When Do You Know You're Doing Everything Wrong?

Summary

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

Episode: When Do You Know You're Doing Everything Wrong?

Date: July 26, 2026
Hosts: Suze Orman & KT (Katie Travis)

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Episode Overview

This episode blends the popular "Ask KT & Anything" listener Q&A with a "Suze School" deep dive, targeting practical, real-life money questions and the emotional roots behind our financial choices. Suze emphasizes that financial problems often can't be fixed by money alone—they stem from our beliefs and actions. The episode offers hands-on advice for listeners at different life stages, from planning for retirement to handling family finances and difficult end-of-life scenarios.

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Key Discussion Points & Insights

1. Solo 401(k) Deadlines & Strategy

Timestamps: [01:12] – [03:56]

• Opening/Funding Deadlines:
  • You must open a Solo 401(k) by December 31st of the tax year you want it to apply to, but you can fund it up until you file taxes the next year (April 15, or October with extension).
• Sole Proprietor vs. S Corporation:
  • If you’re self-employed as a sole proprietor, you decide how much to contribute by year-end, then have until tax filing for actual funding.
  • If you’re an S corporation, employee contributions must be made via payroll by Dec 31st. Employer contributions have until tax filing.
• Insightful mini-lesson:

  “If you’re self employed, you are crazy in most cases not to have a solo 401k.” – Suze Orman [01:31]

2. S Corp vs. Sole Proprietorship – What's Right For You?

Timestamps: [03:56] – [07:42]

• Sole Proprietorship:
  • Simple; profits go straight to personal tax return, but you pay full self-employment tax (~15%).
• S Corporation:
  • Separate entity. You pay yourself a salary (subject to payroll tax); profits above salary are distributions, not subject to self-employment tax.
  • More paperwork, cost for payroll service, and IRS scrutiny on "reasonable" salary.
• Who should switch to S Corp?
  • Stick with sole prop if just starting/making modest money. Switch if profits greatly outpace reasonable salary.
• Notable quote:

  “If a reasonable salary for you is X and all of a sudden you've made 2 or 3x, that's when you consult a CPA and look into getting an S Corp. Just that simple.” – Suze Orman [07:17]

3. Can I Afford a Designer Handbag Near Retirement?

Timestamps: [07:42] – [11:36]

• Listener’s Dilemma: 67-year-old teacher, about to retire, wants to buy a designer handbag ($1,500–3,000).
• KT's Advice: Consignment or secondhand market for designer bags—get quality at a better price.
• Suze's Concern: Why now? Retirees typically prioritize savings as income stops. Self-reflection recommended on why this purchase matters at this specific life stage.
• Notable moment:

  “Why at this point in your life, why is now the time that you want a designer bag?... I want you to understand why.” – Suze Orman [10:00]

4. Mortgage Payoff Priority for Retirement

Timestamps: [11:36] – [16:33]

• Listener Situation: 63, owes $130K on mortgage, $110K/year salary, $300K in 401(k), $15K in emergency savings, just bought a car with a big down payment, $60K in gold/silver.
• Suze's Direct Feedback:
  • Stop spending to impress others (big car, minimal savings).
  • Suggests selling gold/silver, applying proceeds to mortgage principal.
  • Emphasizes bi-weekly payments to accelerate payoff.
  • Urges careful re-examination of spending—listener used "I" not "we," suggesting independence.
• Notable quote:

  “Invest in the known versus the unknown....You have done everything wrong. You just have.” – Suze Orman [13:50]

5. Living Revocable Trust – Does It Need County Registration?

Timestamps: [16:33] – [16:55]

• Short, actionable answer: No, a living revocable trust does not need to be registered at the county.

6. No Executor, No Family: How To Handle Estate Planning

Timestamps: [16:55] – [20:51]

• Listener's Concern: 76, no family/executor, wants to leave estate to charity, attorney won’t serve as executor.
• Suze's Guidance:
  • State will intervene if no plan—assets pass under intestate succession.
  • Use "pay on death" or "transfer on death" designations for accounts, including charities as beneficiaries.
  • Biggest risk is incapacity; need durable power of attorney for finances and healthcare.
  • Professional trustees are available, banks and brokers may help—act now.
• Notable quote:

  “Not taking action now just because you have an excuse of I don't have an executor for my estate just doesn't hold water with me.” – Suze Orman [19:57]

7. 94-Year-Old Mother in Debt: When is Bankruptcy Appropriate?

