September 25, 2025 • 27 mins
On this Ask Suze & KT Anything episode, KT asks Suze your questions about funding your trust, the Must-Have Docs, Roths, and so much more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:07):
September 25th, 2025.
KT (00:10):
Wait, tell everyone why you're laughing.
Suze (00:13):
Well, why don't you tell everybody why we're laughing?
KT (00:16):
So Suze had a keratin treatment yesterday.
Suze (00:19):
We're in Florida.
KT (00:20):
We're in Florida. She had a keratin
treatment...
Suze (00:22):
and my hair can be a little bit unmanageable.
KT (00:24):
And when I picked her up from the salon, she,
she had a little cap on, a little baseball cap,
and when we got home,
she took it off and I said, Oh my God,
where's your hair? So this treatment makes your hair like
real flat.
Suze (00:38):
Yes.
KT (00:39):
And I, I said, Why'd you let him cut it?
She said, I never cut not one strand. I said,
Oh my God, what did you do, Suze? And I
keep looking at her and she's, her hair's real flat.
We should post a photo.
Suze (00:55):
Maybe, maybe we'll see what happens anyway...
KT (00:58):
Today's a lucky day. Suze has flat hair and it's
our nephew, our great nephew, Nicky's first birthday. So how
does he think it feels, Nicky, to be one?
Suze (01:12):
You know what I think is so funny, everybody. First
of all, welcome to the Women and Money podcast...
KT (01:17):
And everyone's smart enough to listen.
Suze (01:19):
All right, so we've got that down. KT has already
just been going, going, going this morning, um, but what
I think is so funny is that everybody's making all
these presents, remember, in our family we don't really buy things,
so I've watched KT paint a coconut, paint all these
little things, you know, figures on it and everything, and
(01:39):
I'm like,
all these people are going there to be with him
on what's so fascinating. He's not really even gonna know
it's his birthday.
KT (01:47):
Yes, he does.
Suze (01:48):
Yes, he does anyway, KT.
You have questions for me today because ask KT and
Suze anything, but most people tuning in, maybe for the
first time would think, oh, this is the KT show.
KT (02:03):
It should be. I bet the ratings will skyrocket if
there's ratings on a podcast.
Suze (02:09):
There's a number of downloads, right? I think what, what
are we approaching 50 million. So we're approaching a nice
number anyway.
KT (02:16):
All right. Hi, Suze and KT what does fund your
trust mean?
What do I need to do? Is this something I
need to do before getting my must-have documents notarized? Please
advise from Linda.
Suze (02:33):
Here's the thing, Linda, that you need to understand.
A trust is like a suitcase where you have to
pack things in it. You have to put things in
it so it goes from one place to another very easily.
If you have a suitcase and there's nothing in it,
(02:55):
then you get to the place that you're going and
you open it up and there's nothing there.
KT (03:00):
I love
that analogy.
Suze (03:02):
Oh,
KT (03:02):
I'm, no, I love that.
Suze (03:04):
I'm so glad. So when you have a trust, I
want you to think about it as a suitcase that
you have to put things into that suitcase so it
can easily go from you
to your beneficiaries that all kinds of things can happen
to it when it's in the suitcase. So funding your
(03:26):
trust means you have to first do the trust, get
it notarized, get it witnessed. Then what you have to
do is you have to change the name of, let's
say your individual bank account from, let's just say, Suze Orman.
To Suze Orman Trustee for the Suze Orman Trust. You
(03:47):
have to change the assets that you have your bank accounts,
your brokerage firm accounts, your real estate. All of those
things get changed from your individual name,
into the suitcase and the suitcase has the name of
Linda trustee for the Linda revocable trust and whatever date
(04:12):
you did it just that simple. So that's how you
fund a trust.
Now, when you get the must-have docs, and I have a
feeling that you're talking about them and the must-have docs
are a living revocable trust, an advanced directive and durable
power of attorney for health care, a financial power of attorney,
(04:33):
and a will.
And when you get those and you do them all
of them, you will absolutely have instructions when you're doing
the revocable trust of how you fund it. They'll take
you through the entire process and for those of you
who don't know what
the must-have documents are go to musthadocs.com for $99. You
(04:59):
will get $2,500 worth of state of the art documents,
good in all 50 states. All right, KT.
KT (05:08):
All right, Suze, next question. This is from Liza.
Suze (05:13):
Are you sure?
KT (05:14):
Yes.
Suze (05:14):
Do you remember when we saw Liza Minnelli?
KT (05:17):
I loved it. I love Liza Minnelli, everybody.
Suze (05:20):
We got to go backstage.
KT (05:22):
Yeah, we saw her on on Broadway for her show.
Suze (05:25):
It was so good. Was it on Broadway or was it somewhere else?
KT (05:27):
It was on Broadway because we were in New York. We had
to walk all the way down the steps.
To get to her dressing room, the old New Yorker...
Suze (05:35):
Never mind. Next question, KT. We're already done with this podcast.
KT (05:40):
Liza, Liza with a Z. Hi Suze. I'm 30 years
old and I lost my job earlier this year with
the Doge funding cuts. I want to roll my former
employer Roth 401k into my Roth IRA. I have
$34,000 in my Roth 401k. Question is, when I roll
(06:01):
the funds over, do I dollar cost average this money
into my Roth IRA as I normally would do with
my investments? If I dollar cost average, am I missing
out on money that would have been growing before rolling
it over and now sitting in cash?
