How Not To Pay Taxes On An Inherited Retirement Account

Summary

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Podcast Summary:

Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Episode: How Not To Pay Taxes On An Inherited Retirement Account
Date: December 11, 2025
Host: Suze Orman (with regular co-host KT)

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Main Theme

This episode features the “Ask KT & Suze Anything” segment, where Suze Orman and KT answer listeners’ personal finance questions. The central discussion revolves around handling inherited retirement accounts—specifically the impossibility of avoiding taxes on traditional inherited accounts—and addresses a variety of listener questions about life insurance schemes, Roth accounts, car purchases in retirement, Medicare enrollment, trust beneficiaries, and sensitive family inheritance issues.

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Key Discussion Points & Insights

1. Borrowing Against Life Insurance and Stocks

• Listener Question: Can you get a life insurance policy or put stocks into a trust and borrow against them for better financial leverage?
• Suze’s Take:
  • Not a scam, but “just stupid” (01:38).
  • Borrowing against your own money means paying interest to use your assets (01:54).
  • With margin accounts, borrowing means paying interest and risking margin calls, which can result in selling off your stocks in a downturn (02:49).
  • “Are you kidding me? It just makes no sense whatsoever.” (01:56, Suze)

2. Inherited Retirement Accounts and Avoiding Taxes

• Listener Question: Elderly father inherited a large 403(b) from deceased daughter—can taxes be avoided?
• Suze’s Take:
  • “There is absolutely no way to avoid taxes on it.” (04:30)
  • Only way to avoid income taxes is by using Roth accounts, which must have been set up before the inheritance (04:30).
  • Withdrawals must occur over time—likely within 10 years, not all at once—so taxation is inevitable but can be managed (06:20).
  • Focus on how to take the money out, not how to avoid taxes.

3. Roth IRAs and Conversions for Seniors

• Listener Question: 84-year-old with $100,000 in savings/CDs—is it worth converting to a Roth?
• Suze’s Take:
  • Only possible to convert money in a traditional retirement account to a Roth (07:26).
  • Cannot convert regular savings/CDs to a Roth unless you have earned income—it would be a new contribution, not a conversion.
  • “No, it does not make sense for you to do that. And, in fact, you cannot.” (07:26, Suze)

4. Choosing IRA Investment Risk

• Listener Question: Should a Roth IRA be low-risk or aggressive?
• Suze’s Take:
  • Depends on age, needs, job security, and emotional tolerance for loss (09:01).
  • If young and uncertain, dollar-cost averaging in an S&P 500 index fund ETF is a good, simple option (10:24).

5. Expensive Car Purchases in Retirement—Money or Value Conflict?

• Listener Scenario: Spouse wants a $90,000 car; partner feels it’s excessive despite having the funds.
• Suze’s Framework:
  • Men often hit milestones ("dollar of the decades") and want to indulge, but it's often unwise (12:11).
  • Full cost is much more than purchase price: insurance, maintenance, depreciation, registration, and opportunity cost could total $175,000 in five years (13:27–15:55).
  • Both partners should agree on major purchases; “I always go with the one that doesn’t want to do something.” (13:27)
  • Suggests compromise: consider slightly used cars; calculate true long-term costs (16:58–18:13).
  • “A car is such an extortion. It is not an investment; it’s simply a show-off toy for others if you ask me.” (19:07, Suze)

6. Designating Beneficiaries: Trusts vs. Individuals

• Listener Question: Should a single person name a trust or specific individual for employer retirement account beneficiary?
• Suze’s Guidance:
  • Unless your trust is a “see-through trust,” default to naming the actual person you wish to receive the funds (20:20).
  • For trusts, only use as contingent beneficiary if married and trust is compliant.

7. Medicare Enrollment While Still Working

• Listener Question: Should someone turning 65 with employer benefits enroll in Medicare?
• Suze’s Guidance:
  • If employer has 20+ employees, delay Medicare Part B & D; employer plan remains primary (22:16).
  • If employer has <20 employees, must enroll in Medicare A & B as Medicare becomes primary (22:42).
  • If contributing to an HSA, delay Medicare A to keep contributing (23:36).
  • Always be careful with Medicare Advantage plans (24:36).
  • "Call your HR department and ask them the size of your employer." (22:18, Suze)