Timestamps: [20:51] – [28:40]

• Listener's Case: 94-year-old mom, early memory loss, $10K (possibly $100K) in credit card debt, reverse mortgage, five adult children help.
• Suze's Take:
  • If truly $10K debt, kids should pay it off if possible.
  • If $100K, consider bankruptcy (if home is protected), or just stop paying—ruins FICO, but little else to lose at 94.
  • Emphasizes getting realistic about long-term caregiving options, selling home, exploring equity and reverse mortgage status.
  • Reiterates that kids should get involved with parents’ money sooner, before problems escalate.
• Notable moment:

  “Who cares about a FICO score when you are 94 years of age?” – Suze Orman [25:25]
  “Kids, get involved with your parents’ money sooner than later. Parents, let your kids get involved with your money...this situation never should have happened, ever.” – Suze Orman [27:58]

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Memorable Quotes

• “Stop spending money you don't have simply to impress people you don't even know or like.” – Suze Orman [12:27]
• “You have done everything wrong. You just have. And that is me standing in your truth for you.” – Suze Orman [13:50]
• “Not taking action now just because you have an excuse of ‘I don't have an executor for my estate’ just doesn't hold water with me.” – Suze Orman [19:57]
• “Who cares about a FICO score when you are 94 years of age?” – Suze Orman [25:25]

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Big Takeaways

• Solo 401(k)s: Maximize your self-employed retirement options by matching contributions to your structure and deadlines.
• Entity Choice: S corps make sense as profits grow, but are not worth the hassle for micro-businesses just starting out.
• Self-Introspection in Spending: Major purchases near retirement warrant self-reflection about motive and long-term impact.
• Mortgage-Free Retirement: Make mortgage freedom a top priority for security, with disciplined payoff strategies trumping flashy consumer spending.
• Estate Planning No Excuses: Use “pay on death” and professional fiduciaries if you lack family; don’t procrastinate.
• Elder Family Finances: Step in early; with major debt and advanced age, bankruptcy can be the lesser evil, and FICO scores sometimes just don’t matter.

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Important Segments & Timestamps

• Solo 401(k) rules: [01:12] – [03:56]
• Sole proprietor vs. S corp explained: [03:56] – [07:42]
• Designer luxury purchase dilemma: [07:42] – [11:36]
• Mortgage payoff guidance: [11:36] – [16:33]
• Living trust registration: [16:33] – [16:55]
• No executor/charity estate planning: [16:55] – [20:51]
• Elder debt/bankruptcy Q&A: [20:51] – [28:40]

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Episode Closing

Suze closes by previewing a forthcoming masterclass on required minimum distributions, reemphasizing the show's core mantra:

“People first, then money, then things.” [29:04]

Listeners are encouraged to prioritize people and personal well-being over material things, especially in financial decisions.

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For more Suze Orman guidance and community features, download the Women & Money App.

Transcript

[Chorus/Intro Singer]

Foreign.

[Katie (KT)]

Hi everybody. Good morning Susie.

[Susie Orman]

It is always a good morning with you, Ms. Travis.

[Katie (KT)]

It's July 26th, 2026. Okay, so we pre recorded this podcast before we left for our trip to Italy birthday.

[Susie Orman]

This is another Ask KT and Anything combined with Susie School. Now why do I say that? Because some questions require more of a detailed explanation that's more like a teaching part and others are just kind of answers to people's questions. So therefore we're combining them kind of together. But are you ready, Katie? I'm ready.

[Katie (KT)]

So that's how I'm opening today's podcast on the Women and Money app. I got another little series of questions but this one in particular I think is really important. It says, Susie, when is the last calendar day I can contribute to a solo 401k?