So Liza, invest in ETFs.
Suze (06:23):
Yeah, so Liza with a Z.
When you transfer that 34,000 into your Roth, if that
money had been fully invested, listen to me closely already,
let's say it was in your Roth 401k in a
Standard and Poor's 500 index fund if it was already
(06:44):
totally invested.
When you actually transfer it, maybe you'll transfer it in cash.
Who knows? I would not dollar cost average. I would
actually just totally invest if the money that you are
transferring was 100% invested at that time. If it wasn't
(07:04):
and it was sitting in cash, then I would dollar
cost average. All right, KT.
KT (07:10):
Hi, Suze and KT, if I am maxing out my 401k...
Suze (07:14):
Who is this from?
KT (07:15):
AC.
Suze (07:15):
AC. Ok AC, Ask KT AC.
KT (07:20):
Should I add additional dollars?
Suze (07:22):
I'm SO.
KT (07:22):
Should I add additional dollars to a traditional rollover IRA
or brokerage account? I have both additional accounts, but I'm
not sure which is a better investment for retirement, which
I would like to do in about 10 years. My
income doesn't allow me to contribute to a Roth IRA
just in case you were wondering.
Suze (07:43):
Yes and I was.
AC because as you were, as KT was reading that
to me, I was going, why doesn't you just do
a backdoor Roth, and you can't do a backdoor Roth,
everybody remember this if you have a traditional IRA, uh,
a SEP plan, a simple plan that is pre-tax, you'll be,
(08:03):
you just don't want to do it if you have one.
Now my answer's gonna probably surprise you, AC.
If you are asking me which is better, a traditional
IRA or a brokerage account, I would tell you I
would do a brokerage account. And the reason that I
(08:24):
would do a brokerage account is because once you make
an investment normally, you may keep it for 10 years
or longer, and while it's in there, you don't pay
taxes on it anyway, but when you do go to
take it out,
what can happen then you will only pay capital gains
tax if you have a gain. What happens if you
(08:47):
have a loss? Then you can take the loss off
your taxes. You also may have some things in there
that have a gain. Some have a loss, so you
can offset them all so you don't pay any taxes. Oh,
you die. And now the money goes down to your beneficiaries.
They get a step up in basis. So let's just
(09:08):
say you took that money and you turned $50,000 into $300,000.
You die, guess what? Your beneficiaries get a step up
in basis. They get all of that for $300,000.
They could sell it all, no taxes. You put it
in a traditional IRA and it grows and it grows
(09:29):
and it grows. Oh great. Now you go to take
it out - ordinary income. Oh, you've lost money on it,
can't take it off your taxes. You die and it
goes to your beneficiaries. Totally taxable.
An investment account over an IRA any day if you
ask me when it's pre-tax. All right.
KT (09:51):
OK, next question from Karen.
Hi Suze and KT, I'm reading your retirement book and loving it.
Suze (09:58):
The Ultimate Retirement Guide.
KT (10:00):
For 50+. I remember you've mentioned on your podcast, and
I just read it in your book as well, that
a Roth SEP IRA is now allowed.
Suze (10:12):
Yea, if you can find one.
KT (10:12):
Do you know...
There you go. The question is, do you know of
any institutions currently offering one? Do you?
Suze (10:21):
No.
KT (10:22):
All right, well.
Suze (10:23):
Listen, everybody, I don't understand, now that the laws have
changed and you can have a SEP IRA as a Roth,
no financial institution really is offering it. Maybe I found one,
but I wouldn't put my money there.
But so here's what I would do if I were you.
It's just such a shame. Fund your SEP IRA and
(10:46):
convert it just that simple and pay taxes on it
when you convert it. It's the same as if you
put money into a Roth SEP IRA with after tax money.
It would come out the same. All right, go on.
KT (11:01):
All right. Next question is from Miguel. Hi, Suze. I
recently switched jobs and I had a 401k with my
previous employer.
It is a traditional 401k and I was thinking of
rolling it over to my personal Roth IRA or should
I open a traditional IRA?
(11:22):
And then Miguel goes on to say, it's about $650
not much. Hey, every dollar counts, Miguel, but I'd love
to move it in the best way possible, avoiding a
tax hit. Where should I move this money? Thank you.
Suze (11:38):
You know, KT, this is such a sweet question and
one that is...
KT (11:45):
They're all sweet.
Yes, this one is very...
Suze (11:47):
Very sweet because people would go, really, $650?
So, and what you said is every penny counts. Miguel,
listen to me.
You are to convert it to a Roth IRA absolutely.
Because now what will happen is as you invested and
(12:08):
if I were you I would put all $650 into
an ETF by the symbol VOO,
and let it grow because now the money will grow
tax free. So take your tax hit now, put it
into a Roth IRA and see what happens. It's not
(12:29):
going to be that big of a tax hit, but
I'd rather you take a tax hit on $650 than
years and years and years from now, maybe taking a tax
hit on 5000, 10,000, 15,000 or more when you go
to take it out. All right, KT.
KT (12:47):
Suze, the next question is from Jenny. My husband and
I have a business, so we have the SEP IRA accounts.
