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Should I Sell My House To Bridge My Income Gap? · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  Suze: May 21st, 2026. Welcome everybody to the Women and Money podcast.
• 0:14
  Suze: We are back. KT, are you still jet lagged?
• 0:18
  KT: A little bit?
• 0:19
  Suze: What do you mean a little bit?
• 0:20
  KT: Konnichiwa!
• 0:22
  Suze: Tell everybody what that means.
• 0:23
  KT: Konnichiwa means good morning in Japanese.
• 0:26
  Suze: We had the best time in our lives.
• 0:30
  KT: What was your highlight?
• 0:31
  Suze: I'm sure it was yours as well, but for me.
• 0:34
  Suze: Honest to God, meeting Fitzy Keith Fitz-Gerald and his wife
• 0:39
  Suze: Noriko in person was beyond the beyond.
• 0:44
  KT: Wait, we didn't just meet them in person. We met
• 0:47
  KT: them in Kyoto, his wife's hometown, and now his hometown
• 0:52
  KT: as well, and we met at the temple where they
• 0:55
  KT: were married, and it was magical.
• 0:59
  Suze: It was, it gives me goosebumps...
• 1:00
  Suze: as I'm sitting here and even thinking about it, so
• 1:03
  Suze: the rest of Japan was fabulous, fabulous.
• 1:06
  KT: Suze's second favorite was sumo wrestling. Everyone, she became hooked.
• 1:11
  KT: She's a sport buff and she became hooked on sumo wrestling.
• 1:15
  KT: She said, KT, take me to the match next year
• 1:18
  KT: in Tokyo. I wanna sit there right at ringside. I said, No,
• 1:22
  KT: you don't. If they fall off, they crush you.
• 1:26
  Suze: But seriously, we could not have had a better time
• 1:31
  Suze: if we tried.
• 1:32
  KT: And KT's favorite was the Benesse House which is on Nyoshima Island.
• 1:38
  KT: It's an art museum designed by the great architect Ando. Unbelievable. So... the best.
• 1:46
  Suze: There was nothing that we didn't like about that trip.
• 1:53
  Suze: So, we're going back again next year in May with
• 1:57
  Suze: Keith and Noriko to do the same things kind of
• 2:01
  Suze: that we did, but to go to the sumo championship matches. Oh,
• 2:06
  Suze: I'm so excited, but anyway, we're back. This is the
• 2:11
  Suze: Ask KT and Suze Anything edition. We have thousands of
• 2:15
  Suze: emails that came in while we were gone.
• 2:18
  Suze: So I hope you didn't miss us too much. I
• 2:20
  Suze: think we only needed to do one best of, but
• 2:23
  Suze: if you have a question, please send it into our
• 2:27
  Suze: new email address which is podcast@askSuze.com. If you've been using
• 2:33
  Suze: the older email address, it will still get to us,
• 2:38
  Suze: but the one I want you to start using is podcast@
• 2:42
  Suze: Ask Suze S U Z E.com.
• 2:45
  Suze: That will help a lot against all kinds of things
• 2:49
  Suze: known as scammers and people answering you that are not me.
• 2:53
  Suze: All right. Therefore, that's what I want you to do.
• 2:57
  Suze: But KT, what do you have to start?
• 3:01
  KT: My first question is from Trudell.
• 3:04
  KT: Hi, Suze and KT, thanks for taking us along to Japan.
• 3:09
  Suze: What she means by that, everybody, is that if you
• 3:12
  Suze: go to the Women and Money community app, if you
• 3:15
  Suze: don't have it, you can download it on Google Play
• 3:18
  Suze: or Apple Apps. It's free, obviously, and on there I
• 3:21
  Suze: posted some of the pictures that we took while we
• 3:26
  Suze: were in Japan with Keith and Noriko, as well as
• 3:29
  Suze: the sumo wrestlers that I was with.
• 3:32
  Suze: I stood right in the middle of two of them.
• 3:34
  Suze: Oh my God, they're huge. Anyway, go there and you'll
• 3:38
  Suze: see them. OK, go on.
• 3:39
  KT: OK, if I can manage my money well, maybe I
• 3:43
  KT: can go there someday too.
• 3:46
  KT: I will be needing the income from my 401(k) within
• 3:49
  KT: five years. When Suze says money needed within five years
• 3:54
  KT: doesn't belong in the stock market, does that mean that
• 3:58
  KT: money I have in a 401k mutual fund, that have
• 4:03
  KT: underlying funds and stocks should be moved to money market
• 4:08
  KT: or stable value funds now? I am so grateful for
• 4:12
  KT: your podcast. Thank you.
