March 30, 2023 • 27 mins
On this episode of Ask Suze & KT Anything, Suze answers questions about dividend paying stocks, inheriting a home, opening a ROTH IRA for a minor, rolling accounts in a trust and more!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:34):
March 30th 2023. Welcome everybody to what KT?
KT (00:40):
The Women and Money podcast and everyone, everyone smart enough to listen.
Suze (00:45):
And what edition is this? The ask KT and Suze Anything!
All right. So she's back with us. Ok...
KT (00:57):
And no one wrote in that they missed me.
Suze (00:59):
No. And if they did, do you think I would,
do you think if they did, I would tell you?
Do you think I would do that? Before we start,
I want to remind everybody that today, March 30th, 6pm
East Coast time, 3pm Pacific time, I am doing a
webinar and we
(01:21):
already have 50,000 people who have registered...
KT (01:26):
and they keep signing up. It's gonna be really popular.
Suze (01:30):
So that is today March 30th to register for free,
go to Suze Orman dot com slash webinar. Ok KT,
what do you got for me?
KT (01:42):
First one is from Dianna. Hi, Suze. I'm almost 55
my husband is 52
From 2011 to 2019, I went through a horrible custody
battle which cost about 250,000. It wiped me out financially
and to be able to support the legal situation plus
(02:05):
living expenses. I had to use my Roth, my traditional IRA,
my kids' college savings, my savings. I sold jewelry.
I just needed all the cash I can get. It
finally ended in 2019. So she said ever since her husband,
meaning her new husband and she finally paid off the
(02:27):
debt about a year ago. But this is the part
that's really sad, Suze, we save but then something comes
up where we have to take chunks out of our savings.
Car issues, medical
issues, putting kids in sports that cost so much. We
had to pull them out. Right now we only have
(02:47):
$10,000 to our name. We just can't seem to get
past that amount and keep the savings going. How do
we break through that? And we don't live an expensive lifestyle, Suze,
any advice you can give us, we will take.
Suze (03:07):
Deanna. First of all, let's put things in perspective here. You spent
your life savings, your kid's college education and everything to
do what
to essentially get custody over the most priceless children that
you wanted to keep in your life. I think truthfully
(03:31):
if you look at it in perspective, that is such
a deal. Such a deal because of what you ended
up with. Now, with that said, you cannot look at
what you spent
and regret it on any level.
There is a law of money, look at what you
(03:52):
have not at what you had and that applies to
everything in life. You had those accounts, you had savings
for this, you had that. Now what do you have?
Custody of your children, small price to pay. Next, in
(04:13):
your email, you use the words we can't
right? We only have $10,000. We can't seem to do this.
You have got to change your thoughts to change your reality.
As you know another saying is be very, very careful
about what you think. Because what you think you eventually say,
(04:34):
be careful about the words that you use because your
words become your actions, your actions become your habits and
your habits become your destiny.
You have got to think greater thoughts than you are thinking.
You have got to create a new truth for yourself,
which isn't one like you're doing right now. I can't
(04:57):
do this. I never get ahead. Always something happens. For
the next six months
I want you to make a promise that every single
day you will write down 25 times. You will say
it silently to yourself 25 times. You will scream it
(05:17):
in your car 25 times the following
money than I will ever need.
Any time you get afraid and you think that you can't,
let your thoughts tell you that you can. Also just so,
you know, we do have a course called Overcoming Your
(05:39):
Financial Fears. I'm sure it's on the women and Money
app under Suze shop. It's something that you might look at.
That's what I would be doing if
I were you, I would look at what I have.
I would not look at what I had. KT, next question.
KT (05:56):
Ok. From Gabriella. Hi, Suze and KT, love you guys. I like these.
Suze (06:03):
Then why didn't you write in and tell KT how
much you missed her.
KT (06:07):
Yea. Gabriella. Ok. I'm wondering how to find dividend paying stocks
and tell if a dividend paying stock is worth its weight.
I did invest in the oil one but now I'm
looking to diversify.
Suze (06:20):
Good because you should be diversified. The last thing you
want is to be only invested in any of those
oil stocks. I still think over the long run oil,
the price of energy will go up. But you definitely
want diversification. I have to tell you one of the
best ways for you to get diversification easily
(06:41):
is by simply buying the Schwab US Dividend Equity ETF
symbol is S C H D. They're at about 71
or $72 a share right now. They're paying about a 3.5% dividend.