We maximize the amount every year. My question is, we
currently have it with Merrill Lynch. My hubby's 61, I
am
56 they charge us 1% on what we have in
the account. Should I move it to a no brokerage
(13:09):
firm like Fidelity so we stop paying the 1% when
we stop contributing? It adds up every month.
Suze (13:18):
So first of all, my dear Jenny, here's how I
would look at this if I were you and everybody
else wondering this question.
Because as I peruse the emails that you send in
to ask Suze - Suze- podcast at gmail.com, all of
you seem to be asking this question lately. If you
(13:39):
have money with a financial advisor and let's say 100%
of it is invested for growth.
Is it worth it for you to pay 1% or
more in fees because that will mount up, to this
financial adviser. Here's how I would make the decision if
I were you. A financial adviser should at least in
(14:01):
my opinion, beat the Standard and and Poor's 500 index.
Now you all know that I really like the exchange
traded fund by the symbol VOO. Take a look
at the return for VOO.
And if your adviser has beat that, all right, stay
(14:21):
with the adviser. If the adviser has not beat it,
then what are you paying for?
Just that simple. All right, KT, next.
KT (14:32):
This is from Steph Suze, and the reason I love this,
it says pick me KT. It's a quick and Rothy.
Suze (14:40):
Oh, you know, we should create a...
KT (14:42):
A drink. Let's make a, let's make a smoothie called,
A Frothy Rothy. I'll put it on the, I'll put
it on the wall, everybody.
Suze (14:52):
And what would be in it?
KT (14:53):
I'm not gonna tell you now they have to go
to the wall to get the recipe.
Suze (14:57):
Guess what I would have in it?
KT (14:58):
Banana.
Suze (15:00):
No, I would have root beer and vanilla ice cream.
KT (15:06):
And a banana maybe? OK that's called a root beer float.
I need one that's called a Frothy Rothy Root Beer maybe.
I keep... (laughing)
Hi KT and Suze. I can't begin to thank you
(15:26):
for all the Roth knowledge you passed, passed on to me.
I currently (laughing)
I just drank a frothy.
I just drank my Frothy Rothy this morning and currently
have a standard investment account and a Roth IRA. They
are both all invested in great companies you've suggested, Suze, yippee.
(15:51):
That yippee is for real, by the way.
My question is this now that I know so much
about Roth IRA accounts and how to invest well within them,
is it possible to transfer shares of these fabulous stocks
from my standard investment account into my Roth IRA,
As my annual $8,000 contribution next year? So Suze, Steph
(16:16):
is over $50. I really don't want to sell those
that I have in the standard, and I sure wish
they were in my Roth.
Suze (16:24):
So when she says standard, she means in her regular
investment account. Should I give you that as a pop quizzy?
KT (16:31):
Oh, no.
Suze (16:33):
Why?
KT (16:36):
No, no, don't, because I'm on a roll here.
Suze (16:40):
Oh really? Do all of us think she's on a
roll here?
KT (16:44):
I am.
Suze (16:45):
Trust me...
KT (16:46):
Come on, answer the question before everyone forgets the question.
Suze (16:49):
All right.
So, Steph, the easy answer to that is no, you cannot, right?
You cannot transfer stocks that are in an investment account
into a Roth IRA and have that be considered your.
Contribution only cash can be considered a contribution when investing
(17:11):
in a contributory Roth. Could you sell those stocks, pay
taxes on them now, and then take that money and
put it in as a contribution? Yes, but I'm not
sure cause I have a feeling you probably have some
serious gains in those stocks.
Especially if they are... anyway, go on, go on,
KT (17:34):
Just enjoy another Frothy Rothy. All right.
This is from Cindy.
Suze (17:41):
Oh wait, let me put my flat. Let me fluff...
KT (17:43):
Cindy said, Suze, I got the must-have documents. I live
in Texas. When I... listen to this question, everybody, whoa,
make this one my pop quizzy. When I met with
an attorney to change the name of my home deed
to the trust name, they
said my trust document was not valid since it was
(18:05):
from California.
Suze (18:06):
Let me finish this question, and they wanted to do
a new trust for them. Go on,
KT (18:10):
It says of course they offered to create a new
will and trust. Is this so? Cindy, you absolutely need
to listen to Suze and everyone out there smart enough.
Suze (18:24):
In the same way that you have the ability, Cindy,
when you're like creating a corporation for a company.
You can create and incorporate in really any place you
want in Delaware or anywhere. The same is true with
a living trust. If you create a living trust governed
(18:45):
by the laws of California, it's good anywhere that you
happen to be.
And the reason that the must-have documents chose the state
of California is that they have the most liberal trust
laws anywhere, so your lawyer is 100% wrong. I just
want to make this statement, everybody.
Over the years, millions and millions and millions and millions
(19:10):
of people have purchased the must-have docs from all over
the United States. Don't you think by this point in time,
that would have been noticed if it wasn't possible. Many
of those people are no longer alive. They passed everything
down to their beneficiaries absolutely with ease. There's never been
(19:33):
a lawsuit or anything like that against them, so I
doubt highly,
that the manufactures of the must-have documents would have allowed
that if it wasn't legal. So therefore they are wrong,
and by the way, I just have to say.
We had the must-have documents, and we live in Florida.
(19:55):
Just saying, go on, KT.
