Podcast Episode - Roth Conversions: What You Need to Know

On this Ask Suze & KT Anything episode, KT asks Suze your questions about Roth Conversions, Bitcoin, and home titles.  Plus, the correct way couples should split expenses and so much more.

Listen to Podcast Episode:

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Podcast Transcript:

Suze: August 14, 2025. Welcome everybody to the Women and Money podcast as well as everybody smart enough to listen. Why are you looking at me like that?

KT: Because today's August 14th, and tomorrow's August 15th. One of my very favorite days of the whole year.

We're going to definitely be in the saltwater. It's Saltwater Day.

Suze: Oh, I know what we're going to do tomorrow. Tell everybody what that is. I'm not really sure all of the religious connections to Saltwater Day, but when I was a little girl, my grandma and grandpa would bring all of us down to the ocean, and we had to put our feet in the saltwater.

KT: It was just a blessing. It's a saltwater day. I think it was a blessing for fishermen back in Italy long, long, long ago.

So today also is a special day because Suze and I are alone on the island. Colo's in Colombia with his family, and we're just, we're just having like this best time. Kind of on our own schedule. Colo usually has coffee with us in the morning, we figure out the day. We do a lot of planning, but we're, we're like on vacation. We don't have to work.

Suze: But you know, I think we've told them that many times how much we obviously love Colo, but think about those of you who have children and their older children and you love them so much, but then when everybody leaves the house and it's kind of just you on your own.

KT: It's like the kids went to camp.

Suze: And we don't have to think about are we dressed, are we not dressed, all those kinds of things. All right, so this is Ask KT and Suze Anything. And if you want to ask a question and if KT chooses it, you have to be patient everybody, and you have to listen every week because you just never know when if you ask something from quite a few months ago. If she's chosen that or not, so don't give up hope.

And hey, if you really have a question that you want answered and you did write in a long time ago, write in again, but keep it short cause if it's long, I ain't going to pick them. However, how do you write in? Go to ask Suze - SUZE podcast at gmail.com. And that is where you ask your brief question. All right, KT.

KT: Keep it short, keep it simple. OK, this is from Lisa. She said, Hi, Suze, I have a question for you. You always say husband and wife or partners should contribute equally towards monthlt expenses.

Suze: Yes... equal percentages.

KT: She forgot the most important word, Lisa—percentage. Which is, yeah, this is gonna change your entire email question ready? She said my husband's a big fan of you, Suze. He follows almost every advice you give and in this case wants me to contribute half of my salary.

Suze: No. Stop. Do you see right there, KT? He's a big fan. He listens to everything I say. I never said if one of you makes $7,000 a month, the other makes $3,000 take home a month. And your expenses, let's say, are $3,000 a month that you each put in $1,500. No—equal percentages, not equal amounts.

KT: So finish giving people that example. So if she makes $7,000, she makes $3,000 take home—

Suze: So you add those two together. That's $10,000. You divide $10,000 into your joint expenses, $3,000, and that's 30%.

So, of his $7,000, KT, he would have to give 30% of that into the expenses—that's $2,100. Because she only makes $3,000, let's say it's her, right? 30% of $3,000 is $900. There's your $3,000—equal percentages but not equal amounts of money. Go on, KT.

KT: OK, so Lisa said she makes a third of his salary. But he doesn't contribute anything in managing the house. Now Lisa goes on to kind of whine a little bit about I take care of the kids. I drop them off and pick them up from school. I clean, I cook, I work without any break, even on the weekend. All he does is wake up, take the dog for a quick walk and go to work. He watches movies on the weekend, talks with his friends. How is that fair?

So it is fair if you go back to adding the little words Suze said that your husband left out—"percentages." You always say, Suze, people first, then money. So there's your answer, Lisa. It's really easy—percentages.

Suze: So KT, let me tell you what I really think about this. All right. When somebody is making 2/3 more of the money than you—because she's only making 30% of what he's making. Somehow. People tend to—I'm not saying her husband does, but I think he does, right—get this attitude of, well, I'm bringing in most of the money. I'm obviously therefore working harder. And therefore, yeah, I deserve to be able to sit around and relax and take the dogs out or do whatever and that's it. That's all I need to do. So that could be going on.

What's very important, Lisa, is for you to sit down with him and it's not just all right, now you're going to divide it by equal percentages, all right, cause that still doesn't take into consideration what's done in the house. So you need to sit down with him because maybe you straighten out the money aspect of it, but it doesn't straighten out the household chores of it, and you should talk with him, not to him, with him about how you feel—that just because you make less than doesn't mean that you work less than, doesn't mean that you don't work as hard. So therefore, what can you do to divide up chores so that you feel it's equal financially, as well as physically around the house.

