Hosts: Nancy Hecht, CFP®, AIF® and Joe Bert, CFP®, AIF®
Yes, indeed. It’s an Ask The Experts Saturday morning on WDBO, and this is On The Money, brought to you by Orlando’s oldest and largest independent firm of certified financial planning professionals, that’s the name of the Certified Financial Group in Altamonte Springs. With us this morning, we have 2 of the 12 certified financial planning pros. Say good morning again to my personal favorite, Nancy Hecht.
I thought I was your personal favorite.
Come on, Joe, there’s a woman in the room. Hi Nancy.
Good morning.
It’s so nice to see you.
Thank you, thank you, and I would like to wish all of my Jewish friends and our listeners a happy and healthy new year, starting at sundown tomorrow night.
Absolutely.
And may you be written in the book for another year.
Happy Rosh Hashanah, is it?
Yes.
Okay, I knew that was it <?>.
And you heard in the <Inaudible> of her voice, the tones, the affluent aforementioned — Orlando, Joe Bird is back in the studio.
Good to be back, been a while.
Where’ve you been?
I’ve been traveling <?>. A little travel, a little vacation.
Well, everybody deserves it.
It’s good to be back.
Well, Joe, let’s see if you can slide right back in. What’s this show all about?
Well, once again, Nancy and I are here to take your questions about your personal finances, about all the things that might be in the back of your mind, about what do I do about this and about that, and I want to retire, I want to maybe change jobs, I want to stop working, and kids are going out of the house, and do I have enough money so when those pay checks stop and Social Security comes in that I can fill the gap with what I’ve been able to save and invest over my working lifetime. And oftentimes that revolves around questions that you have on your personal finances like stocks and bonds and what do I do with my IRAs and 401(k)s and long-term health care and real estate and annuities and life insurance and reverse mortgages, all that and more. Those are the things that Nancy and I and 10 other certified financial planning professionals at CFG deal with every day, day in and day out. And like, are we allowed to say on Saturday mornings, we’re not as laid back <?> during the week. We do it, we’re paid, on Saturday morning, we do it for free. So we’re here to answer your questions.
Here’s the phone number, folks. It’s 844-220-0965. And we’re live today, by the way. 844-220-0965. You could text this from your mobile device. That texting number is 21232. 21232. And if you want your voice to be on the show, then you can just use the open mic. You’ll find that on the News 96.5 app. And don’t forget, Dave Wall is in the news center keeping an eye on Matthew. I’ve got a bad feeling about this one, Joe.
Well, we’re overdue.
Yeah.
We’re overdue.
That’s true.
Fortunately, it looks like it’s going to just kind of brush us.
Maybe.
Yeah.
Just keep going up east. You know, I was on your website this morning, checking things out, and this is a pretty downer type of a must-read here.
Well, it’s the realities of what’s going on in the world out there for many people. It’s the financial dos and don’ts of divorce, what to do and what not to do, and in terms of divorce it comes down to money and to protect yourself and preserve what you have and be fair, and some of the stuff —
Well, you mentioned empty nest —
<Inaudible>
That’s sort of hard stuff <?> for me, because we’ve been empty-nesters for a whole like 10 weeks.
I like it.
It’s wonderful.
Isn’t it great?
It’s wonderful.
I’m telling you, the best part of your life.
For many people, it’s not. I mean, I had done a blog a while ago about when the kids are finally done with high school and moving off to college, or done with college and moving out onto the real world like we’re doing. And sadly, that’s a time where a lot of people end up getting divorced.
Yes, it is. And why do you think that is?
Well, because the solid relationship between the husband and the wife, I’m at the point where — and I like to tell my other friends that are approaching empty nest — you get to be a girlfriend or a boyfriend again, and if you don’t have that kind of relationship and your relationship is built around your children, when they’re gone then —
They’re the glue that kind of holds it all together.
Right, right, right. And if you’re doing a good job, in my opinion, of raising your kids, they should be able to leave and not come back.
Yep.
But sadly, for 50% of the country, that’s not the case, and thus we have the topic of our must-read, is that people are facing divorce.
We used to have a little plaque in our kitchen, I still remember, that the two best things you can give your children are roots and wings. And it’s all about letting the kids grow up and do their thing and recognize that that’s all part of the life cycle, and that’s what happens. Kids leave home, and the kids were the glue that’s held the family together, and now the kids are gone, the glue is gone, and now the husband and wife are looking at each other and really, what’s going on.
