Hosts: Denise Kovach, CFP®, AIF® and Joe Bert, CFP®, AIF®
Yes indeed it’s an Ask the Experts Saturday morning on news 96.5 WDBO. It’s good to have you with us. My name is Kirk and this is On the Money brought to you by Central Florida oldest and largest, independent, firm of certified financial planning professionals. That being the Certified Financial Group in Altamonte Springs. With us this morning we have 2 of the 12 certified financial planning professionals with the Certified Financial Group. Say good morning to Denise Kovach.
Good morning Denise Kovach.
And the oracle of Orlando Joe Bert is in the studio. Hi Joe.
How are you?
Glad to be here, thank you.
Thanks for ripping your way through the fog to join us this morning.
Anything for you.
Tell everybody what you are here to do.
Well Denise and I are here to answer the questions that you have regarding your personal financials. As we often times say in our personal that unfortunately we don’t learn this stuff in school, we go through life trying some of this, trying some of that. Reading Money Magazine, talking to our co-workers, watching television, listening to our friends and relatives and we find out one day we have a collection of financial accidents with really no direction. So we are here to answer those questions of what do 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. It’s kind of clearing up the financial fog if you will. So we are here to take questions that you might have regarding your personal finances. Often times revolves around decisions that you have to make about stocks and bonds and mutual funds and real estate and long-term health care and IRAs and annuities and 401(k)s, life insurance, reverse mortgages, all that and more. So we are here and if you have any questions about any of those topics or anything else that I failed to mention, the good news for you there is absolutely no-one in line. So all you have to do is pick up the phone and you don’t even to give your real name. You can have an alias, just pick up the phone and dial —
844-220-0965, 844-220-0965. Or you can text us from your mobile device, a short text at the number 21232 or even your voice could become part of the programming, find the open mic on the news 965 app. Denise some of the things we’re going to talk this week about, some new scams to avoid in 2016.
Yep they are still out there. I’ll tell you what there is a lot of ways to make sure that your finances are in good health. One of them is really knowing how to spot a scam. Unfortunately many people are swindled out of their hard earned savings every year. Here is what you really need to be aware of:
- Is scammers are still impersonating the IRS. They are intimidating consumers into paying penalties for back taxes. A lot of this happened in 2015, expect a lot more this year.
Oh okay. We’re going to talk about that and a bunch more scams coming up. You know how Clark Howard talks about scams.
Guess everybody is on the radio. Lets talk to Jerry. Hi good morning Jerry.
Good morning Jerry. How are you?
I was calling — I’m very good thank you. Thanks for taking my call.
I’m calling to see what the advantages and disadvantages are for a fixed indexed annuity.
Well I can tell you the advantage is, is that as they say that you will not lose money.
That’s the good news. The bad news is you won’t make much money and you may have some surrender penalties that are very severe. Which you have to understand is that — and the way these things are touted, and we’ve seen them all, we’ve done an extensive analysis if you will in our office about all the programs that are out there. But at the end of the day the insurance company can really pay you no more than they earn on their own investments, and insurance companies by law, are required to have very conservative investments. Now they tout that you are going to get market returns, but if you read the fine print you are going to have what’s called a participation rate; which means that if the market goes up, that’s a percentage you are going to get a percentage of that. Or you will have a cap and the fine print in many of these programs is that they can adjust that at any point in time. Of course insurance companies have to make a profit, and once they have that — you on the contract you are kind of at their mercy. But you will never lose money.
With respect to that cap, they can change it any time? Even after you get into the program they could say hey <Inaudible>
X percent is Y percent.
Yes if you read the fine print they can adjust the cap and/or the participation rate.
That’s usually do on an annual basis.
Go to our website Jerry financialgroup.com and there is a tab there called info to know. Alright up at the top info to know and beneath that is another link that is called the rest of the story. The rest of the story.
In there is a whole bunch of white papers and articles about indexed annuities, about the — one of the other things that is very popular, has a lot of ads on the radio, about life insurance — well they don’t call it life insurance. But it is using life insurance as the end all, be all, savings program that will solve all your ills and you want to read that as well.
