Podcast Episode - Ask KT & Suze Anything: What Do I Do If I Forgot To Start Taking My RMD?

On this episode of Ask KT and Suze Anything, Suze responds to some of your comments, and answers questions about trusts, IRAs, fixing RMD mistakes and more.

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Podcast Transcript:

Suze: May 29, 2025. Welcome everybody to the Women of Money podcast as well as everybody, and I oh so mean everybody smart enough to listen. Today is Ask KT and Suze Anything, and this is where you can write in to ask Suze podcast@gmail.com. Ask a question if Ms. Travis chooses it,

Oh, we'll answer it on the podcast, and you just never know when I will answer you personally. How are you this morning, Miss Travis?

KT: I'm great. And, and to Suze's point about whether or not she answers you personally, listen to this first comment from Anne.

Suze: Oh well, there you go.

KT: Suze, wow

Suze: You didn't know what I was going to say. So how'd you have that in order?

KT: Suze, wow, thanks so much for responding to my email. You made my day when I saw your response. My husband was sure that someone answered it for you.

Suze: Figures. Men.

KT: And I loved it at the end when you identified that it was you answering. More importantly, you are helping me to feel more confident with interviewing and selecting a financial advisor with your response. Thanks again for all of your advice over the years. I love how it makes common sense, and trying to make smart, informed decisions with money can be confusing and costly.

Take care, wishing you well. Keep up the great work, Suze! Anne.

Suze: Thank you, Anne.

KT: See, her husband doubted that you're the one, and let me tell all of you, no one responds to any of you except Suze. No one.

Suze: We don't even have anyone to do it.

KT: Well, no, she has her editor Carla that she's worked with for 25 years. You all heard about Carla's birthday on Sunday if you listened last week.

Suze: But that's for books.

KT: that's editors,

Suze: But not for financial advice.

KT: Yeah, even when I try...

Suze: And why do you try?

KT: But, but let's tell everyone if they're looking for the same answer that you gave to Anne, why don't you post it?

Suze: Oh my God, it's so long.

KT: So what? They want it.

Suze: I sent you Anne a list of every she wanted to know how you check out a financial advisor and make sure that they're OK.

And I talk about it. I think it's in Chapter 8 of the Ultimate Retirement Guide, which, by the way, is out in soft back now, and the audio is coming out in June sometime, so you might want to check that out with all the changes because there were so many changes from when the book first came out a few years ago.

But, Anne wanted to know more ways to check out a financial adviser and oh, I gave them to her. So in honor of Anne, because I'll post it for all of you the resources that I sent to Anne. All right, KT, next.

KT: OK, and this next one is kind of the same. This subject was called Truth Hurts. Ready?

Suze, my friend group calls you our selected mentor.

Suze: Thank you.

KT: We love your financial advice, but your thoughts on relationships have been at the forefront of our conversations. I wouldn't do it again. Letting fear and shame control my actions kept me in a relationship that was emotionally abusive and manipulative. I mean, I've heard that before.

So then, then she goes on to say, thinking there might be a KT just around the corner gave me the strength to leave, and I love you both for it.

Suze: Let me tell you what's so great about that, right? The truth is.

Obviously I've been in many relationships over the years. I met KT when I was 50, but I stayed in these horrific, in my opinion, relationships where on some level I wasn't, how, what would you say was I, I was just—they weren't healthy, but

KT: no, they, they were. They were just there. They were there. They actually had, they didn't contribute anything.

Suze: But I just stayed because I thought it was easier to stay than to leave and I didn't know that there was a KT out there. I didn't know what a true relationship, an honest relationship, an equal relationship was because I had never had one.

I'm so touched, KT, that people are sensing that there can be a KT out there for them because I stayed, especially in the last relationship, 8 years in a relationship that after 6 months I knew was going nowhere.

And so because it was just easier to stay, but it's never easier to stay. It's never easier to insult yourself. So always stand in your truth and move on.

KT: That's why I thought that title was Truth hurts.

Suze: It does hurt.

KT: All right, now this next one's even better.

Suze: So before we go into questions like...

KT: These are, these are all important because it's kind of just I'm just in that mood to share great things, great news with everybody.

Suze: Because it's one week before my birthday.

KT: Oh, her birthday is next Thursday, everybody.

What are we doing? How are we celebrating?

Suze: I have two gifts for you.

KT: What about, what about my gift to you?

Suze: I don't want any gifts on birthdays.

KT: We don't exchange gifts any...

Suze: Not physical gifts, right? Written gifts, things like that. But there's something that you've been wanting me to do now for many.

Many years.

KT: Oh, don't make me cry,

Suze: Right? And

KT: I know, I know what she's gonna do, but let's not reveal it. We're gonna reveal it next week. And if she's, yeah, if it's what I think it is, I'm gonna post a photo for all of you, and then you'll cry.

