Podcast Episode - Is Now a Good Time to Refinance My Mortgage?

On this Ask Suze & KT Anything episode, KT asks Suze your questions about funding your trust, the Must Have Docs, Roths, and so much more.

Listen to Podcast Episode:

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Podcast Transcript:

Suze: September 25th, 2025.

KT: Wait, tell everyone why you're laughing.

Suze: Well, why don't you tell everybody why we're laughing?

KT: So Suze had a keratin treatment yesterday.

Suze: We're in Florida. And my hair can be a little bit unmanageable.

KT: She had a keratin treatment. And when I picked her up from the salon, she had a little cap on, a little baseball cap, and when we got home, she took it off and I said, Oh my God, where's your hair? So this treatment makes your hair like real flat. And I said, Why'd you let them cut it? She said, I never cut not one strand. I said, Oh my God, what did you do, Suze? And I keep looking at her and her hair's real flat. We should post a photo.

Suze: Maybe, maybe we'll see what happens. Anyway...

KT: Today's a lucky day. Suze has flat hair and it's our nephew, our great nephew, Nicky's first birthday. So how do you think it feels, Nicky, to be one?

Suze: You know what I think is so funny, everybody. First of all, welcome to the Women and Money podcast...

KT: And everyone smart enough to listen.

Suze: All right, so we've got that down. KT has already just been going, going, going this morning. But what I think is so funny is that everybody's making all these presents. Remember, in our family we don't really buy things, so I've watched KT paint a coconut, paint all these little things, you know, figures on it and everything. And I'm like, all these people are going there to be with him on what's so fascinating. He's not really even gonna know it's his birthday.

KT: Yes, he does.

Suze: Yes, he does. Anyway, KT, you have questions for me today because it's Ask KT and Suze Anything, but most people tuning in — maybe for the first time — would think, oh, this is the KT show.

KT: It should be. I bet the ratings will skyrocket if there's ratings on a podcast.

Suze: There's a number of downloads, right? I think — what are we approaching — 50 million? So we're approaching a nice number. Anyway...

KT: All right. Hi, Suze and KT, what does "fund your trust" mean? What do I need to do? Is this something I need to do before getting my must-have documents notarized? Please advise. — Linda

Suze: Here's the thing, Linda, that you need to understand. A trust is like a suitcase where you have to pack things in it. You have to put things in it so it goes from one place to another very easily. If you have a suitcase and there's nothing in it, then you get to the place that you're going and you open it up and there's nothing there.

KT: I love that analogy.

Suze: I'm so glad. So when you have a trust, I want you to think about it as a suitcase that you have to put things into so it can easily go from you to your beneficiaries. All kinds of things can happen to it when it's in the suitcase. So funding your trust means you have to first do the trust, get it notarized, get it witnessed. Then what you have to do is change the name of, let's say, your individual bank account — from Suze Orman to Suze Orman, Trustee for the Suze Orman Trust. You have to change the assets that you have — your bank accounts, your brokerage firm accounts, your real estate. All of those things get changed from your individual name into the suitcase, and the suitcase has the name of Linda, Trustee for the Linda Revocable Trust and whatever date you did it. Just that simple. That's how you fund a trust.

Now, when you get the must-have docs — and I have a feeling that you're talking about them — the must-have docs are a living revocable trust, an advanced directive and durable power of attorney for health care, a financial power of attorney, and a will. When you do all of them, you will absolutely have instructions with the revocable trust on how you fund it. They'll take you through the entire process.

And for those of you who don't know what the must-have documents are, go to musthadocs.com. For $99 you will get $2,500 worth of state-of-the-art documents, good in all 50 states.

KT: All right, Suze. Next question. This is from Liza.

Suze: Are you sure?

KT: Yes.

Suze: Do you remember when we saw Liza Minnelli?

KT: I loved it. I love Liza Minnelli, everybody.

Suze: We got to go backstage.

KT: Yeah, we saw her on Broadway for her show.

Suze: Was it on Broadway or was it somewhere else?

KT: It was on Broadway. We had to walk all the way down the steps to get to her dressing room, the old New Yorker...

Suze: Never mind. Next question, KT. We're already done with this podcast.

