Hosts: Nancy Hecht, CFP®, AIF® and Harry Stadelmayer, CFP®, AIF®
Well, good morning everybody, it’s another Saturday here in Central Florida, 9:00, and that means it’s time for On the Money with the Certified Financial Group here on News 96.5 WDBO. We have Harry Stadelmayer and Nancy Hecht live here in the studio taking your phone calls at 844-220-0965. Good morning, everyone.
Good morning.
Good morning, Tom.
How are you guys today?
Oh, fantastic.
Alright.
How about this weather?
Ah, that’s really gorgeous.
This is why we live here.
I know. Can I have just the next couple of weeks of that? Now, Nancy’s smiling because I know she hates this weather.
I don’t like the temperature. I like the sunshine, but I don’t like the temperature.
So, you like it during the day, just not at night.
I — 85 or higher is good for me.
Okay, so Nancy and I have been working at Certified for right at 30 years plus and her office is next to time. There’s war <Inaudible>. War.
I don’t know how the thermostat ended up in harry’s office, but —
Oh, it’s a good thing.
Oh man, yeah.
Well, sometimes it’s funny as I walk around and I’m sweating when I walk around this building, I look into offices and the women have the electric blankets. And I’m like oh, okay, well it’s easier to get the electric blanket. Do they make the reverse of that for men? I can put a cool blanket on?
I have a sweater behind me. So, my in the office heater died, so I have to go out and buy a new one.
Aw. <Inaudible> That war gets a little <Inaudible> there at the office <Inaudible>. Well, since — Harry, since you’re sitting in Joe’s seat, what can we call you about today?
Well, today’s show is about money. Anything pocketbook related as we call it. If you have questions about stocks, bonds, mutual funds, long-term care, health insurance, life insurance, debt reduction, mortgage re-fi, I mean we will touch on all those subjects and one thing I also want to say I have people call me on Monday morning and say you know, I wanted to call but I thought it was a stupid question. Let me just say this: There is no such thing because if you’re thinking it, there might be 50 or 100 people that are thinking the same thing. You know, Nancy and I do this for a fee during the week, but today for the next hour it is absolutely free. So, we encourage you to give us a call if you have some questions about your portfolio or anything that may be pertaining to money and we’d be happy to answer that the best we can over the next hour.
Alright, just simply dial us up at 844-220-0965. 844-220-0965. The text machine is up and running as well, 21232. That’s 21232. Just keep it to about 160 characters, that’s all we can see on our screen. I know if you have a lot of people that like to write in several texts to make a giant story out of it — no, no, no, no, no, no, we can’t do that. That’s when you need to have a phone call, that’s when you have to have a conversation with the panel, but if it’s a quick text, couple here couple there percentage numbers, it’s alright. 21232, 160 characters. Alright, today’s topic, let’s get straight to it. This one was interesting when I read it when you e-mailed it to me yesterday. I go ooo, I can’t wait to hear this. Your 401k could be a Goldmine if you do two simple things.
Absolutely goldmine.
Alright, let’s hear it.
Time and time again, we have folks into the office and their question is what is the one thing that I can do to retire comfortably and usually the first thing we’ll look at is what; their 401k.
Correct.
And as Nancy and I do financial planning, probably maybe next to your home the largest asset that we see walking into our door is the 401k. The two things that you must do, number one is participate. Then it’s well, my employer only matches 3% so I’m only going to do 3%. In fact, I was just getting a cup of coffee out here Tom, and I saw where you guys, it’s enrollment time, and it’s time to —
Yep, yep, yep. It’s all over the building.
And most people will maybe only match up to the 3% that the company matches because that’s all they feel like doing. You’re leaving money on the table. You’re leaving money on the table. If you do not participate, even to a small degree, the important thing is to find out what your income is and what your expenses are, and then review and maximize your 401k. That money that’s going into the 401k is on a pre-tax dollar, which means Uncle Sam’s not getting a dime of that, which if you’re in the 28% tax bracket is a 28% return on your investment. That’s a guaranteed return on your investment. So, if you’re not doing that, step number one, you need to participate and participate to the max.
And a lot of people will say I can’t afford. So, what they’re really — they don’t realize is that they’re giving the money to the government. That money is being spent anyway, so wouldn’t you much rather have it in your pocket versus making a gift to the federal government.
