# Should I Sell My House To Bridge My Income Gap?

An episode of [Suze Orman's Women & Money (And Everyone Smart Enough To Listen)](https://invisiblenetwork.ai/podcast/1439621652), 21 May 2026, 36 min.

Audio: https://traffic.omny.fm/d/clips/2df1102a-5761-4c99-b489-aabd0161f8fe/44e0936e-923c-43c7-9e2a-aade00edf4d3/114b865d-8d8f-4303-afea-b451000ea8b3/audio.mp3?utm_source=Podcast&in_playlist=4e05fb00-5a5b-4ed9-b353-aade00edf4dd

On this all new Ask KT and Suze Anything episode, we get an update on Suze and KT’s trip to Japan. Then, Suze answers your questions about 410(k)s, Lady Bird Deeds, credit card debt and so much more. Learn more about the Ultimate Scam Protection program here: SuzeOrman.com Watch Suze’s YouTube Channel Jumpstart financial wellness for your employees: https://bit.ly/SecureSave Protect your financial future with the Must Have Docs: https://bit.ly/3Vq1V3G Get your savings going with Alliant Credit Union: https://bit.ly/3rg0Yio Get Suze’s special offers for podcast listeners at suzeorman.com/offer Join Suze’s Women & Money Community for FREE and ASK SUZE your questions which may just end up on the podcast. Download the app by following one of these links: CLICK HERE FOR APPLE: https://apple.co/2KcAHbH CLICK HERE FOR GOOGLE PLAY: https://bit.ly/3curfMI See omnystudio.com/listener for privacy information.

## Transcript

[0:08] Suze: May 21st, 2026. Welcome everybody to the Women and Money podcast.
[0:14] Suze: We are back. KT, are you still jet lagged?
[0:18] KT: A little bit?
[0:19] Suze: What do you mean a little bit?
[0:20] KT: Konnichiwa!
[0:22] Suze: Tell everybody what that means.
[0:23] KT: Konnichiwa means good morning in Japanese.
[0:26] Suze: We had the best time in our lives.
[0:30] KT: What was your highlight?
[0:31] Suze: I'm sure it was yours as well, but for me.
[0:34] Suze: Honest to God, meeting Fitzy Keith Fitz-Gerald and his wife
[0:39] Suze: Noriko in person was beyond the beyond.
[0:44] KT: Wait, we didn't just meet them in person. We met
[0:47] KT: them in Kyoto, his wife's hometown, and now his hometown
[0:52] KT: as well, and we met at the temple where they
[0:55] KT: were married, and it was magical.
[0:59] Suze: It was, it gives me goosebumps...
[1:00] Suze: as I'm sitting here and even thinking about it, so
[1:03] Suze: the rest of Japan was fabulous, fabulous.
[1:06] KT: Suze's second favorite was sumo wrestling. Everyone, she became hooked.
[1:11] KT: She's a sport buff and she became hooked on sumo wrestling.
[1:15] KT: She said, KT, take me to the match next year
[1:18] KT: in Tokyo. I wanna sit there right at ringside. I said, No,
[1:22] KT: you don't. If they fall off, they crush you.
[1:26] Suze: But seriously, we could not have had a better time
[1:31] Suze: if we tried.
[1:32] KT: And KT's favorite was the Benesse House which is on Nyoshima Island.
[1:38] KT: It's an art museum designed by the great architect Ando. Unbelievable. So... the best.
[1:46] Suze: There was nothing that we didn't like about that trip.
[1:53] Suze: So, we're going back again next year in May with
[1:57] Suze: Keith and Noriko to do the same things kind of
[2:01] Suze: that we did, but to go to the sumo championship matches. Oh,
[2:06] Suze: I'm so excited, but anyway, we're back. This is the
[2:11] Suze: Ask KT and Suze Anything edition. We have thousands of
[2:15] Suze: emails that came in while we were gone.
[2:18] Suze: So I hope you didn't miss us too much. I
[2:20] Suze: think we only needed to do one best of, but
[2:23] Suze: if you have a question, please send it into our
[2:27] Suze: new email address which is podcast@askSuze.com. If you've been using
[2:33] Suze: the older email address, it will still get to us,
[2:38] Suze: but the one I want you to start using is podcast@
[2:42] Suze: Ask Suze S U Z E.com.
[2:45] Suze: That will help a lot against all kinds of things
[2:49] Suze: known as scammers and people answering you that are not me.
[2:53] Suze: All right. Therefore, that's what I want you to do.
[2:57] Suze: But KT, what do you have to start?
[3:01] KT: My first question is from Trudell.
