Hosts: Harry Stadelmayer, CFP®, AIF® and Joe Bert, CFP®, AIF®
It is an Ask the Expert Saturday Morning on NewsTalk WDBO. Nice to have you with us this morning. Nice to be here this morning. In the studio, Joe Bert from the Certified Financial Group, Harry Stadelmayer from the Certified Financial Group. The Certified Financial Group being the oldest and largest independent firm of certified financial planning professionals, and they’re here to help you out with your pocket book as use <?> this morning. Standby, I’ll give you that telephone number, but Joe, first off, what are you taking calls about?
Well, first of all, Harry and I are here by ourselves, all by our lonesome this morning, to take your calls about anything that might be on your mind regarding your personal finances. As we say in the ads we run here on WDBO, we go through life trying some of this, trying some of that financially only to wake up one day in our mid-50s and find out we have what we call a collection of financial accidents, and the reason that happens is because we’re never trained on this. You know, we know how to drive a car, we know how to cook a meal, but for the most part, when it comes to savings and investing, we’re kind of left on our own. We get information from the radio, from television, from magazines, from our brother-in-laws, or wherever, whatever, whatever and only find out that it’s not working. So, Harry and I try to straighten this out every day at office for a fee, and on Saturday morning, we do it for free. So, if you have any questions regarding your personal finances, any decisions that have to be made, anything you want cleared up, we’re here to clear up that financial mind fog. So, the good news for you is the lines are absolutely wide open, and all you have to do is pick up the phone and dial —
844-220-0965, 844-220-0965. If you’d rather send us a short text from your mobile device, that texting number is 2132, 2132. And if you’re so inclined and you want your voice to be heard on the program, you can always use the open mic feature. The open mic can be find on the News 96.5 app. Man, it’s kind of dreary outside today.
It is, but we need about a week of this rain, I’ll tell you.
It’s fantastic —
It’s almost — you know, Harry, it’s almost as dreary as some of the 2017 market predictions I’ve been hearing.
You’re seeing them fast and furious. This is a time of the year where everyone that is a gypsy or a fortune teller comes out of the woodwork and tells exactly what’s going to happen or not happen this year. Right, Joe?
Or that has a microphone or a camera in their face.
And this is when we get the call from folks that say, but I heard — and they said.
And oh my gosh, and so this is a warning. That is for entertainment purposes only. Hopefully you have a plan in place. You still follow the plan regardless of the noise that’s going on around you. If you haven’t done a financial plan, you really need to get one done. This is an awesome time to start. Take a look at what did 2016 bring for you, what kind of changes financially are you going to make in 2017. So, it’s a time to kind of reflect, sit back and say I want to make some better decisions, but don’t base those decisions on someone that says — and I love him to death, Harry Detts says the Dow is going to drop to 5,000. Really?
Just after he said it was going to go to 20,000 three <?> years ago.
Exactly. He did.
<Inaudible> but we’re close.
We are very close. We almost hit it yesterday.
Yes, very close.
So, that’s for amateurs. That’s for — that’s — that’s for entertainment purposes only. Need to have a financial plan. Need to take a look at your situation in 2016 and see what kind of better decisions — hopefully better decisions you’re going to make in 2017.
We got a call coming in here right now from Chris in <Inaudible> Atlantic. Good morning, Chris, how can we help you?
Good morning. Good morning. Good morning. Help me plan for retirement.
That’s right. We’re planning tomorrow today, my friend.
How can we help you?
Yeah. I started a series of life problems. I’m 53 years old and don’t have any retirement.
And need to get on that track to have at least some type of retirement.
But I’m too old to work.
You’re too old to work.
When I get too old to work.
Oh, when you get too old.
Okay. All right, all right. Let’s back up a little bit. Let me — let’s — tell us a little bit something about your family situation. Are you married? Do you have kids? What’s going on there?
Divorcing. With kids.
You’re divorcing. With kids?
How old are the kids?
They’re older kids.
Okay. All right. So, you’re going to be pretty much on your own to fend for yourself for the next 10 year, 12, 15 years or so, right?
All right. So, what do you think we’d start with here, Harry?
