On The Money Transcript 2/24/18

Well, good morning everybody and welcome to another addition of On The Money with a certified financial group here on News 96.5 WDBO’s Ask the Experts weekend. We’ve got the oracle of Orlando, Joe Byrd, alongside Gary Abley live here in the studio, taking your phone calls at 844-220-0965. They are from the Certified Financial Group, certified plan professionals here on the radio, helping you get to that retirement finish line. Good morning, guys.

Good morning.

Good morning.

How are you today?

I’m doing great, how are you?

Hanging in there, trying not —

Yeah, trying to get rid of that —

— swallow pollen.

Oh, this pollen? The worst.

It’s paint on my car after I washed it on Thursday.

Oh, it’s terrible.

It rained a little bit yesterday, and I was like oh please.

It’s been so dry for so long.

Just to wash away and it’s not happening fast enough.

It seems like it gets worse every year, is it just my imagination.

No, two years ago it was bad. It was really bad.

Yeah.

Well because this isn’t over yet, it’s just starting, baby.

Well, you know, if the oak trees don’t die off and come back.

Well of course it’d be interesting to see what happened with a hurricane, because a lot of oaks got defoliated.

And that’s why I think it’s so bad.

Yeah.

I was talking about this with somebody over at Channel 9 the other day, and they go yeah, that has a lot to do with it. The oak trees were down, it was already pollen — and because we had so many freezes —

Right.

— and stuff, all that’s growing back. The oak trees are starting to come back, but it’s creating all the pollen as they try to regrow.

Super pollinating.

Yeah.

Super pollinating.

Not good. Anyway —

Worst in the country, Central Florida right now.

Yeah, that’s what I heard.

Worst in the country.

<Inaudible> Zertek.

<Inaudible> plug.

I love it.

I know.

Alright, well we’re here this morning to cure your allergy remedies and anything you want to talk about , how to blow your nose and all that stuff. The problem <?> with that, we’re her to talk about your personal finances, anything that might be on your mind regarding your personal finances. As we say, we go through life, trying some of this, trying some of that, and hope that when the paycheck stops, it all kind of comes together and we have that income coming in to supplement our Social Security, but we know in the world, Gary, it doesn’t work like that, right?

No, it doesn’t.

Unfortunately, people go through life and have a collection of financial accidents, only to wake up and find they really have a mess on their hands. So Gary and I are here to show you what you need to do, or tell you what you need to do, based on your own personal situation, and we’ll talk about anything that’s on your mind regarding your personal finances. If you have questions about your IRA , about a 401(k), about mutual funds, about real estate, about long-term healthcare, annuities, life insurance, reverse mortgages, all that and more, we are here and we don’t bite. We’re easy to get along with. As we say, Monday through Friday, we do this for a fee, but on Saturday morning, Gary and I here are absolutely free, and by the way, we are the only radio show in Central Florida that’s manned by and womaned by — manned by — I guess you can say manned by —

Manned by —

Certified financial planner professionals, and Gary’s not only a CFP, he’s also a CPA and —

We have a tax question.

Oh, don’t do that. Don’t do that to me.

And hosts some of our most popular lunch and learn programs, or breakfast and learn, or brunch and learn.

There you go.

We’ll call them brunch and learns, you’ve got some of those coming up, we’ll talk about those and how to register. We’re also going to talk about how you can win two free tickets to the upcoming spring concert this year on April 28th between <?> the music of the police and the things, so we’ll talk about that a little bit more. So anyway, if you have any questions regarding your personal finances, the good news for you is the lines are absolutely wide open. So if you always thought about calling, want to talk to Gary or me, all you had to do is pick up the phone and dial these magic numbers.

844-220-0965, that is 844-220-0965. We also have the text machine up and running as well, 21232. That’s 21232. Alright, Gary, topic of the day we have here, advantages of a non-traditional retirement for those over the age of 65.

You know, when I wrote that out, I said you know, it could be at really any age, but mostly we think of retiring when our Medicare kicks in, which kicks in around 65. And I’ve been reading articles lately, but mostly just meeting with people, I’m finding that so few people today undertake what we would consider a traditional retirement; retiring at 65 or 67 and just plain quitting. And then, I’ve been meeting with some people who do just quit, and what they’re telling me is I really miss work, I really miss the people. And so while we’re here to talk mostly about the financial topics for getting ready to retire, we also want to talk a little bit about ways to retire from an emotional standpoint, because that can —

Social interaction.

