I Won the Lottery, Now What Transcription

Speaker 1:
Stay tuned for On the Money, Central Florida’s most listen 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 9844) 580-WDBO. That’s (844) 580-WDBO and enjoy the show.

Josh McCarthy:
Good morning and welcome to On the Money right here on WDBO 1073 FM and AM 580. My name’s Josh McCarthy, the middleman between you and your financial future. This is your chance to call and talk to a couple of certified financial planning professionals because with On the Money, this show for more than 30 years, they have been answering questions for listeners every week right here on WDBO’s On the Money they’ve become Central Florida’s most listen to financial call in program. And I believe they’re the only financial call in program live right now answering your questions about your financial future. And it’s the only call in program where all of the hosts are their very own certified financial planner professionals. As one of the oldest and largest independent financial planning firms in the area, the CFP professionals have more than 300 years of combined experience providing financial planning and asset management to Central Florida families for more than 40 years. Today we are so fortunate to be joined by Charles Curry and Joe Bert, the Oracle of Orlando himself. How are we doing today gentlemen?

Joe Bert:
We are doing great Josh.

Charles Curry:
Yeah, we’re going well.

Joe Bert:
We’re doing great. Yeah, thanks for the kind intro. As the intro says, this is the only show that really takes calls on the air. Everybody else is a one hour infomercial. We are here to help you. And as so, if you’re trying to discern what you need to do about your 401k, about an IRA, decisions that you’re trying to make regarding selling your house, about long-term healthcare, about a reverse mortgage, about your mutual funds, about planning for the future, this is what Charles and I and now 14 other certified financial planners here at Certified Financial Group do for our clients every day, day in and day out. We charge a fee for our services working with you as a fiduciary. And Saturday morning we are here for you absolutely free.

Joe Bert:
So if you have any questions on your mind, things that you’re trying to figure out. If we don’t know the answer right away, we will get the answer back to you, we promise. So the good news for you is, this is Saturday morning, you can reach us live right now and pick up the phone because there’s nobody in line and you can be there first in line by dialing these magic numbers.

Josh McCarthy:
Those numbers are (844) 580-9326 or if you like letters more, it’s (844) 580-WDBO, and Rodney is awaiting your calls right to the certified financial group. Rodney, you can reach him at (407) 869-9800.

Joe Bert:
Rodney, in addition to being a certified financial planner, is also a CPA and has a number of years of experience. He also heads up our outpost at our office down in the Windermere area for our listeners down in the South Orlando area. So once again though, Charles and I here live and we encourage you to call right now at (844) 580-9326. That’s (844) 580-WDBO. So the lines, as I said, the lines are absolutely wide open and the topic for today is Charles?

Charles Curry:
We’re going to talk about winning the lottery.

Joe Bert:
How about that? Well, we’re fortunate to have some lottery winners as clients so let’s tell them all about it.

Charles Curry:
Yes, we are very fortunate, part of having a long career in this business is that you get the opportunity to work with lottery winners and some of the things that folks, when you win the lottery, you kind of have that kind of feeling you dream of kind of buying a new car, riding around in maybe a limousine, or buying a big mansion, or telling off an annoying boss that you quit and move on, do something else. But very rarely do you think about the opposite side of it, of having paparazzi or the news all surrounding your house. Having old acquaintances and old strangers and old family members all of a sudden reaching out to you, constantly asking for money, having bad business ventures kind of thrown your way and begging for a handout.

Joe Bert:
You’re a hundred percent right. You’ve got to be careful of how you handle that money. Sudden wealth, whether it’s inherited or won in a lottery, really has the ability to change your life and not always for the better.

Charles Curry:
That’s correct, and it’s one that we advise clients that when you win the lottery, take a minute, take a breath, kind of your life is going to change. And with that, we kind of recommend people to keep quiet first once you win. You don’t want to go out and make all this news public immediately. You kind of want to. You want to go on top of the mountain and shout it out, but you want to take a moment, because there are consequences on a couple different things.

