.
KT (08:50):
OK, so now you have all the information you need,
Jeff and husband.
Suze (08:56):
Thanks, wife!
KT (08:57):
OK. Are you ready?
Suze (08:58):
Yeah.
KT (09:00):
Next question is from Sherry. I like this question because
this is information everyone has to have. Good day. I'm
about to get our will, trust, and all must have
documents in order. Where do you recommend I keep the
final forms safe?
What if they get destroyed in a natural disaster such
(09:22):
as a hurricane? Now, you can also add on to
that fire, tornado, flood. I mean, add everything on there, Sherry,
with the weather these days. And then she asks a
good question, Suze, should I make duplicates of signed forms
and then share with certain family members? I assume they
would be valid too.
(09:42):
Are they?
No. They are not valid.
Yeah, they're not.
Suze (09:45):
Only the original is valid.
KT (09:48):
It's still a good safeguard.
Suze (09:50):
But that doesn't mean that her family shouldn't know what
her intentions were, right.
KT (09:55):
And then it says thank you, Susie for your invaluable advice.
So tell everyone where to get the must have documents.
Suze (10:01):
If I were you, I would keep them at home
in a fireproof and waterproof box.
I know, I know. I'm so sorry that we're no
longer manufacturing the gold box, the silver box, the blue
box that met those needs, but we're just not right now.
You never know when we'll bring them back. But for now,
(10:24):
we're not. So...
KT (10:25):
Some people keep them in their safe deposit box in
a bank.
Suze (10:29):
If you do keep it in a safety deposit box,
then you have to make sure
the relative... you die, how are they going to get
to it? So you have to make sure that your
relative and another relative know they happen to be on
the name of the safety deposit box. And what happens, KT?
I know you're going to think I'm nuts, but what
(10:50):
happens if there's a tornado and all of a sudden
the bank office that has all of that has been
blown away. They're not open. You can't get to it.
Right, and you happen to be killed in that disaster.
I mean, things can happen. I would have them in
either a waterproof, fireproof box that I kept, or keep
(11:12):
it at another person's home. That is the person that
would need it in case something happened to you, so
it's not at your home.
And hopefully they live somewhere that's safe, but that if
they ever had to evacuate, they just take it with them.
So there are boxes that aren't so heavy that you
(11:33):
can just grab and go with them and just know
that the only thing that's valid is the original. So,
like with the must have docs that let's say you
lost them.
All right, they went away somehow. You can go right
online again and print them out and then go get
them notarized once again. And then there valid all over again.
(11:57):
So that's what I would be doing if I were you.
KT (11:59):
Now tell them where to get them.
Suze (12:01):
Oh, if you want to get the must-have docs, go
to musthavedocs.com.
And that's where you get them currently. They are $99
for $2500 worth of state of the art documents, good
in all 50 states, and I just think they're fabulous.
KT (12:20):
Everyone has to have the must have documents.
Suze (12:22):
Alright, go on.
KT (12:24):
Ok, Janet...
Suze (12:25):
You know, it's funny, KT, the commercial that you see
on television all the time where this guy pops up
and goes, no, it doesn't work that way. They're charging
$199
KT (12:33):
just for the...
Suze (12:34):
the will. Are you kidding me? I mean, this is $99
for the will, the living revocable trust,
the advanced directive and durable power of attorney for health
care and the financial power and any time you want
to change them, you can do it again and again.
You want to share your activation code with members of
(12:54):
your family. You can do it. If the company that
manufactures it ever has an upgrade, you get the upgrade
for free. For those of you who have lost your
activation code, we give you a new one. Are you
kidding me? Anyway, go on.
KT (13:10):
Ok, the next question is from Janelle and Patrick.
Hi Suze and KT. My husband and I are 65
years old. Can you educate us about the ins and
outs of converting traditional IRA dollars to a qualified longevity
annuity contract known as a QLAC as a tax strategy
(13:34):
to defer RMDs when we turn 73? We won't need
the RMD dollars for living expenses.
And have concerns about income exceeding IRMAA brackets. So Suze,
how does that all work?
Suze (13:50):
So basically, what concerns me is you say currently you
don't need your RMDs, which are required minimum distributions.
And I don't know exactly how much you have within
your IRAs and things like that, but if you did
a qualified longevity annuity contract and everybody, it's just a
(14:14):
special kind of like deferred income annuity, and it can
be purchased, however, with funds from a traditional IRA or
a qualified retirement plan.
So why would people do that? Because you can defer
required minimum distributions beyond the age of 73, but only
(14:34):
up to the age of 85, which could possibly help
you manage taxable income and Medicare and things like that.
What concerns me is, all right, you said that you
don't need your RMDs.
But what if you needed the actual principle that's generating
(14:55):
the RMDs, because once you do this, right, that's it,
you can't really do anything else with it. The money
is removed to the annuity, and what this does is
you can't touch it.
