Hosts: Gary Abely, CFP®, AIF® and Joe Bert, CFP®, AIF®
It’s Saturday morning <Inaudible> everybody, I am Carl Cassandra. This is On The Money with the Certified Financial Group here on News 965 WDBO. Gary Abley, Joe Bert, good morning gentlemen!
Good morning.
Good morning.
How are you guys today?
Doing great.
Wonderful. Beautiful weather out there.
It absolutely is.
Time to be in Florida, baby.
It’s a good day to tailgate if you’re headed out.
<Inaudible>.
We’re going to continue to entertain you on your drive over here on News 965 WDBO’s Ask the Experts weekend with what Joe?
Well, Gary and I are just talking about anything that’s on your mind regarding your personal finances. Week in and week out, Gary and I and the other certified financial planners at CFG work with our clients to show them what they need to do now. Then they’ll look back 5 or 10 years from now and say gee, I wish I had known, or gee, I wish somebody had told me about that. So that’s what we do, we do financial planning for a fee, but on Saturday morning we do it absolutely for free. So if you have any questions regarding your personal finances, how your decisions might revolve around things like stocks and bonds and your 401k and an IRA and life insurance and reverse mortgages and annuities and real estate, and all that and more. Gary and I are here, and the good news is Gary is not only a certified financial planner professional, he’s also a CPA.
Oh.
Yes, so he has an extra credential, the best that we have.
<Inaudible>
Well, he’s qualified, qualified to answer that as well. We are here to answer your questions, and the good news for you is we are live in the studio, and the lines are absolutely wide open, and if you have any questions all you have to do is pick up the phone and dial these magic numbers.
844-220-0965. 844-220-0965. Yeah, you’re right about being live, you know. It’s December 2nd, UCF <sp?> is playing today. How can we record this three weeks ago?
That’s correct, we are live.
We are live. We’re always. The Certified Financial Group never takes a Saturday off.
We don’t, I don’t think we’ve ever done a best of <?> show.
Well, your entire team is able to rotate between all the days, so everybody gets time off.
My poor Joe is here every week.
Well, we are committed. Some people say we should be committed, but we are committed.
We are.
Well again, the number to dial is 844-220-0965, 844-220-0965. I have a feeling Gary Abley is going to get a lot of questions coming up as it’s already December, it’s December 2nd. It’s the last month to get your finances in order before the taxes come, so if there’s any last minute things you got to do before the end of the year or any questions you may have, that’s what Gary’s here for. 844-220-0965. We also have the text machine up and running as well. 21232. Just keep that to about 160 characters, that’s all we can see on our screen here. We don’t want your message to get cut off and then we miss some information, give you the wrong question. It’s going to be a quick question, text is perfect. 21232, but if it requires a little bit more of a conversation that’s what the phone number is for, and that phone number is 844-220-0965. Alright, let’s get started with today’s topic, how to pay for the hurricane damage.
Cash.
Credit card.
Yeah, I think that’s <Inaudible>
I don’t have that. What’s the next best option?
Well, we’ve been trying to get a roofing company out to our house to look at the damage for quite a while, but the good news is because —
Any luck there, by the way?
Well, not yet, but we keep walking the dog and talking to the different roofers in our area, see if we can snag one of them. In fact Beth is doing that here a little bit later this morning. Anyway, a lot of the sustained damage, whether it be to fence, your roof, maybe knock out windows, maybe cars.
Screen enclosures.
Screen enclosures, big losses there. So fortunately our government has relaxed some of the rules regarding casualty losses. So normally, you’ve got to itemize to take a deduction for that kind of a loss, and that has changed. Normally, you have to get above 10% of your adjusted gross income, and that has changed. Those are two beautiful changes for us who live in a federally declared disaster area, because that’s what it takes in order to make these deductions easier.
So let’s back up a little bit. For those folks that don’t do their own taxes or might not be familiar with the terminology in adjusted gross income and the 10% threshold, let’s take an example. Let’s say my adjusted gross income is $60,000. I just pick a number, and we have this 10% threshold. So what’s that mean for me as a $60,000 adjusted gross. Now adjusted gross income is the amount of income that shows up on your 1040 on the bottom there after you’ve —
Bottom of page one, <Inaudible>
After some deductions for IRAs, HSAs, things like that.
