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How Many Ex-Wives Are Entitled To His Social Security? · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  KT: Welcome everyone to the Women in Money podcast and everyone
• 0:12
  KT: smart enough to listen. This is the Ask Suze and
• 0:16
  KT: KT Anything edition.
• 0:18
  KT: And today's a special day. It's June 25th, 2026.
• 0:24
  Suze: All right, now, everybody, why do you think today is
• 0:28
  Suze: a special day? Tell everybody, KT.
• 0:31
  KT: It's Travis's birthday, and Travis, I can't believe how old
• 0:35
  KT: you are, and I can't believe you're getting married this year.
• 0:38
  Suze: In September. Who is Travis? Tell everybody.
• 0:40
  KT: Travis is our nephew, and Travis is very special
• 0:45
  KT: to me for many, many reasons, but he is our
• 0:49
  KT: nephew that lives in Colorado, and we just love him
• 0:52
  KT: up dearly.
• 0:54
  Suze: Wait, nobody loves him more than his aunt Kathy. They
• 0:58
  Suze: have this special relationship, and I just sit there I go...
• 1:01
  KT: He's my angel boy, and he knows why.
• 1:04
  Suze: I go, OK, now, but anyway, happy birthday, big boy.
• 1:08
  Suze: How old is he, KT?
• 1:09
  KT: He's gonna be 29, Suze.
• 1:11
  Suze: I have to tell you, everybody, he is the only
• 1:14
  Suze: man in my life who has traumatized me.
• 1:17
  KT: Why, why?
• 1:19
  Suze: Do you rememember, so listen, I know, I know. So this, I, I, we,
• 1:24
  Suze: we always tell stories now when we start, but it's
• 1:27
  Suze: because we like to, so we're going to. So when
• 1:30
  Suze: the kids were growing up, they stayed with us every
• 1:35
  Suze: single summer here at our condo where we still live now,
• 1:40
  Suze: and it's a small two bedroom condo, and there's four
• 1:43
  Suze: of them.
• 1:44
  Suze: And we always stayed together and Travis must have been three, four, five...
• 1:52
  Suze: really tiny...
• 1:52
  KT: About three years old...
• 1:54
  Suze: And he was into Pokemon
• 1:57
  KT: I know he was so excited about those Pokemon cards.
• 2:01
  Suze: So I'm in the bathroom.
• 2:03
  KT: She's doing her morning business...
• 2:05
  Suze: All right, everybody...
• 2:06
  KT: And she's naked.
• 2:07
  Suze: All right, everybody, and he walks right in...
• 2:10
  Suze: In his little pajamas...
• 2:11
  Suze: And leans on me to show me
• 2:14
  Suze: his Pokemon cards and this is the first time really
• 2:17
  Suze: my introduction to kids, so to speak, and I'm like,
• 2:20
  Suze: are you kidding me?
• 2:21
  KT: And she's completely naked and it didn't faze him at
• 2:24
  KT: all and he couldn't wait to show his Aunt Suze
• 2:27
  KT: and I hear her saying, KT, KT, help me.
• 2:33
  Suze: So anyway, but Trav, I don't know if you remember that,
• 2:37
  Suze: but I sure do. All right, KT, now we wait
• 2:40
  Suze: before you begin, if you have questions, everybody.
• 2:44
  Suze: All you have to do is send them into podcast@
• 2:49
  Suze: ask Suze.com. That is our new email address, so just
• 2:54
  Suze: send them there, and if KT chooses it, oh, we
• 2:58
  Suze: will answer it on this podcast. Go on, KT.
• 3:01
  KT: OK. My first question is from Ellen. Hi, Suze and KT.
• 3:06
  KT: I'm 54 years old and I've been divorced for seven years.
• 3:10
  KT: When I got divorced, my husband said, 'Good luck with
• 3:13
  KT: the money that you took from me.' Typical, right? 'I'm
• 3:17
  KT: sure you will lose it all.'
• 3:20
  Suze: All right, tell me, how much money does she have?
• 3:22
  Suze: She must have done great.
• 3:23
  KT: I now realize that after 22 years of marriage, he
• 3:27
  KT: never saw me as his partner.
• 3:30
  KT: I have been working diligently with my financial advisor to
• 3:33
  KT: make sure I do not lose the money I walked
• 3:36
  KT: away with.
• 3:38
  KT: I've been growing it over the years. However, my biggest
• 3:42
  KT: fear is that being single and not having that second income,
• 3:46
  KT: that I may not have enough money saved for retirement.
• 3:50
  KT: When I asked my financial advisor about this, he said,
• 3:53
  KT: 'Don't worry, you have enough to retire comfortably.' But he
• 3:57
  KT: never takes the time to explain to me how. Sounds like,
• 4:02
  KT: sounds familiar, right? Her husband didn't either.
• 4:06
  KT: So she said, I have accumulated $1.8 million in my
• 4:10
  KT: stock brokerage account, and of that only $100,000 is in
• 4:15
  KT: a Roth. I make $150,000 a year and I continue
• 4:20
  KT: to contribute to my Roth 401k.
• 4:24
  KT: I also have an annuity for $400,000 which my financial
• 4:29
  KT: advisor set up for me to give me security and
• 4:32
  KT: peace of mind...