A lot of people don’t realize it. Pre-tax.
Pre-tax, before anyone touches it. And so if you do that over a course of 30 or 40 years on a pre-tax basis, now I know you’re going to pay taxes on it somewhere down the road, but on a pre-tax basis if you do that every pay period, you don’t miss it and then the important thing is, too, if you’re getting a raise, is look at your 401k and try to allocate it. If you’re not maximizing, which I believe next year is 18,500, if you’re not maximizing, maybe you’re only doing 8,000, but you get a raise and maybe now you can do 9,000. Step number two for your Goldmine is to take a look at your investments. If you’re participating in your 401k and it’s all going into a money market or a cash account, you’re not properly allocated. Again, this is a long-term venture. People say well, the market’s too high right now, the market is too volatile right now, I’m not sure, what if it crashes. Again, this is long-term. If you truly believe that the markets are going to be at or below where they are in the next 20 to 30 years then you know what, you need to put it under the matters, but that’s not going to happen.
And actually, the idea of <Inaudible> to have money going in because a 401k forces you to dollar cost average. You have regular amounts of money going in every single month. If the markets are going down while you’re adding, then you’re buying more shares time, after time, after time. And the name of the game is accumulating shares. Shares will equal Growth and Income when it comes time to have to use the money. It’s almost like going into the store and buying shoes on sale, and women <Inaudible> —
I think, well, no —
Shoes on sale. Oooo.
No, but everybody seems to like to buy everything on sale except for investments, which doesn’t make sense.
Yeah, that doesn’t make any sense. It’s the exact opposite with stocks for some reason. I don’t understand why everybody wants to buy high but —
Yeah.
<Inaudible> well if you have a question, 844-220-0965, 844-220-0965. I actually have a question for the panel I was going to ask them today. Last week we were talking about all the potential changes that could happen with the 401k with the budget being passed this week, so my question to you guys is has there been any change? We going to be okay?
There hasn’t — well, I mean, the most prominent word last week was that it’s not going to be reduced.
Yeah <Inaudible> that, that was like 2,400?
2,500 is <Inaudible>
2,500.
Anything that dissuades people from saving just drives me crazy and I just cannot imagine that that drastic of a cut would occur. But, the president is saying that is not going to happen.
That would be devastating for folks looking at retirement because if you’re limiting the amount that you can put in, all that does is make us rely more on Social Security and we already know Social Security is not the healthiest and so as we get older — in fact, I think down the road you’re going to see the age 62 of taking retirement, “retirement”, which is really early retirement, I think that’s going to go away. I think that number is going to go up in the next 5 or 10 years up to 65, 66 and we’re going to see all the age brackets go up. So, by limiting that I think all we’re doing is shooting ourselves in the foot down the road because now we’re relying more on Social Security and that’s not a good plan.
Yeah.
I probably won’t see Social Security by the time I retire.
Don’t say that.
<Inaudible>
I’ve been paying in my entire life. I hope to see some of it.
Well, I mean, you know, and it used to be that you could shake hands with the person that you were contributing for because for every one person receiving there was five people contributing. Now that’s flipped. There’s so many people taking and so few people that are paying into the system. However, even though the trust fund is stated to run dry, there’s still the tax dollars going in. So.
Okay.
So, it may not be as doom and gloom as —
No, no, no, but — and the one change that has been made so far is that full retirement age has been pushed out. As Harry said early, I think that that will change — also go from 62 to 65. One good thing that I would love to see happen that will make a huge difference and won’t impact retirement age; if you defer or delay beyond your full retirement age, you get an automatic 8% per year up until age 70. If that’s reduced just to 5%, which is still a really nice guarantee in this world, that’s going to save an awful lot of money. And on a 5% bump is not bad and I would take it.
I’d take it.
That’s a guarantee.
Yeah, that’s awesome.
There’s very little in the financial world that is actually guaranteed.
Well, you guys have just brought good news to me this morning. This is great. This will be the best first 10 minutes I’ve had all week. 844-220-0965. 844-220-0965 is the number to call in on the — to get the question answered here by the certified financial planner professionals at Certified Financial Group; Harry Stadelmayer and Nancy Hecht here. 21232 is the text number. Now, one of the other things we get a lot about on the 401k and we were talking about the 401k and the benefits <Inaudible> I can’t afford it even though it’s pre-tax, a lot of people don’t realize that, but if you put it away there are ways to take money out of the 401k without being penalized. A lot of people don’t realize that in the form of a 401k loan. Is that something you advise somebody who maybe is still on that fence?
