September 11, 2025 • 27 mins
On this Ask Suze & KT Anything episode, KT asks Suze your questions about avoiding the stress of downsizing, is it too late to invest in the stock market, when to stop contributing to an HSA and so much more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:08):
September 11, 2025. Welcome everybody to the Women and Money podcast,
KT (00:13):
and Everyone Smart Enough to Listen.
Suze (00:14):
Today is KT and Ask Suzie anything. And so for
those of you who want to write in and ask
a question, and if KT chooses it, it will be
on the podcast, please send those questions to ask Suze
SUZE podcast at gmail.com.
(00:35):
September 11th, 24 years ago today, KT,
KT (00:39):
we never, ever, ever will forget,
Suze (00:41):
nor will anybody else ever forget. So to all of
us who will never forget, we always send blessings, prayers,
and hope for all. All right. Any anything else you
want to say there?
KT (00:57):
No, I think that's good, Suze.
Suze (00:59):
That's
good. All right, sweetheart, so.
What do you got?
KT (01:04):
OK...
Suze (01:04):
Did you have a good anniversary with me.
KT (01:08):
Yeah, we had, um, we had our wedding anniversary, not
our meeting anniversary.
Suze (01:15):
I actually like celebrating KT,
KT (01:17):
The meeting anniversary
Suze (01:18):
25 years ago because 15 just doesn't sound like long enough.
And I remember, I just want to tell you this.
I remember when I first met you, I always thought,
please let me get to double digits.
KT (01:30):
You did?
Suze (01:31):
I did. Let me get to double digits. Then we
got to 10 years and I was like, yeah. Then
at 15 years we got married. Then here we are
about 25 years from when we were...
KT (01:42):
What are we going to do to celebrate that?
Suze (01:45):
Our 25th, yeah, yeah, probably nothing. All right, go on.
KT (01:50):
OK, here's my first question, Suze.
I love listening to your show in part because even
when I think the topic doesn't apply to me, I
find that I gained so much from it anyway. I've
got a question about a problem that's a good problem,
but it's causing great anxiety and indecision. OK, remember those
(02:12):
two words, everybody, anxiety, indecision.
Now here's the question. My father recently died and left
me with $1.2 million
Suze (02:22):
That can cause anxiety, believe it or
not.
KT (02:25):
In mostly non-taxable funds. This was never and not expected.
My wife and I are 76 and 67 respectively, with
two adult children adopted who each have disabilities.
Before this inheritance, we planned to downsize and sell the
house and move into a condo that would cost no
(02:46):
more than about half a million dollars. This price range
in Minneapolis area would limit us slightly. There are some
amazing options in the $700,000 to $850,000 range that we
did not consider.
I'm wondering if at this point we can afford the
more expensive condo options. The HOA fees are similar to
(03:07):
the less expensive option.
But I'm extremely anxious about somehow losing what seems like
a huge amount of money that was just plopped in
our laps. We have no debt, but I worry that
now I suddenly have this unexpected inheritance. I'm feeling like
I don't want to spend any of it, and it
(03:28):
scares me to consider a more expensive downsized condo...
Suze (03:33):
What was the word?
KT (03:34):
It scares me. Which would not really be downsizing at
all because it might cost close to what we would
sell our house for. On the one hand, I think
we should go ahead and buy the nicer condo and
we would still be no worse off than we were
before this sudden influx of money.
Suze (03:54):
But the question is, on the other hand...
Right. Should she keep, what should she do? Essentially, that's
what she wants to.
KT (04:02):
What should she do Suze?
Suze (04:02):
What hand should she look at? Here's the answer to
this dilemma.
I've always told all of you the following.
When do you buy what you need versus what you
can afford?
When you can afford more than what you need.
(04:23):
Cause the key to creating more and more wealth, to
making more money out of your money is not to
buy what you can afford, but to buy what you need.
And in this case, what's sad about this is that
with Sharon what's happening here is they were fine. They
(04:44):
were going to downsize. Everything was perfect.
Until they got this $1.2 million unexpectedly, and now she's
full of anxiety.
KT (04:55):
She's scared.
Suze (04:56):
She's scared. She doesn't know what to do. Well, I'll
tell you what to do. It's not, oh, now you
have this extra money so you can buy something more. No,
you're going to continue according to plan. You're going to
continue to buy the one in the $500,000 arena. That's
what you wanted.
(05:17):
And you're just going to either save this money, invest
this money, give some away to charity. I don't know
what you're going to do with it, but you're not
going to spend a gift and have it create an
intense situation for you where you have anxiety and you
are scared.
Remember what is the goal of money? It is for
you to be secure. You were secure before you got
(05:40):
this money. Now you don't know what to do. Well,
I'll tell you what not to do. Don't buy more
just because you can afford it. Buy what you need
versus what you can afford, no matter how wealthy you get.
And believe it or not, everybody, that is still to
this day exactly
(06:01):
how KT and I live our lives. All right, KT, next.
KT (06:06):
That's for sure.
Sometimes I say to Suze, let's spend a little money.
