Evaluating the Policies Offered Today Versus Those from 20 Years Ago – On The Money Podcast Transcript

Recording:
(singing)

Josh:
Good morning, and welcome to On the Money, right here on WDBO 1073FM and AM580. For more than 30 years, the professionals at Certified Financial Group have been answering questions for listeners every week on WDBO’S On the Money. They’ve become central Florida’s most listened to financial call in program and lucky for you, it’s the only call in program where all the hosts are in fact certified financial planning professionals. As one of the oldest and largest independent financial planning firms in the area, the CFP professionals have hundreds of years of combined experience providing financial planning and asset management to central Florida families. And today we are so fortunate to be joined with Aaron Burt and the Oracle of Orlando himself, Joe Burt. How are you guys doing today?

Joe Burt:
Good morning, Josh. We’re doing great.

Aaron Burt:
We’re hanging in there.

Joe Burt:
Welcome aboard my friend.

Josh:
Thank you so much. Of course I am the middleman between you guys, the listener and the professionals on the other end. If you have a question for them, give me a call at (844) 580-9326. That’s (844) 580- WDBO. You’re going to call in. You’re going to talk to me. I’m going to ask you some questions and then I’ll go ahead and sit out the answer because I know you’re not calling really to talk to me. You want the answers from the professionals. For example, Jerry gave me a call earlier today, Jerry, from Lake Mary, how you doing today?

Joe Burt:
Jerry?

Jerry:
I’m doing fine. I appreciate you guys efforts [inaudible 00:01:42]

Joe Burt:
Sure. Welcome aboard. And you get the early bird prize this morning. How can we help you?

Jerry:
My early bird’s about 6:00 AM, by the way.

Joe Burt:
Okay.

Jerry:
I was calling to see where I can buy I Bonds and if the limit is $10,000 per person or-

Joe Burt:
Right.

Jerry:
Per household.

Joe Burt:
Right.

Aaron Burt:
Per social security number. So yeah, per-

Joe Burt:
Right per… Yeah. Right. That’s correct. You got to go direct to the treasury. Treasury.gov.

Aaron Burt:
Yeah. I think it’s treasurydirect.gov.

Joe Burt:
Yes. That’s the treasurydirect.gov and you have to do it online. You can’t do it through a brokerage firm. You can’t go to your bank, you have to do it through the treasurydirect.gov website, Jerry.

Aaron Burt:
And unfortunately that’s why most people don’t want to do it because they don’t want to deal with going… They don’t trust themselves either to go through the treasury direct website and they don’t feel comfortable with it. And then that’s the only way you can track it. And unfortunately, I think that’s why a lot of people are hesitant to be buying the I Bonds, but that’s the only way you can get them is through treasury direct.

Jerry:
Okay. And those could not be put into a set plan, can they?

Aaron Burt:
No, sir. No, sir.

Jerry:
Okay, I didn’t think so.

Joe Burt:
I like your creative thinking though. I like your creative thinking. I appreciate your call early this morning and I appreciate you listening,

Aaron Burt:
But you can buy more than 10,000, if you use part of your tax return as well in order to purchase them. I believe it goes up another five grand. So I think you get 15 grand if you use, if you overpay the government in taxes and use part of your tax return in order to purchase more. You can get additional above the 10,000, so.

Jerry:
Okay.

Aaron Burt:
They’ve been getting a lot of popularity lately with what’s been going on with inflation, obviously. But I will say that the base rate on them is really, really low. So when the inflation cools down, you’re not really going to be getting much. So you just got to make sure you read the fine print and understand.

Jerry:
Okay. I appreciate it a whole bunch.

Joe Burt:
Okay.

Aaron Burt:
Yes, sir.

Joe Burt:
Appreciate your call Jerry. Thank you. So there we go. So let’s kick off the show, Josh, of those folks that might be tuning in for the very first time. Aaron and I are here to take our listeners’ calls. This is not a one hour infomercial. We are here to help you solve those financial questions that you might have. As I say time and time again, they don’t teach us this stuff in school. We go through life trying some of this, trying some of that. Wake up at 55 years old and find out that we’ve got to figure out where the paycheck’s going to come in, when our paycheck stops. So this is what Aaron and I and the 13 other certified financial planners do for our clients day in and day out for a fee, providing financial advice and investment management.

Joe Burt:
But on Saturday morning, we’re here for you absolutely free. So if you have any questions regarding your personal finances, questions that you might be trying to figure out about your IRA, about a 401k, like Jerry this morning about I bonds, long term healthcare, reverse mortgages, all that and more, we are here to take your call. So don’t be bashful. The lines are absolutely wide open and all you have to do to reach us is pick up your phone and dial these magic numbers. And those numbers are, Josh.

