Podcast Episode - Your Fear of The Unknown Keeps You From The Truth of The Known

On this Ask Suze & KT Anything episode, KT asks Suze your questions about when to take Social Security, financial protection, Roth contributions and so much more.

Listen to Podcast Episode:

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Podcast Transcript:

Suze: October 23rd, 2025. Welcome everybody to the Women and Money podcast, and everybody smart enough to listen. We have pre-recorded this because as you know, we, as you're listening to this, we are in Italy.

KT: I think we're in Sienna having an incredible, incredible lunch. Pasta with truffles and mm, delicious!

Suze: You know, we're just having the time of our lives.

KT: Yeah, we're painting up a storm.

Suze: Anyway, so for your pleasure, we will now do a pre-recorded Ask KT and Suze Anything. Go for it, Mi Amor. Was that Spanish?

KT: (KT sings a little of Amore) I'm gonna sing for you.

KT: OK, so hi KT and Suze, this is for KT. Been enjoying your podcast and especially the Ask KT and Suze Anything part. My question's a bit complicated and sorry for the long email.

So Sarah said, Suze, my mom passed in 2005. She created a trust before she passed that made it so my sister and I inherited her home with the provision that her husband—not our father—could live in the house as long as he was able to reimburse us for the amount of the mortgage payment each month.

Fast forward 20 years later, her husband passed in 2024. We sold the house this year for $1.1 million. At the time of my mom's passing in 2005, we had two real estate agents give us a written estimate of the value of the house at about $900,000.

Since I want to make sure I am prepared and not surprised by a tax bill for 2025, do we report capital gains on the difference between the value at her passing of $900,000 and the sale price of $1.1 million?

Suze: There you go, KT. This is an email that I answered.

KT: Oh, you spoke to Sarah.

Suze: I answered her, right, to the best of my ability. However, for those of you who happen to have questions, write in to asksuzepodcast@gmail.com, and you never know when—because I scroll them—and if one catches my eye for whatever reason, I will write you back the answer.

Now in this particular situation, KT, here's what I didn't know, but I wrote her back. If the trust that her mother left used the words that "I am leaving a life estate to my husband," then the truth of the matter is Sarah would use the $1.1 million number, and that is what she then would owe taxes on, which would probably mean nothing. She'd probably get everything tax-free at that point—no capital gain—because her cost basis would be what it was when her mother’s husband passed, not when her mother passed.

KT: OK.

Suze: All right, but it's got to say that in the trust. It's got to say "life estate." If it just says, take care of my husband, make sure he pays for everything, blah blah blah, but doesn't specifically say that, then chances are she's going to owe taxes from the $900,000 to what she sold it for—the $1.1 million. Now obviously she can take off real estate commission, all kinds of things like that, but the key here, everybody, is this:

You have a home and you're living in it with your spouse. And if you die, you want that home to pass to your children because maybe the spouse is not the kids’ father or mother—whatever it may be—make sure that if you own it in trust, that in the trust it says that you are leaving a life estate to your spouse or whoever you're leaving it to. It doesn't even have to be your spouse.

That way, upon that person's death, your kids or your beneficiaries will get a step-up in basis as to the value of that asset upon the death of that person that had the life estate. Just know that. So either way though, capital gains tax is not going to be that horrific on this property.

KT: OK, next question is from Rhonda. Hi, Suze and KT. I have a question on when to take Social Security. My husband and I are retired. I'm 62 and he's 63. We live comfortably with $2 million in investments and several rental properties that are paid for.

She said our 17-year-old son passed several years ago. This has resulted in my husband drinking a lot, and he has been a smoker for over 39 years. He's a good man but has suffered from depression throughout his life.

Suze: You never get over that.

KT: No, never. He also has high blood pressure and high cholesterol, which he takes medication for. We could easily wait until we're both 70 to draw Social Security, but given his health, I'm wondering if we should start to draw mine early. It is about one-third of what his is. Thank you for all you do. Love and blessings, Rhonda.

Suze: I know this is going to sound strange, but first of all, always our condolences for the past loss—always, always, always. People, just because they have high blood pressure, they drink, they smoke, they do all the things that you think should kill them—sometimes they live longer than you, believe it or not.