Oh my goodness, yes. So, I think years ago, you would say men derived a lot of their affirmation, if you will, or their social connections from the workplace, and I think that’s probably misstating it today. I think both genders today get a lot of what they need from their daily interactions, and people are retiring and they’re saying you know, Gary, I’m not happy retired. I didn’t have a plan. I had a financial plan, we’re prepared financially, but I’m not prepared emotionally. And some of our clients, they go back to work.

Yeah.

And they miss the contact, they miss the daily contact.

But you know what happens, I’ve seen and read about this, you probably have as well, where they retire and they lose the contact, the daily contact to the people, as we just said.

Right.

And then they begin to drift out of your life.

Yes.

So you know you no longer have the kids at home

Right.

Which kind of bound the family together. You have the comradery and the social interaction when you were at work, and those people, they continued doing what they’re doing and now you are a memory.

You can be isolated.

Yes.

And so, you know, there’s obviously financial advantages to we’ll call it semi-retiring, if you will. For every year you defer taking Social Security, you’re going to get an 8% bump up.

Right.

Past year — well, past any age, really. I mean, if you took it early, you’re going to be penalized, right, about 8% a year, and if you defer past 66 or 67, depending on your full retirement age, you’ll get an 8% bump up. But the, of course, advantages, there’s less number of years to be funding retirement if you’re semi-retiring, because you’re still able to put money away and you’re not having to dip into those retirement assets.

You’ve seen it, as well as I have, when you do a financial plan, and somebody’s getting ready to retire, and then you show them the impact of working another year or two.

Oh, it’s huge.

It’s huge!

It is.

That extra dollar that they earn is often worth four, five, six times that.

That’s right.

In their later years, and when you show them on paper, the extra year that you’re going to put in, it’s worth thousands of dollars to you in future benefits.

Well, that’s right, and that you may actually have a more pleasurable retirement by easing into retirement.

Yes, yes.

And the other issue we see a lot is couples retiring together, and sometimes that’s not the best — sometimes one spouse should figure out how to retire, and then the other spouse should undertake it. Both spouses, together, at the same, well we kind of see that in our office, too. It’s not the best scenario. And a lot of people don’t know, retiring or semi-retiring, we’ll say, and still working past the age of 70, even though you have to take a required minimum distribution from your IRA, you can take that required minimum distribution and actually fund a Roth IRA.

Yes.

Which can have huge advantages as well.

Or you can continue to contribute to your 401(k).

That’s right.

Yeah.

If you’re in a 401(k), exactly.

Yes.

So there a lot of advantages, but I think we underestimate the social impact of retiring. And so, I think what we want to stress is have a financial plan, but then also have a plan of action for what you’re going to do.

Or even if it’s — charitable work is a wonderful thing.

Sure.

Get involved volunteering, something like that, or take some — I’ve had a couple of clients over the last 25, 30 years of what they want to do is drive the train at Disney.

Yeah.

It’s so funny.

That’s my retirement plan, let me tell you.

Yeah.

I just want to drive the train around Magic Kingdom in my elder years.

Honest to God.

Yeah.

I can’t tell you —

Modern rail <?> driver.

I’ve heard that more than once.

I have, too, as a matter of fact, just from an engineer close to retirement. He thought you know, that would be a fun thing to do.

Yeah, three days a week, you’re supposed to drive the monorail, the train around Magic Kingdom.

Yeah.

I’ll do that, yeah, absolutely.

<Inaudible> all kinds of interesting people.

That’s it.

You get a break in the past <?>.

Sure.

Of course, <Inaudible>

And then play some golf on the other days that I’m off. That’s it.

There you go. Alright, we’ll sign up.

Well, 844-220-0965 is the number if you have a question for the panel. 844-220-0965 or text us, 21232. You guys said something I never thought of before, about couples retiring at the same time. I had never heard that. Now that you say that, that makes perfect sense.

Well, it makes sense to do that because you’re wanting to spend time together.

Maybe, yeah.

Maybe.

Well, sometimes that working career gives you a limited amount of time and throwing a full 8, 10, 12 hours in a day together may not always work.