Josh:
(844)-580-9326. Or if for you’re more of a letters person, look at your keypad and dial (844)-580-WDBO.

Joe Burt:
(844)-580-9326, (844)-580-9326. And as I said, the lines are absolutely wide open. And our topic for the day this morning is-

Aaron Burt:
We’re talking about long term healthcare.

Joe Burt:
Long term health care.

Aaron Burt:
And so the question or the topic really revolves around comparing the old policies of long term healthcare versus what’s available out there today. We get this question a lot because people are, they’ve grown up. Think about the old days, when people got sick, how they got taken care of, really the family took care of them. The kids stepped up, they took care of mom and dad, brought them into the house and took care of them as well as they could. And really the cost for healthcare wasn’t as expensive back then. So if you needed to hire somebody to come in and maybe help, it wasn’t a huge burden on the family, but with what’s been going on with healthcare costs lately, and then what they’re paying to take care of these people, because people are living longer and they need more and more advanced healthcare.

Aaron Burt:
There’s really been a focus on how do we pay that cost. And really there’s two ways to pay for that type of cost. As people start to age, and either you’re going to pay yourself or your family’s going to help pay it. So you’re going to self fund, that’s one option for it. There’s also long term benefits offered through Medicaid. So that’s the state run long term healthcare program where the state steps up and they have limited numbers of beds through the Medicaid program where they can actually offer to take care of you. In that regard, I will tell you that it is difficult on the Medicaid side because you have to qualify. And the qualifications really mean that you don’t have any assets. So the people that are kind of in that tween spot really are going to end up having to spend down their assets in order to then qualify for Medicaid. And at that point, the government steps up and starts taking care of them.

Joe Burt:
Well, I wouldn’t say any assets, there are some thresholds.

Aaron Burt:
Right. But it’s really, really, I mean, the thresholds are very low and really, if you do have assets, it involves some advanced planning and some foresight. So then the question you get is, well, if you have enough money that you can self pay, that’s one thing. If you don’t have enough money that you can qualify for Medicaid, that’s another thing. And then there’s those people kind of right in the middle. And then they end up figuring out how they’re going to pay for someone to take care of them if they need to. And really that’s where long term care insurance came into play. When did long term care… 20 years ago?

Joe Burt:
Oh, it’s about-

Aaron Burt:
30 years ago?

Joe Burt:
30 years. 30 plus. Yeah.

Aaron Burt:
So historically in the old days, before my time, long term healthcare insurance was really kind of like your fire insurance or your automobile insurance, you paid a premium and if you got in a wreck or you needed someone to take care of you, then the insurance company would start paying some sort of benefit. The problem with those types of policies was that there wasn’t a lot of experience from the insurance companies about how those benefits would be tapped into over time. So that’s one issue, so they didn’t have a lot of experience on what the claims would be. And then the other problem that we’ve since run into because of that, is that now the people who have had policies for a long period of time, the benefits aren’t guaranteed and the premiums aren’t guaranteed. So just like your homeowner’s insurance, when a hurricane blows through and everyone’s getting new roofs, if everyone’s getting sick and claiming on their long term care policies, the insurance company has the ability to come back and ask for either an increase in premium or decrease in benefits.

Aaron Burt:
And so that’s what we’ve been seeing really over the last five, 10 years, is our clients coming into us with those types of policies and asking the questions about really what they should be doing. Now, if you got a good benefit and you can afford the premiums, and obviously you’re in an advanced age that you’re probably more likely to claim on it. So really the idea is to keep those policies and make sure that you continue to fund those so that you can pay for that long term care, because really the possibility or probability of you using it is actually a lot higher. So we’ve been having those conversations with clients, but now we’re dealing with people who need long-term care, or are interested in it because again, they’ve been seeing what’s happening with their parents or their friends. And then the question is, well, what do they need or what should they get?

Aaron Burt:
And really we have not seen a lot of interest in those traditional type of long-term care policies because of the reasons I mentioned earlier. The benefits generally aren’t guaranteed and the premiums aren’t guaranteed. And so that’s really scared off a lot of people and created a lot of negative press around those. And really they’re a lot more expensive too because the underwriting has gotten a lot more stringent and they have a lot more experience. And so they’re underwriting it more appropriately and pricing it in such a way as well. So that’s one of the issues that we have with long-term care currently. Now there is a solution that people are interested in, but it looks like we’re getting a caller in too. So I don’t want to ramble along. I can talk about the solution after our callers.

Joe Burt:
We can, just got to queue it up, so keep going.

