Ask KT & Suze Anything: Can I Start a Roth for My 3 Year Old?

Summary

Podcast Summary: Suze Orman's Women & Money (And Everyone Smart Enough To Listen) Episode: Ask KT & Suze Anything: Can I Start a Roth for My 3 Year Old?
Release Date: April 3, 2025

In this engaging episode of Women & Money, Suze Orman and her co-host KT delve into a series of listener questions, providing expert financial advice tailored to diverse personal circumstances. The conversation spans various topics, including investment strategies, retirement planning, and optimizing Social Security benefits. Below is a detailed summary capturing the key discussions, insights, and conclusions from the episode.

---

Market Insights and Economic Context

[01:01 - 05:27]

Suze opens the episode by addressing the current economic climate, particularly the anticipation surrounding President Trump's impending tariff announcements. She explains the impact of such political developments on the stock market, highlighting the volatility it introduces. Suze provides a technical breakdown of market support and resistance levels, educating listeners on how to interpret these indicators:

“A support level is when the market goes down to a certain point and the market supports it there and you want it to hold there. And if it breaks at that level, it then falls.”
– Suze Orman [02:39]

Despite the uncertainty, Suze reassures listeners by comparing the market's unpredictability to a roller coaster, suggesting a strategy of preparedness and resilience.

Listener Questions and Expert Advice

1. Teresa’s Inquiry: 529 to Roth IRA Conversion

[06:41 - 09:15]

Question: Teresa inquires about transferring funds from a 529 account, which has approximately $7,000 remaining, to a Roth IRA for her son. She faces a constraint where her son’s existing Roth account has been open for only a year, conflicting with IRS rules requiring a 15-year account duration for such a transfer.

Suze’s Response: Suze explains the stringent IRS regulations governing this transfer:

“The 529 account has to have been open for at least 15 years... contributions and earnings from the last five years... are not eligible to be rolled over.”
– Suze Orman [07:07]

She concludes that the process is overly complicated and likely unfeasible for most, advising caution and reconsideration.

2. Andrea’s Query: Municipal Bond ETFs for Tax Reduction

[10:13 - 12:25]

Question: Andrea seeks advice on whether investing in municipal bond ETFs and money market municipal bonds is a safe and effective method to reduce federal income taxes.

Suze’s Response: Suze critically evaluates the efficacy of municipal bonds for tax reduction, pointing out potential drawbacks:

“The interest rate on municipal bonds are lower than what the actual taxable yields on treasuries and certificates of deposits happen to be like.”
– Suze Orman [10:29]

She suggests alternative investment vehicles, such as high-yield CDs from Alliant Credit Union, which may offer better after-tax returns and greater security.

3. Neisha’s Retirement Decision: Lump Sum vs. Annuity

[12:25 - 17:09]

Question: Neisha faces a decision between taking a $500,000 lump sum or a $3,300 monthly annuity, especially considering the recent transfer of her company's pension to an insurance firm.

Suze’s Response: Suze underscores the importance of evaluating longevity and survivor benefits:

“When one spouse dies, their spouse's return goes down to 1,650... you could be hit with a tremendous tax bracket.”
– Suze Orman [13:35]

She emphasizes the necessity of personalized financial planning, considering factors such as the presence of children and the potential need for accessible principal.

4. Maria’s Roth IRA Conversion Timing

[17:50 - 19:00]

Question: Maria, unable to contribute directly to a Roth IRA due to income restrictions, asks whether she should convert her traditional IRA immediately or wait to avoid accruing taxable interest.

Suze’s Response: Suze clarifies the mechanics of a backdoor Roth IRA:

“Put it in an account that doesn’t make any interest for a few days. And then when it feels right to you convert it to a backdoor Roth.”
– Suze Orman [17:50]

She reassures Maria that the process is straightforward, advising prompt conversion to minimize tax liabilities.

5. Jerry’s Social Security and Investment Choices Amid Government Cuts

[19:00 - 21:34]

Question: Jerry is concerned about potential government cuts to Social Security and seeks advice on whether to liquidate his Social Security benefits into CDs, high-yield savings, or Treasuries.