Charles Curry:
One of the things when you want to start thinking about once you’ve won the lottery is whether you want to be anonymous or come forward and have your picture taken and your name taken and how much you win, and have it be publicized kind of out there in the public. Some of the advice that we give folks that we talk to is you don’t want to go off and just have this big massive spending spree. You don’t want to kind of post your windfall on Facebook. You want to try to maintain some level of privacy, especially in the beginning as you assemble your experts that are going to help you make some important financial, as well as personal decisions, because there are predators, and litigators, and creditors that are all floating out there that once they hear that you have something, they’re all going to be coming knocking at your door sooner versus later.

Joe Bert:
Without question. And the first thing you want to do is protect that ticket, because if you don’t have the ticket, you don’t get the winnings. So what you want to do is take a picture of you with the ticket and have that picture on your phone, and maybe some other place, and then put the ticket in a safe place. Because once again, if you don’t have the ticket, you can have difficulty collecting. So you have to have proof that you have that, maybe photocopy the ticket as well.

Charles Curry:
And also have maybe a video of yourself holding the ticket as well. Because you have to be careful, because the lottery ticket is a bearer instrument. So anyone with that ticket can claim on it. And the other piece too is there’s a decision on whether you sign the back of that lottery ticket or not. There are some court cases out there where somebody signs the back of their lottery ticket and then all of a sudden they lose the opportunity to be anonymous. That they have to come forward. One of the other kind of advices that we give to folks is you hire an experienced estate planning attorney right out of the gate, someone with heavy tax background. This isn’t the time to try to do it alone. You of course now have a windfall that you can afford to hire the best of the best when it comes to estate planning. Also in terms of CPAs, as well as financial planners to help you figure out how to make this money last and do all the things that you want to do.

Joe Bert:
Right. Yeah, certified financial planners, we try to act as the quarterback in that regard of bringing all the pieces together, the CPA and the attorney, and then of course the investment side is what we do. But you need to have a team. And you don’t want to go out and do this on your own. You’re right about hiring the best people that you can get because you can find yourself making mistakes, it’ll cost you a good part of your winnings if you’re not careful.

Charles Curry:
Correct. And with that, like I said, you can afford to hire the best folks. There are some decisions you need to make on whether you want to set up a trust, or an LLC, or a foundation. What’s the best way prudently for you depending on how much you win to set these things up and to make sure to minimize your tax impact.

Joe Bert:
Right.

Charles Curry:
The other things you kind of forget about is that you need a security team if you’re substantial amount of winnings. Potentially having insurance for liability, you might want to look at increasing that. Unfortunately some of the other pieces around kidnapping insurance or others, because now all of a sudden you’re putting a big target on your family and there’s a lot of different folks that are out there that are opportunists.

Joe Bert:
Which is all the more reason why you don’t want to broadcast the good news on social media, because not only you are susceptible to being kidnapped, but you’re family members. And that stuff happens folks, and you don’t hear about it because oftentimes it’s paid off and under wraps and so forth. But you got to be careful out there. It’s a jungle, literally a jungle out there when it comes to finances.

Charles Curry:
Yeah. And one of the things that’s interesting, if you recall, we had that mega billion dollar jackpot that was what by somebody in Illinois and that person has not come forward yet. It’s been over a month.

Joe Bert:
Good.

Charles Curry:
And they’re taking their time. And it’s interesting that Illinois is one of those few states, there’s a handful of them, where you can claim anonymously. And the other one of course when you look at the largest jackpot, this one was I think over 1.3 billion. The last largest one was, or the biggest one ever was 1.5 billion that was won by somebody in South Carolina.

Charles Curry:
And that brings up an important part that people kind of forget, when you win the lottery, let’s say you are a Florida resident and you win the lottery, let’s say in South Carolina, you’re going to be paying taxes in the state that you bought the ticket, not in the state that you live in, which seems counterintuitive.

Joe Bert:
Well, and the other side of it, you may be touching on this. Let’s say you win the lottery today, you’re going to have to pay income taxes, and heaven forbid you die tomorrow.

Charles Curry:
Correct.

Joe Bert:
Then what happens? Then you’ve got estate taxes and before you know it, between income taxes and estate taxes, depending on the size of you’re winnings, you may end up with very little. So that’s where the planning comes in.

