Hosts: Roger Johnson, CFP®, AIF® and Joe Bert, CFP®, AIF®
Yes indeed, it’s an Ask the Expert 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 being the Certified Financial Group in Altamonte Springs. With us this morning, we have two of the 12 certified financial planning pros with us. We have back in the studio Roger Johnson. Good morning, Roger.
Hey, good morning Kirk, how are you? Good morning Orlando.
And the oracle of Orlando, back in the studio once again, Joe Bert, Joe —
Good morning.
Joe, remind everybody what you’re here to take calls about.
Once again, Roger and I are here to take any questions that you might have regarding your personal finances. As we oftentimes say, we go through life making financial decisions. Sometimes we have no idea why we made these decisions after we’ve made them, and we look back and say my gosh, what did we do, and we go through life with a collections of financial accidents. But there’s going to come a point in time when that paycheck will stop, and the only thing you’ll have coming in for sure is Social Security and then whatever you’ve been able to save and accumulate during your working lifetime will help supplement that Social Security to allow you to enjoy the as they say the golden years. So, we have to make decision —
We can take questions or comments today. We can take both.
Yeah. I’m sure some people are commenting out there right now.
<Background Noise> this morning.
Joe waking up.
He’s working on it. Anyway, so we’re going to take questions that you might have about your personal finances, on stock, bonds, mutual funds, real estate, long-term healthcare, IRAs, annuities, reverse mortgages, all that and more. Roger and I are here to take your calls. There is no question that is off the wall, because in the last 25, 30 years we’ve pretty much heard them all. And as we say on Monday through Friday, we do planning for a fee, but on Saturday morning we do it for free, so if you have any questions that’s been on your mind, just pick up the phone and dial. In fact, you don’t even have to use your real name. You can pretend your Daphne or Jack or somebody. Pick up the phone —
<Background Noise> Gladys.
Gladys will work, too. What’s the number for that?
844-220-0965. I laugh because we had a fellow call a couple of weeks ago, saying his name was Daphne. It was kind of cute. 844-220-0965. You can also text us from your mobile device; the texting number is 21232, again 21232. Or, you could use the open mic. You’ll find the open mic on the News 96.5 app. Joe, it’s great to have you in the studio with us this week, and you as well, Roger. Let’s take a look, because we’re coming up to the end of the year here, it’s time really for people to start looking at their portfolios, don’t you think.
It’s a good time to review your portfolio. There’s some things that we like to encourage people to do on their own, or we can help them do that, and go through things like a wellness check up. How am I doing? Actually measure your results and see how you’ve been going along with this. We’ve had a rally here in the last week or so.
Rally, whoa.
We’ve had a stock rally but we’ve not had a bond rally. The bond markets, bond funds may have suffered a bit because interest rates appear to be going up. Of course we’ve heard that before, but long-term rates have started to work their way up, and your <Lost Signal> have worked their way up as well. Look at your asset allocation, what we mean by your mix between stocks, your different types of stocks within the US and maybe some foreign stocks, and also bonds, and look at that as a mixture. We’d look at and say well wow, the stock market has been up, great; how is my portfolio doing? There may not be the greatest results because it’s a diversified portfolio, so that maybe hurt a little bit here in the last month, but the diversified portfolio is built there to protect you from vast changes in stocks that can happen in a relatively short period of time.
That’s the idea.
We’ve got a call here this morning from Mike in Deltona. Good morning, Mike.
Morning, how are you doing today?
We’re doing great. How can we help you.
This is my situation: Long story short, I make roughly about $2,400 a month. I pay my father $1,000. He’s helping me with my credit card issues.
Okay.
And, I have let’s just say about an extra $400, and I want to invest maybe about $100 to $200 for my retirement. I have $10,000 in a retirement account that I set up a long time ago.
Okay.
What’s the best way to use the $100 to $200? What should I invest it in?
How old are you, Mike?
I’m 37.
Okay, so you’re not a young guy as much anymore.
Yeah.
Single, I presume? No dependents?
I have a son and I just got through a divorce.
So, you’ve carved out $100 or $200 extra, you’ve earmarked that as money you can save for retirement, is what you’re saying.
Yes, and I just didn’t know what’s the best way to — what to put it in.