Yeah, yeah. You see —
That’s what happens.
People either, they get divorced, or they end up spending a ton of money, or they gain a lot of weight and their health fails.
Yeah, that happens too.
Yeah.
Well anyway, we’ve got <Inaudible>
I mean, this is the reality.
It is what you and I deal with every day in the office.
Yeah, it is.
We see both sides, the family dynamics, and this is what it’s all about. So, if you want some information on this, the financial dos and don’ts of divorce, that’s on our website, FinancialGroup.com. FinancialGroup.com. And click on this week’s must-read.
Nancy, you mentioned a blog.
Yes.
What is your blog?
My blog address is Hechteffect.net.
Hecht, like in the old department store?
Yeah, or in like my last name.
Of course. Alongside the Hecht Effect, the blog, we have the A Man is Not a Plan. So, if you’ve got any type of — that kind of dovetails, I guess, right along with this <Inaudible>
Yeah, it does.
<Inaudible> so if you’ve got a question, Nancy is the expert. By the way, when I say expert, you and your colleague, Denise Covach, have the very latest on Social Security and you’re going to be having a workshop coming up.
Yes, our next Social Security Boot Camp is October 20th, that’s a Thursday. We’re going to serve a light meal.
What time?
From 6:00 or 6:30 — I don’t know, look at the website.
But sometime right after work.
6:00 to 7:30. But I will tell you, we have room for like eight more people and that’s about it. So if you would like to make a reservation and get some good concise plain English Social Security information, and there’s been a lot of changes since the end of March this year, you can either go to our website, which is FinancialGroup.com and click on the workshops and make a reservation, or you can call our offices Monday through Friday 8:30am to 5:30pm, 407-869-9800.
And on October 25, right after that, on Tuesday evening, Gary Abelie, certified financial planner and CPA, will be hosting another workshop, Know Your Number, When Can You Retire? And this is good stuff as well. We hold these workshops, as Nancy alluded to, at our office in Altimont Springs in our classroom, state of the art audio/visual equipment, nice open room, we don’t cram you into a little board room or something around a small table. We can accommodate 20 or 25 people. We’ll give you some refreshments and give you some good information. People ask well, why do you do this stuff? We do it for basically two reasons.
1. To impart knowledge so you don’t fall prey to some of the mistakes that we see walking into our office, and to help you become financially independent.
2. Secondly, frankly, to introduce you to our firm and what we do for our clients for a fee and how we do financial planning. Leave your checkbook at home. This is absolutely no cost or obligation. But go to our website. That’s FinancialGroup.com. And click on workshops. You can make your reservation right there online.
And you can call right now, especially if you have a Social Security type question. Nancy Hecht is in the studio along with Joe Bird, and here’s the number. 844-220-0965. We’ll get to some texts a little bit later on. The texting number for your mobile device is 21232. Nancy, would you consider somebody with a 401(k) an investor?
Yeah, why would you not?
Well, I always thought of investors as somebody who dabbles in the market and stuff like that.
No, no.
Those are speculators <Inaudible>
For most people, the 401(k) is the largest or potentially the only investment bucket of money that they have. A big part of what we do is helping people manage their 401(k)s while they’re still working, but for most people it is the foundation, for most people it is the first. I mentioned we are newly empty-nesters. My daughter has her first job. And when she was filling out all the paperwork for the employee benefits, blah, blah, blah, blah, the firs thing I said to her is you put no less than 10% into the 403(b).
There you go.
So getting used to payroll deducting, paying yourself as opposed to paying the federal government, is a real easy way to start building up a good solid nest egg for yourself, and as I mentioned, for most people it is the largest pool of investments that they have. And it needs regular care and maintenance. It can’t just be ABCD funds look good, or this is what everybody else is doing, so I’m going to go with the same things, and then just never readjust it. We’ve seen the economics change, people’s lives change, management, performance changes, and just because everybody else in your group is taking care of fund AB and C, your taking advantage of it doesn’t necessarily mean that that works for your lifestyle. One thing that we do is we invest to the person as opposed to investing to a particular demographic or pie chart or something along those lines.