She said, Why? And I can never answer. All right,
so next is from Linda. She said, Hi, Suze and KT.
I'm 74 years old and have been listening to your
podcast for almost two years now. I'm a retired teacher
(06:28):
and my net income is about $4,500 a month through
my pension program and a little bit of Social Security.
We love teachers, don't we have. My question is, should
I try investing in the stock market? My goal is
(06:48):
to save enough money in case I need more money
for long-term care in another 10 years or so.
At my age, long term care insurance is too expensive,
so I think I'd be better off saving...
Suze (07:01):
How old is she?
KT (07:02):
74.
Suze (07:02):
Right, so she's talking about 84 now go on.
KT (07:05):
She said at my age long term care insurance is
too expensive, so I think I'd be better off saving
than pouring that money into an insurance
policy. I own my home. It may not be paid
off in my lifetime. I do have approximately $175,000 equity
in my home, and I owe about $150,000 more. Also,
(07:30):
my interest rate is only 2.75%. Should I try putting
$1,000 in the Vanguard VOO,
now just to get familiar with it or just stay
with CDs?
Suze (07:44):
Let
me see that.
KT (07:45):
Go with the Voo.
Suze (07:46):
Go with
KT (07:47):
the with the voo. Let her try it.
Suze (07:50):
Is that what you would tell her? Yeah, so this
is your quizzy. You would say, cause she's fine, she
has good income and all. She has about 48... I'm
reading this now, she has about 48,000 CDs and checking.
All right. She is 74.
And you would say, take that $1,000 extra dollars and
(08:10):
see what you can do with it..
KT (08:11):
With the VOO...
Suze (08:11):
You would, would you, why not? Because I'm going to
show you how a great financial advisor, I'm very serious,
which I am, would look at this problem here.
And tell her how to solve it. You know, it's funny, everybody,
I look at all of your money like it's a
(08:33):
chess game. If I make one move, how does that
affect everything else? And what is the smartest move that
I can make?
So that you can have checkmate. You can always win
no matter what. So here, my dear Linda, is what
I want you to think about. You say...
KT (08:53):
Wait, you'd have to just, I just want to say something.
So there's nothing wrong with VOO. It's just not right
for Linda at this time.
Suze (09:02):
Well, it
wouldn't be necessarily wrong for Linda, but there's a better way.
KT (09:06):
OK, OK.
Suze (09:07):
There's an absolutely better.
KT (09:09):
Let's hear it.
Suze (09:10):
First of all, she says she has $175,000 of equity
in her home, and she owes still about $150,000 and
she has a 2.75% interest rate. That means she bought
it a few years ago.
And she's still her her mortgage payments with that KT
(09:31):
are probably about $612 right around there, a month. OK, great.
What if, because obviously she has a 30 year mortgage, right?
It's obvious that that's what she has. All right, so
listen to me closely, Linda. You have a $612 a
(09:52):
month mortgage.
But you still probably owe about 27 years on this
mortgage and you're already 74 years of age, so you're
probably never going to have it paid off in your lifetime.
All right, however, what if you were to take that $1,000?
(10:13):
And put it towards your mortgage so that rather than
$612 a month, you're now paying $1,612 a month towards
this mortgage. Do you know if you did that, you
would own this house outright in seven years and about
(10:33):
four months.
Do you like that, KT?
KT (10:36):
I love that.
Suze (10:37):
All right, so now you have a home that's worth
$325,000 maybe $350,000 at that time or more that you
could either sell, do a reverse mortgage on, but you
now have also lowered your expenses by $1,600 a month
because you were able to pay it for a mortgage.
(10:59):
Now you don't have that anymore.
Now what would happen if you took that $1,000 and
you invested it, let's say in V oo. Now, even
though I know VOO has averaged about 15% over the
past five years or so, let's just be conservative where
(11:19):
it averages about 10% because that's on average what it
should make. So what that would mean is that in
7.4 years.
At about a 10% average annual rate of return, you
would have $124,000.
But you would still owe $118,000 on your mortgage. Now
(11:46):
I have a lot of money invest in the known
versus the unknown.
If you put $1,000 a month into the house, we
know in 7.4 years you're going to get rid of
$150,000 and own your home outright. We actually don't know
(12:07):
what's going to happen in the stock market. We don't
know that we could say that $1,000 over the next
7.4 years is going to make 10%. It could lose 10%.
We have no idea. Therefore, what you are going to
do is you're going to invest in yourself, in your security,
(12:28):
and the known versus the unknown, and you are going
to put that extra $1,000 towards the principal payment of
your mortgage, and that's exactly what you are going to
do with it. You are not going to invest it.
There you go, KT.
How was that?
KT (12:46):
That's why you're Suze Orman. I'm not.
Suze (12:49):
Pretty good. I can pull numbers like that..
KT (12:51):
You always could. OK, my next question is from a man.
I love these from Randy. He said, Hi, Suze and KT,
thanks for taking my question. I'm one of the guys
from Ohio that is smart enough to listen.
Suze (13:06):
There's a clue for all of you men out there.
That's all you have to say.