KT (19:57):
All right, next question is from Carlene. I turned 60
in January 2025. Do I qualify for the additional catchup
amount of $11,250 on my 401k for the 2025 tax year?
Suze (20:17):
Pop quizzy.
KT (20:17):
Yes.
Suze (20:18):
What if she had turned 64?
Would she have qualified?
KT (20:22):
I think yes.
Suze (20:24):
No, it's only between the ages of 60 and 63.
Don't ask me...
KT (20:28):
I didn't know that.
Suze (20:29):
Of course you didn't.
KT (20:30):
Why?
Suze (20:31):
Don't ask me why.
KT (20:31):
ask,
Suze (20:32):
Don't ask me why. That's the law. I don't know
why they did that, but yes, you absolutely
qualify for that catch up contribution. With that, let's say
you were 59 let's say you were 64, it's only
like $7,500. All right, go on, KT.
KT (20:50):
OK, my final question is from Kara, and I, I
picked this one because it said in the subject, is
now a good time to refinance my mortgage?
Hi, Suze and KT. I bought a house two years ago.
I have a 30-year mortgage with an interest rate of 6.125%.
(21:10):
I've been watching mortgage interest rates waiting for them to
go down so I can refinance to a lower rate.
Two local credit unions have 20 year mortgage refinance rates
of 5.5 and 5.375. Should I lock in one of
these lower rates now or wait to see if the
(21:32):
interest rates go down further?
Suze (21:34):
Interest rates probably will go down further, but again, then
you never know.
KT (21:38):
You never know how, when, right?
Suze (21:40):
You never know. They should go down sooner than later.
We'll see, but truthfully, the current rate on a 20
year mortgage,
if you were to get it it's still at about 6.10%,
so those are really great rates. So I don't know.
I think if you did it would probably be OK,
but you might just want to wait a little. Is
(22:02):
it a special offer that these credit unions are offering
right now?
Or is it gonna go away? So can you just
ask your credit unions, is this a special or what
do they think? Because it might be a special to
get you to do it now and it's gonna stay
that way even if they lower rates. So there you go.
KT (22:24):
OK, Suze, that's a wrap.
Suze (22:25):
I don't think so.
KT (22:26):
Oh no.
Suze (22:28):
Yeah, you're right.
KT (22:28):
Oh no, she's doing it. She's bringing back the quizzes.
Suze (22:33):
So this is where I asked KT a question.
And all of you are being asked the same question,
and I want you to be able to answer this question.
This is from Doctor SD. All right. Hi ladies, I
love listening to the way the two of you interact.
(22:55):
Oh yeah, like today? Anyway, it is so much fun
in addition to being a learning experience. I just listened
to both Roth podcasts together. Did I do this right?
I am over 65. OK, I opened a Roth in 1994.
It had about $60,000 in it.
(23:17):
So I opened a Roth on January 10, 2025 and
transferred everything from my Schwab account that I had opened
in 1994 to a new account at Fidelity feeling it
was time to consolidate. So KT, just to be clear,
(23:38):
this person is 65. They opened a Roth in 1994
at Schwab. The beginning of this year, they opened up
another Roth at Fidelity, and now they want to transfer
the money from the Schwab account to the Roth account
at Fidelity. Here's the question:
(24:01):
Right after that, I converted my traditional IRA about $30,000
into the Roth, and I know I will owe taxes.
The conversion has its own 5 year clock which I
read starting January 1st of the year I did the conversion.
So in my case, can I withdraw the money I converted.
(24:25):
But I have to wait 5 years to withdraw any
earnings on the converted amount. Is that right?
KT (24:33):
I believe, yes.
Suze (24:35):
You're thinking about this?
KT (24:36):
Yeah, I think.
Suze (24:38):
Again, she's...
KT (24:38):
Wait, wait, wait, wait, hold on, 65.
Hm.
Suze (24:45):
And she had a Roth all the way back to 1994.
KT (24:51):
I think that um, I think the doctor's exempt
from having to owe anything at this point.
Suze (25:00):
Ding ding ding ding. Because when you converted, Doc,
into a Roth IRA that had already met the 5
year time clock and you are over 59 and a half,
you can take anything you want out without taxes or
penalties whatsoever.
KT (25:21):
I learned um from all of Suzy's Roth lessons that
59.5 is a really magic number everyone just needs to remember.
Suze (25:31):
And...
a Roth that has been open for at least 5 years.
All right, KT, now that's a... that's a Rothy, Frothy wrap.
All right, everybody, so until Sunday.
Though it looks like we have a hurricane possibly coming
our
way.
KT (25:50):
Yeah, we're in the season, Suze.
Suze (25:52):
So there's one this Invest 94, I think it is.
Isn't looking so good for us. So hopefully if everything
goes the way it should because we're on our way
back now to the island now that I have flat hair.
So anyway, and so we'll see what happens, but hopefully
(26:12):
Sunday we'll be here with a Suze School. I'll be here.
KT (26:16):
And happy birthday, Nicky.
Suze (26:19):
Happy birthday, Nicky. Happy Rosh Hashana everybody.
KT (26:22):
Happy New Year.
Suze (26:23):
Right, Happy New Year and
Until then, there's only one thing that we want you
to remember, and it is this:
KT (26:30):
People first, then money, then things.
