TRANSCRIPT FOR THE FEBRUARY 25, 2017 “ON THE MONEY” SHOW

Hosts: Harry Stadelmayer, CFP®, AIF® and Joe Bert, CFP®, AIF®

Hello everybody and welcome to another addition of On The Money with a Certified Financial Group here on News 96.5 WDBO.  We’ve got Joe,  the Oracle of Orlando here in the studio along side Harry Stadelmayer and they are taking your calls at 844-220-0965 on how to get you to that golden finish line that is retirement.  Gentlemen, how are you today?
Good, excellent.

Excited another Saturday, it’s the end of February already.

Hard to believe huh?

Is it, or is it July out? I’m not sure.  Goodness.

It wasn’t too bad, it was 68 when I left the house today.

<Inaudible> Top down.

Rock and roll.

Not in Michigan you wouldn’t do this.

It’s a great day to hit the golf course, isn’t that right?

I’m ready to go.

He’s got his clubs in his bag in the back seat of his truck, let me tell you this.

Guys, what can the audience call you about today.

What you’re going to hear <Inaudible> take any questions you may have regarding your personal finances.  As we say, unfortunately we go through life trying some of this, trying some of that in our personal finances because they don’t teach us the stuff in school.  We listen to our stock broker, to our insurance man, to our CPA, to our neighbor, to our coworker, to our brother-in-law, read Money Magazine.  At the end of the day we wake up with a bunch of financial accidents and —

Fake news on Facebook.

All that stuff, exactly.  So you have to make decisions because one day those paychecks will stop and that money that you’ve hopefully accumulated over your working lifetime will have to be turned into a stream of income.  But that’s what Harry and I do <Inaudible> financial planners at the Certified Financial Group.  As we say on Monday through Friday, we do it for a fee, but on Saturday morning we do it absolutely free.  We’re going to take any questions you might have regarding your personal finances as they might revolve around decisions about stock and mutual funds and real estate and long-term health care and IRAs and annuities, life insurance, reverse mortgages.  All that and more.  So we are here and the good news for you is that the lines are absolutely wide open.  If you and Henrietta are sitting there —

Henrietta!

Or Laverne, or Loretta, or whatever your name might be.

Leroy and Larry is that the cartoon <Inaudible>.

You don’t even need to use your real name, so you can call and pretend to be somebody like Jack or Daphne or somebody.

Yeah we don’t care who you are.

However you want to be identified on the radio, just go ahead and <Inaudible>

The numbers for you to call are 844-220-0965.

And we do have the text machine up and running, 21232.  We just keep it to about 160 characters.  That’s all we can see on our monitor here, we don’t want anything to get cut off and miss a key detail.  If it’s  quick question the size of a tweet, send us a text 21232.  If you want to have a little back and forth with the guys, it’s 844-220-0965.  I believe I saw a headline earlier today in the week that the Dow was going up, up, and up.  Here we are almost, we’re pretty much halfway done through quarter one as we end February.

It’s amazing, Kyle.  I just got a tweet from Mr. Buffet this morning, I was telling Joe.  It’s not really a tweet, but his relief this morning I guess from his annual share holder meeting is that this market has more room to run.

It’s got it’s legs.

It’s got it’s legs.  And he proceeded to explain his reasoning for this market continuing to run.  It is quite incredible, and I think the calls we’re getting more at the office now is this coming to an end.  Is it time to get out.  Do we go to cash.  The answer is no.  You need to re-evaluate your plan.  What’s happening is maybe your equity positions are getting a little out of whack in your portfolio and it might be time for you to go in and re-balance your portfolio because your equity positions may have gone from a 50% allocation in your portfolio to maybe 70% and that could be a little dangerous.  We’re not saying get out, but certainly look at the allocation of the portfolio and make sure you’re still within your risk tolerance level.  That is the key to successful investing long-term.  But to get out and try to out-guess this market — once you get out, now you have another decision to make.

When you get —

When you get back in.  And if this thing continues to run and you get out at, what were we, 21.7 and it’s now 23.7, do you really want to get in now?