So you have a $10,000 account through your employer, is that what that was, or is that an IRA.
Yeah, it’s 403(b) account.
Great, that’s great. So the main thing you’re going to want to have is emergency funds set aside for let’s say three to six months of expenses. So I’d build that one up first. Put that money aside. It’s going to be a very low risk, maybe even just a savings account. This money is not going to make you a lot of money, but it’s going to be there to save your hide if something happens to that 2,400 a month income, you’re going to need that emergency fund. So build that up first, and then look into adding more money to that 403(b).
Okay.
That would be a great way to save for retirement. You’re going to get a tax break with the money going in, and it’s going to grow tax-deferred for all those years.
Okay.
In your 403(b), do you have a Roth feature in that.
Yes it does, because it was through my old employer to my current employer right now. It was a 403(b), I rolled it over to I believe a Roth IRA kind of a thing.
Oh, so you no longer have anything through your employer?
No I don’t, I used to. Long story short, I had left my employer to become a consultant. That didn’t pan out, so I returned back to my employer three years ago, and my only regret is I didn’t invest when I went back.
So now the employer you have has a 403(b)?
Yes it does.
Okay, and does it have a Roth feature.
I have to check on that, I really don’t know. Sorry about that.
In your tax bracket, a Roth makes sense because you’re giving up very little in the way of the tax deduction, and you can get the money out in case of an emergency without too much tax consequences. So I would look at the Roth. Look at the target-date fund that you might have available in that plan. You know what a target-date fund is?
I’m assuming that’s when I can pull the money out.
No, no. Target-date fund is geared to your retirement date. So you’re 30, so you’d be looking at like a 2045, 2055 fund. It’s going to be very aggressive, but it’s where you need to be putting your money on a monthly basis. Roger, anything to add to that.
Yeah, if that’s all your income and you’re not in a high income tax bracket, the Roth might be the best way to go.
Okay.
There’s another feature. I’m going to mention this, but a little asterisk, like try not to do this, is that when you make Roth contributions, you may choose to withdraw that without penalty, but you can only withdraw your contributions. So you could almost — you want to be a little bit more aggressive, you could use your Roth as a quasi-emergency fund, or at least part way.
<Inaudible>
So instead of, as Roger indicated, you need an emergency fund, but if you use the Roth to build up that capital, then that could serve as that, and hopefully you don’t need.
Try not to be too aggressive with that Roth at first, so that it is works as an emergency fund, the money there.
What you’ve told us, though, is you’ve had some credit card issues, so you want to have that emergency fund so you don’t fall back on those credit cards and get out of that way of life.
Oh yeah, and I hate to bring this up, but the reason — and I don’t want to take too much time — the reason I got into credit card debt is because I was trying to pay off my student loans, and so long story short I ended up defaulting on my student loans so I started paying off my credit cards.
Robbing from Peter to pay Paul.
Sadly enough yeah, that was the life I was in for nearly seven years.
Maybe you’re past that now and you can get back onto the positive.
That’s what I’m hoping for.
Alright Mike, thanks for the call.
Thanks for the call Mike.
Thank you very much.
Alright, it’s coming up on 9:15 on WDBO. Dave Wall is in the news center keeping an eye on things. He’ll have the very latest coming up, including President-elect Trump is scheduled to come to Orlando. He’ll tell you when. That’s coming up. Also, the Army/Navy game is today. Have you ever seen so much hype for a football game as Army and Navy.
<Inaudible> Army.
What? Did I say that.
Joe is an Ohio State fan.
Ah yes.
Dave’s coming up in about five minutes. What’s the biggest threat to a comfortable retirement? Your ignorance.
Yep, this week’s must read — for those folks that may be new, every week Roger and I and the certified financial planners at CFG scour the financial press to find interesting articles that we think might have some broad appeal. This week’s must read is Test Your Retirement IQ. It’s on our website at financialgroup.com. Just click on the right hand side that article. Plus —
<Inaudible> it’s a little <Inaudible>. I got a high score.
I did pretty good. I got one wrong. The question is — oh, I’m going to give it away here. Why not? Is Social Security going bankrupt? Now, if nothing is done to it, it will, so things need to be changed, but the answer is no, but I said yes and it said no.
