October 23, 2025 • 28 mins
On this Ask Suze & KT Anything episode, KT asks Suze your questions about when to take Social Security, financial protection, Roth contributions and so much more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:08):
October 23rd, 2025. Welcome everybody to the Women and Money podcast,
and everybody smart enough to listen. So...
We have pre-recorded this because as you know, we, as
you're listening to this, we are in Italy.
KT (00:26):
I think we're in Sienna having an incredible, incredible lunch.
Pasta with truffles and mm, delicious!
Suze (00:36):
You know, we're just having the time of our lives.
KT (00:38):
Yeah, we're painting up a storm.
Suze (00:40):
Anyway, so for your pleasure.
We will now do a pre-recorded Ask KT and Suze Anything.
Go for it, Mi Amor. Was that Spanish?
KT (00:55):
(KT sings a little of Amore)
I'm gonna sing for you. OK, so hi KT and Suze,
this is for KT.
Been enjoying your podcast and especially the Ask KT and
Suze anything part. My question's a bit complicated and sorry
(01:16):
for the long email. And here's her question. So Sarah said, Suze,
my mom passed in 2005. She created a trust before
she passed that made it so my sister and I
inherited her home.
With the provision that her husband, not our father, could
(01:36):
live in the house as long as he was able
to reimburse us for the amount of the mortgage payment
each month.
Fast forward 20 years later, her husband passed in 2024.
We sold the house this year for 1.1 million. At
the time of my mom's passing in 2005, we had
(02:01):
two real estate agents give us a written estimate of
the value of the house at about 900,000.
Since I want to make sure I am prepared and
not surprised by a tax bill for 2025, do we
report capital gains on the difference between the value at
her passing of 900,000 and the sale price of 1.1?
Suze (02:27):
There you go, KT. This is an email that I answered.
KT (02:32):
Oh, you spoke to Sarah.
Suze (02:33):
I answered her, right, to the best of my ability. However,
for those of you who happen to have questions, write
in to ask Suze podcast@gmail.com, and you never know when
because I scroll them.
And if one catches my eye for whatever reason, I
(02:56):
will write you back the answer. Now in this particular situation, KT,
here's what I didn't know, but I wrote her back.
If the trust that her mother left.
Used the words that I am leaving a life estate
(03:17):
to my husband.
Then the truth of the matter is Sarah would use
the $1.1 million number, and that is what she then
would owe taxes on, which would probably mean nothing. She'd
probably get everything tax free at that point, no capital gain.
(03:37):
Because her cost basis would be what it was when
her mother's husband passed, not when her mother passed.
KT (03:47):
OK.
Suze (03:47):
All right, but it's got to say that in the trust.
It's got to say life estate if it just says,
take care of my husband. Make sure he pays for everything,
blah blah blah, but doesn't specifically say that.
Then chances are she's going to owe taxes from the
(04:09):
900,000 to what she sold it for the 1.1 million.
Now obviously she can take off real estate commission, all
kinds of things like that, but the key here, everybody
is this.
You have a home and you're living in it with
your spouse.
And if you die, you want that home to pass
(04:31):
to your children because maybe the spouse is not
the kid's father or mother, whatever it may be, make
sure that if you own it in trust, that in
the trust it says that you are leaving a life
estate to your spouse or whoever you're leaving it to,
(04:53):
it doesn't even have to be your spouse that way
upon that person's death,
your kids or your beneficiaries will get a step up
in basis as to the value of that asset upon
the death of that person that had the life estate.
Just know that. So either way though, capital gains tax
(05:16):
is not going to be that horrific on this property.
All right, go on.
KT (05:22):
OK, next question is from Rhonda. Hi, Suze and KT.
I have a question on when to take Social Security.
My husband and I are retired. I'm 62 and he's 63.
We live comfortably with 2 million in investments and several
rental properties that are paid for.
(05:43):
And this is sad, Suze, she said our 17-year-old son
passed several years ago. This has resulted in my husband
drinking a lot, and he has been a smoker for
over 39 years. He's a good man but has suffered
from depression throughout his life.
I can imagine how depressed he's been since his son passed, Suze.
Suze (06:08):
You never get over that.
KT (06:09):
No, never, ever. He also has high blood pressure and
high cholesterol, which he takes medication for. We could easily
wait until we're both 70 to draw Social Security, but
given his health, I'm wondering if we should start to
draw mine early. It is about 1/3 of what his is.
(06:32):
So thank you all for both you do love and blessings, Rhonda.
What do you think?
Suze (06:39):
I know this is gonna sound strange, but first of all,
always our condolences for the past loss, always, always, always.
People just because they have high blood pressure, they drink,
they smoke, they do all the things that you think
should kill them.
Sometimes they will live longer than you, believe it or not.