Suze: Next question, KT.

KT: Suze, next question's from Albert, a man smart enough to listen.

Suze: Victoria and Albert, have you all ever been?

KT: Oh, the V and A museum in London.

Suze: If you're ever there, go, go, go.

KT: What a great she was our favorite queen of all, Victoria. Yes, she and Albert were madly in love. They had, I, I think 13.

kids or something huge number of children.

Suze: So you don't think that Queen Elizabeth was madly in love with...

KT: No, not like Albert and Victoria. And they couldn't. Albert and Victoria were the greatest love story of all of English history and with Bar none.

Suze: And what about our love story?

KT: The greater than English, greater than the world history, bar none. All right. Hi.

and Suze, I'm really confused about the money I converted from my IRA to my Roth IRA. I opened up a Roth IRA with Vanguard in 2021 with ETFs. I converted some money, about $10,000 from my IRA to my Roth IRA this year. I know I will pay ordinary income taxes.

I was listening to a podcast from 2024, and Suze said the five year rule will start over on that conversion.

Suze: Absolutely true.

KT: I freaked out, said Albert said, I freaked out, Suze. I did not know that. That's a lesson to all of us to listen to every podcast. He's right.

Correct me if I'm wrong, but any contributions I have put in since 2021, Albert said he's 57.

I can take out penalty free any time but not the earnings.

Suze: Correct.

KT: But the 10,000 I converted this year will start its own five year rule.

Suze: Right

KT: Which means I cannot touch it until 2030.

Suze: January 1st, 2030. Go on.

KT: Does that go for the earnings too that the 10,000 earned?

Suze: Well, it depends, right, because only if Albert is going to be 59 and a half years of age or older, which I think he's going to.

KT: He will be because he's 57 now.

Suze: Here's the thing you have to understand, everybody, whenever you convert, it does not matter how long your original Roth IRA has been open. All right, when you convert.

Every conversion has its own five year rule, period. But what's so fascinating is that the five year rule is dated in a very awkward way. So let's say that Albert converted on December 31, 2024. Let's just say that's true.

Then that counts as an entire year towards the conversion, so it doesn't matter when you convert in a year, it's as if that year has already passed, so to speak. So now it's 2024, his five year rule,

will be up like in 2029, believe it or not, KT right at January 1st, 2029, even though it hasn't been a full five years from December 31st, so just know that, everybody. So that's number one. Number two, there are two penalties. There's taxes on a Roth.

When you don't follow the rules and a 10% tax penalty if you're not of age, once you reach 59 and a half, it doesn't matter if it hasn't been in there five years cause you're already too old for the 10% penalty to apply. So forget that one regardless of how long it's been in there. It's the ordinary income tax penalty that you're worried about.

So that has to have been in there for five years for you not to owe ordinary income tax on the earnings when it comes to your original amount you converted and paid taxes on.

You're not going to owe taxes on that, so I wouldn't worry too much about that. So that's just what you have to do.

KT: So Albert, you didn't really make any mistakes, right, Suze?

Suze: No, it's like it's fine.

KT: You're good Albert.

Suze: You'll be there before you know it. Remember, it's January 1st of 2030 that all that money will be available to you, period.

Right, but, and you know, it is how it is. What are you gonna do? OK, what are you gonna do, KT? Do you know what you're gonna do when it comes to converting money?

KT: Don't talk to me about Roth right now.

Suze: Fine, I won't. I knew it would get to you.

KT: Let's talk. Let's...

Suze: When I want to aggravate her, everybody, I walk around the house and I whisper, I want to tell you something. And she comes up to me close and I go, Roth IRAs KT. Anyway, go on.

KT: All right.

KT: This is from Gina. Gina said, Hello, Suze and KT. I tried to buy some Bitcoin ETFs, which is Ibit the other day in my Merrill Edge account. To my dismay, it is a restricted fund, and they do not let you

purchase it because of the risk. I called customer service and they said no Bitcoin is allowed. Any thoughts on how I can get around this and put bitcoin in my portfolio?

Suze: So let me tell you, Gina, how I would get around it if I were you.

Obviously they won't allow you to do it. Everybody writes me and says, Why won't they allow me to do it? And for some reason, Merrill Lynch still feels the edge account that it is too risky. All right, that's just the stance that they are taking. Now what would I do if I were you, if I really wanted to invest in Bitcoin?

I would open up an account at either Charles Schwab or Fidelity or most of the other brokerage firms that will absolutely allow you to buy a Bitcoin ETF just that simple.