• 4:14
  Suze: So Trudell, it's very difficult for me to answer that
• 4:18
  Suze: question because I really don't know what else you have
• 4:21
  Suze: and how much of the income that you are going
• 4:25
  Suze: to need to live on will come from your 401(k).
• 4:29
  Suze: So this is what you need to do. This is
• 4:31
  Suze: kind of a rule of thumb. Add up all your expenses.
• 4:35
  Suze: What does it actually cost you to live every month?
• 4:38
  Suze: Escalate that by a few thousand dollars every year just so
• 4:42
  Suze: in case inflation hits, you have more than enough money.
• 4:45
  Suze: Where is the income going to come from to cover
• 4:50
  Suze: those expenses? How much will Social Security cover? How much
• 4:55
  Suze: will a pension cover if you're going to get one?
• 4:58
  Suze: How much is generated in dividends and or interest on
• 5:02
  Suze: the money?
• 5:02
  Suze: In the 401(k), so if you left everything invested in
• 5:07
  Suze: your 401(k) and let's just say it was in dividend
• 5:10
  Suze: stocks and those dividends pay you enough income plus everything
• 5:14
  Suze: else to cover your expenses, you're OK. However, if you
• 5:20
  Suze: need 100% of the money that is in your 401(k)
• 5:26
  Suze: to generate the interest that you need to live on,
• 5:31
  Suze: as well as an emergency fund. So if you have
• 5:35
  Suze: money in the 401(k), you have no other money at all,
• 5:40
  Suze: and you don't have an emergency fund, then you need
• 5:43
  Suze: at least 3 to 5 years of your must pay
• 5:46
  Suze: expenses liquid, meaning in a stable fund within your 401(k),
• 5:52
  Suze: so that if you needed a larger sum of money
• 5:55
  Suze: you could get it without having to sell
• 5:57
  Suze: stocks or ETFs. So that's kind of the formula. So
• 6:03
  Suze: I can't tell you what you should do, but those
• 6:05
  Suze: are some guidelines that you should follow. Next question, KT.
• 6:09
  KT: OK, this is from Alicia. This is a good one, Suze,
• 6:12
  KT: because I, I understand her position. She said, Dear Suze...
• 6:16
  Suze: Does that mean you don't understand many of these people's positions?
• 6:19
  KT: Yeah.
• 6:21
  KT: Dear Suze...
• 6:24
  KT: I have been a dedicated listener for many years and
• 6:27
  KT: your voice was the one in my head that pushed
• 6:31
  KT: me to build the emergency fund that just saved my life.
• 6:34
  Suze: You know what I thought she was gonna say, and
• 6:36
  Suze: your voice was the one that pushed me over the edge.
• 6:39
  KT: I'm 59, living in a New York beach townhouse that
• 6:43
  KT: I love. I have $1 million net worth. Uh, she
• 6:48
  KT: has $400,000 in accounts and $600,000 in home equity, Suze,
• 6:52
  KT: just to give you a perspective, and she said, I
• 6:54
  KT: have zero debt other than my $320,000 mortgage.
• 6:59
  KT: I own my car outright. I don't carry any credit card,
• 7:03
  KT: but last year I was laid off for 6 months.
• 7:08
  KT: I used $60,000 of my $100,000 emergency fund to survive.
• 7:13
  KT: Your must have documents and advice were my lifeline. I'm
• 7:17
  KT: now in a new commission only role, and for the
• 7:20
  KT: next
• 7:21
  KT: two months I'm not quite making my nut of $4,000
• 7:25
  KT: a month for mortgage and taxes. Friends are telling me
• 7:29
  KT: I should sell, move somewhere cheap, and pay cash for
• 7:33
  KT: a house, but Suze, I don't want to. My home
• 7:37
  KT: is my office, my sanctuary, and my highest yielding asset.
• 7:42
  KT: If I rented elsewhere I'd pay the same 4,000 without
• 7:46
  KT: gaining any equity. I don't spend on clothes or vacations.
• 7:50
  KT: My only extravagance is self-care and my 10 month old
• 7:53
  KT: rescue kitty Salem. I'm betting on myself to turn this
• 7:58
  KT: job into a W-2 salary by June. My question to you:
• 8:03
  KT: Am I being standoffish with my money by refusing to sell,
• 8:08
  KT: or is it a sound move to protect my joy
• 8:12
  KT: and my equity while I bridge this gap?
• 8:16
  KT: Yeah, great question.
• 8:19
  Suze: How old KT?
• 8:19
  KT: She's um 59.
• 8:23
  Suze: So she still has a number of years. So here's what...
• 8:26
  KT: But can I just say something?
• 8:27
  Suze: No.
• 8:28
  Suze: Go on. I'm joking. Go on.
• 8:30
  KT: She sounds very adamant that she can turn this into
• 8:34
  KT: a W-2 situation. She's in a commission-only job right now.