[Susie Orman]

Yeah, I'm kicking myself because KT, I should have had that in the masterclass two weeks ago. What was I thinking? But here's what you need to get. All right. You have to open and by the way, if you don't know what I'm talking about with a Solo 401K or a SEP IRA, go back two weeks from today and listen to the Masterclass on solo 401ks versus SEP IRAs and you'll find out that if you're self employed you are crazy in most cases not to have a solo 401k. However, the last day that you can Open a solo 401k is December 31st. Let's say this year if you are going to open up one for 2026, you have to opened it up by December 31, 2026. However, that doesn't mean that you have to fund it by December 31, 2026. But here's what you need to know if you are a sole proprietor when you open it up and it has to be opened by December 31, 2026. If it's for this year, you have to elect how much of your own salary deferral you are going to put in it. You don't have to do it, you just have to make that election and you have for the actual money you have till the day that you file your taxes. So KT for 2026 contributions, that would be April 15, 2027 or all the way by the way, like we do till October 15, 2027 if you file an extension. However, here's what everybody needs to know. Because remember, when you're self employed you have two ways to go. You can be a sole proprietor, right Katie? Or you could form an S corporation. Okay? Now if you're an S corporation and you pay yourself a paycheck, a W2, which chances are you will, then your employee contribution, your employee hat has to come out of that paycheck through your payroll. And that has to be done by December 31st of this year. No extension, nothing. Your employer hat or your employer contribution can still wait until you file. Now how is that for complication? Kt, that was a little mini Suzy school.

[Katie (KT)]

Susie, tell everyone, what is the difference between an S corp and a sole proprietorship?

[Susie Orman]

All right, so before I go to an S corp, everybody, let's just start simple. A sole proprietorship. I always want you to think of the name of something. A sole proprietorship means it is just you. So maybe you're a freelance, you consult, you sell things and you've never filed any other special paperwork. All right? It's just you and your business, same person. The business makes a dollar and that dollar is yours and it goes right in your personal tax return. Now you may think that's just great, everybody, but you probably didn't know that on that money, on the profit you're paying, self employment tax, that's Social Security and Medicare, a little over 15% on every dollar that you make. That's essentially how it is. So that's a sole proprietorship. Very easy. You and your business are one. But when you form an S corp, you are not one with your business. The S corp is a separate business. It's not just you anymore and you, everybody, you become its employee. So therefore you have to pay yourself a real salary, like a paycheck, a W2, just like you work for anybody else. However, you only pay Social Security and Medicare tax on your salary. But the profit above, above your salary, that comes to you as a distribution. So there is no self employment tax on it. None. So bottom line, if your business is making serious money, an S corp saves you thousands in payroll taxes every single year. So kt, you tell everybody, in your opinion, why doesn't everybody do that?

[Katie (KT)]

S corps aren't that easy. All right? There's benefits, but it costs you money, everybody. You have to set up payroll services. You need a separate tax return. And the IRS really takes a look to make sure your salary is reasonable.

[Susie Orman]

Yes.

[Katie (KT)]

So you can't get away with anything.

[Susie Orman]

Yeah. You can't pay yourself $10,000 everybody and then take $200,000 in distributions. They will come every after you for that. So kt, tell everybody who should do, in your opinion, an S corp versus a sole Proprietor.

[Katie (KT)]

Okay, if you're just starting out, let's say you're a hairdresser, you're just starting out, you're making modest profits. A sole proprietor's fine. It's simple, it's clean. It's actually a whole lot easier and a little less work in terms of filing and keeping track of everything.

[Susie Orman]

You're doing great so far. I got to get a ding, ding, ding. Yeah.

[Katie (KT)]

Wait a minute. But Susie, if you start out and let's say you have a great idea for a business and that business, after your first second year starts to skyrocket, let's say it goes beyond your wildest dreams.

[Susie Orman]

Actually, kt, it's if, wait, if it goes beyond what a reasonable salary would be for you. That is the key. If a reasonable salary for you is X and all of a sudden you've made 2 or 3x, that's when you consult a CPA and look into getting an S Corp. Just that simple. KT next question.

[Katie (KT)]

Okay, Susie, this next question is from Teresa. And I can tell you something. She watched the Susie Orman show because after reading this question, it is definitely a can I afford it? Question.

[Susie Orman]

Oh, well, now that's easy. Denied.

[Katie (KT)]

She said, susie, I would like to buy a quiet luxury handbag in a basic color that is timeless, meaning I will keep it until I die. She said, I'm 67 years old. I am a teacher. I plan on retiring next year. I live in California and will retire with a decent educator's pension. So she said, right now I have about 600,000 in a 403B and a 457. I have 200,000 in a CD, I have 30,000 in savings, and my husband and I have a house fund for emergencies of about 16,000. The most I have ever spent on a handbag was $259. And that was for a Dooney and Bourke, which is a nice looking bag.