Suze: So I'm gonna try. OK,

KT: Suze, this next one is one of your all-time favorites ready. It's from Manson.

Suze: I remember Manson.

KT: So Manson wrote, but wait,

Suze: Tell everybody about Manson.

KT: I want you to tell them, but let me read what he sent you. He just sent this. He just sent this. Hi Suze and KT. I was on the podcast about a year ago. Everything worked out just as you and KT said it would.

Regarding coming out to my family, right? I graduated from law school last week with my mother and partner Justin taking the photo watching so proudly. I, I can we post this photo? Manson is here in his UC Davis gown. It's such a great photo, and he's with his, um, mom and sister, I think, with him.

And his partner Justin is taking the photo. You should see the smiles on the three faces.

Suze: Yeah, what's interesting, everybody, is this is a man, and if you listen back, I don't know which podcast it is, right, but it's obviously about a year ago.

Where he wrote in and he was scared to death because he had a year or so left on his—he had law school, law school—and obviously his mother was helping him financially and had property or something like that that she might leave him.

And he was scared to death that she would cut him off, that she would cut him out of that whole will and trust later on if he came out to her and said, Mom, I'm gay, and I wrote him back essentially saying to him, the money will never matter.

What matters is when you stand in your truth and on and on and on, and it was fabulous. And here we are a little bit later, he told his mom, obviously she is fine with it and he's doing great. I just love that one. So anyway, all right.

KT: All right. Next is from Kim. Hi there, Suze.

Suze: Are we at questions yet?

KT: Um, Yes, this is a question...

Suze: Finally, finally, 9 minutes into it, we're at the Ask KT and Suze anything podcast.

KT: All right, go on. So this is from Kim. Hi there, Suze. My parents and I and my older brother are trying to piece together what we should obtain in addition to my parents' will that they made a long while ago.

I know that they want a durable power of attorney over financial and health, but they also want to get an irrevocable trust and a revocable trust as well. Everyone's confused right now here, Suze. One of the main reasons why they want a revocable trust, is that they can be in control of the money or assets they put into it in conjunction with that, they would also like to have an irrevocable living trust so that in the rare case that they have to go to a nursing home.

And they put the house, cars, and maybe some money in it that the state won't go after that. They're very confused here. I said, I want to know if this is something that you think is a wise choice, and if so, are the assets protected from day one in an irrevocable living trust and revocable trust.

Suze: So obviously KT you have a family theme. And a personal and a personal truth-telling theme going on here in this podcast. Kim, I want you to listen to me.

People first, then money, then things.

Been my motto now for 20 some odd years or longer actually, and the truth of the matter is your parents and even possibly you seem to be putting money, believe it or not, before themselves. It's true if they put things in an irrevocable trust and everybody an irrevocable trust means you can touch it. It no longer is part of your estate.

It's now out of your hands. Somebody else is in control of it. You are not. So that's a big deal, cause a lot of times you think things are, oh, I'll just put it in an irrevocable trust. I can then go into a nursing home. The estate will pay for it. Everything will be great, da da da da. Listen to me and listen to me closely. You can put it in an irrevocable trust, and somebody else will have control over it.

But what happens if something happens to the person who has control over it. What happens if all of a sudden they die and the next it can become very, very complicated, Number 1. Number 2,

you do not want to put money before your own benefit.

To go in a nursing home where a state pays for it on Medicaid, if you think the care in a nursing home on Medicaid is going to be as good as when you are a private pay patient, I am here to tell you you are going to make one of the biggest mistakes out there. It does not work that way. Are you at all listening

to the news about how certain bills that are being passed could cut down on Medicaid, could cut down on Medicare, can make it very, very hard. There are many, many nursing homes for many reasons now that are starting to actually close down because they don't have the money anymore to continue to run.

So to put this money, your parents' money, in front of their care just so you could be OK and have the money, the house can be protected is not something that I advise. Their money is there to take care of them, to make sure that when they get older.

They have the care that they deserve in a respectful way if they go through the money, OK.

Then you just have to figure that out, but your parents' well-being should come first, so I would never ever do something like that. Obviously a revocable trust absolutely makes sense because they can change it any time they want, and they're in control of it. But if something happens to them in case of an incapacity, whatever it may be, because they end up in a nursing home, let's say with Alzheimer's.

You can sign for them. People can take care of them while their money is still in trust, and if anything did happen to them, they die. It can pass without probate. So therefore, I have a problem with the revocable trust. That's why the must have documents exist.