And remember, investing is different than speculating.  You should not be putting your money into equities or bonds if you don’t have a commitment to it.  You’ve got to remember that investing is long-term.  There’s a difference between investing and speculating.  What we do for our clients is invest their money long-term to provide them the income and security they need as opposed to trying to find the next Google or Yahoo! or whatever it might be.  There’s a whole different world out there.  That’s not what we do.  And as Harry, we said last week when I was on with Gary, we were talking about the average intra-year decline in the market is about 14%, so it wouldn’t be uncommon to have about a 3,000 point drop in the market some time this year, which is common.  That happens.

It’s healthy actually.

It is healthy, but unfortunately what most people do when that happens is they run for the sidelines and wait for it to go back up and get back in, which is the worst thing you can do.  So if you have that — and we’re going to have that kind of correction, we just don’t know when it’s going to happen.  But if you look at a long-term chart, geney when that happens the market ends up for the year back to positive territory or the following year it’s up.  So if you don’t need the money short-term, the worst thing to do is get out at the wrong time.

Joe, in your opinion, why is this happening?  A lot of people think —

Why is what happening?

This run.  A lot of people say well it’s the new president or the new administration.  In your opinion, why?

I think it’s a combination of two things, Harry.  I think for the longest time a lot of people have had their money sitting on the sidelines, and unfortunately have that sitting in low income yielding kinds of investments, CDs, savings, money market accounts, earning 1%.  And they’re waking up and saying you know we just can’t get there from here with that.  And what’s happened is that when you have — what you see is now momentum.  You see the new administration coming in, talking about less taxation, less regulation, less litigation and better education.  All those things combined, there’s a new optimism.  So maybe what we’re looking at is momentum.  People are saying maybe this is the time that things will turn around in investments that will have a long-term growth to it, but nobody expected after November 8th that it would take off like that.  So right now people are just trying to hang on and take advantage of it.  In my opinion it’s a combination of the low interest rates that we’ve had and now a new administration with a new vision that can hopefully be implemented if Congress plays ball.

Joe Burton here from the Certified Financial Group.  They are taking your calls at 844-220-0965.  Thank you so come for the opinion guys.

I always get real news with you guys, the real story.

<Inaudible> opinion.

Let’s get to our busy phone lines here.  Again if you want to join the conversation, it’s 844-220-0965.  Deborah, you’re up first.  Deborah, you’re on with the Certified Financial Group.

Thank you.

Good morning Deborah.

Hi Deborah.

Good morning, how are you?

Great, how can we help you?

Thank you, I just wanted to ask you — good morning.  I wanted to ask you how much money is necessary and what types of investments to retire comfortably now days?  I like mergers and acquisitions, and I used to travel internationally a lot for a very long time.  It was easier to see what was going on all over the world and come back into the United States and get a better idea of what’s going on instead of just relying on a newspaper or someone, but I would like to know what you think about investments for <Inaudible> retirement and what you think an income level for a good retirement would be if someone like me has a smaller portfolio.  I’m actually still building, and I’m in my early 60s.

Early 60s, okay.

Yes.

First of all, let me reflect on your comment about traveling internationally and coming back to the United States.  Every time I do that, you’re right.  I get a whole different perspective about the world and about investing.  And I had that happen to me in 2008 and 2009, and it was fortuitous because we were able to do some things to protect our clients.  Because sometimes you can’t see the forest for the trees.  That being aside, your question is how much money do you need to retire, right?

Yes.

Unfortunately that’s the kind of question we can’t answer on the radio because everybody’s lifestyle is different.  Some people need X number of dollars and some people need Y.  Without knowing what your lifestyle is and without knowing what your Social Security might be and if you have a pension, it’s virtually impossible to tell you.  Here’s a quick rule of thumb, if you will.  Look at how much money you’re spending every month or every year.  Subtract what Social Security might provide for you and if you have a pension, subtract that.  Then multiply it by 25.

Alright.

If you need $100,000 a year, that’s $2.5M.

