Podcast Episode - What Happens When Trust Is Lost

On this edition of Ask KT & Suze Anything, Suze answers your questions about spouses who won’t communicate about money, title theft, inherited IRAs and so much more!

Listen to Podcast Episode:

---

Podcast Transcript:

KT: Good morning Suze. Today is December 18th. Welcome...

Suze: Wait, are you just talking to me?

KT: Yes, wait, I'm about to welcome all of our listeners, especially those that are having their first cup of coffee. Welcome to the Ask Suze and KT Anything podcast, your favorite Thursday drop.

Suze: Actually, welcome everybody to the Women in Money podcast, and everybody smart enough to listen.

And today is the day where if you happen to have a question that you want to ask us and if KT chooses it, we'll do it on the podcast. Please write into ask Suze S-U-Z-E podcast at gmail.com. So how are you today?

KT: It's a countdown. We're counting down.

Suze: What are we counting down to?

KT: We're counting down the year, Suze. It's almost over.

Suze: Right? I'm counting down to next Thursday.

KT: Christmas.

Suze: Christmas Day.

KT: Ah, that's our big reveal. Did we tell everyone yet?

Suze: We haven't. Nobody knows yet.

KT: You're gonna get a Christmas gift from Suze and I that you won't believe.

Suze: But it's not for them. This was a Christmas gift...

KT: This is for everybody.

Suze: No, KT, you're wrong. Miss Travis, just so you know, right, this was a very great Christmas gift to Miss Travis and myself, a huge gift to us.

KT: Probably one of the, I'd say the second biggest.

Suze: OK, so you're just gonna have to wait now for one more week for us to reveal it.

KT: But we'll reveal it at the top of the hour, I promise.

Suze: Are you sure?

KT: Yes.

Suze: You promise?

KT: Yes, OK. All right, all right. So here we go. My first, this, this, this is interesting. I picked this...

Also, December 18th is a lucky day. It's a lucky number, but I also wanna say it's the day before one of my dearest friend Joyce's birthday, and Joyce, we love you. Happy birthday in Hong Kong.

Suze: How old is Joyce gonna be tomorrow?

KT: Let's see, 84,

Suze: 84.

Oh, Joyce Ma, I just have to say, everybody, Joyce Ma, oh KT's thinking.

KT: Maybe 85. Wait, she's two years older than me in the Chinese horoscope, which means she's 12 years older than me. So how old am I?

Suze: How old are you, can you remember?

KT: 73.

Suze: No, you are going to, so you're 73...

KT: I'm 73, so...

Suze: she's gonna be is gonna be 85,

KT: 85. Whoa.

Suze: I just have to say this as I was starting to say is Joyce Ma has to be one of the most extraordinary women in the world, maybe the most extraordinary woman, seriously, in the world that I've personally ever met, and KT had the pleasure of working with for a number of years over in Asia,

KT: 20 years.

Suze: KT, if they Google her, will her history come up?

KT: Probably. Joyce Ma, M-A, J-O-Y-C-E, Ma, the fashion Doyan in the world, of the world, the fashion Doyan of the world.

Suze: But even more than what she's done, it's who she is.

KT: Her heart is bigger than all the gold in China.

KT: So my first question here is not a question, it's a situation where I hope Suze, you can fix. This is from Alison. She said, good morning, Suze and KT. My husband told me his financial situation yesterday.

Suze: Wait, I have to say something. Remember a little bit ago I said to all of you, if you write in, right, we might answer it on the podcast. I read some of them and some of them catch my eye. This one did, and I communicated directly with Alison, so I know exactly what you're going to say here. Go on.

KT: So this caught my eye too. So she said after I told him I cannot operate in the dark any longer, so he finally told her and revealed to his wife his financial situation. He has 15,000 in checking, 11,000 in credit card debt, 200 in a 401k, and this part is what caught my eye. He sold an investment property just a couple of years ago and he netted over 200,000 and spent it all, but he won't tell Alison where and how. Suze, he has no other debt.

So she said, I do not even know where to begin to protect myself. He's a wonderful man other than his avoidance of money conversations. He stonewalls me for this topic, and the stress is greatly affecting my health. So she said, Suze, how do I protect myself? What do I do first? So what did you tell Alison?

Suze: Well, as I just said a second ago, I have been communicating with Alison, KT.

KT: What did you tell her?

