On the Money Transcript

Hosts:  Nancy Hecht, CFP®, AIF® and Aaron Bert, CFP®, AIF®

Well good Saturday morning to you everybody, it is 6/17/17. You’ve got the experts on your radio today, Aaron Bert, Nancy Hecht, from the Certified Financial Group. It is On The Money, Saturday every Saturday at 9:00am right here on News 96.5 WDBO. How are you guys this morning?

 

We are doing great. How are you doing?

 

Not too bad. What can the audience call you about today?

 

We are here to talk about anything having to do really with your personal finances, usually focusing around retirement. So we can answer questions about retirement, mutual funds, stocks, bonds, real estate, annuities, long-term care, Social Security, real estate, all that and more. And as Joe likes to say when he sits in this chair Monday through Friday, we do this for a fee, but on Saturday morning we are here doing this for free. So we will answer any questions. And fortunately for you, the lines are wide open and they can give us a call at —

 

844-220-0965! 844-220-0965! We also have our text machine up and running as well, 21232. Anything, 401k, 403b, minimum required distribution, all that —

 

<Inaudible>

 

Absolutely! I get to — now that I take some notes and know what everybody is calling about, I can pull out the most common questions we get on the show and we always like to kick it off with a conversation and everybody knows that tomorrow is Father’s Day, and Nancy Hick’s got some information for us. I believe it was the —

 

Financial wisdom <?> we learn from our fathers.

 

Right, so I’ve polled the Facebook world for what kind of advice they got from their dads, and I got a ton of responses. Thank you everybody! So obviously, I can’t share them all, but just to start like with my own family, myself and my siblings, we were all in our early to mid-20s when my dad passed away, which — the point at which you would really want to get the advice, so sadly it wasn’t available to us. My father-in-law, one of his big pieces of advice was don’t buy other people’s dreams which I thought was good advice. A lot of dads told their kids to pay themselves first, which is a great thing. One of my school friends, her dad said save 10%, tithe 10%, budget the rest and live within your means. A lot of don’t spend more than you can afford and pay off your credit cards. One of my childhood friends said my dad taught me that I am my first bill, and then her dad said did I say that?

 

Hahahaha.

 

That was really funny. One of my girlfriends said that she wants something and she would ask her dad how much is it, and his response was always it’s more than you’ve got in your pig. And it taught her that if she has to decide if something was a want or if something was a need. If it was a want, that she should buy it, and if it was a need — then it really wasn’t necessary. And if you don’t have the cash for it you don’t get it.

 

Wait, wait, wait. It was want?

 

If it’s a want, you get it — I mean if it’s a need you get it. If it’s a want you don’t. I’m sorry.

 

Okay.

 

I’m sorry.

 

I’m like wait, wait what?

 

Really.

 

You know what, let me <Inaudible> I’m still trying to re acclimate to the real world after being at the beach.

 

No, no, we just want to make sure we didn’t say something we didn’t really mean.

 

Yeah, well and that’s something I had told my daughter, when you’re shopping you go to the back of the store first, where everything is on sale, and work your way to the front and is it a want or is it a need. And if it’s a need then that’s where you go.

 

Those big fancy displays are in the front of the store for a reason.

 

Right. Always put away a minimum of 5%, preferably 10% from your salary if you can do that. Don’t lend or borrow from family. This girl’s dad was a real stickler about this one, says it always ends up in trouble.

 

Yeah.

 

Yeah.

 

So many things can go sour.

 

Yeah.

 

And you don’t want to do that with family.

 

Yeah, so and another friend said if she wants, even though her parents were financially able to get her whatever she wanted, had also <?> the discussion about a want versus a need and always had — the parents always had veto power over things that were unnecessary.

 

Interesting.

 

Yeah, so there’s a lot of really good advice from people here. Never buy anything you can’t pay for now, live off of a written budget, pay as you go.

 

Yeah, absolutely. Most people don’t physically watch the cash leave their wallet or purses and then watch that wad get smaller, and smaller, and smaller. It’s all virtual. Just swipe a card and it’s easy.

 

Yes, and that’s a problem I have seen with my daughter in forward <?>. For us, we had checking accounts, we had paychecks. She had to — money was real, and now it is as you just said.

 

It’s all virtual.

 

It’s a picture on the screen and doesn’t mean as much.

 

Actually, we get that a lot with new prospects or clients that come into our office when we do personal financial planning with them. One of the things we go through is — it’s not budgeting, but we have this form. We call it the blue form, and it’s a personal expense form that we give to them and we give it to them so we can find out what their lifestyle is, because when we do personal financial planning, we look at money coming in and we look at money going out and that kind of gives us an idea of the money going out. And I can’t tell you the number of times that people have said to us, wow, that was a great exercise, I had no clue where all the money was going.

 

And the big difference in our expense summary is when people think of expenses they think of housing, they think of food, they think of their car maintenance and the utilities, and we have things on there like vacations, pet care, education —

 

For my bond <?>.

 

Yes, every little thing that you’re spending money on over regular periods of time is a two-column form with a lot of spaces.

 

Actually, in the past, we have offered that form out. If anyone is interested in getting that form, you can just drop us an e-mail at plan@financialgroup.com. Just put blue form in the subject line with some contact information so we can either mail you a hard copy or we can e-mail that to you if you’re interested in getting that form so you can go through and maybe get an idea and wrap your head around maybe where your money is going.

 

If you have a question for the panel, the number to dial us up is 844-220-0965. Text machine is up and running as well, 21232. If you have something your father taught you of financial wisdom, I’d like to hear some more of those today. 21232. I saw a stack <?> the other day now that we’re talking about this: College sophomores up until that point have never lived without a check card. Check cards were — came in — became <Inaudible>

 

Right, right.

 

So they were born in a world where check cards always existed. Yeah, I tried to get my daughter to keep some cash in her wallet for emergencies, some stash money. Especially this time of year, a conversation I have with my clients is how much cash do you have in your house, because if you lose power and a store has a generator and you can get there —

 

<Inaudible> Internet or connect to a credit card servers or anything like that.

 

If you have cash you can get stuff.

 

I was having that talk with my wife. The last hurricane, the first hurricane she had ever experienced, said we need to go to the bank and get cash. Said why. Said because if they don’t have power and they’re <Inaudible> generators, you can only buy with cash. And she goes yeah, that makes total sense and something I would have never thought of. Just another one of those things that you take for granted <Inaudible>

 

Water and cash.

 

Yes.

 

Is there anything like a personal budget plan software that you guys like to use or an app or anything like that that you recommend, that you like?

 

<Inaudible>

 

I personally used Quicken software that’s the desktop software on your computer and every day I download all my transactions. I download all my credit cards, I download all my checking, all my investments, my retirement plans, everything, categorize all my expenses. So every day I do that and I see what expenses are — what my expenses are. I do that for a couple of reasons. I do it, number one, to look for fraud, so if anything fishy comes across, I’m often texting my wife: hey honey, did you buy such and such at such and such, and then she’s like are you on Quicken again.

 

Oh yeah.

 

But she hates that I’m looking at that stuff. At the same time — because we have caught a couple of times fraudulent transactions <Inaudible> just because I’m on top of it every day. So I personally use Quicken and then it develops a budget for you. You can see where your money is going.

 

You’re worse than me. I do it about twice a month, the end of the month and the middle of the month. Bills that are due on the 15th and the bills that are due on the 1st.

 

Once you become a victim of identity theft —

 

That’s all it takes, just once.

 

Yeah, well, twice for me. Yeah, you’re on top of it every single day.

 

Wow.

 

I mean it’s just part of my daily routine. When I sit down at my computer at work I start up Quicken, I just run the download and then I start downloading all the other stuff that I do to —

 

<Inaudible> I use it as well and it’s pretty savvy, especially now you can direct connect to the bank and just refresh and just see in real time how much you spend.

 

Yeah.

 

I think a lot of people when they look at that pie <?> at the end and go man, I spent $1,400 on food in the past two months, we can cut that down to 900. There’s something there and that is a key. Now if I go and find the extra $500 and I said okay there’s my savings. What should I do with that? Put it aside? Put it away for retirement? I know CDs and savings accounts don’t return any more.

 

They don’t. However, you have to have an emergency fund, something that we talked about all the time. And it’s a discussion I have with every new client that I’m sitting with is what is your comfort zone for cash on hand. So once you figure out what that is, it doesn’t matter that checking, savings, money market is earning nothing. It’s cash. But if you are consistently having $500 extra, then yes, my first inclination would be to increase what you’re saving pre-tax, increase your payroll deducted retirement account. It’s — you can afford to put a little bit of the net in there but because you’re saving money in taxes as opposed to making after-tax contribution it’s not going to make that much of a difference in your spendable.

 

You can see that savings grow just by taking a pre-tax.

 

Exactly.

 

A lot of people can go on their company’s website and do it.

 

Yes, and you have time on your side because you’re a young guy and that will make a huge difference, even just an extra $50 a month will make a difference.

 

Well Nancy Hick and Aaron Burt are here in the studio, taking your questions you may have at 844-220-0965.

 

<Inaudible> my wife just texted me and said yeah, it’s annoying when I download my transactions every day and text asking her if she’s spending money on stuff.

 

Well, but I do that to my husband.

 

At least she listens.

 

It’s the nature of the beast. I do that to my wife all the time, like when I’ll sit in the computer and saying what did you spend this on, what did you spend this on, and she always has — then she comes in and said what are you looking at. So I think she’s interested in it, but I don’t really know if I’m annoying her with that or not.

 

Yeah, I don’t ask my husband what did you spend blank on. I say did you spend that much money.

 

That’s what I do. I don’t ask what she bought. I just make sure it’s a legitimate transaction.

 

I like to know what we’re spending it on, so if I just see a blanket $60 charge to Walmart, well that could be food, that could have been clothes, that could have been this, so that’s why I always ask. I’m that — I want to know between food, and clothes, and gifts, I want it down to the detail and what the purpose is. Like, no, we’re spending too much on gifts, we’re not doing that.

 

Okay.

 

844-220-0965 is the number to join us on the radio today, Nancy Hick, Aaron Burt, certified financial planners, Certified Financial Group. The text machine is up and running as well, 21232. We do have some text questions in. We’ll get to those on the other side. Right now, it’s time to get to three big things you need to know.

 

Welcome back to On The Money here on News 96.5 WDBO. This is On The Money with the Certified Financial Group. Nancy Hick, Aaron Burt, here in the studio, taking your phone calls at 844-220-0965. We also have the text machine up and running as well, 21232. We are five minutes away from <Inaudible> news, weather, and traffic with Dave Wahl on the News 96.5 newsroom. Back to our questions here on the text line. Alright, Aaron and Nancy, this is a texter writing in. I’m female, single, 61 years old, head of household. Understand you can withdraw money from your employer’s retirement plan to invest elsewhere. Any suggestions?

 

Okay, well my first comment is going to be why. Why you’re going to take pre-tax, tax-deferred dollars out to invest elsewhere. So —

 

Is there anything that an employer that would not be pre-taxed.

 

Yes, some employer plans have Roth contributions. Those after-tax dollars, but that’s money that’s growing tax-deferred and/or tax-free depending on how long it’s been in there, but it’s really a function of how the plan is written and not necessarily the dynamics of the person making the withdrawal. So first you need to find out from your HR department if they allow in-service withdrawals and what is the minimum age for in-service withdrawals before you get into the demographics of being head of household and all that other stuff.

 

We’re assuming she’s still working and trying to take money out of the plan while she’s still employed. Obviously, if she stopped working then she has other options.

 

Well, yes. If you’re no longer employed, then you have the rollover option and then you can pull money out at will depending on what your age is. You’re going to pay taxes and penalties, but —

 

She’s 61, so she’s past the penalty age.

 

Alright, so and most plans that offer in-service withdrawals it’s at 55 or older and it’s a percentage of what you have in there that you can take out. But I just — it doesn’t make sense to me. If it is as stated to invest elsewhere —

 

Right so but one thing to consider too is if you are no longer working and you are considering a rollover, there are some advantages to rolling out of a 401k into an IRA, one being that you can take distributions at will versus in the 401k normally there’s a fee every time you take a distribution and you can’t maybe do monthly income. So if you’re trying to supplement your Social Security — well not Social Security yet, but you want to get a regular check, you normally can’t do that from a 401k.

 

Well and withdrawals have an automatic 20% withholding and this person may not be in the 20% tax bracket.

 

Right, so the other consideration too is that in an IRA you may have better investment options, it may be less expensive for you depending on how expensive your current retirement plan at work it, and there’s a lot of factors that go into trying to decide whether or not it’s a good idea to move from your 401k into an IRA or some other type of investment vehicle.

 

If that’s the type of withdrawal that this person is asking about, <Inaudible> invest elsewhere is to roll the funds over to an IRA so it’s still staying tax qualified. I may not have a problem with that. I’ve had clients that have done that, to be able to divest some of the limited choices they have in their 401k and they have done an in-service withdrawal as a rollover.

 

Got you.

 

But it doesn’t make sense to just take it out <Inaudible> taxes and invest it into a regular brokerage account. There’s no reason to do that.

 

And there’s no major penalty for doing a rollover, right?

 

No. There’s — no. As long as it goes from corporate plan to individual plan and it’s all tax qualified, yeah, non-taxable event.

 

Alright, just like that, thank you so much, texter, for writing in. If you have a text question: 21232. If you like to talk on the phone line the old fashioned way, if you have <?> a follow-up question or the team has a follow-up question for you, it’s real simple to do that too: 844-220-0965. Lou in Auburndale has a question for our panel. We’ll get to that as soon as we get the latest news, weather, and traffic. On the other side, we are planning tomorrow —

 

Today.

 

With Nancy Hick and Aaron Burt from the Certified Financial Group here on WDBO.

 

Welcome back to On The Money here on News 96.5 WDBO with the Certified Financial Group, Aaron Burt, Nancy Hick, live here in the studio taking your phone calls at 844-220-0965. Text machine is up and running as well, 21232. Aaron for those of the new audience that may have joined us during the latest news, weather, and traffic, what can they call you about today?

 

We are here, Nancy and I, to answer anything having to do with your personal finances. We can talk to you about stocks and bonds and mutual funds and real estate and long-term healthcare, Social Security, 401ks, 403bs, IRAs, anything, all that and more. Nancy and I are here to take your calls, and fortunately for you the lines are pretty wide open. We have Louie here that we’re going to talk to in a minute, but we want to get more callers up here lined up so that the next half hour will be pretty entertaining.

 

Absolutely. You can do that by dialing 844-220-0965. And just like that, call us up, we’ll get you screened, we’ll put you in line and just like Lou did, Lou here in Auburndale, you’re on the Certified Financial Group on WDBO.

 

Good morning everybody!

 

Good morning, how are you?

 

Uh, living <?>.

 

Alright, what can we do for you, Lou?

 

Hey! Us too!

 

Yeah! There you go! On 64 <?>. I own my own business. My husband and I have put our house up for sale and when all the dust settles, we should have about $300,000 ahead and we want to take our RMD and travel the United States. I pay <Inaudible> work while we’re on the road <?>, but I’m wondering what to do with all that extra money to maximize our retirement.

 

Okay, so you’re self-employed?

 

Yes, I am.

 

Okay, and is your husband still working or no?

 

No, he’s retired.

 

Okay, so I don’t know if you’re taking advantage of something like a SEP-IRA or something along those lines, which —

 

No, nothing right now.

 

Okay, well, so if you have a SEP-IRA you can set aside 25% of your adjusted gross income for this year is up to $54,000.

 

<Inaudible>

 

So depending on how you fit in those parameters, you may be able to use some of the proceeds from the sale of your home, to fund a retirement account for yourself. If nothing else, you can certainly do a traditional IRA or a solo 401k which would allow you to set aside more for yourself than even the traditional IRA would.

 

What was the IRA you were talking about?

 

A SEP-IRA or you could do a solo 401k or you can do a traditional IRA.

 

Okay.

 

Okay so that would be one use of the proceeds that could help you for your retirement. Being 64, generally I do planning for life expectancy to at least 90, so you have quite a number of years ahead of you and anything that might be excess you’re going to want to look at some type of balanced portfolio of mutual funds, I would say leaning a little bit heavier towards equities for long-term growth. Planning for this type of windfall no matter how big or small it is, chunks of money are different to everybody is one of the types of things we do.

 

Lou, one thing that I’m thinking about is you say you’re going to get in your RV and start driving around the country. What’s you’re plan when you stop driving around the country?

 

Probably I guess long-term it would be maybe a condo.

 

So you’re going to come back and buy another property?

 

Maybe, yeah.

 

Okay, so those are the types of things, really, that go into doing some detailed financial planning. Because obviously if you have some money that you need to set aside for to purchase a property in maybe a year, two years, three years, four years, whatever it might be, that you don’t take a tremendous amount of risk with those dollars so that you have those funds available to you when you come back or wherever you end up planting your roots <?>, and —

 

When you say set aside, how would I set aside — what would I set it — in what? Like my father had American Mutual Funds, and they did very well for him.

 

Right, and that is a very nice fund family, but — and let’s say that you’re in two years going to want to buy a home, a condo or whatever, so that — whatever you might want to set aside to spend on it, $80,000, $100,000, that would be something that’s relatively liquid, so I would look for a two or three-year CD, something that if you’re looking at 24 months or less, you don’t want to actually invest it in a fund such as your father had, so whatever money you want to set aside for the future home, it’s got to be checking, savings, and money market or CD. I had some clients that did what you’re about to embark on doing for — they took five years. They liquidated everything, sold the home, bought the RV, and for five years they traipsed all around the country, went wherever they wanted to, had a wonderful time. But one thing they had done and you may want to consider is they had predetermined where their end point was going to be, and had purchased a small home. The situation that we’re in now is an environment of rising interest rates, and if you’re not going to pay cash for whatever that future home may be, you might want to start thinking about that now and maybe purchase a place before you go and then hit the road knowing comfortably that you have a place to go back to and you’re not going to pay five years worth of inflation and higher interest rates to buy that place.

 

If I went ahead and did that and bought a condo let’s say and my end game was five years of travel like these other people did, what do I do with the condo for the first five years.

 

I would rent it out if it was me, but you can leave it empty and use it as a home base for when you get tired of driving around or you can rent it out and make some supplemental income.

 

There’s nothing wrong with leaving it unoccupied, but as Aaron said, renting it out you’d have to hire a management company because you’re going to be long distance.

 

Right.

 

Lou, is this money coming out of your home same the only savings that you have for retirement or you have other stuff above and beyond this.

 

I have a little bit of savings from my business, not much, but we plan on selling the house, having the RV, and staying local and I was thinking of maybe working another two years here which would net us about another 150,000 maybe. I would love to invite you, Lou, to come in for a complimentary consultation and let’s look at maybe potentially doing some financial planning so you can hit the road with the peace of mind that you have absolutely nothing to worry about and you’ve planned this all out.

 

Great.

 

Okay, you could either go to our website which is financialgroup.com, and click on — if you want to click on my picture and it will take you to our page and you can request a complimentary consultation or you can call our offices Monday through Friday, 8:30am to 5:30pm 407-869-9800.

 

Alright, just like that anybody else that wants to call you up during the week, that’s the best way to do it. Alright Lou, thank you so much for your phone call. If you want Lou’s line, it’s 844-220-0965. We also have the text machine up and running as well, 21232. Let’s go to Liz. Liz has a Social Security disability question. Liz, you’re on WDBO.

 

Hi, good morning!

 

Good morning!

 

Good morning, Liz!

 

I have a question. My husband got hurt on his job and he was on workman’s comp and that has expired, and he is now trying to see — we don’t know if it’s possible if he can apply for disability whether it would be partial disability, short-term, or long-term. He’s also on Social Security now, so he’s 73, so we don’t know where to go from there.

 

Well, you can’t go — Social Security disability will pay you before you start drawing Social Security. Basically, they start paying you your Social Security benefit early, so if he’s already receiving a Social Security benefit, Social Security disability won’t be an option for him, as far as I know.

 

Yes, and that is correct. But you also had mentioned short-term disability or long-term disability. Is that something that he has through his employer as a benefit that you’ve taken advantage of?

 

No, no. I don’t know if they have that, but he had gone in to see the workman’s comp person who is assigned to him, I think. And he — they had told him that workman’s comp is running out right now, so he will have to apply for disability. However, he’s already on Social Security.

 

But, Liz, if you talk to or you have your husband talk to the human resources department of his company, they may have short-term and long-term disability as an employee benefit, and that may be what the workers comp person is talking about in terms of the Social Security.

 

Alright, and that won’t affect his Social Security?

 

No, no.

 

Okay, but that would be through the company.

 

Correct, it’s an employee benefit that some companies offer.

 

Okay.

 

Alright?

 

Alright, thank you!

 

Thank you!

 

Bye Liz <Inaudible> Thanks so much for your call! If you want Liz’s line, it’s 844-220-0965. Aaron Burt and Nancy Hick from the Certified Financial Group are here in the studio for another 14 minutes, taking your phone calls and your text questions at 21232 for the text question. I believe we have some workshops coming up. I wanted to mention those. Nancy Hick’s got the calendar right over there. Great workshops you guys have at Certified Financial Group.

 

The next workshop is Tuesday, July 11, from 6:00 to 8:00 in the evening, hosted by Gary Avelie, and this is healthcare options in retirement on Thursday, July 20, from 6:00 to 7:30. Denise Kovach and myself will be hosting our Social Security boot camp claims strategies. Then we take a little bit of a break and in September, Saturday the 16th of September from 11:00am to 1:00pm, financial basics, lifestyle strategies for success, also hosted by Gary Avelie, and Saturday, October 21, from 9:00 to 11:00 everything you want to know about mutual funds. Again, hosted by Gary Avelie, and if you go to our website, financialgroup.com, you can clock on the workshop tab and you can make a reservation for any of the workshops you wish to attend.

 

It’s free, right?

 

Yes, they’re all free, leave your checkbook at home. Generally there’s some refreshments, light dinner, light lunch, some type of snacks provided, and yes, bring an open mind and a closed checkbook.

 

Got to have some brain food to take in all the information you’re going to get.

 

And the reason we do that is a couple of reasons, the first reason being to provide general information to the public so they can make informed decisions about their retirement and healthcare and Social Security and all these other things that are going on in their lives. The other is to give them a familiarity with us in our office so they can come into our office, see our facilities and use our classroom and just become familiar and more comfortable, because it’s hard making an opportunity, walking in some place just cold if you’ve never been there and you’re not familiar with it.

 

Absolutely. Well, we still have some time to take your phone calls, 844-220-0965. Juliane’s on hold. We’ll get to her right after we get the three big things you need to know. Welcome back. It’s the final segment of On The Money with the Certified Financial Group, Aaron Burt, Nancy Hick, last chance to get your question answered 844-220-0965. Let’s get back to our busy phone lines. Talk to Juliane, first <?> Juliane in Orlando, you’re on WDBO.

 

Hi Juliane!

 

Hi! How are you?

 

Good, how about yourself? What can we do for you?