Suze’s Response: Suze addresses the uncertainties surrounding Social Security:

“I cannot imagine... they make it that you do not get your Social Security check at 70 under the current laws.”
– Suze Orman [19:15]

She advises focusing on personal security rather than speculative financial maneuvers, highlighting the importance of Social Security's reliability while acknowledging the unpredictability of government policies.

6. Clay’s Question: Opening a Roth IRA for a 3-Year-Old

[21:36 - 23:18]

Question: Clay wants to open a Roth IRA for his three-year-old daughter, who participates in a medical study, questioning whether this counts as earned income.

Suze’s Response: Suze dispels the misconception about what qualifies as earned income:

“Earned income means you work for it. You can't go to, like, Vegas and win money.”
– Suze Orman [22:53]

She confirms that income from a medical study for a child does not qualify as earned income, thus making it ineligible for a Roth IRA contribution.

7. Kelly’s SEP IRA Contribution vs. Investment Account

[23:24 - 25:13]

Question: Kelly is advised by her accountant to contribute $45,000 to her husband's SEP IRA, who already has $400,000 in a SEP IRA. She wonders if investing in a regular investment account might be more beneficial.

Suze’s Response: Suze advocates for maximizing SEP IRA contributions and leveraging backdoor Roth strategies:

“You should absolutely do the SEP ira... convert it to a Roth.”
– Suze Orman [23:46]

She recommends consulting with an accountant to explore converting SEP IRA funds to a Roth IRA, thereby increasing after-tax retirement savings.

8. Jennifer’s Inherited IRA Management

[25:13 - 26:19]

Question: Jennifer inherited a $500,000 IRA composed of individual stocks and mutual funds and is concerned about the tax implications of taking minimal distributions over time.

Suze’s Response: Suze advises a strategic withdrawal plan to minimize tax burdens:

“Divide it by 10, and take out that amount of money every single year so the account really is wiped clean by the end of the 10th year.”
– Suze Orman [26:13]

She emphasizes working with a CPA to tailor the withdrawal strategy based on current and projected tax brackets.

9. Marcy’s Social Security Contributions at a New Job

[27:17 - 28:27]

Question: Marcy, aged 62, works at a new job that does not contribute to Social Security and is concerned about the impact on her future benefits.

Suze’s Response: Suze explains the implications of insufficient Social Security contributions:

“If you don't already have 35 years in Social Security... these years that you're working that don't pay into Social Security will absolutely hurt you.”
– Suze Orman [27:41]

She advises assessing her total years of Social Security contributions to determine the extent of the impact, recommending adjustments if necessary.

Conclusion and Key Takeaways

[28:26 - 30:06]

As the episode concludes, Suze and KT reiterate the fundamental principle that places people’s well-being above financial considerations:

“People first, then money, then things.”
– KT [28:44]

They encourage listeners to stay informed, secure, and focused on their unique financial paths, emphasizing the importance of personalized financial planning and resilience in the face of economic uncertainties.

---

Final Thoughts:

This episode of Women & Money showcases Suze Orman's commitment to demystifying complex financial topics and offering actionable advice. From optimizing retirement strategies to navigating inheritance and understanding Social Security nuances, Suze provides listeners with the knowledge to make informed financial decisions. Her engaging and straightforward approach ensures that listeners, regardless of their financial literacy level, can grasp and apply the insights shared.

---

Note: While Suze Orman offers valuable guidance, it's essential for listeners to consult with certified financial advisors to tailor strategies to their specific circumstances.

Transcript

[Suze Orman]

Hi, everybody. Suzio here. Now, what is the goal of money? The goal of money is for you to be secure. And there is no better way for you to be secure than having an emergency savings account. It is essential for your financial foundation. So all of you should be participating in the Ultimate Opportunity savings account at Alliant Credit Union. Go to myalliant.com to find out more. And be secure.

[Unknown]

We are strong we are wise we will not apologize we are here we will thrive Together we will rise we're the little bit of faith and everything it takes we are strong we are wise Together we will rise.