So if I were you, given what you have—that you really don't need your Social Security—you have $2 million in investments, several rental properties giving you income, you're fine financially speaking, I would withdraw my Social Security, but not before the age of 67. Just withdraw it starting in a few years. You say you're 62, so that's five years from now. That’s when I would withdraw it at your full retirement age. Otherwise, you're going to take a penalty because you're under full retirement age, and it's really not worth it.

And obviously when he dies, you're just going to take over his full Social Security. So hopefully he will make it till he's 70, and he should wait till he's 70 because you'll just take it over at that point in time, which will be a whole lot higher. So therefore, that is the answer to your question.

KT: Suze, I picked this next question because it sounds a little desperate. It said, "Pick me, pick me, please, KT, pick me." Hello, Suze and KT. I need some advice on protecting myself financially. I live in a community property state. My marriage of 14 years is circling the drain.

Last year I separated my income into a checking and savings account that my husband does not have access to. Since my name is still on a couple of his credit cards used without my consent and on the joint checking account, I am still getting hit financially when he misses a credit card payment or overdraws the joint checking account.

He is now saying he wants all of the credit card debt to go to collections because he doesn't have any money to pay them. I am very discouraged. I've been telling him for over a year that he needs to find a job for consistent income and work out paying off his debt. He claims his medical issues prevent him from working, but he doesn't have debilitating medical issues.

I am highly considering filing for divorce, something he has periodically threatened to do for the last 10 years, but I'm concerned about how things will turn out. I feel very used and insecure financially. The worry and stress of this is drawing so much of my attention, and I'm exhausted. Any advice you have for this situation would be greatly appreciated.

Suze: Here's the thing, girlfriend. Your situation is not simple, and it's probably more complex than this email says because this has been going on for a long, long time. So the real answer to this is: why have you stayed? More than me telling you what you should do, I need you to ask yourself, why haven’t you done what you know you should do?

You say in this email that you should divorce him, you're thinking about it, he threatens you with divorce. What is keeping the two of you together? Chances are you are afraid that if you divorce him at this point, he's going to come after half your money, he's going to do this, he's going to do that, who knows what. But your fear of the unknown is keeping you from the truth of the known.

Do you want me to say that again? Your fear of the unknown—what’s going to happen if you divorce, if you leave him—is keeping you from the truth of the known. And the truth of the known is: he is a financial disaster. He is hurting you financially. You are stressed out. You are miserable. You know you want to divorce him. And you know you need to move on.

And the only way for you to move on, in my opinion, is to face the known, stand in the truth, and do what you are afraid to do, which is divorce him. The sooner you can separate your finances from him and then you know what you have, you know what you can do, you know everything that is yours from that point on and that you can build upon it—then you won’t be stressed, you won’t be insecure, and you won’t feel very used.

Now, in this email, you use the words, “I feel very used and insecure financially.” Who’s using you? Who is making you feel insecure? You're using yourself. You're using excuses to keep you in a situation that you know you need to leave. You feel insecure financially because you know you are not doing that which you need to do financially to separate everything from him.

You now need to take the final step and separate everything. Don’t be afraid. I’ve talked to thousands of women who have written emails exactly like this one, and then years later I hear from them: “Suze, that was the best thing I ever did.” “Oh my God, Suze, I finally own a home on my own.” “Oh Suze, I own property. I own this. I own that. Oh Suze, I’ve saved a million dollars in my Roth retirement account.”

Don’t be afraid to do that which you know you should do. What’s making you miserable right now isn’t him. What’s making you miserable right now is that you are lacking the courage to do that which you know you should do for yourself. Just saying.

KT: OK, Suze, next question is from Mario. I love when I get the men questions.

Suze: KT, you love when you get any questions.

KT: Yeah, but I like when we have the men smart enough to listen participating. So Mario asked, how do I get rid of a collection account which is six years and nine months old? I'll tell him—pay it off.

Suze: No, you get rid of it if you just simply wait three more months, it will go away. Something that is on a credit report such as a collection account stays on for seven years. At that point it comes off. So you have three more months to wait.

