Hosts: Judith Sanborn, CFP®, AIF® and Nancy Hecht, CFP®, AIF®
Ultimate project. Now, our Ask the Experts weekend continues on News 96.5, WDBO. Yes, indeed. It’s an Ask the Expert Saturday morning on WDBO. This is On the Money, brought to you by Orlando’s oldest and largest independent — Independent. Firm of certified financial planning professionals, that being the Certified Financial Group in Altamonte Springs. And for over 25, going on 30 years now, in Orlando.
You just said it very well. For nearly that long, wow, we’ve had the Certified Financial Group on every Saturday morning at 9:00 to answer all of your questions about retirement and more and how to make it more comfortable, how to make it last longer and all of that nice stuff. And today’s no exception. Today we have two of the certified financial planning professionals with us. We have — you just heard her lovely voice — Judith Sanborn.
Good morning.
Good morning. Good to see you again.
You, too.
And also with us today, we’re lucky to have the author of A Man is Not A Plan, Nancy Hecht.
Good morning.
How are you?
I’m doing well. How about yourself?
Fine. Got to change the name of this show to your name.
No, I don’t think so.
The Nancy Hecht show.
No, this is the Certified Financial Group, On the Money.
Well, I’m sure your husbands would agree with me when I say, today, I am the thorn between two beautiful roses. But we’re not here to talk about looks and stuff like that. Judy, what kind of questions are you going to take this morning from our callers?
We will answer questions about anything financial that you have a concern about, retirement planning, 401(k)s, IRAs, life insurance, long-term care insurance, stocks, bonds, mutual funds.
Very good.
<Inaudible>.
That and more.
That and more.
Right off the top of your head. That was beautiful.
Yeah.
That and more. Let me give you the telephone numbers if you’d like to talk with Judy or Nancy. The numbers are 844-220-0965. You can text us from your mobile device. The texting number is 212-32. 212-32. And if you so feel like it, you want your voice to become part of the program, you can use the open mic <Inaudible> open mic on the News 96.5 app, and we’ll hear your question live. Again, 844-220-0965. Some of the things we’re going to talk about this week are eight ways to go wrong with a traditional inherited IRA.
I think we don’t talk a lot about inherited IRAs. I was looking back at some of my previous topics and we’ve been talking a lot about required minimum distributions from IRAs because people are turning 70 and a half — 70 this year and having to face that question. And now we’re facing — because the baby boomers are aging, people are passing away and they’ve accumulated all of these assets in an IRA and many years ago maybe or, more recently, they’ve named a beneficiary. But when they pass away, oftentimes the beneficiary doesn’t really know what their options are. I just moved one account into three inherited IRAs, so timely topic.
Yes, and I have a very interesting inherited IRA situation as well that I’m working with.
Okay, so if you’d like to talk about what you should know in order to benefit the most from this type of inheritance, give us a call. 844-220-0965. Also this week, how to retire but keep the best of the office. Like, what are you going to miss the most when you leave your offices? The free pens, the paper.
Well, the camaraderie.
People don’t realize, really, how much of their socialization happens in the office. And that is something that you really need to be aware of because some people retire, and they thought that the people in their office were their best friends. And they probably were from a work standpoint, but then they retire and they say, well, I never hear from Bob anymore. He and I used to have lunch every day. So you have to replace that or you have to be the person who reaches out to those former colleagues and makes sure that you stay in touch or you have another social group, but you have to think about several things, non-financial. Obviously the financial part of it, but there’s a lot of non-financial considerations when you’re getting ready to retire.
Or if you want to talk about those financial things, we can do that, too.
No, but that part is really important. I always ask people, when we’re planning for retirement, what are they going to do with their time. And if they have no idea, then they have no business retiring because somebody who retires with absolutely no idea what they’re going to do ends up blowing through their money, gaining weight, and getting divorced.
Wow.
Yes, and there is a high percentage of alcoholism among retirees. There’s a high percentage of depression among retirees for that very reason that we just — especially if you’ve worked 30 or 40 years.
Or you could move to the Villages and have all kinds of fun.
Yeah, yeah.
There you go. You could do that, yes.
Yeah. Their activity newspaper is huge.
Really?
Yes, it’s like two inches thick. It’s amazing.