Very good.  This was good —

That’s a quick and dirty rule of thumb.  When we do financial planning, we really get in more detail.  We look at your lifestyle, what kind of cars you buy, what kind of vacations you take and try to custom tailor it for you.

The answer to that is really difficult.  I think Joe and I both have clients that have comfortably retired on 200,000, 300,000, 400,000 because their expenses are extremely low.  They live very —

Frugally.

Yeah, modest, frugally.  And then we have millions of dollar portfolios that can’t make their fourth mortgage payment on their seventh house in the Bahamas.  It is a function, not of what you’re bringing in necessarily, it is to a certain point, but what are you spending.  What’s going out.  Unfortunately, many folks don’t know that answer.  They know what’s coming in, but they have no clue what’s going out.  Retirement is a process, and it definitely needs and requires some number crunching.

The only way to find that for sure is to do a plan, and that’s what we do.  Just making it sound like a commercial here, but that’s what we do for our clients.  We charge a fee for it.  The fee is a function of time and complexity, and I can tell you when that’s done you will have a clearer vision of what you need to do now so you don’t look back five or ten years from now and say gee, I wish I’d known or gee, I’m sorry I didn’t.  In the business that we’re in, when you go to see somebody in the “investment business,” the first thing they want to do is manage your money.  They want to take your money and invest it and put it in some product or manage it for you for a fee.  We do that, but we do that after and only after we have a good understanding of what your own situation is.  And we’ll design that portfolio for you as a well tailored suit of clothes.  That’s what I would suggest you do.  We’d love to work with you.  You want to work with a certified financial planner, somebody that will give you unbiased advice and charge you a fee for it, not to try and sell you a product.

What’s the number to do that?

407-896-9800.  There will be somebody there Monday morning at 8:30, or you could go to financialgroup.com, and we have a wonderful website with a lot of information.  Actually a little video about what to expect when you do walk in the office.  And actually there’s a chance for you to click on and say hey somebody give me a call, I’d love to chat with you.

All right Deborah, thank you so much for the call.  If you want Deborah’s line, it’s 844-220-0965.  Bob in Orlando, Bob you’re up next with the Certified Financial Group.

Bob in Orlando, good morning, how can we help you?

Hello Bob!

Hi, this is Ralph  from Sebastian.

Ralph from Sebastian?  All right Ralph, good morning.  How can we help you.

<Inaudible> and now I’m wondering what to do to correct it.

All right we’ll try to help you.

Back in <Inaudible> talking about rate hikes and they were talking about the election.  So all the experts were saying it’s not a good time to be in the market.

Uh-oh.

So I put about $0.5M in mutual funds and a 401(k) and I parked it on the sidelines in basically a zero money market account.  And that was a big mistake because those funds <Inaudible> for about 26 years, so now I’m <Inaudible> 1099s for the whole thing because I’ve <Inaudible> the shuffle <Inaudible> money market requires a sell —

Hold on.  You said it was in a 401(k)?

The 401(k) is okay, but the other ones are taxable funds I’d had —

Oh okay okay.

You basically went cash in everything, 401(k) and non-qualified money.  Is that right?

I did take the cash — it’s in <Inaudible> zero in the safe money market they said you can park your money there.  I didn’t realize until five weeks later that they told me that required a sale to do that.  They always told me over the years if things get volatile you can slide it — you can park it up to safe —

You can park it, but unfortunately when you made that move, you did sell out of one investment and basically you bought another which was the money market account, and yes you did trigger the tax consequence on that, and the 1099 reflects the tax that will be due on that transaction.  There’s no way around that.

The tax had to be paid eventually, so that’s not that big of a deal, but I also lost my year-end dividends, which is quite a bit.  They said you have to be in without the <Inaudible> dividends.  So I lost all of them.  And then I lost <Inaudible> percent with this market the way it’s going.  <Inaudible> waiting for that drop like you had said, which <Inaudible> 20% drop, you’ve got a market like this.

It really gets back to when you’re going to need the money, and then if you’re going to need the money short-term, you shouldn’t be investing, and that’s where the planning comes in.  I wish I had a better answer for you on the tax situation, but I don’t.