The four must have documents which happen to be a will, a revocable trust, an advanced directive, durable power of attorney for healthcare, and a financial power of attorney. Go to musthavedocs.com. $99 there are

$2500 state of the art documents if you went to a lawyer, that's what they would cost you. So this is something that you should look into and you can change them any time you want and on and on. It's must have docs.com that you should do. But the rest of it isn't wise. I can go on and on and on, but that's my opinion. KT, go on.

KT: OK, next question, Suze, from Yvonne. Hi

Suze: It's kind of mysterious with this one.

KT: Well, this one is interesting.

Suze: And I aren't they all?

KT: yeah, but this one ready, this reminds me of someone we know. I want to create a trust and put our parents' house into it. My wife and I have our own trust thanks to you. I have 3 siblings. My mother wants the house to be split among the 4 kids after she transitions into whatever is next.

Now ready, Suze, listen carefully. The risk is if she moves on first. My father has a girlfriend, and we're not quite sure what he would do. This is the worst part. Ready, they're from the state of California. My mother and father are still legally married. My mother has been living in the house all her life with one of my brothers. My father lives in a nearby city.

The house is in the state of California...

Suze: Community property state.

KT: So Yvonne goes on, Suze, to ask all these what ifs. What if my father does this and what if my father dies?

Suze: Well here's the real question at hand, Yvonne, how is title to this house held?

Because if the title to this house is held as joint tenants with right of survivorship and mamma dies, it does not matter if she has a will. It does not matter if she has a trust, cause listen to me closely, everybody, how you hold title to an asset overrides the wishes of any will or trust.

So if the house is held in joint tenancy with right of survivorship, it will immediately go to your father.

Now it's in his name, and if his will says hey, it's to go to my girlfriend or whatever it is, guess what you have just been disinherited. Now if Mommy is living in that house with your brother.

Your father is not living in that house. Obviously has another girlfriend, yet they are still married. The proper way for Mommy to do it after she's divorced is to get the title to that house in just her name, number one.

Number 2, then transfer it to the title of a trust held for her benefit while she's alive, and upon her death it goes to all the four kids divided however she wants to do so, but she needs to deal with it now because otherwise your greatest nightmare.

If she dies first is absolutely going to happen. So the only way to prevent that is to stand in your truth right now and deal with this. Now, I'm not exactly sure why she hasn't divorced him, but maybe it's an amicable relationship, and maybe he's willing to say, Oh yeah, I'll take the house out of my name and just put it in your name right now, and that's it. But you have to make sure

that she has a trust and it goes to you guys because otherwise what's going to happen if she doesn't have a will, she doesn't have a trust and it's just in her name and she dies intestate in the state of California, the next beneficiary will be her husband. So bottom line, you have got to get, she's got to get divorced and somehow figure that out.

KT: So step one, get a divorce. Put the title only in her name and put the house in a trust in her name.

Suze: That's what I would be doing. But they might have reasons why they haven't gotten a divorce. Like, is she getting his Social Security? Is he, I don't know why.

KT: She should just ask him to put the house title in her name.

Suze: Yo start with,

KT: Yes.

Suze: And then make sure that she has.

It so that her will, her trust leaves it to the kids or if she's really freaked about it, put all four kids on the title and have them all be joint tenants with the right of survivorship, but that would be a serious mistake if she did that because they wouldn't get a step up in basis and on and on. All right, OK, see how complicated things can absolutely be.

KT: Yeah, all right, so here's one more family matter ready.

My siblings and I inherited my aunt's IRA in 2020. Am I able to roll it over to my IRA I have with RBC? That's the Royal Bank of Canada, everyone, good, good bank. So I don't have to withdraw within 10 years and not be able to reinvest the large sum, which is about $100,000. That would give me 5 more years of investment before I have to start withdrawing.

So what should Kathleen do?

Suze: Here's the thing, Kathleen.

The question you're asking is your siblings and you inherited your aunt's IRA in 2020. The date 2020 is important because the Secure Act now is in effect. So then your question is, am I able to roll it over to my IRA I have with RBC? And the answer to that is no, you are not.

Because you are inheriting this IRA, so you have got to open up what's called an inherited IRA. You cannot mix this money with your IRA that you already have, and you're saying, can you do that?

So you don't have to withdraw the money within 10 years and not be able to reinvest the large sum. You are going to have to withdraw the money within 10 years, and my advice to you would be do not wait till the 10th year to withdraw it because it will be taxed to you as ordinary income, and that will be a big deal. You should be taking out a tenth every single year,

and pay taxes on it at that point, so you can't outsmart this one, my friend. All right.

KT: Suze, just one more question since we're talking about RMDs, this one's really a good one from Janet. She said, I've got a problem with not starting to take my RMDs at age 73. I was misinformed on when to start.

Having been told as long as I am working full time, I don't have to start taking RMDs. I recently turned 76, and I'm considering retiring very soon. Suze, can you advise me on what I need to understand and do?

