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If You Take Social Security at 62, What Will You Do at 92? · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  Suze: December 4th, 2025. Welcome everybody to the Women and Money podcast,
• 0:14
  Suze: and everybody's smart enough to listen, right, KT?
• 0:17
  KT: Yes ma'am.
• 0:18
  KT: People write me and they say they love when I
• 0:20
  KT: call you Miss Travis. Miss Travis.
• 0:23
  KT: She calls me that when she's either mad or about
• 0:26
  KT: to correct me.
• 0:30
  Suze: Miss Travis, yes, you know what tomorrow is?
• 0:34
  KT: Tomorrow is Suze's half birthday. I don't know if all
• 0:37
  KT: of you celebrate a half birthday. I never did. I
• 0:40
  KT: don't even know what mine is, but Suze loves December 5th.
• 0:45
  KT: Tomorrow her half birthday. How are you gonna celebrate it?
• 0:49
  Suze: I'll
• 0:49
  Suze: be 74 and a half, tomorrow. I'll celebrate it like I do every year.
• 0:55
  Suze: My friend from grammar school, Leslie Lynn's full birthday is
• 1:00
  Suze: on December
• 1:01
  KT: 5th...
• 1:02
  Suze: So I write Leslie and I say happy birthday. She
• 1:05
  Suze: writes me and says Happy half birthday, and then we
• 1:09
  Suze: are complete.
• 1:10
  KT: rAll ight, all right, I can't wait to hear from
• 1:12
  KT: her too. I love that woman. Don't you though?
• 1:14
  KT: Yeah, she's one of Suze's...
• 1:17
  KT: And you've been, you've known each other since how old?
• 1:19
  Suze: Oh, early in grammar school, early, like, like forever,
• 1:25
  KT: She's a forever friend. OK, I'm starting with a thank you, and
• 1:29
  KT: this is post Thanksgiving, but it's a...
• 1:32
  Suze: Oh, wait a minute, I'm not done.
• 1:34
  KT: Oh, OK.
• 1:35
  Suze: So you know we didn't do a podcast on Sunday
• 1:39
  Suze: and all, but however, how was your Thanksgiving?
• 1:42
  KT: Delicious. Suze and Colo yet once again made the best
• 1:49
  KT: turkey stuffing or dressing, as many of you call it,
• 1:53
  KT: we ever had. But this year we had Thanksgiving with
• 1:56
  KT: my sister Lynn and lots of people and kids and...
• 2:00
  Suze: And bottom line, fabulous, fabulous, fabulous and all. And now
• 2:05
  Suze: we are back on the island. All right, KT.
• 2:08
  KT: OK, this is a post Thanksgiving thank you.
• 2:11
  KT: This is from Vicky, she said. Suze, I waited until
• 2:15
  KT: I was 70 to take my Social Security and received
• 2:19
  KT: an extra 30.7%, which was added to my 100%. The
• 2:26
  KT: wait felt like forever, but I did it, and I
• 2:29
  KT: am extremely happy.
• 2:31
  KT: I tried to talk my friends at work into this
• 2:34
  KT: about Social Security, and they thought different than me. They
• 2:38
  KT: did not want to wait, and most of my coworkers
• 2:41
  KT: took theirs at age 62.
• 2:44
  Suze: Such a mistake.
• 2:44
  KT: I know, and she said, Suze, thank you so much,
• 2:47
  KT: From Vicky. No questions here. She just wants to thank you.
• 2:51
  Suze: Well, she wants to...
• 2:51
  Suze: She listened to you.
• 2:53
  Suze: She wants to thank me. However, I have a feeling
• 2:57
  Suze: Vicky also wants me to say to everybody, since her
• 3:00
  Suze: coworkers didn't listen to her, the biggest mistake in most cases,
• 3:05
  Suze: in my opinion, when it comes to Social Security, is
• 3:08
  Suze: if you take it at 62.
• 3:12
  Suze: How many emails do I get saying, why did I
• 3:15
  Suze: take it at 62? I'm now 92. I never thought
• 3:19
  Suze: I would live this long. It doesn't cover anything. Just
• 3:24
  Suze: biggest mistake, Suze. So we're all living longer.