But it guarantees you income later in life. So if
you live to 85 and beyond, the qualified annuity ensures
(15:19):
that you won't outlive your money now.
I don't think it's worth it to tell you the truth.
I just don't. The maximum you can do is 200,000
per person from your traditional, but I don't know, it's
not indexed for inflation.
It's, I just don't think it's they shouldn't do it.
I wouldn't do it if I. OK, there you go.
(15:40):
I would want to know I could have access to
my money, and if I really didn't need it, then
maybe you should start converting it to a Roth so that,
you know, eventually when you do take it out because
you're only 65, right?
That won't qualify for RMDs anyway. I just don't like them. Also,
do me a favor, ask your financial advisor the commission
(16:02):
they'll make if you buy one. All right, go on.
KT (16:06):
Oh
OK.
Suze (16:09):
OOOH, what does that remind me of?
KT (16:11):
She loves the commercial. What is it for?
Suze (16:14):
I
don't even know. I just wait and watch him go,
KT (16:16):
Oh, the
little boy, um, in the commercial looks at his daddy who,
who hits a baseball, breaks a windshield. It's for, for
the windshield replacement company. Little boy looks at his daddy
and goes, Oh, like you did it, and
Suze loves that commercial.
Suze (16:32):
But then I stopped watching after he does that. All right.
KT (16:35):
All right, so from Laurie, Hi Suze. I've been listening
to you for many years and try to take your
advice as often as possible. I am a teacher that
is starting to look at what my retirement could look
like possibly 3 years from now. First of all, we
want to both say we love teachers.
And we love your profession. You're very, very important.
Suze (16:57):
There's this commercial where you see this teacher taking some
pill that's making her feel great, whatever, but she's dancing
through the classroom and she's doing these great things and
she just looks so happy and I was thinking, oh,
maybe I need to be a teacher. And then I thought...
KT (17:15):
You are a teacher.
Suze (17:17):
But couldn't you see me in a room with little kids?
KT (17:20):
Oh, being a teacher for children.
Suze (17:23):
No, no...
KT (17:24):
No,
I cannot
stay with the big
kids stay with the old kids.
So, and then she said, Suze, you've always advised opening
a trust. I was informed that a trust should not
contain your pension and TDA.
Correct, yeah, it, it, it wouldn't contain the pension. As
(17:46):
a divorced mother of two, I want to protect and
plan for myself and make sure my hard work will
go to my children without any issues. Can you elaborate
on trust and why this is not an option for
me and what I should be doing, so I think
the trust is an option that...
Suze (18:08):
You have to do the trust for other things like
your house, your bank account, your investments, all of those
things to make it easier for your children. However, an
individual retirement account,
IRA I'm just gonna start there to make it easy
for you. It's an individual that owns that retirement account.
(18:31):
So given an individual cannot be a trust.
It cannot be in a trust. The same is true
with your pension as well as your tax deferred annuity.
Now your tax deferred annuity because you are a teacher
is exactly like a 401k or a 403B, and it
(18:52):
has to be in the employee's name, not in the
trust name.
So it is the school district that has hired you,
not the trust, but you can, if you want, just
name your children as long as they're like over 18
or 19 or they're responsible with money as the beneficiaries
(19:14):
of that TDA, and then it will go to them directly,
just that simple. Also with your pension.
Usually your pension upon your death also goes away unless
you do a joint and survivor pension with your spouse.
I don't know if they allow you to do it
with children, but you should have a trust. But no,
(19:39):
individual retirement accounts, pensions, annuities, and things like that when
you're an employee cannot be owned in a trust.
KT (19:49):
OK,
so my final question is from Laura.
And it's a really great one. I have a question
about a sticky situation. And Suze, after I read this,
I said, Oh, this is a sticky question, and I'm
really excited to hear how you're going to respond. A
divorce in our family left our sister-in-law at 72 still
(20:13):
working full time in a Montessori school, living in a
one bedroom apartment and struggling to make ends meet.
She unwisely emptied her retirement account to support her son
in trying and failing to become a trader. He tried
to be a day trader at the time. We covered
(20:34):
the unexpected tax consequences for her. Now ready, this is
the sticky part. Our brother is remarried and has homes
in Rio de Janeiro, Chicago, and recently is considering buying
a third property.
Joining together with a third sibling, our family's providing our
(20:56):
sister-in-law with $1000 a month in order to ease her situation,
so they're subsidizing a sister-in-law, the rest of the siblings.
Our decision in this case is becoming more difficult for
me because I can feel as though by helping our sister-in-law,
which feels like the right thing to do, we are
(21:18):
enabling our brother to live an expensive lifestyle and shirk
his own responsibilities. He does live up to the letter
of their settlement agreement, but no more, thus leaving his
ex-wife vulnerable.
To be honest, I find this situation to be undermining,
(21:38):
if not damaging, my relationship with my brother and his
second wife.