(07:02):
So if I were you, given what you have, that
you really don't need your Social Security, you have 2
million in investments, several rental properties that are giving you income,
you're fine financially speaking. I would withdraw my Social Security,
but not before the age of 67.
(07:24):
So just withdraw it starting in a few years. You
say you're 62, so that's five years from now. That's
when I would withdraw it at your full retirement age,
otherwise you're going to take a penalty because you're under
full retirement age, and it's really not worth it.
(07:45):
And obviously when he dies you're just going to take
over his full Social Security, so hopefully he will make
it till he's 70, and he should wait till he's
70 because you'll just take it over at that point
in time, which will be a whole lot higher.
So therefore that is the answer to your question. Ok.
KT (08:09):
Suze, I picked this next question cause it sounds a
little desperate. It said, Pick me, pick me, please, KT,
pick me. Hello, Suze and KT, I need some advice
on protecting myself financially. I live in a community property state.
My marriage of 14 years is circling the drain.
(08:30):
Last year I separated my income into a checking and
savings account that my husband does not have access to.
Since my name is still on a couple of his
credit cards used without my consent and on the joint
checking account, I am still getting hit financially when he
(08:50):
misses a credit card payment or overdraws the joint checking account.
He is now saying he wants all of the credit
card debt to go to collections because he doesn't have
any money to pay them. I am very discouraged. I've
been telling him for over a year that he needs
to find a job for consistent income and work out
(09:12):
paying off his debt. He claims his medical issues prevent
him from working, but he doesn't have debilitating medical issues.
Then she goes on to say, I am highly considering
filing for divorce, something he has periodically threatened to do
for the last 10 years, but I'm concerned about how
(09:34):
things will turn out. I feel very used and insecure financially.
The worry and stress of this is drawing so much
of my attention, and I'm exhausted.
Any advice you have for this situation would be greatly appreciated.
Suze (09:50):
Do we have her age anywhere in there?
KT (09:52):
No, unfortunately not.
Suze (09:55):
All right, so here's the thing, girlfriend, which is this your
situation is not simple.
And it's probably more complex than this email says, because
this has been going on for a long, long time.
So the real answer to this is, why have you stayed?
(10:17):
More than me telling you what you should do, I
need you to ask yourself, why haven't you done what
you know you should do? You say in this email
that you should divorce him. You're thinking about it. He
threatens you with divorce. What is keeping the two of
you together?
(10:39):
Chances are you are afraid that if you divorce him
at this point he's going to come after half your money,
he's going to do this, he's going to do that,
who knows what.
But your fear of the unknown.
Is keeping you from the truth of the known.
(11:00):
Do you want me to say that again?
Your fear of the unknown. What's going to happen if
you divorce, if you leave him.
Is keeping you from the truth of the known.
And the truth of the known is, he is a
financial disaster. He is hurting you financially. You are stressed out.
(11:22):
You are miserable. You know you want to divorce him.
And you know you need to move on, and the
only way for you to move on.
In my opinion,
is to face the known, stand in the truth, and
do what you are afraid to do, which is divorce him.
(11:47):
The sooner you can separate your finances from him.
And then you know what you have, you know what
you can do, you know everything that is yours from
that point on and that you can build upon it.
Then you won't be stressed. You won't be insecure, and
(12:08):
you won't feel very used. Now, in this email you
use the words I feel very used and insecure financially.
Who's using you?
Who is making you feel insecure.
You're using yourself. You're using excuses to keep you in
(12:33):
a situation that you know you need to leave.
You feel insecure financially because you know you are not
doing that what you need to do financially to separate
everything from him. Hey, at the beginning of your email
you say you separated your checking account, your money, all
(12:54):
of that.
You now need to take the final step and separate everything.
Don't be afraid.
I've talked to thousands of women who have written emails
exactly like this one, and then years later I hear
(13:16):
from them. Suze, that was the best thing I ever did.
Oh my God, Suze, I finally own a home on
my own. Oh Suze, I own property. I own this.
I own that. Oh Suze, I've saved a million dollars
in my Roth retirement account.
Don't be afraid to do that which you know you
(13:37):
should do. What's making you miserable right now isn't him.
What's making you miserable right now is that you are
lacking the courage to do that which you know you
should do for yourself. Just saying.
All right, KT, what do you got next?
KT (13:56):
OK, Suze, next question is from Mario. I love when
I get the men questions.
Suze (14:03):
KT, you love when you get any questions.
KT (14:05):
Yeah, but I like when we have the men smart
enough to listen participating. So how do Mario asked, how
do I get rid of a collection account which is
six years and nine months old? I'll tell him, pay it off.
Suze (14:22):
No, you get rid of it if you just simply
wait three more months, it will go away.
So something that is on a credit report such as
a collection account stays on for seven years. At that
point it comes off. So you have three more months
to wait. Next question, KT.
KT (14:43):
All right, so next question, Suze.
This listener said, I have a Roth with about $850,000.