It depends on the situation. You don’t want to treat your 401k as a savings account or your emergency nest egg if you will. But in certain situations, someone maybe is a first time home buyer. There’s some benefits there. If you’re looking at reducing —
Some type of medical emergency.
Medical emergency, there are reasons for doing that and typically most 401k loan programs have a loan provision in that you pay yourself back over a period of time. And so in certain emergency situations — the problem with that is in most cases once you know it’s available, it does become — it can be abused, and that’s what we want to be careful — because again, remember this 401k is for your retirement. It’s not for your every day expenses.
For a piggy bank.
And there’s a reason there’s a penalty.
Right, right, and the interest that you pay yourself back is, I think, relatively high. And if somebody retires or leaves employment and they have an outstanding loan and they can <Inaudible> in a lump sum replace it, that all becomes taxable.
And that could really hit you hard.
Well yeah, especially if you’re under full retirement age, it’s taxable plus penalties.
And for those that are retiring and maybe have a — have rolled their 401k into their IRA, there’s also a way of getting short-term loans out of your IRA and that would be pulling the money out, just making sure that you put it back within 60 days and that will avoid any tax and/or penalties if you’re under age 59 and a half. So, there is a way of accessing those funds if need be for emergency situations. But again, we don’t typically recommend you do that. But the IRA has a 60 day provision <Inaudible> put it back, so there are some options there.
Great information. Harry Stadelmayer, Nancy Hecht, in the studio taking your phone calls at 844-220-0965. It’s time to get the three big things you need to know, but Samantha and Lewis have called in. We will get to your question on the other side. Right now we pause to throw it over to Dave Wall. Here are the three big things you need to know. 9:24 here at News 96.5 WDBO, you are listening to On the Money with the Certified Financial Group right here on News 96.5 WDBO. 844-220-0965 is the number you’re going to want to have in the back of your head when you hear Harry Stadelmayer and Nancy Hecht say something. You’ll go ooo, I’ve got a question about that. Because they are the certified financial planners here in the studio taking your phone calls and your text questions. Before the break, we had two great calls come in, so we’ll want to get right to them first. Let’s start off with Samantha in Orlando. Samantha, you’re on with the Certified Financial Group right here on WDBO. Good morning.
Good morning, thank you.
What’s your question?
My question is we have $100,000 liquid and my husband wants to put it in the money market and I’d like to put it in the stock market, which we don’t know what to do.
Well, so, this is a discussion that I have with my husband and I have with my clients also. You have to determine between the two of you what is a comfortable amount to always have in cash. And if the 100,000 is something that you both agree on, then you keep it in a money market account. I happen to think personally that that’s a little bit much to always have in cash. That happens to be the comfort zone for my husband also, but I don’t know if you have talked about — well what is your comfort zone? How much do you want to keep in cash and how much do you want to invest versus the 100,000 that he’s comfortable with?
I think $4,000 would be fine.
How much —
The mortgage is only — our mortgage and taxes are only $2,500 a month and he makes 200,000 and I make 100,000, so even if he lost his job I could cover the mortgage. If I lost my job, he could cover it, so I just don’t think we need all that money liquid.
Samantha, is this the only money that you have liquid? Just this?
Yes, right now. We do have another $60,000, but we’re doing some renovations on the house and we’d like to put a pool in.
Okay, so I agree with Nancy. I think 100 is a bit much. However, the other factor here is that you have a very nice income and obviously you’re meeting your needs from an expense and debt standpoint. So, in my opinion, I tend to agree with you. I think you should maybe keep three months — a lot of planners will say three to six months of emergency cash, meaning if you lose your job, that type of thing, but I think 100 is a little strong. You’re still very young and you’ve got many years in the market, and I would tend to say that maybe you leave 15 to 20, in my opinion, and take the rest and move it into the market. And if you’re not comfortable dumping all 60, 70, 80 whatever that number is in, dollar cost average in over the next six months and take advantage of the highs and lows of the market. We don’t know where this thing’s going, it’s going to end at some point, but long-term I agree with you, Samantha.
Well, and when Harry says three months, it’s replacing income not three months of expenses, three months of income.