Well, I think I’m going to move to the Villages when I —
You really have to be careful when you drive around out there. I have clients in the Villages and I go up there and you have to really be careful when you’re driving.
The number’s, again — because we’re wide open this morning. Everybody’s taking advantage of this peaceful weather.
Yeah, probably.
844-220-0965. 844-220-0965. Or text us at 212-32. Here’s a question for you. 42% of investors surveyed said I honestly have no idea, when asked to choose a definition of alternative investments.
That’s correct. Well, that’s something I read, so I’m assuming that’s correct. But we incorporate alternative investments in many of our portfolios. And more recently, to make it more mainstream, there’s an advertisement by Invesco that is advocating that 20% of your portfolio be in alternative investments. So when I read that, I thought well I wonder if people even understand what an alternative investment is. So primarily it’s something that is very different than our traditional stocks, bonds, mutual funds that typically we build a portfolio with. And in our firm, we oftentimes use some non-traded type of investments. Real estate investment trusts would be one. You can also buy a public real estate investment trust and that would still be considered an alternative. You have some thoughts about that Nancy?
Well, no, it is a very confusing term and when you hear it, you don’t really know what it means. Does that mean the gold and the silver and the precious metals that you see the commercials for? It could be, yes.
Yeah. Anything that’s not correlated with the traditional investments <Inaudible> think about.
Right.
And it diversifies your portfolio. They do have some risk — more risk, perhaps, than the ordinary investments connected with them. So if you’re going to invest in alternative investments, you certainly have to understand what that’s about and what the risks might be. And there’s some advantages to being part of it.
Well, one thing that you just mentioned is a term that’s a really old term. But it’s one of the best things that you can think about when putting together a portfolio. And it’s diversification.
Yes.
You have to have a diversified portfolio. You said correlation, so tell me what you mean by that.
Well, correlation would be that it’s stocks. We’ve often said when the stock market does well, the bond market doesn’t do so well. So we consider those non-correlated assets. So if the stock market, perhaps, and the bond market aren’t doing so well, oftentimes an alternative investment — it doesn’t move similarly.
Okay, so it’s <Inaudible> move in opposition.
<Inaudible>. Right.
What do you think of these people who — they run commercials all over the place that say convert your retirement to gold, you can hold it in your hands, and that kind of stuff like that. For a free brochure, call 800 wadda, wadda, wadda, wadda.
The free brochure is the only inexpensive thing of that type of — the premiums that people pay for those companies for the gold and the silver are tremendous. I think the lowest premium from anyone that I’ve researched is 40%.
Wow.
And by premium, I mean, say gold is $1,000 an ounce. You’re going to pay 40% on top of that just for the opportunity to own it, when you could get an exchange-traded fund or a regular open-ended mutual fund that holds nothing but 100% gold bouillon. And you don’t have a 40% premium to own that. And, as Judy says, that’s something that negatively correlates with the stocks and bonds.
Every time the gold advertising increases, it’s typically based on fear and what they’re —
And they’re targeting older folks, too.
Right.
Yeah, inflation fears, dollar devaluation fears, and I actually have had a client recently ask me how he could hold gold in his IRA. And there are ways. And perhaps, in certain situations, it makes sense for somebody to do that. When he told me why he wanted to do this, one of the things I said, because of all the reasons he was telling me, I kind of said, if all of those things happen, gold isn’t even going to help us.
Yeah, no one’s going to be able to — how are you going to be able to use your gold coin to get groceries or pay your power bill or whatever.
Really?
Yeah.
<Inaudible>.
So it’s not that it’s a bad investment. I think it just has to be for the appropriate person in the appropriate circumstance. It can be done.
Again, the number is 844-220-0965. My name is Kirk and this is On the Money brought to you by the Certified Financial Group in Altamont Springs. Coming up in about three minutes, we’ll head on back to the News Room and talk to Dave Wahl. He’s following a developing story out of Washington State. Police north of Seattle are on the lookout for a guy who went into a Macy’s and killed a lot of people.
Very sad.
So Dave will have the very latest in the search for that guy coming up in about two and a half minutes now. Right now, we’ve got Judy Sanborn and also Ms. Nancy Hecht from the Certified Financial Group. Again, the number, 844-220-0965. Or text us at 212-32. I was on your website this morning, looking at this week’s Must Read. And if you’re driving around and you’re near the corner of Savings Avenue and Retirement Street, this is something you might want to check out, too. Tell us about it.