In addition, Suze, my husband is comfortable continuing with this,
and I do not feel that my concerns are being
heard or addressed by him. We have always been on
the same page when it comes to money matters. Suze,
(22:00):
I'd love to hear your take on this, and I
would appreciate any advice you can give us.
Suze (22:06):
Laura. We have two separate issues here, and you need
to separate them.
Number one, let's first deal with the easy one, which
is your husband.
Sometimes it's easier just to give money than to deal
with a situation that's going on, and your husband may
(22:26):
be somebody number one who doesn't like conflict, but number two,
he doesn't have the connection.
The natural connection like you do with your brother. It's
his brother-in-law, and he may not have been close with him.
Maybe he was, who knows. But again,
(22:49):
you need to be a little bit compassionate in that
maybe he doesn't like I said, like conflict, and it's
just easier to come up with a few hundred dollars every
month to support the sister-in-law than have to deal what
could happen with your brother, not his brother. So you
need to understand that he doesn't have that blood relationship
(23:11):
like you do. That's number one. Number two, it's your sister-in-law.
And I can tell you with my sister-in-laws I don't
feel like they're my sister-in-laws. I feel like they are
my sisters and I have long conversations with them and
love with them as if they are my sisters, but
(23:36):
I don't quite feel that way with the brother-in-laws, right?
I love them, but I don't have these long conversations
except with one, right? So it's, I feel different towards them.
So I think it would make sense that you feel
closer to your sister-in-law.
Than your husband probably felt towards her, and you just
(23:58):
need to understand that as well. This really boils down
to issue number two, which is you and your brother.
We don't know why they got divorced, number one, so
KT and I can't comment on that. Your brother, however,
is living up to his agreement that they made, so
(24:22):
at least he's doing that. So you should not be
punishing him at all for his success. He wants to
buy 5 homes, 15 homes. All right, that's his prerogative.
But what you need to do is sit down and
talk with him, not to him, but with him. You
(24:43):
must not make him feel bad that he's been successful
and he's buying homes. There's nothing wrong with that. He
obviously doesn't have an emotional attachment to his ex-wife, so
you should talk to your brother about how it's affected
you to see her suffer so much.
(25:04):
And the real question becomes here how old is the
son now? What is the son doing now? Is the
son making money now? Because again, your sister-in-law emptied her
retirement account in order to support her son, no matter
what she did with it, she did it to support
(25:26):
her son.
And now if her son, cause she's 72, so her
son very well should be in his 30s right now,
maybe even 40s at this point in time, is he
working and why isn't he helping her? So you have
two issues here. The son isn't helping her.
(25:50):
Obviously because you don't say so in your email and
her ex-husband isn't helping her and you need to deal
with those two things. So if I were you, forget
your husband in terms of him not wanting to do it.
That's fine. Understand that and don't take it personally. It's
not damaging your relationship in reality. It's just in your head.
(26:14):
I would sit down and have a one on one
talk with my brother from your heart.
And what could he do possibly to make it easier
on his ex-wife and therefore make it easier on you
as well? And again, I would be sitting down with
the son and saying, What are you doing? How much
(26:35):
money are you making? Do you understand that we're supporting
your mother? And if anything happens to us, what is
your mother going to do? So therefore you need to
get involved with your mother now.
That's what I would tell Laura KT.
KT (26:51):
I agree. I agree 100%. I love that.
Suze (26:56):
I didn't go on too long?
KT (26:56):
No, but, but I really love what you said about
her and her husband. She's getting frustrated with the husband,
but it has nothing to do with them. They have
a great relationship, so it's really, it's a sticky question though.
Isn't it? I mean, it's very interesting.
Suze (27:14):
It's sticky, but it's not, because again, when you get divorced,
who knows why you got divorced, number one.
And you maybe get divorced from somebody and you really
do not like that person anymore and you want to
have nothing to do with them. KT, truthfully, my last
relationship before you, I want nothing to do with this person.
(27:37):
I could care less what... I mean, I could go
on and on.
KT (27:40):
We're not going to do that.
Suze (27:41):
All right, but do I care if she's doing well
financially or not and da da da, not on any level.
However, there are exes, right, KT that I have that
I'm still close with and they were good people and
honorable and I help them financially...
KT (28:01):
Standing up when they're in need.
Suze (28:03):
Yeah, and I love doing that, so it all comes
down to
under what circumstances do they get divorced and why do
they get divorced, Alright.
KT (28:11):
So that was a good Sunday
conversation. I like that
question.
Suze (28:21):
All right, so let's do, maybe we need to do Sunday conversations...
No, we're gonna keep it how it is.
KT (28:32):
Oh! Sunday chats with KT.
Suze (28:32):
Oh, you like that do you?
KT (28:32):
Why don't you put me on both Thursday and Sunday?
And then if you have to do a Suze School,
I'll just listen.
Suze (28:40):
Because you distract me when you're here.
KT (28:44):
If you all want to have Sunday chats...
