401k, Financial Advisor, Podcast, Retirement, Saving
October 06, 2022
Listen to Podcast Episode:
On this episode of Ask Suze & KT Anything, Suze answers questions from you all, about freezing your accounts, diversifying your portfolio, inheriting money, young couples pooling their money and more.
Suze: October 6th, 2022. She is back.
KT: I'm here! KT is in the house.
Suze: Now I know that maybe you miss me, but I know for sure you missed KT. Welcome everybody to the Ask KT and Suze Anything podcast. It is October sixth. What does that mean KT?
Suze: Come on, come on, tell me you don't know.
KT: Oh we have one day. October seventh is Friday, tomorrow, and that is the last day of your big opportunity for your do-good checking account
KT: with Alliant.
KT: Don't miss this.
Suze: All you have to do is go to my alliant
Suze: and that is A-L-L-I-A-N-T .com. Don't go anywhere else. Go to myalliant.com/good to open up a checking account. We call it the do-good checking account where all you have to do is put in $100 tomorrow
Suze: and then
KT: or today
Suze: or today you can do it today.
Suze: You got
Suze: to do it by today, and then every month through February 2023 just make an electronic transfer can be for any amount of money, $5 whatever you want, and electronically transferred into your account. And at the end of February 2023,
Suze: Alliant will give you $100. And you will get to choose one of the three charities that they have chosen to receive. $100 on your behalf. KT, what do you got for me today?
KT: The first question, I love this question because it happened to my sister. This is from Jenna.
KT: This is about identity theft. Everybody Hi Suze and KT. My social security number was stolen and I'm looking for guidance and what steps to take. In July I received a letter congratulating me on a credit card that I knew nothing about. I called the bank,
KT: and I opened a fraud report. They closed the card and they froze my credit at the three reporting agencies. I had hoped that was the end of it. Well listen to this Suze... this week, Jenna got another letter saying that her request for a new credit card was denied due to frozen credit. So the good thing is that her credits frozen, and that's working. The bad thing is someone is still trying to use her information.
KT: I checked my credit report, and the initial fraudulent card is on there. It's still there. But nothing else. Suze, what should I be doing?
Suze: So here's the thing. KT, what's a frozen account?
KT: What do you mean? What's a frozen account?
Suze: What do you mean? What do I mean?
KT: What do you mean? You can't use it.
Suze: But but do we have frozen accounts?
KT: Yeah. We purposely freeze our credit reports in our accounts.
Suze: And so should every one of you
Suze: listening. Right. So when you freeze your accounts from Experian, Equifax and Trans Union, the three credit bureaus that generate your scores, your FICO scores and things like that, when somebody applies for credit including you, right,
Suze: it's immediately denied because they can't get into your information at all. You if you freeze your accounts can't check your FICO scores, and if you want to apply for credit you have to unfreeze them, then apply, and then freeze them back again.
Suze: However. In today's day and age, it's absolutely worth it as Jenna is now experiencing. Girlfriend, listen to me. They have the information from your social security and other information that they obviously have as well. Okay. No big deal because you took the right step in freezing your accounts. But you have to set your expectations
Suze: correct. Freezing your accounts is not going to stop them from trying to open up an account. It will stop them from being able to open up an account. So you should set your expectations where you're going to see they're going to try over and over again, until they just get tired of it and they realize there's no way in. If you really want to protect yourself, however,
Suze: there is one identity theft company that I like very much. Again, everybody please know when I recommend a company like I'm about to do, they don't know that I'm recommending them. I don't get paid a penny to do. So I've done my own independent research and I really like them
Suze: and that identity theft company is by the name of Aura A-U-R-A. So look up Aura Identity Theft. And if you want, sign up with a program with them, so that if they happen to steal anything else from you, you'll have a place to go and they'll take care of it for you. Because sometimes what's hard is to know, what should I do, where do I go? Who do I contact?
Suze: In this case, if you did something with Aura then you would contact them. So that's something I would suggest for all of you.
KT: I'm gonna add a little tip. When I go to the doctor's office, they, if anyone asks for my social, all I give them is the last four digits. They never really need the full number. All right, Denise. Suze, I'm 54 years old. I have only worked and put money into a 401k
Suze: Do you remember when you were 54?
KT: it was a great
Suze: It was four years
Suze: after I got
KT: We were very very very entrenched in speaking engagements, television, media. We were all over the place. We probably traveled more in that year
KT: than any year.
Suze: Do you know that? We went for 10 years, and we never really spent more than one or two days in one
Suze: place and I constantly in the air on the road. We loved it though.
Suze: Yeah we felt more it was
KT: It was fun.
