TRANSCRIPT FOR THE APRIL 1, 2017 “ON THE MONEY” SHOW

Hosts: Judith Sanborn, CFP®, AIF® and Joe Bert, CFP®, AIF®

Hello everybody and welcome to on the money with the Certified Financial Group, here on News 96.5 WDBO.  We’ve got Joe Bert here, the Oracle of Orlando, Certified Financial Group here in the studio today, along side Judi Sanborn.  We are here taken your phone calls at 844-220-0965, 844-220-0965… Joe and Judi, how are you today?

Good morning, Kyle <?>.  We’re doing great.

Good morning, <Inaudible> wonderful.

Good, good.

It’s a little warm out there for the first day of April.

I know, I don’t like.

<Inaudible>, isn’t it?  Yes.

Now, if I start calling Joe, Judi and Judi, Joe, it’s just an April Fool’s thing.

No, I got it.

<Inaudible> Joe, I’m sorry, I —

No problem.

I know <Inaudible>.

It is April Fool’s, right?

I was trying to think of what’s a good April Fool’s — they do on the radio today?  It’s Saturday and I just couldn’t come up with one.  It was a slow come-up process this week.

<Inaudible>.

Yes.

Well, what can the audience call you about today, guys?

Judi and I are here to talk about anything that’s on your mind regarding your personal finances.  As we say on our ads, unfortunately our educational <?> system has failed us when it comes to teaching us how to save and invest for our financial future.  Because, there will come a point in time in our lives when the paychecks will stop.  And, hopefully, we’ve accumulated some money and we have to turn that money into an income to supplement our Social Security.  How do we do that?  It’s with Judi and I, and the others that are <Inaudible> financial planners of CFG do day-in and day-out for a fee.  But, on Saturday morning we are here to do it for free.  So, we are here to take any questions that might be on your mind regarding your personal finances.  As it might relate to questions that you have about stocks, bonds, mutual funds, real estate, long-term healthcare, IRAs, annuities, life insurance, reverse mortgages, all that and more.  Those are questions that people deal with day in and day out.  As I said, they don’t teach us this stuff.  We go through life trying some of this and trying some of that, and wake up and we’re 55 years old.  Look across a kitchen table at Loretta, and say Loretta, you know, the kids are gone.

What are we going to do?

What are we going to do?

We’re going to live another 40 years.

That’s correct.  How do we plan for this?  So, this is why we are here this morning.  So, Loretta pick up the phone and call us.  That phone number is 844-220-0965, 844-220-0965.  Of course the text machine is up and running as well, 21232.  That’s 21232.  Judi, we have a question on the text machine left over from last week but I thought we’d kick this show off with it <Inaudible> because I know you can answer it… I turned 70 and a half this year, and was just told that I must take a distribution from the Roth 401k I have with my former employer.  I thought Roth accounts were not <Inaudible> with RMDs, what’s going on?

Well, I think that’s a great question, and April 1st, besides being April Fool’s day, also is the last day that individuals can take their required minimum distribution if they turned 70 and a half last year.  So, we’re going to talk a lot about that.  Regarding the question, yes, normally you do not have to take a required minimum distribution from your Roth IRA, if you are the original owner of your Roth IRA.  However, there are different rules, and RMDs, required minimum distribution rules can be very complex.  But, there is a different rule for a Roth 401k, just as if you have severed employments and you have a 401k that you left, at your employer, you still have to take your required minimum distribution from that, separate from the required minimum distribution you might take from your individual IRA.  So, you do have to do that, you have to take the distribution, just like you do from your IRA, based on the market value on December 31st.  You can avoid this situation, however, if you would roll that Roth 401k into your individual Roth IRA.

So, what you’re saying there is, if you have a Roth 401k, you have to start withdrawing, simply because it’s left in an employer plan, as opposed to moving it to an individual Roth, where you can not have to take the required minimum distribution.

Correct.  And, in most instances the distribution will be tax-free, at this point, most instances.

Okay, alright, just like that.

If you have another question for Judi it’s 21232.  That’s 21232.  And, of course the number to dial is 844-220-0965.  Yeah, it’s April 1st.  It’s the last day — or, are we too late, is it March 31st.

