April 17, 2025. Welcome to the Women and Money podcast, as well as everyone smart enough to listen. Hello again, Robert, the producer here and while Suze and KT are taking some time off, we're presenting parts of episodes that are good to be at the top of your feet again. Today we'll hear part of an Ask KT and Suze anything from last fall, and well, let's just get right into it with KT reading a comment.
I have such a great, great selection of short emails that I think this might be a rapid fire cause I'd love to get through them, but the first one. I'm starting with Suze is from Mike, and this isn't a question. It's a thank you, but let me share it with all..
You love to start with these thank you's.
So Mike said, Suze, I'm studying for my series 65 exam. Tell everyone what that is.
When you study to be a stockbroker or a financial adviser, there are certain exams you have to pass so you can do stocks and all of. That series 65, I believe, is for mutual funds, so you have to do all those
They're not easy. They're very complicated. So he said, I'm reading the book and listening to the on-demand classes and getting so confused. Then Susie, I remembered you covered many of these topics in Suze School. So he went back and listened. He said things are now clear. Thank you, thank you, thank you, thank you. And then Mike said, You know, Suze, you could charge for your school. It's far better than the online training
I actually paid for. So Mike, we hope you pass and congrats on your studies.
You know, I just want to tell everybody, KT about series 7 exam. When you first study for it, you study for months. It is so hard, I cannot even tell you. And the very first time I took it I failed. I failed, and there were only about 7 people out of the entire class. There were a lot of people that failed, and I was one of them.
And that's when I decided I'll never forget saying to myself, all right, right, you want to see how much I really want to do this if this is a test because I always think everything's a test from above, right, that if you really want to see how much I want to do this and you're testing me, let's see what I can do, and I studied because you only had one week to study and try to take it again. And the second time I obviously passed, but sometimes in life when you fail, maybe it's a test to see,
do you really want to do this or not? And if you do, go for it with everything you have. All right,
But and Orman never gives up. Yes, I remember that. OK, my first question is from Karen. I have 3 children that will inherit my 401k. How is the RMD completed? Do each contribute a certain amount each year thereafter? How is this calculated?
You know, Karen, while that seems like a very simple question. It really depends on will the kids be eligible designated beneficiaries, or will they be non- eligible designated beneficiaries and it will also have to do with have you died on or after the RBD date. So all of that has to be taken into consideration. What I can tell you is this since it's in a 401k. You should instruct them that the second this happens, if it's still in the 401k to do individual inherited IRAs
in a brokerage account, that's where you start. And then depending on what your situation is, it's really not that hard. Just make sure that if the money is still in a 401k when you die, that they do inherited IRAs at a brokerage firm. And by the way, I just want to say one other thing to everybody, you really want to save your beneficiaries a whole lot of trouble, just do a Roth retirement account, Roth Roth Roth, and if everything is in a Roth when you die, they're fine. All right, go on.
Zoe, this is long, but I want to read this because I. I, we know people in the same situation, so I'm reading the whole email from Zoe. Hi, Suze, my life partner and I have been together for 20 years. Remember that, everyone, 20 years. We're not married, nor do we plan on getting married. We're buying our first home, a co op apartment in New York City. We're putting 20% down and taking out a 30 year fixed mortgage.
While I will be contributing to the down payment, my partner is putting down most of it and will be paying the mortgage. He has a great job, and he can easily handle the payments. We are buying below our and his means. I recently switched careers and decided to pursue my dream career as an artist. OK, we all know what that means, everybody.
What does it mean KT?
If you're an artist, you're never going to have like a guaranteed income, so it's going to be very unstable maybe in the beginning and obviously her partner supports this now until my, but listen to this, I like how Zoe is very positive. Until my career takes off, I will not be able to contribute to the mortgage. Our title will be a joint tenancy with the right of survivorship. We have separate bank accounts. My concern is if something happens to him, I will not be able to pay
the mortgage on my own. I also want to make sure we have the right to the property if something happens since we're not married, so. if we do J T W R O S
Joint tenancy with right of survivorship.
Do we still need to get a living revocable trust?
So here's the thing, Zoe,
I just want to say one more thing for those of you listening. He's in his mid-50s, she's in her late 40s, so they're not kids.
Yeah, here's what I don't understand, Zoe. You have been with this person now for 20 years. Why do you not want to get married, especially given that you're about to become an artist in terms of your living? You probably already have already been an artist, but now your income is going to possibly drop at least for a while. He makes a lot more money than you, so later on in life, maybe if you were married, you would be able to claim either half of his Social Security or if he died.