The only way I would seriously consider getting in is over time now, dollar cost average.  Because I would do it maybe over a year, because if that drop’s happening maybe this summer, you could take advantage of the highs and lows, but I’m not sure I would dump all of it back in tomorrow or Monday with probably dollar cost averaging over the next 12 months or 18 months.

Bob in Sebastian, I’m sorry I said you were in Velenda, you’re in Sebastian.  Thanks for the phone call.  We appreciate it.  If you want to give Bob’s line a fill, 844-220-0965.  We also have the text machine up and running as well, 21232, if you’ve got a quick question about anything we’ve talked about on the air today.  Guys, what’s the number to reach you on Monday at Certified Financial Group?

Monday at 407-869-9800.  Or financialgroup.com.

We are planning tomorrow today with Harry Saddlemeyer, Joe <Inaudible> Certified Financial Group right here on News 96.5 WDBO.  Time to get the three big things you need to know

<Inaudible> WDBO.

Welcome back to On the Money here at News 96.5, WDBO.  We are here with the Certified Financial Group, listening to <Inaudible>.

<Inaudible> because March 6th, we’re going to host for the sixth year in a row the springs concert at the Springs Community in Longwood.  This year’s featuring the music of ABBA backed up by the full complement of the Orlando Philharmonic Orchestra.  It’s a wonderful evening around the springs, bring your blanket, bring your adult beverage, and kick back and relax.  You know, when we started doing this, a lot of proposal thought that it was the Philharmonic just playing the music of ABBA.  The beauty if it, they play the music of ABBA, but they back up a tribute band so you have — it sounds like ABBA is there on stage and you have a full complement of Philharmonic in the beautiful evening.  It’s wonderful.

It is.  I remember our — I think it was the first, we had John Denver.  Except the guy that came out was John Denver, I think.  I swear he came back from the —

He did, with the glasses and the —

It was crazy.

It’s good stuff.

We are two minutes away from latest news, weather, and traffic with Dave Wall over there in the News 96.5 News Room, so let’s get right back to our busy, busy phone lines.  If you want to join those phone lines, 844-220-0965.  Joe is Kissimmee, you’re on with the Certified Financial Group.  Go ahead Joe.

Joe, good morning, what’s up?

Good morning.  I have a question about taxes.

Okay.

Hello, can you hear me?

We can hear you, what’s your question?

I had a municipal bond for three or four years, and it pays tax-free interest.  I sold the bond last year and it had a $3,000 gain on the bond from what I paid for it.  Is that gain taxable?

Yes it is.  The income you received from the municipal bond is tax-free, but the gain can be taxable.  Of course it all depends on your tax bracket.  If you’re in the 25% or lower tax bracket, you won’t pay any capital gains, but above that you can pay 15% or 20%.

Well what if there’s a loss on the bond?  Can you deduct that as an expense?

Yes you can, you can offset it against gains as well.  Yes.  If you don’t have any gains, you can carry it forward $3,000 a year.

Okay so in other words if you have a gain you pay the taxes and if you have a loss you can deduct it from your regular income.

You got it.

Thank you very much fellows.

Thank you Joe.

Joe in Kissimmee, we appreciate it.  That’s it for segment two.  Guys, flying by this morning.  We’ve got a long segment, planned, a long segment, plenty of time to get all your questions answered.  If you want to get in line and take Joe’s line, his line was on line number four, 844-220-0965.  We also have the text machine up and running as well, 21232.  We are planning tomorrow today on WDBO.

<Inaudible>

Welcome back to On the Money here on News 96.5 WDBO.  This is the show where the Certified Financial Group comes in and answered your question on how to get to that golden finish line that is retirement to make sure you are prepared for it, and you can give them a call at 844-220-0965.  Joe <Inaudible> Harry Saddlemeyer from Certified Financial Group are here in the studio today and you are listening to the music of ABBA, Take a Chance on Me.  Joe, why are we listening to ABBA?

