Podcast Episode - Don’t Sell The House To Get Out of Debt

On this Sunday Ask Suze & KT Anything episode, KT asks Suze your questions about smart investing, trusts for children, worrying about a financial crash and so much more.

Listen to Podcast Episode:

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Podcast Transcript:

Suze: October 19, 2025. Welcome everybody to the Women and Money podcast, and everybody smart enough to listen. This is...

KT: Ask... no, this is Sunday. I was about to say this is Ask Suze Anything, but it's Sunday, and on Sunday, guess what, you can still ask Suze anything. I'm doing the show with her on Sunday.

Suze: So here's the thing, everybody. As you know, if you've listened to the Women and Money podcast and everybody smart enough to listen, we are in Italy as you are listening to this, but we pre-recorded it so you wouldn't have to just listen to best of the whole time we're gone. However, because I don't really know what's happening out there in the economy and things like that, it's just better that KT and I do—for the whole time we're gone—Ask KT and Suze Anything.

And I'm starting to like it. Maybe KT, what do you think? Should we just go to once a week with just us?

KT: Why not?

Suze: Maybe twice a week with just us?

KT: Why not?

Suze: Yeah, maybe we'll do...

KT: And how about YouTube and us.

Suze: Oh, here we go. All right, so she wants me to tell all of you, you should definitely subscribe to my YouTube channel. Go to youtube.com/SuzeOrman. And just subscribe. Just do it. You won't regret it. So that's why it's KT and me today. All right, KT, school me.

KT: All right, my first question is from Maria. She said, Hi, KT and Suze, I've been listening to you for a couple of years now, and I'm so afraid of losing any money. I just can't afford it.

Maria said, I do have a Roth IRA, but I would like to do more. I know you've spoken about having a Roth IRA in VOO, but I'm not sure how to go about that. Please help. So sweet, very sweet. So let's help Maria.

Suze: But first, Maria, I have a question. You say that you have been listening to me now for a couple of years and you're so afraid of losing any money. KT, that kind of means we haven’t really done a very good job for those two years that she's been listening. Because one of the main objectives of the Women and Money podcast—and everybody smart enough to listen—is to diminish your fear, to take it away, to instill courage and bravery in you to just try.

So Maria, what I would say to you is... and I think about this all the time. I've given this example, and we still do it here when we go in the ocean. Sometimes when we go in the ocean, it’s really cold, especially during the winter months. We just don't go in and jump in. We go a little bit—especially me. KT just jumps in.

KT: I was gonna say speak for yourself.

Suze: I know who you are. So, little by little. And as soon as I get used to it, then I take the final dip in. So how would you go about it? You would go about it little by little. Decide on an amount of money every single month that you feel comfortable with putting into an ETF like VOO. You say you already have a Roth IRA, so within the Roth IRA just do exactly what I just told you to do with VOO, and I promise one day somebody’s going to be happy—and that will be you. Got it, KT?

KT: You and VOO.

Suze: You and VOO. All right, doll.

KT: OK, my next question is from Jude, and Jude said, I am...

Suze: Hey Jude—(singing) that should have been Maria. Don't be—Isn't it? Don’t be afraid. Yeah, so hey Maria, don’t be afraid.

KT: All right, so hello Suze and KT. I'm a 70-year-old retired female. I have a whole life insurance policy I bought two years ago just so my two children will have a little something upon my passing, along with a small 401(k). My annual premium is $2,569 for a $50,000 insurance policy with Mutual of Omaha. There are no paid dividends. Is there something better or is this a good policy?

She said, I keep doubting if this is the best thing for the money. I could put the premium into my 401(k) if that makes more sense.

Suze: Well, my face looks like this because I answered her directly. I told Jude, let’s not worry about the kids. You’re 70 years of age. You are four years younger than me, OK? You are still young. Hopefully, you have vitality and you have a lot of living to do yet. So can we just start thinking about ourselves versus our kids? Really, everybody, if you pass something along to them, OK. But the greatest thing you can pass along to them, Jude, is them seeing that their mother is living life—not, “Oh, look, we got this money, but my mom didn’t do anything. She was miserable,” or whatever it may be.

So can we just change how you think? What I showed her was: you can keep this if you want, or if you simply took the $2,569 and you invested it for 10 years at an average rate of like 8 or 10%, you’d have about $45,000. For 20 years, you’d have about $160,000. You’d have far more to leave them—if you live your normal lifespan—than if you just have this policy. So yeah, you can do better things with it than that.

