On The Money Transcript 4/7/18

Well, good morning everybody and welcome to On the Money by the Certified Financial Group, the only show in Central Florida that is hosted exclusively by Central Florida planning professionals. We are here with Joe Burks and Nancy Hick. Good meeting everyone.

Two of the Central Florida practitioners, financial planning practitioners, certified —

Certified financial planning practitioners.

That’s us.

Say that five times.

Certified financial planning practitioners.

Did I say it wrong?

<Inaudible> practitioners.

You got.


You got it.

Oh yeah, that was a big title, but what do you do Joe?

We are here — Nancy and I here this morning to take your calls. 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, wake up at 55 years old and say Loretta, one of these days that paycheck is going to stop and we want to enjoy the rest of our lives. Where’s that money going to come from? We’ve got Social Security, but you know, you’ve got this money in 401ks and IRAs and we’ve got this life insurance policy we had. Should we refinance our house? How about a reverse mortgage? We’ve got to make some decisions. So these are the things that Nancy and I do every day, day in and day out, for a fee for our clients at Certified Financial Group. But on Saturday morning, we are going to do it for you for free. So we are your financial planning body shop. Patch up those dings and dents that you might have, and there’s no question that is off the boards. If we can’t answer it, we’ll find the answer some way, somehow, some shape or form. So if you have any questions regarding taxes and stocks, bonds, mutual funds, real estate, long-term healthcare, IRAs, annuities, life insurance, reverse mortgages, all that and more, we are here and the good news for you is the lines are absolutely wide open. So all you have to do is pick up the phone and dial these magic numbers.

844-220-0965. That’s 844-220-0965. We also have the text machine up and running as well. You can text us your questions. Just keep it to about 160 characters. It’s 21232. You know, we’ve got a lot of people texting questions and it always seems to get cut off. Just count to 160 and if you’re writing a small novel, that’s when you want to give us a phone call at 844-220-0965. Alright, topic of the week Nancy Hick, what are your chances, because you had a client recently that says will I live to be 87.



So we talk frequently about doing planning for our clients. We also update our plans regularly, and I have a couple that is going to be both retired in a couple months, and that was exactly what the husband had asked me: What are my chances of living to 87? I said I can tell you that exactly, because we just got this nice study that was put together by MetLife. They both happen to be 65. So a male aged 65 has a 50% chance of living beyond age 85, and a 25% chance of living beyond age 92.

Right. Say that one more time.

Okay, living beyond. Not living to, but living beyond age 85.

So if you’re 65, you have a one in four chance of living beyond 92.



I mean we generally — I use 90 for life expectancy on my plans. And most people are shocked.

They’re shocked about the women <?>.

Then we go about this. So for us, somebody who’s 65 and retiring, a female, they have a 50% chance of living beyond age 88, and a 25% chance of living beyond age 94.

94. Now what if you’re married, age 65.

So if both of them happen to be the same age, which is rare, but they’re both retiring at age 65, they have a 50% chance of living beyond age 92 and a 25% chance of living beyond age 97.

This is critical.

Okay so —

It is, it is, because oftentimes people will say you know well, — and I’m a perfect example. My father was 50 when he passed away. What is going on in our family medical chemistry has been discovered since my dad passed away at such a young age, we found out that there is huge inherited cholesterol problems. So I have taken care of that. I’ve obviously lived beyond age 50. So family history plays a part. However, medical technology has gone a long way to increase life and increase quality of life. We’re eating better, the environment is better, there’s so many different factors that make longevity possible, and people just don’t believe it. So if I happen to use 90 or 97 on a plan and their wrong and I’m right, then I’m erring in the favor of the client.

Right, we get a lot — I get pushback just like you when you do the plan, they say I’m not going to live that long, I’m going to spend the money now, you know, because I’m not going to live to be 90. Once again, give that statistic. If you’ve got a married couple —

A married couple both age 65 —

What happens?

They have a 50% chance of living beyond, not to, but beyond age 92, and a 25% chance of living beyond age 97.

There you go. So it’s planning —

Might have to change our plans to 100, who knows?


