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How Not To Pay Taxes On An Inherited Retirement Account · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:07
  Suze: December 11th, 2025. Welcome everybody to the Women and Money
• 0:11
  Suze: podcast and what KT?
• 0:12
  KT: And everyone's smart enough to listen.
• 0:16
  Suze: And if they don't listen, does that mean they're not
• 0:18
  Suze: smart enough? Yes.
• 0:21
  Suze: This is the Ask KT and Suze Anything edition. If
• 0:26
  Suze: you have a question, write into Ask Suze, S U
• 0:29
  Suze: Z E podcast at gmail.com. And if KT chooses it, oh,
• 0:35
  Suze: we will answer it on this podcast. All right.
• 0:40
  Suze: Should we just get into it?
• 0:41
  KT: Let's get right into it. My first question is from Susan,
• 0:45
  KT: and she said, Hi, Suze and KT. My father, who
• 0:48
  KT: is 75, watches these people on Facebook, and they told
• 0:53
  KT: him that he could get a life insurance policy and
• 0:56
  KT: borrow against it.
• 0:57
  KT: That he can put the stocks into a trust and
• 1:01
  KT: borrow against them as well for a house. I think
• 1:04
  KT: it's a scam. What are your thoughts on this?
• 1:07
  Suze: It's not a scam, Susan. It's absolutely just stupid. How
• 1:10
  Suze: is it possible that your father at 75
• 1:14
  Suze: is not intelligent enough to know not to listen to
• 1:17
  Suze: somebody on Facebook that he knows nothing about. Why are
• 1:21
  Suze: they telling him this? It's just stupid. OK. First of all,
• 1:26
  Suze: when you see that you can borrow against something.
• 1:30
  Suze: What does that say to you? It says that you've
• 1:32
  Suze: put your money somewhere and now you're going to borrow
• 1:35
  Suze: against it, which means you're going to have to pay
• 1:37
  Suze: an interest rate to use your own money. Are you
• 1:40
  Suze: kidding me? It just makes no sense whatsoever. I'm very,
• 1:46
  Suze: very familiar with these policies, and my advice to your
• 1:50
  Suze: father would be stay away, stay away, stay away. Next,
• 1:55
  Suze: anybody can put money
• 1:57
  Suze: into an investment account, whether it's in trust or individual name,
• 2:01
  Suze: and qualify for something called margin, and margin is where
• 2:05
  Suze: you have these stocks, and you can borrow against them
• 2:09
  Suze: to do anything you want, but then once again, it's
• 2:12
  Suze: not free. You have to pay the brokerage firm the
• 2:15
  Suze: money to borrow against the stocks and
• 2:18
  Suze: if the stocks that you borrowed the money from start
• 2:21
  Suze: to go down significantly, there's something called a margin call.
• 2:25
  Suze: And if your father doesn't have the money to absolutely
• 2:28
  Suze: pay that call, what does that mean? They will liquidate
• 2:31
  Suze: the stocks that he has, and he could possibly lose
• 2:34
  Suze: most of his money, if not all of it. It's
• 2:38
  Suze: not a scam. It is stupidity, all right.
• 2:43
  KT: I think that's great. Not a scam. It's just stupid.
• 2:47
  Suze: Well, you know, all these people...
• 2:48
  KT: I think that was just all you had to say.
• 2:50
  Suze: Yeah, when you see the word
• 2:52
  Suze: borrow when you see the word that you can do
• 2:55
  Suze: something with your stocks and borrow against them twice now,
• 2:59
  Suze: twice in this email you read me the word borrow.
• 3:04
  Suze: Just think about what the word borrow means and if
• 3:07
  Suze: you have the money, why would you borrow your own money?
• 3:11
  Suze: All right. All right.
• 3:12
  KT: Next question is from Marie. She said, first...
• 3:16
  Suze: What a way to start off the morning.
• 3:17
  KT: I know. I'm sorry.
• 3:19
  Suze: You did that on purpose.
• 3:20
  KT: No, I didn't. I like to rile you up, but
• 3:22
  KT: it woke you up. That's for sure. OK. Next question
• 3:26
  KT: from Marie. She said, first, thank you so much for
• 3:29
  KT: an excellent podcast. I've learned so much from both of you.
• 3:33
  KT: She said first time question submitter, this situation is a
• 3:37
  KT: real conundrum. Sadly, my sister passed away recently. She named
• 3:43
  KT: my elderly father as the beneficiary for her quite large 403b.
• 3:49
  KT: What's the best way to handle the funds to avoid, ready?
• 3:54
  KT: Avoid ordinary income taxes.
• 3:58
  Suze: Listen, Marie.
• 4:01
  Suze: Sometimes, obviously, you want to avoid income taxes if you can.
• 4:05
  Suze: However, whenever it comes to a retirement account, there's only
• 4:10
  Suze: one way to avoid income taxes, which I have been
• 4:14
  Suze: preaching from the mountain top now for over like 20
• 4:17
  Suze: or 30 years, however long it's been really, and that
• 4:22
  Suze: is what? By doing a Roth IRA, a Roth 403B,
• 4:28
  Suze: a Roth 401k, a Roth TSP.