[Suze Orman]

April 2, 2025 welcome, everybody, to the Women in Money podcast as well as everybody smart enough to listen. Yes, I know I said April 2nd and most of you are listening to this because the podcast normally drops on April 3rd, but because we will be traveling tomorrow, we recorded it a day earlier and it's actually 9:37am and the reason that I'm telling you that, everybody, is that before we begin the Ask KT and Susie Anything portion of the Women in Money podcast, say hi to everybody.

[KT]

Hi, everybody.

[Suze Orman]

Right, Is that obviously today is the day that tariffs are going to be announced. And so many of you have been writing in to go, Susie, Susie, what's going to happen when he announces, are there tariffs? Are there not? Take a pause, take a breath. All right, President Trump has told you he's going to be announcing tariffs at the time that we are recording this. He hasn't announced yet. But let me just talk to you a little bit about the stock market. Regardless of what happens right now, it is down because people think he is going to be announcing tariffs. And do you know how I talk to all of you about support and resistance levels? You need to know that this market is going to probably go on a roller coaster ride. It's already been on a roller coaster. Do you like roller coasters? I actually do.

[KT]

Susie loves them.

[Suze Orman]

I love them. I love them so much. But anyway, I don't. So just be prepared for it as I'm recording this with KT. The Standard and Poor's 500 index is about 5601. That is the level it is at. It's down 30 points so far on the day. A lot of you have been writing in and go, what is the next support level? The level that if it goes down to, it should bounce up that level is 5,480. For those of you who just want to know, if it breaks that level, it could absolutely go down another 5%. To 5367. Okay, so it could go down, but I expect that it will hold at 5,480, and it could then go up, and its resistance will be 5703. So for those of you who don't know what I'm talking about, a support level is when the market goes down to a certain point and the market supports it there and you want it to hold there. And if it breaks at that level, it then falls. More resistance is it starts to go up and it hits a resistance level, and it's very hard to go through that. So the next week or two, you're going to see bouncing all over the place. And for those of you who wrote in and wanted to know that, now you know. All right, kt, how are you, my dear?

[KT]

Kind of bouncing around. That's what I am.

[Suze Orman]

Should that have been your quizzy?

[KT]

What is the resistance level?

[Suze Orman]

All right.

[KT]

All right. So are we ready?

[Suze Orman]

What do you think my resistance level is with you?

[KT]

Zero.

[Suze Orman]

You don't think I have a resistance level with you?

[KT]

Never.

[Suze Orman]

What does that mean? Does that mean that I just go off the wall no matter what, all the time? No, kt, that's not true.

[KT]

We don't have resistance levels.

[Suze Orman]

We just keep going higher and higher.

[KT]

Yeah, we just go up, we don't drop, and we don't worry about resistance level.

[Suze Orman]

Oh, that's my girl. All right, kt, you got good questions.

[KT]

I have a. First, a comment from Natalie, and I love this.

[Suze Orman]

Wait, I just want to say something before you ask questions. All right, as much as all of you care about the stock market, there are other things in your personal financial life that you need to pay attention to, which is usually what this particular podcast ask KT and Susie anything is about. So just don't focus on one thing. You have to focus on everything. All right, kt.

[KT]

Okay, but focus on this, everyone. This is from Natalie. She said, hi, Susie and kt. I played your Can I Afford it? Games on Susie's YouTube channel. Wait, so many of you don't know this, But Susie's official YouTube channel, which is YouTube.com suziorman S U Z E. Yes, now offers a really fun Can I Afford it? Game, which is part of the original Susie Orman show, which many of you watched for decades. In any event, I want you to go there and play this. Natalie writes super fun, great jackets. She's mentioning Susie's wardrobe. If you can definitely make more of these, please. But obviously you need to come up with a KT Avatar. So I'm not going to tell you why she said that until you go and actually play Susie's Can I Afford It Game.

[Suze Orman]

Yeah, and there's other things there as well, and it seems to be quite popular. We just launched it a week or two ago. Can you believe that for all these years I couldn't get my own YouTube channel back? Somebody had it and we didn't even know who had it. Anyway, that's besides the point. All right, kt, Ask away, my love.