Suze: and you know in an airport going on a plane
KT: We never looked at the menu when we would go to the hotel because we memorized them.
KT: We knew. We would just call and say what we felt.
Suze: Those are some of the best years of our life and I hope this one is the best year for you as well keep going.
KT: Okay, so Denise is 54. She's only worked and put money into a 401K. And now she's saving in her Thrift Savings Plan. So she she's asking this question, do I need to have a financial advisor? I know nothing about what to do. And I would like to retire at 67.
KT: Currently 350,000 after inflation hit. I suppose she means that's what she's got.
Suze: At this point.
KT: Right. So she, she wants to retire
KT: at 67.
KT: There you go. 00:08:10
Suze: All right. I got it, KT.
Suze: Denise, I have a favorite saying, do you know what it is? KT?
KT: If you want to find the best financial advisor Denise, look in the mirror.
Suze: Oh you got that right. Ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding ding a ding. If that's essentially when you say I've only worked and put money in a 401k, and now a thrift savings.
Suze: So what that line says to me is that the only money you really have, hopefully besides an emergency account that you should have outside of that, right. So you know I want you all to have 8-12 months of a savings account.
Suze: All right, you should just know that. So, given that that's really all your investable money that you have, no, you don't need a financial advisor at least at this point. And hopefully you never will. One of the goals of the Women & Money podcast, is to give you enough
Suze: education, through the 400 podcasts that we have, if you listen to them along with my books now, along with my Amazon Freevee shows that are out there, and who knows what we may have coming up for you next year sometime. You never know. But with all of that out there, honest to God from the bottom of my heart, I believe that you will have enough information and find something
Suze: that I've talked about that will absolutely relate to your personal situation. You also whenever you need to, can write in to asksuze, that's S-U-Z-E firstname.lastname@example.org. Or download the Women & Money App by going to Apple app or Google Play, and all you have to do then is search on the wall there. The first thing you come to podcast content,
Suze: and type in what you want to know and the podcast that you need to listen to will come up. I personally think you need to listen to all of them. But that's all you need to do. And I think you'll be fine honest to God
Suze: when you know what to do with money. You then own the power to control your destiny. Okay. KT, that should be our tagline at the end.
KT: Own the power to control your destiny.
Suze: Yeah. There's only one thing that matters when it comes to your money and that's for you to own the power to control your destiny. Do you like that better than safe, strong and secure? No, I didn't think so.
KT: Okay, Suze. Next question is from Thomas.
KT: Suze. My mother passed away this year and gave my daughter $100,000 in her will.
KT: So first Thomas, we're really sorry for your loss. But listen to this, Suze. My mother was not a US citizen or a legal resident in the United States. What are my daughter's options to receive this money from her grandmother? Suze, is it better to receive this fund $16,000 each year, or in a lump sum from a gift tax perspective?
Suze: Why do you look so perplexed?
KT: It was just, because I don't know what do you do when, I don't know what's the answer. I'm as perplexed as Thomas. We're sorry your mommy's gone.
Suze: Yeah, we're sorry our mommies.
KT: Yeah. You never stop missing your mama and your daddy.
Suze: But you wanna know what's so funny, everybody. It's almost like I love my mother more in death
Suze: that on some level I did in life. That's a very fascinating thing, you know? And maybe is it because in life you take it for granted, or in life all the things that, you know your relationship with her, all those things come into play. But then after she's gone, you realize, what was wrong with me?
Suze: Why can't I have been more mature? I just remember her little face. I look identical to her by the way.
KT: Suze looks exactly like her mom.
Suze: Especially when I look in the mirror and I'm not dressed. I go mom! Anyway. So here's the thing Thomas, I don't have enough information because are you telling me that your mother is not a US citizen or a legal resident, but is she here on a green card?
Suze: Is she in the United States? Does she have an account here in the United States? So let's just assume that she does. And in her will, she's left $100,000 to your daughter. It hopefully it should have been left to her as either a pay on death account, so that she doesn't have to go through probate. But hopefully you'll figure out what are the legal ways you have to get this money.
Suze: However, your question is, is it better to receive this fund $16,000 a year, or in a lump sum from the gift tax perspective? We're no longer talking about gift tax Thomas. Because your mommy has died. So now
Suze: we're talking about a state tax. And mommy can leave estate tax-free up to almost $12 million dollars in total. So this is not something you need to worry about. I personally would take all $100,000, and absolutely take it at once. Now. The question is different.
Suze: It's different because the grandchild is only 21 years of age. What will she do with $100,000 all at once? So you need to know your daughter, and what's the healthiest thing to do for your daughter?
Suze: Do you understand? If that is the case, then you might want to take it in small amounts, and give it to her like that. Just that's your main thing that you need to decide. Gift tax is not a problem here.
