Podcast Episode - Ask KT & Suze Anything: We’re in our 50s, should we get married?


Children, Children And Money, Investing, Podcast, Retirement, Roth


March 07, 2024

For this episode of Ask KT and Suze Anything, Suze answers questions about opening investment accounts for children, catching up on a ROTH, maintaining retirement savings and so much more.

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Podcast Transcript:

Suze: March 7th 2024. Welcome everybody to the Women and Money podcast as well as...

KT: Everyone smart enough to listen.

Suze: Good you did it! Ding Ding Ding! Good on you KT. And this is Suze O and KT here and this is the Ask KT and Suze Anything podcast, however,

Suze: we're here, but we're not really here.

KT: Yeah, we're not here. We're in Abu Dhabi.

Suze: But we're here until we're in Abu Dhabi because we're trying to pre-record podcasts for you so that you don't miss us. You don't miss a when we are gone.

Suze: All right, Miss Travis, let's get to it because I'm looking over there and has a big stack. But let me just say for any of you who would like to send in a question, you need to keep them short. They should be like no more than 100 words. You go on beyond that, it's almost impossible for us to answer it. But if you would like to write in a question and send it to ask Suzie Suze podcast at gmail.com. If KT chooses it, then we will answer it on the one and only KT and Suze podcast.

KT: My first question I love, it's from an 11 year old girl who wants to start investing for her future.

KT: She said, Suze, I really wanna open a brokerage account so I can make money and use it for my future. I make $24 a month by doing chores and I plan to start babysitting soon. In my savings account I have $4000 but my parents want me to open a custodial Roth IRA. I don't wanna open a custodial Roth IRA because I wanna be able to use the money when I'm younger and invest in a house. What do you think? She's 11. I love this question. It's from Hazel Suze. What should she do?

Suze: Hazel. Hazel Hazel. All right. Listen to me. You're making $24 a month. That's $288 a year. Yeah, you could put that into a Roth IRA like your parents want you to. However, I like your idea. I have to tell you I would open up a uniform gift to Minors Act account. Your parents are gonna have to do that for you as well because you're only 11 and invest that $24 a month. Open it up at a discount brokerage firm like Fidelity or Schwab and buy slices of great quality stocks. You can do that or great quality exchange traded funds and let that money grow.

Suze: Then when you get older and you can take it all out if you want to buy a house, go for it. So, all right. I happen to agree with you.

KT: There you go Hazel. My next question is from Maria. I love this one too. Is it financially beneficial to get married when both parties are in the mid to late fifties? One person makes 90,000 a year while the other makes 200,000. I just want us to receive all of our Social security benefits that we are allotted. So I guess I'm asking, will we receive less or more if married.

Suze: It has nothing to do with...

KT: I was gonna say, Suze and I got married in our mid fifties.

Suze: It has absolutely nothing to do at all with how much you get to get for social security if you are married or not. The only way it becomes beneficial is if your spouse's social security happens to be greater than your own and your spouse dies and you're able to take over your spouse's social security as if it were yours and vice versa. So there's absolutely some benefits in getting married. But what you really have to think about is all the other things that it means to get married. There's no estate tax for you to inherit any kind of money. There's all kinds of benefits...

KT: You get to have an anniversary every year.

Suze: It's like it's called, it's called Love In Love. So I wouldn't be worried about your social security. I would want you to know that you liked and loved whoever this person was and wanted to spend the rest of your life with them. Ok. Otherwise don't get married. Go on.

Suze: You picked some interesting questions.

KT: The next question is from Tania. Can I catch up with my Roth IRA? Hi, Suze and KT Love listening to both of you on the podcast. Here's my question.

KT: My husband lost his job last December if it takes too long for him to find a job and we end up running out of our emergency fund. Would we be able to take out from our Roth IRA, which we fully funded for several years now. My employer offers a voluntary Roth 403b. Once we're back on our feet, can we replace what we took out of the Roth IRA into my Roth 403b? So that's the question.