We’d start with — first of all, tell us a little bit about what you’re doing or what you do? I mean, I’m assuming your employed.
Yes, yeah. I’m a maintenance tech. Not making a lot of money.
You’re a what?
A maintenance tech, okay. All right. Okay.
Not making a lot of money. You know, definitely, you know, less than $15 an hour. If I make $15 a hour, I go to McDonald’s.
I hear you.
How’s your debt situation, Chris?
Does that hang over your head?
Yeah. Yeah. It’s less than 8,000.
Is this divorce going to change your financial world?
Not much, no.
Well, what I would do is — I’m assuming you’re working for a company. Do they have a 401(k) plan available for you, Chris?
They do, and they do the matching up to 5%. 100% for the first three, and then 50% of the second two.
Okay. That’s a — first of all, that’s a great start.
You kind of <Inaudible> sounds like you’re making some money. You need to walk into HR Monday morning and you need to say I want to start contributing.
Do the math, pay what you can afford. I mean, you’re leaving free — first of all, the matching, you’re leaving free money on the table, but forget that, that’s bonus.
You need to take the responsibility now at 53 to say, all right, I’m going to pull up my boot straps, and I’m going to work, and I’m going to start saving some of this money on a pre-tax basis. That is the most powerful vehicle that you have available, Chris. Most of our clients that walk in our office at 60, 65, 70, their largest asset maybe besides their home is what they socked away, and they didn’t miss it, and that’s the thing. So, need to —
And you’ve got some catch-up you need to do. So, you need to get a little aggressive and starting putting that money away. Go to HR, and honestly if you — if they send you all these investment options and you kind of look at it, call my office or call me at the office, I’ll be happy to tell you which investment you should take advantage of or investments in your 401(k). Happy to help you with that, but the fact of the matter is you need to start.
Right. I just wanted to —
As you already said, Chris, you’re leaving money on the table. For every dollar you put in, your going to get 80% on that first 5%. So, you know <Inaudible> if you put in $5,000, they’re going to put in $4,000. Man, you can’t beat that with a stick. So, you’ve got to strive to do that. Okay? And that’s where you start it. Then, what you want to do is increase it.
And then strive to put in 10% to 15% of your income in there, and you’d be amazed at how that’ll accumulate over 10 or 15 years. And then what you have to do is, as I said, you learn to live on what’s left.
That’s going to be tightening your <Inaudible> making some lifestyle changes, maybe not doing all the things you want to do, you know, but that’s what life is all about. You got to take charge. The good news for you, you still have time.
Yeah. All right.
I mean, <Inaudible> this will be the first year I’m eligible for it, and I’m definitely going to jump into it.
Good <Inaudible> and good start.
And take Harry up on his offer, Chris, of calling him, and we’ll give you some guidance, and that’s also something we do for clients that might have plans otherwise. How do we do that, Harry?
We do something — well, basically what we do is we’ll take a free consultation with you, have you come to the office. We don’t charge you a dime to come in, sit, and chat, take a look and see what your situation is, how we might be able to help you. Any questions that you have for us, we’ll answer and see if there’s a match, and help you with your direction and give you some answers. And that first visit is free.
So, take us up on that.
And how about that —
All right. Thank you.
You’re welcome, Chris. Best of luck to you.
And help our clients that have 401(k)s out there that are kind of drifting. We often times see this. They sign up for the plan. They have no idea what they’re doing. Market goes up. Market goes down. Market goes sideways. They change funds. What do I do? Why do I do it? What’s our answer, Harry?
The answer is we can take control or help you — not take control, we can help you manage those assets. Something that we do we don’t talk a lot about on the show. It’s called <Inaudible> account. We don’t — custodial will take control of those funds, but we have the ability to look at those funds in your 401(k), and as I said earlier, sometimes those are the largest assets that folks come to us with, and sometimes they’re just sitting out there. They’re drifting.
But yeah, there’s no direction —
In many cases, I’ve seen folks that have had money in money markets for six, eight, ten years and have earned zero on it. So, we do have the ability to do that. We do have a minimum on that, which is $100,000, but it’s something that we do. We don’t talk a lot about on this show, but if you have a plan at —
Anywhere, and you’re interested and saying, you know, I need a little direction on this, we are able to help you with that 401(k) and leave the plan where it is. And if it’s an old plan, we may talk about rolling it over and then actually bringing it into house and managing it that way.