If you reinvest the dividends in this ETF, over the past,
(07:04):
I think 20 years or 10 years or something like that,
this ETF actually outperformed the Standard and Poor's 500 ETF,
as long as you reinvested the dividends, their expense ratio
is only .06%. So that is how I would be
doing it without getting totally educated. That way, if you
(07:28):
dollar cost average into it, you now have time to
look at what does it take to get a good
dividend stock? And just briefly, it has
to have good management. It has to have positive cash flow.
It has to have good earnings and all of those things.
Somewhere I did a podcast on that. Next question, my
(07:50):
dear non missed.
KT (07:57):
Ok. That's, that's not nice. They, they did miss me.
Suze (07:59):
Of course, they did. But I get sick and tired
of where's KT? I miss KT. She's the main reason
I listen to this podcast. All right.
KT (08:08):
All right. This next question is from Lynne and I
call it where, what and when
She said Dear Suze help. I'm a newly unmarried woman.
I love that first line, newly unmarried, meaning she just
got a divorce. I moved to a new state Colorado
from California and I'm currently renting a home. I'll be
(08:28):
selling two real estate properties in California and netting about 160,000.
I have 16,000 in cash. I have credit card debt
of 33,000
and she has three interest rates. So probably across three
cards and then she says, where do I put my money?
(08:48):
What to invest in first? And for how long? T Bills?
Alliance CDs or Series I? And when should I consider
the purchase of a primary resident? So there you go.
Suze (09:02):
Alright my dear Lynn. I know KT you picked this
because Lynn is your twin sister's name, right?
KT (09:08):
Not necessarily, I just love the where, what and when.
Suze (09:12):
Where do I put my money? KT, what is one
of my absolute laws of money? When you have just
been newly unmarried. Do you remember?
That's a no, you can say no. OK. That's fine.
Don't look at me like tell me, right? You don't remember.
KT (09:35):
I don't remember.
Suze (09:36):
All right, no problem. You are to do absolutely nothing.
But what KT?
You still don't remember.
KT (09:45):
No, you're not supposed to do anything for about a
year until you get yourself settled in.
Suze (09:50):
Right? KT. You are to do absolutely nothing other than
keeping your money safe and sound after the loss of
a loved one, for at least six months to one
year
And a loss could be death, it could be divorce,
whatever it is, but nothing other than keeping your money
(10:12):
safe and sound.
You just wrote this email into Ask Suze podcast at
Gmail dot com, which by the way is where all
of you would write in when you have a question
and if KT chooses it, we will answer it on
the podcast. So it is too soon as to what
(10:33):
should you be investing in. So, where do I put
my money? Well, the truth of the matter is the
first thing you do because it is not safe and
sound to have credit card debt.
So the very first thing you're going to do is
you are going to pay off $33,000 of credit card
debt that will leave you when you add the $16,000
(10:58):
in cash that you already have; $143,000. For now, if
I were you, I would just put it somewhere
that I feel safe and sound. That obviously is if
you choose a bank would be FDIC insured and or
(11:18):
a credit union, obviously Alliant Credit Union. Now, the first
thing you always have to do is now figure out
how much does it cost you with rent with every
single bill that you have got to pay?
How much does it cost you with the must pay
expenses every single month. You wanna times that by eight
(11:44):
or 12, either one and that is how much money
you need in an emergency savings account. So that if
anything ever happened to you, you would have enough money
to pay your must pay expenses for at least eight
months to one year. After you have done that, then
(12:04):
really you need to start thinking about, do you want
to buy a home, do you not? So just be
easy where you put this money. Again as you know,
I love the Alliant Credit Union one year CD at 5%.
Series I bonds. I have not decided yet if I
want people to invest in them by April 25th, right
(12:28):
in there. So shortly I will know depending on inflation,
but I'm not sure in your particular situation, I would
want to lock up money for five years. So chances
are I would not be doing that. When should you
consider the purchase of a primary residency? As soon as
you feel secure. You're happy, you know, the neighborhood that
(12:52):
you wanna live in, you know, you're going to stay
in Colorado, you know, those things for sure, but do
not be in a rush on any level.
So keep your money safe and sound. That would be
in either CDs or T bills or money market funds
or money market accounts that are all paying a nice
(13:13):
interest rate. But that is what I would be doing
if I were you... KT!
KT (13:19):
And keep those credit cards clean clear. No Debt.
Suze (13:23):
No debt, no debt you pay for cash, put them
on your credit card, pay it in full at the
end of every month.