• 4:33
  Suze: And to give him a $20,000 commission.
• 4:35
  KT: Exactly. After the divorce, I did purchase a house in
• 4:39
  KT: Southern California for $740,000.
• 4:43
  KT: I still owe $400,000 on that mortgage. That is really
• 4:48
  KT: my only debt. I own my car outright, but it
• 4:51
  KT: is older and acting up, so I may need to
• 4:54
  KT: purchase a new car in the future. So Suze, Ellen's asking,
• 4:58
  KT: is she OK? Does she...
• 4:59
  Suze: Is she still working?
• 5:01
  KT: Yeah, $150,000 a year. Ellen's young. She's only 54.
• 5:06
  Suze: Ellen, there's one line in your email that seriously gets me,
• 5:12
  Suze: and it is this.
• 5:14
  Suze: You say when it comes to your financial adviser, he says,
• 5:18
  Suze: don't worry, you have enough to retire comfortably, but he
• 5:22
  Suze: never takes the time to explain to me how. Why
• 5:27
  Suze: do you settle for that? You are this powerful woman.
• 5:30
  Suze: You're making $150,000 a year. You're still only 54 years
• 5:35
  Suze: of age, yet you once again have gotten yourself into
• 5:38
  Suze: a relationship with a male financial adviser...
• 5:44
  Suze: Who doesn't explain to you and consider you an equal
• 5:47
  Suze: partner in this given that it's your money? I don't
• 5:51
  Suze: care how well he's doing for you financially. There are
• 5:54
  Suze: a lot of great financial advisers out there, but when
• 5:58
  Suze: a financial adviser does not give you what you need
• 6:02
  Suze: from him or her, that is not a great financial adviser.
• 6:07
  Suze: Now we can put it on him.
• 6:10
  Suze: Or we can put it on you for not standing
• 6:13
  Suze: in your power. I want you to explain to me
• 6:16
  Suze: why you think I'm going to be OK and what
• 6:18
  Suze: my numbers are actually going to be. That's on you
• 6:22
  Suze: to ask him.
• 6:24
  KT: Suze, if you were the financial advisor, what would those
• 6:27
  KT: numbers be? What would you say to her?
• 6:30
  Suze: So Ellen, here you are sitting across the desk from me.
• 6:34
  Suze: And I'd be so happy to say to you, you're
• 6:37
  Suze: gonna be more than OK in my opinion, but let
• 6:40
  Suze: me tell you why. You currently have $1.8 million invested now.
• 6:45
  Suze: But Ellen, let's just say you don't need that money
• 6:48
  Suze: for 10 years, and we're just gonna have a conservative
• 6:52
  Suze: growth rate of that of let's just say 5%. That
• 6:56
  Suze: should give you about $2.9 million because most of it's
• 7:00
  Suze: in retirement accounts there.
• 7:03
  Suze: And so, even if it were all taxable, let's just
• 7:06
  Suze: assume that it is, even though a lot of it
• 7:09
  Suze: will not be cause you're doing a Roth 401k. All right.
• 7:13
  Suze: That would give you at a 4% withdrawal rate approximately
• 7:17
  Suze: $116,000 a year. I don't know how much of that
• 7:22
  Suze: will be taxable or not, but Ellen, it will depend
• 7:25
  Suze: how much we get into a Roth before you retire.
• 7:29
  Suze: But you know that annuity
• 7:30
  Suze: that I had you do all right, even if we
• 7:34
  Suze: just kept that annuity, if it made 5%, that should
• 7:39
  Suze: add about another $20,000 a year if you decide to
• 7:42
  Suze: keep it, Ellen, anyway, right? $20,000 a year in 10 years.
• 7:49
  Suze: So now you're also going to be eligible
• 7:53
  Suze: for Social Security, you may wait a few years or
• 7:55
  Suze: until you're 70 to take it up to you. Or remember,
• 8:00
  Suze: you do also qualify once your full retirement age for 50%
• 8:06
  Suze: of your ex-husband's Social Security. So Ellen, we'll just have
• 8:10
  Suze: to figure out what that is. So it is
• 8:13
  Suze: very possible for getting Social Security that you could have
• 8:17
  Suze: $136,000 a year of income gross. Now, here's what I
• 8:24
  Suze: don't know, Ellen. What are your expenses going to be then?
• 8:28
  Suze: You say that you bought a house seven years ago.
• 8:32
  Suze: All right, you owe $400,000 on it. That kind of
• 8:36
  Suze: tells me that you probably had a 15 year mortgage.
• 8:41
  Suze: And really that means in eight years from now that
• 8:44
  Suze: mortgage payment will be gone. So Ellen, I'm assuming if
• 8:48
  Suze: this is all true, you're paying about $4,000 a month
• 8:51
  Suze: for that mortgage. So now when it's gone, you've reduced
• 8:55
  Suze: your expenses by $4,000 a month. And Ellen,
• 9:00
  Suze: your home is probably worth at least $1.2 million or
• 9:05
  Suze: more right now. So, everything is dependent on you, Ellen.
