Hosts: Gary Abely, CFP®, AIF®, CPA and Joe Bert, CFP®, AIF®
Yes, indeed, it’s an ask the expert Saturday morning on WDBO and we’re live in this studio, the last day of 2016 with Joe Bert and Gary Abely from the Certified Financial Group, Orlando’s oldest and largest — try that again. Independent — Independent. Firm of certified financial planning professionals. Independent.We’ll tell you more about Certified Financial Group coming up here. Why do you stress that word, independent? But let’s welcome right into the studio — like I said, we’re live here today, this Saturday morning. And Joe, in case anybody may be new to the program, tell them what it’s all about.
Gary and I are here to answer any questions you may have regarding your personal finances. As we oftentimes say, we go through life trying some of this, trying some of that. We go to seminars, we read books. We read Money Magazine, we talked to our co-workers, our insurance man and we find out at the age of 50 we have a collection of financial accidents and nothing is working or we have no idea how this is all going to come together. And the day comes when the paycheck stops because when the paycheck stops, what you will live on is Social Security, plus whatever you’ve been able to accumulate and save over your working lifetime. So we’re forced to make decisions and don’t have a lot of good information. We are here to answer those questions as we say on Monday through Friday, we do it for a fee, but on Saturday morning we do it absolutely free. So if you have any questions regarding your personal finances, about mutual funds and real estate and stocks and bonds and 401ks, IRAs, annuities, life insurance, reverse mortgages, all that and more, then Gary and I are here to take your calls. The good news for you is the lines are absolutely wide open. There’s nobody there. You can be the first in line.
How about that.
And you don’t even have to use your real name. And we have a text operation as well. Dial 21232, 21232 and give us a text or you can call —
844-220-0965. Can you believe it? We’re here, it’s the last day of 2016.
Hard to believe that we’re <?> here.
I know <Background Noise>.
It seems like just yesterday it was 2000. Remember that panic about the airplanes falling out of the sky and don’t be caught in an elevator with <Background Noise> midnight and world’s coming to an end. Your computer’s — there was a whole industry on how to save your computers and what you need. I remember what we did, I mean as a company we couldn’t afford to lose all that stuff. All the backups we did and all the extra work and extra stuff we did. And then all for naught.
12:01 — 12:00 came and <Background Noise> here we are.
That’s correct.
No question about it. Here we are 17 years later.
Of course, Gary Abely, one of the most popular men around the Certified Financial Group, not only because you’re a certified financial planning professional, you’re also a CPA.
I do get those tax questions <Background Noise>
And the answers as well. So we’re here to take those questions, Gary and I, so pick up the phone and dial once again.
844-220-0965. I was just on your website, guys, and I was looking at when the next workshops are coming up. Of course, anybody who knows Gary knows that he handles the when can you retire, know your number workshop.
Yeah, Curt and I <?> really like that workshop because it gives folks an opportunity before they retire to find out with pretty good assurances that they have enough money to retire. Of course, if they don’t, there’s options that we discuss in the workshop, such as reverse mortgages, maybe a part time employment, semi-retirement. But it’s a great way to find out whether you are on schedule. Maybe you’re three, four years away from retirement and have <?> a goal based upon your spending wishes so that you will know that you withdraw between 4% and 5% of your money and have about a 90% probability of not outliving it. So that’s the goal of that workshop.
The toughest cases that we work on are clients that have already retired, have not done any planning. They get a gut feeling that they were going to be okay. What they do — what I call back of the envelope financial planning. They look at what their expenses are, what they spend every week or every month in gasoline, groceries, electricity, all that stuff, and they say, oh, I’ve got Social Security coming in. I’ve got this interest I can drop in my account. So <Inaudible> okay. Then six or seven years in retirement, the wheels are coming off because they really didn’t do the forecasting or they use one of those online tools.