The mistake we see time and time again is people go online and look at what might be performing well at the moment and decide well, that’s doing well, I’m going to put my money in there, only to soon find out that’s going to be perhaps the worst performer for the year, and then they sell that at the bottom, and then they look what’s doing good at the moment and they buy at the top and they continue the endless cycle of buying high and selling low. And that’s how people really mess up their 401(k). The key to a 401(k) investing is be consistent, do it every pay check, don’t buy into what’s going on in the market, don’t try to be another Warren Buffett, don’t be market timers, don’t go online and be monkeying around with it. You need some guidance, use either the target-date funds that are oftentimes in the 401(k) plan, or use a risk-based portfolio, but for most people they shouldn’t be picking individual funds unless you have some professional guidance. That’s what we do for our clients. How do we do that, Nancy?
Yeah, really.
Well, first off, somebody could take advantage of a complimentary consultation. And we use independent analytical sources to report and analyze the different investment portfolios that people have available to them and that they’re taking advantage of. We have a very extensive risk questionnaire, we have an extensive expense questionnaire, and we use all these things to put together a blueprint. I come from a construction background. That works best for me as far as explaining how we work for people. We help people build a blueprint toward their retirement, and look at what walls need to be changed, and —
Well, when it comes to managing the 401(k), we have the ability to do things that we couldn’t do years ago, and that’s thanks to technology, your 401(k) plan stays where it is. We don’t take possession of it, but what you give us authorization to do is look at your plan and then determine of all the choices that you have what’s best for you. And then we make that, we create a portfolio for you within your 401(k) and then monitor it, because as you know funds change. Funds come and go out of a plan, and funds are added, taken away, and then you don’t know what you’re doing. We have the ability to do that. Of course, we do that for a fee, and the minimum account size is $100,000 for us to do it. But we do it, and then we tie it in with the other stuff you have so you have a consolidated <Inaudible> —
Yeah, comprehensive plan.
Yep.
And also, one thing that I find that my clients are forwarding me, which has saved some people a couple times, is anything that they’re getting from their benefits department in reference to their retirement. I had a couple clients that missed their choices as far as pensions go. Should you take in a lump sum, or do you want to take it over your lifetime or whatever, and they miss the decision time.
They’re locked in.
So they got defaulted to something that may or may not have been the best decision.
Speaking of getting stuff in the mail, there was an interesting article in this morning’s Wall Street Journal, that we’ve seen these scams come across in e-mail from the IRS.
Yeah.
Have you gotten any calls at home about the IRS, they’re going to arrest you, and so forth, have you been on that call list?
Not lately. Probably not since March of this year.
Well, I get them regularly. But anyway. First of all, listeners need to know that the IRS will never call you. The IRS will never e-mail you. But now these scammers have now — they’re sending you mail.
Really?
Yes, they’re sending you in the mail with the IRS logo, and it ties into — what they’re saying is that because you’ve been deficient of the Affordable Care Act or something about the Affordable Care Act, you owe this penalty. Send your check, but the key is they’re telling you to make it payable to the IRS. The IRS never wants it to the IRS. It’s the US Treasury Department. So be on the lookout for anything that comes in the mail that says IRS and Obamacare or the Affordable Care — I shouldn’t say <?> Obamacare — the Affordable Care Act, you owe a penalty. And make the check payable to the IRS. That is bogus. Report it to the Internal Revenue Service.
Of course their IRS is like the Indiana Revenue Service.
That’s correct.
It’s amazing how sophisticated.
We need to get to the news center and Dave Wall. Let me give you the number real quick. It’s 844-220-0965. Coming up, Joe mentioned speculators. I want to know what speculators are saying. And we really want to hear from you. 844-220-0965.
Hurricane Matthew is moving through the Caribbean. Start your Monday morning with Orlando’s morning news with Joe Kelly for the very latest with severe weather center 9 <?> chief meteorologist Tom Perry. This is where Orlando turns first for severe weather. News 96.5 WDBO.
This hour was paid for by the host and does not reflect the opinion of News 96.5.
We’ll get back to Dave Wall in about four and a half minutes now with more in-depth look at that hurricane, where it is, coordinates, and all that stuff. Right now we’re talking with Joe Bird, Nancy Hecht from the Certified Financial Group, and this is On The Money. You can join us if you have a financial question, a pocketbook issue you want to bring up. The number is 844-220-0965. Let’s talk to Sam in Palm Bay. Good morning, Sam.