However, never cancel an insurance policy unless you know you are perfectly healthy. Period.

KT: She sneaks in and sees all my selections.

Suze: This last week I went a little crazy, as KT will tell you, right before we left—which is I answered so many of your questions personally, and all of you know that I did when you got them. And so I also, by the way, said thank you to hopefully all of you that sent in what the name or the subtitle of the Women and Money podcast should be. There are a few that we like a whole lot, right KT?

KT: Uh, again, there's many that we like.

Suze: So we'll pick one. We'll see. But you know, I sent every one of them back a little thank you note, and they went...

KT: Whoa.

Suze: So anyway, there you go. If you have a question, write in to asksuzepodcast@gmail.com. You never know when KT will choose it, but you never know when I’ll answer you directly. However, keep it short. Go on, KT.

KT: OK, this next question is from Leslie, and I think Leslie needs to have a little talk with the in-laws. Ready?

Loyal listener for over a year here. My brother-in-law is in money trouble. He owes $200,000 with a 12% annual interest in an unconventional loan that can be paid in as little or as long as possible. And then she wrote, sketchy—I know.

He's not good with money. When it says unconventional loan, something's a little awry. Suze, I originally thought a HELOC loan was a good idea, but they're at 18% where he is. I believe he should sell his house, which is worth about $500,000 to $600,000. Get out of this mess once and for all and start fresh. He has a family. They could rent or live with relatives to truly save up and get ahead. What do you think?

Suze: No, she wants a tip on what he should do. And then hopefully she'll say, you know what, brother-in-law, you need to listen to Suze on the Women and Money podcast and listen to what she thinks you should do.

Leslie and brother-in-law, in case he’s listening: all right, I get you owe $200,000. But the goal is not to just get out of this debt. Because if we can’t figure out why you got into this debt to begin with, you’re just going to get into it all over again. Was it a gambling problem? What did it come from and why did you accumulate it and why is it at such a high interest rate?

Now Leslie, you say that you think that a HELOC would have been a good idea, but they're at 18% where he is. No, they're at 18% because his FICO score is so low that for anybody to even lend money on a house that has equity to somebody who is irresponsible with paying money back—that’s when they raise the interest rate. So another danger sign. So no, I would not, number one, take out a HELOC. And number two, I would not sell the house to pay off this debt.

Why? Because this debt, even though it may be sketchy, may be an unsecured debt, which means he can’t pay it, he can’t do whatever—they can’t take his house. Like, what kind of debt is this? If you sell the house, you pay off the debt, now they rent or do whatever—they have, you know, $300,000 or whatever they have in equity in that house—he’s going to blow it before you know it. Then they won’t even have a home to live in.

So therefore, we’ve got to figure out how did he get into this debt, why hasn’t he been able to pay it off, what’s really going on with him? So rather than giving him financial advice, you need to start talking with him in terms of personal advice—as to what the hell is going on with you and why. Because until you figure that out, you cannot solve this.

How many times have I said you can never solve a financial problem with money? And this man has a problem with money. Period.

KT: I actually thought you were going to say to sell the house. But it is true. First of all, an unconventional loan—hmm. That to me was the big red flag. He better fess up and tell the truth.

Suze: Yeah, first to himself.

KT: All right, next question is from Bryant, and Bryant says, Hi Suze, my wife and I are both 45 with two kids, nine and five. We have some questions about getting an estate plan together. I'm currently working in the New York City school system, and my wife is a homemaker. Should something happen to us, how can we set up our kids so that they can be financially stable? What type of trusts are out there so that we can provide them with income?

Suze: No they don't.

KT: Why?

Suze: They do, but they need something more than that, KT. (Suze makes the wrong answer sound)

KT: All right, sorry, I got that quizzy wrong.

Suze: Got that quizzy wrong. Listen, Bryant, you're both 45 and you have two minor children, so it's true that you need to protect them. Now you do not say in here that you own a home. It doesn't really say that you own anything, except these kids.

And what you want to know is how do you protect these kids? So the very first thing that you should do is get a term life insurance policy on both you and your wife, because even though you may have some insurance with where you work, it's probably one year's salary, so it's not enough to really set them up. And at 45, if you got a 20-year level term policy, assuming that you are both healthy, you could get $1 million, $2 million on each of you or more. And then if something happened to one of you, the other would actually be protected. If something happened to both of you, then your kids would be protected—especially if you left that policy to a trust.