• 8:39
  KT: What do you think?
• 8:42
  Suze: That's what you wanted to say.
• 8:43
  KT: Yeah, I, I love that she's determined. She's very, you know,
• 8:47
  KT: she's hell bent on not having her...
• 8:50
  Suze: What would you do?
• 8:51
  KT: Absolutely stick to my plan. She has a deadline. Her
• 8:55
  KT: deadline said by June she wants to turn things around.
• 8:59
  KT: So what do you think?
• 9:00
  Suze: So here's what I would say to you. June is
• 9:02
  Suze: just a few days away, which is not very long.
• 9:06
  Suze: All right. Number one. Number two:
• 9:09
  Suze: You know the truth of your situation. You know things
• 9:14
  Suze: can happen, and the truth of the matter is, you
• 9:17
  Suze: have a plan that you're gonna be able to turn
• 9:19
  Suze: this around, but also plans can go the wrong way,
• 9:24
  Suze: meaning you could be in a car accident, you can
• 9:28
  Suze: get sick, things can happen that prevent you from working.
• 9:33
  Suze: And you're having a hard time right now while you're working,
• 9:38
  Suze: making your bills. That is reality, not what you think
• 9:42
  Suze: is going to happen, not what you want to happen,
• 9:44
  Suze: but that is the reality right now.
• 9:48
  Suze: Obviously, you have a home that's worth approximately $920,000 you
• 9:54
  Suze: have $600,000 equity in it, so that meant that's the
• 9:57
  Suze: $320,000 of your mortgage. Now, I don't know what your
• 10:01
  Suze: mortgage payments are.
• 10:03
  Suze: And does it make sense for you to refinance? I
• 10:06
  Suze: don't know what your original mortgage rate was when you
• 10:09
  Suze: first got this, but is it possible that you could
• 10:12
  Suze: refinance this house, that $320,000 and go out longer in
• 10:18
  Suze: terms to reduce your monthly mortgage payment, if this is
• 10:22
  Suze: where you want to stay. That's one choice for you.
• 10:26
  Suze: Your second choice is getting a home equity line of
• 10:30
  Suze: credit just in case you need more time. Now, the
• 10:35
  Suze: best place for you to do so, seriously, is to
• 10:38
  Suze: go to myalliant.com and look into getting their home equity
• 10:43
  Suze: line of credit. Now that home
• 10:46
  Suze: equity line of credit is only offered currently in 28 states.
• 10:51
  Suze: You happen to be one of the lucky ones because
• 10:54
  Suze: it is offered in New York and there is no
• 10:57
  Suze: better home equity line of credit currently on the market
• 11:01
  Suze: than that one. Your first 6 months will only be
• 11:03
  Suze: at 3.99%.
• 11:06
  Suze: And after that it can be as low as 6.75%,
• 11:09
  Suze: but it's 0 plus prime and nobody usually offers that.
• 11:14
  Suze: So go to my alliant.com and check that out. Third,
• 11:20
  Suze: you obviously could sell, take the equity that you have
• 11:23
  Suze: in your house and
• 11:24
  Suze: maybe buy something outright that's little and you can afford,
• 11:27
  Suze: but you're not ready for that right now. What you
• 11:30
  Suze: have to understand is you have options, so take advantage
• 11:34
  Suze: of which option makes the most sense to you. Personally,
• 11:38
  Suze: if I were you, I would most likely do the
• 11:41
  Suze: home equity line of credit.
• 11:42
  Suze: But check it out, see what the rates are, and
• 11:46
  Suze: make that decision, but don't let this go on too long.
• 11:52
  Suze: If you find that in June, in January, and sometime
• 11:56
  Suze: next year, you're still in the same situation,
• 11:59
  Suze: then girlfriend, what you really have to do is sell
• 12:04
  Suze: and change your situation. All right, KT next.
• 12:07
  KT: All right, from Lisa, Hi Suze and KT, your podcast
• 12:11
  KT: is my favorite and I never miss an episode. Thank
• 12:15
  KT: you so much for helping us all get smarter about finances.
• 12:20
  KT: I'm looking for some guidance as my parents are divorced
• 12:24
  KT: and are both aging and both have separate houses in
• 12:28
  KT: different states. My mom is in Florida and has put
• 12:31
  KT: her house in a Lady Bird trust for me. It's my
• 12:35
  KT: understanding that that allows her and my stepdad to live
• 12:40
  KT: in the house while alive, but then at their death
• 12:43
  KT: the house transfers to me.
• 12:45
  KT: My dad is in New York and not remarried. He
• 12:49
  KT: sold me his house for $1 so I am listed
• 12:54
  KT: as a grantee on the deed.
• 12:56
  Suze: Trouble, KT trouble.
