Podcast Episode - Ask Suze & KT Anything: A Smart, Strong and Secure Thanksgiving

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On this Thanksgiving episode of Ask Suze & KT Anything, Suze answers questions about financing a car, what happens after you pay off your mortgage, rolling over a pension, investing in an HSA and more.

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Podcast Transcript:

00:00:35

KT: Gobble, gobble, gobble, gobble, gobble, gobble, gobble, gobble, gobble, gobble.

00:00:43

Suze: It's here.. it's here...our favorite holiday of the year.

00:00:46

KT: And it's to yours too. It's Suze's... no one buys gifts. We actually just cook.

00:00:55

Suze: Nobody buys gifts anyway. But anyway, it's true, it's here. So from us to all of you, we wish you a very, very Happy Thanksgiving. Now with that said,

00:01:11

Suze: I want you to listen throughout this podcast, not only because it's the Women & Money podcast and everyone smart enough to listen. Not only is it the Ask KT and Suze edition of the Women & Money podcast, but we also have two announcements

00:01:31

Suze: that I want to make to you and one that I think you should absolutely take advantage of and the other one you should absolutely take advantage of. But for now, KT, where do you want to start?

00:01:42

KT: Sweepstakes baby!

00:01:44

Suze: That's the first announcement then. Alright, everybody, you need to enter and become part of

00:01:53

Suze: the Suze holiday sweepstakes between now and December 15th, if you already have an Ultimate Opportunity Savings account, you are automatically entered into the sweepstakes where two of you will win $10,000 each. At this point, if you're already a member of the Alliant Credit Union, you should have gotten an email

00:02:19

Suze: welcoming you telling you that you were entered and giving you a referral link. If you send that link to your friends and family members, everybody and they open up with that link and Ultimate Opportunity Savings account. Guess what? Everybody, they're entered into the sweepstakes and you get another entry. If you haven't for whatever reason, gotten an email from Alliant,

00:02:49

Suze: then just go to my Alliant, A-L-L-I-A-N-T .com/suze. And you'll be able to get your personalized link there for those of you who have never been a member of the Alliant Credit Union, go to myalliant.com

00:03:11

Suze: and it is there that you can find out about the Ultimate Opportunity Savings account where if you just put in $100 a month every month for 12 consecutive months you get $100 plus. Currently you're being paid 2.5% interest and you will be entered into the sweepstakes. So you would just go to myalliant.com. Alright KT, that was the first announcement.

00:03:39

KT: They have to wait for the second one, Suze, wait till I give them a couple of questions.

00:03:43

Suze: KT would always say, good things come in pairs now, why do you think she would say that to you?

00:03:51

KT: Because I'm a twin.

00:03:52

Suze: That's right. All right, go on.

00:03:54

KT: And my twin is a good thing. Lynn, I love you. Okay,

00:03:58

KT: okay, ready? This first question is from...

00:04:00

Suze: Can you believe I kind of live with two of them because they are so identical in so many ways. Oh my God. Besides, but anyway, go on.

00:04:11

KT: Okay, so this is from Betty, Suze, love, love, love you both. I'm so grateful for all your advice these last 20 years I've been a listener. Suze I need to buy a used car

00:04:25

KT: and I've been waiting because of what's happening with the availability and prices of cars this year. I know you can't predict the future, but I trust your opinion so much. Do you think I should buy it now or wait until January? I need to finance about $10,000 and it kills me to have to pay such a high interest.

00:04:48

KT: I plan to only finance for 24 months.

00:04:52

Suze: Fabulous Betty I would wait if I were you because it is true that used price cars are definitely coming down. Absolutely. They're coming down. One of the reasons by the way is repossessions on the cars are going up and up and up and

00:05:12

Suze: those cars that are being repossessed, nobody is really buying them. So on the used car market prices are going down and down. I would wait.

00:05:22

KT: Good. Next is from Audrey. Hey Suze, my son paid off his 21,000 student loans during the pandemic. He requested a refund from his loan servicer and has since received the 21,000 and it is in the bank.