KT (13:30):
All right. This is a great question. This is from Irene. Hi,
Suze and KT. Can I open a Roth IRA for my
16 year old if she works a summer job
Now. I didn't know the answer to this but Susie,
tell everybody what the deal is with, with um, opening Roth IRAs.
Suze (13:49):
Oh, should that have been your quizzie?
KT (13:51):
Well, I wasn't sure... how... you have to have earned income.
Suze (13:55):
Pop quizzie. This is the pop quizzie everybody, right?
Pop quizzie means KT just asked me a question. Now,
all of you, how would you answer that question? Can
Irene open a Roth IRA for her daughter who simply
(14:18):
has just a summer job right now? Yes or no.
And if she can do that, what is the maximum amount that she can put in?
KT (14:27):
So the answer is yes, if she has earned income, that's reported. But let me just say some kids get a summer job where you know, they cut, they mow the lawn.
Suze (14:33):
Does that count?
KT (14:45):
No, it doesn't count because they just get cash. It's
not reported income.
Suze (14:52):
All right. So, truthfully KT ding ding, ding, ding, ding. The second part, the second
part is let's remember the maximum that you can put
in if you are under 50 is $6500 a year.
So what is the maximum that Irene's daughter could put in?
KT (15:10):
$6500 a year? Wait, she's under 50.
Suze (15:15):
I know that is the maximum, but there's more to
it than that, right. Irene's daughter can put in, because
obviously it will be a custodial Roth IRA because Irene
isn't 18 years of age yet. The maximum you can
put in to a Roth regardless of age
(15:38):
is 100% of your earned income or $6500 a year
if you're under 50. $7500 if you're 50 or older,
whichever one is less. So, if Irene's daughter is only
making $1000 in earned income, the maximum she can put
(16:02):
in is $1000. KT next question.
KT (16:07):
All right. This is from Mary. Hi, Suze and KT. I know
you like short questions. That's why I picked this one, Mary.
So I'll try to keep it short and sweet.
Suze (16:19):
I also like short women.
KT (16:27):
That's, that's true. Well, you only recently. True. That's me. That's me.
Suze (16:31):
You have been short since the day I met you, right?
KT (16:34):
But you've had some girlfriends that are a lot taller than you.
Suze (16:36):
And did I say I like them?
KT (16:39):
No, let's, let's continue.
Suze (16:44):
KT tell him the story about my mom, because KT is about 5'2".
KT (16:53):
I'm five ft two. Suze... Suze's mother was like, you know, 4'11" or something, 4'8" when she was in her nineties. So she looked at me one day and she looked up,
she said, you know, KT when I was young I
was tall like you. Well, Suze left probably for a
week over that one.
Suze (17:09):
My mommy was 54 though. My mother was a little bit less than I am right now.
KT (17:12):
And when you get old, you shrink everybody, you kind
of crumble up, crumble. Ok. So, so Mary's question is,
I'm going to be 62 years young in 2026. I
was married for 19 years to my ex-husband
and I've never remarried. My question is, should I start
collecting on his social security or should I wait until
(17:37):
full retirement age? So she was going to start collecting
when she turned 62 in 2026. What should she do?
Suze (17:45):
My dear Mary, since you were going to be 62 in 2026,
that means that you were born
after 1960, which means your full social security age happens to
be 67. So if you take his social security, half
(18:06):
of it, at 62, you will have about a 30-32%
penalty on what you would have gotten if you waited
till 67. If I were
you, I would wait till I was 67. If you can,
as long as you're healthy, you know, you're gonna live
(18:27):
hopefully a long life. It is worth it. And by
the way, he doesn't have to be collecting his social
security for you to get it. You will however, only
get 50% if you wait till you are 67
as to what he would have gotten at his full
(18:48):
retirement age, whatever that would be.
KT (18:51):
Suze, this next question is from Sammy. Hi, Suze. Thank
you for sharing your superb knowledge.
My husband and I have an account at a bank
with 6 CDs and a savings account. The total value is $450,000.
I just put all the accounts in our revocable trust.
(19:14):
I thought this would be higher protection for the balance.
I just followed up with the agent to make sure
everything was ok, and she informed me that we're only
covered for 250,000 because it's considered one account versus a
joint account. I'm so perplexed. Should I put half the
(19:36):
money in the trust? Please help me. So I just um, want you to remind her also of the whole podcast you did on this topic.