Now this is where KT is correct. Ding ding ding ding. You should have—forgets about the kids for a second—you should have for yourselves a living revocable trust, an advanced directive, a durable power of attorney for health care, as well as a financial power of attorney. You really need to look into the must-have docs. Go to musthavedocs.com and check them out. They're $99 for $2,500 worth of state-of-the-art documents that are good in all 50 states. You can update them whenever you want. You can share them with your other members of the family, whatever it may be.

You need to do that to, number one, protect yourselves in case something happens—you never know what can happen. But really, if you have that in place, then maybe the trust could be the secondary beneficiary on your retirement accounts. Remember, your spouse is always the primary beneficiary on your retirement accounts, but the trust could be the secondary beneficiary where it would say how the kids are taken care of. Because kids can't inherit money—they're minors.

So therefore, if you want to make sure that they're set up financially in case something happens to you, but somebody is in charge of it until they're adults—and maybe you'll even set it up depending on how much insurance or whatever you have in there—maybe it is set up so that they don't get this money until they're 25, 35, 45. Because you need to be an adult in every possible way to handle money.

KT: OK, next question is from Robert. Hi Suze. We're in retirement with some new income from an apartment we are renting out. Besides that, our income is Social Security and our investments. We do have an emergency fund—enough for about 10 months of expenses—but we're concerned about the possibility of a real crash and are wondering if we should take 50% of our retirement investments and put it somewhere able to withstand, ready? A 1929 or a 2008 level crash.

Suze: So first, Robert and Liz, let me say this about 2008. That crash happened because banks were lending on homes that were underwater, no money down. It was so crooked how money was being used back then by the financial institutions, and one bank was selling a loan to another bank. They didn’t care if you qualified. It was no money down. It was horrific. And that led to the crash.

That's not where we are right now. Nobody’s doing that anymore. So we’re solid on that level. So stop thinking that way. 1929 was a whole other story—that’s not going to happen at this point in time again. So just get that out of your head.

I don’t think we’re ever going to have a crash like those crashes. However, that doesn’t mean that the market can’t go down significantly because something else happens—and we don’t know what that could be—but that could happen no matter what.

If you are afraid, you’re concerned for whatever reason—nothing I say should make you necessarily feel better. Because the truth is I don’t know. Do we have another September 11th? Do we have a cyberattack? What can happen of the unknown that could really cause everything to freeze up or do whatever?

Therefore, you need to do what you need to do to make yourself feel safe and sound. Because the goal of money is for you to be secure. Even though I still think these markets and everything have a long way to go—another year or so, especially in certain areas—I do not think that we are in an AI bubble by any means. And I could go on and on.

But what’s important here is you have to honor your own thoughts. You have to listen to your own fear about things. So only you know what's right for you, and whatever decision you make, don’t ever spend time thinking about “Did I make the right decision?” Make the decision you made right. Period.

KT: So Suze just quoted Dr. Ellen Langer, who was a guest on the Mel Robbins podcast. And we were listening to it. We like to take our infrared saunas at night and we listen to books or podcasts or whatever we think we could learn from. It’s very relaxing and we just love the thinking of this doctor. It’s called The Mindful Body. So listen to it if you can. It’s great.

Suze: Actually, KT, we learned two really important things from the doctor. The first one was what I just quoted you, everybody, which is: don’t question whether you made the right decision. Make every decision you make right. We thought that was brilliant.

And the second one that we loved—among others—was: rather than adding more years in your life, add more life to your years. And KT and I, especially at our age right now, really love that one. So that’s where that came from.

KT: Yeah, Dr. Langer, that's our favorite, and we live by that. We add life to our years.

Suze: All right, go on.

KT: All right. So this next question: I currently have $515,000 invested in a taxable brokerage account all in the Fidelity Total Stock Market Index Fund. I'm 59 years old, and I think it’s time to cash this position out and put the money in a safer investment.

See, Suze, people are getting skittish. John said, I spoke to my accountant. He advised me—ready?—to cash half of the fund out this December and the balance right after the first of January. My question is: do you have any suggestions on safer investments other than equities?

Suze: Well, John, I have to tell you, I don’t think the advice that you got from your accountant is the best advice at all. And here is the reason why—KT just gave me your email. The $515,000—everybody, listen to me closely—that John has invested is in a taxable brokerage account in the Total Stock Market Index. Over the past year, two or three, that has gone up considerably.