• 3:28
  Suze: We all will need more and more money cause things
• 3:31
  Suze: get more and more expensive. If you're gonna take Social Security,
• 3:35
  Suze: at minimum, wait till your full retirement age. Currently for
• 3:40
  Suze: most of you, 67. All right, KT.
• 3:43
  KT: All right, this is from Patricia.
• 3:45
  KT: She said my 92 year old organized mom invited me
• 3:50
  KT: to go over and look through her documents, financial accounts, passwords,
• 3:57
  KT: and the works. She said her documents include a will,
• 4:01
  KT: healthcare proxy, power of attorney, and living will.
• 4:05
  KT: And then she said, I bought the must-have documents thinking
• 4:08
  KT: we could update her will as it's dated 1996 and
• 4:12
  KT: my last name has also changed since then. I see
• 4:17
  KT: that I must create a trust. My mom only has
• 4:21
  KT: $20,000 in a high yield savings account which she added
• 4:26
  KT: my name to. She owns a co op worth $250,000
• 4:31
  KT: and a car worth $18,000.
• 4:34
  KT: So she pulls at least 1,000 out of her savings
• 4:38
  KT: each month. Should I hire an attorney to create her will,
• 4:42
  KT: or does it make sense to create a trust? So Suze,
• 4:46
  KT: tell Patricia what she really needs to do.
• 4:48
  Suze: So here's the thing. First, let me clear up everything
• 4:51
  Suze: about the must-have docs. It used to be when the
• 4:55
  Suze: must-have docs first came out over 25 years ago.
• 5:02
  Suze: You first had to create a will, then you had
• 5:05
  Suze: to create a trust, then you had to create the
• 5:08
  Suze: durable power of attorney for health care. You had to
• 5:10
  Suze: do each one individually, but you then had to do what?
• 5:14
  Suze: reenter the information to each and every one of them.
• 5:19
  Suze: So as time went on, people were also just doing
• 5:23
  Suze: the will. They weren't doing the trust. They were doing
• 5:27
  Suze: what they wanted, but not necessarily what they needed.
• 5:31
  Suze: So in the end, the must-have documents, once you fill
• 5:35
  Suze: in the information, it automatically populates all of the must-have
• 5:40
  Suze: documents for you, so you don't have to do one
• 5:44
  Suze: after the other after the other. Now, Patricia, just fill
• 5:48
  Suze: it out. No big deal. You don't want to do
• 5:51
  Suze: a living revocable trust. Fine, don't.
• 5:54
  Suze: But there is where you'll have your will. It will
• 5:57
  Suze: create one for you, so you don't need to hire,
• 6:00
  Suze: in my opinion, an attorney to do so. However...
• 6:05
  Suze: I just wanna make you aware of that mama has
• 6:09
  Suze: a co-op. Now, listen, not all co-ops allow their stock certificates,
• 6:15
  Suze: cause when you own a co-op, you have a stock
• 6:17
  Suze: certificate to be transferred into the name of a trust.
• 6:21
  Suze: So mama might not even be able to do it.
• 6:23
  Suze: You need to find that out. However, if mama dies,
• 6:29
  Suze: that co-op is going to go into probate.
• 6:32
  Suze: And you are going to have to file filing fees
• 6:36
  Suze: could be $200 to $1,000. Probate fees could be $3,000
• 6:40
  Suze: 10,000 dollars, whatever it may be. So there will be
• 6:44
  Suze: costs involved there. You just need to be aware of
• 6:48
  Suze: the downside if mama dies without a revocable trust, just
• 6:54
  Suze: that simple. However,
• 6:57
  Suze: KT, I wrote Patricia already and I told her all
• 7:02
  Suze: this because what I said to her was...
• 7:05
  Suze: The problem isn't about should you have a trust, not
• 7:07
  Suze: have a trust, a will. The problem is the money.
• 7:11
  Suze: She has $20,000 in an account. She's pulling out $1,000
• 7:16
  Suze: a month to meet her expenses. That means in another
• 7:20
  Suze: year and a half or so it's gone. Then what?
• 7:23
  Suze: Just something to think about. All right.
• 7:26
  KT: All right.
• 7:26
  Suze: And by the way, for those of you, you just
• 7:29
  Suze: heard me, I answered somebody directly. I've answered so many
• 7:32
  Suze: of you directly, it's not even funny.