For you, because he is older than you, you would be able to take over his Social Security. There's also so many more benefits I can't even tell you. However, whatever that reason may be, so be it. Here's the thing with joint tenancy, with right of survivorship, yes, if he dies you automatically get the house and put in your name. Problem is you can't afford it. So therefore, if you're doing a 30 year mortgage as you say you are, maybe what you should do is get a 20 year
term insurance policy on him. So if he were to die. Then you get enough money to pay off the mortgage and be able to keep it just that simple. Why 20 years instead of 30, cause most likely 20 years from now it still may be affordable for you. You have to make sure it's a fixed, a level term policy, but by then maybe you could put extra money towards the mortgage so that maybe in 20 years it would be paid off anyway. That's number one. Do you need a trust? No, not
if he dies. You're fine. The question is, Zoe, what if he doesn't die? What if all of a sudden now he's in an accident, he is incapacitated. He doesn't recognize you. He can't work any more. There is no more income coming in from him. And now you have to sell the property, and the question is can you? Joint tenancy with right of survivorship means you both have to sign for it. Therefore, if he's incapacitated and he
can't sign, you can't sell it. If you had a revocable trust with an incapacity clause in it. You could sign for him. He could sign for you. No problem. So that's one of the reasons you want to go to Musthavedocs.com and check it out. All right, KT.
Suze, next question from Bridget. Is it better to leave a 401k to children or cash? The kids would say cash. Then she said, I know the new inheritance rules on 401ks are complicated. Should my husband and I live off our cash in retirement or spend down our 401k? And then she said with great joy, all of their daughters opened Roth's at 21. Our youngest now 20, opened hers at 18.
So what happened to Bridget? Well, Bridget, why don't you have a Roth 401k? Why don't you convert? Why don't you do things like that so that when they do inherit, it's not that big of a deal? Absolutely not. You are to listen to me and listen to me closely. You say in here cause KT just gave this to me your email that they opened Roth's at 21 and your youngest is now 20. So now they're getting older
and they'll be fine financially speaking. Why don't you care about you and your husband and what you're going to do when you get older and what is best for you? You and your husband, Bridget in terms of what should you do to make the most out of your money. So I'm not even going to answer this question other than Roth 401k, start doing that. Let it grow, let it grow, let it grow, and it depends on your tax bracket what you live off of at the time.
Stop worrying about the kids, mama bear and start worrying about yourself. Typical mother, right?
Yeah, and 3 girls. All right, this is from Sheila. Hi KT and Suze. Love your advice and I'm wondering about capital gains from ETF dividends in a rollover IRA. Should I set them to automatically reinvest the dividends into the corresponding security or have them deposited to the core account to pay the taxes later? It's hard to answer this one, huh?
This one couldn't be easier to answer if I tried. What are you talking about?
Well I'm just giving you the best questions I like.
So Sheila, make it so you reinvest the dividends and you get the most growth out of your money. Obviously you're going to have to pay taxes on it later. The other thing you can start to do is start converting to a Roth. There you go. All right.
We better do another Roth podcast.
Oh my God, are you crazy?
No, just to remind people how great it is. So...
You hate those podcasts.
But I think it's just a good reminder, refresher, a Roth refresher. That's a good. I wish you all could see my face a Roth refresher. We should do that. All right, everybody, from Susan. I enjoyed the Sunday podcast about managing money successfully in marriage like you and KT... I just added that part. My husband and I have been married for 14 years. I manage all of our finances. I'd like to get my husband more involved so he
understands what's going on, but he's not interested. He's never been good about saving money, but I insure that we do. We are debt free. We have an 8 month emergency fund, and we're on track for retirement. We have about a million dollars to date. We are both 46. Good for them with kids 8 and 11 years old. Short of chasing him around with a laptop, how do I get him more involved so he can be part of our financial decisions. Want me to tell you, Suze?
We're gonna make this the Ask KT Anything today.
This is what I would do, Susan. Call your husband in, pour a glass of wine, say, honey, I need to tell you something really serious. He'll say, what? And then give him that glass of wine. We're broke We're just broke. Then you'll get more involved in your money.
All right, right, so here's what I would tell you to do. I would get very serious with him and I would play, ready? I would play incapacitated or death, I'm serious.
Yeah, they're 46.