Good morning. How are you?
Great, Sam, how are you?
Hi Sam, how are you?
What’s up?
Good morning. So, my mom and my dad had an insurance policy that upon both of their deaths would pay out to myself and my two sisters, $500,000. And that purpose of that was to pay inheritance taxes. My mom passed away last October, my dad just talked with us last week and says that he’s 80 now. He said he may just want to go ahead and cash out the insurance policy now because at 90 it’s of no value anyhow, and it’s being depreciated in return at his age already. So we opted to do that. Each of us is receiving about $39,000. But we want to make sure that we put that into a vehicle where we would have ready access to it in the unfortunate situation of my dad’s passing so we can pay those inheritance taxes.
Well, that — wait, wait, wait. Let me stop you right there. First of all, the insurance was bought for estate tax purposes. Okay? What’s the size of your dad’s estate?
Right now he says it’s between 3M and 4M.
Okay, there’s no estate taxes here, so you can put that to the side <?>.
Yeah, right.
Okay.
But his property, he lives in South Carolina. We’re originally from Pennsylvania, so he has property in Pennsylvania and in South Carolina.
Okay.
Now, my sisters live in Pennsylvania at this time.
Okay. So there may be state inheritance taxes. You have no federal estate taxes. But the more important thing I’m concerned about is probate. Do you know what probate is?
Yes. He has a trust <Inaudible> —
Okay.
To avoid that.
Right.
Okay, are the properties in the trust, because people set up trusts and oftentimes don’t go the next step and put the properties in the trust. You can have a trust but if there’s nothing in it, doesn’t do you any good.
Right.
So let’s assume that the properties are in the trust.
They are in the trust.
Okay.
Okay.
So getting back to your question, you’ve got — you and your sister are going to get $39,000 apiece.
My two sisters and I, yes.
Right, okay.
So, and you want to keep the monies liquid in case there’s any kind of final expenses that need to be dealt with when your decides he’s done with this world. Right?
Correct.
Okay, so if you’re looking for an area to keep the funds so you have ready access, then you’re really looking at cash reserves. Checking, savings, money market, CD. Any amount of money that you have set aside for some type of emergency may potentially need it back, you need to keep in some type of cash equivalent.
Right. I was thinking savings account, but I didn’t know if there was another vehicle that might return more of an interest rate or not.
Well you could have a year or year and a half CD and see what that might pay you versus a savings account, but you can’t really go much beyond that.
There’s virtually nothing short-term that’s going to give you any kind of rate of return, unfortunately. We get this question asked every day.
Right, yeah, but cash reserves are cash reserves. You’re looking at shopping 0.25% versus 0.4%.
Alright, we need to get to the news center. Sam, if you have another question, you can hang on. We’ll take your call as well. The number is 844-220-0965.
I’m Jamie Dupree, your Washington Watchdog, and this is where Orlando turns first for breaking news, weather, and traffic. News 96.5 Good Saturday morning. The good news is is we’ll be a little drier today. Only a 40% chance of a few scattered showers and thunderstorms inland as we head into our afternoon and evening. We’ll top out at 90 degrees today and then tonight, mainly dry with a low of 73. Widespread showers and thunderstorms expected on Sunday, with a 60% chance and a high of 89. I’m channel nine meteorologist Marina Jareka.
<Inaudible> things on your roadway. Still seeing a crash that’s off to the shoulder on Oakridge Road and JYP, as well as an accident on Goldenrod at Lake Underhill. This traffic report brought to you by the Center for Disease Control. Zika is being spread by mosquitos. Protect yourself, your community, pregnant women, and our next generation. There are actions you can take, go to cdc.gov/preventzika to learn more. Triple T <?> traffic on <Inaudible> News 965 WDBO.
This is severe weather <?> and I am chief meteorologist Tom Perry. This is where Orlando turns first for breaking news, weather, and traffic. News 965 WDBO.
Hey, it’s Joe Kelley. Join me for Orlando’s morning news every weekday morning starting at 5:00. Listen when you wake up using your news 965 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, has the best coverage of the I-4 ultimate project.
Now, our ask the experts weekend continues on news 965 WDBO.
