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

Episode: Your Questions About Suze’s Roth Five Year Rule Masterclass
Date: September 18, 2025
Host: Suze Orman (A) with KT (B)

Overview

In this episode, Suze Orman and KT respond to a variety of listener questions that arose after Suze's recent masterclass on the "five-year rule" for Roth accounts. Clarifying confusion around Roth IRAs, Roth 401(k)s, conversions, and required minimum distributions (RMDs), Suze provides detailed guidance, practical advice, and her trademark tough love to ensure listeners build strong financial foundations—especially when it comes to harnessing the power of Roth accounts and understanding the crucial five-year rule.

Key Discussion Points and Insights

The Triple Nine Day and Listener Participation

[00:41 - 01:42]

• The episode starts on a positive note: September 18, 2025, is a "triple nine" day, which Suze and KT declare as lucky for money.
• KT is in the studio for an "Ask KT & Suze Anything," which excites the audience.
• Questions can be submitted to asksuzypodcastmail.com, and if chosen, are answered on air.

The Five-Year Rule and Roth Conversions

If You Can't Pay Taxes on Conversion—Don't Convert

[03:12 - 04:35]

• Listener Julie asks about converting a traditional IRA to a Roth if taxes are withheld from the conversion.
• Suze’s firm guidance: "If you don't have money outside of a retirement account to pay the taxes, don't do it. Because if they withhold the money...there's going to be a 10% penalty...It makes absolutely no sense whatsoever." (A, 03:38)
• Rule of Thumb: Only convert if you can pay taxes with non-retirement funds.

The Five-Year Rule Only Needs to Start Once

[04:35 - 08:46, Pam]

• Pam, age 68, worried that making a new Roth conversion into a new account was a "boo boo," instead of using her original over-20-year Roth.
• Suze clarifies: Regardless of how many Roth IRAs you open, the clock of your first Roth follows you.
  • "Because you've had a Roth for five years and you're over 59½, you can convert all you want, pay the taxes...and take that money out anytime you want." (A, 07:04)

Can You Mix Contributory and Converted Roths?

[08:46 - 09:32, Rebecca]

• KT’s question: Can contributory and converted Roths be held in the same account?
• Suze: "Absolutely. Without any problem." (A, 09:14)

Conversion Limits

[09:32 - 10:56, Ann]

• Confusion between contribution limits ($7,000/$8,000) and conversion amounts.
• Suze: "When you are converting, you can convert any amount of money you want. Just know whatever you convert, you are going to owe ordinary income taxes." (A, 10:27)

Roth 401(k)s vs Roth IRAs: Different Clocks, Different Rules

[11:07 - 13:37, Scott]

• Are the five-year rules the same?
• Suze explains the clocks:
  • Within Roth 401(k): The first plan's clock follows to a new employer’s Roth 401(k).
  • Roth 401(k) to Roth IRA: The five-year clock resets unless you already have a Roth IRA open.
• Additional tip: Roth IRAs allow more flexible withdrawals of contributions than Roth 401(k)s.
• Advice: "After the point of the match in a Roth 401(k), you're far better off taking that money and having a Roth IRA...Once you've maxed out your Roth IRA, go back to your Roth 401(k)." (A, 13:12)

Multiple Roth Accounts and the Five-Year Rule

[13:37 - 15:21, Janet]

• Regarding old Roth IRAs and new conversion Roths at various brokerages:
• Suze reiterates: Once past age 59½ and with a Roth open for more than five years, the rule is satisfied—regardless of the account number or location.

The Magic Formula

[15:21 - 15:34]

• "The magic takeaway, Susie, is 59 and a half." (B, 15:25)
• Plus, five years since Roth opening.