Suze (28:46):
Do not even go there, KT. All right, listen to me, everybody.
KT (28:50):
Sunday brunch with KT.
Suze (28:52):
By the way, what is for brunch today?
KT (28:55):
I wanted, I've been
craving pancakes and I'm not a sweet. I don't like
sweet things in the morning, but I've been craving pancakes.
I have no idea why.
Suze (29:06):
Tell them my favorite...
KT (29:06):
Oh, Suze, Suze's a creature of habit and she loves
the Mariposa gluten-free, um, cinnamon raisin toast, and she actually
has this sent to her from San Francisco, which was
the bakery that we would go to all the time,
every weekend.
And she has it sent to her in like, you know,
(29:28):
6 loaves at a time so that she freezes it
and loves her two slices of Mariposa gluten-free raisin cinnamon
toast with a cup of coffee every
morning.
Suze (29:42):
That's my breakfast.
KT (29:42):
And a matter of fact, sometimes as a treat instead
of dinner, she looks at me with these puppy eyes
and says, KT, don't say no.
KT...
Suze (29:52):
This
happened last night, which is why she's talking about it.
KT (29:54):
Don't say no. Please don't say no. I said, yeah,
I'm not going to agree to that until you ask first.
Can I have a cup of coffee and my raisin
toast for dinner? And I always say, yes, of course you can.
Suze (30:07):
I was so happy, but anyway, everybody, do not forget
that July 2nd.
is when we will be doing the next Ask KT
and anything, right?
Wednesday rather than Thursday and we have a very, very well,
a special announcement that I really think is a great
(30:29):
deal at this
time and you should really, really take advantage of it.
So until then there's only one thing that we want
everybody to remember and what is it, KT?
KT (30:40):
People first,
Suze (30:41):
then money,
KT (30:42):
Then things.
Suze (30:42):
Now you stay safe.
KT (30:44):
Happy Sunday.
Suze (30:45):
Bye bye.
June 29, 2025. Welcome everybody to the Women and Money podcast,
and everybody smart enough to listen. No, today is not
Suze School.
KT (00:41):
It's ask... KT's here, so it's Ask KT and Suze Anything Sunday.
Suze (00:45):
Because God forbid you should go more than a week
or two
Without hearing KT, who you just all adore, I hope
you all do. But anyway, so we switched Thursday to
be Suze School a few days ago, and you should
all listen to that.
KT (01:01):
It was a good one. I'm glad you switched.
Suze (01:04):
And now here we are. I just want to inform
you all right now, obviously...
Next Thursday is July 3rd, but we're gonna be doing
the podcast on July 2nd instead, so tune in one
day early because I have a very special just for
(01:24):
all of you on this podcast from Alliant Credit Union,
and you do not want to miss it.
KT (01:31):
Oh yea, don't miss it.
Suze (01:33):
You're really gonna want to tune in because I don't
know how long it will last. That is July 2nd.
All right, KT, I just have to say because people
are yelling at me, well, how do we write in
a question? So because we haven't said it.
For some reason I just forget to do it sometimes.
If you wanna ask a question.
(01:56):
Go to ask Suze S U Z E podcast at gmail.com.
Send it in and if KT chooses it, we will
answer it on the podcast, but you have to listen
every week to see if your question was answered. All right, KT.
KT (02:15):
So Suze, first question is from Gloria. Hi Suze, I
have a question...
Suze (02:20):
That's a great name
KT (02:22):
Yeah, that was a great song, wasn't it.
I have a I have a savings account that gives
me 3.75% monthly...
Suze (02:32):
I doubt it, but go on.
KT (02:32):
...with $88,000 in that account. I have a home equity
line of credit that I owe $43,000 on.
And I'm paying $500 a month in charges. Should I
take some money out of my savings account to pay
that off?
Suze (02:52):
All right, everybody, I want you to listen to me
very carefully. Did you notice anything in Gloria's email that
made absolutely no sense whatsoever?
Uh huh, no responses. Listen, Gloria, it is impossible that
(03:12):
you are making 3.75% monthly on your $88,000. That would
mean that you are being paid 45% a year in interest.
You're making 3.75% APR. That is what you are making
(03:33):
over the entire year.
Therefore, you should absolutely take $43,000 out of that savings
account and do what with it? Pay off your home
equity line of credit. All right, next, KT,
KT (03:49):
OK, from Jeff, this is very sweet.
Hey, Suze and KT, thank you for continuing to give
us guidance when you could clearly just stop and enjoy
your retirement years.
Suze (04:02):
Yeah, I've been talking to KT about that lately, haven't I?
KT (04:05):
Your advice has been life changing. I dread the day
you decide to call it quits. She's not going to quit, Jeff,
as long as I'm around, she'll never quit.
Suze (04:16):
Go on.