[Susie Orman]

I personally wouldn't know.

[Katie (KT)]

Okay, so she said, I would really like to own a nice designer bag, the row, a Bottega Veneta chanel, anything between 1500 but no more than 3000. What is your advice? Really? What's your advice?

[Susie Orman]

My advice is let's hear what KT has to say to you.

[Katie (KT)]

Okay, so Susie's asking me to answer this because she knows I worked in the luxury business for many years with all of these designer brands. And I have to tell you something. If I were you, Theresa, I would go to a consignment store or some of these online secondhand you know, opportunities where you can get a beautiful designer bag for pennies on the dollar, and then you satisfy both needs, you keep saving, and you have a designer bag that you really wanted.

[Susie Orman]

See, I knew you would give her the best answer.

[Katie (KT)]

What do you think?

[Susie Orman]

Well, I think your answer is absolutely correct. But here's my concern. My concern is this, Theresa. You're 67 years of age and you plan on retiring next year. Year. That means your income, everything stops. And at the time of life, when you're retiring, this is when you want a designer bag. Usually especially women, when they approach retirement and they know income is going to stop rather than spend, that's when they take their money and they want to save, save, save. But not you. So it makes me wonder why. Why at this point in your life, why is now the time that you want a designer bag? Hey, if you were 40, 50 right now, I'd say, yeah, go ahead. But at 67, I'm just wondering why. So I'd like you to answer that question for yourself. And if you come up with the reason that makes sense, that you want to spend that kind of money one year before you retire, okay, if it were me, I would not be doing it. But more important than you buying the bag, I want you to understand why. Why, at this point in your life, do you want to do that? Next question, Katie.

[Katie (KT)]

Okay, from Stacy. Hi, Susie. I saw where you mentioned that paying off your mortgage is the most important thing for retirement. I agree.

[Susie Orman]

One of them, yes.

[Katie (KT)]

Okay, so here is my dilemma. I am 63 years old. I owe 130,000 on my condo. I make 110,000 per year, and I have $300,000 in my 401k. I only have 15,000 in saving because I just put a big down payment on a car. I also have about 60,000 in gold and silver that I can sell. I am still working and don't plan to retire anytime soon. Any advice as to how to pay off my mortgage?

[Susie Orman]

Yes. Stop spending money you don't have simply to impress people you don't even know or like. Because anybody who buys a big car and they have to put a down payment on it, that's exactly why they're doing it. But that's besides the point. Here's my concern for you. You say that you want to own your home outright, all right? By the time you retire, even though you don't plan to retire anytime soon, number one, you want to make God laugh. Have you ever heard this? Show her your plan. You don't Know, are you in a car accident? Are you sick? What happens? Does your company close? You don't know how long you have to work. You don't know that that's an unknown. So I always tell you, invest in the known versus the unknown. The known is most likely you're still going to need a home to live in whether you are working or not. The known is your biggest monthly expense is your mortgage payment. Therefore, if you know that you want to stay in that house for the rest of your life, then that should have been a long time. Now that should have been for a long time your number one priority to have it paid off by the time you retire. But no, you decided to take money even though all you have is $15,000 in an emergency fund, right? Really? All right. You decided to take emergency fund money from savings to put a large down payment on a car. Why? So your monthly payments could be smaller. Are you kidding me? And you have $60,000 in gold and silver doing what? It already has gone up. Here's the bottom line. If it were me, this is what I would do. I would sell the gold and the silver, all of it. Maybe you have a capital gain, maybe you don't. I don't know. You'll have to check that out before you sell it. If you could take that money and put it into your mortgage that you currently have towards principal, make sure it goes towards principal. Now, all you owe is $70,000. And if you continue to pay your monthly mortgage like you do right now, or do it on a bi weekly schedule where you actually do it every two weeks, which means you make one extra payment a year, you will have that mortgage paid off sooner than you have any idea. That is number one. Number two, you make 110,000 a year and you're 63 years of age and you only have now 15,000 in savings, you need to take a hard look at yourself and what are you spending your money on? Because you don't say you're married, you don't say that you have kids. You use the word I throughout this entire thing, you know? And so therefore you also have $300,000 in a 401k. It's not even a Roth 401. So that means you don't have 300,000 in there because when you go to take it out, you're going to owe ordinary income tax on it. So you have done everything wrong. You just have. And that is me standing in your truth for you. Because you wrote in and you didn't write in to get me to tell you what you could do. You already knew. You need to stand in your truth and you need to make you and your life and your money in savings and investment your number one priority over flashy things such as a car. All right, KT Next.