Aaron Burt:
Okay. So the solution we have nowadays is what we… Is called asset based care or hybrid based long-term care. And what these type of policies are is that it’s a policy that’s either wrapped around an annuity contract, a fixed annuity or a life insurance contract. And the idea is that you’re buying a life… Well, we’ll use a life insurance example, for an example. So you’re buying a life insurance policy and if you need long-term healthcare, then you are able to then tap into that death benefit to start pulling out that death benefit while you’re still alive. And if you don’t need long-term healthcare, then that death benefit then passes onto your beneficiaries. So it’s a way to tap into… Create basically a wall around your assets that you may have by protecting it with this type of policy, to be able to tap in again for long-term care into a death benefit.

Aaron Burt:
And then again, if you don’t need it, then somebody gets something at the end of the road, which seems a lot more palatable to people than the old type of policy where you just pay a premium. And again, if you never use it’s lost. And again, the premiums aren’t guaranteed or the benefits aren’t guaranteed either. So these policies are guaranteed by the insurance company with benefits and premiums, and there’s lots of providers that offer them. And obviously there’s lots of agents that sell these types of policies. But again, this is kind of what we’ve been seeing for people who want long-term care, have an interest in long-term care versus again, those traditional types of policies.

Joe Burt:
Yeah. The beauty of those, as you say, is that they allow you to get your money back if you don’t use it, unlike traditional insurance, where you pay the premium and you don’t get anything back. Now, it’s not designed to be an investment but it’s a way to take what I would call idle dollars, lazy dollars, if you will, and turn them into a multiple for your use for long-term care. If you don’t use it, you and/or your beneficiaries, get the money back.

Aaron Burt:
Get something back.

Joe Burt:
Yeah. Yes. Well, if you don’t use it, you get the money back.

Aaron Burt:
They’re structured in such a way that you get something back.

Joe Burt:
Right. And you said the word annuity before, and you hear people running out of the room screaming. Annuities in and of themselves are not bad. There’s good annuities, they’re bad annuities. The bad annuities that we see are the ones that are offered at these free lunch and dinner seminars that I can’t tell you how often we’ve had folks come into our office and say, “I bought this annuity about eight years ago. I don’t really know what it is, but it sounded good. Can you explain it?” And then once we explain it, you can see that they perhaps had buyers remorse. So those are the ones generally you want to stay away from. So there are great annuities out there. We deal with annuities that have no sales charges, no commissions. And those get you the most bang for the buck. But anyway.

Aaron Burt:
And I will say that if you do have one of those old annuities, they are able to be moved into a long term care policy-

Joe Burt:
Oh, good point.

Aaron Burt:
To fill another role within your portfolio, within your asset mix. So if you do have an annuity that you don’t know what to do with, or don’t know why you have it, that’s something that can be used or transferred over into a long term care annuity as well, so.

Joe Burt:
So you get some more mileage out of that. I see. You’ve got a call there, Josh. You want to fire it up?

Josh:
Yes, we do. We have a surprise, a listener listening all the way from Maine. Wes, what’s your question for the guys?

Wess:
Okay, good morning. Great to hear you guys again. My question is I’m selling my home, it helps to settle an estate for my late parents and after the heirs are paid off and I anticipate the house will be sold this calendar year. What do I do with the proceeds? I tend to buy another home here, but probably not for another six months or so. So from the proceeds from the sale, my share, should I just keep it in a real conservative investment account or park it in the local bank? Or what are your thoughts on this?

Joe Burt:
Well, Wes, first of all, let’s determine whether or not there’s any taxes due on the sale of the house, so.

Wess:
Right, right.

Joe Burt:
Okay. So have we investigated that?

Wess:
Not yet. I doubt at the level of proceeds, we’re going to run into any heavy tax consequences as far as… Well, I’m not sure, as far as inheritance taxes, is that what you mean?

Joe Burt:
Well, yeah, I’m talking about income taxes and estate taxes. Probably not in the estate tax, but maybe the income tax act. So your mom and dad have passed away?

Wess:
Right. Right.

Joe Burt:
Okay. So now you are the owner of the home, the home is now in your name?

Wess:
It is not in my name. I am the personal representative in the will and I’ve got another heir out of state that I need to pay off. We’re probably only talking around 200, 250 as my share, once everything is said and done.

Joe Burt:
Okay. Well, first of all… All right, so there, it sounds to me like this is passing via a will.

Wess:
Yes.

Joe Burt:
Okay. So now you have a probate issue. Have you been through the probate process to get this?

Wess:
Yes. I’m in the process of doing that now. I have, yes.

Joe Burt:
Okay. So when it’s all said and done, you and your sibling will then own the house 50 50, I presume.