Suze (26:33):
Now you stay safe, healthy, and secure. Bye bye now.
September 25th, 2025.
KT (00:10):
Wait, tell everyone why you're laughing.
Suze (00:13):
Well, why don't you tell everybody why we're laughing?
KT (00:16):
So Suze had a keratin treatment yesterday.
Suze (00:19):
We're in Florida.
KT (00:20):
We're in Florida. She had a keratin
treatment...
Suze (00:22):
and my hair can be a little bit unmanageable.
KT (00:24):
And when I picked her up from the salon, she,
she had a little cap on, a little baseball cap,
and when we got home,
she took it off and I said, Oh my God,
where's your hair? So this treatment makes your hair like
real flat.
Suze (00:38):
Yes.
KT (00:39):
And I, I said, Why'd you let him cut it?
She said, I never cut not one strand. I said,
Oh my God, what did you do, Suze? And I
keep looking at her and she's, her hair's real flat.
We should post a photo.
Suze (00:55):
Maybe, maybe we'll see what happens anyway...
KT (00:58):
Today's a lucky day. Suze has flat hair and it's
our nephew, our great nephew, Nicky's first birthday. So how
does he think it feels, Nicky, to be one?
Suze (01:12):
You know what I think is so funny, everybody. First
of all, welcome to the Women and Money podcast...
KT (01:17):
And everyone's smart enough to listen.
Suze (01:19):
All right, so we've got that down. KT has already
just been going, going, going this morning, um, but what
I think is so funny is that everybody's making all
these presents, remember, in our family we don't really buy things,
so I've watched KT paint a coconut, paint all these
little things, you know, figures on it and everything, and
(01:39):
I'm like,
all these people are going there to be with him
on what's so fascinating. He's not really even gonna know
it's his birthday.
KT (01:47):
Yes, he does.
Suze (01:48):
Yes, he does anyway, KT.
You have questions for me today because ask KT and
Suze anything, but most people tuning in, maybe for the
first time would think, oh, this is the KT show.
KT (02:03):
It should be. I bet the ratings will skyrocket if
there's ratings on a podcast.
Suze (02:09):
There's a number of downloads, right? I think what, what
are we approaching 50 million. So we're approaching a nice
number anyway.
KT (02:16):
All right. Hi, Suze and KT what does fund your
trust mean?
What do I need to do? Is this something I
need to do before getting my must-have documents notarized? Please
advise from Linda.
Suze (02:33):
Here's the thing, Linda, that you need to understand.
A trust is like a suitcase where you have to
pack things in it. You have to put things in
it so it goes from one place to another very easily.
If you have a suitcase and there's nothing in it,
(02:55):
then you get to the place that you're going and
you open it up and there's nothing there.
KT (03:00):
I love
that analogy.
Suze (03:02):
Oh,
KT (03:02):
I'm, no, I love that.
Suze (03:04):
I'm so glad. So when you have a trust, I
want you to think about it as a suitcase that
you have to put things into that suitcase so it
can easily go from you
to your beneficiaries that all kinds of things can happen
to it when it's in the suitcase. So funding your
(03:26):
trust means you have to first do the trust, get
it notarized, get it witnessed. Then what you have to
do is you have to change the name of, let's
say your individual bank account from, let's just say, Suze Orman.
To Suze Orman Trustee for the Suze Orman Trust. You
(03:47):
have to change the assets that you have your bank accounts,
your brokerage firm accounts, your real estate. All of those
things get changed from your individual name,
into the suitcase and the suitcase has the name of
Linda trustee for the Linda revocable trust and whatever date
(04:12):
you did it just that simple. So that's how you
fund a trust.
Now, when you get the must-have docs, and I have a
feeling that you're talking about them and the must-have docs
are a living revocable trust, an advanced directive and durable
power of attorney for health care, a financial power of attorney,
(04:33):
and a will.
And when you get those and you do them all
of them, you will absolutely have instructions when you're doing
the revocable trust of how you fund it. They'll take
you through the entire process and for those of you
who don't know what
the must-have documents are go to musthadocs.com for $99. You
(04:59):
will get $2,500 worth of state of the art documents,
good in all 50 states. All right, KT.
KT (05:08):
All right, Suze, next question. This is from Liza.
Suze (05:13):
Are you sure?
KT (05:14):
Yes.
Suze (05:14):
Do you remember when we saw Liza Minnelli?
KT (05:17):
I loved it. I love Liza Minnelli, everybody.
Suze (05:20):
We got to go backstage.
KT (05:22):
Yeah, we saw her on on Broadway for her show.
Suze (05:25):
It was so good. Was it on Broadway or was it somewhere else?
KT (05:27):
It was on Broadway because we were in New York. We had
to walk all the way down the steps.
To get to her dressing room, the old New Yorker...
Suze (05:35):
Never mind. Next question, KT. We're already done with this podcast.
KT (05:40):
Liza, Liza with a Z. Hi Suze. I'm 30 years
old and I lost my job earlier this year with
the Doge funding cuts. I want to roll my former
employer Roth 401k into my Roth IRA. I have
$34,000 in my Roth 401k. Question is, when I roll
(06:01):
the funds over, do I dollar cost average this money
into my Roth IRA as I normally would do with
my investments? If I dollar cost average, am I missing
out on money that would have been growing before rolling
it over and now sitting in cash?