We’re listening to that because on March 6th, Certified Financial Group will once again be the lead sponsor for the annual springs concert to be held at the Springs Community in Longwood.  It will be a wonderful evening under the stars around the beautiful spring setting there.  Bring your blanket, and adult beverage, kick back, listen to the music of ABBA, backed up by the entire complement of the Orlando Philharmonic Orchestra.  It’s a wonderful night.  For more information, go to orlandophil.org, and you can get tickets.  In fact, they have a deal going on right now, and some folks last year — in several years passed it’s a sellout.  And it makes a great Mother’s Day gift, which Is right around the corner, so I know Phil <Inaudible> and we hope to see you there.

All right.  And then you’ve got some workshops coming up as well.

We do.  Next Saturday, March 4.  Gary Ably in our office will be conducting a workshop called Financial Basics, and it is a wonderful opportunity for you to just get some basics about investing.  As Joe said at the start of the show, sometimes we don’t get this information in school.  And so Gary’s going to go through the A through Zs of financial investing and some of the pitfalls and what to look for and not look for, and it is absolutely free.  Go to our website.  You can register there.  Give our office a call on Monday at 407-869-9800.  I think he has some seats available, and it is a really nice informational workshop.  We’re not going to sell you a book or a tape or, lock you in a room at any time.  Just really good information that in the future, if you need some help, we hope you think about us.

Yeah, leave your checkbook at home.  Once again, it is free.  11:00.  We’ll give you some good information.  And people say why do you do this.  We do this for two reasons.  Number one, to give you some information and trying to avoid those disasters that we see walking into an office after <Inaudible> and insurance planning.  And of course to introduce you to what we do as a firm.  So whether you need planning now or some time in the future, you will give us an opportunity to earn your business.  So go to our website, FinancialGroup.com.  Click on workshops, and you register right there.

All right, and we’re going to continue taking your phone calls here.  And we want to get back to our busy, busy phone lines.  And we’ve got a nice, long segment.  Plenty of time to answer lots of questions.  If you want to get in line, 844-220-0965, 844-220-0965.  Text machine’s up and running as well, 21232.  We will get to the text questions right after we get to Edward in Orlando.  Edward, you’re on with the Certified Financial Group.  Good morning Edward.

Good morning.

How can we help you?

How do you figure out how much to take out of an inherited IRA on the required minimum distribution?

It’s based on life expectancy.  So is it your inherited IRA?  You inherited it from someone.

Yes.  Yes.

Okay, your custodian will tell you at the appointment time, usually in the fourth quarter, that you have to make that withdrawal, and they will calculate it for you.  It’s based on age and it’s based on the balance in the previous year on December 31.  And so that’s how it’s calculated.  And your custodian will do that calculation for you.

Oh, okay.  Because they haven’t.

Yeah they will.  <Inaudible>.

Yeah, you can contact them and they will do the calculation for you, generally right there on the telephone.

All right, Edward, thank you so much for the call.  If you want Edward’s line, it’s 844-220-0965.  844-220-0965.  Text machine’s up and running as well.  21232.  Richard in the Villages.  Richard, you’re on with the Certified Financial Group.  Good morning Richard.

Good morning.

How can we help you?

Good morning.

How can we help you?

Well, I am collecting Social Security.  I took it at my maximum deadline, turned 66.  My wife is turning 62 next month.

Okay.

What is the best way to get the most for her?

Well, she can claim a part of your benefit.  She’s entitled to half of your benefit reduced because of the fact that she’s 62.  Or she can — does your wife have a work record, an earnings record?

Yes, but it’s much less than half of what I’ve done.

Okay, then — okay, then she can start claiming at 62.  She will be entitled to half your benefit, minus 25% from reduction, because she’s claiming it at 62.  And if you don’t need the money, I would suggest that she wait until her full retirement age, and then she would get more.  She would get the full half of what you’re getting.

Okay, so there’s no way of collecting on hers now, and then when she rolls over —

No, no, those rules changed last year.  The file and suspend and all that stuff has pretty much changed.  And because of your age differences, no, you missed that opportunity.