All right. Thanks. For the call, and you could have that line now at 844-220-0965, 844-220-0965.
Before we get too far into the show, we want to mention a little program we’ve got going at the office today at 11:00, right, Harry?
Yeah. Gary Ably, today, is doing a workshop. So, if you’re laying in bed right now and you have nothing to do, get up right now!
Get your butt out of bed!
And the workshop is called what’s your number. It’s basically a retirement — there was a commercial, I think Fidelity used to run it years ago where folks would run around and they had this big number under their arm, and it would say what’s your number? Well, Gary’s going to help you with that number. It’s today. Get up! Right now! It’s from 11:00 to 1:00. It’s at our office. He does have some seats available. And it’s free. He’s not — I think he’s got a little breakfast or some food for you, so you don’t even need to eat breakfast. Just run up to the office and tell him you want some scrambled eggs, and he is — not really, don’t do that, but from 11:00 to 1:00 at our office today, and it’s called What’s Your Number. It’s a really good basic retirement type of a workshop at our office.
It’s things you need to know to get prepared for retirement and give you some direction. Once again, it is free at the Helener classroom at AltamonteSprings right there on Douglas Avenue, just south of 434, and you can get more information. You can find our map, go to our website, that’s financialgroup.com, financialgroup.com. And while you’re at it, you may want to go to our website at financialgroup.com/responder. Next week is National Responder — First Responder — actually, the state of Florida is recognizing first responders for the fire fighters, police officers, EMT folks. Go to our website and nominate somebody, first responder, who they are, why they should be nominated, and we are offering them four tickets to be our guest at this year’s annual Springs concert with the Orlando Philharmonic. Going to be at the Springs on May the 6th, so we’re going to give you an opportunity to get four tickets to that as well as the retirement plan, financial plan that we’re going to do for you as well. That’s for the first responder, go to financialgroup.com/responder, not responders, but responder and nominate somebody, and you can nominate a coworker. So, if you’re a fireman, a police officer, an EMT, nominate your coworker who you think is deserving of that nomination and that recognition, and that’s our website, once again financialgroup.com. We’ve got Michael here on a cell phone. Good morning, Michael. How can we help you?
Hi. I wanted to ask questions about the 401(k). I recently just relocated here to 401(k).
Oh, welcome. Where you from, Michael? Where’d you come from?
I came from Pensacola.
Pensacola. Okay. Welcome to Orlando.
Thank you. The thing that I did was — I know my company that I’m working with now, they have plans to get the 401(k), but I’m trying to get a jump start. I was listening to Chris. I’m kind of like in the same ball park. I’m 54.
I had it at one time with a company that I worked with in Pensacola. It worked out great for me, but I got to dealing with some financial issues so I had to cash in, but what would be the best avenue for me to take to try to get this kicked off while I’m waiting for them to initiate it in the company?
Well, if you don’t have a plan at work, your next option is to do an IRA.
You can put money into an individual retirement — how old are you, Michael?
All right. You can put $6,500 into an IRA all the way up until you file your taxes for 2016. So, you can put $6,500 in for last year and $6,500 in for this year, so you can get a $13,000 head start there.
Did you say that you did or did not have a 401(k) available to you?
They’re working it. They don’t have one yet.
They’re working it?
Yeah, they’re working on it.
And the old plan that you had up in Pensacola, is that — did you cash all of that?
Yes, I did.
Okay, so you have nothing left there. Okay. So, yeah, you’re kind of in the same boat as Chris. Once you’re eligible, you need to do that, but like Joe said, to take care of an immediate situation where you can put some money away right away, you may want to do —
You may want to look at an IRA for 2016 and for ’17.
What’s your income, Michael? Maybe a Roth would be a good idea for you. What’s your income?
I’m probably somewhere around 38, 40.
Are you married?
Does your wife work outside the home?
She just recently started.