00:05:41

KT: He did the request so that he would have a balance to forgive in the event that the loan forgiveness actually goes through our thought is that even if we pay back the interest starting in January, it will be worth it if the forgiveness is approved. He's also a Pell grant recipient. So the amount forgiven would be 20,000. Thank you for helping us stay on top of this.

00:06:07

Suze: Well there you go. So here's what I would do if I were you.

00:06:12

Suze: Leave it just like it is for now because remember President Biden is wanting to extend the moratorium on student loan repayments starting again in January because that's when those payments start to be due plus interest. If he does do that and there's another moratorium and this loan qualifies for that,

00:06:34

Suze: then you would be putting that money into the bank, so to speak. Or a credit union. You could be making let's say with Alliant Credit Union 2.5% on that money. You also could be part of the Suze Holiday sweepstakes. Who knows? $10,000. You never know. And then just see what happens. Also, just on this topic, they're also making it, or they've made it

00:07:02

Suze: easier to actually bankrupt a student loan believe it or not. So, things are changing with student loans. We'll see what happens. Will this pass? Will this not? But just keep it right there. Making interest for yourself on it.

00:07:20

Suze: And let's see what happens with President Biden's moratorium extending it if he needs to or the forgiveness of the loan. All right, go on KT.

00:07:30

KT: Suze. Next question's from Lucy.

00:07:32

KT: My question is after paying off my mortgage, what's the next step? What about the title Suze? Should I transfer my name to the title of the house right away?

00:07:44

Suze: Well normally Lucy what happens is when you buy a home, you have a deed issued in just your name with the mortgage holder.

00:07:55

Suze: As a lien against that deed. Alright so that's how it is when you pay it off. However the original deed of trust is sent to you

00:08:09

Suze: and also it should have a stamp on it or say or where it says paid in full or canceled.

00:08:17

Suze: Now this usually can take about 60 days for that to happen because remember your real estate property is public record, so for them to straighten out the public record as to who is the proper holder usually takes about 60 days. Now along with that you should also get like a satisfy cation of mortgage letter

00:08:43

Suze: because remember you kind of signed a promissory note that you would pay this back. So two things are usually sent to you. Now

00:08:52

Suze: you can check to see where are you in this process by contacting the county registrar. Also. What you should do is when you purchased this home you had title insurance on it. The title is still good. But give it a few months and go and do another title search on your property just to make sure that it absolutely

00:09:19

Suze: has been filed correctly and it now is just in your name. However

00:09:26

Suze: the truth of the matter is you know how I feel about real estate and owning real estate in your own name. If you want to be smart, you should own real estate in the title of a living revocable trust. So that is what is important and you should all  

00:09:50

Suze: own your property, seriously everybody in the title of your trust. Now I've gone through this over and over again. Why owning a home in the title of your living revocable trust is 10 times better

00:10:08

Suze: than owning it in your individual name. So you could just search past podcasts and figure that out. However.

00:10:15

KT: Ding ding ding ding ding ding ding ding.

00:10:17

Suze: What? About time for the second big announcement?

00:10:23

KT: Yes. Listen up everybody. Because this is this is one of the reasons I wanted that particular question. Ready? Go for it Suze.

00:10:31

Suze: Alright. As all of you know,

00:10:35

Suze: really as a gift to all of you believe it or not, we offer you what's called the must have documents. The must have documents are a living revocable trust, a will, an advanced directive and durable power of attorney for healthcare and financial power of attorney.

00:10:54

Suze: If you went to an attorney to get those five documents, they would cost you approximately $2500. But those documents were created by our trust lawyer. KT's and my trust lawyer, we did this about 20 years ago.

00:11:14

Suze: Those documents are the exact same documents that KT and I both have, and if they are good enough for us, they are good enough for you. And years ago we decided who can afford $2500 or more to get documents and how do you even know if your documents are any good or not? So we created the must have documents. If you go onto the app,

00:11:44

Suze: the Women and Money app you will see we normally sell these must have documents for approximately $99. Alright everybody if you do it through the offer that we make good for all of you where you go to Suzeorman.com/offer, then they're also that exact same price. However

00:12:12

Suze: we used to offer on HSN what was called the Gold Box and this Gold Box was essentially waterproof. It held 10 file folders within it, of the most important areas of your life.