You’re right, if there are no adjustments to Social Security, in fact it will go bust, but that’ll be adjusted.
So there’s 1 out of 10 that you know you’re going to get right. It’s fun. It’s a true/false, 10 questions, and tests your knowledge on your nest egg, Social Security.
Financialgroup.com, click on this week’s must read.
I’m going to give you the number again, it’s 844-220-0965. We have another caller.
Okay.
I can’t tell who it is.
You can’t, I can. Travis.
Good for you.
Hi Travis in Orange County.
Hey Travis, what can we do for you?
Good morning, how can we help you?
I was calling to let the guy know that called before that didn’t know to do with his $200 —
Oh, you’ve got an idea, yeah? Tell us.
Yes. He should give it to the person who he’s asking for advice.
We appreciate that.
We do it for free on the weekends. Thank you, though.
Saturday mornings we are for free, Travis. We appreciate the advice.
But hey, listen. If somebody — explain, because a lot of people don’t really have an idea how a certified financial planning professional works. You don’t take charge <?> or money or anything like that, do you?
Well, I can only explain how we work at Certified Financial Group. We are fee-based advisors. When we work with clients, we charge a fee for our advice. We’re not trying to sell you anything. If you want us to do a plan for you, that’s what we do. That’s how we built this firm over nearly 40 years, and we now manage a lot of folks’ money. We don’t custody the money; by that I mean if our firm should disappear tomorrow, your money is never with our firm. We have two major custodians, Fidelity Investments and TD Ameritrade, and so you know your money is there. We tell them what to do on your behalf, and we do it all for a fee. There’s no commission, no sales charges, no fees, no nothing, and what you see is what you get. Our job is to develop portfolios to help your reach your long-term goals and select some of the best money managers in the world and monitor those investments, and be sure that you’re on track. That’s what we do.
And people can see their accounts 24 hours a day online.
Seven days a week.
It’s in your name.
Yep, that’s it.
It’s not in anyone else’s name other than theirs.
Alright, we’ve got a caller here on line two from Greg in Tavares, good morning Greg.
Good morning.
Hey Greg.
How can we help you?
I have a qualified IRA. I live mostly off of — very simply off my Social Security, and I have used a couple of brokers over the last four or five years, and didn’t have any success at all, so I ended up pulling it out right when Brexit happened, and it’s just been sitting there for six months. I’m wondering, is it foolishness on my part to consider some way to increase that with the precious metals like gold or silver? How would I go about doing that?
You don’t want to do that.
Greg, how old are you? You said you’re in retirement.
I’ll be 65 in May.
Alright, so you’re living off Social Security basically.
Right.
And you have an IRA that you pulled out — and I assume you mean you sold your investments and the money is still in the IRA.
It’s still in the IRA with BoA, and it’s just sitting there doing nothing.
Just sitting there in cash, right.
Yeah.
So, how has gold been doing lately?
Well, I see obviously it’s around eleven sixty or so.
Let me tell you how it’s done in the last month since the election: It’s down 8%, so that doesn’t sound so good, does it? Here’s the thing: If you look at —
It seems like the time to get in if it’s down.
Well, it was down before the election as well. It’s been down for the better part of two years.
Okay.
The height of gold was — I’m not looking at any charts right now — somewhere in the 2013, I would say. ’12, ’13.
Yeah, 2011, 2013.
Yeah, it was almost 30%, 40% higher than it was now. So, it seemed like a good idea at the time then, it was going up, so if you bought in at that time, you’re down 40% now, <Background Noise>.
Well, I guess I’m battle scarred from stocks, and I don’t know what to do with this qualified.
You know why you’re battle scarred, Greg? You know why you’re battle scarred? You got emotional, you saw Brexit coming. If you’d have stayed in there, you’d be up today. And that’s the mistake that virtually everybody makes in investing. I’m not being critical.
Oh, I know.
I mean, we’ve all jumped out of something when we were younger <?>.