It’s April 1st.

Okay.

But, since April 1st is Saturday it might be too late, if you haven’t done it yet.

Yeah, and this is for what you deferred, that you were supposed to take on December 31st.

Gotcha.

You get that one opportunity to say, ooo, I’m turned 70 and a half last year but I don’t want to take it this year, you can defer until April 1st.  But then, you have to take another one this year by December 31st.

Right.

Gotcha.

As a required minimum distribution <?>.

So, if I didn’t take it, what’s happening to me now?

Well, if you don’t take your required minimum distribution, and I thought this was a very interesting question that one of my clients asked me this year.  He just turned — he will be 70 and a half this year.  So, I was telling him, we needed to start thinking about that.  He said to me, well, what if I don’t take it?  I said well, I don’t think that’s a great idea.  But, if you don’t take it, it’s a 50% penalty.

50%, wow.

It’s huge.

<Inaudible>.

I mean there were taxes and penalty, you’ve got $0.10 left.

The good news is that there are people, if you’re not involved perhaps in an investment account or with a financial planner, there are individuals who forget, legitimately forget.  If that happens, in the first year and the IRS comes back to you and wants to penalize you, they actually are very kind about that.  If you submit the <Inaudible>, if you will, then often times they will waive that 50% penalty, as long as you take your RMD and continue.

There are some Safe Harbor exclusions. I think those just came out last year.  There’s about 9 or 10 of them, that if one of these things happen, they will say you don’t have to — like, the dog ate my homework or something, you know.

And you just file that?  What if I paid my taxes already this year, and then forgot to take it out?

I think —

If I paid my taxes for 2016.

Well, the rule, if you will, as soon as you realize that you haven’t taken your required minimum distribution, you need to do that.  Then, you need to file with the IRS.  There is something, of course, that you would file, that says I forgot but I’ve done it.

Gotcha, okay.

There was an exception to that required minimum distribution on <?> a 401k.  If you’re still employed.

Ah.

So, if you’re still employed.  If you’re over 70 and a half and you’re still employed, but you’re not a 5% or more stockholder in the company, you do not have to take your required minimum distribution until you stop working.

I want to add, if you are no longer employed by that company but you left your 401k there, you have to take your required minimum distribution from it.

Right, okay.

But, I want to employ is that 10 hours a week, 20 hours a week —

You’re on the payroll, <Inaudible>.

Okay, okay.  That’s interesting.

That is interesting.  It’s a great, creative tool that we use to — for our clients that are over 70 and a half.  And maybe you’ve gotten a second career and have those big rollovers, you can roll it into your company 401k and stop the RMDs.

Alright, well that’s interesting.  Alright, well we’ve got a question for Joe and Judi — that’s it, 844-220-0965.  844-220-0965.  We also have the text machine up and running as well, 21232.  That’s 21232.  Now, what I find interesting, especially around tax time and requirement distribution — requirement

Required minimum distribution —

Minimum, that’s the work I’m looking —

It’s RMD.

RMD, minimum distribution.  How it relates to all that stuff, but 70 and a half, is <Inaudible> for a 401k or a Roth IRA, or a regular IRA.  Is there a difference there, or is it all 70 and a half, except the Roth IRA you don’t have to take it, unless it’s a Roth 401k.  So, if I am in my late 30’s/early 40’s, and I don’t plan to retire.  Because, I love what I do, <Inaudible> mind 70’s.  Well, you know, <Inaudible> hypotheticals out here, in five years, I may hate what I do.  In 70 and a half, if I’m planning to work beyond 70 and a half, which one should I choose first?

Well, Joe and I might have a little difference of opinion on this.

That’s alright.

Well, first of all, we always encourage anybody who’s employed and has the benefit of an employer-sponsored plan, to participate in that employer-sponsored plan.  That’s the first step, kind of the foundation.  If you have the opportunity to choose to invest in something, perhaps outside of that plan, or if your employer doesn’t offer you a sponsored plan.  Then, when you’re younger — I mean there’s a lot of considerations.  Okay.  But, I encourage people to participate in a Roth if they don’t need the tax deduction, if they’re not in a higher income.  There’s a lot of variables there.  If they don’t need the tax deferral at this stage in their life.  Because, according to the rule of today, that will grow tax-free.  Now, you’re going to be taxed on it, because on the contribution you will be taxed, you’ve already paid the taxes on it <?>.  It’s the rules today.  If you’re 30, who knows what the rules are going to be 40 years from now, we don’t know.