[Katie (KT)]

Okay, this is from Maria, a simple one liner which I love everybody. Maria asks Susie, does a living revocable trust need to be registered at the county you live in?

[Susie Orman]

No, it does not. Never has and never will. Now, maybe there's some places that do, but not that I know of. All right, go on. Next.

[Katie (KT)]

So from Diane. I don't have a trust because I don't have any executor for my estate. I have no family members and most of my friends are older or gone. I tried to hire an attorney and she did not want to be the executor. I'm leaving my entire estate to charity and I'm 76 years old. I don't know what to do and I'm very concerned. So, Susie, how will the documents work if I don't have anyone to distribute my assets? So I think. And she wrote, please enlighten me. So can you please enlighten her?

[Susie Orman]

I can. And here's the first thing I'm going to tell you. You don't have a will, you don't have a trust because of this excuse that you don't have an executor. Guess what? You have one. If you die, and this is true for everybody, if you die without a will, without a trust, the state that you live in deems that you have died in test state succession and your assets will pass according to the succession rules of the state that you live in, plus probate fees. Okay, so let's just say your mother was still alive and you had kids. All right? Maybe half would go to your mother or father, half would go to your kids. If you don't have any relatives or anybody, maybe they're going to look for cousins, uncles, aunts. But you already have one, whether you know it or not. You want to take power over your money, there's a few things you can do depending on where your assets are. I'm assuming you have bank accounts. Maybe you have a brokerage account, maybe you have a retirement account. You could designate right here and right now upon your death, what's known as a pay on death account. You die, name the charities. Now that you want to get your money, you own a home, you could do a transfer on death account if you want. Who is to get your home if you have one, if that's to go to a charity, then do that. But you name it now while you still cam and that's the easiest way to take care of it. But I'm actually not that concerned about where your money goes when you have died. I'm concerned about what happens if something happens to you and how do we use your money to pay your bills, write your checks, if you even write checks anymore to pay for a nursing home to do all those things. Who Diane is going to do that for you? All of a sudden you become incapacitated, you have a stroke, anything can happen. So you need to designate a durable power of attorney for health care who can make health care decisions for you. So the must have documents really can serve you well. Now if you really don't have any friends, if you don't have anybody in your life, then you're in a situation where you need to hire a a professional trustee. And there are firms that do that. Many banks will do that for you. Many brokerage firms may be will do that for you. You never know. But you will find somebody. But you need to get on it right now. But not taking action now just because you have an excuse of I don't have an executor for my estate just doesn't hold water with me. So tomorrow you are to make calls and you are to make pay on death accounts. Find a trustee and get yourself the must have documents and do this now. Go to musthavedocs.com yes Katie.

[Katie (KT)]

Okay, this next one and my final question is Fabulous. Susie. I love this. It's from Mary. She said KTKT kt. Please, please please pick me and said help our beautiful 94 year old mom. Love this question. My 94 year old mom has about $10,000 in credit card debt and has only been able to make the minimum payments. Susie, the account is not delinquent, but it's becoming a burden. She has no other debt. She does have a reverse mortgage and lives on Social Security and and a teacher's pension. She has early memory loss from multiple mini strokes but she's still remarkably independent. I moved in with her this year to help care for her. Though she's amazingly physically capable for her age. The five of us kids help with expenses when needed but we're at a point where we need to prioritize our own financial future. If she doesn't have this credit card debt she could cover her monthly expenses. What do you recommend?

[Susie Orman]

So you know I'm a little confused here because $10,000 of credit card debt is nothing. I have a feeling that Mary meant to say she has about $100,000 in credit card debt.

[Katie (KT)]

No, really?

