Podcast Episode - Ask KT & Suze Anything: Should I Get a Prenup?

On this edition of Ask KT & Suze Anything, Suze answers more questions about applying for disaster relief, medical bills causing debt, and when (or if) you should stop funding your Roths.  Plus, a quizzy about HSAs and so much more!

Listen to Podcast Episode:

Podcast Transcript:

Suze: October 17th, 2024. Welcome. What do you want to say?

KT: I wanna say, where did the year go? Honestly? Like it's October. It's the, it's past the middle of October.

Suze: It's almost the end of the year.

KT: It's almost the end of the year. Where did it go?

Suze: I don't know. I actually don't know where the past 24 years have gone. No, seriously.

KT: That's amazing. You said that that's everybody listening the past 24 years is when Susie and I found each other and it's like, bam, they're zipping by and they're going too fast and we don't like it,

Suze: But I want to know what's so sweet KT is that I remember just wanting to be a double digit with you. I just wanted to be able to say we were together at least 10 years

KT: Now it's going to be 25. What do you think of that?

Suze: I don't think it's long enough to tell you the truth. However, welcome everybody to the Women and Money podcast

KT: and everyone's smart enough to listen.

Suze: This is the, what KT?

KT: Ask Suze anything and

Suze: KT and if you write in to ask Suze podcast at gmail.com. Your question, you have got to keep it short or we will

KT: And that's why I'm in a good mood. Everybody I have questions in front of me that are nice short, concise. One topic, one question, many of you send me like multiple questions in one email and I can't do it.

Suze: Also. What I was gonna tell you is that KT I see that you've chosen some from our community app, which is all of you. And by the way, you miss out on things if you're not part of the women and money community and you can just simply download the app, it's free on either Apple Apps or Google Play and I post things there that I do not post anywhere else.

KT: And did you post what I think you're about to tell them?

Suze: Well, I wasn't gonna tell them anything but what did you, what did you think I posted?

KT: They should go look and see if you did post one. The first catch of the season. The first catch, not, not, don't say anything else. If you want to know what she posted, go to the women and money and look for the first catch of the Wahoo season 2024.

Suze: But KT should we start?

KT: Let's go.

Suze: So what is your first question?

KT: This is from Roz and this is from the Community app. It said Suze, when do medical bills become credit impacting debt? Does it vary depending upon the medical provider. I get notices from medical centers that the co parent hasn't paid their portion 30 days, 60 days plus past due. So far I haven't noticed an impact on my credit score, but I'd like to understand the process more.

Suze: Yeah. First of all, I don't know if all of you know this or not, but as of July 2022 - 2 years ago, major credit Bureaus, Equifax Experience TransUnion. That should have been your quizzy to name three credit bureaus. Anyway, they no longer include medical debts under $500 on credit reports. That's number one.

And if you did have a medical collection that was reported on your credit report and you paid it, then they're also required to remove it from your credit reports however different than the question that you asked me the truth is that most medical providers will send you a bill that's due immediately or within 30 days if the bill isn't paid and it becomes overdue.

But most medical providers allow some grace period. Usually I wanna say 90 to 100 and 80 days before turning that unpaid bill, KT over to collection agencies. Now, obviously some are more lenient than others, but that's about it. Now, what's important for all of you is that you should be checking because you wanna know is it on your credit report or not? And this person didn't say really? Did they say how long it had been?

KT: It's the co parent.

Suze: So the co parent

KT: that hasn't paid their share and Roz is concerned

Suze: for 30 to days...

KT: Yea, its going to affect her credit.

Suze: So you have at least really 180 days after the bill is sent to collections because it's not the medical provider, everybody, that's gonna put it on your credit report. It's when they actually sent it to collections, the collections agency will put it on your credit report. But if I were you and I had a co parent that was responsible, that's linked to your account, you better establish it very clearly that it's their financial responsibility and not yours. So you should not be directly responsible for their portion. I'm just saying.

KT: OK, so this is my next question. It's actually a thank you said, Suze, thank you for your podcast last Sunday. Can you tell me how do I go about applying for disaster relief from FEMA? Now, this is sad. A little everyone. I'm 80 years old, a widow and I'm so confused. Can you help me?