Well, this week’s Must Read is a hail Mary retirement plan if you have nothing saved. And I actually have recently had someone come in and they were in their late 40s, and they had gone through bankruptcy and they had just come out of bankruptcy and they were very worried that they are now starting at ground zero. But they really have a lot of time and there are a lot of things that they can do to prepare for retirement and do that relatively successfully. And even people come in in their 50s and there isn’t — all hope is not lost. We can typically work longer. People don’t like that answer.
70 is not abnormal for people to be working until.
Right.
Well, you know what else I’m thinking. Look how old your mom and dad are, if you’re lucky to still have them. They’re gaining up there towards 90, right?
My mom just passed away at 99.
Chances are pretty good you’re going to live that long, too, Judy.
That’s right.
It’s that good European blood you’ve got in you.
And that’s a big thing that we look at, too, if somebody’s retiring at 70, there’s the potential for 25 years, in retirement, which is an awful long time.
<Inaudible> fixed income.
Yeah, so we’re not just planning for the day or the year after they retire. We’re planning for the long-term afterwards.
Scandinavian, right?
Italian.
Oh. Wow, cool. Alright, let me give you the number again. 844-220-0965. Or text us at 212-32. We’re going to come back and take some calls and answer some texts and talk to you, too. 844-220-0965.
Now, the three big things you need to know.
Three.
Another mall shooting, this time in Washington, north of Seattle. Five are dead. The gunman is at large.
Two.
Hillary Clinton calling off a visit to Charlotte as she and Trump get ready for Monday’s showdown debate.
One.
Tropical storm Karl far from us, but in the news at 9:30, I’ll tell you what’s spinning toward Florida that has beach lifeguards on high alert. It’s all clear and no rain on News 96.5, WDBO. <Inaudible> weather radar is <Inaudible> 81 in Orlando.
Monday morning on Orlando’s morning news.
Monday night, it will be the single most watched political event in American history, and you can be a part of it as well. Monday night, it’s the first presidential debate, right here on News 96.5, WDBO.
The only all-news morning show. Orlando’s morning news, Monday starting at 5:00am on News 96.5.
In a recent survey, 40% of Americans said they’re unsure if they’ll have enough money to last them through retirement. For nearly 40 years, certified financial planning professionals at Certified Financial Group has been providing retirement planning and investment advice for a fee. And because they’re working on your behalf for a fee, they won’t try to sell you something. Get a complementary consultation by calling 407-869-9800, or 1-800-EXECUTE. Certified Financial Group, where they’re planning tomorrow, today. Online at financialgroup.com. Fee-based planning and investment management for Certified Advisory Corp, a registered investment advisor.
Summer remodeling plans start at S&W Kitchens. Scott Inez back. I’ve been 100% satisfied with the work that S&W Kitchens has done at my house, from the remodel, the kitchen, and the two bathrooms. We couldn’t be happier with the job that S&W Kitchens did. There were no surprises. Everything was talked about and agreed upon during the planning process. S&W Kitchens, they’ll do the same for you, folks. If you’ve been thinking about transforming that tired, old bathroom, now is the time to do it with S&W Kitchens. Go ahead and make that decision to replace last century’s appliances. And heck, if you just need cabinets, let S&W Kitchens help you with the best election and pricing in town. Local family owned since 1977, visit the updated website. Sandwkitchens.com. Or call them at 407-487-4901. Five showrooms, coast to coast, Ocala to Okeechobee, S&W Kitchens is simply wonderful.
Discover the art of wine-making at Lakeridge Winery. We specialize in the production of unique premium wines, which have won over 750 awards for wine-making excellence. Join us for our complementary winery tour and sample our wines. Then, browse through our unique wine shop, where a selection of gourmet foods and gifts for the wine enthusiast in your family. We invite you to visit our website and learn more about our monthly wine and music festivals. Our wines are also available in your local supermarket or wine shop. Lakeridge Winery, dedicated to your good tastes.