 

I’m good, thank you. I just sold a property that I had rented for about a year and a half. And I want to know what I can do with the profit I’ve made to hopefully avoid a large tax payment. I would like to buy another property, a condo, but I don’t know if that’s part of what I can do or not.

 

You can do whatever you want with the proceeds. Because it was not your primary residence, whatever profit you made is — net of your total cost basis, all your expenses and stuff, is going to be taxable at capital gains rates which right now is 20%. If we do get tax reform, who knows. It could go down a little bit, but —

 

You’ve already sold this property?

 

Yes.

 

Okay.

 

It just closed yesterday.

 

Because there are things called 1031 exchanges which are a little bit more complex that allow you to roll the proceeds from that into another property without paying the taxes and basically you carry forward the basis into the new property.

 

You may want to think about that after you buy the next property and you want to sell it.

 

Right.

 

I got you. Okay. I haven’t received the funds. Does that matter?

 

No, it doesn’t matter, because the sale’s already done.

 

Yeah, okay.

 

It has to be from point A to point B directly with the 1031 exchange. So —

 

Okay, and I did receive a 1099 from them. Okay well mazeltov on the profit.

 

Okay.

 

Have fun finding your new property.

 

Alright Juliane, thanks so much for the call. If you would like her line, it’s 844-220-0965. Ellen in Del Tona. Ellen, you’re on WDBO.

 

Hi Ellen!

 

Hi can you hear me?

 

Yeah, we can now. How are you doing?

 

Okay. Um my questions was in regards to my parents. They’re in their 80s and they have set up a will with — of which I am the executor. <Inaudible> that even though they have a will it would still have to go through probate.

 

Correct.

 

That is correct. A will says probate me.

 

A will is the probate court’s instructions on how to take care of your parents’ estate.

 

Ellen, one way that you can avoid everything being public and having to go through probate, if they have money say in checking, savings, money market, all they have to do is add an in trust for or payable on death designation to that. Anything that has a beneficiary designation does not go through probate. It passes by title. So what you’ll be left with is personal items, furniture, clothing, jewelry, potentially the home. But —

 

<Inaudible> mostly have <?> a lot of belongings. They don’t have a lot of fluid cash, but they own their home outright, a very nice home, and they filled it with lovely furniture and antiques, jewelry, the like <?> and it’s being willed to myself and my two brothers. I can foresee this being a very tedious process if we have to vacate that home through six months of probate. I don’t anticipate any dispute on the will. That won’t be an issue, but we will still have to maintain the home while it goes through that process.

 

You’re in Velucia County, is that correct?

 

Yes.

 

Okay, so what I would do is go to the clerk of the court’s office and see what might be done to add a beneficiary designation onto the deed of the house so that will pass outside of the will also and thus avoid probate.

 

Alright Ellen, thanks so much for the phone call. We are out of town for this week’s edition of On The Money. We will be back here next Saturday, 9:00 for the Certified Financial Group for Aaron Burt and Nancy Hick. We’ve been planning tomorrow —

 

Today!

 

Stay tuned for latest news, weather, and traffic, right here on News 96.5 WDBO.

 

Dictation made on 6/21/2017 3:18 PM EDT.

Hosts: Special Guest, Jodi Murphy and Joe Bert, CFP®, AIF®

Good morning everybody and welcome to On the Money with the Certified Financial Group here on News 96.5 WDBO.  We are here with Joe Burt and Jodie Murphy, taking your phone calls at 844-220-0965.  Good morning, Joe.
Good morning, Tom.

How are you today?

I’m doing great, how are you?

Trying to enjoy the heat before the rain comes, apparently, this afternoon.

It was a beautiful morning.

Yes, it was very nice.  So hopefully everybody is out on their back deck with their radio on, and we’re going to get them to that retirement finish line safe and sound.  How are we doing that, Joe?

Well, we have a special treat here this morning.  Jodie Murphy, estate planning attorney, is here with me and we’re going to answer your questions — or she will answer your questions about estate planning.  All those things we talked about weekly on the program — folks call in about wills and, what is a trust, what’s a living trust, what’s an irrevocable trust, what’s a healthcare surrogate, what’s this durable power of attorney I’ve been hearing so much about? All those things Jodie deals with day in and day out.  She’s also a specialist in the area of elder care —

That I am.

— and a specialist in VA benefits.  And I’ve learned a lot about VA benefits, how a lot of those VA benefits are being left on the table simply because people aren’t aware of them.  Particularly when — usually the old man, right — is up in years and needs help and care, and doesn’t know those benefits are there and the benefits that the caregiver can have to help care for the old man so to speak.

That’s correct, so lots of things that we can talk about —

That does sound awful, the old man.  But that’s the reality.

It could also be an old woman —

I’m the old man. <Inaudible>

It could be any veteran who served our United States forces and now needs care themselves, or even a surviving spouse of a veteran.  There’s lots of benefits available.  So, we’re here to talk about all that and then the usual stuff that we talked about on a Saturday morning about things to help you plan for your retirement.  Because, as you get closer to those years in which the checkbook stops, you have to start making some decisions.  And unfortunately, as we say they don’t teach you this stuff in school.  So, we go through life trying some of this, trying some of that, going to seminars, reading money magazines, talking to our stock broker or our coworker, and wake up at the age of 55 with a <Inaudible> of financial accidents.  So, we’re here to be the body shop to your financial accidents, fix those up this morning <Inaudible>

I’ve been working on it.

I was going to say, <Inaudible> coming in with some — I mean, you knew Jodie was going to be in, so you had to bring in the good ones.

Well, I was in New York early this week, so I’ve got my A game going here.

Yeah, yeah, yeah.

Anyway, so we’re going to answer your questions that you might have about stocks, bonds, mutual funds, real estate, long-term healthcare, IRAs, annuities, life insurance, reverse mortgages, all that and more.  So, if you have any questions about estate planning, about those wills, trusts, irrevocable trusts, what’s the difference between the irrevocable trust and a living trust, why do I need a healthcare surrogate, why do I need the durable — why do I even need a will? Right?

All great questions <Inaudible>

I’ve got all my stuff in joint accounts, I don’t need a will anymore, right?

Yup, yup, oh sure.

We’re here to take your calls and the good news for you is the line is absolutely wide open.  So, you can be first in line by simply picking up the phone and dialing these magic numbers.

844-220-0965.  844-220-0965.  Wait, there’s more.  We have the text machine up and running as well.  If you’d just like to be one of those young Millennials and text questions in, we’ve got the ability to do that for you.  21232.  <Inaudible> that we get you <Inaudible> keep it to 160 characters because that’s all we can see on our screen.  Again, the text number, 21232.  Well, since we have Jodie in today, let’s just ask her a bunch of questions, right Joe?

Let’s do it.  Come on.

I’m ready.

Alright, Jodie.  I’ll start off this one.  This one always usually gets a phone call with me.  What’s the most common question you’re getting in the past few weeks.

Oh goodness, well there’s tons of questions that I get, but the most common one that I get is how do I protect my loved ones in case something happens to me.  I think especially recently with all the tragedy that we’ve seen around the world, we’re coming up with the anniversary of the Pulse shooting, people are now starting to think about how do I protect myself? How do I protect my loved ones.  And it’s never too early to start.  Start young.  I always recommend that even if you have a young adult child who has turned 18, it’s an appropriate time to start with estate planning.  Make sure you have those disability documents in place.  Make sure you have a way to transfer assets at death. a need there’s a number of different ways to do that.  As Joe mentioned some of them earlier, you can have a will, you can have a trust, you can use beneficiary designations, so sitting down with an elder law or estate planning attorney is a great way to find out what all of those options are.

So, you just brought up the anniversary of the Pulse, which is this week.  And all those young adults, probably many of them had never even thought about estate planning.  Why is it important for somebody age 18, 19, 20, 21, 22 years old — that’s <Inaudible> a kid.  You’re just starting your life, even consider thinking about estate planning.

Well Joe, I think you are aware that we represented several of the families of the victims and one of the most difficult things for us to help them navigate was the legal system.  All of these young adults were facing medical crises for the people who survived and then of course probate for those who did not, and if you do not have a healthcare surrogate in place there is absolutely no one who is authorized to make a medical decision for you once you turn 18.

Okay, so let’s just draw a picture here.

Okay.

I’m 20 years old.  I was shot.  I’m now in the hospital.  What happens?

It depends.  If you’re able to communicate and talk to the doctors, you can consent to your own medical treatment —

I’m in a coma.

If you’re in a coma —

I’m just laying there on the gurney.

Then the law does not say who can make a medical decision for you.  So, in reality the doctors will try their best to work with family members.  But what if those family members are not here locally? What if you have a mom and dad who are divorced and who disagree on what medical treatment should be received.  What if you’re married and your spouse does not agree with what your parents want? If you do not have in writing who you want making a medical decision, it becomes a mess for lack of better words.  And then the doctors don’t know whose direction to follow and will require that a court ordered guardian be assigned and to get a guardian assigned is a very long, lengthy, expensive process.

In the meantime, I’m on the gurney bleeding.

Hopefully not.  Hopefully the doctors have done their —

Sure.

— lifesaving —

Sure.

— emergency procedures.  But that —

But there’s decisions that have to be made.

Absolutely.

Regarding your medical care that, unless somebody’s been appointed and you can’t make them —

Correct.

Then the doctors really have no choice.

Absolutely.

They have to back away and hopefully —

Until the court gets involved.

— the legal system gets involved.  So this is critical.

And as you followed with Terry Schiavo, that was a case here in Florida.  It took 10 years going back and forth until ultimately it was the Florida supreme court in 2004 that made that decision.  It wasn’t a family member or a loved one.  So, it’s really, really important that everybody who has turned 18 takes the time to put in writing who they want to make a medical decision for them.  And not just who can make a decision, who are they authorizing to talk to the doctors, review confidential medical records.  If you don’t authorize them on a HIPAA release, by law, the doctors cannot share medical information with a parent, a sibling, a spouse.

And some folks, unfortunately, think that this is very, very expensive to have done.  And that form is very basic.

It is.

There’s not a lot of time and expense, but it’s something that’s very important and should be done by an attorney.  Why is it important that it should be done by attorney? Why can’t I go online and just fill out the form?

Well, because the law in Florida is always changing.  So, with the healthcare laws, specifically healthcare surrogate laws, we had a change in our Florida statutes last year with the durable power of attorney financial forms.  The last change was in 2011, and online forms are not always current, up to date, or include all of the provisions that need to be included.  Every state law is different.  So, if you get a form that might be valid in California, it may not contain all of the provisions that Florida law requires.

And I would presume that if I came to you and I had this work done and then the law changes, I am in your system and you would automatically let me know that work we did for you a couple years ago, the law has changed and we need to update it so I’m always current.

Absolutely.  That’s crucial —

<Inaudible> yeah.

— I would recommend every three to five years that you review any documents you’ve already executed.

There you go.  Alright, we’ve got a call here.

Yeah, we do but <Inaudible> give out the phone number for anybody who wants to ask Jodie a question or Joe a question, 844-220-0965.  844-220-0965.  And let’s get started with our first caller today and talk to Robert.  He’s got a trust question.  Robert, you’re on with the Certified Financial Group on WDBO.  Good morning.

Good morning, Robert.

Good morning, how you doing this morning?

Good.  Thanks for calling.  How can we help you?

Hi, Robert.

I want to understand the ins and outs of a trust.  If you have money and you want to put it away for your family and you put it in a trust, how does that exactly work? Can they take it out of the trust if they choose to do so <Inaudible>, is it locked in, what’s the benefits and the pros and cons of having a trust for your family?

Well Robert, that is a great question and the answer is all going to depend on what kind of trust you have.  So, there’s two main types of trust.  The first one is a revocable trust.  The second one is an irrevocable trust.  They are very different.  A revocable trust, I always explain, is like a basket.  During your lifetime you put assets into your basket.  The basket has a set of written instructions that says who manages the basket, who can use the things in the basket, what happens if somebody becomes incapacitated, and ultimately at the death of the grantor, what happens to that stuff in the basket.  So, with a revocable trust, it is treated as if it was still your asset.  You can take money in, you can take money out, you can use it, you can change it, you can do whatever you want as long as you are capable.  An irrevocable trust is the exact opposite.  Once you set it up and fund it, it cannot be changed.  Irrevocable trusts are used to protect assets.  There is an element of creditor protection in case you’re in a lawsuit, or if you need to shelter assets to apply for government benefits like Medicaid or Veteran’s benefits.  But again, once you put the money in, it’s almost like you’ve made a gift.  You cannot get it back out yourself.  There might be somebody else who has access, but it’s a basket with iron bars wrapped all around it.  So again, it really depends on what type of trust you’re using as, again, once you have a trust and once you’ve put money into it, the number one benefit of that is anything in your basket, whether it’s wrapped with iron bars or not, will avoid probate.  So, it’s a great way to gather your assets and make sure that you’re not getting a court or judge involved at your death.  Because those things avoid probate.

Another name for the revocable trust — excuse me Robert — is the living trust.

That’s correct.

Now, most people know about revocable versus irrevocable.  So, revocable is living.

Okay.

And while you’re living, you can make the changes because it is revocable.  Once you’re gone, then that revocable often turns into an irrevocable trust.

It can.

If you have a living trust, if you’re being sued, can they take any assets from that trust?

Yes they can.  So, the rule of thumb is if you can get to your assets, so can creditors.  So, if it is just simply a living trust, revocable trust, you’re the trustee, you have the ability to go in and access your money, then so can creditors.  It also counts as your asset for those government benefits like Medicaid or VA.  An irrevocable trust cannot be accessed by creditors.  So, if you are sued and you have an irrevocable trust, it cannot get to that, but neither can you.

I understand, I understand.  Thank you, you answered all my questions.

Okay, well thank you for calling Robert.

Robert, thanks for the call.

Alright Robert, thanks so much.  If you want Robert’s line, it’s 844-220-0965, 844-220-0965.  You’re going to want to get in line because we have a lot of time still left on the show today, but we have to pause and get the three big things you need to know.  But first, Jodie, what’s the number to reach you at during the week?

If you’d like to call and set up a consultation — and those consultations are always complimentary — you can call my office at 407-865-9553.

And as always, Joe, what’s the number to reach the Certified Financial Group?

407-869-9800.  Or better yet, go online at financialgroup.com.  In fact, you can click on estate planning, see the lovely smiling Jodie Murphy and her partner, Michelle Murtlin, and learn a little bit more about their firm.  And you can reach them through that website as well.  It’s financialgroup.com.

We are planning tomorrow —

Today —

With Joe Burt and Jodie Murphy on News 96.5 WDBO.  And welcome back.  This is the second segment of On the Money with the Certified Financial Group here on News 96.5 WDBO’s Ask the Experts weekend.  Joe Burt and Jodie Murphy are here taking your phone calls at 844-220-0965.  844-220-0965.  Lots of great information coming up for you, but coming in up in five minutes we’ll have the latest news, weather, and traffic with Dave Wall in the news 96.5 studio, get the latest look at the road ways and when will it start raining this afternoon.  <Inaudible> severe weather center <Inaudible> all coming up in five minutes here on WDBO.  Let’s get back to the conversation with our phone callers here.  Again, the number to dial in, 844-220-0965.  Mike in Apopka, you’re up next.  Mike, you’re on with the Certified Financial Group on WDBO.

Morning Mike.

Thank you, good morning.  My wife and I are 67.  We have a son that’s 29.  About 10 years ago we set up a separate living trust for each of us that encompassed, included, all of the joint property that we own.  It did not encompass the portfolio that we’ve accumulated together and some stocks that she inherited from her mother.  We have a 29 year old son.  We’re thinking that maybe we should set up a family trust, bring all of this under one umbrella.  Would there be an advantage in doing that?

Mike, that is a fantastic question and again, it all depends on what your assets are.  So, 10 years ago when you and your wife set up those separate trusts, the tax laws were very different.  They changed, obviously.  So, what we’re seeing a lot of are what was previously called an AB trust where a husband would have a trust, a wife would have a trust.  When the first spouse died, they could put the maximum amount that could pass tax free into a separate trust.  And the whole idea of these AB trusts was to double what could pass tax free at death.  Well, because tax laws have changed so much, right now the current federal tax law says that you can pass $5.45M per person, and that is indexed for inflation, and if you’re married you get to have a carryover to your spouse.  So, ultimately under today’s law, you and your wife can pass $10.9M tax free.  So, we’re not seeing these AB trusts being used as much for the tax planning.  Now your question of whether it would be best to consolidate into one family trust is going to depend on are you under that tax limit?  If you are —

Yes we are.

Then there’s a huge benefit to consolidating and that’s the amount of work that has to be done at the death of the first person will be greatly reduced.  So, if you have a family trust, when the first person dies, nothing needs to happen.  There’s no court filing, there’s no paperwork, everything continues on.  And then when the second spouse dies, your trust can be set up to seamlessly transfer things to your son or your beneficiaries without any court involvement.  So, I do recommend that my clients take a look at what they have in place currently, look at your assets, and decide whether it would be worth doing the work now to consolidate to make it easier at death.  It also would make it easier if you and your wife become incapacitated because now somebody can step in and manage everything that you have instead of trying to do things piecemeal.  And I think I heard you say there are some assets that you never put in the trust, some stocks and bonds and things like that.

That’s correct.

The purpose of a trust is, now, not just for the tax advantages, but to avoid probate.  And if you’ve never put those stocks or bonds in the trust, you might still have to go through probate with those assets at death.  So, the <Inaudible> to look at what you have, maybe consolidate into one family trust.  If your wife wants to keep her inheritance separate, she could possibly have a separate trust just for the inheritance, but all family assets can go into one trust and it will make things easier down the road.

Okay.  Wonderful.  You’ve been very helpful, thank you.

Mike, you’re more than welcome to call and schedule a consultation with me.  I’d be happy to review what you have.  Again, the consultation is complimentary, and if you’d like to set one up, you can call our office at 407-865-9553.

Number one more time.

407-865-9553.

Alright, just like that, if you want Jodie Murphy to answer your question on the radio today, the number to dial her up is 844-220-0965.  844-220-0965.  We are planning tomorrow —

Today —

With the Certified Financial Group on WDBO.  And welcome back, it’s the third segment of On the Money with the Certified Financial Group; Joe Burt, Jodie Murphy live here in the studio answering your phone calls at 844-220-0965.  844-220-0965.  Just so the new audience has joined us during the latest news, weather, and traffic wants to refresh everybody, what can they call you about today, Joe?

<Inaudible> I’m here to answer any questions what might be on your mind regarding your personal finances, the decisions you have to make regarding the 401k and IRA, stocks, bonds, mutual funds, real estate, long-term healthcare, reverse mortgages, annuities, all that and more.  That’s what I deal with day in and day out at the Certified Financial Group.  As I like to say, on Monday through Friday we do it for a fee, but on Saturday morning I’m here for free.  And the good news is, I also have with me today estate planning attorney Jodie Murphy, who’s worked with our firm for years, working with our clients, and she’s here to answer questions that you might have about those estate planning documents you’ve heard so much about like a will and what’s a trust, and durable power of attorney, and healthcare surrogate, and a HIPAA release form, and all those things and why they’re important, why they need to get done, and why they need to be done while you’re still capable of doing them because I can tell you I have seen tragedies walk into my office like people that had not done the estate planning and dealing with a nightmare.  The court system trying to get assets passed on, and then the family disputes that it creates, and the hardship it creates, the heartbreak it creates.  And families that just fall apart.  So, while you’re of sound mind and while you’re listening to this show, the good news for you is the lines are absolutely wide open.  So, if you have any questions about estate planning or financial planning, we are here to take them and all you have to do is pick up the phone and dial these magic numbers.

844-220-0965.  844-220-0965.  We had a caller before the news here, and this was for you, Jodie.

Okay.

Her mother was recently widowed — and she did stay on the line.  Vivian, if you’re listening, please call back — mother recently widows and wanted to know what was the easiest way to get one of her children on the deed to her house.

So, a lot of people think oh, I’ll just gift part of my house.  I’ll put them on the quitclaim deed, I’ll pull a deed off the Internet, and <Inaudible> record it.  Well yes, that will put a child on the deed.  But, there could be lots of problems with that.  Number one, you have now just created a penalty if you need to apply for Medicaid benefits For <Inaudible> key benefits.

If you make a gift during the five years leading up to applying for benefits, you will receive a penalty.  So you want to make sure that we’re not doing something that could actually have more harm in the future.  Also there could be doxing <?> and taxes that are due if there’s a mortgage on the property.  So doing a gift through a <Inaudible>, not always recommended.  There is a very specific type of deed called an enhanced life estate deed, also known as a ladybird deed.  That will allow you to retain ownership in the house, you can continue to live there for the rest of your life.  You can sell the house, pledge the house, mortgage the house, but at your best it will transfer to a listed beneficiary.  That beneficiary does not have an ownership interest until you die.  So it doesn’t trigger that gift or transfer penalty or taxes.  So if you’re just looking to pass a house at death to a child or to a loved one without going through probate, an enhanced life estate deed would beautiful good option.

There you go.

Piece of cake, just like that.

Just like that.

If you have a question for Jodie <Inaudible> 844-220-0965.  844-220-0965.  Let’s get back to our phone lines here, we’ve got a couple of callers calling in.  Let’s go to Bill in Merrit Island first, Bill.  You’re on with the Certified Financial Group on WDBO.

Good morning Bill.

Good morning Bill.

Good morning.  I have a revocable <?> trust and I had heard that with that, when you <Inaudible> — you know how when you say property if you’re married, you get 500,000 tax-free or 240 single?

You’re talking about <Inaudible>

Does that preclude that?

Yes.  So if it’s homestead property and it’s a revocable trust that is properly written to own homestead property, it’s treated just as if you owned it.  So you still get the tax exemption, you still get everything that you would have as a married couple.  But you need to make sure that your trust has those provisions in it.  And usually you’re looking for a paragraph that’s titled right to reside.  That’s specifically addressed as your ability to own homestead property in the trust.

Okay, thank you very much.

You’re welcome.

Alright, thank you so much for the call, Bill.  If you want Bill’s line, it’s 844-220-0965.  844-220-0965.  Robert in Orlando has a real estate question.  Robert, go ahead.  You’re on with the Certified Financial Group on WDBO.

Hi, first of all I want to say you guys are doing a great thing here, I really appreciate what you guys are doing for us.

Oh, thank you Robert.

<Inaudible>, how can we help you?

You guys really answer a lot of questions.  I’m just now starting to get into real estate.  Well I have a question for you: If I’m buying real estate, if I want to just buy a regular house, fix it up and rent it out as a regular person, or if I want to rent to section eight, how difficult is it getting section eight, and is it possible to get out of section eight once you have a house that’s in section eight?

Well, section eight is the low income housing, as I’m sure you’re aware maybe our listeners are not.

Okay.