• 7:35
  Suze: You can always write in your question to ask Suze podcast@gmail.com.
• 7:40
  Suze: That's S U Z E.
• 7:42
  Suze: And ask a question. Keep it short, because if they're long,
• 7:45
  Suze: we're just gonna skip over them truthfully. Although once in
• 7:48
  Suze: a while I answer them.
• 7:49
  KT: Not only that, can you please tell everyone listening if
• 7:52
  KT: they need the must-have documents where to get them?
• 7:55
  Suze: Oh, I forgot about that. So yes, for those of
• 7:58
  Suze: you who want the must-have documents, and you should all
• 8:01
  Suze: want them because you need them, a will, a living
• 8:03
  Suze: revocable trust, an advanced directive, durable power of attorney for
• 8:06
  Suze: health care, and financial power of attorney.
• 8:09
  Suze: $2,500 worth of state of the art documents currently $99
• 8:14
  Suze: good in all 50 states. Just go to must-havedocs.com and
• 8:19
  Suze: you can get them there. And of course when you
• 8:22
  Suze: get them there, once you have them, you can share
• 8:25
  Suze: them with every one of your family members. You give
• 8:28
  Suze: them the activation code they create it for themselves, so
• 8:31
  Suze: it's like a $2,500 gift to every single person you
• 8:34
  Suze: give it to. All right.
• 8:35
  KT: Yeah, great year-end gift.
• 8:37
  KT: So, Sandra wrote and she said, Suze, I'm retired age
• 8:41
  KT: 69 and a half. She is a half birthday girl too.
• 8:46
  KT: She said, I have a Charles Schwab account in the
• 8:48
  KT: amount of $107,000 and my husband has the same in
• 8:53
  KT: his own name.
• 8:54
  KT: Suze, we were advised to put it into individual annuities
• 8:58
  KT: and the remainder into individual life insurance IRA policies with
• 9:03
  KT: the goal to transfer taxable money over 5 years into
• 9:07
  KT: non-taxable income for a later date. I mean, they're 69
• 9:13
  KT: and a half, right?
• 9:14
  Suze: It's just stupid.
• 9:15
  KT: So we have a home valued at $650,000 with a
• 9:20
  KT: $230,000 mortgage.
• 9:24
  KT: My husband will retire in April and will receive a
• 9:27
  KT: healthy pension. What would be your advice in regards to
• 9:31
  KT: the annuities and life insurance policies? Wait, look at her face.
• 9:36
  Suze: Well, because I answered this with one simple thing, that
• 9:39
  Suze: emoji with a thumbs down. That's how I answered Sandra. Sandra,
• 9:44
  Suze: listen to me.
• 9:46
  Suze: Let's say you were lucky enough to come to me directly.
• 9:50
  KT: You should see your face everybody.
• 9:52
  KT: Go ahead. I'm sorry.
• 9:54
  Suze: We should be YouTubing this.
• 9:55
  KT: I know.
• 9:56
  Suze: I wish you could see. Like I'm up on my,
• 9:59
  Suze: my arms on my face.
• 10:00
  KT: It's like so ready to like blast it. All right, go ahead.
• 10:03
  Suze: Right, but I'm like holding myself up right on the
• 10:07
  Suze: arms of my chair, leaning into the mic with both
• 10:10
  Suze: hands like ready to choke, right? So let's just say
• 10:15
  Suze: you were lucky enough.
• 10:16
  Suze: To be sitting across the desk from me and you
• 10:20
  Suze: told me that here you are 6915. I imagine that
• 10:25
  Suze: your husband is pretty near that age as well somewhere
• 10:29
  Suze: and that you have a home worth $650,000 but you
• 10:33
  Suze: still have a $238,000 mortgage.
• 10:38
  Suze: And you had $214,000 among you. I don't know if
• 10:45
  Suze: it's in an IRA. I'm not exactly sure where it is.
• 10:49
  Suze: And you said, what should we do, Suze? And you
• 10:52
  Suze: have a pension. You have your fine. I would look
• 10:54
  Suze: at everything. I'd go, I'll tell you what I would
• 10:56
  Suze: do if I were you. If you could, that money's
• 10:59
  Suze: in a money market fund, for instance.