Don’t just like your pool. Love it. Hi, Tony Caruso of TC Water Features and host of the Pool Fanatics, Saturday at 5:00. Let us show you how amazing things can happen in your backyard. Call us at 407-282-4911 or tcwaterfeatures.com.
You’ve made mortgage payments for years. Now get a mortgage that may take care of you, a reverse mortgage. Hi, I’m Cindy Myers of People’s Bank. And if you’re 62 or older and have equity in your home, a reverse mortgage may turn that equity into cash. Use the money to repay your existing mortgage, then take any remaining money as a lump sum, a line of credit, monthly income, or a combination of all of these. We offer products backed by the FHA. And unlike a traditional mortgage, a reverse mortgage requires no repayment until the home is sold or the owner permanently moves out or passes away. Best of all, proceeds are tax-free and you retain title to your home. Call me, Cindy Myers, at People’s Bank and let me show you how a reverse mortgage could be just right for you. Call 407-920-5382. That’s 407-920-5382. Or go to reverse-quote.com. Consult with a financial advisor or CPA regarding any effects on taxes of government benefits.
Are you looking for a great fence company? If the answer is yes, then consider these three questions. Does the fence company have the knowledge and expertise that you need? Do they listen? And do they give you more than expected, adding value to the overall experience? At Mossy Oak Fence, the answer is yes. Plus, you get the longest workmanship warranty and the highest craftsmanship in the industry. Go to mossyoakfence.com, or call 888-44MOSSY, and let the Mossy family protect your family.
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It’s an Ask the Expert Saturday morning on WDBO. It’s good to have you along with us. Dave Wahl will be back with a more in-depth look at the news in just about five minutes from now, or less than five minutes, so stick around For less than five minutes, so stick around for that. More on that Washington shooting. In the studio, with us for On the Money, Judy Sanborn and Nancy Heck. We’re talking about anything financial, any pocketbook issue you want to talk about, 844-220-0965. We have an interesting question this morning from Paul in Daytona. Good morning, Paul.
Good morning, how are you?
Fine. What’s up?
Okay, back in like 2005, I did a — I left my job and I took my money and put it into Charles Schwab. Talking about a particular stock. I decided — I bought in. It was at $15 a piece. I bought 500 of them with a chunk of my money. I’m now 46. That stock is now worth over $200 a piece. I’m thinking, I’m not sure if I should withdrawal a bunch of that money to pay off my house, or I should leave it in now. Like five years ago, I contacted Charles Schwab and they did an analysis of everything. They told me I was too much into like Internet stocks. But every single Internet stock that I bought has gone up tremendously. It’s like Google and a few other big companies.
Paul, can I ask you a question. Is your money in an IRA? Did you <Inaudible>. It’s in an IRA.
Yeah, I left my job and then I rolled — yes, it was a 401k, so I rolled it over. So I would not have to worry about taxes.
Right, okay. Well taking your money out of the IRA is not a good idea because you are under 59 and a half. Not only would you pay ordinary income tax on that withdrawal, but you would be penalized 10%. So you don’t want to withdrawal any money from this IRA unless it’s an emergency.
Even if it would pay off the house and basically everything right there in that one particular stock, like I consider it like free money because I spent maybe $8,000, a little over 8,000 on my initial purchase. Now, it’s worth over 170.
Well, you know, and I have to say, first of all, mazel tov to that. Second of all, you know, what Judy said is absolutely correct. It is going to cost you big time to take this money out of your retirement account and pay the penalty. Because if you dump $100,000 onto what your earnings are now, I’m guessing it’s going to push you into a whole other tax bracket. So you might not move from 28 — 20 to 28, that’s not an 8% increase. It’s significantly more than that. Plus the 10% penalty on top of that. However, we were talking earlier about diversification. If you want to hang onto some of those gains, then you should within your IRA sell some of the shares and re-allocate the money into something different. We’re not comfortable with more than 10% into one area and we’re certainly not comfortable with somebody under 59 and a half pulling money out of a retirement account and paying huge taxes on it and penalties.
Yeah.
Don’t forget the penalties.
Listen, we’re going to break for Dave Wall. Paul, if you have some more questions, you can hang on. We’ll put you on after we go to the news center. Are there instances when an HR department or your 401k would give you a hardship, a loan, before or give you <Inaudible>.
Yeah, to pay off your <Inaudible>, yeah.