Mm.
Okay, three months of combined income?
Correct. Well, that’s what I would look at being a little bit more conservative. So, if you’re looking at more like 40,000 always kept in cash and then the 60 that you can invest. And as Harry said, don’t invest it all at one time.
And his fear is that if the market were to drop — so what you’re saying is yes it’s okay to put that money in the stock market, just don’t dump — like write one check out.
Right, right. You want to have — put together a diversified portfolio and then over — if you have $60,000 to invest, take six, seven, eight months to invest it and do a regular chunk of money and a regular period of time. Try and look for days when the markets are negative and that’s when you buy the items that you’ve identified you wanted to buy.
And the other part of this is —
Would it be okay just to call like Charles Schwab or one of the — Prudential, or — he has Prudential, I have Charles Schwab. Is it okay just to go through there or are you saying look for own individual accounts?
Well, first of all I would — if you’re not working with a planner or an advisor, I would recommend you do that. You’re 56, that’s a large amount of money and I wouldn’t want to fly this plane alone if you’re not really sure where you’re going and what you’re doing. I would contact an advisor or professional that does this for a living instead of just going on a website and saying let me pick the six five-star funds because that may not be in your best interest.
Right.
And have a qualified <Inaudible> plan put together and feel free to give us a call, 407-869-9800. Or, go to our website, financialgroup.com, and you can request a complimentary consultation.
Yeah, financialgroup.com. Recommend that for Samantha and anybody else that might be in the same situation. Alright, Samantha, thanks so much for the phone call. If you want Samantha’s line, it’s 844-220-0965, 844-220-0965. Lewis and Lane, you guys are up next. You have great questions. We want to get to them on the other side, but right now we have to pause for the latest news, weather, and traffic, right here on News 96.5 WDBO. This is On the Money where we are planning tomorrow —
Today —
With the Certified Financial Group here on WDBO. Hey and welcome back, this is the second part of the Certified Financial Group’s On the Money right here on News 96.5 WDBO. Harry Stadelmayer and Nancy Hecht live here in the studio answering your phone calls at 844-220-0965, 844-220-0965. Text machine is up and running as well, 21232. Got a lot of great calls on the line. We’re going to get to them all right now here in this longer segment. But first, I just want to <Inaudible> for anybody that might be joining us during the latest news, weather, and traffic, Harry, what do you do and what can they call you about?
This show is all about money, how to make it, earn it, spend it, invest it. Any question that you may have about stocks, bonds, mutual funds, long-term care, your mortgage, life insurance, any other question that you may have. Again, there’s no such thing as a dumb question or a crazy question. If you’re thinking it, a lot of people are. We’re here to answer your questions for the next 30 minutes or so, so get in before the lines fill up, so help us out, come on in, and ask us. We’re ready and waiting.
Yes we are.
Yeah, 844-220-0965 is the number to do that, so let’s get back to our phone lines. First, let’s go to Lewis in Melbourne. Lewis, you’re on with the Certified Financial Group here on WDBO.
Hi Lewis.
Morning.
What’s your question?
Morning guys, how you doing?
Good, Lewis.
Yeah, I was calling — I’ve had — we have always had a financial planner and we’ve had some financial planners over the last 15 years or so, and I was trying to maybe get some input into the best way to evaluate the performance of our financial planners. I don’t think I’ve been real happy over the years. Maybe — And maybe the way I’m looking at it isn’t entirely right, but I’ve tried to look at the S&P, the Dow, global Dow, maybe the Vanguard US Index, and it is — even my own 401k, which is not managed by my financial planner — as metrics to compare against percentage growth or not. But is there a better way to do that? I mean, that’s the way I’ve been doing it and I just wanted to make sure if there was a better approach to evaluating the performance of the financial planner.
Well, one thing we do, Lewis, is we offer a second opinion. So, there’s us and other firms out there I assume that would offer a second opinion on your portfolio. But, as far as I’m concerned, it’s not just performance of your portfolio. We are very service oriented, so it’s important to me how often are you having a face-to-face meeting with your financial planner so that they can keep up to date on what’s going on in your life and maybe changes in your saving and investing plans, and then they can keep you abreast of what’s going on in the markets and how it’s impacting you on the short-term and the long-term.