8. Using 401(k) to Pay Off Living Expenses or Debt

• Listener Scenario: 60-year-old considering taking money from 401(k) to pay off apartment/HOA fees due to difficulty selling.
• Suze’s Advice:
  • Don’t touch the 401(k)—consider reducing the sale price by the amount you’d lose to taxes if you withdrew from your 401(k) (27:56).
  • Withdrawing creates unnecessary tax hit and jeopardizes retirement security.
  • “If you can’t sell it, it means it’s priced too high. Lower the price until somebody buys it. Period.” (28:13, Suze)

9. Sensitive Family Inheritance Questions

• Listener Scenario: Dad with $9M gave brother $900k from IRA originally designated for both; listener feels slighted.
• Suze’s Guidance:
  • Always stand in your truth and communicate one-on-one—not in an accusatory way, but to understand motivations and decisions (30:49-31:40).
  • “It’s your business because it’s bothering you. When you hold something in, it’s going to eat at you.” (31:52)
  • Approach with understanding—“You have absolutely nothing to lose and everything to gain.” (32:44)

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Notable Quotes & Memorable Moments

• On Borrowing Against Money:

  • “It's not a scam, Susan. It's absolutely just stupid.” – Suze (01:38)
  • “When you see the word ‘borrow,’ just think about what that means.” – Suze (03:21)

• Inherited Retirement Accounts:

  • “There is absolutely no way to avoid taxes on it.” – Suze (04:30)
  • “Stop worrying about the taxes. There is no way around them.” – Suze (05:50)

• Car Purchases:

  • “It's the dollar of the decades... they want to buy a boy toy.” – Suze (12:11)
  • “Never look at just what something costs to buy; you have to look at what does it cost you to keep.” – Suze (16:33)
  • "It is not an investment; it’s simply a show-off toy for others if you ask me." – Suze (19:07)

• Medicare Enrollment:

  • “If your employer has 20 or more employees, then your employer plan has to remain as primary, and you do not need Medicare B or D at 65.” – Suze (22:16)
  • “If she has an HSA ... and she enrolls in part A, she won't be able to have a health savings account.” – Suze (23:36)

• Facing Family Conflicts Over Inheritance:

  • “Approach your father, not in an accusing way, but speak directly from your heart and with respect.” – Suze (32:50)
  • “You have absolutely nothing to lose, and everything to gain.” – Suze (32:54)

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Timestamps for Important Segments

• 01:12 – Borrowing against life insurance and stocks
• 04:30 – No way to avoid taxes on inherited retirement accounts (main theme)
• 07:26 – Roth conversion for seniors with savings/CDs
• 09:01 – IRA investment risk: low vs. high
• 12:11–19:40 – The $90K car debate: cost, values, and marital agreement
• 20:20 – Naming trust vs. person as retirement account beneficiary
• 22:16 – Medicare enrollment rules for those still working at 65
• 27:56–28:13 – Using 401(k) to pay off real estate—don’t do it!
• 29:27–33:24 – Inheritance, family communications, and standing in your truth

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Tone and Style

Suze’s hallmark directness, paired with KT’s supportive and sometimes playful interjections, creates a warm, honest, and sometimes humorous tone. Suze is blunt (“it’s just stupid”), practical (“lower the price until it sells”), and consistent in emphasizing long-term, values-based financial decisions. Both are passionate about listeners’ financial education and security over financial shortcuts or family drama.

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For Those Who Haven't Listened

This episode offers actionable advice on inherited retirement accounts and other complex personal finance scenarios. Suze reinforces that there is no magic trick to avoid taxes on inherited traditional accounts; the only way is with Roth structures set up beforehand. She touches on emotional money decisions, family conversations about inheritance, and critical details behind Medicare and beneficiary choices. Perfect for anyone facing retirement decisions, family inheritances, or just striving to make smarter, more value-aligned financial choices.

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Transcript

[Susie Orman]

Hi, everybody. Suzio here. Now, what is the goal of money? The goal of money is for you to be secure. And there is no better way for you to be secure than having an emergency savings account. It is essential for your financial foundation. So all of you should be participating in the Ultimate Opportunity savings account at Alliant Credit Union. Go to myalliant.com to find out more. And be secure.

December 11, 2025. Welcome, everybody, to the Women and Money Podcast and YKT.

[KT]

And everyone's smart enough to listen.

[Susie Orman]

And if they don't listen, does that mean they're not smart enough?

[KT]

Yes.

[Susie Orman]

For sure. Is the Ask KT and Susie Anything addition. If you have a question, write into asksusie s u z e podcastmail.com and if KT chooses it, oh, we will answer it on this podcast.

[KT]

All right.

