Hosts: Denise Kovach, CFP®, AIF® and Joe Bert, CFP®, AIF®
Well, good morning everybody! Welcome to another edition of On The Money with the Certified Financial Group here on News 96.5 WDBO. Joe Bert and Denise Kovach are here answering your questions at 844-220-0965. Good morning everyone!
Well, not too bad. How are you today?
Good! Good. Just good.
Well, you know, kind of a rainy, gloomy kind of day it looks like, but it’s good.
Well, you know what gloomy days in October mean.
There’s a cold front — there’s a cool front.
Ah, you got it.
Not in Florida.
Well, well, well — no, no, what I hear is a rumor. Next weekend, we could be lows in the 50s, high in the upper 70s during the day.
Really? So that’s great motorcycle riding weather, so I’m very excited about that and I know you are, too, Denise. I’ll take the gloomy weekend if that means beautiful next week, that’s how I’m —
But Joe, why are we near at 9:07 on a Saturday morning?
Denise and I are here to answer any questions that might be on your mind regarding your personal finances. As we say, we go through life trying some of this, trying some of that, and wake up at 55 years old, look across the breakfast table at Loretta and say, Loretta, you know, we’re going to have to retire one day and where’s the money going to come from? The paychecks will stop, we have Social Security, but how do we continue this wonderful lifestyle that we’ve enjoyed for the past 25 years of marriage? Kids are gone, kids are married, and it’s just you and me, honey!
For the next 30 years.
That’s right, so what are we going to do? How do we turn that savings that have in the IRAs, and 401(k)s, and the stuff that we’ve accumulated into a lifetime of continuing income? That’s what Denise and I do, every day, day in and day out, for our many clients doing it for a fee. But on Saturday morning, we are here absolutely free. We’re here to answer any questions that might be on your mind regarding your personal finances, as it might revolve around questions that you have about stocks, and mutual funds, and bonds, and real estate, and long-term healthcare, and IRAs, 401(k)s, annuities, life insurance, reverse mortgages, all that and more. We are here to take your call. The good news for you, the lines are absolutely wide open. So if you want to pick up the phone — you don’t even have to give us your real name; you can pretend you’re Loretta, or Daphne, or Jack, or Sophia, or whatever it might be. Just kind of, you don’t have to use your real name.
I like Sophia.
I love Sophia Lorenz.
Sophia Lorenz. Get me started.
Okay, so we’re here to take those calls, and all you have to do is pick up and dial these magic numbers.
844-220-0965. Very simple: 844-220-0965. And we have the magic of technology in the text form as well, 21232. We ask you to just keep to about 160 characters, that’s all we can see on our screen, so we don’t want your question to get cut off. We know a lot of people give their life story in those text — 160 characters, that’s it, 21232. Denise Kovach is going to kick off today’s conversation: Mistakes or common mistakes with inherited IRA.
Well, yeah. Inherited IRAs are also known as stretch IRAs, and they’re specifically designed for non-spouse beneficiaries; however, on occasion, it would be appropriate for a spouse — okay, if she needed the money prior to being age 59 and a half. However, if inherited IRAs are not set up and funded correctly, there could be irreversible and very costly consequences, and I’m going to talk about a few of them.
So, let’s draw for our listeners that might not be familiar.
So, Mom passed away, Dad’s gone. Mom passed and Mom had an IRA, and now she wants to leave the IRA to Junior. That’s an inherited IRA.
That’s an inherited IRA.
Where are the problems?
One of the problems is incorrect account titling, because they must be set up — believe it or not — with a deceased name on the account title.
Ah, so I can’t put Junior’s name on the account? Or I can put Junior here, but I have to have Mom’s name on it, too.
Well, you can’t — some financial institutions will do that, but that causes confusion, too. Okay, because Junior might forget about it being an inherited IRA, make a contribution to it, and I’m going to talk about that.
So you keep it separate <?>.