Charles Curry:
It really does. Because you have a choice when you win the lottery, whether you take a lump sum or annuity, and there’s different tax impacts around that in terms of what you pay in taxes upfront, as well as if something was to happen if you were older and you pass away. Kind of the estate tax that can kick in on top of that and make those winnings diminish even further.

Joe Bert:
Right, right. And so, if you take the annuity, you’re going to get a payment out for many years. You don’t get that lump sum, but heaven forbid estate taxes are due with nine months of death and you may not have the money to pay it, because you’ve got this income stream coming for, not you, you’re gone, but your estate is not going to have income to pay it. So this is where the planning comes in folks. So we wish everybody the best in trying to win the lottery. We don’t play it ourselves, I shouldn’t say that. We had the pool for the big Mega.

Charles Curry:
[inaudible 00:11:11].

Joe Bert:
I couldn’t say everybody in the office doing, sure, yeah, what’s a buck here or there? But you don’t want to make it a part of your everyday life. But it does take planning and this is what it’s all about. And this is what we do for as certified financial planners, providing this kind of advice to our clients. Certainly not on just lottery winnings, but in trying to get you to and through your retirement years. And I see we’re up against a break. Josh, so why don’t we take the break and we’ll get back. Got a couple of calls lined up as well.

Josh McCarthy:
You got it. Thank you so much. Charles and Joe will be right back. If you have any questions for the certified financial group here, right here on On the Money, the number to reach us is (844) 580-WDBO. That’s (844) 580-9326. Any questions about planning and if you won the lottery, there’s no better time to get some fantastic free advice than right now. And I want to add some questions for you myself. What’d you do? How’d you do? What slot did you pull? All these questions need answers. Call right now to On the Money where we’re planning tomorrow…

Joe Bert:
Today.

Josh McCarthy:
Right here on WDBO.

Josh McCarthy:
Welcome back to On the Money right here on WDBO. My name’s Josh McCarthy, the middleman between you and the experts at the Certified Financial Group. Today we’re so lucky to be joined by Charles Curry and the oracle of Orlando himself, Joe Bert. Topic of the day right now is what to do if you won the lottery. Doesn’t have to be the big Mega Millions, could be a handy scratch off and you want to know what’s the best way to handle your sudden, sudden income. And so this is the time to call if you have a question right now, (844) 580-9326, (844) 580-WDBO. Not just limited to lottery questions though, really we’re going across the board because why can’t you when you have the experts of Certified Financial Group. Right now we’re going to head up to Claremont where Randy’s got a question about how to handle his annuity.

Joe Bert:
Morning Randy.

Randy:
Good morning, thank you for taking my call.

Joe Bert:
Sure. What’s up?

Randy:
I’ve got a question. I have an annuity and I won’t say who it’s with, but it’s going to whale jump out of this ocean. So my question is this, I am going to probably cash this annuity out. I do have a monthly income stream, but it’s not that great. There’s about $77,000 in surrender value.

Joe Bert:
Okay.

Randy:
My question is this, when I cash this out, what’s it going to do to my taxes?

Joe Bert:
Well, first question is, is the annuity held in an IRA or it’s a non-IRA annuity?

Randy:
It is a non-IRA.

Joe Bert:
Okay. So in the annuity you have two parts to it. One is your original cost basis, what you invested, and then the gain. Okay? And what you have been withdrawing has all been taxable up to this point.

Randy:
That is correct.

Joe Bert:
Okay. And so you pay taxes every year. When you cash it in, you will pay difference on what’s left in there of the gain, not on your original purchase price.

Randy:
Okay. Well maybe I gave you wrong information because I got this annuity by rolling over a, I guess it was a 401k.

Joe Bert:
Ah, so then it’s in an IRA. It’s really an IRA annuity.

Randy:
Yeah.

Joe Bert:
Okay. So that changes. Everything that you withdraw then will be taxable income to you.

Randy:
Okay. So that will affect my adjusted gross income for the year.