• 4:32
  Suze: That is why I've been saying it. Once your money
• 4:36
  Suze: is in a traditional 403B, meaning pre-tax account,
• 4:41
  Suze: and the owner, your sister, dies and it now goes
• 4:45
  Suze: to your father. It is now in an inherited retirement
• 4:50
  Suze: account and there is absolutely no way to avoid taxes
• 4:55
  Suze: on it. However, stop thinking about the taxes that he's
• 4:58
  Suze: going to owe. Start thinking about how much money is
• 5:03
  Suze: in there.
• 5:04
  Suze: And how he will take it out. I don't know
• 5:06
  Suze: how old he actually is, but he will either have
• 5:09
  Suze: to take it out according to how old your sister
• 5:12
  Suze: was when she died, all of that, but something is
• 5:15
  Suze: always better than nothing.
• 5:18
  Suze: And if you approach this as, I want to just
• 5:20
  Suze: give the money away so he doesn't have to pay taxes,
• 5:22
  Suze: what can I do? What can I do? You're gonna
• 5:24
  Suze: get yourself in trouble. And just know that it is
• 5:28
  Suze: possible that when your father dies, maybe you then get
• 5:33
  Suze: that money because he gets to name who
• 5:35
  Suze: he wants as a beneficiary on this inherited IRA. So
• 5:41
  Suze: stop worrying about taxes. There is no way around them.
• 5:45
  Suze: All right, go on.
• 5:46
  KT: OK, this is sweet. Suze from Rosie.
• 5:48
  Suze: However, I just have to say one thing. He's not
• 5:50
  Suze: going to take all of this money out at one time.
• 5:53
  Suze: So don't be freaked that all of a sudden he
• 5:55
  Suze: got a lot of money and he's gonna take it
• 5:56
  Suze: out at one time. He's not, OK. It's gonna take
• 6:00
  Suze: out little by little, but probably it's gonna have to
• 6:02
  Suze: be wiped clean within 10 years. It just depends on age.
• 6:07
  Suze: All right, go on.
• 6:08
  KT: Suze. This next...
• 6:08
  Suze: Are you sure I'm done with that question?
• 6:10
  KT: Yeah, 10 years, Suze. This, this next, this next question
• 6:15
  KT: is from Rosie, and it's very sweet.
• 6:17
  KT: She said, I was born in 1941, so currently I
• 6:22
  KT: am 84 years old.
• 6:23
  Suze: Me too. 10 years later.
• 6:26
  KT: I do not have a great deal of money. However,
• 6:29
  KT: in total, I have over $100,000 in savings and CDs.
• 6:35
  KT: I think that's a great deal of money, Rosie.
• 6:37
  Suze: That's a great deal of money for most people.
• 6:38
  KT: And then she said, Does it make sense for me
• 6:40
  KT: to convert any of the savings to a Roth?
• 6:44
  KT: And then Rosie gives you an explanation as why she's asking.
• 6:47
  KT: She said, my family is long lived with my mother
• 6:51
  KT: living to 101 years old.
• 6:54
  Suze: See, Rosie, here's the problem. If this money right now
• 6:57
  Suze: is just in a savings account, $100,000 in savings and CDs,
• 7:03
  Suze: you can't convert any of that to a savings Roth.
• 7:07
  Suze: Unless you are currently working and you have earned income
• 7:13
  Suze: and then you're not converting it, you're just opening up
• 7:16
  Suze: a contributory Roth and putting some of this money in it,
• 7:20
  Suze: but I got news for you. It really doesn't make
• 7:23
  Suze: any sense to do that if it's all in savings
• 7:26
  Suze: and chances are that you're living off of the interest
• 7:29
  Suze: on that savings and everything. No, it does not make
• 7:32
  Suze: sense for you to do that. And in fact you cannot, OK.
• 7:38
  Suze: KT, you can only convert you money.
• 7:41
  KT: If you are working.
• 7:41
  Suze: No, no, you can only convert money to a Roth
• 7:45
  Suze: if you have it in a traditional retirement account. Then
• 7:48
  Suze: you convert it. If it's not in a Roth to
• 7:51
  Suze: begin with, you're not converting anything. You're opening up a new,
• 7:55
  Suze: a new one, and you have to have earned income
• 7:58
  Suze: to do so. And at 84, for some reason, I
• 8:01
  Suze: have a feeling.
• 8:02
  Suze: She might not have income, but anyway, go on.
• 8:04
  KT: OK. Next is from James. We have a man smart
• 8:08
  KT: enough to listen. Yay, Suze, I know you want everybody
• 8:11
  KT: to have a Roth IRA account, including myself, and I
• 8:15
  KT: want one, but do you want us to take a
• 8:17
  KT: low-risk IRA out or an aggressive one?
• 8:22
  KT: I don't know the difference between the two.
• 8:24
  Suze: Well, one is investing your money, risky, maybe.
• 8:27
  KT: He said, I don't know what the best option should be.
• 8:29
  Suze: It's KT, low risk would be treasuries, CDs, money market accounts, maybe even...
• 8:36
  KT: Aggressive is higher.