It’s an ask the expert Saturday morning on WDBO. Slightly overcast here in parts of Orlando. Joe Burns is in the studio, along with Nancy Hex from the certified financial group. They are Orlando’s oldest and largest independent firm of certified financial planning professionals. Although, I must say, if you go to the website and take a look at the picture of all these financial planning pros, they don’t look old.
Photoshop baby, photoshop.
Maybe for you.
Come on Nancy, you’ve got that natural glow about you. Here’s the telephone number if you’ve got a question for Nancy or Joe. Nancy, what kind of calls are you taking here?
The retirement pocketbook questions are our primary focus. Looking at your retirement plan, the date, 401k, IRA, stocks, bonds, mutual funds, and then the things that go along with it such as long-term care. And as we were talking to Sam, life insurance, estate planning, just a lot of the questions that concern our clients when they’re getting ready to move into the next phase.
As we say, you know, unfortunately they don’t teach this stuff in school. We go into life, we start earning money, and life happens. We get married and buy the house and have the kids and the weddings and the college and all that stuff. And we go through life trying some of this, trying some of that only to find out we have a collection of financial accidents. We’re kind of here as a repair shop this morning to try and strengthen out those dents and bruises that you might have in your financial situation. So, call us with questions. That number is:
844-220-0965. We’re going to get to these texts coming up. If you’d like to text us from your mobile device you can do that with the numbers 21232. Real easy to remember.
So, we’re <?> a repair shop and we’re just contractors. <Inaudible>
Well, let’s talk to Lynn in Sanford. She has a question about Social Security, Nancy. Good morning, Lynn.
Hi, Lynn. What’s your question?
I went online this morning with my bank to see if my Social Security check was in and I noticed that an additional check was listed for I think it was $330. Is there something going on with Social Security or could that be a scam?
An addition deposit from the Social Security Administration for $330?
Is this your first check that you’re getting from Social Security?
No, no I’ve been on Social Security for years. But, I thought well maybe there’s a refund coming to seniors or something that I haven’t heard of.
I haven’t heard of it either.
No.
We’re shaking our heads, we’re puzzled.
No.
Okay, <Inaudible> direct deposit.
Does the deposit look exactly like your regular Social Security deposit as far as the coding and everything?
I’m on the road now, so I don’t remember. It’s just listed in my direct deposits on Social Security, but the regular check was also there.
Yeah, I would look to see the coding for the deposit. You know, the line that reads — when you’re not behind the wheel and you can sit down and pull up your bank account and see if everything looks exactly the same. But, we’re shaking our heads. We don’t know anything about any extra payments being made.
Okay, well, I can also chat online with the bank, but I just was wondering if I just missed something in these conversations. I haven’t received any e-mails or anything like that. So, I was hoping <Inaudible>
You know what, I would ask that once you find out let me know.
Yeah, really.
Yeah, I’m curious.
Call the show next week with what you know because this is the first we’ve heard of Social Security making gifts.
Okay, I probably won’t get to that until Monday, but I will do that.
Thank you Lynn, thank you for your call and thanks for listening.
I’m reminded of that Green Acres episode where everybody in Hooterville got a huge refund. <Inaudible> It was so funny.
I don’t know what you’re talking about either.
You never watched Green Acres?
I did, but I don’t know what you’re talking about it.
Okay. Let’s talk to EJ. Good morning, sir.
Good morning. I have a question. I’m a husband and I have three kids, young kids. The oldest is five years old. Met with is a registered nurse and I’m a student right now. I’m a physician assistant student graduating next year, so I’m just looking ahead of finances to school and things like that. What should we be doing and so forth? Right now we don’t have any bond or any — we do have some saving account and things like that, but we don’t have any stock market or anything like that. So, I want to know — that is bothering me, so I wanted to talk to someone and see if there — what should we be doing and right now. <Inaudible>.
To summarize here, you’re in school. Is your wife working?
Yes, he said his wife is an RN.
And you have three kids?
Two kids.
Two kids? Three kids?
Three kids. Okay, three kids. So, we’re really starting from ground zero.
Right, right. So, the most important thing EK in my mind is that you have a good, solid emergency fund. We were speaking earlier with somebody in reference to setting up cash reserves. So, with you soon to be graduating and you having young kids at home, having emergency funds are really, really important. You want to build up what you have in a savings account, a money market account. So if, God forbid, somebody is sick or breaks an arm or the refrigerator breaks or you need to get your roof repaired, you don’t have to go into credit card debt to take care of emergencies. You said your wife is an RN, is she working at a hospital?
