Podcast Summary: Suze Orman's Women & Money (And Everyone Smart Enough To Listen) Episode: Ask KT & Suze Anything: Do You Know The Difference Between Aristocrat and King Stocks? Release Date: March 20, 2025

Introduction

In this engaging episode of Women & Money, Suze Orman, the renowned personal finance expert, teams up with co-host KT for a dynamic Q&A session. Titled "Do You Know The Difference Between Aristocrat and King Stocks?", the episode delves into a variety of listener-submitted questions, offering actionable financial advice and insights. The conversation is lively, informative, and peppered with Suze's signature wisdom, making complex financial concepts accessible to all.

Hosts

• Suze Orman: A globally recognized personal finance guru with over four decades of experience, Suze offers transformative advice to millions seeking financial empowerment.
• KT: Suze's co-host, bringing a conversational and relatable dynamic to the podcast, often interjecting humor and additional insights.

Listener Questions and Answers

1. William’s Conundrum: Pro Rata Rule and Backdoor Roth IRA

Timestamp: [03:37 - 06:45]

Question:
William is confused about the pro rata rule after consolidating his 401(k)s into separate Roth and rollover IRAs. He wants to execute a backdoor Roth IRA but is unsure if it's possible without incurring significant taxes.

Suze’s Response:
Suze explains the complexity of the pro rata rule, emphasizing that if you have pre-tax retirement accounts, converting to a Roth IRA will require paying taxes proportionate to the pre-tax balance. She outlines a calculation method to determine the taxable amount and advises whether it’s worthwhile based on individual circumstances.

Notable Quote:
“There is this crazy tax rule that says if you have any pre-tax retirement accounts... you are going to have to pay taxes based on a pro rata rule.” [04:02]

2. Amanda’s Dilemma: Riding Out the Market or Moving to Cash

Timestamp: [08:28 - 11:34]

Question:
Amanda, 53, is anxious about her $250,000 invested in Roth and IRA accounts, which are currently losing value. She’s contemplating moving her money to cash to avoid further losses.

Suze’s Response:
Suze advises that if Amanda cannot afford to lose more money and is losing sleep over it, she should consider moving her investments to safer options like treasuries or CDs. She differentiates between losing principal versus losing profit and emphasizes the importance of peace of mind over potential market gains.

Notable Quote:
"If it's your principal that you are now losing, I would probably come out because either way, you're going to lose sleep at night." [10:20]

3. Leslie’s Question: Withdrawing from a Roth IRA for a New Car

Timestamp: [11:30 - 13:45]

Question:
Leslie, 37, needs to purchase a new car within five years and is deciding whether to use her savings or withdraw from her Roth IRA, where she has $124,000.

Suze’s Response:
Suze strongly advises against tapping into the Roth IRA for non-essential expenses like a car purchase. She recommends using existing savings to avoid disrupting the compounded growth and tax-free benefits of the Roth IRA.

Notable Quote:
"Whatever you do, don't take it out first from there or ever hopefully, because that's money that's compounding free for you. Tax free." [13:00]

4. Susan’s Concern: Dropping a Long-Term Care Policy

Timestamp: [14:19 - 16:37]

Question:
Susan, 60, is contemplating whether to continue paying for a long-term care policy or to invest the premium dollars herself, considering her financial stability and lack of dependents.

Suze’s Response:
Suze discusses the importance of long-term care insurance, especially if one faces unexpected health issues. She suggests keeping the policy if it’s affordable and providing peace of mind, emphasizing that such insurance can be invaluable in unforeseen circumstances.

Notable Quote:
"If you can easily afford it, keep it. If you can't and you think you're gonna drop it anyway... then drop it now because there's nothing worse than paying for it and paying for it and paying for it." [15:10]

5. Scott’s Inquiry: Transfer on Death Deed vs. Revocable Trust

Timestamp: [16:53 - 19:51]

Question:
Scott seeks advice on the pros and cons of a transfer on death deed compared to a revocable trust for estate planning, especially in cases of incapacitation.