Okay.

Okay?

All right, I appreciate it.  Thank you.

Appreciate your call, thank you <Inaudible>.

All right Richard, thanks so much for the call.  If you want Richard’s line it’s 844-220-0965.  844-220-0965.  Ted in Orlando.  Ted you’re on with the Certified Financial Group.

Hi, thank you for taking my call.

Okay, how can we help you?

Well I have a 457, a Roth, and a 401.  And I’m thinking in five years to pretty much stop working and doing more of the hobbying and doing other vision fields <?> and other stuff.  My wife is going to be working part time.  Right now we operate on 42,000 a year.

Okay.

In five years we’re not going to have any mortgage, so we’re going to reduce another 12,000, so we should be fine.  Because we’ve been living on 42,000 for the past 10 years.

Okay.

So my question is —

How old are you?

Currently I’m 40.  And at 45 I’m thinking of pretty much ending the full-time job.

Okay.

So I will have 457, 200K roughly.  A Roth, another 110.  And 401, somewhere around 410,000, 420,000.

Okay.

Which area do you suggest for me to withdraw first?  I was told you can withdraw the Roth if it’s more than five years over the 457.

You can.  I would draw, what you want to do is take a look at your tax situation and look at where you start bumping up into the 15% tax bracket.  If you can withdraw, depending on what your income sources might be, take out as much as you can out of it — but however — wait a minute, back up.  You’ve got a Roth, you could take from that.  457 you can take out of it at age 50 without the 10% penalty.  The 401 you’re going to have to wait until you’re 55.  So here’s what I would do.  I would look at drawing from the 457 up until you hit the bump up into a higher tax bracket, and then take from the Roth.  And do that every year.  And then when you get to be 55, you can switch over to the 401 and draw from there.  But you’ve got a nice situation <Inaudible> yeah go ahead.

Yeah, so you don’t think I would — my goal is I was doing a lot of reading about the <Inaudible> so I wasn’t going to withdraw more than 15,000 a year.

Okay.

So if I withdraw 15,000 let’s say from the 457 or 15,000 the following year from the Roth, it doesn’t matter which way I’m going to join, as long as I stay within the 4% or 3.5%, it shouldn’t make the difference right?

Well that’s, in terms of maintaining your principal, yes.  In terms of taxes it might be a little bit different.  Like I said, what you want to do is draw from the taxable account until you start bumping up into a higher tax bracket. <Inaudible>.

Yeah, because my wife, she’s going to be in a part-time job as well, so she’s going to be bringing home somewhere around 25,000, 30,000.

Wonderful.

And with my other 15, we should be way below 15 <Inaudible> in five years.

Right.  Now let me caution you.  The wildcard in your situation is health insurance.  What are you doing for health insurance?

The health insurance, I was told — again, we don’t know in five years.  But we purchase our own health insurance.  Because I know a few people that are getting the Obamacare type of health insurance.

Right.

And it’s actually cheaper right now than what we’re paying with our current employer.

Okay.  Well that’s <Inaudible>.

Because we’re going to fall in a lower tax bracket, so we should qualify for insurance.

Yeah, that’s — but stay tuned on that, because all of that is likely to change in the coming years.  And that’s the wildcard.  The problem is you’re still a young guy, and you’re not going to qualify for Medicare until you’re 65.

Correct.  But as long as I stay frugal and don’t withdraw more than 15,000, and as long as my investments are diversified, I should have a great chance of not running out of the money.

That’s true.  The only wildcard in the whole situation is healthcare.

Okay.  Yep.

All righty Ted.  Thanks so much for the call Ted.  If you want Ted’s line, it’s 844-220-0965.  844-220-0965.  I know you’re looking at your clock and saying, well you have 15 minutes.  Are you really going to get to my call?  Yeah.  Call in.  If we don’t get to you, we’ll give you a private consultation off the air.  Again, 844-220-0965.

Larry in Avito.  Larry, you’re on with the Certified Financial Group.

Good morning Larry.

Thank you sir.

How can we help you?