So, title it in the name of John Doe (Deceased February 1, 2017) IRA for the Benefit of Jane Doe. That’s how it has to be, unfortunately. Ineligible rollovers: You can’t go to the bank, cash out the IRA, get a check, and take it and roll it into an inherited IRA.
Yeah, so people think, oh, I’ve got that 60-day rule. I’m just going to cash it in 60 days and put it into my IRA.
Oh no! You’ll be putting it into your checking account, because it’s considered a distribution.
No, not good at all, because all of the funds are going to be considered withdrawn and very taxable. You can’t contribute to it. So, back to the titling.
If you forget that that’s a beneficiary IRA or an inherited IRA and you contribute to it, well, all of it’s going to be taxable. When you need to take your mandatory distributions, they must begin by December 31st of the year after death. They’re going to be typically based on your life expectancy. That’s if you were the named beneficiary or the trust that was named beneficiary saw through to you. Those are a few things that you really have to look at, and there’s more.
So if you’re not careful, you can blow the whole deal.
Absolutely! And that could be very expensive.
People do it. We see it all the time.
Well, that’s why you need to call us..
You’ve got it!
Alright, Kyle, we’ve got a call here.
<Inaudible> 844-220-0965. If you’ve got a question for the panel, again, 844-220-0965. You can dial us up like Walter in Titusville has this morning. Walter, go ahead. You’re on with the Certified Financial Group here on WDBO.
Good morning, Walter.
Hey, how are you?
How are y’all doing this morning?
Good! What’s up?
Listen, I’ve got a quick question on 401(k). I’m still working and I’m collecting a pension right now, and I’m curious if I should — I’ve got my 401(k) maxed out to what the company matches me.
But I have extra money coming in from a pension, a previous pension, and I don’t — should I put more money in my 401(k) at work or I also have two mutual fund Roth IRAs through T. Rowe Price.
So your question is, you’ve got some extra cash flow that’s just kind of <Inaudible> there, and you want to build up some more. How old are you?
Right, I’m 53.
53, okay, the good news for you, Walter, is you can put $24,000 into your 401(k).
Right? And you’re only putting what the company is matching which is probably, what, 3% of your income, maybe 5%?
It’s 8% on — 50% on the 8%.
<Background Noise> so the 8% of your income is probably not $24,000.
And then what they do now, they froze our pension previously at work. So what they do is they dump — I think it’s like, I want to say it’s like $4,000 a year in the 401 to cushion the frozen pension portion.
Okay, well you are eligible to put $24,000 per year into your 401(k), and that’s what I would do. That’s the target that I would use. What do you think, Denise?
Well, unless Walter — if you have any debt. Do you have any debt?
Just house payment, that’s it.
Okay, okay, just wanted to make sure there. Definitely, I’d take advantage of putting some more funds into your 401(k), like Joe said. You can contribute up to 24,000, so if you’ve got discretionary income, pop that up, definitely.
So I mean, I was just curious about the Roth IRA. I’ve had them since like ’85, and I do monthly deposits in that, but I mean, you know, not near as much as I probably should be doing.
Well, what’s your — are you married?
Okay, what’s your income between you and your wife? Does your wife work outside the home?
No. I’m a little over 100 a year.
Okay. Forget the Roths.
You get no tax deduction, okay? And you can use the Roth with the idea that when you put the money in there, you’re going to get it out tax free, right? I mean, that’s why <Background Noise>. There is no guarantee that the rules in the law will not change. You’re laughing! I’ve been through it, Denise has been through it. We’ve seen tax law changes. One day you think you have this, next day the rules have changed and you thought what you had is not going to be the same.
I’m concerned that somewhere down the road, they’re going to change the rules on Roths. Now, that doesn’t mean that the money coming out will be taxable. But what will happen, I suspect, is they’re going to make it what’s called means testing. So if you’re in a high enough tax bracket, then what you’re after is you want to get the tax deductions. You can either claim tax deductions of $24,000 a year by putting it in your 401(k), and that’s exactly how it is. Now the question is, the allocation on your 401(k). How is the money allocated there, Walter? What are you investing in?