Suze (19:45):
On May first, I did a podcast on FDIC and
NCUA insurance for credit unions. How it works. I touched
on it with the podcast I did with Sheila Bair
a few weeks ago.
I'm a little confused here, because I'm not exactly sure...
did you take the six CD accounts and a savings account?
(20:06):
And did you title each one of them in the
title of the Trust or
did you take all of this money when it matured
and took the money and put the cash that you
had in these things, in the living, revocable trust and
within the living revocable trust, you bought one CD. Now
(20:29):
I'm going to assume that that is what you did.
And if that is what you did, where you liquidated
your CDs they had matured. And what did you do?
You put that money in one living, revocable trust. You
have insurance for every single beneficiary of the trust.
(20:51):
So, if you have, let's say three children and you
have them as your primary beneficiaries after you have died, obviously,
then you get $250,000 of insurance for each beneficiary within
the trust up to a maximum of five beneficiaries or
(21:12):
$1.25 million currently. All right. So that's something that you
should just know. However,
if you titled all six individual accounts in the name
of the trust,
that's not going to work. Remember, FDIC insurance insures different categories.
(21:39):
So you have a category of being single. That's one category.
A category two is a joint. You and your spouse
open up an account in joint names, you have an
account as a trust and things like that.
But if you just titled all 6 CDs and your savings
(22:01):
account in the title of the trust, the agent is correct.
So therefore figure out another way to do it, re-title
those CDs one in your individual name, one in the
title of the trust one in joint and things like that.
And you should be OK. OK. All right.
KT (22:22):
OK. Our last question is from Raquel. Dear Suze and KT, Thank
you for all you do. I don't know where I
would be without you.
And she said my dad passed away recently and my
brother and I inherited his home, which is located in Texas.
I live in Los Angeles. And we, we, the question
(22:44):
that we're both asking, I guess she and her brother,
what's the best way to sell the home so that
we don't end up owing high taxes?
Suze (22:56):
What's very important for everybody to understand, the best way to inherit any asset from a parent
or anybody, is for you to understand that if that
asset is in their individual name or in a trust
for them and you are the beneficiaries of that or
they just leave that asset to you via a will
(23:19):
or however you get it
as long as it's not in your name on title.
So you inherit it, you get a step up in
basis as to what the value of that home is.
So Raquel, if your daddy bought that house a long
time ago for $100,000, let's just say, and now he
(23:42):
just died and left it to you and your brother.
And now let's just say it's worth $3 million.
You get a step up in basis to $3 million, you
turn around and you sell it for $3 million. You do
not pay any income tax on it whatsoever. Just an
(24:04):
example there. What KT?
KT (24:06):
Is there a limit as to how long you can
hold it when you inherit it before you sell it?
Suze (24:13):
Well, the thing is you inherit it, you got to
step up in basis in this example, let's just say,
you know, it went to $3 million, right?
And now you're holding it and now the real estate
market takes off and now it's worth $3.5 million. Now,
you would only get the $3 million as your cost basis.
(24:33):
You would owe taxes on the appreciation of it. All right, KT.
KT (24:40):
That's a wrap. That's a wrap Suze.
Suze (24:44):
What do we want to tell us everybody? We want to remind them of..
KT (24:47):
So everyone, I'm excited. Join us tonight. Listen to Suze's webinar.
Suze (24:51):
Are you gonna listen, KT?
because, you know, KT, I really never know what Reid,
who is the co-host with me, what he's actually going to ask. And by
the way, I just want to tell everybody because you
have all been asking. Finally, the must have documents that
we took off the market for us to update them.
(25:15):
They are back on sale. So you might want to
think about them. Again they are $99. The way that
you get them is by going to Suze Orman dot
com slash offer or they are on the women and
Money podcast app right there. However, today on the webinar,
(25:37):
I don't know what the offer is. I'll probably ask,
Reid about it
because that's up to them. But you might want to
tune in and find out about that. I wonder if
they're gonna be doing an offer on the Women and
Money book that I just absolutely renewed. You know, it's..
(25:58):
it's updated. So hopefully they'll offer that as well. All right.
So until Sunday, where I am going to finally do
the podcast on calculating your net worth so that you
really understand what your net worth is, no matter what happens,
(26:19):
is going to be the podcast this Sunday. But until then,
KT there's only one thing that we want people to
say every single day. And what is it?
KT (26:32):
Today...
Suze (26:33):
Wherever I go..
KT (26:35):
I will create a more peaceful, joyful and loving world.