• 11:02
  Suze: I would take that money and pay off the mortgage
• 11:05
  Suze: on my home because why would I do that? Your
• 11:09
  Suze: mortgage goes away, therefore, your largest monthly expense goes away.
• 11:14
  Suze: You own your home outright. You have nothing to worry
• 11:18
  Suze: about at that moment in time. Nothing will make.
• 11:21
  Suze: You feel more secure than owning your own home outright,
• 11:24
  Suze: but no, this advisor wants you to put it in
• 11:27
  Suze: an annuity and possibly a life insurance policy just so
• 11:31
  Suze: in five years he can do it again or she
• 11:34
  Suze: can do it again and get another commission so you
• 11:36
  Suze: can have non-taxable income. Are you crazy? Are you crazy?
• 11:42
  Suze: I would actually, if I had an advisor that advised
• 11:45
  Suze: me to do that.
• 11:47
  Suze: At this point in your life, I would switch my
• 11:50
  Suze: account to another advisor. So, that's number one. Number two,
• 11:55
  Suze: I want you to seriously think about what I said
• 11:58
  Suze: to you. How would it make you feel?
• 12:01
  Suze: If you owned your home outright, now again, I don't
• 12:06
  Suze: know where this money is. I don't know if there's
• 12:08
  Suze: capital gains tax involved. You have to check all of
• 12:11
  Suze: that obviously with an accountant and everything like that, but
• 12:14
  Suze: I would make it your number one goal more than
• 12:16
  Suze: anything else to pay off your mortgage as soon as
• 12:22
  Suze: you can. Go on, KT.
• 12:23
  KT: OK, next question.
• 12:25
  Suze: Wait, I have a question.
• 12:27
  Suze: No, I'm very serious. Why are we getting hundreds of
• 12:32
  Suze: emails from people who have accounts? I'm very serious at
• 12:36
  Suze: Fidelity and Charles Schwab, and the number one piece of
• 12:41
  Suze: advice they are all being given is to get an annuity,
• 12:45
  Suze: get an annuity, get an annuity.
• 12:49
  Suze: For all of you, if you are in that situation,
• 12:52
  Suze: you must ask your financial advisor. If I get an annuity,
• 12:57
  Suze: how much commission are you going to make?
• 13:01
  Suze: You really have to understand how annuities work, everybody. I
• 13:05
  Suze: just don't get it. There are so many better things
• 13:08
  Suze: that you could probably be doing with your money. Sometimes
• 13:11
  Suze: it makes sense, but most of the times it does not,
• 13:15
  Suze: especially if it's money in a retirement account. Are you
• 13:18
  Suze: kidding me? Go on.
• 13:20
  KT: My next question is from Amy. She said, I switched
• 13:23
  KT: jobs back in 2018 and never moved my 401k from
• 13:29
  KT: my previous employer since it was doing so well. I
• 13:33
  KT: also have a Roth 401k with my current employer. I
• 13:37
  KT: like the idea of not paying taxes on my 401k
• 13:41
  KT: in retirement. Would you recommend converting to a Roth now?
• 13:46
  Suze: So I imagine, Amy, you're asking me, do I recommend
• 13:50
  Suze: you converting to the Roth 401k at your new employer's
• 13:55
  Suze: rather than just a Roth? And here's two things I
• 13:58
  Suze: want you to understand. You would be far better off
• 14:03
  Suze: right now converting little by little to a Roth IRA.
• 14:08
  Suze: Rather than the Roth 401k at your new employer. Number one,
• 14:14
  Suze: there are more investment options in a Roth IRA than
• 14:18
  Suze: a Roth 401k. A Roth 401k when you absolutely retire
• 14:24
  Suze: from there and then take it and do a rollover
• 14:27
  Suze: to a Roth IRA.
• 14:29
  Suze: The time clock of the Roth 401k does not come
• 14:33
  Suze: with you. You start the time clock all over again.
• 14:37
  Suze: Remember that five-year rule. If you were to convert right
• 14:40
  Suze: now to a Roth IRA, the time clock starts now.
• 14:45
  Suze: So later on, when you have your Roth 401k that
• 14:49
  Suze: you are continuing to contribute to, and then you transfer
• 14:53
  Suze: that to a Roth IRA, you already met the five-year rule,
• 14:57
  Suze: most likely at that time.