Wess:
Well, we’ve chosen to sell it, not to transfer the deed [inaudible 00:14:19]

Joe Burt:
I understand, but in order for you to sell it, you’ll need to have it in your name and then you’ll turn around and sell it.

Wess:
Correct. Yeah.

Joe Burt:
Okay. So when that is done, then what you have is what’s called a step up in basis, which means that you’ve inherited the house at whatever value it was worth when the last survivor passed away. And then if there’s any gain between that date and the date you sell it, then you’ll have taxes to pay on that gain. And then the question is what to do with the money. And I see we’re at a hard break, so we’ll get back to you right after the break, Wes. Hang on.

Wess:
Okay. Thanks so much.

Aaron Burt:
Sure. Thanks bud.

Josh:
Thank you so much, guys. If you have a question for the team here on, On The Money, on WDBO, the phone number to call is 8449. Forgive me (844)-580-936. (844)-580-WDBO. We’ll be right back with more of On the Money. Right here on WDBO.

Recording:
This hour was paid for by the host and does not reflect the opinion of WDBO. This is WDBO 1073 FM and AM580 Orlando’s news and talk.

Josh:
Just makes you want to hum along with that song, doesn’t it? Right now, you are listening to On the Money here on WDBO. If you have any questions for the guys that are Aaron and the Oracle of Orlando, Joe Burt, the number to call is (844) 580-9326. That’s (844)-58-WDBO. Right now we’re talking about long term care insurance and evaluating the policies offered today verse those of yester year, 20 years ago. And before the break, we were talking with Wes in Maine, he’s looking to sell off some of his estate in Maine and they were going right in the middle of his answer, when little old me had to get those commercials out. Right back to you guys.

Joe Burt:
Yeah. Josh, I bet you don’t know who this artist is singing the song.

Josh:
I’m going to guess one of the BGS.

Joe Burt:
No.

Josh:
No, is it just GB, maybe

Joe Burt:
Johnny Rivers.

Josh:
Ah, okay. Yeah. I’ll pretend to know who that was.

Joe Burt:
It’s before your time. Before your time. Anyway, all right let’s get back to Wes. Wes up there in Maine. Mom and dad have passed away. Sorry for your loss Wes. And the question was, do we have any taxes on this transaction? And more importantly, you called what do I do with the money? So let’s recap for the listeners who just might have tuned in here. So you got to sell the house. Their house is now going through probate, and then the house will have to be in your name or you and your siblings name, and then you will sell it and you will pay taxes on any gain between the date of death and the date you sell it. And then you can move on and then you and your sibling will split the proceeds. And your question was what to do with the money. Is that correct?

Wess:
That is correct. Yes.

Joe Burt:
All right. So let’s, Aaron, what do we tell Wes to do?

Aaron Burt:
Well with the money. The biggest concern that I have is, you said the magic words that you need it in six months. So really whenever we have a conversation with people, there’s always a conversation about savings and investing. And so if their timeframe is that short, investing by its very nature requires time. And with the timeframe that short, you really are in the savings mode versus the investing mode. And so it’s painful to sit on that type of money for a period of time, but really that’s where you are, if your timeframe is that short. So really what you’re looking at then at that point is how do you maximize your return in savings?

Aaron Burt:
And really the maximization recently, well, in the recent past, I should say, has been very poor in the savings arena. I mean, you were looking at interest rates less than 1%, but I will tell you with what’s been going on with the federal reserve raising interest rates, that there are some savings accounts now where you can get one, one and a half, maybe 2%, if you shop around over that six month period in order to generate a little bit of interest on the cash.

Joe Burt:
Now that’s an annual rate. That’s not 2% for six month. [inaudible 00:18:08]

Wess:
Right. Right.

Joe Burt:
Okay.

Aaron Burt:
So really the challenge is to use a service. You can go on bankrate.com and you can look at all the banks that are offering the best savings rates, or you can go to your local bank, or you can go to your credit union or wherever it is that you may shop or give us a call. And I can point you in a direction on Monday as well.

Joe Burt:
So what’s the weather like up there in Main, Wes?

Wess:
It is absolutely beautiful. It’s about-

Joe Burt:
Oh, shut up.

Wess:
75 degrees. I’m 200 feet from the ocean with the islands and lighthouse and surf. And we should get a little sea breeze this afternoon. So, it’s going to be summer in Maine. Very good.

Joe Burt:
All right. Wes, enjoy the day while we’re down here sweltering. Appreciate the call.

Aaron Burt:
Thanks Wes.

Recording:
(music)

Aaron Burt:
Now this song sounds somewhat familiar, so. [inaudible 00:18:57] It kind of rings a bell so.

Josh:
Oh yeah this one.

Joe Burt:
The Beach Boys. There you go.