Right.

You’ve got to find out what works.

Right.

And it’s a process.

It’s as much finance — psychological as it is financial.

That’s right.

In fact, if the psychological isn’t straightened out, the financial is meaningless.

That’s right.

Yeah.

I mean, there’s case upon case about that, people go to retire and they end up getting divorced, because they realize they can’t live together 24 hours a day.

Wow.

Or <Inaudible> rates as well, because they’re not as active, they’re not moving.

Exactly. Exactly. So as certified financial planners, we can give you the financial peace of mind in retirement, show you what you need to do and be prepared to do it, but you have to think about really — and you know, when we go through the financial planning process, you sit down with the clients and we talk about what that looks like.

That’s right.

And for the first time, maybe it stimulates the conversation.

Yes.

You know, and that’s important.

Well, and once you’re past the age of 65, especially the small employers, you really have a lot of leverage to negotiate a part-time plan, simply because healthcare is so expensive, especially for individuals in that 60-64 bracket that once you’re on Medicare, you might be able to go to your current employer and say look, I only want to work MondayWednesdayFriday, and on Friday I want to work from home, and this is what I want to earn, and I don’t need healthcare anymore, and ease your way into retirement.

Right.

I think is a lot better approach than just being abruptly doing nothing.

Speaking of Medicare, it was two weekends ago that Gary had a standing memorial <?> overflow crowd for everything he wanted to know in Medicare and long-term healthcare.

That’s a good topic.

Yeah.

It really is a good topic. Long-term care —

Part A, Part B, Part C, Part J, I don’t know.

Yeah, it’s confusing, it really is.

Well Gary had some people expert on that.

Yeah. Had some people attend multiple times, just because they get a little bit more out of it each time. We always say everybody needs a long-term care plan. Now, the plan could be anywhere from family helping out, it could be purchasing an increase policy, it could be positioning your assets so that you’d be able to qualify for Medicaid, but everybody needs a plan. And so often times, we meet with people who — we’re going over the financials, we’re going over how much they’ve been able to accumulate and whether they’ll run out of money or not, but they don’t have a plan for who is going to take care of them when they need help.

Right.

The odds are really high.

And you begin to really focus on this when you get at or near 65 because your mailbox literally explodes.

Yeah.

With information.

It does, yeah.

I mean, you get bombarded with information about it, and this is where the confusion lies, because there’s multiple options.

There are.

And people have absolutely no idea what they need to do, when they need to do it, how they need to do it, so that’s why Gary’s presentation on that was — when do you have another one scheduled for that?

We have one in June on the healthcare.

Healthcare.

So, for example, one of the things I ask in the class, which I think is pretty interesting, I’ll say raise your hand if Affordable Care Act, also known as Obamacare, got rid of pre-existing conditions, and most people realize that that’s exactly right, so most people raise their hands. I say well that’s true for everybody 64 and under, but for the people who utilize the healthcare the most, those 65 and over, you can be still subject to pre-existing conditions, meaning if you don’t stay within original Medicare and you opt to go out to this Part C advantage plan, which are — there are often times HMOs or sometimes PPOs, but Part C Medicare is run by private companies. Whereas, Medicare, of course, is run by the federal government. If you opt for Part C and then you want to go back to original Medicare, because maybe you couldn’t find the doctors or maybe it costs you more than you thought, you have to prove that your healthy to get back. And a lot of people —

So that’s not — ooh.

Well, you just have to be careful.

Yeah.

So we always recommend for those who can afford to buy the Cadillac, or whatever we want to call the Cadillac today, to go ahead and buy that.

That’s the Medicare plan — supplement.

The supplement, and then you can always go downward. You can go to a Part C plan without a problem, you just can’t go from the Part C plan back into original Medicare Part A and B with the supplement and Part D with prescription. So, if the A, B, C, Ds confuse you, we have a workshop for you coming up on June 2nd, and I think that’s really helpful. About half of it’s Medicare and about half of it’s long-term care.

So let’s circle back to that, because I think a lot of people jump on the advantage plans because they feel it doesn’t cost them anything.

Well, right.

And they’re greedy <?>.

It’s a free thing.

So I want that because I don’t have to pay for it, but as you said, if you have some medical problems down the road and you have pre-existing conditions, you’ve got a mess on your hands.

