Summary of "Ask KT & Suze Anything: Should I Take Money From an IRA to Pay Off Credit Card Debt?"

Podcast Title: Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Host/Author: Suze Orman Media
Episode Title: Ask KT & Suze Anything: Should I Take Money From an IRA to Pay Off Credit Card Debt?
Release Date: July 17, 2025

In this engaging episode of "Ask KT & Suze Anything," financial guru Suze Orman and her co-host KT tackle a series of listener questions, offering expert advice on personal finance dilemmas. The episode delves into topics ranging from managing joint finances and understanding retirement taxes to handling inherited IRAs and investment losses.

1. Including a Spouse in Financial Accounts

Listener: Diane
Timestamp: [02:12]

Issue: Diane, a 66-year-old wife managing her and her 70-year-old husband's finances, realizes she has neglected his access to their financial accounts. All utilities and credit cards are solely in her name, leaving him vulnerable if anything were to happen to her.

Advice from Suze Orman: Suze emphasizes the urgency of including Diane's husband in their financial arrangements to prevent potential future complications. She recommends:

• Applying for a credit card in her husband's name.
• Adding him to utility accounts.
• Establishing legal documents such as a living revocable trust, advance directives, durable power of attorney for health care, and a financial power of attorney.

Notable Quote:
Suze Orman at [04:24]: “It's only $99 again for $2,500 worth of state of the art documents. And by the way, everybody, you can share the activation code with as many family members as you want.”

2. Michigan's Retirement Income Tax and Roth vs. Traditional IRAs

Listener: Jennifer
Timestamp: [06:38]

Issue: Jennifer heard a rumor that starting in 2026, Michigan will no longer tax retirement income and seeks Suze's interpretation of how this affects traditional versus Roth IRA recommendations.

Advice from Suze Orman: Suze clarifies that as of the podcast's recording, the rumor's validity is uncertain. She explains Michigan's current state income tax and advises that the potential tax change does not alter her strong recommendation for Roth IRAs over traditional ones. Suze underscores the federal tax implications over state considerations.

Notable Quote:
Suze Orman at [07:12]: “Do you hear me, my dear Jennifer and everybody that's listening to me, if you are not doing a Roth 401k or a Roth IRA if you qualify... you are making the biggest mistake in your life, if you ask me.”

3. Helping a Nephew Fund Law School

Listener: Marilyn
Timestamp: [11:25]

Issue: Marilyn, financially secure herself, wishes to assist her nephew in Poland who is starting law school. She seeks advice on setting up a fund to invest for his education.

Advice from Suze Orman: Suze advises against putting the funds directly in the nephew's name, suggesting instead establishing a separate investment account earmarked for his education. She cautions against impacting his financial aid eligibility and recommends considering a 529 plan for U.S. educational institutions.

Notable Quote:
Suze Orman at [12:19]: “Just set up a side account that you know is for him, where you put money into it, you invest into it, you keep compounding it.”

4. Using Inherited IRA to Pay Off Credit Card Debt

Listener: Ana
Timestamp: [13:38]

Issue: Ana, 37, inherited an $82,000 IRA and contemplates using $41,000 to eliminate credit card debt. She struggles with the emotional aspect of this financial decision, especially after experiencing significant personal losses.

Advice from Suze Orman: Suze advises against using the inherited IRA to pay off the debt due to the substantial tax implications. She outlines that withdrawing the necessary funds would push Ana into a higher tax bracket, effectively making the move financially illogical. Instead, Suze suggests alternative strategies:

• Ensuring the credit card debt is at a 0% interest rate.
• Considering balance transfers.
• Setting up a manageable repayment plan over several years.

Suze emphasizes the importance of viewing the debt as a meaningful experience rather than merely a financial burden.

Notable Quote:
Suze Orman at [15:53]: “If it was strictly a financial decision, I wouldn't let her do it on any level.”

5. Paying Advisory Fees from Roth IRAs vs. Other Accounts

Listener: Kathy
Timestamp: [21:05]

Issue: Kathy seeks clarification on why Suze recommends paying advisory fees from non-retirement brokerage accounts when her financial advisor suggests otherwise.

Advice from Suze Orman: Suze reiterates her stance that advisory fees should not be deducted from Roth IRAs to preserve their tax-free growth potential. She argues that reducing the compound growth within the Roth diminishes its long-term benefits and questions the advisor's rationale regarding Required Minimum Distributions (RMDs), which do not apply to Roth IRAs.

Notable Quote:
Suze Orman at [21:58]: “You don't want to take money, especially from the Roth that's accumulating tax free to pay the fees. That makes no sense. You're losing out on compounding.”

6. Handling Investment Losses in a Roth Fund

Listener: Elisa
Timestamp: [24:13]

Issue: Elisa is concerned about her husband's investment in a declining Roth fund. Despite receiving dividends, the fund's value has decreased significantly, leading to substantial losses.

Advice from Suze Orman: Suze recommends selling the underperforming fund to prevent further losses, highlighting the risk of a "yield trap" where investors stay committed to a failing investment due to attractive dividends. She advises evaluating the fund's viability and considering diversification through ETFs to mitigate risks.

Notable Quote:
Suze Orman at [26:06]: “This is called a yield trap. There is a name for it where you're stuck in a stock because of the yield that it pays you.”

7. Dollar Cost Averaging in Roth IRAs

Listener: Maria
Timestamp: [30:25]

Issue: Maria, at 62 and nearing retirement, inquires whether dollar cost averaging is still applicable to Roth IRAs.

Advice from Suze Orman: Suze enthusiastically affirms that dollar cost averaging is indeed applicable to Roth IRAs, reinforcing its effectiveness in long-term investment strategies.

Notable Quote:
Suze Orman at [30:58]: “The answer to that is yes.”

Closing Remarks

In addition to addressing these pressing financial questions, Suze encourages listeners to take proactive steps in managing their finances wisely. She promotes the Alliant Credit Union's savings accounts and invites listeners to join the Women & Money Community through the dedicated app for further resources and support.

Final Thought:
Suze Orman emphasizes the mantra, "Make your money, make more money," advocating for continuous financial growth and security.

Disclaimer:
The podcast content is intended for informational and general purposes only and does not constitute financial, accounting, or legal advice. Listeners should consult their own advisors regarding their specific situations.