That’s on our website. Financialgroup.com. Listen indexed annuities have become very very popular, particularly after what happened in 2008-2009 because people got their head kicked in and they want to be in the market but they don’t want to lose money. So these products were created with the idea that you are going to get in the market but you will never lose money. That is in fact, that’s true, you won’t lose money. But you are not going to make a lot. The numbers that are projected over the course of the maturity of the products is you’ll probably earn 3% maybe 4% on them. So that’s where you are.
Alright I appreciate your help very much.
Alright Jerry thanks for the call.
Alright thank you. Before we go onto Mike here in Leesburg I wanted to mention, you mentioned the website. I was just looking on the workshop page don’t you have a workshop page.
We do, we’ve got one going on. Gary Abley’s got it going on today, right Denise? What’s it all about?
Well he is — what is it — Countdown to Retirement, or that’s —
No Financial Basics for Life. <Background Noise>
Like the 101 course, it is. He is hosting that in our offices. Come on out, he’s going to be there from 11:00 until 1:00. I think he’s going to have a light lunch that will be served and there is still some room. So if you have an interest come on out to our offices at 1111 Douglas Avenue and sit down and hear about Finance 101.
Gary is going to talk about many of the things we talk about on the show. He will take your questions. Gary is — in addition to being a certified financial planners he’s also a CPA. Very very knowledgeable. Leave your checkbook at home, it is free, and the reason we do this folks is to answer your questions and also to introduce you to what we do as fee based planners and how we work. Come to our office — if you want more information simply go to our website financialgroup.com, financialgroup.com. Click on workshops. They’ll tell you all about it. Also tell you about upcoming workshops and you get a map. You can just walk in this morning because I know he has a few seats, we are going to hold it in our large what we call classroom. We’ve got room for about 30 folks, the audio, visual equipment and it’s very casual. You can come in almost your pajamas, but we would prefer you don’t do that. Throw on some shorts or some jeans.
Come on down and Gary will give you some great information, there will be something to eat, and I’m sure you will walk away informed. Everybody says boy we are glad we came out to this. We have a lot of people, friends and relatives do it. So once again that is this morning from 11:00 to 1:00 at our office in Altamont Springs and I’m sure Gary will be glad to see you.
Okay. It’s just about 9:15, quarter past 9:00 on News 965 WDBO. You know Dave Wall is in the news center keeping an eye on things. He is coming up in five minutes. One of the stories he’s working on is this Philadelphia cop shooter. Guy walked up to a cop car and just started shooting. He’ll have more on that coming up, five minutes now, from the news center on News 965 WDBO. Lets talk to Mike in Leesburg. Good morning Mike.
Good morning. I have a question about a 403b. I want to terminate my account but they are telling me it’s going to cost 25%. Should I wait until I’m 67? I’m 48 right now? Thank you.
It’s going to cost you — don’t hang up, are you still there Mike?
It’s going to cost you 25% to terminate your account, is that because of taxes? Probably because of taxes?
5% <Inaudible> and 20% federal tax.
Right so you’ve got a surrender charge to get out of the program and yes you are going to have to pay taxes. I presume that you need this money for something? Or are you just not happy with the —
No, no, it’s just not making me any money. I’ve had it for four years, it’s not making me any money. I think I would rather put it in the bank.
No, no, no, no, no, no, no. How old —
You say you are 48. Did I hear you say you are 48?
Okay you are 48. You are still employed with the same employer?
Yes, I was putting 300 a month but I’m stopping that because I’m just not making any money.
No, no, no, no, no, no. You are going the wrong way Mike.
First of all what are you invested in?
Tell us what you are invested in?
I think I be in four different quadrants to be honest with you. So I’m not a high tolerance level person.
In other words —
It’s just not making any money I’ve had it four years, zero money. I’m actually losing money to be honest.
Well I wish I knew more about what you are investing in but Mike I want to tell you this is what you need to be doing to maximize and to benefit yourself for retirement. Right Denise?