Yeah, I think just based on performance, evaluating the planner. Because if you’re looking at — you may have told your planner that you want to be moderately conservative and so hopefully they’ve accommodated you in that aspect. And so maybe your returns aren’t as good as your neighbor’s. I think there’s several issues; you need to make sure you trust this individual. I don’t know how long you’ve been working with him. You want to hopefully make sure they’re a certified financial planner, and hopefully they offer to do some actual financial planning, not just investments, saying that you should be guying X, Y, Z and that’s it because I think a good, true financial planner will look at not just your investments, but the big picture and look at planning as well.
And one thing that people are getting caught up on right now, Lewis, is that the markets are doing so phenomenal this year, and this year does not an investment portfolio make. Investing is long-term, long-term in our world is five years or more. Anything beyond that is really saving and/or trading. So, a lot of it has to do with the relationship and making sure that you’re both on the same page in more than just the numbers. Did you have something else you wanted to say or ask.
Yeah, I think in fairness the financial planners I had in <Inaudible> have done a good job of the overall planning, where do we want to be, <Inaudible> do we want to be. I do trust them. They’ll meet with me as often as I want to meet with them, but at the end of the day just from a quantitative perspective, and I agree with you, if I’m down one year or two years against the market or something like that it’s not that big a deal, but <Inaudible> 15 years, I mean this is across multiple planners, but I just have not performed from a pure percentage perspective with the market. My question is why bother with a financial planner. Why not just go with the S&P and I’d have been much better off.
And Lewis, I’m going to suggest that you take advantage of our offer for a second opinion on your portfolio.
Yeah, I agree.
And just get a fresh set of eyes that are really just going to do nothing but give you an opinion.
Okay.
Alright.
No, I appreciate it.
Yeah give us a call at — our office number is 407-869-9800. And again, it’s just a very low-key, one hour meeting and we’ll just kind of review everything and hopefully you’ll walk out with a better understanding or a better feeling. Whether you’re <Inaudible> or not. Yeah peace of mind.
Peace of mind or a giant number that’s going to save you some money in the long run.
And as far as the review goes and the opinion, we use third party, completely independent, rating services and none of us have an axe to grind. We have no products to sell. We work for our clients.
Alright.
Lewis, thanks so much for the phone call, we really do appreciate you listening this morning and dialing us up. If you would like Lewis’ line, it’s 844-220-0965. I’m looking at the text machine. We have some text questions in there. We’ll get to those in just a moment. Let’s go to Lane in Orlando. Lane, you’re on WDBO, good morning.
Good morning.
Good morning, how are you?
I’m good. My question is I inherited some money from my mom when she passed and I’m at a loss as to what to do with it right now. It’s sitting in a savings account. I’m 62 years old, I work for municipality, so I’m in the Florida Retirement System. I’ve been there 20 years. Should I open a Roth IRA or is it too late at my age?
No, it’s not too late. Can we talk about — is this the only monies that you have or obviously you have money in the Florida Retirement and you’ve been contributing, I’m hoping, for awhile in that. Is this the only money, Lane, that you have that is non-qualified if you will? Non-IRA.
Yes.
It is, okay.
I have a small — we have like a 457B at work that I contribute to, but it’s lost more over the years than it’s gained, so there’s only about like $20,000 in there.
Well, that’s a whole other issue that should be looked at if you’ve lost money over the last couple years, that needs to be addressed as well. But, my recommendation is a Roth — what kind of money are we talking about, Lane? Are we looking at 100, 1M, 10M?
Oh, lord no. It’s more like 25,000, 30,000.
Okay. Do you have any debt?
No, we just paid our house off. I do have a vehicle payment, but other than that, it’s just day to day living.
Well, congratulations on the house payoff. I would suggest that you invest the money whether it be in a Roth — you may or may not qualify for the Roth depending on your income, but it’s certainly another option to put money in. Again, you don’t get the tax deduction or it’s not pre-tax, but it certainly would come out tax free down the road. But, it sounds like this is money that it’s kind of found money and I would get the money to work. But again, need to be careful about the investments you select.
And we had an earlier discussion with a caller about an emergency fund. So, if part of all this $20,000 that you inherited ends up being your emergency fund, then having it in a money market account is the perfect place for it. So, might be worthwhile again to have somebody do a financial plan for you and look at whether Roth is something that you can do. As Harry mentioned, there are income limitations when you have qualified plans through your employer, or if there might be some better use of the dollars.