KT (04:17):
My husband retired early at the age of 57 and
has a 401k, both Roth and regular, because our company
didn't offer the Roth in the beginning. Our financial adviser
has suggested we roll it over to him. After seeing
financial institutions fail around 2008. Now that was a long
(04:40):
time ago.
I'm hesitant to put all our eggs in one basket.
I believe our balances are larger, more than a million,
than brokerage account insurance is allowed, but I'm not exactly
sure how this works. The fees are also higher with
the financial adviser, but he's been worth his weight in
(05:00):
gold with other
accounts he manages. Which is great, Jeff. Our financial advisors
with Morgan Stanley. Should we go ahead and roll over
the 401k to him in both the traditional and Roth,
or should we keep them where they are? All right, what's,
what's your advice to Jeff?
Suze (05:20):
So here's the thing, Jeff, you're 57, and you retired
at the age of 57, OK.
There is a rule called 72T that if you leave
service in the year that you turn 55 or later,
you can access any money you want in your 401k
(05:44):
without any penalties whatsoever. Obviously you would have to pay
taxes on it, but you could access some of that
money right now. If you roll it over to your
financial adviser,
you cannot touch that money until you are 59.5 years
(06:06):
of age. Now, do you already have a Roth IRA
with that financial advisor, because if not, your 401k Roth
is going to have to start the five year period
all over again, so you're not going to be able
to access that either without penalty and possibly taxes. Therefore,
(06:29):
I would think about this. You also don't have to
be an all or nothing investor.
You feel comfortable with the money obviously in your 401k.
It's doing great hopefully in your 401k. The question that
you have to ask and answer with this financial advisor
(06:50):
if you roll it over to him.
Is it true that he will be able to make
you more in his opinion that will cover the management
fee than you would make simply leaving it in the 401k?
You also could leave some of the money in the
(07:10):
traditional 401k.
Just so that you can access it if you need
to without the penalty, just something to think about because
you lose that if you roll it over. So up
to you. One last thing, even though I know Miss
Travis thinks it's too much information, I always think, you
(07:31):
know what, you need to know everything you need to
know when it comes to your money. Remember,
your husband may still be working. One day you may
decide to go back to work and earn even more money.
And if you're making more than the modified adjusted gross
income limits for Roth IRAs, you will not be able
(07:52):
to contribute to it unless you do a backdoor Roth.
But you won't be able to do a backdoor Roth
if you have an IRA. You will be able to
do it if you have a traditional 401k.
Just saying, KT don't look at me like that.
KT (08:09):
I've got a front door Roth. OK. All right, Sherry,
Suze (08:13):
She so hates I go long.
KT (08:16):
No, no, no, it's not, it's not too long. Actually
there's some questions in here where I want to have
conversations with you. It's the Roth and everyone knows that
it's confusing. So I think the least amount of information.
to put under your hat with the wrath the best.
Suze (08:36):
But KT, you've got to know
KT (08:37):
these things. I know, but you can know them one
at a time, not all in one question.
Suze (08:42):
He
needs to know it because he's about to do an
IRA rollover with his broker, and if he does, he'll
never be able to do a backdoor roll.
KT (08:50):
OK, so now you have all the information you need,
Jeff and husband.
Suze (08:56):
Thanks, wife!
KT (08:57):
OK. Are you ready?
Suze (08:58):
Yeah.
KT (09:00):
Next question is from Sherry. I like this question because
this is information everyone has to have. Good day. I'm
about to get our will, trust, and all must have
documents in order. Where do you recommend I keep the
final forms safe?
What if they get destroyed in a natural disaster such
(09:22):
as a hurricane? Now, you can also add on to
that fire, tornado, flood. I mean, add everything on there, Sherry,
with the weather these days. And then she asks a
good question, Suze, should I make duplicates of signed forms
and then share with certain family members? I assume they
would be valid too.
(09:42):
Are they?
No. They are not valid.
Yeah, they're not.
Suze (09:45):
Only the original is valid.
KT (09:48):
It's still a good safeguard.
Suze (09:50):
But that doesn't mean that her family shouldn't know what
her intentions were, right.
KT (09:55):
And then it says thank you, Susie for your invaluable advice.
So tell everyone where to get the must have documents.
Suze (10:01):
If I were you, I would keep them at home
in a fireproof and waterproof box.
I know, I know. I'm so sorry that we're no
longer manufacturing the gold box, the silver box, the blue
box that met those needs, but we're just not right now.
You never know when we'll bring them back. But for now,
(10:24):
we're not. So...
KT (10:25):
Some people keep them in their safe deposit box in
a bank.
Suze (10:29):
If you do keep it in a safety deposit box,
then you have to make sure
the relative... you die, how are they going to get
to it? So you have to make sure that your
relative and another relative know they happen to be on
the name of the safety deposit box. And what happens, KT?
I know you're going to think I'm nuts, but what
(10:50):
happens if there's a tornado and all of a sudden
the bank office that has all of that has been
blown away. They're not open. You can't get to it.
Right, and you happen to be killed in that disaster.