Well, it’s — they have a few funds at work right now. Actually, they’re doing pretty good. I have them written down here. I think it’s turned in like 14%-15% so far this year.
Okay, well you’re —
It’s just a few funds. There’s no stock in the company.
Sure, sure. Well, what you want to look at is if you don’t have the ability to <Inaudible> it into a fund, you have what’s called target-date funds in your plan.
Yes, we do.
That maybe a little bit better approach for you. They’re not as exciting as maybe what you’ve got going on right now in a rising market like we’re having right now, Denise, Right? Everybody’s happy with their market mutual funds.
They’re very, very happy.
But that whirlwind <?> is going to happen, so you may want to consider moving some of your money into the target-date fund, which is geared towards your retirement date.
So that’s a little bit more conservative. It’s kind of a set it and forget it. As you approach that date, it becomes more conservative and it avoids having the bottom fall out when you’re ready to retire.
Another thing to consider, too, is — Walter, I don’t know if you have any emergency fund. Also, if you’ve got extra money coming in, you might want to establish that if you haven’t already, which is typically — You said your wife stays at home?
Okay, so about at a minimum, six months worth of your net expenses.
Oh, okay. Yeah, I don’t have one of those.
You do or do not?
I do not, no.
Well, how much is in your Roths, Walter?
I think right now — I think, I don’t know, there’s a little over 100,000.
Well, there’s your emergency fund. You could always take out from your Roth what you put in without any kind of penalty. I’d go back to putting in the $24,000 in to your 401(k). Next year, as I said, it’s going to go to 24,500. And if you want, you still have time, you can go to HR and say, listen, I want to take out the maximum that I can — It might be your whole paycheck! — between now and the end of the year to get that $24,000 stuffed in there. But you’ll be a happy camper come tax time next year.
Oh, yeah, I wish I could afford that.
Well, if you have money around, use that money that you’re bringing home. If you have money sitting in a checking account or savings account, use that money instead of what you’re going to bring home in your paycheck. It’s the same thing. You’re just taking from one bucket and putting into another, but you’re going to get tax deductions.
Right. What I was doing is I was taking my money that I’m getting from a previous employer. They allow me to take my pension early with — I mean, very, very little penalty — and that’s the money that I was using to put in extra to my 401.
Okay, well, once again: Strive to get the maximum that the law will allow you, to put in $24,000, and you’re well on your way.
Alright? Sounds good. Alright, thank you very much.
Thanks for the call.
Yep, thanks so much, Walter. If you would like Walter’s line, it’s 844-220-0965, 844-220-0965. You could take, at 53, when does it go from 18,000 and start increasing, at what age?
50, thank you. I was wondering what that was.
There are some benefits of getting older.
And that’s one of them, absolutely!
Got to focus on that.
As you said that, when you said — oh, yeah, when does it go up from 18? 50! Interestingly enough. There you go.
Interesting, Walter said he’s maxing out his 401(k) and that’s a common thing that people think, I’m maxing out because I’m putting in what the company’s matching.
No, I was in that camp, too.
Right, everybody does that — a lot of people do that.
You want to put in what the law will allow you to get that maximum tax deduction, and as I said, go to 24,500 next year.
Yeah, and <Inaudible>.
It’s one of the reasons we’re on the radio, right?
Sure, that’s why we’re here.
844-220-0965, that’s 844-220-0965. Or you could text us, 21232, that’s 21232. We are playing tomorrow —
— with Joe Bert and Denise Kovach from the Certified Financial Group here on news 96.5 WDBO.