Suze: Yeah, the truth is if you went on to the Women and Money community app, I actually listed all the URLs and phone numbers, but just for you, here's what you would do to apply for FEMA disaster assistance. The very first thing you need to do, sweetheart, is you need to fill out a disasterassistance.gov application and KT, you do that online.

So applying using the FEMA app, you can also do that. So if you know how to download an app, look for the FEMA app and it's from any app store, from your iphone or whatever that may be, you also can apply by phone, which is 800-621-3362. And the truth is if you're really in a disaster area, then you could apply in person at a disaster area, recovery center that's near you. So that's how you would do it.

KT: Have, if you can't do this yourself and have someone help you just fill in the application. That's the number one step and do that. People are being your community that is in the disaster zone is so fabulous. Everyone will help you find a friend, find, um a church, find a medical facility. They'll help you fill it in for sure.

Suze: It's not that hard. You just have to be patient and no, listen, if you've made it to 80 you can do this girlfriend, you can do this. You're smart. You're stronger than you think you wrote into the show. So you must be smart.

KT: So I have one more FEMA question that came in, Suze. It said, can you explain what the 50% rule is that FEMA is saying, I fall under. Try to try to keep this short and try to tell people again where to get the information,

Suze: The FEMA 50% rule. And this applies to FEMA's flood insurance program under the National Flood Insurance. NFIP. Here's what it says. Everybody, if your repairs to your structure exceed 50% of its market value.

All right, then you have to bring up the entire structure to the compliance of the current flood regulations. So it ensures that the properties are updated with future flood risk. Now, unless you already brought your home up to compliance, then it won't matter. But if you haven't, then you have to bring it up to compliance with your own money. All right, KT.

KT: Ok. My next question, this is from PBS. I am... I like that name PBS. I'm a single mother of two adult children, 24 and 18, Suze, I take home about $12,300 per month after maxing out my TSP plus another 3000 from the rental. I have about 1.5 million in retirement and my equity in my home is approximately another 1.5 million. My expenses are about 10,200 a month. I also live with a wonderful man who takes home about 3900 per month because of the big difference in our salaries. I'm a little nervous to marry him without a prenup arrangement. Any advice on that? There you go. What would you do?

Suze: Well, first of all, it's 1.5 million, I'm sure equity in her home as well as her rental. So she has a home a rental 1.5 million in retirement and makes a fabulous income.

Listen, PBS, I would just stay living with him. I'm not sure that I would marry him. There's really no advantage for you to marry him. You could leave him all of this via a trust or making him a beneficiary of everything, even a transfer on death account on your piece of real estate or whatever it is.

But there's all kinds of ways that you could do a prenup. But they can become very complicated because you have to have a lawyer, he has to have a lawyer who knows if they'll hold up in court or not. So, the real question is that you have hesitation or you wouldn't have written into us and you're nervous about marrying him.

You shouldn't be nervous about the person that you're marrying because your differences in terms of how much money you make or how much you have. You should just continue living with him until you're no longer nervous on any level. And then you have to get a prenup. But me, I would just stay living with him. What would you have said to her?

KT: I think it's the kids that are more nervous than, than mom. They're 24 and 18. They, they see the writing on the wall. There you go. All right. Next question is from Joy. She said, love your podcast, husband and I are both freelance performers, musicians and teachers. I love that. I love that. You're a musical family.

Now, she says Suze, at what age should we stop funding our Roth IRAs, would there be a reason to stop at a certain age? I don't think so. We are over the five year minimum by a lot. And we've both religiously been funding for years now. We're in our sixties. Musicians don't retire. That's true. But we definitely have saved some for a future where we'll work less. Thanks so much.

So, the question is at, what age should we stop funding our Roth IRAs? Never, never,

Suze: never,

KT: never, never.

Suze: You stop funding your Roth IRAs when you no longer have any earned income period. Other than that, you keep funding them, funding them, funding them because especially since you're past the five year period, you can take that money out anytime you want. So, are you kidding me when you stop earning money? All right, KT.

KT: So I love this question. This is from Wendy. She said hi, Suze and KT. Thank you so much for all you do. I can't tell you how nice it is to be able to ask questions to someone. I trust. There you go, Suze.