Josh:
(singing)

Joe Burt:
Brian Wilson and the gang. Yep.

Josh:
All right. Well, my name is Josh McCarthy with the team at WDBO. If you have a question for the expert certified financial advisors here on, On the Money, the number to reach me is (844)-580-WDBO. That’s (844)-580-9326. And this is On the Money on WDBO, where we’re planning tomorrow-

Joe Burt:
Today.

Josh:
With a certified financial group.

Recording:
Welcome back to On the money. Central Florida’s most listened to financial call and show. Brought to you by Certified Financial Group in Altamonte Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open call (844)-580-WDBO. That’s (844)-580-WDBO. And enjoy the rest of the show.

Josh:
Now at the beginning of every segment, I’m trying to google every term. So I can find out if I know this song or not, in case there’s a pop quiz coming at the end of my intro. My name is Josh McCarthy. You’re listening to On the Money right here on WDBO. If you want to talk to me, to really talk to the professionals. I know I’m just the middle man. I know my place. The number to call me is (844)-580-9326 that’s (844)-580-WDBO. Today On the Money, we’re talking with Joe Burt and Aaron Burt, and the topic is long term care insurance. We’re evaluating the policies offered today verse those, when this song came out a couple decades ago. If you want to reach out to us, the number is (844)-580-WDBO. How you doing guys?

Joe Burt:
We’re doing great. We’re doing great. Good to have you with us, Josh. We wrapped up a couple of calls this morning, the lines once again are wide open. So if you want to reach us, you can reach us at (800)-580-9326. That’s (800)-580-9326 or (800-580-WDBO. Aaron and I are here to take your calls, as we have been on this program for more than 30 years now answering listeners questions, things that might be on your mind regarding your personal finances, decisions that you’re trying to make regarding your IRA, regarding a 401k, regarding a mutual fund, home, healthcare, annuities, life insurance, reverse mortgages, all that and more. That’s what Aaron and I and the 13 other certified financial planners do for our clients day in and day out, Monday through Friday, working with our clients as fiduciaries, as certified financial planners, providing investment advice and financial planning for a fee. But on Saturday morning, we’re here for you. absolutely free.

Joe Burt:
So if you have any questions about things that might be on your mind, don’t be bashful and you can also reach our colleague certified financial planner and CPA Rodney Ownby. Rodney heads up our [inaudible 00:21:59] operation down there too. So if you want to reach Rodney, right now, you can call our office at 407-869-9800. 407-869-9800. 407-869-ninety eight hundred or 1-800-EXECUTE as if you’re executing a legal document. And he’d be glad to take your call. If the line is busy, just leave a message, and he promises to get back to you. And one thing that you’re probably not familiar with Josh, so we’ve been offering to our clients now for some time it’s called score my funds. It’s an opportunity for you to have a in depth look, as the fiduciaries do of the quality of the investments that you might be holding in your 401k, your IRA, or even your brokerage account. And this is apropo for mutual funds and ETFs. And actually, how does that work, Aaron?

Aaron Burt:
Yeah, so we have a website. It’s actually scoremyfunds.com, where you can go to the website, enter in your ticker symbols, or look them up off of your brokerage statements or off of your online portal, whatever it is that you have that communicates your information to you. Enter your ticker symbols in there. And then we will receive a message saying that you’re interested in having those funds scored. We will score those, provide a report back to you, showing you the quality of the investments that you have when compared against their peers. Now our system scores the funds on 11 different criteria. And again, they’re all scored against their peers. So you’ll know whether you have the best large cap growth fund using again those criteria or whether you have a good small cap value fund or whatever it is that you might have.

Aaron Burt:
And we’ll report back to you on again, the quality of those funds. And then once we get that report, once you receive that report, we’ll also follow up with a risk tolerance questionnaire to kind of get an idea of what you’re feeling about risk in the markets may be. So again, scoremyfunds.com. There’s no obligation. We’ll send you a report. You can use that information to go talk to your own broker, your own advisor. If you’re interested in talking to us about it, we’ll be happy to interpret the results for you and give you more information about our services and how we use our tools.

Joe Burt:
And it’s absolutely free. So once again, scoremyfunds.com. And if you don’t know the tickers there, when you go on on the website, scoremyfunds.com. There is a pull down menu. All you have to do is put in the name of the fund and it’ll give you the ticker and you can take it from there. So if you want to follow up on that, once again, absolutely free, scoremyfunds.com. We’ve had several folks take advantage of that. And several folks would comment, I was really surprised. I thought this was a good fund. Well, they thought it was great because they were getting nine or 10% return when the market was doing well, when they should have been getting 18 or 19% return because of the risk that fund was taking.