[3:04] KT: Hi, Suze and KT, thanks for taking us along to Japan.
[3:09] Suze: What she means by that, everybody, is that if you
[3:12] Suze: go to the Women and Money community app, if you
[3:15] Suze: don't have it, you can download it on Google Play
[3:18] Suze: or Apple Apps. It's free, obviously, and on there I
[3:21] Suze: posted some of the pictures that we took while we
[3:26] Suze: were in Japan with Keith and Noriko, as well as
[3:29] Suze: the sumo wrestlers that I was with.
[3:32] Suze: I stood right in the middle of two of them.
[3:34] Suze: Oh my God, they're huge. Anyway, go there and you'll
[3:38] Suze: see them. OK, go on.
[3:39] KT: OK, if I can manage my money well, maybe I
[3:43] KT: can go there someday too.
[3:46] KT: I will be needing the income from my 401(k) within
[3:49] KT: five years. When Suze says money needed within five years
[3:54] KT: doesn't belong in the stock market, does that mean that
[3:58] KT: money I have in a 401k mutual fund, that have
[4:03] KT: underlying funds and stocks should be moved to money market
[4:08] KT: or stable value funds now? I am so grateful for
[4:12] KT: your podcast. Thank you.
[4:14] Suze: So Trudell, it's very difficult for me to answer that
[4:18] Suze: question because I really don't know what else you have
[4:21] Suze: and how much of the income that you are going
[4:25] Suze: to need to live on will come from your 401(k).
[4:29] Suze: So this is what you need to do. This is
[4:31] Suze: kind of a rule of thumb. Add up all your expenses.
[4:35] Suze: What does it actually cost you to live every month?
[4:38] Suze: Escalate that by a few thousand dollars every year just so
[4:42] Suze: in case inflation hits, you have more than enough money.
[4:45] Suze: Where is the income going to come from to cover
[4:50] Suze: those expenses? How much will Social Security cover? How much
[4:55] Suze: will a pension cover if you're going to get one?
[4:58] Suze: How much is generated in dividends and or interest on
[5:02] Suze: the money?
[5:02] Suze: In the 401(k), so if you left everything invested in
[5:07] Suze: your 401(k) and let's just say it was in dividend
[5:10] Suze: stocks and those dividends pay you enough income plus everything
[5:14] Suze: else to cover your expenses, you're OK. However, if you
[5:20] Suze: need 100% of the money that is in your 401(k)
[5:26] Suze: to generate the interest that you need to live on,
[5:31] Suze: as well as an emergency fund. So if you have
[5:35] Suze: money in the 401(k), you have no other money at all,
[5:40] Suze: and you don't have an emergency fund, then you need
[5:43] Suze: at least 3 to 5 years of your must pay
[5:46] Suze: expenses liquid, meaning in a stable fund within your 401(k),
[5:52] Suze: so that if you needed a larger sum of money
[5:55] Suze: you could get it without having to sell
[5:57] Suze: stocks or ETFs. So that's kind of the formula. So
[6:03] Suze: I can't tell you what you should do, but those
[6:05] Suze: are some guidelines that you should follow. Next question, KT.
[6:09] KT: OK, this is from Alicia. This is a good one, Suze,
[6:12] KT: because I, I understand her position. She said, Dear Suze...
[6:16] Suze: Does that mean you don't understand many of these people's positions?
[6:19] KT: Yeah.
[6:21] KT: Dear Suze...
[6:24] KT: I have been a dedicated listener for many years and
[6:27] KT: your voice was the one in my head that pushed
[6:31] KT: me to build the emergency fund that just saved my life.
[6:34] Suze: You know what I thought she was gonna say, and
[6:36] Suze: your voice was the one that pushed me over the edge.
[6:39] KT: I'm 59, living in a New York beach townhouse that
[6:43] KT: I love. I have $1 million net worth. Uh, she
[6:48] KT: has $400,000 in accounts and $600,000 in home equity, Suze,
[6:52] KT: just to give you a perspective, and she said, I
[6:54] KT: have zero debt other than my $320,000 mortgage.
[6:59] KT: I own my car outright. I don't carry any credit card,
[7:03] KT: but last year I was laid off for 6 months.
[7:08] KT: I used $60,000 of my $100,000 emergency fund to survive.
[7:13] KT: Your must have documents and advice were my lifeline. I'm
[7:17] KT: now in a new commission only role, and for the
[7:20] KT: next
[7:21] KT: two months I'm not quite making my nut of $4,000
[7:25] KT: a month for mortgage and taxes. Friends are telling me
[7:29] KT: I should sell, move somewhere cheap, and pay cash for
[7:33] KT: a house, but Suze, I don't want to. My home
[7:37] KT: is my office, my sanctuary, and my highest yielding asset.