Joe Bert:
Yes sir. And depending on your age, if you’re receiving Medicare, it’ll impact perhaps your Medicare premiums, and if you’re receiving social security, it could impact the taxation of your social security. So maybe what you want to do, depending on your situation, is spread out the withdrawal over a year or two, or three.

Randy:
Okay. Okay. Yeah, I thought about that also. I didn’t know you could… I’m not for sure on this one that you can just withdraw part of it. And maybe you can enlighten me on that.

Joe Bert:
Well, how long have you had it?

Randy:
Oh, it’s been at least 10, 12 years.

Joe Bert:
Yeah, chances are it’s totally liquid at this point. So you ought to be able to take it out as you need it and as you want it.

Randy:
Okay. Issue date was October of ’03.

Joe Bert:
Yeah. Yeah, oh yeah. You got 19 years there. Yeah. Time flies, doesn’t it, randy? 19 years.

Randy:
Yeah man. I’d say it does. It does. It seems like 10, 12 years ago.

Joe Bert:
Yeah, 19 years. Yeah. So you want to be careful. You want to be careful what your other income is. As I said, it’ll impact the taxation of your social security, and maybe what your Medicare premiums are.

Randy:
Yeah, my adjusted gross income last year was $68,000.

Joe Bert:
Okay.

Randy:
And this has a surrender value of it of $77,000.

Joe Bert:
Okay.

Randy:
So that’s going to jump me from a 12% to a 22%. Yeah. Now is that going to affect my Medicare payment? [inaudible 00:16:38].

Joe Bert:
Yeah. It could impact your Medicare premium. I would, if you don’t need all the money in a lump sum, I would take it out over a couple years. Take out some now and take out some more in January. Just to be safe.

Randy:
Okay. Yeah.

Joe Bert:
If that’s what you want do. Yeah.

Charles Curry:
Because that way-

Randy:
That’s probably what I’ll do.

Joe Bert:
But I was going to say, let me ask you this, is there any urgency for you to do that?

Randy:
No, there’s just… Here’s my story.

Joe Bert:
Well, we’re up against the break. Randy, we’re up against the break. I hear the music coming. Why don’t you hang on and we’ll get back to your story after the break.

Josh McCarthy:
Thank you so much Randy. We’ll pop, we’re going to do a quick news, weather, and traffic for a quick break and we’ll be coming back to Randy to finish his question out right here On the Money. If you ever want to get your question answered by the team at the Certified Financial Group, now is your chance to call. Any questions you may have on how to handle your assets, your annuity, which is a word I spelled correctly. I’m proud of myself. The number to call is (844) 580-9326. That’s (844) 580-WDBO. You’re listening to On the Money with the Certified Financial Group where we’re planning tomorrow.

Joe Bert:
Today.

Speaker 7:
Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but it’s limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Certified Advisory Corp is registered as an investment advisor with the SCC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

Speaker 1:
Welcome back to On the Money, Central Florida’s most listened to financial call in 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 McCarthy:
Welcome back to On the Money right here on WDBO 1073 FM and AM 580. This is your chance to get your questions answered on how to handle your money. And this is the one and only show, it’s a call in show live right now on the radio. And they are all certified financial planner professionals. So anybody you get this advice from, because I assume you wouldn’t do anything I say, because I’m not certified financial, but anybody from the team at the Certified Financial Group is a certified financial planner professional. So call in right now for some trusted advice. (844) 580-9326, (844) 580-WDBO. We’re going to head right back to the phones, Chuck, George, I see you, but we gave Randy a promise. We’re going to come right back to Randy. Randy, go ahead and finish your conversation here with the gentlemen.

Joe Bert:
Randy, I’m going to get back to your question too about the tax. Let’s circle back for our listeners who may have just joined us. You have an annuity that has a surrender value about $77,000. You said your adjusted gross is $66,000? $60,000?

Randy:
Yeah.

Joe Bert:
Okay. If you cash in that annuity, it’s not going to impact the taxation of your social security anymore than it is now, and it will not impact your Medicare Part B premium. So you’re okay to do that. My question is really why do you want to cash in this annuity? What’s bugging you about it?

