Latest / Suze Orman's Women & Money (And Everyone Smart Enough To Listen) / Eternally Grateful

Transcript

Eternally Grateful · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  Suze: October 9, 2025. Welcome everybody to the Women and Money podcast,
• 0:13
  Suze: as well as everybody smart enough to listen. This is...
• 0:18
  KT: Ask Suze and KT anything.
• 0:21
  Suze: And if you write in to ask Suze podcast at
• 0:23
  Suze: gmail.com and KT chooses it, oh, we will answer it
• 0:28
  Suze: on this podcast. 9 days, KT 9 days before we leave.
• 0:34
  KT: We go to Italy, but then we also have Halloween.
• 0:38
  Suze: I don't care about Halloween. We start with this Halloween stuff.
• 0:42
  KT: I'm gonna do the favorite candy...
• 0:44
  Suze: No, you did that last year. Your age is showing because
• 0:48
  Suze: you're wanting to repeat things we've already done. So, but
• 1:01
  Suze: in 9 days...
• 1:01
  KT: Viva Italiano. (Then KT sings a little Dean Martin).
• 1:01
  Suze: Is that Italian I guess that's Italian, huh? All right,
• 1:03
  Suze: go on.
• 1:04
  KT: I'm Italian.
• 1:05
  Suze: What do you have for me?
• 1:07
  KT: Now wait, before we start questions, I want to tell
• 1:11
  KT: everyone to check out your YouTube channel. Suze has an
• 1:15
  KT: official YouTube channel, and it's YouTube.com/ Suze Orman. Why do
• 1:20
  KT: I want you to go there? She's starting to post
• 1:23
  KT: these really cool live segments and little pieces of information.
• 1:28
  KT: She wants you to know they're very current.
• 1:31
  KT: They're great and along with that you get to see
• 1:33
  KT: some Suze Orman show and all kinds of things. Maybe
• 1:36
  KT: I'll come on and wait, wait, it's free.
• 1:40
  Suze: They know YouTube is free, KT.
• 1:43
  KT: But when you say subscribe, some people might think that they have to pay.
• 1:46
  Suze: They understand subscribe when it comes to YouTube. All right, everybody,
• 1:50
  Suze: you heard the boss. Now KT, let's go to questions.
• 1:55
  KT: OK, this is from Rachel.
• 1:58
  KT: Now Rachel um is sending this in. I like this
• 2:01
  KT: a lot and I like Rachel that who you are.
• 2:04
  KT: So let me share this with all of you.
• 2:05
  Suze: What, have you met her?
• 2:06
  KT: No, but listen, I've read...
• 2:08
  Suze: Do you have a correspondence with her.
• 2:10
  KT: No, but I'd like to know just to like her.
• 2:12
  Suze: You would like to know her?
• 2:13
  KT: Yeah. My name is Rachel. I'm 34 years old, the
• 2:17
  KT: oldest child of a Vietnamese immigrants, now an emergency and
• 2:22
  KT: intensive care physician. Congratulations, Rachel.
• 2:26
  KT: She said, I'm married to a fellow physician and a
• 2:29
  KT: new mom of a healthy and happy six month old boy.
• 2:33
  KT: That's great.
• 2:35
  Suze: That's why you want to get to know her?
• 2:37
  KT: No, no, no, I just like this, um, email. So
• 2:40
  KT: she said, though I consider myself a successful and very
• 2:43
  KT: blessed person, my parents were unable to teach me about
• 2:47
  KT: personal finance. I have listened to your podcast for the
• 2:51
  KT: past 3 years and learned immensely from it. You have
• 2:54
  KT: filled this void in my understanding
• 2:56
  KT: and empowered me to jumpstart securing my own family's financial future.
• 3:01
  Suze: Now before you get to her question, because there has
• 3:04
  Suze: to be a question in there, right?
• 3:05
  KT: Yes, it's up here.
• 3:07
  Suze: But did you mainly like this because of everything you
• 3:11
  Suze: just read to me?
• 3:12
  KT: I liked it because she's the oldest child of Vietnamese immigrants.
• 3:17
  KT: And I know many Vietnamese immigrants and I really have...