• 8:38
  Suze: It's higher return and higher risk. James, can we just
• 8:43
  Suze: talk for a second? How do you expect me to
• 8:45
  Suze: answer that question? And I want everybody to listen to
• 8:48
  Suze: this answer.
• 8:50
  Suze: I know nothing about you. I don't know your age.
• 8:53
  Suze: I don't know how much we're really talking about. I
• 8:56
  Suze: don't know how secure your job is. I don't know
• 8:58
  Suze: your health. I don't know your emotion quotient, which means
• 9:02
  Suze: you put in $5,000 and you lose it. Are you're
• 9:04
  Suze: going to want to commit financial suicide? Some people can't
• 9:07
  Suze: afford and don't want to emotionally lose even $10. So
• 9:11
  Suze: how can I answer that question? I cannot. So therefore...
• 9:17
  Suze: I can't answer that question. Go on, KT.
• 9:21
  KT: But he is smart enough to listen.
• 9:23
  Suze: Smart enough to listen. But James, if you've been listening
• 9:26
  Suze: now for a while, you would know that, you know.
• 9:29
  Suze: But just assuming that you don't know a lot about
• 9:31
  Suze: the stock market because you must not even to ask
• 9:34
  Suze: that question.
• 9:35
  Suze: If you're still relatively young, you have at least 5, 10, 15,
• 9:40
  Suze: 20 years till you need the money and you don't
• 9:42
  Suze: know what to do. Why don't you just dollar cost
• 9:45
  Suze: average every month in a Roth IRA in a Standard
• 9:49
  Suze: and Poor's 500 index fund?
• 9:51
  KT: There you go, James.
• 9:53
  Suze: Actually an ETF. All right,
• 9:54
  KT: All right, there you go, James. This is from Sarah.
• 9:57
  KT: She said, My husband and I are 60 and 63.
• 10:00
  KT: He is retired, and I will be soon.
• 10:03
  KT: We are very well suited financially. We have always lived
• 10:08
  KT: within our means and continue to do so and enjoy
• 10:10
  KT: a retirement of purposeful travel, fitness, and continuing
• 10:15
  KT: education.
• 10:15
  Suze: Don't you find this is an interesting way to start
• 10:17
  Suze: a question? What, what, where's she going? Where's she going?
• 10:20
  KT: OK, ready. Here's where she's going. My husband loves cars.
• 10:25
  KT: Are you ready?
• 10:27
  KT: He'd like to purchase a car that I feel is
• 10:30
  KT: too expensive.
• 10:31
  KT: It will cost about $90,000.
• 10:34
  KT: Is that, um, is that one of those, um...
• 10:37
  Suze: I don't know what kind it is, KT.
• 10:39
  KT: Which I personally feel is ridiculous
• 10:41
  Suze: Don't become like James now.
• 10:43
  KT: All right, wait, so Sarah said, I feel, I personally
• 10:45
  KT: feel this is a ridiculous price to pay for a vehicle.
• 10:49
  KT: He's a car guy and ready, Suze? Her husband says
• 10:52
  KT: cars give him pleasure.
• 10:55
  Suze: Now how old is he?
• 10:57
  KT: Well, 60 and 63, so I think he's 60. She's
• 11:00
  KT: a little older and wiser. This is...
• 11:03
  KT: This is a big argument between us.
• 11:05
  Suze: Does it say he just turned 60 like he's in
• 11:07
  Suze: his sixties?
• 11:08
  KT: It says my husband and I are 60 and 63.
• 11:11
  KT: He's retired. He's retired.
• 11:14
  Suze: So he's 60, right? All right.
• 11:17
  KT: She's 63, a little wiser. Ready? It's a big argument
• 11:22
  KT: between us. At a minimum, I'd like him to buy
• 11:24
  KT: a car that is two or three years old.
• 11:27
  KT: She said, yes, I know we have the money for this,
• 11:30
  KT: but it doesn't fit with my values. So, is this
• 11:34
  KT: a money solution or a value solution? What do you think, Suze?
• 11:40
  Suze: Sarah, in my opinion, your husband is going through something
• 11:43
  Suze: that I call the dollar of the decades.
• 11:46
  Suze: It's almost as if men, not women, but when men
• 11:50
  Suze: turn a decade, 50, 60, 70, those ages, for some
• 11:57
  Suze: reason they wanna buy a boy toy. They wanna impress
• 12:01
  Suze: other people at a stop sign and say, look at
• 12:04
  Suze: what I have, especially if they have retired. It's a
• 12:09
  Suze: very fascinating thing.
• 12:12
  Suze: And I have a feeling that's what he's going through,
• 12:16
  Suze: and you say that he always loves cars.
• 12:19
  Suze: Well, think about that. KT and I are very, very
• 12:23
  Suze: wealthy women, and I love cars, but it would not
• 12:29
  Suze: matter how wealthy we are. No way would I ever
• 12:33
  Suze: spend $90,000 on a car.
• 12:35
  KT: Tell them what you drive.
• 12:37
  Suze: I drive a 2012 Mercedes convertible that's worth now maybe
• 12:42
  Suze: $10,000 or less at this point in time.
• 12:47
  Suze: We only have 50,000, 60,000 miles on it.
• 12:51
  KT: 53,000.
• 12:52
  Suze: All right, but it's, oh, now you know numbers.