I'm one of the men smart enough to listen, and
I have a feeling, Ms. Travis will pick it.
KT (13:15):
I will always pick it, always put you on top
of the list. My question concerns maximizing my HSA contribution
as I approach age 70. I'm a June baby. He's
like you, Suze. Yeah, little Gemini baby.
I'm a June baby. I'm a June baby and trying
to maximize my annual contribution in my 70th year before
(13:39):
I draw SSA checks and still avoid a federal six
month look back penalty. Does it make any sense for
me in my 70th year to make a January HSA
contribution and then delay SSA checks by a month? I
appreciate your feedback.
(14:00):
This is way out of my league.
Suze (14:02):
Do you even know what we're talking about?
KT (14:03):
No, I do not, way out of my league, Randy.
Suze (14:06):
Randy has a health savings account which is attached to
a high deductible health insurance plan, and he's allowed to
put money in every single year up to a max,
and he can take that money and invest it in
the HSA mutual fund that they offer.
(14:28):
And once he turns 65 or older, he can use
that money for any qualified medical expense that he may have,
and he doesn't pay taxes on it when he takes
it out and it was a tax deduction when he
put it in. So big deal if you ask me.
(14:50):
When you file for Social Security,
you're automatically once you're 65 or older, you're automatically enrolled
in Medicare Part A, but it's retroactive for up to
six months, so that retroactive Medicare coverage makes HSA contributions
(15:14):
for those months ineligible, and if they're ineligible and Randy
works to put money in during that period,
he could face tax penalties if he contributed during that period.
So I know this sounds complicated, but in essence he's saying,
can he postpone it for a month because if Randy's birthday,
(15:37):
his 70th birthday is in June. Social Security. Now listen
to this, everybody. Social Security is going to consider him
to have reached age 70 in May.
They use the month before your birth month, Randy.
So if you file to start benefits in May, Medicare
(15:59):
Part A would be retroactive back to November of the
prior year, which wipes out HSA eligibility for contributions to
that point. Here's the bottom line, sweetheart. Is it worth it?
I just don't think it is worth for you to
contribute one month extra of an HSA contribution,
(16:24):
and give up one month of Social Security income.
I just can't see it making sense. So therefore, don't
do it, don't do it, don't do it.
KT (16:38):
So this is my next question, Suze. I have a
Roth quizzy. This is from Liz. Liz is 58 years old.
She has a $90,000 IRA
from previous employment she would like to gradually convert that
to a Roth. I understand the five year timeline, so
(16:58):
she's asking if she starts to convert with a small
amount when she converts more money, does the five year
rule kick in for each conversion? Does it start a
new timeline for every conversion?
She has conflicting information.
Suze (17:18):
You should see KT's face.
KT (17:21):
I think, I think that the five year rule, the
number is 59 and a half, and that's when the
penalty goes away. I'm, no, I, I know my stuff.
So I think that's all you need to worry about.
Suze (17:34):
That's
not all you need to worry about.
KT (17:36):
OK, ok.
Suze (17:36):
Liz, there is a lot of conflicting information out there.
And the answer has a lot to do with, do
you already have a Roth that met the five year rule,
or do you not? The age, all kinds of things.
So therefore this Sunday in honor of you, Ms. Travis,
(17:58):
I'm going to give a Suze school once again on
this particular topic.
KT (18:04):
And I'm joining her. I'm going to join you. I'm
going to help everybody.
Because I... wait till they hear how much I learned
about Roth.
Suze (18:12):
KT, they don't care what you've learned about Roth. They
care about what they need to learn about a Roth.
KT (18:17):
I'll be there, everybody. I'll be there Sunday.
Suze (18:20):
You are not going to be at my Suze School
with me.
KT (18:22):
I'm gonna be there.
Suze (18:24):
All right, anyway, so that's what we're gonna do. So Liz,
make sure you tune in because I think my answer's
going to surprise a lot of you because you're really
getting it wrong. All right, go on, OK.
KT (18:37):
OK, next
question is from Judy.
Judy said, I'm 64-year-old single woman who has been retired
three years thanks partly to your advice. Thank you, Susie,
she said. I have a quick question about AI. I
want to dabble with some of the money I can risk,
(18:57):
and I wanted to know what ETFs and or stocks
you suggest that I can start with for my AI investment.
Thanks for everything, and she said hello to KT. So Judy,
this is the first time I read this where people
have money to risk that doesn't sit well with Suze.
Suze (19:17):
KT, what did you hear me do the other day
on the phone? I said, this is risk money, buy this.
You absolutely...
KT (19:25):
Not with my money.
Suze (19:26):
No, you don't like risk.
KT (19:28):
I never...
Suze (19:29):
I don't care if you have money to risk. I
want you to have money to risk. Why would I
want
that>
KT (19:33):
So answer her question. What does she do? What does
she invest in with AI?
Suze (19:38):
What you didn't tell me is how much money
you have to risk. Therefore, the number one ETF that
I would be telling you to buy if you're really
interested in artificial intelligence is the ETF with the letters SMH.