• 3:22
  Suze: So it touched your heart.
• 3:22
  KT: It touched my heart. Anyone from Asia touches my heart,
• 3:26
  KT: quite frankly.
• 3:28
  Suze: All right, that's because KT spent 20 years or more living in
• 3:32
  Suze: and working in Asia.
• 3:34
  KT: Love, love the Asian society.
• 3:37
  KT: She said, I want to jump start securing my family's
• 3:40
  KT: financial future and allowing me to be able to give
• 3:44
  KT: back to my parents. There you go, Suze, for that,
• 3:48
  KT: she said, I am eternally grateful. So here's the question.
• 3:53
  KT: My husband currently makes $80,000. He receives a match in
• 3:58
  KT: his traditional 403B.
• 4:00
  KT: This year we maxed out his traditional 403B and he
• 4:04
  KT: received $2,000 in employer contributions. Next July he will have
• 4:10
  KT: the option for a Roth 403B though without matching.
• 4:16
  KT: So for 2026, does it make sense to not contribute
• 4:21
  KT: to a traditional 403B with matching and instead max out
• 4:27
  KT: the Roth 403B for tax-free growth, though it would imply
• 4:32
  KT: leaving money on the table. That's her question.
• 4:37
  Suze: That took forever to get to her question. That's besides
• 4:40
  Suze: the point, but no,
• 4:42
  KT: But I wanted to share Rachel's, uh, story.
• 4:45
  Suze: Because we all do, everybody, we have a story and
• 4:49
  Suze: the Women and Money podcast is made up of thousands
• 4:54
  Suze: and thousands of stories.
• 4:56
  Suze: Stories of people who were living in their car, got
• 5:00
  Suze: divorced and didn't have a penny, came from different countries
• 5:04
  Suze: and ended up here. Never knew anything about money. Nobody
• 5:08
  Suze: could teach them about money. Their parents had no money.
• 5:11
  Suze: All kinds of stories. But the great thing in my opinion, KT,
• 5:16
  Suze: about the Women and Money podcast, those who listen,
• 5:20
  Suze: their stories end up exactly where I know they would
• 5:25
  Suze: want to be financially speaking, and that is the reason
• 5:30
  Suze: we keep doing this even though we don't have to
• 5:33
  Suze: be doing this. We do this because we love it
• 5:36
  Suze: and we want to, and we want you to have
• 5:39
  Suze: the best financial advice around. Rachel, yhy can't you have
• 5:44
  Suze: your cake and eat it too?
• 5:47
  Suze: You obviously said that your husband maxed out on his
• 5:52
  Suze: traditional 403B but only got $2,000. What that says to
• 5:57
  Suze: you is they only match up to a certain point
• 6:02
  Suze: of his pay.
• 6:04
  Suze: After that point, if I were you, I would stop
• 6:08
  Suze: contributing to the traditional 403B. You already got your match there,
• 6:14
  Suze: and then I would change to the Roth 403B. And
• 6:19
  Suze: later on you just transfer what's in your traditional 403B
• 6:24
  Suze: to your Roth 403B. Then you have your match.
• 6:30
  Suze: And you get to enjoy it too.
• 6:33
  KT: That, that's, I like the cake better. All right. Next
• 6:38
  KT: question is from Susan. She said, Hi, Suze. Husband and
• 6:41
  KT: I both retired. We're in our 70s, and live on
• 6:45
  KT: Social Security, his pension, and rent from three rental houses.
• 6:50
  KT: I'm about to sell one of those rentals that I've
• 6:53
  KT: had for 40 years. Proceeds from that sale after taxes
• 6:59
  KT: will be about $300,000.
• 7:02
  KT: Now here's the big question. How can I invest this
• 7:06
  KT: for monthly income to make up for the loss of
• 7:09
  KT: the rental income which after property taxes, insurance, and other expenses,
• 7:16
  KT: netted out to be about $1,100 a month? Is that possible?
• 7:24
  Suze: So, KT. You know how I often say I scroll
• 7:26
  Suze: through these, and every once in a while one catches
• 7:29
  Suze: my eye.