Suze (14:52):
That's good!
KT (14:52):
A regular IRA with $775,000 and a regular investment account
with $1.2 million.
Suze (15:04):
That's my person.
See, listen, I just have to say something. All of
you out there may be wondering how do these people
have so much money. You want to know how? They've
been listening to me for 40 years. They've been doing
everything I have told them to do, and now most
of them honest to God,
(15:25):
are multimillionaires. So what are you doing if you're brand new,
you're gonna be listening and listening and listening and doing
and doing and doing.
KT (15:36):
OK, so this, this, uh, listener says I take my
required RMDs and about $24,000 out of my regular account.
I would like to gift my kids the 19,000 allowed
every year and was wondering if taking it out of
my Roth would be the prudent thing to do.
Suze (15:58):
It would be prudent for you because you won't have
to pay taxes on it.
But if you want to be prudent for your kids,
leave your Roth intact, take the money out of either
your investment account or even your traditional IRA and just
pay taxes on it because you're not in that high
of a tax bracket.
(16:19):
And let your money compound tax free because on your
death all the money in the Roth goes to your
kids tax free. The money in your regular IRA, it's
going to be totally taxable to them. So if I
were you, I would draw
down the IRA more than anything else. Go on.
KT (16:40):
And now this is from Laura. Good afternoon, KT and Suze.
I'm 62. My 401k Roth retirement account at work was
opened in April 2022.
Would it be better to wait until I hit the
five year rule, or can I take my contributions and
(17:02):
roll that over into my existing Roth IRA?
Suze (17:05):
Pop quizzy, pop quizzy.
KT (17:06):
OK, ready, everybody. Laura's 62...
Suze (17:10):
Yes.
KT (17:11):
And 59 and a half was that lucky number.
Suze (17:14):
But that's just for the penalty. Taxes, however, the account
has been open for five years. That's the question she's
asking here.
KT (17:23):
So she's asking, can I take my contributions and roll
that over into my existing Roth IRA?
Suze (17:31):
Yes, but her 401k has only been open for how long, KT?
KT (17:36):
Since 2022.
Suze (17:37):
So that's three years, right, so...
KT (17:40):
Two more to go.
Suze (17:41):
So should she leave it there till all five years
are met? This is her question, or should she roll
it to her IRA Roth?
KT (17:53):
Hm.
Suze (17:56):
Tick tick tick...
KT (17:57):
I think, I think you have to wait for the
five year rule. (Suze makes the wrong answer sound) Oh wait,
you so you could wait. Oh yeah, they're both Roths. Sorry, sorry, mistake.
It wasn't a 401k. It's a 401k Roth. So the
answer is yes, you can, because they're both Roths.
Suze (18:15):
No, because...
KT (18:17):
Is that why?
Suze (18:18):
No, when you take a 401k that's maybe even been
there 10 years.
When you roll it to a Roth IRA, that rollover
takes on the time clock of your Roth IRA, right,
so just so you know, so if her Roth 401k, KT,
(18:40):
had been open for seven years, her Roth IRA for
only one.
And then she rolled it to her Roth IRA. Now
all of it would only have a one year time clock.
She would have lost all those years of her Roth 401k.
KT (18:57):
All right, good.
Suze (18:58):
All right.
KT (18:59):
So the next question's from Tina, she said, guidance needed, please.
I am 57, have two kids, 25 and 27. One
still at home. Both are employed and self-sufficient with no
student loan debt. That's great.
I live with my boyfriend of 17 years. We make
(19:20):
about the same income. The house is in his name
and paid off. I have no debt. I use one
credit card and pay it off each month. Here's where
I need your help. 11 years ago, I was sold
a whole life policy. Yes, I know that was a
bad decision.
The policy has a face amount of 250,000 and a
(19:44):
cash value of over 100,000. Final premium was paid last year.
Should I keep it or take all of the cash
value and surrender it?
I've already got a quote for a 20 year term,
same face amount as the whole life, so I know
if I decide insurance is needed I can get it
(20:07):
and would do so before I decide the fate of
the whole life policy.
There is no one in my life who has the
knowledge to help me. We both know the agent who
sold it to me is not going to be a
reliable source. Would you be able to share your opinions, Suze, please?
Suze (20:26):
You know, I always say that you normally don't ask
a question that you don't know the answer to already.
If it were me.
And I knew my kids were going to be OK
and everything. I would cash it out, just check and
make sure no taxes are going to be owed. I'm
sure you put more money in there than the cash value,
so it should be tax free, and I would take
(20:49):
that and I would invest it for your own future.
And if you feel like you need insurance for the kids,
I would do the term insurance. However...
My concern isn't about this insurance policy, and it's not
about your kids. It's about you. You live in a
home with your boyfriend of 17 years. The house is
(21:14):
in his name and is paid off.
