And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial advisor.

Happy to be with you this evening.

Season five.

Exciting to be back.

It's like the first day of school all over again.

Real excitement in the air.

The teams all back together.

This is the way it's supposed to be.

Because we're all together to serve you.

You are what makes us the most relevant financial show on television today.

Bar none.

Without a doubt.

Because I'm not going to lecture you on the tax code.

I'm not going to pontificate on the legal side of.

I'm not going to try to lecture.

I'm going to answer questions that you've determined are really, really important to you.

So if you are a loyal viewer, then you know exactly how this works.

We have a collection of emails that you have sent to us shortly.

I'll give you that email address that you can join that Pereda as well.

But we'll go to a collection of emails that you have sent to us and we'll be answering your specific concerns from a individual with a lot of years of experience directly to you.

We are blessed.

We have a more than money team that's extensive, it's deep, it's talented, it's very, very experienced.

So every single email that you send us gets answered back to you.

You'll get answers to your questions whether your email appears on a future show or not, you will still get all the good information that you need to have more confidence to make those financial decisions in a way that better fit you and your financial future.

So Gene at askmtm dot com.

G-E-N-E at ask mtm dot com works very, very well for you to get your information to us and for us to respond back to you.

Please, please, we implore you, don't put yourself in the position of uncertainty.

Don't feel like you must muddle along in any kind of a situation without good counsel.

There's absolutely no charge.

Free for the asking.

Information back to help you as much as we possibly can.

So having set that stage, why don't we give you a demonstration and why don't we go to our financial correspondent and we ask Megan, Megan, what email, what questions do we start with this evening?

Hi, Gene.

Good to be back in the studio.

Our first question tonight is a mix of financial advice and I think just personal advice.

It says My husband and I are at odds over an inheritance from my late aunt.

She split her money between my mother and me.

My mother insists on putting her full share in a college fund for our daughter.

I have two teenage stepsons.

They don't have anywhere close to the amount of money saved up.

While my husband and I contributed to their college funds, their mother and her very large extended family do not.

I want to use my money as a rainy day fund.

Our house is old and we'll need a new roof and foundation repairs soon.

We also have retirement to think of.

My husband argues that I should love my stepsons as much as my daughter, and they deserve an education, not drowning in college loans.

I don't think this is very fair.

My stepsons and I have a civil relationship, but we aren't close.

They have a mother and it would be horrible of me to shoehorn my way into that position.

And my stepsons haven't even met my aunt before.

I understand the rising cost of college, but there is community college, scholarships, and the rest of their extended family to think of.

Part of me is bitter because if I do give them the money for school, do I finally get allowed to voice my opinion?

As a stepmother, I have always been told to step back and it wasn't my place to voice an opinion on what my stepsons do or do not do.

I really need some help here.

Thank you for your advice.

Goodness.

Well, first of all, my heart goes out to you.

And speaking on behalf of all the blended families in, there are millions and millions and millions of us.

It is a delicate balance.

There's no question.

There is always the concern of boundaries.

What are the appropriate boundaries between a parent and a step parent, particularly, and a stepchild?

What are the appropriate boundaries in your case between you and your stepsons?

You and your husband have a daughter together.

That's fairly clear cut, but it also sadly often will reveal the weaknesses.

Perhaps in your relationship with your husband.

The communication piece seems to be at odds and while the topic is financial, the communication concerns may may go deeper.

There may be a deeper issue there.

I understand your your description of your relationship with your stepsons very well.

They are older.

They had their they have their mom.

You're not trying to replace their mom.

But apparently it has been the the standard operating procedure in your family that the stepmom has a has a lesser role.

And as a result has a lesser relationship.

That's a choice that you and your husband have made.

And I would say without a doubt made jointly and has been made very clear to you over the years that you have been married.

Your mom made her choice about supporting your daughter and her education perfect sense.

Obviously, your husband has no influence over that.

That question you are using, in my opinion.

And of course, I would be correct.

But in my opinion, I think you're using some very sound judgment.

I think you're looking at the bigger picture in a very sound way.

You and your family, including your husband and daughter and stepsons to some degree, need a safe, secure home.

So if it's a roof and a foundation, these are not minor issues that need attendance.

And yes, indeed, the best gifts that any parent can give their children is for the parent to be financially independent throughout the entirety of their lives.

