Ask KT & Suze Anything: Do My HSA Expenses Ever Expire?

Summary

Summary of "Ask KT & Suze Anything: Do My HSA Expenses Ever Expire?"

Podcast: Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Host/Author: Suze Orman Media
Release Date: February 27, 2025

In the episode titled "Ask KT & Suze Anything: Do My HSA Expenses Ever Expire?", Suze Orman and her co-host KT engage in an insightful Q&A session, addressing a variety of financial concerns submitted by their listeners. The discussion spans topics from retirement portfolio management to health savings accounts (HSAs) and estate planning. Below is a detailed summary of the key discussions, insights, and conclusions drawn during the episode.

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1. Evaluating Inherited Retirement Portfolios

Listener: Irene
Timestamp: [02:34 - 07:15]

Issue: Irene inherited a retirement portfolio worth $240,000 a decade ago, which has only grown to $266,283 over ten years—a meager 1% annual return. She seeks advice on whether this growth rate is normal.

Suze’s Analysis: Suze scrutinizes Irene's situation, highlighting the alarmingly low growth rate compared to standard market indices. “If you put $240,000 in 10 years ago and today it's worth $266,283... that's about a 1% annual average rate of return,” Suze criticizes, labeling it “pretty low” and “horrific” given the S&P 500’s average annual return of approximately 12% over the past decade.

Recommendation: Suze advises Irene to transfer her IRA to another firm to seek better investment opportunities, such as certificates of deposit (CDs) or Treasury securities, potentially yielding around 4.5%. She underscores the importance of minimizing fees, suggesting that the current financial advisor may have been earning as much as Irene did in returns through fees alone.

Notable Quote:

“Even if you are in a preservation mode just to preserve it, I'm telling you, that makes no sense whatsoever.” – Suze Orman [03:45]

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2. Roth IRA Conversions and Qualified Charitable Distributions (QCDs)

Listener: Nanji
Timestamp: [07:15 - 10:46]

Issue: At 72 years old, Nanji has a traditional IRA of $200,000 and a Roth IRA of $20,000. Her Social Security and pensions cover her living expenses, and she possesses a substantial emergency fund. She inquires about the benefits of continuing to convert her IRA to a Roth IRA while making qualified charitable contributions to minimize taxes.

Suze’s Analysis: Suze explains that Nanji can utilize Qualified Charitable Distributions (QCDs) to satisfy her Required Minimum Distributions (RMDs), thereby potentially reducing her taxable income. She emphasizes the strategic timing of conversions, recommending that Nanji convert as much as possible before mandatory RMDs begin at age 73.

Recommendation:

• Immediate Conversion: Nanji should convert funds to a Roth IRA while her tax bracket remains favorable.
• Post-QCD Conversion: Continue gradual conversions post-QCD to further reduce future RMDs.

Notable Quote:

“The more you get to convert, the less your RMDs are going to be as well.” – Suze Orman [10:46]

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3. Health Savings Account (HSA) Reimbursements and Expiration of Expenses

Listener: James
Timestamp: [10:46 - 14:17]

Issue: James, 58, has an HSA with $80,000 and uses it for current medical expenses, hoping it grows. He wonders if he can reimburse past medical expenses years later and whether these expenses ever expire.

Suze’s Analysis: Suze clarifies that HSA funds for qualified medical expenses do not expire. Individuals can save receipts for medical expenses indefinitely and reimburse themselves tax-free at any time, regardless of age.

Recommendation: James can indeed submit his saved medical expenses from the past seven years all at once. Suze emphasizes the flexibility HSAs offer and reassures listeners about their utility in long-term financial planning.

Notable Quote:

“Any qualified medical expense for an HSA can be paid out tax free from your account. You don't have to worry about that.” – Suze Orman [12:32]
“Your expenses never expire.” – Suze Orman [13:37]

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4. Roth IRA Conversion Strategy for Low-Income Retirees Abroad

Listener: Maria
Timestamp: [14:17 - 15:56]

Issue: Maria, a 50-year-old widow who retired early and moved abroad, relies on interest income from CDs ($4,000) and seeks advice on converting her IRA to a Roth IRA to maximize her standard tax deduction, which she fears she might be losing due to low interest income.