KT: All right, so next question, Suze. This listener said, I have a Roth with about $850,000, a regular IRA with $775,000, and a regular investment account with $1.2 million.

Suze: That’s my person. See, listen, I just have to say something. All of you out there may be wondering how do these people have so much money. You want to know how? They've been listening to me for 40 years. They've been doing everything I have told them to do, and now most of them—honest to God—are multimillionaires. So what are you doing if you're brand new? You're gonna be listening and listening and listening and doing and doing and doing.

KT: OK, so this listener says I take my required RMDs and about $24,000 out of my regular account. I would like to gift my kids the $19,000 allowed every year and was wondering if taking it out of my Roth would be the prudent thing to do.

Suze: It would be prudent for you because you won't have to pay taxes on it. But if you want to be prudent for your kids, leave your Roth intact. Take the money out of either your investment account or even your traditional IRA and just pay taxes on it because you're not in that high of a tax bracket. Let your money compound tax-free, because on your death all the money in the Roth goes to your kids tax-free. The money in your regular IRA—it’s going to be totally taxable to them. So if I were you, I would draw down the IRA more than anything else.

KT: And now this is from Laura. Good afternoon, KT and Suze. I'm 62. My 401(k) Roth retirement account at work was opened in April 2022. Would it be better to wait until I hit the five-year rule, or can I take my contributions and roll that over into my existing Roth IRA?

Suze: Pop quizzy, pop quizzy.

KT: OK, ready, everybody. Laura's 62, and 59 and a half was that lucky number.

Suze: But that's just for the penalty. Taxes, however—the account has to have been open for five years. That’s the question she’s asking here.

KT: So she's asking, can I take my contributions and roll that over into my existing Roth IRA?

Suze: Yes, but her 401(k) has only been open for how long, KT?

KT: Since 2022.

Suze: So that’s three years, right? So...

KT: Two more to go.

Suze: So should she leave it there till all five years are met? This is her question. Or should she roll it to her IRA Roth?

KT: Hmm...

Suze: Tick tick tick...

KT: I think you have to wait for the five-year rule.

Suze: (Suze makes the wrong answer sound) No, because when you take a 401(k) that’s maybe even been there 10 years, when you roll it to a Roth IRA, that rollover takes on the time clock of your Roth IRA. So just so you know, if her Roth 401(k), KT, had been open for seven years, her Roth IRA for only one—and then she rolled it to her Roth IRA—now all of it would only have a one-year time clock. She would have lost all those years of her Roth 401(k).

KT: So the next question's from Tina. She said, guidance needed, please. I am 57, have two kids, 25 and 27. One still at home. Both are employed and self-sufficient with no student loan debt. That's great.

I live with my boyfriend of 17 years. We make about the same income. The house is in his name and paid off. I have no debt. I use one credit card and pay it off each month. Here's where I need your help. Eleven years ago, I was sold a whole life policy. Yes, I know that was a bad decision.

The policy has a face amount of $250,000 and a cash value of over $100,000. Final premium was paid last year. Should I keep it or take all of the cash value and surrender it?

I've already got a quote for a 20-year term, same face amount as the whole life, so I know if I decide insurance is needed I can get it and would do so before I decide the fate of the whole life policy.

There is no one in my life who has the knowledge to help me. We both know the agent who sold it to me is not going to be a reliable source. Would you be able to share your opinions, Suze, please?

Suze: You know, I always say that you normally don’t ask a question that you don’t know the answer to already. If it were me, and I knew my kids were going to be OK and everything, I would cash it out. Just check and make sure no taxes are going to be owed. I’m sure you put more money in there than the cash value, so it should be tax free. And I would take that and I would invest it for your own future.

And if you feel like you need insurance for the kids, I would do the term insurance. However, my concern isn’t about this insurance policy, and it’s not about your kids. It’s about you. You live in a home with your boyfriend of 17 years. The house is in his name and is paid off.

Can you tell me—though you can’t, because you can’t hear me now—but you will. But anyway, can you tell me what happens if he’s killed in a car crash tomorrow? Does he have a trust? Has that house been left for you in trust? Or does he simply even have a will that leaves it to you?