Beneficiaries, RMDs, and Roth Rules

Traditional IRA Beneficiary Decisions

[15:34 - 17:54, Lynn]

• Should a 71-year-old designate her 90-year-old husband as sole beneficiary?
• Suze’s take: "Your job in life is to make sure your husband is taken care of...If it were me, I would absolutely leave it all to him. I would not think about the RMDs...Leave it to him. And don't worry about those stupid RMDs." (A, 16:34)

Asset Allocation with Roth Conversions

[17:54 - 19:20, Steve]

• If converting, should you transfer equities or bonds?
• Suze: "Convert the equities first because they have a better chance of going far higher than bonds right now." (A, 18:54)

Using RMDs to Fund Kids’ Roths

[19:20 - 21:05, Marie]

• Can RMD withdrawals fund a child’s Roth IRA?
• Suze: Yes, if the child has earned income and only up to $7k (or less, if their earnings are lower). "After you've paid income tax, you can do anything you want with that money." (A, 20:02)

Why Are People Scared of RMDs?

[21:05 - 22:37]

• Because RMDs can trigger taxation on Social Security and higher Medicare premiums, and you may have to withdraw even if you don't need the money.

Suze’s Roth Mantra

• "If you don't do a Roth retirement account on your own in IRA, a Roth 401(k), TSP, you are making the biggest mistake in your life. Don't be stupid, everybody." (A, 21:35)

New Roth Accounts and Ongoing Contributions

Transferring Roths and the Five-Year Rule

[22:37 - 24:36, Katie]

• If you open a new Roth, does the old five-year clock apply?
• Suze: “If you’re over 59½ and you’ve had a Roth IRA opened anywhere for over five years, the five-year rule no longer applies." (A, 23:34)
• Tip: Consider consolidating Roths for better investment options and easier management.

Max Out Traditional vs Roth 401(k)?

[24:36 - 24:53]

• "Absolutely. Convert to a Roth." (A, 24:53)
• Don’t stick with a traditional 401(k) if you can use a Roth.

How Much to Convert Each Year?

[25:01 - 25:13]

• "Whatever amount of money makes sense, tax wise. Check with your CPA so that you don't go into a higher income tax bracket." (A, 25:13)

Backdoor Roths Alongside Roth 401(k)?

[25:22 - 25:43]

• KT: "Yeah, you can." (B, 25:39)

Notable Quotes & Moments

• Suze, on conversions when you lack funds to pay the taxes:

  "Don't do it. Don't do it. Don't do it." (A, 03:38)

• Suze’s golden rule for Roth IRAs:

  "Your first Roth that you open, the date of that first Roth follows you everywhere." (A, 06:44)

• On account consolidation:

  "It might be a whole lot easier for you...to transfer all these accounts that you have into just one Roth IRA now." (A, 08:23)

• On RMDs and securing loved ones:

  "Your job in life is to make sure that your husband is taken care of in whatever way he needs." (A, 16:29)

• Suze’s Roth advice (passionate):

  "If you don't do a Roth...you are making the biggest mistake in your life. Don't be stupid, everybody." (A, 21:35)

Key Timestamps for Reference

• 00:41 — Episode opens; explanation of “triple nine” day.
• 03:12 — Start of Roth five-year rule Q&A.
• 04:35 — Five-year clock and multiple Roths discussion.
• 11:07 — Roth 401(k) vs. Roth IRA five-year rules.
• 15:34 — Question: IRA Beneficiaries and RMD focus.
• 17:54 — Asset allocation in Roth conversions.
• 19:20 — RMDs and funding children's Roths.
• 22:37 — Transferring Roth accounts.
• 24:36 — Lightning round: conversion max, backdoor Roths, mixing accounts.

Episode Takeaway

If you’re over 59½ and have had any Roth IRA open for 5+ years, you’re clear of the five-year rule, no matter how many accounts. Conversions should only be done if you can pay the taxes out-of-pocket, and always strive to move towards Roth-type accounts for maximum long-term flexibility and tax benefits. Don’t let RMDs or confusion over account clocks stop you from making smart, empowered decisions.

Suze’s closing mantra:

"People first, then money, then things... Stay safe, stay healthy, stay secure, and we’ll see you soon."