Well yeah and especially if you continue to contribute it’s pre-tax dollars your dollar cost averaging even in a down market which is where we are at right now.
And they are not contributing I don’t think, are they? Your employer?
No my company is not doing anything?
You mentioned company, you wouldn’t have a 403b generally with a company?
Do you work for a not-for-profit.
I don’t want to mention who I’m working for.
I understand that, that’s fine. So do you work for a corporation or do you work for the state of Florida or county or city?
So back to the benefits Mike it allows you to put money away tax deferred at least, it is pre-tax money. That accumulates over a period of time. Again you are dollar cost averaging. That benefits you as well. You really need to take a look at the investments and what you are invested in like Joe had said earlier. I wish that we knew what was there, what is the meaning —
What if I just stop contributions and just leave it alone?
Well you could do that.
You can do that but you are really you are shooting yourself in the foot Mike. Because as Denise said — I hear the frustration in your voice. But I want to tell you you are going to look back 17 years from now when you are 65 years now and say man I really wish I would have kept this up. First of all you are getting a tax deduction for the money that you are putting in, okay?
The good news for you believe this or not, every paycheck when you are putting money in if the market is going down you are buying more and more shares of what you are investing in. So when the market does turn around you are going to do a lot better than if you never lost money in that account. I mean I can show you on paper and I’ve been at this long enough to know that what you are doing is what you need to do. You’ve got a little bit of pain in this, but forget about it. This is for retirement. This is — don’t look at it on a day to day, week to week, month to month basis. This is the biggest mistake that people make, particularly this week. Right Denise? What’s going on?
Well hell the market has been a little bit challenging and people are a little bit emotional simply because 2008 is still on their mind. We had a terrible, terrible recession during that time. So people are a little bit nervous as far as okay what’s going on out there. But the thing is when the market is down that’s when you need to buy, so keep on doing it.
Okay I appreciate it. Thanks so much.
You need to be putting some — your welcome. I wish you well but as we say don’t even look at it. Just put it in there knowing that this is for retirement in 17-18 years. You are going to be fine and you will be thankful of the day you called this show.
You got a little adamant about that.
Well I know how it works, this isn’t rocket surgery.
Joe Burt has been standing on the same soap box for how many years now? 25 years.
Well 30 something outside here but at least 25 here in this studio.
I understand clearly the frustration that people have. I mean I understand it, I feel it, I can — I know what is going through their mind. But I can tell you folks this is the worst thing that you can do is to stop contributing to your retirement plan. It is absolutely — because when you stop working where is that money going to come from Social Security plus whatever you’ve been able to save in the meantime and saving on a pre-tax basis and letting it accumulate without taxes is by far in a way the greatest way to achieve wealth.
This hour was paid for by the host and does not reflect the opinion of news 965.
It’s Ask the Experts Saturday morning on News 965 and this is On the Money brought to you by the Certified Financial Group. We’ll get back to the news center in a little over four minutes. Dave Wall will have that story for you about that Philadelphia cop that I told you about. News scams to avoid in 2016, some of the things we’re going to talk about. Also you have only until April 30th to take advantage of this Social Security planning strategy that Denise is going to talk about. And things you could do this year to brighten to your financial outlook. But we love to hear your questions. Joe what kind of questions do you take.
Well Denise and I are here to clear up the fog that you might have regarding any decisions that you have to make regarding your personal finances. We go through life, trying some of this, trying some of that. We read this, go to seminars, get free lunches, free dinners. Free everything and we buy something and say oh my gosh what did I do. So we are here to answer your questions and take any questions you might have on personal finance regarding stocks and bonds and real estate and annuities, 401(k)s, 403b, 457, IRAs, reverse mortgages, all that and more. We are here and the good news for you is once again the lines have cleared up and there is absolutely nobody in line. So pick up the phone and dial —
844-220-0965, 844-220-0965 or text us, send us a short text from your mobile device that number is 21232, 21232. Another quick reminder that your colleague Gary Abley has something going on today.
