Hosts: Nancy Hecht, CFP®, AIF® and Joe Bert, CFP®, AIF®
Well good morning central Florida. I am Kyle Cassandra and this is another addition of On The Money with the Certified Financial Group, the certified financial planner professionals show. Bert and Nancy Hect live here in the studio taking your phone calls here at 844-220-0965 on a day most people in central Florida didn’t want to wake up to the bad news but we’ll keep you updated throughout the day, all of the latest and what’s going on down there in Kissimmee. But right now, let’s open up the phone lines and talk about your future. Joe how are you today?
Well, we’re okay. How are you, Kyle?
Not too bad. Not too bad.
Beautiful, a little cool this morning. I went out to get the paper about 5:00 and there was a little chill in the air believe it or not.
It looked as if it had rained at my house all night.
It poured at my house.
It did? It poured?
How about your house?
We didn’t get as much rain.
Well, my gosh, I mean, we had a monsoon.
Yeah.
No, we had a little bit and that was it.
That’s Nancy Hect and we are here to do what show?
We are here to answer any questions that might be on your mind regarding your personal finances. As we say in our ads, we go through life trying some of this, trying some of that, wake up when we’re 50 years old and find out what we have is a collection of financial accidents. Therapist going to come a point in time when the paychecks stop and you have to turn hopefully the savings and investments that you’ve accumulated over your working life time into cash, because when paychecks stop, all you have is Social Security plus whatever you’ve been able to save and invest. Oftentimes, we go through life as I said trying some of this, trying some of that. We make investments. We go to these seminars, we listen to our brother-in-law, to our coworkers, read Money Magazine, and find out it’s just not working. Nancy and I are here to
<Inaudible>.
I’m always ready with a smack <?>.
We don’t start at 9:00 on time, you can <Inaudible>.
So here we are.
We’re here to clear up the mind fog about your personal finance and answer any questions that you might have regarding stocks and bonds, mutual funds, real estate, decisions that you have to make about 401(k)s, IRAs, annuities, reverse mortgages, life insurance, all of that and more. We are here. As I say, on Monday through Friday we do it for a fee. But on Saturday morning, we are here for free. So if you have any questions, all you have to do is pick up the phone and you don’t even need to use your real name. You can pretend you’re Jack or Laverne or Daphne or whatever and we are here and just dial these magic numbers.
844-220-0965. That’s 844-220-0965. We also have a text machine up and running as well, 21232, that’s 21232. Nancy Hect is going to get us started with today’s conversation. Ladies, it’s time to take care of yourself. Why older women are in worse financial shape.
Yes, lately it seems like I’m on a wave of meeting with a lot of single women. Whether it’s due to widowhood or divorce, but it seems like — these women are in their mid to late 50’s or older and are dealing with things like still helping their kids and their grandkids.
Oh, yeah, yeah, yeah.
You know you want to make sure that the grandkids have whatever healthcare they need.
That’s what mamas do.
Or school supplies or extracurricular activities and oftentimes we do this to the detriment of ourselves. Many times women, throughout their working lives earn less than men, have more responsibility for the family, end up having more debt in retirement often. Again, family planning and somebody passing away before you expect them to and then they’re left with this or a lot again of what I’ve been seeing in the last couple of weeks helping the kids car broke down. So, we have the superman cape and my warning is that you have to turn the cape around and wrap it around yourself and
I like that.
And be a little bit selfish.
I like that.
Because if we do not take care of ourselves
You’ll be living with your kids.
Well, yeah, and who wants to do that? And second of all, you’re going to be good to nobody. So you have to be a little bit selfish in your later years when it comes to planning for your retirement. Whether you’re single or not, you almost have to take the attitude as if you are out there by yourself and do for yourself and make sure that you protect yourself. If you’re in good financial standing then you have the ability to try and help and do for others.
And that’s exactly where planning comes in.
Exactly.
Because if they don’t know what they can spend, they’ll just spend it and wake up 10 years later and say, oh my gosh, I never should have done that. And if they can do it, so much the better.
One thing that was good yesterday, I met with somebody who is in a relatively new marriage but it is a second marriage for both of them and not quite sure where everything is. We have a wonderful, extensive financial organizer. So I gave it to her and it was a great benign way to open up the conversation. You know, I’m at this age in life, it’s time to get serious thinking about these things, let’s sit down and do this. The financial organizer will help you outline all of your assets, your liabilities, who needs to be notified, the various different medical personnel, what types of things you want said at your funeral, where do you want your funeral to take place, what type of funeral.
