Episode Summary: Ask KT & Suze Anything: Should We Stay in the Stock Market?

In the December 5, 2024 episode of Suze Orman's Women & Money (And Everyone Smart Enough To Listen), Suze Orman teams up with co-host KT to address a series of listener-submitted questions, providing expert insights into various personal finance dilemmas. This episode, titled "Ask KT & Suze Anything: Should We Stay in the Stock Market?", offers a blend of practical advice and personal anecdotes, making complex financial topics accessible and engaging for listeners.

Introduction and Warm Wishes

The episode kicks off with Suze Orman celebrating her half-birthday on December 5th, sharing heartfelt greetings and expressing gratitude towards her listeners and friends. The hosts engage in light-hearted banter, setting a warm and welcoming tone for the session.

Notable Quote:

Suze Orman [00:37]: "Happy half birthday to you. December 5th is her half birthday, which she celebrates more than her birthday on June 5th."

Listener Questions and Expert Advice

The heart of the episode revolves around Suze and KT addressing seven listener questions, each uncovering unique financial challenges and solutions.

**1. Katina’s Concern: Life Insurance for an Elderly Mother

Question Overview: Katina writes about her 71-year-old mother who persistently applies for whole life or modified whole life insurance policies. Believing these are financially draining due to her mother's health, Katina seeks advice on the best approach to cover funeral expenses.

Suze's Advice: Suze challenges Katina to reassess the necessity of her mother's life insurance. She suggests evaluating the total funds available for funeral expenses and considering a prepaid funeral plan if sufficient funds exist. This approach would negate the need for continuous insurance payments, thereby saving money.

Notable Quote:

Suze Orman [04:02]: "You need to sit down with her and find out how much money she has. Does she have enough money right now to pay for her funeral expenses and just simply do a prepaid funeral?"

2. Stephanie’s 403B Rollover Issue with Voya

Question Overview: Stephanie recounts her attempt to transfer an old 403B to a rollover 401k with Vanguard. During the process, a Voya representative withheld 20% of her funds, causing confusion and financial strain.

Suze's Advice: Suze vehemently criticizes the Voya representative's actions, clarifying that a custodian-to-custodian transfer should not involve a 20% withholding. She advises Stephanie to escalate the matter within Voya's management to rectify the error and recover the withheld funds without tax penalties.

Notable Quote:

Suze Orman [07:14]: "I cannot tell you that the representative at Voya, not necessarily Voya itself, but the person working there, could not be more wrong if they tried."

3. Shannon’s Decision on a Fixed Income Annuity

Question Overview: Shannon, a 67-year-old retiree with Social Security and a small pension, considers investing $360,000 into a fixed income annuity that promises $24,000 annually for life. She seeks guidance on what questions to ask her financial advisor.

Suze's Advice: Suze urges Shannon to contemplate her beneficiaries and the implications of the annuity if she passes away. She highlights the lack of flexibility and potential inflation concerns associated with fixed annuities. Suze recommends asking about the commission structures and evaluating whether alternative investments might offer better returns and legacy benefits.

Notable Quote:

Suze Orman [10:00]: "You have to decide, do you have any beneficiaries that you want to leave this money to? ... You could probably do better than that, believe it or not, and have money to leave to your beneficiaries."

4. Susan’s Palantir Investment and Capital Gains Tax

Question Overview: Susan, celebrating rapid investment growth, inquires about the capital gains tax implications should she sell her Palantir stocks, which have soared from $16 to approximately $70.

Suze's Advice: Suze acknowledges the substantial gains but stresses that capital gains taxes are unavoidable upon selling. She references Keith Fitzgerald’s investment strategy, suggesting that doubling her investment might warrant selling a portion to secure profits while allowing the remainder to continue growing. Suze emphasizes the importance of aligning investment decisions with long-term financial goals.

Notable Quote:

Suze Orman [16:57]: "But the answer to your question is if you sell it, you absolutely have to pay capital gains tax on it."

5. Ma Angelina’s Query on Variable Annuities for a Special Needs Son

Question Overview: Ma Angelina, aged 64, seeking to secure her retirement and her special needs son's future, is advised by her banker to invest $100,000 in a Nationwide variable annuity. She queries the suitability of this investment.

Suze's Advice: Suze categorically advises against variable annuities, expressing strong disdain for their complexity and potential drawbacks. She underscores the importance of setting up a special needs trust to protect her son's eligibility for Social Security Income (SSI). Suze advocates for more transparent and flexible investment options like mutual funds or ETFs over variable annuities.

Notable Quote:

Suze Orman [18:44]: "But anyway, it sends shivers down KT's spine. She hates that word, hate. ... One of the things that I hate the most are variable annuities. There is not one circumstance on any level where it makes sense to do."

6. Mary’s Strategy on Taking Profits in a Rising Market

Question Overview: Mary, a 57-year-old full-time worker with modest earnings, is concerned about knowing when to take profits from her stock investments amidst a continually rising market, especially fearing a major downturn.

Suze's Advice: Suze explains the unpredictability of market recoveries, which can span three to ten years after significant drops. She advises assessing Mary's investment horizon, tax implications of selling, and emotional readiness to handle market volatility. Suze suggests considering a "free trade" strategy—selling shares that have doubled in value—to secure profits while maintaining exposure to growth.

Notable Quote:

Suze Orman [21:40]: "It is very possible, if the market were to go down significantly, it could take three, five, or ten years, believe it or not, for it to recover."

7. Linda’s Choice Between Roth IRA and Mutual Funds

Question Overview: Linda seeks advice on whether to open a Traditional Roth IRA or invest in mutual funds for a five-year period, aiming to make the most of her savings.

Suze's Advice: Suze clarifies the confusion between Roth IRAs and mutual funds, explaining that a Roth IRA is a tax-advantaged account within which one can invest in mutual funds, ETFs, or individual stocks. She reinforces the benefits of Roth IRAs for long-term growth and tax-free withdrawals, making them a preferable option over standalone mutual fund investments.

Notable Quote:

Suze Orman [25:35]: "There's no such thing as a traditional Roth. It's a traditional IRA, which simply means it is pre-tax. A Roth IRA is after-tax."

Interactive and Engaging Elements

Throughout the episode, Suze and KT maintain an engaging and personable dynamic. They incorporate playful interactions, such as KT participating in a quiz segment and discussing plans for a sister-focused podcast episode. These elements enhance the listener experience, making financial discussions relatable and enjoyable.

Notable Quote:

KT [24:34]: "I'm going to go for the gold ring."

Suze Orman [24:47]: "It was never gold. When I went on a mini, it was all translated."

Conclusion and Final Thoughts

As the episode wraps up, Suze imparts a heartfelt wish for her listeners to achieve financial security and freedom. She reinforces the importance of mastering one's financial destiny and encourages continuous learning and proactive financial management.

Notable Quote:

Suze Orman [28:08]: "My wish is that for all of you, for all of you to be safe and sound, to know that you all have the ability to be the masters of your own financial destiny. And may financial freedom bless, really every one of your doorsteps."

Additional Resources

Listeners are reminded to join Suze’s free podcast Community by downloading the Women & Money App available on the Apple App Store or Google Play. The app offers access to past episodes, the opportunity to ask questions, take classes, and engage with the community and possibly Suze herself.

This episode of Women & Money underscores Suze Orman’s commitment to empowering women with practical financial knowledge. By addressing real-life financial concerns with clarity and compassion, Suze and KT provide listeners with actionable strategies to navigate their financial journeys confidently.