[Susie Orman]

Should we just get into it?

[KT]

Let's get right into it. My first question is from Susan, and she said, hi, Susie and KT. My father, who is 75, watches these people on Facebook and they told him that he could get a life insurance policy and borrow against it, that he can put the stocks into a trust and borrow against them as well for a house. I think it's a scam. What are your thoughts on this?

[Susie Orman]

It's not a scam, Susan. It's absolutely just stupid. How is it possible that Your father, at 75, is not intelligent enough to know not to listen to somebody on Facebook that he knows nothing about? Why are they telling him this? It's just stupid. Okay, first of all, when you see that you can borrow against something, what does that say to you? It says that you've put your money somewhere and now you're going to borrow against it, which means you're going to have to pay an interest rate to use your own money. Are you kidding me? It just makes no sense whatsoever. I'm very, very familiar with these policies, and my advice to your father would be stay away, stay away, stay away. Next, anybody can put money into an investment account, whether it's in trust or individual name, and qualify for something called margin. And margin is where you have these stocks and you can borrow against them to do anything you want. But then, once again, it's not free. You have to pay the brokerage firm the money to borrow against the stocks.

[KT]

And.

[Susie Orman]

And if the stocks that you borrowed the money from start to go down significantly, there's something called a margin call. And if your father doesn't have the money to absolutely pay that call, what does that mean? They will liquidate the stocks that he has and he could possibly lose most of his money, if not all of it. It's not a scam. It is stupidity. All right.

[KT]

I think that's great. Not a scam. It's just stupid.

[Susie Orman]

Well, you know all these people.

[KT]

I think that was just all you had to say.

[Susie Orman]

Yeah. When you see the word borrow, when you see the word that you can do something with your stocks and borrow against them. Twice now, twice in this email, you read me the word borrow. Just think about what the word borrow means. And if you have the money, why would you borrow your own money?

[KT]

All right, next question is from Marie. She said first, what a way to.

[Susie Orman]

Start off the morning.

[KT]

I know. Sorry.

[Susie Orman]

First, you did that on purpose.

[KT]

No, I didn't. I like to rile you up, but it woke you up, that's for sure. Okay, next question from Marie. She said first. Thank you so much for an excellent podcast. I've learned so much from both of you. She said first time question submitter. This situation is a real conundrum. Sadly, my sister passed away recently. She named my elderly father as the beneficiary for her quite large 403. What's the best way to handle the funds to avoid ready avoid ordinary income taxes?

[Susie Orman]

Listen, Marie, sometimes obviously you want to avoid income taxes if you can. However, whenever it comes to a retirement account, there's only one way to avoid income taxes, which I have been preaching from the mountaintop now for over like 20 or 30 years, however long it's been really. And that is what? By doing a Roth IRA, a Roth 403B, a Roth 401K, a Roth TSP. That is why I've been saying it. Once your money is In a traditional 403B meaning pre tax account and the owner, your sister dies and it now goes to your father. It is now in an inherited retirement account and there is absolutely no way to avoid taxes on it. However, stop thinking about the taxes that he's going to owe. Start thinking about how much money is in there and how he will take it out. I don't know how old he actually is, but he will either have to take it out according to how old your sister was when she died, all of that. But something is always better than nothing. And if you approach this as I want to just give the money away so he doesn't have to pay taxes. What can I do? What can I do? You're going to get yourself in trouble. And just know that it is possible that when your father dies, maybe you then get that Money because he gets to name who he wants as a beneficiary on this inherited ira. So stop worrying about taxes. There is no way around them. All right, go on.

[KT]

Okay, this is sweet Susie from Rosetree.

[Susie Orman]

However, I just have to say one thing. He's not going to take all of this money out at one time. So don't be freaked that all of a sudden he got a lot of money and he's gonna take it out at one time. He's not. Okay, it's gonna take out little by little, but probably it's gonna have to be wiped clean within 10 years. It just depends on age.

[KT]

All right, go on, Susie. This next year, are you sure?

[Susie Orman]

I'm done with that question.

[KT]

Yeah, 10 years, Susie.

This next question is from Rosie and it's very sweet. She said, I was born in 1941, so currently I am 84 years old.

[Susie Orman]

Me.

[KT]

I do not have a great deal of money. However, in total, I have over $100,000 in savings and CDs. I think that's a great deal of money, Rosie.

[Susie Orman]

That's a great deal of money for most people.