• 7:30
  KT: This one caught your eye.
• 7:31
  Suze: This one caught my both my eyes.
• 7:33
  KT: OK, that means that she answered her already.
• 7:36
  Suze: I did. I answered Susan directly.
• 7:39
  KT: Would you tell her?
• 7:40
  Suze: Right, so here's what it is, and I just answered
• 7:43
  Suze: her because her and her husband are both retired and
• 7:46
  Suze: they live on Social Security, his pension.
• 7:49
  Suze: Which obviously maybe when he dies will go away for her,
• 7:54
  Suze: don't know, and rent from their three rental houses and
• 7:59
  Suze: they're about to sell one that they've had for 40
• 8:01
  Suze: years so that touched my heart because this obviously is
• 8:04
  Suze: a really big move for Susan, however, everybody, when it
• 8:11
  Suze: comes to real estate, even though I know Susan said,
• 8:16
  Suze: that she's going to get about $300,000 and it needs
• 8:19
  Suze: to replace $1,100 a month from her rental. The truth is,
• 8:24
  Suze: in my opinion, you don't know for sure what you
• 8:30
  Suze: net when you have a rental.
• 8:33
  Suze: Because if all of a sudden something happens and you
• 8:36
  Suze: need new windows, you need a brand new roof, you
• 8:40
  Suze: need a new refrigerator, all of a sudden, and that
• 8:44
  Suze: could be $10,000 $20,000, or whatever, maybe for that year
• 8:49
  Suze: you aren't netting $13,500 a year. It is possible you
• 8:54
  Suze: are actually in deficit for that amount of time. So
• 8:59
  Suze: when it comes to rental income,
• 9:01
  Suze: you can't always just say this is what we net...always
• 9:07
  Suze: because it's not always, always so there's many things that
• 9:12
  Suze: I told Susan, KT that she could do obviously if
• 9:15
  Suze: she wanted to she could do a mix of treasuries,
• 9:18
  Suze: municipal bonds and CDs, and she could probably get in
• 9:22
  Suze: an average of about 4 to 5% range on that.
• 9:27
  Suze: Which would net her $13,500 a year or about $1,125
• 9:33
  Suze: a month, but then they're more long term and that's it.
• 9:37
  Suze: At this point I would like for Susan to also
• 9:42
  Suze: not to just have this income that she knows, but
• 9:45
  Suze: also have growth on her money as well if she
• 9:49
  Suze: would be willing to take a little bit less income.
• 9:53
  Suze: It would be very possible.
• 9:55
  Suze: For her to put all $300,000 in to utilities, REITs, ETFs,
• 10:02
  Suze: all kinds of things, and average 3 to 4% but
• 10:06
  Suze: also probably get growth, especially in the utility area, everybody,
• 10:11
  Suze: but that would only average her about $10,500 a year.
• 10:17
  Suze: That's about $875 a month. Good dividend paying stocks.
• 10:23
  Suze: That would give her the potential for growth or even ETFs.
• 10:29
  Suze: That would be the way I would go if I
• 10:30
  Suze: were her. But Susan, if you just want to replace
• 10:34
  Suze: what you have, you don't care about growth, you don't
• 10:36
  Suze: care about inflation or anything, then just lock in all
• 10:40
  Suze: 300,000 at about 4.5% in different quality bonds, treasuries, and
• 10:47
  Suze: things like that, right? She could also do an immediate annuity.
• 10:53
  Suze: But not my favorite because it might be all of
• 10:56
  Suze: a sudden she dies, then what happens to that income
• 10:59
  Suze: for the husband, but that could easily give her $1,400
• 11:02
  Suze: to $1,600 a month, right now.
• 11:05
  Suze: But I don't think it would be a joint and
• 11:07
  Suze: survivor annuity.
• 11:08
  KT: So, so it is possible that when she makes the sale,
• 11:12
  KT: she can replace that with invested income.
• 11:15
  Suze: Yes, and she could do a different thing. She could
• 11:17
  Suze: put 40%, let's say, in bonds and CDs, 40% in
• 11:20
  Suze: dividend paying stocks.
• 11:21
  KT: You know what I would do?