We’ll talk about that. We’ll talk about all of those instances or whatever. First, we have to get to Dave in the news center.
This is News 96.5, WDVO, Orlando <Inaudible> for breaking news, weather and traffic, 24 hours a day. <Inaudible> Coverage starts now.
9:30 news, 96.5, WDVO. Our top story, federal authorities have joined the hunt for a gunman who opened fire at a mall in Burlington, Washington, north of Seattle. Alex Stone tells us that a man shot and killed five people including four women.
Witnesses say the gunman walked into Macy’s and began shooting, but not in rapid fire. They heard a shot and then a second or two pause, another shot, and so on. Armando Partino works for the mall and says at first, he didn’t know they were gun shots.
I see a bunch of people running out of Macy’s and that’s when I knew that shots were fired.
Police flooded the area but the gunman got away. Strangely, police say they’ve received multiple callers claiming to be the gunman.
This is a developing story. Get back with us on air. Plus we’ve got a lot of information at News 96.5.com.
News 96.5, WDVO. Where Orlando turns first for breaking news.
The hot streak we’ve seen for the first couple of days of fall has continued into this weekend. I’m <Inaudible> meteorologist, Rusty McCraney.
Monday ball news, 96.5, WDVO interaction weather radar is showing lots of sunshine. There’s no rain right now. 81 in Orlando. Tropic storm, Carl, far from Florida. Now is near Bermuda with 95 miles an hour winds. But meteorologist Rusty McCraney and Severe Weather Center Nine tells us that Carl is something waves our way.
That is bringing us long easterly swells which will kick up the rip core risk for the weekend ahead. So if you’re not a strong swimmer, please be aware of that. The additional rip core statement, because of the high rip core probability has looked today and on Sunday.
<Inaudible> County deputies searching for whoever set a patrol car and two other vehicles on fire. The patrol car is sitting at a Holly Hill repair shop yesterday. Eyewitnesses called our partner, Channel Nine.
I looked over at their faces, smoke, I thought it was clouds. But I looked at both of them, I see <Inaudible>. I was like oh my god, I’ve got to get 911 real quick.
Sheriff office says damage to the vehicle is estimated around $20,000.
Democrats and Republicans fighting to override President Obama’s veto of a bill to allow families of September 11th victims to sue the government of Saudi Arabia. The president rejected the bill on Friday, warning of a house of unintended and severe consequences if it were enacted. 9:32 with news out of WDVO.
Are you losing sleep? Tossing and turning. Well this isn’t an ad for a new pillow or mattress. It’s an offer to help put your mind at ease. In a recent survey, 40% of Americans said they are unsure if they’ll have enough money to last them through retirement. After all, they don’t teach us this stuff in school. Many of us go through life trying some of this and some of that, only to wake up in the middle of the night worrying that our financial life could just be a collection of financial accidents. For nearly 40 years, certified financial planner professionals and certified financial groups have been providing retirement planning and investment advice for a fee. They can probably help you get a good nights rest too. Working on your behalf for a fee, they won’t be trying to sell you something. So forget the new mattress and get a complimentary consultation right now. Call 407-869-9800 or 1-800-Execute. It’s your answer to you in a financial plan. Certified financial group, where they’re planning tomorrow, today. Online at financialgroup.com. <Inaudible> planning and investment management for certified advisory board or registered investment advisors. Financialgroup.com.
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Hey, it’s Don Terry. This is where Orlando turns first for breaking news, weather, and traffic. News 96.5 WDVO.
The hot streak we’ve seen for the first couple days of fall continues into this weekend as well. Look for 92 for a daytime high today and a partly cloudy skies will throw up a couple of thunderstorms in the afternoon hours, but pretty isolated <Inaudible>, 30% chance. Still, watch out for the heavy rainfall and the lightning. Tonight, party cloudy skies. We’ll be dry overnight with lows in the mid 70s. Then for your Sunday, another 30% chance of mainly afternoon storm and a high of 91. I’m Channel Nine meteorologist, Rust McCraney.
Maintouch Security, Triple Team traffic.