[KT]

And then she said, does it make sense for me to convert any of the savings to a Roth? And then Rosie gives you an explanation as why she's asking. She said, my family is long lived with my mother living to 100, 1,000 years old.

[Susie Orman]

See, Rosie, here's the problem. If this money right now is just in a savings account, $100,000 in savings and CDs, you can't convert any of that to a savings Roth unless you are currently working and you have earned income, and then you're not converting it, you're just opening up a contributory Roth and putting some of this money in it. But I got news for you this. It really doesn't make any sense to do that if it's all in savings. And chances are that you're living off of the interest on that savings and everything. No, it does not make sense for you to do that. And in fact, you cannot. Okay, kt, you can only convert if you're working. No, no, you can only convert money to a Roth. If you have it in a traditional retirement account, then you convert it. If it's not in a Roth to begin with, you're not converting anything.

[KT]

You're opening a new one.

[Susie Orman]

A new one. And you have to have earned income to do so. And at 84, for some reason, I have a feeling she might not have income. But anyway, go on.

[KT]

Okay, next is from James. We have a man Smart enough to listen.

[Podcast Disclaimer Voice]

Yay.

[KT]

Susie, I know you want everybody to have a Roth IRA account, including myself, and I want one. But do you want us to take a low risk IRA out or an aggressive one? I don't know the difference between the two.

[Susie Orman]

Well, one is risky. Risk your money risky. Maybe it's.

[KT]

He said, I don't know what the best option should be.

[Susie Orman]

KT Low risk would be treasuries, CDs, money market accounts, maybe even aggressive is higher return. It's higher return and higher risk. James, can we just talk for a second? How do you expect me to answer that question? And I want everybody to listen to this answer. I know nothing about you. I don't know your age. I don't know how much we're really talking about. I don't know how secure your job is. I don't know your health. I don't know your emotion quotient, which means you put in $5,000 and you lose it. Are you going to want to commit financial suicide? Some people can't afford and don't want to emotionally lose even $10. So how can I answer that question? I cannot. So therefore I can't answer that question. Go on.

[KT]

Kt.

But he is smart enough to listen.

[Susie Orman]

Smart enough to listen. But James, if you've been listening now for a while, you would know that. But just assuming that you don't know a lot about the stock market because you must not even to ask that question. If you're still relatively young. You have at least 5, 10, 15, 20 years till you need the money and you don't know what to do or why don't you just dollar cost average every month in a Roth IRA in a Standard and Poor's 500 index fund.

[KT]

There you go, James.

[Susie Orman]

Actually an ETF. All right.

[KT]

All right. There you go, James. This is from Sarah. She said, my husband and I are 60 and 63. He is retired and I will be soon. We are very well suited financially. We have always lived within our means and continue to do so and enjoy a retirement of purposeful travel, fitness and continuing education.

[Susie Orman]

Don't you find this is an interesting way to start a question? Where's she going? Where's she going?

[KT]

Okay, ready? Here's where she's going. My husband loves cars. Are you ready?

[Susie Orman]

Go on.

[KT]

He'd like to purchase a car that I feel is too expensive. It will cost about $90,000. Is that. Is that one of those.

[Susie Orman]

I don't know what kind it is. Kate.

[KT]

Which I personally feel is ridiculous.

[Susie Orman]

Don't Become like James. Now, go on.

[KT]

Wait. So Sarah said, I, I personally feel this is a ridiculous price to pay for a vehicle. He's a car guy and. Ready. Susie, her husband says cars give him pleasure.

[Susie Orman]

Now, how old is he?

[KT]

Well, 60 and 63. So I think he's 60. She's a little older and wiser.

This is a big argument between.

[Susie Orman]

Wait, wait. Does it say he just turned 60, like he's in his 60s?

[KT]

It says, My husband and I are 60 and 63. He's retired. He's retired, my husband.

[Susie Orman]

And they have. So she. He's 60.

[KT]

Right.

[Susie Orman]

All right.

[KT]

And she's 63. A little wiser. Ready. It's a big argument between us. At a minimum, I'd like him to buy a car that is two or three years old. She said, yes, I know we have the money for this, but it doesn't fit with my values. So is this a money solution or a value solution? What do you think, Susie?

[Susie Orman]

Sarah, in my opinion, your husband is going through something I call the dollar of the decades. It's almost as if men, not women, but when men turn a decade, 50, 60, 70, those ages, for some reason, they want to buy a boy toy. They want to impress other people at a stop sign and say, look at what I have. Especially if they have retired. It's a very fascinating thing. And I have a feeling that's what he's going through. And you say that he always loves cars. Well, think about that. KT and I are very, very wealthy women and I love cars, but it would not matter how wealthy we are. No way would I ever spend $90,000 on a car.

