Saying the ‘F word’ out loud | TRANSCRIPT

Bill Purham:
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 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.
Stay tuned for 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 show.

Josh McCarthy:
Welcome to On the Money right here on WDBO. My name is Josh McCarthy joined in studio with the team at Certified Financial Group. This is your chance to hop on the air, hop on the brains, hop on the tip of the tongue for the certified financial planners with the Certified Financial Group. If you want to join the phones today, the phones are wide open. We got one calling in. Let me put that one on hold right now so I can grab them in just one second.
The number to call is 844-580-9326. You need that number because On the Money is one of the only shows of its kind in the Central Florida area. You have a question about your finances, about your future, how to plan, how to prepare, and I have the experts. We’re sitting in the studio today with Joe Bert and Matt Murphy with the Certified Financial Group. They are part of a team with over 400 years combined experience giving out financial advice. How is that? It seems like a made up number, guys.

Joe Bert:
Well, it’s getting closer to 500 now as all of us age a little bit.
Yeah, Josh, we are here this morning, as we have been for more than 30 years, taking calls from our listeners. And I was listening to our intro that the voice of WDBO, Bill Purham, throughout their Central Florida’s most listened to financial call-in show. Frankly, it’s the only financial call-in show. I listened to the other programs on the weekend and they are all what I would call one-hour infomercials. But Matt and I are here live as we have been for more than 30 years, taking calls from our listeners, trying to get you to and through your retirement years. Monday through Friday, Matt and I and the 16 other certified financial planners provide financial planning and investment advice for a fee. On Saturday morning, we are here for you absolutely free.
So if you have anything on your mind regarding your personal finances, things you might be thinking about regarding your IAA, your 401(k), stocks, bonds, mutual funds, real estate, long-term healthcare, all those things that Matt and I and our 16 other certified financial planners deal with every week, we are here to take your calls. So the good news for you, we have a caller waiting, but the lines are still wide open for the most part. So Josh, throw out those numbers, buddy.

Josh McCarthy:
The numbers are 844-580-9326, 844-580-WDBO, or feel free to send in your open mic via the free WDBO app. I’ll play those back for you. Joe and Matt live on the air and they’ll answer them as if they were a caller.
Today’s topic, “Saying the F-word Out Loud,” and I got to be honest, as an FCC employee, that scares me a little bit. Matt, where are you going with this one?

Joe Bert:
So have your dump button ready.

Josh McCarthy:
I’m ready.

Joe Bert:
Why don’t we take Tim’s call first because we don’t want to keep him holding on the line and the topic will always be there, so let’s take Tim off the air.

Josh McCarthy:
Sure thing. Tim, you’re on the air. Go ahead.

Joe Bert:
Good morning, Time.

Josh McCarthy:
You’re joined by Certified Financial Group.

Tim:
Well, good morning. If you put taxed money, money that’s been taxed, into some sort of IRA or 401(k) and then you receive gains on it of course over time, how does the IRS know that, say, the principal you put in was taxed so that you’re not taxed on the principal and the gains, if that makes sense?

Matt Murphy:
Well, Tim, basically the way that works is when you make a contribution to an IRA… It’s a good question. When you make a contribution to an IRA, typically that money is going to be after-tax money anyways, and at the end of the year when you file your taxes, you will note on your tax return that that contribution, whatever the amount was, was an IRA contribution and if you’re eligible for it, you’ll get a tax deduction for making that contribution.
Now, there’s some things that could cause that contribution not to be tax-deductible, but let’s just assume that it would be tax-deductible. Then each year as you make those contributions, you’ll have documentation that that money that’s in that IRA was pre-tax, and when you go to take that money out in retirement, you’ll get a tax form, a 1099-R, each year that will just demonstrate that you’ve taken money out of an IRA, it’s never been taxed before, and it obviously then will be taxed upon withdrawal in retirement.

Joe Bert:
So you’re not… Go ahead, Tim.