Suze: So let me just say a little, tell you and everybody a little bit more about Alison. Her husband is 62, she's 55, number one. Number two, this is his first marriage, but her second. And because it's her second, she was smart enough to put everything in a separate trust. The house they live in, a rental property, he signed paperwork knowing that all of that is hers, and blah blah blah blah blah blah. The problem is, right, they live in a community property state.

And she's done everything to protect him. She has a life insurance policy, everything, and he has done nothing to protect her. And she says that she's realistic. She thinks she's very realistic, but he has magical thinking and he'll be fine, but he does nothing.

The one thing that you read which I find fascinating was you said he's a wonderful man other than his avoidance of money conversations. Are you kidding me, everybody? Are you kidding me? He stonewalls me on this topic. I think that's what you just said. All right, so how do I protect myself? She wants to know that. They've discussed divorce, at least as a last option.

So, everybody, I just wanna say something, and there's so many more things with this about how she feels and everything about it, but here's what I wanna say to all of you.

Have I not said forever that you and your money are one, that money is a physical manifestation of who you are, and I'm going to say that to you till the day that I die. And when somebody won't talk to you about money. They're not talking to you about who they are. They are hiding who they are. The big problem is he sold a house, as you said. He got $200,000 for it, and she has no idea where that money went.

How can you be in a relationship with somebody and you can't say he's a good man, he's this and that, except he avoids money. No, a good man, Alison, doesn't do that. A good man who you're married to sells property, takes 200,000, and says, honey, what should we do with it.

KT: Right.

Suze: Everything should be discussed. Obviously I told Alison she needs to get herself a good lawyer, number one, and just discuss everything. She needs to check all of her credit reports, freeze her credit, possibly close down any joint credit cards they have, take any money that they might have in a joint account, separate it out, and keep everything absolutely separate from her husband.

But the main thing that I've always said to all of you, is when you ask a question, not just about money, what to do with it, things like that, but about a person that you're involved with, and the problem is money. When you ask me that question, you already know the answer to it.

And Alison, you were married once and you got divorced, and sometimes I don't know why you got divorced the first time, but sometimes we repeat a mistake that we've made in the past again until we really, really learn it. You are 55 years of age. You have many years ahead of you, but you should not spend one more day doubting who you are, what's happening with the money, what's going on in this relationship. You already spoke about divorce once as a last option.

The first option, he already hasn't stepped up to the table with, which is telling you everything and where that money went.

Obviously you have to, everybody, when you're in a situation like this, you have to take steps to protect everything you have by separating it, checking your credit reports, your FICO scores, talking to a lawyer, see what your next steps would be if divorce were to happen.

However, like I've said, you already know the answer when you ask me a question like this. I always ask the question back.

If you were going to do this all over again, knowing everything you know today about that person, would you marry that person again?

If the answer is no, I would not. You know what your next step is. If the answer is yes, you'd better both go see therapists right away and get so honest, it's not even funny. Just be prepared to hear what he did with that money.

KT: Hmmm, big mystery.

Suze: Oh, it's not a big mystery.

KT: No, I mean, I'm curious. I wish Alison would tell us...

Suze: Either he has an incredible gambling problem. He has something, I don't know what, but when somebody doesn't tell you what happened to $200,000, it's a problem. All right, go on.

KT: I'm curious too. I hope Alison, you write back to us. Tell us the conclusion.

Suze: Well, I hope we know how it went when she talked with him. She's got to talk with him, not to him. She's gotta sit him down and be really honest. But KT, here's the question. Really, I know we're supposed to do any... but I wanna talk to you a little bit about this.

How do you ever trust somebody again?

KT: I don't think you — I know I couldn't. I can only speak for myself. I couldn't. Once you've been deceived, deception is a very, very dangerous place. And once you've been deceived, I don't think — you can forgive, but you never...

...forget.

Suze: See, and well, how do I live my life? I don't forgive and I don't forget.

KT: I forgive. I believe in forgiving. And I think forgiveness and forgiving is very, very necessary in order to get through life, but... I don't forget.

Suze: I move on from the person, don't I?

KT: Just — yes. Suze really cuts ties and moves on.

Suze: If somebody lies to me, if — everybody, this is so true — I was very close with somebody for quite a long time. And they lied to me not just once but two or three times. Never again, ever. I just won't, and that's...

