And good evening.

You've got More Than Money, you've got Gene Dickison, your host, your personal financial adviser, and for the next half an hour, I'm at your service and happy to be so.

Happy to be so indeed.

If you're a loyal viewer of More Than Money, you know exactly how this works, you send us your e-mails, we answer as many as we possibly can on air for you.

We can't answer every single e-mail - as you might expect, we get far more than we could possibly do.

We don't have enough hours in the day.

But we do you have a commitment to you personally to answer every single e-mail directly to you.

You might see yours on a future show, so send those to me, Gene@askmtm.com.

And the show is More Than Money, so you can ask about any topic that has something connected to your life and your finances that you find concerning.

It could be investments, it could be retirement, it could be estate planning, it could be wills and trust, it could be income taxes, 401(k)s, IRAs, it could be businesses - how to set them up, how to run them, how to liquidate them - all of those are fair game and anything else that you might come up with.

One of the most common topics that we answer in our e-mails to you is one that you might not expect.

But it's one that our correspondent Alyssa and I have encountered often in recent months, so I'm going to invite Alyssa to More Than Money and we're going to talk a little bit about one of the things that lots and lots of folks in the Lehigh Valley and well beyond are really fascinated about - the rules around gifting.

So, Alyssa, give us the basics.

Folks who are saying, "I want to give gifts to my family but I don't want to get "into a pickle with the IRS," what are some of the basics?

- Sure.

So, people are often worried about whether or not there will be any income tax implications when they give large gifts.

The good news is that an individual person can give up to $15,000 per person, per year and not even need to file a single piece of paper.

So, as a married couple, you could give $30,000, for example, to each of your children without any concerns about income tax implications.

- Very good.

And, if they had some, perhaps they have a daughter that would like to put a large down payment on a home and Mom and Dad want to give her $100,000, how much trouble are they really in?

- They're not in any trouble, they just need to file a simple piece of paper when they do their income tax return that acknowledges that gift.

Because they have up to $11.7 million that they can give in their lifetime.

- And if they're a married couple, is it a little bit bigger?

- Yeah, it's about 23 million.

- So, if we have listeners, viewers that are hearing us discuss this and saying, wait a second, we have a large family business, we have a large family farm, we have a lot of real estate and, indeed, it's measured in $10 million, $15 million, $20 million and I'm worried that, when I pass away that that is going to pass to my kids and they're going to pay tremendous amounts of money in estate taxes, this might be an effective way to get around that?

- That's right.

It gives you a large amount that you can give as a gift that would then not go into your estate and be subject to inheritance tax.

- And the people receiving the gifts, the recipients, the donees - which is a strange word, but you get the idea - pay no tax whatsoever, gifts are never income taxable, and the donor, that would be Mom, Dad or Mom and Dad, they pay no gift taxes either.

Sounds like a pretty good deal.

- Sure is!

- Now, for some folks, it's not their families they're concerned about at the moment,, it's those organizations that they're really committed to.

Maybe it's PBS39, maybe it's their church, maybe it's Folds Of Honor, it could be any number of nonprofits that they would like to support.

If they are of the appropriate age, what might be able to happen so that they can make that contribution and maybe not be pinched by the IRS?

- So, people who are required to take distributions from retirement accounts, such as an IRA, sometimes they don't need that income and they need to take it out, they are required to take it out, so it ends up being an income tax bill for them that they would like to avoid.

So, one of the things you can do is use that required minimum distribution to donate directly to a nonprofit or a charity.

When you do it that way, it's called a qualified charitable distribution, or a QCD, and then the money is not subject to income tax.

So, you're meeting your required minimum distribution without income taxes, and then you're also helping out your charity of choice.

- Pretty fabulous idea.

Now, I understand it feels like it's an alphabet soup, RMD, QCD, IRS - the reality is that these are just facts of life and there are strategies that allow you, at aged 70 and above, to give away some portion, or a large portion, of your IRA.

I think the limits, I'm always blanking on it, I think it's 100,000, it might be 120.

Alyssa, do you remember?

- It's one of those two numbers!

- It's one of those two numbers!

- Let's use 100 to be safe.

- Yeah.

- You can give away up to $100,000.

It passes directly from the custodian to the nonprofit, so it could go directly to PBS39, it could go directly to your church, etc.

And it doesn't affect your income taxes and, for many people, something of real concern, it doesn't affect your Medicare premiums.

Because sometimes, if you make a large gift or you take a large withdrawal and show that as income, you end up paying not so much more in taxes as much more in Medicare premiums.

How annoying is that?

So, pretty interesting ideas both to help fuel your family gifting and fuel your charitable gifting.

Hopefully, that gives you some real insight.

But, speaking of insight, one of the things that we do that people seem to appreciate the most is answer questions that have come to us.