I mean, things can happen. I would have them in
either a waterproof, fireproof box that I kept, or keep
(11:12):
it at another person's home. That is the person that
would need it in case something happened to you, so
it's not at your home.
And hopefully they live somewhere that's safe, but that if
they ever had to evacuate, they just take it with them.
So there are boxes that aren't so heavy that you
(11:33):
can just grab and go with them and just know
that the only thing that's valid is the original. So,
like with the must have docs that let's say you
lost them.
All right, they went away somehow. You can go right
online again and print them out and then go get
them notarized once again. And then there valid all over again.
(11:57):
So that's what I would be doing if I were you.
KT (11:59):
Now tell them where to get them.
Suze (12:01):
Oh, if you want to get the must-have docs, go
to musthavedocs.com.
And that's where you get them currently. They are $99
for $2500 worth of state of the art documents, good
in all 50 states, and I just think they're fabulous.
KT (12:20):
Everyone has to have the must have documents.
Suze (12:22):
Alright, go on.
KT (12:24):
Ok, Janet...
Suze (12:25):
You know, it's funny, KT, the commercial that you see
on television all the time where this guy pops up
and goes, no, it doesn't work that way. They're charging
$199
KT (12:33):
just for the...
Suze (12:34):
the will. Are you kidding me? I mean, this is $99
for the will, the living revocable trust,
the advanced directive and durable power of attorney for health
care and the financial power and any time you want
to change them, you can do it again and again.
You want to share your activation code with members of
(12:54):
your family. You can do it. If the company that
manufactures it ever has an upgrade, you get the upgrade
for free. For those of you who have lost your
activation code, we give you a new one. Are you
kidding me? Anyway, go on.
KT (13:10):
Ok, the next question is from Janelle and Patrick.
Hi Suze and KT. My husband and I are 65
years old. Can you educate us about the ins and
outs of converting traditional IRA dollars to a qualified longevity
annuity contract known as a QLAC as a tax strategy
(13:34):
to defer RMDs when we turn 73? We won't need
the RMD dollars for living expenses.
And have concerns about income exceeding IRMAA brackets. So Suze,
how does that all work?
Suze (13:50):
So basically, what concerns me is you say currently you
don't need your RMDs, which are required minimum distributions.
And I don't know exactly how much you have within
your IRAs and things like that, but if you did
a qualified longevity annuity contract and everybody, it's just a
(14:14):
special kind of like deferred income annuity, and it can
be purchased, however, with funds from a traditional IRA or
a qualified retirement plan.
So why would people do that? Because you can defer
required minimum distributions beyond the age of 73, but only
(14:34):
up to the age of 85, which could possibly help
you manage taxable income and Medicare and things like that.
What concerns me is, all right, you said that you
don't need your RMDs.
But what if you needed the actual principle that's generating
(14:55):
the RMDs, because once you do this, right, that's it,
you can't really do anything else with it. The money
is removed to the annuity, and what this does is
you can't touch it.
But it guarantees you income later in life. So if
you live to 85 and beyond, the qualified annuity ensures
(15:19):
that you won't outlive your money now.
I don't think it's worth it to tell you the truth.
I just don't. The maximum you can do is 200,000
per person from your traditional, but I don't know, it's
not indexed for inflation.
It's, I just don't think it's they shouldn't do it.
I wouldn't do it if I. OK, there you go.
(15:40):
I would want to know I could have access to
my money, and if I really didn't need it, then
maybe you should start converting it to a Roth so that,
you know, eventually when you do take it out because
you're only 65, right?
That won't qualify for RMDs anyway. I just don't like them. Also,
do me a favor, ask your financial advisor the commission
(16:02):
they'll make if you buy one. All right, go on.
KT (16:06):
Oh
OK.
Suze (16:09):
OOOH, what does that remind me of?
KT (16:11):
She loves the commercial. What is it for?
Suze (16:14):
I
don't even know. I just wait and watch him go,
KT (16:16):
Oh, the
little boy, um, in the commercial looks at his daddy who,
who hits a baseball, breaks a windshield. It's for, for
the windshield replacement company. Little boy looks at his daddy
and goes, Oh, like you did it, and
Suze loves that commercial.
Suze (16:32):
But then I stopped watching after he does that. All right.
KT (16:35):
All right, so from Laurie, Hi Suze. I've been listening
to you for many years and try to take your
advice as often as possible. I am a teacher that
is starting to look at what my retirement could look
like possibly 3 years from now. First of all, we
want to both say we love teachers.
And we love your profession. You're very, very important.
Suze (16:57):
There's this commercial where you see this teacher taking some
pill that's making her feel great, whatever, but she's dancing
through the classroom and she's doing these great things and
she just looks so happy and I was thinking, oh,
maybe I need to be a teacher. And then I thought...
KT (17:15):
You are a teacher.
Suze (17:17):
But couldn't you see me in a room with little kids?