KT: You can't. She can't. Lying for Suze is the greatest sin of all life.

Suze: Yeah.

KT: But I forgive. I always forgive. I never forget.

Suze: I know. But you're the sweetheart in this relationship.

KT: No, I think forgiving is important. Just don't forget. That's just being stupid, but you can forgive.

KT: OK. Next is from Suzanne. She said, Good morning, Suze and KT. Thank you so much for all the support and education for the little guy out there and in my case, the little gal.

If I inherit an IRA from my mother, who holds an inherited IRA year three of the 10-year distribution timeline, do I pick up where she left off, or does the clock start again giving me 10 years when I inherit her inherited IRA?

Suze: Yeah, no, you just pick up from it. You have seven years left and that's it.

KT: I was gonna say,

Suze, make it a pop quizzy.

Suze: I'm sorry, but everybody, the rules are very simple,

KT: I studied that answer.

Suze: When you've inherited an inherited IRA, it's a whole different thing when you are the first person to have inherited it. Then it's different. But when you've inherited an inherited IRA, you have 10 years. That's it. Over. But you pick up from the time clock. It does not start all over again. All right.

KT: Great. OK. My next question is from Susan. The other one was from Suzanne.

Suze: Oh, was it? You just like — you just want a whole bunch of Suze's in your life, don't you?

KT: I do.

Suze: Could you take more than one of me?

KT: Never. No, no.

Suze: I'm being very serious.

KT: Never.

Suze: Why is that?

KT: Because you're, you're very powerful. You're extremely, um... No, you're a Gemini. You're not neurotic, you're a Gemini, which means things change often.

KT: All right, here we go.

Suze: Notice everybody, she didn't wanna go deeper.

KT: Here we go. You always say to wait until 70 to collect Social Security, but I have heard that when there's a couple, the lower earning spouse should collect at 62 and the higher earning spouse collect at 70. We are thinking of doing this so we don't have to withdraw as much from our 401k and IRA and they can then grow more. Your thoughts.

Suze: Don't do it. Listen. Waiting till 70 isn't always what somebody should do. You have to remember, if you are married and the spouse is going to get 50% of the higher earning spouse's money, they're only going to get what the spouse would have gotten at full retirement age.

So let's say, KT, somebody waits till they're 70 and they get 3,000 a month and if they had done it at 67, let's just say — I don't know if these numbers are accurate — but just let's say they would have gotten 2,700 a month or something like that. The spouse is only gonna get 50% of the 2,700, not of the 3,000. So number one, sometimes you don't wait until you're 70.

Especially if you're in a relationship. Number two, one thing you must never, ever, ever do, however, is start it at 62 because you're gonna be penalized. You're gonna make more by waiting to take Social Security till your full retirement age than your money is going to guarantee you to grow in a 401k.

So KT, your money grows guaranteed with cost of living increases in Social Security. You don't know your money's gonna grow in a 401k. It could go down and down and down. So therefore you can do what you want, but don't do it at 62. All right.

KT: OK. Here's my favorite one from Leslie. Hi Suze and KT.

Suze: Wait, is it your favorite one out of all of them, or just your favorite one from Leslie?

KT: So far.

Suze: I was gonna say, is Leslie your pen pal and it's your favorite one?

No, I just... ready?

Can you just tell I wanna talk to you this morning?

KT: Yeah, we're gonna get through this, everybody, don't worry. All right, so Leslie said, Suze and KT, I want to do a backdoor Roth conversion.

For a traditional IRA that was funded with non-deductible funds, however, I also have a traditional inherited IRA that I will be taking RMDs from. So would the IRS pro rata rule apply? If so, would that knock me out of doing a clean tax-free back door Roth conversion? Don't do it, Suze. Don't make this a pop quizzy.

Suze: Pop quizzy. Pop quizzy.

KT: No, no, no...

Suze: Pop quizzy.

KT: I — I have a — look. Wait, we have to...

Suze: You already answered this already, one exactly like this a few weeks ago, and you got it right. Pop quizzy, pop quizzy, pop quizzy.

KT: Would the IRS pro rata rule apply? I think yes.

Suze: Oh, I was so proud of you. (Suze then makes the wrong answer noise)

KT: I — I — this one was really complicated.

Suze: KT, you answered this a while ago and you got it right. Everybody, once again...

KT: Who can remember about Roths?