[7:42] KT: If I rented elsewhere I'd pay the same 4,000 without
[7:46] KT: gaining any equity. I don't spend on clothes or vacations.
[7:50] KT: My only extravagance is self-care and my 10 month old
[7:53] KT: rescue kitty Salem. I'm betting on myself to turn this
[7:58] KT: job into a W-2 salary by June. My question to you:
[8:03] KT: Am I being standoffish with my money by refusing to sell,
[8:08] KT: or is it a sound move to protect my joy
[8:12] KT: and my equity while I bridge this gap?
[8:16] KT: Yeah, great question.
[8:19] Suze: How old KT?
[8:19] KT: She's um 59.
[8:23] Suze: So she still has a number of years. So here's what...
[8:26] KT: But can I just say something?
[8:27] Suze: No.
[8:28] Suze: Go on. I'm joking. Go on.
[8:30] KT: She sounds very adamant that she can turn this into
[8:34] KT: a W-2 situation. She's in a commission-only job right now.
[8:39] KT: What do you think?
[8:42] Suze: That's what you wanted to say.
[8:43] KT: Yeah, I, I love that she's determined. She's very, you know,
[8:47] KT: she's hell bent on not having her...
[8:50] Suze: What would you do?
[8:51] KT: Absolutely stick to my plan. She has a deadline. Her
[8:55] KT: deadline said by June she wants to turn things around.
[8:59] KT: So what do you think?
[9:00] Suze: So here's what I would say to you. June is
[9:02] Suze: just a few days away, which is not very long.
[9:06] Suze: All right. Number one. Number two:
[9:09] Suze: You know the truth of your situation. You know things
[9:14] Suze: can happen, and the truth of the matter is, you
[9:17] Suze: have a plan that you're gonna be able to turn
[9:19] Suze: this around, but also plans can go the wrong way,
[9:24] Suze: meaning you could be in a car accident, you can
[9:28] Suze: get sick, things can happen that prevent you from working.
[9:33] Suze: And you're having a hard time right now while you're working,
[9:38] Suze: making your bills. That is reality, not what you think
[9:42] Suze: is going to happen, not what you want to happen,
[9:44] Suze: but that is the reality right now.
[9:48] Suze: Obviously, you have a home that's worth approximately $920,000 you
[9:54] Suze: have $600,000 equity in it, so that meant that's the
[9:57] Suze: $320,000 of your mortgage. Now, I don't know what your
[10:01] Suze: mortgage payments are.
[10:03] Suze: And does it make sense for you to refinance? I
[10:06] Suze: don't know what your original mortgage rate was when you
[10:09] Suze: first got this, but is it possible that you could
[10:12] Suze: refinance this house, that $320,000 and go out longer in
[10:18] Suze: terms to reduce your monthly mortgage payment, if this is
[10:22] Suze: where you want to stay. That's one choice for you.
[10:26] Suze: Your second choice is getting a home equity line of
[10:30] Suze: credit just in case you need more time. Now, the
[10:35] Suze: best place for you to do so, seriously, is to
[10:38] Suze: go to myalliant.com and look into getting their home equity
[10:43] Suze: line of credit. Now that home
[10:46] Suze: equity line of credit is only offered currently in 28 states.
[10:51] Suze: You happen to be one of the lucky ones because
[10:54] Suze: it is offered in New York and there is no
[10:57] Suze: better home equity line of credit currently on the market
[11:01] Suze: than that one. Your first 6 months will only be
[11:03] Suze: at 3.99%.
[11:06] Suze: And after that it can be as low as 6.75%,
[11:09] Suze: but it's 0 plus prime and nobody usually offers that.
[11:14] Suze: So go to my alliant.com and check that out. Third,
[11:20] Suze: you obviously could sell, take the equity that you have
[11:23] Suze: in your house and
[11:24] Suze: maybe buy something outright that's little and you can afford,
[11:27] Suze: but you're not ready for that right now. What you
[11:30] Suze: have to understand is you have options, so take advantage
[11:34] Suze: of which option makes the most sense to you. Personally,
[11:38] Suze: if I were you, I would most likely do the
[11:41] Suze: home equity line of credit.
[11:42] Suze: But check it out, see what the rates are, and
[11:46] Suze: make that decision, but don't let this go on too long.