Right, and they’re not that great. Some of these online tools don’t factor in the crazy cost of health care if you retire before age 65. I was just doing a — going <Inaudible> healthcare.gov for my family just to get an idea of what it would be for me, and our premium for 2017 ranges for a family of four — I’m 51. I won’t say my wife’s age and we have two 18-year-olds, but for a family of four, the premium was as high as 46,000 <?> a year <Background Noise> plan.
That changes a lot of things. We’ve got a call here on line one. Terry in Lake County, Terry, thanks for calling. How can we help you?
How are you doing, sir?
We’re doing great.
Good morning. I have a 401k that I had from a previous company I just left and I wanted to know if it was a wise idea to roll it over into another 401k that — with the company I’m currently with, or should I roll it over into an IRA. My wife works for a company that does IRAs and she seems to think that that would be a great idea. I have no idea about IRAs.
Well, it all depends. It all depends on what your options are, so let’s talk about this, Gary.
Well, Terry, we would want to know how active an investor you are. For example, let’s say that you have all of your money in a target-date fund at your current 401k and if you’re satisfied with that, and it’s an excellent target-date fund — and there are some that are not so good. We won’t mention names, but certainly you would want to have one of the three top target-date funds in order to leave it in there. But I think what your wife might be alluding to is you have, say, 20, 30 <?> options at your prior company and maybe 20 or 30 at your new company, but you have 30,000 options in your own IRA. That can be a blessing and it can be a curse. So we have seen circumstances, I’m sure, Joe, you have as well, where people roll to an IRA and decide they’re going to be a stock trader and all of a sudden they’re buying mostly one sector. Maybe it was energy because they heard, gee, you can’t go wrong buying the Exxon Mobiles and the Mobiles and Chevrons of the world and we saw what energy did over the last 18 months.
Gary, one of the other things we want to look at is what kind of platform is your current or your old 401k on and what kind of platform is your new 401k. If it’s offered by an insurance company, there may be a lot of buried fees and expenses in there that you don’t see, but it could be very, very expensive. So what we want to know or what we would look at is what are the investment options and what’s the platform that that 401k is —
How old are you, by the way, Terry?
I’m 37.
37, okay. So what we have to look at is where you are now and what the costs are of maintaining that. Unfortunately a lot of people think the 401k is free, no it it’s often not.
Why is it often not free?
Well, there are administrative costs and somebody is earning a living off of a 401k, so oftentimes you find some employers will pay for those administrative costs, others will pass it on to the employee. Oftentimes those costs are embedded in the mutual fund.
They can be hidden.
Here’s a key, Terry, that you want to look at, and our listeners want to look at too. If you know the name of the investments that are in your plan — I don’t want the names — but what I’m saying is what you want to want to do is look at that and then pick up the — go online and try to find the exact name with what we call the ticker. If you have that, that’s a good indication that you might have a reasonably priced plan. Oftentimes, you’ll find plans that are sponsored by insurance companies that may have household names like Janus or Vanguard or T. Rowe Price and you think you actually own those funds, but they’re wrapped in what we call a group annuity contract and with those — those fees are embedded and you don’t see them and they can be very, very expensive. So we want to look at what you have, and if it’s reasonable being able to stay there, or roll it into an IRA as your wife suggests and then get some professional guidance.
So Terry, another thing you can look at on funds, sometimes they’ll have a letter and a number after them like R1, R2, R3, and R6 right now for most funds is the lowest cost share class. So if you — if our listeners out there have a 401k with, say, R1, R2, R3, that’s a good indication most likely that you’re not getting the lowest cost share class. A lot of folks don’t realize you can have 15 different share classes of identical mutual funds and the only difference is fees. Yeah.
I’m sorry we can’t be specific with you, Terry, but those are the things you want to consider and look at. If you want to send that information to our office, send it to Gary, he’ll take a look at what you’ve got, where you are, what your old plan is, what your new plan is and we can at least compare the two and see if it makes sense to — if you have more than $5,000 in the old plan, you can stay there. They can’t throw you out. If the new plan is better, you can transfer the old plan into the new plan. If the new plan isn’t any good, then maybe rolling it all into a self-directed IRA may not be a bad idea. So give Gary a call, Terry, or you can reach him at 407-869-9800, or better yet, go to our website. That’s financialgroup.com. You can find Gary’s smiling face and you can go right to his mailbox and he’ll be glad to help you.