Our philosophy — I think we’re in agreement there.  Our philosophy is grab the tax deduction today, if you’re in a high enough tax bracket.  If you’re in a 10% tax bracket for Roth, you’re not giving up a lot and the benefit is you can always withdrawal what you’ve contributed to the Roth without any kind of penalty if you need it.  So, it’s kind of an emergency fund that’s there for you.  You’re not given much of a tax deduction.  But, if in fact you’re in a higher tax bracket, I’d like to grab the tax deduction today.  <Inaudible> burden <Inaudible>, as opposed to if we’re going into it with a promise that the money coming out, in the future, as Judi said, will be tax-free.  That’s the current law.  Heaven knows what the law will be in 25 to 30 years, it may not be tax-free, it may be means-tested <?>.  That’s what my concern is.

Okay.

I have something that I think is interesting, in regard to this.

Sure.

A lot of people want to know, well, why do I have to even start taking this withdrawals.  One reason is, you’ve never paid taxes on this.  The government is looking at the largest generation in US history has to start taking this required minimum distribution this year, 2017.

Yeah.

That is a huge, 100’s of billions of dollars over the next several decades is going to go to the government, because you have to pay taxes on that required minimum distribution.  There are 75M baby boomers, and the oldest just crossed 70.

<Inaudible>.

<Inaudible>, so that is a big reason why.  You know, at some point, perhaps the government will decide that you have to take an RMD at an earlier age, I don’t know.  Obviously that’s speculation.  But, there is a legitimate reason why you have to start taking that required minimum distribution.

Yeah, you got a tax deduction when you put it in, never paid taxes on it.  It grew over all these years without being taxed, and now you hit 70 and a half, and bingo, it’s time to pay up.  Now, some people think that you have to cash it all out at one time.  I’ve got all this money built up there.  There are people walking around thinking I’ve got to cash all this in at one time and pay taxes on it, which we know is not true.

As the whole IRA <?> or —

The lump sum, yes.  Cash out the whole account

— oh, no no no.  Okay.

When you turn 70 and a half.

But, you recommend against that.

Oh, of course.

Of course, of course.

That’s why we have required minimum distribution.

Right, right.  There’s a formula.  And, if you’re involved in any of the brokerages or with a financial planner, then they are going to prompt you and tell you how much is required for you to take out.  You can go and do your own calculations on our website.  We have a calculator there, according to your balance on December 31st.  Plug in your age and it will tell you how much you have to withdrawal <Inaudible> age.

There you go.  Well, if you have a question for the panel, it’s 844-220-0965.  844-220-0965.  Of course the text machine is up and running as well, 21232.  What is the phone number for the office at the Certified Financial Group.

It’s 407-869-9800.  You can call and leave a message this weekend, someone will get back to you on Monday.  You can call in on Monday of course.  You can go to our website, FinancialGroup.com and request a complimentary consultation.  There are many ways to contact us.

Speaking of our website, we’ve got a reminder on three weeks from today, April 22nd, is our annual shredding event at our office.

Isn’t that a couple days after taxes are due?

That’s correct.  So, if you’ve been accumulating all that stuff with your private information on it, Social Security numbers and all that stuff, bring it by our office, limit two banker’s boxes.  Come on by.  You can also register for two free tickets to win an upcoming springs concert, in the springs community in Longwood this year featuring the music of Abba.  Bringing a tremendous tribute band, that will backed up by the Orlando phil, around the springs there.  Bring your adult beverage and a blanket, and kick back and relax.  All that information is contained at our website.  That’s at FinancialGroup.com.