So Liza, invest in ETFs.
Suze (06:23):
Yeah, so Liza with a Z.
When you transfer that 34,000 into your Roth, if that
money had been fully invested, listen to me closely already,
let's say it was in your Roth 401k in a
Standard and Poor's 500 index fund if it was already
(06:44):
totally invested.
When you actually transfer it, maybe you'll transfer it in cash.
Who knows? I would not dollar cost average. I would
actually just totally invest if the money that you are
transferring was 100% invested at that time. If it wasn't
(07:04):
and it was sitting in cash, then I would dollar
cost average. All right, KT.
KT (07:10):
Hi, Suze and KT, if I am maxing out my 401k...
Suze (07:14):
Who is this from?
KT (07:15):
AC.
Suze (07:15):
AC. Ok AC, Ask KT AC.
KT (07:20):
Should I add additional dollars?
Suze (07:22):
I'm SO.
KT (07:22):
Should I add additional dollars to a traditional rollover IRA
or brokerage account? I have both additional accounts, but I'm
not sure which is a better investment for retirement, which
I would like to do in about 10 years. My
income doesn't allow me to contribute to a Roth IRA
just in case you were wondering.
Suze (07:43):
Yes and I was.
AC because as you were, as KT was reading that
to me, I was going, why doesn't you just do
a backdoor Roth, and you can't do a backdoor Roth,
everybody remember this if you have a traditional IRA, uh,
a SEP plan, a simple plan that is pre-tax, you'll be,
(08:03):
you just don't want to do it if you have one.
Now my answer's gonna probably surprise you, AC.
If you are asking me which is better, a traditional
IRA or a brokerage account, I would tell you I
would do a brokerage account. And the reason that I
(08:24):
would do a brokerage account is because once you make
an investment normally, you may keep it for 10 years
or longer, and while it's in there, you don't pay
taxes on it anyway, but when you do go to
take it out,
what can happen then you will only pay capital gains
tax if you have a gain. What happens if you
(08:47):
have a loss? Then you can take the loss off
your taxes. You also may have some things in there
that have a gain. Some have a loss, so you
can offset them all so you don't pay any taxes. Oh,
you die. And now the money goes down to your beneficiaries.
They get a step up in basis. So let's just
(09:08):
say you took that money and you turned $50,000 into $300,000.
You die, guess what? Your beneficiaries get a step up
in basis. They get all of that for $300,000.
They could sell it all, no taxes. You put it
in a traditional IRA and it grows and it grows
(09:29):
and it grows. Oh great. Now you go to take
it out - ordinary income. Oh, you've lost money on it,
can't take it off your taxes. You die and it
goes to your beneficiaries. Totally taxable.
An investment account over an IRA any day if you
ask me when it's pre-tax. All right.
KT (09:51):
OK, next question from Karen.
Hi Suze and KT, I'm reading your retirement book and loving it.
Suze (09:58):
The Ultimate Retirement Guide.
KT (10:00):
For 50+. I remember you've mentioned on your podcast, and
I just read it in your book as well, that
a Roth SEP IRA is now allowed.
Suze (10:12):
Yea, if you can find one.
KT (10:12):
Do you know...
There you go. The question is, do you know of
any institutions currently offering one? Do you?
Suze (10:21):
No.
KT (10:22):
All right, well.
Suze (10:23):
Listen, everybody, I don't understand, now that the laws have
changed and you can have a SEP IRA as a Roth,
no financial institution really is offering it. Maybe I found one,
but I wouldn't put my money there.
But so here's what I would do if I were you.
It's just such a shame. Fund your SEP IRA and
(10:46):
convert it just that simple and pay taxes on it
when you convert it. It's the same as if you
put money into a Roth SEP IRA with after tax money.
It would come out the same. All right, go on.
KT (11:01):
All right. Next question is from Miguel. Hi, Suze. I
recently switched jobs and I had a 401k with my
previous employer.
It is a traditional 401k and I was thinking of
rolling it over to my personal Roth IRA or should
I open a traditional IRA?
(11:22):
And then Miguel goes on to say, it's about $650
not much. Hey, every dollar counts, Miguel, but I'd love
to move it in the best way possible, avoiding a
tax hit. Where should I move this money? Thank you.
Suze (11:38):
You know, KT, this is such a sweet question and
one that is...
KT (11:45):
They're all sweet.
Yes, this one is very...
Suze (11:47):
Very sweet because people would go, really, $650?
So, and what you said is every penny counts. Miguel,
listen to me.
You are to convert it to a Roth IRA absolutely.
Because now what will happen is as you invested and
(12:08):
if I were you I would put all $650 into
an ETF by the symbol VOO,
and let it grow because now the money will grow
tax free. So take your tax hit now, put it
into a Roth IRA and see what happens. It's not
(12:29):
going to be that big of a tax hit, but
I'd rather you take a tax hit on $650 than
years and years and years from now, maybe taking a tax
hit on 5000, 10,000, 15,000 or more when you go
to take it out. All right, KT.
KT (12:47):
Suze, the next question is from Jenny. My husband and
I have a business, so we have the SEP IRA accounts.