So if you have not yet begun to have a very sound retirement plan for the two of you, now is a very good opportunity.

Put these funds to good use and have that at least start down that path of financial security for your future.

While I appreciate that as your husband hears you say, Hey, there's community college.

He will hear that differently than I will.

He will hear that as well.

My daughter's going to go to a real school.

Your kids will go to a lesser quality institution.

That is simply not the case.

I don't hear that at all.

Now, to be fair, perhaps to be more transparent, I'm a huge fan of community colleges.

We happen in our area to have two of the best with tremendous programs as in terms of value for the dollar community colleges.

And again, my opinion is second to none.

You have tremendous opportunities and extremely low costs.

And then if after a couple of years of getting lots of great credits at very low cost, you wish to transfer those credits to a four year school, you have cut your cost in half, literally and half, perhaps even more.

And still your your diploma will say, fill in the blanks.

Lehigh, Lafayette, Moravian, Muhlenberg, etc..

So the opportunities, the alternatives for your stepsons to get a excellent education for very low cost are very real.

The one thing I will warn you about, you need to buckle in.

This is not going to be a smooth ride if your husband has not yet seen the logic of what you're presenting.

It is unlikely he will quickly come to that understanding.

I pray he comes to that understanding in time, but he may not quickly come to that understanding.

But I also will warn you in a different regard, if you decide I'm giving in and yes, I'm just going to give the money to my stepsons, I guarantee you one or both will get a degree in art history.

They will spend four or five or six years getting a degree that qualifies them to be the the evening host at Olive Garden and not a whole lot more.

And then your your angst, your your your anger will will be in full blown.

Don't allow that to happen.

You're on the right track.

Stay calm.

Communicate.

Spend more time in communication with your husband.

Let him deal with the fallout with his ex and his stepsons.

Wow.

Megs very that there is a lot to unpack there.

I'm.

I'm prayerful that I help this young lady a little bit.

Or at least give her some some ideas that she can share with her husband, who I hope the next one is a little less onerous.

Yeah, I think that was great advice.

I try to listen to it as a viewer and that that that was helpful in my eyes.

This one's a little bit easier, I think it says.

A few years back I went to one of those dinner seminar seminars where the guy and his girlfriend were selling annuities.

They pestered me pretty good afterward about going into their office for a meeting, and they sure weren't willing to take no for an answer.

I liked the idea of investing in the stock market without losing, but I didn't like the pressure.

I think I'm ready now to work with an advisor.

I do want to invest in the stock market, but I'm really concerned about the risk and I really hate the high pressure tactics.

So what do I do, Gene?

Oh, that.

Good for you.

Good for you.

High pressure tactics are almost always employed by people who have something other than your best interest at heart.

They're salesmen, pure and simple.

They earn commissions.

And in the case of.

I know exactly who you're talking about, in their case, very high commissions.

Annuities can pay in exceptionally high commissions up modest annuities, ones that reputable financial advisers use might pay 1 to 3% commissions.

The kinds that high pressure salesmen use will pay six, eight, ten, 12% commissions.

So you walk in with a reasonable sum of money.

Let's say it's $200,000, a lot of money in a two hour time frame.

They're fully expecting they will be paid $24,000 in commissions.

If you knew that on the other end of a two hour meeting, you had a check coming to you for 24 grand.

You put high pressure on people too, unless unless unless you had integrity, unless you were a fiduciary.

Fiduciary is an odd word.

A lot of folks have become more familiar with it in recent years, but not necessarily.

What fully informed as to its meaning?

In its simplest state, it is both a legal and ethical obligation to act in the client's best interest.

Is it in the best interest of the client for me to make a $24,000 commission in 2 hours?

The answer is no.

Now, if you are looking for someone to put your best interests at heart, you're looking for a financial adviser, typically registered investment adviser.

Absolutely.

One that is a fiduciary and holds themselves to that standard, perhaps even is legally holding themselves to that standard as a registered investment adviser.

They can still offer you a number of different options where you can invest in the stock market.

And yet still not have tremendous risk.

You can have little or no risk and still invest in the stock market without paying tremendously high commissions to a salesman.

In contrast, if you are dealing with a registered investment adviser versus the salesman who has earned a 12% commission, the adviser will need to serve you at a very high level.

Satisfactory to you.