And how can they get that organizer?
Well, all they have to do is contact our office at Financialgroup.com or if somebody wants to contact me directly, it’s Nancy@financialgroup.com. And request the financial organizer.
There you go. Free of charge.
Yes.
There you go. Thank you very much.
Alright, well we are six minutes away from the latest news, weather, and traffic. But we want to get to our busy phone calls this morning as we already have two. Let’s kick it off with Harry in Orlando. Harry, you’re on with the Certified Financial Group here on WDD0.
Good morning Harry.
Hey, Financial Group, this is my first time calling. Nancy, I’ve been hearing your show and recently my brother was giving me information about investing in some kind of online business that you buy some tokens and those tokens convert into coins and then right now, its value is $200 per coin, $200 per coin. In the future, that company grows up and then it becomes $500 of coin. So, you bought the coin for $200 but then five years later, ten years later, you try to sell that coin for $1,000, $500 and you <Inaudible> on that profit. So, I’m 26 years old and I have a couple of thousands of dollars in my savings and I was looking to invest in such a way risk free that I can have kind of income later on in my life.
Okay, so Harry, if you want to buy these coins, how much are you willing to lose? And I’m not saying that you’re going to lose, but this is new, this is really an untested market. We don’t know what type of market there is now or in the future for these coins. So whatever you might put into that, you have to be willing to unequivocally lose 100% of what you put in there.
Right, that’s what he told me too, that I was risking $1,000 that to as if I had never had that money and if my luck that it goes up. If not, then there’s a risk of losing that $1,000 over the years.
So if you’re going to do something like that, that is the proper attitude to take. Now you mentioned that you have $2,000 in savings and that you’re 26. So you do have time to take these types of risks but
No, I don’t have $2,000 in savings, I have more than that, about more than $10,000.
Wonderful. Okay, because I was concerned about you putting 50% of what you have at risk. Harry, you have the right attitude when it comes to buying these coins. This is a gamble. You do have time on your side. You have the attitude that you’re willing to lose that $1,000 as if you never even had it. As long as you have the right mind set, that’s the way you go with that. I don’t know that I would call it an investment at this point. It’s a speculation. But if you feel comfortable with it and you’re willing to lose the money, go for it.
Harry, this is Uncle Joe, forget it. You’re blowing your money. Anything that says you’re going to put in 100 and it’s worth $500 in five years or something, that’s — it’s a scam. It’s an obvious scam. There’s nothing in the world that will do that for you.
Well, yeah. I don’t know if that’s Bitcoin or what.
Nancy is right, if you’re willing to lose it, go for it. It’ll be a life lesson but if you were smart, you would be better off buying lottery tickets frankly.
Especially with our ball being so high right now.
Yeah, but thank you for listening Harry. Have a great weekend.
Thanks for the call. If you want Harry’s line, it’s 844-220-0965, that’s what we’re doing here on the radio this morning, 844-220-0965. Of course, we are talking to the certified financial planner professional at Certified Financial Group, Joe Bert and Nancy, we are planning tomorrow today. Time for a news update with Dave Wallman. Here’s 96.5 Newsroom right after this.
<Background Noise>.
Welcome back, this is On The Money with the Certified Financial Group, a part of News 96.5 WDBO’s ask the experts weekend. We have the certified financial planner professionals with Joe Bert and Nancy Hect live here in our studio, taking your phone calls at 844-220-0965. That’s 844-220-0965. Joe, for those of us that joined during the latest news, weather, and traffic, what can they call you about?
Well, we’re going to try this again as I messed it up at the start of the hour. We are here to answer questions that might be on your mind regarding your personal finances. As I say, we go through life trying some of this, trying some of that, wake up when we’re 50 years old and find out it’s just not going to happen. So what Nancy and I do and the other certified financial planner professionals at Certified Financial Group today in and day out, we work with our clients to show them way what you need to do now so you don’t look back five or ten years from now and say, gee, I wish I had known that or gee, I’m sorry I did that. That’s what planning is all about. As I say, on Monday through Friday, we do it for a fee. But on Saturday morning, we are absolutely free. So if there’s anything on your mind regarding your personal finances, about stocks and bonds and mutual funds, and real estate, and long-term healthcare IRAs, annuities, life insurance, reverse mortgages, all of that and more. Nancy and I deal with that every day so we are here to take your calls. The good news for you, there’s a couple of lines open and all you have to do is pick up the phone and dial these magic numbers.