That is the problem when people invest; they think it’s — there’s a difference between investing and speculating, and what you’re doing now by asking this question about should I invest in gold or silver is speculation. Where should I put my money today so I see a nice gain and I’m okay. Investing is long-term, and this is IRA money and you need to be thinking for the next 25, 30 years of having this money grow for you. The best way to do that is to own stocks, okay? Now, gold and silver are certainly stuff. You can buy real estate, that’s stuff. You can buy Beanie Babies, that’s stuff. Some people did that. You can invest in comic books or playing cards.
Baseball cards.
Baseball cards, but it’s not <?> a diversified portfolio.
Almost everybody —
And you can have some gold in there if you want.
But most everybody wants to — you should own something that goes up in value, and over time, investing in companies around the world go up in value. It’s never a straight line, it’s never a smooth line. You can do that very efficiently, very effectively, by using mutual funds. Stay away from individual stocks, because that’s where most people get burned because they’re speculating. They think they know what’s going on with stocks, but use well-diversified mutual funds and it will get you there. And you need to have a portfolio that’s diversified, as Roger’s been urging you <?>. Roger, a combination of stocks and bonds.
Stocks, bonds, and you can have a little sliver of gold in there.
A very small bit in there <?>.
Yeah, that’s right. Go small.
Greg, if you have any more to say <?>, hold on. John in Kissimmee, you’re going to have to hold on as well, I’m way over time here.
I hear he’s a father again.
Yes you can get satisfaction.
78 <?> —
No he’s 80.
No he’s not. He’s 70-something.
Maybe you’re right.
With a ballerina.
Yeah, a 28-year-old ballerina. I guess that’s what it takes.
Check please.
Mick Jagger of the Rolling Bones <?> there. We’ve got about a minute before we’ve got to get to Dave Wall in the news center. That’s my fault, I went way over on time here, so I’ll tell you what: I’m going to ask John to hang on to get a private consult off the air — or you can wait — and then I’m going to offer you to call and we’ll put you right in line at 844-220-0965. You can text us as well. That texting number is 21232, or use the open mic, and you’re find that open mic on the News 96.5 app. Before we go to Dave in the news center, what’s the best way to get ahold of you, Joe or Roger, during the week?
The best way is to call our office, 407-869-9800, and talk to — there’s usually one of the 12 CFPs available to take a question. We’ll talk to you at no charge for a bit, and we’ll also offer a complementary consultation if you want to get into things a little deeper.
<Inaudible>
That’s a great way, just call the office, or go on the Internet. That Internet is still around, isn’t it.
Yeah.
Yeah, I think it is. You can go on that, it’s financialgroup.com, and make an appointment.
The number again, 844-230-0965, back with more of your calls, because we’re planning tomorrow today with the Certified Financial Group.
What you’re What year was that, Joe?
’68.
You’re right. What were you doing in 1968?
Getting my motor running, baby.
Sowing your wild oats, shall we say?
Alright, Joe Burt is the Oracle of Orlando from the Certified Financial Group. Also with us today, Roger Johnson. Both of these gentlemen are certified financial planning professionals. Joe, remind everybody what you’re taking calls about.
Once again, Roger and I are here to take any calls that you might have regarding music that was played in the 1950s <?> and also regarding your personal finances. We’ll talk about things that you might be trying to figure out in your own life because they don’t teach us this stuff in school, so we kind of stumble through it and hope it all comes together only to find we have a collection of financial accidents. So, we’ll talk about decisions that you might be making regarding a 401k, or an IRA, or about life insurance, about annuities, reverse mortgages, stocks, bonds, real estate, long-term health care, all that and more. Roger and I are here to take your calls and then good news for you, the lines are absolutely wide open. So, pick up the phone, don’t be shy, and dial these numbers.
844-220-0965. 844-220-0965. Or text us from your mobile device. The text number is 21232. 21232.
I want to circle back to Greg who called a little earlier. Remember Roger was talking about gold and silver?
Yeah.
I sent out this e-mail blast to my clients yesterday. Basically, it says all that glitters is not gold because there’s been a legal finding in New York. Major banks, including HSBC, UBS, and Parkways, were allegedly involved in rigging the silver market. So, your precious metals markets can be rigged, folks. And you know, if you listen to — if you watch cable news or you listen to the radio it’s all pot of gold, buy silver. They’ve been saying the same thing forever, right?
For years.
Now may be the time to buy gold.