00:12:29

Suze: You were able to not only get the must have documents, you were also able to get the personal finance course, 10 eBooks on the most important areas of your life that are constantly updated. You would also get the insurance evaluator, you would also get the debt eliminator
00:12:52

Suze: and you would also get the do’s and don't cards. Now that has been on sale for $250. If you go to my website that is the only place that you can get that.

00:13:07

Suze: For Thanksgiving, you can go to the Women and Money app and you download that app by going to Google play or Apple apps and when you download it go to the Suze shop

00:13:25

Suze: and then when you go to the Suze shop just go down three things and you will see the Gold Box offered for $125. Now you can buy the must have documents if you want for $99, or for essentially $25 more

00:13:45

Suze: you get right this incredible box. It's a fabulous case. It has everything you need and which is where we keep all of our documents as well so you can grab, grab and go. So if I were you there are only 700 of them left. Everybody I would so take advantage of that right now if I were you.

00:14:11

KT: Those are two announcements so we don't call it Black Friday. We call it Gold Friday.

00:14:18

Suze: Just start doing it now this offer by the way will expire and go away in a few days I think it's on Monday so so just Thanksgiving, Thanksgiving weekend. So for those of you who tune in and listen right away it's there for you. Alright fabulous. Get them.

00:14:37

KT: All right next is from Hillary, Suze.

00:14:40

KT: My husband and I are self-employed. We have purchased stocks years back that were put into a SEP IRA. I'd like to move it into my Roth IRA. Is that something I can do and if so is it best to do it when the stocks are below what we purchased them for? Thank you so much for your help.

00:15:00

Suze: Should that have been your quizzie?

00:15:02

KT: No.

00:15:04

Suze: Alright, so my dear Hillary, whether you have a traditional IRA, a simple IRA, or a SEP IRA, you can absolutely do what's called a conversion where you can convert whatever is in your SEP IRA

00:15:22

Suze: into a Roth IRA and you can absolutely do the conversion with like two like meaning if you have certain stocks in your SEP IRA, you can convert the stocks to your Roth IRA just remember anything that you convert, you will owe ordinary income taxes on for the year that you convert.

00:15:45

Suze: obviously the lower the price of your stocks when you convert them, the less income tax you're going to pay on that conversion. So you bet it's better to do it when the stocks are below the value that you purchase them for. Okay, KT, we're rocking and rolling, go on girlfriend.

00:16:07

KT: This is from Sheila. Next question’s from Sheila Suze,

00:16:10

KT: dear Suze, can my husband roll over his lump sum pension of $18,000 into a Roth IRA to avoid tax?

00:16:22

Suze: No. Also you don't roll over a pension do you? You don't roll it over? Well, the truth of the matter is no pensions come into formats, you have a pension, and they give you a monthly pension

00:16:37

Suze: income for the rest of your life from the corporation, or you can take whatever that lump sum would have been and then you can do what's called an IRA rollover with it because you never pay taxes on that money. So it goes from the pension from the corporation in a lump sum.

00:16:56

Suze: If you do a custodian-to-custodian transfer, which is the only way you should do it directly into your IRA rollover. If you do it that way, you don't pay taxes on it. And as you withdraw the money, little by little if you want to,

00:17:12

Suze: that's when you pay ordinary income tax on it. Sheila, if you roll it directly into a Roth IRA, you are going to owe ordinary income tax on all $18,000 of that pension from that point on. However, it's now in a Roth IRA. And guess what? Now you don't owe any more income tax on it from that point on.

00:17:39

Suze: However, the $18,000 may put you in a higher income tax bracket. So I wouldn't do that. And depending on your tax bracket, you might want to do 9,000 this year and 9,000 next. Or just do little amounts of money over the next few years. Alright, yes, Miss Travis rock and roll.

00:18:00

Suze: And you know why she's rocking and rolling through all these? She's not so chatty. She wants to go back to her family.