Tim:
No, I just want to make it clear. I’m talking about money you’ve already paid taxes on and then you want to put it into the… So when you’re 70, 75, you start taking it out. How do they know that, well, most of it maybe was already taxed? I guess that’s what I’m trying to say.

Matt Murphy:
Well, there are some circumstances where you may have after-tax money in an IRA that you did not get a tax deduction for when you put that money in. And in that case, and I can’t think of the name of the IRS form, I want to say it’s… I don’t know, I’d have to look it up, but there’s a specific form, Tim, that each year, if you make after-tax contributions to an IRA, you have to file that form with your taxes to show that hey, this portion was after-tax dollars, and then eventually when the money comes out because you’ve kept those records over the years, a portion of it, of course when you take it out, then would not be taxed upon withdrawal. And then the portion that is the gain, to your point earlier, would be taxed.
So normally, that’s a form that, if you have somebody doing your taxes, you just want to make sure that they know each year, hey, this is money that’s after-tax that’s going into this IRA so that you do have that documentation over the years.

Joe Bert:
That only applies, Tim, if you did not take the tax deduction when you put the money into the IRA because when you put the money into a deductible IRA, you put in $7,500, you get a tax deduction for $7,500. So when it comes time to take that money out, you’ll be taxed again on the $7,500. So even though you have $7,500 now that’s already been taxed, when you put it into deductible IRA, you get a tax deduction for that $7,500. You follow me so far?

Tim:
Yes.

Joe Bert:
Okay. And then any growth on that, plus the $7,500 in which you got the tax deduction for when you made that contribution, then when that comes out, then it’ll be deductible to you. Unless, as Matt says, it’s an after-tax contribution that you’re putting in there and then it’s pro rata when it comes out in the future.

Matt Murphy:
I’m just going to add to that. That’s an important point, what you just mentioned, Joe, the pro rata. So let’s say, Tim, over the years, let’s just use some numbers. Let’s say you put $20,000 after tax into an IRA and it grew to $100,000. What the IRS generally speaking does not allow you to do when you take that money out is just cherry-pick the $20,000 that was after tax. Normally, you have to take it out pro rata. So each withdrawal will be a little bit of your after-tax money, and then each withdrawal will be a little bit of your money that’s never been taxed before. So just keep that in mind as well if you are making these after-tax contributions to an IRA

Joe Bert:
And then also, your custodian, whosever holding that money, has the records as well. So at the end of the year, they will send the appropriate forms, which will show how much is fully taxable and how much is perhaps an after-tax money. That make sense?

Tim:
That’s great.

Joe Bert:
All right.

Tim:
Great. Thanks so much for clearing that up. We appreciate it.

Joe Bert:
You’re welcome, Tim. We really appreciate the call. So back to the F-word.

Matt Murphy:
Well, we are a family. We pride ourselves on being a family show here, Joe.

Joe Bert:
This is a family show.

Matt Murphy:
Yes, indeed.

Joe Bert:
We’re family.

Matt Murphy:
Now F could also be fall. We’re getting some beautiful weather here.

Joe Bert:
That’s right. Could also be fun.

Matt Murphy:
Yeah. Yes, indeed. But what we’re referring to here this morning with the F-word is fiduciary.

Joe Bert:
Ah.

Matt Murphy:
And I don’t know about you, Joe, but I have a lot of folks that come into the office, particularly ones that are coming in for the first time maybe just getting to know us a little bit, and one of the questions that typically comes up is what exactly is a fiduciary and what does that mean to me?
And so I thought maybe today we’d talk a little bit about what the difference between somebody who is actually a fiduciary is and somebody who’s not a fiduciary. And I know this hits home with you, Joe, because you’ve really structured this firm so that we here take great pride and put a lot of work into delivering on our fiduciary commitments.
And I think the main difference between a fiduciary and somebody that’s not a fiduciary, I think about the old-school broker, and there’s some rules in place for brokers in our industry that sort of just sell products rather than work in the client’s best interest. And the standard that a broker is held to is really just what we’d call suitability, meaning if we’re selling you a product, we just have to demonstrate that it’s not doing any harm.
Well, there’s a big difference between selling somebody something because it does no harm and actually a more proactive stance which would be doing what’s in the client’s best interest, and that’s what a fiduciary means.