Randy:
Well, here’s my deal. We have worked and worked and worked to have different incomes, investment incomes. This one would be the easiest one to cash out.

Joe Bert:
Okay.

Randy:
But even without what our monthly income from this annuity, if you take that away, we are still $2,500 surplus every month.

Joe Bert:
Okay.

Randy:
So we’re in financially great shape.

Joe Bert:
Great.

Randy:
But we want to start doing stuff. And when I say do stuff, I mean like huge travel stuff.

Joe Bert:
Sure.

Randy:
And I want some liquid money to where we can just say, hey, let’s go there and we do it.

Joe Bert:
Got it. Got it.

Randy:
I mean. We’ve worked too hard to say, yeah, we’ve got a lot of money invested, but we can’t get to it.

Joe Bert:
Got it.

Randy:
I talked to an investment person, it’s been a while back, and he looked at me like I had three eyes and he said, why aren’t you spending some money?

Joe Bert:
Sure.

Randy:
And I was like, well, I don’t know. But this is what we work for.

Joe Bert:
I understand. Yeah. So that answers that question. Really what you want to do is get your hands on some money to do the things that you’ve always wanted to do.

Randy:
Correct.

Joe Bert:
Right. You want to comment on that, Charles?

Charles Curry:
Yeah. The comment, two thoughts that we had when we were talking off air was that with that annuity that you have, of course there’s a couple different options besides this cashing out completely. One of the things you can look at with annuity and what’s unique about them is they do typically have a living benefit built in where you can take distributions out of that annuity to live on. And that might be, depending on what that income is from that policy, it might be enough for you to do the travel and all the fun things that you want to do, versus taking a lump sum and taking that tax hit.

Charles Curry:
The other option, of course, is that you can roll that annuity into an IRA. That way you preserve the tax kind of deferral for a little bit longer and allow you to pull money out as needed for your travel, versus kind of taking that big tax hit. Kind of a one lump sum.

Randy:
Right. Yeah. Well, I didn’t know that I could, I thought when you cashed out you [inaudible 00:22:31], but if I could just take part of it.

Joe Bert:
Yeah. Check with the company. It’s going to be, it is a function of what the contract says. My guess is that you’ll be able to withdraw whatever you want, when you want it to be able to do what you want to do, when you want to do it. So once again, don’t worry, it’s not going to impact your social security anymore than it is now and it’s not going to impact your Medicare premium.

Randy:
Okay. That was my two biggest concerns.

Joe Bert:
Okay.

Randy:
Okay.

Joe Bert:
All right, Randy? Thanks for the call and bon voyage buddy.

Randy:
Okay, thank you. Bye.

Joe Bert:
You’re welcome. Bye. All right.

Josh McCarthy:
Go ahead. Go ahead there, Joe.

Joe Bert:
No, that’s a common question. What do I do with this annuity. People have bought annuities in years past, they’re great vehicles and now they’re looking them, they’ve got all this money built up in these annuities. What do you do with them? One of the things that we’re showing a lot of our clients how to take this money that you maybe don’t need today, it’s been accumulating tax deferred and turn it into some long term healthcare and get a multiple of whatever that annuity is worth so you don’t have to use your other assets to pay for your long term healthcare. And it keeps it all in one nice little bucket there. And you can always cash it in if you need the money, want the money. But it’s a way to take maybe what I would call lazy money, unperforming money, or underperforming money, and turn it into providing you some protection. And once again, in these new forms of policies, if you don’t use them, you get the money back or your beneficiaries get the money back. So it’s a way to get more bang for the buck, if you will, if you’ve got some lazy dollars laying around.

Joe Bert:
Once again, these are some of the things that we look at as certified financial planners working with our clients as fiduciaries. We’re always looking for the best option for you, and that’s what our responsibility is, and that’s how we do it. So you’ve seen that, right, Charles? On these newfangled programs, these what we call asset care kinds of asset based.

Charles Curry:
Yes, I’ve seen those and we’ve had clients bringing those policies in for us to review. And it’s one of those things with the industry, it continues to evolve. The benefits on these different policies have changed from just kind of a lifetime income or a tax deferred vehicle to one now where there’s a lot of different lifetime benefits kind built in as different riders on those annuities.

