Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Ask KT & Suze Anything: When Is The Right Time To Self Insure?
Thu, 06 Feb 2025
For this Ask KT & Suze Anything episode, Suze answers your questions about withdrawing from an IRA, fear of the markets, renting versus buying and so much more! Jumpstart financial wellness for your employees: https://bit.ly/SecureSave Protect your financial future with the Must Have Docs: https://bit.ly/3Vq1V3GGet your savings going with Alliant Credit Union: https://bit.ly/3rg0YioGet Suze’s special offers for podcast listeners at suzeorman.com/offerJoin 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/3curfMISee omnystudio.com/listener for privacy information.
Chapter 1: What are the current interest rates and CD options?
All right, listen up to me, everybody. Interest rates are not going to last. They're going down, down, down, down, down. So I want you to take advantage of the 12 to 17 month CD at myalliant.com. You have to look at it. So much higher than treasuries. I cannot even tell you. So currently, they are paying for amounts of $1,000 to $74,999, 4.25 APR for $75,000 and up. It is 4.30.
4.25.
4.25.
4.25. We are strong.
We will not apologize We are here, we will thrive Together we will rise With a little bit of faith And everything it takes We are strong, we are wise
February 6, 2025. Welcome, everybody, to the Women in Money podcast, as well as everybody smart enough to listen. Guess who's in the house this morning?
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Chapter 2: Who is joining Suze on this episode?
KT.
Why are you saying it like that?
Because why wouldn't I be? I don't know, actually. It's Thursday.
Well, sometimes it was Sunday.
No, no, no, no, no. KT and Susie are always Thursday. Occasionally, I join you for Susie's school. However, Miss Travis. You're going to change it up?
You asked, and people answered on the email.
They want me all the time.
They want you all the time.
Okay, you got me. You got me all the time. I'll do it Sunday, Thursday, and I won't charge overtime.
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Chapter 3: What is the debate about renting vs buying as a senior?
Yes.
And the cost for moving to a cheaper apartment is high. So folks are stuck, Susie. At the time, my partner and I bought a townhouse in Staten Island, New York in 1984. Are you kidding me?
She's comparing 1984 to now.
Are you just kidding me, Mrs. Staten Island? She's a senior. My rent for one bedroom was about to be raised to $400 in a nearby neighborhood. His in Brooklyn was around the same, maybe $450,000. So we would have wasted so much money in rent over the years. Yes, we've had big surprise maintenance costs, but at least it's not rent going to someone else's property. And this is in bold, everyone.
And we can't be evicted, which is as close as one can get to security, right? You might disagree with that, Susie. And now, so Ms. Staten Island said, you suggest one might save a million dollars in Roth investments over 40 years. That implies one with known home ownership has unsecured money he can afford to lose. A million is barely a backup now for old age. In 40 years, it will be a pittance.
I don't know, a million dollars in 40 years, what would it really be, Susie?
Well, probably at about a 2.5% inflation rate, around $375,000 right around there. Well, there you go. All right, so wait. So let's get realistic here. All of us who are older lived in a very privileged time. We lived in a time when real estate was really so inexpensive, I can't tell you. I remember when this incredibly large house in Berkeley, California was $17,000. You do? Yeah. Wow.
And then the next year, it was $34,000. KT, I bought that huge home there. 97 Tunnel Road for $40,000.
I remember you showed it to me.
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Chapter 4: How to handle disagreements on financial advice?
So I look at everything and I just think, all right, I'd rather come up with whatever it's going to cost to fix everything than have to pay $28,000 a year. Now, my big fear is hurricanes. So it's possible that we could get hit this summer after I've canceled.
It's also possible that for the 20-some-odd years that we have lived there and we've gone through many hurricanes... Can you believe we've lived there? How long have we lived there? 20, 21 years.
Yeah, 21. 21 years. 21, maybe going on 22 years.
Whoa, can you believe it?
Yeah.
Anyway, and we love it there. We've never been hit by a hurricane yet. So if I were to say, okay... Can I go five years maybe and not being hit? And that would be $150,000 savings, which would probably be enough to fix everything. But regardless, it's right for us to self-insure because the truth of the matter is no matter what happened in that condo, we can easily afford to fix it.
And it will not on any level affect us financially in terms of our security or anything. So that's kind of how when you know it's right is if you drop your insurance and this next week or whatever, the place is destroyed. Can you afford to replace it totally on your own? And it's easy to do. All right, Katie.
All right. Next is from Ashley. It's about a Roth. All right. So ready. Everywhere I go, I'm told.
Which, by the way, I have to say something, everybody. So I told KT, today was supposed to be a Roth quizzy just for her.
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Chapter 5: What advice does Suze have for someone in an abusive relationship?
Okay. This is from Beth. I like this one because it's so many of us are in the same boat here. As my dad's power of attorney for finances, I may soon need to decide which investments to redeem so he can receive the care he needs. He is 95 years old.
Yeah.
He has a good daughter. Most of his assets are in mutual funds with only a small portion in an IRA. He does not have long-term care insurance. Number one, I'm guessing, should I use his regular investments first? But how do I decide which ones to use? The best performing, the worst performing. Number two, should I liquidate a sum of money now for easy access, a year's worth, more or less?
So Beth wants to do the right thing and ask you your advice.
You know, KT, if you remember, I think it was last week I answered, you picked a question very similar to this. Similar to that, which had, yeah, numbers, amounts of money.
Yeah.
How come you're picking the same type of question because it's touching your heart?
Yeah, I think because many people that we know are in this situation of taking care of elderly parents, the decisions and just the conversations are so awkward and difficult.
Yeah, but this one isn't about an awkward or difficult one.
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Chapter 6: When is the right time to self-insure your home?
Currently, they have approximately $60,000 in credit card debt. And they owe about $110,000 on their mortgage. Remember, they're only in their 60s. they are about to receive ninety-eight thousand dollars as a tax-free inheritance from the sale of my grandmother's home additionally my father has around two hundred fifty thousand in his 401k.
My question is, should they use the inheritance to pay off their mortgage, or should they use it to pay off their credit card debt? Think about it. $98,000 tax-free. Daddy has $250,000 in a 401k. Should they use the inheritance to pay off their mortgage or their credit card debt?
I'm ready with my answer. What is it? I think they absolutely should pay off the mortgage, but there's going to be some money left over, right?
No, they're not going to have enough, right? Their mortgage is $110,000. They only have $98,000.
Coming in?
Yeah, so they're going to owe still $12,000. Pay off the mortgage. Absolutely, your final answer.
I think so.
You sure? Yeah. Oh, I'm so happy to be able to do this to you. Are you ready?
Yeah.
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