May 04, 2023
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On this Ask Suze and KT Anything episode, Suze answers questions about ex-spouses and Social Security, investing, gifts with strings attached, leaving money to a pet and more.
Music: Music In.
Suze: May 4th 2023. Welcome everybody to the Women and Money Podcast and Everybody Smart Enough to Listen. And this is Ask KT and Suze Anything...
KT: We have so many great questions here. This, this is the best podcast question lineup
KT: that I have put together for all of you in a very long time.
Suze: KT also told me because of the nature of these questions she's picked out the quizze for herself, right. So she's going to be asking it because she told me we sat down and I said, why are you smiling? And she said, let me tell a story.
Suze: All right, because she wants to tell you. And she said these are really...
KT: Want to start with the quizzie?
Suze: No, these are really, really different questions that I have been saving because they're really more emotional in nature than anything else. So I have the quiz for you Suze, today.
Suze: So, all right, here's your, that quizzie will be to me. All right. All right. I can't wait to hear why these questions are so different than all the others because I wait and see. Right.
KT: It, it talks about a Roth once but in a much more interesting way. All right. First one, Suze is, it's called a strange question but she didn't sign it, but it's called a strange question.
KT: So, just that title got... caught my eye, but there's no stranger...
Suze: Did it catch your left or your right eye?
KT: Both, both. A strange question: my ex-husband and then she says we were married for 12 years who totally was dishonest in every possible way with our divorce settlement, left me penniless and powerless
KT: after years of listening to you, Suze, I worked my way back up. So, congratulations on that stranger. I own a home outright. I have money in a Roth retirement account and will be collecting Social Security. However, my ex's Social Security is more than mine.
KT: But I feel, and I guess it's half, right.
Suze: She would, I think what she's saying is half of his is more than her total hers.
KT: But I feel like if I collect half of his, he will be back in my life. Suze, what should I do?
Suze: Collect half of his? Right. If you could collect all of his, listen to me,
Suze: he will not be back in your life. He will not even know that you are collecting half of his on any level. That's just something that you do directly with the Social Security administration. So, girlfriend don't punish yourself and get less money because you think he's gonna be back in your life.
Suze: Maybe at this point you can think, oh, well, this is one good thing I got from him at least. And then just smile sometimes...
KT: It's easy, she just goes online, right?
Suze: Yeah. Just go online. You do it. He'll never ever. No. All right, great.
KT: So the next one is from Johnny.
KT: When I read the words risk on and risk off, what do they mean? This is investing... He said that when he reads this, when he invest in the stock market, I have no idea what that means.
Suze: A lot of time analysts will tell you all right, the risk is on or they'll say the risk is off and what that means is when risk is on, they think the stock market is looking good.
Suze: And therefore it's really wise to be investing in the stock market and to take that risk. When they say the risk is off, that means they do not like what they see in the stock market and therefore don't take a risk and invest. It's usually for like day traders and things like that. So Johnny must be a day trader. So when risk off
Suze: is something that is said in regards to the stock market, they don't want you to be buying. When risk is on, it's like, come on, let's take this risk, let's put it on. We'll probably make some money.
KT: And where do you see that?
Suze: Usually I see it all the time and some of the reports I get, especially the ones I get from Katie Stockton. She'll say the risk is on, the risk is off. She'll say it all the time. Yeah.
KT: I didn't know that. Ok. Next question is from Marcia. I have a dilemma. Ok. Well, this is an interesting one and I bet it happens to people often ready?
KT: I have a dilemma. My husband's parents want to give us money to buy a home outright, but only if the home is in the name of my husband
KT: and... ready for this, Suze, this is... if he dies, the home goes back to them. And then Marcia said, Suze, that makes me feel horrible. But yet my husband wants to do it anyway. What are your thoughts?