[KT]

Tell them what you drive.

[Susie Orman]

I drive a 2012 Mercedes convertible that's worth now maybe $10,000 or less at this point in time. We only have 50,000, 60,000 miles on it.

[KT]

53,000.

[Susie Orman]

All right, but it's, oh, now you.

[KT]

Know numbers, because I'm the driver.

[Susie Orman]

All right, anyway, but it's like, what a waste of money. In my opinion, however, it's something that he wants. And with kt, before either of us spend a large sum of money or want to be buy something, both of us have to be in agreement because it's both of our money and this is both of your money. And I always go with the one that doesn't want to do something. If KT doesn't want to do it and I really want to do it, we do not do it because you are going to be a little bit resentful the whole time. But here's how I would deal with it if I were you. You have to sit down with him and you have to say, can we just seriously figure out what this car is actually going to cost us? Because, Sarah, it's not just $90,000. There's going to be tax on it. There's going to be all kinds of things on it. But just let's say it was $90,000, including tax. But that's not where it ends. When you own a $90,000 car, you have automobile insurance. So you're looking at, at least, depending on his record, everything else, even his FICO score, believe it or not, four to six thousand dollars a year in insurance. You're looking at maintenance on a car like that. And maintenance could easily be $2,500, $1,500 a year. You're looking at depreciation, by the way, of anywhere between nine and $12,000. Actually, it could be more like $18,000 the second he drives it off the lot. Just saying. So he lost that money right there. Fuel for the car, $90,000 cars, unless it's electric, and somehow I have a feeling it's not. It's going to be at least, depending on price of fuel, 2,500, $3,000 and then registration and all of these things. So you're looking at least, besides the $90,000, $8,500 to $10,000 a year just to have that car. Okay, now let's do the math on the real cost of this car, because he's just looking at $90,000. The way that I would do it is I would say, okay, what is $90,000 deposited into an account right now? Let's just say that's true. And you add $8,500 a year for five years. What is the cost of that car over five years? And let's just say that money was able to make a 7% annual average rate of return. You're looking at about $175,000 for the cost of that car. And in five years, if he wanted to sell it, good luck if he gets more than 38,000 to $45,000. So he now is making an investment as you are entering your retirement years and he is no longer working, and he is looking at how much money you have, and he thinks that he can just do this. He has to understand the financial ramifications of making a purchase like this. You never look everybody at just what something costs you to buy. You have to look at what does it cost you to keep. Right, Katie?

[KT]

Yeah. Absolutely. You know what I would do?

[Susie Orman]

What would you do?

[KT]

If I were her, I would. Because they have all of these very special, like fancy car, you know, loan places or renting places. I would rent one for a week, see if he gets it out of his system.

[Susie Orman]

Now what I would do is rather than buying it right away, there's always going to be a $90,000 car that he can buy. And given that Sarah does not want to do it, it's going to cause problems between them. It just is. I just have to ask you this question. If it was me, what would you say I want?

[KT]

Seriously?

[Susie Orman]

Yeah.

[KT]

At your age and with the amount of money you have, Susie, if that car makes you happy, buy it. But I'm not going to drive it.

[Susie Orman]

Oh, then I would never buy it.

Yeah. It's at this time in your life, everything you do with money, both of you have to say yes. And if you don't and it really upsets you, I'm sorry, I would just say no. Now maybe he wants to buy a car that's two or three years old and you could compromise somehow like that. Yeah.

[KT]

Meet him in the middle.

[Susie Orman]

Meet him in the middle. But.

[KT]

And say to him, let's sit down and look at the expenses because Susie just laid it out for you. And then Sarah said, let's meet in the middle, let's compromise because I want you to be happy, but I also want you to respect my values.

[Susie Orman]

Yeah, but the truth is, I'm telling you, it's the dollar of the decades. 60. Uh huh. Okay.

I tell you, a car is such an extortion. I know we're going on.

[KT]

Yeah. Because Susie's a car person. Sarah, I'm not at all. I don't care what wheels you put under me. But she loves cars.

[Susie Orman]

I love cars.

[KT]

She likes to go. She likes to go to the showrooms and walk around and look. And she knows everything about cars. She's been looking at me for probably the past six years saying maybe we need to think about what our next car will be since this one's so old. But she loves this little Mercedes and.