(19:58):
So that's what I would tell you to buy. That's
what I've been telling everybody to buy for a long
time right now because it actually has all of the
AI stocks and the stocks in that category. Obviously my
favorite AI stocks are Microsoft,
Nvidia, AMD, and I can go on and on like that. However,
(20:24):
I think the best way to start to dabble would
be with SMH. And by the way, Apple, you've got
to be invested in Apple. All right, KT, next question.
KT (20:35):
I'm invested in Apple, everybody.
Suze (20:38):
You've been invested in Apple a long, long since I've
known you.
KT (20:44):
I got lots of apples. OK, ready. Next question is
from Betty. Hi, Suze and KT. My brother-in-law recently passed
and left my sister-in-law a million dollars life insurance benefit.
Suze (20:58):
Love that.
KT (20:59):
After making a budget, she'll be short $3,300 a month.
Her CPA and financial advisor recommend she takes out a
$518,000 lump sum
immediate annuity that will provide the income for life if,
and if she dies, ready for this, it'll pay her
(21:21):
beneficiaries for up to 10 years from starting the annuity.
She's 73 years old, in good health does not own
a home. The million dollars is all she has. The
advisor said
there's no fees, surrender charges, and everything is built in.
(21:41):
Whatever that means. She also wants to take out a
life insurance policy with a long-term care benefit for $150,000
that would provide $370,000 in long-term care for up to
four years. The commission on investments is about 1.05%, which
(22:02):
sounds reasonable to me.
I'm nervous for her to spend half of what she
has in a lump sum to provide only $3,300 in income,
but I know my sister-in-law would also feel secured with
guaranteed income. Betty wants to know, Suze, what do you think?
(22:25):
Can I tell everyone what your face looks
like?
Suze (22:27):
Yeah. Like always. I'll tell you what upsets
me.
KT (22:31):
These CPAs and financial advisors.
Suze (22:36):
How old is Betty? How old is...
KT (22:38):
She's in good health. She's um 7,
Suze (22:41):
73,
KT (22:41):
she's in good health. She doesn't own
a
home.
Suze (22:44):
Here's
the scoop, everybody. I think this is horrific advice, horrific advice.
When somebody says there's no fees, there's no commissions, there's
no anything in it.
KT (22:54):
It's built in
Suze (22:55):
And it's built in. Well, why the hell would they
want to do it then?
Who's paying them to do that? They get 1.05% for
other investment advice they're gonna give this person, but they
don't make any money on this. Are you kidding me?
They're probably going to get on an immediate annuity.
Could be anywhere from 25,000 to 30 or 40,000 they're
(23:18):
going to get a lot of money if she does this.
That's number one.
Number two, just let me explain to everybody how this
annuity works. It's what's known as a 10 year certain annuity.
So KT, she's the same age as you. She's 73
and she's in good health, like she's in good health.
So if anything were to happen between the day that
(23:41):
she buys it and 10 years from now, what's left
in that 10 year time period, so if in five
years from now she's killed in a car crash, her
beneficiaries get that $3300 a
month for another five years. Once she lives past 10
years and she dies, her beneficiaries don't get anything. So
(24:05):
the first question has to be, does she have any
beneficiaries that she cares about, because the truth of the
matter is she could get the exact same income right now,
not touch her principal. She could actually get more income
and still have $518,000 to leave to her loved ones.
(24:27):
I mean, I want you all to think about this,
so it's just not something that she should be doing
at this period in time in terms of the long
term care, all right, but if I were all of
you and I want you to listen to me closely,
I do not get a penny for saying this, never
(24:48):
have and never will.
If you are interested in buying a long term care
insurance policy of any kind, that's fine, but I would
not buy it before I consulted with Phyllis Shelton, who,
in my opinion, is one of the experts in long-term
care in the entire United States. She has a whole
(25:12):
staff that is so knowledgeable I cannot tell you if
you went to the Women and Money community app.
And you look where all those little boxes are when
you first sign on, you will see long term care insurance,
click there and it will tell you how you contact her.
(25:32):
Right, I would do that, Betty. I would have your
sister-in-law do this before she purchases anything from these people.
The other thing here that I don't like is that
you have both a financial adviser and an accountant, a CPA,
both saying to do this. Now I'd like to know,
(25:57):
does that CPA get a referral fee
for referring it to a financial adviser and therefore they
both are going to benefit. I would never ever ever
do business
with somebody who gets a referral fee when I used,
like I just said right now with Phyllis Shelton, I
don't get a referral fee. There is no way she
(26:19):
can benefit me in any possible way. The only thing
she can do is help you when you need help
in picking out the right solution for you. You don't
have to go with her if you don't want, but
there's no fees to do so.
So there you go, that's my answer, but Betty, I
won't touch this annuity with a 10 ft pole.
(26:45):
What I would touch, however, with a 10 ft pole.
Is the podcast on Sunday where all of you are
going to learn something you all need to know? I'll
be there. Don't you hate that saying be there, be square. Anyway,
that's besides the point. There's only one thing we want
you all to remember when it comes to your money.
(27:06):
And what is that, Ms. Travis?