Even if he sells half this year and half next year, he’s going to owe taxes on that money. That means the taxes that he paid are no longer available for him to compound or invest—it’s out because he’s paid taxes on it. Now he’s reinvesting that money in something that’s also going to be taxable.

What could he do instead? John, you have in your 401(k)—not a Roth 401(k)—in your traditional 401(k) $450,000. If it were me advising you, I would have told you: listen, if you want to become more conservative, you have to look at your money as a whole. Where can you take money out that you don’t have to pay taxes on, and in the future it would even help you more if it didn’t grow that much?

That would be your 401(k), because when you go to take money out of your 401(k), number one, it’s going to be taxed as ordinary income. Next, you’re going to owe RMDs on that money. Therefore, if I were you, I would come out of the market with the 401(k). If you’re going to quit your job, OK, or whatever, you can then do an IRA rollover with that money—no taxes—and put it in treasuries, do whatever you want with it to keep it safe and sound. But guess what? You never pay taxes on it.

And there you go. You accomplished the diversification but didn’t have to pay taxes. And therefore, you could just let the $515,000 in the Total Stock Market Index ride, because it’s going to go up, most likely. It’s a great place to be diversified. You’re doing exactly what you should do. The rest of your money, the Roth IRA—fabulous. You don’t have to worry about taxes there. But if it were me, I would use the money in the 401(k) plan and not do what your accountant told you to do.

KT: So this next question is from Orhan. It's an interesting name, isn't it? Orhan.

Been a listener for years and thank you both for all the knowledge you give us. I turned 73 on the last day of 2026, December 31st. Wow, that's a new...

Suze: This is going to be your pop quizzy.

KT: All right. Is my RMD calculated on the total traditional IRA's value as of December 31, 2025 and can I or must I access my RMD throughout the entire 2026 year even though I don't turn 73 until the last day of the year? I don't want to take out two RMDs in 2027. Thank you.

Suze: Pop quizzy.

KT: All right, so he's turning 73 on the last day of December. I think he only needs to take one RMD.

Suze: But he's not turning 73 till the last day of 2026. Can he—first question—can he, before he turns 73, anytime in that year, can he take out his RMD before he turns 73 to satisfy the RMD for 2026? Yes or no?

KT: Ohh. All right, KT, this is gonna be a guess. I'm guessing. I think that he can pass. I think you get a little grace period and he can do it in '27.

Suze: If he does it in '27, however, because he turned 73 in '26...

KT: On December 31st—on the last day.

Suze: If he takes it out in '27, he's gonna have to take out two in '27: one for '26 and one for '27. So now he subjected himself to two RMDs in 2027. Is that his only alternative? Yes or no?

KT: I don't think it's his only alternative.

Suze: So what else could he do? He has to take two out?

KT: Yeah.

Suze: (Suze makes the wrong answer sound)

KT: I think—no, I said you get a grace period.

Suze: You don't get a grace period.

KT: You don't?

Suze: No.

KT: So what did I do wrong?

Suze: You don't know the rules, and I'm going to tell you the rules. That's all you did wrong, my love. So listen to me, everybody. Your RMDs are based on the value of your account on December 31st the year before you turn 73. So in this case, it will be based on December 31st, 2025.

Since it's based on that amount and that's not going to change—because that is the amount—he is allowed to take out an RMD anytime during 2026, even though when he takes it out, he may not be 73 yet. But because he's going to be 73 in 2026, the last day, he can take one RMD out in 2026 and another one then when he wants to in 2027. That one will be based on the ending value of his account on December 31, 2026. That's how he would do it, just so you know.

You never want to subject yourself, KT, to two RMDs. You do not—listen closely to me, KT—when you take out a required minimum distribution, you have to take it out by April 1st after the year you turn 73, OK? If you do that, it doesn’t mean that you're postponing the next one. You'll have to take out two that year: the one you should have taken out for '26 that you postponed till '27 and the one that you should have taken out in '27.

So you never ever want to postpone—unless you know you're going to be in a really 0% tax bracket—you want to take your RMD in the year you turn RMD age. And for those of you born 1960 or later, you're not going to have to do it till you're 75.

KT: All right, that is a wrap.

Suze: So we hope you enjoyed our Ask KT and Suze Anything vacation edition.

KT: Let's go eat some pasta.

Suze: I'm sure we will be at this point in time. But anyway, there's only one thing that we want you to remember when it comes to your money. And what is that, KT?

KT: People first, then money, then things.

Suze: Now you stay safe and go to youtube.com/SuzeOrman and subscribe. See you soon. Bye-bye.