I don’t know what it takes to get out of it.  I think it’s a difficult thing to do because you’ve got that commitment from the government, you’ve gotten a break to be able to do that property.  And to unwind it might be a little bit more complicated.  It’s beyond my pay grade to answer that question for you in detail.  You’ve got some — one thing we can address for you and I know a lot of our listeners like to dabble in real estate.  And we talked about should I do it on my own, should I set up separate LLCs, which is something that you may want to consider.  What’s the benefit of what this gentleman wants to do.  Buy real estate, fix it up, how might you recommend he would do this legally, Jodie?

And that’s exactly what I was going to jump in and suggest is if you’re looking at this as an investment and you’re not going to be living in the house.  You’re either renting it or you’re flipping it, having an LLC will protect your own personal assets in the event that you are sued.  We hear all of the time Florida is one of the most litigious states.  So if you have a tenant that comes in and slips and falls and sues the owner, if you personally are the owner, you’ve now exposed all of your assets to that lawsuit.  Of course, having good insurance is always your first line of defense.  But if you’ve now set up an LLC, think of an LLC like a bubble.  If the only thing inside of that bubble is one property and one bank account for that property, if the lawsuit exceeds the amount of insurance that you have, you’ve now segregated your own personal assets.  So you’ve created a lot of asset protection by having an LLC.  That does have to be registered with the state, you do have to maintain it like a business and pay your annual filing fees.  But it’s a very easy process to do that.

Now what if you’re really going — after this you have 4, 5, 6, 8, 10 houses?  Do you need 10 LLCs?

I do recommend that.  Because again, asset protection.  You don’t want to commingle 10 houses in one bubble.  Now you’re exposing all of your investments.  There is a vehicle in Delaware called the Delaware Series LLC.  It has not been tested by a Florida court, but we do have some clients that choose to use it.  And it services as an umbrella.  So you have the parent umbrella, and that umbrella is what’s responsible for the insurance, the taxes, the maintenance.  Paying the annual filing fee to the state Delaware.  But then underneath the umbrella, you can have 10 different buckets.

It’s like a holding company.

<Inaudible> LLC — exactly.

A holding company does all of the administrative stuff and all of the subsidiaries, if you will, are all of the individual houses that you might have out there.

Correct.  So again, several clients do use that if they have multiple real estate investments, but it has not been tested by a Florida court.  There are about eight different states that have tested and have said that yes, you do maintain asset protection in that structure, but dollar is not one of them yet.

So it’s called a —

Delaware Series LLC.

There you go, alright.

Thank you much.

You’re welcome, thanks for the call, good luck to you.

You’re very welcome.

Alright Robert.  If you want Robert’s line, it’s 844-220-0965.  844-220-0965.  We have a couple of text questions in at 21232, so let’s get to those.  First one, I believe is for Jodie here.  Hi, explain <?> that buying an annuity is a good plan for a senior citizen as an investing tool.  Ah, that’d be for you, Joe.

Well an annuity can be.  An annuity is nothing more than a contract between you and an insurance company to hold your money for a period of time and somewhere down the road to either give you that money back as a lump sum, or to turn it into a stream of income.  And annuities take all different shapes, sizes.  There’s good ones, there’s bad ones, there’s a lot of them in between.  We generally recommend that you stay away from those annuities that are offered through these free lunch and dinner seminars because they’re loaded with fixed fees and expenses and they’re very, very difficult to get out of.  We used some annuities in certain cases and a CD alternative.  Today, you can get five year annuity, about 3.5% guarantee for that five year period on a tax-deferred basis.  But it’s not for everybody, it could and should be perhaps part of a portfolio, but it isn’t an end all and be all.  So an annuity is nothing more than an investment option.  Now, we’ve used annuities —

Yeah.

Even I’ve used annuities in the VA side.

VA and Medicaid.  It can be a great tool to use with the rest of your portfolio if you need to convert an asset that would otherwise be deemed available for Medicaid or VA to an exempt asset.  So you can take money that’s sitting in the bank and invest it in very specific types of annuities with the hopes of qualifying for then Medicaid or VA.  It has to be done as part of an overall strategy.  You should not go out and just start buying an annuity, thinking it will give you VA benefits because most of the annuities out there do not work for VA or Medicaid purposes.  But there are several that are specifically designed for that purpose.

This is critical, because I’ve seen — unfortunately, some unscrupulous things going on in the insurance industry where annuities salesmen would come along and say well just put all of your stuff in here, and boy, you’ll be able to qualify for Medicare and all of these benefits because they won’t see <?> it’ll be in does annuity.  You’re right Jodie, it has to be a specific kind of annuity designed specifically for that, and that’s where you’re the expert.  So annuities can be good and they can also be a problem if you don’t know what you’re doing.

Alright, we’ll get back to the tax machine in just a moment.  First, let’s get back to our phone callers here.  Talk to Tom in Orlando.  Tom, you’re on with the Certified Financial Group on WDBO.

Good morning Tom.

Good morning, got a question.  A <Inaudible> single parent has a joint account <Inaudible> children.  Upon the death of that parent, <Inaudible> issue of that person — the child on the account withdrawing money and closing out the account?

It depends on how the account is set up.  So if it is a joint account with the child being an owner on the account, then no there’s no issue because when one owner dies, the other joint owner still owns the asset.  Whether, we have seen through some of our probate cases that there are ways of setting up accounts where a child is listed only as an authorized user, not as an owner.  The child thinks they’re an owner, they think it’s a joint account, but in reality it’s not.  So it’s important to go back to your bank or financial institution and find out exactly how that account is set up and if the child is indeed an owner on the account.

Okay, thanks so much.

You’re welcome.

Alright, just like that.  Thanks so much for the phone call, Tom.  Tom’s line is 844-220-0965.  Mary in Orlando has a little question for you, Jodie.  Mary, go ahead, you’re on with the Certified Financial Group on WDBO.

Thank you, hello Jodie.

Hi Mary, how are you?

Good, thank you.  We have one child and my question if everything is titled correctly, the IRAs <?>, the brokerage account, TOD to him, and we also have a ladybird trust, do we still need a will?

I do recommend everybody have a will because you don’t have a crystal ball.  We never know what kind of assets we will have at death.  Maybe your death will result in a lawsuit, and now your estate has a claim for medical malpractice or negligence.  And the proceeds or the settlement from the lawsuits go into the estate.  The will then will control the assets of the estate.  Also if you have your child listed as a beneficiary on all of your assets, your bank accounts, your IRAs, things like that, what happens if your child does not survive you?  Where do those assets go?  So having a will can serve as your back-up.  We hope that you don’t need it, and that it’s just there in the what-if situation.  But it is important to have those contingency plans in place.

While we’re on the subject of a will, many times I have seen people misunderstanding what a will is.  They think I’ve done a will, I’m going to <Inaudible> probate.  It’s going to — we’ll really you <Inaudible>

I get that all of the time.

Yes.  I’ve done my will, I’ve done me estate planning, I’m going to avoid probate.  When really a will is nothing more than your instructions to probate court <?>.

That’s correct.  <Inaudible> your one-way ticket to see a judge.  The judge then looks at your will and issues an order naming an executor and allowing assets to be transferred.  Probate is the legal process of transferring title on assets if those assets cannot transfer otherwise.  So again, if there’s a joint owner that survives or a listed a beneficiary that survives, those assets do not go to probate.

So things that go through probate, <Inaudible> the only thing is you go through probate, are those things that are in your name alone.

Correct.

Alright, so if you have jointly owned property as you said earlier, it automatically passes to survivor.  If you’re a single individual, as we set up investment accounts for our clients, we set them up as what’s called TOD or transfer on death.

Right.

That avoids probate.

As long as that person survives you.

That’s correct.

And of course, the IRAs and annuities, and life insurance policies, that beneficiary designation.  And one of the things that we’ve seen a lot is people want to name their trust as the IRA beneficiary.  What’s the pros and cons of that?

So naming a trust can be a great way to make sure that your wishes are honored no matter what, especially is a child doesn’t survive or you have minors involved, grandchildren, great-grandchildren, charities.  So you certainly could name a trust as a beneficiary on any type of asset.  But you want to make sure if it’s a retirement asset, that the trust is set up to be a conduit trust.  Meaning we can look through the trust, determine who the ultimate beneficiaries are, and allow them to stretch out the distributions from that plan over their lifetime.  If it is not set up as a conduit trust, the ultimate beneficiaries will have five years to liquidate the IRA, which would mean taxes and possibly penalties within that five-year period.

That’s why it’s very, very important when that trust is done, that it’s done in the proper way because the beneficiaries will lose the opportunity to use the stretch.  So <Inaudible>, this is why you don’t want to do this online stuff.

Exactly.

Because if you think you’ve done it right and all of the sudden you found out you’ve just created a huge tax mess because trust hasn’t been written right to accomodate being an beneficiary of an IRA.

Right, and if your trust is not written right, then sometimes it’s better just to list your children or the individuals as beneficiaries.

She is Jodie Murphy, an estate planning attorney.  And he is Joe Berg, certified financial planner with the Certified Financial Group giving out a wealth of information for free here on the radio today.  And last segment is coming up in just a moment.  It’s your last chance to get your question answered.  844-220-0965.  844-220-0965.  We are planning tomorrow —

Today.

With the Certified Financial Group on WDBO.

9:56, four minutes to 10:00 here at News 965 WDBO, it is the final segment.  Your last chance to get your question answered with the Certified Financial Group.  Joe Berg, Jodie Murphy live in studio.  So let’s get back to our phone lines.  Ted in Orlando has got a question for Joe.  Ted, go ahead.  You’re on WDBO.

Good morning Ted.

Yeah, hi.  Thank you for taking my call.  I have a question, I have a 401k and I’m matching to a max <?> in the 401k through the employer.  My wife currently, she doesn’t work so we are maxing the Roth of 11,000 for her as well.  The only question I have is can I open an IRA and put another 18,000 <Inaudible> for my wife?

You’ve got your math a little mixed up.  The maximum that you can put into an IRA is $5,500 at the age of 50, okay?

Alright, so I’m doing mine 55 <?> and hers 55, are we doing 11,000?

Okay, good.  And your question is — go ahead.

Now can I — my question is can I do an additional 18,000 in an traditional IRA for her?

No — you’re thinking of what you’re able to put into a 401k or 403b, no you can’t.  You can <Inaudible>

So pretty much the only I can do for her is the 5,500, that’s it?

That’s correct.  Now you said you’re maxing out your 401k, you’re putting in the 18,000 into the 401k?

Yes.

Very, very good.

Well I’m putting a little bit less than 18 because the employer is — can I do 18 plus the employer or <Inaudible>

Oh yeah, yeah.  <Inaudible> you’re under the age of 50?

No, I’m 40 right now.

Yeah, so you’re under the age of 50.  You can put $18,000 of your own money, regardless of what the employer does or does not put in.  That’s what you ought to be striving for, yes.

Okay, so then anything extra then I should just do like a brokerage account or tax <?> brokerages, I can’t save anymore?

Well, there’s no other tax way to go.  You can do a perhaps a deductible IRA for each of you without knowing your tax situation.  Or perhaps the Roth.  But yes, you can do that.  Or a non-deductible IRA is always available to you.  Once again <Inaudible> you wife can’t put in the 18,000 because she’s limited to just an IRA contribution.

Gotcha.

I appreciate the call.

Thanks, Ted.

Alright Ted, thank you so much for dialing us up.  We’re all out of time.  We have one quick question for Jodie on the texting line: What is the name of the deed you transfer upon death for a house?  You weren’t clear on that, he said.

That is called either an enhanced life estate deed, or a ladybird deed.

Gotcha.  Alright, Joe.

We’ve got a workshop coming up July the 11th.  Gary Abely, CPA, CFP is going to be talking about healthcare options in retirement.  Everything you wanted to know about Medicare, what do I need to do, why all of those A, B, C, D, E, F plans, what do I do?  Part A, Part B, what’s deductible, what’s not?  Part W?  Gary is going to handle that.  Go to our website financialgroup.com, that’s financialgroup.com.  Click on workshops, it’s going to be Tuesday, July the 11th attorney offices in Altemonte Springs, 6:00pm to 8:00pm.  You can <Inaudible> some light refreshments and you walk away with some really good information.  So once again, our website.  Financialgroup.com, click on workshops and you can make reservations right there.  There’s no Part W, that was a Joe-ner <?>.

Alright, that’s going to do it, boy did that go by fast.  A lot of information, great information, great call.  Great texts.  You know what, let’s go ahead and do it again next Saturday at 9:00am.

We’ll do it, shall we?

Alright, Florida Homes and Gardens is next here on News 965 WDBO, Ask the Experts weekend.  But first, the latest news, weather, and traffic from Dave Wahl from the News 965 newsroom.

Dictation made on 6/14/2017 2:42 PM EDT.

Hosts: Harry Stadelmayer, CFP®, AIF® and Joe Bert, CFP®, AIF®

Hello everybody and welcome to On the Money with the Certified Financial Group here on News 96.5 WBBO’s Ask the Experts weekend.  We are taking your phone calls at 844-220-0965 with Joe Bert and Harry Stottelmeyer from Certified Financial Group.  Joe, how are you today.

Good morning.

Hello.  What can the audience call you about.

You can call us this morning about anything that’s on your mind regarding your personal finances.  Harry and I are here to answer those questions, kind of clear up that mind fog about those decisions that you might be making or things you may be considering as we work our way into the future and your planning for retirement.  As we say, that we go through life trying some of this, trying some of that, and wake up when we’re 55 years old and find out we haven’t done any planning, and that we have a <Inaudible> financial accidents tucked away, and we’ve got to get it straightened out.  Harry and I are here to answer your questions that you might have about stocks and bonds, and mutual funds, and real estate, and long-term healthcare, and IRAs, annuities, life insurance, reverse mortgages, all that and more.  Monday through Friday at Certified Financial Group we do it for a fee because we are fee only planners.  On Saturday morning we do it for free.  So if you have any questions about your personal finances, anything that might be on your mind, give us a call.  The good news for you is the lines are wide open and you don’t even need to use your name.  You can make up a name like Jack, Daphne, Loretta, or whatever you want.

I just want to know how to refer to you <Inaudible> call you on the air.  You can say number seven.  Okay, number seven in Orlando, yeah, we’ll take that.  844 — oh, go ahead.

The lines are wide open, go ahead.

844-220-0965, 844-220-0965.  We also have the text machine up and running as well, 21232.  That’s 21232.  Keep it to about 160 characters, that’s all we can see on our screen.  I’ve got a question in e-mail the other day, why do you always ask for 160 characters.  Well, that is the average amount of one text for all the phone carriers.  Anything past 160 characters you get charged for two texts.  So our machine only sees one text at a time, which equals 160 characters.  That’s the way our system works, that’s what it is.  So if you’ve got AT&T, Verizon, Sprint, everybody’s covered.

Now we know.

That’s how it works.

Know about that.

But 160 characters, that’s all we can see in the text line.  But well gentlemen, Harry, a lot of people don’t know this about you, but you are a big golf enthusiast.

I am.  I have been.

We’re talking to former past chairman of the Arnold Palmer Invitational.  There was something in the headlines this week that you saw and you let me know, you know what, I have something to say on the radio today.

Well, it’s as many of our listeners know, I’ve been involved with the Arnold Palmer Invitational for over 24 or 25 years.

Started out in the parking lot handing out donuts, ended up running the whole thing.

That’s it.  My good friend obviously has passed.  In the news this week was just a little article about his will being released to the public.  I think it was kind of a shock to me, and I think the take-away from this little conversation is not was it right or wrong, but when folks get into planning, financial planning, estate planning, hopefully all their ducks are in a row.  I was quite shocked to see that Mr. Palmer’s will was released, which kind of shocked me a little bit.  We never talked really financially.  He knew I was a financial planner, but I was a little shocked that his will was released, which becomes public record.

It doesn’t need to be.

And it doesn’t need to be.

That’s the interesting here, who is really do his estate planning.  Somebody of that stature has all of his personal situation, and who he favors, and who got what open to the public and there for scrutiny.  Now look, there’s no rights or wrongs there.

No, not at all.

But particularly somebody like him who was a very private individual, you would think that he would want to keep that stuff confidential.

So the point here is if you’re doing estate planning and you’re looking at the benefits of a will versus maybe a trust, that’s one of them, is that it is kept very, very private —

If you use the trust.

If you use the trust.  That’s correct.  Just an FYI.  We’ll leave that alone.

Interesting.  Yeah, no, that’s one — you would think that.  I was like well, okay, if you’re somebody who’s in the public, or even if you own a small business, you don’t want your employees finding out.  Even if you own a small restaurant on the corner, you don’t want that to get out.  Privacy, trust versus a will.

It’s very easy to do.

Because a will is <Background Noise> people don’t understand this, they think well I’ve done my estate planning, my will, I’m going to avoid probate.  But your will is really the instructions to the probate judge.  It will go through probate, and when it goes through probate, it’s a public record.  So this is what happens.

And when you start looking at the dollar amounts — it’s anticipated there was about 800M of net worth there, another reason to be looking at estate planning because of the taxes and all that that’s involved.  There are many methods of doing it.  So if you’re out looking for estate planning, consider that.

That’s it.

Well, let’s get started with today’s questions on the phone lines.  It’s 844-220-0965, 844-220-0965.  Bob in West Melbourne’s going to kick us off today.  Bob, go ahead, you’re on the Certified Financial Group on WBBO.

Good morning, Bob.

Yeah, good morning.  Thanks for taking my call.

Sure.

The only <Inaudible> I have is my primary residence, okay.  We owe about 128,000 on that.  We wound up with over 30,000 in our personal savings.  I don’t know if I’d be better off to invest that in something else to earn more interest or swap <?> it toward the house, keep like 10,000 and maybe put 20,000 somewhere else.  I was just wanting to get you guys’ input on what I should do with that.  Because I hate just having it sitting around and earning basically no interest, you know what I mean.

Of course, of course.  Well let’s back up here.  First of all, how old are you.

I’m 53.

Okay, and you plan on staying in the home I guess.

Yeah.

How far are you into the mortgage.  Is it a 30-year mortgage, 15-year mortgage, what was it.

I will have it paid off in about 12 years at the rate that I’m paying, because I’m paying more towards it.

Was it a 30-year to begin with.

It was.

It was a 30, okay.  So you’re to the <Inaudible> crossover point where most of your payment is going toward principal and not to interest anymore.  So you’ll save some on interest if you pay it off.  Now let’s back up here.  One of the most important things you probably need to be considering is what happens when the paycheck stops, right Harry.

Absolutely.

Okay.  So you’re 50 — how old did you say you were.

53.

Alright.

I mean, I can retire in 10 years, but —

Alright, so let’s look at that.  At this point, really the only asset we have is your home and the $30,000 that you have tucked away in the savings, and the savings isn’t earning anything.

Yeah <Inaudible> that are separate <Inaudible>

There’s no retirement plan of any sort.  No IRAs, no —

Oh, yeah yeah, oh —

Oh, okay, so we have other assets.  That’s where I was — I read a different angle.  If there are other assets, this is just money that you’ve accumulated in the checking account that is on and above — you’ve got good cash flow, positive cash flow, is that right bob.

Yeah, we’re good.  I mean, we have our retirement account <Inaudible> that’s just extra that I feel I should do something with on that.

Well, we — Joe and I always advocate that you do keep an emergency cash fund available.  Typically we look at three to six months of living expenses as kind of a general rule.  Now, a lot of that depends on — you’ve mentioned that only debt you have is your home.  We get this question a lot is I’ve got $30,000, $40,000.  I’m looking to maybe buy a car in six months, what should I do with that money for the six months.  The answer is nothing.  If that money is earmarked for anything, and maybe in your case Bob it’s not, but if that money is earmarked for anything and you “invest” it to try to get a couple percent more, and this market takes a turn on you, you’re not real happy when it comes time to pull the money out.  I do want to make sure that you do have a cash reserve that you can go if the water heater goes or your roof goes.  Then certainly if you have that covered, then you may want to look at putting the money aside, maybe a nice growth or growth and income fund because you are very young at 53.  You have 40 years theoretically for life expectancy.

Let’s talk about the retirement plans that you’re using.  Do you have a 401k at work.

It’s a TSP, yeah.

A thrift savings plan.  Okay.  Does your wife work outside of the home.

She doesn’t any longer, but she has probably 50,000 in her retirement <Inaudible>.

How much are you putting in your TSP every year.

10%.

What’s that come to in dollars.

About 6,000, 7,000.

Okay, here’s what you want to do.  You want to max out your contribution to your TSP.  At your age, you can put $24,000 a year into that.  What I want you to do is to immediately go to HR on Monday and tell them you want to increase to the max that you can, which is $24,000.  That means you’ll be bringing home less money, right.

Yeah.

Okay, so what I want you to do then is take the money out of your checking account that isn’t earning you anything and use that to make up the difference that you’re not bringing home.  By taking the money out of your paycheck, you’re immediately getting a tax deduction, saving money right off the top.  Now you’re building a retirement fund.  That money will grow a heck of a lot faster than it is in your checking account.

Okay.

Alright.

Okay.

Alright, thanks for the call.

Thanks for your advice.  Bye.

Bye.

We appreciate it, Bob.  If you want Bob’s line, it’s 844-220-0965, 844-220-0965.  Jacob in Orange City is up next.  Jacob, you’re on the Certified Financial Group on WBBO.

Good morning, Jacob.

Good morning, boys.  How are we doing today.

Good, what’s up.

Alright, good, good, good.  My question is like you kind of talked about earlier a few minutes ago, I of course am worth more dead than alive.  I don’t really have a whole lot going for me.  I’ve got a 401k and all that good stuff, but as far as a will is concerned, I’ve got my children as my beneficiary.  But as far as my things, like my motorcycle, my tools and whatnot, does that have to be written down in, I don’t know, a legal sense to basically leave to my son.  I was talking to your screener, it’s more my ex-wife isn’t interested in my Craftsman.  She’s not interested in my small boat.  Mostly my son’s interested in stuff like that, my motorcycle and whatnot.  Does that have to be so legal or can I just — dear son, sorry I left you.  This is what I have for you — kind of thing.

First of all, do you have a will.

That’s what I’m kind of getting at.  It’s piddly stuff like that, does that need to be in a will.

Life changes.  You know, you might sell the motorcycle, buy a motor home.  You might sell the motor home and buy a camper, who knows what.  Life changes.  What you do is you get the will done, because that’ll kind of clear up these loose ends.  Then at that point in time, you can decide who gets what, but then you can attach what’s called a codicil to the will.  This is your own handwritten thing that you can write in your own hand, it doesn’t have to be fancy.  You don’t have to go see the attorney.  Write in your own hand I want to leave my motorcycle to my son, I want to leave my boat to my granddaughter, I want to yadda-yadda-yadda-yadda.  Date it, have it notarized, and attach it to your will and you’re done.

It’s that simple.

You can get as specific as you want.  Your coin collection, your rings, whatever, whatever.  The more detail you have in it, the easier it is for the probate judge to determine really what your intentions are.

Jacob, you said your ex-wife, just making sure.  So you did go into your 401k, your life insurance policies, etc., etc. and change the beneficiary.