• 12:57
  KT: Well, hold on then. She's asking, I don't know that
• 13:00
  KT: this was the correct way to do it. It was
• 13:03
  KT: not all right. So then she's saying, is it possible
• 13:06
  KT: to redo something at this point? Then she said, Suze,
• 13:09
  KT: can you give the best options on both of these?
• 13:12
  KT: Is a Lady Bird trust legit?
• 13:15
  Suze: So first of all, it's not a Lady Bird trust KT.
• 13:20
  Suze: It's known as a Lady Bird deed. It's also known as
• 13:25
  Suze: an enhanced life estate deed, and they're absolutely, I have
• 13:30
  Suze: to tell you, legal in Florida. In fact, Florida is
• 13:34
  Suze: one of the only handful of states really that recognizes
• 13:38
  Suze: this tool.
• 13:39
  Suze: And it's all right. It's not as great as a
• 13:42
  Suze: living revocable trust, so listen to me, everybody. All of
• 13:46
  Suze: you are so concerned about transferring an asset from maybe
• 13:51
  Suze: daddy or mommy's name down to your child without probate.
• 13:54
  Suze: All right, in Florida, a Lady Bird deed will absolutely do that. However,
• 14:00
  Suze: it's not the only concern that you need
• 14:04
  Suze: to have the reason a living revocable trust is far
• 14:08
  Suze: better is because it will accomplish the same thing. It
• 14:11
  Suze: will avoid probate. However, if Mommy in Florida becomes incapacitated,
• 14:18
  Suze: they need to sell the house before she's died. A
• 14:21
  Suze: Lady Bird deed is not going to help them on any level. Why?
• 14:26
  Suze: Because if Mommy is incapacitated, she's not competent enough to
• 14:31
  Suze: sign the deed to sell it.
• 14:33
  Suze: There's no paperwork saying that the daughter can sign it.
• 14:38
  Suze: So now Mommy's going to have to be declared incompetent,
• 14:41
  Suze: get a conservatorship for her. Now you have opened up
• 14:43
  Suze: a big can of worms. If you had simply a
• 14:47
  Suze: living revocable trust where the house was held in trust
• 14:51
  Suze: for her benefit while she was alive, your benefit after
• 14:54
  Suze: she has died, you
• 14:56
  Suze: avoid probate, but it also will have an incapacity clause
• 14:59
  Suze: in it that allows you to sign for her when
• 15:02
  Suze: she cannot sign for herself. So there you go. You
• 15:07
  Suze: have a choice, but if it's in a Lady Bird deed,
• 15:10
  Suze: it's fine, not a big deal, except unless your mother
• 15:15
  Suze: becomes incapacitated. However, Dad's house, this is where we have
• 15:20
  Suze: a problem because he sold it to you for $1.
• 15:26
  Suze: That is going to be deemed as a gift because
• 15:29
  Suze: everybody knows that that was a tool used to get
• 15:33
  Suze: the house in your name and they'll just void it
• 15:37
  Suze: so it will be considered a gift to you, which
• 15:39
  Suze: means you are going to inherit his cough spaces on
• 15:45
  Suze: the house when he dies. So if he paid $80,000
• 15:49
  Suze: for the house.
• 15:50
  Suze: It's now worth $600,000. He dies. Your cost basis is
• 15:55
  Suze: going to be $80,000. You go to sell it. You,
• 16:01
  Suze: because you didn't live in the house as your primary residency,
• 16:04
  Suze: you are going to owe taxes on the difference between
• 16:08
  Suze: those two amounts, which is $520,000.
• 16:15
  Suze: If you inherit the house after he died, it's in
• 16:20
  Suze: his name now. He dies, you inherit it, you get
• 16:24
  Suze: a step up in cost basis. So then your cost
• 16:28
  Suze: basis on that house, if it's currently worth $600,000 would
• 16:32
  Suze: be $600,000. If you turn around and sell it right
• 16:37
  Suze: away for $600,000 you don't owe any taxes.
• 16:43
  Suze: So it creates several, several problems for you, seriously. The
• 16:48
  Suze: next problem it creates is that house is now in
• 16:50
  Suze: your name.
• 16:51
  Suze: If you are in a car accident or you do
• 16:54
  Suze: something and you get sued and for some reason they
• 16:57
  Suze: take that house away from you, guess what, your father's
• 17:01
  Suze: going to be out of a house, so you have
• 17:04
  Suze: to be very careful because now that house is legally
• 17:08
  Suze: exposed to creditors, a lawsuit, divorce, or anything else that
• 17:14
  Suze: life's going to throw at you, girlfriend. So the good
• 17:18
  Suze: news is this.