[11:52] Suze: If you find that in June, in January, and sometime
[11:56] Suze: next year, you're still in the same situation,
[11:59] Suze: then girlfriend, what you really have to do is sell
[12:04] Suze: and change your situation. All right, KT next.
[12:07] KT: All right, from Lisa, Hi Suze and KT, your podcast
[12:11] KT: is my favorite and I never miss an episode. Thank
[12:15] KT: you so much for helping us all get smarter about finances.
[12:20] KT: I'm looking for some guidance as my parents are divorced
[12:24] KT: and are both aging and both have separate houses in
[12:28] KT: different states. My mom is in Florida and has put
[12:31] KT: her house in a Lady Bird trust for me. It's my
[12:35] KT: understanding that that allows her and my stepdad to live
[12:40] KT: in the house while alive, but then at their death
[12:43] KT: the house transfers to me.
[12:45] KT: My dad is in New York and not remarried. He
[12:49] KT: sold me his house for $1 so I am listed
[12:54] KT: as a grantee on the deed.
[12:56] Suze: Trouble, KT trouble.
[12:57] KT: Well, hold on then. She's asking, I don't know that
[13:00] KT: this was the correct way to do it. It was
[13:03] KT: not all right. So then she's saying, is it possible
[13:06] KT: to redo something at this point? Then she said, Suze,
[13:09] KT: can you give the best options on both of these?
[13:12] KT: Is a Lady Bird trust legit?
[13:15] Suze: So first of all, it's not a Lady Bird trust KT.
[13:20] Suze: It's known as a Lady Bird deed. It's also known as
[13:25] Suze: an enhanced life estate deed, and they're absolutely, I have
[13:30] Suze: to tell you, legal in Florida. In fact, Florida is
[13:34] Suze: one of the only handful of states really that recognizes
[13:38] Suze: this tool.
[13:39] Suze: And it's all right. It's not as great as a
[13:42] Suze: living revocable trust, so listen to me, everybody. All of
[13:46] Suze: you are so concerned about transferring an asset from maybe
[13:51] Suze: daddy or mommy's name down to your child without probate.
[13:54] Suze: All right, in Florida, a Lady Bird deed will absolutely do that. However,
[14:00] Suze: it's not the only concern that you need
[14:04] Suze: to have the reason a living revocable trust is far
[14:08] Suze: better is because it will accomplish the same thing. It
[14:11] Suze: will avoid probate. However, if Mommy in Florida becomes incapacitated,
[14:18] Suze: they need to sell the house before she's died. A
[14:21] Suze: Lady Bird deed is not going to help them on any level. Why?
[14:26] Suze: Because if Mommy is incapacitated, she's not competent enough to
[14:31] Suze: sign the deed to sell it.
[14:33] Suze: There's no paperwork saying that the daughter can sign it.
[14:38] Suze: So now Mommy's going to have to be declared incompetent,
[14:41] Suze: get a conservatorship for her. Now you have opened up
[14:43] Suze: a big can of worms. If you had simply a
[14:47] Suze: living revocable trust where the house was held in trust
[14:51] Suze: for her benefit while she was alive, your benefit after
[14:54] Suze: she has died, you
[14:56] Suze: avoid probate, but it also will have an incapacity clause
[14:59] Suze: in it that allows you to sign for her when
[15:02] Suze: she cannot sign for herself. So there you go. You
[15:07] Suze: have a choice, but if it's in a Lady Bird deed,
[15:10] Suze: it's fine, not a big deal, except unless your mother
[15:15] Suze: becomes incapacitated. However, Dad's house, this is where we have
[15:20] Suze: a problem because he sold it to you for $1.
[15:26] Suze: That is going to be deemed as a gift because
[15:29] Suze: everybody knows that that was a tool used to get
[15:33] Suze: the house in your name and they'll just void it
[15:37] Suze: so it will be considered a gift to you, which
[15:39] Suze: means you are going to inherit his cough spaces on
[15:45] Suze: the house when he dies. So if he paid $80,000
[15:49] Suze: for the house.
[15:50] Suze: It's now worth $600,000. He dies. Your cost basis is
[15:55] Suze: going to be $80,000. You go to sell it. You,
[16:01] Suze: because you didn't live in the house as your primary residency,
[16:04] Suze: you are going to owe taxes on the difference between
[16:08] Suze: those two amounts, which is $520,000.
[16:15] Suze: If you inherit the house after he died, it's in
[16:20] Suze: his name now. He dies, you inherit it, you get
[16:24] Suze: a step up in cost basis. So then your cost
[16:28] Suze: basis on that house, if it's currently worth $600,000 would
[16:32] Suze: be $600,000. If you turn around and sell it right
[16:37] Suze: away for $600,000 you don't owe any taxes.