It’s pretty free and clear this morning. We do have two injury accidents. The first of which is on <Inaudible>, south of Central Florida Parkway and another crash on Oseoto Parkway, east of Vineland Road. This traffic report brought to you by Hallafax Health, Hospice Hallafax Health. Hospice has been providing extraordinary care to those with life limiting illnesses and their families since 1979. For more information, call 1-800-272-2717. Hallafax Health, a hospice <Inaudible> caring for Orange and Oseoto counties. Triple Team traffic, Oseoto Horner <?> <Inaudible>, 96.5, WDVO.
This is sever weather and I’m chief meteorologist, Don Perry. This is where Orlando turns first for breaking news, weather, and traffic, news 96.5, WDVO.
Hey, it’s Joe Kelly. Join me for Orlando’s morning news every weekday mornings, starting at 5:00. Listen when you wake up, using your News 96.5 app. Then on your radio when you get in the car. I’ll make sure you get to work on time with Triple Team traffic and the best coverage of the I-4 ultimate project.
Now our ask the experts weekend continues on News 96.5, WDVO.
Yes, indeed. It’s an ask the experts Saturday morning with the Certified Financial Group from Almont Springs. With us this morning, we have two of the twelve certified financial planning professionals. We have Judy Sanborn and Nancy Heck. I didn’t mean to sound patronizing to you earlier when I said I’m the thorn between two lovely roses.
Well, we did not <Inaudible> that at all.
Were you paying attention to him?
We actually —
I love you.
We’re very complimentative.
Judy Sanborn and Nancy Heck. Judy and Nancy are both certified financial planning professionals with the Certified Financial Group and have come in this morning to answer your questions. Nancy, what are you taking calls about?
A lot of your retirement pocketbook questions, that is our primary focus. Calls like Paul just gave, should I act as my IRA or ABC, 401ks, rollovers, mutual funds, stocks, bonds, annuities, long-term care, inherited IRAs.
Mhm, we’re going to talk about that. If you’d like to join us, here is the telephone number, 844-220-0965. The lines are wide open. You can text us at 212-322-1232 <?>. Inherited IRAs, let’s get back to that.
First of all, inherited IRA is if you were named the beneficiary on an IRA, either, you might be the spouse of the owner of that IRA, you might be a non-spouse. You can be the child. In some instances, a relative, whatever, because we can name anybody we chose as beneficiaries to our IRA. The first thing you need to realize, is do not take a distribution from that IRA until you actually really seek the advice of an advisor, that would be the first thing I would recommend that you do. Because there are very significant financial consequences to taking lump sums. I had a situation recently where a woman passed away. Her husband and her daughter were 50% beneficiaries and the daughter wanted to take a certain amount of money out and give it to her dad. I had to tell her that’s not a good idea because it would be taxed as ordinary income. Anything you take out, ordinary income. So there was a way for us to do this. They need to roll it into an inherited IRA. Once they do that, then they have to take a required minimum distributions based on their life expectancy, typically each year. That money is taxed as ordinary income, but it gives you the ability, of course to do what’s called a stretch IRA and let that money grow for you over time.
I have a question.
Okay.
So if the spouse was the 50%, the spouse inherited. If the spouse was not yet 70 and a half, would he have to take a distribution.
No. Good question.
What if the wife was over 70 and a half and had passed away and had not taken the distribution, would the spouse have to take the distribution.
Not the spouse. Before the IRA got rolled over, if that person is 70 and a half gets <Inaudible>, 70 and a half or older and was taking a required minimum distribution, and had not taken it, then yet, they have to take it.
Good question.
This is very confusing.
Yes, there a lot of nuances to this. If you do not roll this in the first year, you have until December 31st after the owner of the IRA passes away, to make this rollover. If you do no do that, then you become subject to a five year rule. So you have to take the money out over a five year period of time and every time you take a distribution, it’s 100% taxable as ordinary income. I didn’t realize that until I was researching this. So that, if it’s a large IRA, that has significant consequences.
Taxes issues are tremendous and you really, really need to seek some professional help in these types of situations.
Your CPA or something.
Well, CPA in conjunction with somebody like us.
Right.
Hey, isn’t Jerry a CPA.
Yes he is.
You have CPAs in the office then.
Yes.
Oh, okay. So like if somebody wanted to get ahold of <Inaudible> to ask a question.
They could holler at us at 407-869-9800, can go on our website and contact us through our website, financialgroup.com.