Suze (26:42):
And if you do that, what will they be KT?
Unstoppable! Unstoppable!
March 30th 2023. Welcome everybody to what KT?
KT (00:40):
The Women and Money podcast and everyone, everyone smart enough to listen.
Suze (00:45):
And what edition is this? The ask KT and Suze Anything!
All right. So she's back with us. Ok...
KT (00:57):
And no one wrote in that they missed me.
Suze (00:59):
No. And if they did, do you think I would,
do you think if they did, I would tell you?
Do you think I would do that? Before we start,
I want to remind everybody that today, March 30th, 6pm
East Coast time, 3pm Pacific time, I am doing a
webinar and we
(01:21):
already have 50,000 people who have registered...
KT (01:26):
and they keep signing up. It's gonna be really popular.
Suze (01:30):
So that is today March 30th to register for free,
go to Suze Orman dot com slash webinar. Ok KT,
what do you got for me?
KT (01:42):
First one is from Dianna. Hi, Suze. I'm almost 55
my husband is 52
From 2011 to 2019, I went through a horrible custody
battle which cost about 250,000. It wiped me out financially
and to be able to support the legal situation plus
(02:05):
living expenses. I had to use my Roth, my traditional IRA,
my kids' college savings, my savings. I sold jewelry.
I just needed all the cash I can get. It
finally ended in 2019. So she said ever since her husband,
meaning her new husband and she finally paid off the
(02:27):
debt about a year ago. But this is the part
that's really sad, Suze, we save but then something comes
up where we have to take chunks out of our savings.
Car issues, medical
issues, putting kids in sports that cost so much. We
had to pull them out. Right now we only have
(02:47):
$10,000 to our name. We just can't seem to get
past that amount and keep the savings going. How do
we break through that? And we don't live an expensive lifestyle, Suze,
any advice you can give us, we will take.
Suze (03:07):
Deanna. First of all, let's put things in perspective here. You spent
your life savings, your kid's college education and everything to
do what
to essentially get custody over the most priceless children that
you wanted to keep in your life. I think truthfully
(03:31):
if you look at it in perspective, that is such
a deal. Such a deal because of what you ended
up with. Now, with that said, you cannot look at
what you spent
and regret it on any level.
There is a law of money, look at what you
(03:52):
have not at what you had and that applies to
everything in life. You had those accounts, you had savings
for this, you had that. Now what do you have?
Custody of your children, small price to pay. Next, in
(04:13):
your email, you use the words we can't
right? We only have $10,000. We can't seem to do this.
You have got to change your thoughts to change your reality.
As you know another saying is be very, very careful
about what you think. Because what you think you eventually say,
(04:34):
be careful about the words that you use because your
words become your actions, your actions become your habits and
your habits become your destiny.
You have got to think greater thoughts than you are thinking.
You have got to create a new truth for yourself,
which isn't one like you're doing right now. I can't
(04:57):
do this. I never get ahead. Always something happens. For
the next six months
I want you to make a promise that every single
day you will write down 25 times. You will say
it silently to yourself 25 times. You will scream it
(05:17):
in your car 25 times the following
money than I will ever need.
Any time you get afraid and you think that you can't,
let your thoughts tell you that you can. Also just so,
you know, we do have a course called Overcoming Your
(05:39):
Financial Fears. I'm sure it's on the women and Money
app under Suze shop. It's something that you might look at.
That's what I would be doing if
I were you, I would look at what I have.
I would not look at what I had. KT, next question.
KT (05:56):
Ok. From Gabriella. Hi, Suze and KT, love you guys. I like these.
Suze (06:03):
Then why didn't you write in and tell KT how
much you missed her.
KT (06:07):
Yea. Gabriella. Ok. I'm wondering how to find dividend paying stocks
and tell if a dividend paying stock is worth its weight.
I did invest in the oil one but now I'm
looking to diversify.
Suze (06:20):
Good because you should be diversified. The last thing you
want is to be only invested in any of those
oil stocks. I still think over the long run oil,
the price of energy will go up. But you definitely
want diversification. I have to tell you one of the
best ways for you to get diversification easily
(06:41):
is by simply buying the Schwab US Dividend Equity ETF
symbol is S C H D. They're at about 71
or $72 a share right now. They're paying about a 3.5% dividend.