Alright.  Now it’s time to get the three big things you need to know on DBO… Welcome back to On The Money, here on news 96.5, WDBO’s Ask The Expert’s weekend.  We are taking your phone calls at 844-220-0965.  844-220-0965, with Joe Bert and Judi Sanborn with Certified Financial Group are here in the studio, ready to take Susan from Orlando’s call.  Susan, you’re on with the Certified Financial Group.  Good morning.

Well, good morning.  How are you?

Good, —

Good morning Susan.

How can we help you?

Okay, <Inaudible> my taxes done recently.  I was told because my only income is my Social Security, that I’m not going to have to file taxes anymore.  I’m wondering, how does that effect my RMD.  Am I still required to take it out.  I mean —

Yeah.

But, I’m not going to be paying taxes on it since I have no income.  Not enough income.

Do you mind my asking how old you are?

I am 74.

Do you have an IRA?

Yes I do.

Alright, have you been taking this required minimum distribution from it since you turned 70 and a half?

Yes, I have.

Okay.  Well, does a tax professional do your taxes?

Oh, definitely, yes.

Okay.  Well, that person should have been, and probably was, considering that ordinary income for you.  Because that’s how required minimum distributions are categorized on your taxes, it’s ordinary income.  So, if that didn’t put you in the situation where you would pay taxes.  Then, I’m sure that tax professional was considering that.  But, yes, for our listening audience, it doesn’t matter if you didn’t pay taxes or didn’t have to pay taxes last year, your required minimum distribution could put you into a situation where you do have to pay taxes.  Because that distribution is 100% taxable as ordinary income.

Yes, well I don’t fall into that.  I just got my Social Security check.  It’s not enough.  Even adding my RMD, I still am falling short of having to file taxes.

Well, at — over age 65, the threshold this year is about $11,900.  So if your gross income is under about $12,000, you’re right, you don’t have to file taxes.

My accountant told me that because it’s <Inaudible> Social Security, that I don’t have to file — that I don’t have to file for Social Security or other income.

No, your Social Security plus your RMD is added together to come to that threshold amount.  If you’re over that threshold amount, then you do need to file taxes.

Right.

And, what is the threshold amount?

About $11,900 this year.

Oh really?

Yes, how much was your RMD?

500.

You’re probably okay.

You’re probably okay.  And, Social Security and the required minimum distribution are separate situations as well.

I mean, my total income from my Social Security is like around 19,000 —

Woah!  Woah, I think you’ve got some bad information.

Do you have deductions, other than the standard.

I do, I do.  Property tax, mortgage, insurance, <?>, things like that.

Well, there’s a difference between not having to file, and <Inaudible> and not paying taxes.  Based on what you’ve told me, I think you need to file.  You may not have to pay any taxes based on your deductions, but the point is you still need to file.

Okay, so again, my question.  If I do file, which I told my — the accountant, yes I feel better to file and not owe anything.  But, am I still required to do the RMD.

Oh yes, yes.

Yes.

Everybody is required to take that minimum distribution at 70 and a half.  There are no exceptions that I can think of.

Okay, well now, Susan thanks for calling up.  If you want more information you can give the office a call on Monday morning.  We’ll give out that number, right after we get the latest news, weather and traffic with Dave Wahl, <Inaudible> 96.5 Newsroom.  We’re playing tomorrow <?> —

Today —

for the Certified Financial Group, on WDBO… Welcome back to On The Money, here on News 96.5 WDBO.  This is the show where we help to get to that retirement finish line safe and sound.  Joe Burt, Judi Sanborn here from the Certified Financial Group.  We are planning, tomorrow —

Today

— and the way to get that tomorrow plan is 844-220-0965.  That’s the number here at News 96.5, WDBO to ask Joe and Judi a question.  Again, 844-220-0965.  The text machine is up and running as well, 21232.  That’s 21232.  I will get to the text questions just a minute.  But, Joe, from the audience that joined us during the latest news, weather and traffic, now what can they call you about?