KT (17:20):
Oh, being a teacher for children.
Suze (17:23):
No, no...
KT (17:24):
No,
I cannot
stay with the big
kids stay with the old kids.
So, and then she said, Suze, you've always advised opening
a trust. I was informed that a trust should not
contain your pension and TDA.
Correct, yeah, it, it, it wouldn't contain the pension. As
(17:46):
a divorced mother of two, I want to protect and
plan for myself and make sure my hard work will
go to my children without any issues. Can you elaborate
on trust and why this is not an option for
me and what I should be doing, so I think
the trust is an option that...
Suze (18:08):
You have to do the trust for other things like
your house, your bank account, your investments, all of those
things to make it easier for your children. However, an
individual retirement account,
IRA I'm just gonna start there to make it easy
for you. It's an individual that owns that retirement account.
(18:31):
So given an individual cannot be a trust.
It cannot be in a trust. The same is true
with your pension as well as your tax deferred annuity.
Now your tax deferred annuity because you are a teacher
is exactly like a 401k or a 403B, and it
(18:52):
has to be in the employee's name, not in the
trust name.
So it is the school district that has hired you,
not the trust, but you can, if you want, just
name your children as long as they're like over 18
or 19 or they're responsible with money as the beneficiaries
(19:14):
of that TDA, and then it will go to them directly,
just that simple. Also with your pension.
Usually your pension upon your death also goes away unless
you do a joint and survivor pension with your spouse.
I don't know if they allow you to do it
with children, but you should have a trust. But no,
(19:39):
individual retirement accounts, pensions, annuities, and things like that when
you're an employee cannot be owned in a trust.
KT (19:49):
OK,
so my final question is from Laura.
And it's a really great one. I have a question
about a sticky situation. And Suze, after I read this,
I said, Oh, this is a sticky question, and I'm
really excited to hear how you're going to respond. A
divorce in our family left our sister-in-law at 72 still
(20:13):
working full time in a Montessori school, living in a
one bedroom apartment and struggling to make ends meet.
She unwisely emptied her retirement account to support her son
in trying and failing to become a trader. He tried
to be a day trader at the time. We covered
(20:34):
the unexpected tax consequences for her. Now ready, this is
the sticky part. Our brother is remarried and has homes
in Rio de Janeiro, Chicago, and recently is considering buying
a third property.
Joining together with a third sibling, our family's providing our
(20:56):
sister-in-law with $1000 a month in order to ease her situation,
so they're subsidizing a sister-in-law, the rest of the siblings.
Our decision in this case is becoming more difficult for
me because I can feel as though by helping our sister-in-law,
which feels like the right thing to do, we are
(21:18):
enabling our brother to live an expensive lifestyle and shirk
his own responsibilities. He does live up to the letter
of their settlement agreement, but no more, thus leaving his
ex-wife vulnerable.
To be honest, I find this situation to be undermining,
(21:38):
if not damaging, my relationship with my brother and his
second wife.
In addition, Suze, my husband is comfortable continuing with this,
and I do not feel that my concerns are being
heard or addressed by him. We have always been on
the same page when it comes to money matters. Suze,
(22:00):
I'd love to hear your take on this, and I
would appreciate any advice you can give us.
Suze (22:06):
Laura. We have two separate issues here, and you need
to separate them.
Number one, let's first deal with the easy one, which
is your husband.
Sometimes it's easier just to give money than to deal
with a situation that's going on, and your husband may
(22:26):
be somebody number one who doesn't like conflict, but number two,
he doesn't have the connection.
The natural connection like you do with your brother. It's
his brother-in-law, and he may not have been close with him.
Maybe he was, who knows. But again,
(22:49):
you need to be a little bit compassionate in that
maybe he doesn't like I said, like conflict, and it's
just easier to come up with a few hundred dollars every
month to support the sister-in-law than have to deal what
could happen with your brother, not his brother. So you
need to understand that he doesn't have that blood relationship
(23:11):
like you do. That's number one. Number two, it's your sister-in-law.
And I can tell you with my sister-in-laws I don't
feel like they're my sister-in-laws. I feel like they are
my sisters and I have long conversations with them and
love with them as if they are my sisters, but
(23:36):
I don't quite feel that way with the brother-in-laws, right?
I love them, but I don't have these long conversations
except with one, right? So it's, I feel different towards them.
So I think it would make sense that you feel
closer to your sister-in-law.
Than your husband probably felt towards her, and you just
(23:58):
need to understand that as well. This really boils down
to issue number two, which is you and your brother.
We don't know why they got divorced, number one, so
KT and I can't comment on that. Your brother, however,
is living up to his agreement that they made, so
(24:22):
at least he's doing that. So you should not be
punishing him at all for his success. He wants to
buy 5 homes, 15 homes. All right, that's his prerogative.