• 11:22
  Suze: What?
• 11:22
  KT: I'd sell all three of those houses. She had this
• 11:25
  KT: one for 40 years and your point about maintenance and
• 11:29
  KT: the what ifs.
• 11:30
  KT: Get rid of all three and invest all that money.
• 11:33
  Suze: She has to worry a little bit, I'm sure, about
• 11:34
  Suze: capital gains. So she knows what she's doing. That's not
• 11:38
  Suze: the point. But the bottom line is don't be afraid
• 11:42
  Suze: to sell real estate. All of you, thinking, how are
• 11:45
  Suze: you going to replace your rental income. There are a
• 11:49
  Suze: million ways to do so. All right, KT.
• 11:52
  KT: OK, next question is from Erica. I call this "Niño."
• 11:57
  Suze: Like our Colo, Niño... so wait, I just have to say...
• 12:02
  KT: We have to tell them the backstory of Nino.
• 12:05
  Suze: So KT kind of treats Colo like it's her favorite son.
• 12:12
  Suze: And of course it is because we don't have a son. So,
• 12:15
  Suze: so we're sitting there at the breakfast table, whatever it
• 12:18
  Suze: may be, and all of a sudden he comes in
• 12:20
  Suze: and she says, Oh please don't go on the ladder
• 12:22
  Suze: today and fix this. I'm afraid maybe you'll fall. Or no, Colo,
• 12:26
  Suze: don't do this. It's too hot outside, and I do
• 12:29
  Suze: this thing. I go, Oh well, Niño, Niño, it's your
• 12:33
  Suze: favorite little son, Niño even though it's...
• 12:36
  KT: So let me, let me read this one ready. So
• 12:38
  KT: this is Erica. I call her email "Niño."
• 12:42
  KT: My dearest Suze and Katy, Suze, I've followed your guidance
• 12:46
  KT: for most of my life, and I truly credit my
• 12:49
  KT: strong financial position to your sound advice over the years.
• 12:55
  KT: Listening to you and KT feels like spending time with
• 12:58
  KT: sisters I never had.
• 13:00
  KT: Comforting, wise, and always encouraging.
• 13:03
  Suze: I'm not sure our sisters would be thinking that right now,
• 13:06
  Suze: but anyway, that's besides the point. Go on.
• 13:09
  KT: I am a 20 year navy veteran and just retired
• 13:13
  KT: after an additional 20 years. Now that I'm entering this
• 13:17
  KT: next chapter, I'm thinking ahead, especially about my son's future.
• 13:24
  KT: When I got to that part, I said, Nino, I
• 13:27
  KT: have half a million dollars in cash, and I would
• 13:30
  KT: like to create a stream of income for him. He's
• 13:34
  KT: 40 years old. I know how you feel about annuities,
• 13:39
  KT: but I am struggling to find another way to ensure
• 13:43
  KT: he receives a dependable monthly check when he turns 60.
• 13:48
  KT: Do you have any suggestions or thoughts on how I
• 13:51
  KT: might achieve this goal in a better or more efficient way?
• 13:58
  KT: I'm not going to comment. Go ahead, Suze. You say it, Niño.
• 14:02
  Suze: No, but Erica, here's the thing I just want to say.
• 14:07
  Suze: What you didn't say is how are you doing financially.
• 14:14
  Suze: You didn't say that upon my death,
• 14:18
  Suze: I would like to leave him 500,000 if I still
• 14:22
  Suze: have it, cause will you or will you not? What
• 14:25
  Suze: if all of a sudden you have to be in
• 14:27
  Suze: a nursing home or an adult living facility or you get,
• 14:31
  Suze: who knows what can happen, or you want to hire
• 14:33
  Suze: somebody to come in to take care of you? Who knows?
• 14:38
  Suze: So assuming that you mean after you have died and
• 14:43
  Suze: don't you dare do this while you are still alive.
• 14:48
  Suze: Do you hear me?
• 14:49
  KT: He's only 40, right?