• 17:20
  Suze: Likely it can be unwound just so you know, your
• 17:25
  Suze: father can deed the house back to himself. Then he
• 17:30
  Suze: has accomplished two really good choices for himself. Number one
• 17:35
  Suze: is that, and this is what I just told you,
• 17:37
  Suze: he can create a revocable living trust where he puts
• 17:42
  Suze: the title of the house into the trust.
• 17:46
  Suze: Held for his benefit while he was alive, your benefit
• 17:51
  Suze: when he dies.
• 17:53
  Suze: Also, if he wants, not as good of an option,
• 17:57
  Suze: but New York finally, and I think it was in 2024,
• 18:01
  Suze: they authorized transfer on death deeds. So what he can
• 18:06
  Suze: do is it works very similar to your mom's Lady Bird deed.
• 18:11
  Suze: He keeps full control while he's alive.
• 18:14
  Suze: And the house transfers for you on his death automatically
• 18:18
  Suze: with the step up in basis. So that's what I
• 18:22
  Suze: would do if I were you. Bottom line, do the
• 18:26
  Suze: must-have documents. Go to must-havedocs.com currently for $99 but if
• 18:34
  Suze: you
• 18:35
  Suze: wait till June 4th and you tune in to the webinar,
• 18:40
  Suze: you may find birthday pricing will be there for those
• 18:44
  Suze: of you who know. So that's June 4th, 6:00 p.m.
• 18:48
  Suze: Go to Suzeorman.com to register. We almost have 100,000 people
• 18:54
  Suze: at this point in time.
• 18:56
  Suze: So, you're going to want to hear a webinar and
• 19:00
  Suze: information that can actually change your life for the better,
• 19:05
  Suze: but you can go there and get those documents and
• 19:08
  Suze: do what I just told you to do, or
• 19:11
  Suze: Just make sure you have a Lady Bird deed and a
• 19:15
  Suze: transfer on death deed in New York, worst case scenario
• 19:20
  Suze: after your father has fixed what he did. All right, KT.
• 19:24
  KT: OK, next question is from Petra.
• 19:27
  KT: Suze and KT, thank you so much for everything you do.
• 19:31
  KT: I am deeply grateful. I would so appreciate your guidance
• 19:35
  KT: on a decision I'm facing regarding a custodial account I
• 19:40
  KT: opened for my daughter. She is now 22 years old.
• 19:45
  KT: In 2018 before discovering your work, I opened a Merrill
• 19:49
  KT: guided investment account for her with $10,500. Today it has
• 19:56
  KT: grown to approximately $23,000. The annual program fee is 0.45%,
• 20:05
  KT: and other fees may apply. Recently, Bank of America rep
• 20:09
  KT: called and advised us to simply close the custodial account,
• 20:14
  KT: open a Merrill guided investment account in my daughter's name
• 20:19
  KT: and transfer the funds as is keeping the existing investments intact. However,
• 20:26
  KT: I'm wondering if it would be wiser to instead sell
• 20:29
  KT: the investments, pay the
• 20:32
  KT: capital gains tax now, they live in Connecticut, Suze, and
• 20:36
  KT: use a portion of the proceeds to fund her Roth
• 20:39
  KT: IRA while investing the remainder in her Schwab brokerage account
• 20:45
  KT: in the stocks and ETFs you and Keith recommend. Now
• 20:50
  KT: she said a little bit about her daughter.
• 20:51
  Suze: She's gotta listen to June 4th. June 4th.
• 20:55
  KT: Don't miss Keith and Suze.
• 20:57
  Suze: All right, go on.
• 20:58
  KT: Um, she said, my daughter just graduated from Carnegie Mellon University.
• 21:04
  KT: They're so proud of her, and now she's going for
• 21:06
  KT: her master's. So should we follow the bank's advice and
• 21:11
  KT: transfer the account as is, or would it make more
• 21:14
  KT: financial sense to sell, pay capital gains tax, and start
• 21:19
  KT: fresh with the stocks and ETFs you and Keith recommend?
• 21:23
  KT: Given her limited earned income right now, should we prioritize
• 21:28
  KT: funding her Roth with some of this money?
• 21:31
  Suze: Yeah, so the answer to that question is no, don't
• 21:35
  Suze: listen to the advisor.
• 21:38
  Suze: Number one, because the truth of the matter is you
• 21:42
  Suze: can do something without having to pay any fees if
• 21:46
  Suze: you don't want to and have more control over the money.
• 21:50
  Suze: But the reason that you do need to change the
• 21:53
  Suze: account from a UGMA account to her own name is
• 21:57
  Suze: she is now 22 years of age, so it now
• 22:00
  Suze: has to be in her individual name. In fact, it
• 22:03
  Suze: should have been so even starting at least a year ago.
• 22:06
  Suze: That's number one.