Right, right, okay.
So in essence, in your case earning 60,000, you would number one have to itemize. So let’s say you’re married filing joint, which you are. You would have a standard deduction typically of around 12,000. So you would have to have itemized deductions above 12,000 in order to itemize, right. And then on top of that, your loss would have to have been at least or greater than 10% of the 60,000 adjusted gross. So in other words, you would need losses above 6,000 and you would need itemized deductions above 12,000, roughly. So most people, unfortunately, can’t deduct it because of this 10% limit. So, our government has graciously for those of us in Florida and Texas has suspended that 10% rule and has also suspended the rule as it relates to Harvey and Irma for having to itemize.
Aha.
In addition, you’re able to go backwards to your 2016 return. So we know this hurricane just happened this year, but the government is saying hey, some tax payers may need some money now, so let’s allowed them to deduct this on a return that’s already been filed so they can get an immediate refund.
So I can get a refund on my 2016 taxes, even though I may have gotten a refund on 2016 I can reach back and get even more.
Exactly. You file a 1040-X, which is an amended return. Now you have an option. You can go back to 2016 or you can wait until your 2017 return is done. Now, why would you want to wait until 2017? You would if you were in a much higher tax bracket, right?
Right.
If you’re 2016, you were in a low tax bracket, we’ll you’d decide to deduct these losses in 2017. If you’re in a higher bracket in 2016, maybe you just retired in 2017, right?
Right.
You would go ahead and amend your 2016 return.
There you go. So it’s a way to get some money in your pocket right now.
Right, now in addition —
Well, not right now, we have to file your taxes first.
You’ve got to file your taxes, yeah. But in addition, they’re allowing you to pull money from your IRA or 401k and to pay this amount of money over a three year period, so over the next three returns — say 2018, 2019, 2020, for example, and allowing you to pay back that money into your IRA. So there’s a lot of pros and cons to that.
How about the 10% penalty?
Well, they’re going to waive the 10% penalty.
Aha.
Alright, so now a few people have called us and they’ve asked us hey, should I pull money out of my IRA to pay for my roof? What we really have to examine is if you don’t have the money right now to pay for that roof, how are you going to have the money to pay for that roof over the next three years. In other words, to get that money back into your IRA?
So you don’t have the penalty, or don’t have the taxes.
Right. So they’re not making this withdrawal from your IRA tax-free, they’re just simply making it penalty-free.
And you have three years in which to pay it back into the IRA to avoid the taxation.
Right, then what you’d have to do is file an amended return, right, so that you could get back the taxes you already paid. So it’s a little complicated, but for anybody out there listening to us who’s had hurricane damage, which is quite a bit of us, it’s a good thing to talk to your CPA about that this filing year and understand if you do get insurance proceeds — so let’s say just as an example you have a loss of 15,000, you had a $5,000 deductible. If the insurance company is paying 10,000 above your deductible, then your loss is really only that 5,000, right?
Right.
Right.
So you can’t deduct what the insure company is reimbursing.
Right.
But anyway, that’s a nice — it’s a nice new law, and I think there’s some complaints out there that this didn’t happen to the victims of Sandy and, well —
Matthew was in October, right?
Is this Irma and —
Right, Irma and — what’s the other one, I can’t think of it.
Irma and —
This year?
Yeah, this year, what are the —
Harvey.
Harvey! Thank you.
<Inaudible>
I was thinking — are you thinking of the local ones, or I guess Harvey was Houston, yeah.
Houston, yeah.
So anyway, it’s great for people if you’re in Florida who’s sustained some damage.
Yes, there you go.
Alright. Good to know.
That’s a lot, I mean — is there a website I can go back and re-read that if I was driving down the road and I think I missed something?
Actually, what you can do is contact our office and we’ll find something we can send you. So just contact Gary.
Yeah, I can actually send you a video. I was interviewed on Fox for that.
There you go, there you go.
Could be a little selling <Inaudible>.
That was a lot there, Gary, that was a lot of good information in there, a lot of good details.
This is the problem letting a CPA talk, you know.