So, Alyssa, let's go right to our first e-mail question.

- Sure.

This one says, I've been working remotely part-time as an independent contractor, AKA form 1099, for a friend for four years, doing book-keeping and admin work.

When I started, she told me how much she pays and I was happy with the rate, since it's more than I could make where I live.

I don't want to ruin this friendship but I also don't want to be a sucker.

I have been at the same hourly rate for the entire four years.

She frequently tells me how she appreciates me, what a good job I do and begs me not to leave.

While the rate is more than I could make where I live, it's at least 20% less than she would have to pay for someone in her location.

The hours are very flexible and I am grateful for that.

In 2021, she raised the wages of all her employees by 5% to 10% as her company is doing very well post-Covid.

She has never offered to raise my rate.

Admittedly, I have not asked for an increase.

It is not a matter of her being able to afford it, she's very wealthy, worth at least 20 million, her company is very profitable.

My husband says I should be thrilled with what I make.

My local friends say they think I am being taken advantage of.

I am torn.

Gene, what do you think?

- I think that, for one of the very first times in my very long, decades-long media career, questions between husbands and wives, where I am always confident that siding with the wife in a difference of opinion is the safest way to go.

I'm married, you guys understand.

Bottom line is... ..in this case, you're wrong.

In this case, your husband is absolutely correct.

In this case, your friends are nothing more then pot-stirrers.

They're simply trying to drive a wedge between you and a wonderful arrangement that, to be blunt, your $20-million-net-worth friend could have left you behind years ago.

Could have decided to bring that function in-house years ago.

She can afford to pay, obviously, much more than she's paying you to have it right down the hallway.

And yet, she's been loyal to you, giving you flexible hours, working from your own location, you didn't have to relocate, giving you much more money than you can make where you are.

And if the issue is location, that they make more where she is and you're really committed to that, move your family.

Pick up, sell your house, pack up the whole household, move the kids out of their school... Yeah, it sounds kind of crazy, doesn't it?

It sounds more than a little bit crazy.

It sounds like somebody needs a lesson in gratitude.

It sounds like, phew, your husband's absolutely right.

You should be thrilled.

You have a wonderful job working for somebody you consider a good friend.

You're being a paid way more than you could in an alternative job, if you're not willing to move.

And if it really annoys you all that much, yeah, be respectful, be professional, be a friend and let her know.

Just a simple phone call, perhaps - I would never do it by e-mail - just, "Hey, just wondering, been together a long time, "maybe we could bump up our salary just a little bit."

And see what she says.

If the answer is disquieting to you or disturbing in some way, you can always quit and go and go work someplace else.

For less money.

With worse hours.

Not a good idea.

Enjoy what God has laid on your plate and be thankful.

That's from one gentleman to a young lady, I think that's good advice.

Alyssa, another question, please.

- I'm looking to move three 401(k)s to an IRA, I just signed up for social security.

I'm worried about the timing of moving them, since the market is down - but today, I noticed, it's up a bit.

A friend of mine mentioned an in-kind transfer, but I'm not sure about how to go about doing this and if I should wait?

- This is an interesting question on two levels.

Number one, the issue of consolidating accounts, I think, is a very good idea, Making your life simpler, making the accounting simpler, making the tax issues simpler.

Right now, with IRAs, if you're taking any kind of distributions, you're getting three 1099s - ugh!

One 1099 is more than enough.

So, the whole idea is very, very simple.

For some of our viewers, the term in-kind transfer is not that simple.

It may actually be a little jarring.

"I don't know what the heck that is!"

Well, an in-kind transfer is much simpler than it sounds.

It simply means that I want to be able to take whatever's in this account and lift it out, completely intact, and drop it into a new account.

I'll use a simple example - I have 100 shares of Apple stock, I don't want to sell it, I want to lift it out, 100 shares, and drop the exact same 100 shares into my new account.

That's what an in-kind transfer is.

It's being transferred... ..in kind, that is as close as I can get to explaining the IRS code, that uses some strange terminology.

So, bottom line is, I understand the concern about the margins being up and down.

What I think the misunderstanding, I think where we're disconnected here, is the issue of whether that's a problem or not.

Because if you liquidate properly and the money arrives in the account properly, in very short order, if you sold the 100 shares of Apple and end up - there's no tax, it's in an IRA - ends up in the new account and the cash buys 100 shares of Apple, the differential in those, that short period of time between the money arriving and the stock being repurchased, should result in you having fundamentally the same scenario that you currently have, which is the stocks or mutual funds or ETFs that you currently have in your IRAs, are now residing in your new account, your one new account.

So, I think, on two levels, there's some misapprehension that may not be appropriate.

Number one, the idea that you, in some way, shape or form, are going to "loose out" in that brief time period between point A and point B.