00:18:08

KT: All right, the next question, Suze is from Janna. Dear Suze and KT, with the Social Security COLA cost of living adjustment at 8.3%, if we wait till 70 to take Social Security

00:18:26

KT: at 70, will we also get that COLA?

00:18:29

Suze: Yes, so let's just a living adjustment. So here's what all of you need to understand whether you're currently collecting social security or not.

00:18:40

Suze: All of your calculations are already calculated with all the cost-of-living adjustments. So yes, you will get both. The cost-of-living adjustment added on plus the increase until you are 70 to take social security.

00:18:59

KT: Alright, Alright, ready? Dear Suze and KT, thank you for all the great advice you give, please help me. In 2008...

00:19:05

Suze: Is that why you picked it? When they say please help me help me?

00:19:08

KT: Yeah, this this one needs some help...

00:19:11

Suze: I tell you so I'll never forget when in my New York apartment I had a little answering machine right? And all of a sudden I thought I'd be funny and I recorded it rather than: "This is Suze, please leave a message..."

00:19:27

Suze: I recorded, "Help me help me. I'm trapped in this little machine and I can't get out. Please call as many people as you can and just help me get out." And this was before I was "Suze Orman" Suze Orman, if that even made sense and I never forget, I came back and you know, to check all the messages...

00:19:52

Suze: totally full and people just were telling people to call one another and people I didn't even know were calling just to listen to that message and I finally had to take it off because the phone never stopped ringing. Anyway, go on.

00:20:07

KT: That's like something going viral on Tiktok vintage, 30 years, 40 years out of that. And I went actually like 50 years ago. All right. This is from Greg.

00:20:21

KT: It said please help me. In 2008, I was advised by my financial advisor to put $15,000 within my Roth IRA into a non-traded REIT. That’s R-E-I-T people for those that don't know is a real estate investment trust. At the time I was a conservative investor and wanted to limit my risk and keep my savings secure for retirement.

00:20:50

KT: So this is why I wanted to read this to everyone. So Greg wanted to do this and did it under the guise he'd have something for retirement. But listen up, wait, wait, Suze, hold on. Listen to the end of the story. I'm being told by my REIT company that they're only doing redemptions upon death.

00:21:14

KT: How can this be legal? Why would my advisor have made such a recommendation when they knew I was looking for retirement security, Suze. Is there anything I can do or is this money really lost? Greg.

 00:21:31

KT: So that's why I wanted to read this. Um I think it's sad.

00:21:39

Suze: Yeah, here's the problem. A real estate investment trust, one that is traded, you could buy and sell anytime you want on the stock market. And KT, a real estate investment trust is where a company goes out, they buy all kinds of real estate or the same kind of real estate they put it in trust and you buy shares in that trust. You also get income usually from it but you can buy and sell it to trade as like a stock on the stock market.

00:22:08

Suze: A non-traded REIT does not work the same way. His advisor screwed him to tell you the truth. Well that's not nice but but but but let me tell you why. I say that right, and I say that because when you see the words non-traded that means this REIT does not trade

00:22:39

Suze: and it's up to the discretion of the company, as to do you get any money back they normally, after all the shares are sold, they close it and they suspend the redemption policy which means you cannot redeem this unless they give you permission to do so. And this particular company obviously is only allowing redemptions on the death

00:23:08

Suze: of Greg. Now how sad is that? He wanted the money for retirement and he put it in what 15 years ago. Now normally what happens is a good REIT will spin off income to all of you and put that into your account. The bad ones, which this one obviously seems like it is, usually doesn't spin off anything and they keep all the money for themselves

00:23:36

Suze: and that's usually what happened.

00:23:38

KT: So what can he do?

00:23:40

Suze: So he can complain all he wants, he could complain to the company that he purchased it from.

00:23:48

Suze: Right but they're just going to say hey sorry sorry this is how it works. He can try to sell it on the secondary market but if he put $15,000 in somebody might buy it for like $5,000 dollars, he'll lose his shirt on it. So the biggest blessing in this is that it's in his Roth IRA, because imagine this one

00:24:15

Suze: if it was in his traditional IRA, he now turns 72, that $15,000 or whatever it's worth is included in how much he has in his retirement accounts. So required minimum distributions would be based on that amount as well.