KT (27:07):
It is people first, then money, then things, and you stay safe,
and I'll see you Sunday.
Suze (27:13):
There we go. Bye bye, everybody.
September 11, 2025. Welcome everybody to the Women and Money podcast,
KT (00:13):
and Everyone Smart Enough to Listen.
Suze (00:14):
Today is KT and Ask Suzie anything. And so for
those of you who want to write in and ask
a question, and if KT chooses it, it will be
on the podcast, please send those questions to ask Suze
SUZE podcast at gmail.com.
(00:35):
September 11th, 24 years ago today, KT,
KT (00:39):
we never, ever, ever will forget,
Suze (00:41):
nor will anybody else ever forget. So to all of
us who will never forget, we always send blessings, prayers,
and hope for all. All right. Any anything else you
want to say there?
KT (00:57):
No, I think that's good, Suze.
Suze (00:59):
That's
good. All right, sweetheart, so.
What do you got?
KT (01:04):
OK...
Suze (01:04):
Did you have a good anniversary with me.
KT (01:08):
Yeah, we had, um, we had our wedding anniversary, not
our meeting anniversary.
Suze (01:15):
I actually like celebrating KT,
KT (01:17):
The meeting anniversary
Suze (01:18):
25 years ago because 15 just doesn't sound like long enough.
And I remember, I just want to tell you this.
I remember when I first met you, I always thought,
please let me get to double digits.
KT (01:30):
You did?
Suze (01:31):
I did. Let me get to double digits. Then we
got to 10 years and I was like, yeah. Then
at 15 years we got married. Then here we are
about 25 years from when we were...
KT (01:42):
What are we going to do to celebrate that?
Suze (01:45):
Our 25th, yeah, yeah, probably nothing. All right, go on.
KT (01:50):
OK, here's my first question, Suze.
I love listening to your show in part because even
when I think the topic doesn't apply to me, I
find that I gained so much from it anyway. I've
got a question about a problem that's a good problem,
but it's causing great anxiety and indecision. OK, remember those
(02:12):
two words, everybody, anxiety, indecision.
Now here's the question. My father recently died and left
me with $1.2 million
Suze (02:22):
That can cause anxiety, believe it or
not.
KT (02:25):
In mostly non-taxable funds. This was never and not expected.
My wife and I are 76 and 67 respectively, with
two adult children adopted who each have disabilities.
Before this inheritance, we planned to downsize and sell the
house and move into a condo that would cost no
(02:46):
more than about half a million dollars. This price range
in Minneapolis area would limit us slightly. There are some
amazing options in the $700,000 to $850,000 range that we
did not consider.
I'm wondering if at this point we can afford the
more expensive condo options. The HOA fees are similar to
(03:07):
the less expensive option.
But I'm extremely anxious about somehow losing what seems like
a huge amount of money that was just plopped in
our laps. We have no debt, but I worry that
now I suddenly have this unexpected inheritance. I'm feeling like
I don't want to spend any of it, and it
(03:28):
scares me to consider a more expensive downsized condo...
Suze (03:33):
What was the word?
KT (03:34):
It scares me. Which would not really be downsizing at
all because it might cost close to what we would
sell our house for. On the one hand, I think
we should go ahead and buy the nicer condo and
we would still be no worse off than we were
before this sudden influx of money.
Suze (03:54):
But the question is, on the other hand...
Right. Should she keep, what should she do? Essentially, that's
what she wants to.
KT (04:02):
What should she do Suze?
Suze (04:02):
What hand should she look at? Here's the answer to
this dilemma.
I've always told all of you the following.
When do you buy what you need versus what you
can afford?
When you can afford more than what you need.
(04:23):
Cause the key to creating more and more wealth, to
making more money out of your money is not to
buy what you can afford, but to buy what you need.
And in this case, what's sad about this is that
with Sharon what's happening here is they were fine. They
(04:44):
were going to downsize. Everything was perfect.
Until they got this $1.2 million unexpectedly, and now she's
full of anxiety.
KT (04:55):
She's scared.
Suze (04:56):
She's scared. She doesn't know what to do. Well, I'll
tell you what to do. It's not, oh, now you
have this extra money so you can buy something more. No,
you're going to continue according to plan. You're going to
continue to buy the one in the $500,000 arena. That's
what you wanted.
(05:17):
And you're just going to either save this money, invest
this money, give some away to charity. I don't know
what you're going to do with it, but you're not
going to spend a gift and have it create an
intense situation for you where you have anxiety and you
are scared.
Remember what is the goal of money? It is for
you to be secure. You were secure before you got
(05:40):
this money. Now you don't know what to do. Well,
I'll tell you what not to do. Don't buy more
just because you can afford it. Buy what you need
versus what you can afford, no matter how wealthy you get.
And believe it or not, everybody, that is still to
this day exactly
(06:01):
how KT and I live our lives. All right, KT, next.
KT (06:06):
That's for sure.
Sometimes I say to Suze, let's spend a little money.
She said, Why? And I can never answer. All right,
so next is from Linda. She said, Hi, Suze and KT.