Joe Burt:
And so this is the kind of stuff that we dig into. This is created by the center for fiduciary studies, from the University of Pittsburgh. And we’ve been uing it, uing it-

Aaron Burt:
Using it.

Joe Burt:
[inaudible 00:24:38] You to say. Using it for many, many years. And we report to our clients on a regular basis on the quality of the investments that we have invested on their behalf. So working as fiduciaries is exactly what we do. And I see you’re teeing up a call there. So we’ve got a text question there Aaron, can you get that text question [inaudible 00:24:56]

Aaron Burt:
No, actually, well, I was going to save that for later if we-

Joe Burt:
okay.

Aaron Burt:
Needed some time, but we got Tom-

Joe Burt:
We’ve got Tom? Tom-

Aaron Burt:
Let’s go with him.

Joe Burt:
Let’s key off, key up with Tom. Tom, what’s up?

Tom:
Yes. How you doing guys?

Joe Burt:
We’re doing great.

Tom:
Well, I am in a very, very good spot. Thank the Lord. Thank my wife. She passed away five years ago. We worked hard and I own my home out right. I own four cars. I have zero expenses. Virtually zero. My electricity is about $50 a month and my wallets only [inaudible 00:25:35]

Joe Burt:
Tom, are you living in a… Tom, are you living in a tent or? What is $50 a month?

Aaron Burt:
He’s got solar panel. Do you have solar panels?

Tom:
Yeah. No. It’s just that frugal. I try to analyze everything I spend. And even if I have a car repair, I find a mechanic that would do it for the best cost, so.

Joe Burt:
Well, good for you.

Tom:
I just try to do the… But the question is that I have is, that I was thinking of moving to a country, actually was going to be Costa Rica. And I was wondering if any of the finances that I have here would be affected by moving to another country.

Joe Burt:
Well, I’m not quite sure what your question is. Your finances that you have here would be affected by moving to another country. So you’re not thinking… Are you thinking of giving up your citizenship?

Tom:
Well, that’s the thing I really don’t know much about that. [inaudible 00:26:36]

Joe Burt:
Don’t do that. Don’t don’t do that my friend. You’ll be trying to cross the Rio Grand one day. Don’t do that.

Tom:
Okay. I’m glad to hear that.

Joe Burt:
Yeah.

Tom:
So I-

Joe Burt:
You want to go down there, you want to go down there and live for a while, that’s okay.

Tom:
Okay. Well, I think that would be good if I just go down there, maybe live for whatever [inaudible 00:26:58] stay I have.

Joe Burt:
I think the first thing you need. I think the first thing you can do, Tom is go down there and try it. Don’t pack up. Don’t make irrevocable decisions that you can’t come back to. Go down there and live for a month, two month, three months, six months. And see if you really like it. You may find that it’s not everything you thought it was. And maybe it’s not as good as you thought it was. And then you can come back home to good old USA. But yeah, you can keep your money here and have your money sent to Costa Rica. You’ll still have to pay taxes as a US citizen, but yeah, folks do that.

Tom:
Okay. That’s something that it is… So I still have to pay taxes as a US citizen because I am still a US citizen. As long as I’m a citizen, I have to pay.

Joe Burt:
That’s correct. That’s correct. So, there’s people… All you have to do is turn on the TV and see the thousands of people every day are fighting to get into this… Not, I shouldn’t say… They don’t fight anymore. There’s crossing, going across the river, coming in this country, trying to get into here, the good old USA. So don’t give up what we spent 250 years fighting for and the greatest place on earth to live. So, but you may want to go there and try it, maybe a different lifestyle for you. And a lot of people do it, but I wouldn’t give up your citizenship. At least if it was me, I wouldn’t do it.

Tom:
Sounds like good advice. I’m glad that I called you guys.

Joe Burt:
Tom, let me ask, how old are you?

Tom:
I’m 64.

Joe Burt:
64. Okay. Well yeah, you go down there and believe me there’s a lot of expat communities down there, where people have just done exactly what you do and have really changed their whole lifestyle, decided to call Costa Rica their home. So I’m not saying it’s wrong, but you need to go in with your eyes absolutely wide open, but it sounds like based on the way you’re living, you’ve kind of got your life under control. And you said you’ve found yourself in a very, very, very good place. I’m not sure that it’s going to get any better if going anywhere else to where you are.

Tom:
Okay. It’s just, I wanted a change of scenery, you know? So I-

Joe Burt:
Take a vacation.

Aaron Burt:
Yeah. Take a trip, go down there, check it out, go talk to some expats down there and see how they like it. See how they’re doing it. And then you can make a decision. I mean, obviously this isn’t our specialty, but just from our own personal experience for the people we talk to, the first step would be to go down there for a month or two and just check it out.