[16:43] Suze: So it creates several, several problems for you, seriously. The
[16:48] Suze: next problem it creates is that house is now in
[16:50] Suze: your name.
[16:51] Suze: If you are in a car accident or you do
[16:54] Suze: something and you get sued and for some reason they
[16:57] Suze: take that house away from you, guess what, your father's
[17:01] Suze: going to be out of a house, so you have
[17:04] Suze: to be very careful because now that house is legally
[17:08] Suze: exposed to creditors, a lawsuit, divorce, or anything else that
[17:14] Suze: life's going to throw at you, girlfriend. So the good
[17:18] Suze: news is this.
[17:20] Suze: Likely it can be unwound just so you know, your
[17:25] Suze: father can deed the house back to himself. Then he
[17:30] Suze: has accomplished two really good choices for himself. Number one
[17:35] Suze: is that, and this is what I just told you,
[17:37] Suze: he can create a revocable living trust where he puts
[17:42] Suze: the title of the house into the trust.
[17:46] Suze: Held for his benefit while he was alive, your benefit
[17:51] Suze: when he dies.
[17:53] Suze: Also, if he wants, not as good of an option,
[17:57] Suze: but New York finally, and I think it was in 2024,
[18:01] Suze: they authorized transfer on death deeds. So what he can
[18:06] Suze: do is it works very similar to your mom's Lady Bird deed.
[18:11] Suze: He keeps full control while he's alive.
[18:14] Suze: And the house transfers for you on his death automatically
[18:18] Suze: with the step up in basis. So that's what I
[18:22] Suze: would do if I were you. Bottom line, do the
[18:26] Suze: must-have documents. Go to must-havedocs.com currently for $99 but if
[18:34] Suze: you
[18:35] Suze: wait till June 4th and you tune in to the webinar,
[18:40] Suze: you may find birthday pricing will be there for those
[18:44] Suze: of you who know. So that's June 4th, 6:00 p.m.
[18:48] Suze: Go to Suzeorman.com to register. We almost have 100,000 people
[18:54] Suze: at this point in time.
[18:56] Suze: So, you're going to want to hear a webinar and
[19:00] Suze: information that can actually change your life for the better,
[19:05] Suze: but you can go there and get those documents and
[19:08] Suze: do what I just told you to do, or
[19:11] Suze: Just make sure you have a Lady Bird deed and a
[19:15] Suze: transfer on death deed in New York, worst case scenario
[19:20] Suze: after your father has fixed what he did. All right, KT.
[19:24] KT: OK, next question is from Petra.
[19:27] KT: Suze and KT, thank you so much for everything you do.
[19:31] KT: I am deeply grateful. I would so appreciate your guidance
[19:35] KT: on a decision I'm facing regarding a custodial account I
[19:40] KT: opened for my daughter. She is now 22 years old.
[19:45] KT: In 2018 before discovering your work, I opened a Merrill
[19:49] KT: guided investment account for her with $10,500. Today it has
[19:56] KT: grown to approximately $23,000. The annual program fee is 0.45%,
[20:05] KT: and other fees may apply. Recently, Bank of America rep
[20:09] KT: called and advised us to simply close the custodial account,
[20:14] KT: open a Merrill guided investment account in my daughter's name
[20:19] KT: and transfer the funds as is keeping the existing investments intact. However,
[20:26] KT: I'm wondering if it would be wiser to instead sell
[20:29] KT: the investments, pay the
[20:32] KT: capital gains tax now, they live in Connecticut, Suze, and
[20:36] KT: use a portion of the proceeds to fund her Roth
[20:39] KT: IRA while investing the remainder in her Schwab brokerage account
[20:45] KT: in the stocks and ETFs you and Keith recommend. Now
[20:50] KT: she said a little bit about her daughter.
[20:51] Suze: She's gotta listen to June 4th. June 4th.
[20:55] KT: Don't miss Keith and Suze.
[20:57] Suze: All right, go on.
[20:58] KT: Um, she said, my daughter just graduated from Carnegie Mellon University.
[21:04] KT: They're so proud of her, and now she's going for
[21:06] KT: her master's. So should we follow the bank's advice and
[21:11] KT: transfer the account as is, or would it make more
[21:14] KT: financial sense to sell, pay capital gains tax, and start
[21:19] KT: fresh with the stocks and ETFs you and Keith recommend?
[21:23] KT: Given her limited earned income right now, should we prioritize
[21:28] KT: funding her Roth with some of this money?