Suze: All right. And there's the answer. Tania listen. You can take out any money that you originally put into your Roth IRA. Those are known as your original contributions. You can take those out without any taxes or penalties whatsoever, regardless how long it has been in there. All right?

Suze: Iit's just the earnings on those original contributions that you can't take out until you're 59 and a half. And the account's been open for five years. All Right. So you take out $10,000 chances are, however, if you take out $10,000 it's because you need to spend that $10,000 you need to live on that $10,000. Later on in life. Forget that $10,000 now because it's gone.

Suze: If you now have other money and you want to contribute to the Roth 403b at your employers. Ok. But I got news for you ain't gonna be with that $10,000. One has nothing to do with the other.

KT: Ok. Next question, Suze is from Maria. Hi, Suze. And KT

Suze: Wait, what does that, what does that make you think of?

Suze: (Suze and KT sing a bit of "Maria" from West Side Story) I knew it. I knew it. You see how well we are? Ok?

KT: We can both sing together too.

Suze: Hopefully nobody can hear it when we do.

KT: Oh, I was telling some, I, I have to go off track. I was telling someone the other day, um, about you and that you have won pretty much every possible award out there except we can never call you an ECOT. Is that what it's called ECOT? And they said why? And I said she's never gonna get the grammy. She can't sing.

Suze: Its EGOT.

KT: EGOT. She can't sing. All right, ready. This is from Maria. Hi, Suze and KT help. She said help. I'm so confused about my trust.

Suze: Does that mean you think one day I could get an Oscar?

 

KT: Possibly.

Suze: A Tony?

KT: For sure.

Suze: All I have is an Emmy.

KT: And you have, you have an Emmy. You have two Emmys.

Suze: Well, that's it. So you can get up there with one out of three.

KT: You could do an Oscar, do a cameo role.

Suze: And win an Oscar? Alright now, KT.

KT: Maria says help. I'm so confused about trust, how to find a trust where to go to set up a trust and what exactly I can put into a trust. Will you please ready for this? Will you please consider doing a Suze school on this topic?

KT: So she said, since listening to you, I have saved over $15,000 in my Alliant savings over the past year and a half. Hear that everybody year and a half. And then she said, I look forward to every Thursday and Sunday. Thank you ladies. Can you enlighten Maria about her trust and why everyone needs one.

Suze: Maria go to the women and Money community app and you'll see on one of the little squares that comes up, you can search the podcast for past content, put in living revocable trust and hopefully,  um articles or blogs or podcasts will come up on that topic. I have done many, many, many. If you happen to have my ultimate retirement guide for 50 plus, I do an extraordinary job explaining them in that book as well as far as almost every book I've ever written. I have delved in to how a living revocable trust works, how you fund it and all of those things.

KT: Suze. Next questions from Cherry. Hi, Suze and KT. I love your podcast. My question is in regards to leaving your 401k employer's plan after you retire.

KT: I've been retired for four years and I've not done a roll over to an IRA for a couple of reasons. One, I don't feel comfortable with financial planners. It's a good reason. Two, low administration fees. I've heard that this is not the most effective way to maintain my retirement savings. Please advise.

KT: So here's what I've always said. What is the goal of,

Suze: of money. Drum roll KT, what is it?

KT: To be secure.

Suze: That's right, girlfriend. So Cherry, listen, if you feel comfortable with your 401k employer's plan, stay there. What do you care? A lot of people do an IRA rollover to diversify their investments, they want more than maybe the few mutual funds that your employer's plan happens to offer.

Suze: However, if you're comfortable there and that's where you wanna keep it. I don't have a problem with that. All right, KT.

KT: Ok, Suze, I have a question here about divorce. All right. I'm getting divorced in our retirement assets of 401k. Roth IRA are getting divided 50-50. I'm gonna retire in two years and we'll use social security and my retirement accounts. How is all of this roll over transfer conversion different for me?. I will get social security through my husband's account, he had a better income and we were married over 10 years.