Suze’s Analysis: Suze acknowledges Maria’s low income and the potential to utilize her standard deduction more effectively through Roth conversions. She suggests that converting portions of her IRA now could optimize her tax situation without significantly impacting her finances.

Recommendation:

• Convert enough of her traditional IRA to a Roth IRA to fully leverage her standard deduction.
• Additionally, consider converting an extra $4,000 to further minimize future tax liabilities.

Notable Quote:

“If you were to do that and because you only have $4,000 this year of interest coming in and that's really your only income... I would talk to your CPA about that.” – Suze Orman [15:05]

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5. Understanding Pay-On-Death Accounts and Beneficiary Designations

Listener: Lillian
Timestamp: [16:19 - 22:50]

Issue: Lillian seeks clarification on what happens to pay-on-death (POD) accounts and life insurance beneficiaries if the primary beneficiary (her son) also passes away.

Suze’s Analysis: Suze explains that POD accounts typically do not allow for contingent beneficiaries. If both Lillian and her son die, the assets in the POD account would pass through her estate and be subject to intestate succession laws, unless specified otherwise in her will or trust.

For life insurance:

• If the primary beneficiary (her son) and the policyholder both die, the contingent beneficiary (her brother) would receive the life insurance proceeds.

Recommendation:

• For POD Accounts: Establish a trust or designate contingent beneficiaries to ensure asset distribution according to her wishes.
• For Life Insurance: Ensure contingent beneficiaries are clearly defined to avoid complications.

Notable Quote:

“If you have not taken the time to do a will on your own... you've got to check it out. Or better yet, you should get a trust and a will.” – Suze Orman [18:01]
“So, in your case, where both you and your son pass away in an accident, the money that is in that CD will be governed by your estate, your will.” – Suze Orman [17:57]

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6. Trusts vs. Ladybird Deeds for Home Transfers

Listener: Darlene
Timestamp: [19:51 - 22:53]

Issue: Darlene, residing in North Carolina, owns a home and wishes to simplify the transfer process to her son upon her passing. She asks about the differences between setting up a trust versus a Ladybird deed.

Suze’s Analysis: Suze outlines that while a Ladybird deed can facilitate the seamless transfer of real estate without probate, it lacks flexibility in naming alternate beneficiaries. This rigidity can cause complications if the primary beneficiary predeceases the donor.

Recommendation: Suze recommends establishing a living revocable trust instead of a Ladybird deed. Trusts offer greater flexibility, allowing for alternate beneficiaries and accommodating more complex estate planning needs.

Notable Quote:

“A Lady Bird deed will make it absolutely easy for you to transfer your home to your son... The disadvantages, however, is it only involves real estate.” – Suze Orman [20:07]
“But given that they don't allow you to have an alternate with a Ladybird, I most certainly would be doing a living, revocable trust instead.” – Suze Orman [22:44]

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7. Funding Trusts for Minor Beneficiaries

Listener: Lynn
Timestamp: [23:04 - 28:00]

Issue: Lynn, who has prepared all necessary legal documents including a trust, seeks guidance on how to properly title her home so that it seamlessly transfers to her two-and-a-half-year-old daughter upon her passing.

Suze’s Analysis: Suze emphasizes the importance of "funding" the trust, meaning transferring asset titles from personal ownership to the trust’s name. An unfunded trust, or an "empty trust," will result in assets not being transferred as intended.

Recommendation:

• Funding the Trust: Change the title of all assets, including the home, from individual names to the trust’s name.
• Execution: Follow the instructions provided by Must Have Documents, ensuring all assets are appropriately titled to avoid probate issues.

Notable Quote:

“If you haven't done that and you give them that suitcase and they open it up, it's going to be empty.” – Suze Orman [24:04]

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8. Roth IRA Contribution Limits and Calculations

Listener: William
Timestamp: [28:00 - 33:28]

Issue: William, 35 years old, earned $160,480 last year, just below the Roth IRA eligibility cutoff of $161,000. He asks how much he can contribute to his Roth IRA.

Suze’s Analysis: Suze explains the phased reduction in Roth IRA contribution eligibility within the income range. For individuals whose income exceeds the threshold, the allowable contribution decreases proportionally.

Recommendation: Using a specific formula, Suze calculates that William can contribute approximately $243 to his Roth IRA given his income level.