It’s 9:16 on WDBO. Dave Wallace in the News Center, he’ll be joining us coming up in about four minutes from now. Of course the big story is the semi-big chill. But I swear, there’s something going around <Background Noise>.
It’s got to rain, man. It’s got to rain. Is that what it is?
That’s what it is. It’s the pollen in the air. All that dust, yeah.
I feel like bleah.
Yeah, everybody’s sneezing and wheezing and <Background Noise>.
Anyway, Dave Wall will have that coming up in a few minutes. What I really want to hear about, maybe at the bottom of the hour, we can get him to tell us what happened to that Rhonda Rousey fight last night. Did you guys happen to see it?
Rhonda Rousey? <Background Noise>.
No <Background Noise> Rhonda Rousey is.
She’s like the ultimately woman fighter.
Oh, really, oh.
Yeah.
They’ll <?> follow that story.
Yeah, no, well, anyway, it’s a — a lot of people do. A lot of our listeners do, and maybe I can get it to <Background Noise>.
I know it <?>.
She was up against a real rock last night.
Really.
Yeah.
Alright.
Thank you.
I’m sorry, Joe.
Coming up on 9:18 on WDBO, here’s a question for you. I heard stocks are expensive now. Are they? Should I be selling now? Gary?
You know, we’re hearing that a lot. Any time you get a lot of media attention around the Dow has hit new highs or the S&P has hit new highs, we frequently will get that question and certainly I think Joe and I would agree they’re not on a fire sale right now, but just because stocks hit new highs doesn’t mean this is a time to change your portfolio allocation or to change your risk tolerance and oftentimes there’s a reason stocks are hitting new highs. There’s always the expectation of markets moving higher based upon growth of the economy, and I think that’s what we’re seeing.
And there’s always bargains out there, and this is where your active fund managers are looking for the bargains or bottom fishing for a turn around situation.
That’s where you make the money, with their <?> active managers that don’t have to follow an index and specialize and focus on certain industries and find bargains that the return <?> on the situation, that’s where the real money is and that’s what you pay a good manager to do.
That’s a good point. I think I was reading an article on the S&P 500 and I think there was 200 or 300 of the stocks that barely moved at all and there was roughly 200 I think out of the 500 that are trading at a price/earnings ratio below 12. So there’s a lot of value still in the market, you just have to look for it in the right places.
Coming up on news time with Dave Wall here. Let me give you the numbers. You can join us right now. There’s nobody on the line, and we’re live in the studio, by the way.
Live from New York.
No, no, no.
<Background Noise> portfolio <?>.
844-220-0965. We’ll take your text at 21232. Certified Financial Group. 30 years here in Orlando, right?
More than <?> 40.
30 years on the air.
Our <Inaudible> go back 40 years.
30 years <Inaudible>.
Wow, when are you going to retire, Joe?
Um.
You probably hate that question, don’t you?
I get it a lot. There’s no date circled on the calendar.
Yeah, you’re not old enough, yet <Inaudible>. Alright, stick around. Dave’s next and then back with Joe Bert and Gary Abely from the Certified Financial Group
<Inaudible> shutting down two Russian <?> compounds in Maryland and New York.
Pay back against the Russians.
There’s no doubt that the Russians were hacking.
Democrats and Republicans are united on Vladimir Putin and Russia interfered in our election.
I think we’ve got to get on with <Inaudible>.
Whatever happens in 2017, you’ll hear about it hear. This is where Orlando turns first for breaking news. New 96.5, WDBO.
Red alert. <Inaudible> security. Triple team <Inaudible>.