Suze: You know, so many times, especially with kids who have trusts that are set up that they're to get money,
Suze: the trusts are actually controlled and the trust will say you cannot leave this money to anybody that you marry. If you use this money to buy a home and something happens, the money comes back to the trust and it's like they just get you and they won't let you go. And I can see why your husband would want to do that. Obviously, he comes from a wealthy family.
Suze: Or a family that's been really good with money.
KT: Or they don't like Marcia.
Suze: No, no, they like... this has nothing to do with Marcia. This has to do with, they are going to give enough money to buy, to buy house out right. That is a lot of money to do so that their son can be secure.
Suze: But what they're not understanding is it's going to cause trouble. In my opinion, it already does. Which is why Marcia wrote.
Suze: I have to tell you the times that I have been actually asked this question
Suze: where we had to really make a decision because they were my clients or whatever.
Suze: I asked the husband or the wife because sometimes it's the wife, to pass up this offer, your husband will inherit this money one day anyway, if they're going to leave it to him and you need to feel like you and your husband are equal in this relationship
Suze: And you will never feel equal living in his home. Knowing that if the price of that home goes up from 500,000 to a million and a half, you don't participate in it. So your wealth isn't building. So I would probably pass on it and see what you and your husband can do together as one. That means you have to rent. So rent
Suze: That means you have to save together to buy a home together. Then wait and do that. If this had just been an outright gift where, of course your name would be on it and of course, if something happened, it would go to you. But think about it, you'd be living in this house. Something happens. He dies and now you're gonna lose your husband and you're gonna lose the home because it's gonna go back to his parents.
Suze: I have to tell you I wouldn't be doing it. Money's not worth it if you ask me. All right KT.
KT: I don't think you would answer that way.
Suze: What did you think? I would say.
KT: Have grandchildren and see what they do.
Suze: You're so funny. So Funny.
KT: Next question is from Minnesota.
Suze: You know what? I want to say something else. Sometimes when the parents do something like that, it's also their way of continuing to control their son because think about what that would do to the wife,
Suze: you know, so I just remember people first then then things. don't do it.
KT: Ok. The next question is from Minnesota.
KT: You know, Suze, I was thinking about Minnesota and how we used to love to go to Saint Paul. And it was fun.
Suze: Especially in January. Everybody. That's where I did all nine PB PBS specials. Can you believe it's still running everybody?
KT: We used to stay in the, like the presidential suite of the Saint Paul Hotel is a little hotel in this square in Saint Paul, in Minnesota. And,
KT: and, and that particular week when we were there was the first or second week of January, they would have the ice queen parade and the ice sculpting um exhibition and contest and it was just magical for us to be in snow.
Suze: My favorite KT, is when we went on that ice drive with the police.
KT: That was fun. Ice fishing. So, I live in Minnesota and one month ago
KT: I bought a lottery ticket and won $50,000.
Suze: Yea baby!
KT: Oh, wait, this is complicated, Suze. I did not tell my husband my friends or anyone. In fact, I have not even cashed in the ticket. Suze, here's why ready. There's a big, uh oh..
Suze: Should I guess it?
KT: No, let me tell you my husband and I are in the middle of a divorce...
Suze: I could have guessed that!
KT: and this is all the money we have. He has gambled everything away. And when I found out about his gambling, our marriage was over. Suze, what should I do?
KT: So, basically how does she protect the 50 grand and keep it in her name?
Suze: So, what I would do if I were you number one, make sure you sign the back of that ticket, right? Because if you happen to lose that ticket and it's not signed, anybody can cash it in.
KT: Put it in a safety deposit box too.
Suze: Now, what's important, and I don't know this for a fact, but every single state has an amount of time
Suze: that you have to cash in that ticket until it's null and void and it can be 60 days, I think in Florida it's 60 days KT, right? Or 90 days in many places and a year. But you said that you did it one month ago. So no matter what, I'm sure you're in the time limit. Look up what is the time limit for Minnesota.
Suze: Actually KT...
KT: Wait, I'm gonna look it up.