Suze: Not you, but here's the thing, everybody. Just remember: the pro rata rule does not apply to any inherited traditional IRA at all — just so you know. It only applies to traditional IRAs that you yourself have funded or did an IRA rollover with. All right, go on.

KT: I like this one. This is from Kathleen. I'm a low-income senior. I receive the minimum amount from a combination of Social Security and SSI, since most of my adult life I was a stay-at-home mom. Now I own a modest home in a quiet 55+ community. Home and property are both mine. I'm concerned about title theft. Do you advise buying title protection? And if so, is one company better than the other?

This is interesting that she wrote this, and the reason I picked it is because there's these title theft commercials.

Suze: You know what I was... last night when we were watching television...

KT: Yes, and I think a lot of older people are saying...

Suze: A lot of people.

KT: So, is that something they need to spend money on? What do you think?

Suze: Here, I wrote Kathleen back directly.

KT: OK, so tell me.

Suze: No, I'm not telling you anything. You don't listen. I tell you something...

KT: Tell us, tell us all, because these commercials are making them — prompting them — to buy.

Suze: If you have title insurance on your home, which most of you have — if you bought a home, for you to usually buy a home, you also have title insurance to know that the home that you're buying, the title is now in your name and the person you're buying it from really owned the title. Therefore, if you have that, really, you don't need this on any level. So I've told her if it were me, I would not be buying it. All right, go on.

KT: All right. Next is — you're gonna love this one. This is from Lisa. She said, Hello, you wonderful...

Suze: Your hair looks good this morning.

KT: It does.

Suze: Yeah. All right, go on.

KT: Thank you, Suze.

Suze: Well, wait, everybody — when KT's doing a FaceTime, you should FaceTime KT. It's really something to watch. She's always playing with her hair rather than looking at the person she's talking to. She's looking at a picture of herself — you know when you FaceTime — and making sure that her hair looks good. And so this morning it's perfect.

And I noticed she hasn't been fidgeting with it, so you did good this morning.

KT: Well, it's humid, and when it's humid out, it curls a little.

Suze: KT, it is as straight as they come.

KT: So this is from Lisa. She said, hello, you wonderful woman.

Suze: Yes we are!

KT: No, "woman." I just know woman to you. "Hello you wonderful woman."

Suze: I'm a wonderful woman because I have a wonderful woman behind me.

KT: OK, I just read that Vanguard will soon let people put part of their 401k into annuities so it functions more like a pension while keeping the rest invested in stocks and bonds. I always thought annuities were something to avoid, but pensions have historically been so valuable, and I see that firsthand with my father as he ages. Does this change your thoughts or advice on annuities? So there you go, Miss Wonderful Woman.

Suze: So, here's the thing, Lisa. It depends. Is this within a retirement account, that is a Roth or a traditional one? So just because it's a 401k, will they allow you to do it within a Roth 401k? Because where it can get to be very complicated is if it's in a traditional 401k, you do an annuity, and now let's say you roll it — if you even can — to an IRA if you want to. And now you have to do RMDs, which you would have to do in a 401k as well, if you left it there and you were no longer working for them. It becomes very complicated to figure out what is the value of that annuity. At the end, it becomes very complicated to do RMDs when an annuity is involved. Let me just put it that way.

So, if you wanted to do an annuity, and you wanted to do one to make sure that you had income — all right, I don't have a problem with that. But if it were me, I would be doing it outside of my retirement account. Because within a retirement account — more than you getting income from there that you're gonna have to pay taxes on most likely — let that money grow. Let it be geared towards growth or dividends or whatever that may be. And outside of your retirement accounts, if you wanna do one, OK.

But see, here we are again. I just wanna say something very fascinating, KT. Vanguard now has joined the ranks of Fidelity and Schwab.

KT: They all need money.

Suze: Where all of a sudden, they're suggesting annuities. They're making ways for people to buy annuities, and the reason I say this, everybody, is that almost every email I get from somebody who opens up an account at Schwab or Fidelity — the number one advice, at least with the people who are writing in to the Women and Money podcast — they're saying to me, "My adviser there has said I should get an annuity, an annuity, an annuity," over and over again. And over and over again, I have to say, don't you dare.

That's number one. Number two, now Vanguard all of a sudden is allowing annuities within a 401k. I don't know. Just be careful. All right, there you go. But Lisa, I wouldn't be doing it. It does not change my thoughts or advice on annuities. But I don't have a problem with an immediate annuity that gives you income outside of a retirement account.

