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Suze Answers Your Mega Retirement Plan Strategy Questions · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  KT: Good morning, Suze. Are we recording?
• 0:11
  Suze: Why are you asking me that? Tell them what we
• 0:13
  Suze: just did, KT.
• 0:14
  KT: We just did the best podcast on earth, and she
• 0:17
  KT: just looked at me and said, KT, you're gonna kill me.
• 0:18
  KT: And I said, Don't tell me. She didn't record it.
• 0:23
  KT: She didn't
• 0:23
  KT: push the button, baby. Push my button. Push the button.
• 0:28
  KT: She's pushing my buttons right now. OK, so today is
• 0:33
  KT: January 8th, 2026.
• 0:35
  KT: Ee just had an extraordinary great week and the one
• 0:40
  KT: thing that we did that we haven't done in 14 years was...
• 0:43
  Suze: Did you welcome everybody to the Women and Money podcast?
• 0:46
  KT: I did not, because I welcomed them three times already
• 0:48
  KT: this morning.
• 0:50
  Suze: So everybody, welcome to the Women and Money podcast, and
• 0:53
  Suze: Everybody Smart Enough to Listen, but not every host that's
• 0:57
  Suze: smart enough to push the record button. But anyway.
• 1:00
  Suze: Right? This is the Ask KT and Suze Anything edition,
• 1:04
  Suze: although I'm not sure she's gonna talk to me for
• 1:06
  Suze: a few minutes here, but if you want to write
• 1:09
  Suze: in and ask a question, write in to ask Suze,
• 1:13
  Suze: S U Z E podcast at gmail.com. And if you
• 1:18
  Suze: write in, keep it short, and KT picks it, oh,
• 1:22
  Suze: we will
• 1:24
  Suze: answer it on the podcast. What were you saying now, girlfriend?
• 1:27
  KT: So I was telling everyone that we really had a
• 1:29
  KT: great week despite Susie messing up the, the beginning of
• 1:34
  KT: this podcast.
• 1:34
  Suze: KT, it only a 45 minute podcast.
• 1:37
  KT: Oh my goodness.
• 1:38
  Suze: It was so good everybody,
• 1:39
  KT: It was so great. So I'm not gonna sing again.
• 1:41
  KT: I was singing and she cut me out.
• 1:44
  Suze: I didn't cut you out.
• 1:45
  Suze: So tell them what I was singing. You sing it.
• 1:48
  Suze: I'm not gonna sing it. You know I don't sing.
• 1:51
  KT: Yes, you can. Everyone can sing this.
• 1:53
  Suze: KT. They don't even have a clue what we're talking about.
• 1:55
  Suze: So tell them what we did. Go on.
• 1:56
  KT: We saw a great movie called (sings) Song Sung Blue....
• 2:02
  KT: ...Everybody knows one...
• 2:04
  Suze: Yeah.
• 2:05
  KT: OK, we saw the new movie Song Sung Blue featuring my,
• 2:09
  KT: my big hero Hugh Jackman and now Kate Hudson. Kate Hudson,
• 2:15
  KT: who knew you could sing like that? Wow.
• 2:18
  Suze: She's great. She's up for, you know, she's up for...
• 2:20
  KT: Both of them should get Oscars, Golden Globes, you name it,
• 2:23
  KT: they should get them all. They were brilliant.
• 2:26
  Suze: So here's what's interesting, everybody.
• 2:29
  Suze: Is that I was telling KT in the previous podcast
• 2:33
  Suze: that never got recorded, right, is that I thought that
• 2:38
  Suze: maybe we should start telling people what we do during
• 2:41
  Suze: the week.
• 2:41
  KT: Wait, let's ask them, are you interested?
• 2:44
  Suze: They wrote me and told me that they loved the
• 2:46
  Suze: fact that we talked on Sunday, last Sunday about Landman
• 2:50
  Suze: and what we did on New Year's Eve. And now
• 2:53
  Suze: I've had at least 50 emails that I've read saying,
• 2:56
  Suze: oh my God,
• 2:57
  Suze: I immediately went and I watched Landman. It's on Paramount+
• 3:01
  Suze: and fabulous, fabulous, Susie. I can't wait. I, it's the
• 3:05
  Suze: best thing I've ever seen.
• 3:07
  KT: It's really good, good.
• 3:08
  Suze: And here's what's so fascinating is after we went to
• 3:13
  Suze: the movie on Sunday, we went last Sunday, OK.
• 3:17
  Suze: We go to the movie and on Sunday is when
• 3:20
  Suze: the new episodes show of Landman. We come back. We're
• 3:26
  Suze: watching it and they go into this like bar and
• 3:29
  Suze: what happens KT?