844-220-0965. That’s 844-220-0965. We also have the text machine up and running as well. You can reach us in 160 characters 21232. That’s 21232. Let’s get back to our phone line. Talk to Iman in Melbourne. Iman, go ahead. You’re on with the Certified Financial Group here on WDBO.
Good morning Iman.
Good morning guys, thank you so much for taking my call.
Sure, talk away.
So my question today is regarding a house. I’m 32 and my wife is 30 . We just purchased our first home back in 2014. I feel like we got a really great deal on it. It had a newer roof, remodeled kitchen and whatnot. I built some equity since we made that purchase. Now, one of the downsides to this house is it is an older home and it has cast-iron plumbing. So I think we’re starting to develop issues with that. I was wondering if it’s a good idea to tap into the equity that we’ve built to go about getting some of this replaced or would it just be a wiser bet to spend some of the money that we have saved up. I just wanted some of your advice and insight on that.
In reference to the money that you have saved up, do you have an emergency fund that’s adequate to pay for the plumbing and still leave you in a comfortable place as far as you’re concerned for cash. Or would it take that down too low?
No, I think that we could pay for it and then have a small cushion left. You know in case of a rainy day. The way the economy is and this presidency and stuff, I’m always scared to spend what we have on him <?>. Not to be that conspiracy doomsday person but you hear where I’m coming from.
Right. Have you looked into an equity line and what kind of rate you would be charged?
I’ve just briefly talked to a manager at a bank about it. I didn’t really deep dive into the percentages and stuff.
You should not be talking about a lot money to do that re-plumbing job. Did you get an estimate as to what that’s going to cost you?
Right, so about 5,000 to 6,000.
Okay, so you’re looking to borrow 5,000 to 6,000 and the payments ought to be reasonable. You can take a tax deduction for it. If the interest rate is a 4% or 5%, I wouldn’t be opposed to it. You’re forcing yourself to do it and then you can always have your emergency money there If you need to pay it off, like Nancy is alluding to, you want to have an emergency fund.
Right. Okay.
And I would try and get a hard number on the rates and if the rate is low enough, you’re not talking about a ton of money, as we said. You’ll get a little bit of a tax break, assuming that you can itemize.
Okay, so I want to shoot in that 4% to 4.5%, that’s
Correct. You’re probably looking at maybe 5% to 6% on a home equity loan, assuming your credit is good.
But anything more than that, then just pay cash for it.
Okay, excellent, well thank you so much guys. I love this show and I really appreciate that.
Thank you. Have a great weekend.
Alright, appreciate it. Thank you so much. Iman, if you want his line, it’s 844-220-0965. That’s 844-220-0965. Gabriel in Orlando has got a question for you guys. Gabriel, go ahead. You’re on with the Certified Financial Group.
Good morning.
Hey, how’s it going?
Good, how can we help you?
So a little jumbled of a question but I’m a graduate student, first year, going through it and I’m trying to go ahead and go through a transition now where I’m a graduate assistant as well, so I’m kind of getting some assistance from the school and I’m trying to go into a place where I’m no longer working full time. So I’m trying to figure out what are good options instead of just relying on loans where I can still manage to pay off credit card and live off of that money.
So what you’re asking is where are you going to get more income so you’re not living on credit cards.
Yes, and what’s a good option for a graduate student who doesn’t have that availability to work full time and go to school full time.
Well, I mean, as most students do, anything in the food service industry will give you flexible hours and a little bit of extra cash. I mean it’s not — you know — it’s an honorable profession that many of us worked in food service while we were going through school. What I try to do is build up some cash reserves as quickly as you can. You’re heading towards a future, working as an assistant and in grad school to hit an ultimate goal. Whatever type of job you take right now is going to help you make ends meet and nothing really should be beneath you. You just need to find something that’s going to be flexible as far as hours go.
Here’s my advice to you. The challenge that you have is not spending more than you’re earning. And the problem you’re going to have is trying to keep up and maintain a lifestyle perhaps with your peers and you run into that stuff and all of the sudden, you’ve got more debt than you thought and now you’re living on the credit card cycle and you never get out of it. You have to look at this as a short — think of it as the minor leagues. Right now, you’re in the minor leagues, you’re trying to get into the majors. Right? So if you’re in the minor leagues, think about a minor league baseball player that goes from city to city living on a bus and eating McDonald’s hamburgers. That’s what you need to do in this particular point in your life. Save as much as you can, try to stay out of debt and get that degree and move on and then enjoy life debt-free if you can.