Joe Bert:
Right. Right. And we have the ability to get these annuities without any commissions attached to them, unlike the ones that you get at the free lunch and dinner seminars. These are totally stripped from commissions and they get you more bang for the buck. So if you want more information about that, I would suggest you go to our website, that’s financialgroup.com. Financialgroup.com. You can learn all about Charles and me, and the 14 other certified financial planners here that make up the Certified Financial Group. So I see we’ve got time for another call here. Josh, take it away buddy.

Josh McCarthy:
That’s right, just got a call from Watson in Winter Park. Watson, go ahead.

Joe Bert:
Morning, Watson. What’s up?

Watson:
Yes, I heard you earlier talking about being able to grow, increase the value of a Roth IRA. I have a very, very small one. It’s a little over $6,000 and I have it in a bank. It’s in a bank and it’s earning interest. I think it might be a money market account, I’m not sure which. But is there some way that I can use that to purchase or invest in something to let it grow and it could still be in my Roth IRA. How could I do that?

Charles Curry:
Yes, there’s a way to do it. It just depends on how that Roth, how it’s being held. If it’s being held, for example, in a bank CD, of course it’s a certificate of deposit. If your goal is growth on that Roth, you want it to be-

Watson:
It’s not a CD. I know it’s not a CD.

Charles Curry:
Okay. Yeah, with the-

Watson:
It’s like a savings account, I guess.

Charles Curry:
Correct. Yeah. And they have those at the bank. You just have to be very careful on what the rate of return is on those. Typically it’s very low compared to investing that in a Roth kind of brokerage account where you can buy almost any type of investment, invest in the stock market, or with mutual funds, which should get you a higher rate of return than you would on some type of savings rate at your local bank.

Watson:
Right, okay. So I can do that though? I would transfer the money out to a brokerage account without any tax consequences.

Joe Bert:
Yes, it’s a direct transfer. Direct rollover. Yes. Do you have a brokerage account now? Watson, do you have-

Watson:
No, I do not.

Joe Bert:
Okay.

Watson:
No, I do not.

Joe Bert:
Okay. It’s easily done. You can almost do it online if you want. For that size account, go to Vanguard. Go to vanguard.com, you can fill out the forms right there online and they can do the effect the transfer for you.

Joe Bert:
Now, let’s learn a little bit something about your situation. You want growth on this, which by definition growth says you can allow the money to live there for a while and go through the ups and downs in the market with the idea that you’re going to get long term growth. Is that in the plans, so you don’t need to tap into this in the near future?

Watson:
I don’t need to tap into it, no, but it would still remain liquid. I could sell anything in a brokerage account if I needed it, right?

Joe Bert:
That’s correct. That’s correct. Yep. Yeah, so get it out of the bank because the bank today, they’re not paying you anything, and in fact, it’s getting so bad, if you’ve got a toaster in years past, they’re going to come back and get the toaster from you.

Watson:
Well, I think I’m making a little bit, I think it’s 2%. I mean, it’s not zero.

Joe Bert:
Sure. Sure, sure. Yeah. Go to vanguard.com and you can do it right online.

Watson:
Okay, I’ll look at that. Thank you very much.

Joe Bert:
You’re welcome.

Watson:
Bye.

Joe Bert:
And once again, if you want professional advice as to how to go forward with that, that’s what Charles and I, and the 14 other certified financial planners do day in and day out for our clients. This is pretty much a straightforward decision and you can do it on your own, but if you want professional advice, this is what we do for our clients.

Joe Bert:
You want to take another call there, Josh?

Josh McCarthy:
I think we got time for one more. Let’s head on up to Kissimmee where Chuck’s been holding patiently. Go ahead, Chuck.

Joe Bert:
Good morning Chuck. Thanks for holding. How can we help you?

Chuck:
I own a townhouse that I don’t live in. I never resided there. I’ve owned it for 10 or 15 years. It becomes quite valuable. I never rented it. I visit there different times. It’s in the Washington area.

Joe Bert:
Okay.