Gary does he’s going to be talking about Financial Basics for Life. So Finance 101. He’s at our offices at 1111 Douglas Avenue and I believe there is a couple of seats still available. So if you have an interest in learning some good information come on down. It’s from 11:00 until 1:00. I think he’s serving a light lunch. So come on down and visit with Gary and hear what he has to say about financial situations.
If you want more information go to our website financialgroup.com. You could even pull it up on your mobile device there and get a map to our office. Right there in Altamont Springs, just off of I-4, just south of 434. Easy on, easy off.
Picture this you are — go to the intersection of I-4 and 434, get off in the ramp there and you want to go west of I-4, one block. Then you go south, one block and we are right there. And you are there.
Left hand side. Yep.
That big beautiful — not beautiful —
It’s a one story building.
You know what I like about it?
<Inaudible> did the landscaping. How does it look?
It looks great, still looks great.
Hey I wanted to ask you this week before I forget about the complimentary consultation.
Well if you have an interest in meeting with us to get some information we provide an initial consultation at no charge whatsoever. What it does is allow us to wrap our arms around your situation and hopefully we can help you and guide you and go forward and see if we can’t accomplish some goals with you.
The only thing we have to sell is our service and advice and we charge a fee for that. The fee is a function of time and that means complexity. Often times I hear people say gee I didn’t realize this was so reasonable. But once again we can’t tell you what that fee is without really getting to know you and getting — believe me folks there isn’t anything that we haven’t seen in the nearly 40 years we’ve been doing it. We have seen it all. Some people I think are maybe somewhat embarrassed. I can tell you for a fact that the — in fact I had two CPAs in my office this week. Wonderful people, worked for a national firm whose name you would recognize, who came in professional advice. Because they don’t do what we do for a living. It’s not uncommon. In fact I’m sure <Inaudible> the more successful the individual is in their career as a profession, usually the worst shape their financial plan is in. So folks there isn’t anything that we have not seen. People bring in stuff in shopping bags. I mean we are here to help you and to get you into retirement.
How do they set that up?
Well you can definitely go to our website at financialgroup.com. You can schedule an appointment through that. You can give us a call at the office at 407-869-9800. Or you can e-mail us at askatfinancialgroup.com.
Alright stick around. Dave Wall is in the news center. It’s an Ask the Experts Saturday morning on News 965. Coming up right after this program, right after Dave Wall’s news at the top of the house. It is Florida Homes and Gardens. I believe we have the Experts from Solar Rays in and we are going to talk about why you may want to convert some of that wasted energy of yours to solar power. Also questions for our resident plumber at Benjamin Franklin Plumbing. Right now we are talking to the experts from the Certified Financial Group. In the studio the oracle of Orlando, Joe Burt, and also Denise Kobatch, both certified financial planning professionals. Obviously trying to get through to the office right now and I guess maybe Gary is on the phone or something. But I couldn’t get through. Do we have any knowledge if there is any seats left open for the workshop.
There are a few seats left open. Gary’s workshop is Financial Basics for Life. Strategies for success. Gary is a CFP and a certified public accountant and he’s going to provide you with some great information that you could use now and going forward to avoid some of those mistakes that virtually everybody makes as we move toward those retirement years. So if you’d like to come by simply go to our website financialgroup.com, click on workshops. Tell you how to find us. It is free from 11:00 to 1:00 at our office in Altamont Springs. So come on by and I’m sure Gary would like to see you.
You could call Joe and ask Denise and ask a question at 844-220-0965, 844-220-0965. Or text at 21232. You could talk about your 401(k), your IRA, rollovers, stocks, bonds, mutual funds, long-term health care. That’s something we hardly ever talk about anymore, but that’s something that’s so necessary.
Yeah it is, it’s the Achilles heal in many people’s retirement plan.
I could rob you of everything you have. Lets take a text here. How are you handling accounts that require minimum deductions scheduled for this month because of current markets?
How are we handling — what’s that again? Read that again.
Can you read that?
How are we handling accounts that require minimum deductions scheduled for this month because of current markets?
I don’t understand it do you Joe?
<Inaudible> my name is <Inaudible> we need some more information than that?