Or Gabriel, if you had heard the beginning when I was talking about women taking care of their self and being a little bit selfish, you can take on a little bit of that attitude right now for yourself. You know, your buddies may not have the academic obligations that you have right now but you have to do for you right now, while you’re in grad school to get to the point where you want to be.
So thanks for the call and good luck to you.
Alright, appreciate it Garbiel. If you want Gabriel’s line, it’s 844-220-0965. Talk to Maria. Maria, go ahead you’re on the Certified Financial Group here on WDBO.
Maria.
Good morning, good morning.
Good morning, how can we help you?
Hi, I am a 55 year old nurse and I have a straight pension. I didn’t know if I should roll that into a 401(k) that I currently have or should I start drawing on it?
Are you able to draw on it now?
At the age of 55, yeah.
At the age of 55.
It’s approximately
Okay so you have the ability to start withdrawing your pension or will it grow for you if you don’t draw on it? In other words, if you wait until 62 or 65 or 66, will you get a larger benefit?
No, unfortunately, it’s only grown in the past couple of years approximately $90 or $100 per year.
Do you need the income from the pension Maria?
No, no, not at all. I’m a nurse. I only owe 60,000 on my home. I have an emergency fund of about 6,000. No credit card debt to speak of.
How much longer do you plan on working?
I’d love to retire but I can’t.
Have you had anybody do a financial plan for you to see when you can retire?
Not at all.
Well, of course that’s something that we offer. If you’d like to contact us during normal business hours, financial planning is a big part of what we do and we could answer the questions for you as to when would be the most opportune time for you to tap into the pension and how much should you start contributing to your 401(k). I think anything that you can do pre-tax is phenomenal and makes very little difference in your spendables, depending on how much you’re saving pre-tax. You’re at the age where a lot of people do financial planning and then start doing regular check-ups on their planning to make sure they’re on track. So, why don’t you contact us and let’s give you a complimentary consultation <Inaudible> services.
Give her the number to do that.
407-869-9800 or you can go to Financialgroup.com and request a complimentary consultation.
That’s financialgroup.com.
Correct.
Alright, thank you Maria. Appreciate the phone call. If you want Maria’s line, it’s 844-220-0965. Let’s keep going. We’ve got a busy phone line today. Jeff in Edgewater. Jeff, you’re on with the Certified Financial Group here on WDBO.
Good morning Jeff. How can we help you?
Good morning. I have a question about IRAs.
Okay.
I have a drop coming, lump sum payment, and I want to roll it over into IRA and I want to roll it over into a Roth eventually but I believe I want to do it part one year part next and maybe even split it over three years.
Alright.
Now, I talked to a broker and they said that if I put it in one Roth, I can’t just roll half of that Roth into — I’m sorry if I put it in a regular IRA first, I have to roll the whole IRA into the Roth.
No, that’s not right. That’s not right. You can manage
Maybe that’s their rule.
Yeah, you can manage the transfers from IRA to Roth at will and the idea of you spreading it out over two or three years is to manage the taxability and there’s absolutely nothing wrong with that thought process.
Can I set up two IRAs to start with and then just transfer one into the Roth and then the other the next year?
Well, I don’t really think you need to do that. I think you’re complicating the situation.
Right, right, yeah.
But I think that’s the broker that’s causing this — I think they just don’t want to split an IRA
First of all, let me
But they told me — they suggest that I set up two IRAs first and then do one the first year, one the second.
How much money are we talking about?
About 28,000.
Yeah, no, it’s crazy that he has to open up two accounts. So, you could do one rollover IRA, have the drop go into there and then as you feel that you want to convert some of it to a Roth, you do it.
Let me give you a heads-up here.
Okay.
We are not big fans of Roth but you’re talking about a modest amount of money. If you can make that conversion in a 10% tax bracket, that’s not so bad. But one thing that you want — the one thing that you want to know and this is where many people really blow this Roth conversion is that the taxes that you’re going to pay on the conversion should not come out of your IRA. In other words, you need to write that check on the outside so you’re transferring and going to end up with the entire amount in the Roth. So if you’re going to transfer 28,000 from an IRA to a Roth, you want to have 28,000 going into the Roth, now 28,000 after taxes. Otherwise, it doesn’t work at all. You follow what I’m saying?
