October 22, 2022
Listen to Podcast Episode:
For this Suze School, Suze talks about gifting Series I Bonds, and then gives an update on the federal student loan debt forgiveness program.
Suze: October 22, 2022. And we have a lot of 22 in here. It's 22, 2022. Lot of 22s. But anyway, welcome to the Women & Money podcast as well as everyone smart enough to listen.
Suze: Alright, so many things I want to talk to you about today, but I'm going to start with my favorite topic. Actually before I do that,
Suze: I have an idea for all of you. I'd like you all to start a Suze notebook
Suze: where when you listen to a podcast and I say something that either pertains to you or I give you a URL address that I want you to go to or whatever it may be. You write it down. Maybe it's your own personal highlights of the podcast that you need to know
Suze: because I personally think it is far easier to flip through just one notebook and put a title on it. Series I bonds, Social Security, dollar cost averaging whatever it is that I talk to you about.
Suze: So that you can go and find the information that I gave you on this podcast versus having to search podcast listen to it all over again.
Suze: Why not just make your lives easier?
Suze: The reason I say that is because I gave a podcast in July 21 of this year, all about gifting I bonds
Suze: and it gave you everything you needed to know in that one podcast.
Suze: But now a lot of you are writing me and you're asking the questions that you want to know about gifting I bonds and maybe I see your email. Maybe I don't, there's so many that come in you know because I sometimes just flip through and whatever it lands on that's the one I answer.
Suze: But this way you wouldn't have to come back or write me an email and ask a question.
Suze: You could go to your little Suze notebook and find the answers right there. Or at least you could put down the date of the podcast and go straight to that. However, it's better if you write it down.
Suze: So there's a few days left until you can buy a Series I bond at this particular interest rate. And one of the greatest things that you can do for others family members, whoever it may be is that if you want to give a gift to your grandkids, to your spouse, to your nieces, to your nephews. Whoever.
Suze: The greatest gift you could give them right now is a Series I bond maybe you do it as an early holiday gift. Doesn't have to be for $10,000. Remember, I bonds can be purchased for as little as $25 and then any amount after that up to $10,000. And that is the maximum that you can buy as an individual.
Suze: And even though you know I've talked to you about their other ways for you to get more money into. I bonds in one year.
Suze: You can only gift in I bond from an individual account. You can't gift an I bond from a trust account or a business account. Just a personal individual account.
Suze: Let's just say you want to gift somebody from your account
Suze: a Series I bond.
Suze: What you need to know because this is what is confusing you.
Suze: You're wondering that if you purchase a bond as a gift,
Suze: while it sits in your gift box, does the time clock start?
Suze: And what I mean by the time clock is this. As you hopefully all know by now that you cannot touch any money that's in an I bond for one year.
Suze: After that one year, years two through 5, there's a three month interest penalty.
Suze: So that is the clock, the five-year clock that has to pass for you to be able to take out any amount of money you want from your I bond account without any penalty whatsoever.
Suze: When you gift an I bond to somebody and it sits in your gift box before you deliver it to them,
Suze: does the time clock start? Does that five-year time clock start? And the answer to that is yes it does. So if it needs to sit in your gift box for one year,
Suze: and then you deliver it to the person that you purchased it for
Suze: They at that time. If they took money out they pay the three month interest penalty from years two through 5,
Suze: Let's just say it's sat in your gift box for five years.
Suze: It just sat there. Maybe you're giving it to a niece and you want her to be older before you give it to her
Suze: And you give it to her in the 6th year when she gets it.
Suze: She could take any money out of that. I bond. She wanted because the five-year time clock has already passed. Now. A lot of you may be thinking, why would I wait if I want to buy an I bond as a gift, why would I wait and leave it in my gift box before I deliver it to the person that I want to give it to.
Suze: Maybe that person that you want to give it to has already purchased a $10,000 I bond for that year.
Suze: You can't give it to them, then you can't deliver it because then they would be over the limit for a personal account. KT and I have both purchased Series I bonds as gifts for each other that sit in our gift box in our individual accounts.
Suze: KT and I both contribute $10,000 a year to our personal I bond on account and will continue to do so while interest rates are high.
Suze: We're still able to take advantage of these high interest rates because all the gift bonds that I purchased for KT and vice versa are making 9.62% annualized. Right now they'll make 6.48%
Suze: when the 9.62% interest rate is up. Remember those are annualized deals. And so we'll continue to make that high interest rate on those I bonds that are in our gift boxes for each other as well as being able to buy individual I bonds in our individual accounts. Am I making sense to you?