Notable Quote:

“The answer to that question is $243.” – Suze Orman [31:28]
“You have to subtract your $160,480 from the 161,000 number one. That's a $520 difference. That's how much you are under the max.” – Suze Orman [31:31]

Educational Insight: Suze breaks down the calculation method, emphasizing the importance of understanding income phase-outs when planning Roth IRA contributions.

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Conclusion and Takeaways

Throughout the episode, Suze Orman and KT provide comprehensive financial advice tailored to individual listener situations. Key takeaways include:

• Active Management of Retirement Portfolios: Regularly review and adjust investment strategies to align with market performance and personal financial goals.

• Strategic Roth IRA Conversions: Utilize Roth conversions to optimize tax benefits, especially when income levels are favorable.

• Maximizing HSA Benefits: HSAs offer flexibility in managing and reimbursing medical expenses without time constraints.

• Estate Planning Essentials: Establish wills or trusts to ensure assets are distributed according to one's wishes, and understand the implications of beneficiary designations.

• Understanding Contribution Limits: Be aware of Roth IRA income thresholds and how to calculate permissible contributions based on income levels.

Final Notable Quote:

“The choice is up to you.” – Suze Orman [Summary Emphasis]

Listeners are encouraged to stay informed, regularly consult with financial advisors, and take proactive steps in managing their finances to achieve security and growth.

Transcript

[Susie 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 we will.

[Susie Orman]

February 27, 2025 welcome, everybody to the Women in Money podcast as well as everybody smart enough to listen. Today is what?

[KT]

KT February 27th.

[Susie Orman]

Don't be smart. Don't be smart.

[KT]

No. February 27th.

[Susie Orman]

Anyway, this is the Ask KT and Susie Anything, anything, anything, anything, anything.

[KT]

I'll do any for you, dear.

[Susie Orman]

Anything.

[KT]

Okay, let's go. Ready?

[Susie Orman]

No, wait. If you want, write into asksusie s u zepodcastmail.com and if you have a question, that is, it comes to us right here. KT looks through them and if you're lucky, she chooses it and we answer it here on the podcast. Now you have to listen to the podcast to know if we've answered your question. Somebody wrote the other day and said, susie, I've been waiting. I wanted to hear back from you. My question was never answered. I went, wait.

[KT]

I got another one today that said, please give me a heads up when you're answering my questions so I can listen. I'm thinking, I'm not going to do that. Now you have to listen to everyone. I'm not going to give you, give you a heads up warning, you know, emergency, ding, ding, bell.

[Susie Orman]

Early this morning, I was looking at kt. I said, what are you doing? She goes, I'm looking through to just make sure I have the most interesting ones. So let's see.

[KT]

And I do.

[Susie Orman]

Let's see if you do, little one.

[KT]

All right, so here we go. This is from Irene. Hello, Susie and kt. I was listening to your podcast and decided to review my retirement portfolio which I inherited from my husband 10 years ago. @ that time, I was led to an investor by my husband's cousin. A few months.

[Susie Orman]

Danger, danger, danger. I can already tell you, danger, wait.

[KT]

A few months after my husband passed, as I review my portfolio, there was a $240,000 in an IRA today.

[Susie Orman]

So 10 years ago, she deposited $240,000. And how much is it worth today?

[KT]

Ready? The same account balance has grown to $266,283 in 10 years. All right, so this is the question she's asking. Is this a normal growth rate? It seems so low for 10 years. I was. Is set up as a moderate growth. More on the preservation side. So that's her question. Is it normal?

[Susie Orman]

What do you think?

[KT]

KT sounds pretty low to me for 10 years.

[Susie Orman]

So you'd be upset at that.

[KT]

Very upset, considering what the stock market's been doing in the past 10 years.

[Susie Orman]

All right, so, my dear Irene, what do you think? If you put 240,000 in 10 years ago and today it's worth 266 or essentially 26,000 over 10 years, that's about a 1% annual average rate of return.

[KT]

It's pretty low.