• 14:51
  Suze: Yes, he's only 40, which means she's really not that
• 14:55
  Suze: old either, and she could easily live another 20 or
• 15:00
  Suze: 30 years, which means you are not to give him
• 15:04
  Suze: a penny at this point in time. It will not
• 15:07
  Suze: help him. It will hurt him.
• 15:10
  Suze: And therefore you just need to set up a living
• 15:14
  Suze: revocable trust where somebody is a trustee and that he
• 15:19
  Suze: only gets X dollars per month until the money's gone, just
• 15:25
  Suze: that simple. But please don't baby him at 40. I
• 15:31
  Suze: know I'm going over today, but there's really something that
• 15:34
  Suze: struck me that I want to say to all of you.
• 15:38
  Suze: And this has happened in many cases of where somebody
• 15:42
  Suze: I'll never forget on the Suze Orman show,
• 15:45
  Suze: this elderly woman now in her 80s, which is only
• 15:49
  Suze: five years away from me, but that's besides the point. OK,
• 15:52
  Suze: but no, but she was older, she was sick, she
• 15:55
  Suze: had cancer. Her 58 year old son still lived with her.
• 16:02
  Suze: To support him, she took out all the equity in
• 16:05
  Suze: her home. She had no money at all to leave him.
• 16:12
  Suze: And he lived with her and still smokes even though
• 16:15
  Suze: she has lung cancer, and her question to me was
• 16:19
  Suze: what can I do to make sure that he's OK.
• 16:23
  Suze: And my answer to her was "nothing."
• 16:27
  Suze: You shouldn't have ever babied him the way that you did,
• 16:31
  Suze: cause there's no equity in the house now. He can't
• 16:34
  Suze: afford to pay the mortgage that you still have, 'cause
• 16:37
  Suze: you took it all out. You don't have any money
• 16:40
  Suze: to give him, so at the age of 60 or so,
• 16:45
  Suze: he's going to be on the streets.
• 16:48
  Suze: And there's nothing that I can do for him or
• 16:52
  Suze: you at this point in time, so you better tell him.
• 16:56
  Suze: He better figure that out now, cause otherwise he's going
• 16:59
  Suze: to be in big trouble. Now, Erica, I'm not saying
• 17:04
  Suze: that's your son by any means, but everybody listening to
• 17:09
  Suze: me right now, don't baby your children. Don't make it
• 17:14
  Suze: easier on them than they even want.
• 17:19
  Suze: Let them grow up. Let them be responsible human beings.
• 17:22
  Suze: Let them generate their own money. Let them be independent
• 17:27
  Suze: and then give them a surprise maybe upon your death.
• 17:30
  Suze: But don't do it now. Erica, take what I just
• 17:34
  Suze: said to heart, all right, KT.
• 17:37
  KT: OK, next question, Suze is from Elena.
• 17:40
  KT: I'm 39, married, and a mom to a two year old,
• 17:44
  KT: and I'd love your advice on whether it makes sense
• 17:47
  KT: for us to pay off our home early. Here's where
• 17:50
  KT: we stand. We have a mortgage for $415,000. It's a
• 17:56
  KT: 30 year fixed at 3% scheduled to end 2051.
• 18:02
  KT: With child care costs...
• 18:04
  Suze: Won't be our problem in 2051.
• 18:07
  KT: With child care costs, we don't have much extra cash,
• 18:11
  KT: but we could put an extra 100 or 200 a
• 18:14
  KT: month toward the principal, which would shorten the loan by
• 18:18
  KT: two to three years. I'll admit some of this is emotional.
• 18:22
  KT: I have friends who paid off their homes early, and
• 18:25
  KT: it makes me second guess our path. Now there's quite
• 18:30
  KT: a bit of background.
• 18:32
  KT: Details here on...
• 18:33
  Suze: KT, I just have to ask this, right, because usually
• 18:36
  Suze: when they're asking me it's because somebody else is in
• 18:39
  Suze: the picture that isn't agreeing with them or she would
• 18:41
  Suze: just be doing it. Anywhere in that email because it's long.
• 18:46
  Suze: Does it say that her spouse doesn't agree with her?
• 18:51
  KT: Funny that you feel that because there is a challenge here,
• 18:55
  KT: she said.