Joe Bert:
And here’s the challenge that we have as fiduciaries who are really doing it, is that anybody can call themselves a fiduciary. If you listen closely to these folks on the radio during the weekend, everybody’s a fiduciary. You can say you’re a fiduciary. Anybody can say they’re a fiduciary, but are you really acting as a fiduciary? And the distinction that we have here at Certified Financial Group is we actually put it in writing in our management agreements to our clients that we will serve on your best… Ask for the management agreement and look if the word fiduciary is in there. If it says it, then you are dealing with a fiduciary, but most people don’t put it in writing because anybody can say they are and talk is cheap.

Matt Murphy:
And I think another good question to ask is what is your process for adhering to… If you’re saying you’re a fiduciary, what is your process for adhering to your fiduciary commitments? What systems do you have in place to ensure that the advice that you’re giving is truly in the client’s best interest? And I think what you’ll find a lot of times is people will call themselves fiduciaries, but they’re kind of empty words. They don’t have a process in place to follow up on those fiduciary commitments.
So part of what we do here is educate the listeners. Obviously, we want you to come visit with us, but if you’re shopping around, those are good questions to ask on that subject of the fiduciary.

Joe Bert:
For sure. And I see we’re up against the break here, Josh, so take it away, buddy.

Josh McCarthy:
That’s right. If you want to hop on the air, we’ve got David on hold waiting to ask about his retirement, but if you want to join the line, 844-580-9326 is the number to call, 844-580-WDBO. Hop on the air with Joe Bert and Matt Murphy with the Certified Financial Group. This is On the Money where we’re planning tomorrow-

Joe Bert:
Today!

Matt Murphy:
Today!

Josh McCarthy:
… with the Certified Financial Group.
Welcome back to On the Money right here on WDBO 1073 FM, AM 580, always taking your calls live on the air, streaming live inside that WDBO app. My name is Josh McCarthy, joined in studio today with Joe Bert and Matt Murphy with the Certified Financial Group, taking your calls, like I mentioned. If you’ve got some questions about your Roth IRA, your 401(k), hearing some financial advice in the news and you want to just follow it up with a voice that you trust, that’s what we’re doing here live today. Oh, go ahead.

Joe Bert:
Josh, I want to take a second to reintroduce Matt. Matt has just celebrated his first anniversary here with us at Certified Financial Group.

Josh McCarthy:
All right!

Joe Bert:
… and we’re thrilled to have him. He has a background of being with Fidelity Investments for how many years?

Matt Murphy:
12 years.

Joe Bert:
12 years. And he’s come over to the independent side, still has the ability, as all of our planners do, to work directly with Fidelity. However, we do it under an independent umbrella, which means that we can pick and choose from whatever investments we feel is best for our clients. And we have the same thing holds true for our relationship with Charles Schwab. Charles Curry is on taking calls off the air. Charles is a former Schwabie, if you will. He was with Charles Schwab for 10 years, has come over to the independent side.
So it’s one of the things people wonder if they come to work with us, “Where do I house money?” Well, we don’t hold your money here. Your money is never with Certified Financial Group. We use the two major custodians in the world, that’s Fidelity Investments and Charles Schwab. Your money is there. What we do is we act as fiduciaries, as we talked about in the first few minutes of this program, and that allows us to pick and choose from the entire supermarket of investment choices that are available at those firms. We’re not locked into picking just fidelity funds or just Schwab funds. We can do the Vanguards, the T. Rowe Prices, whomever we believe that is best in our client’s best interest. That’s the distinction.
We’re proud to have Matt with us. Right, Matt?

Matt Murphy:
Really makes me want to say the F-word, Joe.