Stop and slow traffic in Orange County for a stopped vehicle on I-4 West between Sand Lake and the Beachline. Also keep in mind that you are going to see delays on Church Street, both directions, between Rio Grand and OVP <sp?> as well as on Tampa Ave on both directions between Washington and Orange Center Boulevard for the Buffalo Wild Wings Citrus Bowl. Triple team traffic, I’m Pam Warner, News 96.5, WDBO.
This hour was paid for by the host and does not reflect the opinion of News 96.5.
Today, ask the experts Saturday morning on WDBO and this is on the money. Brought to you by the Certified Financial Group in Altamont Springs. We’ll give you their telephone number here coming up shortly and the address where you can show up for one of Gary’s workshops, and we’ve got some of them coming up, so stick around. We’ll have more on that. Joe, let’s remind everybody what we’re here taking calls about.
Once again, Gary and I are here to answer any questions you may have regarding personal finances. As we say oftentimes, we make decisions based on a gut feeling, based on something we’ve read, some seminar we went to, some whatever, whatever <Background Noise>
Brad Dreyberg <?>.
That’s whatever <?>.
And looking for the hot tip and the secret formula. There are none out there. What you need to do is have some direction. You know what you need to do so you don’t look back, as we say, 5 or 10 years from now and say, gee, I wish I would have known. So we’re here to clear up that mind fog about your personal finances and as we say, on Monday through Friday, we do it for a fee, but on Saturday morning we do it for free. So if you have any questions regarding mutual funds or what to do with your IRA or decisions you have to make about a 401k or life insurance or annuities, reverse mortgages, stocks, bonds, real estate, all that or more, we are here to take your call. Good news for you, once again, the lines are absolutely wide open and all you have to do is pick up the phone and dial these numbers.
844-220-0965. No waiting. 844-220-0965. You can also text us at 21232. Of course, Gary Abely in the studio along with Joe Bert. And thanks to all of the folks that called to tell me the results of that woman’s <Background Noise>
<Background Noise> big followers out there.
<Inaudible> I know about her.
You’d be surprised what happens <?>, what guys will like.
Okay.
Catfight.
What is the average retirement account balance for a 44-year-old male? Trying to gauge if I’m on track. I have a 225,000 between four accounts, taxable <?>, 401k, that’s when we lose the text.
So what he wants to know is does he think he’s on track with nearly a $0.25M at age 44? I’d want to know a little bit more. For example, I would want to know, is he married, and if so, does his spouse have also $0.25M or is that the amount between the two of them.
<Inaudible> substance, right?
So here’s a good way of looking at this. Let’s take a 6% return. I think the average person in a 401k earns about 5%, so actually let’s take 5%. Takes 5 into 72 <?>. So it’s going to be around 15, so it’s going to take about 15 years to double that money. So let’s take 15. That gets him to 59, which he’d be eligible to take money out at that point. So he would be at 450 plus what he put in from now until then at age 59, right? So I don’t want to make assumptions as to what he’s saving, but let’s say he can accumulate maybe 800,000 by the time he retires.
I’d just say maybe close to $1M.
That depends of course, you know, if he’s maxing out, getting the maximum on other stuff.
Yeah, so it could be 800,000 <?>.
<Background Noise>.
<Inaudible> easy on $1M.
Nah, let’s make <Background Noise>.
So he could take out $40,000 a year and likely not outlive his money beginning at his retirement age and that money plus his Social Security, we would want to ask him, does that put him on target. The problem of looking at averages is nobody’s average. You get that one guy in the middle, one guy is the medium point and everybody else is different. So we don’t like averages. We would want to know exactly what he was planning on spending in retirement.
We can get back to that at the end of the break and talk about your workshop that addresses that specifically.
There you go.
Alright, it’s just about 9:30. We’ve got to get to Dave Wall, but here’s the telephone numbers if you want to join us. 844-220-0965, or text us at 21232, the Certified Financial Group, planning tomorrow today.