Judi and I are to talk about anything that’s on your mind regarding your personal finances.  We go through life trying some of this and trying some of that.  In our 401ks, we have IRAs, we bought some life insurance.  We have an annuity.  We’re considering reverse mortgage.  We’re looking at putting money in mutual funds, all those things you and I deal with, every day, day-in and day-out with our clients.  Doing planning for a fees.  Then, on Saturday morning, we’re here to answer your questions for free.  So, if you have any questions regarding your personal finances, the good news for you, the lines are pretty much wide open.  There’s a couple lines open, all you have to Wide open, there’s a couple of lines open.  All you have to do is pick up the phone and dial these magic numbers.  844-220-0965.  844-220-0965.  We’ll get to those next questions we have in just a moment.  First, let’s go to George in Orlando.  George, you’re on with the Certified Financial Group on WDBO <sp?>.

Hi, good morning.  How can we help you?

If it’s okay, I’d like to ask a real quickie question before I go to my main question.

Okay.

Whenever you file your taxes at the bottom, and it asks you if you want to contribute $3 for the presidential campaign but then it says that if you say yes, it won’t affect your taxes.  Now how does that work?

Well that is not a tax deduction.

It’s just not a tax deduction, that’s why they’re saying it doesn’t affect your taxes.

Yeah, but where does that money come from?

It comes from you.

They didn’t take $3 from you — from your — I don’t know.

Yes, it comes from you.

That’s a good question.

Yeah, but they say it won’t affect your — you know, whatever is going to happen with your taxes.

It’s not a tax deduction, but it’s a contribution that comes I believe from any taxes that you owe that’s going to increase your taxes by $3.

Oh really?

You know, that’s a great question.

That’s a good question, I don’t know.

You know, I don’t know, George.

<Inaudible>

Somebody it came from some kind of fund, you know.

<Inaudible>

You know, it might.  You know, it very might.  You know, that’s a great question, George.  And, I’m going have to do some research here while we’re on the show and I’m just trying to figure that answer out.

<Inaudible>

It won’t affect your return, so I mean, it’s got to come from somewhere.

Well yeah, it probably comes from a general fund somewhere.

Okay, my main question is with the required minimum distribution and last year was the first year, and I went ahead and did it, and I’ll do my taxes with this one outfit <?> and co-sign that, I had to pay like $1,800 in taxes.  So this year, I went through the taxes again and they said well I think somebody might have <Inaudible> here, and you overpaid.  So, quite a bit.  I’ve overpaid for $1,000.  And they did an amended form, you know?  And sent that in.  Now, if they did this wrong again, am I going to get in trouble or what?

Well, I think really that is a tax question.  If your RMD was taken — was it taken last year?

Yes ma’am.

In 2016?

Yes — well, ’15.  Oh I’m sorry, the one from the previous year.  And then I did this year, and when I did this year, they said that they had made a mistake over $1,000.  That I overpaid.  And then they include <Inaudible> amended return.

Well I think you have to have some confidence in whoever is doing your taxes.  Well, they did it wrong last year, so you tell me.

Well, I don’t know since I don’t know who does your taxes.

Well you know, I don’t want to mention it unless you want me to.

No, no no no no.  We don’t want you to mention it.

Yeah I mean, they’re a great outfit you know, but something about the rules changed or I — I don’t know.

Well —

But <Inaudible> can they come after me?  I didn’t do the taxes.  I mean, I just went by what they said.  I mean, can I get in trouble or what?

Well, they’re going to come back to you and then whoever has done your taxes is going to be with you to address any questions perhaps that the IRS has.

Okay.

Okay?

Yeah.

Thank you for your call.

<Inaudible>, George, before heading out though, we do know that the $3 check off does not increase your taxes.

Right, where is it coming from?

And it doesn’t decrease any taxes.  Well you know what, the magic in Washington, George, is it’s magic.  They just create <Inaudible> dollars and just <Inaudible> $3 on there on your — I’m going to figure out — I’m going to find out where there a fund and I don’t know where it goes.  But we do know at this point that it doesn’t increase or decrease your taxes in anyway.

Interesting.

Yes, there’s a pool — there’s a pool of money out there.

<Inaudible>

Pool of money somewhere.

Alright.

George, thanks so much for the phone call.  If you want George’s line <?>, it’s real simple.  844-220-0965. 844-220-0965.  Let’s go to Carmel in Orlando.  Carmel, you are on for the Certified Financial Group on WDBO <sp?>.