Suze: Right. So KT T s looking it up and it is one year she's showing me. All right. So you have one year, to cash this in and just
Suze: keep it in a safety deposit box, make sure that it's good. Everything's good about it and again that you signed it, do not feel bad about not telling him because or anybody because he gambled away all of your money. Ok. Get the divorce, you know, take a little time for the divorce to settle and go your separate ways, cash it in at that time and for a while
Suze: for maybe ever don't tell anybody because the last thing you want to do is have it get back to him and who knows what he would do. So just do that
KT: Safety deposit box, forget it and set the alarm of when to cash it in.
Suze: The way I would view this
Suze: is that it's God's way of taking care of you just so you know. Ok.
KT: All right. Next question is really fun and, and one that I'm gonna take, I'm gonna take this one very seriously, Suze. This is,
KT: this is from a dog lover. It said dog lover. How can I leave $20,000 to my dog, Maggie?
Suze: Oh, sweet dog lover. So number one, you can't leave money to a dog or cat. But, uh, let's say Maggie is actually considered a possession like your dishes, like your silverware... KTs looking at me.
KT: Don't tell her that. No, no, no.
Suze: So you can leave your possessions to somebody,
Suze: but you can't leave money to Maggie. So the way that you would do it, however, is either through a living revocable trust or a will. That first, let's say, let's say all you had is a will. You would do what's called, you would name a pet guardian
Suze: and leave that money to that person to take care of Maggie. So you can listen to this over and over again. But it, you would write something like this or create this in a will where you say something like. I leave my and let's say, I don't know what kind of dog she is, but let's just say Maggie is a golden retriever. You would say I leave my golden retriever,
Suze: Maggie and $20,000 to KT. Let's just say it was to KT because you, she would take such great care of her. With the hope that the money be used for Maggie's care and maintenance,
Suze: but you also have to make sure because you don't know that KT is going to survive Maggie. So then you have to have a second part and you need to say if KT does not survive me. Right. And Maggie, right. I leave Maggie to X, let's say you leave it to KT's sister Lynn
Suze: with the hope the money will be used for Maggie's care and maintenance in many online programs and things like that. There are pet bequests. So just look it up and that's how you could do it, but you can absolutely do it. There
Suze: are people who leave millions to their animals and boy, we so understand that. All right. Next.
KT: Ok. This is from Jasmine. Hi, Suze. And, and listen to the subject. This is why I picked this one and it's a little bit sad. It says we're in a pickle help.
KT: Oh, so Jasmine said my 83 year old in-laws live by themselves. This is very recent, over Easter weekend my husband found his dad unconscious in the tub. Long story short, dad is now in a nursing home after a week of being treated in the hospital, he's incapacitated and my mother-in-law has progressive dementia.
KT: Suze, my in-laws do not have a trust. We managed to set up a will, financial power of attorney and durable power of attorney for health care for my mother-in-law. She's lucid in the morning but goes downhill as the day progresses. My father-in-law has nothing. No trust, no will. And we're not sure if he'll ever be back in shape to be able to draft a trust for him to sign.
KT: The house is in both of their names, bank accounts and IRAs are also in their names with the two sons as beneficiaries. Suze, at this point, what can we do to protect their assets?
Suze: Yeah. You know, it's funny you don't know this KT but I actually wrote back, Jasmine and Jasmine's been writing me back and forth. And the last correspondence that I got from Jasmine
Suze: because there's really not a lot they can do at this point. But the last correspondence I got from Jasmine was that Suze, please tell everybody how important it is to have a will to have a trust to do these things that you've been telling everybody about, put it in place. But essentially what I did tell Jasmine
Suze: is the good news is since the house is in both of their names, right? Chances are daddy is going to die before mommy
Suze: and mommy does have a will now. So if daddy dies before mommy, the house will go to mommy. When mommy dies, then it will be dictated by her will. So that's good. Their retirement accounts do have beneficiaries. So the two sons, so that money when they die will go to the two sons, right. Unless you know the primary beneficiary was mommy.