Well that’s the kind of stuff that we do as planners. People think we’re just in the investment business, we do planning first and foremost and those are all the things that you want to look at and you want to help people manage their money, and then we talked about what you need to do to invest your money so you don’t run out of money when you’re 87 years old.
Gary’s — any tax questions as well <Inaudible>.
As long as we’re on taxes, Joe, why shouldn’t somebody buy a mutual fund in December?
Well, because — many people aren’t aware of this, they’ve seen the value of their mutual funds go up over the course of the year, and the value of that mutual fund often times has what we call embedded gains, capital gains throughout the year that manager is buying and selling and hopefully creating a profit, so those gains are embedded in the value or the price of the fund, as well as any dividends that might have been paid by the underlying investments that the mutual fund owns. So, over the course of the year the value of those shares is going up and you see a nice big increase in — maybe it was $15 a share in January, now it’s $20 a share because you’ve got some embedded gains in addition to the increase in the underlying value of the stocks.
Right.
But then what happens in December when —
Well, you get the mutual funds will declare capital gains distributions and dividends, and you will have to pay taxes. So the best way to understand this is maybe through an example. I remember years ago, I think it was ’95. I think that was a really good tax year, and I had a client that had invested in a Fidelity Magellan Fund.
Oh.
That thing had a high turnover in ’95, and they bought it in December, they put 100,000 into it roughly, and tax return comes due the following year, calculate things out to ’96 and it turns out that about $30,000 of distributions we had to pay taxes.
Huh.
<Inaudible> pay taxes.
And —
And they didn’t earn it!
Well, they didn’t spend it.
Because they just bought it.
They didn’t spend it — oh they bought it, <Inaudible>.
So what happened was in the following year, they had to pay taxes on 30,000 they didn’t earn, which means they — and they were in a high bracket, they had to pay 12,000 in taxes. So what does that mean? They had to sell the fund they just bought for 100,000 to raise the 12,000 in taxes. Now they’ve got an investment of 88,000.
Ouch.
So it’s really important to look at that. There are other options. If people said I want to get into the market, well you can buy an exchange-traded fund, that would eliminate that worry of capital gains distributions.
Right.
So just be careful out there.
Your advisor needs to know what he or she is doing, particularly in the last quarter of the year because you’re paying for gains that you’re not really going to receive. One of the comments that we often hear from clients that they have — they get the 1099 and they’ve got to pay taxes on those dividends <Inaudible>. Where’s this money, I never saw it, I never got it, I never spent it! Where is it? This isn’t fair, I’m paying taxes on money I’m not getting! And really what happens is when those capital gains and dividends are reinvested, you’re buying more shares, the share price drops, but at the end of the day you’re in the same place in terms of value. But you want to be careful about buying that stuff, particularly in the fourth quarter because you’re paying for gains that you really didn’t get.
That’s right.
That’s interesting, so January, that’s the time we want to buy mutual funds.
Well, you know it’s going to be interesting in January if this tax bill passes, and people <Inaudible>
Which apparently last night it did.
Well, it passed the Senate and now it’s got to go to committee. They’ll iron some things out, but I think it bodes well for the early — at least the early part of 2018.
Okay, well that’s good.
844-220-0965 is the number. If you want to ask Gary Abley or Joe Bert a question, the Oracle of Orlando, Joe Bert in the studio here answering your questions. 844-220-0965. Or you could text us to 21232. We are planning tomorrow —
Today!
With the Certified Financial Group. Time to get the three big things you need to know.
Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but it’s limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Certified Advisory Corp is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded, or is exempted from registration requirements.
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<Inaudible> National Security Advisor Michael Flynn pleading in the mother case.
This is Mike Flynn admitting live to the FBI.
Is this leading to information that could implicate someone like Kushner or Donald Trump Jr.?
This is where Orlando turns first for the latest developments on the Trump White House. News 965 WDBO.
It’s 9:25 <?> at News 965 WDBO. This is On The Money with the Certified Financial Group. Joe Bert, Gary Abley live here in the studio taking your phone calls at 844-220-0965, 844-220-0965. We’re three and a half minutes away from the latest news, weather and traffic with Dave Wall over there in the News 965 newsroom. Text line is open as well, 21232. That’s 21232, just keep it to about 160 characters, that’s all we can see on our screen. We had a comment here during the break here Joe. This is just a comment, it’s not a question from the listener. With the irrational exuberance in the stock market in Bitcoin, this has bubble written all over it.
