Podcast Episode - Ask Suze & KT Anything: Do I Need Life Insurance?
September 14, 2023
Listen to Podcast Episode:
On this edition of Ask KT & Suze Anything, Suze answers questions about escrow accounts, real estate, caring for parents, the “Taylor Swift Economy Bump” and more.
Podcast Transcript:
00:00:00
Intro/Outro: All right, Suze, KT. Are you ready for today's podcast? Yeah,
00:00:04
Intro/Outro: of course. We're ready because we are unstoppable. Yeah, baby,
00:00:12
Intro/Outro: Music In.
00:00:33
Suze: September 14th, 2023.
00:00:36
KT: Good morning, Suze. Good morning.
00:00:39
Suze: But wait, everybody knows that it's really September 14th, but we didn't record this
00:00:46
Suze: on September 14th because why? We're on our way back...
00:00:52
KT: We're on a plane...
00:00:53
Suze: We're on our way back from Spain.
00:00:56
KT: Ok. So that's, that's really difficult when I just woke up for you to tell me I'm on a plane.
00:01:02
KT: So everyone knows that I recorded this today, but it's not really today.
00:01:08
Suze: The know it's not today. But we remember KT, we wanted to make sure that we had new podcasts for them while we were gone versus just playing the best of.
00:01:21
KT: But those best of are great because they call it the best of.
00:01:26
Suze: It is September 14th when you're listening to this 2023.
00:01:31
KT: I can't wait to tell you all about our trip.
00:01:33
Suze: Well, that will be the very next ask KT and Suze Anything will be on September 21st, we will have been back and all will be great.
00:01:46
KT: What are you looking like?
00:01:47
KT: Is it that, is it that long? The 21st...
00:01:51
Suze: Today is the 14th and seven days from today is what?
00:01:58
KT: It's... Yeah, but, ok. All right. I just woke up. Let's go!
00:02:04
Suze: Do you want me to start all over again?
00:02:06
KT: Let's go. Keep going, Suze.
00:02:07
Suze: Anyway, this is when you're listening to this, September 14th 2023 welcome everybody to the Women and Money podcast and everybody smart enough to listen. This is the Ask KT and Suze edition. This is where if you write in to Ask Suze podcast at gmail dot com,
00:02:31
Suze: you ask a question. If KT chooses it or I ask her to choose it, then she will read it and your question will be answered.
00:02:43
KT: You're so, you're so perky today. You're so perky.
00:02:48
KT: Usually, usually I'm a lot perkier than you. But no, I had a really, I didn't sleep enough.
00:02:56
Suze: And why was that?
00:02:57
KT: I don't know, I just didn't sleep enough. Ok. Are we ready to begin?
00:03:03
Suze: I think so.
00:03:03
KT: Here we go. First question is from Donna. Thank you for all you do to help everyone with our finances. Listening to you both makes it fun to learn. I'm glad I'm glad we make it fun for you. So, so Suze, Donna has a traditional Ira a Roth Ira and HSA, 401k. She knows that topic better than me.
00:03:28
KT: But here's the good news, Suze. She left this to her three kids. So outside and other accounts she has outside of retirement, her saving, checking her treasury direct for treasury bills. All of these she made the trust the owner. Now this is number six house title. This is just in my name. Are these correct? This is my quizzie to you, Suze
00:03:56
KT: is number six. Correct. Yes or no
00:04:00
Suze: No.
00:04:01
KT: Ding, ding, ding, ding, ding, ding, ding. I want to do that.
00:04:05
KT: Ok. She got it right. Everybody. Number six is not correct because it should be in the trust as well.
00:04:12
Suze: All right. So Donna, here's what you need to understand. You've done such a great job taking care of your kids, making them the beneficiaries, the pay on death account, blah, blah, blah, love that. However, for yourself, you've taken title to your home
00:04:30
Suze: according to the email KT just gave me in just your name and now you are leaving your kids and you in jeopardy. Why is that?
00:04:43
Suze: That is because you don't die, you become incapacitated. How many times have I told all of you? It's not just about leaving something easily to your kids. You have to make sure that you have taken care of yourself. And as you get older, you can get sick, you can have a stroke,
00:05:02
Suze: you can have an accident, you can have an accident at any time. You can become incapacitated at any time. And if that happens, who's going to pay your bills, who's gonna write your checks? And the fact that your house may need to be sold, you might not be able to sell it because you're incapacitated and you can't sign the deed to be able to sell it.