Suze: Now that becomes a little difficult because mommy is also incapacitated. So who makes those decisions? But the good news is that's why they have a financial power of attorney and everything. So that's good. So Jasmine really has taken care of it.
Suze: Right. The bad thing will be if mommy dies before daddy and then daddy's totally incapacitated. If that happens, then they're going to have to go down to court, probate court, get a conservatorship for daddy. He has to be declared incapacitated and then they'll be able to sign and take care of everything
Suze: But that's why it's so important to do this now. All right.
KT: Ok. Next question, Suze is from Robert. Suze, you keep saying over and over again that I should pay my home off by retirement and then he says I don't get it.
KT: I'm 50 years old. I paid $400,000 for a condo. I put 200,000 down. It's 50%. That's a lot. I did a third..
Suze: He probably had a house. He sold it and put all the money into it.
KT: Well, and we don't know for the payment. Ok. So let's just hear his story. So he said I,
KT: I took out a 30 year mortgage at 6%. Payments...
Suze: He's recently done this if it's at 6%.
KT: Yeah. Payments for my mortgage are just $1200 a month that I can easily afford from the interest I earn on my money. So why would I want to pay it off and lose the tax rate off. He's 50. Yeah.
Suze: So, Robert, right now you're making interest on that money
Suze: Right now because interest rates have gone up, you're making four, maybe 5%. Can you just remember a few years ago, two years ago when interest rates were at 0% you couldn't get an interest rate for, for anything. You know, I remember when we first started with Alliant Credit Union
Suze: and the interest rate they were given was 0.6%. And all of you went gaga over it because it was the highest interest rate out there. But there were, there were times in life when interest rates were really high, then they went all the way down, then they went high again and now they're high again. But don't think that they're always gonna stay up here because they might,
Suze: but they also might not. That's number one. When you say, why would you want to pay it off and lose the tax write off? Do you know that after 20 years of paying this when you will be 70
Suze: on a $200,000 mortgage, you will still owe $100,000 on it. Why is that? In 20 years, you only paid 50% of what you owed. But then in the next 10 years remaining, you'll pay the other 50%.
Suze: And that is because the tax write off is only in the beginning years, if you are paying essentially $1200 a month right now, probably $1000 a month of that is interest and will give you a tax write off. Absolutely.
Suze: But if you look at your amortization schedule, you will find that, all right, for the first eight years, maybe you have 1000 or $900 of a tax write off per month. But then it starts to go down. Why is it so high in the beginning months there? Because, and I've said this before to all of you, but I'm gonna say it again because Robert obviously didn't hear it.
Suze: Is that chances are the bank thinks that there's a good possibility in seven or eight years, you will sell this condo or your home if you have it
Suze: And they want the majority of their interest up front
Suze: while you still own it.
Suze: So that if you do decide to sell it, they actually made more money on you interest wise because your principle will still be high.
Suze: Then if you kept it the entire time, I'm sure if you looked at your amortization schedule that after 20 years, your interest payments will only be $500 a month after 30 years, maybe they're gonna be $200 a month. And towards the ending years of your mortgage, it will be $20 a month, $50 a month, there will not be any tax write off any more. That's number one, that's a big one.
Suze: Number two,
Suze: how much money do you need in a bank account, in a credit union
Suze: to generate $1200 a month of a mortgage payment?
Suze: 1200 a month is $14,400 a year.
Suze: Even at 4%
Suze: you would need about 400 to 500,000 at 4% is $20,000 a year after taxes that gives you your $14,400 a year or $1200 a month. You need 2 to 2.5 times what you owe.
Suze: So don't you think you would be better off just paying off the mortgage,
Suze: taking $1200 a month is what you would save on your mortgage payments and start saving that money up again at these high interest rates. Because whether you know it or not, 6% is still a very, very different interest rate than if you were at 2%. And again, you never know what can happen.