Good morning.

Good morning.

My question was my wife and I are late 60s, early 70s.  One of us is working full-time still for another couple years.  The other one is semi-retired, but brings in some income.  And right now we’ve got a good bit — we’ve got a 401(k), a TIAA-CREF, and some other stuff.  And my question is, at this point, because it kind of looks like the stock market’s been going nuts, going up higher and higher lately.  I was thinking about putting everything into very conservative things, or at least bonds.  Am I in touch with reality thinking that things may start to pop pretty soon?  Or should I just keep where I am?

Larry, I don’t know if you heard our earlier call.  I believe it was Bob or Ralph, or somebody earlier, talked about one of the biggest mistakes he’s made is listening to the media and getting out and trying to time the market.  And that’s what I’m hearing you saying at this point.  You’re in your 60s and 70s.  You’re guessing that maybe there’s a popped bubble coming for whatever reason you think that.  But what you have to remember is this money doesn’t — it’s not just when you retire.  This money has to last 20-some years.  You’re in your 60s.  Remember what milk, bread, eggs were in your 40s?  Look forward.  This money is going to have to go until you pass away.  That could be in your 90s, so you need growth.  And moving all your monies to a bond in a rising interest rate environment could be just as devastating.  So I think it’s important that you have a good balance, and forget about the day-to-day and forget about the long-term.  Like Joe said, we may have a correction.  But I promise you that in 10 or 15 years, this market will be back.  It might be five years, three years, it may not happen.  So don’t try to time the market, because that’s financial suicide, or it can be.

Yeah, you need to think long-term, don’t try to time the market, don’t — we’re always going to have periods where the market will go down.  There’s no question we’re at record highs today, it’s going to happen, I can guarantee it sure as I’m sitting here.  If you need the money in the short-term, you shouldn’t be invested.

Right, right, right, right.

But you’re talking about the rest of your life.  And so the key to getting through things is to have diversification, you want to have quality in your portfolio, you want to have some stock mutual funds for growth, bond mutual funds for safety, and the appropriate balance based on your time horizon.  Because everybody is unique.  But I wouldn’t be running to bonds right now, particularly for reasons <Inaudible> said.

And that’s what we do for a living.  I mean, if you’d like someone else to fly the plane, we’ll fly the plane for you.  We’ll put together the portfolio for you and let you sit back and have an adult beverage in the back.  And we’ll hit some rough spots, but we’ll get through this.  But I also talked about if you’re nervous about the market, maybe you do pull some of your profits in some of your equity funds that did really, really well.  Go ahead and pull the profits, or pull some of your — the monies that you made and get back to your original investment.  And go ahead and move that maybe into something a little bit more secure if you think that bubble is about to pop.

And the key to investing is to know what target rate of return you need to get on your money to be sure you don’t run out of your money.  Some people can be extremely aggressive and they don’t need to be and taking more risk than you need to.  And some people are very, very conservative, and they’re just not going to get there and don’t realize it until 10 years down the road.  And that’s the beauty of planning, and that’s why planning is so important before you do investing.

Well Larry, thank you so much for the call.  We really do appreciate you calling in here on a Saturday morning on News 96.5 WDBO.  If you want to join — John is in Altima Springs, Louis in Castleberry, and Bob in Orlando, who are on the line.  And we’ll get their question answered when we come back from getting three big things you need to know.  Join them being doing 844-220-0965.  844-220-0965.  And if we don’t get to your question on the air, Harry and Joe Bird from Certified Financial Group will give you a private consultation off the air after we get done today.  Right now, we’re planning tomorrow today.  And the three big things you need to know.

Welcome back to On The Money, here on News 96.5 WDBO, the Certified Financial Group.  For Joe Bird, Harry Settlemeyer, in the studio, taking your calls at 844-220-0965.  844-220-0965.  We are enjoying the music of Abba today.  Why Joe?