• 9:11
  Suze: That looks like what your income is going to be,
• 9:15
  Suze: assuming that you don't put anything more towards your 401k,
• 9:20
  Suze: so you can count on even more than that.
• 9:23
  Suze: Now the question is, what are your expenses going to be,
• 9:27
  Suze: and that is up to you. So, let's go over
• 9:30
  Suze: what your current expenses are now. Let's see what they
• 9:34
  Suze: are projected to be 10 years from now, and then
• 9:37
  Suze: we'll know how comfortable you can really be. Now, Ellen,
• 9:40
  Suze: you're not really sitting across the desk from me, and
• 9:43
  Suze: I don't know your expenses, but that's what should have happened.
• 9:46
  Suze: But in my estimation, given that you're gonna continue to
• 9:49
  Suze: contribute to the Roth 401k.
• 9:53
  Suze: You should be pretty good if you ask me. That's
• 9:56
  Suze: what I would do, KT. That's what I would have done.
• 9:58
  KT: So that's what Ellen's looking for an explanation.
• 10:02
  Suze: Well, I just gave it to her.
• 10:03
  KT: You gave it to her, great.
• 10:04
  Suze: All right, but that everybody is what her advisor, something
• 10:08
  Suze: like that, because I'm assuming these numbers are correct that
• 10:12
  Suze: I'm working with here, right? That's what an advisor should
• 10:15
  Suze: do and show her. And then Ellen, who's making 150,000
• 10:19
  Suze: a year and was smart enough to become a partner
• 10:22
  Suze: in her own life to herself and her money. Oh,
• 10:26
  Suze: she's gonna have a great time. All right, KT, next.
• 10:29
  KT: OK, this is from Ray.
• 10:32
  KT: And Ray said, Hi Suze and KT. Maybe this is
• 10:35
  KT: a quizzy for KT. This is a Roth conversion question.
• 10:40
  KT: All right, I'm 73, retired last year. My income is
• 10:45
  KT: $34,000 a year, and that's her combined Social Security and RMD.
• 10:52
  Suze: Great. All right.
• 10:53
  KT: So about a year ago I bought a few shares
• 10:55
  KT: of Dell at $99 and I've been DCAing ever since.
• 11:01
  Suze: What is DCAing KT?
• 11:03
  KT: Dollar cost average.
• 11:04
  Suze: That's my girl. Go on.
• 11:06
  KT: Would it be smart to do a Roth conversion here?
• 11:09
  KT: Remember she's 73. There will be ordinary income tax on
• 11:14
  KT: the contribution and capital gains on 8,000 plus.
• 11:20
  KT: So that's her question. That's from Ray.
• 11:23
  Suze: Ray-Ray, that was a great investment, but you have something wrong.
• 11:29
  Suze: When you have money in a traditional IRA.
• 11:33
  Suze: It doesn't matter what you paid for the stock, doesn't
• 11:37
  Suze: matter what it's worth now, whatever amount of money that
• 11:40
  Suze: you take out,
• 11:43
  Suze: is taxed to you as ordinary income. There is no
• 11:47
  Suze: such thing as a capital gain in an IRA. It's
• 11:52
  Suze: all just ordinary income tax, period, because you never paid
• 11:56
  Suze: tax on your original amount that you invested to begin with.
• 12:01
  Suze: However, at your age you are required to take required
• 12:06
  Suze: minimum distributions, and that plus your Social Security only adds
• 12:11
  Suze: up to 34,000 annually. So I don't see an advantage
• 12:17
  Suze: for you to take money out truthfully and put it
• 12:19
  Suze: in a Roth IRA at all and convert it.
• 12:24
  Suze: Leave it exactly where it is. When you need it,
• 12:28
  Suze: just take it out at that time, and you should
• 12:31
  Suze: be absolutely fine. But a Roth conversion, in my opinion,
• 12:36
  Suze: is not for you in your particular situation. But obviously,
• 12:40
  Suze: make sure you check with your CPA next, KT,
• 12:43
  KT: OK, this next question is from Karen.
• 12:47
  KT: Hi Suze. In one of your recent podcast or webinars,
• 12:50
  KT: I thought I heard you say that you do not
• 12:54
  KT: currently recommend bonds or that investors should focus on treasuries,
• 13:00
  KT: possibly long term treasuries instead. However, in the ultimate retirement
• 13:06
  KT: guide for 50+, this is the '24 edition, you write,
• 13:10
  KT: if you want a solid bond strategy that will work
• 13:14
  KT: over
• 13:14
  KT: long term intermediate term treasury bonds that mature 5 to
• 13:19
  KT: 10 years remain a smart way to go. Has your
• 13:23
  KT: thinking changed since the book was published? As of June '26,
• 13:28
  KT: what is your current recommendation for the bond portion of
• 13:32
  KT: a retirement portfolio?
• 13:34
  Suze: Actually, my advice has not changed it, believe it or not.
• 13:39
  Suze: According to the book, remember, when I write a book...