00:05:26
Suze: So therefore your kids now are going to have to declare you incompetent, get a conservatorship for you and blah, blah, blah. Your kids don't do that. They have to go down to probate court and probate court will do that.
00:05:39
Suze: You have now entered really a living nightmare since you've taken such good care of your kids. Why can't you just put your house in the title of the living revocable trust? Just that simple. And by the way, I just have to say KT, I don't even know if you know this, but Hay House
00:05:59
Suze: has totally redone. The must have documents and now they've put them back on sale again at Must have Docs dot com.
00:06:08
KT: Oh, she should go get a must have document.
00:06:10
Suze: No, she already has a trust, KT, she has a need to buy a new one. She's fine. But for those of you who don't.
00:06:17
Suze: All right, you might want to listen to September 10th's podcast where I talk about it, but I, I don't know if you knew that KT, Hay House has it back on sale. They totally redid everything...
00:06:33
KT: And they made it really easy, right?
00:06:35
Suze: I educate, they sell and they program. There you go.
00:06:40
KT: So next question is from Pamela. Suze and KT, I have a quick question
00:06:46
KT: for the first time in three years. My escrow account is short $204. What's an escrow account?
00:06:56
Suze: KT, somehow and I don't know why, when people get a mortgage,
00:07:01
Suze: the banks usually talk them into why not combine your mortgage, your property tax payment and your insurance payment all in one escrow account. You pay us monthly, we'll hold it in an escrow account for you even though we make interest on it in most cases and we will pay it when it comes due and you don't have to worry about it, obviously, because insurance is great.
00:07:29
Suze: The insurance went up for the first time ever. Right. Pamela is short $204 and the amount of money that she had been paying into this escrow account. So now she has to come up with an additional $204. What's her question?
00:07:48
KT: So what is the benefit of paying it outright or rolling it into my monthly mortgage payment in which I would have to make a higher payment,
00:07:58
KT: Suze, I have the money to pay it out right out.
00:08:01
Suze: Pay it out right. Done. Done. Done. Done. There's no...
00:08:05
KT: She said, what are the advantages or disadvantages.
00:08:07
Suze: There are no advantages with an escrow account. You're just simply making interest with your money for
00:08:14
Suze: the mortgage holder. Why not just pay it either outright in one lump sum? And when you do, by the way, it's usually cheaper. When you pay your insurance, either monthly or whatever it may be. They add about 8% to it
00:08:32
Suze: Right. Because you're doing it monthly versus all at once. So I would not have an escrow account. I would do it myself and earn interest on that money myself rather than the mortgage holder. Go on, KT.
00:08:44
KT: Next is from Melissa. Hi, Suze and KT. I had a family member pass earlier this year without a trust. There you go, Suze. The executor of the
00:08:56
KT: state was able to sell his house in a matter of months without going through probate. I was told this was due to a transfer on death deed. Yeah, you've talked to. Suze's explained this before. I've never heard of this before and when I Googled it, it seems to be another way to pass your house onto your heirs avoiding probate.
00:09:20
KT: Could you speak to this and why or why not, this might be an alternative to a trust?
00:09:26
Suze: I actually addressed this with Donna a second ago because Melissa, if your only goal is to pass everything down to your kids without probate, fine. There's nothing wrong with doing it this way. However,
00:09:44
Suze: if you want to protect yourself in case of an incapacity, a transfer on death will not do that because you're fine, if you've died,
00:09:55
Suze: you don't have problems, the kids get everything. But if you don't die, you become ill, you become incapacitated. A TOD or transfer on death account will help you zippo. Not at all. So get yourself a living revocable trust. Must have docs dot com. Go on, KT.
00:10:17
KT: Ok. This question.
00:10:19
KT: Ready Suze and ready everyone listening. Listen up really carefully. This is from Shell and the subject line which is why I can't wait to read this to you, Suze. Is Taylor Swift economy. So I keep reading
00:10:36
Suze: I love Taylor Swift.
00:10:37
KT: I know... she loves. I do too, but I, I want you to answer this and explain why
00:10:44
KT: Taylor Swift Tour is boosting the economy and then Shell writes, I can't understand how millions of people are spending an average $1300 on the experience. While I'm happy for everyone going to the shows. I don't see how for many people it's a financially responsible decision.
00:11:06
KT: I'm just trying to understand how the economy is boosted by people going into debt and spending more money than they should. I have always followed your rule to live within my means and have savings. I think it's amazing to splurge on the things we love.
00:11:25
KT: When we have the resources, I'd like to save up and spend on travel. It just seems backwards to me that the government is encouraging us to blow our budgets. Can you explain? So, Shell wants to know how does Taylor Swift?
