EPISODE SUMMARY
Along with her many impressive achievements as a #1 New York Times bestselling author, magazine and online columnist, writer, and motivational speaker, Suze Orman is one of the top experts on personal finance in America. In part one of our interview with Suze, we spoke with her about finances in midlife, a Roth IRA and Roth 401K, insurance versus investment, and how to figure out how much money you’ll need for retirement.
First, we asked Suze about the important steps we need to take with our finances in midlife. She explained to us that the most important thing a midlife woman can do is take control of her money. Many women with male spouses have control of household finances but nothing else, and if their spouse dies, they’re left will all the money and no idea how to handle it. Suze emphasized that women need to take their financial power and become their own financial advisor, because a hired financial advisor won’t care about your money as much as you do. An important aspect of taking control of our money, especially in midlife, is financially planning for retirement. When figuring out the best place to put your money, you first have to ask yourself if the corporation you work for matches your contribution to the company. Your next step is deciding between a traditional 401k or a Roth account instead. When asked to describe the differences between the two, Suze told us that while a traditional 401k or IRA puts money into a retirement account where you work and doesn’t tax you unless you take the money out, a Roth account has you pay taxes on money to later invest it. Suze highly recommended putting your savings in a Roth account because with it, you can have both an employer sponsored plan and an individual Roth account. Within your retirement account, it’s also important to ensure that you diversify to figure out how close you are financially to retiring. Since employer sponsored plans can be diversifying hard, Suze suggested to go with the safest option during a downward market.
When further explaining the Roth IRA and Roth 401k, Suze said that there are different income requirements for a Roth IRA depending on marital status. For single people, you can make a maximum of $139,000 of adjusted gross income and still qualify for a Roth IRA. When employers match your money, it tends to go into a traditional 401k. However, you can have a Roth 401k and still get an employer match. In fact, as of this year, employers are allowed to put matches into a Roth 401k directly. You have to go through your company in order to have a Roth 401k, and while you can transfer money from a traditional 401k to a Roth version, you’ll pay ordinary taxes on any amount you convert. We also spoke to Suze about the different kinds of life insurance, and she explained to use the difference between whole life insurance and term insurance. Whole life insurance is meant for your whole life, while term insurance is good for a specific period of time. Suze recommended that people in their 50s buy ten-year term insurance, and that if they want to switch from whole life insurance to term insurance, they need to make sure they have a term insurance plan in place first. Suze also suggested that if you’re in your 50s, you should pay off the mortgage on your home, so you own it outright by the time you retire.
Long term care insurance is vital, but unfortunately, not everyone has access to it. Long term care insurance was cheap in the late 1990s, but as the years have passed, it has become progressively more expensive. If someone were to consider buying it, they’d first have to ask themselves if they can afford the premium not only at the initial purchase but all the way into their 80s and into nursing homes. The average age someone enters a nursing home is their 80s, and the average stay is 2-3 years with Medicare only paying for three months. Finally, we asked Suze for tips on how to figure out how much money you’ll need to retire. One of the keys to retirement is reducing expensive, and Suze told us that the most important thing is to have an idea of how much retirement will cost you. Along with paying off your mortgage, you should know how much you and your spouse’s social security is worth at different ages, which you can calculate by going onto the social security website. However, while you should know your social security’s worth, you should never touch it before your retirement age. Other factors you should consider when calculating your retirement funds are what the money in your retirement accounts will generate for you, how much any additional income gives you once taxes are taken out, what happens if you lose your spouse and are down to one social security check, and how long your money will last if you choose to go into a nursing home. While it all may seem overwhelming, Suze encouraged us and our listeners to take everything one day at a time and to focus on the most important things, which is the match in your 401k and getting out of debt in your 50s.
Suze Orman
Suze has been called “a force in the world of personal finance” and a “one-woman financial advice power house” by USA today. A #1 New York Times bestselling author, magazine and online columnist, writer/producer, and one of the top motivational speakers in the world today, Orman is undeniably America’s most recognized expert on personal finance.