• 14:59
  Suze: So that's what you should be doing.
• 15:03
  Suze: Now, the way you would be doing it, do a
• 15:04
  Suze: little bit this year. It's almost at the end of
• 15:06
  Suze: the year. A little next year. Consult with your CPA
• 15:10
  Suze: or tax accountant as to how much you could convert
• 15:14
  Suze: every year so that you don't go into a higher
• 15:17
  Suze: income tax bracket. All right, KT.
• 15:19
  KT: OK, Suze, this next question is...
• 15:21
  Suze: Are you having fun?
• 15:22
  KT: Yeah
• 15:23
  Suze: You don't look like it.
• 15:24
  KT: Well, because some of these questions are baffling me, especially
• 15:28
  KT: this one.
• 15:29
  Suze: This is from, let me just.
• 15:31
  Suze: Is this about a
• 15:31
  KT: Roth? No, no, no, no, I'm, I like Roth now, everybody,
• 15:36
  KT: I changed.
• 15:37
  Suze: If we ever get a dog, you know what I'm
• 15:38
  Suze: gonna call it? Roth
• 15:39
  KT: Roth, but you all like my Roth smoothies.
• 15:43
  Suze: They did, didn't they?
• 15:43
  KT: My frothy by
• 15:44
  Suze: Roth, she has in front of her.
• 15:47
  KT: Yeah, I'm drinking it right now. Frothy Rothy.
• 15:50
  Suze: I know.
• 15:50
  KT: Yep, I made, Oh look, you noticed, they're green.
• 15:54
  Suze: Wait a minute.
• 15:54
  KT: They're also the color of money.
• 15:56
  Suze: As Colo would say: "wait a minute."
• 15:59
  Suze: Does that mean you think I don't notice things?
• 16:01
  KT: Well, I didn't.
• 16:01
  KT: I didn't know if you noticed that one.
• 16:04
  Suze: How could I miss it?
• 16:06
  KT: Usually I shouldn't have any drinks on the recording table
• 16:10
  KT: with the equipment. OK, ready. This is from Bavani. This
• 16:14
  KT: is baffling me.
• 16:15
  Suze: I love that name.
• 16:16
  KT: I do too, but she, she said my husband passed
• 16:19
  KT: away 4 years ago. I downsized. Ready for this. This
• 16:23
  KT: is why I'm confused. I downsized by selling our home
• 16:27
  KT: in the country.
• 16:28
  KT: And buying a smaller one in the city. I have
• 16:33
  KT: about $30,000 in savings from the sale, and I have
• 16:38
  KT: been slowly using it. What can I or should I
• 16:42
  KT: do to make the money last? I'm almost 63. I
• 16:47
  KT: don't see how I can ever retire since I am
• 16:50
  KT: a one income household now.
• 16:53
  KT: You know, I'm looking at you confused. It seems like
• 16:56
  KT: if you move from the country into the city, your
• 16:59
  KT: expenses are gonna be higher in a city environment.
• 17:02
  Suze: But maybe she felt better in it that we don't know.
• 17:05
  Suze: What I don't know, Bavani, is, does that mean you bought, uh,
• 17:10
  Suze: and you, you say that you are buying a smaller
• 17:13
  Suze: one in the city. Does that mean that you have
• 17:16
  Suze: a mortgage on it?
• 17:18
  Suze: Or do you own it outright from the proceeds of
• 17:22
  Suze: the house that you had in the country? I don't
• 17:26
  Suze: know that. So this isn't a financial question, even though
• 17:30
  Suze: you may think it is. This is a question about
• 17:35
  Suze: you feeling at the age of 63 that there's no
• 17:39
  Suze: way you can ever retire and as long as you
• 17:43
  Suze: continue to think that way.
• 17:45
  Suze: That will be true. You have to remember that your
• 17:49
  Suze: words and your thoughts are more powerful than you have
• 17:51
  Suze: any idea.
• 17:53
  Suze: That if you think you can't, you never ever will.
• 17:57
  Suze: You have to say I will. You have to say
• 18:00
  Suze: I can. You have to say I want to. You
• 18:03
  Suze: have to see it. You have to envision it, and
• 18:06
  Suze: you have to go for it. Just that simple. There's
• 18:11
  Suze: always something you can do. There's a lot of elderly
• 18:16
  Suze: people seriously in a city.