Chuck:
Anyway, I would like to get out from it. I own it, free and clear, but I don’t want to pay an exorbitant amount of taxes either. Is there any way that your firm could assist me in that or someone mentioned a 1031.

Joe Bert:
Right.

Chuck:
Invested in Florida here.

Joe Bert:
Yup.

Chuck:
But I am on social security and I’m on Medicare, and I didn’t want to really affect that in any way. My payments and everything.

Joe Bert:
Sure, sure. Well, let’s give some specifics. What did you pay for the property?

Chuck:
$134,000.

Joe Bert:
And what do you think it’s worth today?

Chuck:
400, 450.

Joe Bert:
Okay, so you’ve got about $300,000 worth of gain, taxable gain. Okay. The worst situation is you’ll have to pay capital gains taxes on that. All right? Which is better than an ordinary income tax. However, a 1031 exchange will allow you to defer the taxes and continue to own real estate. And it doesn’t have to be like kind property as long as it’s investment property, whether it could be an apartment building, raw land, a house, whatever it is, a 1031 exchange is an option. Also a charitable gift annuity. You can give that to a charity and in turn get a lifetime income if you wanted to do that, and you avoid the taxes. So those are some of the options that you have available to you. Any other ideas there, Charles, you can think of? To avoid the taxes on the real estate transaction?

Charles Curry:
Okay. I just can’t think of one off top of my head at the moment.

Joe Bert:
Yeah, a 1031 and a charitable annuity would allow you to defer that. Eliminate the taxes with a charitable annuity and defer the taxes on a 1031 exchange. For our listeners that might not be familiar with that, you need what’s called a qualified intermediary to do that. This is not do it yourself time. It allows you to take an existing property that you have a nice gain in and defer the taxes, rolled into another property, and hopefully continue the growth and continue on down the road until you ultimately want to sell it. So those are some options for you, Chuck, does that help you?

Chuck:
Yes, it does. Does your firm…

Joe Bert:
We do not do 1031 exchanges, although we have people that can help you with that. If you want to give Charles a call on Monday morning, we can point you in the right direction.

Chuck:
All right. Well thank you very much, Joe.

Joe Bert:
All right. You’re welcome Chuck. Thanks for the call.

Josh McCarthy:
Thank you so much, Chuck. That opens up a line for your chance to call in. One more segment to get your questions answered, and we want to talk to you about some of the workshops we have coming up with the Certified Financial Group. If you want to call in right now is your chance, (844) 580-9326. (844) 580-WDBO. You’re listening to On the Money where we’re planning tomorrow.

Joe Bert:
Today!

Josh McCarthy:
With the Certified Financial Group.

Josh McCarthy:
Welcome back to On the Money, our final segment right here on WDBO 1073 FM and AM 580. Your chance to call in to get any financial questions you have answered by the professionals, the certified financial planning professionals at the Certified Financial Group right here in Central Florida, (844) 580-9326. (844) 580-WDBO. And of course, if a question pops to your head as we talk about the upcoming workshops, you can always call in after the show and get your question answered by Rodney off the air. He’s standing by at (407) 869-9800. That’s (407) 869-9800. And guys, we got the workshops coming up soon, huh?

Joe Bert:
Yeah, we do.

Josh McCarthy:
Charles?

Charles Curry:
Yeah, we do. We have a couple workshops just to tell you about this morning, and one of them has to do with Savvy CYber Security, the 10 threats that every person in business faces and how to protect yourself now. That’s going to be on Wednesday, September 14th from 7:00 PM to 8:00 PM, and it’s actually going to be hosted by myself. It’s appropriate for individuals concerned about cyber security and the different steps you can take to protect yourself there. Of course, lots of different scams out there and there’s some things you need to know in terms of the new cybersecurity rules and ways to protect yourself online.

Charles Curry:
The next workshop we have is Will Your Savings Last a Lifetime? That’s being hosted by another one of our CFPs here, Gary. It’s going to be on Saturday morning on September 24th from 10:00 to 12:00 PM and it’s appropriate for both-

Joe Bert:
Both 10:00 to 12:00 AM.