KT: Liza, Liza with a Z. Hi Suze. I'm 30 years old and I lost my job earlier this year with the Doge funding cuts. I want to roll my former employer Roth 401(k) into my Roth IRA. I have $34,000 in my Roth 401(k). Question is, when I roll the funds over, do I dollar cost average this money into my Roth IRA as I normally would do with my investments? If I dollar cost average, am I missing out on money that would have been growing before rolling it over and now sitting in cash? So Liza, invest in ETFs.

Suze: Yeah, so Liza with a Z. When you transfer that $34,000 into your Roth, if that money had been fully invested — listen to me closely — already, let's say it was in your Roth 401(k) in a Standard and Poor's 500 index fund, if it was already totally invested, when you actually transfer it, maybe you'll transfer it in cash — who knows. I would not dollar cost average. I would actually just totally invest if the money that you are transferring was 100% invested at that time. If it wasn't and it was sitting in cash, then I would dollar cost average.

KT: Hi, Suze and KT. If I am maxing out my 401(k)...

Suze: Who is this from?

KT: AC.

Suze: AC. OK AC, Ask KT AC.

KT: Should I add additional dollars to a traditional rollover IRA or brokerage account? I have both additional accounts, but I'm not sure which is a better investment for retirement, which I would like to do in about 10 years. My income doesn't allow me to contribute to a Roth IRA just in case you were wondering.

Suze: Yes, and I was. AC, because as KT was reading that to me, I was going, why doesn’t she just do a backdoor Roth? And you can't do a backdoor Roth, everybody — remember this — if you have a traditional IRA, a SEP plan, a SIMPLE plan that is pre-tax, you just don't want to do it if you have one.

If you are asking me which is better — a traditional IRA or a brokerage account — I would tell you I would do a brokerage account. And the reason that I would do a brokerage account is because once you make an investment, normally, you may keep it for 10 years or longer. And while it's in there, you don't pay taxes on it anyway. But when you do go to take it out, what can happen? Then you will only pay capital gains tax if you have a gain.

What happens if you have a loss? Then you can take the loss off your taxes. You also may have some things in there that have a gain, some have a loss — so you can offset them all so you don't pay any taxes. Oh, you die. And now the money goes down to your beneficiaries. They get a step-up in basis. So let's just say you took that money and you turned $50,000 into $300,000. You die. Guess what? Your beneficiaries get a step-up in basis. They get all of that for $300,000. They could sell it all — no taxes.

You put it in a traditional IRA and it grows and it grows and it grows — oh great. Now you go to take it out — ordinary income. Oh, you've lost money on it — can't take it off your taxes. You die and it goes to your beneficiaries — totally taxable.

An investment account over an IRA any day if you ask me when it's pre-tax.

KT: OK, next question from Karen. Hi Suze and KT, I'm reading your retirement book and loving it.

Suze: The Ultimate Retirement Guide.

KT: For 50+. I remember you've mentioned on your podcast, and I just read it in your book as well, that a Roth SEP IRA is now allowed. Do you know...

Suze: Yea, if you can find one.

KT: There you go. The question is, do you know of any institutions currently offering one? Do you?

Suze: No.

KT: All right, well.

Suze: Listen, everybody, I don't understand. Now that the laws have changed and you can have a SEP IRA as a Roth, no financial institution really is offering it. Maybe I found one, but I wouldn't put my money there.

So here's what I would do if I were you. It's just such a shame. Fund your SEP IRA and convert it — just that simple — and pay taxes on it when you convert it. It's the same as if you put money into a Roth SEP IRA with after-tax money. It would come out the same.

KT: All right. Next question is from Miguel. Hi, Suze. I recently switched jobs and I had a 401(k) with my previous employer. It is a traditional 401(k) and I was thinking of rolling it over to my personal Roth IRA, or should I open a traditional IRA? Miguel goes on to say, it's about $650 — not much. Hey, every dollar counts, Miguel — but I'd love to move it in the best way possible, avoiding a tax hit. Where should I move this money?

Suze: You know, KT, this is such a sweet question.

KT: They're all sweet.

Suze: Yes, this one is very sweet because people would go, really, $650? So — and what you said is every penny counts. Miguel, listen to me. You are to convert it to a Roth IRA — absolutely. Because now what will happen is as you invest it — and if I were you, I would put all $650 into an ETF by the symbol VOO — and let it grow because now the money will grow tax-free. So take your tax hit now, put it into a Roth IRA, and see what happens. It's not going to be that big of a tax hit, but I'd rather you take a tax hit on $650 than years and years and years from now maybe taking a tax hit on $5,000, $10,000, $15,000 or more when you go to take it out.