• 12:54
  KT: Because I'm, I'm the driver.
• 12:56
  Suze: Anyway, but it's like what a waste of money in
• 13:00
  Suze: my opinion. However, it's something that he wants, and with
• 13:06
  Suze: KT before either of us spend a large sum of
• 13:10
  Suze: money or wanna buy something, both of us have to
• 13:14
  Suze: be in agreement because it's both of our money.
• 13:18
  Suze: And this is both of your money, and I always
• 13:21
  Suze: go with the one that doesn't want to do something.
• 13:24
  Suze: If KT doesn't wanna do it, and I really wanna
• 13:27
  Suze: do it, we do not do it, cause you are
• 13:31
  Suze: gonna be a little bit resentful the whole time. But
• 13:35
  Suze: here's how I would deal with it if I were you.
• 13:39
  Suze: You have to sit down with him and you have
• 13:42
  Suze: to say, can we just seriously figure out what this
• 13:46
  Suze: car is actually going to cost us because Sarah, it's
• 13:50
  Suze: not just $90,000. There's gonna be tax on it, there's
• 13:54
  Suze: gonna be all kinds of things on it, but just
• 13:56
  Suze: let's say it was $90,000 including tax.
• 14:01
  Suze: But that's not where it ends. When you own a
• 14:05
  Suze: $90,000 car, you have automobile insurance. So you're looking at,
• 14:12
  Suze: at least, depending on his record, everything else, even his
• 14:15
  Suze: FICO score, believe it or not, $4,000 to $6,000 a
• 14:19
  Suze: year in insurance. You're looking at maintenance on a car
• 14:22
  Suze: like that.
• 14:24
  Suze: And maintenance could easily be $2,500, $1,500 a year. You're
• 14:30
  Suze: looking at depreciation, by the way, of anywhere between $9,000
• 14:34
  Suze: and $12,000. Actually, it could be more like $18,000 the
• 14:39
  Suze: second he drives it off the lot. Just saying so,
• 14:41
  Suze: he lost that money right there. Fuel for the car.
• 14:46
  Suze: $90,000 cars unless it's electric, and I somehow I have
• 14:49
  Suze: a feeling it's not. It's gonna be at least, depending
• 14:53
  Suze: on price of fuel, $2,500 - $3,000 and then registration
• 14:58
  Suze: and all of these things. So you're looking at least
• 15:00
  Suze: besides the $90,000, $8,500 to $10,000 a year just to
• 15:08
  Suze: have that car, OK.
• 15:10
  Suze: Now let's do the math on the real cost of
• 15:13
  Suze: this car because he's just looking at $90,000. The way
• 15:17
  Suze: that I would do it is I would say, OK,
• 15:19
  Suze: what is $90,000 deposited into an account right now? Let's
• 15:25
  Suze: just say that's true, and you add $8,500 a year
• 15:30
  Suze: for five years. What is the cost of that car
• 15:34
  Suze: over five years? And let's just say that money was
• 15:37
  Suze: able to make a 7%
• 15:39
  Suze: annual average rate of return, you're looking at about $175,000
• 15:44
  Suze: for the cost of that car and and in five years,
• 15:47
  Suze: if he wanted to sell it.
• 15:49
  Suze: Good luck if he gets more than $38,000 to $45,000.
• 15:54
  Suze: So he now is making an investment as you are
• 15:57
  Suze: entering your retirement years, and he is no longer working,
• 16:01
  Suze: and he is looking at how much money you have,
• 16:03
  Suze: and he thinks that he can just do this. He
• 16:06
  Suze: has to understand the financial ramifications of making a purchase
• 16:12
  Suze: like this. You never look, everybody, at just what something
• 16:17
  Suze: costs you to buy.
• 16:18
  Suze: You have to look at what does it cost you
• 16:21
  Suze: to keep, right, KT?
• 16:24
  KT: Absolutely. You know what I would do?
• 16:26
  Suze: What would you do?
• 16:27
  KT: If I were her? I would, because they have all
• 16:29
  KT: of these very special like fancy car, you know, loan
• 16:33
  KT: places or renting places. I would rent one for a week,
• 16:37
  KT: see if he gets it out of his
• 16:38
  KT: system.
• 16:39
  Suze: Now, what I would do is rather than buying it
• 16:43
  Suze: right away.
• 16:44
  Suze: There's always going to be a $90,000 car that he
• 16:47
  Suze: can buy.
• 16:49
  Suze: And given that Sarah does not want to do it,
• 16:52
  Suze: it's going to cause problems between them. It just is.
• 16:55
  Suze: I just have to ask you this question. If it
• 16:57
  Suze: was me, what would you say?
• 17:01
  KT: Seriously, at your age and with the amount of money
• 17:06
  KT: you have, Suze, if that car makes you happy, buy it,
• 17:11
  KT: but I'm not gonna drive it.
• 17:14
  Suze: Oh, then I would never buy it.
• 17:17
  Suze: Yeah, it's at this time in your life, everything you
• 17:20
  Suze: do with money, both of you have to say yes,
• 17:24
  Suze: and if you don't,
• 17:26
  Suze: and it really upsets you. I'm sorry, I would just
• 17:30
  Suze: say no.