00:24:37

Suze: So he would be having to take out more from all of his money even though he doesn't have access to that 15,000. He's lucky. Which is why I like Roth IRAs everybody. He's lucky because this is in a Roth IRA where required minimum distributions are not required.

00:24:58

KT: I'm gonna ask a silly question. So is that if he has a trust,

00:25:04

KT: it wouldn’t help him on any level at this point. So the only people that will benefit is whoever he leaves his money to.

00:25:12

Suze: That's right. His beneficiaries. Beneficiaries and obviously you have some children that you know you can leave it if it's worth anything. So

00:25:20

Suze: one has to see this is why it's important everybody, that you ask questions. So Greg I'm sorry that this happened to you. I seriously am. And I'll write to you personally about this just so you know. However

00:25:38

Suze: what happened to you may now have helped thousands of people never get into that situation. So what to do? I'm so so sorry. Alright. Yes. KT.

00:25:51

KT: Okay Suze. Next question's from Jackie. Suze, I have an HSA and I have the opportunity to invest some of the funds. My husband and I are on my health insurance. The current balance is $2600.

00:26:06

KT: Do you recommend investing some of these funds? Why or why not?

00:26:11

Suze: Okay KT. You picked a difficult one for your last question before your quizzie.

00:26:17

Suze: So everybody and I'm going to have to do a Suze School on this one for great detail. But in HSA,

00:26:27

Suze: as a health savings account and a health savings account is attached to what's called an HDHP, which is a high deductible health plan.

00:26:42

Suze: And many people are going into high deductible health plans that are attached to health savings accounts because truthfully on HSA with an HDHP have lower premiums than a regular health insurance account. But because they have lower premiums, KT, they also have higher deductibles on them. Now they're complicated.

00:27:11

Suze: So Jackie what I would tell you is this:

00:27:16

Suze: Usually because they're higher deductibles. That means that between you and your husband the minimum of a deduction right now if anything goes wrong where you have to pay for it out of pocket is $2,800 for a family. $1400 for an individual. That's the minimum. It could be higher depending on your plan

00:27:43

Suze: because your current balance is only $2600. No you should not be investing that money at this point in time because you need at least $2800 in there to meet the family deductible. And you don't have it. If you told me that you had 5,000 or $10,000 in there then I would say yeah

00:28:09

Suze: you could invest some of it but not 2,800. Now if you want to get what's in there up you are also allowed to do a one-time IRA transfer. So let's just say that you have you know $7,000 in an IRA. You could transfer that $7000 into your health savings account next year

00:28:38

Suze: because the maximum contribution that a family can put in is 7,300 per year right now. Or 3,650 as an individual. That then would allow you to have a whole lot more money in there without you having to come up with it out of your pocket. And then you could look at investing some within the HSA. But everybody,

00:29:03

KT: oh we need to do a Suze School on that one.

00:29:08

Suze: Alright, KT, it's Thanksgiving. Thanksgiving quizzie. Right, and I picked this quizzie  

00:29:19

Suze: because it comes from somebody by the name of Tommy Givens.

00:29:24

Suze: So why do you think I picked it?

00:29:27

KT: Thanksgiving's Tommy Gibbons.

00:29:29

KT: Thanksgiving's right. TG. Thanksgiving. That's how I picked this quizze. All right. What do you think about that? The poet here? Tommy Gibbons. Thanksgiving. Don't you love that? I thought, I thought everybody that was so brilliant on my part. It's not even funny. Okay.

00:29:46

KT: What do you got for me?

00:29:47

Suze: So what Tommy wants to know is, Hi Suze. I'm new to your app.

00:29:53

Suze: I just want to say one other thing about the app. Now I know a lot of you right, maybe you've downloaded the Women and Money app. Maybe you haven't. But here's what's starting to happen on the app that you best download it if you want to keep up with me on certain things. For instance last week oil started to go down which meant many of your energy stocks started to go down

00:30:23

Suze: on the app. On the wall. On the Women and Money app I posted about what I thought about oil. Should you keep it? What should you do about it? And when if ever I expected it to recover.