Suze: So in answering this, you know, we never use people's names who are going through a divorce until it's final because you just never know who's listening to this podcast, but you have nothing to worry about. It's transfer conversion roll over. That doesn't really matter here. What's going to happen is half of his assets are going to end up in your retirement account with your individual name on it and then it will be yours. Just that simple. So don't worry on any level. All right, KT.

KT: All right, this is from Lisa.

KT: Hi, Suze. I'm 55 years old. My home is paid for and is valued between 400 to 430,000. I have zero debt except for two vehicle loans that are for my company, vehicles and my company makes the payments each month. I am a small business owner. I have a very small traditional IRA valued at about 25,000 and I have a savings account for emergencies also valued at about 25,000. My question is, should I tap into my home equity to make an investment in another property or any other kind of investment or should I sit on my property and continue to have no mortgage payments to make? Now, here's something interesting. She said, I know I need to be contributing more to the IRA each month. And I also need to look into long term care insurance. So now remember she's only 55.

Suze: I wish you could see my face right now because my face would tell you, oh, you are so denied. Just no way. Listen, when you take out a home equity line of credit, you have to look at what the current interest rates are on home equity lines of credit and they are very, very high. That's number one, you have to look at the price of real estate today, the price of the interest rate on a mortgage today.

Suze: And the main thing you have to look at is your emergency fund. You have $25,000 in an emergency fund. And I have a feeling that if you were to look at everything that is not eight months of expenses for you to be safe and sound. So no, you are not to do this. You are to contribute more to your retirement accounts. You are to make sure that your cars, there's no debt on it. You are to make sure that you have long term care insurance, take care of your tomorrows today by investing in yourself people first then money, then things absolutely not under any circumstance denied, denied.

KT: This is from Kathy. This is very dear to my heart, this one. Dear Suze and KT thank you for sharing the recent emails related to caring for ill family members, my twin and I are helping out our out of state sister serving as her medical and financial power of attorney respectively. She's taken a turn for the worse and has really bad cancer. So we're so sorry for your sister's illness.

KT: My sister suggested adding me to her bank accounts to assist with paying her bills. My question is if my sister dies, am I liable for her unpaid expenses at death? Her medical and living expenses are greater than her social security income.

 

Suze: Yeah. No, you will not be responsible for any debt that is in her individual name. That debt will essentially either die with her or they will come back against the state and ask for money and the estate will have to pay for it.

Suze: But let's say your sister had absolutely no money at all just enough to pay her monthly bills from her social security, they won't be able to get anything. But if your sister dies, you will not be liable for her unpaid expenses at death. But her estate will be. But that isn't you personally. So whatever money she has in her name or in the account that isn't your liability. It's cash in that account may have to go to some of her debt.

KT: So it's ok that she puts her name. The sister puts her name on the bank account.

Suze: Yes, because then it will make it easy for her truthfully to use the money to access to access the money and pay her bills and things like that.

KT: There you go. So Carol is the next question we have. And it said dear Suze and KT, thank you for all you do for so many. You're welcome, Carol.

KT: And she said I have a sister in law who is $12,000 in debt on five credit cards. She's 82 years old and in very good health. Wait, this gets really better. She even teaches yoga classes to try to make ends meet earning about $600 a month. Her social security and small pension yield is 1900 a month. Her rent is $1000 a month and her utilities are around 150.

KT: She has some car insurance payments but the car is paid off and getting old and needs repairs on occasion. 82 years old ready. She's moved her credit cards from one to the other time and time again to stretch out the zero interest. But now I'm interested in getting all of those cards paid off and ensuring she does not add any more debt to the credit cards.

KT: The question is, am I able to legally prevent her from opening other credit cards?

Suze: No you are not.

KT: B) do you think I have a chance of negotiating the balances down with a credit card company or should both of us go to consumer credit counseling type of an agency? Which one would you recommend?

Suze: So let me just tell you about your little sister in law.

Suze: She teaches yoga classes at 82. I can't even take a yoga class, let alone teach a yoga class. But for her to move her credit cards from one to another at a 0% interest rate, that means your sister in law has a high FICO score and therefore she's doing ok. She hasn't gotten herself in to credit card trouble in terms of being late with her payments. If you are gonna negotiate the balances down with the credit card companies, they're only going to do that if she's been missing payments and has a poor FICO score, she's delinquent and she's delinquent and you don't want that for her. 