Charles Curry:
Correct. 10:00 AM to 12:00 PM. Yeah, it got me off guard, [inaudible 00:33:29]. Don’t be there at midnight.

Joe Bert:
It’s their midnight workshops.

Charles Curry:
Yeah, that’s right. Correct.

Joe Bert:
Cocktails will be served.

Charles Curry:
Yeah, it’s appropriate both for current retirees concerned about running out money and those currently planning for retirement. Topics are around investment basics, tax planning, planning for special healthcare needs, budgeting, and then calculating the appropriate withdrawal rates from retirement accounts. And then lastly, we have another seminar on October 12th, which is also a Wednesday from 7:00 to 8:00 PM, hosted by myself. And that has to do with an important topic for a lot of families this time of year around college planning and in particular around late stage planning on how to pay for college.

Joe Bert:
This is the first time we’re doing this one, and I found this one really fascinating, because now we have the ability to sit down with the parents and the student and talk about, okay, what college you want to go to and what do you want to be when you grow up? What’s your career path? And now thanks to technology, we can plug in your information, plug in what school you want to go to, project what the costs are, project what financial aid you may be eligible for, and then if you need a student loan, what that would cost. Then out comes a number, and it’ll say based on where you want to go, what it’s going to cost to do that, what your income will be. This is what your projected situation is. So you can see, oh, I’m going to graduate with a degree in French literature. I’m going to make $4,000 a month, but my student loan is going to be $2,500 a month. Do you really want to go down that path? You really want to look at what those options are.

Joe Bert:
I think it’s going to be a tremendous workshop. I encourage any family that’s has children at or near college age to come in. It’s is absolutely free. We’ll show you how we do it, show you what the benefits are, and you can learn all about those big decisions, because financial decisions on college, and today is a disaster. What we don’t want to see you do is cash in your IRA, your 401k, to help pay for that college because really what you’re doing is you’re setting your own retirement back and then unfortunately the kids graduate from college, move back home, and you’re really in a jackpot. So before you go off and spend this big amount of money, you really want to know what that’s all about.

Joe Bert:
Once again, all these workshops are absolutely free. This last one is the college planning. It’s on October 12th. As I said, Charles, we’ll be hosting this right here in our learning center. We can easily accommodate about 30 something people. In fact, we have over 30 people here this morning going over the Medicare, Everything you Want to Know about Medicare, that workshop is full. So for those of you sign up, I hope you’re coming in because he saved you seat.

Joe Bert:
Anyway, get more information. You can go to our website, that’s financialgroup.com. Financialgroup.com, click on events, workshops. You can make your reservation right there and we’ll save you a seat. It is absolutely free. Why do we do this? We do this for two reasons. Number one, to prevent you from becoming a financial casually because they don’t teach you the stuff in school. We want to help you. And secondly, to introduce you to what Charles and I, and the 14 other certified financial planners do for our clients. Providing financial planning and investment advice for a fee, working as fiduciaries. This way, whether you need our services now or sometime in the future, maybe you’ll give us a chance to earn your business, but its absolutely free. Go to our website, that’s financialgroup.com. Financialgroup.com.

Josh McCarthy:
Thank you so much. Of course we got just about 90 seconds left. So if you want to get your questions answered by the certified financial group right here in Central Florida, the number to call is (407) 869-9800. That’s (407_ 869-9800. Rodney is standing by ready to answer your questions. Plenty of workshops if you want to pop in, get these questions answered. The one today of course is Full Healthcare Options in Retirement. They told me right away that’s going to be a popular one and I can tell they were not talking out of turn, because that one is now full. One coming up September 14th at 7:00 PM How to Handle some Savvy Cyber Security. And then of course, coming up in September 24th, How to Make Sure your Savings Last a Lifetime.

Josh McCarthy:
Thank you so much for listening to On The Money right here on WDBO. Your chance to talk to a live certified financial planning professional. And we always love the interaction we get from you guys. Thank you much for listening to On the Money where we are planning tomorrow.

Joe Bert:
Today!

Josh McCarthy:
With the Certified Financial Group.

 

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