If you reinvest the dividends in this ETF, over the past,
(07:04):
I think 20 years or 10 years or something like that,
this ETF actually outperformed the Standard and Poor's 500 ETF,
as long as you reinvested the dividends, their expense ratio
is only .06%. So that is how I would be
doing it without getting totally educated. That way, if you
(07:28):
dollar cost average into it, you now have time to
look at what does it take to get a good
dividend stock? And just briefly, it has
to have good management. It has to have positive cash flow.
It has to have good earnings and all of those things.
Somewhere I did a podcast on that. Next question, my
(07:50):
dear non missed.
KT (07:57):
Ok. That's, that's not nice. They, they did miss me.
Suze (07:59):
Of course, they did. But I get sick and tired
of where's KT? I miss KT. She's the main reason
I listen to this podcast. All right.
KT (08:08):
All right. This next question is from Lynne and I
call it where, what and when
She said Dear Suze help. I'm a newly unmarried woman.
I love that first line, newly unmarried, meaning she just
got a divorce. I moved to a new state Colorado
from California and I'm currently renting a home. I'll be
(08:28):
selling two real estate properties in California and netting about 160,000.
I have 16,000 in cash. I have credit card debt
of 33,000
and she has three interest rates. So probably across three
cards and then she says, where do I put my money?
(08:48):
What to invest in first? And for how long? T Bills?
Alliance CDs or Series I? And when should I consider
the purchase of a primary resident? So there you go.
Suze (09:02):
Alright my dear Lynn. I know KT you picked this
because Lynn is your twin sister's name, right?
KT (09:08):
Not necessarily, I just love the where, what and when.
Suze (09:12):
Where do I put my money? KT, what is one
of my absolute laws of money? When you have just
been newly unmarried. Do you remember?
That's a no, you can say no. OK. That's fine.
Don't look at me like tell me, right? You don't remember.
KT (09:35):
I don't remember.
Suze (09:36):
All right, no problem. You are to do absolutely nothing.
But what KT?
You still don't remember.
KT (09:45):
No, you're not supposed to do anything for about a
year until you get yourself settled in.
Suze (09:50):
Right? KT. You are to do absolutely nothing other than
keeping your money safe and sound after the loss of
a loved one, for at least six months to one
year
And a loss could be death, it could be divorce,
whatever it is, but nothing other than keeping your money
(10:12):
safe and sound.
You just wrote this email into Ask Suze podcast at
Gmail dot com, which by the way is where all
of you would write in when you have a question
and if KT chooses it, we will answer it on
the podcast. So it is too soon as to what
(10:33):
should you be investing in. So, where do I put
my money? Well, the truth of the matter is the
first thing you do because it is not safe and
sound to have credit card debt.
So the very first thing you're going to do is
you are going to pay off $33,000 of credit card
debt that will leave you when you add the $16,000
(10:58):
in cash that you already have; $143,000. For now, if
I were you, I would just put it somewhere
that I feel safe and sound. That obviously is if
you choose a bank would be FDIC insured and or
(11:18):
a credit union, obviously Alliant Credit Union. Now, the first
thing you always have to do is now figure out
how much does it cost you with rent with every
single bill that you have got to pay?
How much does it cost you with the must pay
expenses every single month. You wanna times that by eight
(11:44):
or 12, either one and that is how much money
you need in an emergency savings account. So that if
anything ever happened to you, you would have enough money
to pay your must pay expenses for at least eight
months to one year. After you have done that, then
(12:04):
really you need to start thinking about, do you want
to buy a home, do you not? So just be
easy where you put this money. Again as you know,
I love the Alliant Credit Union one year CD at 5%.
Series I bonds. I have not decided yet if I
want people to invest in them by April 25th, right
(12:28):
in there. So shortly I will know depending on inflation,
but I'm not sure in your particular situation, I would
want to lock up money for five years. So chances
are I would not be doing that. When should you
consider the purchase of a primary residency? As soon as
you feel secure. You're happy, you know, the neighborhood that
(12:52):
you wanna live in, you know, you're going to stay
in Colorado, you know, those things for sure, but do
not be in a rush on any level.
So keep your money safe and sound. That would be
in either CDs or T bills or money market funds
or money market accounts that are all paying a nice
(13:13):
interest rate. But that is what I would be doing
if I were you... KT!
KT (13:19):
And keep those credit cards clean clear. No Debt.
Suze (13:23):
No debt, no debt you pay for cash, put them
on your credit card, pay it in full at the
end of every month.