Hello and welcome back, it’s On The Money with the Certified Financial Group here on News 96.5 WDBO. Joe Bert and Denise Kovach, our certified planning professionals at Certified Financial Group and they are here to take your phone calls at 844-220-0965. That’s 844-220-0965. We also have our text machine up and running as well, 21232. That’s 21232. Not only do they come here on the radio each and every Saturday morning at 9:00am to answer your QS on WDBO, another service they offer is the workshop.
We’ve got workshops! Yes we do. In fact, the good news is that this coming Thursday, the lovely Denise Kovach who’s sitting right here to my left, and Nancy Hecht, the lovely Nancy Hecht as well will be doing a Social Security Bootcamp: Planning Strategies. There’s a lot of different things you can do with Social Security, and most people make the wrong choice because they just don’t know. So, Thursday evening from 6:00 to 7:30 in our office in Altamonte Springs, Nancy and Denise will be holding a workshop. It is absolutely free, leave your checkbook at home. We’re going to have some light refreshments, and I guarantee you will get a lot out of it because the wrong decision could cost you tens of thousands of dollars. Spend some time, come on by. All you have to do is go to our website. That’s financialgroup.com, financialgroup.com. Click on the menu — if you’re on your mobile app, click on menu and go to workshops, and you can sign up right there. Or you can call our office right now at 407-869-9800, 407-869-9800, and leave a message on the recorder and we’ll be sure to save you a seat. We hold this in our classroom. It’s got to accommodate about 25 people, nice open area, and nobody’s crammed into a small room. We’ve got some food and refreshments and some great information. Once again, that’s this coming Thursday starting at 6:00 to about 7:30, and you better be there if you want to know about Social Security.
You’ll also learn a little bit about the upcoming COLA, or the cost of living adjustment that <Background Noise>
Big news yesterday!
Big news, why don’t you our listeners about that, Denise?
Well, basically, it’s a 2% increase in the benefits for 2018, which is the largest cost of living adjustment since 2012.
How about that.
So, let’s see what they do with Medicare.
The good news is, you’re going to get a bump in your Social Security. The bad news is, you’re going to get a bump in your Medicare Part B premiums and it’s going to almost eat up everything that they’re going to give you on the other side.
But we don’t know that yet.
Well, I know Medicare is going up, because they did raise it on 70% of the people last year because of the rule that if you’re already getting — yadda, yadda, yadda, but you can expect Medicare will go up. You get to keep a little bit of that 2%, but the entire 2%.
But, that’s just stuff you’re going to cover in the workshop.
I am! But don’t we have a couple more coming up?
We do have a couple more coming up. Let’s talk about healthcare options in retirement. Gary Abley, CPA, Certified Financial Planner professional, will be holding this. This once again ties into those decisions that you have to make about Medicare. What are all these options? When you get to be near the ages of 65, you start getting inundated with all these Medicare options, which plan is best for you. The good news is that Gary is an expert in that area. He can talk about what Medicare Part A is, Part B, Part C, Part D, Part F. All those choices that you have to make. He’s not going to try to sell you anything. He doesn’t do Medicare supplements on this stuff. He wants to give you some good information. Once again, information on that is on our website. That’s financialgroup.com, financialgroup.com. If you’re on the mobile app, click on the menu, go to workshops, and you can make a reservation right there. Or you can go to your phone and call our phone at 407-869-9800 or 1-800-EXECUTE. If there’s no one at the office, you can leave a message on the recorder. It’s absolutely free and you’ll be glad you went, and I’ll see you there.
I can use my phone to call your phone?
How about that, huh?
What a concept!
Yeah, I <Background Noise>
That’s right! Man, I tell you what, technology these days, let me tell you!
Full of surprises.
844-220-0965, 844-220-0965 is the number to dial us up. It’s easy to just call in right now. We’ll get your phone screen during the latest news, weather, and traffic with Dave Wahl at 96.5 WDBO! 9:35, here at News 96.5 WDBO is On The Money with the Certified Financial Group. Joe Bert and Denise Kovach are here live in the studio taking your phone calls at 844-220-0965, 844-220-0965. Joe, what are you doing here in the studio today?