Depending on what your income is — I’d probably do a deductible IRA. Just go for the IRA. You can go — you can do that online by yourself. Go to vanguard.com, click on the — and it’ll take you right to it and do it, and you said you’re 54, you can do what’s called a target-date fund, which is geared towards the day you’re going to retire. Let’s say that’s 15 years now, so maybe a 2030 fund, Vanguard 2030 fund, 2035 fund. It’s a set it and forget it. There’s nothing else you need to do, but that’s what you want to do to get started.
All right, Michael?
All right. All right. Thank you very much.
You’re welcome. Just do it. All right. Standby, Mindy in Orlando wants to talk about a 403(b) I think, and we’ll take your phone call as well. The number is 844-220-0965, 844-220-0965. Harry Stadelmayer and Joe Bert are both certified financial planning professionals with the Certified Financial Group, and they’ll be right back right after Dave Wall in the news center.
This hour was paid for by the host and does not reflect the opinion of News 96.5.
You’re so vain, you probably think this song is about you. You’re so vain.
This is attorney Tom Olson. Thanks for listening to my —
Hey, how did Tom get in there? Man, I don’t know, guys. He’s —
I don’t know how he got in there. You pressed the wrong button.
There you go.
Thank you anyway. Hey, listen, bad clock timing on my part led to a situation here. We went long in that — real long in that first segment. Let’s see if we can squeeze in a quick question before we go to Dave Wall in the news center. Mindy?
Good morning, Mindy. How can we help you?
Good morning. I have a question. My husband and I both work for the same company. We each have two 401(k)s. One of them is VALIC and one of them is the company-sponsored 401(k), but VALIC is leaving. Should we roll over the VALIC into the company 401(k)?
Possibly. It depends on what your options are in that 401(k). You want to look at what the costs are. If the 401(k) is sponsored by an insurance company, chances are you have heavy fees involved in that plan, and you may want to look at rolling it into an individual retirement account and managing it on your own. There’s pros and cons to that, Mindy, but it’s not a cut and dry answer. I wish I can tell you yes for sure you should that, but you want to look at is what your options are in the new plan.
And the other thing is make sure that your company will accept the VALIC. There’s some company plans that won’t allow new contributions I have seen in certain situations. So, you need to make sure your company plan will accept VALIC.
Get your motor running. Head out on the highway. Looking for adventure and whatever comes our way.
Very good. That’s Joe.
Joe’s got a little bit of rocker in him then.
I heard Joe pulling into the parking lot.
I heard him, yes, I did. I did, Joe. I’m not sure what it was.
I had my windows up!
I heard — I heard him pulling into the parking lot. Just saying.
Rock on, man!
I wasn’t going to say anything, but that was — I had to go there.
Old rockers never die. They just roll on, man. They just roll on.
As the great maestro Ian Anderson once said, you’re never too old to rock and roll. You’re never too old to die, right?
This is On the Money, brought to you by the Certified Financial Group. They are Orlando’s oldest and largest independent firm of certified financial planning professionals. That’s again the Certified Financial Group in Altamonte Springs. With us this morning, the oracle of Orlando, Joe Bert, along with Harry Stadelmayer, and they’re taking your phone calls. What are you taking calls about?
We’re here to take any questions that you might have regarding your personal finances. If you thought about decisions or thinking about decisions you have to make about your IRA, your 401(k), about an annuity, life insurance, reverse mortgages, anything else, we are here. And the good news for you, we have a couple of lines open, And before we get into our next call with Tom there in Fort Orange, I just want to say once again that Gary Abely is holding a workshop in our office this morning in Altamonte Springs, right there on Douglas Avenue, just south of 434, and at 11:00 he’ll provide some refreshments. He’ll answer those questions, things you need to know about retirement. How do I figure out how much capital I’m going to need to be able to stop working and draw from Social Security and enjoy the lifestyle I want, so it’s a roll up your sleeves kind of workshop. He’ll provide the information. Gary, in addition to being a certified financial planner is also a CPA, so you’ve got some heavy duty power there, and the good news here is he’s got a couple of seats open. You can just walk right in; it is absolutely free, leave your checkbook at home. People say, well, why do you do this kind of stuff, Joe? We do it for two reasons:
1. to give you some information so you can hopefully have those golden years be absolutely golden.