[KT]

Okay, first question here. It says, my mother has a 529 account for my son. My son is going to graduate in May. This is from Teresa, so let me explain. This is a little bit long, Everybody. There's approximately $7,000 left in that 529 account. On one of your podcasts, you mentioned that 529 accounts can be moved into a Roth account.

[Suze Orman]

Yeah.

[KT]

The 529 company confirmed this, but said the funds wouldn't be accessible without a penalty for 15 years. Ready? The IRS rules. This isn't a quizzy. Hold on. The IRS rules say that the Roth account has to be open for 15 years to do this, which isn't the same as what the 529 company said. Susie, My son has a Roth that's been open for a year. So what should we do with the leftover 529 money then? She said her mom is 81 years old.

[Suze Orman]

Teresa, listen to me. For your son to be able to transfer it to a Roth IRA, the 529 account has to have been open for at least 15 years. For those of you who are wondering, what Theresa is talking about is that if you happen to have had a 529 account that has been open for at least 15 years. And let's just say Teresa had had this account for 15 years and the beneficiary of it was her son, and he had earned income in the year that he wanted to roll it over into the Roth. The Roth IRA has to be in the name of her son, and it has to be subject to the annual Roth IRA contribution limit for this year, which is $7,000, since he is under 50. And just so you know, there's a lifetime limit of $35,000 that can be rolled over for this. So it's very tricky. Everybody. And listen, contributions and earnings from the last five years that you've put into the 529 are not eligible to be rolled over. So they gave you a benefit that is just so hard to use. It's not even funny. So I doubt many of you will be able to be qualified for it. All right, KT next. Why are you looking like that?

[KT]

Because I wish. People, we need to video at least one of our podcasts. We're sitting here with our bathrobes on, it's late in the morning on the 2nd, and Susie's so animated that her hands fly everywhere when she's giving this advice. And she often just barely misses the mic. So I'm looking at her like trying to direct those hands flying everywhere. She gets very, very excited and very animated.

[Suze Orman]

Well, the reason that I get excited and animated, it's like you're frustrated. If you're going to give everybody a benefit, like being able to transfer money from a 529 plan into a Roth, make it so that it really applies to the majority of. Don't make it so hard that even the 529 plan company doesn't know how it works.

[KT]

All right, all right. This is from Andrea. She said, I love your podcast so much.

[Suze Orman]

Me too.

[KT]

My financial advisor is advising me to buy municipal bond ETFs and money market municipal bonds. Is this a safe way to reduce federal income taxes? Is it?

[Suze Orman]

You know, all of you have to weigh reducing income taxes against possible loss of principal, any municipal investment, a bond or an ETF or mutual fund that is made up of municipal bonds, the interest on those bonds are absolutely free, federally tax free, but they also have to be bonds that are in the state that you live in if you live in a state that is taxable. So if you live in California, you would need an ETF or mutual fund that was made up of all municipal bonds of the state of California. I don't think that's a great way for you to save taxes because normally the interest rate on municipal bonds are lower than what the actual taxable yields on treasuries and certificates of deposits happen to be like. If you look at the Yield on the 12 month CD at Alliant Credit Union, which is an incredible yield right now, I think you would find. And you would do that, by the way, by going to myalliant.com I think you would find that that yield after taxes may be even higher than your ETF or mutual fund made up of municipal bonds. And remember, an ETF or a mutual fund doesn't have a maturity date, so you have no guarantee of getting back the amount of money that you originally put in. So the fact that you're even asking this question tells me about your sophistication level and truthfully, I wouldn't be doing it if I were you. All right, what does that look for?

[KT]

Took a long time to get to a no.

[Suze Orman]

Am I being too verbose?

[KT]

No, just.

[Suze Orman]

Is verbose the right word?

[KT]

It's not verbose at all. Verbose is your actions. But the amount of information. I would have taken the no right up front and be happy with it.

[Suze Orman]

But, kt, don't you want these people to be educated as to how it works?

[KT]

Not necessarily.

[Suze Orman]

Yeah, of course you don't.

[KT]

Just give her the straight up no.

[Suze Orman]

All right? No, don't do it.