Well lets see my name is Tom. I’m just trying to figure out how I would be most secure with my financial situation. I work with the state, you’ve got — you have your 403b available to you like our earlier caller. You can put $24,000 a year into that and that’s what you ought to — 24,000 if you are over the age of 50, 18,000 if you are under the age of 50. That’s what you ought to be striving for. Depending on your age, you want to — the younger you are the more aggressive you want to be. As Denise said earlier you put the money in, you get an immediate tax deduction for it. It grows for you without being taxed, that’s what you ought to be striving for.
You could text us, here’s the number 21232, again 21232. The number to call us right now is 844-220-0965. Real quick on the website I was looking here the new scams that we have to watch out for. I guess one of the big things is how to spot a scam Denise.
Well yeah you’ve just got to be on your toes. I’ve already talked about the IRS scam which went on quite a bit last year and it’s going to go on again this year. But we are in political scammers this year. This is going to be an important thing to be on the lookout for. Because what happens is people are spoofing candidates numbers. So the caller ID on your phone seems to be coming from that candidate’s campaign.
Wow that’s a whole new deal isn’t it?
Absolutely. So what happens is they’ll ask you to join a virtual town hall meeting if you will, with the candidate and at some point during the call it is interrupted and you are asked to press like #one to make a donation. You are not going to want to do it. So that’s one. Now we’ve got people out there, we call them mobile wallet pick pocketers. They are scammers who are actually tapping into the accounts of others through PayPal, google wallet and so forth. Just check your accounts, check your credit card statements, just be aware of things. I mean myself I’m looking online at my bank accounts, at a minimum weekly, if not more often. Making sure that things look right, even with my American Express bill, what is going on. Are there any fraudulent types of things and even American Express. If there is — if we use our card. Lets say I use it on Amazon.com, I get a notification from American Express that it was used online. Okay. So these are the types of things that you can do to just protect yourself, just be aware, be on top of it.
That’s pretty cool. I’m going to have to sign up for that. Hey lets talk to Paul in Orlando. Good morning Paul.
Good morning Paul.
Good morning. Thanks for taking my call.
Sure, how can I help you?
My mother-in-law wants to gift her house to my wife. The house is located in Scotland and I want to know if there is any father-in-law implications for my wife and I with regards to our joint filing for tax.
Boy that’s a question that I can’t answer off the top of my head. Let me be sure I understand clearly. Your mother-in-law wants to give your wife her house, that’s located in Scotland.
I can tell you my guess is probably not. Because basically she is making a gift. Now in the state — is your mother-in-law a US citizen?
No, no she isn’t.
So she lives in Scotland. I can’t tell you what the gift tax laws are in Scotland but if your mother-in-law was a US resident there may be some gift taxes that your mother-in-law would have to pay. Your wife would have to probably pay zero even if in this case. Now when you ultimately sell that property then I can’t tell you what the tax consequences of that are either because I’m not familiar with Scottish law.
But here the cost basis would be what your mom had paid for the house and any updates and so forth. Unfortunately if your mother or mother-in-law did not — here in the states — I can only speak here. If she did not gift it and upon her death it became now your wife’s then it is a step up in cost basis. Meaning that if your mother-in-law paid — she’s got 100,000 invested in this house and it is worth 500 then now you own a property that’s now got a cost basis of 500,000. So if you turned around and sold it for 500 there is no capital gains. Otherwise with the gifting, again here in America, if there is a cost basis of 100 and you sell it for 500 then you’ve got capital gains on 400.
But my guess Paul is that the gift in your situation, your tax situation was probably not going to have any impact. But what might be different is the tax consequences when you ultimately sell the property and that’s what you have to look at.
If you and your wife hope to keep the property for a number of years it probably doesn’t make any difference. But I think my guess is, and I’d be willing to bet on this that you would have no income tax consequences if your mother-in-law gave your wife her house in Scotland. I can’t tell you what is going to happen to your mother-in-law if there is any gift tax consequences in Scotland as I said. But I’m pretty sure you and your wife are going to be Scott free.