Suze’s Response:
Suze explains that while a transfer on death deed simplifies the process of passing property to beneficiaries without probate, it fails in situations where one spouse becomes incapacitated. She advocates for a revocable trust, highlighting its comprehensive benefits in managing assets during unforeseen life events.

Notable Quote:
"A transfer on death deed doesn't help you if all of a sudden you own this home... you cannot sell the house." [17:30]

6. KP’s Scenario: Moving Out of State with Mother and Property Ownership

Timestamp: [20:00 - 23:00]

Question:
KP, nearing retirement, plans to move out of state with her financially secure mother to live together. She seeks advice on who should purchase the new home and how to hold the title to facilitate future inheritance.

Suze’s Response:
Suze advises that the mother should purchase the new home within a living revocable trust, naming KP as the successor beneficiary. This strategy offers tax advantages like a stepped-up cost basis and simplifies the inheritance process. Additionally, Suze recommends evaluating the financial benefits of renting out KP’s current home versus selling it.

Notable Quote:
"If mommy has the money and she doesn't care, let Mommy pay for it outright. She is the primary beneficiary that it's held in trust for her benefit while she's alive." [21:14]

7. Monina’s Curiosity: Investment Accounts vs. Roth IRA

Timestamp: [23:00 - 25:38]

Question:
Monina, who has established a solid financial foundation with a revocable living trust, maxed 401(k) and Roth contributions, and no debt, wonders about the next steps in maximizing her retirement funds. She asks if there's a way around the pro rata rule or if she should wait until 59½ to convert.

Suze’s Response:
Suze encourages Monina to explore investment accounts outside of retirement accounts like IRAs. She explains that regular investment accounts offer flexibility and tax advantages, such as lower capital gains taxes compared to the ordinary income taxes of pre-tax IRAs. Suze suggests that for those restricted by the pro rata rule, diversifying investments outside traditional retirement accounts can be equally or more beneficial in the long run.

Notable Quote:
"A regular account at any discount brokerage firm... when you buy something and keep it for a long time, you're not paying taxes on it." [24:18]

8. Kristin’s Inquiry: Dividend Aristocrat vs. King Stocks

Timestamp: [25:38 - 28:58]

Question:
Kristin, 42, aims to build a dividend-focused portfolio to cover her living expenses in the future. She asks about the differences between Dividend Aristocrats and King stocks and whether to focus on one over the other.

Suze’s Response:
Suze defines Dividend Aristocrats as companies that have increased their dividends for 25 consecutive years, and King stocks as those that have done so for 50 years. She recommends investing in Aristocrats for potentially higher dividends and growth compared to Kings. Suze also mentions Dividend Aristocrat ETFs, specifically highlighting the ProShares 500 Dividend Aristocrats ETF (ticker: NOBL) as a reliable option.

Notable Quote:
"If I were going to be investing at this point in time between one or the other, I would be investing in the Aristocrats because I just think you'll get a little bit higher dividend and possibly some more growth." [26:48]

Conclusion and Final Thoughts

As the episode wraps up, Suze and KT reiterate the importance of prioritizing people over money. They encourage listeners to explore their new YouTube channel, "Can I Afford It Game," and engage with the Women & Money community through the app. Suze leaves the audience with a powerful reminder:

Notable Quote:
"People first, then money, then things." [29:25]

This episode offers a wealth of knowledge, addressing diverse financial concerns with clarity and empathy, empowering listeners to make informed financial decisions.

Additional Resources Mentioned

• YouTube Channel: Can I Afford It Game
  URL: youtube.com/SuzeOrman

• Dividend Aristocrat ETF:
  Ticker: NOBL (ProShares 500 Dividend Aristocrats ETF)

• Estate Planning Resource:
  Website: musthavedocs.com – Offers affordable wills, trusts, and power of attorney documents.

Stay tuned for more insightful episodes dropping Thursdays and Sundays. For further questions or to join the community, download the Women & Money App from the Apple App Store or Google Play.