But what you need to do is sit down and
talk with him, not to him, but with him. You
(24:43):
must not make him feel bad that he's been successful
and he's buying homes. There's nothing wrong with that. He
obviously doesn't have an emotional attachment to his ex-wife, so
you should talk to your brother about how it's affected
you to see her suffer so much.
(25:04):
And the real question becomes here how old is the
son now? What is the son doing now? Is the
son making money now? Because again, your sister-in-law emptied her
retirement account in order to support her son, no matter
what she did with it, she did it to support
(25:26):
her son.
And now if her son, cause she's 72, so her
son very well should be in his 30s right now,
maybe even 40s at this point in time, is he
working and why isn't he helping her? So you have
two issues here. The son isn't helping her.
(25:50):
Obviously because you don't say so in your email and
her ex-husband isn't helping her and you need to deal
with those two things. So if I were you, forget
your husband in terms of him not wanting to do it.
That's fine. Understand that and don't take it personally. It's
not damaging your relationship in reality. It's just in your head.
(26:14):
I would sit down and have a one on one
talk with my brother from your heart.
And what could he do possibly to make it easier
on his ex-wife and therefore make it easier on you
as well? And again, I would be sitting down with
the son and saying, What are you doing? How much
(26:35):
money are you making? Do you understand that we're supporting
your mother? And if anything happens to us, what is
your mother going to do? So therefore you need to
get involved with your mother now.
That's what I would tell Laura KT.
KT (26:51):
I agree. I agree 100%. I love that.
Suze (26:56):
I didn't go on too long?
KT (26:56):
No, but, but I really love what you said about
her and her husband. She's getting frustrated with the husband,
but it has nothing to do with them. They have
a great relationship, so it's really, it's a sticky question though.
Isn't it? I mean, it's very interesting.
Suze (27:14):
It's sticky, but it's not, because again, when you get divorced,
who knows why you got divorced, number one.
And you maybe get divorced from somebody and you really
do not like that person anymore and you want to
have nothing to do with them. KT, truthfully, my last
relationship before you, I want nothing to do with this person.
(27:37):
I could care less what... I mean, I could go
on and on.
KT (27:40):
We're not going to do that.
Suze (27:41):
All right, but do I care if she's doing well
financially or not and da da da, not on any level.
However, there are exes, right, KT that I have that
I'm still close with and they were good people and
honorable and I help them financially...
KT (28:01):
Standing up when they're in need.
Suze (28:03):
Yeah, and I love doing that, so it all comes
down to
under what circumstances do they get divorced and why do
they get divorced, Alright.
KT (28:11):
So that was a good Sunday
conversation. I like that
question.
Suze (28:21):
All right, so let's do, maybe we need to do Sunday conversations...
No, we're gonna keep it how it is.
KT (28:32):
Oh! Sunday chats with KT.
Suze (28:32):
Oh, you like that do you?
KT (28:32):
Why don't you put me on both Thursday and Sunday?
And then if you have to do a Suze School,
I'll just listen.
Suze (28:40):
Because you distract me when you're here.
KT (28:44):
If you all want to have Sunday chats...
Suze (28:46):
Do not even go there, KT. All right, listen to me, everybody.
KT (28:50):
Sunday brunch with KT.
Suze (28:52):
By the way, what is for brunch today?
KT (28:55):
I wanted, I've been
craving pancakes and I'm not a sweet. I don't like
sweet things in the morning, but I've been craving pancakes.
I have no idea why.
Suze (29:06):
Tell them my favorite...
KT (29:06):
Oh, Suze, Suze's a creature of habit and she loves
the Mariposa gluten-free, um, cinnamon raisin toast, and she actually
has this sent to her from San Francisco, which was
the bakery that we would go to all the time,
every weekend.
And she has it sent to her in like, you know,
(29:28):
6 loaves at a time so that she freezes it
and loves her two slices of Mariposa gluten-free raisin cinnamon
toast with a cup of coffee every
morning.
Suze (29:42):
That's my breakfast.
KT (29:42):
And a matter of fact, sometimes as a treat instead
of dinner, she looks at me with these puppy eyes
and says, KT, don't say no.
KT...
Suze (29:52):
This
happened last night, which is why she's talking about it.
KT (29:54):
Don't say no. Please don't say no. I said, yeah,
I'm not going to agree to that until you ask first.
Can I have a cup of coffee and my raisin
toast for dinner? And I always say, yes, of course you can.
Suze (30:07):
I was so happy, but anyway, everybody, do not forget
that July 2nd.
is when we will be doing the next Ask KT
and anything, right?
Wednesday rather than Thursday and we have a very, very well,
a special announcement that I really think is a great
(30:29):
deal at this
time and you should really, really take advantage of it.
So until then there's only one thing that we want
everybody to remember and what is it, KT?
KT (30:40):
People first,
Suze (30:41):
then money,
KT (30:42):
Then things.
Suze (30:42):
Now you stay safe.
KT (30:44):
Happy Sunday.
Suze (30:45):
Bye bye.
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