Was any of this <Inaudible>
It may or it may not be.
Was any of this reported <Inaudible> it’s all time lows. It’s not guaranteed, but it will double.
Forget it.
Never goes out of style.
The market could be <Inaudible>.
And if it doesn’t go up, you can wear it.
That’s true.
I’m trying to think of a B grade actor they have pitching that stuff.
A couple of them.
<Inaudible> you know. Well anyway, 844-220-0965 is the number. 844-220-0965. You want to talk about your 401k, IRAs, rollovers, stocks, bonds, mutual funds, you name it. Any pocketbook issue. One of the things we wanted to talk about today with Roger was this triple tax favored accounts.
Yeah.
Why not.
Triple tax favored.
Not one, not two, but three.
Now, I’m going to say this is probably — this type of account is the most efficient and wonderful account there is. There’s very little amount of money you can put in it. The limits are low, but it’s a health savings account and you have to first qualify to have a health savings account by having a qualified high deductible health plan. But if you do — and there’s some stipulations. You have to have a high minimum out of pocket, you have to have a high deductible, the numbers are under IRS publication 969.
Oh, the old 969.
The old 969. But, notice how the new administration is talking about changing the Affordable Care Act and some of the things that you mentioned that he wants to do is be able to sell insurance across state lanes and he also mentioned that we want to increase the availability and use of the HSA plan, the health savings account. So we’re going to hear more and more about these.
Tell us <Inaudible> financial <Inaudible> why this is a <Inaudible>.
Well, I think that’s pretty good, isn’t it. If you take the 408 across to the — Johnny Carson. I kid you not.
It’s doggone good, I got it. Alright.
Alright, so, back to reality here. The triple savings of these accounts is that you get a tax deduction for the money you’ve put in and you get tax free growth during the time that money is in this HSA account.
That’s two.
And when you take the money out for qualified medical expenses — which we all will have — it’s tax free withdrawals.
And qualified medical expenses are such things as —
Well, during your working years you could use it to pay vision, dental. You could pay it for long-term care payments. If you go on to meet your out of pocket, you become unemployed, you could use it to pay for your COBRA plan. You can’t use it to pay your premiums, but you can use it for a whole bunch of other stuff.
You can use it for dental?
Yes you can.
For dental?
Dental and vision.
For prescriptions that may not be covered by your medical plan?
You are correct, sir.
How about that.
It’s a triple play.
It’s a triple play and best of all, you get — tax deductible, tax free growth, and tax free withdrawals for qualified expenses. Now, the worry is oh, well, I’m close to 65. I’m going to go on Medicare. I’m going to lose that money. No you will not.
No.
No, all the money — and that’s one of the things I’m trying to do is build up my HSA account and I have chosen to not use it to pay medical expenses. I have a prescription, I get sick, I go — I pay it out of my pocket and then I — luckily I can afford to do that — and I use this HSA plan and I invest the money with a mutual fund. And my goal is to let this thing grow and use that second tax advantage, the tax free growth, for as long as I can. Then in retirement or in — after going on to Medicare, which isn’t that far away from me, I will be able to use this for paying part B. I will —
There you go.
I will pay part B out of whatever I pay and I can reimburse myself for that expense out of my —
There he goes. Here the goes again.
Wait a minute. You know who that was, don’t you?
Yes.
Who?
It was —
Art Fern.
Art Fern?
Art Fern. Johnny Carson playing Art Fern.
Art Fern?
Art Fern.
I remember that character.
You remember Art?
<Inaudible> flashing cut off too.
And then get out and cut off his <Inaudible>.
There it is.
Art Fern <Inaudible> with the lovely Carol Wade. No longer with us now.
Sorry. Moving on.
Alright, we’ve got a call here.
We’ve got a call.
Bob in Viera.
Hiya Bob.
Bob in Viera, good morning.
Good morning.
Welcome to the Johnny Carson show. How can we help you?
Yeah, I thought I was on it.
How can we help you?
Alright, my brother died and left a <Inaudible>. Okay, I’m one of the three people closest to the <Inaudible>. The lawyer sent us a letter here from Pittsburgh that we have a choice of putting in the estate, in a lump sum, or taking it individually and I chose to take it individually because of the taxes are a lot less. Here’s my question, alright. When we do that, alright, that money should be invested in an IRA — according to the letter we have to have an IRA to put it in at the time. Is that correct?