Okay, can I do a money market through the bank?
Yes you can, yes you can.
Absolutely.
Okay.
But again, a money market won’t give you more than less than 1%. So be aware of that.
<Inaudible> money.
That’s the place to go. If this is emergency safe money, correct.
Okay. Thank you.
Alright, thank you Lane.
Alright, Lane, thank you so much for the phone call. If you would like Lane’s line, it’s 844-220-0965, 844-220-0965. James in Norman Beach. James, good morning. You’re on with the Certified Financial Group here on WDBO.
Good morning. Great show, guys. I had the TSP account. I retired three years ago. I’m 64 and it has about 400K in it. And I was just wondering what your opinion is on what I should do with it. I don’t need the money, I have a pension coming in, the house is paid off, and I just thought — I know if have to take it out starting at 70, but what’s your suggestion on what to do with it at this point?
My suggestion, James, would be as — we’re starting to sound like a broken record, but you need somebody to give you — do a financial plan for you, get some questions answered in reference to your attitudes about risk knowing that you need to start taking some withdrawals in six years. It’s still into the letter range as far as we’re concerned, so there’s plenty of time to allow the money to invest and grow for you, but it’s really hard on the radio to say that you should take a chunk and put it here, and a chunk to put in here, and a chunk to put in here without looking at how you’re living your life, what kind of life cycle and family events you may or may not have coming up. A financial plan followed by some investment recommendations is the most prudent suggestion I can make.
James, are you — is the money still at work? At your place where you worked?
Yes. Yes it is and I know I have to take it out in six years or start taking it out. Is it better to start now little by little or just wait until I’m 70 and have to take it out.
Well, as Nancy said, you really, in my opinion — you need some guidance because this is obviously a huge decision. You don’t want to make a mistake. One of your options is to, if you’re interested in getting it out of the plan at work, you certainly can do what we call a direct rollover and move the money and have a financial planner manage the assets, put the assets to work for you. If you develop a relationship with the planner, that’s what I would highly suggest because again you’ve got many decisions to make and some can be catastrophic if you’re not careful.
And James, one of the points you just addressed with should you start taking the money out now, could be a valid point depending on what happens with the tax law changes.
Exactly.
However, Harry mentioned a direct rollover. I’m not a fan of leaving money where you are no longer and if you withdraw directly from the corporate plan, there’s an automatic 20% withholding. If you do a rollover and it does seem that it’s prudent to start taking withdrawals now, you can manage your taxability. You may only want to pay 10% in taxes on those withdrawals as opposed to 20. So, those are the types of questions that we can answer for our clients.
Okay, thank you very much.
Thanks for listening, James. Appreciate it.
Alright James, thanks so much for the phone call. If you’d like James’ line, it’s 844-220-0965. Want to move over to the text machine. We’ve got a bunch of questions in the text machine today. Let’s start off with the bottom everybody <Inaudible> waiting for this for a little while: Are reverse mortgages a good idea? I’m 65, my spouse is 57, the house is paid for, we have no family to leave the house to and are struggling on Social Security.
Then I say yes.
That’s a great, great question. There’s so many misnomers on reverse mortgages. They can be a wonderful, wonderful tool if used correctly. My concern there is that you’re awful young in a reverse mortgage world and I’m not sure that you’re going to get the benefit that you think you may receive because, again, there are some restrictions. Certainly, a reverse mortgage is only for ages 62 and older. The spouse is 57. So, —
Oh yeah, both of the mortgage holders have to be 62 and up.
Yeah, I think we have a little problem there as far as qualifying at this point. And you may be a little young for the reverse mortgage. However, down the road that may be a great idea.
Okay.
Especially if you’re struggling and it’s just Social Security that you’re living on.
And I know people that it has worked wonderfully for.
Yeah, I have too.
I am a fan of the reverse mortgage.
Alright, another texter writes in: I am pre-65 and retired early — I love that, pre-65. That’s great.
Yeah.
What is the recommended sequence of funds to use when cash is needed? Deferred comp, investments with higher returns <Inaudible>, 401k — and that’s when it cuts off. That’s why we ask you to <Inaudible>.