Good morning, glad you’re with us. It’s an ask the expert weekend here on WDBO, and a nice crisp Saturday morning spending with the Certified Financial Group in Altamont Springs. But in the studio right now, we have the oracle of Orlando. Joe Bert is with us along with Gary Abely. Both these guys are certified planning professionals and a CPA to boot. So if you’d like to give us a call, here is the number: 844-220-0965. Anything financial on your mind. Some good stuff coming up. Stick around. We’ve got some callers who want to talk to you.
Let’s talk to Debbie in Lake County. Good morning, Debbie.
Good morning.
How can we help you?
I was wondering is it even worth my time and someone else’s time to talk to about retirement plans because I’m 62 and have only 70,000 in my 401k.
Well, you need some direction. You need to know what you need to do so when you stop working, that 70,000 will last you or what you can do to increase it. I can recommend <?> —
Absolutely, and I think this is important for all of our listeners to hear this. It matters not what your retirement account balance is. Everybody needs a plan. You know, we need a plan for what happens if we need long-term care at some point in our lives. We need a plan for how are we going to live on a budget. What can we do with that amount of money so that you meet your expenses without worrying about being in a real bind. So I think, Debbie, it’s very important to talk with a financial planner, especially if you are at that asset level at age 62.
And somebody’s going to try to sell you something. We do planning. We do it for a fee. And our fees, I think, are very reasonable. What it’ll do, Debbie, is it’ll give you some direction and you’ll need to know what you need to do so when you stop working, that whatever you’ve been able to accumulate will last you. It’s really an eye opener, I find, with doing planning. Right there <Background Noise>.
Oh, yes.
And I want to mention something that Joe has said a couple times. We meet for a fee Monday through Friday, but I just want our listeners to know we also meet complementary consultation initially so that we can help give you some direction. I know I’ve been able to answer a lot of questions and give people some peace of mind in that initial meeting. So don’t hesitate to meet with somebody, Debbie. A lot of planners will meet with you initially at no charge.
Okay, alright, thank you.
Thank you <Background Noise> it was a pleasure <Background Noise> to you.
Alright, we’ve got a call from Bill here. Bill, how can we help you.
I have a few questions. So me and my wife are a little nervous. My wife’s company decided to franchise out so she lost her job. She had $130,000 in a 401k, which we took out and put into an IRA. She also had an option to take out her pension, but to keep an annuity <?>. She could take a one-time cash out and we decided to take the cash out because in case she passed away, the annuity would go away with it. So we’re looking at oil <?> what do you guys think of oil right now to money into it.
That’s a commodity, so one of the things that is very concerning when you’re looking at investing for your financial future is selecting any one item. It could be the energy sector, it could be health care. Most people think health care was bullet proof, right? This year the average health care fund has just done horrible compared to the overall market. So you really don’t want to bet — that’s not investing. That’s more like gambling.
Speculating.
Yeah, speculating, when you pick one commodity. You’re much better off buying a diversified mutual fund that will grow hopefully 7%, 8% a year if it’s an equity mutual fund and be there versus trying to speculate on a commodity. But to answer your question because you did ask a specific one, I guess it’s a supply and demand issue right now, and there will always be some meetings with OPEC, but we seem to have more supply right now than we initially thought, and if you have an abundance of supply, you’re going to be able to ramp up production and keep that price per barrel low even if we want to try to control the outlook. There will always be cheaters in that market.
Bill, you’re asking the typical question of an investor who’s trying to find a secret formula to take that 130,000 plus the pension and turn it into $1M. Go ahead.
Well, the one thing what we had looked at was like, Royal Dutch Shell. They do a 6% dividend payback. So we’re looking at more like where’s the dividend going to come from more than like stock price. We’re still learning all this stuff.
Sure.
I got Google Finance on my phone right now <Background Noise> so I’m talking <Background Noise>.
