Podcast Summary: Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Episode: Ask KT & Suze Anything: Why I Quit My CPA
Release Date: March 13, 2025
In this insightful episode of "Women & Money (And Everyone Smart Enough To Listen)," hosts KT and financial guru Suze Orman delve into a series of listener-submitted questions, providing expert advice on navigating complex financial decisions. Despite Suze battling sinus issues, the dynamic duo delivers a robust discussion covering topics from mortgage refinancing to Roth IRAs, ensuring listeners gain valuable knowledge to manage their finances effectively.
Introduction
The episode kicks off with an empowering message about strength and resilience, setting the tone for a candid and supportive conversation. KT introduces Suze, who is recovering from sinus issues but remains committed to addressing the audience's financial concerns. Suze emphasizes the importance of understanding not just market movements but the underlying personal financial decisions that impact wealth.
Mortgage Refinancing: Navigating Interest Rate Changes
Listener: Michelle
Timestamp: [02:56]
Michelle faces a significant increase in her mortgage payment after moving to a new house with a higher interest rate. Having planned for this eventuality, she inquires about the optimal time to refinance her mortgage.
Suze's Advice:
Suze cautions against the common mistake of refinancing into a longer-term mortgage, which can negate potential savings. She outlines two critical considerations:
- Mortgage Term Alignment: Ensure the new mortgage term does not exceed the remaining years on the current mortgage.
- Cost-Benefit Analysis: Calculate the refinancing costs against the monthly savings to determine the break-even point.
Notable Quote:
"Fear is the greatest internal obstacle to wealth. So it's best to do nothing than something you don't understand in many cases." — Suze Orman [01:05]
The Importance of Financial Literacy: Challenging Professional Misconceptions
Listener: Pamela
Timestamp: [06:13]
Pamela shares her experience of having a misleading conversation with a CPA regarding Roth IRA withdrawals, highlighting the necessity of financial literacy.
Suze's Insight:
Suze underscores that professional titles do not always equate to accurate financial advice. She recounts her own experience with PBS rejecting her correct information about Roth IRAs, reinforcing the importance of double-checking financial information.
Notable Quotes:
- "Just because somebody is in a suit, sitting behind a desk with some plaque that says they're this or that doesn't mean they know what they are talking about." — Suze Orman [08:20]
- "You have to check, double check. Be clear. Be crystal clear, and know and know." — Suze Orman [09:21]
Evaluating Annuities for Predictable Income
Listener: Deb Johnny
Timestamp: [09:50 - 12:18]
Deb seeks advice on using her traditional 401(k) funds to purchase a single premium immediate lifetime annuity to secure predictable income before retiring.
Suze's Recommendation:
Suze advises against this strategy, explaining that fixed annuity payments do not account for inflation and may not meet future expenses. Instead, she suggests focusing on growth-oriented investments like dividend-paying stocks to preserve and increase assets.
Notable Quote:
"The 2.8 is not going to change for the rest of your life... you need to keep up with inflation and you need growth at this age." — Suze Orman [11:04]
Maximizing Roth IRA Contributions Through Backdoor Conversions
Listener: Maria
Timestamp: [12:18 - 13:43]
Maria, restricted by income limits from contributing directly to a Roth IRA, asks if she can use after-tax savings to execute a backdoor Roth conversion.
Suze's Guidance:
Suze confirms that Maria can perform a backdoor Roth IRA conversion by first contributing to a non-deductible traditional IRA and then converting it to a Roth IRA, provided she has no other traditional, SEP, or SIMPLE IRAs to avoid the pro-rata rule complications.
Notable Quote:
"Forget what you have at work... then you decide which investments that you have make the most sense." — Suze Orman [13:43]
Supporting a Family Member's First Roth IRA Investment
Listener: Jody
Timestamp: [13:57 - 15:59]
Jody seeks advice on guiding her 29-year-old daughter in setting up her first Roth IRA, specifically regarding brokerage firms and investment options.
Suze's Advice:
Suze recommends reputable brokerage firms like Vanguard, Fidelity, or Schwab. She advises funding the Roth IRA with a combination of Treasury money market funds initially and gradually investing in diversified ETFs to leverage market growth while managing risk through dollar-cost averaging.
Notable Quote:
"It's just that simple. So if she puts in $7,000 at once, then you would have her put in approximately $583 a month into either the Standard and Poor's 500 index fund, the Vanguard Total Stock Market Index Fund..." — Suze Orman [15:23]
Strategizing Roth Conversions to Limit Required Minimum Distributions (RMDs)
Listener: Scott
Timestamp: [15:59 - 17:53]
Scott, approaching 50, contemplates converting multiple traditional IRAs to Roth IRAs amid recent market fluctuations to minimize future RMDs.
Suze's Recommendation:
Suze endorses converting traditional IRAs to Roth IRAs, especially when markets are down, to take advantage of lower tax liabilities. She advises converting incrementally to avoid pushing into higher tax brackets.
Notable Quote:
"But it's definitely worth it to convert while the markets are down." — Suze Orman [16:49]
Understanding Social Security Spousal Benefits
Listener: Linda
Timestamp: [18:09 - 23:54]
Linda, a retired teacher, seeks clarity on spousal Social Security benefits and whether her husband should start collecting benefits at 67 or wait until 70.
Suze's Guidance:
Suze clarifies that spousal benefits are based on the spouse's full retirement age (67 in this case), not the age at which they eventually collect. She advises that the husband should commence benefits earlier if it allows both spouses to maximize their collective benefits without unnecessarily delaying Social Security payments.
Notable Quotes:
- "You only get 50% of what your spouse would have gotten at their full retirement age of 67." — Suze Orman [20:34]
- "Therefore, in those two years, that would be close to $61,000 of money that you're entitled to that you wouldn't have claimed." — Suze Orman [23:42]
Clarifying Backdoor Roth IRA Eligibility with Employer-Sponsored Plans
Listener: Sheila
Timestamp: [23:54 - 25:23]
Sheila is confused about whether having employer-sponsored retirement accounts like 401(k)s and 403(b)s affects her ability to perform a backdoor Roth IRA conversion.
Suze's Clarification:
Suze confirms that the backdoor Roth strategy specifically pertains to individual retirement accounts (IRAs) and is not affected by employer-sponsored plans like 401(k)s or 403(b)s.
Notable Quote:
"Any money you have in employer sponsored plan, I don't care what kind of money it is in there, then that doesn't count for the Pro rata backdoor IRA. It's only traditional IRAs." — Suze Orman [24:56]
Conclusion
The episode wraps up with a heartfelt reminder from KT and Suze about prioritizing faith, financial stability, and personal well-being. Suze reiterates the importance of making informed financial decisions and not succumbing to fear-driven inaction.
Final Takeaways:
- Financial Literacy is Crucial: Always verify financial advice, even from professionals.
- Strategic Financial Planning: Align financial decisions with long-term goals and market conditions.
- Incremental Actions: Avoid making large financial moves all at once to mitigate risks.
Notable Closing Quote:
"People. First God, Then money. Then things." — KT [25:28]
Suze adds a final note of encouragement:
"Stay safe, stay strong, stay healthy. Then together we really will rise." — Suze Orman [25:29]
This episode serves as a comprehensive guide for listeners seeking clarity on various financial matters, emphasizing the significance of informed decision-making and proactive financial management.