• 3:30
  KT: Neil Diamond, they were playing Neil Diamond, Sweet Caroline, which
• 3:34
  KT: was really, really fun since we just watched. Well, we
• 3:38
  KT: can't give it away. We can't tell anyone about the movie.
• 3:41
  Suze: We're not... by you telling people that they sing Sweet
• 3:44
  Suze: Caroline in a Neil Diamond movie. I don't think is
• 3:47
  Suze: giving anything away, Ms. Travis, but Sweet Caroline does the
• 3:50
  Suze: song plays a big part in that movie and for
• 3:53
  Suze: us to come back and a few hours later turn
• 3:58
  Suze: on Landman, which we were so excited to do, so
• 4:01
  Suze: excited we actually watched it twice, believe it or not, um.
• 4:05
  Suze: And have them sing that song we went. Whoah!!
• 4:09
  Suze: All right, Ms. Travis, we're gonna now do the podcast again, everybody.
• 4:14
  Suze: And really, this podcast is gonna be answering the questions
• 4:19
  Suze: that a lot of you had about last Sunday's podcast. Now,
• 4:23
  Suze: listen to me. If you didn't listen to last Sunday's podcast,
• 4:28
  Suze: I really want you to listen to it.
• 4:32
  Suze: January 4th, 2026. I don't care when you're listening to
• 4:36
  Suze: this podcast, whether it's today, whether it's five months from now,
• 4:40
  Suze: you have got to go back and listen to the
• 4:43
  Suze: January 4th, 2026 podcast, cause what I tell you about
• 4:47
  Suze: in there, you really need to know and understand, because
• 4:53
  Suze: it is a little complicated.
• 4:57
  Suze: Many of you had questions, so we invited you all
• 4:59
  Suze: to write in your questions, and that's what we're gonna
• 5:02
  Suze: answer right now. All of these pertain to last Sunday's podcast.
• 5:08
  Suze: Go for it, girlfriend.
• 5:09
  KT: Well, I'm starting with Shelby. I love what Shelby has
• 5:12
  KT: to say to you, Miss Suze.
• 5:14
  KT: She said, thank you for all you do. I am
• 5:17
  KT: one of those who had zero savings, some credit card debt,
• 5:21
  KT: and no retirement when I was 40. Now at 62,
• 5:26
  KT: I own my own home. I have $3 million in
• 5:30
  KT: retirement savings, over $300,000 in emergency savings, and zero debt
• 5:38
  KT: except for my mortgage.
• 5:39
  Suze: Wait, can I just stop you right there?
• 5:42
  KT: Sure.
• 5:44
  Suze: She's giving, she just rolled her eyes at me, everybody
• 5:47
  Suze: again anyway, the reason I loved KT that you chose this,
• 5:52
  Suze: by the way, I answered Shelby directly because she just
• 5:56
  Suze: complimented me so how could I not? No, really, is
• 6:00
  Suze: many of you listen to this podcast and maybe you're younger,
• 6:05
  Suze: you're 25, 30 years of age, and you think I'm
• 6:09
  Suze: never gonna have money. This doesn't apply to me.
• 6:12
  Suze: So why should I even listen? It's because of people
• 6:16
  Suze: like Shelby and literally tens of thousands of people who
• 6:20
  Suze: have written over the years just like Shelby who went
• 6:25
  Suze: from nothing to seriously having a lot of money. So
• 6:29
  Suze: even if you don't need or can't use what I'm
• 6:32
  Suze: telling you about right now in your life, one day
• 6:36
  Suze: if you follow me, I promise you you will. All right,
• 6:40
  Suze: go on, KT.
• 6:41
  KT: So Shelby also goes on to say she has a will,
• 6:45
  KT: revocable trust, durable power of attorney, and a healthcare proxy.
• 6:52
  KT: She said it's all down to Susie's expert guidance. So
• 6:56
  KT: listen up, everyone. Here's her question.
• 6:59
  KT: I do have a question about the mega Roth conversion
• 7:03
  KT: and the pro rata rule. If my employer permits in-plan
• 7:07
  KT: conversions or rollovers, does the pro rata rule still apply?
• 7:12
  KT: I have a traditional IRA in addition to my employer
• 7:17
  KT: Roth 401k and catch-up accounts. So that's her question. Does
• 7:23
  KT: it apply?
• 7:24
  Suze: The reason KT, Shelby's asking that question,
• 7:28
  Suze: is because there's a backdoor Roth strategy.
• 7:34
  Suze: And then there is the mega backdoor Roth strategy for
• 7:39
  Suze: a 401k. So, everybody, just so you know, and you
• 7:44
  Suze: should listen to last Sunday's podcast, then you'll know why
• 7:47
  Suze: I'm telling you this now. To do a Roth IRA,
• 7:52
  Suze: which is an individual retirement account that you fund with
• 7:55
  Suze: after-tax dollars, which in my opinion is the absolute best
• 7:59
  Suze: retirement account bar none, and you can have a Roth
• 8:03
  Suze: IRA and an employer sponsored Roth plan as well, however.