2. To introduce you to what we do as a firm and how we do it this way, whether he needs financial planning now or sometime in the future, you’ll give us an opportunity to earn your business. For further information, go onto our website, that’s financialgroup.com, and while you’re there, you may want to go to financialgroup.com/responder. If you have an EMT in your life, or know one, or a firefighter, or a police officer that is worth of some recognition, go to financialgroup.com/responder and enter them into a contest for us to select the First Responder of the Year. For Certified Financial Group, we’re going to honor them with four tickets to the upcoming strings concert, with the Orlando Philharmonic this year, May the 6th, as well as do a financial plan for them absolutely free. So go to financial group.com/responder for more information.
And next week is the state Governor Scott announced is First Responder Week, so we’re doing this for recognition of all those men and women that put their lives on the line every day to keep you and I safe and healthy.
And while you’re at the website, the girls, Denise and Nancy, are also doing–
How patronizing. Oh please.
I call ’em girls.
Send your cards to–
Sorry, Denise. Sorry, Nancy.
They’re wonderful, they know I love ’em. With them for what, 25 <Inaudible> years —
Social Security boot camp. Social Security boot camp, they’re doing that on January 19th so that’s coming up, so while you’re at our website, you may want to look at that because I know Social Security’s a real hot button and hot topic and there’s so many moving parts, and they do a very — the ladies do a very nice job of dissecting Social Security and what to look for.
There’s a lot of workshops coming up. Once again, Joe, how do we find out more about these workshops?
Go to our website, that’s financialgroup.com, that’s financialgroup.com. You can learn all about what we do and how we are different from most folks out there that call themselves investment advisors or financial planners, whatever it may be, so that’s financialgroup.com.
I can’t wait for the health care options in retirement workshop that’s coming up, boy that’s going to be a good one.
There you go.
Gary Abely does that as well, so Gary is a wealth of knowledge, and once again he’s got one this morning at 11:00 at our office in Altamonte Springs. Go to our website for more information. Let’s talk to Tom, in Fort Orange. Good morning, Tom, how can we help you?
How’re you doing? I have a question. Um. I’ve been contributing to my IRA since I’m 30, I’m 52 now, and I’ve always put in 15% with a matching 5% from work but recently, about five years ago, I moved it to 5% with matching 5% and I opened up a Roth outside my work because I was thinking that maybe contributing to the Roth 10% outside and not — and be able to withdraw it when I retire at 62, I might be able to hold off Social Security until 67 by using the Roth through retirement. Is that– Does that make sense, or I really didn’t work it out mathematically, but that was my thinking.
The most important thing in deciding whether or not to use a 401(k) or deductible IRA is what are you giving up in the way of a tax deduction, so tell us a little bit, something about your income situation. Are you married.
Does your wife work outside the home?
Yes she does.
What’s your combined incomes?
Combined, about 110,000.
Okay, you’re giving up too much there, you’re giving up 25% by putting your money in the Roth. Let me do the math for you, okay? When you put the money in–
Well, I have three kids also.
I’m not in the 25% tax bracket.
Well, no, wait a minute, don’t confuse your tax bracket with your effective tax rate. If your taxable income is $75,000 or over, you’re in the 25% tax bracket.
So let’s assume that you are. Here, let me do the math for you. To put a dollar into that Roth account, you’d have to earn $1.33. Take a $1.33, subtract 25% from that, and that’s how you end up with a dollar to put into the Roth because it’s not deductible. If you put a dollar into your 401(k), you get an immediate deduction so it only costs you $0.75. So that’s why I’m not a big fan of the Roth, plus you’re assuming that they don’t change the tax laws, and the Roth is still a good idea 10 years from now. For more information I want you to go online and Google “Roth: A Wolf In Sheep’s Clothing”. It’s an article that I wrote for Kiplinger that talks about the negatives of doing a Roth, particularly if you’re giving up a tax deduction. So that’s what really drives it, and I hope that will help you.
Well, what happens is my — my retirement account, I’m only earning, averaging maybe about 7% in the last I don’t know seven or eight years, and my Roth, I aggressively invested it in pharmaceutical companies, and I’ve been making about 18%.
Well, you’re going to get <Inaudible> a lot.