Because, I made this tape.  So once again, we’re going to be the sponsor for the annual spring concert at the <Inaudible> community in Palmer I should say.  This year <Inaudible> will be featuring the music of Abba, backed up by the full complement of the Orlando Philharmonic Orchestra.  It’s a beautiful night under the stars.  Bring your blanket, bring your adult beverage, kick back and listen to some great music.  For more information, you can go to OrlandoPhil.org.

All right, we’ve got busy phone lines, a couple text questions.  Let’s get right to them before we get to the <Inaudible> four minutes away from the latest news, weather, and traffic here on News 96.5.  John in Altima Springs.  John, you are up next with the Certified Financial Group.

Good morning John.

Yeah, thank you.

Go ahead, what’s up.

Quick question.  What’s the difference between an IRA and a non-qualified?

And a non-qualified account?

Yes.

Non-qualified means it’s not wrapped in a retirement package, if you will.  It’s not qualified money in that you have a 401(k), an IRA, those are all tax deferred vehicles.  A Roth is a tax free vehicle.  A non-qualified is like putting money in your CD or bank account or opening a mutual fund and it is what it is.  It’s not a retirement asset per say.  I mean it can be used as retirement, but it’s not tax deferred, I think is the key there.

And chances are you don’t get a tax deduction when you put it in.

Right.

So you didn’t do it for tax purposes.

Right.  Yep.

No, one quick question before I go.  The money that I invest, that is not taxable right?

Well, any gain on it would be.  If you invest $100 and it turns into 200, and you sell it, that $100 gain is taxable, yes.

And if you put it in mutual fund, it generates dividends, capital gains, or interest, that’ll be taxable to you as well.  In a retirement account, it’s not taxable until you withdraw it.  Thank you for the call.  We got a couple more <Inaudible>.

Appreciate it John, thank you.  Scott in Ustes, Scott <Inaudible>.

Reporting, what’s up?

Hey, I got two questions for you.  One is the — I’m basically 44 and all of my money’s in the 2045 Vanguard target fund.  And my question on that is do you think that it’s, I’m worried that it’s too conservative.  Right now it’s at 90% stocks, 10% bonds.  When I retire, I think it’ll be about 60% stocks, 40% bonds.  My question is should you have any bonds at all or does that make it too conservative.  I mean it seems <Inaudible>.

It depends on the kind of bonds.  I think you’re okay based on your age, based on the target date that you’re in, I would stick with it.

All right, my second question is I have an income of about 600,000 a year.  Right now I’m putting — I did my 18,000 in my 401, and I did mine and my wife’s Roth at 11,000, 5,500 a piece.  I <Inaudible> did a backdoor Roth.  My question is I could do my 401 also in the Roth.  Should I be putting it all in the Roth?

No, no, no, no.  Based on your income, you want the tax deduction today, because there’s no guarantee that when it comes time to take the money out of the Roth that it’s going to continue to be tax-free.  Go to Google, an article that I wrote for Kiplinger some time ago, called Roth, A Wolf in Sheep’s Clothing.  A Roth, A Wolf in Sheep’s Clothing.  It’ll tell you the pros and cons, mostly the cons of giving up a tax deduction for anything to do with a Roth.

Thanks for the call.

That’s good, thank you.

All right, Scott, thank you so much for the call.  We’re just about out of time here ladies and gentlemen with the phone calls.  Bob in Orlando, hang on the line, you’ll get a private consultation off the air.  I wanted to make sure we’ve got plenty of time to give out the phone numbers.  And one more time, the workshop, Certified Financial Group.

Next Saturday, March 4, Gary Abley, in our office, Financial Basics A to Z.  What it takes to invest wisely.  From 11:00 to 1:00.  11:00 to 1:00 next Saturday morning.  407-869-9800.  Or FinancialGroup.com to register for Gary’s workshop.

All right, and then Certified Financial Group. <Inaudible>.

April 22, the annual shredding event at our office.  More information coming.  Circle that date in your calendar.  Be open to the public from 9:00 to 12:00.  We’ll be broadcasting live.  More to come on that.

All right, that’s going to do it for this week’s edition of On The Money.  We’ll see you back her next Saturday.  We planning tomorrow today on WDBO.

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