[21:31] Suze: Yeah, so the answer to that question is no, don't
[21:35] Suze: listen to the advisor.
[21:38] Suze: Number one, because the truth of the matter is you
[21:42] Suze: can do something without having to pay any fees if
[21:46] Suze: you don't want to and have more control over the money.
[21:50] Suze: But the reason that you do need to change the
[21:53] Suze: account from a UGMA account to her own name is
[21:57] Suze: she is now 22 years of age, so it now
[22:00] Suze: has to be in her individual name. In fact, it
[22:03] Suze: should have been so even starting at least a year ago.
[22:06] Suze: That's number one.
[22:08] Suze: Number two, you have to understand that your daughter is
[22:12] Suze: only 22 years of age, and I have a feeling
[22:15] Suze: that you are still claiming her as a dependent and
[22:19] Suze: supporting her because she's still in school with very limited income. However,
[22:25] Suze: the problem here is cause she's 22.
[22:29] Suze: She, if she sells anything and there is a gain
[22:32] Suze: in it, there's something known as a kiddie tax, which
[22:36] Suze: means it's going to be taxed at your tax bracket,
[22:40] Suze: not at hers. So what you would do is an
[22:43] Suze: in-kind distribution to her own account in her own name
[22:49] Suze: at Schwab, and I would have it at Schwab. The
[22:53] Suze: other thing that you can do is this if she
[22:57] Suze: has limited income.
[22:59] Suze: Maybe what you can do is open up an additional
[23:02] Suze: Roth IRA for her.
[23:05] Suze: And then simply fund it with some money from you
[23:09] Suze: or from her, whatever she's earned up to the point
[23:12] Suze: of what she's earned. Maximum of $7500 obviously, but if
[23:16] Suze: she only earned $2,000 that's the max. But I would
[23:20] Suze: keep everything in kind for her right now until she
[23:25] Suze: does turn 24.
[23:28] Suze: And then it will no longer be as a kiddie tax,
[23:31] Suze: it will be at her tax bracket, so 24 or older,
[23:35] Suze: and that's when I might start liquidating things and investing
[23:39] Suze: in it that way. But just something to think about,
[23:43] Suze: all right? But I wouldn't be selling it, just thinking
[23:47] Suze: that you're not gonna pay any taxes on it, cause
[23:49] Suze: it's gonna be taxed at your tax bracket. Now, one
[23:51] Suze: last thing, if you don't have a high tax bracket.
[23:55] Suze: And you could afford for her to sell $7,500 or
[24:00] Suze: some amount of money.
[24:02] Suze: And not pay a lot of taxes on it, then
[24:04] Suze: I would do that as well. All right.
[24:06] KT: All right. My next question is from Christine. I love this.
[24:09] KT: This is the kind of question I like. Suze, I'm
[24:12] KT: 73 years old and was gifted an I-bond of $10,000
[24:18] KT: in 2022. I am not sure if I should be
[24:22] KT: doing anything with it or just let it be until
[24:27] KT: I decide to cash it in.
[24:29] KT: Thank you for being my guiding light.
[24:31] Suze: So how old is she?
[24:34] KT: 73.
[24:35] Suze: 73. So here's what I would be doing if I
[24:38] Suze: were you. I don't know when the person who bought
[24:43] Suze: the I-bond bought it.
[24:45] Suze: They gifted it to you in 2022, but did they
[24:49] Suze: buy it in 2021? In 2020, if they did, and
[24:55] Suze: you should ask them, you are now past the five
[24:58] Suze: years that you could get out of this bond without
[25:02] Suze: any penalties whatsoever.
[25:04] Suze: And the penalty isn't that much, it's just a 3
[25:07] Suze: month interest penalty. You probably have approximately $12,500 in there
[25:13] Suze: right now, if you've been in there since 2022.
[25:18] Suze: However, interest rates in treasuries right now are far higher
[25:24] Suze: than the interest rate that I-bonds are paying. So if
[25:29] Suze: you're not in a very high tax bracket, and really
[25:33] Suze: you're only going to owe income tax on approximately $2,000
[25:37] Suze: or $3000 at most, and once you hit the 5
[25:42] Suze: year period.
[25:44] Suze: I would then come out of that bond seriously, pay
[25:48] Suze: the taxes, and go into a treasury for a higher
[25:52] Suze: interest rate. I can tell you, everybody, that I myself
[25:56] Suze: yesterday put quite a bit of money into a 30
[26:00] Suze: year Treasury bond and got 5.05% for it. I think
[26:06] Suze: that's a great rate. Now job, Susie. Well, you heard
[26:09] Suze: me doing that, OK. I knew she did it right. So,
[26:12] Suze: and the
[26:13] Suze: reason that I did it was just to keep it
[26:16] Suze: safe and sound, not if interest rates go down, I'll
[26:19] Suze: make money. I like the 5% rate, and I took
[26:23] Suze: money that was in a Treasury money market account at 3.5%.