Right, and I would sit down and say, all right, we're gonna play a game right now. I've either been struck by a car and I'm totally incapacitated. I can't do anything or I've been killed in a car crash. Just play it. What would you do first, sweetheart, and then give him a quiz and write down questions. Where are our accounts? What are we invested in? Where would you get the money to pay the bills? Every question that you could
possibly have. Is there enough money for you to continue to live without me bringing in any money, whatever it may be, and ask him. He's by himself now. Where would he go? What accounts are the bills paid from? How much is everything? Where is the emergency fund? What do you do for the kids? How do we hold title to the house? Everything is there an insurance policy,
every possible question that you could think of? And when he's not able to answer one of them, and now you give him an F, you can then say to him, I am no longer joking with you. This isn't funny. If something happens to me, you have a responsibility to take care of our kids, to make sure that everything is OK, and you cannot be now more irresponsible if you tried. If you, something happens to you, we're fine. If something happens to me, oh, you are screwed.
So what I want you to do right now is make a commitment to me that we're going to figure this out together as one and don't joke with him. It's not funny. It's not funny. Everybody, if you're in this situation with somebody, it's just plain stupid if they refuse to partake in something that is their lifeline if something happened to you. All right, go on, KT.
So I picked this because I want all of you listening to know one thing. There's never a wrong question when it comes to money ever. So this is from Carolyn. Suze, you ready? Carolyn said, Is it OK to purchase a home at the age of 65 or 66?
Of course, if you can afford it, girlfriend, so I want you to do something which is called Play house. So today's podcast is about playing all kinds of things to know what it's like when you really do the real thing, all right, or the real thing happens, you know, you want to purchase a home. So you're going to hopefully put at least 20% down. Besides the amount of money you're going to put down, you need to have an 8 to 12 month emergency fund. So.
You put 20% down. Let's check that box off. Now. Let's decide at your age, truthfully, you should be doing a 15 year fixed rate mortgage because you don't still want to have a mortgage at the age of 95. You want to have it paid off, you know, by the time essentially that you're 80. So therefore look at what the mortgage payments would be. With a 15 year fixed rate mortgage just that simple, write that amount down.
Then you also have to do what? Find out what would it cost you in insurance per month on that house. Write that amount down. What would it cost you in property taxes per month? Write that amount down. What would it need in maintenance? Probably another 200 or $300 a month in case something were to go wrong, write that amount down. Add up all of those amounts. And let's say they come to $4000 a month. Let's just say that's true. And let's say you're currently renting
right now and your rent is $2000 a month. Subtract your rent from the $4000 that would leave you $2000 that you're going to have to come up with. So at the beginning of every month for the next 6 months. Take that $2000 and put it in a money market account or some account paying you interest and see what that feels like. Are you late? Can you do it at the 1st of every month? And if you can, and it's easy, then I got news for you, and you know that your job is stable. You know that
your income will remain for a long time. Then yeah, you can afford to buy a home. And guess what, at the end of those 6 months you'll have a whole lot of money. In this case, an additional 12,000 plus interest to put towards the down payment. If you find that you can't, it's too difficult. You still have money that you saved. All right, OK, next.
OK, next is from Penny. Penny said, my spouse and I are 75 years old. We need to know more information on different types of insurance policies. Which is the best type of life insurance coverage? Is it whole life or term? What are the pros and cons?
So you know, Penny, that your email is Pennywise, right? That's how, that's what you're calling yourself for this email. Now I don't know if that's your real name. Or you know if that's just a name you made up, however, at the age of 75, actuarly speaking, you are closer to death when the insurance companies look at your age and probably health, so whole life insurance is going to be so expensive I can't tell you.
I don't know why you actually need insurance. Hopefully at this point in your life nobody is financially dependent on either of you if you're dependent on your spouse or vice versa. Now maybe we're going to have a little bit of problems, but term insurance at this point would be the only way to go.
All right, Suze, next question is from Jennifer. Hi, Suze, what do you think of paper trading so I can practice? What's your opinion on this, Suze?
I don't think it's a bad idea at all where what is she talking about everybody you pretend on paper that you bought stock or ETFs. You also should all pretend that you start with a certain amount of money. Let's just say $25,000 and What are the 5 or 10 or 12 stocks or ETFs that you're going to invest in? How much of that $25,000 did you invest the first month at what price? And then when do you dollar cost average again and just on paper track it. All right.
This is my last one from Hari. Hello KT and Suze. Thank you for the very informative podcast every week. You suggested adding kids as authorized users to help their credit score. We both have excellent credit scores above 800. Do both parents need to add the kids in each of their credit card or one of the parents' accounts is good enough?
Probably 1 is good enough, but hey, KT and I would always tell you 2 is better than 1. And why do we say that KT?
I'm a twin.
So we had little caps made. 2 are better than one. So truthfully, Hari, you could both do it if you want, but the truth of the matter is do it on all your credit cards, not just one. There's only really one thing that we want you to remember when it comes to your money, and that is what KT?
People first,
Then money.
Then things
You stay safe and healthy, and you will be what unstoppable.