Can you tell me, but you can't cause you can't
hear me now, but you will. But anyway, can you
tell me what happens if he's killed in a car
crash tomorrow? Does he have a trust? Has that house
(21:35):
been left for you in trust, or does he simply
even have a will that leaves it to you?
And then it has to go through probate, and then
you're going to have to pay a whole lot of
money and wait for a long time to get that house.
What if all of a sudden he's in a car
accident and he's incapacitated, he's not dead, but you need
(21:57):
to sell that house because you now need money to
take care of him or whatever it is. You can't
sell that house because why? You don't own that house.
He can't sign for that house.
So the real question is here, what have you done
to take care of yourself if he doesn't have a
(22:19):
living revocable trust and a will.
Then what you need to do is you need to, today,
go to musthavedocs.com and get the must-have docs for $99.
$2,500 dollars worth of state of the art documents good
in all 50 states. He should take that, put the
(22:39):
house in trust just in his name with you as
beneficiary and you as successor trustee.
And if something were to happen to both you and
him at the same time, what's going to happen to
your kids? Where does that house go?
Intestate succession, it goes to his nearest relatives if he
(23:01):
doesn't have a will, which are not your kids and
it's not even you.
Because you're not married to him. You got to think
about that more important than this life insurance policy, to
tell you the truth, next KT.
You are not expecting that.
KT (23:19):
I wasn't.
Suze (23:20):
Ms. Travis. I know you.
Right, you were expecting that I was going to get
so mad at her for the whole life policy, but
that's not what I was upset about. Do you see?
All right, go on.
KT (23:34):
All right. Next question is from Gwen. Gwen says, Suze,
I've been listening to your show on and off for
the past five years. Gwen, you should only listen to
the show on, not off.
Suze (23:47):
That does not necessarily endear you to me.
KT (23:51):
I've been listening to your show, you can get rid
of the off part for the past five years. She said,
I retired 4 years ago and I am 67 years
of age. I want to move the funds of the
traditional IRA to a Roth, but I was told that
I could not do it because I am retired. Is
this true?
Suze (24:13):
This is why you have got to listen every single show.
KT (24:18):
Yeah, not off.
Suze (24:20):
Right? Not off, because you would know whoever gave you
this advice is an idiot, is an idiot, is 100% wrong,
and is an idiot. So therefore, never ask this person
for advice again. You could convert any time you want.
It does not matter your income, no income, age, nothing
(24:41):
from a traditional to a Roth any time. You have
to have earned income to do a contributory Roth IRA
or even a traditional IRA for that matter, where you
put money in every year. Idiot. Was there another question?
KT (24:57):
From Gwen?
Suze (24:58):
Yeah.
KT (24:59):
Gwen's talking now about her grandchildren. She said the next
question is helping
my young grandchildren. Money you spend to assist with minor
grand school tuition. Can you write it off on your taxes?
Suze (25:13):
No. Next question, KT.
KT (25:15):
That's it.
Suze (25:16):
We're off of Gwen. I get it. That was a joke, Gwenny.
Just joking with you. All right.
KT (25:22):
OK, Suze, we have one more question, and it's from CW.
Suze (25:26):
CW!
KT (25:27):
CW. Traditional IRA question. We only have traditional IRAs. Don't ask.
This is... CW didn't even want to put their full name.
We are 70 and 73, and my husband is subject
to a large RMD. My question
(25:49):
do an in-kind withdrawal? For example, shares of a mutual
fund with a robust and consistent capital gain distribution or cash?
Many thanks for all that you and KT do.
There you go. That's your finale.
Suze (26:06):
KT. What is an in-kind contribution?
KT (26:08):
I don't know what that means.
Suze (26:10):
I'm so surprised. You should have said to me, what
is an in-kind distribution, Suze? But anyway, I'll just tell everybody.
So first of all, CW, here's the thing.
Whether you take money out as an RMD in-kind meaning
in the stock or the mutual fund shares that you
(26:32):
actually own or in cash, both of those you are
going to owe ordinary income tax on it. Now if
you do an in-kind distribution.
Of these mutual funds that have, here's the key, that
have a consistent capital gains distribution meaning at the end
(26:54):
of the year, KT they distribute to CW all of
this money as a capital gain. You're going to owe
taxes on that if you take it as an R&D,
have it now in an investment account.
So not only are you going to owe taxes on
the capital gain distribution when you hold it, but if
(27:18):
this goes up and up in value when you sell it,
you're going to owe more taxes on it again.
So if it were me, I would probably just take
it in cash, but either way you're going to owe
taxes on the original distribution for the RMD. All right, KT,
(27:39):
that's a wrap. Take us out, girlfriend.
KT (27:41):
All right, there's only one thing we both want you
to remember, and that is this. I'm going to say
it in Italian.
Suze (27:49):
Oh, good luck. Go on.
KT (27:51):
I'll do it in English. People first, then I, then things.