KT: All right, next question, Suze is from Jennifer.
KT: Hi KT and Suze, I am a divorced mother of five-year-old twins. I'm a twin. I like it.
Suze: If you people write the word twin, she’ll pick it.
KT: You could say I have twin questions you can ask too.
KT: I have for the past 2.5 years had my boyfriend live with us, I own my own home,
Suze: Who is "us?"
KT: Her and her twins and they're only five.
KT: I own my own home that I paid $2,700 a month for, and I pay all the bills. During this past summer I kicked my boyfriend out
KT: because he wasn't interested in helping to contribute financially. He feels that if he does the construction projects around the home, that his labor should count as his rent. I completely disagree. While I'm financially responsible and can afford my home, I still believe he should pay rent. Suze, please give me your advice. Can I tell you what's funny about
KT: Well wait, here's what's funny.
KT: She doesn't say anything about I miss him, I love him, I really wish that we could figure - she just wants him to pay the rent.
Suze: She already kicked him out.
KT: She did kick him out.
Suze: If I were you, I would still so keep him kicked out. It's not even funny.
KT: You never said like I really miss him, and I love him -just that
KT: it's over.
Suze: Yeah. And
Suze: Here's the...
Suze: Here's the danger that you have which is depending on how many years you actually end up living with him. Let's say it's 10 years, 20 years, 30 years. Then you realize you should have stuck to your decision and never let him back and kicked him out when you did, who knows what? He will come back and sue you for it can get very messy. I've seen this happen many times. 00:16:14
Suze: If you really loved him,
Suze: you would and if he really loved you,
Suze: it would have worked out something very different. You know, there were times when I had a girlfriend, and we would buy real estate together. I had the money, she had all the labor and everything. But we would buy houses in San Francisco that were like shacks that when I say she had to work 24 hours a day and lived in this shack, and renovated the whole thing,
Suze: that's what she did. And it would take maybe eight months to fix it up, then we owned it 50/50. Because I would have had nothing without that. But to do some little construction and here and there, and fix this up and that. I had another girlfriend who would do that with a home.
Suze: And it was like no, you know, she also had to pay rent. Are you kidding me? So no, I would not be taking him back. Because truthfully you know and I know, there's another reason why you really
KT: kicked him out. You should still remain good friends though, because you never know when you need a handyman.
KT: Alright, ready? Next question's from Sharon. I have a newlywed daughter and a son in law that both make different amounts of salary. Suze, can you please address how a young couple should merge their money or figure out how to plan a life together on when they plan on having children, and how their expenses should be paid? Suze I come from old school where money is pooled together and you spend what you need to spend from the joint account,
KT: and if each person needs their own money, they can put that aside, but I appreciate hearing your thoughts on what they should do.
KT: She has a great, she has a great plan, everybody.
Suze: Essentially Sharon you have the right idea where you have a joint account and that you pay all your needs from there. The question always becomes, how much do you each put into that joint
Suze: Because you know I talk to people all the time who's one of you is making far more money than the other,
Suze: and if you put 50% in and what you're making, it may leave the other person with absolutely very little, so here's how you would do it.
Suze: Let's just say, and I've used this example over and over again, but I don't think you can hear it too many times. Let's just assume your son in law is making and taking home $3,000 a month. And your daughter is taking home $7,000 a month. You add those two amounts together. So after taxes, after their 401k contributions, that is their take home.
Suze: So that would be $10,000 a month. Let's just assume that their joint expenses, really, for their rent and everything. Now I understand this is low, but this is just an example. Is $3,000 a month. You then would take $10,000 and divide that into $3,000, which is 30%.
Suze: One of them, that's making your daughter $7000 a month, 30% of that 7,000 or $2100 a month goes into the joint account.
Suze: For your son in law, bringing home 3,000 a month, 30% of 3,000 is $900 a month. So it's different amounts. $2,100, $900. But those two amounts equal $3,000 a month. It's equal percentages,
Suze: not equal amounts of money. And that is something that every one of you needs to get. Do not do this thing where let's just do 50/50.
Suze: Don't do it that way. Then they each have their own separate accounts as well. I would have at least three accounts if they have kids or whatever and they want another account for college expenses, they would do it the same way. Keep everything as equal percentages. And and then, it's an equal relationship financially speaking. All right.
KT: Next question is from Dina.
KT: I have $19,000 in a money market account with my bank earning nothing. Suze, what should I do with it?
Suze: Well that's an easy,
Suze: What I want you to do right today Dina. Is go to my alliant.com to open up an Ultimate Opportunity Savings account. And I want you to deposit $17,900 in there.