So the bottom line on an inherited IRAs, is —
The bottom line is the first thing you should do is seek financial advice from an advisor because often times custodians aren’t always familiar with the rules. They might misguide you. So don’t take distributions, seek some advice, and know exactly what it is that you can do before you make any decisions.
I don’t care what anybody is telling you, nobody is under pressure to make a decision immediately with the money.
9:42 on WDVO. The number is 844-220-0965. Let’s talk to Shepherd on his cell phone. He has an interesting question. Go ahead, sir.
Good morning, folks. I had an automotive back route. I’m a retired auto mechanic and built fire trucks for 21 years. My house is paid off, my cars are paid off. I have no debts to speak of. I have roughly $200,000 in annuities, IRAs, cash. I secretly invested in a start-up automobile company called HelioMotors. They’re already into the stage of building their first 100 prototypes, five of which will be turned over to the government and observed that <Inaudible>. The stock has gone from $12 to $100 a share and they have not even sold their first car yet. My question is assuming that this becomes the next Google or Microsoft, how do I handle the dividends from that, how do I actually see a benefit from that.
Well, is this in an IRA or is it in a tax <Inaudible>.
It’s just stock. I bought it through a company called, you’re probably familiar with is, Start <Inaudible>.com.
Now the fact that you paid $12 for, it’s not $20 a share. Let’s say that you wanted to sell some of your shares now. As long as you’ve held it over 12 months, then you would pay long-term capital gains.
Okay, we’ll I’ve only had it six months.
Well, I understand that. If you sold some now to diversify and take some of your gains, then you’ll pay short-term capital gains which is 28% versus — or ordinary taxes versus 20%. One thing that you really have the pay attention to, Shepherd, is depending on who gets elected, there will be some changes for capital gains tax. So if you have earnings and you want to be able to — I know you said you’re retired. And you want to be able to make contributions into a retirement account. You might want to use some of this stock to fund your retirement and put it into a tax deferred wrapper. But you can’t do that if <Inaudible>. Right, I said if he has earnings, if you have earnings. Otherwise, you just really need to pay attention to whatever changes come down the pipe with capital gains taxes. Please make sure, as we had said to Paul, that this stock does not become too big a percentage of your investment holdings.
Okay, thank you Paul, we appreciate that —
This is Shepherd.
Oh, I’m sorry, Shepherd. We talked to Paul earlier. Thank you, Shepherd. Safe driving to you sir. We’ll move on to Michelle. Michelle, you’re on WDVO.
Yes, I have a question. I’m 56 and my company is offering me a payout on my pension that I’m due to collect. I can start collecting it at 60. I don’t know if I should take the payout and roll it into an IRA and try to control it myself and make some money, or let it sit and wait.
Well that’s a great <Lost Signal>. well, that’s a great question, and we visit about that with a lot of our clients. There’s several considerations for you. First of all, if you don’t need the money, you don’t need the stream of income right now, so that’s one thing to consider. Depending on how much the lump sum is and whether, again, you’re going to need that money in any short period of time, then you could roll it over into your own IRA and invest it and let it grow in the long-term. If you have short-term financial needs, then that might not be a good idea. So you really should — I would recommend that you consult with somebody who can look at your overall financial picture and help you make a decision based on your other financial resources, what you’d like to do. You’re quite young, and I would want to talk to you about whether you want to work in the future and a lot of other financial issues.
So if I need consultation, you guys do that?
Yes, we do. Initial consultations are complementary, and you can request a complementary consultation through our website, which is financialgroup.com. Or you could call our office Monday through Friday, 8:30 through 5:30, 407-869-9800. Whether you’re going through the website or calling, ask for Judy, and she’ll be happy to crunch some numbers for you.
Again, that number is 1-800-execute, as if you’re executing that financial plan. 1-800-execute. All right, here’s the telephone number if you want to join us right now. 844-220-0965. 844-220-0965. Michelle, did that help you out?
Yes, it did. I guess I do need to crunch some numbers, I’m going both ways with it.
Yeah, it’s really nice to have the unemotional, impartial number crunching done, and <Inaudible>.
<Inaudible> pay off in <?> 401(k) money, and there’s some savings, so.
Okay, well, that’s good.