The other issue, I think, is largely a misperception of investment strategy, is the fact that, yes, markets are up and down dramatically these days.

This year alone, we've had two days where the Dow was declined by more than 900 points, about a 3% drop in one day.

And you say, well, that's just devastating, that's painful.

It may be, except in both of those cases, within just a few days, it had returned to its previous high.

So, the day-by-day movements of the market should not be a driving factor in how you invest, when you invest, how you make these adjustments in your accounts.

And if they are, in many ways, I think you're creating your own angst, your own agita, your own discomfort for no real gain over the long term.

It is literally a blip, literally a blip on the screen for what will probably be decades and decades of your investment career.

So, don't get your knickers in a twist, make sure you make those transfers efficiently and effectively, re-establish the assets that you wish in the new account and put a smile on your face, your life got a little simpler.

I think it's a very good idea indeed.

Alyssa, a question from a listener?

- Absolutely.

My wife and I are both on social security.

I'm 87 and she is 71, we have been married for 50 years.

She get $749 a month and I get $2,870 a month.

I am in very poor health, I will probably pass before she does.

If I die first, how much social security will she get?

I really appreciate your help and enjoy your show.

- Well, first of all, our prayers go out to you, being in poor health in your senior years is a real challenge.

Social security is intended to provide for that financial safety net for husband and wife, spouses - traditional spouses, single-sex marriages, it is absolutely intended to provide for the security of that family unit.

Even to the extent, on a very different topic, we recently counseled a young lady who lost her husband at 42, with five young children.

And they are now receiving social security survivor benefit, which is exactly the topic that this gentleman raises.

In the case of children, very generous until they turn 18, so it's got to be well attended to.

In this particular case, there are a couple of wrinkles.

We would certainly recommend that you sit with a trusted social security adviser.

On More Than Money world headquarters, we're very lucky to have such a gentleman, Mark Bacak, who assists us in analyzing these kind of situations and crafting the most beneficial approach to the family.

In this case, the crafting has already been done, largely by the IRS, largely by the rules of social security.

In that, at your passing, your wife will receive your social security benefit or at least the vast majority of it.

The only wrinkle would come into effect is if she had taken her social security at a discounted rate at an early age.

Normal retirement age, anywhere from 66 to 67, as we speak, as long as she took her normal retirement age social security, there will be no discount.

If you took yours at normal retirement age, there will be no discount.

There may be discounts if she took hers early or if you took yours later.

My apologies, I'll correct that as I speak - the fact that you took it later increases her available survivor benefit.

So, your current, I believe it was about $2,800 a month, is what she can count on.

Sadly, she does not get both, some folks are under that misimpression that, at the passing of one spouse, the surviving spouse gets both benefits, they do not, but she will get the higher of the two which, obviously, is yours.

I would strongly recommend that you sit with, again, a trusted social security adviser, not so much because I think the answer is going to be different or change, but for the peace of mind that it may bring your wife in this circumstance that she's facing, which is very, very challenging, very, very difficult, and our prayers go out to her as well at this challenging time.

But for her to have some degree of peace of mind, some degree of confidence that she understands what's ahead for her financial picture, I think, is really, really important.

A social security expert, a financial adviser, perhaps, perhaps a tax adviser, maybe a combination of all three might be required to bring her to that level of confidence.

But it's certainly something that, if it is physically possible, if it is appropriate in terms of your ability to move around, certainly, visiting an office and having that opportunity is great.

if, for some reason, your challenges, health challenges, don't permit that, don't give up the ghost, make sure that you understand, most quality advisers today will accept phone conferences, they will accept Zoom calls.

You can see the folks that are giving you counsel face-to-face and yet not have to leave your home.

So, that may be something you'll consider as well.

But I admire you, I respect you for your concern at this difficult time for you is focusing your concern on your wife and, with the right team, we'll be able to maximize her benefit as well.

And, again, we keep both of you in our prayers.

Alyssa, do you have another question for us?

- I do.

Gene answered an e-mail question on the radio from an 82-year-old gentleman about paying off a life insurance policy loan to avoid inheritance tax for his family.

I missed Gene's answer and I have a similar situation.

Should I pay off the loan or simply deal with the lower death benefit at my passing?

I am 20 years younger.

Thank you, I tune in both to the weekly TV show and radio show, love both, particularly many of the great guests on TV.

Thanks for all you do to educate folks about personal financial issues, people really need more of this information.

- Well, aren't you kind.

That's very, very kind and I will tell you that, as much as we absolutely enjoy answering financial questions on air, some of the guests that we've interviewed, they have changed me as well.

It is an absolute honor to explore the life experiences with some of these very accomplished folks and learn some of the lessons they've picked up along the way.