Any questions that might be on your mind regarding your personal finances. As we say, we go through life, try on some of this, try on some of that, and wake up in our 50s to find out we’re dealing with a collection of financial accidents!
So, we’re here as your financial body shop to knock out those dents and creases that you might have in your financial situation, and answer questions that you have about stocks, and bonds, and mutual funds, and real estate, and long-term healthcare, and IRAs, annuities, reverse mortgages, all that is what we are here.
The good news for you, there’s a couple lines open. However, we have Sophia, I see, on line two. Sophia, talk to me —
I was going to say, let me get out the phone number real quick: 844-220-0965, 844-220-0965. And the text number is 21232 and we had a texter text in earlier, but the message had a lot of characters in it and we didn’t get the full message, so we invite them to send their text in again or just give us a phone call.
844-220-0965. Nobody fixes the bumpers of a Roth IRA like Joe Bert. Sophia in Sanford, you are up! Sophia, go ahead. You’re in Certified Financial Group here on WDBO.
Hey, yeah, my last name’s Procrastinator.
And your first name is Sophia, I can tell. You like a sweetheart, Sophia.
What’s on your mind?
Here’s what I want to ask you, real quickly. I was the one that called awhile ago. Should’ve came in 20 years ago, I want people to know that, because I didn’t wake up one day — I wake up every day worried. What I was going to ask you was, I have a mutual fund — I’ve had it for, I don’t know, 25 years, 30 years And you’re right, you said a while ago, things are looking good, and my question in my mind is, what do I do with that? I mean, if it’s hot, do I get rid of it, hang on, and the other part is I don’t know if I can tell you what fund it is, I don’t know if it’s half stock, half bond, I don’t know, you know? I don’t know if I’m allowed–
<Inaudible>. Nobody’s going to go through the phone and tell you you shouldn’t say that. What’s the fund?
Fidelity Puritan fund.
So Denise, how would you– You’ve got a lot of money —
The symbol. I’m very aware of that fund and it is a moderately allocated fund so anywhere between 50% and 70% of the holdings are going to be invested in equities and the remainder will be invested in fixed income and the like so it’s an allocated or moderately allocated fund already. It’s a highly rated fund so it’s a good fund. It’s actually risk tolerance which is moderate then you’re in the right place. If you are aggressive then maybe you need to consider moving some of that into something a little bit different, it could be more conservative, it’s the opposite. So does that answer your question?
Well my second question is– I should have came in and seen you. It’s not the only fund I have but what I’m saying is I’m 66 and I really don’t– you know, I just want to kick back but I’m saying if I come in and you tell me if it’s high right now, sell it, and then you put me in something that’ll give me income, you know what I’m saying?
Here’s what you want to have done and here’s what we do for our clients, so if <Inaudible> here’s what–
My middle initial’s S, okay?
Well call him Mr. Procrastination, Mr. P.
That’s my name!
Here’s what you want to have done. You really want to have a plan done and that’s what Denise and I and the other certified financial planner professionals at CFG do day in and day out. What you want to know is what you need to do now with the assets that you have. Are you still working?
Okay so your income has stopped for all intents and purposes. Are you collecting Social Security?
No, I screwed up on that last year. I called you once before, I thought it was 60s– No, I did have ’em done, I’m sorry.
That’s okay, that’s fine, and that may be a good thing, if you’re able to not need Social Security you’re letting that benefit grow by 8% per year and now you get another 2% kick with what happened last year, or this year on the cost of living. But anyway, here’s what you want to have done. You want to have somebody look at your situation, and everybody is unique with what you spend, with what your lifestyle is, there’s no rights or wrongs, factor in what your current assets are, what your projected income will be from Social Security and if you’re fortunate enough to have to pension of course we factor that in. Any other sources of income that you might have, you have rental properties, and all that kind of stuff and then is there a gap, is there a delta between what you’re going to be bringing in and what you want to spend? If not then you have a surplus and what you want to do is what we do with that surplus and set aside for the future, to when the cost of living increases. If you have a deficit how are you going to pay for it and where’s that money going to come from and what bucket are you going to take it from? Once we do the planning then we know how conservatively you can invest your savings and investments to kind of a high probability of not running out of money by the time you’re 93, and that’s what planning is all about. We charge a fee for that. Right, Denise?