Suze: All at once. So the majority of your money can start earning 2%. And trust me, it's going to go higher, and higher, and higher. I want you to keep $1100 out of that account, and then every month transfer $100 into that account. At the end of 12 months, not only will you have made a great interest rate,
Suze: but you will also get that $100 bonus which makes it a seriously great interest rate. So that's what I would do with that money if I were you. So KT, you know what time it is.
KT: My quizzie time. I'm ready. I'm ready for it. I missed it last week.
Suze: Oh right. Because we didn't have a satellite.
KT: What's my quizzie?
Suze: Which is from Susan. Susan asks, I was hoping to hold on and use my 2005 Honda CRV for at least another two more years before buying another car. But I think the car is now no longer drivable.
Suze: And I'm asking KT a quizzie. Before I go on with this quizzie, this quizzie is for all of you as well. How would you answer this question? So KT don't answer right away. Okay?
KT: Alright I'll listen.
Suze: So I had it towed, but I'm nervous the fix may outweigh the value already. I did not decide to replace the AC system in June,
Suze: but the car died on me last night while driving home. Thankfully I was close to home and got dear friends to help push it to my condo. Any advice on what I should do about a replacement? I don't use the car much. Usually the bus system, but there are times when I need a vehicle. Think about it, think about it. What would you do if you were in Susan's
KT: I have one word.
Suze: What is it?
KT: That's my answer.
Suze: And how would you then have her do this? What would her plan be?
KT: Okay, so first of all Susan, it's a 17-year-old car.
KT: I wouldn't even bother trying to repair it. Get rid of it, see what you can get for it. 17 years old. You have no air conditioning. I don't even know, where does she live? Where is Susan?
Suze: I don't know, I don't have any idea.
KT: No air con. I mean probably, you know, no air con, no heat, nothing. It's gonna keep breaking down. Which is dangerous. It's now become dangerous to drive a 17-year-old car. Listen, our car is 10 years old.
Suze: Older than that.
KT: Yeah, it's 11. And we love this car and one sooner or later we're going to have to get an electric car is what we're really planning on for Florida. But for you Uber for now, see how you go since you don't really use it that often, you take public transport, and then if you need to buy a car, maybe get a used car.
Suze: Uber, Uber, Uber, Uber. So, Susan, here's what I would tell you.
Suze: Used cars were selling for so off the charts a few months ago, it's not even funny. And I would find out if I were you by contacting Carvanna, go online and see what they will give you for your car. 00:24:56
Suze: Let them buy it from you if they can because the car is no longer working. Somebody is willing to give you something for that car somewhere.
Suze: You know, there is KT one of her favorite things because she loves the little jingle, they sing cars for kids, maybe you donate it. If nobody will buy it, and do a tax write off, we had a car that actually Lynn, KT's sister, we gave it to her years ago and it was breaking down. She loved that car. She was attached to that car, but it needed to go. And so we found somebody that bought it for $1,000.
Suze: So I would be selling that car now, because again, used cars are still going for a lot of money, even if they're not working. Maybe the person that you took it to to get it fixed, may be the one who wants to buy it. I would get rid of it. And the main reason I would get rid of it is because the car died on me last night while driving it home.
Suze: Listen, we were taking a walk the other day, and we were don't going on this path and we were by ourselves, and I looked at KT and I said, do you think it's smart that we're walking by ourselves? You think we should carry mace or something with us? We live in a day and age where you cannot afford as a woman,
Suze: to be breaking down somewhere at night. You just can't. That's not safe, that's not smart, and that doesn't make you feel secure. So what KT says is correct.
Suze: If you can sell the car, and you can get a few $1,000 for it, that's money that you could then use to Uber when you need it. And you would be saving that money in the meantime. Interest rates are too high right now to finance a car,
Suze: and car prices are still too high to buy a car. If it's a good time to sell, it's not a good time to buy. So given that you don't use it often because you usually use the bus system, see what it feels like not to have a car, and how much you're spending on Uber, and then make the calculation if you can get by with Uber versus what it would cost to buy a used car,
Suze: insurance, gas, fixing it, and all those things. Are we sure Uber isn't worth it? It may be in your particular situation. KT, that's a wrap girlfriend. What do you want to tell everybody?
KT: Everyone we’ll see, come and tune in Sunday.
Suze: I'm going to talk to you about what's going on in the stock market obviously and my thoughts again about
Suze: everything because I think you need to hear it. This is a crazy time. So tune in Sunday so we can make some sanity out of it all. KT, ready? There's only one thing that we want for all of you, and that's for you to be
Suze: strong, and secure. Love you all so much. Bye bye.
KT: Bye Bye.
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