It doesn’t increase or decrease <Inaudible>

Oh Carmel, you’re listening through your phone, that’s a big no-no, we can’t be doing that.

<Inaudible>.

Carmel, are you there?  Phone call <Inaudible>

Nope, see, listening through your phone call, so we’re going to put you back on hold.  And ladies and gentleman, it is a great example of why we say to listen through your phone and not on your radio.  We are on a 12-second delay and we’ve already moved on by the time you hear us.

It used to be seven seconds, and now it’s 12?

Yeah, it’s 12, yeah.

They learn from our show, huh?  <Inaudible>

And I won this year, I’ll say that.  Ray in Titusville, you guys are out there.  I don’t think I’ve ever had — we’ve never had a problem with this show.

That’s <Inaudible>.

<Inaudible> being here.  Ray in Titusville, you’re on with the Certified Financial Group.

So, <Inaudible> good talk to you.

Good morning, how can we help you?

Yeah, well I was doing my taxes this morning and <Inaudible> have <Inaudible>.  But I cannot find my 1099, my Social Security — you know, that they send me?

Uh-huh.

Can I print that off of the internet?

Boy, I don’t know.

Yes, for your Social Security?

The 1099 that the <Inaudible>.

Yeah, I’m like — yeah, I mean <Inaudible> all my checks to <Inaudible> — or, can I go through my bank statements and just take my accountant’s number so that it won’t <Inaudible>, will that work?

Yeah, you can do that.  As long as you — you know what exactly what you put in.  Not having the 1099 probably is not going to be a big deal because the government has it.  So as long as you plug that number in, you know what it is, I think you’re going to be okay.  You know — go to IRS.gov and try to print it out.  I don’t know that you have the ability to do that, I’ve never tried it.  I don’t know if <Inaudible>.

Or SSA.gov.

You know — what did say?

You said IRS.

No — yeah, I’m sorry.  You’re right, I said <Inaudible>

SSA.gov, you might to your <Inaudible> SSA.gov, and that might be available online.  I haven’t ever looked for anything like that.

<Inaudible> they do send that to you every year, right?

Yep.

Yeah, they’re supposed to.

Yeah, their 1099?

Yeah, <Inaudible> probably looks like junk mail.  Probably <Inaudible> and just throw it away.

<Inaudible> probably.

Yeah.

And that it would look like a bill, I threw it away.  <Inaudible> But anyway.  Okay, thank you very much.

Thank you.

Okay Ray, thanks so much for the phone call.  If you want Ray’s line, it’s 844-220-0965.  844-220-0965.

I’ve got an answer for George on where the money comes from.

Oh.

Every year, it’s a budgetary item.  The Federal Election Commission asks the money goes in the federal budget, and it goes into a pool of money there that candidates can draw from. <Inaudible> so <Inaudible> paid for some way, some shape or form.  <Inaudible> $3 coming out of <Inaudible> and doesn’t reduce your taxes, doesn’t increase us taxes.

How about that?

So it’s a budgetary item, and there we go.  George, I appreciate that.  <Inaudible> today.

Look at that.

<Inaudible>

Well at least your learn something.

Now I’ll try Carmel again.  Carmel, can you hear us?

Carmel?

Yes, I’m on.

Alright, you’re on-board <Inaudible> with the Certified Financial Group.

How can we help you?

Okay, so I have a Roth that I have and it was my husband’s and he retired.  <Inaudible> IRA, he had Roth while he was working.  While he’s passed away, had been gone three years, and this — I have this Roth <?> and annuity that’s due to come up.  And I’m wondering about the interest rate — the dividends on that Roth.  When I pull that out, the tax has been paid on the Roth.  What about the dividends?  Do you have to pay tax on that?

You shouldn’t have to pay taxes on any portion of the Roth.

Of everything I get out, even the dividends?  It will be <Inaudible>.

That’s correct.

Correct, correct.

Well, that’s great.  That’s <Inaudible>.  It’s in my name now and that shouldn’t affect it either, should it?

No, it should not under current law.

No.

Now you said it’s in an annuity?

Yeah, it was just <Inaudible> annuity which is due up this month.

Okay, so it’s about to mature right?