Joe Burt:
And spend some time on google.

Aaron Burt:
Yeah. Google it,.

Joe Burt:
Google it. Life in Costa Rica. You’ll learn all kinds of stuff. The good, the bad and the ugly.

Tom:
Yeah. I was doing that. I try to Google at least, because I like to drink a lot of milk and I know that they highly pasturize the milk down there. So that’s a good thing.

Joe Burt:
All right, Tom, thanks for your call. Appreciate it. Good luck to you.

Tom:
Yeah. Thank you for the advice. Thank you.

Joe Burt:
All right.

Aaron Burt:
Thanks.

Joe Burt:
And I see, we’ve got another call here, queued up. Josh?

Josh:
This is Sue. That’s right. Sue calling from Novito.

Joe Burt:
Hey Sue. Good morning. Thanks for calling. What’s up?

Sue:
Good morning, sir. Thank you. My husband and I have a lot of EE bonds and I bonds that we’ve bought over the years. They’re listed as co-owners, him and I. What happens when we pass? Do they automatically go to my son? Do they go through probate? Do I have to have… Will he have to have them reissued in his name or what happens?

Joe Burt:
So what, let me be sure, I understand what you did here. You’ve got a numerous bonds that you and your husband, but did you buy these through work or you bought them direct?

Sue:
Direct.

Joe Burt:
Okay. Are any of them more than 30 years old? Because they stopped paying interest after 30 years.

Sue:
Not yet. I mean, they’re getting close. A lot of them.

Joe Burt:
Okay. All right. All right. So what do you think Aaron?

Aaron Burt:
Well, it looks like you can name a beneficiary on those accounts. So if you have… You would have to register them with the treasury, if you have the physical certificates, obviously you can’t have a beneficiary on them. So you’d have to register them with the treasury website and then you can name beneficiaries on them so that they’ll bypass the probate process and pass over to your son, I guess, who it is at your passing. I will say though, that I bonds and E bonds, I do not believe get step up in basis.

Joe Burt:
No they don’t.

Aaron Burt:
So if he inherits those, he’s going to end up having to pay-

Joe Burt:
Pay tax. Income taxes.

Aaron Burt:
Accumulated taxes on the gains that they have. So for instance, if you bought a hundred dollars bond and now it’s worth $200, he would have to pay taxes on a hundred dollars of income. There’s no step up in basis on those bonds, so.

Sue:
Can we pay the interest up to this… Can we pay the interest up to this point?

Joe Burt:
If you have been.

Sue:
And then he pay-

Aaron Burt:
Yeah. Yeah. You have to do that-

Sue:
No, we haven’t.

Joe Burt:
Oh, okay.

Aaron Burt:
Oh yes.

Sue:
I didn’t know we-

Aaron Burt:
Yeah. So you have the choice.

Sue:
I didn’t know that was an option when we did it.

Aaron Burt:
Yeah. You actually have the choice. You can pay as you go or you pay all at once. So if you haven’t paid as you went, then obviously that-

Sue:
No.

Aaron Burt:
Ship has sailed for it. So you can pay it all at once. You also have the option of cashing them in now, if you want to pay the interest and then you can keep the cash and obviously that would go directly to your son-

Sue:
Okay.

Aaron Burt:
Without him having to pay anything.

Joe Burt:
But remember that the only taxes he pays is on the gain, not on what you paid for the bond. So he’s got to pay taxes on the interest, not on the original purpose, so.

Aaron Burt:
No, I will also say that a lot of those I bonds right now are paying some really good interest rates. So if you have some older ones, the rates on them that you’re receiving are really good. So I’m not sure I would go cashing those in just to avoid your son having to pay taxes at your passing.

Sue:
Right. Okay. But if we have to set up an account, if I have to turn in my paper bonds, you have to set up an account.

Joe Burt:
Yes.

Sue:
And is that a big arduous thing to do? I know I have to send them all in.

Joe Burt:
Yes.

Aaron Burt:
Yeah. You just have to be comfortable with the treasury website and registering the serial numbers and setting up an account. It’s not a hard thing to do, but maybe your son can help you do that as well, if you have trouble.

Sue:
Oh, okay. So then we just send the bonds in to them, after we register them or?

Aaron Burt:
They have a process of how you do that. Actually, I think you can actually hold on to them. You just have to register them on the site, but again-

Sue:
Gotcha.

Aaron Burt:
There’s only one of them. So anyway, there’s a process online and then they explain how to do it.

Sue:
Okay. Well thank you very much. I appreciate the information.

Joe Burt:
You’re welcome, Sue. Thank you for the call. Have a great weekend.