I don’t think it’s an irrational exuberance in the stock market, although the stock market has certainly reached recent highs, if you look at multiples and earnings. People — it’s not like it’s going up <Inaudible> — it’s going up meteorically, if you will, but in that short period of time. It’s been over a year now.
One year, yeah.
And gradual increases.
Some people think —
That one year is a long — short period of time.
<Inaudible> certain but you have to look at the crummy year we came off of before, and so all things kind of — we’re getting the gains that we didn’t get in previous times, and thing have a way of reverting to the mean. As I tell all my clients, take the gains when you get them because you’re going to give some of them back. You can never keep them all forever, but I think the irrational exuberance in Bitcoin, that’s there.
Bitcoin seems to be a more popular, popular topic.
Cryptocurrency, not only Bitcoins but there’s other copiers out there.
Your thoughts on Bitcoin?
I’ll let you handle this one, Joe.
Well, in fact we have just run up against the clock here. If anybody wants to know about how Bitcoin works, go to our Facebook page, Certified Financial Group on Facebook, and I’ve posted an article from Business Insider that explains really how Bitcoin works, how you can participate in Bitcoin. I’m not recommending it.
Nope.
But millions of people are doing it because —
It’s speculation.
It is speculation, it’s like electronic Beanie Babies. Remember Beanie Babies?
Or Tulips.
Oh sure, electronic Tulips.
It allows you to right there while you’re having dinner or in the restaurant and you pull up your iPhone and you want to buy some Bitcoin or sell some Bitcoin and you can play games with it, it’s crazy. It’s absolutely nutso, and we don’t recommend that as an investment. It’s certainly speculation, but it’s certainly caught public’s attention. Now there’s hedge funds that are speculating in it and mutual funds and everybody wants to get in on the ground floor.
Insurance.
Bitcoin <Inaudible> no question about that.
I think it’s nutso, but.
Alright, are you guys going to do a workshop on Bitcoin maybe one year?
I don’t think so.
No, <Inaudible>.
Not by me, anyway.
Well what are you going to do on the workshops coming up here?
Well actually, I think our next workshop is Know Your Number, Know When You Can Retire. It’s January — what’s the date on that?
January 6th.
January 6th.
And you’re doing it!
I am doing it, it’s a Saturday morning 9:00 to 11:00. So we’re looking forward to seeing some folks there. What we talk about in that particular workshop — it used to be called Will You Outlive Your Money, but we were told we can’t use that term and so I guess I shouldn’t even say that term. But anyway, apparently that’s <Inaudible>.
Take it back.
But that’s the idea, that as we want people to know comfortably that they are not going to run out of resources in retirement. So the only way to really do that is to calculate the lump sum of money you need at retirement, and to know at a reasonable withdrawal rate, which we think is 4%, you won’t outlive your resources.
And you cover all that, it’s absolutely free at our office in Meltomon Springs, if you want more information go to our website, financialgroup.com. Financialgroup.com, and click on Workshops, you can make a reservation right there online. Hope to see you there January 6th.
Financialgroup.com. You should cover will you outlive your Bitcoin.
Alright, it’s always a Bitcoin joke. Alright, 844-220-0965 is the number you can dial us up. We’ve got two people on the line, we’ll get to those on the other side. If you want to be behind them, 844-220-0965. 844-220-0965. We are planning tomorrow —
Today!
Joe Bert and Gary Abley from the Certified Financial Group here on News 965 WDBO.
And welcome back, this is On The Money with the Certified Financial Group here on News 965, WDBO, <Inaudible> first weekend. Joe Bert, Gary Abley live here in the studio. Taking your phone calls at 844-220-0965, 844-220-0965. Joe, for anybody that may have joined us during the latest news, weather and traffic, what have you answered on the radio today?