Suze: So, no, you can't do that. As I just said a few seconds ago. No, you're not able to legally prevent her from opening other credit cards, nor should you because she's doing pretty good transferring them from one 0% to another. She's doing great that way. And should she go through consumer credit counseling? I don't think so because you're gonna have to pay them 10 or $15 a month to do what? To get her credit card interest rate down to zero, which she's already done. So, no, that's not gonna help. 

Suze: So, truthfully, my dear Carol,you really need to let your sister in law continue to do exactly what she's doing. She's obviously has a body that's very flexible and can stretch and she's being very flexible in stretching the money that she has to make it go even further than you have any idea. So, for now, if it were me,

Suze: I would leave it alone.

KT: Next question, Suze is from Mary Ellen. My husband wants to open a second. Roth IRA. He's 74 and I am 65. We already have separate ones and we both have earned income besides our social security. I'm leaning against this because we would have to wait five years before we can withdraw.

KT: So, basically, she's asking what are the pros and cons.

Suze: There's all kinds of pros. Are you kidding me? First of all, you need to understand that any money you were originally put into your Roth IRA, you can take out at any time you want to, regardless of how old you are or how long it has been in there. That's not a problem. So if you combine that with your other Roth IRAs, I'm sure you'll have enough money. It's only the earnings that you cannot touch for at least five years. But because you're already over 59 and a half, then there's no 10% penalty. So it doesn't even matter if you touch the earnings, you're not gonna be penalized 10%. You're only gonna have to pay ordinary income on it anyway. Which would be true if you took this money, you invested it, let's say, in a CD. And now you're getting interest, you'd be paying ordinary income tax on that interest So, in my opinion, there are no cons whatsoever.

Suze: The pros also are if you don't need to access this money and now it grows and grows and grows and you die and it goes to your beneficiaries, it's all tax free. So in this case, listen to your husband. KT, do you realize what you did in this podcast?

KT: No. What did, what did you do? Did I do something wrong?

Suze: No. Every single question that you asked was what? From a woman? That's great. Did you do that unconsciously or on purpose?

KT: Just unconsciously. I didn't think about it.

Suze: You didnt, did you? All right. And I was just sitting here everybody going, another woman, another woman. Because there are sometimes when she chooses a lot of men and you write me and you go, what about the women? This is a Woman and Money podcast. And Everyone smart enough to listen. So don't worry about it.

Suze: KT, are you ready for your quizzy?

KT: I'm always ready for a quizzy. Is everyone else ready? That's the question you wanna ask.

Suze: This is going to be a little bit different of a quizzy for you. So I want you to answer it in the best way and actually shortest way, you know, possible.

Suze: Hi, Suze. I have been an avid listener of your podcast for two years now and I just love the KT and Suze podcast.

Suze: Could you have a KT interview? We know about you, Suze. Your rags to riches story. But what about KT? She is such a sweetheart, very caring and will giggle at the drop of a hat. She is also so caring and will also cry at the drop of a hat. All we know is that KT has a twin sister named Lynn. I mean, what does KT stand for? What is KTs background?

Suze: So that is your quizzy, this one man on this podcast by the name of Dennis. Dennis. Dennis.

KT: Ok. Let me give everyone a thirty second commercial of who I am. I'm not shy about this at all. KT stands for Kathy Travis. I was born and raised in New Jersey, right on the ocean on the shore with a fabulous Italian mother and father and I have five siblings and with myself is six kids and my twin sister is the eldest. She's three minutes older than me.

Suze: How many bathrooms were in your house?

KT: One and a half.

Suze: So there were eight people in a house with one and a half bathrooms.

KT: You don't even wanna know those stories. But, but anyway, shortly thereafter I went, was fortunate enough to go to school and then I made my way to Hong Kong to visit a friend and I fell in love with the far east so much so...