Yes, sir.

That is a mistake that we see many times is folks kind of forget that, and that becomes real ugly and real nasty at death.  Good for you.

Do you have any accounts outside of your retirement plan, any savings accounts, checking accounts, and so forth.

Yes, but my current wife is attached to those.

Okay, got it.

There’s no misunderstanding with that.

I always say this, Jacob: a will is not very expensive to establish, and with a will there are typically five or six additional documents.  It’s just not about your instructions from the grave as to where your assets go, but God forbid you get hit on I-4 and you don’t die, there’s things called living will, durable power of attorney.  Who pays the bills if you’re incapacitated.  There are so many parts to the will, it’s not just about where are my assets going.  And for a nominal small fee, you have it done, you put it aside.  It’s kind of like the fire extinguisher on the wall.  You don’t know if it’s really working until you have to use it.  This is another situation where you want to make sure that will is solid, concrete.  Put it aside, pay a couple bucks, and it’s really to benefit your children to be honest with you, and your wife.

Now that you bring that up, without actually having a will, I know that she does have — my current wife does have power of attorney if I’m not able to make that decision.

Good, that’s good.

You’re ahead of the game, that’s great.

Just is I just need to have the will drawn up for my —

The loose ends.

The things that are in your name alone are all the ones that are subject to probate.  Probate decides who gets what.  So, to make it a lot easier, have a simple will drawn and whatever your intentions are at that particular moment.  Then, as I said, as life progresses and you get rid of the boat, you buy the camper, you get rid of the camper and buy who knows what, buy another boat, and you want to leave it to whomever, just attach it to the will, get it notarized, and it’s done.

Alright, well Jacob, thanks so much for the phone call.  If you’d like Jacob’s line, the number to dial us up is 844-220-0965, 844-220-0965.  Joe Bert, Harry Stottelmeyer are certified financial planners with the Certified Financial Group, where we are planning tomorrow today.  Time for the three big things you need to know. <Background Noise> Hey, welcome back.  This is On the Money with the Certified Financial Group here on News 96.5, WBBO’s Ask the Experts weekend.  This is the show we help you get to that retirement finish line with plenty of nest egg money for you to sit back and enjoy those golden years.  Joe Bert, Harry Stottelmeyer, right here in the studio, answering your questions at 844-220-0965.  844-220-0965.  We are three minutes away from the latest news, weather, and traffic with Dave Wall in the News 96.5 news room.  Let’s get right back to our busy phone lines, talk to Logan in New Smyrna Beach.  Logan, you’re on the Certified Financial Group on WBBO.

Good morning guys, thanks for taking my call.

Sure, Logan.

Just a quick question for you.  I’m 29, I did four years in the Marine Corps.  I do collect disability every month and make about $1,500 every two weeks or a little over that.  We just sold our first house, I have a young family, and we have about 15,000 sitting in the savings.  And kind of piggy-backing off a couple callers ago, I’m just uneducated when it comes to Roth IRAs or CDs or anything like that where if I wanted to invest a little bit, nothing too risky, what would be the best plan of attack for that.

Logan, how’s your debt situation.

Other than our home that we just bought and our truck payment, that’s really all I have.  I don’t have any other debt than that.

Okay.  You’re contributing to a retirement plan at work, or are you — <Background Noise> you’re disabled, right.  You said you were disabled, is that correct.

Yes, 60%, but I still work as much as I can and I do have a job, but we don’t have any benefits as of yet.  Next year we’re hoping to be able to establish that.  But like I said, I have about 15,000 in savings, and not looking to use all of it, but I didn’t know if it’d be smart to take a chunk of it.  Again, I’m not as educated as I should be on different ideas as far as investing.

Do you have any children.

I have one, a son.  He’s four years old.

Four years old, okay.  Here’s what we need to look at first and foremost is insurance.  Insurance isn’t exciting, insurance isn’t investing, but what happens if something happens to you and your wife, and who takes care of the baby, and how do we cover that expense for the next 15, 20 years.  Your disability is physical.

Yes.

Okay, obviously it’s physical — not obviously, but it’s physical.  It may not affect your ability to get life insurance, or if it does it may not be as bad as you think.  I would like you and your wife to consider buying life insurance as a starting point.  What you want to look at is term insurance.  Term insurance is the most cost-effective way to buy insurance.  You have a four-year-old; look at a 15 or 20-year policy to get him through those grown-up years and perhaps through college.  You’ll need more life insurance than what you think, but the good news is at your age, it should be relatively inexpensive.  From then, you’ll want to look at setting up an individual retirement account.

Perhaps an IRA or potentially a Roth.  You’re 29 years old, so I believe it’s — what is it, 5,500 this year.  I believe it’s $5,500.  You could put that aside.  You don’t have to fund it all at once, you can put it in monthly, you can do it quarterly, however you feel comfortable doing that.  I typically recommend if you’re just starting out and you’re not looking to go to a financial planner and get some information, many times just go on to Vanguard.  It’s a wonderful, wonderful website.  Take a look at the different mutual funds.  It’s very easy to set up.  You print the application, set up a Roth.  The beauty of the Roth is again it can grow for you tax-free over the years.  Or if you’re looking for the deduction in the current year, you can set up a regular individual IRA.  You can do one for yourself and for your wife as well.

Okay.

You’re looking at 5,500 between the two of you, we just took care of $11,000 of the $15,000 for you.

Well, Logan, thanks so much for the phone call.  If you want Logan’s line, it’s 844-220-0965.  If Logan wanted to give you guys a call this week, what’s the number to do that.

407-869-9800.  407-869-9800 will take you right to our switch board.  We’d love to meet with you if you have a pressing need.

Go to the website, financialgroup.com.

Garfield and Carrie, hang on the line, you guys will be next up after the latest news, weather, and traffic.  We also have some great text questions.  We’ll get those all answered on the other side, the second half of On the Money with the Certified Financial Group, where we are planning tomorrow —

Today.

On WBBO.

Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.  Discussions and answers to questions do not involve the rendering of personalized investment advice, but is limited to the dissemination of general information.  A professional advisor should be consulted before implementing any of the options presented.  Certified Advisory Corp is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

And welcome back.  This is On The Money with Certified Financial Group, a part of Hughes <?> 96.9 WDBO’s ask the experts weekend.  We’ve got Joe Burton, Harry Steilmyer answering your questions on the radio today at 844-220-0965.  Joe, for all the people that <Inaudible> news, weather, and traffic here, I’d like to re-state <?> what can the audience call you about today?

You can call us about anything that’s on your mind regarding your personal finances.  You’re going to have to make decisions either now or sometime in the future about what to do now so you don’t look back five or ten years from now and say, gee, I wish I would’ve known and had already prepared for retirement, because someday in the future that paycheck will stop, you’ll have Social Security, and plus whatever else you’ve been able to save over your working lifetime.  So as we say on Monday through Friday, Barry and I and the other certified financial planners at CFG do it for a fee, but on Saturday morning we are here for free.  If any questions on your mind regarding your personal finances, the good news for you, there’s still a couple of lines open; all you have to do is pick up the phone and dial the magic number:

844-220-0965.  We do have the text machine up and running as well: 21232 is the number to do that.  Keep it to about 160 characters.  That’s all we can see on our screen.  And we’ll get to some of our text questions in just a moment.  The other thing you guys do as the Certified Financial Group that sets you guys apart is your workshops.  Not only do you get on the radio in <Inaudible> central Florida, you guys invite people into your classroom.

We do, Kyle.  We have a nice board room over on Douglas Avenue, and this Tuesday, I believe that’s June 6th, Tuesday, Gary Ably does a wonderful job, and the workshop is about retirement and titled What’s Your Number.  As Joe stated earlier, we go through life and we have all these financial accidents and we’re throwing darts and we hope everything ends up working out for us.  Gary’s going to sit down and plot out what you need to do.  What is your number.  What is that retirement number.  I know Fidelity — I think it was Fidelity — years ago had this commercial on TV with people running around with this number under their arm.  That’s what Gary’s going to be talking about.  And that’s June 6th, that’s Tuesday from 6:00 to 8:00.  Leave your checkbook at home, we’re not going to try to sell you books and tapes and any kind of a sales pitch; it’s just really good information.  And why do we do this?  You may need us now or maybe sometime in the future.  We want you to know who we are, what we do, and how we do it, and why we’ve been doing it for, what, 40 years in central Florida.  So if you’re looking for a seat, go to our website at financialgroup.com.  You can go in, click, register, say hey, I want to be there, or you can call our office on Monday at 407-869-9800.  That’s this Tuesday, June 6th.  What’s Your Number.

6:00.  6:00.  6:00 to 8:00.  6:00pm.  And he’ll serve some light refreshments and you can come right from work so you won’t go home totally hungry.  Not serving you a five course dinner, but it will tide you over until you get to your favorite restaurant or get home.  It’ll be good information, and hope to see you there this Tuesday at 6:00.  Go to our website, financialgroup.com, and click on workshops.

Alright, let’s get back to our busy, busy phone lines.  Garfield was up next.  Garfield, go ahead.  You’re on the Certified Financial Group on WDBO.

Good morning, Garfield.

Good morning.  Thanks for taking my call.  How are you guys doing?

Good.

Garfield, all the years we’ve been doing this program, you’re the first Garfield.

Oh really?

Yes.  Yes.

That’s good.

<Inaudible> just back up here.  I want to explore this.

Uh-oh.  Here we go.

Do your friends call you Garfield or you have a nickname?

No, they call me Garfield.

Garfield.  Okay.  Alright, Garfield.  How can we help you?

I’ve got a couple questions.  First one, I owe the IRS about 10,000 and I’ve been hearing on the radio about the fresh start initiative.  Do you guys have any information as far as how that might work?

Don’t know about those particular programs.  What’s been your conversation with the Internal Revenue Service?  Have you had any conversation?

Well, they gave me an option of taking a <Inaudible> monthly payments, automatic debiting the checking account.

Right.

Without <Inaudible> the fresh start initiative.

I can’t speak for them, good, bad, or indifferent, Garfield.  I don’t want to give you some bad information, so I do not know.  I haven’t either, Garfield.  I haven’t had real experience with that.  I know that when the IRS is knocking, you listen.  So I don’t know where he would go to find out —

Are you having trouble making the payments, Garfield?

No, I’m not.

I’ll tell you what you can do.  You can talk to the IRS — what’s called the advocate, and sit down with them, and sometimes they will cut you some slack, and you may want to start there.  Doesn’t cost anything to do that.  They are user friendly, believe it or not.  Irs.gov, go to advocate, and that may be an easier way for you to go.  These other services, I believe they’re going to charge you a fee, and of course if they save you some money it may be worth it, but I’d start with the IRS — start with the least expensive way first, and then if not, then you may want to go for those other services.  And I’d like to hear from any of our listeners that have had experiences with debt relief program.  So let us — go ahead Garfield.

That’s the advocate — you said that was the advocate —

Advocate.  Irs.gov, yeah, look for what’s called the advocate, yes.

Okay.

Alright.

Now my other question — I have a question.  I’m 55 right now and I don’t have any life insurance, and I’m wondering if I should do whole life or term insurance.

Well first of all, do we even need insurance.  Do you have a family, do you have dependents?

I have no dependents, just me and my wife.

Just you and your wife.  Okay.  Term insurance is the best way to go.

Term insurance.

Term insurance is the best way to go, and you can do that almost online as a matter of fact.

Okay.

Select Quote.  Go to Select Quote, you’ll find some rates there to help yourself.

Select Quote.  Okay, thanks guys.

Alright, good luck to you, Garfield.

Alright Garfield, thank you so much for the phone call.  If you want Garfield’s line, it’s 844-220-0965.  Carrie in Orlando.  Carrie, you’re on with the Certified Financial Group on WDBO.

Good morning, Carrie.

Good morning, how are you?

Good, how are you?

I’m very good, thank you.

Good.  What’s your question, Carrie?

My question is I’m due to retire in 20 months.  I’m currently in the DROP program.  I also have some deferred comp, like $60,000, and my DROP will be like 180, plus my retirement fund in 20 months.  And I know they charge — I mean, the interest is like 20%, and I need to know what to do with that when I get out, because I haven’t sought a financial advisor yet.

Okay, I love that word yet, because —

Yeah.  I need one.

First of all, do you have something on the fridge that says, 20 months, 19 months, 18 months?  Do you have a countdown clock?

I sure do.  I do.  I’ve thought about it.  21 to the day.

Well good for you, Carrie.  This is the time for you to seek guidance.  You have a lot of decisions that you’re going to be facing over the next 20 months, and you can’t afford a mistake.  As you walk down this road, let a professional who does it all day every day, whether it’s our firm or another certified financial planner, help you go down this path, because there’s a lot of number crunching that really should be done as far as what to do with the DROP.  It’s a substantial amount of money for you, and again, no mistakes needed at this point.  So you really want to seek some guidance.  We offer a consultation, you come in, it’s very low key, we’ll ask you a lot of questions and at least get you started into the right direction, Carrie, as to what do you do when that magical day comes.  And the other thing is, we want to make sure that when you walk out of that office and that paycheck stops, that that money’s going to last the rest of your life.

Exactly.

So it’s not just about here, I’ve got a little bit of money, let me throw it into this fund or this fund or this fund.  We need to know how aggressive or conservative do we invest the monies, and where do we put it.  So there’s a lot of moving parts here, Carrie.  So I liked when you said yet, because at least you’re thinking in the right direction.

Carrie, at the risk of sounding a little self-serving, you definitely want to work with a certified financial planner who’s going to do this for a fee for you.  There are a lot of gimmicks out there; some say, well we normally charge a fee, but if you call in the next 10 minutes we’ll do it for free, this kind of stuff.  Their real objective is to sell you something.  What you want is some objective advice, and we’ll tell you the good, the bad, and the ugly and what you need to do now, so like I say, you don’t look back five or ten years from now.  And the fee is oftentimes a lot less than what people think.  And the thing that I see — what I see when Harry and I do planning is that people walk out of there with peace of mind.  For the first time in their lives they know where they are, what they need to do to get ahold of it.  And when you start your retirement years you have a high degree of confidence that you’re going to be okay.  Give Harry a call on Monday morning at 407-869-9800, or go to our website, you can find Harry’s smiling face, click on that, and they would love to talk with you.

Sounds so good.  Thank you gentlemen.

Thank you Carrie.

Good luck Carrie.  Best wishes.

Alright Carrie, thanks so much for the phone call.  If you want Carrie’s line it’s 844-220-0965.  We also have a couple of text questions here.  I want to get to those before we get to the three big things you need to know.  Let’s start with this one: What do you think of investment apps Acorn and Stash?  Are they safe, and do they have any catches?

Acorn and Stash basically is a way of accumulating some money through apps on these smartphones.  I think they’re very, very new and I don’t have a lot of experience with them.  I know they can be a little bit expensive, I think they charge $1 a month, so if — Bank of America used to do something called Round-up, and this is kind of a takeoff on that.  So if your latte is $4.22, they round it up to $5, they take that money, they put it into a little investment account, and you can select the different investments.  So it’s a way of accumulating some change, if you will, as you go through with your all-day expenses.

A lot of us take the change and put it in the jar at the end of the day, you know?  You take it out of your pocket — what do you do with the loose change in your pocket?

I have a — you’re going to laugh — I have a bucket it goes into, and once a year in December I go to that stupid coin machine and pay 10%.  That’s what I do.

But this is a way to do that and <Inaudible>.

Yeah, that’s exactly right.

They are legit.  <Inaudible> it’s a way to accumulate some capital and then you can use it for your Christmas fund.

Alright, there you go.  Just like that, text question answered.  21232.  Well we are up against the break to get the three big things you need to know.  Joe Byrd, Harry Steilmyer are here every Saturday morning at 9:00 on WDBO, but they are <Inaudible> during the week.  What’s the number to reach you guys during the week?

407-869-9800.  Or our website at financialgroup.com.

And we are planning tomorrow today on WDBO.

96.5 WDBO.

And welcome back.  This is Florida Homes — I’m sorry, no, this is On The Money.  Not yet, it’s not 10:00 yet.  I’m sorry.  It’s not 10:00 yet.  I saw Tim and Bill walk in and I got distracted.  No no no no no.  It’s still On The Money.  It’s the final segment of On The Money with the Certified Financial Group here on News 9.65 WDBO.  It’s your last chance to get your question answered at 844-220-0965.  We’ve got two callers left.  Let’s go to Rich in Orlando.  Rich, you’re up first.  Go ahead with your question with Joe Byrd and Harry Steilmyer.

Good morning guys.

Good morning.

Okay, here’s my situation.  I recently started a new business, and I’m having a hard time getting qualified for a home loan because I haven’t been in business for two years.  Now, with that being said, I draw a small paycheck, and I think what’s going to happen is when my two years is up, I’m not going to show enough on the books to qualify for the home that I really can afford, and I’m just kind of looking for some suggestions on how to go about that.

Well, they’re going to want to look at your tax return.

Correct.

Even though you’re not drawing a paycheck, your tax return hopefully is representative of the income that you’re earning.  And if you’re not, you’re a tattle cheat <?>, end of story.

Yeah, exactly, exactly.

So that’s what you’re up against.

Well I mean — well, with now having my business, there are a lot of things that I can —

Of course.

— write off through the business, but I do draw a small paycheck.  But unfortunately I think what’s going to happen is at the end of the year they’re just going to say, well, you’re only qualified for a $100,000 home.

Rich, do you have any other debt, because this is about debt/equity ratio.  Do you have any debt that we can eliminate over the next year or two?

I recently have a boat loan, but I have zero credit card debt.  I have one truck loan, so a small monthly payment on that.

Okay.  Well, like Joe said, it’s a tax return situation, and they’re going to — even though you may be drawing a small salary, I think it was your schedule C will reflect how well the business is doing, and all I can say is shop mortgage brokers until you find one that hopefully will help you.

Where have you looked for a mortgage?

Oh, I’ve been everywhere.  My credit union, my bank, a couple private loaners.  I’ve been — everybody gives me about the same story.  I’ve got to have two years just to show them that it stands.  But even though my income has actually gone up since my previous job, it’s still — I’m kind of stuck between a rock and a hard spot <Inaudible>.

Well, it’s like Harry said, it’s going to come down to your tax returns, because they’re going to look at your ability to make that mortgage payment, and with the changes in the banking laws ever since the crisis, it’s gotten tougher and tougher, and you’re experiencing that.  Wish you well.  There’s really not much in the way of alternatives.

Alright, let’s get to number seven.  Number seven, you’re on <Inaudible>.

Number seven, good morning.

Yeah, hey, number seven here.  I should’ve called earlier because I know you’re almost closing, but I just — I still don’t get the capital gains.  In other words, I have to take in the capital gains 1099s, whatever they’re called, and then when I do sell the fund, I’ll still have to pay the money on it.  You see what I’m saying?  It’s like paying for something that’s imaginary, and I don’t understand that.

You’re talking about the capital gains that are reinvested in your mutual funds, you’re paying taxes today and then you’re going to have to pay taxes again.

Right, right.  I mean, it’s not — I don’t have the money, but — go ahead.

Well, basically what happens, number seven, is that basically adds to your basis, so let’s assume that you had $20,000 and you had a long-term capital gain and you had it reinvested and now it’s — it was a $1,000 capital gain, it’s reinvested back in the fund.  Now your cost basis is at 21,000, so when you go to sell and your investment goes to 25,000, it’s not the 20 you put in, it’s the 21 you pay.  You pay long-term capital gains on 4,000, which is at 10%, and so it does add to your basis, so you really don’t pay twice on that.

Yeah.  It feels like it because you’re not seeing it and you’re paying taxes today, but as Harry said, a really adds to the original investment to reduce the capital gains when you ultimately sell that investment.

Joe, Harry, what’s the number to reach you during the week?

407-869-9800.

And don’t forget the workshop, Harry, workshop on Tuesday, Know Your Number.  Go to our website, financialgroup.com, click on our workshops, and hope to see you there 6:00 on Tuesday evening.

We have been planning tomorrow today with the Certified Financial Group.  We’ll see you next week, 9:00am, right here on WDBO.

This is News 96.5 WDBO with Orlando <?>

Dictation made on 6/13/2017 6:30 PM EDT.

Hosts: , Gary Abely CFP®, AIF® and Joe Bert, CFP®, AIF®

Well hello everybody, welcome to another addition with On the Money with the Certified Financial Group here on News 965, WDBO.  We are here with Joe Bert and Gary Abely from the Certified Financial Group.  Guys, how are you this morning?

 

Good morning.

 

Terrific.

 

Keeping a little cool out as <Inaudible>

 

Oh, beautiful morning.

 

It is nice, a little smoke in the air, but <Inaudible>

 

Oh yeah.

 

I wondered where is that fire, does anybody know?

 

I don’t know, could be anywhere.

 

Did you smell it when you came up <Inaudible> this morning?

 

I did not, I did not.

 

I didn’t either, so it must be down somewhere —

 

South?

 

I don’t know <Inaudible>

 

Or east?

 

Or downtown <Inaudible>

 

If anybody knows where the fire is, let us know.

 

Yeah.

 

There you go.

 

They’ll text it, <Inaudible> all know.

 

Hopefully it’ll be out very, very soon before that <Inaudible>.  But Joe, what can the audience call you about today?

 

Well Gary and I are here this morning to talk about anything that’s on your mind regarding your personal finances.  As we oftentimes say, we go through life trying some of this, trying some of that, and wake up one day at age 55, look across the breakfast table to Loretta.  And say Loretta, you know the kids are gone and here we are, we’ve got retirement staring us in the face, what have we done?  And then Loretta will say well went to this seminar a couple of years ago.  We bought that annuity, and that’s not working out just like we thought it was, and you’ve got your 401k and your IRA.  And we’ve got some Social Security going to come in.  Do you think <Inaudible> we’ll take those vacations like we want to do, and do all of that stuff?  And all of those things that run through your mind as you’re trying to plan for what we call those golden years, are things that Gary and I and the other certified financial planners at CFG do.  Helping out clients plan for retirement.  So it’s what you need to do now so you don’t look back 5 or 10 years from now and say gee, I wish I would have known.  Or gee, I’m sorry I did this or that.  So we’re here to clean up the mind fog that you might have regarding your personal finances.  Questions that you might have about stocks and bonds and mutual funds, real estate, long-term healthcare, IRAs, annuities, life insurance, reverse mortgages, all of that and more, we are here to take your call.  So if you have any questions about any of those topics or anything else I might not have mentioned, the good news for you is to pick up the phone and dial these magic numbers.

 

844-220-0965.  844-220-0965.  Or you could text your question to 21232.  Gary Abbely from the Certified Financial Group is here as well.  Gary, how are you?

 

I am doing terrific.

 

Gary, do you have any workshops coming up?