Joe Bert:
That’s it, fiduciary! All right, I see we’ve got a call here. Can we squeeze them in here before the bottom of the hour?

Josh McCarthy:
That’s right. David calling from DeBary. Go ahead, you’re on the air.

Joe Bert:
Hi, David. Good morning. How can we help you?

David:
Good morning. Thanks for taking the call.

Joe Bert:
Of course.

David:
Yeah, I’m a federal employee and I was just trying to get smarter on their TSP options. So my question is really just trying to figure out advantages, disadvantages, what might be the better option. I know I can contribute from my check and put it into pre-tax versus after-tax contribution. So I’m just trying to figure out should I start doing the after-tax contributions so that I’m not taxed later or do I have it all backwards? Just wanted to get your guys’ thoughts on that.

Joe Bert:
It all depends. It all depends, first of all, on your tax bracket. How old are you, David?

David:
I’m 35.

Joe Bert:
35? See, you’re a young guy obviously. You got a lot of years in the program.

David:
Yes, sir.

Joe Bert:
So what you want to do is you want to be aggressive in your investing. Right, Matt?

Matt Murphy:
Absolutely, yep.

Joe Bert:
So are you familiar with… Let’s talk a little bit about the Thrift Savings Plan for our listeners that may not be familiar with what it is. It’s really the government’s 401(k) plan and you have several options in there. You want to tell our listeners what those options are?

Matt Murphy:
David, really you have two paths that you can follow. The first path… And by the way, this would be regardless of whether you do pre-tax or after-tax money. The two paths would be number one, going with what we would call a Life-Cycle Fund, and you’ve probably seen these before. It could be like a 2040 Fund or a 2050 Fund and that’s intended to be the entirety of your portfolio. So you can contribute all the money that you put in into that Life-Cycle Fund and the idea is it will automatically be invested according to that date.
So for example, somebody that chooses a 2050 Fund, a younger person, is anticipating that they would retire maybe sometime around 2050. So that’s going to be much more aggressive than maybe the 2030 Fund, which is intended to be invested for somebody that’s going to retire here within seven years. That’s the first option.
The second option would be this listing of funds, and you’ve probably seen these, the G Fund, the S Fund, the I Fund, the C Fund. That’s more designed for people that want to pick and choose their own investments, and the TSP gives you those options to be able to cobble together your own portfolio.
So the right path as far as that goes would be just really the type of investor you are. If you’re somebody that pays a lot of attention to this and is willing and able to manage it over time, going with those individual funds might be a better choice. But if you’re someone that says, “Hey, I just want to put X amount of dollars of each paycheck into my plan, I kind of want to have it on autopilot,” you’re probably better off with those Life-Cycle Funds.

Joe Bert:
And many people are, David. The Life-Cycle Funds are not a bad idea if you’re not working with an advisor because it prevents you from doing the things that everybody does that becomes a poor investor and that’s trying to time the market. You see what’s going on and you jump in, you jump out, and you make the wrong decision at the wrong time.
So I would recommend, unless you’re working with an advisor, to use the Life-Cycle Fund. So let’s talk about pre-tax versus after-tax. Are you married?

David:
Yes, sir, I am.

Joe Bert:
All right. We’re going to get the details when we come back from the break.

Josh McCarthy:
Stick with us, David. If you want to hop in the line, the number is 844-580-9326, 844-580-WDBO. David, we’re about six minutes away from returning your call. Quick break for news, weather, and traffic.
You’re listening to On the Money where we’re helping you and David plan tomorrow-

Joe Bert:
Today!

Matt Murphy:
Today!

Josh McCarthy:
… with the Certified Financial Group.

Bill Purham:
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, AM 580, always streaming live inside your very own personalized WDBO app. You can find the open-mic option inside there too if you want to join the program today. Open up that app, click the open-mic button, give us your best 15 seconds. And right now, Joe Bert and Matt Murphy will answer your financial future question accordingly, or if you want to hop on the air via the telephone, the number to call is 844-580-9326, 844-580-WDBO.
Let’s go ahead and pick up where we left off. What do you say, guys? Go right back to David?