• 18:56
  KT: My husband would rather put any extra money into the
• 19:00
  KT: stock market. I see his point. The returns can outpace
• 19:05
  KT: our 3% mortgage, but I still struggle with carrying debt
• 19:10
  KT: for so long.
• 19:10
  Suze: I knew it. I knew it. Well, I felt it
• 19:14
  Suze: because otherwise why would Elena be asking me if that's
• 19:17
  Suze: what she wanted to do? She would just do it.
• 19:20
  Suze: So I've done this long enough, everybody, that when somebody's
• 19:23
  Suze: asking me
• 19:25
  Suze: a very simple question because they know what they want
• 19:28
  Suze: to do. Somebody doesn't want them to do what they
• 19:31
  Suze: want to do, just that simple. That happens between me
• 19:34
  Suze: and KT all the time. Anyway, here's the thing, Elena.
• 19:39
  Suze: You're only 39. You say that there isn't really a
• 19:44
  Suze: whole lot more than a few $100 a month extra
• 19:49
  Suze: and that it's going to be many, many years, 2051
• 19:54
  Suze: before the house is paid off. I doubt highly that
• 19:58
  Suze: here you are, you're only 39. You have a two
• 20:01
  Suze: year old. I doubt highly that may be your only child.
• 20:05
  Suze: What if all of a sudden you have another child
• 20:07
  Suze: and then another child? You could.
• 20:10
  Suze: You really could, and that house is too small now
• 20:14
  Suze: or doesn't meet your needs, and you want to move.
• 20:18
  Suze: The house will continue to appreciate in value regardless of
• 20:23
  Suze: the mortgage that you have on it.
• 20:27
  Suze: So it's not about the 3% in the mortgage that
• 20:29
  Suze: you want to get rid of, which is how you're
• 20:32
  Suze: gonna make money. You make money in a home by
• 20:36
  Suze: it appreciating over the years, and that will happen. Therefore,
• 20:42
  Suze: if I were you and you don't have a lot
• 20:44
  Suze: of money to really make a difference here.
• 20:48
  Suze: I would listen to your husband, and I wouldn't be
• 20:51
  Suze: doing it, and I would be investing it and making
• 20:54
  Suze: sure that you have like a Roth IRA or whatever
• 20:58
  Suze: it may be and start doing it that way, where
• 21:02
  Suze: you increase your worth not only in your home but
• 21:05
  Suze: in your retirement and forget about owning it outright, at this age.
• 21:09
  KT: OK, Suze, this next email is right up your alley.
• 21:14
  KT: You ready? This is from Jewel.
• 21:17
  Suze: Here's what that means.
• 21:20
  KT: Get ready for a slapdown.
• 21:21
  Suze: It's gonna aggravate me.
• 21:23
  KT: It is get ready for a slapdown.
• 21:25
  Suze: She loves when I get aggravated.
• 21:28
  KT: So this is from Jewel, she said, I'm 94 years old and
• 21:31
  KT: I sold my house. I downsized and live independently in
• 21:36
  KT: a small townhouse. I don't need the proceeds but would
• 21:41
  KT: like to know where to invest it for safety and growth.
• 21:45
  KT: She's 94.
• 21:47
  KT: And then this is really sweet. She says my financial
• 21:50
  KT: adviser would like me to put the proceeds approximately $1.4 million.
• 21:57
  Suze: Oh wait, wait, let me guess.
• 21:58
  KT: Wait in an S&P indexed annuity. I don't feel comfortable
• 22:03
  KT: without your advice. The annuity protects 90%
• 22:07
  KT: of the principal and gives me 80% of the S&P
• 22:12
  KT: gain over a six year period. So on her 100th birthday...
• 22:20
  Suze: But you know what she didn't say there's that and
• 22:23
  Suze: how much 1.4 million,
• 22:27
  Suze: in one annuity, which you would never do, people, I'll
• 22:30
  Suze: tell you why in a second, right, would get in commission.
• 22:35
  KT: How much?
• 22:35
  Suze: I'm sure...
• 22:36
  KT: Just guess.
• 22:38
  Suze: 70,000 or more.