Of course, I'm a little further down the road as well, we've picked up a few lessons ourselves and I'm happy we're sharing those when we have that opportunity.

But we really, sincerely appreciate your comments and your compliments.

It is one of those mysteries of life that we get almost an equal number of e-mail responses that say we really love the guests and an equal number that says we really would prefer you don't have guests.

So, apparently, hmm, we have a schizophrenic... No, we have a divided camp out there.

But hopefully, each week as you tune in, you pick up a little something.

So, let's talk about this gentleman's question specifically, it's a very interesting one, and one that applies to a number of folks and they may not even know it.

Isn't that intriguing?

I thought so, added a little drama.

Bottom line is that life insurance contracts often build up cash value.

Not all, but often they do.

Whole-life policies, universal-life policies, variable universal-life - these are all types of contracts that will build up cash value, typically, over time.

That cash value can be utilized on an income-tax-free basis by borrowing against that cash value.

So, let's say you have a $500,000 life insurance contract, you have built up $150,000 of cash value and you need to do a home improvement and you borrow out $50,000.

You do not need to repay - you may - you do not need to pay interest on it - you may - but you don't need to.

So, at that moment, we have a $500,000 contract that, at your passing, will only pay $450,000.

Because the insurance company will take the loan repayment out first.

Well, if you have cash available, let's say you have a CD in the bank that is $100,000.

That CD, at your passing, will go into your estate, it will be estate taxable and that could be an issue.

Or if you took that 50,000 and paid off your loan, that estate tax disappears.

Now, 4% of 50,000, roughly the estate tax in the state of Pennsylvania for direct descendants, couple thousand bucks.

Is it make or break it?

No, but it's real money.

And of course, if the loan is much larger, it could be significantly greater money.

So, if your number-one objective is to reduce your taxable estate, then paying off that loan inside the life insurance contract is a very good idea and saves your family a bit of money.

In many cases, a lot of money.

If your real concern is day-by-day cash flow, then I wouldn't get much concerned about it, I would allow it to remain as is and maybe push that choice off for some point in the future, where it seems more urgent.

Alyssa, we have a short period of time, do we have a short question?

- I do, I have one more.

My daughter just started a new job that gave her a Roth 403(b).

I told her she should take the money from her old 401(k) and transfer it to the Roth.

Is there a way to do this correctly?

- Well, goodness.

First of all, good advice to your daughter.

Second of all, congratulations to your daughter, doing a great job, she has a Roth 403(b), which was exactly the right choice she should have made at that point in time.

Roth, when you're young - young up to, I would say, 50, 55 - is the perfect choice.

And even beyond, it could be the perfect choice.

So, is this opportunity, if the opportunity exists, to take her current retirement funds, drop it into the new retirement plan and have the same Roth treatment, the same Roth tax sheltering and then the same Roth tax-free withdrawal powers in her retirement, she absolutely should do that.

Doing it correctly entails two steps.

Number one, sitting with, talking to, going online and getting confirmation from her new plan that they accept funds from previous plans.

Most do.

I would say 85% to 95% do.

Many do not.

So, make sure that her new plan will accept those funds.

And then number two, use the paperwork that is issued by her former plan to do that transfer.

It will ask her to identify where the money is to be sent - obviously, her new plan.

It will ask her to, obviously, provide her identification, certification, maybe even notarization.

But it's typically a pretty simple form, the money goes directly from the old plan to the new plan.

Now you've eliminated one plan, one opportunity for money to melt away, be forgotten about, "Hey, I moved and I didn't get the statements forwarded," and, years later, you find out or forget to find out that there's money that should be yours.

So, good for you, good advice to your daughter, good, easy mechanics to follow so that she can end up exactly in the position that we want her to be.

It should be absolutely easily done.

By the way, if it isn't, make sure you reach out to us again, we're happy to sit with you, it'll take 15 minutes, make sure the paperwork's done correctly.

We'll help her out happily, happily.

Folks, covered a lot of ground.

I want to thank Alyssa for her discussion with me about gifting both to families, lots of different, interesting opportunities there, and gifting to nonprofits.

PBS39's a great example of an organization that maybe you're deeply committed to and you want to make sure that they continue their mission.

If you've got an IRA, you're over age 70 and you're really annoyed about having to pay tax on money you don't want to take and don't really need, this QCD idea is one you should really factor in.

By the way, keep in mind, whether it's PBS39, whether it's your church or Folds Of Honor, you can also split the amount.

So, if your RMD is 15,000 and want to go 5,000 each of three, that's easily done as well.

Folks, if you have questions about anything you heard on tonight's show, shoot me an e-mail, Gene@askmtm.com, maybe your question will be on a future show.

I hope you'll join me right here on future shows of More Than Money.