We maximize the amount every year. My question is, we
currently have it with Merrill Lynch. My hubby's 61, I
am
56 they charge us 1% on what we have in
the account. Should I move it to a no brokerage
(13:09):
firm like Fidelity so we stop paying the 1% when
we stop contributing? It adds up every month.
Suze (13:18):
So first of all, my dear Jenny, here's how I
would look at this if I were you and everybody
else wondering this question.
Because as I peruse the emails that you send in
to ask Suze - Suze- podcast at gmail.com, all of
you seem to be asking this question lately. If you
(13:39):
have money with a financial advisor and let's say 100%
of it is invested for growth.
Is it worth it for you to pay 1% or
more in fees because that will mount up, to this
financial adviser. Here's how I would make the decision if
I were you. A financial adviser should at least in
(14:01):
my opinion, beat the Standard and and Poor's 500 index.
Now you all know that I really like the exchange
traded fund by the symbol VOO. Take a look
at the return for VOO.
And if your adviser has beat that, all right, stay
(14:21):
with the adviser. If the adviser has not beat it,
then what are you paying for?
Just that simple. All right, KT, next.
KT (14:32):
This is from Steph Suze, and the reason I love this,
it says pick me KT. It's a quick and Rothy.
Suze (14:40):
Oh, you know, we should create a...
KT (14:42):
A drink. Let's make a, let's make a smoothie called,
A Frothy Rothy. I'll put it on the, I'll put
it on the wall, everybody.
Suze (14:52):
And what would be in it?
KT (14:53):
I'm not gonna tell you now they have to go
to the wall to get the recipe.
Suze (14:57):
Guess what I would have in it?
KT (14:58):
Banana.
Suze (15:00):
No, I would have root beer and vanilla ice cream.
KT (15:06):
And a banana maybe? OK that's called a root beer float.
I need one that's called a Frothy Rothy Root Beer maybe.
I keep... (laughing)
Hi KT and Suze. I can't begin to thank you
(15:26):
for all the Roth knowledge you passed, passed on to me.
I currently (laughing)
I just drank a frothy.
I just drank my Frothy Rothy this morning and currently
have a standard investment account and a Roth IRA. They
are both all invested in great companies you've suggested, Suze, yippee.
(15:51):
That yippee is for real, by the way.
My question is this now that I know so much
about Roth IRA accounts and how to invest well within them,
is it possible to transfer shares of these fabulous stocks
from my standard investment account into my Roth IRA,
As my annual $8,000 contribution next year? So Suze, Steph
(16:16):
is over $50. I really don't want to sell those
that I have in the standard, and I sure wish
they were in my Roth.
Suze (16:24):
So when she says standard, she means in her regular
investment account. Should I give you that as a pop quizzy?
KT (16:31):
Oh, no.
Suze (16:33):
Why?
KT (16:36):
No, no, don't, because I'm on a roll here.
Suze (16:40):
Oh really? Do all of us think she's on a
roll here?
KT (16:44):
I am.
Suze (16:45):
Trust me...
KT (16:46):
Come on, answer the question before everyone forgets the question.
Suze (16:49):
All right.
So, Steph, the easy answer to that is no, you cannot, right?
You cannot transfer stocks that are in an investment account
into a Roth IRA and have that be considered your.
Contribution only cash can be considered a contribution when investing
(17:11):
in a contributory Roth. Could you sell those stocks, pay
taxes on them now, and then take that money and
put it in as a contribution? Yes, but I'm not
sure cause I have a feeling you probably have some
serious gains in those stocks.
Especially if they are... anyway, go on, go on,
KT (17:34):
Just enjoy another Frothy Rothy. All right.
This is from Cindy.
Suze (17:41):
Oh wait, let me put my flat. Let me fluff...
KT (17:43):
Cindy said, Suze, I got the must-have documents. I live
in Texas. When I... listen to this question, everybody, whoa,
make this one my pop quizzy. When I met with
an attorney to change the name of my home deed
to the trust name, they
said my trust document was not valid since it was
(18:05):
from California.
Suze (18:06):
Let me finish this question, and they wanted to do
a new trust for them. Go on,
KT (18:10):
It says of course they offered to create a new
will and trust. Is this so? Cindy, you absolutely need
to listen to Suze and everyone out there smart enough.
Suze (18:24):
In the same way that you have the ability, Cindy,
when you're like creating a corporation for a company.
You can create and incorporate in really any place you
want in Delaware or anywhere. The same is true with
a living trust. If you create a living trust governed
(18:45):
by the laws of California, it's good anywhere that you
happen to be.
And the reason that the must-have documents chose the state
of California is that they have the most liberal trust
laws anywhere, so your lawyer is 100% wrong. I just
want to make this statement, everybody.
Over the years, millions and millions and millions and millions
(19:10):
of people have purchased the must-have docs from all over
the United States. Don't you think by this point in time,
that would have been noticed if it wasn't possible. Many
of those people are no longer alive. They passed everything
down to their beneficiaries absolutely with ease. There's never been
(19:33):
a lawsuit or anything like that against them, so I
doubt highly,
that the manufactures of the must-have documents would have allowed
that if it wasn't legal. So therefore they are wrong,
and by the way, I just have to say.
We had the must-have documents, and we live in Florida.
(19:55):
Just saying, go on, KT.