Well, you do, and free doesn’t mean you have no out-of-pocket costs, so some of these plans have 7,000 in-network out-of-pocket, maybe 14,000 out of network, and you compare that to a Medicare supplement that might cost you 200 a month and cover all of your medical costs.

Then once you’re in the pool, you’re in the pool and they can’t throw you out, but if you’re in —

That’s exactly right.

So if you’ve got the Medicare advantage, and then you have some serious medical conditions that aren’t going to be covered to the extent that you want them covered by your Medicare advantage plan, you can’t go back and say okay, I want to really get the good stuff now.

That’s right.

You’re locked out.

Yep.

So we have to be careful on that. It’s all about the Gary cover <?>. Like I said, easy and resident expert. We’re fortunate to have him with the firm and we’re here this morning to talk about anything that’s on your mind in addition to Medicare, Medicaid — I don’t think we’re going to spend the air on <?>, but if you have any questions on that, we can do it, along with any questions that you might have on your IRA, your 401(k), trying to make some financial decisions in your own life, that’s what we do day in and day out at Certified Financial Group for a fee, but on Saturday morning, as I said, we are here absolutely free. So if you have any questions on any financial topic that might be on your mind, the good news is the lines are still wide open. We’ve been chatting here, people listening, now’s the time to pick up the phone and dial these magic numbers.

844-220-0965. That is 844-220-0965 or you can text us at 21232. Right now, we pause to give three big things you need to know.

And welcome back to On The Money with Certified Financial Group here’s on News 96.5 WDBO’s Ask The Experts weekend. We are taking your phone calls with the oracle of Orlando, Joe Byrd alongside Gary Abley from the Certified Financial Group, 844-220-0965. That is 844-220-0965. Text machine is up and running as well at 21232. That is 21232. Alright, we are four minutes away from the latest news, weather, traffic, so we want to get to our busy phone lines here. First up is Gary in Longwood. Gary, you’re on with the Certified Financial Group here on WDBO. Good morning.

Morning, Gary, thanks for calling.

Good morning.

Good morning, thank you. I have been trying to figure out Medicare for a long time and I’m going up next week to sign up. I’ve got my card already, the Part A, I guess, the red, white and blue card, but I’m still working. I am going to retire, and next week, I’m going up to get signed up. But I’ve never heard about this pre-existing condition thing.

Yeah, so Gary, you are fortunate that when you are first coming off of a group health plan, or when you are just turning 65, there are no pre-existing conditions for you to sign up, it’s after that. So let’s say, Gary, you were to sign up for a supplement this year. You’re fine with the supplement next year, but if you sign up for an advantage plan this year, when you’re first eligible, and then next year you decide you want to go to a supplement, you have to medically qualify. So, it’s really important, especially if you have any known health conditions.

Which I do.

Yeah, that you might want to consider the supplement route. When you really put a pencil to it, the free plans aren’t always cheaper. They can be, and there are many good Medicare advantage plans out there, but what you’re doing, is you’re limiting, typically, the number of providers that can see you to a network. Again, some plans do have both in and out of network benefits, but the out of network benefits are much, much more costlier than if you stayed in network, and we often get the feedback when we do these workshops that well, I’m — well, we don’t like them to say company names, but I’m in this, and I couldn’t find a dermatologist, or I couldn’t find this cardiovascular person, and so some networks are more scarce with providers than others.

And are probably getting more scarce as time goes on.

Well, yeah. So one of the things that the Affordable Care Act did is it is reducing, a little bit, the reimbursements that are going into these private companies for the advantage plans.

And so they have fewer and fewer docks participating in the plan, so your choice or maybe your waiting period is worse.

My doctor, I’ve called my doctors, they’re on the plan that I’m looking at. I already have my Part A card I’m going to have to activate, I guess, but the Part B, they accept. The PPO, it rhymes with Amana PPO, but they take it, and it that what I should be getting, from what you said, on Part B?

Well, so you do have to have both A and B, both parts.

Right.

In order to either buy a supplement or to go out of original Medicare and go on to Part C.

Now, before you go any future, because people have never heard of this or just getting their toes wet, let’s describe what Part A and Part B is, and then we talk about the supplement and Part C and all that other stuff.

Okay, alright.

So let’s give a little primer on it.