Suze: How old were you?

KT: Um 27... about 27.

Suze: Before 27 KT, tell everybody what you did.

KT: In New York? Ok. So I left college, left school, went right to New York.

Suze: What school did you go to?

KT: Rhode Island School of Design.

Suze: What was your degree in?

KT: It was in illustration at the time. So I graduated in '74 but I graduated earlier than my class by a semester. So I got to New York in January. Everyone else got there later in the summer. So I go to New York. I start working and I eventually opened a really great little hot shop and had an advertising company that was fabulous and got involved with fashion and all kinds of.

Suze: How old were you now?

KT: I'm 21... So I had a, a very, very um interesting and very exciting beginning in New York City and was friends with people of the likes of Andy Warhol and, you know, quite a few very famous fashion designers. I worked for Liz Claiborne in the very early days and lots of, you know, Ralph Lauren people that I knew...

Suze: And did you do studio 54?

KT: Yes, I was hot.

KT: No, I had a very, very exciting New York life. So one thing leads to another. I then go to Hong Kong to visit a friend and end up making six trips in 1980 back and forth to Hong Kong. And eventually I was in love and eventually I got a job with Ogilvy, Ogilvy & Mather advertising. But my job was a start up. It was a start up and I was hired and given a very small amount of money, 1200 square feet and a secretary by the name of Kelly Chua. And I started that business and grew it to be a rather large multimillion dollar agency for Ogilvy. But it was a special agency. We did brand development, brand management. We were the first computerized design firm in the far east. I then grew that.

Suze: What was your position there?

KT: I was the president.

Suze: Uh huh. So, did you hear that everybody of one of the fifth, five divisions at that time, only women, only woman...

KT: Five companies under Ogilvy's umbrella. And I was the only woman, the youngest president of them.

Suze: And the most profitable.

KT: They called me the cash cow. I didn't know what that meant but everyone was, you know, Britsh, all my other bosses were British. Oh, she's a cash cow. And I was always wondering what did that mean? And it meant that I was the most profitable for the investment or for the size of the company than all of the other four. In any event, what I really love about my story in my 20 years in the Far East is that I opened seven more offices in seven countries and had the most incredible portfolio of clients in the world. I worked with very, very high fashion. I worked when I say high fashion, all of the couture designers from Europe, Japan, even America - Donna Karen. We opened her first store.

KT: I worked with Joyce Ma, Joyce boutiques, which was unbelievable.

Suze: Who brought Every designer to the far east.

KT: I worked with all of the five star hotels and properties. I was able to open for Eric Hilton, the first Conrad in the world in Hong Kong. I opened for Bill Marriott, the first uh Marriott hotel that was a five star in the Ritz Carlton and everything else that he bought.

KT: And I had the time of my life and I opened for the Sheraton Group, the first hotel in Kathmandu. So we had a extremely um you know, very, very exciting and for Issy Sharp, the four seasons, we don't want to forget him in the Almond resorts. Those were the real lux properties. So here I am this relatively young president traveling all over Asia living the high life, working with unbelievable creme de la creme brands. And then I meet Suze.

KT: 20 years after a very illustrious life in the far east. And I still, and I brought Suze to Hong Kong and China and

KT: Malaysia and Thailand, you name it. We went everywhere. So my background is in advertising. I was always behind the camera. Suze was always in front of the camera. And when we met each other, which was in San Francisco where I had purchased property. I remember I was very successful in making quite a lot of money in my late thirties and forties, a lot of money and I needed to invest it. So I bought fabulous property and, and I didn't even live in it. And then I met Suze in San Francisco when I finally moved into one of my homes and there.

Suze: But was still going back and forth all the time, go back and forth. Like every weekend it was the craziest thing I'd ever seen. But that is a small glimpse, really, a small glimpse of the,

KT: The life of KT and Suze.

Suze: And so now Dennis, you know

Suze: And there's only one thing we want all of you to know and to remember when it comes to your money and it is this people first, then money, then things now you stay safe and you absolutely. Do you hear us... stay unstoppable.

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