Gary Abley and I here to talk about what’s on your mind regarding your personal finances. As we go through life, we try some of this, try some of that, wake up when we’re 55 years old, look across the table at Loretta and say Loretta, you know the paycheck’s going to stop and how are we going to convert that IRA and 401k and that annuity and all that stuff we bought into income? That’s what we talked about. So we do day in and day out, Certified Financial Group for a fee, but on Saturday morning Gary and I are here absolutely free. So if you have any questions about those kinds of topics, mutual funds and your 401k and IRA and all that stuff, pick up the phone and call.
844-220-0965, 844-220-0965. Just like John in Merritt Island has done. John, you’re kicking us off. You’re on with the Certified Financial Group here on WDBO.
Hey John, good morning.
Good morning. Thanks for taking my call.
Sure.
I have a tax question regarding the sale of a home. Earlier this year, lost my dad. And in preparation for his care, we had come to the decision that we had to sell the home. So we had the home listed, had a contract, and as that progressed, had a concern that he was going to pass before the closing. We executed a quick claim to put the home in my name. He subsequently died, and then I did the closing to sell the home after his death. So my question is, what tax implication does that hold for me for this year.
Most likely, no tax implication. But I want to clarify something. The property was transferred to your name prior to death.
Correct.
Okay, so what happens is you get a step up in basis to fair market value for that property. So when you then subsequently sold the property, there would be no gain allocable to you. So you would not have any tax issue at all on that sale.
And then so when I do my taxes, then I will show the sale of the property on my return, correct.
If you were the owner, correct.
Yes, okay, good.
Yup.
Alright, that does it.
Alright, great, Jon. Thank you for calling, and I’m sorry for your loss.
Thank you very much.
Bye Jon, thanks so much for the phone call. Let’s go to our old friend, Sofia in Sanford. Sofia, go ahead, you’re on the Certified Financial Group here on WDBL.
Sofia!
Good morning Sofia.
Hello, <Inaudible> I, my last name is Procrastinator. I called once before.
Yup.
I remember, I remember.
Oh yeah.
How can we help you?
And, too bad I didn’t come in there 20 years ago.
It’s never too late, Sofia.
I know. I still plan to come, and <Background Noise>
And I think I talked to you, Sofia, on the phone once, too. Anyway, <Background Noise> alright, what’s your question.
Here’s the question. I may have to come in next week or something. But it’s a time factor. I found this place that I’ve always wanted to live in this little area. And I have two other places. And I have two other places. So that’s a — anyway, it’s a little house and I like it. And the guy is nice, he wants to sell it. Let’s say it’s $100,000. Now, I have $100,000 cash, and I have a mutual fund, $100,000, and I have an IRA, $100,000. And I really don’t want to get a mortgage because I don’t have an income. I mean, finance, what I’m saying.
Okay, sure. Now let me ask you — I understood.
I want to buy it. <Inaudible> yeah if I was 40 years old, I’d buy four houses and put 25,000 down, but I’m 66. So If I really wanted, I mean who knows how long I’m going to live, why not use — which money would you take from to buy it outright.
So, I would either use the cash, or the mutual fund if that’s not in IRA. So I think you mentioned you have three separate buckets of money. Cash of 100, mutual fund of 100, an IRA roughly of 100. So I would either take it from your cash, and that was probably what I would do. Or, I would take it from your mutual fund and cash, maybe 50/50. So we would want to look at your overall allocation, how much equity would you have, relative to your outstanding net worth, after the purchase. But in general, I would use not your IRA, save that IRA for later. Keeping in mind, anything you take out of that IRA will be subject to tax. Now, I think I remember chatting at one point, so there may even be an opportunity to take money from your IRA, potentially without a tax effect, if, for example, our viewers should know this, just general advice, sometimes we find ourselves maybe in between work or we’re retired but not taking Social Security, and clearly, you might want to take, if you were a couple in that situation, 20,000 out of your IRA because you pay absolutely no income tax if you had no other income. Right. So why not get money out of that IRA, and use that money if you’re not going to pay any income tax because later on, when you start taking Social Security, you may be in a tax situation. So I would take it from —
Let me ask you a question. Hello?
Sure, go ahead.
Go ahead.
Oh, I wanted to ask a question. The mutual funds, I’ve had this one since 1984. If it’s high right now, I mean, all of them, I guess.