 

We do indeed.  We have one coming up Tuesday, June 6th, from 6:00pm to 8:00pm.  And that — well we used to call that Will You Outlive Your Money, which is just what Joe was talking about.  But T. Rowe Price said hey, that’s our name.  So we’ve renamed it When Can You Retire, Know Your Numbers.  So the purpose of date workshop is to actually calculate during the workshop based on your spending what you will need before you say see you later to your boss.  So we don’t want you to quit before we know that you’re going to be okay.  We want you to have at least a 90% probability of not outliving your money.

 

But as they’re going through this process with you, it’s confidentially.  You’re not going to ask <Inaudible>

 

Oh absolutely, right right right <Inaudible>

 

And everybody is going to have their own opportunity <Inaudible> workshop.

 

Right.  And then we go through — we actually go through an example that will help everybody take that example home and then calculate it on their own.  The next workshop we have is July 11th and that is on healthcare options in retirement.  And there’s a little confusion in the media right now on Plan F, which is kind of the Cadillac on Medicare supplements, so we’ll help clean that up so people aren’t worried about that.  But we talk about not only your Medicare options and other healthcare options, Medicaid, but we also talk long-term care which is something that a lot of folks will put off until their mid-50s, mid-60s.  And we recommend you consider well before that time.  That market is just getting tougher and tougher.

 

Let’s circle back to the Medicare supplement because I find in meeting with clients that haven’t had to deal with this for themselves or with their parents, they’re somewhat confused when they get into those — that age 65, they say I’m going to have Medicare, what does that do for me?  Which is Part A, Part B, Part C, Part D, you just mentioned Part F.  They’ve got more —

 

Actually, Plan F.

 

Or Plan F, that’s right.

 

Like it is confusing.

 

It is Plan F, not Part F.  You go down to Plan Z, probably.

 

<Inaudible> the Part F.

 

Yeah, what’s that all about?

 

Well, so Part A and B cover about 80% of your hospitalization and your doctor visits.  And of course we know that if you have a 20% exposure, that is way too much.  So the industry has come up with things called supplements that help pay that 20%.

 

So A and B is provided by the government.

 

Well, yes and no.

 

Okay.

 

Part A is you’ve been paying for it all your life, and Part B you have to pay for once you hit 65.

 

Right, but yet they’re government programs.

 

They are government programs.

 

And Part A covers —

 

That’s going to cover your hospitalization.

 

So go in the hospital, pay the hospital bill, but not the doctor.

 

That’s right.

 

And then Part B covers that.

 

They cover the doctor business, outpatient surgery, and <Inaudible>

 

But it doesn’t cover it all.

 

Doesn’t cover it all.

 

That’s why you need —

 

A supplement.

 

Which is a plan <Inaudible>

 

Plan F, that goes Plan A, B, C, D, then you have Plan F and N, you have Select Plan F, and you know.  So it gets confusing.  But the Cadillac plan out there is Plan F.  That covers virtually all of your medical expenses.  Now, to confuse folks a little bit more, that does not cover prescriptions.  So that’s where Part D kicks in, and that’s going to cost you <Inaudible> it is.  And to purchase that though, it comes again at the premium.  You’ll pay anywhere on the low side $15, probably all the way up to $80 a month.  So it can get expensive.

 

So the easiest way to remember that is when you say Part-something, that’s the government plan.  When it’s plan-something, that’s an insurance company plan that you use to supplement the government plan.

 

<Inaudible> Is there a better way to say it?  Oh okay, alright.

 

Well, we have Part C of Medicare which is really you’re getting out of the original Medicare which is A and B, and your care is then provided by an outside insurance company.  So those are also called Medicare advantage plans.  So I don’t really think of those as a government plan, even though the government is involved, the government might say to somebody living in Orange County we’ll pay you $9,000 and you take care of Joe Burt’s care from now on.  And if you pay out less than $9,000, well you make some money.  But if Joe costs you more than $9,000, well I’m sorry, that’s your loss.  And so the insurance company obviously is going to manage your care.  So they’re looking to have a closed network — some of them.  Some of them have open networks where you can go in and out of network.  But you’re going to pay money when you go to doctors and hospitals, you’re going to have exposure that would otherwise be covered by paying a monthly premium for the supplement.  And that exposure can be high, it can be 7,000 in network, maybe 15,000, 20,000 out of network.

 

So the good news is you will cover all of that and more at your workshop <Inaudible> that’s going to be on Tuesday, July the 11th at our office in Altemont Springs from 6:00 to 8:00.  You’re going to provide some light refreshments.

 

Yes.

 

And we have a nice classroom there, we can get about 25 or 30 people in comfortably.  And you’ve got some big screen television there and all kinds of audio visual stuff, you’ll be razzling and dazzling them.

 

There you go.

 

So if you want some more information about that, go to our website, that’s financialgroup.com, financialgroup.com.  Click on workshops, you can make a reservation. Right there in addition to the one that Gary is doing the week before on June the 6th, also a Tuesday — no it’s not, I’m sorry.  The month <?> before.  June the 6th, and that’s the What You Need To Do Now To Prepare For Retirement, get an idea of your number.

 

Okay, we got a call.  Perfect.  Well I was going to say if you have a question for Gary, 844-220-0965.  That’s 844-220-0965.  Let’s get to our first caller today, Chris in Orlando.  Chris, go ahead.  You’re on with the Certified Financial Group here on WDBO.

 

Good morning, Chris.

 

Hey, good morning, guys.

 

Good morning.

 

The one thing — I’m 30 years of age and my main concern was basically for the future because I know that whole saying <?>, Social Security is going to be out of the picture by the time I get of age, but right now I’m working on my Series Six and some of the things I’ve learned is about annuities and Roths.  And I was wondering — your intake is — at a person of my age, what should be the best direction to try to secure some type of — I know I should have worked to start it on like 10 years or 20 years ago.  But at this point, at this moment, is a Roth and an annuity a good idea, or?

 

Well Chris, I don’t know about starting at age 10.  <Inaudible> that’s pretty good, if you can start then.  So Joe, what do you think about an annuity for somebody 30?  I don’t particularly like it.

 

No, and they’re oftentimes promoted by these free lunch and dinner seminars and they will tell you all of this wonderful stuff that their annuities will do.  There’s a place for annuities, but oftentimes they’re not the ones that are offered through these seminars.  What you want to do — and you said you’re studying for your Series Six?

 

Yes, sir.

 

Okay, for those who are listeners that might not be familiar with that, that’s a securities exam through the Financial Industry Regulatory Association for someone who’s studying offer mutual funds to the general public.  So you’re getting some good information there.  And what you ought to be looking at is when you talk about retirement, what you ought to be using is some form of retirement plan.  Are you employed now?

 

Yes.

 

Go ahead.

 

I have a 401k in place already.

 

Okay, so that’s what you want, that’s what your number one target ought to be.  Maximizing your contribution to your 401k, Chris.  At your age, you can put $18,000 a year into a 401k on a pre-tax basis.  Okay?

 

Yeah so Roth, would you at least consider a Roth better than a 401k?

 

Well, so most 401k — I don’t know about most, but probably about half wouldn’t you say, Joe, 401ks offer both a Roth version and a regular version.  And my rule of thumb and a lot of financial planners differ on this.  But if you’re in a 10% or 15% bracket, consider a Roth.  You are giving up a current deduction, but that current deduction is not providing you a lot of benefit.  But clearly if you’re in the 25% bracket or higher, it’s my opinion that you should put away money on a pre-tax basis that actually allows you to put away more money, right?  If you’re putting away $10,000 into your 401k, it’s only costing you 7,500.  But again, if you were in a 10% bracket, you’re just getting started, it might be nice to have early in life some money accumulating toward a Roth bucket of money.  And it’s a little complicated, we go into this in the workshops.  But it does permit you later on to have a tax-free bucket of money to live on in addition to taxable — the 401k or the regular IRA bucket so that you can manage your tax brackets later on in retirement and possibly avoid having taxes on your Social Security if you have a large enough bucket on your Roth side.  Now Joe, you have some thoughts on that, too.

 

Well, I agree with you 100% that if you’re in a low tax bracket.  Particularly, somebody that’s young because you could use the Roth as kind of an emergency fund as well.  Because <Inaudible> withdraw your principal from it and not pay taxes on it.  And if you don’t withdraw it, it’ll continue to grow for you on a tax-free basis.  So using a Roth — but the question is okay are you going to use a pre-tax or an after-tax.  Pre-tax is you’re going to use a 401k or traditional IRA.  After-tax, you’ll use a Roth.  But then really the question is where you invest it.

 

Right.

 

So here you are at age 30.  The good news for you, you have a great asset.  You know what that asset is, Chris?

 

Time.

 

Time.

 

Yep, you got it baby.

 

Tim is a great asset.  It’s a great healer.  So what you want to do is be as aggressive as you can possibly be, go fully invested in the market and don’t look at it for 25 years.  I guarantee you, you’ll do far better than somebody that’s trying to put it in a CD today because they don’t want to lose any money.

 

That’s right.  And most annuities are going to earn somewhere in the — in today’s timeframe if you’re looking at fixed annuity or fixed indexed annuities you’ll probably get somewhere between 3% to 5% at best.  And we know even if you look at the worst 20-year period or actually even the worst 15-year period from 1992 to 2012, we had a return of — for the S&P 500 index of a positive 4.5%.  And that is if you had the worst timing, meaning you suffered a loss in the 49% decline and the Dotcom bust.  And you suffered a 57% decline in the financial recession.  So if you have the worst possible timing, the worst 15-year period during that 20-year timeframe, actually still provided you with a little bit better positive <Inaudible> percent return.

 

Right.

 

Which is probably better than what most of the annuities would be paying today.

 

Yes.  And, what you want to do as — do that through your 401k because you’d be able to what we call dollar cost average.

 

Right.

 

Which means that you’re adding to the account on a regular basis and the best thing for you is hope that the market goes down for the next 15, 20 years.

 

Well actually yes, I was going to say for the next 34 <?> years even until you retire.  Really, the idea of dollar cost averaging is getting — and just as it sounds, an averaging of your prices throughout retirement and obviously the best thing would to be able to buy more shares at lower prices.  So bear markets, especially for people in their 20s and 30s are terrific ways of accumulating more and more shares.  So don’t be afraid of them, actually we also try to say if we’re in a bear market, see if you can put some more money away because you’re buying low.

 

Does that help you, Chris?

 

That helped me a lot, thank you.

 

Okay, good luck to you, man.

 

<Inaudible> Alright, good luck with the exam.

 

Just like that Chris, it’s that simple.  844-220-0965.  844-220-0965. if you have a question for Joe Burt or Gary Abbely from the Certified Financial Group, we are planning tomorrow, today.  Now it’s time to get the three big things you need to know.

 

And welcome back to the On the Money here on News 965 WDBO.  We are taking your phone calls at 844-220-0965 with the Certified Financial Group.  Joe Burt, Gary Abbely here in the studio taking your phone calls and your texts as well, 21232 is the number to get that.  21232.  But again, if you have anything to do with getting to that golden finish, as I like to call retirement, 844-220-0965.  One of the great resources Certified Financial Group provides is what’s called This Week’s Must-Read.  And this week’s must-read, what you should know before collecting Social Security.

 

Well the important things are is that if you start collecting at 62 and you’re still working full-time, chances are you’re not going to get the benefit that you thought you were going to get because of the offset.  Where you get back $1 for every $2 that you earn over about $17,000 today.  And then of course if you wait until your full retirement age, you’ll get the full benefit available to you.  But if you wait to age 70 —

 

Excuse me while I choke to death, here.

 

You get about an 8% bump-up each year.

 

Yeah, an 8% guaranteed increase per year, and that’s a big deal depending on your situation, your health situation, your spouse’s situation.  It might makes sense to do that.  So those are the things that we look at when we do financial planning for our clients.  Do that analysis because the difference can mean several tens of thousands if not hundred thousand dollars of different in terms of in terms of ultimate benefit that you and your spouse might be able to attain.

 

Well that’s right.  And you know you think the market is at an all-time high, maybe this is a good time use some of that retirement account to live on and let those Social Security benefits grow and grow and grow.

 

Exactly.  In fact, we did a little case study and presented that again this week, Gary, about looking at where you are in retirement and what accounts to draw from.  And then depending on what your tax bracket is, you may want to start drawing from your retirement accounts when you’re in a 0% tax bracket.  And maybe convert that to Roth.

 

Well that’s right.  So we had met with somebody who was early 60s and we looked at his tax situation and realized well if we defer Social Security and we start using some of his after-tax money, basically money in a brokerage account to live on, that he would really be paying no taxes.  And this particular person was single and we could — with the standard deduction and personal exemptions, he could convert roughly 40,000 a year into a Roth IRA with very, very little taxes.  So sometimes it’s not a good idea to pay no taxes.  We want people to use that — the 0% bracket and the 10% bracket at a minimum and have a process where you convert your regular IRA to a Roth IRA, especially if we know your <Inaudible> is going to be a 25% or 28% or higher bracket later on in life.

 

Or the other opportunity is take some capital gains.

 

Well that’s right.  If you’re in the 0%, the 10%, or the 15% tax bracket, and let’s say you bought Apple at 100 and it’s 150, you could turn around and sell Apple.  Would secure that $50 gain and not pay any income taxes on it as long as it’s long-term, as long as you’re in the 15% bracket or lower, obviously check with your tax preparer first.  But that’s a great way to step up your basis in a stock.

 

Yep.  Well before we get to the latest news, weather, and traffic, what’s the number to reach the Certified Financial Group during the week?

 

407-869-9800.

 

Elizabeth and Ed, hang on the line.  You’re going to be first up when we come back from the latest news, weather, and traffic right here on News 965 WDBO.

 

Welcome back, and this is On the Money with the Certified Financial Group here on News 965 WDBO.  It’s ask the experts weekend, we are here to take your phone calls at 844-220-0965.  844-220-0965 with Joe Burt, Gary Abbely.  Joe, for anybody that joined us during the latest news, weather, and traffic, what can they call you about?

 

We’re here to answer those questions that you might have on your mind regarding your personal finances.  Whether <Inaudible> do now so you don’t look back 5 or 10 years from now and say gee, I wish I had known about that.  Or gee, I’m sorry I did that.  That’s we do as certified financial planners.  We charge a fee for our services.  We act as fiduciaries for our clients, which is a distinction between a broker and a fiduciary, there is a distinction.  You can go to our website and learn all about that.  That’s financialgroup.com.  When we work with our clients, we do it on a fee basis.  We’re not here to sell you something, what we do is sell advice.  On Saturday morning , we do it for free.  So if you have any questions regarding your personal finances, we’re here to take your calls.  And the good news for you, there’s still a couple of lines open, and that number:

 

844-220-0965.  844-220-0965.  We also have the text machine up and running as well, 21232.  Elizabeth down at Yeehaw <?> Junction has a question for the Certified Financial Group.  Elizabeth, go ahead.  You’re on WDBO.

 

Good morning Elizabeth.

 

Hi.

 

Thanks for calling.

 

Good morning.

 

How can we help you?

 

Can you hear me okay?

 

Yep.

 

We can hear you fine.

 

Okay, terrific.  So I’m driving to West Palm Beach from Wesley Chapel, Florida.  And I have a question, I also sell advice and in one aspect I get paid as an employee.  And in one aspect, I get paid as a independent contractor.  I have several different banks and I was told by a financial advisor to truncate the amount of bank accounts I have.  I separate my businesses by bank accounts, is that not advisable?

 

Well Elizabeth, I believe you should have separate accounts so you Can keep your business affairs separate from personal affairs.  If you’re ever audited, it’s a lot easier than having to explain oh, this one’s personal, this one’s business.  I would definitely keep those separated.

 

I think I understand —

 

Separate the accounts.

 

I think I understood you to say that you have an accountant — several accounts for the independent contractor business.  Let’s say you have five clients that you work with, you have an account set up for each one of them.  Is that what you —

 

No no, what I do is I sell advice about <Inaudible> services and I have a bank account for that.

 

Okay.

 

I also am a business development coach for actually a radio station.  So, I have a separate bank account for that.  And then I have another independent business — concierge business, and I keep a separate account for that.  So, I’m buying to buy down my debt to raise my credit, so my initial question was whether or not I should be concerned — if I’m single with no dependents, should I be really concerned about buying my debt down for any other reason than just getting my credit score up?

 

Well, I guess I would ask — I don’t want you to tell us what your credit score is — but if your credit score is adequate where it’s at, then I don’t know that I would be paying down low interest debt.  I would continue to put away money for your retirement.  But if you had in the teens credit card debt, then I think I would be focused on that.

 

The credit card debt is in the 20s.  It’s greater than 25,000.

 

Oh, okay.

 

So, my credit score — I’m sorry, go ahead.

 

We’re talking about interest rate on the credit card.

 

Oh yes, they are in the teens because I had an accidental foreclosure that was just a complete debacle with Wells Fargo, but that was literally — my mortgage was on auto-pay for the last 12 years.  It went out of auto-pay because if you don’t have enough funds they go out three times and then take it out of auto payment.  And I never knew it was taken out of auto-payment until I got a notification that my house was under foreclosure.  I paid $6,000 in the bank.  I had no idea because —

 

Elizabeth, I think I would just focus on the debt right now.  If you’re in the teens, that would be the best thing to focus on and get the debt situation, debt equity situation improved and then I would focus on retirement.

 

Alright, Elizabeth, thanks so much for the phone call.  It’s 844-220-0965.  If you would like Elizabeth’s line.  Let’s go to Ed in St. Cloud.  Ed, you’re on with the Certified Financial Group on WDBO.

 

Good morning, Ed.

 

Good morning, how are you?

 

Great, how can we help you?

 

Great.

 

I heard one of your answers and a previous caller had mentioned that you could put $18,000 in your 401k tax free and that sparked a question for me.  I currently feed 10% of my income into a 401k, which is about $12,000 a year, and I also feed an IRA, the max, which is, I think, 5,000 a year.  Am I better off to stop feeding that IRA, which is post-tax money, and —

 

Yeah, Ed, I do think you are better off contributing the maximum to your 401k at that income level.  You are in most likely the 25%, 28% bracket.  So, I would be putting more than the 12,000 that you’re putting away into the 401k.  The max, just so that our viewers know, is 5,500 for an IRA.  It’s 6,500 though if you’re old like me.

 

Over the age of 50.

 

Over the age of 50.  So, but because you’re doing your contribution on an after tax basis to your IRA, you really should max your 401k out.  And then —

 

So, just leave that IRA alone or do I roll that over —

 

No, just leave it alone.

 

Leave it where it is.

 

Leave it where it is and just let it keep growing.

 

Is that person going to be interested in managing that if I’m not feeding it anymore?

 

Well, it depends.  It depends on who you’re working with.

 

We can’t speak for how they would treat that account.

 

Right.

 

But there’s no — there’s not necessarily a financial advantage to having it combined.  A lot of people think it will grow faster if I combine all my accounts into one account.  It will grow faster.

 

Right, yeah.

 

Which is not correct.

 

Correct.

 

Okay.

 

Alright Ed.  Well, thank you very much.

 

Thanks for your call, Ed.

 

Yeah, appreciate it.  If you want Ed’s line, it’s 844-220-0965.  That’s 844-220-0965.  Katie in Lake Mary.  Katie, you’re on with the Certified Financial Group on WDBO.

 

Hi Katie.

 

Good morning.  I appreciate your time.

 

Sure.

 

Real quick question.  Good or bad, I’ll be 65 in December.  I am gainfully employed.  I am a social worker, I have no intention of retiring at this point of my life.  I’m wondering about Medicare.  Is there advantage to waiting until I decide to stop working? Should I sign up for it now? I know there’s Medicare A and B and if I wait on the B it will cost me more down the road.  I don’t know what to do.

 

Well Katie, I assume that you are covered by your employer’s group health plan.

 

Correct.

 

Okay, so I would suggest to you because the Part B is expensive and there’s no reason for you to spend 125 a month when you don’t need to.  So, a lot of people feel that once they’re 65 they need to sign up for Part B so that they don’t face some penalty later.  But the rule is this; you have a guaranteed issue right to purchase any Medicare supplement sold if you’re coming — I don’t care if you’re working to age 75.  If you’re coming directly off of a group health plan and you haven’t had a lapse of coverage.  And that’s an important distinction because one of the things that I ask in the workshop is Obamacare, the Affordable Care Act, got rid of pre-existing conditions, true or false.  And of course most people will say true, and it’s true for everybody 64 and under, but a lot of people don’t realize when you’re on Medicare you are subject to pre-existing conditions if you don’t buy a supplement when you’re first eligible.  Meaning, if you buy the part C plan, the Medicare advantage plan, and you later say ah, this isn’t working out for me, I don’t maybe like the network that I have, I think I’ll buy a supplement next year.  You get to the next year and you realize oops, I’ve got some medical questions I have to answer.  It’s not a guarantee that I can get back into original medicare.

 

Oh.

 

So it’s important to buy what you want.  If you can afford the Cadillac, buy that initially.  Later on, if you can’t afford the Cadillac, you can go downstream in quality, if you will, but you can’t necessarily go upstream.  You can’t always go from an Advantage plan to a supplement.  There is —

 

Understood.

 

Yeah, but in your case there’s no advantage for you really to sign up for part B Medicare.  I would wait until you stop working.

 

Okay.

 

Doesn’t the — something in the back of my mind though, Gary, and you’re the expert in this, so that’s why I’m asking you.  The plan that she’s in has to be a qualified plan.

 

It has to be creditable coverage.

 

Creditable coverage.

 

And I’m assuming that you’re working for the government, Katie?

 

Yes.

 

Yeah, so it’s going to be creditable coverage.  Now, what Joe was referring to, and this is a good point, let’s say that you were offered a couple different plans at your office and one of those was a high deductible plan.  Also known as a health savings account compatible medical plan.

 

Yes, understand.  Understand.

 

Well, those aren’t always deemed creditable coverage and so you potentially could be on that type of a plan and have a penalty when you sign up for Part D Medicare because you didn’t have creditable coverage for prescriptions for example because you had to first meet this large deductible.

 

Right.

 

So, you do want to stick with a traditional plan when you’re close to signing up for part B, so that’s a great distinction Joe, thank you.

 

Okay.  May I ask another quick question?

 

Sure.

 

Regarding Social Security, do I wait until I retire? I’ve heard rumors from different coworkers that are in my age bracket, some of them are taking out Social Security now because they’re claiming that when they go to sign up at Social Security, Social Security is telling them it really doesn’t matter, you’re not going to really gain that much from waiting, so might as well get the “free money” now.

 

No, I disagree.  Disagree completely.  I would say, Katie, if you do not need the additional money that Social Security would currently provide, defer it.  You will be gaining an 8% approximate benefit for each year you continue to work and sometimes it’s even greater.  And the reason for that is when you work past your full retirement age, what Social Security does is they average your 35 highest years of earnings.  And let’s say by chance you were a mom raising a family and you had a lot of zeroes in those working years, you might be able to eliminate some of the zeroes with some high working years from the ages of say 67 to 70.  So, I don’t think that advice that you’re getting from your coworkers is good advice.

 

Okay.

 

The only caveat there is if your health is poor.

 

No, not by the grace of God.  No.  Nope.