Joe Bert:
Yeah, let’s talk to David. David had a question about this Thrift Savings Plan. Once again, the TSP Plan is the government’s answer to the 401(k) plan, which allows him to put in money out of his paycheck. And the question he really had before we going off on a tangent is should I do pre-tax or after-tax?
And David, that all depends. So you said you’re married, you still married after the break here, everything’s still the same, right, I presume?

David:
Everything’s still the same. Yes, sir.

Joe Bert:
Okay, so it depends on your tax bracket. So what’s your taxable income between… Does your wife work outside the home?

David:
No, she does not.

Joe Bert:
Okay, so it’s just you. So let me tell you, if you’re married, filing a joint return, if your taxable income is less than, let’s say, $90,000, you can consider using the after-tax account because you’re not giving much in a tax deduction. You’re only in the 12% tax bracket. So you’re not giving up much in terms of tax deduction. If you’re looking for tax deductions, then you want to use the pre-tax section. That makes sense to you?

Tim:
Yes. Yeah, yeah, yeah.

Joe Bert:
So as your income increases, you want to keep track of the cutoffs on there, and once you get up in the 22% tax bracket, of course that assumes that taxes don’t change, which are likely to change in the next couple of years, you want to use the pre-tax amount as opposed to the after-tax.
So start with the after-tax because you’re in the lower tax bracket. As you go through the higher tax brackets, then you want to get the tax deduction today. That’s my personal philosophy. What do you think, Matt?

Matt Murphy:
Yeah, and I would add to that. David, this is a little bit of a crapshoot here because the decision to make pre-tax contributions versus after-tax, it does take a lot of factors into consideration, including your age, including your income now. But it also takes into consideration things that we don’t have control over, which of course would be what tax rates are going to be in the future.
And I know Joe’s got some opinions on the Roth IRA in the after-tax buckets long-term, and maybe those ending up being taxable down the road. And of course, all this, again, is a crapshoot, but to me, I like to see younger people in general splitting up those contributions between pre-tax and after-tax so that you’re not totally invested in one particular outcome with regards to what taxes do in the future. So by putting some into pre-tax, maybe it’s half, half into pre-tax, half into after-tax, you’re straddling the fence a little bit there and you can benefit from either outcome with regards to what happens to taxes in the future.

Joe Bert:
David, if you hang on for just a minute and do us a favor, so you’re obviously a WDBO listener?

David:
Mm-hmm.

Joe Bert:
When do you listen to WDBO? What’s your listening schedule? Do you listen during the week, during drive? What do you do?

David:
Yeah. Typically, I’ll listen during the week on my way home from work, so usually around 3:30, 4:00. But then right now, I’m listening to you guys every Saturday as I’m driving up to DeBary to take care of my in-laws’ place while they’re traveling for a couple of months.

Joe Bert:
Got it. So you’re a regular WDBO listener and you listen on your drive time on your way home, 3:30, 4:00?

David:
Yes, sir.

Joe Bert:
All right. We’re always interested in how our listeners find us. How did you happen to find our show? Are you just tuned on on Saturday mornings and we just popped up?

David:
Yes, yes, I’ve done it before. They love to travel, my in-laws, and so I’ll take care of their property while they’re gone. So usually, Saturday mornings while the kids are asleep, I’ll go out early and then depending on how long I got to be there, usually I’ll catch an hour or two of your show on Saturdays.

Joe Bert:
Great. Well, we appreciate your call and have a great weekend, David.

Matt Murphy:
Thanks, David.

David:
Thank you so much for the help. Appreciate it.

Joe Bert:
Okay, you’re welcome.