All of them, sure.
So, wouldn’t it be better to take, just go ahead and sell the mutual fund. And this is my problem. Because when I talk to them one time, they said that well, you paid capital gains over the year, you may not have to pay anything. I mean, wouldn’t that — you see what I’m saying. If I take the money off the mutual fund, and just sell it, you know.
That could be, that could very well be a good choice, and I think to answer your question, I think we would want to look at your overall allocation of equity and fixed income after the purchase. So that’s a good thing to just give a holler on, and we can help you with that.
Okay.
Alrighty, thank you so much fir the phone call. Gary, <Inaudible> phone number to reach you on Monday morning.
Sure, that’s 407-869-9800.
Alright, 844-220-0965 is the number to jump in on the conversation. Larry in Orlando is up next. Larry, you’re on with the certified financial group here on WDBO.
Good morning, Larry.
Good morn. Thank you for taking my call. I’d like a little further clarification on the hurricane catastrophic expenses. So you were talking about tax year 17. If those losses are going to be realized in 18, how is that going to be handled.
Well that’s a great question. And I’m going to say, Larry, that that brings up an interesting point, because sometimes, we have these losses, but we have no idea how much they are because we can’t get a roofer out until maybe 18. And so one of the things that our listeners want to make sure that they do is because the statute of limitations is typically three years. So, if, for example, you don’t know the actual loss, you can file a form with the Internal Revenue Service that basically puts them on notice that you intend to amend your return for a casualty loss, and you explain the circumstances. It can be as simple as a letter that says look, I’ve sustained losses. However, I don’t know how to calculate it yet. I think they might be in the $30,000 to $50,000 range, but when I know the actual realized losses, once I pay for these repairs, I intend on amending my 2016 return. By doing that, by putting the Internal Revenue Service on notice, you will not have an issue with the statute of limitations, right, because you’re basically putting them on notice to say hey, I’m going to have a loss, but I can’t calculate it yet. And so, does that answer the question, Larry?
Yeah, I think it does, specifically, my insurance company has given me an estimate, but exactly like you said, <Background Noise>
Yeah, you can’t calculate it.
<Background Noise>, roofers, I have other people coming out that haven’t made it yet, and until the dust settles, I don’t know exactly where I’m going to be on the whole thing.
Yeah, and for many people, this could be a matter of years, depending on when you can get the contractors out. So just talk to your tax preparer and I would recommend using a licensed person. Either a certified public accountant or at least an enrolled agent to help you with this because you don’t want to lose out on this deduction because of time going by.
Okay. Thank you very much.
You’re very welcome.
Alright there, thanks for the call.
Hi, Larry in Orlando, if you want to <Inaudible> Larry’s line, it’s 844-220-0965. That’s 844-220-0965. We’ll keep rolling with Glenn, who’s also in Orlando. Glenn, you’re on with the Certified Financial Group here on WDBO.
Good morning, Glenn.
Good morning.
Hi, how are you?
Good.
Great.
What’s up?
I’m getting ready to retire in about a year, and previously, I didn’t have this choice, but recently, we now have a choice between taking the annuity pension or taking a buyout of about somewhere in the neighborhood of 500,000.
Okay.
And I was wondering about the — I’m leaning towards the pension because my wife is seven years younger than I am, but I was wanting a discussion. I’d like to hear a discussion about the pros and cons between taking the buyout or taking the pension.
Well, every case is unique, Glenn.
Right.
And we do this as a matter of when we do financial planning. You are certainly a candidate to have some financial planning done because you’re about to enter into that stage of your life where you’ve got to make some long-term financial decisions. Every pension is unique. Every situation is unique in terms of what your other assets are and what your desires are, and how strong that pension looks, because pensions are not guaranteed. They are guaranteed only by the strength of that particular pension, and we have known in times of past, in fact I was with a client the other day that used to get a pension from Eastern Airlines.
Oh boy.
And also I had another client in, strangely enough, that was — used to get a pension from United Airlines, and they filed bankruptcy.
Mhmm.