• 22:08
  Suze: Number two, you have to understand that your daughter is
• 22:12
  Suze: only 22 years of age, and I have a feeling
• 22:15
  Suze: that you are still claiming her as a dependent and
• 22:19
  Suze: supporting her because she's still in school with very limited income. However,
• 22:25
  Suze: the problem here is cause she's 22.
• 22:29
  Suze: She, if she sells anything and there is a gain
• 22:32
  Suze: in it, there's something known as a kiddie tax, which
• 22:36
  Suze: means it's going to be taxed at your tax bracket,
• 22:40
  Suze: not at hers. So what you would do is an
• 22:43
  Suze: in-kind distribution to her own account in her own name
• 22:49
  Suze: at Schwab, and I would have it at Schwab. The
• 22:53
  Suze: other thing that you can do is this if she
• 22:57
  Suze: has limited income.
• 22:59
  Suze: Maybe what you can do is open up an additional
• 23:02
  Suze: Roth IRA for her.
• 23:05
  Suze: And then simply fund it with some money from you
• 23:09
  Suze: or from her, whatever she's earned up to the point
• 23:12
  Suze: of what she's earned. Maximum of $7500 obviously, but if
• 23:16
  Suze: she only earned $2,000 that's the max. But I would
• 23:20
  Suze: keep everything in kind for her right now until she
• 23:25
  Suze: does turn 24.
• 23:28
  Suze: And then it will no longer be as a kiddie tax,
• 23:31
  Suze: it will be at her tax bracket, so 24 or older,
• 23:35
  Suze: and that's when I might start liquidating things and investing
• 23:39
  Suze: in it that way. But just something to think about,
• 23:43
  Suze: all right? But I wouldn't be selling it, just thinking
• 23:47
  Suze: that you're not gonna pay any taxes on it, cause
• 23:49
  Suze: it's gonna be taxed at your tax bracket. Now, one
• 23:51
  Suze: last thing, if you don't have a high tax bracket.
• 23:55
  Suze: And you could afford for her to sell $7,500 or
• 24:00
  Suze: some amount of money.
• 24:02
  Suze: And not pay a lot of taxes on it, then
• 24:04
  Suze: I would do that as well. All right.
• 24:06
  KT: All right. My next question is from Christine. I love this.
• 24:09
  KT: This is the kind of question I like. Suze, I'm
• 24:12
  KT: 73 years old and was gifted an I-bond of $10,000
• 24:18
  KT: in 2022. I am not sure if I should be
• 24:22
  KT: doing anything with it or just let it be until
• 24:27
  KT: I decide to cash it in.
• 24:29
  KT: Thank you for being my guiding light.
• 24:31
  Suze: So how old is she?
• 24:34
  KT: 73.
• 24:35
  Suze: 73. So here's what I would be doing if I
• 24:38
  Suze: were you. I don't know when the person who bought
• 24:43
  Suze: the I-bond bought it.
• 24:45
  Suze: They gifted it to you in 2022, but did they
• 24:49
  Suze: buy it in 2021? In 2020, if they did, and
• 24:55
  Suze: you should ask them, you are now past the five
• 24:58
  Suze: years that you could get out of this bond without
• 25:02
  Suze: any penalties whatsoever.
• 25:04
  Suze: And the penalty isn't that much, it's just a 3
• 25:07
  Suze: month interest penalty. You probably have approximately $12,500 in there
• 25:13
  Suze: right now, if you've been in there since 2022.
• 25:18
  Suze: However, interest rates in treasuries right now are far higher
• 25:24
  Suze: than the interest rate that I-bonds are paying. So if
• 25:29
  Suze: you're not in a very high tax bracket, and really
• 25:33
  Suze: you're only going to owe income tax on approximately $2,000
• 25:37
  Suze: or $3000 at most, and once you hit the 5
• 25:42
  Suze: year period.
• 25:44
  Suze: I would then come out of that bond seriously, pay
• 25:48
  Suze: the taxes, and go into a treasury for a higher
• 25:52
  Suze: interest rate. I can tell you, everybody, that I myself
• 25:56
  Suze: yesterday put quite a bit of money into a 30
• 26:00
  Suze: year Treasury bond and got 5.05% for it. I think
• 26:06
  Suze: that's a great rate. Now job, Susie. Well, you heard
• 26:09
  Suze: me doing that, OK. I knew she did it right. So,
• 26:12
  Suze: and the
• 26:13
  Suze: reason that I did it was just to keep it
• 26:16
  Suze: safe and sound, not if interest rates go down, I'll
• 26:19
  Suze: make money. I like the 5% rate, and I took
• 26:23
  Suze: money that was in a Treasury money market account at 3.5%.