It’s not a matter of the Roth versus where the 401(k), it’s a matter of how you invested it. In your Roth, you’re taking high-risk, high-risk, high reward. If the medical situation changes you can see those stocks plummet, so that’s what’s going on. It’s not a function of what’s doing better, why it’s doing– it’s doing better, because you’re investing in two totally different things.
Yeah, you’re comparing apples and oranges.
Well, I work, I can’t invest it in anything aggressive at all, there’s no– nothing like that.
–and that’s where both of my IRA is, but I started with nothing five years ago.
Okay. Well, the real question is is should you put your money in a pre-tax? You can still do a– well, depending on your income, you might not be able to get a tax deduction for an IRA to look at those numbers again, Harry. Let me see <Inaudible> returns, deductibles–
But if I don’t– if I don’t need the– if I don’t take the money at 62 because I’m using my Roth, my Social Security would increase more I believe at 67?
66 and change for you, yeah. That’s correct. You know what, if you’re still working, you definitely don’t want to start drawing your Social Security. Your plan is–
No, no, my plan is to retire at 52 but what I wanted to do is use my Roth so that way I won’t have to pay taxes on my Social Security or my pension.
Delaying Social Security is what you– So you’re <Inaudible>
Social Security and <Inaudible> that way also. But I’m not sure if that’s not the right thing–
Well, let’s look at this; if you’re not working, then it’s really not going to cost you a lot of money to take money out of your 401(k) or your IRA because you’ll end up being in a very low tax bracket. So the benefit that you’re getting from the Roth really isn’t going to be worth that much to you because it’s tax free income.
What’s the lowest tax bracket I could be in?
Ha ha ha.
Well, my wife is going to be working, that’s the problem. She’s five years younger.
So tell me, what’s your income?
Our income’s about 50,000.
50,000. Okay, very excited <?> your return, so that’d be 15%, roughly about a 15% tax bracket for you. You know, I think we’re looking at this two different ways. You’re really enthralled with your Roth because you’re doing well in it because you’re betting the farm on a pharmaceutical company that has gone well in current years. That could change overnight and the bottom could fall out; high-risk, high-reward by picking an individual sector versus getting a tax deduction on your 401(k) and you’re saying you don’t have aggressive choices in there. What you probably don’t have is the ability to pick– get your sectors.
The other thing I’m more concerned about is do you know much capital you’re going to need to be able to stop working at 62? I mean, when you retire at 62, when we do planning I’ve got 30-some years, at least 25 years I have to worry about you in retirement and having enough income.
Social Security and my pension should be almost equivalent to my pay.
Okay, now that’s great. That’s great, now do you have a cost of living adjustment on your pension.
No I don’t. Well yes there is, there is a cost of living, I have a THIRO <?> pension.
Okay, all right, while you’re waiting you might be okay. The thing that you should do before you retire or before you make the decision is to have a plan done. Seek a certified financial planner that will charge you a fee to have a thorough analysis and where you are, and before you make those irrevocable decisions you should have a plan done for yourself. That’s what we, Gary and I, do every day, day in and day out, Harry.
Yeah. You may yellow-pad it, but that yellow pad may not be accurate, let’s just say that.
In the toughest cases that we work on there are clients that come in our office that have done what we call back of the envelope or yellow pad planning, they total up what their projected income is, what they’re spending today, and there’s six or seven years of retirement, the wheels are coming off because they didn’t factor in all things they have to factor. And what you also want to be careful of is using those online calculators. Those, you know, you could be wrong by an inch and you’re off by a mile. And so, you’re making some lifetime decisions, pay somebody to do some lifetime analysis for you. It’s not trying to sell you something, some insurance product or some annuity or something.
How do folks get ahold of the Certified Financial Group?
And that would be online at financialgroup.com. There’s a plethora of information there, or they may dial 407-869-9800, and we’d be happy to get in touch with you and see how we can help.
All right, let’s take a call from Craig in Clearbrook. Good morning, Craig! How can we help you?
Hey, how are you this morning.
Great. What’s up?
Good. Uh, I’m looking to retire at the end of this year.
I have 40 years with this company I work for, I’ve got a full loan–
–and, yes sir.