Josh McCarthy:
Thank you so much, David. His in-laws love to travel. Now, our next caller is calling from somewhere who also loves to travel and she wants to make sure that when she is retired she is able to travel.
Alicia, go ahead. You’re on the air with Joe Bert and Matt Murphy with the Certified Financial Group.

Joe Bert:
Good morning, Alicia.

Alicia:
Hi. Good morning, Joe. Good morning, Matt.

Matt Murphy:
Good morning!

Joe Bert:
Good morning. How can we help you?

Alicia:
Yeah. I want to make sure that I have enough money to travel when I retire. I have two kids, my son plays golf but he’s not very good so I don’t imagine that he’ll get a scholarship, and my daughter doesn’t do anything, and so I’m trying to figure out how to fund my retirement and college. I don’t know which to do first and I want to make sure that I have enough money to go on all of these trips that I have planned with my friends.

Joe Bert:
Aha. All right, so how old are you, Alicia?

Alicia:
I am 47.

Joe Bert:
47. Do you have any form of savings right now, a 401(k), IRA, retirement plan?

Alicia:
I do. I work for the state and so I’m going to have a pension at some point.

Joe Bert:
Okay, you have that. So number one, let me ask you this, what’s the number one thing on your mind in terms of your money? Is it college for your kids? Is it retirement? Is it… What might it be? What keeps you up at night?

Alicia:
Having enough-

Joe Bert:
Having enough?

Alicia:
… to do all the things I want to do when I retire, yeah.

Joe Bert:
Okay, okay. So it’s retirement and knowing that when you’re in your retirement years, you could do what you want to do. So if Alicia strolled in our office Monday morning, where do we start, Matt?

Matt Murphy:
Yeah. Well, I think first of all, you’re at the right age to start thinking about these things. Number one, we need to know where your cashflow is going right now, so whatever money you have that’s disposable on a monthly basis, we would take a look at where those dollars are going and making sure that, like Joe said, based on what your priorities are, you’ve got, it sounds like, a lot of priorities between college funding, retirement, travel, et cetera, let’s see where that money’s going right now, first and foremost, and make sure that that’s consistent with what your goals are.
And depending on how old your kids are, you may need to ramp up some of the dollars that are going towards funding their college. Let’s say if your kids are 12, 13 years old, you only have a few more years to save for them. So for the time being, it may be that you need to allocate more dollars towards college savings, whether that’s, depending on where you live, whether that’s a 529 plan, whether it’s a prepaid-type plan, or something else for that matter. And then once you’ve satisfied that savings goal, let’s say, if you’re 47 now, in your early 50s, quite frankly, depending on your income, you probably still have time to really focus on your retirement goals even at that point.
Obviously, we’d always encourage people to start as early as possible, but I have clients that come into my office all the time, Joe, that, given a good income, you can do a lot of damage starting in your early 50s, and if your goal is to retire by 60 or 65, with good prudent investing and good disciplined habits with saving, with an eye on taxes too by the way, you can probably accomplish all those goals.
But the first step would be you really need to get everything down on paper and find out where is your money going right now, what your goals are, and what path are you on for the future?

Joe Bert:
Alicia, the most important thing for you to know is what you need to do now so you don’t look back five years from now with regrets and say, “Gee, I wish I’d have known that,” or, “Gee, I wish I could have done that. I should have done that.”
And this is what makes Certified Financial Group different. A lot of people out there give lip service to financial planning. In fact, some people will do financial planning for you for free as a come-on so they’ll want to manage your money. At Certified Financial Group, we do a deep dive into where you are today and where you want to be, what your lifestyle is, factoring inflation, factoring in taxes, and then telling you, showing you what you can do if you do X, Y, and Z. And that takes into consideration your own personal situation. You like to travel, you like children, and between now and then, you’re going to be buying cars, maybe parents are going to enter in the situation, other things. All those things are factored in too, and that’s what financial planning is all about, and that’s what Matt and I and 14 other certified financial planners do for our clients is give you that roadmap.
Then the next step is the easy part from our perspective is managing the money. We manage billions of dollars for clients, but good investing requires good planning. Everybody wants to do the investing. Like I said, they’ll give away the financial plan, it’s free, we’ll do it for you for free. We do financial. It’s like going to a general contractor and having to build your house without a set of blueprints and we don’t know if that house is going to stand, if it’s really what you want, and that’s what makes the distinction.
So to answer your question, at your age, as Matt said, you probably have a lot of opportunity there because you have several years before you’re probably going to stop working. You have a pension, but you have to look at what you need to do now because time is a great asset and we’d love to help you and we do this stuff. We offer you a complimentary consultation. Right, Matt?