Now you stay safe.
Suze (27:58):
All right, everybody,
bye bye now.
October 23rd, 2025. Welcome everybody to the Women and Money podcast,
and everybody smart enough to listen. So...
We have pre-recorded this because as you know, we, as
you're listening to this, we are in Italy.
KT (00:26):
I think we're in Sienna having an incredible, incredible lunch.
Pasta with truffles and mm, delicious!
Suze (00:36):
You know, we're just having the time of our lives.
KT (00:38):
Yeah, we're painting up a storm.
Suze (00:40):
Anyway, so for your pleasure.
We will now do a pre-recorded Ask KT and Suze Anything.
Go for it, Mi Amor. Was that Spanish?
KT (00:55):
(KT sings a little of Amore)
I'm gonna sing for you. OK, so hi KT and Suze,
this is for KT.
Been enjoying your podcast and especially the Ask KT and
Suze anything part. My question's a bit complicated and sorry
(01:16):
for the long email. And here's her question. So Sarah said, Suze,
my mom passed in 2005. She created a trust before
she passed that made it so my sister and I
inherited her home.
With the provision that her husband, not our father, could
(01:36):
live in the house as long as he was able
to reimburse us for the amount of the mortgage payment
each month.
Fast forward 20 years later, her husband passed in 2024.
We sold the house this year for 1.1 million. At
the time of my mom's passing in 2005, we had
(02:01):
two real estate agents give us a written estimate of
the value of the house at about 900,000.
Since I want to make sure I am prepared and
not surprised by a tax bill for 2025, do we
report capital gains on the difference between the value at
her passing of 900,000 and the sale price of 1.1?
Suze (02:27):
There you go, KT. This is an email that I answered.
KT (02:32):
Oh, you spoke to Sarah.
Suze (02:33):
I answered her, right, to the best of my ability. However,
for those of you who happen to have questions, write
in to ask Suze podcast@gmail.com, and you never know when
because I scroll them.
And if one catches my eye for whatever reason, I
(02:56):
will write you back the answer. Now in this particular situation, KT,
here's what I didn't know, but I wrote her back.
If the trust that her mother left.
Used the words that I am leaving a life estate
(03:17):
to my husband.
Then the truth of the matter is Sarah would use
the $1.1 million number, and that is what she then
would owe taxes on, which would probably mean nothing. She'd
probably get everything tax free at that point, no capital gain.
(03:37):
Because her cost basis would be what it was when
her mother's husband passed, not when her mother passed.
KT (03:47):
OK.
Suze (03:47):
All right, but it's got to say that in the trust.
It's got to say life estate if it just says,
take care of my husband. Make sure he pays for everything,
blah blah blah, but doesn't specifically say that.
Then chances are she's going to owe taxes from the
(04:09):
900,000 to what she sold it for the 1.1 million.
Now obviously she can take off real estate commission, all
kinds of things like that, but the key here, everybody
is this.
You have a home and you're living in it with
your spouse.
And if you die, you want that home to pass
(04:31):
to your children because maybe the spouse is not
the kid's father or mother, whatever it may be, make
sure that if you own it in trust, that in
the trust it says that you are leaving a life
estate to your spouse or whoever you're leaving it to,
(04:53):
it doesn't even have to be your spouse that way
upon that person's death,
your kids or your beneficiaries will get a step up
in basis as to the value of that asset upon
the death of that person that had the life estate.
Just know that. So either way though, capital gains tax
(05:16):
is not going to be that horrific on this property.
All right, go on.
KT (05:22):
OK, next question is from Rhonda. Hi, Suze and KT.
I have a question on when to take Social Security.
My husband and I are retired. I'm 62 and he's 63.
We live comfortably with 2 million in investments and several
rental properties that are paid for.
(05:43):
And this is sad, Suze, she said our 17-year-old son
passed several years ago. This has resulted in my husband
drinking a lot, and he has been a smoker for
over 39 years. He's a good man but has suffered
from depression throughout his life.
I can imagine how depressed he's been since his son passed, Suze.
Suze (06:08):
You never get over that.
KT (06:09):
No, never, ever. He also has high blood pressure and
high cholesterol, which he takes medication for. We could easily
wait until we're both 70 to draw Social Security, but
given his health, I'm wondering if we should start to
draw mine early. It is about 1/3 of what his is.
(06:32):
So thank you all for both you do love and blessings, Rhonda.
What do you think?
Suze (06:39):
I know this is gonna sound strange, but first of all,
always our condolences for the past loss, always, always, always.
People just because they have high blood pressure, they drink,
they smoke, they do all the things that you think
should kill them.
Sometimes they will live longer than you, believe it or not.
(07:02):
So if I were you, given what you have, that
you really don't need your Social Security, you have 2
million in investments, several rental properties that are giving you income,
you're fine financially speaking. I would withdraw my Social Security,
but not before the age of 67.