• 8:11
  Suze: After you make more than the modified adjusted gross income limits,
• 8:16
  Suze: check Sunday and you'll find out what I'm talking about,
• 8:19
  Suze: you no longer qualify for a Roth IRA, but there
• 8:24
  Suze: is a way to go through the back door to
• 8:27
  Suze: get money into a Roth, even if you make too
• 8:30
  Suze: much money.
• 8:31
  Suze: It does not make any sense to do that, KT,
• 8:34
  Suze: if you have a traditional IRA, a pre-tax one, a
• 8:38
  Suze: pre-tax IRA rollover, a simple, a SEP IRA, because there's
• 8:42
  Suze: something known as the pro rata rule, which means you're
• 8:45
  Suze: gonna pay taxes on that money that you put into
• 8:48
  Suze: a backdoor Roth. So, you only do a backdoor Roth
• 8:53
  Suze: IRA if you do not have a traditional IRA, IRA rollover,
• 8:58
  Suze: or any of those.
• 8:59
  Suze: People are starting to think that that applies as well
• 9:04
  Suze: to their employer sponsored plan, and it does not. Individual
• 9:09
  Suze: retirement accounts have nothing to do with an employer account.
• 9:14
  Suze: There are no income limitations for a Roth 401k, 403B,
• 9:19
  Suze: or a TSP, none.
• 9:22
  Suze: So, you can put money in pre-tax, you can then
• 9:25
  Suze: convert it, you can do after-tax contributions. The pro rata
• 9:29
  Suze: rule does not apply when putting in money. It does
• 9:34
  Suze: not apply for what we were talking about. OK.
• 9:39
  KT: This question from Laura continues on what you just said.
• 9:42
  KT: She said, Suze, I just listened to your podcast where
• 9:45
  KT: you mentioned contributing after tax to a 401k using the
• 9:50
  KT: 415C rule. Is this a potential option for me if
• 9:55
  KT: I am 33 and not eligible for catch-up contributions? My
• 10:01
  KT: employer currently only offers a traditional 401k and not a
• 10:05
  KT: Roth option.
• 10:07
  KT: I would love to be able to contribute additional money
• 10:10
  KT: to my 401k after tax in this way. Thank you
• 10:14
  KT: very much. I've learned so much from you. So what
• 10:17
  KT: should Laura do?
• 10:18
  Suze: Laura, listen to me.
• 10:21
  Suze: In last Sunday's podcast, everybody, I talked about two things,
• 10:26
  Suze: the 415C after-tax contributions, where you can put up to
• 10:31
  Suze: 72,000 if you're under 50 or 80,000 if you are
• 10:36
  Suze: 50 or older into your 401k or 403B. I also
• 10:43
  Suze: talked about, however, if you are 50 years of age
• 10:47
  Suze: or older.
• 10:49
  Suze: You work for an employer and you made more than
• 10:54
  Suze: $150,000 in 2025 on your W-2 form.
• 11:01
  Suze: You then can only put your catchup contributions into a
• 11:07
  Suze: Roth 401k, a Roth 403B, or a Roth TSP.
• 11:14
  Suze: So, Laura, you're mixing up the two.
• 11:18
  Suze: Your age therefore has nothing to do with the fact
• 11:21
  Suze: that you're 33 has nothing to do with anything in
• 11:26
  Suze: terms of being able to put extra money into your
• 11:30
  Suze: 401k under the 415C rule, however...
• 11:36
  Suze: Listen closely now to me, everybody. If the employer that
• 11:40
  Suze: you work for does not offer a Roth 401k or
• 11:45
  Suze: a 403B, now, I'm not talking about TSPs here.
• 11:50
  Suze: Because they do not allow 415C contributions, so forget 415C
• 11:58
  Suze: contributions right now, if your plan is a TSP. So
• 12:03
  Suze: for 401ks and 403Bs, if your employer does not offer
• 12:09
  Suze: a Roth.
• 12:10
  Suze: Or they do not allow in plan transfers, which means
• 12:16
  Suze: in your 401k or 403B.
• 12:21
  Suze: You can do this, by the way, however, in a
• 12:22
  Suze: TSP where you're allowed to go from pre-tax to after tax.
• 12:30
  Suze: Then guess what, if they do not allow that.
• 12:35
  Suze: Then you do not want to do a 415C. You
• 12:39
  Suze: only wanna do it if your company allows an in-plan transfer.
• 12:46
  Suze: If it's with an after-tax contribution, otherwise you are far
• 12:51
  Suze: better off, Laura,
• 12:54
  Suze: if you simply do what? You either open up a
• 12:57
  Suze: Roth IRA.