[Susie Orman]

Pretty low. That's horrific. Truthfully, number one, even if you are in a preservation mode just to preserve it, I'm telling you, that makes no sense whatsoever. Even if this person had taken your money and put $120,000 in and half of it and locked it up for 3% for all those years, and the other. And invested it, right, to kind of preserve it and protect against inflation, and over all those years, you only made 7%. Let's just say you'd have $397,000 today. So no matter how you look at it, you know, because the truth is, everybody, over the past 10 years, the Standard & Poor's 500 index has averaged 12%. So when I say an annual average rate of return, one year, it might go up 10%. The other year it might go down 20. But over all those 10 years, the average annual rate of return comes out to be about 12%. So if he had just put it in a Standard and Poor's 500 index, I hate to tell you, you'd have $745,000. At just a straight 6%, which is pretty moderate, you'd have $429,000. So any way you want to look at it at 1% is all he's made for you. It's not somebody that you want to stick with. Now, at least you made a little money. It's not like you lost any money. However, if I were you, I would think about taking this money away from him. Obviously, it's in an IRA, because you inherited it. I'm now looking at your email, and it says it was in an ira. I would do an IRA transfer to another firm because you could just very easily take all of this money and put it in a certificate of deposit or a Treasury and average 4 and a half or so percent for probably the rest of your life. So that's what I would be doing if I were you. I'm so, so sorry.

[KT]

Yeah.

[Susie Orman]

Oh, look at her thing. It says my retirement portfolio. This is the subject area. My retirement portfolio seems suspiciously wrong.

[KT]

That's why I picked it, the word suspiciously.

[Susie Orman]

You know, I would go back and I would ask this person, what kind of fee was he taking for all those 10 years on this money? I will bet you any amount of money he made as much money as you did in fees. All right. Just saying. Because even if he made 1% a year KT, he made the exact same amount of money as she did.

[KT]

Beware of cousins recommendations.

[Susie Orman]

It's kind of true, everybody.

[KT]

Yeah. Sometimes it's better not to all you.

[Susie Orman]

Are not to do anything other than keep your money safe and sound for one or two years, possibly three, after suffering the loss of a loved one.

[KT]

All right, so Susie, this next question is from Nanji. She said, I absolutely love you both and only wish I had known you years ago. I'm 72. I have a $200,000 traditional IRA.

[Susie Orman]

I wish I had known you years ago.

[KT]

As well as a tiny 20,000 Roth. So at the end of the day, what Nanji's asking is, her Social Security and pensions more than cover all of her living expenses. She also has a five year emergency fund and CDs at Alliant, so she doesn't need these IRAs. In my case, does it make more sense to continue to convert as much as I can afford for the next few years if I choose to make a qualified charitable contribution with my first and possibly second rmd, so there will be no taxes associated with them. Could I continue to convert for these few years as well?

[Susie Orman]

Okay, now, Nanji, so first of all, you're old enough, you have to be 70 and a half or older to do qualified charitable distributions. And basically what that is, everybody is if you have a retirement account like an IRA that you've never paid taxes on, or a 401, whatever it may be, you can contribute up to $108,000 in 2025. Anyway. It was a little lower for 2024, but you can do so directly from your IRA to a charity, and that will count against your RMDs. Now, obviously, Nanji, if you have only $200,000 in your IRA, your RMD, your required minimum distribution is only going to be about $7,500 so the most you're going to be able to do in a QCD that counts against your rmd will be $7,500. After you have done that, then if you want, you can convert. But remember, Whether you take RMDs or you give them away through a QCD, you have to do that before you can convert. So if I were you, given that you're only 72 years of age right now and you don't have to start taking RMDs until 73, I would be converting as much as you possibly can this year right now before you have to take RMDs. I would do so because you're not really in that high of a tax bracket. So you should see a CPA and decide how much money can you convert this year right now into a Roth IRA without really screwing up your taxes. All right, that's number one. Number two, absolutely. Next year after you do a qcd, then absolutely I would be converting. I would continue to convert little by little to a Roth, given you do not need it. The more you get to convert, the less your RMDs are going to be as well.

[KT]

All right, Susie, next question I have is from James. Susie, I saw you on a PBS special and have been listening ever since. I'm 58 and currently have an HSA with $80,000 saved that I do use. I pay for my current qualified medical expenses out of pocket with the hope of letting the HSA investment grow. My understanding is that at age 65 and beyond, I can withdraw money from the HSA tax free, so long as the money is to be used to reimburse a medical expense.