• 22:40
  KT: Wow in one piece of paper.
• 22:43
  Suze: One piece of paper. What's interesting, Jewel, is you yourself
• 22:49
  Suze: said I don't feel comfortable without your advice.
• 22:54
  Suze: Now let's pretend my advice wasn't here.
• 22:58
  Suze: The truth is you don't feel comfortable. Full stop.
• 23:04
  Suze: Doesn't matter about my advice. What if I told you,
• 23:08
  Suze: go ahead and do it, but maybe you still felt uncomfortable.
• 23:14
  Suze: It doesn't matter what I say. It doesn't matter what
• 23:18
  Suze: I tell you to do. The only thing that matters
• 23:22
  Suze: is you feel comfortable. You feel secure.
• 23:28
  Suze: Now in this particular instance, you run, don't walk away
• 23:34
  Suze: from this person. First of all, you would never put
• 23:37
  Suze: more than 250, maybe 300,000 in one annuity. And why
• 23:44
  Suze: is that? Because they're only protected... same thing with FDIC
• 23:48
  Suze: insurance and everything in a bank.
• 23:50
  Suze: Life insurance companies, annuity companies work the same way. So
• 23:55
  Suze: if anything happened to that company, oh, you would have
• 23:58
  Suze: approximately $1.1 million at risk. That's the first thing. Second,
• 24:05
  Suze: if you want to invest this money in the Standard
• 24:09
  Suze: and Poor's or an ETF like VOO, then go ahead
• 24:13
  Suze: and do that. Why? Because as that money grows, what
• 24:19
  Suze: would happen is, later on if you wanted to take
• 24:23
  Suze: it out, capital gains.
• 24:26
  Suze: But you die and really at 94 you have to
• 24:29
  Suze: be thinking about that, and it passes down to your beneficiaries.
• 24:34
  Suze: They would get a step up in cost basis on
• 24:38
  Suze: that money, so there would be no income tax to them.
• 24:42
  Suze: Your financial adviser should absolutely have said, do you have beneficiaries?
• 24:47
  Suze: Do you care about that? Do you want to leave
• 24:49
  Suze: money somewhere other than a nonprofit?
• 24:52
  Suze: And if the answer to that is yes, then he
• 24:56
  Suze: never would suggest such an investment, because the Standard and
• 25:00
  Suze: Poor's will probably go up. You would probably make money
• 25:04
  Suze: on this. However, upon your death, let's say you put
• 25:08
  Suze: in 1.4 million, it's now worth 1.7 million. It's now
• 25:13
  Suze: worth 2 million.
• 25:15
  Suze: Upon your death your kids are going to owe ordinary
• 25:19
  Suze: income taxes on $600,000. Are you crazy? So no, you
• 25:27
  Suze: are not to do this on any level.
• 25:29
  KT: Run, Jewel, run, run, run, run.
• 25:33
  Suze: Run, run, run.
• 25:35
  KT: All right, Suze, this is my last email and one
• 25:38
  KT: that I really think is going to set you off
• 25:41
  KT: yet again, but I want you to set everyone straight here.
• 25:45
  KT: This is from Mary. She said, Suze and KT. 10
• 25:49
  KT: years ago my husband, a financial adviser, told me that our finances were
• 25:55
  KT: none of my business.
• 25:57
  Suze: Please just pray. Let me pray that she divorced that idiot.
• 26:02
  KT: Ready? After 30 years of marriage, he left me to
• 26:07
  KT: start a new life with a woman in his office. Blindsided,
• 26:13
  KT: I was in a fog until COVID when I started
• 26:17
  KT: listening to your podcast and reading your books. Good for you, Mary.
• 26:21
  KT: And then she said, you literally changed the course of
• 26:25
  KT: my life, and I am eternally grateful.
• 26:29
  KT: That's the theme actually of this week's podcast Eternally grateful.
• 26:33
  Suze: KT, that should be the thing that'll be the title,
• 26:36
  Suze: the Women and Money podcast on our website. It will
• 26:40
  Suze: make you eternally grateful you listened. I love that.
• 26:44
  KT: So we'll we'll make that the title of this one.