I'm 74 years old and have been listening to your
podcast for almost two years now. I'm a retired teacher
(06:28):
and my net income is about $4,500 a month through
my pension program and a little bit of Social Security.
We love teachers, don't we have. My question is, should
I try investing in the stock market? My goal is
(06:48):
to save enough money in case I need more money
for long-term care in another 10 years or so.
At my age, long term care insurance is too expensive,
so I think I'd be better off saving...
Suze (07:01):
How old is she?
KT (07:02):
74.
Suze (07:02):
Right, so she's talking about 84 now go on.
KT (07:05):
She said at my age long term care insurance is
too expensive, so I think I'd be better off saving
than pouring that money into an insurance
policy. I own my home. It may not be paid
off in my lifetime. I do have approximately $175,000 equity
in my home, and I owe about $150,000 more. Also,
(07:30):
my interest rate is only 2.75%. Should I try putting
$1,000 in the Vanguard VOO,
now just to get familiar with it or just stay
with CDs?
Suze (07:44):
Let
me see that.
KT (07:45):
Go with the Voo.
Suze (07:46):
Go with
KT (07:47):
the with the voo. Let her try it.
Suze (07:50):
Is that what you would tell her? Yeah, so this
is your quizzy. You would say, cause she's fine, she
has good income and all. She has about 48... I'm
reading this now, she has about 48,000 CDs and checking.
All right. She is 74.
And you would say, take that $1,000 extra dollars and
(08:10):
see what you can do with it..
KT (08:11):
With the VOO...
Suze (08:11):
You would, would you, why not? Because I'm going to
show you how a great financial advisor, I'm very serious,
which I am, would look at this problem here.
And tell her how to solve it. You know, it's funny, everybody,
I look at all of your money like it's a
(08:33):
chess game. If I make one move, how does that
affect everything else? And what is the smartest move that
I can make?
So that you can have checkmate. You can always win
no matter what. So here, my dear Linda, is what
I want you to think about. You say...
KT (08:53):
Wait, you'd have to just, I just want to say something.
So there's nothing wrong with VOO. It's just not right
for Linda at this time.
Suze (09:02):
Well, it
wouldn't be necessarily wrong for Linda, but there's a better way.
KT (09:06):
OK, OK.
Suze (09:07):
There's an absolutely better.
KT (09:09):
Let's hear it.
Suze (09:10):
First of all, she says she has $175,000 of equity
in her home, and she owes still about $150,000 and
she has a 2.75% interest rate. That means she bought
it a few years ago.
And she's still her her mortgage payments with that KT
(09:31):
are probably about $612 right around there, a month. OK, great.
What if, because obviously she has a 30 year mortgage, right?
It's obvious that that's what she has. All right, so
listen to me closely, Linda. You have a $612 a
(09:52):
month mortgage.
But you still probably owe about 27 years on this
mortgage and you're already 74 years of age, so you're
probably never going to have it paid off in your lifetime.
All right, however, what if you were to take that $1,000?
(10:13):
And put it towards your mortgage so that rather than
$612 a month, you're now paying $1,612 a month towards
this mortgage. Do you know if you did that, you
would own this house outright in seven years and about
(10:33):
four months.
Do you like that, KT?
KT (10:36):
I love that.
Suze (10:37):
All right, so now you have a home that's worth
$325,000 maybe $350,000 at that time or more that you
could either sell, do a reverse mortgage on, but you
now have also lowered your expenses by $1,600 a month
because you were able to pay it for a mortgage.
(10:59):
Now you don't have that anymore.
Now what would happen if you took that $1,000 and
you invested it, let's say in V oo. Now, even
though I know VOO has averaged about 15% over the
past five years or so, let's just be conservative where
(11:19):
it averages about 10% because that's on average what it
should make. So what that would mean is that in
7.4 years.
At about a 10% average annual rate of return, you
would have $124,000.
But you would still owe $118,000 on your mortgage. Now
(11:46):
I have a lot of money invest in the known
versus the unknown.
If you put $1,000 a month into the house, we
know in 7.4 years you're going to get rid of
$150,000 and own your home outright. We actually don't know
(12:07):
what's going to happen in the stock market. We don't
know that we could say that $1,000 over the next
7.4 years is going to make 10%. It could lose 10%.
We have no idea. Therefore, what you are going to
do is you're going to invest in yourself, in your security,
(12:28):
and the known versus the unknown, and you are going
to put that extra $1,000 towards the principal payment of
your mortgage, and that's exactly what you are going to
do with it. You are not going to invest it.
There you go, KT.
How was that?
KT (12:46):
That's why you're Suze Orman. I'm not.
Suze (12:49):
Pretty good. I can pull numbers like that..
KT (12:51):
You always could. OK, my next question is from a man.
I love these from Randy. He said, Hi, Suze and KT,
thanks for taking my question. I'm one of the guys
from Ohio that is smart enough to listen.
Suze (13:06):
There's a clue for all of you men out there.
That's all you have to say.
I'm one of the men smart enough to listen, and
I have a feeling, Ms. Travis will pick it.