• 13:00
  Suze: If you make too much money, you do a backdoor
• 13:02
  Suze: Roth IRA if you don't have a traditional IRA or
• 13:07
  Suze: you're better off putting extra money in an investment account
• 13:11
  Suze: rather than using 415C in the plan that you currently have.
• 13:19
  Suze: All right.
• 13:20
  KT: All right, this next question's from Walt, and, and this one.
• 13:24
  Suze: Wait, I just wanna clear up everything.
• 13:26
  Suze: And maybe do you have a question later on about TSP?
• 13:29
  KT: I do.
• 13:30
  Suze: All right, so everybody listen in a little bit because
• 13:32
  Suze: then I'll make sure you understand exactly what I was
• 13:36
  Suze: referring to with the TSP. Go on.
• 13:40
  KT: OK, this is from Walt. He said, Suze, I'm 77
• 13:43
  KT: years old and retired. I'm no longer working.
• 13:47
  KT: However, I'm getting payments from my 457B plan from Fidelity.
• 13:56
  KT: Of 75,000 for 2025 which comes on my W-2. Can
• 14:01
  KT: I use this money to cover a contribution to my
• 14:05
  KT: Roth for 2025 up to 8,000.
• 14:10
  Suze: So, here's the scoop, everybody. In order to contribute to
• 14:14
  Suze: an individual retirement account and or even an employer account,
• 14:20
  Suze: you have to have earned income, meaning you have a
• 14:24
  Suze: job and you get a paycheck. Somehow you earn money.
• 14:31
  Suze: He's getting his money from a 457 plan, KT, which
• 14:36
  Suze: is a pre-tax deferred plan.
• 14:39
  Suze: It was from money that he earned, but he never
• 14:41
  Suze: paid taxes on it, but he's not earning it now.
• 14:45
  Suze: It's coming out as income to him, which is why
• 14:49
  Suze: it's on a W-2. It does not count for a
• 14:53
  Suze: contribution to an IRA. Next question.
• 14:57
  KT: All right, this is from Kelly, Suze. If I make
• 14:59
  KT: over 150,000, do I have to put all my contribution
• 15:04
  KT: into a Roth?
• 15:07
  Suze: Is that the whole question?
• 15:09
  KT: Yeah.
• 15:09
  Suze: All right, here, everybody, this is where you're being confused again.
• 15:13
  Suze: By the way, do you all have out your Suze notebooks? Well,
• 15:16
  Suze: if you don't, two things.
• 15:19
  Suze: You can listen to this podcast and Sunday's podcast last
• 15:21
  Suze: Sunday over and over again. You can go on the
• 15:24
  Suze: Women and Money Community app by downloading it on Google
• 15:29
  Suze: Play or Apple Apps. It's free, 'cause on the wall there,
• 15:34
  Suze: I did a recap of everything on Sunday's podcast, so
• 15:39
  Suze: you can do any of those things and then understand
• 15:42
  Suze: it even more.
• 15:44
  Suze: But, where people are getting confused is this, starting in
• 15:48
  Suze: January of 2026.
• 15:53
  Suze: If you are working for an employer.
• 15:57
  Suze: And for that particular employer,
• 16:01
  Suze: you have earned more than $150,000 so you see that
• 16:07
  Suze: on your W-2 for 2025. So last year's W-2, it's
• 16:14
  Suze: what you earned in 2025. You can no longer make
• 16:20
  Suze: catch-up contributions and put it into a pre-tax 401k. You
• 16:26
  Suze: have got to put your catch-up.
• 16:29
  Suze: Which is $8,000 if you're 50 or older, so you
• 16:34
  Suze: get to catch up and put that in.
• 16:37
  Suze: Above the $24,500 that everybody's allowed.
• 16:43
  Suze: And if you're the ages of 60 to 63, that's
• 16:47
  Suze: $11,250 catch up, you have got to put those two
• 16:53
  Suze: catchup amounts, whichever one applies to you, into a Roth 401k, 403B,
• 17:00
  Suze: or TSP.
• 17:03
  Suze: So, you just have to know that.
• 17:07
  Suze: If your company does not have currently a Roth 401k 403B,
• 17:15
  Suze: guess what?
• 17:16
  Suze: They have to get one, and if they don't get one,
• 17:21
  Suze: you are not going to be allowed to make a
• 17:26
  Suze: catch-up contribution.