Well, that’s always been my plan, is I’m going to plan to live to be 100. To 100. Because anything after that, I’m probably not going to care and I’m going to make it somebody else’s problem. But now I’m starting to think it’s a little young, maybe I need to go to 105.

Well, it’s reality. It’s what’s happening. And that’s not saying the quality of life is going to great, but you’re going to be alive.

And then you —

But —

Then you’ve got the medical costs.

But the quality of life for people in their 80s and their 90s is much better.

Oh, sure.

And I have a lot of clients that are in their early 80s and if you just met them and they told you how old they were, you’d be shocked.

I’m seeing that more and more these days. Someone’s younger —

People are remaining engaged in life, and that makes all the difference.


Alright. Well, we got a couple of calls coming in. 844-220-0965. That is 844-220-0965. If you want to ask Joe or Nancy a question. Let’s start off today with Mike in Orlando. Mike, you’re on with the Certified Financial Group. You’re on WDBO <sp?>.

Good morning Mike.

Hi Mike.

Morning. Thanks for taking my call.

Sure, what’s up?

I wanted to ask you about the CFP designation and fiduciary responsibilities.


I understand the CFP Board wants the minimum requirements to include all investment products, including insurance, which was left out. There has been a pushback though, of course, insurance companies and other financial advisory companies. What’s your position? Do you agree with the change the Board wants to make? Do you planners currently have fiduciary responsibility for all investments, including insurance? I will hang up now and listen to your answer.

Well, first of all, let’s distinguish what a fiduciary is. There’s two ways of working with the clients in the investment world today. One is what’s called a fiduciary standard, and the other one is called the suitability standard. The suitability standard is what’s been around for years and years and years and years and has been practiced by the brokerage industry, where what you do for your client is suitable, not necessarily in their best interest. And as long as you can prove that it’s suitable, you’re okay. The fiduciary standard is that you’re going to do something that is in the clients’ best interest, not in your best interest. Now, the thing about insurance, it’s a whole — it’s a can of worms, frankly. Because you can take an insurance product and unless you spend a heck of a lot of time analyzing, researching, and dissecting the product, you can be accused of not providing the very, very, very best insurance product that’s out there. So insurance is really a tricky area and frankly, I don’t know where to come down on that particular area, Mike. It’s a tough call. Nancy, you want to add anything to that?

Well, and what I’d like to add to it is I know that some people not CFPs are screaming about now having to come up to this fiduciary standard. The rest of the world is coming up to what we have had to abide by and attest to through our code of ethics for decades. So I see no problem with it. I mean, from an insurance standpoint, there’s a lot of different iterations for insurance, and you have to just really make sure that you’re listening to what the client wants, what they need, and try and find the best product for it.

Speaking of fiduciaries, we have been fortunate to earn the stamp of approval, if you will, by the Center for Fiduciary Excellence, CEFEX.org, where they come in and they do an extreme detailed audit and review of your firm, all of your forms, all of your processes, procedures, disclosures, all the things that — there’s some standards — international standards that you have to comply with. We’ve been designated as a CEFEX firm. You can go to our website and get more information about that. And there’s fewer than 1% of advisory firms in the country that have that designation, and we’re proud to have it. That’s what we do for our clients, how we deal with them on a fiduciary basis.

It was a lot of work and it was painful to get certified —

I can imagine.

But, you know, it’s nice to have it.

I missed it, what was Mike referring to, what was the governing body he was referring to?

Well, so the standards of fiduciary responsible are extending beyond just what a CFP — it always was geared towards investments. So now they’re looking at adding insurance onto it and having a fiduciary responsibility for insurance, making sure that you’re providing what is best for the client as opposed to your own pocket.

Is that due to what we were just talking about? How people are living longer and therefore are we putting the right insurance in —

Insurance is — Risk management is a part of financial planning and you want to do what’s appropriate for your clients. So it’s — And the problem is, I can see on the insurance side, you could have two professionals have legitimate arguments on both sides as to what might be best.

Right. My attitude is protection is protection and investments are investments. Not everybody agrees with me. But I could make a good argument for my attitude.

And there you go, education is key.

844-220-0965 is the number to dial us up here. 844-220-0965. Did we — We didn’t find out about Gary’s workshop? I was going to ask you about that.