All right. Thank you very much for your call. You’re starting to break up there. Next <?>, we have a question earlier, I think it was from Paul who called and said he wanted to take money out of stocks. Sell some stock and pay off his mortgage. Was that <Inaudible>.
Yeah.
And you were talking about what? What was <Inaudible> about borrowing your 401(k)?
You were asking the question after he hung up, is is there a way to access your 401(k) money.
Yeah.
And avoid the penalty.
The 10% hit.
Yes. Well, there is. Some employers allow you to borrow from your 401(k). Now his money is now in an IRA, and there are some instances where you could take the money out without the penalty, but his situation wouldn’t fall into that.
Like if you lost your job or something like that, before you were 59 and a half.
No, not from an IRA.
Not from an IRA.
If it was a 401(k), that may, may be considered a hardship and avoid the penalty, but losing a job, generally, I don’t think it is. It’s generally for a medical. Medical is a down payment on a first house, I think is one of the reasons.
Is how I bought my house, yeah <?>.
<Inaudible> I have a question for you, going back to your situation with the survivor husband and the daughter.
Okay.
So what did she have to do to get the money to dad and avoid the penalty?
Well, she was actually able to do that by just claiming <?> the amount of money that she wanted to get to her dad, and we’re able to roll that amount into his inherited IRA.
Okay.
So there won’t be any income tax liability or penalties or anything at all <Inaudible>.
Okay. When we come back from Dave in the News Center, you guys <Inaudible> some tremendous workshops that are meant to introduce you to people. You’re not trying to sell them anything, but there’s an interesting workshop coming up that you might want to know about, Financial Basics for Life. It will help answer a lot of questions <Inaudible> we’ll tell you about we hit Dave in the News Center.
<Inaudible> Saturday morning on WDBO <sp?>. Sorry <Inaudible>. 9:56, we’re fast approaching the top of the hour, and Dave Wall with the news, so let’s see if we can squeeze in a quick call from Betty in Orlando. Go ahead, Betty.
Hey, good morning. I have a question for you. My husband and I are both in our 70s, and we paid off our mortgage a few years ago. Now we’re positioned where we need to possibly get a reverse mortgage line of credit, and I was thinking what is your thinking on that?
Well, I think if that’s something that will benefit you, certainly I think reverse mortgages in the right situation can be very beneficial to people. I think you probably need to go and visit with somebody and sit down and have somebody look at your whole financial situation and see what your options might be to accomplish what it is you are trying to accomplish.
What are the cons of <Inaudible> have to watch out for?
The only con that I see are the potential expenses. I have absolutely no problem with reverse mortgages. If somebody needs to just do one to stop making their mortgage payments, or like Betty to get some of the equity out of the house, I have no problems <Inaudible> have to make sure — I mean, it’s run through FHA, so there are a number of fixed, hard costs. It’s the ancillary costs from whoever’s providing this for you that you have to be concerned about.
Plus, you’ve got to remember to pay your taxes, otherwise <Inaudible>.
Taxes and insurance.
Yeah, yeah, yeah <Inaudible> before we get to Dave in the News Center, could you give us a quick rundown of the upcoming workshops, these three workshops?
Yes. The first one coming up is September 27th, it’s a Tuesday from 6:00 to 8:00 in the evening, hosted by Gary Abley, Financial Basics for Life: Strategies for Success. The next one is the Social Security Bootcamp on Thursday, October 20th, from 6:00 to 7:30 in the evening, hosted by Nancy Hegg and Denise Kovach. The third one is When Can You Retire: Know Your Numbers, Tuesday, October 25th from 6:00 to 8:00 in the evening, Gary Abley, and Countdown to Retirement on Tuesday, November 8th from 6:00 to 8:00, hosted by Gary Abley and Jody Murphy, who is an estate planning attorney.
Where do we go to find out more about these workshops?
Go to our website, financialgroup.com. You can sign up for them there, or you can call our offices at 407-869-9800.
Okay, thanks a lot for joining us here this morning, folks. If you’d like to get a hold of Nancy or Judy during the week, that number, again, is.
407-869-9800.
All right. Stick around after Dave Wall and the News Center and traffic and the weather, we’ll be talking to the folks from Florida Homes and Gardens. It’s a home fix-up show, and it’s next on WDBO.