Thank you.

So Part A was original Medicare, and think of that as —

Well, let’s do this.

In a minute.

Because we’re 30 seconds away from the latest news, weather, and traffic, so we’ll be back.

30 seconds away.

So that can take a while. So that’s your tease. We will get through and just clarify what all the parts and plans are coming up right after the latest news, weather and traffic. We are planning tomorrow

Today

With the Certified Financial Group here on News 96.5 WDBO.

Welcome back. This is On The Money with the Certified Financial Group here on News 96.5 WDBO. We are here with the Certified Financial Group. 844-220-0965 is the number if you want to call in with your question, ask the panel. Text number is up and running as well, 21232. Joe, we are listening to the police <Inaudible> so close to me why So, close to me, why?

Because on April 28, Certified Financial Group, for the 7th consecutive year, will be the main sponsors for the annual springs concert at the Springs Community in Longwood.

If you’ve never been to the Springs concert, what is that?

It is an opportunity to hear some terrific music. We bring in a tribute band, Jeans and Classics, and they do their stuff. You get the lyrics and all the music of the groups, backed up by the full complement of the Orlando Philharmonic Orchestra. It’s a tremendous evening. You bring your adult beverage and sit around the Springs on a blanket, and the stars come out and you get some great music. Once again for details of that you need to go to our website. That’s financialgroup.com, click on Events, go and click the menu, go onto Events, and you can get tickets. It’ll direct you right there how to get tickets, you can also register to win two free tickets, you just went up this morning so you can have an opportunity to register for two free tickets for the upcoming Springs concert April 28 at the Springs community in Longwood. You also have the opportunity to sign up for Gary’s upcoming workshop. Gary, <Inaudible>?

We have two coming up, financial basics, March 3rd, and these are things that we should have learned in our high school or college but we didn’t and so we teach compounding of money. We teach what you should be saving, good debts, bad debts. So this is really a great thing for young adults but it’s also great for any adult who never learned those basics. The next one we have is April 7. These are both on Saturdays from 9:00 to 11:00 and that one, we cover mutual funds, anything you wanted to know about mutual funds, diversification, asset allocation, the types of funds —

That’s another one that fills up.

It does. You have exchange-traded funds, what’s the difference, so anybody who has an interest in having a better understanding of what we talked about, week in and week out, please come to that one.

Once again you can go to our website, financialgroup.com. Click on Events and Workshops and you can register right there and register to win two free tickets for the upcoming April 28 springs concert.

All right, just like that, I had someone ask in the hallway, what was that Springs concert he’s talking about, I never heard of that before.

You know, there are new people to the area all the time.

Those tickets sell out fast. I mean, right now if you want to buy tickets this is a discount opportunity if you have a four-pack and makes great Mother’s Day gifts. Mother’s Day is right around May so it’s a wonderful thing for your Mom and so forth. So when last we talked we were talking about Medicare and the ABCDF supplements and all that other stuff and you really don’t focus on this stuff until you get <Inaudible> age 65 and then your mailbox explodes with all this information. You have to start making decisions, so why don’t we run through what the basics are, A B and C and so forth?

So Gary, if you’re still on the air, Part A is hospitalization, so that was really original Medicare. If you think about how we got our <Inaudible>

Here you go honey, here’s the explanation!

I had him off.

Yeah, he’s– Gary’s still there.

So part of it was the original health care part of Medicare meaning mostly we got our health care from hospital in-patient. Very rarely years and years ago did you go to outpatient clinics, so as we started to evolve medicine and realize, well, sick people are in hospitals, we should do surgeries on an outpatient basis, we created part B Medicare and that covers doctor visits, outpatient surgery–

And the doctor in the hospital, right?

Yes.

So you go into the hospital now, you have the hospital — that’s pretty much 100% covered, right, the hospital charges.

No no no, so part A and part B cover generally about 80% is a good rule of thumb <Inaudible> bill. There’s some deductibles, there’s co-insurance.

Got it.

So the supplement then to part A and B will pick up the difference.

And then so part A covers the hospital charges, some degree, Part B covers the doctor, <Inaudible> anesthesiologist and the surgeon, all that–

Mostly outpatient doctor visits and outpatient surgery and so forth. Then you have part D you know came around I think–

What happened to Part C?