KT: All right. So this is from Carolyn, and she's just making a comment here. And she said, Good morning, Suze and KT. On December 11th you replied to a question regarding your thoughts on purchasing a vehicle for $90,000. Remember that a couple weeks ago.

Suze: I've been writing with this woman back and forth. Go on.

KT: Her husband wanted a...

Suze: $90,000 car.

KT: ...a fancy car and she just couldn't do it.

Suze: Listen to it — few weeks ago — and you'll hear how I calculated that over the five years it would cost them 177,000. But the key is — keep reading KT. Go on.

KT: So this is from Carolyn. And she said this came from a woman who stated they had retirement investments and savings and could do this. That question spoke to me and I wanted to share my story.

Suze: Oh, now you're crying.

KT: I can't read this. You have to read it. I can't read it. You'll see why.

Suze: Well, I know why. I've read it and I answered her.

KT: But read it.

Suze: All right, she says, "Every morning when I sit at my desk, I see two pictures of my husband with the most joyous smile on his face while he was piloting our pontoon."

"In March of 2021 my husband wanted to purchase a new pontoon. We had been retired for five years, and both of us loved to fish — which is why KT is crying. We had good retirement savings and investments. We could have just kept that money in savings, but I was OK with spending the money for this new pontoon," so she was OK with it, KT.

"We spent countless wonderful hours on the lake. He would fish and I would fish or read. We did not need nor want big vacations. Our vacations were on the lake."

"Two years later, in March of 2023, my husband was diagnosed with stage 4 neuroendocrine cancer. After 15 painful months, cancer won."

"You always say people first, then money, then things. Suze, I have listened to you and followed you for years. This time I put people first, and every day I am grateful for that decision. Life is shorter than we will ever imagine. Memories of smiles and happiness and good times spent together will carry us for a very long time."

KT, just so you know, I wrote Carolyn back after I read this, and I said, "Carolyn, thank you for sharing." But the difference is — the woman that wrote in a few weeks ago, she did not want to invest that money. She did — it was a car. It wasn't a boat. It was a car for her husband to drive — not a boat that they both would be on and share and fish together.

And so we talked about that back and forth, Carolyn and me, and she said, "You're right. You're right."

So there are times when you want to buy something, everybody, and if both you and your spouse agree, go ahead and do it. But when one of you doesn't want to do something — do you remember this now? — when one of you doesn't want to do something, the other one really has to think about it.

So that's how I answered that. What touched you about this, KT? Why were you crying?

Suze: Oh, she can't answer that. All right, so I'll have to — after the podcast is over — we'll have to talk about it. But one other thing that I will say that I wrote Carolyn back, 'cause she wrote me back about how much she loved fishing. And she sold her fishing stuff, she sold everything after her husband died. And I wrote her and I said, "Oh, trust me, I understand that totally."

And I think this is why KT is crying — is KT and I love nothing more than fishing together, as all of you know.

And then in July of 2020, my life really did change when they found that tumor in my neck. And ever since then, everybody — and sometimes you wonder, why is KT going fishing? Why isn't Suze going fishing with her? It's — I really can't fish anymore. My left arm cannot pull in a fish. That's why KT went to British Columbia without me to fish for salmon, because all I would do would sit on the boat and I didn't want to do that anymore. I'm not an observer. I'm a participant usually.

So that's touchy for KT, because her biggest joy is fishing.

KT: With you. With Suze.

Suze: Yes, but I can't fish anymore. And so I don't really love going on the boat anymore because of that. And so therefore that gets to KT, and she understands it.

So KT, do you wanna do any more? Did that one do you in?

KT: (no audible)

Suze: She said — oh, she's looking at me going, no, that one has done me in. So I'll take us out for both of us.

And what this podcast should really, really imprint on your heart is how hard it is for somebody — when they love doing something with their partner in life — and their partner can no longer do it. How really that can affect one. And therefore you then have to find new things that you both can do together and you both enjoy just as much. Which is a reminder to tune in next Thursday to hear what we want to tell all of you and share with the Women and Money community.

But until then, there's really only one thing that we want you to remember, and it's this...

KT: People first, then money, then things.

Suze: Now you stay safe. All right, everybody, bye bye.