• 26:29
  Suze: And I decided, you know what, I don't need that
• 26:31
  Suze: much liquid money. Why not tie up some at a
• 26:34
  Suze: good rate? Why not do it? And if interest rates
• 26:37
  Suze: do go down, all right, then we'll make some money there.
• 26:40
  Suze: So that's what I would be doing if I were you.
• 26:43
  Suze: So check out the bond was purchased.
• 26:47
  Suze: And if it was purchased in 2022, you only probably
• 26:51
  Suze: have another year or so till you're out of the
• 26:55
  Suze: five-year penalty, but also you can check the three-month interest
• 26:59
  Suze: penalty and if it's only $75 or $100.
• 27:02
  Suze: or something like that, you might think about doing it.
• 27:04
  Suze: All right, KT next.
• 27:06
  KT: OK, next one is from Daniel. Hi, Suze and KT.
• 27:10
  KT: I just turned 29 and have a public accounting job
• 27:14
  KT: making around $93,000. My mortgage is around $1,300 and I
• 27:20
  KT: have a $450 car payment. I have about $100,000 saved
• 27:26
  KT: in my 401(k), about $50,000 in a brokerage account.
• 27:31
  KT: My issue is that I have about $15,000 in credit
• 27:36
  KT: card debt that I really want to get rid of. Suze,
• 27:40
  KT: would you advise I withdraw some from my investments to
• 27:43
  KT: wipe this debt out and start fresh? I appreciate your input.
• 27:48
  Suze: Well, I don't know what investments you have, Daniel. First
• 27:52
  Suze: of all, at 29, you are doing fabulous, fabulous. Not
• 27:57
  Suze: sure why you have $15,000 of credit card debt.
• 28:00
  Suze: But I personally don't care, right? If, however, you have
• 28:04
  Suze: a high FICO score, you should check it out. Do
• 28:09
  Suze: you or don't you, like in the 700 area, whatever
• 28:12
  Suze: it may be, check to see if you are paying
• 28:15
  Suze: currently a high interest rate on that $15,000 of
• 28:20
  Suze: credit card debt, could you do a balance transfer to
• 28:23
  Suze: a 0% rate card for like 21 months, then you're
• 28:28
  Suze: not paying any interest on that money and then you
• 28:31
  Suze: could dedicate just $1,000 a month towards that $15,000 and
• 28:37
  Suze: I think you'll find you have that $1,000 a month
• 28:41
  Suze: and therefore in a year and a half, while it's
• 28:44
  Suze: still under the 0% interest rate window.
• 28:48
  Suze: You will get rid of that debt. I would not
• 28:51
  Suze: be liquidating money in my brokerage account unless I had
• 28:57
  Suze: a loss on one of my investments there that I
• 29:01
  Suze: could then liquidate, take up to $3,000 off my taxes
• 29:05
  Suze: if I didn't have anything to offset it with in
• 29:07
  Suze: terms of a gain that I had.
• 29:09
  Suze: And use that money to get out of debt. However,
• 29:13
  Suze: markets still might be pretty good this year, although August,
• 29:16
  Suze: in my opinion, may be a rough month. Remember I
• 29:19
  Suze: said that to you, everybody, August, beginning of September, um,
• 29:24
  Suze: so up to you. But the other thing is, besides
• 29:29
  Suze: just having money in a brokerage account.
• 29:32
  Suze: And it's funny because KT just wrote me a little note.
• 29:36
  Suze: She just put it in front of me and said,
• 29:38
  Suze: What about a Roth? What about a Roth? KT's so good.
• 29:42
  Suze: Dinga dinga dinga dinga dinga. Japan was really good for you,
• 29:48
  Suze: really good for you. The other thing that you are missing, however.
• 29:53
  Suze: Is that you say that you have 100,000 saved in
• 29:56
  Suze: my 401(k). Why don't you have any money in a
• 29:59
  Suze: Roth 401(k)? All new contributions should be going to a
• 30:04
  Suze: Roth 401(k) number one, number two, you're only making 93,000
• 30:10
  Suze: a year, which means you qualify for a Roth IRA
• 30:15
  Suze: as well, so you should be fully funding your Roth IRA.
• 30:20
  Suze: $7,500 and I'm telling you in the long run that's
• 30:24
  Suze: far smarter than having $100,000 in a brokerage account. Remember,
• 30:29
  Suze: any money that you put in a Roth IRA, your
• 30:33
  Suze: original contributions you can take out any time you want
• 30:36
  Suze: without taxes or penalties regardless of age or how long
• 30:39
  Suze: it's been in there, so there are no benefits on
• 30:42
  Suze: any level of an investment account over a Roth retirement account.
• 30:48
  Suze: If you ask me, but you are doing fabulous. Give
• 30:51
  Suze: me one more, KT.