00:30:38

Suze: So if you want to be kept up on things that happen in the market between the time I do one podcast and another podcast, the best way for you to do it is to have the Women and Money app and sign up.

00:30:54

Suze: So that when I post something, you see it because I'm going to start posting more and more, they're about market activity and things like that. All right, everybody, that's what we're doing. This is from Tommy everybody. Hi, Suze. I'm new to your app. That's what started me on that tirade right there. Just so you know, I have a hypothetical question for you and KT.

00:31:22

Suze: Now remember this quizzie question isn't just for KT, it's also for all of you. So KT, wait before you answer.  

00:31:30

KT: I promise I'll give you all a chance.

00:31:35

Suze: Which is a better investment, a six-month bill at 4.57%. A one-year bill at 4.68% or a two year note at 4.43%? So which one is a better investment? And why?

00:31:56

KT: What was the middle one?

00:32:01

Suze: So it's 4.57 for six months, 4.68 for one year or two year note for 4.43.

00:32:15

KT: Okay, can I go, is everyone ready out there? I'm gonna go for the highest 1 year.

00:32:22

Suze: So if this was your money, you would go for a one year at 4.68%. Is that correct? (KT:Yes).

00:32:31

Suze: Final answer. (KT says "yes" again. Suze makes the wrong answer sound).

00:32:33

KT: Why not?

00:32:34

Suze: Alright, let me tell you why not. First of all, when investing in interest rates, environments like this, when we do not know for sure everybody are interest rates going to be higher one year from now? Are they going to be lower one year from now? That is why you do a Treasury ladder

00:32:59

Suze: in this particular case. Six months. What you would be investing in would be a little bit in the six month, a little bit in the one year, and a little bit in the two year.

00:33:12

KT: Wait, give me that choice. But hold on, everybody didn't she say,
00:33:18

KT: would you choose a six month, a one year or a two year? That was the question. And I went for the highest rate. But if you said, what would you do, KT, I would have said, you know, Suze, I'd do a little bit of each.

00:33:33

KT: I'd do a ladder.

00:33:37

Suze: It's not nice to lie on Thanksgiving. It's not nice. Alright.

00:33:42

KT: So Alright, everybody that was a trick question.

00:33:45

Suze: It wasn't a trick question. But here's the thing you need to understand, which is why that's important to understand. It's going to go down. You don't always go for the highest rate. If you think interest rates are going to continue up,

00:34:00

Suze: just let's say you did, then you would be better off truthfully buying a six month one over a one year one because really for 10, 11% difference, which is nothing maybe you would be better off because in six months when that money matures the one year might be at 4.7.

00:34:26

Suze: As I've said to everybody, I think it will continue down here, which is absolutely doing. And then I think it will turn around and go back up higher than now. Higher than now you bet. So six months ago. Well, truthfully again, I wouldn't put it all in one. I would do

00:34:47

Suze: a combination of them all. A ladder. I really would.

00:34:52

KT: Um you need to do a Suze School on ladders.

00:34:56

Suze: I've done it.

00:34:56

KT: But do it again to remind everyone maybe in January.

00:35:00

Suze: KT, what happens in a podcast, is that once I've done a topic they can then on the Women and Money app go to where it says search content

00:35:12

Suze: on the app and go and listen to those podcasts again. Otherwise I would be doing the same podcast over and over and over again. Alright.

00:35:24

KT: I have to go base that turkey. Right.

00:35:27

Suze: Guess what? This year, guess what I'm not doing?

00:35:31

KT: Well, you didn't do it. Everybody is participating. All the sisters. There's a lot of family members here and everybody wants to give Suze a break and they want to cook the dinner. She always cooks the dinner. But this is 16 people,

00:35:47

KT: two turkeys, but this year she wants a break. I'm like all right, everybody, you guys cook the turkey.

00:35:58

Suze: Alright, so until next time, what do you want to tell everybody?

00:36:03

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