Yes.
Okay, has she signed up for their payroll deducted 401k or 403 —
Yes.
Okay.
She has all of that.
Alright, good. Okay.
Let me back up. Let me — when Nancy says is 100% correct. You do need an emergency fund, but let me back up one step further. What you need is life insurance. That’s the most important —
I have that.
How much insurance do you have?
I want to say it’s about 500K.
500,000?
Yes.
Okay, that’s probably not enough with three kids. I hope — you’re using term insurance I hope?
Yes, I believe so.
How old are you?
33.
33, you can buy another $500,000 for chump change for the cost of a Starbucks coffee. I’m serious. You need to increase your life insurance because with three children, chances are you and your wife are educated, you want the same for your children. If something happens to you tomorrow or your wife tomorrow, you’ve got risk there on both sides. Your children’s entire financial personal life is going to be in jeopardy. So, give them the life insurance. Do the, as Nancy says, get the retirement, get that emergency fund, and then start maxing out your contributions to your retirement accounts.
EK, I’m sure just following down the life insurance path, your wife could take advantage of one time her salary through work at probably no additional expense and can increase that for an extremely small amount of money as an employee benefit. So, she can be covered for the life insurance on her side through payroll deduction and have it be very inexpensive. Then, you can take care of it for yourself. But, you’ve got to take care of those basics first and then you can start slowly investing into a good — not knowing anything about you and we — I don’t like giving recommendations for a specific type of investment without having any kind of background information, but a good balanced mutual fund is a good place to start once you have those protection and cash items taken care of.
Work on at least putting 10% of your pay into your retirement account.
Well, once he starts getting paid.
Yeah, and his wife is doing that. You want to strive to put in the maximum under the age of 50 is 18,000. Over the age of 50 is 24,000. If you can do that consistently, you’ll be well ahead of 95% of Americans.
When are you going to be done with school?
In May, next year.
Oh, okay. Alright. So, if there is enough cash to allow for you making an IRA contribution as a non-working spouse, you can do that.
Good point.
So, you can put aside $6,500 in a deductible IRA for yourself.
Oh, okay.
But, again, that’s second to the emergency fund and the protection items.
Awesome <?>.
Okay? Good luck to you.
Thank you so much. Appreciate it.
You can join us as well, here’s the telephone number 844-220-0965. Speaking of Green Acres, have you ever heard of Green Acres, Florida?
Yes.
You have? Where is Green Acres, Florida?
No idea, but I’ve heard of it.
It’s south of West Palm. Just south of the airport. Well, I was looking up during the program here something that Joe said about this IRS telephone scam and now they’re branching out to writing letters and stuff. Well, I found the IRS telephone scam. You want to listen to it?
Sure.
Alright, here we go.
You have one old message. Tuesday, 11:49am.
Hello, this call is officially a final notice from IRS.
That’s it.
Internal Revenue Service. The reason of this call is to inform you that IRS is filing law suit against you. To get more information about this case file, please call immediately on our department number 206-462-5330. I repeat, 20 —
We don’t need to repeat that.
I wonder if anybody has called the number to see who answers <Inaudible>.
Once they get you on the phone, you’re in trouble.
So, I’m sorry that number got out.
That’s okay, but once again, the rule of thumb here is IRS never calls you. They’re going to mail you, they’re not going to e-mail you. As we said earlier if you weren’t listening, right now the new scam is there is a scam out there where you will get something in the mail that looks like it’s from the IRS. They tie it in to the Affordable Care Act, say you have to pay this penalty, and they want you to send a check to Austin payable to the IRS. The IRS does not ask for checks payable to the IRS, it’s the Treasury Department.
There is a big IRS office in Austin, Texas, so. If somebody were to go online and see is this a legitimate location, so.
That was from Green Acres, Florida. <Inaudible> Green Acres the TV show, I love it. I watched it last week. It’s on MeTV or Logo or one of those channels out there.
It’s so funny.
Yay for you.
I love Mr. Haney <?>. Yeah, I love him. Abigail, you’re on WDBO. Good morning. Abigail are you there?