Orman was the contributing editor to “O” The Oprah Magazine for 16 years, the Costco Connection Magazine for over 18 years, and hosted the award winning Suze Orman Show, which aired every Saturday night on CNBC for 13 years. Over her television career Suze has accomplished that which no other television personality ever has before. Not only is she the single most successful fundraiser in the history of Public Television, but she has also garnered an unprecedented eight Gracie awards, more than anyone in the entire history of this prestigious award. The Gracies recognize the nation’s best radio, television, and cable programming for, by, and about women.
In this episode, we discuss…
- [0:01] Introduction
- [0:42] Guest Introduction
- [5:14] Start of Interview
- [7:10] Important Steps to Take with Your Finances in Midlife
- [11:02] Financial Planning for Retirement
- [17:39] Roth IRA and Roth 401K
- [20:53] Insurance V.S. Investment
- [29:18] Long Term Care Insurance
- [32:28] Knowing How Much Money You’ll Need When You Retire
- [37:51] Closing Thoughts
- [38:51] Outro
Useful Resources:
Suze’s Website I [http://www.suzeorman.com/]
Suze’s Blog I [http://www.suzeorman.com/resources?#blogs]
Suze’s Instagram I [https://www.instagram.com/therealsuzeorman/?hl=en]
Suze’s Twitter I [https://twitter.com/suzeormanshow]
Suze’s YouTube Channel I [https://www.youtube.com/@SuzeOrman/featured]
Women & Money Podcast
Women & Money I [http://www.suzeorman.com/podcast]
Suze’s Books
The Ultimate Retirement Guide for 50+ I [https://www.amazon.com/Ultimate-Retirement-Guide-50-Strategies/dp/140195992X/ref=sr_1_2]
You’ve Earned It, Don’t Lose It I [https://www.amazon.com/gp/product/1557043221/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&tag=httpwwwsuze0d-20&camp=1789&creative=9325&linkCode=as2&creativeASIN=1557043221&linkId=80ac2d25442a0cd347bc56c5d5de739f]
The 9 Steps to Financial Freedom I [https://www.amazon.com/gp/product/030734584X/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&tag=httpwwwsuze0d-20&camp=1789&creative=9325&linkCode=as2&creativeASIN=030734584X&linkId=f2464af3beb28256b602aa698011c06c]
The Adventures of Billy and Penny I [https://www.amazon.com/Adventures-Billy-Penny-Suze-Orman/dp/1401953042/ref=sr_1_1?ie=UTF8&qid=1484667515&sr=8-1&keywords=billy+and+penny]
Suze Orman’s Action Plan I [https://www.amazon.com/gp/product/0812981553/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&tag=httpwwwsuze0d-20&camp=1789&creative=9325&linkCode=as2&creativeASIN=0812981553&linkId=fb5ac6d06f508aca624c5bec502dba97]
Suze Orman’s Financial Guidebook I [https://www.amazon.com/gp/product/0307347303/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&tag=httpwwwsuze0d-20&camp=1789&creative=9325&linkCode=as2&creativeASIN=0307347303&linkId=2c3a8f1792c23207febd81fa3cc17159]
The Courage to be Rich I [https://www.amazon.com/gp/product/1573229067/ref=as_li_qf_sp_asin_il_tl?ie=UTF8&tag=httpwwwsuze0d-20&camp=1789&creative=9325&linkCode=as2&creativeASIN=1573229067&linkId=3b9cee9202d033a0c9604307b559da53]
The Road to Wealth I [https://www.amazon.com/Road-Wealth-Comprehensive-Guide-Money-Everything/dp/1573221813/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=1666220573&sr=8-1]
Can’t Get Enough? Find Us Here!
Website I [http://hotflashescooltopics.com/]
Mail I [[email protected]]
Instagram I [https://www.instagram.com/hotflashesandcooltopics/
Twitter I [https://twitter.com/CoolFlashes
YouTube I [https://www.youtube.com/@HotFlashesCoolTopics]
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