[26:29] Suze: And I decided, you know what, I don't need that
[26:31] Suze: much liquid money. Why not tie up some at a
[26:34] Suze: good rate? Why not do it? And if interest rates
[26:37] Suze: do go down, all right, then we'll make some money there.
[26:40] Suze: So that's what I would be doing if I were you.
[26:43] Suze: So check out the bond was purchased.
[26:47] Suze: And if it was purchased in 2022, you only probably
[26:51] Suze: have another year or so till you're out of the
[26:55] Suze: five-year penalty, but also you can check the three-month interest
[26:59] Suze: penalty and if it's only $75 or $100.
[27:02] Suze: or something like that, you might think about doing it.
[27:04] Suze: All right, KT next.
[27:06] KT: OK, next one is from Daniel. Hi, Suze and KT.
[27:10] KT: I just turned 29 and have a public accounting job
[27:14] KT: making around $93,000. My mortgage is around $1,300 and I
[27:20] KT: have a $450 car payment. I have about $100,000 saved
[27:26] KT: in my 401(k), about $50,000 in a brokerage account.
[27:31] KT: My issue is that I have about $15,000 in credit
[27:36] KT: card debt that I really want to get rid of. Suze,
[27:40] KT: would you advise I withdraw some from my investments to
[27:43] KT: wipe this debt out and start fresh? I appreciate your input.
[27:48] Suze: Well, I don't know what investments you have, Daniel. First
[27:52] Suze: of all, at 29, you are doing fabulous, fabulous. Not
[27:57] Suze: sure why you have $15,000 of credit card debt.
[28:00] Suze: But I personally don't care, right? If, however, you have
[28:04] Suze: a high FICO score, you should check it out. Do
[28:09] Suze: you or don't you, like in the 700 area, whatever
[28:12] Suze: it may be, check to see if you are paying
[28:15] Suze: currently a high interest rate on that $15,000 of
[28:20] Suze: credit card debt, could you do a balance transfer to
[28:23] Suze: a 0% rate card for like 21 months, then you're
[28:28] Suze: not paying any interest on that money and then you
[28:31] Suze: could dedicate just $1,000 a month towards that $15,000 and
[28:37] Suze: I think you'll find you have that $1,000 a month
[28:41] Suze: and therefore in a year and a half, while it's
[28:44] Suze: still under the 0% interest rate window.
[28:48] Suze: You will get rid of that debt. I would not
[28:51] Suze: be liquidating money in my brokerage account unless I had
[28:57] Suze: a loss on one of my investments there that I
[29:01] Suze: could then liquidate, take up to $3,000 off my taxes
[29:05] Suze: if I didn't have anything to offset it with in
[29:07] Suze: terms of a gain that I had.
[29:09] Suze: And use that money to get out of debt. However,
[29:13] Suze: markets still might be pretty good this year, although August,
[29:16] Suze: in my opinion, may be a rough month. Remember I
[29:19] Suze: said that to you, everybody, August, beginning of September, um,
[29:24] Suze: so up to you. But the other thing is, besides
[29:29] Suze: just having money in a brokerage account.
[29:32] Suze: And it's funny because KT just wrote me a little note.
[29:36] Suze: She just put it in front of me and said,
[29:38] Suze: What about a Roth? What about a Roth? KT's so good.
[29:42] Suze: Dinga dinga dinga dinga dinga. Japan was really good for you,
[29:48] Suze: really good for you. The other thing that you are missing, however.
[29:53] Suze: Is that you say that you have 100,000 saved in
[29:56] Suze: my 401(k). Why don't you have any money in a
[29:59] Suze: Roth 401(k)? All new contributions should be going to a
[30:04] Suze: Roth 401(k) number one, number two, you're only making 93,000
[30:10] Suze: a year, which means you qualify for a Roth IRA
[30:15] Suze: as well, so you should be fully funding your Roth IRA.
[30:20] Suze: $7,500 and I'm telling you in the long run that's
[30:24] Suze: far smarter than having $100,000 in a brokerage account. Remember,
[30:29] Suze: any money that you put in a Roth IRA, your
[30:33] Suze: original contributions you can take out any time you want
[30:36] Suze: without taxes or penalties regardless of age or how long
[30:39] Suze: it's been in there, so there are no benefits on
[30:42] Suze: any level of an investment account over a Roth retirement account.