[Susie Orman]

And the question is a qualified medical expense. All right.

[KT]

Okay.

[Susie Orman]

I'm just making sure he does.

[KT]

Well, James, question is this. If I save all the receipts from my medical expenses over the next seven years, could I submit them for reimbursement all at once? Or in other words, do the expenses expire?

[Susie Orman]

So now, kt, pop quizzy, pop quizzy here. And the reason I'm giving KT a pop quizzy here is I spent years educating so many people on how HSAs work.

[KT]

She was the queen of HSAs.

[Susie Orman]

I really was really the queen.

[KT]

It was great, right?

[Susie Orman]

But KT went to seminar after seminar after seminar that I gave on this for the Gulfstream Corporation. Therefore, pop quizzy, if James has saved all his receipts from his medical expenses over, let's say, the next seven years, if he saves them, can he submit them for reimbursement all at once? At age 65. Can he?

[KT]

I believe.

[Susie Orman]

Yes, he can. Ding, ding, ding, ding. Yes. He doesn't have to wait till age 65, just so you know, he can do it anytime he wants. So, James, the 65 has absolutely nothing to do with whether that tax free or not. Any qualified medical expense for an HSA can be paid out tax free from your account. You don't have to worry about that. But after the age of 65, just so you know, if you withdraw money for a non qualified medical expense, you're only going to have to pay ordinary income tax on it before the age of 65. It's ordinary income tax and a 20% penalty. But an HSA at anytime is tax free for a qualified medical expense. No matter what your age, you can save all of your receipts. They call it the shoebox technique.

[KT]

Yes, I remember that.

[Susie Orman]

And you keep all your receipts in a shoebox. You've paid for all of these things. You've let your money grow tax free in an hsa, then you submit it to the company regardless of age and they will pay you. Your expenses never expire. Next.

[KT]

I loved that program you did, wasn't it? She went all across America with the president of Gulfstream.

[Susie Orman]

Yep.

[KT]

It was great. And people learned so much. And I think you really liked the HSA program.

[Susie Orman]

I liked their HSA program. Tremendous.

[KT]

That was a big benefit.

[Susie Orman]

Big benefit.

[KT]

All right, from Maria. Hi Susie and kt. I listen to your podcast and I used to watch the TV show back in the day. I value your wisdom and advice. I'm a recent 50 year old widow who retired very early and moved from the US to a foreign country. I'm receiving some income from the interest on bank CDs but otherwise am frugally living off my savings till I can start a business. I realize I may be losing out on the full standard tax deduction of $14,600 because the interest I'm earning may only reach $4,000 this year. Would this be a wise time to convert some of my IRA over to the Roth IRA instead?

[Susie Orman]

Actually it would. So I think in 2025, Maria, that the standard deduction may go up to about 15,200 dol. They have not decided yet. But if you were to do that and because you only have $4,000 this year of interest coming in and that's really your only income and everything. If I were you, I would so convert whatever money you want in order to take advantage of the full standard deduction. And also if you don't mind paying like 10% or so on the tax, you could actually convert more. You could probably do another $4,000, just so you know. Talk to your CPA about that. Yes.

[KT]

Okay, next.

[Susie Orman]

You're a little smart cookie. Marie's a smart cookie.

[KT]

She retired at 50. I wonder what country.

[Susie Orman]

Sing that song, Maria.

[KT]

I just met a girl named Susie.

[Susie Orman]

All right, go.

[KT]

Hi, Susie and kt. Susie, you like when I sing, don't you?

[Susie Orman]

Truthfully, I do. A lot, yeah.

[KT]

Hi, Susie and Katie.

[Susie Orman]

You know, I like more. I like when we dance in the kitchen.

[KT]

Oh, my goodness. Every now and then when I'm cooking. I put on little music when I'm cooking. And if a song comes on that I love, I turn it up so loud. And Susie, wherever she is, comes running because it means KT wants to dance. This next question from Lillian. Hi, Susie and kt. Susie fan here. I have two questions on pod, which is pay on death accounts, everyone and life insurance beneficiaries. What happens if the person named as the paid on death also dies? For example, if I own a CD and the pay on death is my son, if both of us happen to pass away in an accident, what happens then? Wait, let me finish. And then she said, if I have a term life insurance policy for $100,000 and my beneficiaries are my son, 50%, my cousin, 50%, and a contingent beneficiary, my brother at 100. If my son and I pass in an accident, how is the life insurance payment calculated?