Well, Bill, let me suggest something to you. Saturday, March 4th, why don’t you and your wife come to our office. We have a free workshop for a couple hours. It’s Financial Basics for Life, Strategies for Success. And we’ll talk about in that workshop investing in just a sector, which would be speculative. We’ll talk about when to take risk, when not to take risk. But I think we’re at the — where you’re trying to go in selecting one investment, I can think of a great investment a lot of people liked in the energy sector, and that was Enron. I can think of a great one in the telecommunications sector, and that was Worldcom. I can think of a great one in the health care that was Columbia and all of those unfortunately had —
Public computers, Wang <?>.
Right. So the problem with selecting one company is you really get a lot of concentration risk there. So we want you to spread it out. We can talk to — if you want to call us on Tuesday, we can talk about something called an energy ETF where you would at least have many different investments under that one sector.
Any time you pick one company, I don’t care what company it is. It’s a high risk, high reward proposition, so you don’t want to do that. The reason is <Background Noise>
Not with your retirement money.
The real secret to success is if you diversified with quality and remember investing is a marathon, it’s not a sprint. And I think when you’re thinking about investing in one company, one sector, you’re thinking in terms of a sprint, how do I get there the quickest I can or with reasonable assurances, you mentioned the 6% dividend, I understand, so you think that’s more secure. But really it’s a high risk, high reward proposition.
Take Gary up on his offer there to come to that workshop. I think you’ll find it time well spent and you won’t have to be looking at stuff on your phone.
Where do we find out more about these workshops.
Just go to our website, financialgroup.com, click on our workshops, you get all the information you want. Once again, they are totally free. We hold them at our classroom at Altamont Springs. Gary’s going to give us some light refreshments and give you a lot of education. People say, why do you do this kind of stuff, Joe, well, we do it for two reasons:
1. To give you information so that you can be an educated consumer because as we say, they don’t teach you this stuff in school.
2. To introduce you to some of the things we do as a firm, so whether you need financial planning now or some time in the future, perhaps you’d give us an opportunity to revisit.
So go to our website, that’s financialgroup.com.
Alright, got a caller here on line four, John in Kissimmee. Good morning John.
Good morning, gentlemen.
How can we help you?
Well, I’m not in bad shape.
That’s good.
Retired about four and a half years.
Alright.
And I haven’t had to touch anything. I have retirement income, and I haven’t had to touch any of my 401k or my IRAs.
How old are you, John?
I just turned 69.
Okay.
So I’m wondering how this works where I have to take money when I turn 70 and a half.
Alright.
That would be, I think — that’s another thing I don’t understand. I don’t turn 70 and a half in ’17 but in ’18. So on January 1st of ’18, I have to start taking money?
Well, any time during that year. Actually you can defer it to the following year, however you would have to then take out two years worth if you deferred it to the following year, so you’re better off in most cases when you turn 70 and a half, in that year, take it out and you can take it out December 31st if you wanted.
Let’s back up to your basic question, I think. So you had an IRA and a 401k.
Yes. And they’re all over the place.
Oh, okay.
That’s the other question I have.
Sure.
How does that work? Is it considered a <Inaudible>, in other words in one big group, and I just have to take <Inaudible> one amount and they just take a percentage of the total.
Yes. In most cases — there are some cases where you would need to take it from an annuity separately, but in most cases if you have, say, six different IRAs out there and we calculated your required minimum distribution to be, say, 25,000 in total for all of your IRAs combined, you could take it all from just one IRA if you chose to. Also, to answer your question, John, you’ll have to take out a little bit less than 4% when you do turn 70 and a half.
Yeah, 3.65% of the balance on December 31st the year before you turn 70 and a half. What you do want to consider doing, John, is consolidating this stuff. <Inaudible> one because you’re getting all these statements from different places and the penalty for not taking out the <Background Noise> 15% <?> plus the taxes.
Another thing, John, I know you mentioned, I think you’re going to be retiring in four years or <Background Noise>
Already retired.
Okay.
He’s looking to turn 70 and a half.