• 17:30
  Suze: Now, maybe he wants to buy a car that's two
• 17:34
  Suze: or three years old and you could compromise somehow like that.
• 17:38
  KT: Yeah, meet him in the middle.
• 17:38
  Suze: Meet him in the middle, but...
• 17:40
  KT: And say to him, let's sit down and look at
• 17:43
  KT: the expenses because Susie just laid it out for you
• 17:46
  KT: and Sarah say, Let's, let's meet in the middle. Let's
• 17:49
  KT: compromise because I want you to be happy, but I
• 17:52
  KT: also want you to respect my values.
• 17:55
  Suze: Yeah, but the truth is, I'm telling you, it's the
• 17:57
  Suze: dollar of the decades, 60, uh-huh, OK.
• 18:04
  Suze: I tell you, a car is such an... I, I
• 18:07
  Suze: know we're going on,
• 18:08
  KT: Yeah, because Suze's a car person, Sarah. I'm not at all.
• 18:12
  KT: I don't care what wheels you put under me, but
• 18:15
  KT: she loves cars. She likes to go. She likes to
• 18:19
  KT: go to the showrooms and walk around and look, and
• 18:22
  KT: she knows everything about cars.
• 18:25
  KT: She's been looking at me for probably the past six
• 18:28
  KT: years saying maybe we need to think about what our
• 18:31
  KT: next car will be since this one's so old, but
• 18:34
  KT: she loves this little Mercedes.
• 18:36
  Suze: I can't do it. I just can't waste money like that.
• 18:38
  Suze: I just can't do it. It goes against my own values.
• 18:44
  Suze: But KT, what I was gonna say to you and
• 18:46
  Suze: everybody else, please understand that a car is actually one
• 18:51
  Suze: of the most dangerous investments you can make.
• 18:55
  Suze: Because all it takes is somebody smashing into you, somebody
• 18:58
  Suze: cracking your windows, somebody stealing it. It is not an investment.
• 19:04
  Suze: It's simply a showoff toy for others if you ask me.
• 19:09
  KT: Well, that may be that kind of vehicle. Most cars
• 19:11
  KT: are for you to use to get to work, or travel.
• 19:15
  Suze: He's retired. He doesn't need a $90,000 car.
• 19:17
  Suze: But hey, what do I know? All right.
• 19:19
  KT: This next question is from Debbie. She said, Dear KT,
• 19:23
  KT: she said, I'm listing your name first, so you hopefully
• 19:25
  KT: you'll pick me, and I did, Debbie. You were right.
• 19:29
  KT: She said, Dear KT and Suze, if you are single,
• 19:32
  KT: should the primary beneficiary on an employer retirement account be
• 19:38
  KT: the same as the name of the trust, or is
• 19:41
  KT: it best to name a designated beneficiary instead?
• 19:45
  KT: She said, I'm desperate for an answer from you.
• 19:48
  Suze: If you're desperate, if you're desperate, Debbie,
• 19:51
  Suze: let me see if I can help you here. Oh
• 19:53
  Suze: my God, my desperate one. Here comes your financial lifesaver
• 19:57
  Suze: to rescue you.
• 19:59
  Suze: Just put it in your individual name since I don't
• 20:02
  Suze: know what kind of trust you have, and it has
• 20:04
  Suze: to be a see-through trust and everything like that, if
• 20:07
  Suze: it's a beneficiary of any retirement account, since you're single, right,
• 20:12
  Suze: the beneficiary should be the name of whoever you want
• 20:15
  Suze: to leave
• 20:17
  Suze: this too, all right. And if you're married, it should
• 20:21
  Suze: absolutely be the name of your spouse, by the way,
• 20:24
  Suze: for those of you who are married, the contingent beneficiary,
• 20:27
  Suze: if you know it's a see-through trust, can be a trust.
• 20:31
  Suze: All right.
• 20:32
  KT: OK. My next question is from Carla. I love this question.
• 20:35
  KT: She said, I'll be turning 65 in August of 2026.
• 20:41
  KT: I'm still working full time with no plans to retire
• 20:44
  KT: anytime soon.
• 20:45
  KT: I have good medical, dental, vision, and prescription drug benefits.
• 20:51
  KT: Do I still need to enroll in Medicare? If so,
• 20:55
  KT: what parts? I love this question.
• 20:58
  Suze: How old is she?
• 20:59
  KT: She's 64 today, but in August next year.
• 21:02
  Suze: Yes, I hear that. But...
• 21:03
  KT: She'll turn 65.
• 21:04
  Suze: But how long does she plan to work?
• 21:07
  KT: She plans to not retire anytime soon.
• 21:09
  Suze: She didn't give a time frame for that. All right, let,
• 21:13
  Suze: let me just see this for a second.
• 21:15
  KT: Can I just say something? I couldn't wait to turn 65
• 21:18
  KT: to get Medicare benefits.
• 21:19
  Suze: But you weren't working for a corporation that already gives
• 21:22
  Suze: you health insurance, Miss Travis.
• 21:25
  KT: OK.