[Susie Orman]

Should that be a quizzy, too?

[KT]

No, I mean, that's pretty straightforward.

[Susie Orman]

Oh, it is, is it?

[KT]

Yeah.

[Susie Orman]

So in the first case, what do you think happens?

[KT]

Oh, wait, let me just remind myself.

[Susie Orman]

In the first case, she has a CD that it's a pay on death account to her son. But if they both die, what happens?

[KT]

It goes to the contingent beneficiary.

[Susie Orman]

There is no contingent beneficiary. That's the life insurance policy she's talking about.

[KT]

Oh, I don't know.

[Susie Orman]

That's my girl. See, everybody, I don't know.

[KT]

But that is a really important thing to know.

[Susie Orman]

So, first of all, you all have to know when you do a pay on death account, there's very seldom will a bank allow you to do an alternate, meaning something happens to your son, then you get to name an alternate. That's not how pay on death accounts normally work, just so you know. So in your case, where both you and your son pass away in an accident, the money that is in that CD will be governed by your estate, your will. And if you don't have a will, it will go into intestate succession. Every one of you has to understand if you have not taken the time to do a will on your own, you don't have a trust, you don't have anything, and you die. Oh, the state that you live in, oh, they've already written one for you. It's called intestate succession. And every state has decided, if you die without a will, your money first goes to maybe your parents, maybe your spouse, maybe your children. Maybe it's divided between all three. You better check it out. Or better yet, you should get a trust and a will. But that's besides the point. So that's number one. Second, if you have a term life insurance policy where your son is 50% and your cousin is 50% and you both die, then what's going to happen is you have a contingent beneficiary, your brother, who's to get 100%. The contingent beneficiary will be getting your son's 50%. Your cousin will remain at 50%. And that is how it is. So that's how it would work. Next question. KT all right.

[KT]

This is from Darlene. She said, Susie, can you explain the difference in a trust versus a Ladybird deed? I live in North Carolina. My only real asset is my home. We would like to make it easy when we pass for our home to go to our son.

[Susie Orman]

Yeah. So here's the thing, Darlene, you bet a Ladybird deed will make it absolutely easy for you to transfer your home to your son. The thing is, with a Lady Bird deed, the only thing that you could pass that way is real estate. That's it. Obviously, it's simple, doesn't cost a lot. It will obviously KT avoid probate. The disadvantages, however, is it only involves real estate. You have no, just like I said a little bit ago, KT that the bank, when it's a pay on death account, they normally don't have alternatives if something happens. The same is true with a Lady Bird deed. They offer absolutely no flexibility for alternate beneficiaries. So if her son dies before her, all right, now what are we going to do? Also, they have the ability to complicate title insurance and future transaction. Things like that. I will forever tell you, especially because you can get the must have documents, a will, a living revocation trust, an advanced directive and durable power of attorney for health care, as well as a financial power of attorney. And you can get it by going to musthavedocs.com. you get them through Hay House who has manufactured these and is providing them for you? Everybody. However, you are far better off for the $99 they're going to charge you, which is probably less than a Lady Bird deed, truthfully. That if you put the house in trust, it's held for your benefit during your lifetime, but upon death, it transfers to your son. Or if something happens to you and your son, like that other woman was just asking, then your trust provides for alternate beneficiaries. Also, you can include many other things as well. And you can also make it easier for your son if you have an advance directive and durable power of attorney for healthcare and all of those things. So either one. Okay. But given that they don't allow you to have an alternate with a ladybird, I most certainly would be doing a living, revocable trust instead. You know, Katie, people never think that somebody's going to die before them. Ever. Kt, have I already told the story about the woman I did?

[KT]

Yeah. That sadly left her home to her.

[Susie Orman]

Niece, and her niece died before she did.

[KT]

And then she couldn't even live in her own home.

[Susie Orman]

Well, she's living there, but she doesn't own her home anymore. She can't sell it. I don't know if I've told you that story or not, but it's horrific. Be careful, everybody. All right, Go on.