• 17:28
  Suze: If you are 50 or older, made $150,000 on last
• 17:35
  Suze: year's W-2, you're not going to be able to make
• 17:39
  Suze: a catch-up. Now, if you make $149,000 none of this
• 17:43
  Suze: applies to you. If you make anything like under $150,000
• 17:47
  Suze: none of this applies to you. But so many of
• 17:51
  Suze: you are making from your employer,
• 17:56
  Suze: 150,000 or more that's on your W-2 and you want
• 18:01
  Suze: to make a catch-up and you are 50 or older
• 18:05
  Suze: because you can only make catch-ups everybody if you're 50
• 18:08
  Suze: or older this does not apply to you if you
• 18:11
  Suze: are under 50, it has to go into a Roth.
• 18:17
  Suze: All right, there you go, KT.
• 18:17
  KT: Suze, I'm 61. Don't get mad at me, but my
• 18:21
  KT: employer doesn't have a Roth 401k.
• 18:25
  Suze: I'm not mad at you. I'm mad at your employer.
• 18:27
  KT: So I max out my traditional 401k plus make the
• 18:31
  KT: $11,250 catch-up.
• 18:34
  Suze: All right, so this person is either 60, 61, 62,
• 18:38
  Suze: or 63. Go on.
• 18:39
  KT: All right, so ready for this...
• 18:41
  Suze: Now he's freaked out.
• 18:42
  KT: Yeah, he went to his employer after he heard it.
• 18:44
  KT: On Monday and this is what the employer said listen
• 18:47
  KT: to this, this is what the employer said, they told
• 18:51
  KT: me I should just do what I always have done
• 18:54
  KT: and not worry about it. Is that true, Suze? That's
• 18:58
  KT: what the employer said. Just do what you've always done, Bob.
• 19:01
  KT: Don't worry about it.
• 19:03
  KT: Mhm. Look at her face, everybody. We got to videotape
• 19:08
  KT: these podcasts because you should see her face. She is steaming.
• 19:14
  KT: She has the knives coming out.
• 19:15
  Suze: The law is the law. And just because you have
• 19:19
  Suze: an idiot who works in the HR department or wherever
• 19:23
  Suze: you asked and they said that to you.
• 19:28
  Suze: Shame on them. In fact, why don't you simply go
• 19:32
  Suze: to them.
• 19:34
  Suze: Key up your podcast to this segment right here, this question,
• 19:39
  Suze: and play it for them or take it to your
• 19:41
  Suze: CFO or the CEO of your corporation and play it
• 19:45
  Suze: for them. They don't have a choice. If your employer, listen,
• 19:51
  Suze: the past few years you were able to get by
• 19:54
  Suze: because this law went into effect and they allowed you
• 19:56
  Suze: to slide
• 19:57
  Suze: until January 2026 and there was no more sliding, your
• 20:04
  Suze: corporation had no choice but to either get a 401k
• 20:09
  Suze: Roth or a 403B Roth. TSPs already have them, so
• 20:14
  Suze: that's why I'm not mentioning it here.
• 20:16
  Suze: Or say to the employees, you can no longer make
• 20:21
  Suze: a catch-up contribution. They are wrong, wrong, triple wrong, quadruple wrong,
• 20:28
  Suze: and there you go.
• 20:30
  KT: All right. The next question is from Marley. I, I'm not,
• 20:33
  KT: I'm not gonna look at her right now because she's
• 20:34
  KT: still a little red and steaming.
• 20:35
  Suze: Well, here's the thing, KT. Wait, can we just talk?
• 20:38
  KT: I know you hate when these people are...
• 20:41
  Suze: It's listen.
• 20:43
  Suze: The people that you work for, that you put, you,
• 20:47
  Suze: you make them money, you're great employees, you do everything
• 20:51
  Suze: you can so that you make a salary, but that
• 20:54
  Suze: they do great as well. In fact, many of you
• 20:56
  Suze: put their needs in front of your own needs in
• 20:58
  Suze: many ways. You take care of their money and their
• 21:01
  Suze: products better than your own. Are you kidding me? And
• 21:04
  Suze: then you go to somebody who needs to know the
• 21:07
  Suze: correct answers about your money.
• 21:10
  Suze: That they're lazy enough to not even say, wait, let
• 21:14
  Suze: me find out and I'll get back to you. It's OK, everybody,
• 21:18
  Suze: for somebody to say, I don't know, but I'll find out,
• 21:21
  Suze: rather than pretend like they know and it doesn't matter.
• 21:25
  Suze: I hate financial fakers, KT go on.
• 21:28
  KT: All right. Next question is from Marley. Marley said, Suze,
• 21:32
  KT: I'm only 47, but I'm one of the lucky ones
• 21:36
  KT: who've listened to you for over 20 years. I make $180,000.
• 21:42
  KT: I max out my Roth 403B with $24,500. My employer
• 21:48
  KT: matches $9,000 a year, but that goes into my traditional 403B.
• 21:54
  KT: And then I do an in plan conversion.
• 21:58
  Suze: Oh, you are so smart.