[KT]

This is from Neisha. All right. This is a yes or no as well. Hi, Susie. I'm still working, but wondering if I should take a lump sum or monthly annuity when I retire next year. I was sure to take an annuity, but now my company's pension benefit has been sold and transferred to an insurance company as a group annuity. Is it still safe to take an annuity over a lump sum? In this case, yeah.

[Suze Orman]

But I need to know the amounts. What are the amounts?

[KT]

Okay, so the choice is the lump sum is half a million five hundred thousand or the annuity is 3300 per month with 50% survival benefit when I retire next year. That's from Neisha.

[Suze Orman]

So, Neisha, the big mistake that all of you make is that you really think that upon your death that your spouse will need 50% less than what they were getting when you were alive. And I can tell you over all the years that I've been doing this, that is not true. Because if both of you also qualify for Social Security upon your death, Neisha, if you happen to die first, your spouse is going to lose half of your pension in this case and also your Social Security or your spouse's Social Security, one of those will go away, whichever one is lower, so their income will go down dramatically. And when one spouse dies, I call it the loneliness factor, where the spouse is lonely, so they actually spend more money when one of you is alive than when both of you are alive. Because you go to visit your kids more, you go out to eat more, you're just lonely. So you have to take that into consideration. Now, the numbers that KT gave me, that you could have a $500,000 lump sum rollover or an annuity of 3,300 per month or approximately 1,650 per month upon your death. So at 3,300 per month, that's a 7.9% return on your money, which is a return now if you have kids or anything like that, and it does go to your spouse, upon your spouse's death, all that money is gone. So if both of you are killed in a car crash, it's immediately all gone. So I don't know. Do you have kids? Do you not? If you die, then your spouse's return goes down to 3.96%. Obviously, if you rolled it over and you invested it, you probably only would be getting maybe 3 or 4% on that money, but still have access to the principal. So you're going to have to decide this one because I don't have enough information on it. But if you don't have any kids, if you know that your spouse will be absolutely okay with $1,650 a month after your death, because it's possible that your spouse could die before you as well, then the annuity might be a good choice. I just don't have enough information, but I've just given you the information that you need to think about in making this decision. All right, next. Kt. Oh, I finally answered a question. She doesn't have a look on her face like, well, you know, I was.

[KT]

Just thinking about the friend of ours that was in publishing who was not married, did not have children, and for her, the annuity made a great deal of sense, remember? Yes, yes, that worked out great for her.

[Suze Orman]

Great. Great for her. Because she also did it at a time when interest rates were very high and her return was incredible. So sometimes everybody. It does make sense. You need to sit down with somebody and go through the pros and the cons of it in your particular situation because every one of you is different.

[KT]

Very individualized decisions. Yeah. Okay, next, from Maria. I love your podcast and look forward to listening every Sunday and Thursday. Thank you so much, Susie, for all the information and guidance you provide. So for 2024, due to my income, I cannot contribute to a Roth ira. My question is, should I convert the traditional IRA immediately or the same day into a Roth IRA in order to avoid accruing interest that I would need to pay tax on? I've never done this before, so I'm not sure how the timing works.

[Suze Orman]

So obviously she's doing a backdoor Roth and it's not a traditional ira. It is an IRA that she's doing a non deductible contribution to. So she's putting in $7,000 into that. She isn't going to take a tax deduction for it, and she's able then, KT to convert it because it doesn't matter your income, you can convert 100% of the money into a Roth and still qualify for that Roth. So the question is, do you do it immediately? Listen, when you put it in the non deductible Iraq, just put it in an account that doesn't make any interest for a few days. And then when it feels right to you convert it to a backdoor Roth. It's just that easy. It's not a big deal, my dear Maria. All right.

[KT]

Okay. This is from Jerry. She said, hi. Susie and KT love the work you both do to help us all. With all the cuts to government programs, potentially no taxes on Social Security and Social Security running out sooner than later.

[Suze Orman]

God, and that makes a lot of sense. Social Security's running out, so they're going to not tax Social Security, who only helps the rich, not the poor. I just don't.

[KT]

Wait a minute. Calm down. Calm down. I was wondering.

[Suze Orman]

Wait. Look at me waving my arms.