[Susie Orman]

I can't do it. I just can't waste money like that. Just can't do it. It goes against my own values. But kt, what I was going to say to you and everybody else, please understand that a car is actually one of the most dangerous investments you can make because all it takes is somebody smashing into you, somebody cracking your windows, somebody stealing it. It is not an investment, it's simply a show off Toy for others, if you ask me.

[KT]

Well, that may be that kind of vehicle. Most cars are for you to use to get to work and retire. He's retired.

[Susie Orman]

He doesn't need a $90,000 car. But hey, what do I know? All right, all right.

[KT]

This next question is from Debbie. She said, dear kt, she said, I'm listing your name first, so hopefully you'll pick me. And I did. Debbie, you were right. She said, dear KT and Susie, if you are single, should the primary beneficiary on an employer retire account be the same as the name of the trust or is it best to name a designated beneficiary instead? She said, I'm desperate for an answer from you.

[Susie Orman]

If you're desperate. If you're desperate, Debbie, let me see if I can help you here. Oh, my God, my desperate one. Here comes your financial lifesaver to rescue you. Just put it in your individual name. Since I don't know what kind of trust you have, and it has to be a see through trust and everything like that. If it's a beneficiary of any retirement account, since you're single. Right. The beneficiary should be the name of whoever you want to leave this to. All right? And if you're married, it should absolutely be the name of your spouse. By the way, for those of you who are married, the contingent beneficiary, if you know it's a see through trust, can be a trust. All right, go on.

[KT]

Okay, my next question's from Carla. I love this question. She said, I'll be turning 65 in August of 2026. I'm still working full time with no plans to retire anytime soon. I have good medical, dental, vision and prescription drug benefits. Do I still need to enroll in Medicare? If so, what parts?

[Susie Orman]

How old is she?

[KT]

I love this question.

[Susie Orman]

How old is she?

[KT]

She's 64 today, but in Aug. Yes, I hear that, but she'll turn 65.

[Susie Orman]

But how long does she plan to work?

[KT]

She plans to not retire anytime soon.

[Susie Orman]

So she didn't give a time frame for that?

[KT]

No.

[Susie Orman]

All right, let me just see this for a second.

[KT]

Can I just say something? I couldn't wait to turn 65 to get Medicare benefits.

[Susie Orman]

But you weren't working for a corporation that already gives you health insurance, Ms. Travis.

[KT]

Okay, right.

[Susie Orman]

So I'm so glad. We were happy to. To do so, but we didn't work for anybody but ourselves. So, my dear Carla, here's what it depends on two key facts. All right? Number one, how many employees does your employer have KT is looking at me.

[KT]

Yeah.

[Susie Orman]

With question like kt, this question and answer is so critical I can't even tell you. Because if her employer has 20 or more employees, then your employer plan, her employer plan has to remain as primary. And she does not need Medicare B or D at 65. She doesn't need those at all. She can, and she should delay both with no penalty because it's B and D. That can be expensive. However, if her employer, KT has fewer than 20 employees, then Medicare becomes her primary and her employer plan becomes secondary. So in this case, my dear Carla, you must enroll in part A and part B at 65 or you risk being able to have any claims that are absolutely approved, like all these kinds of things. So you have to first confirm your employer size, and I can tell you to do so. Just call your HR department and ask them. And the question becomes, should she enroll in Medicare A at 65 and she enrolls only in part A if it is free. She has to figure that out. So if she's worked for 10 years, 40 quarters, da, da, da, she'll be able to do it. But if she has an H HSA account, a health savings account, and she's contributing to it, if she enrolls in Medicare part A, she won't be able to have a health savings account. So she has to know that because it will immediately disqualify her from it. So, Carla, if you are contributing to an hsa, then delay part A until you stop contributing. If no, enroll in part A at 65 again, only if it's free. All right, so there you go. I just told her what she needs.

[KT]

That's it.

[Susie Orman]

It's not that simple, believe it or not. You thought that was a simple question, didn't you?

[KT]

I did.

[Susie Orman]

What did you think I was going to say?

[KT]

Take it like I did? I couldn't because I got so excited that I didn't have to pay all those medical bills.

[Susie Orman]

Yeah. But I can tell you one thing. Always go for Medicare. Always, always, always be very, very careful of Medicare Advantage. Warning. Warning.

[KT]

Warning.

[Susie Orman]

Warning.

[KT]

All right, Susie, my next question is from Janeth.

[Susie Orman]

What is that?