(07:24):
So just withdraw it starting in a few years. You
say you're 62, so that's five years from now. That's
when I would withdraw it at your full retirement age,
otherwise you're going to take a penalty because you're under
full retirement age, and it's really not worth it.
(07:45):
And obviously when he dies you're just going to take
over his full Social Security, so hopefully he will make
it till he's 70, and he should wait till he's
70 because you'll just take it over at that point
in time, which will be a whole lot higher.
So therefore that is the answer to your question. Ok.
KT (08:09):
Suze, I picked this next question cause it sounds a
little desperate. It said, Pick me, pick me, please, KT,
pick me. Hello, Suze and KT, I need some advice
on protecting myself financially. I live in a community property state.
My marriage of 14 years is circling the drain.
(08:30):
Last year I separated my income into a checking and
savings account that my husband does not have access to.
Since my name is still on a couple of his
credit cards used without my consent and on the joint
checking account, I am still getting hit financially when he
(08:50):
misses a credit card payment or overdraws the joint checking account.
He is now saying he wants all of the credit
card debt to go to collections because he doesn't have
any money to pay them. I am very discouraged. I've
been telling him for over a year that he needs
to find a job for consistent income and work out
(09:12):
paying off his debt. He claims his medical issues prevent
him from working, but he doesn't have debilitating medical issues.
Then she goes on to say, I am highly considering
filing for divorce, something he has periodically threatened to do
for the last 10 years, but I'm concerned about how
(09:34):
things will turn out. I feel very used and insecure financially.
The worry and stress of this is drawing so much
of my attention, and I'm exhausted.
Any advice you have for this situation would be greatly appreciated.
Suze (09:50):
Do we have her age anywhere in there?
KT (09:52):
No, unfortunately not.
Suze (09:55):
All right, so here's the thing, girlfriend, which is this your
situation is not simple.
And it's probably more complex than this email says, because
this has been going on for a long, long time.
So the real answer to this is, why have you stayed?
(10:17):
More than me telling you what you should do, I
need you to ask yourself, why haven't you done what
you know you should do? You say in this email
that you should divorce him. You're thinking about it. He
threatens you with divorce. What is keeping the two of
you together?
(10:39):
Chances are you are afraid that if you divorce him
at this point he's going to come after half your money,
he's going to do this, he's going to do that,
who knows what.
But your fear of the unknown.
Is keeping you from the truth of the known.
(11:00):
Do you want me to say that again?
Your fear of the unknown. What's going to happen if
you divorce, if you leave him.
Is keeping you from the truth of the known.
And the truth of the known is, he is a
financial disaster. He is hurting you financially. You are stressed out.
(11:22):
You are miserable. You know you want to divorce him.
And you know you need to move on, and the
only way for you to move on.
In my opinion,
is to face the known, stand in the truth, and
do what you are afraid to do, which is divorce him.
(11:47):
The sooner you can separate your finances from him.
And then you know what you have, you know what
you can do, you know everything that is yours from
that point on and that you can build upon it.
Then you won't be stressed. You won't be insecure, and
(12:08):
you won't feel very used. Now, in this email you
use the words I feel very used and insecure financially.
Who's using you?
Who is making you feel insecure.
You're using yourself. You're using excuses to keep you in
(12:33):
a situation that you know you need to leave.
You feel insecure financially because you know you are not
doing that what you need to do financially to separate
everything from him. Hey, at the beginning of your email
you say you separated your checking account, your money, all
(12:54):
of that.
You now need to take the final step and separate everything.
Don't be afraid.
I've talked to thousands of women who have written emails
exactly like this one, and then years later I hear
(13:16):
from them. Suze, that was the best thing I ever did.
Oh my God, Suze, I finally own a home on
my own. Oh Suze, I own property. I own this.
I own that. Oh Suze, I've saved a million dollars
in my Roth retirement account.
Don't be afraid to do that which you know you
(13:37):
should do. What's making you miserable right now isn't him.
What's making you miserable right now is that you are
lacking the courage to do that which you know you
should do for yourself. Just saying.
All right, KT, what do you got next?
KT (13:56):
OK, Suze, next question is from Mario. I love when
I get the men questions.
Suze (14:03):
KT, you love when you get any questions.
KT (14:05):
Yeah, but I like when we have the men smart
enough to listen participating. So how do Mario asked, how
do I get rid of a collection account which is
six years and nine months old? I'll tell him, pay it off.
Suze (14:22):
No, you get rid of it if you just simply
wait three more months, it will go away.
So something that is on a credit report such as
a collection account stays on for seven years. At that
point it comes off. So you have three more months
to wait. Next question, KT.
KT (14:43):
All right, so next question, Suze.
This listener said, I have a Roth with about $850,000.
Suze (14:52):
That's good!
KT (14:52):
A regular IRA with $775,000 and a regular investment account
with $1.2 million.