But I’m 65 now. When I retire I’ll be 66, which is my full retirement age. I have an option on my pension. Now, I can take it as a lump sum, or an annuity. And I’ve been debating on the best course, whether I should just take that and lower it over into my 401, as a lump sum–
–or stick with the annuity. I’m confused on that issue.
Okay. Well, for our listeners that might not be familiar with what your options are, why don’t we just start with the basics?
Well, certainly you could take your pension, roll it into an individual IRA, have someone manage it, or you manage it yourself, and then start pulling money out of the 401(k) each month. That’s a simple <Inaudible> option. The other option is that you somehow, some way, look at the annuity and you’ll have probably 5 or 6 options. Is it a life-only annuity, which is a bigger dollar amount? You’ll have life with year certain, or you’ll have a joint life, or you and your wife– so there’s many options from the annuity side. The — you know, the pros and the cons of doing this really really require number crunching. You say when you’ve been debating, I’d love to hear you say that you’ve been doing some calculating on which makes more sense, because this is an irrevocable lifetime decision that you’re going to make and you don’t want to make the wrong one. And so just kind of mulling it over and looking at the numbers, you really want to put a calculator to it. You really want to put a financial planner to it. And let him show you both scenarios. If you took it lump sum and how much you would need to pull out, making some assumptions, obviously rate of return, but we look at taxes and you know, all the other things that go with that. First is saying, okay we want a guaranteed annuity and you’re going to get a life or check up for your lifetime and for your wife’s lifetime, and what does that look like? If you want to do life only, which is the big amount, but with a bigger check amount, the scary part there is you’ve got that in three weeks everything goes away, so you do have some serious decisions to make and I would go down the road with the planner.
I have a question about the pension. Craig, is the pension being paid by the Company or are they laying that off to an insurance company. Do you know.
It’s paid by the company.
Paid by the company. Okay.
That adds another element of risk. We’ve been at this long enough to see that pensions are as much as we would like to think they’ll always be there, what you’re betting on is that the stability of the pension is going to be funded enough to be able to maintain that payout for the next 25 to 30 years in your retirement. When they lay you off through an insurance company, they really transfer that risk to a larger financial institution that you’re in pretty good shape to do that. But as <Inaudible> said, you do really need to do some number crunching because there are some real pros and cons and you need to have it put an analysis on it. But that’s what we do, day in and day out for a fee. We’d be glad to work with you, just go to our website, Craig, financialgroup.com, and we’d love to meet with you.
<Inaudible> right between the time machine, <Inaudible> play <Inaudible> away from here. Well, you don’t know what we can find, why don’t you come with me little girl, on a magic carpet ride?
Steppenwolf. What’s the guy’s name, Joe?
I have no idea.
John Cane. John Cane. Great singer. I remember seeing him back in the —
We’re fast running out of time, let’s see if we can squeeze in one more call here. If you’re not on the air, we’ll take you after the show. Joe? Who’s ready?
Steve, in Fort Orange. Good morning, Steve, how can we help you?
Hello Steve, are you there?
Steve got rocking to Steppenwolf and–
Are you there, Steve?
Steve is gone, so — There he is!
Yeah, I’m 65, I retired at 62 and then ended up being disabled at 62, and it’s a little later so they went back to 62 and retroactive it. So I’m now 65, and I’m thinking about getting back and so on Social Security. I’m thinking about getting back into a business that I used to be in and it’s a Worgys <?> type situation, and I was wondering if it’s– how much money can I– I can still work, is there just a certain amount of money that I can make? Before Social Security is messed up?
Yeah, no, you’re getting Social Security retirement benefits or Social Security disability benefits?
Well, it went back to Social Security retirement because it was higher than the disability.
Okay, yes, the amount that you can earn or I should say, once you get over your full retirement age then you can earn an unlimited, so why don’t you wait until you get to your full retirement age and then go for it. You’ll have an offset of one dollar for every two; I think the number’s $15,800 or something like that.
So I’d be 66, my retirement age would be 66 and a half, I could have unlimited and it won’t affect it?
Correct. That’s what I would do, I’d wait.
Yeah. I appreciate that, because — So after I’m 66 and a half