• 21:58
  KT: This is what she wants, wants Marley to do. I
• 22:01
  KT: do an in...
• 22:02
  Suze: Is Marley a woman? How do you know? We have
• 22:03
  Suze: a boyfriend who's a Marley.
• 22:05
  KT: This is a lady Marley.
• 22:06
  Suze: All right, go on.
• 22:07
  KT: I do an in-plan conversion and pay taxes on it.
• 22:10
  KT: I've been putting about $45,000
• 22:12
  KT: a year in an investment account at Robin Hood where
• 22:18
  KT: I have over $200,000 thanks to the stocks you told
• 22:22
  KT: me to buy, Suze.
• 22:23
  Suze: Some of them aren't doing so well...
• 22:24
  KT: What is the, what is the max after tax contributions
• 22:29
  KT: I can deposit via the 415C rule in the traditional 403B?
• 22:40
  Suze: So, Marley is so smart, because she's already doing in
• 22:46
  Suze: plan conversions of the $9,000 match that her employer gives her.
• 22:51
  Suze: You know, when an employer gives a match, although many
• 22:54
  Suze: of them starting to change this KT, a match is
• 22:57
  Suze: you put in $1 they give you 50 cents or
• 23:00
  Suze: $1 up to about 6% of your base pay, whatever
• 23:03
  Suze: it is, they all have different calculations there.
• 23:07
  Suze: It's in a pre-tax one, which is how they usually
• 23:11
  Suze: fund it so they can take it off as a
• 23:13
  Suze: tax write-off. Right. Then what happens is Marley takes that
• 23:17
  Suze: money and does an in plan, it's still there and
• 23:21
  Suze: puts it into the Roth account. Now she has to
• 23:24
  Suze: pay taxes on it, but she's willing to pay taxes
• 23:27
  Suze: on it now, so it grows all those years tax-free.
• 23:30
  Suze: But here's the thing.
• 23:33
  Suze: Marley puts $45,000 a year away. Listen to me, everybody now,
• 23:39
  Suze: into an investment account with Robin Hood.
• 23:43
  Suze: Because it's in the investment account.
• 23:47
  Suze: Obviously if she buys something, she sells something, she owes
• 23:51
  Suze: taxes on it, it grows maybe tax deferred, she's not
• 23:55
  Suze: paying taxes on until she sells it, but they're always
• 23:58
  Suze: going to have to pay capital gains tax or income
• 24:01
  Suze: tax on the money there. If Marley was able to
• 24:04
  Suze: take that money and rather than put it in Robinhood
• 24:08
  Suze: and she likes the investments, right, in her 403B.
• 24:13
  Suze: What she could do is now employ the 415C. How
• 24:19
  Suze: much can Marley put in?
• 24:21
  Suze: Ready? This Marley is how you would figure it out.
• 24:25
  Suze: You're already putting in $24,500 a year. To that figure
• 24:34
  Suze: you have to add the $9,000 of your employer's match.
• 24:41
  Suze: If you had profit sharing, if they put any other
• 24:43
  Suze: money in there, you would have to add that as well.
• 24:47
  Suze: So everything that goes into your 403B.
• 24:52
  Suze: You have to add up in your particular situation it's
• 24:57
  Suze: only $24,500 plus $9,000. That's a total of $33,500. You
• 25:07
  Suze: take that amount and you subtract it from the max
• 25:12
  Suze: of $72,000.
• 25:16
  Suze: And that will tell you how much you are allowed
• 25:20
  Suze: to put in with after-tax contributions under 415C, which in
• 25:25
  Suze: your case is $38,500. That is a whole lot of money.
• 25:34
  Suze: Think about it.
• 25:36
  Suze: Marley is going to be able to put $38,500 more...
• 25:43
  Suze: eventually it's gonna go right away because she'll do an in-
• 25:45
  Suze: plan conversion into her Roth 403B a year versus putting
• 25:52
  Suze: that money in a taxable investment account so she'll still
• 25:57
  Suze: be able to do $7,000 or whatever in Robin Hood,
• 26:01
  Suze: but now most of that's gonna be
• 26:03
  Suze: tax-free with tax-free growth. All right, KT,
• 26:07
  KT: That's a plan. That's a mega plan.
• 26:09
  Suze: But what, what, wait, do you understand now why they're
• 26:12
  Suze: calling it the mega back door?
• 26:15
  KT: That's a mega.
• 26:16
  KT: It's a mega amount of money,
• 26:18
  Suze: A lot of money.
• 26:20
  Suze: Marley's about to get, you know, thirty some odd thousand
• 26:24
  Suze: dollars into her 403B Roth, which is far more than
• 26:28
  Suze: if she did a backdoor Roth IRA. It would only
• 26:32
  Suze: be $7,500. Now, she could do both.