Well, it’s close. It’s not going to be your IRA. It’s going to be an IRA that is an inherited IRA because you’re not a spouse. You can’t combine it with yours. If you were a spouse, you could combine it with your own. So, it’s going to be a separate account and I suggest you do have a separate account, open up an inherited IRA to receive that — those assets so that you can then take the money out over your lifetime if you chose to do that. You can take it all out and pay the taxes on the whole enchilada if you want. But, if you want to be more tax efficient, you’d leave it in as an inherited IRA and just take a minimum — required minimum distribution needs to be calculated each year.
What you need to do, Bob, is you need to contact the current custodian and you have to have that custodian set up the IRA. Once that inherited IRA is set up at that custodian, then you can change custodians and you continue having it titled as an inherited IRA. As Roger said, then you have the option to take it out as you need it, when you need it, you pay taxes on it. Or you can do what they call the stretch, which says that you take it out of your remaining lifetime.
Okay, the custodian first puts it in an IRA, then I have to take it out and put in an inherited IRA.
No.
No no.
No. The custodian is going to put it in an inherited IRA. He’s going to — that custodian has to set up that inherited IRA for you in your name.
In your name.
Okay.
Okay, and then you name beneficiaries on that so if you croak the next day it’s going to go to your beneficiaries.
That’s a medical term.
Medical term, that’s correct. You got it? So, that custodian needs to set up the inherited IRA that you need to direct him. And then if you want to leave that custodian, you want to do something else with it, you then transfer that inherited IRA to another IRA with another custodian then do what you want with it.
Joe’s talking about the mechanics of it. The new in your account in your name has to be done at where this IRA is now, where your brother’s IRA is now. It’s going to get into your name there. Then, if you chose to you could transfer it to Schwab, Fidelity, TD Ameritrade, ABC Bank, whatever as an inherited IRA.
By all means, don’t cash it out and then try to do this.
Right.
No, don’t touch the money.
Okay, second question. The house is involved in the three way split and it’s not a real big house. It’s probably 50,000 each involved in that. How am I going to avoid paying inheritance tax on that?
You’re not going to pay any at all.
No?
No.
No, no.
There’s really no inheritance tax you’re going to face. The only tax you’re going to face is when you take this money out of his inherited IRA because it hasn’t been taxed yet. But an inheritance coming from you after the house is sold goes into an account there. The personal representative will divvy up the three parts, and you’ll get your check, and it’s not taxable. It’s an inheritance.
Okay.
How about that? That make your Christmas?
That makes me feel good.
<Inaudible> thank you very much.
Alright.
Thanks for the call, Bob.
Here’s the telephone number if you’d like to join. It’s 844-220-0965. 844-220-0965. Or you can text us at 21232. You have a When Can You Retire workshop coming up pretty soon, don’t you?
Looks like we do.
January 7th.
We do. We have Gary Abley. We’ve got a — that one will be When Can You Retire: Know Your Numbers. There’s going to be a Social Security workshop coming up January 19th, countdown to retirement —
Oh, those are always popular. Denise Kobach and <Inaudible>
I’ll tell you one that Gary just did recently and he’s going to do another one in March is the health care options in retirement.
Right.
Talked about Medicare, moving parts to that, long-term care, expenses that you’re going to face, and things we really need to look at, and choices that you have to make, prescription deals, Medigap, all that. <Inaudible> to learn.
Gary knows that stuff inside and out. Go to our website that’s financialgroup.com, financialgroup.com. Click on workshops. You can make a reservation right there. They’re always free. Leave your checkbook at home. We’re not going to be trying to sell you anything. The reason we do this is to give you advice so you don’t fall in those traps that we see many people walking into our office with. And then perhaps whether you need financial planning now or sometime in the future you’ll give us an opportunity to earn your business. So, go to our website. That’s financialgroup.com.
And while you’re there don’t forget, check out this week’s must-read.
Right.