So you know I like Bitcoin. You all know I like Bitcoin, and I used to say only invest with money that you can afford to lose. I have to tell you I am changing that stance because as it goes higher and higher in value, as major banks are starting to actually participate in it, I'm starting to feel better about it, so I do not have a problem.

If you invest a small amount of money, maybe 5% or whatever, in IBIT, and the truth of the matter is, if you did it directly into the Bitcoin itself, you would actually make more money than if you did it through an ETF. But for safety reasons or just because you feel safer with it that way.

I don't think there's anything wrong with you owning Ibit at all. All right.

KT: OK. Next question is from Ellen. She said, Hello, Suze and KT. I have a paid off home. The title has my name and my deceased husband's name on it. Mm hm.

A lawyer advised me I didn't have to take his name off the title. Is this wise? I want to make a revocable trust, and I'm not sure if this needs to be changed before I do that. I have two adult children who will inherit the home.

Suze: Yeah, legally there's nothing that says, Ellen, that you have to take his name off the title. First of all, so sorry for your loss, obviously.

However, however you should, because if you're going to transfer it into the trust, it should be in your name only. It will make it far easier for your children if something were to happen to you. So even though the lawyer says you don't have to, that is technically correct. However, just cause you don't have to do something doesn't mean you shouldn't do it. So what I would tell you,

do it and do it as soon as you possibly can.

All right.

KT: Next question is from Brownie. Do you remember we had a, a fisherman from Bimini called Brownie that took us fishing to get little like Lane snapper. Remember he was so much fun.

Suze: Why do you think?

KT: I don't know.

Suze: What happened to him. Where is he?

KT: I don't know, probably still fishing, but he was like a little fishing guide, very friendly, very happy, and his name was Brownie.

Suze: You know, years ago.

Everybody, when we didn't know how to fish, we would hire the local Bahamians, and they would be the one that would take us out and show us how to fish.

KT: Bahamas style with little yo yos and strings with hooks, very, very, very primitive.

Suze: And they caught more fish than we did on our expensive stupid rods. All right, go on.

KT: All right, so Brownie said, I am 67 and still currently working part time.

I am contributing to a 403B at work which matches 6%. Unfortunately, it is not a Roth. Should I continue to contribute 6% to it and then contribute my other 4% and start a new Roth account? And then Brownie says, just curious if at this stage in our lives would it make that much of a difference. He's 67. What do you think, Suze?

Suze: Yes, Brownie, even at your old age of 67, what is it with these people?

KT: I don't know, right? And it sounds young to me.

Suze: Me too, so it's absolutely worth it. But you're not limited to just 4% into your Roth IRA. I don't know what that 4% would be. You.

You should be funding it to the max of $8,000 a year, but you can't pass up the free money that your corporation is paying you, even though it's in a pre-tax account. No problem. All right.

KT: So Marisol asks, dear Suze, I wonder what would be a better option when

converting from an IRA to a Roth IRA, I have cash infidelity and an ETF. What would you suggest to convert? I have $75,000 in cash. I usually convert $60,000 a year, so my tax bracket doesn't spike. I used the cash to dollar cost average and buying the ETF and stocks you've mentioned in your podcast.

I bet she's done quite well with that, Suze. So this money is in an IRA. Should I convert the cash or the stocks this coming year? It's a lot of conversion money, isn't it?

Suze: Right, so whatever you have in your IRA that happens to be stock.

And that stock can go up in value because let's say you invested it in good things. If I were you, I would be converting that to the Roth first, even if you have to liquidate it, liquidate it, go into a Roth.

And just buy it again what you have and let it increase in value there. The cash in the meantime, let's say it's making 4% when you then go to convert that, you're not going to have to worry about converting it on a

higher amount of money if the stocks continue up. So I would be doing the stocks at this point because if they're good stocks or good ETFs, I do think they're going to go higher and higher. All right, go on.

KT: OK, the next question is from Lynetta. Dear Suze and KT, thank you so much for being there. She said, I've learned so much. I started listening in 2020 and she's come a long way but still needs your guidance, Suze. Ready?

She said, I'm so grateful when you responded to me after my dad died. I had no clue about what to do with the inherited 401k savings. I did as you said, and it is in an inherited IRA at Fidelity. So there you go, good for you, Lynetta. You followed Suze's advice.

Suze: But what's interesting about this email is what one thing that she said.

KT: That she has a long way to go.

Suze: No, and I contacted her directly.

KT: Oh yes, yes, yes.

Suze: So you never know. You never know when you're going to hear from me directly. All right, go on.

KT: And she contacts a whole lot of you directly just so you know that.