KT (13:30):
All right. This is a great question. This is from Irene. Hi,
Suze and KT. Can I open a Roth IRA for my
16 year old if she works a summer job
Now. I didn't know the answer to this but Susie,
tell everybody what the deal is with, with um, opening Roth IRAs.
Suze (13:49):
Oh, should that have been your quizzie?
KT (13:51):
Well, I wasn't sure... how... you have to have earned income.
Suze (13:55):
Pop quizzie. This is the pop quizzie everybody, right?
Pop quizzie means KT just asked me a question. Now,
all of you, how would you answer that question? Can
Irene open a Roth IRA for her daughter who simply
(14:18):
has just a summer job right now? Yes or no.
And if she can do that, what is the maximum amount that she can put in?
KT (14:27):
So the answer is yes, if she has earned income, that's reported. But let me just say some kids get a summer job where you know, they cut, they mow the lawn.
Suze (14:33):
Does that count?
KT (14:45):
No, it doesn't count because they just get cash. It's
not reported income.
Suze (14:52):
All right. So, truthfully KT ding ding, ding, ding, ding. The second part, the second
part is let's remember the maximum that you can put
in if you are under 50 is $6500 a year.
So what is the maximum that Irene's daughter could put in?
KT (15:10):
$6500 a year? Wait, she's under 50.
Suze (15:15):
I know that is the maximum, but there's more to
it than that, right. Irene's daughter can put in, because
obviously it will be a custodial Roth IRA because Irene
isn't 18 years of age yet. The maximum you can
put in to a Roth regardless of age
(15:38):
is 100% of your earned income or $6500 a year
if you're under 50. $7500 if you're 50 or older,
whichever one is less. So, if Irene's daughter is only
making $1000 in earned income, the maximum she can put
(16:02):
in is $1000. KT next question.
KT (16:07):
All right. This is from Mary. Hi, Suze and KT. I know
you like short questions. That's why I picked this one, Mary.
So I'll try to keep it short and sweet.
Suze (16:19):
I also like short women.
KT (16:27):
That's, that's true. Well, you only recently. True. That's me. That's me.
Suze (16:31):
You have been short since the day I met you, right?
KT (16:34):
But you've had some girlfriends that are a lot taller than you.
Suze (16:36):
And did I say I like them?
KT (16:39):
No, let's, let's continue.
Suze (16:44):
KT tell him the story about my mom, because KT is about 5'2".
KT (16:53):
I'm five ft two. Suze... Suze's mother was like, you know, 4'11" or something, 4'8" when she was in her nineties. So she looked at me one day and she looked up,
she said, you know, KT when I was young I
was tall like you. Well, Suze left probably for a
week over that one.
Suze (17:09):
My mommy was 54 though. My mother was a little bit less than I am right now.
KT (17:12):
And when you get old, you shrink everybody, you kind
of crumble up, crumble. Ok. So, so Mary's question is,
I'm going to be 62 years young in 2026. I
was married for 19 years to my ex-husband
and I've never remarried. My question is, should I start
collecting on his social security or should I wait until
(17:37):
full retirement age? So she was going to start collecting
when she turned 62 in 2026. What should she do?
Suze (17:45):
My dear Mary, since you were going to be 62 in 2026,
that means that you were born
after 1960, which means your full social security age happens to
be 67. So if you take his social security, half
(18:06):
of it, at 62, you will have about a 30-32%
penalty on what you would have gotten if you waited
till 67. If I were
you, I would wait till I was 67. If you can,
as long as you're healthy, you know, you're gonna live
(18:27):
hopefully a long life. It is worth it. And by
the way, he doesn't have to be collecting his social
security for you to get it. You will however, only
get 50% if you wait till you are 67
as to what he would have gotten at his full
(18:48):
retirement age, whatever that would be.
KT (18:51):
Suze, this next question is from Sammy. Hi, Suze. Thank
you for sharing your superb knowledge.
My husband and I have an account at a bank
with 6 CDs and a savings account. The total value is $450,000.
I just put all the accounts in our revocable trust.
(19:14):
I thought this would be higher protection for the balance.
I just followed up with the agent to make sure
everything was ok, and she informed me that we're only
covered for 250,000 because it's considered one account versus a
joint account. I'm so perplexed. Should I put half the
(19:36):
money in the trust? Please help me. So I just um, want you to remind her also of the whole podcast you did on this topic.
Suze (19:45):
On May first, I did a podcast on FDIC and
NCUA insurance for credit unions. How it works. I touched
on it with the podcast I did with Sheila Bair
a few weeks ago.