KT (13:15):
I will always pick it, always put you on top
of the list. My question concerns maximizing my HSA contribution
as I approach age 70. I'm a June baby. He's
like you, Suze. Yeah, little Gemini baby.
I'm a June baby. I'm a June baby and trying
to maximize my annual contribution in my 70th year before
(13:39):
I draw SSA checks and still avoid a federal six
month look back penalty. Does it make any sense for
me in my 70th year to make a January HSA
contribution and then delay SSA checks by a month? I
appreciate your feedback.
(14:00):
This is way out of my league.
Suze (14:02):
Do you even know what we're talking about?
KT (14:03):
No, I do not, way out of my league, Randy.
Suze (14:06):
Randy has a health savings account which is attached to
a high deductible health insurance plan, and he's allowed to
put money in every single year up to a max,
and he can take that money and invest it in
the HSA mutual fund that they offer.
(14:28):
And once he turns 65 or older, he can use
that money for any qualified medical expense that he may have,
and he doesn't pay taxes on it when he takes
it out and it was a tax deduction when he
put it in. So big deal if you ask me.
(14:50):
When you file for Social Security,
you're automatically once you're 65 or older, you're automatically enrolled
in Medicare Part A, but it's retroactive for up to
six months, so that retroactive Medicare coverage makes HSA contributions
(15:14):
for those months ineligible, and if they're ineligible and Randy
works to put money in during that period,
he could face tax penalties if he contributed during that period.
So I know this sounds complicated, but in essence he's saying,
can he postpone it for a month because if Randy's birthday,
(15:37):
his 70th birthday is in June. Social Security. Now listen
to this, everybody. Social Security is going to consider him
to have reached age 70 in May.
They use the month before your birth month, Randy.
So if you file to start benefits in May, Medicare
(15:59):
Part A would be retroactive back to November of the
prior year, which wipes out HSA eligibility for contributions to
that point. Here's the bottom line, sweetheart. Is it worth it?
I just don't think it is worth for you to
contribute one month extra of an HSA contribution,
(16:24):
and give up one month of Social Security income.
I just can't see it making sense. So therefore, don't
do it, don't do it, don't do it.
KT (16:38):
So this is my next question, Suze. I have a
Roth quizzy. This is from Liz. Liz is 58 years old.
She has a $90,000 IRA
from previous employment she would like to gradually convert that
to a Roth. I understand the five year timeline, so
(16:58):
she's asking if she starts to convert with a small
amount when she converts more money, does the five year
rule kick in for each conversion? Does it start a
new timeline for every conversion?
She has conflicting information.
Suze (17:18):
You should see KT's face.
KT (17:21):
I think, I think that the five year rule, the
number is 59 and a half, and that's when the
penalty goes away. I'm, no, I, I know my stuff.
So I think that's all you need to worry about.
Suze (17:34):
That's
not all you need to worry about.
KT (17:36):
OK, ok.
Suze (17:36):
Liz, there is a lot of conflicting information out there.
And the answer has a lot to do with, do
you already have a Roth that met the five year rule,
or do you not? The age, all kinds of things.
So therefore this Sunday in honor of you, Ms. Travis,
(17:58):
I'm going to give a Suze school once again on
this particular topic.
KT (18:04):
And I'm joining her. I'm going to join you. I'm
going to help everybody.
Because I... wait till they hear how much I learned
about Roth.
Suze (18:12):
KT, they don't care what you've learned about Roth. They
care about what they need to learn about a Roth.
KT (18:17):
I'll be there, everybody. I'll be there Sunday.
Suze (18:20):
You are not going to be at my Suze School
with me.
KT (18:22):
I'm gonna be there.
Suze (18:24):
All right, anyway, so that's what we're gonna do. So Liz,
make sure you tune in because I think my answer's
going to surprise a lot of you because you're really
getting it wrong. All right, go on, OK.
KT (18:37):
OK, next
question is from Judy.
Judy said, I'm 64-year-old single woman who has been retired
three years thanks partly to your advice. Thank you, Susie,
she said. I have a quick question about AI. I
want to dabble with some of the money I can risk,
(18:57):
and I wanted to know what ETFs and or stocks
you suggest that I can start with for my AI investment.
Thanks for everything, and she said hello to KT. So Judy,
this is the first time I read this where people
have money to risk that doesn't sit well with Suze.
Suze (19:17):
KT, what did you hear me do the other day
on the phone? I said, this is risk money, buy this.
You absolutely...
KT (19:25):
Not with my money.
Suze (19:26):
No, you don't like risk.
KT (19:28):
I never...
Suze (19:29):
I don't care if you have money to risk. I
want you to have money to risk. Why would I
want
that>
KT (19:33):
So answer her question. What does she do? What does
she invest in with AI?
Suze (19:38):
What you didn't tell me is how much money
you have to risk. Therefore, the number one ETF that
I would be telling you to buy if you're really
interested in artificial intelligence is the ETF with the letters SMH.