No. I texted him — I called him and he did not get an answer. But he has a workshop this morning on everything you ever want to know about mutual funds. How to dissect them, what they look like, how they’re put together, how to measure the expenses and performance and all that stuff. And it’s absolutely free. It’s at our office in Altimont Springs this morning, and I’m hoping to get a call from him, because I know he had a couple seats left, but unfortunately Nancy or I do not remember what time it starts.

We didn’t print off the schedule.

Yeah, we didn’t — And it’s been taken down from our website because it’s today. But anyway —

I remember last week —

It’s a great workshop.

You and Denise were asking was it at 9:00 or 11:00?

I know the next one he’s doing, on knowing your number and preparing for retirement, that starts at 9:30, and that’s next month. But today’s workshop, I’m not sure. So Gary, if you’re listening, text me or something and let us know. But this is a good one. Not that his other ones aren’t good, but this is a one that I think applies to a lot of people, because most everybody has mutual funds in some way, shape, or form in their IRAs or 401ks or individual <Inaudible>, and they buy them based on how many stars they might have in a Morningstar rating, which is not the way to buy a mutual fund. And he’s going to talk about all that.

Alright, perfect. Alright 844-220-0965. It’s 844-220-0965. Or you can text us to 21232. That is 21232. We are planning tomorrow today. We’re <?> Certified Financial Group, here on News 96.5 WDBO. Time to hear the three big things you need to know.

And welcome back to On the Money with the Certified Financial Group here on News 96.5 WDBO. We are taking your phone calls at 844-220-0965. That is 844-220-0965. We also have the text machine up and running as well, 21232. We are three and half minutes away from the latest news, weather, and traffic, so we want to get back to our busy phone calls here, talk to Mary, in Ovito. Mary, good morning.

Good morning. How are you?

I’m doing great Mary, how are you?

What can we do for you?

Well, I have a question regarding reverse mortgages.


Okay, I am 59 years old, a widow with no children.


So, a couple people have mentioned to me about reverse mortgages and I don’t know much about them.


I’m wondering if this is a path that I should look at.


Well, I can tell you you’re — my mother was a widow at 48. She has no kids living in the home, and she’s in  her 80s now. But she reached a point where because my dad had died at such a young age, Social Security benefits were not so great. She’d probably be mad at me for saying this on air, but whatever, she’s going to help some people. So to make the mortgage payment was a little bit tight based on the pension that she received from the years that she did work. You have to be age 52 or older to look into taking advantage of a reverse mortgage. What it allows you to do is stop making your mortgage payments. You still have to pay your insurance, you still have to pay your property taxes. Whether or not you take cash out of the house to help with your lifestyle is completely a choice. You could either use the reverse mortgage for extra money or to simply stop making the mortgage payments. And you cannot be kicked out of your house. Some of my clients —


I happen to think it’s a good tool.

Okay, because I have no intentions of moving. I mean, I love my home. My mortgage is only 800 a month.


And I still owe 80,000 on it, okay.

Mary, what’s your house worth?

It’s got to be worth at least 330.


Okay, so you’re in good shape there.

<Inaudible>. Yeah.

Right, right. So I’m figuring — because I spoke to a woman about it and she had told me that evidently they buy my mortgage and pay it and then they charge me like an interest rate?

Right. Well, the interest accrues. So when you pass on, the house is sold and the reverse mortgage is paid back and whatever equity is left would go to heirs. In your case, it could be family members, charity, whatever you would name.

Okay. It sounds like a no-brainer.

But if you don’t — Yeah, if you don’t want to move and you want to pull some of the equity out of your house to live a nice lifestyle, do what you want in retirement, but you don’t want to have to do it in the way of an equity line, something that you have to pay back, a reverse mortgage may be a good tool for you. But you’ve got a couple years you have to wait before you can do it.

Mary —

Right, she told me that as I get older, the payments would increase, correct?