[KT]

Janet? It's Janeth. It's not Janice, it's Janet.

[Susie Orman]

I wonder why they named her that.

[KT]

Probably someone. Jane and Beth. Janet, like maybe two names together.

[Susie Orman]

Only you would come up with that.

[KT]

Janet said, Susie, I'm 60 years old. I'd like to know if it's a good idea to take money out of my 401 and pay off the Balance on the apartment where I live. The HOA fees are high and I haven't been able to sell it. My mother lives with me. She has dementia and I am on my own. My annual salary is $55,000.

And she said thank you. So she's asking 60.

[Susie Orman]

And do you think she's still working?

[KT]

Yeah, she said her annual salary is 55.

[Susie Orman]

You're not listening very good this morning. No, but that's because I have water in my left ear. You do want to hear it squeak if I blow my nose?

[KT]

No.

[Susie Orman]

All right.

[KT]

Squeaks real loud when she does that. I don't like that.

[Susie Orman]

Does it irritate you?

[KT]

Well, no. It seems like something's wrong. That there's a water is stuck in there. Well, who goes in the pool on.

[Susie Orman]

The ocean all the time?

[KT]

You do.

[Susie Orman]

All right. Anyway, so, Janet, here's the thing. Kt, Pop quizzy.

[KT]

Should she do what?

[Susie Orman]

What are you talking about? Should she do what? You just read this to me.

[KT]

No.

[Susie Orman]

Rita says she already went on to make money.

[KT]

She said take.

[Susie Orman]

Forgot what she read.

[KT]

No, don't take money out of the 401k.

[Susie Orman]

Why?

[KT]

First of all, when she takes it out, number one, she has to pay taxes on it. So if she's six, wait, 59 and a half, she doesn't have to pay a penalty. A penalty, but she still has to pay on it. Second, that's her security blanket. I think that she should just aggressively try to sell the apartment and downsize or do something. Do not touch the 401. Good KT.

[Susie Orman]

Yeah.

[KT]

No way. Don't touch it, Janet.

[Susie Orman]

But here's what I'd like to you to think about. If you need to sell something and you're desperate enough to think about taking money out of your 401k and you do not tell me how much you have in your 401k and what the balance is on your apartment. Do you all get the idea? I cannot answer these questions for you if you don't give me the facts. And that doesn't mean it has to be a three page essay. It could have been. Should I take money out of my 401k that has $500,000 in it to pay off the balance on the apartment where I live. That's all it needed to be. Because you're saying since the HOA fees are high, that's kind of why you want to sell. If you took the money out of your 401k, think about how much money you would lose in taxes. All right, number one. Number Two, since you're willing to lose that money in taxes from your 401k, why don't you reduce the price of your apartment by that amount of money, since you were willing to lose it anyway to get somebody to buy it, because you're lowering the price. Do you understand what I'm saying to you? If you can't sell it, it means it's priced too high. If you need to sell it and you're willing to take money out of a 401, lower the price until somebody buys it. Period. All right. Katie?

[KT]

Yeah. Don't touch the 401. Okay. This is from Katherine. This is my final question. She said, my dad put a million dollars in an IRA from me back in 1987 before he remarried. Ready? In the last six years, my brother said he took out my money and gave it to him. My brother hasn't worked in six years and has received at least $150,000 a year from my dad. He's lost all of it. My dad, who is 90 years old, said to us that my brother and I will get nothing when he dies because money doesn't create happiness. Sounds a little sad, right? He can do anything he wants with his money. He worked hard for every cent. But I'd like to hear an honest explanation as to why he took care of one child and not the other. So Catherine's feeling pretty sad over this. In 1987, you would think that a million dollars would have really grown.

[Susie Orman]

A lot.

[KT]

A lot. And the brother, only in the last six years, has been taking money out.

[Susie Orman]

So the father probably opened up an IRA in the father's name. He did a transfer, $1 million, and made Catherine the daughter, the beneficiary. Somewhere in there. However, it doesn't matter who the beneficiary is. That only comes to play upon death. For some reason, the father was taking out money every year or however many times he did it that Catherine may or may not even know about it until all the money was depleted. Now we don't know how the money was invested. And maybe even years later, it was only worth $1 million. Maybe he just put it in an account that wasn't earning any interest. Who knows? So if you think about it, KT, okay, 150,000 a year over six years is like 900,000. So he may have used up all of it. Who knows what happened to the rest of it. But the only way to solve this is for Kathryn for you to stand in your truth, not why did he favor one child over another.