00:11:43
KT: How's her tour boosting the economy? Suze, how many people work for Taylor on that tour?
00:11:49
Suze: Well, but that's not the answer here, KT...
00:11:55
KT: No, I'm just pointing that out.
00:11:56
Suze: No, but that's besides the point,
00:11:59
Suze: it boosts the economy because when people go to see her concert after the concert, they then go out to eat, to go to the concert, they go and they buy clothes to go to the concert. They either Uber or they do whatever to go to the concert. Like many people I know flew to where her... We had friends, flew, flew all the way to Los Angeles with this woman, with her daughter, they could afford it.
00:12:27
Suze: At least the mother could, right? And so the airlines make more money when something is that big, everybody makes money and it does boost the economy. Big time
00:12:42
KT: Bigger. She's bigger than Super Bowl.
00:12:44
KT: She is bigger than Super Bowl
00:12:45
KT: Taylor, You're bigger than Super Bowl.
00:12:47
Suze: We, we've gone to a Taylor show.
00:12:50
KT: Taylor, when you're in Miami, I'll come down, I'll boost it for you. Taylor.
00:12:55
Suze: Here's the thing that you need to understand.
00:12:59
Suze: It doesn't have to make sense. But the thing is this, I'll never forget when I was on morning Joe. Maybe you'll remember this KT and maybe I've told this story before and it was during 2007, 2008, everything was going to hell and people were what were just losing their houses, losing their jobs, everything.
00:13:23
Suze: And I went on to say, stop spending money, everybody stop going out to eat, stop doing this, stop doing that. And that was my spiel. Then before I signed off the air or cut my connection. The next guest came on and said, I couldn't disagree with Suze more.
00:13:45
Suze: If people stop spending money and getting further into debt, then the economy is going to suffer. Because if people don't have money and they don't spend money, nobody makes money. All right, that was the position. I said to the producer who knew I hadn't been disconnected yet, put me back on the air. I go back on the air and I have this huge fight on the air with this person.
00:14:11
Suze: So I've never understood why. In fact, one would go into debt to do things. However, the whole world does that, Shell. They go on vacation when they don't have the money to, they go out to eat when they don't have the money to, they all put everything on their credit cards and they pay the minimum payment due thinking they're keeping up
00:14:36
Suze: when they're not. So you just live your life exactly like you live it where you save up, you don't get into debt and that's your life. The people that are going into debt and spending more money they have or my favorite saying is they're spending money they don't have to impress people they don't even know or like, eventually trust me that will catch up with them. However, from what I've heard,
00:15:04
Suze: it's sure worth going to that concert.
00:15:07
KT: I heard it's unbelievable.
00:15:09
Suze: But is it worth the KT to get into debt to go to it.
00:15:13
Suze: I don't think it's worth to go into debt to do anything.
00:15:16
Suze: Then done, and there's the answer to that question. Next KT.
00:15:20
KT: Next question, Suze is from Tony.
00:15:23
KT: I would love five minutes of your time for advice on a situation with my mom who's receiving 24 hour care at home. So Tony's mom is 97. So my mom and she said this is a situation with my mom who's receiving 24 hour care at home. She's out of money, Suze, but she doesn't want to move to assisted living and doesn't want a reverse mortgage.
00:15:51
KT: My wife and I are considering taking money out of our savings and 403 B to honor mom's wishes to die at home. After the house is sold, we get our money back with interest and taxes repaid and then this is really sweet everybody and maybe you can look it up and, and, and support. Tony. Tony is an artist. He said, Suze, for your advice, I would give you a small painting.
00:16:20
KT: I'm a professional artist with a master's from UCLA.
00:16:23
Suze: Why just a small...
00:16:26
KT: Small to medium size,
00:16:28
Suze: Why not large, Tony. Are you being stingy?
00:16:31
KT: So anyway, I thought that was really kind and he sounds like a real special man. But Tony, listen to Suze's advice. Trust me, she's always right.
00:16:42
Suze: What made you say that?
00:16:43
KT: Because you are in this case.
00:16:45
Suze: Tony, here's my problem, right? Your mom is currently receiving 24 hour care at home. Now, I know exactly what that costs because I had to do that as well with my mother and it could easily be 10 15 $20,000 a month.