Suze (15:04):
That's my person.
See, listen, I just have to say something. All of
you out there may be wondering how do these people
have so much money. You want to know how? They've
been listening to me for 40 years. They've been doing
everything I have told them to do, and now most
of them honest to God,
(15:25):
are multimillionaires. So what are you doing if you're brand new,
you're gonna be listening and listening and listening and doing
and doing and doing.
KT (15:36):
OK, so this, this, uh, listener says I take my
required RMDs and about $24,000 out of my regular account.
I would like to gift my kids the 19,000 allowed
every year and was wondering if taking it out of
my Roth would be the prudent thing to do.
Suze (15:58):
It would be prudent for you because you won't have
to pay taxes on it.
But if you want to be prudent for your kids,
leave your Roth intact, take the money out of either
your investment account or even your traditional IRA and just
pay taxes on it because you're not in that high
of a tax bracket.
(16:19):
And let your money compound tax free because on your
death all the money in the Roth goes to your
kids tax free. The money in your regular IRA, it's
going to be totally taxable to them. So if I
were you, I would draw
down the IRA more than anything else. Go on.
KT (16:40):
And now this is from Laura. Good afternoon, KT and Suze.
I'm 62. My 401k Roth retirement account at work was
opened in April 2022.
Would it be better to wait until I hit the
five year rule, or can I take my contributions and
(17:02):
roll that over into my existing Roth IRA?
Suze (17:05):
Pop quizzy, pop quizzy.
KT (17:06):
OK, ready, everybody. Laura's 62...
Suze (17:10):
Yes.
KT (17:11):
And 59 and a half was that lucky number.
Suze (17:14):
But that's just for the penalty. Taxes, however, the account
has been open for five years. That's the question she's
asking here.
KT (17:23):
So she's asking, can I take my contributions and roll
that over into my existing Roth IRA?
Suze (17:31):
Yes, but her 401k has only been open for how long, KT?
KT (17:36):
Since 2022.
Suze (17:37):
So that's three years, right, so...
KT (17:40):
Two more to go.
Suze (17:41):
So should she leave it there till all five years
are met? This is her question, or should she roll
it to her IRA Roth?
KT (17:53):
Hm.
Suze (17:56):
Tick tick tick...
KT (17:57):
I think, I think you have to wait for the
five year rule. (Suze makes the wrong answer sound) Oh wait,
you so you could wait. Oh yeah, they're both Roths. Sorry, sorry, mistake.
It wasn't a 401k. It's a 401k Roth. So the
answer is yes, you can, because they're both Roths.
Suze (18:15):
No, because...
KT (18:17):
Is that why?
Suze (18:18):
No, when you take a 401k that's maybe even been
there 10 years.
When you roll it to a Roth IRA, that rollover
takes on the time clock of your Roth IRA, right,
so just so you know, so if her Roth 401k, KT,
(18:40):
had been open for seven years, her Roth IRA for
only one.
And then she rolled it to her Roth IRA. Now
all of it would only have a one year time clock.
She would have lost all those years of her Roth 401k.
KT (18:57):
All right, good.
Suze (18:58):
All right.
KT (18:59):
So the next question's from Tina, she said, guidance needed, please.
I am 57, have two kids, 25 and 27. One
still at home. Both are employed and self-sufficient with no
student loan debt. That's great.
I live with my boyfriend of 17 years. We make
(19:20):
about the same income. The house is in his name
and paid off. I have no debt. I use one
credit card and pay it off each month. Here's where
I need your help. 11 years ago, I was sold
a whole life policy. Yes, I know that was a
bad decision.
The policy has a face amount of 250,000 and a
(19:44):
cash value of over 100,000. Final premium was paid last year.
Should I keep it or take all of the cash
value and surrender it?
I've already got a quote for a 20 year term,
same face amount as the whole life, so I know
if I decide insurance is needed I can get it
(20:07):
and would do so before I decide the fate of
the whole life policy.
There is no one in my life who has the
knowledge to help me. We both know the agent who
sold it to me is not going to be a
reliable source. Would you be able to share your opinions, Suze, please?
Suze (20:26):
You know, I always say that you normally don't ask
a question that you don't know the answer to already.
If it were me.
And I knew my kids were going to be OK
and everything. I would cash it out, just check and
make sure no taxes are going to be owed. I'm
sure you put more money in there than the cash value,
so it should be tax free, and I would take
(20:49):
that and I would invest it for your own future.
And if you feel like you need insurance for the kids,
I would do the term insurance. However...
My concern isn't about this insurance policy, and it's not
about your kids. It's about you. You live in a
home with your boyfriend of 17 years. The house is
(21:14):
in his name and is paid off.
Can you tell me, but you can't cause you can't
hear me now, but you will. But anyway, can you
tell me what happens if he's killed in a car
crash tomorrow? Does he have a trust? Has that house
(21:35):
been left for you in trust, or does he simply
even have a will that leaves it to you?