Companies, this happens. So, and you know, you’re looking at this pension for the rest of your life, 25 or 30 years, you may be looking at a pension. Now I’m not trying to down play the pension. But a very critical element is, is that pension going to be guaranteed. Now, we have behind that what’s called a pension benefit guarantee corporation, or known as PBGC.
Right.
And why don’t we tell him how that works.
Well, we also, if the company were to become bankrupt and not be able to meet the obligations, then the pension benefit guarantee steps in and makes payments. But there’s no guarantee, what’s the latest funding on that.
It’s underfunded.
Very underfunded. So you’re counting on something that <Inaudible> may not be available in the future. Now, to answer your question, Glenn, though what we would do is we would discount those cash flows to present value and we would compare. So at a reasonable discount rate. So we would assume, make some assumptions about the longevity, about how long you would live, and if you were looking at doing a joint annuity. The projected time frame for your wife, we would discount those to present value and we would look at it, we would talk about the pros and cons. So for example, the other issue we would want to talk about is are you a risk adverse person. If you are the type of person who would get your quarterly statement see, my gosh, my investments went down 10%, I’m going to run to the hills and put everything in a CD, well then, this annuity or pension might be just what the doctor ordered. But if you want the potential for growth, maybe you want the ability to — there’s excess money to leave to children if you have children. So it’s not an easy answer. There’s a lot of factors that we go in to, but the first step I always take is the discount that annuity to present value to see even if that annuity option is favorable. And then we start talking about everything else, risk tolerance, comfort level, your spouse’s comfort level, et cetera.
Yeah, you’re talking about a $0.5M decision, <Background Noise> spending some time <Background Noise>
It’s worth spending an hour.
Yes.
Yes.
Glenn, I would — I suggest call Gary on Monday morning and we offer a no obligation visit. Come on in and we’ll talk about your situation, we can tell you what we do and how we do it, and we’ll — I know this, when the planning is done, the thing I hear most from clients is their <Background Noise> mind.
Relief
Yeah, really.
Yeah, yeah.
Absolute relief.
Absolute relief.
Absolute relief, so what we don’t want you to do —
We know Glenn is not the only person <Background Noise> situation
Oh yeah.
Yeah.
What you don’t want to do is go into retirement, and look back five years from now, said Gee, I wish I would’ve known this and gee, I wish that I’d done that. And that’s what we do for clients. We do it for a fee, we’re not going to try to sell you something. And the fee is very very reasonable, I believe, for what you get in return. So call Gary Monday morning at 407-869-9800 or you can go to our website, financialgroup.con. Click on his smiling face, and you can make a reservation right there, an appointment right there.
A reservation on a smiling face.
<Background Noise> there, Glenn, and then we hope you’re all set for your retirement. Thank you for the call.
Alright, thanks, if you want Glenn’s line, it’s 844-220-0965. 844-220-0965. We’ll take Sam in Orlando, you’ll be first up after the break. But real quick, before we get the three big things you need to know, upcoming workshops are coming.
January the 6th, Gary’s going to be doing one. <Inaudible> standing next to me.
He’s a stander
<Background Noise>
<Background Noise> stand up desk, that’s the best thing since sliced bread, let me tell you.
He stands up all day long in front of his computer. And I’m sitting here in my <Inaudible> chair, about three feet off the ground, and he’s <Background Noise>
And he probably has significantly less back problems than all of us put together.
I love it.
Love it, love it.
So, January the 6th at our office in Eltemont Springs, Saturday morning, 9:00 to 11:00. Gary will be conducting his know your number. What do you need to know and have knowledge about your number to retire to have enough capital, have enough gas in the tank to get you through those retirement years. It’s absolutely free, go to our website, financialgroup.com. He’s not going to be trying to sell you an annuity or some investment product, but the reason we do this, folks, is to, number one, to avoid those disasters that we see sometimes walking in our office when they’ve made those bad decisions. And secondly to introduce you to our firm, what we do for a fee, and how we work with clients who are nearly 40 years and providing financial advice with 10, 11 certified financial planners at the Certified Financial Group. So give us a call or go to our website, that’s financialgroup.com. Financialgroup.com.
Alright, we are planning tomorrow.
Today.
With Certified Financial Group. Joe Bert, Gary Abley, 844-220-0965. Time to hear the three big things you need to know.