And I want to pull it out so <Inaudible> the technicalities that’s — now it’s all put in my name, does that change anything?

No.

Nope.

As long as it stays a Roth.

And it was just originally and I heard <Inaudible> earlier it’s grandfathered <Inaudible> those were also giving a decent <Inaudible> for that now, I mean.

Well, maybe, maybe not.

But you’re okay, you can take it out and pay no taxes.

Okay, I appreciate that, thank you very much.

Thanks for the call.

Thank you.

Already, thank you so much.  If you want the open phone line, it’s 844-220-0965.  844-220-0965.  Greg in Lake Mary has got a questions.  Greg, you’re on with the Certified Financial Group on WDBO.

Hi Bill <?>, thanks for taking my call.

Sure.

Just had a — actually, it’s a good problem, I guess.  I’m about 48 and I’ve invested and fully funded my profit-sharing plan and I’ve funded for my kids through the 529 plans and they’re good for college.  And I guess — I have some cash that I want to — I don’t know what — how to invest in.  And I still have a mortgage on my home, I also have some rental properties which I owe mortgage on.  They run around <Inaudible> 0.75 <?> interest rate.  And I’ve got about $250,000.  What’s the — should I pay down these mortgages?  Is that the best thing to do?  You know, the stock market is pretty high right now and I’m a little weary about putting some more in the stock market.  And was just trying to get some advice as to the best way to handle this cash.

What’s the interest rate, you say on the rentals?

My home mortgage is 4%, and the rentals properties range from 4.25 to 4.75.

Are they cash flowing?

Yes, they are.  <Inaudible> they break even, they break even.

Okay, so you’re able to cover the mortgage.  I wouldn’t rush to pay that off, that’s going to be tax-deductible to you so the net effect is based on what I think you’ve got going in your life, that net effect of that money is 3%.  What you need to do is get that money working for you, and don’t be afraid of investing it.  Because at your age, 48, hell — you’ve got 30, 40 years to go.  And you have to think long-term.  The market might be high at the moment but it’s — you look back 10 years from now and you’d say boy, it was really good 10 years ago.  And that’s the way you need to think.  That’s the way you need to think.

So, <Inaudible> how I dollar cost averaging to us <Inaudible> in the market.  And rather than that paying off the mortgages?

Sure.

Yeah, because — go ahead.

Oh, sorry.  I just — you know, it’s very hard for us to kind of give you an answer to the question that you have without really sitting down and knowing more about your whole situation and what your future goals are.  So I encourage you at some point we offer a complimentary consultation to maybe come in and discuss this with one of us, and just be able to look at your whole situation.

Okay.

See, the beauty of what you’re doing with those rental properties is you’re paying down the mortgage on a regular basis.  That’s why I asked you if there’s cash flow.  As you’ve got the money coming in, paying down the mortgage, you’re building equity on those properties.  You’re getting a tax deduction while you’re going, and you’re using one of the best things you can do which is OPM <sp?>.  You know what OPM stands for?  That’s other people’s money.  And you’re using other people’s money to build your net worth.  And see, if you pay down those mortgages, now you’ve got extra cash flow, now what do you do with it?  So I wouldn’t rush to pay off the mortgages.  You’ve got cash flowing, that’s a great way to build a nice portfolio.  Take that excess cash and get it working for you and think long-term.  And as Judi says, come on in for a plan, that’s what do for our clients, day-in, day-out.

Okay.

And we’ll get some information about the workshops coming up in just a moment.  But I want to give out the phone number one more time: 844-220-0965.  We have to pause to give the three big those you need to know.  But Julia Walter, Anton Ten <?>, Deborah Roberts, <Inaudible> hang on the line.  We will get you in just a moment.  You’re listening on the money with the Certified Financial Group where we are planning tomorrow, today.

On WDBO.

So we’re back on the money with the Certified Financial Group here on news 965, WDBO.  Ask the experts weekend.  We are five minutes away from latest news, weather and traffic, so let’s get right back to our questions here.  We’ve got our phone lines lit up.  We’ll get to them in just a moment, but there is a text question we wanted to address real quick.  Judi, we have a texter writing in concerning RMD.  What if my wife is younger than me?