• 13:42
  Suze: I don't know when we're gonna reprint an update. I
• 13:46
  Suze: don't know when somebody is reading a book like that
• 13:50
  Suze: was in 2024, it is now 2026. It originally came out,
• 13:55
  Suze: the book in 2020, so, I have to kind of
• 14:00
  Suze: do a middle of the road strategy for everybody. However,
• 14:06
  Suze: with that said, on the webinar and on the podcast
• 14:10
  Suze: that I've been giving lately,
• 14:12
  Suze: I don't like bonds as much as I used to
• 14:16
  Suze: even a few years ago. All kinds of reasons, because
• 14:20
  Suze: of the structuring of bonds, our debt, and everything like that. However,
• 14:25
  Suze: when interest rates are high.
• 14:28
  Suze: And when interest rates on a 30 year bond happens
• 14:31
  Suze: to be at 5, 5.5%, whatever they were at during
• 14:35
  Suze: that week, I think people should have taken advantage of
• 14:38
  Suze: it because number one, it's a treasury very different than
• 14:41
  Suze: a corporate or any other type of bond, and it's
• 14:45
  Suze: not a bad idea to lock in a high interest
• 14:48
  Suze: rate like that because if interest rates ever go down,
• 14:52
  Suze: remember Karen, the fact is this when interest rates go down.
• 14:57
  Suze: The value of bonds go up, and the longer the
• 15:00
  Suze: term of the bond, the more it will fluctuate. Now
• 15:04
  Suze: I put money in, as you know, in a 30
• 15:07
  Suze: year bond back then, and I'm up kind of considerably
• 15:13
  Suze: on it right now. Now, does that mean I'm going
• 15:15
  Suze: to sell it? No, because interest rates have come down
• 15:17
  Suze: a little from when I went in a month or
• 15:20
  Suze: so ago, but I like that it's at 5% or 5.1%,
• 15:24
  Suze: whatever it's at.
• 15:26
  Suze: But I also know that if interest rates do come down,
• 15:30
  Suze: I have the ability to sell if I want, and
• 15:32
  Suze: if not, I'm happy with that rate, but they are
• 15:36
  Suze: very risky long term bonds because remember interest rates could
• 15:40
  Suze: go higher and then you can see that principal seriously
• 15:44
  Suze: go down if you need the money. So only put
• 15:47
  Suze: money in there that you don't need, but,
• 15:51
  Suze: I don't love bonds as much as I like dividend
• 15:56
  Suze: paying stocks. I just don't. I think you need growth
• 16:00
  Suze: plus income in today's inflationary environment, and bonds don't present
• 16:06
  Suze: that same opportunity. However, every one of us needs money
• 16:11
  Suze: that we know is safe and sound. For me and KT,
• 16:15
  Suze: that money really is in treasuries.
• 16:18
  Suze: But we have a lot of other investments obviously as well. So,
• 16:22
  Suze: if you don't know which term to do, a 5 year,
• 16:26
  Suze: a medium term.
• 16:29
  Suze: 10 years at most. Now you're playing it safe, cause
• 16:32
  Suze: maybe you're getting a little bit higher interest rate than
• 16:35
  Suze: a short-term one. If interest rates go down, you've locked in.
• 16:39
  Suze: If interest rates go up, you're still fine because you're
• 16:42
  Suze: not gonna get that much of a decrease, because they're
• 16:45
  Suze: not long term bonds. So, I hope that explains it
• 16:50
  Suze: to you, but honestly, I wouldn't be changing what I
• 16:53
  Suze: wrote in that book for the majority of people that
• 16:56
  Suze: are reading it.
• 16:57
  KT: OK, my next question, Suze, I want to answer.
• 17:01
  KT: Your next question I wanna answer.
• 17:03
  Suze: Well, KT, it's actually our next question because they write
• 17:06
  Suze: into KT and Suze.
• 17:07
  KT: So I'd like to answer this one if you don't mind.
• 17:10
  KT: It says, when should personal values influence your investment decisions? Hi,
• 17:17
  KT: Suze and KT. If a stock remains a strong investment
• 17:21
  KT: but you no longer feel good about owning the company
• 17:26
  KT: because its values don't align with your own, would you
• 17:30
  KT: sell it?
• 17:31
  KT: How should investors balance financial returns with personal values? Can
• 17:36
  KT: I answer that?
• 17:37
  Suze: You can, but I just want to say something before
• 17:39
  Suze: you do, because I actually know what you're gonna say
• 17:41
  Suze: because I went through this with you. But wait a minute,
• 17:45
  Suze: is that every single one of us has to decide
• 17:48
  Suze: what our goals are, what we feel is right, and
• 17:51
  Suze: we can't condemn or praise or whatever anybody else's investment decisions.
• 17:58
  Suze: But you are responsible for what you do with your
• 18:01
  Suze: own money. You know, it's funny, KT, and I don't
• 18:04
  Suze: know why, as I'm sitting here, we have that saying.
• 18:08
  Suze: Do you remember my saying, "Grace is above praise and blame."
• 18:13
  Suze: Do you remember me? Because so many times people have
• 18:15
  Suze: blamed me for this and that and whatever.
• 18:18
  Suze: "Grace is above praise and blame." So all of us
• 18:22
  Suze: should just live our own lives, so to speak, when
• 18:25
  Suze: it comes to what other people do with their money.
• 18:28
  Suze: But KT, answer.