Suze: She must be talking to you. She's talking

KT: to you, Wendy. I love that. You trust Suze. So do I... She said my husband's mom passed away in July and designated him as a beneficiary. He's now 54 years old. I understand. He needs to withdraw the money in 10 years. However, since he's under age 59 and a half, will he be charged a 10% penalty if he decides to withdraw the money? Now, didn't you do a whole podcast on this?

Suze: Of course. But it's also funny because I actually wrote Wendy back. You remember sometimes people I write you back directly when I read it. Tell me what you tell her. I said no, no, no penalty. That's absolutely ridiculous. When you inherit a retirement account, whether you're 13, 15, it doesn't matter what age you are, there is no 10% penalty if you happen to be under the age of 59 and a half. All right.

KT: Ok. Hi, Suze and KT. I recently paid an attorney 1800 dollars to redo my outdated will before listening to all your podcast on Revocable Living Trust. Is it too late now to use the must have documents to add the revocable trust. And can I use it with my new will without creating a poor over will? I can't believe she paid someone $1800 for a will.

Suze: You know what

KT: You pay that for just...

Suze: You know, I have a hard time believing is that I watch some of these TV commercials and it says trust and will $199 for just a will. Are you kidding me, everybody? The must have documents for must have documents $2500 value - a will a living revocable trust in advance directive and durable power of attorney for health care and a financial power of attorney updated as many times as you want to, no charge can share it with your family. Go to must have docs.com and Lynn, you absolutely can do the must have docs.

And if you want to continue to use your will that you have, you can. But remember when you do the must have docs program within an hour, you've answered all the questions that the program asks you and then all four must have docs are created for you at one time. If you rather use the will that your lawyer did and not the will that gets printed out with the program, that's absolutely fine. All right, KT.

KT: So next question is from Jamie. I have learned from you that whole life insurance is a waste of money. Unfortunately, I've been paying into such a policy for 30 years. My children are now grown and I'd like to stop wasting my money. In this way. I'd like to cash out the policy which has a cash value of $8000.

Plus, I'm concerned that if I have an $8000 plus windfall, I'll be in a world of hurt in April when it's time to file my taxes. What is the best thing for me to do in this situation? Thank you so much, Suze, Jamie.

Suze: So Jamie. Chances are over the 30 years that you've been putting money in to this whole life insurance policy. You actually have put in more than 8000 plus over the entire 30 years. If you think about that, if you just put in $1000 a year, that would be 30,000. If you put in 500 a year, you know, that would be 15,000. So chances are you have put in more because you put in more than you have in a cash value. There is no taxable event to you at all because you are getting back less than you have actually put in. So I personally would not be worrying about it if I were you. Why are you looking at?

KT: I didn't know that. That's great. I didn't know that. But what's important is 30 years and she only gets 8000.

Suze: Well, think about it, even if she was putting in 300 a year, that would be $9000. So trust me and you know that 25 a month. So I doubt highly that she's put in less than 8000 plus. But what everybody has to know is that before you ever, ever, ever cancel any life insurance policy, you better make sure that you are healthy, that nothing is wrong that you know that without a shadow of a doubt. So just don't go canceling those insurance policies just in case.

KT: All right. Hi Suze and KT. This is, this is from Jason. This is my last question, everyone. I'm going to be over the Roth IRA limit for 2024 because my husband is amazing and got a big raise plus a bonus at work. Is it better to contribute to a traditional IRA and convert to Roth each time a contribution is made or wait until the end of the year and convert all at once. I think I can make a good argument for either one and I have analysis paralysis.

Suze: So here's the thing, it's not about when to convert. According to the time of the year, you would convert according to what the money happens to be invested in. Remember if you invest in the traditional IRA and let's say you're gonna wait till the end of the year to convert it all at once during that year that you put the money in the traditional IRA. Hopefully you've invested it to take advantage of the market's upward move if the markets are moving up.

But if you then convert it, when the markets are up, you're gonna owe more income taxes on it than if you had done it when the markets were down or if you did it right away and simply then bought something in the Roth IRA. So it doesn't matter. So if it were me and I was making a contribution to my traditional IRA, I would absolutely immediately be converting it to a Roth IRA. Did that make sense to you? KT all Right. Well, if it made sense to KT, you should. Oh, I didn't mean that. KT, I'm so sorry. I was about to say that...