Well we’re going to circle back to that. So I’m still staying within original Medicare.

So A, B, and then D.

A, B, and after we do this but then D. And D covers the prescriptions. Now I will say this is very important for folks to go onto medicare.gov, and you can actually enter in your prescriptions and you will find the lowest cost part D plan. There’s 21 available in this tri-county area and so the costs range incredibly. At one of the workshops I entered in one of the prescriptions and the cost ranged from $2,800 for the one prescription all the way up to 93,000.

Whoa!

Now the 93,000 was simply because 21, one of the 21 prescription plans did not include that drug in the formulary, it was a breast cancer drug, it’s a newer drug, and so it’s really important to go through the exercise. Just don’t go to an agent and just buy what they are selling.

Where do you find this again?

Medicare.gov. I think that is probably — You can still buy the coverage of course through an agent but do your own research, find out what plan makes the most sense for you and your specific needs.

And once again if I don’t sign up for Medicare Part D, which is not required.

It is not required. You will have a penalty, and that penalty is 1% per month times the base amount, the base amount is around $36, $37 and that stays with you forever. And this is a good point too because if you’re coming off of a group health plan, let’s say you work past the age of 65 and then you decide to retire and you go on to Medicare you buy part B, and now you’re saying okay I want to buy part D, you can still face a penalty if your plan was not part D creditable, and what we mean by that if your health plan didn’t have prescription drug coverage then you could have a penalty because you’re not coming off of a plan that is deemed to be creditable coverage.

And how do you find out if your plan is <Inaudible>?

You can contact your HR. I can tell you most probably all health savings account plans which are very popular now are not creditable because they don’t have first dollar benefits for part D for prescriptions. So it’s really important to pick a plan based on what you need. So <Inaudible> back to part C. So the cost for health care are nuts. They’re going up at twice the inflation rate, so we’ve created this new part– I don’t even like calling it Part C Medicare but that’s the general term, because you are leaving original Medicare and you are having your care taken care of by a private organization. A private company. You know all the names, Humana’s those Uniteds, etc. And that provider is paid by the federal government a fee annually to take care of you. Now if that provider pays less for your care they may profit if they pay more for your care, they have a loss, so original Medicare, the federal government is paying the bulk of the bill. The supplement covers what Medicare doesn’t pick up, and most supplements will cover the vast majority some actually cover all of the costs, even part B excess charges that can be charged by physicians. That’s plan F that a lot of people have heard of. Plan F is actually going away.

Really.

And it’s going to be replaced but that’s another story. We don’t need to go into that.

Plan what?

Well it’s– so Plan F, for those who are on it, I don’t want to scare people that they’ll be grandfathered in and they’ll be able to have that, but Part C the big thing that we want to know is when you pick a part C plan, an advantage plan, you have to know that you may not be able to go back into original Medicare if your health changes. So that’s the important part. And a lot of people, as you said, buy the part C plan because they often, not all of them, but they often have no monthly charge, whereas a supplement might be —

So <Inaudible> buy the part C, but you really don’t buy it.

Well, you’re buying it for 0.

But you sign up for it.

Yeah, you sign up.

Doesn’t cost you anything.

And some of them do, though.

But it’s a low cost option.

Yeah, very low cost.

So you think this is a great deal because I can get what I need. It’s not going to cost me anything. And then your health changes and you need to see a specialist, they’re not in the deal, they’re not covered.

They have specialists in the network.

But, but–

It may not be the one you want to see.

And but as we said because the more demand on it there’s going to be fewer and fewer specialists, the line will be longer. So if you’ve got the ability to do a supplement and don’t monkey around with Part C you’re probably better off.

That’s my opinion yes.

Got it.

And make sure you go to medicare.gov for your prescription plans.

So these are the things we deal with day in and day out, Certified Financial Group. We have a specialist in the office, fortunately he’s here with us this morning. He’s with — Gary, you are a certified financial planner, but you’re just happy to be very conversive and knowledgeable in Medicare and Medicaid and so on. That’s why that works out, goes up so fast. You’re going to do this again when in June?

June 2.

June 2. I don’t know if that’s up on the website. Is it on the website? So if it’s on the website you can go on the website, Financial Group. com, click on Events and Workshops, and you can register now. Last time it was a standing room only crowd and we’re not going to do that again. So if you got a seat registered just locked down for you oughtta do it quickly.