• 18:30
  KT: So my answer is yes, I would sell it if
• 18:34
  KT: it doesn't align with your own values and doesn't make
• 18:38
  KT: you feel good.
• 18:39
  Suze: Now tell everybody why you said that because she did that.
• 18:42
  KT: I did that. I opened my statements and this was
• 18:45
  KT: quite some time ago, maybe 10 years ago.
• 18:49
  KT: I noticed that we owned a tobacco stock and it's,
• 18:53
  KT: it was paying it was doing really well.
• 18:56
  Suze: And paying a great dividend.
• 18:58
  KT: Great dividend, one of the highest of them all, and
• 19:01
  KT: I said, Suze, I wanna sell this. She said, KT, why?
• 19:05
  KT: And I said, because it's tobacco, and that was my
• 19:07
  KT: answer and she didn't fight me on it. She thought
• 19:11
  KT: about it and she said, you know, you're making a very,
• 19:14
  KT: very handsome return. I said, I don't care.
• 19:18
  KT: I don't want to be associated with tobacco and cigarettes.
• 19:23
  Suze: I said, fine. We called up John, who is our
• 19:26
  Suze: partner in crime when it comes to our...
• 19:29
  KT: And he kept saying, Are you sure? He, he doing
• 19:32
  KT: his job was looking at the return and the investment
• 19:36
  KT: value was excellent.
• 19:39
  Suze: But what was more important to KT was that she
• 19:43
  Suze: didn't want it. Now, you can be
• 19:46
  Suze: disappointed in me if you want or not, but as
• 19:49
  Suze: a finance person, I looked at the return, I looked
• 19:52
  Suze: at the growth, and I said, no, I want to
• 19:56
  Suze: keep mine. KT sold hers because we usually own the
• 19:59
  Suze: same stocks, but in each of our own accounts, and
• 20:03
  Suze: that's what happened. It continued to go up. I did
• 20:07
  Suze: great with it.
• 20:08
  Suze: I did eventually end up selling it, but I honored
• 20:11
  Suze: KT because your values and what means something to you
• 20:17
  Suze: is more important than money. And so those of you
• 20:21
  Suze: who are out there and maybe you think bad of
• 20:24
  Suze: me because I own a few stocks that are against
• 20:27
  Suze: your political beliefs and everything.
• 20:29
  Suze: Just it is what it is. I'm looking at it
• 20:32
  Suze: totally seriously from a financial return and what that money
• 20:38
  Suze: can do for people when they sell just that simple.
• 20:42
  Suze: But there you go. Next question, KT.
• 20:45
  KT: OK, I like this. It's from Pastor Duncan.
• 20:49
  KT: This is very simple.
• 20:50
  Suze: Oh, is that why I said "grace is above praise
• 20:52
  Suze: and blame?" We knew it was in the air.
• 20:54
  KT: Pastor Mark Duncan. Mark, here you go. Pastor Mark, is
• 20:59
  KT: there any way, Suze, to have your revocable trust read
• 21:03
  KT: as a Georgia document?
• 21:07
  Suze: You, well, you can go to Georgia and read your trust, but,
• 21:10
  Suze: but very seriously, everybody, let's get clear on the must-have documents.
• 21:15
  Suze: Do you know in life when you do a corporation,
• 21:19
  Suze: you decide you want to be incorporated, you get to
• 21:22
  Suze: choose where you want to be incorporated based on the
• 21:27
  Suze: rules and the regulations of what you need. Believe it
• 21:31
  Suze: or not, the same is true with a revocable trust.
• 21:35
  Suze: The trust of the must-have documents is guided under California
• 21:42
  Suze: trust regulations, and the reason that that was chosen is
• 21:47
  Suze: because California has the most liberal regulations of all trusts.
• 21:53
  Suze: So KT and I are residents in Florida, but we
• 21:58
  Suze: have a trust that was regulated by California.
• 22:03
  Suze: Even though we don't own any property there or whatever,
• 22:07
  Suze: so if you choose to do the must-have documents and
• 22:11
  Suze: that confuses you, hopefully that explains it. It is good
• 22:15
  Suze: in all 50 states. Please know over the 20 years
• 22:20
  Suze: that this has been offered to all of you, millions
• 22:24
  Suze: and millions have been sold.
• 22:27
  Suze: Many of those people are no longer with us. Their
• 22:30
  Suze: trust had to be used, and it's always been fine,
• 22:34
  Suze: but you have to feel comfortable with it. You have
• 22:37
  Suze: to know it's what makes you feel secure and make
• 22:40
  Suze: your decision from there. If you're interested, go to must
• 22:44
  Suze: have docs.com and check them out. Yes, KT.
• 22:47
  KT: So, all right, this next question, it's the subject said
• 22:51
  KT: keeping inheritance separate in California but allowing husband access.
• 22:56
  KT: And here's the question. My mother died last year, and
• 23:00
  KT: I am both the executor and beneficiary. I'm 52. My
• 23:05
  KT: husband is 42. We've been together nine years, married five,
• 23:10
  KT: no children, and we live in California. I want to
• 23:14
  KT: keep this inheritance as my separate property, but I also
• 23:19
  KT: want my husband to be able to access it easily
• 23:22
  KT: if I become incapacitated.