KT: I know what she's saying. I'm not gonna do your quizzy if you say that again. You said if it makes sense to KT, then it's gonna make sense to all of you.

Suze: Well, is a little bit when it comes to a Roth, right?

KT: A Roth. Maybe that topic. Maybe.

Suze: All right, ready everybody. It is quizzy time. And this is where I asked KT a question and I'm really asking it to all of you because again, what is the goal of the Women and Money podcast?

Suze: It's so that you can answer all of these. Why are you laughing?

KT: The goal is to be smarter than KT

Suze: No, don't you all

KT: come on,

Suze: let's don't ever say that KT. Alright. Anyway, so all of you can answer these questions. This one comes from Linda and she says I currently have a high deductible insurance plan at work and contribute to an HSA.

KT: I know a lot about HSAs.

Suze: All right.

KT: I do.

Suze: So you think you're gonna get this one right or wrong?

KT: I get it right. I... Suze and I did HSAs for a year for a corporation and I learned a lot about an HSA

Suze: and wait, if you get it wrong, will you do dishes for the next week?

KT: No, I I know HSAs. I feel pretty confident that I,

Suze: So why aren't you willing to bet me that?

KT: I've never bet Suze. Don't ever bet Suze. She always wins. So I'm not going to bet.

Suze: I just, are you sure? And if, and if you're right, then I have to do it for the next month. 

KT: You do the dishes anyway. Keep going.

Suze: Anyway. All right. I just turned 65 and signed up for Medicare part A. Can I still contribute to my HSA while I am still working?

KT: No.

Suze: How do you know that?

KT: Because if you, first of all HSA, if you're, if you're with Medicare, everything else, you stop. I told you for a year, I followed you around America and you lectured to thousands and thousands of employees about their HSA. So I'm good with it.

Suze: Ding, ding, ding, ding, ding.

KT: I'll ding with you. I know HSAs.

Suze: Wait a minute. You're gonna ding ding, ding with me on the podcast. You do.

KT: Absolutely. I know HSAs everybody, not Roth but HSA and I are solid.

Suze: I have to tell you a little secret. I kind of picked these knowing that you won't know the answer.

KT: Are you surprised?

Suze: Do I look surprised to you?

KT: I'm good with HSAs.

Suze: All right. So once you sign up for Medicare, everybody, you cannot contribute more to an HSA. All right. That's it.

KT: That's a wrap.

Suze: It's a wrap.

KT: Hey, everyone. Halloween's coming up. Let's do a Halloween podcast.

Suze: KT Halloween is still two weeks away,

KT: But it's coming up. We should do a trick or treat. Oh, send me trick or treat questions everybody. And if any of you can guess I'm gonna post on the Women and Money App. Three of Suze's favorite Halloween Candies. If you can guess the most favorite, you're gonna get a prize.

Suze: But how will, you know,

KT: what do you mean? How often,

Suze: how will you know, who, guess what?

KT: They'll write into me? My question and they'll guess.

Suze: That's not how you're gonna do it. You're gonna do a poll and we'll see if the majority of people are.

KT: Ok. We're gonna do a poll for Halloween. I'm gonna, I'm gonna start having fun. Everybody year's almost over. I'm done. I want to have fun.

Suze: And when is it that you haven't ever?

KT: Well, right now, well, it's a little stressful these days. Let's tell everyone why. We live in Florida. We live in the Bahamas. We are in hurricane season. It's usually over around Halloween. So I'm gonna start having some fun. That's all there is to,

Suze: It is not over till the end of November,

KT: But I'm gonna be very positive and very hopeful.

Suze: As another one is coming our way anyway, there's only one thing that we really want you to remember and that's for all of you to be hopeful for all of you to have fun for all of you to have this spirit like KT does. And when it comes to money, there's only one thing that matters. And what is it? KT?

KT: It's people first, then money, then, then trick or treat. No, then things, then candy

Suze: Here we go everybody... and if you do that, you will be unstoppable

KT: and fat (laughs).