Great call, Gary!

Thank you so much. Let’s go to Richard in Apopka. Richard, you’re up next.

Good morning, Richard, thanks for hanging on.

And if you’d like to get behind Richard, it’s 844-220-0965. That is 844-220-0965. Richard in Apopka, go ahead.

I did hear that you can– <Inaudible> already in and buy Roth IRAs with it? Do you have to be working to do that?

You do, Richard, so in order to —

Okay, that’s my question.

And that’s a great question, so a lot of people still work beyond the age of 70 and a half when that’s the age that you have to start taking distributions from your IRA so it’s important to know that once you start taking required minimum distributions from your IRA you can no longer contribute to your IRA, but if you are working, if you have earned income, and you’re over the age of 70 and a half you still can contribute to a Roth IRA so we have several clients that simply move their RMD from their IRA and fund their Roth IRA. But it does require Richard that you are working and that you have earned income.

How about if you have a spouse that’s working, financial planning Brett?

Um, yes? So if you have a spouse <Inaudible> I think I have coffee breath, actually, so you can do a spousal IRA, which that would work as well. So once again Richard’s situation if his spouse has earnings and all she has to have is the minimum earnings and if you want to max out —

Yeah, if you want to max out it would be 6,500 so —

If your spouse is earning $6,500 a spouse can put in $6,500 and their deductible IRA if she wanted and could Richard– Richard could then do a Roth.

I believe so, yes.

There we go. Planning tomorrow today, baby.

I wasn’t the one working, she was.

Okay, well that’s good if she’s the one working, so you can do it, it’s easy enough.

I heard that and I thought maybe I missed out on something but I <Inaudible> a little bit but that’s okay.

Thanks for the call, Richard.

Call us if you need any clarification, Richard.

Give out the number for Richard to do that.

Our office number is 407-869-9800. Again, 407-869-9800.

All right, and if you want to call the show it’s 844-220-0965, that is 844-220-0965. The text is 21232. That is 21232. Haven’t got a lot of text questions in usually, get a couple by this time but text machine’s been quite quiet today.

There you go.

You looked like you were going to say something.

I’m looking at the text right there.

I’ll be 65 next year and have health insurance through my wife who will work for several more years. Well good for you. Should I sign up for Medicare at 65, part A and B by advantage.

Good question. So great to have the wife still working.

Ha ha ha!

So you have some options there. So you — This is a really tough question because it actually involves a lot of calculations. You want to look at the after-tax savings of what it costs to stay on the medical plan through your spouse’s employer. Most likely she has a cafeteria plan so she’s able to pre-tax what it’s costing for both her coverage and in this case the texture.

So let’s drill down a little bit what you mean by that.

So when we contribute to a cafeteria plan you typically will save both the FICA taxes which is 7.65% and your income tax bracket. Let’s say you’re in the 22%. So let’s say the coverage for your spouse costs $200. It would really not be 200, it would be 30% less than that so it would be more like 140. So we’d want to use this $140 and compare it to the cost of a supplement. But then we have to drill down a little deeper and we have to say, all right, what kind of coverage are you getting through your employer or the spouse’s employer versus what could you get for paying a couple hundred dollars for a supplement that would pay all medical costs? So it really is not an easy — and you have to crunch the numbers and know the person’s health conditions.

And you have to look at the incomes because <Inaudible> income your Medicare premium could be through the roof.

And that’s another thing, so if the spouse is still working we have something called an income — IRMA, but I’m trying to remember what it stands for.

It was your opinion, wasn’t it?

So it’s basically an income adjustment if you earn what the government says is too much, you could be paying $300, $400 for your Medicare Part B premium.

With after-tax dollars.

Correct.

Huge.

Yes, it is huge. So it’s a really tough calculation.

So if you want to call the show it’s 844-220-0965, we have a couple callers online, going to get to them on the other side. We are planning tomorrow today with the Certified Financial Group here in WDBO. Right now it’s time to get our regular traffic report.

Red Alert. <Inaudible> security Triple Team Traffic Center.

A serious accident on the turnpike northbound, approaching the Central Florida Greenway from Osceola Parkway has it shut down. Traffic is backed up all the way to almost Irlo Bronson. You’re going to want to jump off beforehand at Irlo Bronson. You can take that west. Use 441 to get around the closure. This has been a News 96.5 WDBO Red Alert traffic advisory.