• 23:25
  KT: I know a durable financial power of attorney is one answer,
• 23:30
  KT: and we have one, but when my mother became incapacitated,
• 23:35
  KT: her bank refused to honor her POA, and it was
• 23:38
  KT: a nightmare. So I'm nervous about relying on a POA alone.
• 23:44
  KT: My question is, Suze, what is the smartest way to
• 23:47
  KT: keep this inheritance clearly separate under California community property law
• 23:53
  KT: while still making it straightforward for my husband to access
• 23:58
  KT: and manage if I become incapacitated.
• 24:01
  KT: Warmly, Gregg.
• 24:03
  Suze: So Gregg, here's the thing, and it's funny because this
• 24:06
  Suze: just follows the question of before with the Reverend about
• 24:12
  Suze: the must-have documents. I've been telling all of you for
• 24:16
  Suze: years that you may think that in case of an incapacity,
• 24:21
  Suze: a power of attorney, a durable power of attorney for finances,
• 24:25
  Suze: and all is all that you need, but it's not true.
• 24:29
  Suze: Because you just heard Gregg say that his mother had one.
• 24:35
  Suze: She died and it was still a nightmare. Why is that?
• 24:39
  Suze: Because the bank or the financial institution didn't know. Did
• 24:44
  Suze: she revoke it? She, they didn't know. Was it still valid,
• 24:47
  Suze: because it could be changed in two seconds. Just that easy.
• 24:51
  Suze: That is why a revocable trust, must have documents,
• 24:57
  Suze: has an incapacity clause that says if Gregg, for instance
• 25:02
  Suze: in this case if you become incapacitated then your husband
• 25:06
  Suze: can sign for you in any capacity that you've designated
• 25:11
  Suze: in the trust and the banks will not challenge that
• 25:16
  Suze: because they will actually have a copy of the trust,
• 25:19
  Suze: the date of it, and they'll be fine with that.
• 25:23
  Suze: So to keep things separate, number one.
• 25:26
  Suze: The money that you inherited should be in your individual account,
• 25:31
  Suze: but your individual account should be a revocable trust for Gregg.
• 25:37
  Suze: That's it. Just for you. If your husband wants, he
• 25:41
  Suze: can have one as well, and it should have the
• 25:44
  Suze: incapacity clause in it, giving him right to be able
• 25:47
  Suze: to access the money whenever he needs it. So he
• 25:51
  Suze: would be there. He also would be what's known as
• 25:53
  Suze: a successor beneficiary. So it's in trust held for your
• 25:58
  Suze: benefit while you're alive.
• 26:00
  Suze: His benefit while you've died goes to him immediately what
• 26:05
  Suze: without probate, and probate in the state of California is statutory.
• 26:11
  Suze: It is expensive and you want to avoid probate at
• 26:15
  Suze: all costs, and a durable power of attorney for finances
• 26:19
  Suze: will not do that. Now, obviously you can put him
• 26:23
  Suze: on your accounts as a pay on death that if
• 26:26
  Suze: you die it goes to him. Great, that avoids probate,
• 26:31
  Suze: but it does not help you or him in case
• 26:34
  Suze: of an incapacity.
• 26:36
  Suze: That is why I have been on it and on
• 26:39
  Suze: it and on it for almost now 31 years, everybody,
• 26:45
  Suze: while every single one of you needs a living revocable trust,
• 26:50
  Suze: and again they're expensive. You go to a lawyer, it's
• 26:53
  Suze: gonna be $2,500, $5,000 every time you change it, whatever.
• 26:58
  Suze: That's why the must-have documents were created again, and I
• 27:02
  Suze: don't want this to sound like a sales pitch for them.
• 27:06
  Suze: But to check them out, go to must have docs.com.
• 27:10
  Suze: They are $153 now and just see what you think,
• 27:15
  Suze: and they're worth every single penny if you ask me.
• 27:18
  Suze: Go on.
• 27:19
  KT: So Suze, this next question is from Annukin.
• 27:22
  Suze: Oh, good, good,
• 27:24
  Suze: Why am I saying good? Annukin, you know why I'm
• 27:26
  Suze: saying good. KT, right? I answered her.
• 27:31
  Suze: And I said I can only hope that KT picks this,
• 27:35
  Suze: and she said, me too, and you did, go girl.
• 27:39
  KT: I did. So, here's the question if your 401k balance
• 27:43
  KT: crosses 900,000, up to 85% of your Social Security benefits
• 27:49
  KT: could become taxable income.
• 27:53
  KT: This is called the provisional income threshold, and it silently
• 27:58
  KT: kicks in when your retirement account distributions push your combined
• 28:04
  KT: income over the IRS limits.
• 28:07
  KT: So there you go. Is this a trap?
• 28:10
  Suze: So, Annukin, as I've told you, listen, everybody, there is
• 28:13
  Suze: no IRS rule that says, once your 401k reaches $900,000
• 28:20
  Suze: that 85% of your Social Security automatically becomes taxable.
• 28:26
  Suze: It doesn't matter what the size of your retirement account is.
• 28:30
  Suze: What matters is your annual income, specifically, by the way,
• 28:35
  Suze: what the IRS does call provisional income.