I'm a little confused here, because I'm not exactly sure...
did you take the six CD accounts and a savings account?
(20:06):
And did you title each one of them in the
title of the Trust or
did you take all of this money when it matured
and took the money and put the cash that you
had in these things, in the living, revocable trust and
within the living revocable trust, you bought one CD. Now
(20:29):
I'm going to assume that that is what you did.
And if that is what you did, where you liquidated
your CDs they had matured. And what did you do?
You put that money in one living, revocable trust. You
have insurance for every single beneficiary of the trust.
(20:51):
So, if you have, let's say three children and you
have them as your primary beneficiaries after you have died, obviously,
then you get $250,000 of insurance for each beneficiary within
the trust up to a maximum of five beneficiaries or
(21:12):
$1.25 million currently. All right. So that's something that you
should just know. However,
if you titled all six individual accounts in the name
of the trust,
that's not going to work. Remember, FDIC insurance insures different categories.
(21:39):
So you have a category of being single. That's one category.
A category two is a joint. You and your spouse
open up an account in joint names, you have an
account as a trust and things like that.
But if you just titled all 6 CDs and your savings
(22:01):
account in the title of the trust, the agent is correct.
So therefore figure out another way to do it, re-title
those CDs one in your individual name, one in the
title of the trust one in joint and things like that.
And you should be OK. OK. All right.
KT (22:22):
OK. Our last question is from Raquel. Dear Suze and KT, Thank
you for all you do. I don't know where I
would be without you.
And she said my dad passed away recently and my
brother and I inherited his home, which is located in Texas.
I live in Los Angeles. And we, we, the question
(22:44):
that we're both asking, I guess she and her brother,
what's the best way to sell the home so that
we don't end up owing high taxes?
Suze (22:56):
What's very important for everybody to understand, the best way to inherit any asset from a parent
or anybody, is for you to understand that if that
asset is in their individual name or in a trust
for them and you are the beneficiaries of that or
they just leave that asset to you via a will
(23:19):
or however you get it
as long as it's not in your name on title.
So you inherit it, you get a step up in
basis as to what the value of that home is.
So Raquel, if your daddy bought that house a long
time ago for $100,000, let's just say, and now he
(23:42):
just died and left it to you and your brother.
And now let's just say it's worth $3 million.
You get a step up in basis to $3 million, you
turn around and you sell it for $3 million. You do
not pay any income tax on it whatsoever. Just an
(24:04):
example there. What KT?
KT (24:06):
Is there a limit as to how long you can
hold it when you inherit it before you sell it?
Suze (24:13):
Well, the thing is you inherit it, you got to
step up in basis in this example, let's just say,
you know, it went to $3 million, right?
And now you're holding it and now the real estate
market takes off and now it's worth $3.5 million. Now,
you would only get the $3 million as your cost basis.
(24:33):
You would owe taxes on the appreciation of it. All right, KT.
KT (24:40):
That's a wrap. That's a wrap Suze.
Suze (24:44):
What do we want to tell us everybody? We want to remind them of..
KT (24:47):
So everyone, I'm excited. Join us tonight. Listen to Suze's webinar.
Suze (24:51):
Are you gonna listen, KT?
because, you know, KT, I really never know what Reid,
who is the co-host with me, what he's actually going to ask. And by
the way, I just want to tell everybody because you
have all been asking. Finally, the must have documents that
we took off the market for us to update them.
(25:15):
They are back on sale. So you might want to
think about them. Again they are $99. The way that
you get them is by going to Suze Orman dot
com slash offer or they are on the women and
Money podcast app right there. However, today on the webinar,
(25:37):
I don't know what the offer is. I'll probably ask,
Reid about it
because that's up to them. But you might want to
tune in and find out about that. I wonder if
they're gonna be doing an offer on the Women and
Money book that I just absolutely renewed. You know, it's..
(25:58):
it's updated. So hopefully they'll offer that as well. All right.
So until Sunday, where I am going to finally do
the podcast on calculating your net worth so that you
really understand what your net worth is, no matter what happens,
(26:19):
is going to be the podcast this Sunday. But until then,
KT there's only one thing that we want people to
say every single day. And what is it?
KT (26:32):
Today...
Suze (26:33):
Wherever I go..
KT (26:35):
I will create a more peaceful, joyful and loving world.
Suze (26:42):
And if you do that, what will they be KT?
Unstoppable! Unstoppable!
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