 

Well, if you’re in reasonably good health and expect to live 15 years, 20 years into retirement, you are better off getting a guaranteed 8% increase.

 

Okay.

 

That’s right.  And your friends who are still working will be paying back a good bit of that Social Security because their benefits are going to be taxable because they’re currently working.

 

Oh.  I’ll bet they’re going to have a surprise next year.

 

Well, they need <Inaudible> for those who do take their Social Security, it’s really important to have some federal withholding for those benefits because they will be taxable in most cases.

 

Okay.  I really appreciate — thanks for being there for me.

 

Alright.

 

I appreciate it.

 

You’re welcome, Katie.  Bye, we’re here for you.  Thanks for calling.

 

Thank you, bye.

 

If you’d like Katie’s line, it’s 844-220-0965.  844-220-0965.  Real quick, let’s see if we can’t squeeze in Anna before we’ve got to get to the three big things you need to know.  Anna go ahead.  You’re on with WDBO.

 

Anna.

 

Hi, good morning.

 

Good morning, how are you?

 

Hello.

 

How are you?

 

Good.  Um, my question is, my husband and I are in our 50s.  We’re self-employed.  We make pretty decent money right now and the only investment that we really have made at this time is property.  We have bought some property.  And I would like to know what else could we add to our portfolio to plan for our retirement?

 

Well Anna, you certainly, being self-employed, could set up a retirement plan.  For example, a SIMPLE one or you could do a SIMPLE IRA, a SEP-IRA, what’s called a simplified employee pension.

 

Muni 401k.

 

Yeah, yeah.  So, there’s a lot of different retirement plans you could set up to defer some of that income.  And while having property — rental property that you can control and manage on your own is, in my opinion, one of the great investments, you don’t want to just have that.  I  mean, anything with a retirement plan should have diversification.  So, you do want to have equities.  You likely want to have some fixed income and possibly if you have excess money, saving the taxes I think would be a great opportunity for you.  So, I would open up one of those three plans that we recommended and depending on how much you want to put away —

 

Have you filed your taxes yet for 2016, or are you on extension.

 

Unfortunately, we got an extension from our accountant.

 

There’s nothing wrong with that.  We do it all the time.  The good news for you is that you can still set up a SEP-IRA for 2016 and get some nice tax deductions.  So, ask your tax preparer about what you can put into a SEP-IRA for 2016 and get a tax deduction even though the tax year is closed, it’s one of the few options that’s still available.

 

That’s right.

 

Oh, okay great.  Well, thank you so much.  I’ll look into that.  Thank you so much.

 

Okay, thanks for the call.

 

Alright Anna, thank you so much, if you would like Anna’s line it’s 844-220-0965.  844-220-0965.  We are planning tomorrow —

 

Today —

 

With the Certified Financial Group here on WDBO.  Hey, welcome back, it’s the final segment of On the Money here with the Certified Financial Group on WDBO’s Ask the Expert weekend.  Got five minutes to the latest news, weather and traffic with Dave Wall in the News 96.5 news room.  Dave’s keeping an eye on that forest fire we have in Wachiva Springs State Park, get some updates on the traffic, and how hot will it get later today.  All coming up in four minutes right here on News 96.5 WDBO.  But, it is the last segment, the final chance to get your question answered from Joe Burt and Gary Abley from the Certified Financial Group, 844-220-0965.  844-220-0965.  The text machine is up and running as well, 21232.  We did have a text question here for you guys.  Let’s see.  Hi, explain if buying an annuity is a good plan for a senior citizen as an investing tool.

 

Perhaps.

 

Perhaps?

 

It all depends on the kind of annuity.  It comes in many, many different shapes and sizes, and unfortunately the ones that, as we said earlier, that are generally offered through these free lunch and dinner seminars are the ones that are loaded with things that you don’t quite understand and that you can never get out of them, and they’re very, very expensive.  If you want some information on — and those are what we call fixed index annuities, they’re popular because they say you can go in the market, you’re not going to lose any.  Market goes up, you gain; market goes down, you don’t lose anything.  Go to our website, click on the Info To Know tab, Info to Know, and then click on the other tab called The Rest of the Story.  And there’s some articles in there about these kinds of annuities.  What we oftentimes find is people buy them, think they’re buying a filet and they’re really buying hamburger.  They think they’re going to participate in the market, 100% goes up, I’ll lock that in, it goes down and I don’t lose anything.  But, at the end of the day when it’s all said and done, you really have hamburger when you thought you were buying a filet.  You’re not going to die from it, but it’s not going to get you what you thought you were going to get.

 

Yes, and now the flip side as an alternative to a bank account that might be paying 1% and the annuity might pay 3% to 4%, well of course that’s a better alternative provided you can handle the lack of liquidity.  Because, most of these you can only take out between 7% to 10% of the balance per year without a surrender charge.  And every company is different.  You’ve got to read the fine print.  There’s some good ones and there’s some not so good ones.  So, really look carefully.

 

Yeah, it’s a minefield out there and these kids of programs are oftentimes sold by people that this is the only solution that they have.  It’s like going to the Toyota Dealership and you really want to buy a Ford.  Well, all they can sell you is a Toyota, but you really need a Ford.  So, you have to be very, very careful about that.

 

Well, we’ve got about a minute and a half left of the show for the day.  Gary, real briefly, just tell us again about your upcoming workshops.  You’ve got one on June 6th and July 11th.

 

So, the one on June 6th is When Can You Retire: Know You Numbers.  So, we help calculate just what you’re going to need before you quit your job.  And we want you to be at least 90% confident that you won’t outlive your money.  So, we help you with the calculations there.  We have — the next one is healthcare options in retirement and when we mean healthcare, we mean not only Medicare, Medicaid.  We also are talking about long-term care and what those options are in retirement as well.  That’s July 11th.  And shortly thereafter, July 20th, we have Social Security Boot Camp and that is hosted by Nancy Hecht and Denise Kobach.

 

So, once again these are all held in our office in Altamonte Springs just off of Douglas Avenue just south of 434.  We hold them in our classrooms.  We can accommodate about 25, 30 people comfortably.  We always serve some light refreshments, give you some good information, and they are absolutely free.  People say well why do you do this kind of stuff, Joe? We do it for two reasons.  Number one, to give you information that will keep you from becoming a casualty in your retirement years.  And secondly to introduce you to what we do as a firm.  So, whether you need financial planning now or sometime in the future, perhaps you give us an opportunity to earn your business.  So, if you want more information, go to our website, financialgroup.com.  We want to thank all the Veterans for the service they provided.

 

And God bless America.

 

Well, happy Memorial Day, Gentlemen.  Have a great, restful weekend.  Back to work on Tuesday and

 

Dictation made on 6/1/2017 11:19 AM EDT.

 

Hello everybody, and welcome to On the Money with the Certified Financial Group here on news 965, WDBO.  <Inaudible> the experts we give <?>, they were off last Saturday for the two hour Florida Homes and Gardens because they had a two hour shred event a moment ago.  So if you didn’t get a question answered last week or you’re looking to tune in, now is the excellent time to call in at 844-220-0965.  Aaron Burt is here for Joe today, along with Nancy Hick.  Guys, how are we doing today?

 

We are hanging in there.

 

Hanging in there?

 

Doing well.

 

We’re here.

 

Come one, where is the energy?  There you go, there you go, there’s a smile, alright.  Guys, what can the audience call you about today?

 

Well we’re here to answer your questions having anything to do with your personal finances, usually revolving around financial planning.  And from there, conversations usually go to talking about stocks and bonds and mutual funds and long-term healthcare and Social Security and annuities, life insurance, all of that and more as Joe likes to say: Monday through Friday at our office at the Certified Financial Group, we charge a fee.  But on Saturday morning, Nancy and I are here to do this for free.  So if you have any questions at all, please pick up the phone and dial.

 

You’ve been doing that well, by the way.  844-220-0965.  844-220-0965.  We also have the text machine up and running as well, 21232.  I know there was some turmoil on the markets earlier today, but probably nothing to worry about.

 

Well not today, but during the week.  <Inaudible>.  Yeah.  It was a rollercoaster kind of week.  But you know people will look at the numbers going up big and going down big.  But what they’re looking at is the Dow, and the Dow is 30 companies.  And most people are benchmarked or their investments are held up against the S&P, which is a much broader 500 companies.  And so the swings for the S&P are not as drastic.  And not generally as news worthy as the Dow.  So it’s sort of fun to watch, and I had heard somebody saying — I think the second day that we were down this week on the Dow.  I <Inaudible> look at your 401k, but a lot of people’s 401k deposits hit on those downs.  Which I don’t have <Inaudible> is a bad thing, because you’re buying on sale.

 

Why is that?

 

Any time that you can have your money invested at a lower price per share, you’re buying more shares.  When it comes to retirement, the idea is to accumulate shares.  Shares equals income in retirement.  So the ability to buy things on sale is a great thing.

 

<Inaudible> I’m sorry Nancy, but it was going to say we do a lot of 401k enrollments.  I personally go out and meet with a lot of participants, and one of the things that we often tell people is just to get the right mindset, is the stock market is the only market when things go on sale, people run out of the store.

 

Well that’s a <Inaudible> we love buying stuff on sale.  Car, clothing, whatever.

 

Except for stock for some reason.

 

Whatever investments, we hate to see them on sale.  Like — I mean true retirement is the markets are dipping down as your money is hitting, then that’s a gift.

 

That’s a definite gift.  So one other thing to point out regarding the Dow going down is the Dow right now is over 20,000 still.  In a couple of — 200, 300, 400 point move on the Dow is not like a 400 move on the Dow <Inaudible>.

 

No, it’s tenths of a percent, tenths of a percent.  I think <Inaudible> it was down 300-some-odd points the other day.  It was 0.15%.

 

Yeah.

 

So it’s nothing.

 

Nancy has got some great information from <Inaudible> that you will want to avoid this summer.  But we want to open the phone lines here.  It’s 844-220-0965.  844-220-0965.  We have the text machine up and running as well, 21232.  That’s 21232.  I already see some texts coming in, so we’ll get to those in just a moment.  But first, we’ll start with Rich in Flagler.  Rich, go ahead with the Certified Financial Group on WDBO.

 

Hi Rich.

 

Good morning.  A quick question: Can you contribute to both a 457 plan and an IRA in the same year?

 

The answer to that is it depends.

 

Well, I would have said perhaps, but.  It depends on how much is being contributed.

 

Depends on what your income is.  It depends on a lot of different things.  Why would you want to do one versus the other though, I’m just curious.

 

Or both.

 

I have some stock I’m going to be selling and I want to put it in my Roth IRA.

 

Okay.

 

Okay, so you want to contribute to your 457 at work and you want to contribute to a Roth IRA as well?

 

Right.

 

Okay, so that’s going to depend on how much income you have.  Because there are income limitations to whether or not you can contribute to a Roth, and that also is going to depend on whether or not your wife — are you married?

 

Yes.

 

Okay, so then it’s going to be combined family income, it’s going to determine what you can do in the <Inaudible>.

 

Right.

 

Let me look at a chart <Inaudible>.

 

Look on the — I think the green one has the income limitation there.  So yeah.  The Roth is a little bit more liberally as far as what the income limitations are for contributions.

 

Yep.

 

And may I ask how old you are, Rich?

 

Over 65, but still working.

 

Okay, alright, so fine.  So you could do the whole 6,500 assuming that you’re within the income limits for the Roth contributions.

 

Yeah, and the income limitations for joint is 186,000.  So if you earn under 186,000, you can do the Roth in addition to your 457.

 

Well okay, that’s good information.  Thank you.

 

Sure.

 

Yep, you’re very welcome.  Thank you.

 

Alright Rich, thanks so much for the phone call.  If you want Rich’s line, it’s 844-220-0965.  844-220-0965.  What was the program he was asking for? 450?

 

 

And what’s the 457?  I’ve not heard you guys talk about the 457 yet.

 

It’s a deferred compensation plan.  There’s different flavors of 457s.  Where we normally see them is in the city where they have a pension plan and then on top of the pension plan, they’re able to defer compensation.  It’s kind of like a 401k plan but the rules are a little more liberal.  But basically, you’re just putting money into it on a tax-deferred basis and then it’s just like a 401k.  When you pull it out, <Inaudible> income taxes.

 

But as Aaron said, generally we see 457s for state of federal employees.

 

Gosh, that was it.  <Inaudible> 457, that’s a new number I’ve heard here on On the Money since I’ve been doing this show at the start of this year.  844-220-0965 is the number.  Let’s talk about the summer scam we want to avoid.

 

Okay, alright.

 

<Inaudible> and this one hits home because I have a personal example of this that happened in our family.

 

Okay.  So I got a call from one of my clients asking me to put an alert on his account.  And he had received a call from somebody with a foreign accent telling him that his grandson was out of the country, on vacation, and had gotten into a severe accident and was in the hospital.  And my client of course was a little bit concerned, he wasn’t quite sure if his grandson had gone on vacation and was out of the country or not.  So he did ask which grandson, and all he got back was your oldest grandson.  So my client did start asking a few probing questions, and then eventually hung up the phone.  But he was concerned that what little bit of conversation he had with this person, the fact that he did answer the phone so there was a valid number.  And as inter-connected as things are today, this gentleman didn’t know if potentially they could access through the phone records and through voice maybe some of his investment accounts or his bank accounts or something like that.

 

Yeah.

 

So first of all, just because somebody calls doesn’t mean you have to answer the phone.  Caller ID is on everything.  And if it’s a number that you don’t recognize —

 

Don’t answer it.

 

And if it’s somebody who really wants to reach you, they will leave a message.  You know <Inaudible>

 

And if you really know me, they’ll just text me after <Inaudible> call.

 

Right, right.  I mean, if it really is a family member, they are going to try non-stop to contact you.  And you’re under no obligation to give any information out to anybody without feeling that you know unequivocally who you’re speaking to.  So you really have to be selfish with your privacy and really have to protect yourself.  I mean the scammers are getting smarter and smarter all of the time.  We have heard of many grandparents that have been taken for tens of thousands of dollars by exactly this type of scam.

 

And we’re putting more and more information about ourselves online everyday.

 

Right, right.

 

That’s the other part <Inaudible>.

 

And it makes it easier for people to have the names of your children and your grandchildren, so they can <Inaudible> these scams, essentially.

 

Yeah, very sad, actually.

 

Yeah, it’s happened to my grandmother.  Called up and said your oldest grandson is here in Puerto Rico and needs help.  And she gave him my name and then started using my name throughout the phone call, and they’re really good, they’re really good.  You got to be careful.

 

And the sad thing is that the — really from what I hear, the police can’t really chase these things down.  If you were to <Inaudible> money <Inaudible> I mean it’s done.  You can’t get it back.

 

And it’s an attitude that you are voluntarily hitting it up.

 

So anyways, <Inaudible> yeah, sorry.

 

And as more robo calls come more and more to my cell phone every single day from unknown numbers that I don’t know.  And now they’ve got a trick to make it look like it’s a family member’s name based on area codes and public information about what you can find about family member’s phone numbers.  They’ll Google everybody in your last name and go oh, this is one digit off, a family member.  And then that’s the number they will use to call.

 

But again, if it’s somebody in your phone book, a name is going to come up with that phone number.  And if you don’t recognize it, let it go to voice mail or they’re just going to hang up.  And then there’s a little thing that says block this caller.

 

Yep, <Inaudible> thing.

 

And then of course if you’re ever sure <?>, you can just Google the phone number.  And if you Google the <Inaudible> block.

 

I’ve done that a number of times.

 

That’s what I do — because there’s going to be one day where a legit phone number I don’t have is — they’re going to look for me and then sure enough they don’t leave a message or what-have-you and it was something.  It was a delivery I was waiting for or something like that.  So you don’t want to blankingly unblock callers, but Google the phone number.  You’d be surprised how many things come up on that.  844-220-0965.  844-220-0965 is the number to call up Aaron Burt and Nancy Hick with the Certified Financial Group.  Let’s talk about some of the upcoming workshop, and we’ve got a couple of text questions in here coming in the text machine.  21232 is the number to text us your 160 character question.  Right now, we pause to get the three big things you need to know.

 

Welcome back, this is On the Money with the Certified Financial Group here on news 965, WDBO.  Our ask the experts weekend continues here.  We are six minutes away from the latest news, weather, and traffic.  But for right now, we’re going to talk, Aaron Burt and Nancy Hick and you.  844-220-0965 is the number if you want to dial us up and ask your question.  844-220-0965.  Let’s get back to the conversation and talk to Sherry in Vero Beach.  Sherry, you’re up first in the segment with the Certified Financial Group here on WDBO.

 

Hi Sherry.

 

Hi, thank you for taking my call.

 

Sure, what’s your question?

 

I’m <Inaudible> about — I’m 63 and my husband is 73, and we have some pretty good combined income, <Inaudible>.  Right around 9,000 a month, but we have two houses, both of which have about 100,000 in equity.  And we literally have nothing in savings, <Inaudible> 401k.  So when we sell this house which will go on the market in probably this coming week, we’ll have that equity of course to repurchase another house, to pay off the <Inaudible>.

 

Okay.

 

You know, <Inaudible> money to put away.  What do we do with it, or do we just put it into that house <Inaudible> we sell that would have something to retire on.

 

Okay, so Sherry, the house that you’re selling, is that your primary residence or side that rental property?

 

Primary.

 

Okay, primary, okay.

 

And what are you doing with your other house, Sherry?

 

It’s rented.

 

Okay.  So what do you plan on spending on the new primary residence?  How much of the equity that you will reap from the sale of your current home is going to go into the new primary residence?

 

Well we can do — we want to do a <Inaudible> because the house was build in 1875 <?>.  <Inaudible> the one that we put the contract in on yesterday, and it’s 350,000.  So I think we would have to spend 3.5% of 350,000 to do that rehab one <?> I believe.

 

Okay.

 

So that’s kind of where — so 300 and — 2.5% of equities, say 400,000.  So we’ll have to have 50 to do the <Inaudible>.

 

Okay, alright so — and do you feel that you have an adequate emergency fund?

 

No, and that’s what I wanted to do, is put something away for an emergency fund.

 

Okay.

 

<Inaudible> 70,000, should I put away and where should I put it?

 

Well, I mean how much cash to have on-hand I think is a personal opinion.  Everybody differs.  Some people feel comfortable having $4,000 or $5,000 in cash for the <Inaudible> stock emergency money.  Some people feel comfortable having $50,000 or more.  So that’s a discussion that you and your husband are going to have to have, is what do you feel is comfortable to always have liquid in cash an emergency fund.  And that’s money that’s in a checking, a savings, or a money market.  That’s what emergency fund money is.  So it’s not going to be invested, it’s just going to be tucked aside for whatever that emergency may be.  And then the difference, whatever is left.  If you have 70,000 and you feel that 20,000 is good to have in an emergency fund, then the remainder you can invest in — I would look for a good quality balanced mutual fund.

 

Are you still working, Sherry?

 

Yes I am.

 

So you’re still employed, you still have a 401k.  You know the other thing you can — and your husband you said is in his 70s.  I’m assuming he’s on full Social Security, right?

 

Right.

 

So the income that you’re getting every month is including rental income, Social Security, and your employment income, correct?

 

Correct.

 

Okay, so where Nancy was going is that — now you can invest that money and put it into a mutual fund.  Or alternatively what you can be doing do is be putting that money into your 401k plan.

 

Yeah, increases — you had mentioned your generous monthly income and it’s more than enough for you.  You might want to as Aaron just said, increase what you’re contributing to your 401k.  Because you’re saving pre-tax dollars, if you bump up what you’re contributing to your 401k $100 a month, it’s not going to reduce your spendable by $100 a month.  It’s money that you’re now sending for taxes that you can be putting into your retirement savings.  So that would be a good suggestion also.

 

But I think your situation is the perfect example of someone who needs to do some detailed financial planning so that you can figure out how long you need to be working for, how much money you need to be saving, where that income that you have coming in is sufficient you over your life expectancy and your husband’s life expectancy.  Whether you’re properly taking on the right amount of debt, I mean there’s a lot of questions that you’re asking, it’s hard to talk about over a four-minute phone call.  So I would suggest that you do some financial planning, whether it’s with us at our office or whether you do someone at — it looks like you’re in Vero.  So whether you can meet with someone over in Vero or whether you want to drive over to Altemont Springs, we’ll be more than happy to talk to you.  If you’re interested in calling our office, our phone number is 407-869-9800.  Call and ask for Nancy, she’d be happy to run up a financial plan for you and do a detailed analysis on your situation and get you going in the right direction so that you have a safe and secure retirement.

 

Well Sherry, thanks so much for the phone call.  If Sherry were to come visit at the office, how would they get there?

 

If they go to our website, which is financialgroup.com, there’s directions to our office.  You can also get all kinds of information on upcoming workshops, you can look at all of our bios, and you can click to take advantage of a complimentary consultation.  There’s a lot of information at financialgroup.com.

 

Alright, thank you so much, Nancy.  Sharon and Jim, hang on the line.  If you want to be behind Sharon and Jim, it’s 844-220-0965.  844-220-0965.  We are planning tomorrow today with the Certified Financial Group on WDBO.

 

And welcome back to the second half hour of On the Money with the Certified Financial Group here on news 965 WDBO.  We are taking your phone calls at 844-220-0965 with Aaron Burt and Nancy Hick from the Certified Financial Group.  Guys, has anybody joined us during the latest news, weather, and traffic <Inaudible>.

 

You know I had a little vertigo when I woke up this morning and I came back just then.  Anybody joined who joined us during the latest news, weather, and traffic, what can they call you about today?

 

They can call us about any of their pocketbook questions.  Whether it’s retirement planning, estate tax questions, long-term care, life insurance, 401ks, TSAs, 457s as we talked about.

 

457s was a new one.

 

<Inaudible> planning.  And if somebody wants to call because they whipped out their calculator when we were talking about the Dow and said she said 0.3 and it’s really 1.3, duly noted that the decimal point was a little off in the brain, so.

 

That was a <Inaudible>.

 

It still is a very miniscule — but any financial questions and concerns that you have facing your retirement.

 

Alright, just like that.  844-220-0965.  We do have a line here, so let’s get right back to our busy phone lines.  Sharon in Davenport.  Sharon, you’re on with the Certified Financial Group on WDBO.

 

Good morning, Sharon.

 

Good morning.

 

Hey.

 

Hey, I was wondering: I have some savings bonds that are maturing and not getting any more interest every month from now on.

 

Okay.

 

And I’m going to have to pay a lot of tax — well not, you know, tax on it.  It’s about $100 a week <?> is what it is.  It’s $75 will be taxable a week.  Should I be paying down debt with them, is there something that I can put them back into to get a decent return on <Inaudible>.

 

So you have savings bonds and they have — they’re 30 years past their maturity date, they’re no longer earning interest, correct?

 

Correct, every month.  I already cashed like $300 in last month and it’ll be basically like $400 a month.

 

Okay so you — we were a little puzzled by what you were saying by the per month thing.  So you have bonds coming due every single month, where you Probably bought them payroll deducted years and years ago. <Inaudible>

 

Alright, that makes sense.