Test Your Retirement IQ. Alright, the number again, 844-220-0965. 844-220-0965. We’re going to go to Dave Wall in the News Center and then come back and take your calls. We do have some interesting texts as well. We’ll get to the text questions coming up next here on WDBO.
This is 60s rap music.
Alright, we’re back. A good selection of music there, Joe. Good selection.
Alright, it’s On the Money, brought to you by the Certified Financial Group.
I think our listeners don’t understand what goes on here in the studio.
About how much fun you actually have.
Well, when you have these headphones on and we bring in the —
You think you can sing.
High-def — high-def — sure.
And Joe, you can’t, by the way. I wanted <Inaudible> I had my head phones off and I <Inaudible> it’s not good. It’s not good. But we have fun doing it.
Just in case you’re bearing with us. Gary.
There he is.
<Inaudible> you still there, Gary?
I’m still here.
Alright, Gary.
How can we help you?
Well, I was fortunate enough to think about retiring about a year ago and I’ve got a self-directed IRA with E*Trade. And I’m doing pretty well. I’ve got about 2/3 of it that I use in what I call speculative stocks of <Inaudible> done real well. But, I’ve got about 100K that just sits there and I want to do something very secure with it, you know very low risk, but I’d like to return a little bit money than, say, what they pay on the little <Inaudible> which is what they pay there. Got any ideas?
So, you have $100,000 just sitting — well, we’ll say idle — in your self-directed IRA.
That’s correct.
Now, are you saying that you want to have something that you’re guaranteed will not go down in value?
Well, minimal risk anyway. I mean, I’ve got another — it’s another, say, 200,000 that I’ve got in speculative stocks and it’s done real well. Especially because the market is doing well right now.
Right. Right, right, right, right, right.
And so there’s about 100K I want to keep as my emergency fund, as you guys call it, but I’d like it to return something, you know.
I’d look at one of the bank rate loan funds that are tied to interest rates. Problem is if you got to bonds, as we know as interest rates go up, bond values are going to go down. So, you really need to know what you’re doing in that area. But one of the things that has stability to it that will appreciate as interest rates go up are the Bank Rate Loan Funds, and —
Bank rate loan funds, I like that.
Yes.
So, that would be — that’s back in mortgages and whatnot, right?
It’s tied to interest rates. So, as interest rates go up, your yield will go up and your value will stay pretty constant.
We use that as a combination of other types of bond funds for our clients. But, if you’re looking for a single — and I’m not sure I’d — well, maybe use it — or use one of the multi-sector bond funds. Roger, what do you say?
Yeah, I mean, but does it have to be all bonds? I’m going to suggest he put in some stocks.
Well, he’s got 200,000 of speculative stocks so —
Yeah, I know, but this is —
<Inaudible> yeah, and bonds. I’ve got <Inaudible> bonds and stocks both.
Okay, well how about blue chip US dividend paying stocks. Is that in your line of speculative? Is that it?
Probably not. Yeah, that would be something — I like that. I like the idea of the bank loan one because we know interest rates are going to go up. That’s going to happen. I like that.
Gary, we’ve got to run. We’ve gone one more call from Greg here in Deltona. Good morning, Greg.
Good morning, gentlemen.
Hey Greg. How can we help you?
So, I’m a client of yours with Nancy.
Oh, great.
And I spoke to her a couple months ago, told her that my employer at Lake Mary was <Inaudible> in 2017 this year we’re <Inaudible> and she suggested that I fund that to the max before worrying about <Inaudible>.
Yeah.
My question is I feel like the gentleman said earlier that I think that I cover my medical out of pocket and just let my HSA ride for multiple years.
For tax free growth, okay.
Right. But if something happens down the road, as long as I save my medical receipts and explanation of those that, so let’s say 2017, 2018, 2019 in four or five years —
Yeah, you can go back over the years and pay — take money out of an HSA to pay — reimburse yourself for previous expenses. You’re right on track there too.
Okay, so as long as I save those receipts and if something happens <Inaudible> got to pull out $10,000 <Inaudible> as long as I have those receipts, we’re covered.
As long as you can justify those qualified medical expenses, you are fine and dandy.
Alright, we’ve got to get out of here. Joe, what’s the best way to contact you?
Our website, financialgroup.com. That’s financialgroup.com.
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