• 18:18
  Suze: That need help, that can't take care of themselves anymore,
• 18:21
  Suze: that need help with somebody taking care of them, you,
• 18:24
  Suze: you'd be amazed at how many things you can do,
• 18:28
  Suze: but you have to think it, you have to say it,
• 18:31
  Suze: and then you have to do it. All right.
• 18:34
  KT: Hi, Suze and KT. I know you have given
• 18:37
  KT: us a ton of information on Roth's, but I'm hoping
• 18:41
  KT: you can answer one more question, please.
• 18:44
  Suze: Pop quizzy pop quizzy.
• 18:46
  KT: Oh wait.
• 18:46
  Suze: I don't even know it, but pop quizzy.
• 18:48
  KT: I have a tax deferred account from a previous employer,
• 18:51
  KT: and I want to gradually move the money into my
• 18:54
  KT: existing Roth.
• 18:56
  KT: Do you recommend having taxes withheld when you make a
• 19:00
  KT: conversion or waiting until you file taxes to pay?
• 19:05
  Suze: Pop quizzy, pop quizzy.
• 19:08
  KT: Well,
• 19:10
  KT: OK, hold on, everybody
• 19:12
  Suze: I love this so much You have no idea, everybody.
• 19:13
  KT: Do you recommend having taxes withheld when you make a
• 19:18
  KT: conversion or wait until you file taxes to pay?
• 19:24
  Suze: Remember, now, let me be clear for you, KT, you're
• 19:26
  Suze: taking money out of a pre-tax account. They are going
• 19:30
  Suze: to ask.
• 19:32
  Suze: Because taxes are going to be owed on that money,
• 19:35
  Suze: do you want them to withhold the taxes? There's a 20%
• 19:39
  Suze: withholding tax normally. Do you want them to withhold it?
• 19:44
  Suze: Or do you not and wait until next year to
• 19:48
  Suze: pay taxes on it.
• 19:51
  KT: I would probably wait so you can earn more interest
• 19:54
  KT: on that money.
• 19:55
  Suze: You sure?
• 19:56
  KT: No.
• 19:57
  Suze: Come on.
• 19:58
  KT: I'm not sure.
• 19:58
  Suze: This is like a multiple choice question. First answer is
• 20:03
  Suze: usually correct. You wanna keep it?
• 20:04
  KT: Yeah, keep it.
• 20:05
  Suze: Ding ding ding right?
• 20:07
  KT: Wouldn't you wanna wait?
• 20:08
  Suze: So everybody, here's what you need to be careful of here.
• 20:12
  Suze: I don't know exactly, Karen, how old you are.
• 20:16
  Suze: But if in fact you had them withhold taxes for you,
• 20:22
  Suze: let's say you have $10,000 in there, let's say that's true,
• 20:26
  Suze: and now you want to convert to a Roth, and
• 20:30
  Suze: they're asking you on a piece of paper you're gonna
• 20:32
  Suze: have to fill out, should you withhold taxes, and you
• 20:37
  Suze: say yes.
• 20:38
  Suze: They will withhold 20% or $2,000 in this case. 20%
• 20:44
  Suze: KT of $10,000 is $2,000. Now you will have $8,000
• 20:51
  Suze: that you are converting.
• 20:53
  Suze: However, you have $2,000 that needed to be converted or
• 20:59
  Suze: you're gonna owe ordinary income taxes on it that year, OK.
• 21:04
  Suze: But if you're not 59 and a half years of age at the
• 21:08
  Suze: time you're doing this, then you're gonna owe a 10%
• 21:12
  Suze: penalty on that money. So you absolutely never want to
• 21:16
  Suze: withhold taxes when you are converting. You want it all
• 21:21
  Suze: to convert custodian to custodian, just that simple, OK.
• 21:27
  KT: That's what I thought.
• 21:28
  Suze: I think I answered her too. I'm not sure.
• 21:31
  KT: Hi KT and Suze, this is from Andrew. I'm starting
• 21:35
  KT: a new job with the Florida Department of Transportation. I
• 21:39
  KT: have a question about the deferred compensation, a 457B plan.
• 21:45
  KT: The state requires...