Josh:
Thank you so much, Sue. I appreciate your questions. I’m sure maybe somebody listening had that very same question and your braveness, brevity, confidence, something to talk to the team, here on WDBO is answering questions across the state. My name’s Josh McCarthy here on WDBO. If you have a question for the certified financial professionals, we’re talking just one more break. So try calling up right now. The number is (844)-580-WDBO that’s (844)-580-9326. Today’s topic is long, long care, not long care, long term care insurance and evaluating the policies offered today versus those of yesterday. This is On the Money where we’re planning tomorrow-

Joe Burt:
Today.

Josh:
With the certified financial group

Recording:
Information presented on this program is believed to be factual and up to date, but we do not guarantee it’s 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 is 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 exempted from registration requirements.

Recording:
WDBO Orlando, WOEXFM HD two Orlando W297 BB Orlando powered by New South Window Solution. Click wdbo.com. A Cox media group station.

Josh:
Welcome back to our final segment here on, On the Money on WDBO. My name’s Josh McCarthy behind the microphone here in the control room at WDBO. You are listening to On the Money, a place where you can come, you can tune in every week to figure out how to make some of your money turn into some of your more money. Of course, we’re here with the Certified Professional Group here at WDBO speaking with Joe Burt and Aaron Burton. And guys, you don’t just, if people want to come talk to you, come see you, you have some workshops that you offer as well.

Aaron Burt:
Yeah, one of the advantages of our new state-of-the-art facility that we just renovated over the last couple of years is, we have what we call the learning center, which is a huge classroom that accommodates about 30 people comfortably, gives you an opportunity to come into our office and learn about different financial topics. All the financial topics and workshops are listed on our website, but upcoming soon we have a social security basics webinar. That one is hosted by Charles Curry. It’s August 17th in the evening from 7:00 to 8:00 PM. Again in our office, social security planning and then one of the more popular ones that we have, or very popular ones that we have is the healthcare options in retirement. Because a lot of people, a lot of times people don’t know what to do when it comes time to start claiming Medicare.

Aaron Burt:
When they turn 65 and their mailbox starts blowing up or even if their pre-Medicare age, how do they get insurance to fill that gap from when they retire and get off their company plan, until they go on Medicare. So healthcare options in retirement, again presented by Gary Abely. That one is August 27th in our office that runs from 10:00 to 12:00. So that’s on a Saturday right after the radio show, if you’re interested in that.

Aaron Burt:
And then rolling over to September, we got a couple in September. Charles is doing cyber security, 10 threats every person in business faces and how to protect yourself. Again, that’s 14th September from 7:00 to 8:00. And then Gary’s going to do, will your savings last a lifetime. 24th September from 10:00 to 12:00. So we have four currently on the schedule. If you’re interested in learning more about those or any of our services, please go to our website, financialgroup.com. The workshops are listed up there at the top. You can click on that magic button that says workshops and you can register for those events right there. They do fill up fast. So make sure you go on and register.

Joe Burt:
If you’re thinking about it, you ought to do it. They are absolutely free. Leave your checkbook at home and people say, “Well, why do you guys even do that?” We do it for two reasons. Number one, we don’t want you to become a financial casualty. Because we see folks coming in here, successful people that just didn’t know this stuff. And we see the things that they unfortunately did. So we want to prevent you from becoming a financial casualty. And secondly, to introduce you to who we are, what we do as a firm, this way, whether you need financial planning and investment advice either now or in the future, perhaps you give us an opportunity to earn your business. So go to financialgroup.com, click on workshops and you can make your reservation right there online. I see we got another call coming in here. We got to get to it. Do we have time? Quick.

Josh:
We do. Chris, go ahead with your question.

Joe Burt:
Chris, go ahead.

Chris:
Hey, how are you doing?

Joe Burt:
Good morning. What’s up?

Chris:
Hey, I’m just trying to figure out what I need to do or how I can avoid any kind of tax income. My father passed away a few months ago and we have to sell his house and all his other assets, like his IRAs and all that.

Joe Burt:
Ooh

Chris:
I-

Joe Burt:
Chris, we are up against the hour here. Give us a call, if you would on Monday morning. We’d be glad to answer those questions for you. You can reach us at 407-869-9800 or go to our website financialgroup.com. But you need to deal with a certified financial planner professional that will charge you a fee for this. And we’ll try just do it on a commission basis. Thanks for your listening this morning and take it away.

Josh:
Thank you so much for listening to On the Money, where we’re planning tomorrow-

Joe Burt:
Today.

Josh:
With the Certified Financial Group.

Leave a Comment

Your email address will not be published.

Translate »

Schedule A Virtual Meeting From Anywhere In The World