Suze: That is why I tell everybody if they plan on staying in their home, whether it's a co-op, a condo, a duplex, a single family, whatever it is. If they plan on taying in that home for the rest of their life, their number one goal is to have it paid off by the time they retire. If you don't get what I just said now,
Suze: I don't know what to do. All right, next question KT.
KT: Ok. So, Suze, it's quizzie time and, and this quizze... I resonated with because it's on the news every day. This is a, this is a serious issue going on. It's from Angie. I didn't listen to you, Suze. I didn't listen to you. And I cosigned a loan for my son
KT: on an $80,000 truck. 8% interest for seven years. Oh my God. His payments were $1300 a month and he was making the payments. At least I thought he was. You ready?
KT: Suze, he called me and said I went outside and my truck was gone. I of course thought it was stolen, but it turns out it was repossessed. He said the good part, mom is that we no longer owe that money since the truck is gone. Is that true? So, Angie's asking you, Suze, is that true? No, Angie.
Suze: Angie. Listen to me, sweetheart.
KT: It ain't that easy. It's not true.
Suze: Angie, obviously, I don't know what made you cosign a loan for your son,
Suze: when you knew, obviously, because you didn't listen to me and I used to say, don't cosign, don't cosign for anybody ever no matter what. So obviously you have a really soft spot in your heart for your son or he's an incredible guilt tripper, right? I don't know what made you do it, but you did it.
Suze: But if you ever believe him again when it comes to money, then you should be really, really angry at yourself because what he told you is absolutely not true. Which is why you wrote in to the Women and Money Podcast because you knew in your gut that it wasn't true.
Suze: However, there's not a lot you can do about it. So, here's how it works.
Suze: He probably financed it with the car company that he bought the truck from.
Suze: Now, they repossessed it. All car companies usually have a used car lot as well. Have you ever noticed you drive on and they have new cars, but then they have a whole lot of used cars as well. This car now will go to auction
Suze: and somebody will bid on it a low bid. So let's say that he still owed $70,000 although I doubt highly you put down 10. Ok.
Suze: Now the truck goes to auction
Suze: and it sold for $50,000.
Suze: You are going to still owe the difference between $50,000 what it was sold for and the $80,000 that you signed for.
Suze: So then what they're gonna do just so, you know, is they're gonna take that truck that they paid 50,000 for and put it on their used car lot and probably sell it for 70. That's how car companies make money, but you are going to be responsible for whatever amount of money they sold that truck for
Suze: and what you owe, the difference between the two. It's gonna be probably at least 30 or $40,000 of difference at that 8%.
Suze: So, you're gonna have to pay that until it is paid off.
KT: What if you don't pay it?
Suze: Oh, no, she's gonna pay it or they'll come after her.
Suze: Right. They'll either come after and put a lien against her. They'll take her, they can, they can garnish her wages. No, they're brutal.
Suze: The car, people are brutal.
KT: Yeah, this is becoming a dilemma. That's happening. More and more. People don't have the money to make the payment.
Suze: If you remember everybody, I told you
Suze: a few months ago that repossessions of cars were higher than they have ever been. And that's still true to this day. So with the number of repossessions that are out there when they do go to auction, they go for a lot less than they normally would have gone for. And there you go. Angie. I'm so, so sorry. I mean,
Suze: I don't know your finances but a lot of times when this happens, people claim bankruptcy, believe it or not.
Suze: Oh KT...
KT: That comes to an end.
Suze: These were all kind of sad.
KT: They weren't that sad. They were interesting. They were a little bit different. They were slices of life. So, since it's Cinco de Mayo tomorrow, everybody go have a margarita
Suze: Or you can do what we do every single day. And that is to say... Angie, this is for you. Angie, you got to say it because you got to feel this way. You got to get over this today. Wherever I go, I will create KT take it
KT: A more peaceful, joyful and loving world.
Suze: And if you do that, you will be unstoppable. Bye bye everybody.
Music: Music Out.
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