• 26:36
  Suze: But do you see what I'm saying? All right, anyway,
• 26:38
  Suze: go on.
• 26:39
  KT: All right, so next question is from George. George said, Suze,
• 26:43
  KT: I think you made a mistake.
• 26:46
  KT: I love these questions. I read...
• 26:47
  Suze: Wait, stop, George. You better be right on this.
• 26:51
  KT: No, no,
• 26:52
  Suze: You better be right that I made a mistake because listen,
• 26:54
  Suze: I do make mistakes, and a lot of you write
• 26:58
  Suze: in and you say, Suze, I don't think you're right,
• 27:00
  Suze: da da da, and I, whatever, and it turns out
• 27:02
  Suze: you are right, and I admit it when you're right.
• 27:06
  Suze: So let's wait, should we bet? Is he right or wrong?
• 27:09
  KT: I think he's so wrong.
• 27:10
  Suze: All right, go on.
• 27:12
  KT: George said, Suze, I think you made a mistake. I
• 27:15
  KT: read the limit was $145,000 at the end of 2025
• 27:23
  KT: for a Roth catch-up, not $150,000 like you said.
• 27:28
  KT: Well, who's right?
• 27:29
  Suze: He probably is somebody who went on to either chat
• 27:33
  Suze: GPT or one of those things, and you listen, everybody,
• 27:37
  Suze: you have to be very, very careful when you are
• 27:40
  Suze: using any artificial intelligence to answer a question. Most of them,
• 27:46
  Suze: because I test it all the time.
• 27:48
  Suze: Most of them are using figures from last year, two
• 27:52
  Suze: years ago. They are not up to date. George, you
• 27:56
  Suze: are 100% wrong.
• 27:59
  Suze: The original amount was $145,000 indexed for inflation if we're
• 28:05
  Suze: gonna be accurate about this, George, but then they decided, uh,
• 28:10
  Suze: why should we index it for inflation that's too complicated.
• 28:13
  Suze: Let's just make it $150,000. So starting right now.
• 28:19
  Suze: January 2026, it is absolutely $150,000 of 2025 wages. If
• 28:29
  Suze: you are 50 or older, you are only allowed to
• 28:33
  Suze: do a Roth catch-up. Next, KT.
• 28:36
  KT: This one's really kind of fun. Suze. Charlotte wrote, can
• 28:40
  KT: I really
• 28:40
  KT: put in after tax money on top of my regular contributions?
• 28:45
  KT: My brother, who is a financial guy, said he did
• 28:48
  KT: not think any employer's retirement account allows it.
• 28:52
  Suze: Oh, I have a good idea for her brother. He
• 28:56
  Suze: should go work for the company that that guy who
• 28:59
  Suze: or that woman, whoever it was, right, went to their
• 29:02
  Suze: employer who said don't worry, just put in the 11,200
• 29:06
  Suze: or whatever they put in, OK, are you kidding me?
• 29:10
  Suze: That's it. Next question. I'm not even gonna insult my
• 29:13
  Suze: integrity by answering that.
• 29:15
  KT: Next question is from Tommy, and it's important. He said,
• 29:18
  KT: I have a Roth TSP. I hear they're about to
• 29:22
  KT: allow in plan conversion. I wanna do a 415C so
• 29:27
  KT: I can eventually do a mega backdoor Roth.
• 29:31
  Suze: KT, just so you know, you can say 415. It's all right.
• 29:34
  KT: I didn't know.
• 29:36
  Suze: It's all right, no problem.
• 29:37
  KT: Is that what everyone says, 415 or Four One Five?
• 29:41
  Suze: I think everybody does it however they want.
• 29:43
  KT: 415 is easier, easier to remember.
• 29:46
  Suze: All right, so 415C everybody.
• 29:49
  KT: All right, so what should Tommy do? Can first of all, can
• 29:51
  KT: he do it?
• 29:52
  Suze: Tommy, first of all, you need to know that in
• 29:57
  Suze: most cases.
• 29:58
  Suze: The thrift savings plan, which, by the way, everybody, is
• 30:02
  Suze: usually for federal workers, military.
• 30:07
  Suze: All military and what's so great is KT and I
• 30:10
  Suze: so love the armed forces, don't we?
• 30:13
  KT: Yea, we had, we visited so many bases. We love
• 30:16
  KT: the military and for those of you that don't know,
• 30:19
  KT: Susie was for many, many years the official personal finance educator...
• 30:25
  Suze: ...for the armed forces and for the Army Reserve. However,
• 30:30
  Suze: so I do know their plans inside and out.
• 30:34
  Suze: However, for a TSP they do not allow 415 mega
• 30:42
  Suze: back door just so you know, they do not allow it.