KT: Suze, the next question is from Jenny. My husband and I have a business, so we have the SEP IRA accounts. We maximize the amount every year. My question is, we currently have it with Merrill Lynch. My hubby's 61, I am 56. They charge us 1% on what we have in the account. Should I move it to a no-brokerage firm like Fidelity so we stop paying the 1% when we stop contributing? It adds up every month.

Suze: So first of all, my dear Jenny, here's how I would look at this if I were you and everybody else wondering this question — because as I peruse the emails that you send in to asksuzepodcast@gmail.com, all of you seem to be asking this question lately. If you have money with a financial advisor and let's say 100% of it is invested for growth, is it worth it for you to pay 1% or more in fees? Because that will mount up, to this financial advisor.

Here's how I would make the decision if I were you. A financial advisor should at least, in my opinion, beat the Standard and Poor’s 500 index. Now you all know that I really like the exchange-traded fund by the symbol VOO. Take a look at the return for VOO. And if your advisor has beat that, all right — stay with the advisor. If the advisor has not beat it, then what are you paying for? Just that simple.

KT: This is from Steph, Suze. And the reason I love this, it says “Pick me, KT.” It’s a quick and Rothy.

Suze: Oh, you know, we should create a—

KT: A drink. Let’s make a smoothie called a Frothy Rothy. I’ll put it on the wall, everybody.

Suze: And what would be in it?

KT: I’m not gonna tell you now — they have to go to the wall to get the recipe.

Suze: Guess what I would have in it?

KT: Banana?

Suze: No, I would have root beer and vanilla ice cream.

KT: And a banana maybe? OK, that’s called a root beer float. I need one that’s called a Frothy Rothy. Root beer maybe. I keep... (laughing)

KT: Hi KT and Suze. I can’t begin to thank you for all the Roth knowledge you passed on to me. I just drank a Frothy Rothy this morning and currently have a standard investment account and a Roth IRA. They are both all invested in great companies you’ve suggested, Suze — yippee! That “yippee” is for real, by the way. My question is this: Now that I know so much about Roth IRA accounts and how to invest well within them, is it possible to transfer shares of these fabulous stocks from my standard investment account into my Roth IRA as my annual $8,000 contribution next year? So Suze, Steph is over 50. I really don’t want to sell those that I have in the standard, and I sure wish they were in my Roth.

Suze: So when she says standard, she means in her regular investment account. Should I give you that as a pop quizzy?

KT: Oh no.

Suze: Why?

KT: No, no, don’t — because I’m on a roll here.

Suze: Oh really? Do all of us think she’s on a roll here?

KT: I am.

Suze: Trust me...

KT: Come on, answer the question before everyone forgets the question.

Suze: All right. Steph, the easy answer to that is no, you cannot. You cannot transfer stocks that are in an investment account into a Roth IRA and have that be considered your contribution. Only cash can be considered a contribution when investing in a contributory Roth. Could you sell those stocks, pay taxes on them now, and then take that money and put it in as a contribution? Yes. But I’m not sure, because I have a feeling you probably have some serious gains in those stocks — especially if they are... anyway, go on.

KT: Just enjoy another Frothy Rothy.

KT: This is from Cindy.

Suze: Oh wait, let me fluff...

KT: Cindy said, Suze, I got the must-have documents. I live in Texas. When I... listen to this question, everybody, whoa, make this one my pop quizzy. When I met with an attorney to change the name of my home deed to the trust name, they said my trust document was not valid since it was from California.

Suze: Let me finish this question. And they wanted to do a new trust for them. Go on.

KT: It says of course they offered to create a new will and trust. Is this so? Cindy, you absolutely need to listen to Suze and everyone out there smart enough.

Suze: In the same way that you have the ability, Cindy, when you're creating a corporation for a company — you can incorporate in really any place you want, like Delaware or anywhere — the same is true with a living trust. If you create a living trust governed by the laws of California, it's good anywhere that you happen to be. And the reason that the must-have documents chose the state of California is that they have the most liberal trust laws anywhere. So your lawyer is 100% wrong.