[KT]

Okay. From Lynn. Hello. The very kind KT and the financial sage, Susie.

[Susie Orman]

Why does everybody think you're so much kinder?

[KT]

I am. I'm very kind. Not kinder. No.

[Susie Orman]

What do you mean, no?

[KT]

I'm not going to tell them.

[Susie Orman]

Why?

[KT]

Because that's like, you know, revealing the wizard of Oz. Everyone thinks you're Susie Slapdown, but she isn't. She's Susie Softie. The kids call her Aunt Softie instead of Aunt Susie.

[Susie Orman]

All right.

[KT]

Okay.

[Susie Orman]

Ready?

[KT]

I love starting my day listening to your podcast twice a week. Now that I have our must have documents signed, notarized and funded and placed ready for this and placed in a waterproof and fireproof case. How should the house be titled in order to pass seamlessly to our beneficiary, who is our daughter, and she's only two and a half years old.

[Susie Orman]

Yes.

[KT]

Baby girl. She's a baby girl.

[Susie Orman]

Baby girl.

[KT]

How do they do that?

[Susie Orman]

I'm sure that if you did the must have documents, it's provided that the executor and the successor trustee, everybody, will take care of the house and the child until she's of age. However, I'm a little bit confused. You say because K.T. just handed me your email that you have your must have documents. They're signed, notarized, and funded. If they are funded, what funded means is that you have already changed the title of your house, your bank accounts, your brokerage accounts into the title of the trust. If you haven't done that, you have what's called an empty trust. Because a trust, everybody is like a suitcase where you put everything in it, and then upon your death, the suitcase is just handed to your beneficiaries and they open it up and they get everything that's in it. Simple. But if you don't put anything in it and you give them that suitcase and they open it up, it's going to be empty. So to fund it or to pack that suitcase, so to speak, there you go. You have got to change the title of all of your assets from your individual name into the title of the trust. Now, if you go back to do the must have documents, you just go back into them. Okay, easy for you to do. You know how to do that. And you go to the review page where you're now reviewing your trust. You'll see right under the review, it also says fund the trust. Click on there and then just follow everything that it says for you to do. And then you take it to your bank, you take it to the title company, you take it to your brokerage firm, and they change it for you. The title of your trust is usually like, our trust is Susie Orman, trustee for the Suze Orman Living Revocable Trust, dated, whatever date it was notarized. And so it's just that simple. So you say it was funded, but it's not, because you would not be asking me, how should the house be titled in order to pass seamlessly. So that, my friend, is how you do it. Kt, are you ready for your quizzy?

[KT]

I'm always ready for a quizzy. I love quizzes. And everyone listening. It's for you, too.

[Susie Orman]

You don't love all quizzes.

[KT]

I love quizzes. I just don't. I have a little trouble with the Roth. So Roth quizzes are a little challenging.

[Susie Orman]

Yeah. So, everybody, I just have to tell you something. Today's podcast, I have prepared questions for KT, about 18 of them about Roth IRAs. Remember a few weeks ago, I said, I'm gonna do this, and she's gonna answer every question.

[KT]

I'm not ready.

[Susie Orman]

And I said, this is what we're doing today. And she said, oh, no, I've already picked the questions for today. I said, but KT we can do that next week. Let's do this this week. Absolutely refused. I said, will you be ready next week? And what did you say?

[KT]

No.

[Susie Orman]

No. Will you be ready in a month from now? Maybe, but probably not.

[KT]

Probably not.

[Susie Orman]

All right, so what am I going to do? I'm going to take those questions and on March 6th, I'm going to read them and ask all of you the questions that I was going to ask kt. And let's see if you can answer all of them. And I will explain the correct answer of each one, so don't miss it. All right?

[KT]

Therefore, I'm going to put that in my calendar.

[Susie Orman]

A little bit of a tricky one for your quizzy today.

[KT]

Okay?

[Susie Orman]

All right.

[KT]

Is it a rough.

[Susie Orman]

It's a Roth, but it's tricky.

[KT]

Okay, listen. I'll listen very carefully.

[Susie Orman]

All right. Now, before I begin. All right, I just want to remind you that last year, the phase out range for. Because this is about last year, you can no longer contribute to a Roth IRA if you made over $161,000. I just want you to remember that you cannot. This year it went up to 165 as the max. After that, you can no longer contribute. All right, so you ready?