[KT]

No, she's going crazy now. Anything we talk about with these government programs makes Susie a little hot under the collar. I was wondering if I should take mine at 67 instead of waiting until 70. We don't need the money right now, but would be better off to take it and put it into something safe. In the event that Social Security runs out of money or gets drastically cut, should I put it in CDs or high yield Savings or Treasuries? What should she do? What about an alliance cd?

[Suze Orman]

Now, see, what you have to remember, Jerry, is that from the age of 67 to 70, your Social Security check increases not only by 8% a year, but also by the cost of inflation. And it see the cpi, the Consumer Price Index, and it seems like inflation is going up. So you're not going to be able to meet those returns by a CD or a Treasury or anything that's safe. However, what is the goal of money? The goal of money is for you to feel secure. And if you feel more secure by taking your Social Security at full retirement age, then you should do exactly that. I do not have a crystal ball. I do not know what's going to happen with Social Security. I do not know what the government is going to do with it. I cannot imagine in my wildest dreams that this government would make it that you do not get your Social Security check at 70 under the current laws. I can imagine that for future recipients, they change the full retirement age from 67 to 70. I just can't imagine it. I also cannot imagine that they're going to cut benefits if they cut benefits. There will be the biggest revolt in the United States that there has ever been. So I just. I can't believe it. But then again, I can't believe a lot of things that are happening. So like I said, I don't have a crystal ball. So you have to do exactly what makes you feel secure. All right.

[KT]

This is from Clay. Hi, Susie and Katie.

[Suze Orman]

Did you do that because you like to play with clay?

[KT]

Maybe, but I love it.

[Suze Orman]

Tell everybody how you're a sculptor. What are a sculpture. What are you?

[KT]

A sculptor? And I've been trying to do a portrait of Susie for quite some time.

[Suze Orman]

Is it called a portrait portrait or a bust?

[KT]

It's a bust, but it's a portrait I'm trying to do ahead of Susie.

[Suze Orman]

Can you imagine trying to do my head? Anyway, go on.

[KT]

It's mostly a lot of hair right now, but I'll get there. I really want to get my daughter her own Roth IRA asap. But she's only three years old.

[Suze Orman]

So is she working already?

[KT]

Does enrolling her in a medical study count as earned income? So just to give everyone a background, the medical study is through her pediatrician, and it involves simply monitoring her after the little girl receives routine shots.

[Suze Orman]

And they pay her for that?

[KT]

Yeah. So it's sponsored probably by a medical group anyway, so that's with Pop Quizzy.

[Suze Orman]

Pop Quizzy. Does it qualify for a Roth as earned income?

[KT]

No.

[Suze Orman]

Why?

[KT]

Because she didn't earn it.

[Suze Orman]

Right. So it's taxable. Right, kt, but not earned income.

[KT]

It's not an earned. She didn't work for it. She's three years old.

[Suze Orman]

Yeah. So no KT happens to be right. Ding a ding a ding dingy. Oh, good. There's your Quizzy.

[KT]

That's my Quizzy, baby.

[Suze Orman]

Earned income means you work for it. You can't go to, like, Vegas and win money. And even though that money is taxable, consider that earned earned income, even though you are pulling down a lever, or maybe you just push a button now.

[KT]

Or throwing a parrot dye, or maybe.

[Suze Orman]

You don't do anything. But anyway, so no, it does not qualify as earned income. All right.

[KT]

Okay. So, Susie, question from Kelly. Our accountant has determined my husband can contribute 45,000 to his SEP for this 2024 year. Would you still advise this? Part of me wonders if we were better off putting this in an investment account and not contributing to the SEP any longer.

[Suze Orman]

Let me see that for a second, kt, and see what else she wrote, which is, I see he also has $400,000 already in a SEP IRA. So if he were to do a backdoor Roth, he would have a pro rata rule. All right, I got it. All right, Kelly, you listen to me and listen to me closely now. You should absolutely do the SEP ira. And you don't think about doing a backdoor Roth with him. You think about just simply taking an amount of money from the SEP IRA and converting it to a Roth. If you now put another $45,000 in there and then you convert that, all right, so you pay taxes on that, but you're getting larger amounts of money into your Roth ira. That's how people get a whole lot of money into a Roth, because you're not limited to the 7,000 or the $8,000 a year. You're not limited by income. So you eventually could get all of his money into a Roth IRA simply by converting it. Talk to your accountant about that. All right, kt. Okay, we have time for a few more.

