Podcast Summary: Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

Episode: Ask KT & Suze Anything: Revisiting Can I Afford to Have a Baby?
Release Date: March 27, 2025

In this insightful episode of Suze Orman's Women & Money, Suze Orman and co-host KT delve into a series of listener questions, offering expert financial advice tailored to various life circumstances. The episode navigates topics ranging from retirement planning and investment strategies to the financial considerations of starting a family.

1. Introduction and Technical Hiccups

The episode begins with an inspiring motto shared by an unknown speaker:
"We are strong, we are wise we will not apologize we are here we will thrive Together we will rise." [00:01]

Producer Robert updates listeners about a major electrical failure affecting the recording setup on Suze and Katie's island home. To ensure continuity, they revisit a previous "Ask KT and Suze Anything" segment, diving directly into listener questions. [00:27]

2. Ed's Financial Dilemma: Investing vs. Roth Conversion

Question from Ed:
"I'm 51. I have $10,000 in a bank account. Would Susie suggest investing it in a low-cost brokerage account or using it to pay the taxes on converting some of my somewhat hefty balance $600,000 in a traditional 403 to a Roth 403?" [01:05]

Suze Orman's Response:
"If it were me, Ed, I would absolutely take that $10,000. Since you want to take it and invest it anyway in a brokerage account, I think that your money would be far better converting money to a Roth 403 where you will be also investing it, but you're going to be invest tax-free. So yes, I would be doing that." [01:33]

She emphasizes the benefits of a Roth conversion, highlighting the advantage of tax-free investments. However, she advises consulting a CPA to tailor the strategy to individual circumstances. [01:57]

3. Mike's Concerns: Required Minimum Distributions (RMDs) and Retirement Planning

Question from Mike:
"I'm 61 years old and my wife is 59. We are fortunate to have about $6 million in retirement savings currently. Can I... Have you done an episode or do you plan on doing an episode on what type of planning you should do three years prior to retirement? I find it all a bit confusing. I'm not sure how to prepare if not, can you direct me to some resources on RMDs?" [02:03]

Suze Orman's Insight:
Suze reflects on the evolution of listener demographics over the years. She notes,
"Today, the majority of the questions [...] they are all multi-millionaires, the majority of them, they all own one or two homes outright. They are all doing so great." [03:07]

Addressing Mike's specific query, Suze delves into recent changes in RMD laws under the Secure Act 2.0. She explains the shift in the starting age for RMDs from 72 to 73, and for those born in 1960 or later, RMDs won't begin until age 75 starting in 2033. [05:45] She advises converting traditional retirement accounts to Roth accounts to mitigate the impact of future RMDs, stating,
"Then you wouldn't be building on the money that you have in these retirement accounts right now. You would actually be building your Roth retirement accounts." [07:27]

Suze shares a personal anecdote reflecting on her own regrets about not converting earlier, highlighting the importance of timely financial decisions. [08:00]

4. Suze Reflects on Shifting Listener Profiles

Suze discusses how the nature of questions has transformed over the years. Earlier inquiries were predominantly about financial struggles—debt, lack of retirement savings, bankruptcy—whereas current questions stem from a more affluent listener base. [03:37]

She proudly acknowledges the positive impact of her work, affirming,
"There is nobody out there that is excluded from being able to do that. The only person that excludes you from doing that is yourself." [03:59]

5. Eric's Unique Inquiry: Investing in Art and Wine

Question from Eric:
"Curious on your thoughts on investing in art and wine, both solo, of course, and actively managed with a company or through an app." [09:29]

Katie's Advice:
"I would say, boyfriend, do it. However, I'd be very careful in who I invest with in terms of a company or an app. I think it's really important that maybe you start some direct investing, either with a small gallery that you know or with the wineries themselves." [09:40]

Suze Orman's Caution:
Suze elaborates on the complexities of investing in tangible assets like art and wine, pointing out additional costs such as storage and insurance. She shares her own experiences,
"It cost me a lot of money to store those wines and insure them... One of the pieces that we had evaluated the other day actually has gone down in value rather than up." [10:53]
She warns,
"There are more things than you realize when it comes to investing in art or wine." [11:07]