Okay, so possibly, depending on what your income level is right now where you’re not having to take the RMD, you may even be able to convert some of your IRA to a Roth IRA if you’re not taking Social Security now and do that at a very low tax cost and you don’t have to take RMDs out of a Roth. So one of the things I find a lot, John, is somebody retires early and they’re paying no income taxes and they could have been engaging in a strategy of converting some of their IRA to a Roth IRA at little or no taxes at all. And the other thing you want to look at if you have assets outside of your retirement account, you can sell stocks at a long-term capital gain if you’re in the 15% bracket or lower at no tax cost. A lot of people don’t realize that and then they wait until they’re 72, 73, when they’re taking Social Security and their RMDs and now all of a sudden they’re not in that low tax bracket anymore.
Of course, all this is subject to change.
Oh, yes.
<Background Noise> happens with the tax law next year, but John, basically if you were sitting in my office, what we would look at is why don’t we consider consolidating all of that stuff into one self-directed IRA, determine what kind of rate of return you need to get on that money so you don’t run out of money when you’re 85 years old. Invest it as conservatively as possible, and this way you only have to draw from one account when you hit that magic age of 70 and a half.
Appreciate the call. If you want more information, simply go to our website. That’s financialgroup.com. Got a call here on line three.
Joe in Port Orange, good morning Joe. How can we help you?
Yes, good morning. I’m calling about my son, who’s just changed jobs and he has a 401k that worth around 100,000. He naturally has the option of moving it to his new company, their 401k, or he has I believe — this what I’m calling you about — other options available to him, like putting it into an annuity of some sort. And I was wondering if he did move it into an annuity, is he able to start a 401k with his new employer, just to get the free match.
If his current employer offers a free match, what he does with his prior 401k really doesn’t influence that free match, certainly. How old is your son?
32.
32. I’m not liking the annuity idea for a 32 year old. Oftentimes, you’re going to lock up your money and of course if it’s a retirement account, it should be locked up anyway, you shouldn’t be touching it. But annuities comes with a lot of fees. They can make sense for certain situations. Right now I don’t mind them as an alternative to the fixed income portion of a client’s portfolio. They can actually make sense in an expectation of low returns potentially for fixed income while we have this interest rate environment of increasing the rates. I don’t like the idea of an annuity, but maybe he would like to roll that money into an IRA and that probably makes more sense.
What you need to be looking at, Joe, is forget the annuities, but look at, he needs to be aggressive at his age. At 30 plus years, he needs to be fully invested in a stock mutual fund to get him growth, tell him to put the money there and don’t look at in 30 years and I guarantee you, he’ll be thankful for this information.
He needs growth, putting in an annuity. As Gary said, the fees there are probably not a good idea. He can roll it into an IRA or look at what the investment choices are in his 401k, but he needs to be aggressive in his investing.
Especially in his low 30s, absolutely.
Go for it, man. Because he’s got a great asset, which is time.
And he’s right on target. He’s actually ahead of the schedule <?> I guess. <Background Noise> not at that age <Background Noise>.
<Inaudible>.
I’m so confused about annuities. Any listener to WDBO knows that Clark Howard has nothing but bad things to say about annuities and do they help <?> <Background Noise>.
Unfortunately they’re over-sold. There are a lot of people <Inaudible> it’s like putting a square peg in a round hole, or you’re a hammer and everything you see is a nail, then you’re going to try to fix it with an annuity. No. Unfortunately — and the reason they’re so popular is because they hold these lunch and dinner seminars and they pay big commissions to pay for the lunch and dinners and they make them sound like they sing and dance and this is the one investment, that’s all you need and it’ll fix everything. The other one is we’ve seen a lot of these that they’re insurance contracts. You know. They’re not —
They’re complicated.
They’re very complicated.
When you have — for example I just sold one recently, this fixed income offer. But when you have five pages to sign and initial on the terms, definitions and so forth, you know this gets complicated. But they’re not all bad. We’ve thought about doing workshops on the pros and cons, but we’ve kind of shied away from it because just annuities have such a bad name, for good reason.