• 28:39
  Suze: So what you all have to know, provisional income is
• 28:43
  Suze: calculated as your adjusted gross income, and by the way,
• 28:47
  Suze: that includes IRA and 401k withdrawals. Any tax exempt interest,
• 28:54
  Suze: what else does it include? Let me think here, 50%
• 28:57
  Suze: of your Social Security benefits. So for a single filer,
• 29:03
  Suze: if provisional income is over $25,000 KT, then up to 50%
• 29:10
  Suze: of your Social Security may become taxable. If provisional income
• 29:15
  Suze: is over $34,000 then up to 85% of your Social
• 29:22
  Suze: Security
• 29:23
  Suze: may become taxable. That's always been the rules. Yeah. So
• 29:27
  Suze: what if you're married? If you're married, then over 32,000
• 29:32
  Suze: may trigger taxation on up to 50% of the benefits,
• 29:35
  Suze: and over 44,000 KT may trigger it up to 85%.
• 29:42
  Suze: But here's the key point that I think many people misunderstand.
• 29:47
  Suze: Up to 85% taxable does not mean that you lose 85%
• 29:52
  Suze: of your Social Security. It means that up to 85%
• 29:57
  Suze: of your Social Security benefit is included in your taxable
• 30:02
  Suze: income calculation, and then you pay tax on that amount
• 30:07
  Suze: at your ordinary income tax bracket. Just that simple. So
• 30:13
  Suze: there you go. That's the answer. All right.
• 30:15
  KT: All right, so it's not... It's not a trap.
• 30:19
  Suze: No, it's not a trap. She, she, she thought...
• 30:22
  KT: She thought it was a trap.
• 30:23
  Suze: No, it's not a trap. It's always been the law.
• 30:26
  Suze: So KT, you and I both pay.
• 30:29
  Suze: Right? Our tax, up to the 85% of our Social Security, 85%
• 30:36
  Suze: of that is added into our income.
• 30:39
  Suze: And we pay tax on that amount. All right, OK,
• 30:42
  Suze: we have time for one more, so make it great.
• 30:45
  KT: OK, so this is one more, and I think it's
• 30:47
  KT: a really good one, but it's very confusing. It's from Susan.
• 30:51
  KT: She said, Suze, I'm close to applying for Social Security,
• 30:56
  KT: about to be 67. I qualify under my own work record,
• 31:01
  KT: but I was married for 27 years, and my ex
• 31:05
  KT: made zillions more than I did.
• 31:08
  KT: I called Social Security to see if I would be
• 31:11
  KT: better off filing under his work record. They told me
• 31:15
  KT: I can't do that until he's dead or he files
• 31:19
  KT: for Social Security himself, and they cannot tell me whether
• 31:23
  KT: his amount would be more than twice what mine is
• 31:27
  KT: because I would only get half. Is this true? He
• 31:31
  KT: is remarried, and I have no contact with him. I
• 31:35
  KT: don't expect I'll ever learn from him, that whether he's applied
• 31:39
  KT: for Social Security, this seems crazy.
• 31:42
  Suze: It is crazy.
• 31:43
  KT: So, so we, I have a question.
• 31:46
  KT: Even if her ex is remarried and she waits until
• 31:49
  KT: he dies, is she entitled to anything?
• 31:52
  Suze: All right, so listen, everything that the Social Security agent
• 31:57
  Suze: told her was 100 million percent wrong.
• 32:02
  KT: Yeah, it sounds that way.
• 32:05
  Suze: Wrong. KT doesn't matter if he's remarried. Doesn't matter if
• 32:09
  Suze: he started to collect Social Security or not. All that
• 32:12
  Suze: matters is that he's 62 years of age and older,
• 32:15
  Suze: and I'm sure that he is, and that they were
• 32:17
  Suze: married 10 years, which they were divorced for at least two,
• 32:22
  Suze: which they were. Susan, listen, here's the truth.
• 32:27
  Suze: It doesn't matter what he's doing. This is your money,
• 32:31
  Suze: whether you know it or not. So, if you want,
• 32:34
  Suze: you just apply.
• 32:36
  Suze: And they will tell you what your benefit should be.
• 32:39
  Suze: It will be 50% because you're 67. If you were younger,
• 32:44
  Suze: let's say you were only 62, it might be reduced
• 32:47
  Suze: to like 35%, but since you're full retirement age,
• 32:52
  Suze: when you apply for Social Security at 67, they will
• 32:57
  Suze: calculate for you what 50% of his benefit would have
• 33:02
  Suze: been when he was 67
• 33:06
  Suze: versus what your 100% benefit would be, and then they
• 33:10
  Suze: might do a combination of both so that you get
• 33:13
  Suze: the highest amount possible. So don't listen to them. You
• 33:18
  Suze: don't have to talk to him. You don't have to
• 33:20
  Suze: make a choice. It will be automatically calculated for you. However,
• 33:26
  Suze: there's something that I want to tell all of you
• 33:29
  Suze: that you may not know because nobody ever asked me
• 33:34
  Suze: this question.