Matt Murphy:
Yeah. And I want to add one more thing, Alicia, which is a lot of people that come in my office for the first time, it’s a big step to come in and meet with somebody if you’ve not done that before. What I always tell them is I’m going to say, “I’m going to give you some kudos here for coming in and going through this process,” because regardless of what the outcome is… Sometimes the outcome is we go through a plan and everything looks great. Sometimes we go through a plan and everything doesn’t look great. But you know what? Now you’ve kind of peeled back the layers a little bit. You’ve seen the truth, which is, hey, maybe there’s some things that we need to do here that we’re not doing right now. And the sooner you get to that point where you know what the reality of your situation is, I can tell you just psychologically, that is empowering, regardless of what the results of that plan are.
So do it as soon as possible, come see us, and we’ll have a complimentary consultation. We’ll go through how we do the planning process and regardless, like I said, what the results are, whether it’s, “Hey, we got to make some pretty difficult decisions,” or, “you’re just on the right path already,” regardless, you will walk away feeling empowered.

Joe Bert:
So we encourage you to check on our website, Alicia, that’s financialgroup.com.

Alicia:
And Matt, if I don’t live in state because I’m from Las Vegas, can I still work with you?

Matt Murphy:
Sure, yeah, we do… I mean, geez, I do probably a third of my appointments virtually. So certainly give us a call, Alicia, at our office, 407-869-9800. You can also go to the website, which is financialgroup.com. In fact, you can even book an appointment right on the website there, set up a virtual meeting with one of us and we’ll get to know your situation. Yeah, we work all over the country.

Joe Bert:
We have clients in 28 states, and I don’t know about Nevada, but you may be 29. We’d love to work with you. You have opportunity. The key is is work with a certified financial planner. That’s really the distinction. That’s the starting point of getting the answers done to what you want to have done.

Alicia:
Okay, well, thank you.

Joe Bert:
You’re welcome, Alicia. Appreciate the call and enjoy Belize.

Matt Murphy:
Thanks, Alicia.

Alicia:
Thank you. Bye.

Joe Bert:
Bye.

Matt Murphy:
Bye-bye.

Joe Bert:
There you go. So we have some workshops coming up, right, Matt?

Matt Murphy:
We certainly do. Our next workshop is going to be on October the 11th, that’s a Wednesday, from 6:30 to 8:00 here in our Learning Center. If you haven’t visited our Learning Center before, it’s a beautiful space. “Getting Long-term Care Planning Right: Smart Approaches for People at All Stages.” And that’s put on by Charles Curry and Wynn Smith in the office here. Again, that’s October the 11th, Wednesday, from 6:30 to 8:00.
Long-term care is one of those things. There’s a handful of items that always come up in the course of financial planning. That’s one of the big ones. Everybody’s concerned about it. That’s a great way to get yourself educated on what your options are for solving for that long-term care issue.
So again, our website, financialgroup.com, go to the workshops tab and reserve your spot.

Josh McCarthy:
Thank you so much. If you want to hop on the air right now, get your question in, we got one more break coming up with the members of the Certified Financial Group. 844-580-9326 is the number to call. Send in your open mic using that free WDBO app. 844-580-WDBO. You’re listening to On the Money where we’re planning tomorrow-

Matt Murphy:
Today!

Joe Bert:
Today!