Not any of that. Just sit down with your dad and say, dad, listen, I know it's your money, you worked hard for it and you can do anything you want with it. But why? I just need to know why you gave at least $900,000 to my brother. You told me that you were opening up this account for me, this one million dollar IRA for me. And now you tell us neither of us are going to get anything, even though my brother got 900,000 of what supposedly you told me was mine. I understand that money doesn't create happiness, but it sure does create security. So can you just tell me why so I can understand this?

[KT]

Could you please Also, the father's very wealthy, Susie.

[Susie Orman]

I know he has approximately $9 million.

[KT]

$9 million. And this is 40 years ago. It had to have earned. We don't know.

[Susie Orman]

We don't know anything. But here's the point, Katherine. I have no idea. KT has no idea. You have no idea. But you do know that you have a need to talk to your father about it. And you say, is it my business in this email. The reason that it's your business is because it's bothering you. And when you hold something in, it's going to eat at you. It's going to eat at your relationship with your father. It's going to eat at your relationship with your brother. It's going to eat at you, especially if you're not doing well financially. So if I were you, you have absolutely nothing to lose and everything to gain. And say, dad, can we just sit down, the two of us, and talk? I really need to talk to you. Could you please do that with me and sit down in a. Not in an accusing way, in an attacking way, but speak to him directly from your heart and speak with such love for him. Speak with him with such respect for him. Speak with him with the intention of you truly understanding all of this. Not that you're going to get a million dollars, but you just want the truth and you'll come out fine. And after you've done that, can you just write me and let.

Me. What happened? All right, kt, that's a wrap. Susie, what are we going to do now? You have plans? I can tell you. I know what you want to do today. Tell me what you want to do today, this week.

[KT]

The only opportunity is this afternoon. I can try to catch some yellow eye or yellow tail.

[Susie Orman]

Kt, believe it or not, everybody is out of fish. Yeah, she has no fish to eat. I personally don't like eating fish.

[KT]

I'm like Susie's not a big lover.

[Susie Orman]

Yeah, baby. We don't have to eat fish. Yeah, baby.

[KT]

It's the healthiest, most delicious food we can catch.

[Susie Orman]

You can catch, right? Actually, kt, you know, when I woke up this morning, I looked out the window, I went, ugh. Why do you think I did that?

[KT]

Because it was nice.

[Susie Orman]

It was nice. And as much as I love when she goes fishing, I love it so much more when you just stay around here.

[KT]

I can stay with you today if you like.

[Susie Orman]

And not fish?

[KT]

Yeah. If that's your wish, I will grant your wish. What do you think, everyone? Should I try to catch a fish or grant her wish?

[Susie Orman]

Now here is a perfect example of two of us disagreeing kind of right on whatever. But I'm going to switch my vote from no to yes because number one, doesn't really cost anything to do what you're going to do. It's going to save money eventually on fish because otherwise you're going to end up having to buy it when we go back to Florida. And so go for it, girlfriend. Yay.

[KT]

Woo hoo.

[Susie Orman]

All right, everybody, until next time, there's only one thing we want them to remember and it's what? Fish first fish first, then people, then money, then things. Right?

[KT]

And you stay safe, Right?

[Susie Orman]

Talk to you soon. Bye bye. We are strong, we are wise we will not apologize we are here we will thrive Together we will rise.

It takes. We are strong, we are wise Together we will rise.

Hi everybody. Suzy O here and it's open enrollment time at all corporations. So I hope you are checking all of your benefits so that you know you are up to date with what you need. But I have to tell all of you there is one other benefit that I know all of you need and your corporations need to offer. And it comes from a company that I helped co found over 5 years ago by the name of Secure Save. So whether you're an employee or an employer, I want you to go to securesave.com Suzy S U Z E and take a look at what I have for you there. I promise you you're gonna like it.

[Podcast Disclaimer Voice]

All right now, neither Suze Orman Media nor Suze Orman is acting as a certified financial planner advisor, a certified financial analyst, an economist, cpa, accountant or lawyer. Neither Suze Orman Media nor Suze Orman make any recommendations as to any specific securities or investments. All content contained in this podcast is for informational and general purposes purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any losses which may arise from accessing or reliance on information in this podcast. And to the fullest extent permitted by law, we exclude all liability for loss damages, direct or indirect, arising from the use of this information. The must have documents discussed in this podcast are legal documents created by a lawyer and distributed by Hay House. Thanks for listening.