Katie's Personal Story:
Katie recounts a missed investment opportunity with Andy Warhol's art,
"I remember we were in his factory in New York City and he asked me if I wanted one. And I said, how much is it? He said, for you, $350. $350, everybody... I didn't think at all about it." [13:34]
She laments not purchasing Warhol's pieces, which now sell for millions, emphasizing the potential long-term gains of strategic investments. [14:38]

6. Darshais's Situation: Renovating Home Without High-Interest Refinancing

Question from Darshais:
"I am a recently widowed retired veteran spouse. Equity in the home that we purchased in 2005 has doubled. The present mortgage rate is 3.5% with a balance of $116,000. The home was built in 1986. It's presently worth about $270,000. I would like to do some renovations and have been thinking about using the equity to acquire upfront cash. A 30-year refinance loan, especially with rates in excess of 7% is out of the question. What would you suggest as an alternative to acquire cash without losing my current rate of 3.5%?" [15:02]

Suze Orman's Recommendation:
Suze empathizes with Darshais's loss and financial concerns,
"Simply do, even though I don't suggest it right now because interest rates are so high, but I would seriously simply not refinance my home." [16:39]

Instead, she proposes utilizing a home equity line of credit (HELOC),
"if you want, you could then possibly refinance all of it back to maybe 3.5% or who knows what." [17:12]
She cautions against extending the mortgage term unnecessarily, advising,
"Never refinance for longer than the period of time you currently have left on your mortgage." [16:19]

7. Ashley's Financial Readiness for a Baby

Question from Ashley:
"Hi, Susan. [...] I'm very worried about the financial stress of this step, even if it's an amazing one." [18:30]

Ashley's Financial Overview:

• Annual Income (Post-Tax): ~$15,000/month
• Emergency Fund: $86,000
• Retirement Investments: $138,000
• Monthly Expenses: $6,000
• Additional Cost (Daycare): $3,500/month
• Total Projected Expenses with Baby: $9,500/month [16:09]

Katie's Guidance:
Katie suggests creating a dedicated "baby fund" to cushion unexpected expenses and reduce financial stress,
"I would wait a little bit before I had the baby [...] build a little more of a cushion just for the what-ifs of having a baby." [22:42]

She recommends simulating the financial impact by setting aside additional funds,
"Put away anywhere from three to six thousand dollars a month into a high-yield money market account and see how it feels." [25:01]

Suze Orman's Strategy:
Suze advises Ashley to evaluate her ability to sustain increased expenses,
"If you are able to do that, let's say put $6,000 a month away for a year, now you have an additional $72,000 to add to your emergency fund." [26:08]
She emphasizes the importance of financial preparedness in ensuring a stress-free parenting experience,
"People first, then money, then things." [28:36]

8. Concluding Insights

As the episode wraps up, Suze and Katie reinforce the principle that personal well-being and relationships should take precedence over financial pursuits. Suze encapsulates this sentiment succinctly,
"People first, then money, then things." [28:36]

The episode concludes with the motivational anthem shared at the beginning, reaffirming the podcast's commitment to empowering listeners to thrive financially and personally. [28:40]

Key Takeaways

• Roth Conversions: Converting traditional retirement accounts to Roth can offer tax-free growth, but it's essential to consult with a financial advisor.
• RMD Planning: Stay informed about changing RMD laws to optimize retirement strategies, such as converting to Roth accounts to mitigate RMD impacts.
• Alternative Investments: Investing in art and wine requires careful consideration of storage, insurance, and market volatility. Direct investments may offer more control and potential returns.
• Home Equity Utilization: Instead of refinancing at high-interest rates, consider a HELOC to access home equity for renovations.
• Financial Readiness for Parenting: Establishing a dedicated fund and evaluating the ability to handle increased expenses can ensure a financially secure environment for raising a child.

Suze Orman's episode offers valuable financial guidance, blending practical advice with personal anecdotes to help listeners navigate complex financial decisions. Whether planning for retirement, exploring investment opportunities, or considering family expansion, Suze and Katie provide actionable insights to foster financial well-being.