Suze: Funny because I...

KT: A lot of people don't know anything about this.

Suze: A lot of people don't know anything about a lot when it comes to RMDs, but I actually wrote Janet back and told her exactly what to do, which is what I don't know is, is she talking about RMDs from an IRA,

or is she talking about RMDs from an employer sponsored plan such as a 401K, 403B or TSB. Because KT,

the truth is, as long as she is working full time, which obviously she is right, because that's what it says, that you don't have to take RMDs from a 401k or a 403B or a TSP.

However, that is not true for IRAs. So if you're still working, everybody and you are working full time, which again Janet is.

If you're working and the RMDs are from your employer's plan, your 401K, 403 or TSP, you do not have to start taking them at 73.

So it is important that you understand that's the rule for retirement accounts from employers. However, if you have any IRAs or you only have IRAs or whatever it may be, then that doesn't apply. So if you have an SEP IRA, a simple IRA, and any of that.

You have to take RMDs from the IRAs even if you are working full time. Let's just say she had some

IRAs and she missed her RMDs. Then she has to take those as soon as possible. She needs to fill out forms with the IRS, which she really should do go see a CPA and have them straighten this out, and the IRS may waive the penalties entirely if she can show reasonable cause and everything. But yes, you look at me, you have a question.

KT: Yeah, I do have a question.

Suze: Uh oh.

KT: Should I still be contributing to my SEP IRA?

Suze: You could be if you want to be.

KT: You think it's worth it?

Suze: Listen, everybody, just because you have to take out RMDs once you turn 73 and soon to be 75, they'll change that, doesn't mean that if you have earned income like both of us do, KT, that we can contribute to your SEP IRA. You could put $70,000 in there if you wanted to.

And all and take it as a tax write off and then you could convert it to a Roth IRA if you wanted to. That might be a strategy that we look at however, and I've talked about this, everybody on the podcast before, sometimes maybe you're just as well off if rather than taking a tax write off and putting it into something that's going to compound for you over the years and then you go to take it out and you pay even more in taxes.

You might be better off just paying the taxes now and then investing that money in an individual brokerage account like you have KT.

And you don't pay taxes on that while it's in that stock, let's say that you bought and when you go to sell it, if it is held over a year, you pay capital gains tax on it, but it's still compounding as if it could be making more money in the long run it could be making more money after taxes.

KT: I'm not gonna put any more in.

Suze: I, well, you know, we should look at everything and just...

KT: I need to find an advisor.

Suze: You think that's cute, don't you? You think that's cute, right? It's like, but I don't...

KT: Suze, what should I do?

Suze: The only thing we could contemplate really is putting in a lot of money in our SEP IRA, converting it, paying taxes now, and letting it compound forever tax free.

However, I just thought I don't wanna do that, but we can, we can play around with that. But notice I said the word play around. So anyway, all right, now what are we going to do today?

KT: Well, we could make birthday plans.

Suze: No, I've already planned it out. So many people having birthdays this month,

KT: It's a good month.

Suze: Yeah. So, all right.

KT: Wait, it's going to be a good month. June, June are a lot of birthdays,

Suze: So many.

KT: Remember when we were in New York working with Anderson birthday Anderson Anderson Cooper's birthday is on the 3rd.

Suze: Right, and Kathy Griffin and I'll never forget this one. CNN is live television, absolutely live, and Kathy, don't even ask me how she talked me into this. I like, let's go bust into his set live live and I said, how we gonna get in? And they go, You're Suze Orman. I'm Kathy Griffin. They're not gonna stop us, right?

And so we got there and we walked right through and they said, Oh hi Suze, hi Kathy... Anderson, yeah, and go and Cathy goes, we're going up to see Anderson, OK.

Bam, we go up, we walk in, we have balloons, we have flowers and a cake, and boy, you know,

KT: and they surprised and shocked him and Anderson's a rather shy guy, shy guy.

Suze: He's a shy guy. He's very shy and very private all the years that we would sit in the, um, makeup room before we went on. I did the Anderson show a lot back in 2007 and 2008 and 2009.

And we had the same makeup room. It was one big makeup room. Never said a word, not, not a word ever. And it was like, OK, this is very serious time, but he's so great. I love him alot.

KT: Yeah, he was always quiet before. He went on.

Suze: Unlike us, huh, KT?

KT: And we would be chatting and say nice tie, Anderson. No response.

Suze: Anyway, all right, so until Sunday when I have no idea what I'm going to do for Suze School, there's really only one thing that we want you to remember when it comes to your money. What is it, Miss Travis?

KT: People first...

Suze: then money...

KT: then things. Now you stay safe... And happy.

Suze: All right, bye bye, everybody.