Suze: When interest rates start to go down,
Suze: and you are no longer going to want to buy I bonds because maybe there will be something better for you to buy at that time.
Suze: That's when
Suze: we will stop buying individual I bonds in our individual account and then we will deliver $10,000 of I bonds to each other.
Suze: But at that time we've been making the high interest rate
Suze: and the time clock has already possibly passed.
Suze: So maybe five years from now, six years from now, as we are delivering $10,000 a year,
Suze: then we could take the money out without any penalty and invested in something else. But we had a great interest rate over these years. Am I making sense to all of you?
Suze: Gifting I bonds can be an incredible financial planning tool right now, if you know how to use them correctly.
Suze: All right, everybody. Again, the podcast that I did everything you need to know about gifting I bonds was July 21st, 2022. Are you're gonna write that down in your little Suze notebook? Are you going to write down everything? I just said right now, remember this is a podcast so you can pause it,
Suze: you can pause it and write down notes to yourself. And then once you have done that, start the podcast up again.
Suze: Next, I want to talk about a few things because we have another date looming that you need to know about and that's October 31 and now I'm not going to talk to you about Halloween and buying candy and all of that. Anyway, many of you out there have been working
Suze: for public service organizations and you have been so confused. Do you qualify for public service loan forgiveness? And what that is is if you have a student loan
Suze: And you have worked in the public service sector for 10 years after those 10 years,
Suze: depending on the type of student loan, you have,
Suze: all of your student loan debt will absolutely be forgiven and you will not owe taxes on the amount that was forgiven.
Suze: But do you qualify for it? Do you not? What loan is due? And that even includes if you worked for public service sector for 10 years that maybe weren't consecutive, maybe you worked for three years in one, then you went to work for a regular corporation then for another two years you came back. So there's a website, I want all of you who are in the public service sector and wondering,
Suze: do you qualify for public service loan forgiveness. I want you to go to P
Suze: that's like pee in like profit? S like in Suze, L like in love, F like in friends. So P-S-L-F dot gov and if you go there, and you have to do this before October 31st, you will answer a few questions and they will be able to tell you do you qualify or do you not or what do you have to do?
Suze: So you should all be doing that.
Suze: Now. I want to talk to you about student loan forgiveness as you know, hopefully many of you will have $10,000 of your student loan forgiven up to $20,000 if you had a Pell grant.
Suze: But there have been legal suits brought against this program to stop it. Now I thought on today's podcast, I was going to be able to say to you good news. Everybody guess what? They may very well start forgiving your student loans very shortly here because the objection went to one of the people on the Supreme Court,
Suze: she overruled it. She said nope, I'm not going to take this to the court. And we thought everything was done until last night when another legal suit was brought. So we'll have to see what happens. I doubt highly that any of these suits will absolutely stop this but that's just something that you should know but I would be acting as if this is absolutely going to happen
Suze: and you should be applying for debt relief right now and you do so by going to student aid dot gov slash debt relief again. All these URLs will be on the app on the Women & Money app as well in the notes of this podcast and you should apply right now. It is so easy they ask you a few questions and that is it.
Suze: because this is such a big deal,
Suze: we live in a time a day and an age where fraud and people trying to take advantage of you is rampant.
Suze: So if somebody calls you and says or sends you an email that they can help you make sure that you get your student loan forgiven, that they can fill out the forms for you, that they can do anything for you when it comes to student loan forgiveness, you are to hang up on them
Suze: and you should report them to report fraud dot FTC dot gov. Now these things are important right now because fraud is rampant and many people have already been taken advantage of and how do I know that? Because you're writing me
Suze: and when somebody wants to help you go, oh you can help me. All right, help me. You don't need help with this because it is so easy for you to do Alright everybody. So I just wanted to get all of that out of the way. Now let's talk about investing.
Suze: You're also now starting to write me this week because why? The stock market has gone up considerably. But the truth of the matter is the market hasn't really gone up considerably at all. It's still down quite a bit. It had a good week or two. Now, didn't I say last Sunday
Suze: that it would not surprise me if the market went up this week? Didn't I say that
Suze: and didn't I say that for those of you? However, and I didn't say this last Sunday, but I said this before that those of you who have money invested in this stock market,
Suze: that you seriously cannot afford to lose because you need this money for something, you need it for a down payment on a home, maybe you need it for your emergency fund, who knows what you need it for. But you need it within a year two or possibly three, that is not money that belongs in the stock market.