No, why doesn’t it work that way? Because I just have the money.
Because right off the top you’re penalizing how much is going to grow for you on a tax free basis. It makes no sense.
I know, you’re reducing that amount. But if you don’t have it, that’s the only choice you have.
Well, but if you do it in chunks, then you can manage it.
I’m disabled so I’m low income. So this is my other question is, I qualify. I have Medicare and I qualify for Medicaid. Now, I know if you have the IRA and you don’t take disbursements, Medicaid will consider it an asset. But if you set it up with a distribution, they don’t consider it an asset, right?
Right. That’s correct.
How many years do I have to divide that out to for the distribution?
That I don’t know off the top of my head.
Because it’s a function of income and I have the information in the office, I don’t have it with me here today.
We’re coming up against the break but get out the number so Jeff can give you a call during the week <?>.
407-869-9800 from 8:30 to 5:30 Monday through Friday, 407-869-9800.
Alright, okay. Jeff thanks so much for the phone call. Kim, Dave, and Sam hang on the line. We will get to you right after we get the three big things you need to know.
Hey, welcome back, it is the final segment of On The Money with the certified financial planner professionals, the Certified Financial Group. Joe Bert and Nancy Hect live here in the studio taking your phone calls at 844-220-0965. That’s 844-220-0965. We are four minutes away from the latest news, weather, and traffic. Dave Wall will keep us updated about the situation going on down there in Kissimmee but right now we’ve still got four minutes left so let’s get back to our busy phone calls. Talk to Tim in Orlando first. Tim, you’re on with WDBO.
Hi Tim.
Good morning Tim.
Hi, thanks for taking my call.
Sure, what can we do for you?
I have a good situation I’ve recently inherited some money. Enough to pay off my house. But I only have five years to pay off the house so most of the money is going towards the principal. Should I pay my house off and pretty much that’s all of our debts. We’re good with our retirement — or should I just keep the money and keep that as some liquid money and just continue to make the payments?
Maybe not. Let me ask this. Do you have a retirement plan at work, 401(k)?
Yes, he said they’re good with retirement.
Yeah but what does that mean? Are you using — how old are you?
I am 53 and hopefully would like to retire by 62.
Okay, are you putting $24,000 a year into your 401(k)?
Probably between me and my wife, yes, at least.
Not between you and your wife, I’m talking about you.
Individually, you can put aside 24,000 — if she’s over age 50 also.
Right, well no, I’m not doing that. But we’ve been putting money into — I’m sure we don’t have, between our retirement and our pensions and our Roth, and 401(k)s and I think that by the time we do retire that we’ll be good.
Hold it, hold it, hold it. You can’t go into retirement saying I think. You need to know, you need to know 100% for sure. It’s not a guess. Because when you start down that long road called retirement at your particular age, I have to worry about 35 years for you in retirement. You can’t go into it saying I think.
I have two things for you. First of all, if using the money to pay off the mortgage allows you to increase what you’re contributing to your 401(k), go ahead and do it. Because both you and your wife need to be funding to the max that you can. Point number two, you need to have a financial plan done. So please contact us and schedule a consultation for a financial plan. So you can go from the I think to I know.
And you need to do it before you retire because the toughest cases that Nancy and I work on are clients that have already retired, made the decision to retire and they come in to see us for the first time and the wheels are coming off because they didn’t do any planning.
Thanks Tim for the phone call. I really want to get to Dave in Cocoa Beach. He’s got a quick question before we get out of here. Dave, go ahead you’re on the Certified Financial Group.
Good morning.
Good morning.
I’m 66. Still working, no Social Security. How much am I allowed to <Inaudible> back into a 401(k) and defer until retirement.
$24,000 a year.
Assuming you’re not more than a 5% share holder in the company.
Okay. Yes, I am self-employed.
Well! Okay.
You can do a self-employed pension and for 2017, you can do 20% of your adjusted gross income up to $54,000 into a self-employed pension.
That’s — one up.
That’s better than the 401(k) limit.
That’s going to do it. Real quick. What’s the best number to reach you guys during the week.
407-869-9800 or financialgroup.com.
We have been planning tomorrow, today with the Certified Financial Group. We’ll be back here next Saturday 9:00am right here on News 96.5 WDBO.
Dictation made on 8/22/2017 2:28 PM EDT.