• 21:47
  Suze: Do you know what that is?
• 21:47
  KT: No, no, you have to tell us. The state requires
• 21:51
  KT: a 3% pension contribution from my salary and offers a
• 21:55
  KT: traditional 457B, no Roth option. Suze, would it be better
• 22:01
  KT: for long-term growth and tax efficiency to invest in a
• 22:05
  KT: taxable brokerage account instead of the traditional 457B?
• 22:12
  KT: And then he's 27 years old. Ready for this. I
• 22:15
  KT: max out my Roth IRA. I have an emergency fund
• 22:19
  KT: and will earn a little over $100,000 this year.
• 22:24
  Suze: All right, what's his name?
• 22:25
  KT: Andrew.
• 22:26
  Suze: Andrew, listen to me, boyfriend.
• 22:30
  Suze: Unlike other retirement plans, and everybody, a 457B is just
• 22:35
  Suze: a deferred compensation plan that many companies, corporations, and so
• 22:42
  Suze: forth offer. Think of the words deferred compensation. They are
• 22:47
  Suze: deferring the compensation that they pay you. You get to
• 22:52
  Suze: choose how much up to the maximum limit.
• 22:55
  Suze: But you get to choose what that amount is. It
• 22:58
  Suze: goes into this account, and when it goes into this account,
• 23:03
  Suze: you don't pay taxes on it because it's not part
• 23:06
  Suze: of your taxable compensation. But here's how it differs, everybody,
• 23:11
  Suze: from a 401k or a 403B, which is this a
• 23:15
  Suze: 457B has no 10% penalties on withdrawals if you leave
• 23:21
  Suze: your job.
• 23:22
  Suze: And no matter how old you are, you leave at 35,
• 23:26
  Suze: you can withdraw the money penalty free, 45, 50, no penalties,
• 23:29
  Suze: number one. And when you do withdraw, you simply pay
• 23:34
  Suze: ordinary income tax on it, so it has the flexibility
• 23:39
  Suze: that you want to be able to get at that money.
• 23:43
  Suze: So believe it or not, a 457B is one of
• 23:46
  Suze: the most powerful retirement plans out there. Wanna know why?
• 23:53
  KT: No penalty.
• 23:54
  Suze: No, because he says here that he makes $100,000 a year,
• 24:00
  Suze: da da da da. So he's in about the 24%
• 24:03
  Suze: income tax bracket. He's putting that money in whatever he's
• 24:08
  Suze: putting in.
• 24:09
  Suze: Not paying 24% on it. So that's like he is
• 24:12
  Suze: making 24% on that money a year. He's compounding it.
• 24:18
  Suze: His dividends, everything he's investing in. If he put it
• 24:21
  Suze: in a regular investment account, he would have had to
• 24:25
  Suze: pay 24% tax on it. His dividends, his earnings, everything
• 24:30
  Suze: would be taxable. No, Andrew, go 457 all the way.
• 24:34
  Suze: Next KT.
• 24:35
  KT: That's great, Suze. Next is another man, Tristan.
• 24:39
  KT: He said he's a millennial man smart enough to listen
• 24:42
  KT: to your podcast every weekend, and Tristan said, Suze, I'm
• 24:47
  KT: a fan of SPYM over Vo and definitely over Spy SPY.
• 24:54
  KT: I just want to point this out to you so
• 24:56
  KT: you could advise your listeners. Thank you and KT for
• 25:00
  KT: all you do, inspiring the younger generation like us to
• 25:04
  KT: be brave in this world of finance.
• 25:07
  KT: Every night I fire up your podcast while I'm having
• 25:10
  KT: dinner as if I have you and KT sitting at
• 25:13
  KT: my table exchanging friendly banters and lifelong wisdoms just like
• 25:18
  KT: my own aunties.
• 25:21
  KT: That's sweet.
• 25:22
  Suze: KT, the reason Tristan's writing that seriously, and I wrote
• 25:26
  Suze: him back a little bit, is that on one of
• 25:28
  Suze: the podcasts not so long ago.