Depending on what kind of — if you take a fixed rate or an adjustable rate, yes. So you want to look at that option. There’s been a lot of studies been done in recent years by the financial planning industry that has really come down in favor of reverse mortgages to offset times when your portfolio might be down and you’re drawing from that to live on, to use the — take some withdrawals from your reverse mortgage while things are down and let things heal and then shut off the reverse mortgage. So as Nancy said, you have the option to take the money out in a lump sum, which we generally don’t recommend. You can use it as a line of credit, which isn’t a bad idea as kind of a failsafe position. Or use it as a monthly income and decide what might be best for you. So Mary, the best thing to do is before you launch off into that is really to have some planning done and look at where that might fit into your scheme. Because it isn’t free. But once again, in your situation, is if you don’t have any heirs, you’re not worried about leaving a legacy, it’s not a bad way to go.

Right. Okay. I appreciate the information.

Alright Mary, <Inaudible>.

Thanks so much for the phone call, Mary. <Inaudible> it’s 844-220-0965. It’s 844-220-0965. We’ve got Josh in Orlando with a great question coming up. Josh, hand on the line, you’ll be first up after the latest news, weather, and traffic. We also have two texters. We’ll get to that in just a moment. We are planning tomorrow today with the Certified Financial Group right here on News 96.5 WDBO.

Hey, welcome back to On the Money with the Certified Financial Group here on News 96.5 WDBO. It’s ask the experts weekend. We’ve got the oracle of Orlando, Joe Burk’s here in the studio alongside Nancy Heck and we’re taking your phone calls at 844-220-0965, 844-220-0965. Joe, for the audience that may have joined us during the latest news, weather, and traffic, what can they call you about today?

Nancy and I are here to take any questions that might be on your mind regarding your personal finances. We go through life trying some of this, trying some of that, wake up at 55 and find out we may have a collection of financial accidents. So we are here as your financial body shop. We’re going to bring out the Bondo, answer those questions that you might have about stocks, bonds, mutual funds, real estate, long-term healthcare, IRAs, annuities, life insurance and more. As we say, Nancy and I and the other 11 certified financial planners at Certified Financial Group do this for a fee on Monday through Friday, but on Saturday morning we are here absolutely for free. So if you have any questions on any of those topics, the good news for you is that we have a couple of lines open after we talk to Josh, so let’s give them the numbers.

It’s 844-220-0965. That’s 844-220-0965. Alright, Josh in Orlando, you are up. You’re on the Certified Financial Group here on WDBO.

Morning Josh.

Hi Josh.

Good morning, and thank you for taking my call. I just have a question around when’s the right time to start financial planning? My wife is in her late 20s and I’m in my early 30s, and we don’t want to be 55 and wake up with a bunch of financial accidents. When do we sit down with somebody and have that discussion since we have really strong 401k options from our employers, we just don’t know when’s the right time to get help?

Well, if you’re thinking about it then you should be doing it. I mean, I’m seeing more and more people in your age demographic than I am people that are within five years of retirement lately, and I think it’s phenomenal that at your age you want to do some planning. So if it’s on your mind, then you should make an appointment and meet with somebody and start your planning now.

The best thing to come out of it Josh is peace of mind. The fact that you’re your age and you’re thinking about it, chances are this has been hanging around the back of your mind, you don’t want to wake up at 55, as you said, with a collection of financial accidents, you want to know what you need to do now, between now and retirement age so you don’t look back and say gee, I wish I would have known. And you have a great asset. You have time on your side, and time is a very, very powerful tool if you use it correctly. The thing is, is most people don’t know how to use that and what to do with it. So as Nancy said, what you want to do is sit down with a certified financial planner practitioner, somebody that does this for a fee, not somebody that’s going to do it for free, because if they’re going to do it for free, they’re going to want to try to sell you something.

They try to sell you, yeah.

Stay away from those free lunch and dinner seminars and sit down with a certified financial planner. It’s what we do, but there’s other certified financial planners in Central Florida. I encourage you to go to our website FinancialGroup.com, learn about us, and make an appointment. We offer a no obligation visit and we can meet with you and your wife, determine what your goals are, what your dreams and ambitions are, And like I said, what you need to do so you don’t look back 5 or 10 years from now and say, gee, I wish I’d had known.  But you got to use that asset that you have as time.  And every year that you waste is a year lost, and it takes that much more in savings and investments to get caught up.  So give us a call.  We’d love to work with you, and that applies to any of our listeners that might be out there this morning.