[30:48] Suze: If you ask me, but you are doing fabulous. Give
[30:51] Suze: me one more, KT.
[30:53] KT: OK, this is from Christine, and she said, thank you
[30:56] KT: for the wonderful advice in your recent webinar. So Christine
[31:01] KT: obviously heard webinar Part I.
[31:03] Suze: And by the way, before you go on, all of
[31:07] Suze: you can go on to youtube.com/Suze Orman. Look for the
[31:13] Suze: five things you can do with money.
[31:15] Suze: That title somewhere there. And that's where we recapped and
[31:20] Suze: cut down the webinar that was live on April 23rd.
[31:26] Suze: To like 30 minutes so you can see the highlights
[31:29] Suze: of it, but I just have to say this, that
[31:32] Suze: was more about personal finance. Part II, you cannot miss.
[31:38] Suze: It is all about individual stocks, ETFs. Fitz is going
[31:43] Suze: to introduce his ETF on that day and tell you
[31:48] Suze: all about it. This is something that has been worked
[31:50] Suze: on by him for over two
[31:52] Suze: years now you've heard about it for two years you're
[31:55] Suze: gonna be able to really hear about it on June 4th.
[32:00] Suze: If you weren't already registered for the first webinar, please
[32:04] Suze: go to Suze Orman.com and register for the second one.
[32:09] Suze: This is a webinar you do not want to miss,
[32:12] Suze: and I'm just giving you a little highlight right now
[32:14] Suze: at the end of the webinar, and you need to
[32:17] Suze: stay all the way through.
[32:19] Suze: You will have birthday pricing for the ultimate scam protection.
[32:24] Suze: You will have birthday pricing for the must-have documents and
[32:28] Suze: the other things you have got to tune in for that.
[32:32] Suze: What KT?
[32:33] KT: Suze, tell them whose birthday you're talking about.
[32:36] Suze: Well, the next day it's my seventy-fifth birthday, so that
[32:41] Suze: gives you an idea of what the pricing is going
[32:45] Suze: to be for that day. All right, KT.
[32:48] KT: All right, my last question is from Christine.
[32:51] KT: Again she said thank you for the wonderful advice in
[32:54] KT: the recent webinar part one. During the session you mentioned
[32:58] KT: that choosing target date funds for retirement accounts is a
[33:03] KT: mistake in your opinion. My financial advisor previously suggested a
[33:08] KT: 2035 target
[33:11] KT: plan for my Roth 403B. I am currently 64 years old.
[33:16] KT: I do not plan to retire soon. I hope to
[33:19] KT: delay taking Social Security until I'm 70. Given this context, Susie,
[33:26] KT: what would you suggest instead of a target date fund?
[33:30] Suze: So, here's what all of you need to understand as
[33:33] Suze: to why Suze Orman personally doesn't like the majority of
[33:38] Suze: target date mutual funds that are out there.
[33:42] Suze: A target date mutual fund. Actually, KT, as I'm doing this,
[33:46] Suze: I'm thinking, should I save this for Suze School to
[33:50] Suze: explain to everybody in great detail the difference as to
[33:54] Suze: why I don't like target date mutual funds.
[33:56] KT: Absolutely. All right, do it Sunday.
[33:59] Suze: All right, so therefore, because we're a little bit
[34:00] Suze: over time, so everybody, this Sunday, Suze School is going
[34:05] Suze: to answer Christine's question and get you to understand in
[34:09] Suze: detail why I don't like target date mutual funds, at
[34:14] Suze: least the majority of them. So KT, anything you wanna say?
[34:19] KT: Yes, I do. I wanna wish my baby sister Barbara
[34:22] KT: a very happy birthday yesterday.
[34:26] KT: We love you. I hope you're having a great time.
[34:28] Suze: 65. Can you believe it? Oh my God.
[34:32] KT: Free med, baby.
[34:33] Suze: Medicare, Medicare, yeah, baby, right?
[34:36] KT: We love you, Barb.
[34:38] Suze: We most certainly do, sweetheart, Babsy, Babsy. And so until
[34:43] Suze: Sunday when I'm gonna tell all of you about why
[34:48] Suze: I don't like target date mutual funds, at least the
[34:50] Suze: majority of them. There's only one thing that we want
[34:52] Suze: you to remember when it comes to money, and what
[34:54] Suze: is it, KT?
[34:55] KT: It is people first, then money, then things.
[35:00] Suze: Now you stay safe. Love you. Bye bye
[35:02] KT: Bye bye.

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