And then it has to go through probate, and then
you're going to have to pay a whole lot of
money and wait for a long time to get that house.
What if all of a sudden he's in a car
accident and he's incapacitated, he's not dead, but you need
(21:57):
to sell that house because you now need money to
take care of him or whatever it is. You can't
sell that house because why? You don't own that house.
He can't sign for that house.
So the real question is here, what have you done
to take care of yourself if he doesn't have a
(22:19):
living revocable trust and a will.
Then what you need to do is you need to, today,
go to musthavedocs.com and get the must-have docs for $99.
$2,500 dollars worth of state of the art documents good
in all 50 states. He should take that, put the
(22:39):
house in trust just in his name with you as
beneficiary and you as successor trustee.
And if something were to happen to both you and
him at the same time, what's going to happen to
your kids? Where does that house go?
Intestate succession, it goes to his nearest relatives if he
(23:01):
doesn't have a will, which are not your kids and
it's not even you.
Because you're not married to him. You got to think
about that more important than this life insurance policy, to
tell you the truth, next KT.
You are not expecting that.
KT (23:19):
I wasn't.
Suze (23:20):
Ms. Travis. I know you.
Right, you were expecting that I was going to get
so mad at her for the whole life policy, but
that's not what I was upset about. Do you see?
All right, go on.
KT (23:34):
All right. Next question is from Gwen. Gwen says, Suze,
I've been listening to your show on and off for
the past five years. Gwen, you should only listen to
the show on, not off.
Suze (23:47):
That does not necessarily endear you to me.
KT (23:51):
I've been listening to your show, you can get rid
of the off part for the past five years. She said,
I retired 4 years ago and I am 67 years
of age. I want to move the funds of the
traditional IRA to a Roth, but I was told that
I could not do it because I am retired. Is
this true?
Suze (24:13):
This is why you have got to listen every single show.
KT (24:18):
Yeah, not off.
Suze (24:20):
Right? Not off, because you would know whoever gave you
this advice is an idiot, is an idiot, is 100% wrong,
and is an idiot. So therefore, never ask this person
for advice again. You could convert any time you want.
It does not matter your income, no income, age, nothing
(24:41):
from a traditional to a Roth any time. You have
to have earned income to do a contributory Roth IRA
or even a traditional IRA for that matter, where you
put money in every year. Idiot. Was there another question?
KT (24:57):
From Gwen?
Suze (24:58):
Yeah.
KT (24:59):
Gwen's talking now about her grandchildren. She said the next
question is helping
my young grandchildren. Money you spend to assist with minor
grand school tuition. Can you write it off on your taxes?
Suze (25:13):
No. Next question, KT.
KT (25:15):
That's it.
Suze (25:16):
We're off of Gwen. I get it. That was a joke, Gwenny.
Just joking with you. All right.
KT (25:22):
OK, Suze, we have one more question, and it's from CW.
Suze (25:26):
CW!
KT (25:27):
CW. Traditional IRA question. We only have traditional IRAs. Don't ask.
This is... CW didn't even want to put their full name.
We are 70 and 73, and my husband is subject
to a large RMD. My question
(25:49):
do an in-kind withdrawal? For example, shares of a mutual
fund with a robust and consistent capital gain distribution or cash?
Many thanks for all that you and KT do.
There you go. That's your finale.
Suze (26:06):
KT. What is an in-kind contribution?
KT (26:08):
I don't know what that means.
Suze (26:10):
I'm so surprised. You should have said to me, what
is an in-kind distribution, Suze? But anyway, I'll just tell everybody.
So first of all, CW, here's the thing.
Whether you take money out as an RMD in-kind meaning
in the stock or the mutual fund shares that you
(26:32):
actually own or in cash, both of those you are
going to owe ordinary income tax on it. Now if
you do an in-kind distribution.
Of these mutual funds that have, here's the key, that
have a consistent capital gains distribution meaning at the end
(26:54):
of the year, KT they distribute to CW all of
this money as a capital gain. You're going to owe
taxes on that if you take it as an R&D,
have it now in an investment account.
So not only are you going to owe taxes on
the capital gain distribution when you hold it, but if
(27:18):
this goes up and up in value when you sell it,
you're going to owe more taxes on it again.
So if it were me, I would probably just take
it in cash, but either way you're going to owe
taxes on the original distribution for the RMD. All right, KT,
(27:39):
that's a wrap. Take us out, girlfriend.
KT (27:41):
All right, there's only one thing we both want you
to remember, and that is this. I'm going to say
it in Italian.
Suze (27:49):
Oh, good luck. Go on.
KT (27:51):
I'll do it in English. People first, then I, then things.
Now you stay safe.
Suze (27:58):
All right, everybody,
bye bye now.
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