Suze: And now you're writing me and saying Suze, it's going up. I'm just gonna hold on until it gets back to where I'm even and then I'll sell.
Suze: Alright, I need you all to listen to me carefully.
Suze: I do not under any circumstances believe that this is the start of the market going straight back up.
Suze: If anything, I think now we are closer to next week or maybe two or three or four weeks from now for this market to go right back down.
Suze: So whether it's this week or maybe even next week or whatever,
Suze: and I wouldn't play a game with this market.
Suze: This is the time that if you need the money maybe you want to take it off the table. If however you have 10, 20,30 years 'till you need this money and it's invested properly, especially if you're in dividend paying ETFs or stocks just stay where you are. All right. But also understand
Suze: that most likely you're going to see everything that's up right now this week anyway will probably go way back down again. Now there's no way for me to know. Yes will it? No it won't.
Suze: But that's just what I think.
Suze: So please take that and understand that as these markets are going up however, and really they could go up another two or so weeks before they go down. Although they could absolutely start to go down next week. You never know.
Suze: But while the market is going up like it was this week, that is not the time that you chase a stock and you dollar cost average into it.
Suze: Next topic is Social Security. Now all of you are going to be very happy come January if you're collecting Social Security because your check is going to go up by 8.7%. You're also going to be happy because Medicare premiums for really one of the first times, Medicare part B, they're going to go down.
Suze: And it's going to go down anywhere. You know from $170, right in there a year. Not bad for many of you.
Suze: However, you're also confused about this inflation adjustment, technically it's called COLA. The cost-of-living adjustment and the reason why Social Security is giving you 8.7% more is because of inflation and they want you to be able to keep up with inflation at least with your Social Security check.
Suze: But so many of you think that if you're not already collecting Social Security that you don't qualify for COLA and I just want you all to know that is not true.
Suze: You don't have to be collecting Social Security for the computation to be going into the system that whatever Social Security you're about to get or when you do claim it, it will be adjusted starting now for 8.7%. So you get that cost of living adjustment whether you are collecting Social Security or not.
Suze: Now, you know that over all these years and all the books I've written, I have been always saying in most cases wait 'till you are 70 to collect Social Security, wait 'till you are 70 to collect Social Security because you will get far more because from the age of 67 to 70
Suze: you are guaranteed an 8% increase. That's more than you can make in the stock market or anywhere else.
Suze: Somebody wrote in and gave me this big explanation of why they want to start Social Security at 62.
Suze: And even though they might get a reduction of like 30% from what they would get at full retirement age that if they took that amount of money at 62
Suze: and they invested it in the stock market that over the long run
Suze: they would make a whole lot more money.
Suze: I am begging you if anybody tells you to do that or if you're thinking about doing that, do not do it. Do not do it. Do not do it. Look at what has happened to the stock market just since the beginning of this year, many of you are down 50% in your portfolios and when something goes down 50%, it has to go back up 100% for you to be even.
Suze: Remember when something goes from 10 to 5, that's a 50% decline. But to go from five all the way back up to 10, that is 100% increase. So I am begging you not to do it. That 8% increase from 67 to 70,
Suze: you're not going to get that anywhere else if you don't have to take Social Security earlier than your full retirement age or preferably 70. Please don't. Now I totally understand that there are many of you out there who are ill and you're not gonna make it till your full retirement age, Okay then take it.
Suze: Or many of you are in such dire circumstances that you do have to take it otherwise there is no way for you to get by. Okay, I understand that.
Suze: But the majority of you really if you can
Suze: at least wait 'till full retirement age, preferably 70.
Suze: Right. So those are the things that I really wanted you to know for this particular podcast. Did you write what you needed to know down in your Suze book? I hope so because many of these things are really important for you to know. Otherwise you can be doing things with your money
Suze: and making big mistakes and that is not something that I want you to do. So until next time, there's only one thing that I really want for you and your money and that's for you to be safe, strong and secure. Alright everybody, see you then. Bye, bye now.
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Answer Yes or No to the follow statements.
I pay all my credit card bills in full each month.
I have an eight-month emergency savings fund separate from my checking or other bank accounts.
The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!
I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.
I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.
I have term life insurance to provide protection to those who are dependent on my income.
I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.
So how did you do?
If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.
As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!
But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.