• 21:26
  Suze: Right. So, I'm so glad we were happy to do so,
• 21:29
  Suze: but we didn't work for anybody but ourselves. So, my
• 21:33
  Suze: dear Carla, here's what it depends on two key facts,
• 21:36
  Suze: all right. Number one:
• 21:38
  Suze: How many employees does your employer have? KT's looking at me.
• 21:44
  KT: With question, like why?
• 21:45
  Suze: KT this question and answer is so critical. I can't
• 21:49
  Suze: even tell you because if her employer has 20 or
• 21:53
  Suze: more employees, then your employer plan, her employer plan has
• 21:58
  Suze: to remain as primary.
• 22:00
  Suze: And she does not need Medicare B or D at 65.
• 22:06
  Suze: She doesn't need those at all. She can and she
• 22:09
  Suze: should delay both with no penalty because it's B and
• 22:14
  Suze: D that can be expensive. However, if her employer KT
• 22:18
  Suze: has fewer than 20 employees, then Medicare becomes her primary.
• 22:25
  Suze: And her employer plan becomes secondary. So in this case,
• 22:29
  Suze: my dear Carla, you must enroll in Part A and
• 22:33
  Suze: Part B at 65 or you risk
• 22:37
  Suze: being able to have any claims that are absolutely approved,
• 22:41
  Suze: like all these kinds of things, so you have to
• 22:43
  Suze: first confirm your employer size, and I can tell you
• 22:48
  Suze: to do so just call your HR department and ask them.
• 22:51
  Suze: And the question becomes should she enroll in Medicare A
• 22:56
  Suze: at 65 and she enrolls only in Part A if
• 23:01
  Suze: it is free, and she has to figure that out.
• 23:05
  Suze: So if she's worked for 10 years, 40 quarters, da
• 23:08
  Suze: da da, she'll be able to do it. But if
• 23:11
  Suze: she has an HSA account, a health savings account, and
• 23:17
  Suze: she's contributing to it, if she enrolls in Medicare Part A,
• 23:21
  Suze: she won't be able to have a health savings account.
• 23:25
  Suze: So she has to know that because it will immediately
• 23:28
  Suze: disqualify her from it. So, Carla, if you are contributing
• 23:32
  Suze: to an HSA.
• 23:34
  Suze: Then delay Part A until you stop contributing. If no,
• 23:39
  Suze: enroll in Part A at 65, again, only if it's free.
• 23:44
  Suze: All right, so there you go. I just told her
• 23:47
  Suze: what she needs. That's it. It's not that simple, believe
• 23:51
  Suze: it or not. You thought that was a simple question, didn't you?
• 23:53
  KT: I did.
• 23:54
  Suze: What did you think I was gonna say?
• 23:58
  KT: Take it like I did. I couldn't because I, I
• 24:01
  KT: got so excited that I didn't have to pay all
• 24:03
  KT: those medical bills.
• 24:04
  Suze: Yeah, but I can tell you one thing. Always go
• 24:08
  Suze: for Medicare. Always, always, always be very, very careful of
• 24:14
  Suze: Medicare Advantage. Warning, warning...
• 24:17
  KT: warning, warning.
• 24:19
  Suze: All right,
• 24:20
  KT: Suze, my next question is from Janeth.
• 24:23
  Suze: What kind of name is that?
• 24:24
  KT: Janeth. It's Janeth. It's not Janice, it's Janeth.
• 24:29
  Suze: I'm wonder why they named her that.
• 24:31
  KT: Probably someone Jane and Beth - Janeth, like maybe two
• 24:36
  KT: names together.
• 24:37
  Suze: Only you would come up with that,
• 24:38
  KT: Janeth said, Suze, I'm 60 years old. I'd like to
• 24:41
  KT: know if it's a good idea to take money out
• 24:43
  KT: of my 401k and pay off the balance on the
• 24:47
  KT: apartment where I live. The HOA fees are high, and
• 24:51
  KT: I haven't been able to sell it. My mother lives
• 24:54
  KT: with me. She has dementia.
• 24:56
  KT: And I am on my own. My annual salary is $55,000. Hmm.
• 25:03
  KT: And she said, thank you. So she's asking...
• 25:05
  Suze: How old is she?
• 25:06
  KT: 60, and her...
• 25:07
  Suze: Do you think she's still working?
• 25:08
  Suze: Yeah, she said her annual salary is $55,000.
• 25:12
  Suze: I'm not listening very good this morning.
• 25:13
  KT: No.
• 25:14
  Suze: That's because I have water in my left ear.
• 25:16
  KT: You do?
• 25:17
  Suze: Wanna hear it squeak if I blow my nose?
• 25:19
  KT: No, it squeaks real loud when she does that I
• 25:23
  KT: don't like that.
• 25:24
  Suze: Does it irritate you?
• 25:26
  KT: Well, no, it seems like something's wrong that this water
• 25:29
  KT: is stuck in there.
• 25:30
  Suze: Well, who, who goes in the pool on the ocean
• 25:32
  Suze: all the time?
• 25:33
  KT: You do.
• 25:34
  Suze: All right, anyway, so Janeth, here's the thing, KT pop quizzy.
• 25:43
  KT: Should she, should she do what?
• 25:46
  Suze: What are you talking about? Should she do what? You
• 25:48
  Suze: just read this to me. See, she already went on to...