I presented a plan last week to a girl who was in her mid-30s and using 90 for life expectancy and her working 30 more years and then having all those years of retirement.  So she’s got basically six years ahead of her that we’re looking at on the plan.  It’s very similar to what Josh’s situation is, and she was amazed at how much things grew.  And I said, well, the one factor that you have is time, and this is what compounding and compounding at modest rates of returns of 30, 40 years could make a huge difference.

This past weekend, my granddaughter was in town, and she asked me, okay, what is going to take for me to have $0.5M in 25 years?  I said, well that’s a function of a couple of thing: number one, time — 25, so we know 25 years; how much you’re going to save every year; and the rate of return you get on your money.  I said, so we know 25 years.  Let’s look at how much you need to save, and let’s assume a rate of return of 8% per year.  Now people say, 8%, where are you going to get 8%?  Long-term, the market has done more than 8%.  So let’s just use 8% because people think 8%, I can only get 2% in CDs.  We’re not talking about CDs here, folks.  We’re talking about the opportunities that are out there that you can get that long-term.  So I said, alright, what is it going to take?  And it took about $13,000 a year over 25 years to do that.  8%, about $13,000 a year, a little bit more than $1,000 a month, assuming you don’t increase it over that 25 year timeframe.  I said, now, here, Courtney, let’s look what happens if you wait a year to start saving.  You only have 24 years to do it.  The difference between waiting one year and saving that $13,000 was $90,000.


So if you do it for 24 years, you’d have 910,000.  If she did it for 25 years, she’d have 1M.


So that one year — and that’s what we try to tell Josh, is time is a — compound interest and compound growth is the eight wonder of the world.  This is what they don’t teach us in school.

Compound interest —

And the other problem is, Kyle, is that we’re impatient.  It’s not growing fast enough.


It’s not getting big enough fast enough.

Immediate gratification.

Yeah, so we take out the little bit of savings we have, and we blow it.  Then we’re starting again, then we take, blow it, then we start again, we blow it, we start again, and before you know it, you’re 55 years old and not going to make it.

Very interesting.


Well, I tell you what, compounding interest, you put it in the calculators, and I’m just amazed.


I’m doing it, so hopefully I’ll have a nice little cushion when I retire.

Good.  Good for you.

Alright, Josh, thanks so much for the phone call.  If you want Josh’s line is 844-220-0965.  What was the number to reach you at Certified Financial Group and the website, one more time?

407-869-9800, 407-869-9800, or better yet, go to our website, financialgroup.com.  It’s all about the workshops and upcoming events.  We’ve got the Springs Concert coming up along in the Springs community, and along with this year, featuring the music of Sting and The Police April the 28th.  On the grounds of the Springs, bring your adult beverage and a blanket and kick out under the stars and enjoy the music.  Tickets are available on our website, financialgroup.com.  Click on events.  It’ll take you right there to get some tickets.

That’s what, now, four weeks away?

Three weeks.  Three weeks from today.

No, the 28th of April.


Three weeks.

Oh, yes, three weeks.  Three weeks.  Three weeks.  Alright, thanks to the 21232.  Pros and cons of reverse mortgage, married, no children.

Well that’s — I wonder if that was our caller, so yeah.  I don’t know whatever the con would be.  I don’t know.

Well, there’s nothing free.  You’ve got interest.

Well, yeah, there’s cost.

Interest is going to be accruing, and yes.  There is cost.  Nothing is free, but in the certain circumstances, as you said, the pros far outweigh the cons.

Yeah.  I mean, I talked a few weeks ago about with my mother-in-law, she took out hers in a lump sum and paid herself a pension.  She paid herself a pension for 10 years, and then there was death benefit that went to her children.

When it was <Inaudible>.

Yeah, I mean, it was amazing, and there’s still equity in the house.  So I think that reverse mortgage is a great tool, but it’s not — as Joe said, it’s not free.  There are costs.  It’s regulated by FHA, but the costs are built into the reverse mortgage.  You don’t have to pay them out of pocket.

Alright, just like that.  Leslie in Orlando is on the phone lines.  Here, Leslie, you’re on the Certified Financial Group here on WADBO <sp?>.