[KT]

Okay, I have one from Jennifer. I like this one. Hi, Susie and kt. Love your show. I feel like you're my personal friends.

[Suze Orman]

We are.

[KT]

We are. Jennifer, we're your friend.

[Suze Orman]

Want to go have lunch?

[KT]

Well, she's in Raleigh, North Carolina.

[Suze Orman]

Forget it.

[KT]

Okay.

[Suze Orman]

All right.

[KT]

So her dad passed away in 2022, leaving her with an inherited IRA worth $500,000. That's the current value. It's a mix of individual stocks and good companies like Nvidia, QQQ and a dozen others. I've been taking only the minimum distribution these past two years, but all must be liquidated entirely within eight years. If I continue to pull the minimum each year, I'll have a huge lump sum to withdraw in 2032 when I'm 60 years old, which will be taxed as ordinary income. So she's saying, what should she do? No, she's smart. Would it be better to take out disbursements evenly over these next years or should I continue taking minimums?

[Suze Orman]

Great. So, yes, when you're in a situation where you inherit an IRA from a relative, not your spouse, you are a non eligible designated beneficiary. And all of you should know what that means by now. You have 10 years to wipe that account clean. So you should take whatever amount is in there, divide it by 10, and take out that amount of money every single year so the account really is wiped clean by the end of the 10th year. Otherwise, you're going to be hit with a tremendous tax bracket. But you should also work with a CPA because maybe you'll be in A lower tax bracket in a few years. So you could take out more then than right now. So it's a little tricky. But don't just take out little amounts of money right now and get hit big in 10 years. All right, last one, Katie.

[KT]

Okay. This is from Marcy. She said, Hi, Susie. I'm 62. At my new job of only six months, I do not pay into Social Security. Will my Social Security benefit decrease as a result of my last working years being at an employer that does not allow me to pay into Social Security?

[Suze Orman]

Well, it depends because you don't tell us anything about this, Marci, in terms of. Listen, if you don't already have 35 years in Social Security and jobs that have paid into Social Security, then, yeah, these years that you're working that don't pay into Social Security will absolutely hurt you. Because when you do apply, though, these years are going to be 0,000. If you already have 35 years that you've paid into Social Security, these years will not hurt you. If you have not, then they will. All right, kt, Is that a wrap?

[KT]

That's a wrap.

[Suze Orman]

All right, everybody. So I can't wait to see what happens today with the tariffs and I don't even know what to say anymore. All right, so kt, take us out.

[KT]

There's only one thing we want you to remember, and it's this.

[Suze Orman]

People first, then money, then things.

[KT]

And you stay safe.

[Suze Orman]

Stay safe, stay strong, and just stay on your own path. All right, everybody, see you soon. Bye. Bye. Now.

[Unknown]

We are strong, we are wise we will not apologize we are here we will thrive Together we will rise we're the faith and everything it takes we are strong, we are wise Together we will rise.

[Suze Orman]

Hi, everybody. Suzie O here. Now, if you are looking for a way to start saving to get the most out of your money, I want you to go to myalliant.com that's my A L L I A-N-T.com and look into opening an ultimate opportunity savings account. Put in at least $100 a month, every single month for 12 consecutive months. Earn 3.10% interest on your money right now and get $100 at the end. Are you kidding me? It's the best deal out there. Start saving right now.

[Unknown]

Neither Suze Orman Media nor Susie Orman is acting as a certified financial planner advisor, a certified financial analyst, an economist, CPA accountant or lawyer. Neither Susie Orman Media nor Suze Orman make any recommendations as to any specific securities or investments. All content contained in this podcast is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any losses which may arise from accessing or reliance on information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss damages, direct or indirect, arising from the use of this information. The must have documents discussed in this podcast are legal documents created by a lawyer and distributed by Hay House.