Hello?
Let’s see if we can get her.
Yes, good morning. How are you?
I’m well, thank you. My husband and I are getting a late start. We’re both in our 40s. My husband has just started a retirement account with his new employer. I have been employed for awhile and have some retirement accounts. I have an old 403b that I believe I should roll over to a traditional IRA, but I do not know how to do that. Can you give me some insight?
Sure. Well, and I agree with you, I’m not a fan of leaving money where you no longer are. So, rolling it over to a traditional IRA is the best thing to do. Well, one thing that you can do is take advantage of a complimentary consultation with one of the certified financial planners in our office and we could facilitate that rollover for you.
Okay.
For somebody who wants to do it themselves, you can go on to tdameritrade.com or fidelity.com or vanguard.com and navigate through their paperwork. But, really, if your husband is just starting a new job and you have this old 401k to roll over and you have something at work, it’s a lot to coordinate and a lot of different choices. So, we like to look at the things that people have at work where there’s finite choice and see how that jives with your risk tolerance and your needs and then take the outside things, which would be the traditional IRA, and blend that in so you have a nice, balanced portfolio geared towards your time horizon and your risk tolerance.
Is it something — a traditional IRA is that something that I can invest into a Roth vehicle or a mutual fund?
You can certainly invest in mutual funds. There’s a ton of mutual funds that are qualified for retirement accounts. If you want to take advantage of the Roth, then what you have to do, Abigail, is roll it from the 403b to a traditional IRA, and then you have to convert it from the traditional to the Roth. But, one thing you have to look at <?> is depending on the amount that’s in that account, you’re going to be dumping that into your taxable ordinary income for the year in which you do that. So, you’re going to increase your tax base for the opportunity to have this tax-free withdrawal sometime in the future, assuming that the Roth rules do not change.
Okay, we need to get to the news center for our update here with Dave Woll. When we come back, we’ll talk to Veronica in Brevard County. She’s got a question for you Nancy about Social Security. And there’s time for your call as well at 844-220-0965.
It’s an ask the expert Saturday morning on WDBO. Not a whole lot of time left in the program. On the money with the Certified Financial Group. Let’s get right to the calls here. We’re trying to text questions and answers back at the same time.
<Inaudible>
Yeah, Nancy needs to clarify something.
For EK, I was — EK, I gave you a little bit of bad information for the —
Not bad.
Well, a little bit of slightly incorrect information for the IRA contribution that could be made for you. Because of your age, it would only be 5,500. I was thinking of somebody older than you. Sorry about that, but anyways. If you can do the deductible IRA for a non-working spouse and I say that even though you have primary care for your kids, which is a huge job, you should do that. 5,500 under age 50. 6,500 for people 50 and older.
Okay, let’s talk to Veronica. Good morning, Veronica.
Veronica!
Hi, Veronica.
Good morning, how are you today?
Good, how are you?
Good, good, what’s your question?
My spouse and I, big age difference between the two of us. So, my husband has already met the retirement age based on the years. So, he is technically I think the word is full retirement.
Okay.
So, we actually are in our own business, so the odds of us retiring are going to be slim.
Okay.
So, that would be until 70. However, I am considerably younger, so you’re looking at 12 years younger.
Okay.
I wasn’t sure if he hit full retirement if he’s making income right now will that increase his Social Security from now until he’s 70? Or should I be bringing in the business income myself <Inaudible>.
Just by deferring to age 70 he’s going to get an 8% increase per year. For every year past full retirement age until age 70, he’ll get an 8% credit.
That’s correct, but let’s say he makes $50,000 in the account and in the 35 years he’s at full retirement already — if he brings in 100,000 will that count towards the 35,000? I mean, to the 35 years?
As far as the calculations go?
As far as the calculations go because he’s already hit full retirement? Once full retirement hits, do they just say okay you’ve got your 35 years, you’re done.
Here’s the easiest way to do that. Go to IRS.gov/estimator and you can plug in those variables and we’ll show you exactly what will happen if you continue to —
No, it’s ssa.gov.
<Inaudible>, okay, what did say?
You said IRS. <Inaudible> ssa.gov. My inclination is when you hit full retirement age and your 35 years have been calculated, it’s that plus the 8%. I don’t have the rules right in front of me. If you want to e-mail the office, then I can look at the information