Well, in my opinion if you have after tax dollars, you have maybe an investment portfolio, you may have an investment that hasn’t performed well — well, first of all, hopefully you have an emergency fund. We’ve been hammering that all day long. But, assuming you don’t, my sequence typically then is if I’m looking for money, depending on age, I don’t think the age is listed, but I would look for after tax — pre-65. I would look at after tax money, money that may be invested that haven’t done real well and that’s maybe where I would start because anything out of the 401k, the tax deferred will be 100%.
Although, from a non-retirement portfolio, if there’s some gains that can be matched up with some losses to get some liquid cash on the table, then that’s a nice thing to do also.
Okay, and one more before we get to the three big things you need to know even though we do have some more tax questions — we’ll get to them all, don’t worry: I was told that just gross income is below 100,000, capital gains are not taxed, is this correct? Is there a ceiling or max amount allowed?
There is and we need to look it up on the chart.
Alright, pull out the chart.
It’s been down there forever. This time we’ve got to go to the chart. <Inaudible>
Yeah <Inaudible> income level now, it depends on if the person is single or married.
Yeah, in theory the answer is yes, but there are some limitations that we may need to get.
Let’s let Harry look at the chart. So, we’ll get the three big things you need to know. If you want to call the show, it’s 844-220-0965, 844-220-0965. The text machine number is 21232. We just ask you to keep it to about 160 characters. We’ll get your question answered after we get the three big things you need to know.
This News 96.5 WDBO.
Here it is, the final segment, last four minutes to get your questions answered with Harry Stadelmayer and Nancy Hecht, the certified financial planner professionals at the Certified Financial Group at 844-220-0965. Man, this hour went by quick. A lot of great questions asked today.
Really good questions.
The weather has brought out the great questions today. I love it. Absolutely.
Best listeners, don’t we?
Yeah, we had everybody — everybody on WDBO is an excellent, excellent listener. That’s why I love bring in the experts to share them with. It’s fantastic.
Alright, so our last text was asking about capital gains tax. The capital gains tax is applied if your taxable income falls below the 25% tax bracket which, for those filing single, it’s 37,900 to 91,009 <?> and for filing joint it’s 75,900 to 153,100.
Well, there’s your answer.
You have to do a thumbnail on your taxes and see if you’re going to have to pay capital taxes.
Well, we’d like to thank the chart. The chart comes in handy.
Yes it does.
Once again. Love the chart. We need a <Inaudible> for the chart. Every time we have to use the chart — we go to the chart about once a show. Need to make a ding, ding time for the chart sounder. Alright, now one more text in here at 21232. I have 190K mortgage paying 1,330 a month. How much more should I pay every month to pay it off in 15 years?
It’s somebody that’s talked about this in the past. If you can make bi-monthly payments which has to be done via a draft, you can knock it off — you can knock 10 years off. If they just make one extra payment directly to principal a year, you should knock on average 8 to 10 years off your mortgage.
Okay.
That’s a good rule of thumb.
And you can just set that up with whoever services your mortgage?
Yes, but if you’re going to make an extra payment directly to principal only, you could just do that by writing a check and noting on there with the payment that this is directly to principal only.
Okay. Got another text question here, 21232: I have an annuity through Athene and I made 23.51 return — I’m assuming that’s percent. That’s why we have to proofread our text here folks — is that good or should I go into stocks?
Oh my, we are —
23% over how long a period of time?
Question is is that per year or is that for last year, or is that over the last 20 years?
<Inaudible> re-balance your portfolio, scrape those gains off. It’s a tax deferred bucket, so nothing’s going to be taxable and re-allocate and hang on to those gains.
Chances are that you are already in stocks if you had a 23.5% return in the last year or two. Chances are, you’re — within that annuity, you may already have access — if it’s a variable, you may already be in “stocks” or a stock fund.
Alright, last 30 seconds real quick, upcoming workshops.
Yes, the upcoming workshops are November 11th, Everything You Want to Know About Mutual Funds; January 6th, that’s 2018, When Can You Retire, Know Your Numbers. Both of these are hosted by Gary Abley from 9:00am to 11:00am.
In our office and they’re free.
Alright Harry, what’s the best number to reach you guys at during the week?
407-869-9800. 407-869-9800. We would love to sit and chat if you have any other questions.
Alright, that’s going to do it for this week’s edition of On the Money. We’ll be back here next Saturday, 9:00
Dictation made on 11/7/2017 1:49 PM EST.