(19:58):
So that's what I would tell you to buy. That's
what I've been telling everybody to buy for a long
time right now because it actually has all of the
AI stocks and the stocks in that category. Obviously my
favorite AI stocks are Microsoft,
Nvidia, AMD, and I can go on and on like that. However,
(20:24):
I think the best way to start to dabble would
be with SMH. And by the way, Apple, you've got
to be invested in Apple. All right, KT, next question.
KT (20:35):
I'm invested in Apple, everybody.
Suze (20:38):
You've been invested in Apple a long, long since I've
known you.
KT (20:44):
I got lots of apples. OK, ready. Next question is
from Betty. Hi, Suze and KT. My brother-in-law recently passed
and left my sister-in-law a million dollars life insurance benefit.
Suze (20:58):
Love that.
KT (20:59):
After making a budget, she'll be short $3,300 a month.
Her CPA and financial advisor recommend she takes out a
$518,000 lump sum
immediate annuity that will provide the income for life if,
and if she dies, ready for this, it'll pay her
(21:21):
beneficiaries for up to 10 years from starting the annuity.
She's 73 years old, in good health does not own
a home. The million dollars is all she has. The
advisor said
there's no fees, surrender charges, and everything is built in.
(21:41):
Whatever that means. She also wants to take out a
life insurance policy with a long-term care benefit for $150,000
that would provide $370,000 in long-term care for up to
four years. The commission on investments is about 1.05%, which
(22:02):
sounds reasonable to me.
I'm nervous for her to spend half of what she
has in a lump sum to provide only $3,300 in income,
but I know my sister-in-law would also feel secured with
guaranteed income. Betty wants to know, Suze, what do you think?
(22:25):
Can I tell everyone what your face looks
like?
Suze (22:27):
Yeah. Like always. I'll tell you what upsets
me.
KT (22:31):
These CPAs and financial advisors.
Suze (22:36):
How old is Betty? How old is...
KT (22:38):
She's in good health. She's um 7,
Suze (22:41):
73,
KT (22:41):
she's in good health. She doesn't own
a
home.
Suze (22:44):
Here's
the scoop, everybody. I think this is horrific advice, horrific advice.
When somebody says there's no fees, there's no commissions, there's
no anything in it.
KT (22:54):
It's built in
Suze (22:55):
And it's built in. Well, why the hell would they
want to do it then?
Who's paying them to do that? They get 1.05% for
other investment advice they're gonna give this person, but they
don't make any money on this. Are you kidding me?
They're probably going to get on an immediate annuity.
Could be anywhere from 25,000 to 30 or 40,000 they're
(23:18):
going to get a lot of money if she does this.
That's number one.
Number two, just let me explain to everybody how this
annuity works. It's what's known as a 10 year certain annuity.
So KT, she's the same age as you. She's 73
and she's in good health, like she's in good health.
So if anything were to happen between the day that
(23:41):
she buys it and 10 years from now, what's left
in that 10 year time period, so if in five
years from now she's killed in a car crash, her
beneficiaries get that $3300 a
month for another five years. Once she lives past 10
years and she dies, her beneficiaries don't get anything. So
(24:05):
the first question has to be, does she have any
beneficiaries that she cares about, because the truth of the
matter is she could get the exact same income right now,
not touch her principal. She could actually get more income
and still have $518,000 to leave to her loved ones.
(24:27):
I mean, I want you all to think about this,
so it's just not something that she should be doing
at this period in time in terms of the long
term care, all right, but if I were all of
you and I want you to listen to me closely,
I do not get a penny for saying this, never
(24:48):
have and never will.
If you are interested in buying a long term care
insurance policy of any kind, that's fine, but I would
not buy it before I consulted with Phyllis Shelton, who,
in my opinion, is one of the experts in long-term
care in the entire United States. She has a whole
(25:12):
staff that is so knowledgeable I cannot tell you if
you went to the Women and Money community app.
And you look where all those little boxes are when
you first sign on, you will see long term care insurance,
click there and it will tell you how you contact her.
(25:32):
Right, I would do that, Betty. I would have your
sister-in-law do this before she purchases anything from these people.
The other thing here that I don't like is that
you have both a financial adviser and an accountant, a CPA,
both saying to do this. Now I'd like to know,
(25:57):
does that CPA get a referral fee
for referring it to a financial adviser and therefore they
both are going to benefit. I would never ever ever
do business
with somebody who gets a referral fee when I used,
like I just said right now with Phyllis Shelton, I
don't get a referral fee. There is no way she
(26:19):
can benefit me in any possible way. The only thing
she can do is help you when you need help
in picking out the right solution for you. You don't
have to go with her if you don't want, but
there's no fees to do so.
So there you go, that's my answer, but Betty, I
won't touch this annuity with a 10 ft pole.
(26:45):
What I would touch, however, with a 10 ft pole.
Is the podcast on Sunday where all of you are
going to learn something you all need to know? I'll
be there. Don't you hate that saying be there, be square. Anyway,
that's besides the point. There's only one thing we want
you all to remember when it comes to your money.
(27:06):
And what is that, Ms. Travis?
KT (27:07):
It is people first, then money, then things, and you stay safe,
and I'll see you Sunday.
Suze (27:13):
There we go. Bye bye, everybody.
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