Thank you Joe. We appreciate the call. If you would like talk with Joe Bert or Gary Abely, here’s the telephone number: 844-220-0965. Right now we’ve got to get to Dave Wallace <?>.
And then Orlando powered by Nusbaum Window Solution. Start the new year informed. Download the free News 96.5 app now. Happy New Year from News 96.5 WDBO.
It’s an Ask the Experts Saturday morning and this is On the Money, brought to you by the Certified Financial Group in Altamont Springs. Grab something to write with because we’re going to give you their telephone number and contact information very shortly. First let’s get this quick text here. What is — oh, we already did that one. Opinion: is it wise to keep a reverse mortgage just in case? Opened it nine years ago. Paid all the big fees then. Now paying 30 a month just to keep it open.
First of all, let’s talk about the options that you have when you get a reverse mortgage. You can take it out in a lump sum, right? You can set it up as a line of credit, which this person did, right, or you can get a monthly check. Those are the three options to <?> withdrawal. So in this case, this individual took a reverse mortgage <Background Noise> as soon as safety net, and the question is, should he or she keep it open? What do you think?
I definitely think so. Again, as the text says, they paid all of the big fees then — and most of the fees for setting up a reverse mortgage are up front. In fact, the 30 a month, I don’t know what those fees are, but the 30 a month pales in comparison to what you do pay up front. It’s not cheap, however it is a great safety net. Of course, we’re just talking about this at the break. You have to know that you’re going to stay in your home or have a pretty high likelihood that you’re going to stay in your home and that’s — a lot of people don’t have that, and that’s when a reverse mortgage wouldn’t make sense. If you know you’re going to stay there, then setting on up as a just in case makes a lot of sense.
There’s been a couple of articles recently in professional journals that we read about the advantages of the new reverse mortgages and the benefit is — it isn’t <?> the safety net — because what will happen when you retire, you’ll draw from Social Security, of course. Then you’ll start to draw down your savings and investments. And as we know, markets go up and down and what you don’t want to do is be drawing out of your principal when markets are down. So what you do is you turn on that cash flow from the reverse mortgage, drawing on then <?>, let the market heal and go back and shut it off then go back to drawing from your investments. It’s a great, great tool. And that line of credit grows now. So it’s honest to gosh, folks, if you haven’t looked at it, in some circumstances, it really makes sense. If I knew I was going to stay in my house for the rest of my life, I’d do it in a heartbeat without any questions.
Let me give you a what if. What if I get sick in my elder years and I have a reverse mortgage and I have to go into a hospital or sort of long-term care.
If you’re going to leave your home, when your home is no longer your primary residence, then your home will be sold and the mortgage will be paid and your survivor, your beneficiaries, or you will get the difference between whatever you’ve drawn out plus the interest and whatever they sold the home for, so don’t lose it. And it is non-recourse, so heaven forbid you’ve drawn out more than what the home has sold for or they find nuclear waste under your house <Background Noise> it’s non-recourse, they can’t come after your heirs. It’s a very, very effective tool, given certain circumstances.
Is there anybody at the Certified Financial Group that can help me walk that <Inaudible>.
We’ll, we’d be glad to send you an article about it, about how they work and what they do. We don’t do them, but we’d be glad to send you an article that has been done <?>. The professional journals are — many certified financial planners today are looking at that for the right circumstance really makes it —
And earlier you mentioned that you were talking about managers. You also manage 401ks.
We do. So one of our divisions in our company, we help companies put together qualified retirement plans, whether they be 401ks, 403bs or government entity 457 plans. We can handle those all.
How do folks get a hold of you?
They can go to financialgroup.com, or call our phone number: 407-869-9800.
Alright, happy New Year.
Happy New Year.
And no shooting your guns in the air, there, Joe.
Stick around, Dave Wallace coming up next.
Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarding as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice but is limited to the dissemination of general information. Professional advisors should be consulting before implementing any of the options presented. Certified Advisory Corp is registered as an investment advisor with the FTC and only <Inaudible> states where it is properly registered, or is excluded or attempted <?> from registering