 

Alright.  So you know how much you’re going to have to pay in taxes on these and then you have your net income.

 

Mhm.

 

Okay.  Alright, and you said should you pay down that debt or invest it, is there an opportunity for you potentially to do both at the same time?

 

Well, I have some credit card debt but a lot of it is zero interest.

 

Okay.

 

<Inaudible>.  I’ve been kind of finagling it.  It’s for — I <Inaudible> a credit card for a rental property.

 

Okay.

 

Just because I didn’t feel like <Inaudible> roll the mortgage stuff out.

 

Right.

 

So I then — gone back and forth and I pay about 3,000 on my debt a month.  And I’ve always been under the — always thought well if use your savings, you’ll never put it back.

 

Right, right.  I mean we had the discussion a caller ago about the <Inaudible> stock emergency money.  So if that’s a little bit low in your coffers, you might want to beef that up a little bit and then move onto retiring some of the debt.

 

Yeah, because the 0% interest deals are great, but you know — those eventually catch up to you.  If you run into an instance where you can’t roll that debt, then you are going to have a big bill that’s going to be coming due and you’re going to have to have the cash available to pay that 0% interest.  But you also want to make sure that when you’re rolling those kind of deals, that you are building up some sort of savings account so that you can pay that off in a swoop versus running into the instance where you can no longer roll that debt.  Because that can turn into a big mess for you.

 

Okay.  And I could always borrow on one of the — we have like five rental places and we could always borrow on one of them.  <Inaudible>

 

It sounds Sharon like you need to beef up the cash coffers a little bit and try and retire some of the debt at the same time.  So that would be from this limited conversation, the best advice we can give you right.

 

Alright.

 

But thank you so much for calling.

 

Sharon, thank you so much for the phone call.  If you want Sharon’s line, it’s 844-220-0965.  844-220-0965.  Go ahead Jim in Lake Mary.  Jim, you’re on with the Certified Financial Group on WDBO.

 

Good morning everyone, thanks for taking my call.

 

Of course.

 

What can we do for you?

 

I have a question on required minimum distributions after 70 and a half.

 

Okay.

 

I have fairly substantial IRAs and my question is to maybe make an assumption that I can pull out 3%.  And assuming my earnings are greater than that 3%, can the IRA continue to grow even with these required minimum distributions.  Or do you have to take earnings and principal as well?

 

No, it can continue to grow.  I mean everything grows on a tax-deferred basis.  So — because it’s in the IRA, in the qualified arena, the principal versus earnings really is not an issue like it would be for a taxable.  But I have year after year clients that’s are dealing with it, are having to take larger required minimum distributions because even though they took a withdrawal in 2016, the account has grown so much above what they’re having to withdraw that yes, they still have to.  To regardless of your required minimum distribution, if you have a well diversified portfolio and it’s lined up with your risk and your income needs, yes, there is a potential.  And it should — we would hope, be growing above what you have to withdraw every single year.

 

Now Jim, are you over 70 and a half currently.

 

No, I’m not.  I just turned 66.  So when you hit 70 and a half, you actually have to take 3.65% of your account value on December 31st of the year before you reach 70 and a half.  So you said 3%, just so you know the first RMD is actually 3.65% and then it goes up every year.  So you have to take that money out, you have to pay taxes on your withdrawal.  But if you don’t need all of the money, what we have a lot of our clients do actually is roll some of that money over into a brokerage account.  So that they are then able to keep now an outside of an IRA brokerage account growing for them so they have an additional pot of money to be able to draw from.

 

Right, understand.  Ok, yeah obviously it’s more concerning about tax planning as I do have to start making those large withdrawals.

 

Exactly.  Are you still working?  Do you have income now?

 

That was my question.

 

Yes, yes I am.

 

Have you had anybody do a financial plan for you, Jim.

 

Yes, I have.

 

Okay, great.  Alright.

 

<Inaudible>

 

I’m sorry, I felt very comfortable about where I am right now and it’s been concerning about the RMDs.  That was a concern.

 

Yeah, if you take a conservative rate of return and compound it between now and 70 and a half, you can get an estimate as to what your account may grow to and then apply the 3.65% in the first year.  You’ll know approximately what your first required minimum distribution is going to be.

 

And one thing to think about too, we’ve done a lot of plans for clients lately who are sitting on large IRAs, but then they also have large cash savings.  And then as they go into retirement, what they plan to do is live off of their cash savings before 70 and a half.  Let’s say you retire next year at 67 and then you’re going to live on your cash for three years and then start taking required minimum distributions.  If you are in a low income bracket, you may want to start taking money out of your IRA before you hit 70 and a half and get tax-free withdrawals from that because you’re in a low tax bracket or zero tax bracket and maybe do some Roth conversions.  Start moving some of that money over <Inaudible> into a Roth account.

 

Yeah, that’s a good point.  My wife has retired and to supplement what her income was, we are taking some withdrawals out of it right now to your point <?>.

 

Okay, good.  And we have no idea what’s going to happen with tax reform.  So you can level out the taxes throughout the rest of your life by taking withdrawals prior to 70 and a half.

 

Gotcha.

 

Right.  I wouldn’t take big withdrawals, I’d only take enough to keep you in the lower tax brackets if you’re just taking it in order to lower your IRA account balance.

 

Right, understand.  Well thanks very much.  I appreciate the information.

 

Yeah, you’re very welcome.  Thank you for the call.

 

Alright Jim, thanks so much for the phone call.  If you want Jim’s line, it’s 844-220-0965. 844-220-0965.  Or you could text us your questions, you can do about 160 characters, 21232.  Alright, we have some text questions here, guys.  Let’s start off with this one: Fiduciary says they would charge me a service fee of 1.25% a month and that they would take out of my account yearly.  Is that common?

 

It sounds like it’s 50% <?> a year.

 

I think the wow says no, it’s not common.

 

I think that’s a misprint. <Inaudible> 1.2 <Inaudible>.  And then <Inaudible> got to say 1.25% annually that they — I don’t know.  That doesn’t <Inaudible>.

 

I think the average annual management fees range between 1% and 1.5%.  We’ve seen some people that have charged 2% to 2.5% on assets under management over the course of the year.  But we do not charge 2% to 2.5%, but if it as that person typed, wow.

 

Yeah, <Inaudible>.  Wow.

 

We’ve got another text question here, 21232.  I am 67 at $150,000 in TSP.  I would like to move it to a Roth, but what is the easiest way to convert that tax-free to Roth tax-free, or any other BE and that’s why we ask you to keep it to 160 characters <Inaudible> because this text got cut off.

 

So the TSP is a thrift savings plan, so this person works for a non-for-profit.

 

That’s the government-run thrift savings plan.  Well usually the TSP, I guess they’re different types.  The TSP I’m familiar with is the one that’s offered to government employees.  I was in the military, I had the TSP.

 

Gotcha.

 

It’s tax-deferred savings.  So what they’re asking is can they — what’s the easiest way to convert it to a Roth or roll it to a Roth.  So what they have to do is go from the qualified retirement account to a rollover IRA and then go from rollover IRA to Roth.  What they want to look at is what is the potential tax ramifications of doing that.  If they’re going to roll the whole 150 or convert the whole $150,000 to Roth, they’re adding $150,000 onto their taxable income for the year.

 

Yeah, that’s a lot of money.

 

Yeah, and if they want to stage it and do a chunk every year from the Roth IRA into a Roth conversion, that may make more sense from a tax standpoint.  Especially again if we do have tax reform and brackets go down.  I’m not a fan of paying taxes unnecessarily, so this is not something I would want to do.

 

And that 150,000, that’s at least in the 25% tax bracket, so that’s about $38,000 in taxes.

 

On top of whatever they potential taxable income is.

 

Yeah, exactly.  So that’s a big chunk to take out of your account just so you can move it to the Roth.

 

I’m not a fan of being philanthropic, too.

 

<Inaudible> either.

 

Alright, got another tax question here, 21232.  Current cape <?> is 29.9 equaling 19.9’s <?> Black Tuesday, how overvalued is it, and don’t buy it at the top.

 

So the cape is a type of PE ratio developed and basically <Inaudible>.

 

That’s price to earnings ratio <Inaudible>.

 

<Inaudible> earnings ratio based on the average inflation adjusted earns from the previous 10 years.  As known as a cyclically adjusted PE ratio.  And he is correct — or she is correct, that the PE ratio, currently the cape, is matching the Black Tuesday amount which was back in 1929.  However, it is still within the average — it’s a little bit higher than it normally is median-wise.  But the cape ratio, the all-time high cape ratio was a 45, which is still another 10 points higher than what we’re currently at right now.  So I don’t know.  I mean you can –.

 

Okay, lost me, it’s boring.  I’m sorry.

 

Yeah, <Inaudible>.

 

I’m sorry, I don’t mean to be offending the texter or anything, but you know.

 

It’s looking back into the past to try and dictate what the future is going to do.

 

The world is different, the rules of investing are different, the curves on the markets going down that much are completely different.

 

We’re in a completely different world than we were in 1929 <Inaudible>.

 

You can’t apply what happened — or even what happened in ’87, you can’t apply.

 

Or what happened in the 2000, or I mean — yeah.

 

<Inaudible> a long time ago.

 

History is always interesting and fascinating.

 

And really what’s driving — and if you think about what’s driving the market right now is the hope for some deregulation and for a reduction in litigation possibly and —

 

Taxes.

 

Yeah, taxes.  And so there’s a lot of hope here that the agenda that’s being proposed is going through.  And that’s why last week we had some turmoil because when the White House had a little bit of pressure on it, the markets kind of got the fear that they’re going to be bogged down in that versus doing tax reform and healthcare reform, and all of those other things that are on the agenda.  So that’s why we had some turmoil.  But the market have been growing since November based off of the fact that they think that the government is going to get out of businesses’ way and let this economy start growing again.

 

And if you’ve been an investor for the last 10 or 15 years, 2015 was a negative year, 2011 was a negative year, 2008 was a negative year.  But doing a regular review and analysis with our clients, if you’ve had quality, it’s prevailed.  And people have not for the most part have gotten hurt by these dips over the those three years.

 

Alright, well if you have a question for us, 844-220-0965 is the number to dial us up.  844-220-0965.  If you want to text your question, you can keep it to about 160 characters.  21232.  That’s 21232.  We are planning tomorrow today.  With the Certified Financial Group, Aaron Burt, Nancy Hick in studio.  Now it’s time to get the three big things you need to know.

 

Welcome back to the final segment of On the Money with the Certified Financial Group here on news 965, WDBO.  We are here with Aaron Burt and Nancy Hick from the Certified Financial Group taking your phone calls at 844-220-0965.  Well, it is the last segment, and we haven’t gotten to one of our questions that were e-mailed into us here, Nancy.  This one is I’d like to move a portion of my RMD this month directly to my church.  It is my understanding that the direct move to a qualified charity can reduce the modified income used by the Social Security Administration in determining Medicare taxes.  Is this correct?  It’s an interesting one.

 

Yes, and the simple answer is yes.  That it has to be done properly.  For most of the required minimum distribution forms that we have, if you want to direct it to a charity, you can name who the check is payable but you have to have the tax ID number for the charity for this to all go through properly.  And this is as <Inaudible>

 

So who would do that?  Would that be your financial planner, or — okay.

 

Yes, I have done this for my clients and other people should be able to do it for their clients.  As opposed to taking the required minimum distribution and then you writing a check for it, so it’s going directly from your retirement account to the charity which is all kosher.  And you get the tax deduction, you’re satisfying your required minimum distributions so there’s no penalties there.  And as the question asks, no negative impact on the Medicare.

 

There’s a limit to that, there’s a dollar limit.  And it’s about 100,000 <Inaudible>.

 

$100,000 <Inaudible>.

 

So they can take $100,000 out of your IRA every year and it’ll could towards your RMD and then that can go direct to the charity of your choosing?  So a lot of people are doing that rather than writing checks.  They’re charitably inclined anyway, they just want to use the RMD, and it lowers the overall income and has other positive impacts as well.

 

Well I learned a lot of new stuff today.  <Inaudible> this was one that was really — that’s really interesting, I didn’t realize that.  Got about a minute and a half left to go.  We haven’t talked about the upcoming workshop with the Certified Financial Group.

 

Speaking about learning things, so the next workshop we have is on Tuesday, June 6th from 6:00pm to 8:00pm hosted by Gary Abelly.  When Can You Retire, and Know Your Number.  And then Gary is hosting <Inaudible> Healthcare Options in Retirement, this is Tuesday, July 11th from 6:00pm to 8:00pm.  And then Social Security Bootcamp hosted by myself and Denise Cobach is on July 20th from 6:00 to 7:30.  And the last one that we have on the books is Financial Basics Strategies for Success, Saturday, September 16th from 11:00am to 1:00pm hosted by Gary Abelly.  These are all informational to gather some good data to learn a little bit about us and the services that we provide.  There’s always a light meal supplied.

 

Sure.

 

So go to our website, financialgroup.com.  Click on the workshop tab and make your reservation.

 

Alright Nancy Hick and Aaron Burt in the studio today, thank you so much for joining us.  We’ll be back next week where we plan tomorrow today on news 965, WDBO.

 

Dictation made on 5/25/2017 3:33 PM EDT.

Hosts: Roger Johnson, CFP®, AIF® and Joe Bert, CFP®, AIF®

” When to… when not to roll your 401(k) to an IRA ”

Welcome to another edition of On The Money. The Certified Financial Group here on News 96.5 WDBO. It’s experts weekend. We are here with Joe Bert and Roger Johnson from Certified Financial Group, taking your phone calls at 844-220-0965. Gentlemen how are you today?

Real good, and we’re live.

We are live today.

We are live, yes on May 6. The revenge of the Sixth.

Yes.

Because May the 4th .

Yes.

I’m making cheesy Star Wars references.

Clearly, that’s been the theme of this radio station all week.

Not Memorex, it’s live.

It is live.

We are live here, taking your phone calls, and your texts at 21232. Just keep it to about 160 characters. Gentlemen, what’s on your mind this week?
Continue reading

Well, good Saturday morning to you everybody.  I’m Kyle <Inaudible>, this is On the Money with the Certified Financial Group here on News 96.5 WDBO’s Ask the Expert weekend.  We’ve got the phone lines up and running, 844-220-0965, for your questions to be answered by Joe Bert and Nancy Hecht from the Certified Financial Group.  Guys, how are you today?

 

Good.  Great.  Good morning.

 

Staying cool out there.

 

<Inaudible> expected to hit 102 today.

<!–more–>

Yeah, my car said 100 at 2:30 yesterday.

 

I left here, it was 102.  <Inaudible> come down and then <Inaudible> down to 99.  I don’t know if that’s —

 

I do not complain about the heat.

 

Yeah, you like the heat.

 

I hate being cold, so I do not complain about the heat.  Florida is a great place to live.  Central Florida is a great place to live.

 

Yeah, but 102 can get a little — I don’t want to be sweaty.

 

You know what, that’s what you have air conditioning for.

 

Well, that’s true.  That’s true.

 

You have air conditioning.  You can change that.

 

Well, just to remind everybody who may be tuning in for the first time, what can they call you about today?

 

We are here to talk about anything that’s on your mind regarding your personal finances.  What we have seen over the years is that most people go through life trying some of this, trying some of that, and really have no direction as to what they’re going to do when they ultimately stop working, when their paycheck stops coming in.  How do we pay the bills, how do we enjoy that life that we so hope that we would have? And that’s what Nancy and I and the other certified financial planners at CFG do day in and day out for a fee.  But, on Saturday morning we are here absolutely free.  So, if you have any questions regarding your personal finances, all you have to do is pick up the phone and dial these magic numbers.

 

844-220-0965.  844-220-0965.  And you can also text us.  We have a text machine up and running as well.  21232 is the number to do that.  Just keep it to about 160 characters.  That’s all we can see on our screen here.  21232.  Well, Nancy, Joe, I saw a headline this week said there are going to be some changes to the 401k plan, the new tax law.  I had to come in first thing and ask you about that right off the bat to get your thoughts.

 

Okay, so it goes from there are to there were going to be changes.

 

Ah.

 

So, when I read the whole budget proposal after it was released on Wednesday, by late Thursday night, early Friday morning, the parts that I didn’t like about the 401k had already been changed.

 

Oh.

 

There’s really nothing to worry about.

 

At least for the time being.

 

Yeah, I mean, it’s a bit — the funniest criticism I saw of the budget was it’s only 248 words and seven numbers.  I thought oh my gosh, if somebody — if that’s the criticism, somebody’s really grasping.  But I mean the president is known for throwing out the most drastic ideas ever and then going behind doors and negotiating, and coming out with something that is generally good for the majority of the public.  So, the things that they were going to change with 401(k)s all had to do with the taxability and making it more Roth-like.  And anything to dis-incentivize people from saving I think is horrible, so I obviously was not the only person who thought that and everything that was publicized for the radical changes for 401k at this moment do not exist.  So, there’s not going to be any changes to how 401(k)s are structured, 403(b)(s), any type of pre-tax savings which we always tout as the best thing when you’re saving pre-tax is whole dollars going into your pocket versus money that you’re sending to the federal government and it is the best way to save.  So, for the moment, it’s not changing.  So, that makes me happy.

 

The overall provisions of the tax —  proposed tax bill has got a long way to go.

 

Yeah.

 

Because we know what legislation is like now.  It’s like making sausage.  It ain’t pretty and you never know what’s going to come out the other end, but I really like the idea of eliminating estate tax.

 

Yeah.

 

<Inaudible> about the gift taxes.  Did you see anything about the gift taxes?

 

No.  They did not say estate and gift.  It just said estate tax.

 

So hopefully that will be eliminated as well.  I like the reduction to just three brackets <Inaudible> depends on what is allowed and where the cut-off points are like the increase in the standard deduction.  I like the corporate taxation for not only corporations, but pass-through entities like S corporations, and LLCs, and partnerships.  So, there’s — I think a great stimulus package for the economy and people are going to be squealing that it’s helping the rich.  Well the rich are the ones that pay the taxes.

 

Well, and aside from that, if you actually read what was proposed which, again, is not going to be what’s final, it helps everything.  Everybody.  And the article I was reading in the journal yesterday and there was a lot of quotes and interviews with Dems versus Republicans, they were admitting how it was going to help middle America.  So, you can’t —

 

Both sides of the aisle.

 

You can’t panic over the sound bites.  Everybody wants to get their name out there and hang on to one little point, nothing’s been voted on, nothing’s been a hard proposal.  This is a long way to go with all of this.  So, let’s just not panic with it and deal with what is the known quantity right now.

 

Can’t believe what you see on Facebook and Twitter and fake news websites.  Only right here on 96.5.

 

Even the national news.

 

That’s even <Inaudible>.

 

<Inaudible> Saturday mornings at 9:00 at we’ll set you straight.

 

You know, I was talking to somebody who was talking to the show a few weeks ago and I said I didn’t realize how the pre-tax — when you — the taxes <Inaudible> the 401k, it’s all pre-tax.  It’s not a deduction.  It’s <Inaudible> taxable income.  And I went well yeah, do you see the people really struggle with that?

 

And that was one fine point that was made in reference to the 401k yesterday.  It’s not a tax deduction.  You are not paying any tax on that money that’s going in there, period.

 

Period.

 

Yeah, it’s pre-tax dollars.  So, if you have $100 that you want to save, that whole $100 goes into your retirement account versus $100 minus 10%, 15%, 25% and then the net of that being invested.

 

It’s the full $100.

 

That’s the beauty of it.

 

Take advantage of the 401k.

 

Alright.

 

<Inaudible> payroll deducted.

 

Pre-tax.

 

Yeah.

 

Pre-tax.

 

And the rules between 401k and IRA for some of the <Inaudible> well I have an IRA and <Inaudible> job has a 401k, I — the more I do this show the more I learn and the more I go out there and I speak and we talk about retirement, and then <Inaudible> taxes is on everybody’s mind recently because we just all had to pay them and —

 

Well, you’re right to some extent.  It depends on the quality of the 401k plan that you have.  And you know, you’re limited as to how much you can put into an IRA, 5,500 if you’re at age 50 or 6,500 if you’re over the age of 50.  So, you’re limited.

 

Or, potentially less if you’re married and one spouse has a corporate plan.

 

Ah.  So — but, if you’ve got a match — if you have a match at work, that’s the first thing you want to do because that’s free money.  That is free money.

 

The problem I have with the match, though, is a lot of people will save to the match and that’s it.  And they’re doing themselves a huge disservice.

 

Yeah.  They think they’re maxing out their 401k and getting the match and that’s it.  That’s not right.  $18,000 if you’re under the age of 50, 24,000 if you’re over the age of 50, and that’s what you ought to be striving for.

 

Yeah.

 

Because at the end of the day when the paycheck stops, all you have is Social Security, plus what you’ve been able to save.  And friends, that’s the way to save it.

 

And I would imagine that there’s going to be more changes to the Social Security system before there’s ever changes to any type of retirement account.

 

Yeah, I was going through life never expecting to see Social Security by the time I reach 65 <?> in 34 years.

 

It’ll be there and here’s what’ll happen.  It’s going to be pushed out to age 70.  Full retirement age, you can count on it.  It’s going to be pushed out to age 70 as they did back in the 80s when they adjusted it to 65 to 67.  People are living longer and it won’t be pushed out to age 70 for Baby Boomers.  It will be the Millennials and the <Inaudible> so you can prepare for it.

 

Well, I think one huge change that can bring a lot more money into the system is if the deferral guarantee was dropped from 8% to even 5% or 6%.  I mean, you cannot get, right now, unequivocal 8% guarantee anyplace.

 

<Inaudible>.

 

Right, if you defer taking Social Security beyond full retirement age you get an automatic 8% credit a year.  So, by full retirement age being pushed out, that 8% credit is now only three years for most people versus four, so that’s saving money.  But, I think even to offer a 6% or a 5% guarantee would be nice for a lot of people and more than what you can get in the guaranteed realm today.

 

Hey, I’d take it.

 

And would save an awful lot of government money.

 

Absolutely.  Well, if you’ve got a question for Joe or Nancy, it’s 844-220-0965.  844-220-0965 or you can text us, 21232.  That’s 21232.  We do have a text question in here guys.  Is a sub-corp better than an LLC in terms of accumulating wealth?

 

Accumulating wealth.  Well, <Inaudible> company is that the entity in and of itself is going to be taxed the same way.  You can have the same kind of retirement plans and they function pretty much the same way.  I think — I don’t — I can’t think of any <Inaudible>

 

I would have to agree it’s a function of the business.

 

Yes.

 

And what type of cash flow there is.

 

The entity in and of itself <Inaudible> get the same tax treatment.

 

Okay, well that’s pretty — simple enough.  844-220-0965.  Joe, you were going to say something right after Nancy was done speaking before I gave out the phone numbers.