Josh McCarthy:
… with the Certified Financial Group.
Welcome back to On the Money right here on WDBO. Coming in quickly for this segment because it is a quick one and we want to make sure we get to our last caller of the day today, we got John on hold, if you want to call in right now as the show comes to an end, Charles Curry with the Certified Financial Group is standing by. That number is 407-869-9800. That is the office number for Certified Financial Group. Charles Curry’s standing by for the next few minutes after the show. 4 07-869-9800.
John is calling in from Orlando. Go ahead, John. We’ve got about four minutes left.

Joe Bert:
Hey, John, good morning.

John:
Okay. I had a question about… I’m an older person in my 80s actually, and if you leave finances to your, I have two daughters, do they have to pay taxes on that inheriting it?

Joe Bert:
What do you mean by finances? You mean your assets?

John:
Yeah.

Joe Bert:
Yeah. No, no, they don’t. So are you talking about when you pass away?

John:
Well, either way. Is it better to do it before you pass on or to do it while you’re walking around?

Joe Bert:
You’re better to pass it on because they will get what’s called a step-up in basis, which means they take over the value at your date of death and they could sell it the same day and pay no taxes, income taxes. However, if you transfer it to them during your lifetime, they will inherit your cost basis, which means that they will take over whatever you paid for it and then they will have to pay taxes on that gain. So unless they need the money today or unless you just feel generous, it’s better off to pass assets on at death.

John:
So if you give it to them while you’re living, they pay taxes from the day you… Taxes that you should have paid on it. Is that correct?

Joe Bert:
When they sell it, that’s correct. Now, you could give it to them. They don’t pay any taxes on the gift. In fact, you may be subject to a gift tax if you give more than $17,000 a year, but there is no income tax until they sell it. But their income tax is based on the cost basis. The cost basis, once again, is what you paid for it if you give it to them during your lifetime. If they inherit it, the cost basis then starts all over, they take it over at your date of death, they can sell it the same day and pay no income taxes.

John:
I see, I see. You’re better off to not give it to them while you are walking around?

Joe Bert:
From a tax-wise standpoint, that’s correct. Yep, yep.

John:
Yeah. But you could get to see the nice car that they might buy.

Joe Bert:
Well, that’s correct. That’s not a financial decision; that’s an emotional decision.

John:
Maybe I’ll get to ride in it too.

Joe Bert:
There you go. There you go. There you go.

John:
Okay. Bye.

Joe Bert:
All right, John, thanks for the call.
So I want to wrap up here, Josh. I want to remind our listeners that we got some workshops. Once again, those workshops, Matt?

Matt Murphy:
Yeah. So as I mentioned before the break, Wednesday, October the 11th, “Getting Long-Term Care Planning Right: Smart Approaches for People at All Stages.” Charles and Wynn are hosting that here on our office, 6:30 to 8:00 on Wednesday, October the 11th. Go to our website, financialgroup.com, go to the workshops tab, sign up and reserve your spot there.
I am also doing a workshop on November the 4th, “How Tax Planning Changes Through Four Stages of Retirement.” Again, that’s Saturday, November the 4th. That’s from 10:30 to 12:00. And the reason it’s 10:30 is because I’m doing the radio show with you that morning, Joe.

Joe Bert:
There you go. Looking forward to that.

Matt Murphy:
I will tell you that is probably the most popular workshop of all the ones that I do because everybody leaves from that workshop saying, “Wow, I didn’t know that.” So sign up, go again to our website financialgroup.com to get more information on those and any other workshops that we do. Reserve your spot because they do fill up fast.

Joe Bert:
And Charles is in the office at 407-869-9800 or 1-800-EXECUTE. If the line is busy, he promises to call you back.

Josh McCarthy:
Thank you so much, Matt Murphy and Joe Bert. You the listener, have just enjoyed another episode of On the Money where we’re planning tomorrow-

Joe Bert:
Today!

Matt Murphy:
Today!

Joe Bert:
… with the Certified Financial Group.

 

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