• 33:36
  Suze: When you apply for divorced benefits and now you're collecting
• 33:42
  Suze: divorce benefits, let's say that's true, and he dies, you
• 33:48
  Suze: now can actually switch to 100% of his survivor benefit.
• 33:55
  Suze: So whatever amount of money he would have been getting
• 33:58
  Suze: at the age of 67 or his full retirement age,
• 34:02
  Suze: you now
• 34:03
  Suze: can qualify for that and you can switch just that simple.
• 34:09
  Suze: And KT you want to hear something so crazy and
• 34:13
  Suze: this is a story that somebody wrote in and they
• 34:16
  Suze: just couldn't believe it was true, all right.
• 34:19
  Suze: Her brother married at the age of 20.
• 34:24
  Suze: Right, was married for 10 years, divorced at like 30
• 34:27
  Suze: or 31, right? He got married right away because that's
• 34:32
  Suze: why he left his first wife, OK. And some people
• 34:36
  Suze: never change their behavior. So what happened? He stayed married
• 34:40
  Suze: for 15 years and then divorced his second wife at 45.
• 34:47
  Suze: All right, he's now 45. They were married for 15 years.
• 34:51
  Suze: Does it again.
• 34:53
  Suze: At 45, he's divorced, right? And now what does he do?
• 34:58
  Suze: He marries somebody again and stays married till he is 60.
• 35:02
  Suze: And now he's divorced again and now he's just by himself,
• 35:07
  Suze: but all of a sudden two years later he marries again, right?
• 35:12
  Suze: But this time he's still married. He's now 75 and
• 35:17
  Suze: he just died so the sister writes and says,
• 35:23
  Suze: you know, what is his wife entitled to? What are all,
• 35:26
  Suze: because I'm friends with all of his exes, and they
• 35:29
  Suze: all want to know what they're entitled to. Well, guess what?
• 35:34
  Suze: All four of them are entitled to 100% of his
• 35:42
  Suze: full retirement age, his primary insurance amount, whatever he was
• 35:47
  Suze: qualified for at the age of 67, they each get
• 35:53
  Suze: to claim that if they want to.
• 35:56
  KT: Suze, that's the craziest thing I ever heard.
• 35:59
  Suze: Now you know why Social Security is going broke, but
• 36:01
  Suze: that's besides the point. Wanna hear something else? You all
• 36:04
  Suze: should know, everybody...
• 36:06
  Suze: If in this situation, she claimed 100% of her own
• 36:11
  Suze: Social Security at 67, because it was higher than 50%
• 36:15
  Suze: of his.
• 36:17
  Suze: When he dies, she can then claim as a divorce
• 36:22
  Suze: survivor 100% of what his would have been at his
• 36:28
  Suze: full retirement age of 67, which obviously because she said
• 36:32
  Suze: he made gazillions is more than 100% of what she's collecting.
• 36:39
  Suze: So you have to know these rules because a lot
• 36:42
  Suze: is left on the table.
• 36:44
  KT: So what if she remarries?
• 36:45
  Suze: If she remarries after the age of 60, doesn't matter.
• 36:52
  Suze: Right? If she remarries before the age of 60, she
• 36:56
  Suze: no longer qualifies for everything I just said, unless she
• 37:00
  Suze: divorces later on.
• 37:03
  KT: So let me ask this question. Where do you find
• 37:05
  KT: all this information?
• 37:07
  Suze: Oh well, you just go to Social Security and it's all
• 37:09
  Suze: part of it, or you call in to the Women
• 37:12
  Suze: and Money podcast. But very seriously, everybody, did you know that?
• 37:18
  Suze: So when you have a situation of an ex-spouse,
• 37:22
  Suze: just know if you never made a lot of money,
• 37:25
  Suze: he did or she did, and now they've died and
• 37:29
  Suze: you were married at least 10 years and you did
• 37:32
  Suze: not remarry before the age of 60 or you did
• 37:36
  Suze: get remarried and then you got divorced after the age
• 37:40
  Suze: of 60, you can get 100% of your ex-spouse's survivor benefit,
• 37:49
  Suze: which is 100%
• 37:51
  Suze: of his principal insurance amount at the age of 67,
• 37:56
  Suze: just remember that. You should see KT's face.
• 38:02
  KT: I'm like my mind's spinning with all of these people
• 38:06
  KT: that don't know what they're entitled to and it's not
• 38:10
  KT: like Social Security's gonna brag about it.
• 38:12
  Suze: Yeah, but I'll never forget that woman writing in the
• 38:15
  Suze: sister and saying there are four women here asking me
• 38:19
  Suze: and I'm like, well, guess what, you have good news
• 38:21
  Suze: for all of them anyway, KT, I think that's a wrap.
• 38:25
  KT: That is a wrap, Suze, until Sunday, and Sunday, everyone,
• 38:30
  KT: we have a great announcement.
• 38:31
  Suze: We do. We have a great announcement, a summer announcement.
• 38:35
  Suze: So tune in Sunday. So there's only one thing that
• 38:39
  Suze: we want you to remember when it comes to your money,
• 38:41
  Suze: and what is that, my love?
• 38:43
  KT: People first, then money, then things.
• 38:46
  Suze: Now you stay safe. Bye bye.