And then it has to go through probate, and then you’re going to have to pay a whole lot of money and wait for a long time to get that house. What if all of a sudden he’s in a car accident and he’s incapacitated—he’s not dead—but you need to sell that house because you now need money to take care of him or whatever it is? You can’t sell that house because why? You don’t own that house. He can’t sign for that house.

So the real question here is, what have you done to take care of yourself? If he doesn’t have a living revocable trust and a will, then what you need to do is you need to, today, go to musthavedocs.com and get the must-have docs for $99—$2,500 worth of state-of-the-art documents good in all 50 states.

He should take that, put the house in trust just in his name with you as beneficiary and you as successor trustee. And if something were to happen to both you and him at the same time, what’s going to happen to your kids? Where does that house go?

Intestate succession—it goes to his nearest relatives if he doesn’t have a will, which are not your kids and it’s not even you. Because you’re not married to him. You got to think about that—more important than this life insurance policy, to tell you the truth.

KT: You were not expecting that.

Suze: I wasn’t.

KT: Ms. Travis. I know you.

Suze: You were expecting that I was going to get so mad at her for the whole life policy, but that’s not what I was upset about. Do you see? All right, go on.

KT: All right. Next question is from Gwen. Gwen says, Suze, I've been listening to your show on and off for the past five years.

Suze: Gwen, you should only listen to the show on—not off. That does not necessarily endear you to me.

KT: I've been listening to your show—you can get rid of the off part—for the past five years. I retired four years ago and I am 67 years of age. I want to move the funds of the traditional IRA to a Roth, but I was told that I could not do it because I am retired. Is this true?

Suze: This is why you have got to listen to every single show.

KT: Yeah, not off.

Suze: Because you would know—whoever gave you this advice is an idiot. Is an idiot. Is 100% wrong and is an idiot. So therefore, never ask this person for advice again. You could convert any time you want. It does not matter your income, no income, age—nothing—from a traditional to a Roth anytime. You have to have earned income to do a contributory Roth IRA or even a traditional IRA for that matter where you put money in every year. Idiot. Was there another question?

KT: From Gwen? Gwen's talking now about her grandchildren. She said, next question is helping my young grandchildren. Money you spend to assist with minor grand school tuition—can you write it off on your taxes?

Suze: No. Next question, KT.

KT: That's it.

Suze: We're off of Gwen. I get it. That was a joke, Gwenny. Just joking with you.

KT: OK, Suze, we have one more question, and it's from CW.

Suze: CW!

KT: CW. Traditional IRA question. We only have traditional IRAs—don't ask. This is... CW didn't even want to put their full name. We are 70 and 73, and my husband is subject to a large RMD. My question: is it better to do an in-kind withdrawal—for example, shares of a mutual fund with a robust and consistent capital gain distribution—or cash? Many thanks for all that you and KT do.

Suze: KT, what is an in-kind contribution?

KT: I don't know what that means.

Suze: I'm so surprised. You should have said to me, "What is an in-kind distribution, Suze?" But anyway, I'll just tell everybody. So first of all, CW, here's the thing. Whether you take money out as an RMD in-kind—meaning in the stock or the mutual fund shares that you actually own—or in cash, both of those you are going to owe ordinary income tax on it.

Now, if you do an in-kind distribution of these mutual funds that have—here’s the key—that have a consistent capital gains distribution, meaning at the end of the year they distribute to you all of this money as a capital gain, you're going to owe taxes on that if you take it as an RMD and have it now in an investment account.

So not only are you going to owe taxes on the capital gain distribution when you hold it, but if this goes up and up in value and when you sell it, you're going to owe more taxes on it again. So if it were me, I would probably just take it in cash. But either way, you're going to owe taxes on the original distribution for the RMD.

KT: All right, that's your finale.

Suze: KT, take us out, girlfriend.

KT: All right, there's only one thing we both want you to remember, and that is this. I'm going to say it in Italian.

Suze: Oh, good luck. Go on.

KT: I'll do it in English. People first, then money, then things.

KT: Now you stay safe.

Suze: All right, everybody, bye bye now.