• 25:52
  KT: She said takes money out what she.
• 25:53
  KT: No, don't take money out of the 401k. First of all,
• 25:57
  KT: when she takes it out, number one, she has to
• 25:59
  KT: pay taxes on it. So if she's 60... wait, 59 and
• 26:02
  KT: a half, she doesn't have to pay...
• 26:04
  Suze: A penalty.
• 26:05
  KT: A penalty, but she still has to pay on it. Second, um,
• 26:10
  KT: that's her security blanket.
• 26:12
  KT: I think that she should just aggressively try to sell
• 26:15
  KT: the apartment and downsize or do something. Do not touch
• 26:19
  KT: the 401k. Yeah, no way. Don't touch it.
• 26:24
  Suze: But here's what I'd like you to think about.
• 26:27
  Suze: If you need to sell something, and you're desperate enough
• 26:30
  Suze: to think about taking money out of your 401k and
• 26:33
  Suze: you do not tell me how much you have in
• 26:37
  Suze: your 401k and what the balance is on your apartment,
• 26:42
  Suze: do you all get the idea, I
• 26:44
  Suze: cannot answer these questions for you if you don't give
• 26:47
  Suze: me the facts, and that doesn't mean it has to
• 26:49
  Suze: be a three page essay. It could have been, should
• 26:52
  Suze: I take money out of my 401k that has $500,000
• 26:56
  Suze: in it to pay off the balance on the apartment
• 26:59
  Suze: where I live? That's all it needed to be because
• 27:02
  Suze: you're saying since the HOA fees are high, that's kind
• 27:06
  Suze: of why you wanna sell. If you took the money
• 27:08
  Suze: out of your 401k,
• 27:10
  Suze: think about how much money you would lose in taxes,
• 27:14
  Suze: all right? Number one.
• 27:16
  Suze: Number two, since you're willing to lose that money in
• 27:20
  Suze: taxes from your 401k, why don't you reduce the price
• 27:24
  Suze: of your apartment by that amount of money, since you
• 27:27
  Suze: were willing to lose it anyway, to get somebody to
• 27:31
  Suze: buy it because you're lowering the price.
• 27:34
  Suze: Do you understand what I'm saying to you? If you
• 27:36
  Suze: can't sell it, it means it's priced too high. If
• 27:40
  Suze: you need to sell it and you're willing to take
• 27:42
  Suze: money out of a 401k, lower the price until somebody
• 27:46
  Suze: buys it, period. All right, KT.
• 27:49
  KT: Yeah, don't touch the 401. OK. This is from Catherine.
• 27:53
  KT: This is my final question. She said, my dad put
• 27:56
  KT: a million dollars in an IRA from me back in 1987.
• 28:03
  KT: Before he remarried, ready? In the last six years, my
• 28:08
  KT: brother said he took out my money and gave it
• 28:11
  KT: to him. My brother hasn't worked in six years and
• 28:14
  KT: has received at least $150,000 a year from my dad.
• 28:20
  KT: He's lost all of it.
• 28:22
  KT: My dad, who is 90 years old, said to us
• 28:26
  KT: that my brother and I will get nothing when he
• 28:28
  KT: dies because money doesn't create happiness. Hmm. Sounds a little sad, right?
• 28:35
  KT: He can do anything he wants with his money. He
• 28:38
  KT: worked hard for every cent, but I'd like to hear
• 28:41
  KT: an honest explanation as to why he took care of
• 28:44
  KT: one child and not the other.
• 28:47
  KT: So Catherine's feeling pretty sad over this. In 1987, you
• 28:52
  KT: would think that a million dollars would have really grown
• 28:55
  KT: a lot, and the brother only in the last six
• 29:00
  KT: years has been taking money out.
• 29:03
  Suze: So, the father probably opened up an IRA in the
• 29:07
  Suze: father's name. He did a transfer, $1 million.
• 29:11
  Suze: And made Catherine, the daughter, the beneficiary.
• 29:17
  Suze: Somewhere in there, however, it doesn't matter who the beneficiary is,
• 29:21
  Suze: that only comes to play upon death. For some reason,
• 29:26
  Suze: the father was taking out money every year or however
• 29:31
  Suze: many times he did it that Catherine may or may
• 29:34
  Suze: not even know about it until all the money was depleted.
• 29:39
  Suze: Now we don't know how the money was invested.
• 29:42
  Suze: And maybe even years later, it was only worth a
• 29:45
  Suze: million dollars. Maybe he just put it in an account
• 29:48
  Suze: that wasn't earning any interest, who knows? So, if you
• 29:51
  Suze: think about it, KT, OK.
• 29:54
  Suze: 150,000 a year over six years is like 900,000. So
• 30:00
  Suze: he may have used up all of it, who knows
• 30:02
  Suze: what happened to the rest of it, but...
• 30:05
  Suze: The only way to solve this is for Catherine, for
• 30:09
  Suze: you to stand in your truth.
• 30:11
  Suze: Not why did he favor one child over another.
• 30:17
  Suze: Why... not any of that. Just sit down with your
• 30:21
  Suze: dad and say, Dad, listen, I know it's your money.