So she says, I don't have a Roth 403B, but this is now being offered at work. But there's no matching funds. When I talked with the Financial Focus adviser who's handling the accounts for our district, I asked him if I could be invested in stocks and or ETFs. He became a little agitated and said he would invest in what he thought was best for me. Wow. So when asked how much he charged, he said 1%.

I don't like the fact that he doesn't talk more with me about what I want it invested in. My question is, do I open a Roth 403B with Financial Focus, continue buying CDs, or do something else? I'm not sure what to do. I'm 67. I make $70,000 a year. Please help me figure this out. I'm forever grateful for your advice.

KT: So I'll tell you what I would do.

Suze: What would you do?

KT: Forget Financial Focus. Do it on your own, girl.

Suze: Yeah, you can do it on your own, or better yet, since they don't match. Just open up a Roth IRA, and you can invest $8000 a year there and or if you happen to have a mortgage on your home, truthfully.

You're better off at this age making sure that that extra money goes to pay down the mortgage on your home, because I want you all to think about it. Why are you saving money and investing in a Roth retirement account or a 401k...

However you're doing it, it's to generate income for you to pay your expenses. Your largest expense happens to be your mortgage on your home, so you're far better off getting rid of the mortgage on your home.

Than saving money in a retirement account to pay the mortgage payment. Now, KT, I could give you an example of that, but I have in the past. However, that's what I would be doing if I were you. All right.

KT: All right, great. And my last question is from Bob.

I love this one. Yeah, I like what he did.

Suze: You know what I love about the name Bob?

KT: Bob?

Suze: Yeah, what do I love about it?

KT: You can say Roberto, Robert, Bob, Bobby.

Suze: No...

KT: Babushka.

Suze: No.

KT: Ok, what then?

Suze: It's the same backwards and forwards. I just love that.

KT: Oh, you can spell it backwards and forwards and get the same name.

Suze: Yeah, I love that.

KT: Bob, Bob.

Suze: When I used to do the Suze Orman show, I used to love when I saw a name like that. Anyway, go on.

KT: All right, I remember, I remember, um.

Is it was someone that our friend Ken knew someone that could spell everything backwards really fast.

Like you gave him a word and he could spell it backwards like he had that something that he had um...

Suze: And you love that?

KT: Yeah, it's one of the most difficult things to do.

Suze: All right now you all know for Bob. What's his question?

KT: This is my final question. Hi Susie and KT. I'm 61 and retired early due to an illness and surgeries as well as an abusive work environment. Uh-huh. That's the real reason.

So Bob said, I have $1.4 million saved. Good for him. I maxed my Roth contribution since I first watched your show back in the day. Honestly, I would not be where I am if I had not read your books and watched your show. Thank you, Suze.

Suze: I love an appreciative man.

KT: Yeah.

Suze: I love that.

KT: I do too.

I also took a small

pension payout that I am gradually converting to Roth funds. He's so smart. My question, how can I protect my funds that are in CDs and money market accounts from a falling value in the dollar? That's a great question.

Suze: So Bob, what I would be asking you is how's it done? How are your investments doing? Because the dollar has fallen incredibly over these past few months. So the main reason a dollar will affect you when it falls in value is number one if you're going to travel overseas.

So travel becomes far more expensive because the dollar isn't worth as much, so it doesn't convert to as much in a foreign currency. However, the increased cost of goods and everyday items can be affected by a falling dollar because it's more expensive to buy what they need if they have to import it in, so that's

really all that it's going to do. It's not going to affect your actual investments when it's a CD or a treasury. It could affect the stock market, things like that, because a falling dollar can also contribute to inflation. So we just have to watch it carefully, however,

I do think that the dollar isn't going to fall a whole lot more than it has already fallen, so I think you've already seen the things that it can do. But out of everything that you have going on, boyfriend, I wouldn't worry about it.

KT: You did great, Bob.

Suze: Now he's a man who learned how to do what, KT?

KT: Make his money, make more.

Suze: There you go. He's learned how to do that. And now at his ripe old age of 61.

He could actually probably do anything that he wants all right, Miss Travis...

KT: That's a wrap Suze.

Suze: Until tomorrow morning when we go soak in the salt water.

KT: Yes, ma'am.

Suze: But we do that every single day anyway, so I don't know why tomorrow's any more special to you, but anyway, we do soak every single day cause they say salt water heals you and KT and I really believe that.

So until next time is only one thing that we want everybody to remember when it comes to their money.

KT: We're going to do what Bob does make your money, make more money.

Suze: So you are to do that, stay safe and healthy and know that we both love you so very, very much. All right, everybody, bye bye bye now.