I just want to make this statement, everybody. Over the years, millions and millions and millions and millions of people have purchased the must-have docs from all over the United States. Don't you think by this point in time that would have been noticed if it wasn't possible? Many of those people are no longer alive. They passed everything down to their beneficiaries absolutely with ease. There's never been a lawsuit or anything like that against them. So I doubt highly that the manufacturers of the must-have documents would have allowed that if it wasn't legal. So therefore, they are wrong.

And by the way, I just have to say — we had the must-have documents, and we live in Florida. Just saying. Go on, KT.

KT: All right, next question is from Carlene. I turned 60 in January 2025. Do I qualify for the additional catch-up amount of $11,250 on my 401(k) for the 2025 tax year?

Suze: Pop quizzy.

KT: Yes.

Suze: What if she had turned 64? Would she have qualified?

KT: I think yes.

Suze: No, it's only between the ages of 60 and 63.

KT: I didn't know that.

Suze: Of course you didn't.

KT: Why?

Suze: Don't ask me why. That's the law. I don't know why they did that, but yes, you absolutely qualify for that catch-up contribution. Let's say you were 59, or let's say you were 64 — it's only like $7,500. All right, go on, KT.

KT: OK, my final question is from Kara, and I picked this one because it said in the subject, "Is now a good time to refinance my mortgage?" Hi Suze and KT. I bought a house two years ago. I have a 30-year mortgage with an interest rate of 6.125%. I've been watching mortgage interest rates, waiting for them to go down so I can refinance to a lower rate. Two local credit unions have 20-year mortgage refinance rates of 5.5 and 5.375. Should I lock in one of these lower rates now or wait to see if the interest rates go down further?

Suze: Interest rates probably will go down further, but again — then you never know.

KT: You never know how, when, right?

Suze: You never know. They should go down sooner than later. We'll see. But truthfully, the current rate on a 20-year mortgage, if you were to get it, is still at about 6.10%, so those are really great rates. So I don't know. I think if you did it, it would probably be OK, but you might just want to wait a little. Is it a special offer that these credit unions are offering right now? Or is it gonna go away? So can you just ask your credit unions, is this a special or what do they think? Because it might be a special to get you to do it now, and it's gonna stay that way even if they lower rates. So there you go.

KT: OK, Suze, that's a wrap.

Suze: I don't think so.

KT: Oh no.

Suze: Yeah, you're right.

KT: Oh no, she's doing it. She's bringing back the quizzes.

Suze: So this is where I ask KT a question. And all of you are being asked the same question, and I want you to be able to answer this question. This is from Doctor SD. All right. Hi ladies, I love listening to the way the two of you interact. Oh yeah, like today? Anyway, it is so much fun in addition to being a learning experience. I just listened to both Roth podcasts together. Did I do this right?

I am over 65. OK, I opened a Roth in 1994. It had about $60,000 in it. So I opened a Roth on January 10, 2025 and transferred everything from my Schwab account that I had opened in 1994 to a new account at Fidelity feeling it was time to consolidate.

So KT, just to be clear, this person is 65. They opened a Roth in 1994 at Schwab. The beginning of this year, they opened up another Roth at Fidelity, and now they want to transfer the money from the Schwab account to the Roth account at Fidelity. Here's the question:

Right after that, I converted my traditional IRA — about $30,000 — into the Roth, and I know I will owe taxes. The conversion has its own five-year clock, which I read starts January 1st of the year I did the conversion. So in my case, can I withdraw the money I converted? But I have to wait five years to withdraw any earnings on the converted amount. Is that right?

KT: I believe yes. You're thinking about this? Yeah, I think the doctor's exempt from having to owe anything at this point.

Suze: Ding ding ding ding. Because when you converted, Doc, into a Roth IRA that had already met the five-year time clock and you are over 59 and a half, you can take anything you want out without taxes or penalties whatsoever.

KT: I learned from all of Suze’s Roth lessons that 59 and a half is a really magic number everyone just needs to remember.

Suze: And a Roth that has been open for at least five years. All right, KT, now that’s a... that’s a Rothy, Frothy wrap.

KT: Happy birthday, Nicky.

Suze: Happy birthday, Nicky. Happy Rosh Hashanah, everybody.

KT: Happy New Year.

Suze: Right. Happy New Year. And until then, there’s only one thing that we want you to remember, and it is this:

KT: People first, then money, then things.

Suze: Now you stay safe, healthy, and secure. Bye bye now.