[Susie Orman]

And yes, because $10,000 in credit card debt, KT the minimum payment due would be like $200 a month, $300 a month. It's a burden when it's two or three thousand a month. All right, so, Mary, I'm just going to make the assumption that when you wrote this, you wanted to put down 100,000, and instead you put down 10. If you really did mean $10,000, then something is radically wrong and the five kids should each come up with $2,000 each and pay off that debt. But I just can't believe that $10,000 of credit card debt is that big of a burden. So I'm going to go with my feelings, KT and say it's $100,000. So you need to listen to me here, which is this. First of all, you know Mama has already a reverse mortgage. She's been living far beyond her means for a long, long time. You say she has no other debt. Well, that's great. $100,000 of credit card debt, a reverse mortgage, lives on Social Security and a teacher's pension and blah, blah, blah, blah. My real concern is here, she has memory loss and it could get bad. And even though you moved in with her, that doesn't mean necessarily that you're going to be able to take care of her, really. It just does. Because sometimes they wander. They'll leave the house in the middle of the night, all kinds of things. And you'll find that even though you love her, you moved in with her, you might not be able to let her stay there. All right, so you should, number one, be looking at a memory care facility just in case you have to move her into one. All right, that's number one. If you do have to move her into one now, you may need to sell the house, but because she has a reverse mortgage on the home, I don't know how long she has had this home for on a reverse mortgage, there may be equity in her home, and there may not be very much equity in her home. So it just depends how long she has had a reverse mortgage. And given that she is 94, why do I think she's had one for at least 15 or 20 years already? So we have a very, very serious situation here, Mary. And this is where the kids, all the kids, the five of you need to get together and really look at what is the current equity in her home. If the reverse mortgage was to be paid off, how much does a memory care facility really cost? And if, in fact, now listen to me closely, you've done that and they can't really attach a home or take anything away from her or whatever. You've sold the home. She has no assets. If she really has $100,000 of credit card debt after you have arranged everything for her and you know what's really going on, if that was my mother, I would consider claiming bankruptcy. Only if they can't take the house away from her. Because the rules of bankruptcy is once you owe more than what you make, you are already technically bankrupt. Now, that debt is not going to pass down to the five kids. You could very easily, believe it or not, just stop paying it. And what are they going to do really? It's unsecured debt. It's not secured by the house. Will it ruin her FICO score? Absolutely it will. But the truth of the matter is who cares? Who cares about a FICO score when you are 94 years of age? So there are many things that are. That you can do here. But if she really can't afford it and she probably used that money to live on, so she didn't go out and buy all these fancy things and everything, those are some ideas that you might want to think about. Again, listen to my answer. Do you sell the home? Do you claim bankruptcy? Will they allow her to keep the home? Is there any equity in the home?

[Chorus/Intro Singer]

Or.

[Susie Orman]

Or does it just make sense and you should see a bankruptcy lawyer to claim bankruptcy or just stop paying the credit card and let it go into default. Ruins her FICO score, but there's nothing really much more they can do about that, really, because it's unsecured debt. Now, maybe they could sue her, who knows? But they're not going to at this point in time. Those are some of your alternatives that you're going to have to decide what you should do. All right, kt and that was kind of heavy, huh? It's been years since I suggested possible

[Katie (KT)]

bankruptcy, but I'm glad you did because I think that's probably the best solution right now. But she won't. The mother, like, she's 94 and she's racked up that much credit card.

[Susie Orman]

Maybe we don't know how she's lived for the past X amount of years. And this goes back to what I think I said in last Sunday's podcast. Kids, get involved with your parents money sooner than later. Parents, let your kids get involved with your money because this situation never should have happened, ever. And again, Mary, if It is only $10,000 of credit card debt, great. Each of you put in 2000 bucks each. Get rid of the debt, and you're fine. But no way is $10,000 doing this to your mother. No way.

[Katie (KT)]

All right, Katie, that's a wrap.

[Susie Orman]

Susie, that's a wrap. And Listen, next week, August 2nd, I'm going to be doing a masterclass on required minimum distributions. You will love it, so make sure you tune in. We love you all. And there's only one thing we want you to remember when it comes to your money, and it is this.

[Katie (KT)]

People first, then money, then things.

[Susie Orman]

Now, you stay safe. All right?

[Katie (KT)]

Bye. Bye.

[Chorus/Intro Singer]

We are strong, we are wise we will not apologize we are here, we will thrive Together we will rise we're the faith and everything it takes we are strong, we are wise Together we will rise.