• 30:46
  Suze: They do allow you, however, starting January 28th to do
• 30:53
  Suze: in plan conversions which they never allowed before. So if
• 30:57
  Suze: you happen to have money in a pre-tax TSP.
• 31:02
  Suze: And you now wanna convert it to a Roth TSP
• 31:06
  Suze: in-plan there, you now are allowed to do so, however,
• 31:11
  Suze: you just need to know you will pay ordinary income
• 31:15
  Suze: tax on it.
• 31:17
  Suze: However, there is a caveat to this, and there are
• 31:21
  Suze: many people in the armed forces that are still employed
• 31:25
  Suze: in the combat zone. And when you have somebody who's
• 31:29
  Suze: working in the combat zone.
• 31:33
  Suze: Their pay is actually tax exempt. I think the right
• 31:37
  Suze: initials for that is CZTE.
• 31:43
  Suze: So Combat Zone Tax Exempt. For them, they are allowed,
• 31:50
  Suze: ready for this? They are allowed after their normal contributions 24/5,
• 31:58
  Suze: whatever it is, the catch up, the whole thing.
• 32:01
  Suze: They are allowed to put in extra money up to
• 32:05
  Suze: the 415C limits of $72,000 or $80,000 if they're 50
• 32:11
  Suze: or older. It's not called a 415, but it is Combat Zone Tax Exempt.
• 32:20
  Suze: So what would happen is they would put it in
• 32:24
  Suze: their traditional TSP.
• 32:26
  Suze: And then after January 28th, they could do an in
• 32:31
  Suze: plan conversion to what? Their after-tax TSP if in fact
• 32:38
  Suze: they just leave it in their regular pre-tax TSP, their
• 32:45
  Suze: original contribution will always remain tax-free when they take it out,
• 32:50
  Suze: but then the growth on that money will be taxable.
• 32:55
  Suze: So if they could just get it over to the
• 32:58
  Suze: in-plan Roth TSP and also have a Roth IRA on
• 33:04
  Suze: the outside that later on in life when they're no
• 33:08
  Suze: longer in the armed forces, they could then take the money,
• 33:12
  Suze: transfer it to the Roth IRA, and 100% of it
• 33:16
  Suze: would be tax-free or if they leave it in the
• 33:19
  Suze: TSP and it's been in there for at least 5
• 33:22
  Suze: years and they're 59 and a half,
• 33:24
  Suze: they will be able to take all of it then
• 33:26
  Suze: at that point out tax free.
• 33:29
  KT: That's great.
• 33:29
  Suze: So they should just know that. So KT, did that
• 33:33
  Suze: help you at all?
• 33:34
  KT: Suze, I only have one last question and I guess
• 33:36
  KT: I was a little bit confused because we didn't really
• 33:39
  KT: address it. How long can you do this? I don't
• 33:44
  KT: think it applies to me.
• 33:45
  Suze: Now, listen, if you're still working for a
• 33:48
  Suze: corporation maybe you're a solo employer, meaning you have your
• 33:53
  Suze: own 401k, your own, your, you know, a husband and a, a,
• 33:57
  Suze: a spouse. Spouses can do this. Everybody can do this.
• 34:01
  Suze: You can get a fortune if you're making a lot
• 34:03
  Suze: of money into these accounts.
• 34:05
  Suze: However, once you're no longer working, you don't have income,
• 34:10
  Suze: or you're taking your required minimum distributions, or is, right,
• 34:15
  Suze: which is things like that, you probably wouldn't be doing
• 34:18
  Suze: this anymore. All right. However, the majority of people, believe
• 34:22
  Suze: it or not.
• 34:23
  Suze: That listen to this even if they're in their 60s, 70s,
• 34:28
  Suze: they are still working they have extra money, especially if
• 34:33
  Suze: you're out there and you are 30, 40, 50 you
• 34:37
  Suze: have extra money and you can do this. I'm telling you,
• 34:43
  Suze: do it, but you have to make sure again...
• 34:46
  Suze: who you work for has a Roth 401k or 403B
• 34:52
  Suze: and they allow in-plan conversions. All right, everybody? OK, KT
• 34:59
  Suze: take us out, girlfriend.
• 35:01
  KT: There's only one thing I want you to remember besides
• 35:03
  KT: that in-plan conversion.
• 35:06
  Suze: I thought you were gonna say something else. You know what,
• 35:07
  Suze: how I thought you were gonna say? There's only one
• 35:09
  Suze: thing I want you to remember, and it's this: Push
• 35:12
  Suze: the button to make sure that we're recording before we
• 35:17
  Suze: do an entire podcast.
• 35:18
  KT: On that note, everyone remember this people first, then money,
• 35:24
  KT: then things.
• 35:25
  Suze: Now you stay safe. Bye-bye.