That’s a very good question.  If your wife is 10 years younger than you or more, there is a different schedule that you use to calculate your RMD.  So that’s important for those of you who may have younger spouses.

Okay.

The bottom line is you have to take less out.

You have to take less out.

You get a break, you get a break because you’ve married a younger chick.

John!

Well, I didn’t do that.

Alright, 844-220-0965 is the number.  Let’s go to Julia.  Florida, Julia has got a question.  You’re on with the Certified Financial Group.

Good morning, Julia.

Good morning, how are you?

Great, how can we help you?

I had a question about Social Security.  I’m 50 <?> years old and you always here that everybody who’s approaching retirement, their Social Security is fine.  Well, is 50 year-old, <Inaudible> old considered approaching that magical age?

You’re 50 and you’re concerned that Social Security will change for you?

There is a possibility that will happen.  You’re in that area where they’re talking about pushing out retirement ages beyond 67 now, that might affect you.  There’s nothing been proposed, but there’s a likelihood that that will happen preserve the life of Social Security.

Yeah.

But until that happens, there’s nothing to say.

Okay.

Now Julia,  thanks for the phone call. Bob in Claremont.  Bob, you’re on the Certified Financial Group.

Good morning, Bob.

<Inaudible> good morning, so I have a question.  I have a traditional IRA in a brokerage account.  I turn 70 and a half in November and I looked at the table three in the IRS publication for the required minimum distribution based on the December 31st balance, and I took that distribution a couple of weeks ago.  My question is does that distribution count towards my 2016 tax <Inaudible> file, or will be it be for 2017?

It’s going to be for 2017, but it meets the requirement that you have to take it out in 2016.  So you will have to take another required minimum distribution by December 31st of this year.  So that’s —

Okay, I’m going to — I’m sorry, go ahead.

Go ahead.

I was going to say on the second distribution that I have to take by December 31st of 2017, that’s based on what — on the December 31st, 2017 balance?

No, ’16 balance.  <Inaudible>

Right, you’re going to do it twice because you deferred it once.

Right, correct.

<Inaudible> twice.

You are able on your first required minimum distribution to defer taking it until April 1st of the next year.  That’s the only time you get that opportunity, and the problem with that is if you do that, then you have to take another required minimum distribution in the same year.  And again, that’s ordinary income to kind of double what you have to claim as ordinary income.

Well, I appreciate the call, Bob in Claremont.  Thank you so much.  Let’s get to Anton in Kissimmee.  Anton, you’re on the Certified Financial Group.

Hey, good morning, how are you all doing today?

Good, how can we help you?

So I’m calling in regards to trying to get a quick answer.  So I don’t know if you guys know about the Acorn app, the — I guess where they take a little bit of — I guess they <Inaudible>.  Acorn app, you save money, and then what they do is they do a <Inaudible> that’s in <Inaudible> and put it into an account for it.

Yes.

So I got the Acorn app, but I’m also looking into possibility doing — getting an actual Roth IRA because I hear so many good things about doing it.  I’m 32 years old, I was medically retired from the Service.  The only income that I have coming in is my 100% VA disability as well as I’m going to school for computer engineering.  So <Inaudible> how the <Inaudible>.  So it’s not taxable, so is that $5,500 taxable money that I <Inaudible> $500 <?> in taxable money that I can put in?  Or is it — <Inaudible> matter what type <Inaudible>?

Well first of all, you have to have earned income to contribute to any kind of an IRA or Roth IRA.  So if you don’t have earned income, you can’t do what you’re suggesting.

Yeah.

<Inaudible> and if it’s still qualifying you, the Social Security benefit.

Right.

<Inaudible> Well that’s about all the time we have left today.  If you’re on the line, Debbie, Walter, Sandra, Tim, hang on the line, you’ll get a private consultation off the air.  But <Inaudible> anybody else, we’ll see you back here next week.  Or what’s the number to the Certified Financial Group Monday morning?

407-869-9800.

And go to our website and learn about the upcoming Social Security boot camp on April the 20th.  More information on our website, Financialgroup.com.

Dictation made on 4/11/2017 6:09 PM EDT.

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