Hi, Leslie.

Good morning, good morning guys.  I’ll be close to 60 next month, and I’ve got a variable annuity as an IRA and wanted to know if I could e-mail you that fact sheet, my statement, and you guys could advise me if I need to stay the course or change.  As you said before, time is essential.

Sure.  Leslie, one of the things that we do is give a second opinion.


So we can look at your variable annuity IRA, put what you have into planning list <?> so you completely understand exactly how it’s working for you and what it’s invested in, and give you the pros and the cons.  So yes, that’s something that we do all the time.

Sure, I’ll appreciate that.

But the other point is, Leslie, we can opine <?> on the quality of the investment that you have, but we can’t tell you if it’s the right investment.  And the only way you really know that is to do some planning.  So that’s the other side of the coin.  As Nancy said, we can do a second opinion and look at the quality of what you have and tell you whether or not we think it’s good, bad, or indifferent, but how does that fit into the overall things that you’re doing?  The only way you really know that is to do some planning.

Otherwise, you have maybe a financial accident there that we don’t know how it fits in when — it’s kind of like calling a doctor and saying, I’ve got these pink pills I’m taking here.  Are these pink pills any good?  Well, we know the manufacturer, we know what it’s about, we know what they do, but should you be taking pink pills, green pills, or red pills, we only know that if we’re doing planning.

Leslie, if you want to fax it in, and that’s a safe way to do it, the fax number is 407-869-9700.

Thank you, ma’am.


And Leslie, just don’t fax it in.  Mention the show, put it to Nancy’s attention or something so it doesn’t sit in the fax machine and somebody wonders what this is all about because Monday mornings <Inaudible>

I sure appreciate what you guys are doing for the people of Orlando.

Well, thank you, thank you.

Well, we enjoy doing it Leslie.  Thank you for your call.

And put your contact information on there so I can get back to you.

Thank you, ma’am.

Have a great weekend.


Alright, thank you so much, Leslie.  If you want Leslie’s line is 844-220-0965, 844-220-0965.  We got another text question here at 21232.  Please explain Medicare sign up with/without employee medical.

Well, that depends on whether or not your employee medical is going to serve as your primary once you reach age 65.  And when you reach age 65, you’ve got Medicare Part A, Medicare Part B, Medicare Part C, and you’ve got D, which is your drugs, and then you’ve got your supplements.  And you need to meet with HR and find out where your employer plan fits into Medicare, if it’s going to be the primary or if it’s going to serve as a supplement.  So don’t assume anything because you need to have the appropriate coverage.  So without knowing your employer plan and without knowing your situation, it’s impossible to tell you.  But the first thing I can tell you is go to HR and find out what your circumstances are when you get to be age 65 because you really don’t have a choice because it’s dictated by what your employer will provide for you.

Okay.  Alright, let’s get to Jim before we get into the three big things you need to go.  Jim in Samford, you’re on with Certified Financial Group here on WADBO.

Hi, Jim.

Morning, Jim.

Morning.  Real quickly, you’ll understand because I don’t.  I bought a place <Inaudible> in December — I mean, January 5th, but I had the money sent in December, you follow me?  Okay, what I did, I needed $100,000 because I didn’t have that much, so I had to sell some mutual fund.  And I know I’ve had that mutual fund for 20 years, so every year you pay those things, 1099s, whatever it’s called.  Okay, if I’ve paid all that, am I going to have any problem?  They’re going to say, well you sold $100,000.  You see what I’m saying?

Yes.  The difference is your cost basis versus $100,000.  The 1099 is on the dividends and the capital gains, so you have to find out what your cost basis is net of taxes, net of what you’ve paid, and the $100,000.  And wherever you were holding the mutual funds should be able to provide that information for you.

What I don’t understand, though, if you give somebody money all those years and you’re trying to make money, why would I have to pay any taxes on the money, if I’m already paying every year what it makes?  You see what I’m saying?

Right.  We’re not — let’s back up here.

There may be some gains and principal that you have not paid.

Let’s back up here.  You say when you sold it, it was worth 100,000?

Well, he sold 100,000 out of it.

I sold 100 out of it, yeah.