This is news 96.5. WDBO.
It is the final segment of On The Money with the Certified Financial Group here on News 96.5, WDBO, ask the experts weekend, Joe Bert, and Gary Abley. Here in the studio, taking your phone calls at 944-220-0965, 944-220-0965. Sammy, before we get back to you in the two text questions we have, we wanted to circle back to Jon’s question real quick.
Yeah, we want to go over Jon’s question. So Joe just mentioned, I think I misunderstood the timing of the transfer. So let’s just clarify that for everybody listening. If you receive something at or after death, then you do get the step up in basis, but I think in this particular situation, Jon had a quick claim of property to him from his father, while his father was still alive, and that is a carry over basis. So in essence, Jon will have the same cost factor, the same what we like to call basis in the home as his father did. So potentially, there could be a gain there. So wanted to make sure we got that out there.
Yup.
Alright. Sammy in Orlando, Sammy, you’re on with the Certified Financial Group here on WDBO.
Sammy.
Good morning sir.
Good morning.
Good morning, how can we help you.
Yeah, I <Inaudible> 401(k) into IRA because I need to borrow some money. So I borrowed the money and I paid back in less than one month. So I’m going to be 55 soon. I wonder if I draw out my 401(k) from <Inaudible> tax free <Inaudible> 401(k).
I didn’t quite understand, Sammy. Are you — you’re asking is the 401(k) transfer — the 401(k) transfer into an IRA from custodian to custodian —
Yeah
— Is tax free, but if you take money out of the IRA, and get it back, I guess, is what you’re saying, is that permissible, and that would be. If you’re going from an IRA and you get the money back within that 30 days.
<Inaudible> 60 days <Inaudible>
Yeah, but he did it within 30.
<Inaudible>
Yes, no taxable to you.
Right.
So let me be sure we understand. You had money in a 401(k). You put it into an IRA. You took the money out, and now you’re putting it back within 30 days, there are no tax consequences.
Yes, but it’s <Inaudible> sounded like <Inaudible> 401(k), you would <Inaudible> penalty.
Okay, so I think I know what you’re asking. So if you moved money from a 401(k) to an IRA, you have to wait until your 59 and a half to take money out without a 10% penalty. But from a 401(k), in some cases, you’re able to take that early, take money out earlier than age 59 and a half, at age 55 without a penalty. So sometimes, it is not advantageous to transfer from a 401(k) into an IRA if you’re going to need that money.
And if you’re still working, you could borrow from the plan in many cases, <Background Noise> yourself back.
That’s right. Yup.
So you may want to look at that, Sammy.
So don’t transfer into an IRA if you think you’re going to need the money prior to age 59 and a half.
Thank you so much.
Alright. Thanks for the call.
Thank you for the call.
Alright Sammy, alright, let’s get to our text question here. This is an easy one. Can your deposits be withdrawn from a Roth savings account without penalty.
Well as long as you’ve had that account open for at least five years and you’re 59 and a half, you’ll be able to take that money out without the 10% penalty.
But the deposits, are always — you can always pull those out <Background Noise>
You can always pull your principal out, <Background Noise>
<Background Noise> you put in, but the earnings <Background Noise>
The earnings.
The earnings, yes. So you’ve got <Background Noise>
Yeah, so there’s two elements to it.
Yup.
What you put in, and what it’s earned. You can always pull out what you put in.
Right.
Without a penalty, but the earnings are <Background Noise>
Subject to penalty, if you haven’t had that account open at least five years.
Got it. Okay. In the Roth savings account, as long as you only take out what you put in.
You got it.
Correct.
Yup, yup.
Alright, simple enough Thank you so much, guys.
Alright.
Alright, that’s going to do it for this week’s edition of On The Money with the Certified Financial Group. We’ll be back next year, next week. <Background Noise>
Hopefully <Inaudible>
Not in January yet, it’s January in my head.
Not yet.
But December 2nd, I’m getting thrown off here. We’ll be back next week. Until then, we’ll see you guys over at financialgroup.com. Alright Gary, Joe, have been planning tomorrow.
Today.
Right here on New 96.5, WDBO.
Dictation made on 12/8/2017 4:22 PM EST.