But you know maybe the mother-in-law should — maybe the mother-in-law should seek counsel in Scotland just to find out.
Yeah definitely. Thank you very much.
Well thanks for the call Paul.
Have a good day.
Coincidence this is where I’m going on vacation this year.
Really looking forward to it.
Alright lets talk next to is it Joshua, lets go to Joshua. Joshua good morning.
Good morning Joshua.
Hey good morning how are you?
Good how can we help you?
Well I have more of an accounting based question. I would like to pull together some assets between friends and family and I was just wondering here in the state of Florida — after <Inaudible> some of the structures that are available but what would be the most beneficial for having multiple partners involved. And as far as tax and asset protection goes for something like that.
Let me be sure — what you are trying to do is basically form a organization, a company whether it’s an LLC or an S corporation or a C corporation or partnership to launch some business entity and you are going to round up money from family and friends?
That’s right. We have a couple individually owned investment properties, like I have one, my mother has one, and a couple others. <Lost Signal> also some stocks and so forth that we’d like to kind of pull together. Just wondering what the best way to structure that would be?
Well first of all with properties. If by doing that you’ve got to be careful that you lose some of the tax benefits of owning real estate. You know what those are right? That you’ve got depreciation, you’ve got interest deductions, you’ve got deductions for property taxes and maintenance. So in that case you may want to have some kind of pass through entity like an LLC or an S corporation. But the what you are going to do is contribute those assets to that and what you — excuse me — what you have is a legal and an accounting consideration. It’s probably more in depth than I can give you over the phone but I can tell you to seek professional help on this. Because if you don’t set it up right it is a mine field. But if you <Inaudible> the real estate you want to have something that will probably still continue to pass through some of those tax benefits to you and your partners there that’s contributing various assets.
Alright well take the real estate out of it for one second then and just say it was strictly a conglomerate of stocks and bonds and would a limited partnership or an LLC be more beneficial in that situation?
So what you are saying is that — let me make sure I understand you and your family members there have a portfolio of stocks and bonds, and you want to pool these assets right?
Then you want to manage them as somebody is going to take responsibility for managing this stuff right?
Yes that’s right.
Okay. You probably still want to pass through entity because if you have a C corporation you are going to be taxed twice on the dividends and interest and capital gains that that might generate. Yeah you still probably want to run some sort of pass through entity. Whether it is going to be an LLC or S corp or a limited partnership. Yeah you probably wouldn’t want — you know if there is a CPA out there I’d certainly like to get their input on this because I know enough to be dangerous, but I probably wouldn’t want to do a C corp.
I’m just curious as to why are you doing this?
What is your rationale here?
What is your rationale?
Well essentially using the compounding principal of multiple revenue streams to pull on itself and grow. Everybody <Inaudible> together rather than just trying to do it individually.
There is no benefits to putting it all in one pool unless the person managing that pool has better management expertise than the individuals.
That is the reason. Yeah.
Got it. Okay well that makes sense then. But you are going to want to seek — get together with a CPA on that question, Joshua. I know you are going to have to form the entity and that’s a legal question. So you’ve got two professionals that you need to seek in that regards. Thanks for your call, good luck.
Alright we’ve got Caroline in Melbourne coming up. She has a question about I guess she wants to do some home improvement and wants to know if she should take money from an IRA or take a loan and we’ve got Travis in Mount Dora. He’s got some general economic type questions. We’re going to get to you folks on the other side of Dave Walls news. Also I don’t want to sound patronizing to our listeners but we do have the smartest listeners. The question earlier text was how are you handling accounts that require minimum deductions scheduled for this month because of current markets. One texter writes RMD, required minimum distributions. Here is another texter writes was that confusing text about a requirement minimum withdrawal and how it relates to the current lower market? I bet you that was.
Okay the RMD question. Okay do you have time to answer that now?
Now we’ve got to go to Dave Wall. We’ll answer that one on the other side.
You got it.
It’s an Ask the Experts Saturday morning on news 965 WDBO. This is On the Money brought to you by the Certified Financial Group. Lots to get to, not a whole lot of time. So lets do it. Was that recent confusing text about a required minimum distribution withdrawal and how it relates to the current lower market, yes it probably was.