Okay.  Okay, alright, and so let’s back up 20 years, as you said, and let’s say of that 100,000, that you originally invested 25,000.  And over all those years, as you said, you’ve been getting dividends, capital gains on it on 1099s, right?  And you’ve been paying taxes every year, right, on that amount?

Right, right, right.

I just want to be sure we’re following along here.  So that money that’s been reinvested bought you more shares.  So you’ve got more and more shares every year, and you pay taxes on the dividends and capital gains, which increases your cost basis, as Nancy said.  So your original 25,000 that you invested, every year you add whatever you got in dividends and capital gains, which your mutual fund company is keeping track for you.  Then when you ultimately sold those shares, if let’s say all those dividends and capital gains came to $50,000, so you invested 25, you paid taxes on 50,000, and now your cost basis is 75,000, but you sold it for 100,000 because you have appreciation in addition to the dividends and capital gains.  So you’ll have to pay taxes on the $25,000 of gain over and above that.  And it’ll show up on your 1099.

But you would pay it at capital gains rates, as opposed to ordinary income rates, which is a little less.

I wanted to say, you guys are very good because it was 20,000 I put in.  Funny.

Oh, cool.  Good guess.

Well, thanks for the call, Jim.

Yes, thanks so much, Jim.  We appreciate you calling in here, Jim in Samford.  If you want Jim’s line it’s 844-220-0965, that is 844-220-0965.  It’ll be your last chance to get your question and answers.  We are coming up on our final segment, and text questions are up and running as well, 21232.  We are planning tomorrow today with the Certified Financial Group.  Go ahead, Nancy.

I was just going to say, why do I have to pay taxes is a common question.  A common question all year.

And <Inaudible> now.

And everybody seems so surprised by the answer.

Anyway, let’s join Dave Wall, get the three big things you need to know.

This is News 96.5 WDBO.

Welcome back.  This is On the Money with the Certified Financial Group here on News 96.5 WDBO.  We are taking your phone calls at 844-220-0965, that is 844-220-0965.  We are three minutes away from the latest news, weather, and traffic, but before we get out of here, we got one more text question we want to answer here with Joe Bird and Nancy Heck.  If I need to withdraw money before my 60 years of age, should I put money currently at 41 years old in a Roth or brokerage account?

Well, as we had discussed with Jim, if it’s in a brokerage account, something that’s not qualified, then the person is going to pay dividends and capital gains via a 1099 every single year.  If they put the assets in a Roth and the Roth is going to accumulate tax-free, as long as the money is in there for five years or longer, it comes out tax-free, but the principal can always come out tax-free.

And you still have the same investment options in the Roth or in the brokerage accounts if you’re setting it up appropriately.  So it’s not a matter of investment choices, but you don’t want to use the Roth in lieu of putting money in a deductible IRA or a deductible 401(k) if you’re in a higher tax bracket, 20% or more, because you don’t want to give up that bird in the hand today, which is the tax deduction, as opposed to a promise in the future that the Roth money will be tax-free, which we’re all skeptical about in years to come.

Right, and I don’t think there’s going to be any changes to IRAs.


Traditional IRAs.

Well, we’ve got about a minute left.  Thought I’d <Inaudible> some steam <?> music here, and just to plug what, Joe?

We’ve got, on April 28th, once again, Certified Financial Group is a proud sponsor for the seventh consecutive year of the Springs Concert at the Springs community in Longwood.  This year, it’s featuring the music of Sting and The Police.  Tickets are available.  Go to our website, financialgroup.com.  That’s financialgroup.com.  Click on events.  It’ll take you right to where you can find some tickets.  Hope to see you there.  Bring your blanket and adult beverages, and you will enjoy a wonderful evening.

Yeah, hopefully it’s nice.  Alright, Joe, numbers and websites, best number to reach you during the week, and workshops coming up.

407-869-9800.  Our website is financialgroup.com, and if they go to financialgroup.com, they could get a schedule of all the upcoming workshops.


And it’s the best place to get the information.

Alright, that’s going to do it for this week’s edition of On the Money with the Certified Financial Group.  We have been planning tomorrow today.  Take you out with a little Sting for this Saturday morning.

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