• 30:24
  Suze: You worked hard for it, and you can do anything
• 30:26
  Suze: you want with it.
• 30:28
  Suze: But why? I just need to know why.
• 30:32
  Suze: You gave at least $900,000 to my brother.
• 30:37
  Suze: You told me that you were opening up this account
• 30:41
  Suze: for me, this $1 million IRA for me.
• 30:45
  Suze: And now you tell us neither of us are going
• 30:49
  Suze: to get anything even though my brother got 900,000 of
• 30:53
  Suze: what supposedly you told me was mine. I understand that
• 30:58
  Suze: money doesn't create happiness, but it sure does create security.
• 31:02
  Suze: So can you just tell me why, so I can
• 31:06
  Suze: understand this.
• 31:08
  KT: Also, the father's very wealthy, Suze.
• 31:12
  Suze: I know he has approximately $9 million.
• 31:15
  KT: And this is 40 years ago. It had to have
• 31:18
  KT: earned some money.
• 31:19
  Suze: We don't know. We don't know anything, but here's the point, Catherine.
• 31:25
  Suze: I have no idea. KT has no idea. You have
• 31:29
  Suze: no idea, but you do know that you have a need.
• 31:34
  Suze: To talk to your father about it and you say,
• 31:37
  Suze: is it my business, in this email. The reason that
• 31:41
  Suze: it's your business is because it's bothering you and when
• 31:45
  Suze: you hold something in, it's going to eat at you.
• 31:49
  Suze: It's going to eat at your relationship with your father.
• 31:52
  Suze: It's going to eat at your relationship with your brother.
• 31:55
  Suze: It's going to eat at you, especially if you're not
• 31:59
  Suze: doing well financially.
• 32:01
  Suze: So if I were you, you have absolutely nothing to
• 32:05
  Suze: lose and everything to gain and say, Dad, can we
• 32:09
  Suze: just sit down, the two of us and talk? I
• 32:12
  Suze: really need to talk to you. Could you please do
• 32:16
  Suze: that with me? And sit down in a not in
• 32:19
  Suze: an accusing way, in an attacking way, but speak to
• 32:23
  Suze: him directly from your heart and speak with such love
• 32:28
  Suze: for him.
• 32:30
  Suze: Speak with him with such respect for him.
• 32:35
  Suze: Speak with him with the intention of you truly understanding
• 32:40
  Suze: all of this, not that you're going to get a
• 32:42
  Suze: million dollars, but you just want the truth.
• 32:46
  Suze: And you'll come out fine.
• 32:48
  Suze: And after you've done that, can you just write me
• 32:50
  Suze: and let me tell, tell me what happened. All right, KT.
• 32:56
  KT: That's a wrap, Suze.
• 32:58
  Suze: What are we gonna do now?
• 33:00
  Suze: You have plans. I can tell you. I know what
• 33:02
  Suze: you want to do today. Tell them what you wanna
• 33:04
  Suze: do today.
• 33:05
  KT: This week, the only opportunity is this afternoon I can
• 33:08
  KT: try to catch some yellow eye or yellow tail.
• 33:12
  Suze: KT, believe it or not, everybody is out of fish.
• 33:16
  Suze: She has no fish to eat. I personally don't like
• 33:19
  Suze: eating fish. I'm like...
• 33:20
  KT: Suze's not a big fish lover.
• 33:22
  Suze: Yeah, baby, we don't have to eat fish. Yeah, baby!
• 33:25
  KT: It's the healthiest, most delicious food.
• 33:28
  KT: We can, we can catch.
• 33:30
  Suze: You can catch, right? Actually, KT, you know, when I
• 33:34
  Suze: woke up this morning, I looked out the window, I went, ugh.
• 33:37
  Suze: Why do you think I did that?
• 33:38
  KT: Because it was nice.
• 33:40
  Suze: It was nice. And as much as I love when
• 33:42
  Suze: she goes fishing, I love it so much more when
• 33:45
  Suze: you just stay around here.
• 33:46
  KT: I can stay with you today if you like.
• 33:49
  Suze: And not fish.
• 33:50
  KT: Yeah, if that's your wish, I will grant your wish.
• 33:54
  KT: What do you think, everyone? Should I try to catch
• 33:56
  KT: a fish or grant her wish?
• 33:58
  Suze: Now, here is a perfect example of two of us disagreeing,
• 34:01
  Suze: kind of.
• 34:02
  Suze: Right, on whatever, but I'm gonna switch my vote from
• 34:05
  Suze: no to yes because number one, doesn't really cost anything
• 34:09
  Suze: to do what you're gonna do. It's gonna save money
• 34:11
  Suze: eventually on fish because otherwise you're gonna end up having
• 34:14
  Suze: to buy it when we go back to Florida, um,
• 34:17
  Suze: and so go for it, girlfriend.
• 34:20
  KT: Yay, woohoo.
• 34:21
  Suze: All right, everybody, until next time there's only one thing
• 34:24
  Suze: we want them to remember, and it's what fish first.
• 34:27
  Suze: Fish first, then people, then money, then things, right KT?
• 34:32
  KT: And you stay safe.
• 34:34
  Suze: Talk to you soon. Bye bye.