00:17:12
Suze: So I don't know how much longer your mom is going to live. So those bills I can tell you over the years that my mom did that cost me over $2.5 million. And I remember thinking to myself when I first started to do it. All right, mama's not doing so well. I'm sure you know, she wants to die at home. What she did just like your mom
00:17:40
Suze: that this will probably end sooner than later. It did not, it went on and on and on thankfully because I didn't want my mama to die. Yeah, we had her, we had her for a long time, but it ended costing me $2.5 million. Are you prepared that that may be what it ends up costing you? All right. Number one,
00:18:09
Suze: number two, if you take a loan out of your 403 B
00:18:15
Suze: to honor your mom's wishes. The problem with that is if something happens to you, you lose your job, you get ill, you can't work. Any money you took out of your 403 B as a loan will be due and payable within a very short period of time. If you don't have that money to repay it,
00:18:39
Suze: number one, you're in trouble, but number two, you will owe ordinary income taxes on that money as well. And if you're not 55 years of age or older, when you had to leave service, you'll owe a 10% penalty as well. It's really hard right now because if you use up your savings, if you take money out of your 403 B, if the markets all of a sudden skyrocket on you,
00:19:07
Suze: that's so much growth right now, Tony, of money that I know you think you will be repaid when mom sells the house. But there's never any guarantee that a house absolutely continues to hold value. What if a hurricane comes, a fire, whatever it may be? So therefore,
00:19:31
Suze: if your mother wants to stay at home because she doesn't want to move to an assisted living facility, ok? And she has a home that has a lot of equity in it.
00:19:44
Suze: You need to have, in my opinion, a talk with her and she needs to do a reverse mortgage. I'm sure she doesn't want to do a reverse mortgage because in her head, she wants to leave you that home and everything that it's worth so that you'll be ok.
00:20:03
Suze: But she has to understand that in order to keep her there for you to take money from the places you want to, could end up being very, very dangerous. So I love that mama wants to stay at home. But if the only way she can stay at home
00:20:21
Suze: is for her to either do a reverse mortgage and, or you use your savings and you take money as a loan from your 403 B. She needs to do the reverse mortgage. Going back to my mother for one second, my money that kept her going, didn't come out of savings. It came out of the income that I was earning and it wasn't a big deal to me.
00:20:44
Suze: All right. It sounds to me if you have to use your savings and your 403 B, it's a big deal. KT next.
00:20:52
KT: All right. So the next question is from Kelly. I'm writing to you for advice, Suze. I lost my husband of 31 years after a long battle with skin cancer. He was only 57 years old, but he earned six figures. He died.
00:21:09
Suze: I, I saw this one
00:21:12
Suze: and she ended up sending me a picture of her and her husband. I'll show it to you. Such a good looking couple. So sweet. Anyway, go on.
00:21:21
KT: So he died on disability. I just recently found out that I can draw on his SSDI at 60 she said I'll be 59 years old next month. I know that you're going to say, don't take it at 60. But hear me out, Suze,
00:21:37
KT: my husband passed at 57. Never got to retire. And my mother started having strokes at 53 spent the last 14 years of her life in a nursing home who I'm scared I will never get to retire. So she's asking your advice.
00:21:58
Suze: Yeah, let me see the email for a second. All right. So she also says on here KT,
00:22:05
Suze: that her husband's disability is $2200 a month right now and her social security at 70 is $2200 a month.
00:22:16
Suze: So, Kelly, while you may think that I would say no, no, wait till 70. I'm not gonna say that to you because what you need to do is just continue to take his social security disability at 60 for you. That's $2200 a month all the way until you
00:22:38
Suze: are 70. When in fact, what will happen, you will then convert over to your own social security at $2200 a month. That's what you are going to do. Survivor benefits are very, very different KT than divorced and things like that. So that's why you're going to do that. Kelly,
00:23:00
KT: This is from Lisa and it's my last question, Suze. Hi, Suze. I'm a 50 year old single mom. I have a stable $100,000 a year salary job. And I've got 100,000 K in my 401k.
00:23:17
KT: I recently left a relationship and now have $60,000 in credit card debt, mostly from overspending to keep up appearances with my ex partner who had a higher income
00:23:32
KT: now I realize I was breaking the first law of money and hiding my spending. Very soon, I will have 100,000 K from the sale of our home. Should I immediately pay off my credit card debt with that house income?
00:23:48
KT: Do you want to ask me this as a quizzie, Suze?
00:23:50
Suze: No.
00:23:51
KT: Ok. I would say I pay it off, pay it off.
00:23:56
Suze: Yeah. So Lisa, the greatest thing is you learned a priceless lesson. I mean, how many times seriously was I in a relationship? I'll never forget with this woman by the name of Nonny.