[KT]

Yes.

[Susie Orman]

You remember what I just said?

[KT]

Yeah. Max, 160, more or less. $160,000.

[Susie Orman]

161,000. You have to know that figure.

[KT]

All right. 161.

[Susie Orman]

After that, you can no longer contribute to a Roth.

[KT]

Okay.

[Susie Orman]

All right. As an individual.

[KT]

Okay.

[Susie Orman]

Okay. This is from William. Very simple. Ready? My income last year was just below the max income for the Roth IRA of 160,000. $480. How much can I contribute to my roth? He is 35 years of age.

[KT]

I think $7,000, the max.

[Susie Orman]

You're positive?

[KT]

Although if this is tricky, I'm never positive. But his income, his total income. Right. Was 160. The Roth is 161. So I would say, why can't he put in $7,000?

[Susie Orman]

The income ranges last year, 146,000. Anything under that, you could contribute the max of 7,000. Once you get to 161,000, you no longer can contribute at all. Between the 146 and the 161, it decreases. You can only put in the $7,000 if you're under 58,000, if you're 50 or older, if you make under the $146. So how much can he put in if he's making only a few hundred dollars under the max till he no longer Qualifies.

[KT]

It has to be calculated, Susie, because if he. Yeah, it has to be calculated. I need a calculator to figure that out.

[Susie Orman]

And how would you figure it out? What is the formula? You don't know?

[KT]

I'd ask you, but. But here's the thing. No, he can't put in 7,000. Let's put it.

[Susie Orman]

But you said your answer was 7,000.

[KT]

Well, I didn't know about the tricky part, which was the 140,000.

[Susie Orman]

Do you see how she does it? Everybody did. I.

[KT]

Why didn't you say anything about that?

[Susie Orman]

Because I said. Because for years now, I've been telling you there's a range between this and that. Anyway, everybody.

[KT]

And how old is he? 35. Yeah, he could put in.

[Susie Orman]

So take a guess. How much do you think he could put in? Just take a guess. Don't try to figure it out.

[KT]

3,000.

[Susie Orman]

The answer to that question is $243.

[KT]

That's it?

[Susie Orman]

That's it.

[KT]

Wow.

[Susie Orman]

Do you want to know how I got it?

[KT]

Yeah. What's the formula?

[Susie Orman]

All right, everybody.

[KT]

It's not worth it.

[Susie Orman]

Here's what you have to do. If you make more than the max limit last year, 146. This year, 150. If you make more than that, then what you have to do is. And this is what you would have to do, William, in your case last year, it was 146 to 161. It's a $15,000 difference. You would have to subtract your $160,480 from the 161,000 number one. That's 520 difference. That's how much you are under the max. You then have to divide that by $15,000. Why is that? Because it's a $15,000 range, KT from the 146 to the 161. And that would give you.0347. Now you have to times $7,000, which is the maximum that anybody under the age of 50 can put into a Roth. That's the maximum contribution. You have to times that by.0347 to give you the amount of money in this example that you can put into a Roth this year anyway, which would equal $243.

[KT]

So everybody listening? What she just explained to you, all right. Is a little tricky.

[Susie Orman]

Not tricky. It is tricky, but everybody needs to know. How do you figure out if you make more than the minimum to put in the maximum? How do you know how much you are allowed to put in?

[KT]

Call Susie.

[Susie Orman]

Call Susie.

[KT]

Call Susie.

[Susie Orman]

But that is the formula. You should all listen to it all over again, just so you know. All right, kt until this Sunday for another Suzy School. There's only one thing that we want you to remember when it comes to your money. And what is it, kt People.

[KT]

First, then money, then things.

[Susie Orman]

Now you stay great, Stay great, Stay safe.

[KT]

Stay safe, Stay strong, stay healthy, Stay.

[Susie Orman]

Happy, Stay healthy and stay Listening to the Women in Money podcast. 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 grown up in our face and everything it takes we are strong, we are wise Together we will rise.

[Susie Orman]

Hi everybody. Suzy 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 M y a l l I a n t dot com and look into opening an ultimate Opportunity savings account. Put in at least $100 a month every single 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 Susie 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.