And the fee is based on how much time it takes to do that plan.
Which could be considerable.
Or it could be straightforward, but the thing is is we offer you a no obligation visit. You can come on by. We get to know you, you get to know us, we can answer some very basic questions for you, but generally most people want peace of mind. They want to know at the end of the day that they’re going to be all right, and you’re like 99.9% of the folks running around out there trying some of this, trying some of that, listening to people on the radio on Sunday morning and trying to figure it all out. But it’s like going to the doctor for the first time. You don’t know if you’re in great health or if you need to be taking some kind of vitamins or, heaven forbid, you’re terminal. And we don’t pull any punches; we tell you the good and the bad and what you need to do now, so you’re going to be okay. And our job is to make it work, not to send you out the door and say, man, you’re a basket case, is not going to work. Our job is to show you what it’s going to take to make it work, and that might be working longer, might be spending less, it might be going back to work. You know, there’s all kinds of options and there’s all kinds of different investment options that you have that you haven’t even thought of but it’s what’s in our toolbox, and we can show you how to make it work, so I would suggest, Mr. Procrastinator, that you’ve been thinking about this long enough, pick up the phone on Monday morning, give Denise a call and come on in. We’ll give you a cup of coffee, and you can learn all about us and you can learn about the workshops and we’ll put that pain that you might be dealing with right now, put your head on the pillow at night and be able to sleep soundly.
That sounds really good, and Sophia, definitely you haven’t started your Social Security yet, so as you know or may have heard earlier I am hosting with my colleague Nancy this coming Thursday–
Yeah, it sounds like Thursday night. Yeah.
Social Security boot camp, so that I’ll give you some more information about why it might be advantageous for you not to start Social Security <Inaudible>.
There’s no need to wear the wig if you come in the office.
Ha ha ha!
Can I ask you one thing?
Hello? Oh yeah I wanted to say when I get off I want you to tell me when that workshop is, but you know the thing is I was 99% of the people, you know, if my tooth hurts, you don’t– you go to the dentist and that’s what — I just never thought– Here’s one thing. You ask me how I’m living? Eating savings. You know, as long as I have it, and it’s not fun, I mean, some of my friends say hello you got a little bit of money, you know, what happens when it’s gone?
That’s a scary thought.
It’s scary. Every day it’s scary, so I need to come to see you, I should have came 20 years ago so <Inaudible> listening, think about it.
Well it’s never too late and the good news is you now realize you have a toothache that a dentist can fill and help you with so come on by. At least at a minimum come see Denise on Thursday evening at our office in Altamont Springs, and go to our website, that’s financialgroup.com, click on Workshops. You can make your reservation right there and if I’m still hanging around at 6:00 on Thursday I want to meet you. All right?
So be in, Mr. Procrastinator. Thank you so much for the call. Again, it’s 844-220-0965. Got a text question in here, 21232. Does paying credit cards off and canceling them voluntarily hurt your credit?
That depends. You’re not going to want to — Paying credit cards off and canceling them, it really depends, you need to keep at least one or two or three open with no balances, and pay them off and don’t close the accounts, that’s going to help your credit. But I wouldn’t open an account, pay it off, and cancel it. I don’t know if that’s <Inaudible>
Yeah, there are these algorithms that the credit card companies use and the credit bureaus use in terms of how much credit does she have available to you so the more credit cards you have, that affects it, but the most important thing that affects your score is your payment history.