KT (19:57):
All right, next question is from Carlene. I turned 60
in January 2025. Do I qualify for the additional catchup
amount of $11,250 on my 401k for the 2025 tax year?
Suze (20:17):
Pop quizzy.
KT (20:17):
Yes.
Suze (20:18):
What if she had turned 64?
Would she have qualified?
KT (20:22):
I think yes.
Suze (20:24):
No, it's only between the ages of 60 and 63.
Don't ask me...
KT (20:28):
I didn't know that.
Suze (20:29):
Of course you didn't.
KT (20:30):
Why?
Suze (20:31):
Don't ask me why.
KT (20:31):
ask,
Suze (20:32):
Don't ask me why. That's the law. I don't know
why they did that, but yes, you absolutely
qualify for that catch up contribution. With that, let's say
you were 59 let's say you were 64, it's only
like $7,500. All right, go on, KT.
KT (20:50):
OK, my final question is from Kara, and I, I
picked this one because it said in the subject, is
now a good time to refinance my mortgage?
Hi, Suze and KT. I bought a house two years ago.
I have a 30-year mortgage with an interest rate of 6.125%.
(21:10):
I've been watching mortgage interest rates waiting for them to
go down so I can refinance to a lower rate.
Two local credit unions have 20 year mortgage refinance rates
of 5.5 and 5.375. Should I lock in one of
these lower rates now or wait to see if the
(21:32):
interest rates go down further?
Suze (21:34):
Interest rates probably will go down further, but again, then
you never know.
KT (21:38):
You never know how, when, right?
Suze (21:40):
You never know. They should go down sooner than later.
We'll see, but truthfully, the current rate on a 20
year mortgage,
if you were to get it it's still at about 6.10%,
so those are really great rates. So I don't know.
I think if you did it would probably be OK,
but you might just want to wait a little. Is
(22:02):
it a special offer that these credit unions are offering
right now?
Or is it gonna go away? So can you just
ask your credit unions, is this a special or what
do they think? Because it might be a special to
get you to do it now and it's gonna stay
that way even if they lower rates. So there you go.
KT (22:24):
OK, Suze, that's a wrap.
Suze (22:25):
I don't think so.
KT (22:26):
Oh no.
Suze (22:28):
Yeah, you're right.
KT (22:28):
Oh no, she's doing it. She's bringing back the quizzes.
Suze (22:33):
So this is where I asked KT a question.
And all of you are being asked the same question,
and I want you to be able to answer this question.
This is from Doctor SD. All right. Hi ladies, I
love listening to the way the two of you interact.
(22:55):
Oh yeah, like today? Anyway, it is so much fun
in addition to being a learning experience. I just listened
to both Roth podcasts together. Did I do this right?
I am over 65. OK, I opened a Roth in 1994.
It had about $60,000 in it.
(23:17):
So I opened a Roth on January 10, 2025 and
transferred everything from my Schwab account that I had opened
in 1994 to a new account at Fidelity feeling it
was time to consolidate. So KT, just to be clear,
(23:38):
this person is 65. They opened a Roth in 1994
at Schwab. The beginning of this year, they opened up
another Roth at Fidelity, and now they want to transfer
the money from the Schwab account to the Roth account
at Fidelity. Here's the question:
(24:01):
Right after that, I converted my traditional IRA about $30,000
into the Roth, and I know I will owe taxes.
The conversion has its own 5 year clock which I
read starting January 1st of the year I did the conversion.
So in my case, can I withdraw the money I converted.
(24:25):
But I have to wait 5 years to withdraw any
earnings on the converted amount. Is that right?
KT (24:33):
I believe, yes.
Suze (24:35):
You're thinking about this?
KT (24:36):
Yeah, I think.
Suze (24:38):
Again, she's...
KT (24:38):
Wait, wait, wait, wait, hold on, 65.
Hm.
Suze (24:45):
And she had a Roth all the way back to 1994.
KT (24:51):
I think that um, I think the doctor's exempt
from having to owe anything at this point.
Suze (25:00):
Ding ding ding ding. Because when you converted, Doc,
into a Roth IRA that had already met the 5
year time clock and you are over 59 and a half,
you can take anything you want out without taxes or
penalties whatsoever.
KT (25:21):
I learned um from all of Suzy's Roth lessons that
59.5 is a really magic number everyone just needs to remember.
Suze (25:31):
And...
a Roth that has been open for at least 5 years.
All right, KT, now that's a... that's a Rothy, Frothy wrap.
All right, everybody, so until Sunday.
Though it looks like we have a hurricane possibly coming
our
way.
KT (25:50):
Yeah, we're in the season, Suze.
Suze (25:52):
So there's one this Invest 94, I think it is.
Isn't looking so good for us. So hopefully if everything
goes the way it should because we're on our way
back now to the island now that I have flat hair.
So anyway, and so we'll see what happens, but hopefully
(26:12):
Sunday we'll be here with a Suze School. I'll be here.
KT (26:16):
And happy birthday, Nicky.
Suze (26:19):
Happy birthday, Nicky. Happy Rosh Hashana everybody.
KT (26:22):
Happy New Year.
Suze (26:23):
Right, Happy New Year and
Until then, there's only one thing that we want you
to remember, and it is this:
KT (26:30):
People first, then money, then things.
Suze (26:33):
Now you stay safe, healthy, and secure. Bye bye now.
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