The question probably is and I have to take required minimum distributions and the market is down what should I do?
Well you have until the end of the year to take your RMD. So leave it alone, let the market hopefully come back up and when it comes back up to make a decision I’m going to take it now. Sell when it’s higher.
While we are on the text board if one wanted to time the market any suggestions other than don’t try to time the market?
I couldn’t have said it any better.
Another text. My 89 year old mother has an annuity that can be extended for another 15 years, why would you want to do that?
Well you have to look at the annuity, changes are that at death, now this isn’t all cases, but at death the surrender charges are waived. So you want to look at that and be sure that that is in fact the case. If that’s the case then the annuity is guaranteed and you are happy with the performance or with the interest on it, I’d keep it.
It could be also Joe that they have a — the annuitization feature. There is a maturity of the annuity and if you don’t extend it they’ll have to either withdrawal the money or —
And pay taxes which may not be a good idea.
Or annuitize which probably might not be in their best interest.
Talk to Caroline in Melbourne, good morning Caroline.
How can we help you?
I have some cash in my IRA that I won’t be penalized to taking it out but I want to do some remodeling and I’m wondering if it is better financially to leave it in there and take a loan, or take it out and spend it?
Well you can’t take a loan on an IRA. You can take a loan on —
Well I understand that. I can get a loan elsewhere.
Tell us about your tax situation. Are you married?
Yes. Probably in the 28% tax bracket. So as soon as I take that out I would have to pay the tax.
You are going to get a 28% haircut on whatever you take out, which is very very expensive.
Even if you are not 59 and a half there is an additional 10%.
Yeah I’m old.
Easy, easy, easy.
I would probably do a home equity loan and you get an interest deduction for that. It’s going to be cheaper than taking out of your IRA.
Okay but that’s on my house then. Right, so I’d have to get my husbands signature on that.
On he’s not in favor of this remodeling project?
Well he’s with it but — I don’t know if he wants me to take a loan though.
Well remember you can take the loan and then you always have the money in the IRA to pay off the loan sometime in the future. But that is the more financially sound way all things being equal to do it.
Okay well I think that too so I’ll tell you said so.
Tell him to call me.
Okay. Thank you.
Good luck thanks for the call.
Alright lets see if we can squeeze in a quick call from Travis. This is Travis in Mount Dora. Travis go ahead.
Hey thanks for having me real quick here at the end of the show. Just like you to speak if you could just to the general state of our economy and our financial markets, specifically how that relates to China, to our low oil prices and to the fed — our fed’s monetary policy decisions to start raising rates.
Well I could talk about that for about an hour. But let me say give you the broad, the 30,000 foot deal. I can generally the low energy, low oil cost I think are going to have wonderful economic benefits in coming years, but it is going to be very very turbulent time both politically and economically throughout the world. China is in turmoil, they are — it has been seen very clearly that their leaders cannot manage that economy, they’ve tried, putting in the circuit breakers in their stock market and depreciating the Yuan. They are still trying to figure it out and the world is reacting. Now the world isn’t coming to an end, we don’t have a repeat of 2008-2009, there is no real estate bubble, and there is no all that going to go on. This is a normal cycle that we go through and we’ve been through it time and time again. Seeing this kind of turbulence around the world, if it’s not China it is Greece, if it’s not Greece it’s Russia. I think the world economy in general will continue to grow. It always has, it always will. It will never be a straight line, you will always have turbulence. That’s why the most important thing for every investor is to have diversification and have quality and don’t panic. Because it’s panic that causes people to lose money because they make emotional decisions? Right Denise? You’ve seen it time and time again?
And it’s unfortunate but that was nicely said.
Alright remind you Gary Abley has a workshop going on this morning.
Yes come on by at our office in Altamonte Springs, 11:00 no need to even get dressed up for it, well you need to dress but — take of your pajamas and come on down, 11:00 our office Altamonte Springs. Go to financialgroup.com, click on workshops. You get all the information and we look forward to seeing you there.