It is the final segment of On the Money, with the Certified Financial Group, here on News 96.5 WDBO, all part of our Ask the Experts weekend. Joe Burt, the Oracle of Orlando, is here taking your phone calls alongside Gary Aveley, 844-220-0965. That is 844-220-0965. Up next Mike in Winter Garden! Mike, good morning.

Mike!

Good morning.

Hey, good morning.

Good morning, how can we help you?

Okay, 64 years old couple years from retirement and I’ve got about $100,000 of stock that was in an ESPP. And I know I’ll have to pay capital gains on it if I sell it and my gain is about $15,000. Should I sell it now and roll it into an IRA where I’ll get some gain out of it, or should I just wait? The stock has kind of range on it, it goes up and down about $1 a share so it’s not really even <Inaudible> not moving. So I didn’t know.

You can’t transfer it all in at one– you’re only limited to $6,500.

Into it.

Oh, really.

If you could roll over the ESP plan, right?

No, this is a — Did you buy the stock on the ESP plan with pre-tax money?

It’s after tax.

Yeah, so it’s after tax so it’s non-qualified. Yeah. So you’re limited as to how much you can roll into the plan, the IRA limits.

But Mike you brought another thing that I would probably ask you and you don’t have to answer it but what I would want to know is because it’s a substantial number, what percentage of the stock relates to your whole portfolio. If this is 100,000 and let’s say your whole portfolio was 500,000, I’d say well that’s too much. If this is 100,000 of stock and your portfolio is 2M, okay well I feel a little bit better because it’s 5% or less. So as you have the ability to sell shares of sometimes they’re restrictive and sometimes we have to wait a year or so, to get long-term capital gains status but if this is too high a concentration of your total I’d recommend you sell it as you’re able to.

Okay. It’s about probably 5% of my portfolio, okay total. So I didn’t know if it should be — basically, if it– $6,500 is what I can sell in one tranche, or is it limited by year that I can sell that much or —

So the limit on that 6,500 is just what you can put into an IRA, so if you wanted to do a deductible IRA, now you may be at an income level that you perhaps can deduct the IRA but you can still contribute it would be a nondeductible IRA and it gets a little confusing or perhaps a Roth, and then if you’re married you have the option on spousal, so there’s some factors there that need to be considered. But the bottom line is you can’t take all that stock and roll it into an IRA and a tax fee contribution.

I do recommend, especially if you’re getting additional stock to get a look at how much that is of your total and start divesting as you can.

Yeah, okay, I appreciate it, thanks very much.

Bye Mike, thanks for the call!

Thanks for the call. All right we got about two minutes left. We do have a text question here.

I am now 68, when I turned 65 I have government health insurance. I only took part A. Now that I’m 68 I decided to apply for Part B, because of a 10% penalty per year and it– And that is why we keep it at 160 characters, ladies and gentlemen, but <Inaudible> before we get out of here.

So that’s a good question. I mean, you are going to have a penalty for each year that you don’t elect part D, and sometimes folks choose not to, maybe they wanted to get coverage through another plan and they felt they didn’t need it but each year that you defer you can face a penalty for not having part D. <Inaudible> qualified–

Unless you’re coming off a qualified, exactly. That’s the exception, if you’re coming off a qualified group health plan, but just making the election not to have part B or D you’ll face a penalty so it comes out a pretty good cost.

About a minute left of the show, the shred event–

Shred event!

March 10 at our office in Altamont Springs. It’s the annual event where we bring in huge trucks so you can see your stuff shredded right before your eyes. <Inaudible> bankers’ boxes. You can also register for a couple of tickets to the Springs concert and all that information is contained on our website, financial group.com, financial group.com clicks on Events and Workshops. You can register for Gary’s workshops, you can register for a couple tickets and get more information on the upcoming shred event. Absolutely free. We hope to see you March 10 at our office in Altamont Springs.

All right, that’s going to do it for this week’s edition of On the money with the Certified Financial Group where we have been planning tomorrow

Today!

Right here on News 96.5 WDBO where you at next week at 9:00am right here. Get your question answered, of course financialgroup.com is the website.

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