Of all over and above everything, the thing that really affects your credit score is your timely payments so if you’re making timely payments and you’re paying a credit card off on a regular basis, that’ll help you, and if you have too many credit cards, maybe you want to cancel one or two of them.
Exactly. But leave, you know, two or three open, and–
Pay ’em off every month.
All right. All right, as simple as that! 21232, that’s 21232 for the text question, let’s go to Mary on line one. Mary you’re on with the Certified Financial Group here on WDBO.
Good morning, Mary!
Yes, good morning. So I’m a woman in my 50s and I’ve always worked on my life stage and at this point my husband and I have gotten all three kids through college without loans. We’ve paid off our house <Inaudible>. My situation is though, my mother-in-law who never wanted to work, who’s actually in better health than me, but she’s in her late 70s, she got a divorce in her 40s, never wanted to work, and she got an inheritance and lived off of that, and really it’s gotten to the point where she and her husband are barely getting by. He’s dying of cancer, he’s like 80 and probably in the next year or two unfortunately he will sadly pass. And two years ago apparently she took out her first mortgage. She <Inaudible> paying enough in the family, and I’m kind of trying to understand like okay so she barely ever worked. First of all I’m assuming she would qualify for his Social Security, right, her husband’s?
But other than that how do you help look at — Okay, because I don’t think she even has a reverse mortgage. I’m not sure I think she’s really stuck there, or frankly she’s in this house, it’s old, needs all this work, with the hurricane, needed all this help with getting trees and other stuff taken down, I mean, it’s an expense just staying in this place. I’m trying to figure out like how do we figure out — I mean, she’s literally, she’s like runners that run out of money because she just hasn’t done anything and then again doesn’t have any health needs.
Well Mary, <Inaudible> at the house, the reverse mortgage will have to be repaid. Now when she took out that reverse mortgage did she do it in– I mean, is it being paid to her on a monthly basis? Is it a line of credit? If so, does she use it? Does she have access to it still? Do you know?
I don’t know. And those are things <Inaudible> when something happens but she called us this week and said oh we can’t afford the cable anymore and they’re just literally living basic, basic. So I don’t know. So I guess somehow I just kind of feel like when it happens, but I just feel like it’s a money pit having her stay in this place, and we’re going to have to subsidize her for that.
Well what you have to do is get a handle on the reverse mortgage situation. When she took out the reverse mortgage, what Denise alluded to she had three options. One is to get a lump sum, which is probably the worst thing for people to do because they take the money and they blow it. Okay?
So the second option is to set up what we call a line of credit which means <Inaudible> as you need it and you need some now, you take it out, and then you shut it off and you take it again out as you need it, and the third thing is you get a monthly check, and we don’t know what choices that she’s made in any case she had some debt on that property because she has withdrawn some money. We don’t know how she’s done it but she’s withdrawn some money, so what you need to do is get your hands on the statement and find out how much she owes on the mortgage and what the house is worth and if there’s any equity. And then you make a decision. Do we sell the house? If you sell the house you pay off the reverse mortgage and you move on down the road with whatever equity she has, or you decide you know, there’s not much equity but what are we going to do? Maybe she should stay in this house, and it’s possible she could refinance the reverse mortgage if she took it out years ago. Perhaps the property is increased in value and now there’s more equity that she can draw from it. So you’ve got to get– first place is to get your hands on the statement, don’t you think?
She needs to wrap her hands around it.
And then you make a decision to switch <Inaudible>
Are there other things that she would know? Her husband was in the military so he gets those health benefits or will she get any– now, now, when it qualifies, this is his fourth marriage.
How long has she been married?
They’ve been married for 18 years at least?
I am not an expert in this. The good news is we work with an attorney who is an expert in VA benefits and she <Inaudible> to his stuff, particularly if he’s ill and there’s help that she can be getting, financial aid that she can be getting to help him so why don’t you call Denise on Monday morning and she will give you an attorney’s name and we can direct you to her and you can get that ball rolling, because that may be of help to you and to her in this immediate time.