00:24:10
Suze: And Nonny was a very, very wealthy woman, although I'm 10 times wealthier than her right now. But that's besides the point, right? But, and I tried to keep up with her so much. I got myself into so much debt because I wanted to impress her. That's where I came up with a lot of these laws of money because I lived them.
00:24:33
Suze: I lived the same way years and years and years ago. So we all have to go through it.
00:24:40
Suze: But once I learned that lesson, like you've just learned it, Lisa, now you are on the path to prosperity. So, yes, sweetheart. When in fact, you sell the house, take $60,000 of it, pay off your credit card debt and then just go from there. You are 50 years of age, you are a single mom.
00:25:06
Suze: That is exactly when I met KT. Not that I'm a mom but, but, and truthfully so much wealth came after that. It's not even funny because I did stand in my truth
00:25:23
Suze: and financial freedom, baby. Yeah. Financing is sweeter than financial freedom. But financial freedom comes with the freedom of truth, the freedom of standing in your truth, the freedom of not being afraid to just be who you are. The freedom of defining yourself by who you are and not by what you have when you define yourself by what you have or what people think you have. You are living a lie
00:25:53
Suze: and you will pay the price. All right, it's quizzie time. This is a simple one. All right. All of you should be able to get this correct.
00:26:07
Suze: And it comes from Kathy.
00:26:09
KT: Wait, I have to just say something. My good friend Jennifer wrote to me. She loved one of your. It wasn't a quizzie, it was a Sunday school but all she said she didn't get any of the questions right.
00:26:22
Suze: Oh, Jennifer Littlehalls. I love my Jennifer.
00:26:24
KT: We love Jennifer. She listens to every podcast. I laughed so hard. I said Suze, Suze Jennifer got them all wrong. Just like me. Finally, I have a soulmate.
00:26:35
Suze: All right. This is from Kathy. All right. Everybody think about this. The truth is every time KT asks me a question, you should think about how you would answer that question.
00:26:52
Suze: But now I'm asking KT a question which means I'm asking all of you a question. You need to know how to answer this
00:27:02
Suze: Kathy says I keep getting mail for term life insurance. I know how you feel about term life per your podcast. I love term life. Everybody. If I am not married, my house is paid for and I am still working and will until I am 70 11 years to go. Yay. Do I even need a life insurance policy?
00:27:28
Suze: My answer is no, but I would love to hear what your thoughts are on this. Don't answer yet.
00:27:35
Suze: Right. She's not going to be 70 for 10 more years. She's only 60. Right. Right. Her house is paid for. Does she need a term life insurance policy?
00:27:51
KT: Does she have children?
00:27:52
Suze: She didn't say but I have a feeling she doesn't because she says I'm not married and I think she would have said if she had because she said all the other details.
00:28:01
KT: Are you ready?
00:28:02
KT: Am I ready to answer?
00:28:03
Suze: I don't know. Are you?
00:28:04
KT: I'm ready to answer. No, I don't think she needs it.
00:28:09
Suze: Ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, listen to me. Everybody. You do not need life insurance of any kind. If you don't have anybody that is financially dependent upon you.
00:28:26
Suze: Zippo, so don't waste your money on life insurance. At that point, I don't care even if it's term insurance. So if somebody is financially dependent on you, a spouse, a parent your Children, then term life insurance is the way to go. But if you don't owe any money, you're not married, you don't have any beneficiaries. You don't personally care.
00:28:53
Suze: Not your problem. Don't let anybody sell you insurance that you don't need. All right. KT how's it feel to be back now in the States?
00:29:05
KT: Jet lagged.
00:29:08
Suze: All right. I hope all of you have enjoyed big time, the prerecording that we did for all of you also. I want you all to remember that you have till December 31st, 2023 to do the kids savings account at Alliant Credit Union, as well as the teens checking account and savings
00:29:34
Suze: account. Go to my alliant dot com. Check it out. You put in $100 a month every month for 12 consecutive months, they will get $100. You need to make finances a family affair and this is only gonna last till the end of December. So please don't miss this opportunity, but until
00:29:59
Suze: our next podcast, which will be with us really in Florida, back from Spain where we'll tell you all about it back from Italy where we'll tell you all about it.
00:30:13
Suze: There's only one thing that we want you to say every single day and that is today. Wherever I go,
00:30:21
KT: I will create a more joyful, peaceful and loving world.
00:30:28
Suze: And if you do that, I promise you you will be unstoppable.
00:30:40
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