• 25:31
  Suze: I had recommended to all of you an ETF with
• 25:35
  Suze: the symbol SPLG, which is a 500 index ETF, and
• 25:41
  Suze: I did that because the expense ratio was at 0.02%,
• 25:46
  Suze: which was better than VOO. Then they changed it to
• 25:52
  Suze: be the symbol SPYM, and when they changed that,
• 25:56
  Suze: I got hundreds of emails saying, Suze, what is this?
• 26:00
  Suze: I can't get information on it. What's going on? I
• 26:03
  Suze: looked it up, and the expense ratio is 0.09%. What
• 26:07
  Suze: should I do? I looked it up immediately because I
• 26:10
  Suze: was in it as well, and when they first posted it,
• 26:14
  Suze: they posted it at a 0.09% expense ratio.
• 26:20
  Suze: And therefore I recommended to all of you get out
• 26:23
  Suze: of it and go to VOO, which is at a 0.03%
• 26:28
  Suze: expense ratio. However, right after that, right around there, it changed.
• 26:35
  Suze: I never bothered to look again, and they corrected it
• 26:40
  Suze: to be back at 0.02% expense ratio, which is actually
• 26:46
  Suze: better than VOO, which again
• 26:49
  Suze: is at 0.03%. So Tristan wanted me to make sure
• 26:56
  Suze: that all of you knew that.
• 26:58
  Suze: And so my utmost apologies to everybody. We did cut
• 27:01
  Suze: that part from the podcast right afterwards, as soon as
• 27:06
  Suze: I found it out. So that's the scoop what to do,
• 27:10
  Suze: and that's how that happened.
• 27:12
  KT: All right.
• 27:12
  Suze: Thanks, Tristan.
• 27:13
  KT: Thank you, Tristan. We will be your aunties anytime.
• 27:16
  Suze: All right.
• 27:17
  KT: All right. OK. So Susie, final question. You ready?
• 27:21
  Suze: No.
• 27:23
  KT: It starts with, I have two short questions, hopefully, but
• 27:26
  KT: I'm only gonna read one. My wife and I both
• 27:29
  KT: started a contributory Roth mid 2025. We plan on contributing
• 27:35
  KT: the maximum going forward. We want to convert our rollover
• 27:39
  KT: IRAs and SEP IRA to Roth's over the next few years.
• 27:45
  KT: Do we need to open a separate Roth IRA for
• 27:48
  KT: the conversion, or can we convert into the current Roth IRA?
• 27:54
  Suze: Pop quizzy again.
• 27:55
  KT: Do we need to open a separate Roth IRA for
• 27:58
  KT: the conversion, or can we convert into the current? Yeah,
• 28:02
  KT: I think you can convert into the current.
• 28:05
  Suze: You did. You're doing so good.
• 28:08
  KT: I'm telling you, I'm reading up on Roth. Is that correct?
• 28:10
  Suze: That's correct. And you just handed me this, and he
• 28:13
  Suze: says on here, 5-year clock starts on all Roth's 1/1/25.
• 28:19
  Suze: That's true, but conversion funds have separate 5-year clocks for
• 28:23
  Suze: each conversion. Is that true or false, KT?
• 28:27
  KT: Oh, I don't know.
• 28:28
  Suze: Oh yes, you do.
• 28:30
  KT: I think, yes.
• 28:33
  Suze: You sound so convincing. Can you imagine going to a
• 28:37
  Suze: financial advisor, listen to this, everybody, and go, do, do, do,
• 28:41
  Suze: do Roth conversions have their own separate conversion and time clock?
• 28:45
  Suze: And they go, I think yes.
• 28:48
  Suze: Try it like you know it. Like you're...
• 28:50
  KT: Absolutely!
• 28:52
  Suze: That's my girl, and she's absolutely correct. KT. Before we end,
• 28:57
  Suze: I just have to ask you something.
• 28:59
  Suze: Do you have any idea how many emails I got
• 29:04
  Suze: saying how much they loved...
• 29:06
  Suze: How vulnerable you are and when you cry and everything,
• 29:11
  Suze: they love that they love your sweetness, they love your vulnerability,
• 29:16
  Suze: they love your honesty.
• 29:19
  Suze: Fabulous.
• 29:20
  KT: But I feel great today, so ready for this? All
• 29:23
  KT: you have to do is remember this people first, then money,
• 29:26
  KT: then things, and you stay safe.
• 29:29
  Suze: See you soon, everybody. Bye-bye.