And is there any other resource, and the reason I’m asking is now I’m still working at 50 but frankly I have some significant health issues and ironically she’s in her 70s and she’s healthy as you can be. But I have some genetic things going on so me having her eventually move in with us is probably not practical because I can’t lift anything, I can’t do anything and it’s like so for her living in this house I can’t be — I don’t know.
You can’t be taking care of her, she’d be taking care of you.
Exactly. I mean, it’s just kind of like it’s just <Inaudible> essentially by age 79 she’s going to need help and it’s like having her move in with us it’s like I can’t help <Inaudible> take care of her. So is there any other resources that you can turn to in the community or other things to kind of — I mean, we’re going to have to help support her some way financially but it can totally drown us trying to support somebody who again just hasn’t chosen to work or save all her life.
I hear you, I feel your pain. I’m sure there are community organizations but you kind of fall in that odd situation that you’re not destitute and so what you have to do is use the resources and assets that you have and this is unfortunately a classic case of somebody that went through life and did absolutely no planning. And now you’re facing reality. So it’s a wake up call for you for you to do some planning to see where you are–
But the thing is I’ve done it all my life, I’ve worked all my life, high school, college, my whole life, raising kids, saving money, paying stuff off, and doing whatever and now to be stuck with someone who like did nothing, it’s like but I definitely think it sounds like I could benefit from still meeting with you guys and getting a plan set up for myself.
There you go.
But I guess as part of that can you figure out — are there ways, for example, with part of that financial planning to say, okay, can I be giving her so much money a year and actually <Inaudible> as my dependent, so I’m getting some kind of break for that?
Yes. We factor that into the planning situation if that’s where you are. So and then in fact I just met with a client this week who’s supporting his sister, who is in an assisted living facility, and he’s giving her $500 a month and we showed him the impact and actually it’s $1,000 a month. We showed him the impact of that on his personal financial situation, and once you see what that is now he has to make some tough decisions. She’s eligible for care or moving in with her daughter, but she doesn’t want to do that. She’d rather still get $1,000 a month from her brother. But it’s draining her brother and he didn’t realize how much he’s drowning until he saw it in black and white. And now it’s a wake up call, but that’s what planning is all about. We get into the nitty gritty and show you what the decisions are and that you’re making or going to make what the impact of that is. So give Denise a call, Mary, that’s what we do day in and day out, we plan to help you.
Mary, we are up against it, so we got to let you go, but go ahead and give Mary the phone number, Denise to your number Monday.
407-869-9800 or email@example.com.
All right, that’s going to do it for this segment but if you want to get your question answered there’s still time at 21232 is the text question, 21232. We have been planning tomorrow with Joe Bert and Denise Kovach, on News 96.5, WDBO.
Well it is the final segment of On the Money with the Certified Financial Group and we’re looking at the clock; we got about a minute and a half left. We went a little long in our last segment so one more time– the workshop information so I can come visit you at your office show with Denise Kovach.
Well, Nancy and I are going to be hosting our Social Security boot camp discussing <Inaudible> planning strategies that’s going to be happening this coming Thursday which is the 19th of October at our offices at 6:00, planning to spend about an hour, hour and a half, we’ll have some light refreshments for you. We have another workshop coming up, hosted by Gary Avely, coming up on November 4, from 9:00 until 11:00. That’s in the morning, it’s about health care options in retirement. So Medicare, part A, B, C, D, and so forth and so on, and then one more on the 11th of November, everything you want to know about mutual funds. Again, hosted by Gary Avely, 11/11 from 9:00 until 11:00. In our office!
<Inaudible> 11/11 at 11:11.
I like that.
On our website, that’s financialgroup.com, click on Workshops and you can make your reservation right there.
Be back here next Saturday 9:00am with the Certified Financial Group
Dictation made on 10/17/2017 5:02 PM EDT.