• 30:53
  KT: OK, this is from Christine, and she said, thank you
• 30:56
  KT: for the wonderful advice in your recent webinar. So Christine
• 31:01
  KT: obviously heard webinar Part I.
• 31:03
  Suze: And by the way, before you go on, all of
• 31:07
  Suze: you can go on to youtube.com/Suze Orman. Look for the
• 31:13
  Suze: five things you can do with money.
• 31:15
  Suze: That title somewhere there. And that's where we recapped and
• 31:20
  Suze: cut down the webinar that was live on April 23rd.
• 31:26
  Suze: To like 30 minutes so you can see the highlights
• 31:29
  Suze: of it, but I just have to say this, that
• 31:32
  Suze: was more about personal finance. Part II, you cannot miss.
• 31:38
  Suze: It is all about individual stocks, ETFs. Fitz is going
• 31:43
  Suze: to introduce his ETF on that day and tell you
• 31:48
  Suze: all about it. This is something that has been worked
• 31:50
  Suze: on by him for over two
• 31:52
  Suze: years now you've heard about it for two years you're
• 31:55
  Suze: gonna be able to really hear about it on June 4th.
• 32:00
  Suze: If you weren't already registered for the first webinar, please
• 32:04
  Suze: go to Suze Orman.com and register for the second one.
• 32:09
  Suze: This is a webinar you do not want to miss,
• 32:12
  Suze: and I'm just giving you a little highlight right now
• 32:14
  Suze: at the end of the webinar, and you need to
• 32:17
  Suze: stay all the way through.
• 32:19
  Suze: You will have birthday pricing for the ultimate scam protection.
• 32:24
  Suze: You will have birthday pricing for the must-have documents and
• 32:28
  Suze: the other things you have got to tune in for that.
• 32:32
  Suze: What KT?
• 32:33
  KT: Suze, tell them whose birthday you're talking about.
• 32:36
  Suze: Well, the next day it's my seventy-fifth birthday, so that
• 32:41
  Suze: gives you an idea of what the pricing is going
• 32:45
  Suze: to be for that day. All right, KT.
• 32:48
  KT: All right, my last question is from Christine.
• 32:51
  KT: Again she said thank you for the wonderful advice in
• 32:54
  KT: the recent webinar part one. During the session you mentioned
• 32:58
  KT: that choosing target date funds for retirement accounts is a
• 33:03
  KT: mistake in your opinion. My financial advisor previously suggested a
• 33:08
  KT: 2035 target
• 33:11
  KT: plan for my Roth 403B. I am currently 64 years old.
• 33:16
  KT: I do not plan to retire soon. I hope to
• 33:19
  KT: delay taking Social Security until I'm 70. Given this context, Susie,
• 33:26
  KT: what would you suggest instead of a target date fund?
• 33:30
  Suze: So, here's what all of you need to understand as
• 33:33
  Suze: to why Suze Orman personally doesn't like the majority of
• 33:38
  Suze: target date mutual funds that are out there.
• 33:42
  Suze: A target date mutual fund. Actually, KT, as I'm doing this,
• 33:46
  Suze: I'm thinking, should I save this for Suze School to
• 33:50
  Suze: explain to everybody in great detail the difference as to
• 33:54
  Suze: why I don't like target date mutual funds.
• 33:56
  KT: Absolutely. All right, do it Sunday.
• 33:59
  Suze: All right, so therefore, because we're a little bit
• 34:00
  Suze: over time, so everybody, this Sunday, Suze School is going
• 34:05
  Suze: to answer Christine's question and get you to understand in
• 34:09
  Suze: detail why I don't like target date mutual funds, at
• 34:14
  Suze: least the majority of them. So KT, anything you wanna say?
• 34:19
  KT: Yes, I do. I wanna wish my baby sister Barbara
• 34:22
  KT: a very happy birthday yesterday.
• 34:26
  KT: We love you. I hope you're having a great time.
• 34:28
  Suze: 65. Can you believe it? Oh my God.
• 34:32
  KT: Free med, baby.
• 34:33
  Suze: Medicare, Medicare, yeah, baby, right?
• 34:36
  KT: We love you, Barb.
• 34:38
  Suze: We most certainly do, sweetheart, Babsy, Babsy. And so until
• 34:43
  Suze: Sunday when I'm gonna tell all of you about why
• 34:48
  Suze: I don't like target date mutual funds, at least the
• 34:50
  Suze: majority of them. There's only one thing that we want
• 34:52
  Suze: you to remember when it comes to money, and what
• 34:54
  Suze: is it, KT?
• 34:55
  KT: It is people first, then money, then things.
• 35:00
  Suze: Now you stay safe. Love you. Bye bye
• 35:02
  KT: Bye bye.