 

Well, sure, the phone numbers once again if you want to call <Inaudible> and the good news is you don’t even have to leave your own name.  You can pretend you’re somebody like Jack or Jessie or —

 

Unless you have a distinctive voice and we know who you are.

 

I just want to know what name to call when I click the number to put you on the air so you can talk.  <Inaudible>

 

Call anonymously.

 

If your name is A, tell me your name is B, I don’t care.

 

There you go.

 

At 844-220-0965 is the number.  844-220-0965.  Or what’s the number to reach you guys on Monday at the Certified Financial Group?

 

They can call us Monday through Friday, 8:30am to 5:30pm, 407-869-9800 or go to our website which is financialgroup.com and there is a ton of information.  We have a lot of things you need to know.  We have the upcoming workshop schedule.

 

Yeah, what is the upcoming workshop schedule?

 

Good question.  We will know at the end of the <Inaudible>

 

I know that the next Social Security workshop is June 20th and I also know that Gary Abley has a couple workshops coming up before then, but at this point we don’t know.

 

No worries.

 

Anyways so you can all look at — there’s a little picture and bio of all of us, directions to our office, you can send in questions, you can request a complimentary consultation.  So, the website has a lot of good information, financialgroup.com.

 

How’d the shred event go last week?

 

It was really nice.  It was really nice.  I did have one person say to me that they were struggling to get two boxes of stuff to shred because now they’re scanning everything and doing so much online, so there’s a shift in that realm.  But we had a nice crowd of people out there and it was nice to be able to see everybody and anybody who wanted a cup of coffee and a donut was welcome to it and —

 

Yeah.  It was a good day overall and <Inaudible>

 

Yeah, and the weather was nice.

 

Kyle was doing a great job here working the board while we were in the parking lot talking to our listeners.  It was great.  I saw this <Inaudible> — just to segue just a little bit into something different — Aaron just sent me — they have just released the details of the I-4, 434 Interchange.

 

Oh yeah?

 

<Inaudible>

 

How bad is it going to be for us?

 

Really?

 

I think it’s going to be very good.  But one thing that I didn’t know, it looks like the express lanes are going all the way to EE Williamson.

 

Wow.

 

Oh.  Okay.

 

That’s a lot further than before.

 

Yeah, they were supposed to stop at 434, so it looks like they’re going all the way to EE, which would be terrific.  I mean, absolutely terrific.

 

I take EE Williamson to <Inaudible> to go to work.

 

Oh yeah, if you want to jump on I-4, it’s better that driving all the way down <Inaudible> road.  That will take a lot of pressure off of Martin Woods.  I hope that’s <Inaudible> reality.

 

Hopefully, it keeps all the tourists in the express lanes.  The locals can use the outside lanes to get to and from.  That sounds great.  Well, we’re up against the three big things you need to know.  But again, the phone number, 844-220-0965.  844-220-0965.  The text machine is up and running as well, 21232.  We are planning tomorrow —

 

Today —

 

With Joe and Nancy from the Certified Financial Group on News 96.5 WDBO.  Hey, welcome back to On the Money with the Certified Financial Group here on News 96.5 WDBO.  That’s the show where we answer everything and help you get your 401k into that retirement finish line.  Joe Bert, Nancy Hecht from the Certified Financial Group are here taking your phone calls at 844-220-0965.  That’s 844-220-0965.  And then the text machine is up and running as well, 21232.  We are listening to ABBA <Inaudible> ABBA because next Saturday evening at the Spring Community in Longwood, Certified Financial Group for the sixth year will be hosting the annual Springs Concert.  And this year featuring the music of ABBA.  They bring in a tribute band, backed up by the full complement of the Orlando Phil.  It’s a great evening under the stars and I would tell you to call, but tickets are all gone.

 

All gone.

 

Sold out.

 

All gone.

 

Sold out.

 

They’re all gone.

 

You sold out.

 

Sold out.

 

Wow.

 

How about that.  Once again we’re proud to be a part of that and bring that service to the community.  We’re looking forward to seeing a lot of our listeners there.  So, if you’re there and you see us, please stop by and say hello.

 

Well, apparently, the after market for the concert can like start to jump up here <Inaudible>

 

Alright, so let’s get back to our phone lines here so we can get some questions answered.  Let’s go to B in St. Cloud.  B, you’re on with the Certified Financial Group.

 

Hello, B.

 

Hi, B.

 

Hi.  I had some questions about my 401k there because it doesn’t seem like I’m making any money off of it.

 

Okay.

 

I mean, at all.  And I don’t know how — I mean, they have the person you know whatever that says how to invest and everything.  My coworkers are making more money than I am, but — they did contribute until the company stopped matching.  But I’m still contributing like $50 a week and they’re making more money than I am.

 

B, I wonder if it’s a function of the investment portfolios you’re taking advantage of versus the investment portfolios that your coworkers are taking advantage of.

 

That’s what I’m saying.  I don’t know what the —

 

Yeah.

 

How to handle this.

 

Okay, have you —

 

I’m doing what they recommended.

 

Yeah.  Well, maybe what they recommended is not what’s performing up to snuff at this moment.  Have you had anybody do an independent analysis for you on what your investment choices are?

 

Well, <Inaudible>.

 

Yeah, so maybe that’s something that you need to do.

 

I just — because it’s easy, you know.

 

I understand that.  But, if you’re not getting the performance that you feel that you should, you need someone else to find all the investment choices and somebody needs to explain them to you — what the composition of stocks versus bonds versus cash, whether it’s foreign, whether it’s domestic, and see what fits in with your risk tolerance and your time horizon, and what might be the best choice for you to make.

 

B, let me ask you.  Let me try to make this a little simpler for you.  And I understand where you’re coming from because people start looking in that stuff and then you start chasing returns and then you start comparing what you have versus what your coworker has.  In your 401k plan, do you have any funds that have years attached to them like 2025, 2035, 2040? Does that sound familiar?

 

They have like a pie chart and I was just looking through the paperwork from my last statement and actually I thought I had it, but I actually have my wife’s.

 

What Joe’s asking —

 

<Inaudible>

 

Is there a fund that has the word target attached to it? Target 2025 or —

 

With a year attached to it.

 

I don’t have the paperwork.

 

How old are you, B?

 

I’m 47 years old.

 

47 years old.

 

Okay, so you have a lot of time.

 

So you’re 18 years out.  Look for, in your plan when you get a chance to look at your options, if you have something that says 2035 or 2040, that’s — I’m talk about years now — 2035, year 2035 or 2040.  That’s what’s called a target-date fund.  Alright, let me tell you how this works.  You put your money in it, set it, and forget it, and don’t look at it, don’t compare it with your coworkers, don’t worry about it until you’re 65 years old.  That fund is managed for you and it will become more conservative as you approach that retirement date.  So, in your early years it’s going to be more aggressive.  As the later years, it’s going to be more conservative so theoretically when you’re ready to retire the bottom hasn’t fallen out.  It’s one size fits all, set it and forget it.  If you don’t have the time, the inclination <Inaudible> working with a professional, that’s the failsafe way to invest in your 401k.  And do not, by any means, compare it with what your coworkers are doing because this isn’t a baseball game that you’re trying to do better.  Because people make the wrong decisions for the wrong reasons.

 

<Inaudible> encourage you to do that.

 

And B, I’m going to tell you that if — when you find your statement and your investment choices, if you want a little bit of help deciphering it, you can feel free to call me next week or it should be an e-mail.  My e-mail address is Nancy@financialgroup.com.  And I can help you find those target funds.

 

Alright, B.  Thanks so much for the phone call.  If you want B’s line, it’s 844-220-0965.  844-220-0965.  The text machine is up and running as well, 21232.  Right now we’re going to pause for the latest news, weather, and traffic with Dave Wall in the News 96.5 newsroom but right now we’re planning tomorrow today with the Certified Financial Group on News 96.5 WDBO.  <Inaudible> no worries, always try to see if I can’t catch you off guard.  So, for the news, here’s Dave Wall.  And welcome back.  This is On the Money with the Certified Financial Group here on News 96.5 WDBO.  We are taking your phone calls at 844-220-0965.  844-220-0965.  The text line is 21232 if you have a text question.  It’s just that simple.  We’ll see it on our monitor here.  I’ll ask it to the panel, and we’ll get your question answered right here on the radio today.  We had a caller that dropped off, guys.  I just wanted to bring — just to get the conversation rolling again — that she was going to get a marital settlement here recently and wanted to know what was the best way to deal with that money.  Should she hang onto it? Should she put it away? She was somewhere In her 40s, so let’s throw it out there, but she’s dropped off <Inaudible> wanted ask that question because I thought it would be pretty good for everybody.

 

From the premise, it sounds like it’s almost like a windfall, like a large amount of money potentially coming to this person that they haven’t had before.  And whenever somebody comes in to sudden wealth, you know there’s a lot of things to be concerned about and there’s a big fear factor so planning is certainly the most important thing to do for looking at where you’re at now, where you want to be.  Is there — some of those <Inaudible>, those if I only had itches that you might want to scratch and take that off the table.  And then look at long-term lifetime planning.  If somebody is in their 40s or their 50s and they’re in this type of situation, you’re looking at a potential 40, 50 year length of time to make this money work for you and you want to be  smart with it.  So first and foremost, what we’d like to do — and it really doesn’t matter what the lump sum of money is for somebody.  Everybody deserves planning.

 

Well here you have a divorce situation, so depending what your income situation is, this person — is this person going to have income, does this money have to be used to provide them income for the rest of their lives?  <Inaudible> sound <Inaudible>.  Do they plan on going to work or going back to work, what’s their lifestyle?  So all of these you mentioned, Nancy, is critical.  And that’s why planning is so important.

 

It is, and that’s — but people look at us as financial planners, money managers.  The planning part is first and foremost.  And we need to help people build their roadmap, their blueprint, any type of —

 

Good investing requires good planning.  Unfortunately, most people don’t do the planning, they do the investing.  Like B over there, he’s chasing is tail, <Inaudible> what his coworkers are doing.

 

Can’t do that.

 

People going to these seminars and then hear about so product somebody wants to sell them as the end-all, be-all, cure-all and think it’ll do what you want to do — don’t do any of that stuff until somebody has done some planning for you.  So you don’t — the most important thing is how conservatively can you invest your money and still have a high probability of not running out of money when you’re 95 years old.  And the only way to do that is to look at all of the variables that go into it.  Taxes, inflation, where your money is coming from, from pensions, from Social Security, what you’ve been able to accumulate.  And then you know — then you have a roadmap and you have a clear guide as to what you need to do now as <Inaudible>.  You don’t look back five years and say gee, I wish I would have known or gee I’m starting again.  I know we’ve got some calls, so let’s take them.

 

Yup, alright well let’s go to Daniel in Orlando.  Daniel has got a question with the Certified Financial Group, go ahead Daniel.

 

Good morning Daniel, <Inaudible>

 

Good morning everybody.

 

Good morning.

 

Hey, thank you for taking my call.  Here’s my question.  I’ve <Inaudible> in January and I’ve started the process I’m going to describe.  I want to have a minimum of 20 rental properties by the time I turn 60.  I’m only getting five year loans on these houses so I’m paying them off fairly quick.  What’s the best way — I’ve not done an LLC, just hold it all like a sole proprietor at the moment.  Is that smart or should I make a change?

 

You have them all in one LLC?

 

No no no, he’s <Inaudible> as a sole proprietor now.

 

No, no you want to set them up as separate properties because you’re going to give liabilities on all of those properties and what you don’t want to do is have the liability upset the whole apple cart.  Because when you’re dealing with somebody in those properties, you’ve got liability for not only what happens in the house, what happens with their guests and the people that trip on the sidewalk and so on.  So what happens is you expose all of the assets that you have in that LLC to a problem that you can have with the <Inaudible> one of the properties.

 

Okay.

 

So that’s a PIA — that means it’s a problem.

 

No sir.

 

Pain in the.

 

Pain in the — yeah <Inaudible>.

 

But Daniel, wouldn’t set up one LLC that you can just copy and number two, number three, number four.  Or I’ve had some clients that have named their LLC by the property’s street name.

 

Okay.

 

But it’s all just — every little house is its own boxed-in business.

 

Okay.

 

You’re <Inaudible> everything.

 

Well good luck.

 

Okay and then after the process — after I get them paid off, what’s the best investment avenue for the profit margin thereafter every month?

 

Well that depends on your time horizon when you hit that, what your risk tolerance is, how you’re living your life, who you might have responsibility for.  So there’s a lot of questions to be answered in the process that we’ve been talking about calling planning.

 

Okay, good to go.

 

Good luck <Inaudible>.

 

Alright, thanks for calling us in and dialing us up.  And if you want Daniel’s line, it’s 844-220-0965.  844-220-0965.  Text machine is up and running as well, 21232.  Let’s go to Ness in Orlando.  Ness, you’re on the Certified Financial Group on WDBO.

 

Yes, good morning.

 

Good morning.

 

Yeah, it’s Neff.

 

Oh, okay. Hi Neff, what’s you’re question?

 

Hi Nancy, well actually one of my questions you just answered about the LLC because I have a property that hasn’t done the LLC and I was thinking about doing that.  And had spoken to my account, and <Inaudible> that off, so that’s a good thing, I’m in the right track there.  Now however, you were mentioning something about a 401k that things are looking better for a 401k versus the Social Security funds.  I missed that because I turned on the radio too late.

 

Oh okay, no we were concerned earlier this week when the budget proposal came out of drastic changes to 401ks but that is not going to occur.  And just throwing out our top of the brain suggestions to try and make the Social Security system last a little bit longer, so that’s really all you missed this morning by turning in things late.

 

Okay.

 

But if you’re — are your properties your sole business or do you do something else?

 

No, well I do real estate, I do — just recently re-located to Florida, so New Jersey, my property is in New Jersey, the one I have rented out.

 

Okay.

 

So I’m here in Florida now and I want to get some more properties to rent them out, so that’s what I’m doing.  But I’m also retired.  I have a 401k, so I just want to know what’s a good package to throw that 401k in, basically?

 

Yeah, the title would be rollover IRA but as far as what investments might be appropriate for you, Neff — again, we need to look at how you’re living your life and what types of things you want to do in the future and pulling it out to age 90 or further.  What your risk tolerances are, what type of cash flow you might need from your 401k, so there’s a lot of questions that need to be answered specifically towards you.  We don’t have a one-size-fits-all kind of program.  <Inaudible>

 

For me is to go see you can so I can get more <Inaudible> information.  Because I’m already 67, so I’m not a young puppy anymore.

 

Well, you still got many years ahead of you, so.

 

But I have a few more years ahead of me I hope.  Okay, so I guess — do I have to set up — I guess I have to set up an appointment.

 

Yes.

 

Okay.

 

Go to our website financialgroup.com, you can click on Nancy’s picture, you can make a <Inaudible> appointment right through the website.

 

Financialgroup.com.

 

I got to know the thought that <Inaudible> just had, had the — was 20 rental properties and that was before Nancy’s suggestion about setting them up all in LLCs.  So he has 20 different LLCs — I’m thinking why not take all of those LLCs and roll them into another master — where they call them master LLC.  Take that cash flow, he’s an employee of the master LLC.  Not only has income coming in, he can set up a 401k through there or cash balance plan <Inaudible> cash flow as he can set aside $0.25M pre-tax.  So depending how this thing is structured, he might be able to have something <Inaudible>.

 

Yeah, well I mean for LLC I was thinking a SEP-IRA with a lot more than a regular 401k, but you know with the cash balance thing, being able to set aside more than 54 <?>, <Inaudible>.

 

Put all of those 20 LLCs into one master LLC, so he has the income coming in there and then he’s the employer <?> of that master LLC, and then he’s on the way to setting up his own retirement plan.

 

So it’s a combination of attorney, CPA, and CFP.  <Inaudible> structured properly.  And seeing as you’re at the begin of it, it’s a great time to do it.

 

Alright, some bad news for <Inaudible> we were hoping for an EE Williamson.

 

<Inaudible> Yeah, <Inaudible>.

 

No, in fact in looking at this more further, it looks like this is where you’ll be able to get on the expressway <?> and you get off — if you’re on I4, but you can’t get on I4 from EE Williamson.

 

Ah.

 

It’s just like the budget <Inaudible> versus reality.

 

Right?

 

Well Neff, thanks so much for the call, we really do appreciate it.  It’s 844-220-0965.  844-220-0965.  Let’s get to Julie in Orlando.  Julie, you’re on with the Certified Financial Group on news 965.

 

Hi, good morning Nancy, good morning Joe.

 

Good morning.

 

I’ve been listening to you folks for a long time.  I have a Medicare question, Nancy.  I’m turning 65 in August and I understand I have to sign up for Medicare.

 

Right.

 

I have not started to take Social Security yet.  My husband is <Inaudible> four years younger than I.  So he’s working full-time and we’ve got insurance coverage through him.  But I’m being bombarded with I should get Medicare part B and supplemental.  I was thinking of taking my Social Security this year when I’ve registered the Medicare.  I wanted to think about that or could I just come in and see you and talk with you about it?

 

Well I mean you can do both, but I mean Julie — if you don’t need to take the Social Security right now from a cash flow standpoint and age 65 is full retirement for you, every year to defer is an 8% increase in your Social Security.  So if can afford to defer, I would do that.  Because — I mean it’s a gift.  So if you don’t need it — and as far as the Medicaid goes, we do have people that are experts in that.  I know many people in this situation that you’re in where the spouse is still working.  And if you’re — if you have health insurance through his, that could be your supplement.

 

Yes, because I did check with him and they said — and I did go to a small free seminar and I checked with the company and they said that I do not have to have Medicare part B in order to continue on his health plan while he’s still working.

 

Right.  And it will <Inaudible>, but you do — unlike being able to defer Social Security, you absolutely have to sign up for Medicare.

 

I do, and I have to do that — I know I put things off — by May 1st?  Because my <Inaudible> in August.

 

Yes, you have to do it a quarter before.

 

Okay.  Okay.  And I can go online — I’m not very computer savvy.

 

Sometime next week you got to get that done.

 

Okay, and if I should need help with that, do you folks help out with that if I need that?

 

Well, as I said Julie, I have somebody that we can refer you to and we would be happy to do that.  If you want to shoot me an e-mail or call our offices, the phone number is 407-869-9800.  Do we have the Medicare referrals on our website or no?

 

No, just call Nancy.  Yeah.

 

Yeah, give a call someday next week and I’ll get you the contact information.

 

<Inaudible> like I said we’ve been listening to you guys for years and we’re planning — because he wants to retire soon, so we’re planning <Inaudible> anyway.

 

Well great <Inaudible> we really appreciate you being a long-time listener, thank you for calling.

 

Alright Julie, thanks so much for the phone call.  If you want her line, it’s 844-220 — I’m sorry Joe, it’s Julie <Inaudible> up next.  Julie, thanks so much for the phone call.  Jean, you’re going to be up next right after we get the three big things you need to know.  But if you want to get behind <Inaudible> it’s 844-220-0965, 844-220-0965.  We are planning tomorrow today with the Certified Financial Group on news 965 WDBO.

 

And welcome back, this is On the Money with the Certified Financial Group here on news 965, WDBO.  It’s our final segment, the last chance to get your question answered by Joe Berg and <Inaudible> Certified Financial Group.  844-220-0965, 844-220-0965.  Text machine is up and running as well, 21232.  We actually <Inaudible> just dropped off, just missed her.  We’re going to go through with — I forget what she had her question — did anybody else remember <Inaudible>.

 

But I do have a question earlier and it was in reference to upcoming workshops.

 

I did, yes.

 

So we have to have that now.

 

So we’re taking a little break in May.  This next workshop is know your number, when should you retire and that’s June 6th in our offices hosted by Gary Abely.

 

6:00.

 

Go to our website financialgroup.com and click on the workshop tab and you could make your reservation and reservations are required.

 

And Gary like us is also a CFP professional in addition to being a CPA, so you’re going to get some great information, leave your checkbook at home as we always say.  Go to our website, financialgroup.com and click on workshops, you can make your reservations right there.  At the break, I was telling Nancy about a case that we were working on this week, the clients were in yesterday we did the presentation of their draft plan.  And these are a couple of young folks, they’re 35 years old, making very, very good money, have a lot of extra cash flow.  And have decided that they want to use the Roth component in their 401k as opposed to getting the tax deduction <Inaudible> with the idea that they get tax-free income somewhere down the road.  Well we did the plan — strangely enough they’re never going to have to take money out of the Roth.  So they’re giving up that tax deduction today with the idea of getting tax-free income that they don’t need somewhere down the road because they’ll have so much capital they’re never going to touch the Roth.  So they’re giving up between the two of them like $10,000 in tax savings today to get something that they’re never going to need down the road.  So this was the benefit of doing the plan, open their eyes, and now they’ll have extra cash flow if they use the deductible portion of their 401k as opposed to the Roth portion.

 

Well <Inaudible> you know what, $133 <?> to save.  100 in the Roth versus saving $100 in the 401k as opposed to the Roth 401k.  So I’m not a fan of being <Inaudible> to the government.  I think I pay enough in taxes as it is.

 

Just pay what you have to pay and <Inaudible>.

 

Yup, that’s it.

 

That’s how I do it <Inaudible> playing by the rules, that’s it. <Inaudible> So Stay tuned, folks, because as this tax proposal winds its way through Congress over the coming several months, we will bring you up to speed on at least what we know.  But once again, it’s never final until it’s final.  We do hope a lot of it passes in its present form because I think it’d be great for the economy, stimulate the economy, which means you’ll have more tax revenue as opposed to less of <Inaudible> run like Reagan did, and let’s make it happen.

 

Ken, we were talking in the beginning of the show how this next tax <Inaudible> was really going to help the middle class.

 

It will, it will.  And if you just do the slightest little search, you can see how much of a difference it will make for everybody.  This is not something that’s for the “wealthy”.  There’s something in there to help every tax bracket, every income demographic.

 

But more importantly, it will stimulate the economy which is really what we need, and that just brings in more revenue and jobs go — we have higher wages because labor is in demand, and it’ll be good.

 

Well, if you think of just the automated services at a lot of fast food restaurants.  And self-checkouts in the front of stores — that’s not being done to make things more convenient for us.  That’s being done to offset taxes and the expenses associated with some of the mandatory benefit plans that —

 

Yup, head counts and all of that <Inaudible> business owners are facing.

 

They would much rather have a person at a register.

 

I much rather be rung up by a person.  I’ve done the self-checkout and go you know what I’m just kind of <Inaudible>

 

I do it if I have to but I prefer to go to where somebody is actually — I want to support that person’s job.

 

That’s it.  Well that’s going to do it for this week <Inaudible> On the Money.  What’s the number of the week — during the week, guys?

 

407-869-9800.  Or better yet, go to our website, financialgroup.com.  That’s financialgroup.com.

 

Nancy <Inaudible> Joe Berg, thank you so much for dropping in today, we’ll see you guys next week.  Stay tunes for Florida Homes and Gardens, that’s coming up next on news 965, WDBO.

 

Dictation made on 5/3/2017 3:40 PM EDT.

 

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