• 26:47
  KT: I've scrimped and saved and now I feel secure in
• 26:51
  KT: my future, but one thing does frighten me. How do
• 26:55
  KT: you know your revocable trust is valid?
• 26:58
  KT: Ready? Now, everyone listened to this. Mary remember had a
• 27:02
  KT: husband who told her finances were none of her business.
• 27:07
  KT: So Mary's not naive. She just didn't know. So listen
• 27:11
  KT: to this question. A few years ago I funded my
• 27:15
  KT: revocable trust. She's 65, by the way. I funded my
• 27:19
  KT: revocable trust at my bank and Fidelity
• 27:22
  KT: and I was confident that I was all set.
• 27:26
  Suze: Danger, danger.
• 27:27
  KT: Yesterday I went with my 92-year-old mom to fund hers.
• 27:33
  KT: While both institutions said it would be easier not to
• 27:38
  KT: have a revocable trust, and she wrote, I know better
• 27:41
  KT: thank you. Why? Because Mary's been listening to Suze. The
• 27:46
  KT: bank said I would need an EIN number. Let's tell
• 27:53
  KT: everyone an EIN just, you know, it's an employee identification number.
• 27:58
  KT: She said, I need an EIN number to fund my
• 28:02
  KT: mother's trust.
• 28:03
  KT: I had never heard of this. Does that mean that
• 28:07
  KT: my trust is not valid? How would I know? We
• 28:11
  KT: went out to the car and we immediately went to
• 28:13
  KT: IRS.gov to get an EIN number for both of us,
• 28:19
  KT: brought them back into the bank. But Suze, is this correct,
• 28:23
  KT: or I am now making my trust invalid? I am
• 28:26
  KT: so confused.
• 28:29
  KT: So this, this is important. I want you to really
• 28:33
  KT: explain to everyone what Mary needs to do.
• 28:36
  Suze: I don't know, Mary, if you made it, that the
• 28:40
  Suze: bank would be the successor trustee upon your mother's death
• 28:46
  Suze: and run the money for her, all right, so if
• 28:50
  Suze: you did, some banks then,
• 28:53
  Suze: Will insist on an EIN for their own internal systems
• 28:58
  Suze: even though the IRS does not require it. So I
• 29:04
  Suze: don't know if that's why they wanted you to do so.
• 29:08
  Suze: Either way, it has not made it more complicated. So
• 29:13
  Suze: you have to know that a revocable trust is what's
• 29:16
  Suze: known as a grantor trust.
• 29:18
  Suze: And the IRS treats it as if that means no
• 29:23
  Suze: separate tax return, so no EIN is required. The only
• 29:28
  Suze: thing that is required is your Social Security number. That's it,
• 29:33
  Suze: which is the tax ID for the trust, just that simple. Again,
• 29:39
  Suze: when an EIN is required.
• 29:43
  Suze: After the grantor dies, that would be your mother. The
• 29:47
  Suze: trust becomes irrevocable, so I don't know if you wanted
• 29:52
  Suze: that as well.
• 29:54
  Suze: So the bank's request for your mother's trust wasn't about validity,
• 29:58
  Suze: my love. It was simply about their policy and by
• 30:03
  Suze: getting an EIN, you did not invalidate anything. You just
• 30:07
  Suze: gave the bank a number they're more comfortable with, just
• 30:11
  Suze: that simple. But everybody in most cases...
• 30:16
  Suze: We have a trust. We each have our own trust,
• 30:19
  Suze: a substantial trust, but we don't have an EIN, just saying,
• 30:24
  Suze: all right, KT.
• 30:25
  Suze: That brings us to the end of this wonderful, fabulous,
• 30:31
  KT: Eternally grateful podcast.
• 30:33
  Suze: I was waiting for
• 30:34
  Suze: you to say that I was
• 30:35
  Suze: setting her up and she did it.
• 30:37
  Suze: All right,
• 30:38
  Suze: everybody, until next week.
• 30:41
  KT: You just remember three things, everyone people first, then money,
• 30:45
  KT: then things, and..
• 30:47
  KT: You stay safe, healthy, and secure. See you soon. Bye