You're the only one.

The only opinion accounts for 12 years to make the kind of money that a annuity salesman and his girlfriend want to make in 2 hours.

You see the contrast.

You see how dramatic that is.

A financial adviser needs to give you good advice, good counsel, good service, good returns for over a decade.

They need to simply pester you until you finally go, okay, look, I guess you're right.

I'll give you a check.

Second, opinion meetings are very, very valuable.

More Than Money, of course.

We give you second opinions.

You get to ask questions by email.

You get to ask questions by phone.

You get to ask questions in person.

In the more than money world headquarters, a lot of quality investment advisors do the same thing.

All right.

Not lots have the most relevant financial show on television.

I get that.

But that doesn't mean that there aren't excellent financial advisors.

Wherever you are, wherever you find yourself, I guarantee you within easy distance.

And if there's the distance is not an issue to you because this is the 21st century, you have noticed, right?

21st century Zoom phone calls.

We have clients.

Gosh, 17 states.

I think more at this point.

Lots of folks who communicate electronically, and yet it works out very, very well.

So investing in the stock market without risk, there are fixed indexed annuities.

It requires a commitment of time five, six, seven years or longer.

There are buffered ETFs, exchange traded funds that have no long term commitment.

As a matter of fact, they're liquid.

They can be bought and sold on a daily basis and their guarantees are typically 12 months in existence in in, in timeframe.

Structured notes, you can often invest in a structured note that will invest in the stock market in an index, typically S&P 500, many other indexes.

And for, say, a two year period, you can be protected, a -20% loss, a -30% loss where you lose nothing and yet you get a nice portion of any upward movement the stock market might make.

So your objective is very attainable.

There are a number of different options that are available to you.

I guarantee you the annuity salesman did not offer any of those others because they don't get a 12% commission on any of those.

As a matter of fact, instead of a $24,000 expense, most of these types of alternative investments that give you protection have expenses measured in less than 1%, less than 1%, in some cases less than one half of 1%.

So very inexpensive, but it's got to fit you.

That's what a fiduciary will do.

They will look at your scenario, find out what you really wish to have happen with your money.

They will give you these options.

Explain the pros and cons.

Nothing's perfect pros and cons and pick advise you what's best for you.

Hopefully.

Hopefully that's exactly the experience that you will have shortly.

Shortly, Megs speaking of good, solid advice from a fiduciary, what advice can I give next?

Well, this next question says I turned 73 in August, and I know that I need to take money out of my IRA and pay taxes.

My friend started taking her money last year and gave it to the church.

She said There's a special way to do that, so it helps with taxes.

Can you please explain how I do this?

Thank you.

Oh, I'd be happy to.

This is a very interesting idea that a lot of folks still are not familiar with.

And yet if they were, it would be wonderful for them.

73 in the year following you, the year you turn 73, you're required to start taking money from your IRAs, your fallen case, etc., under most sets of circumstances.

So using very simple numbers, you have a a $300,000 IRA, your RMD for the first year is approximately 12,000 bucks.

And you're saying, I know I need to take it paying the taxes yuck I don't really need the cash flow from my expenses right now.

Is there a better way if you are as many people are charitably inclined, perhaps you contribute regularly to your church?

You mentioned perhaps it's other nonprofits that do great jobs.

PBS might be on your list.

Goodness.

Folds of Honor might be on your list.

There is an extensive list of wonderful nonprofits doing great work that maybe you already support.

Maybe you're already contributing 500 a month to your church at $6,000.

Maybe you're sending $1,000 to PBS at $7000.

Maybe you're sending $1,000 to Folds of Honor.

That's $8,000.

If you simply take your RMD, you're going to pay tax on the entire 12,000, and then you're going to make those contributions.

Those contributions probably will not help you from a tax standpoint because the vast majority of folks taking your RMD’S are using the standard deduction on their tax return.

Translation, if you increase your charitable deductions, it doesn't lower your taxes at all because the standard deduction is already larger than your than your itemized deductions might be.

If that is the case, then in using my example, you have a $12,000 RMD and you'd like to use 8,000 of that to send it to your church, PBS, and Folds of Honor.

You send those amounts directly from the IRA custodian and now the taxable amount of your RMD goes from 12,000 down to 4,000.

In essence, that distribution, tax free distribution is on top of your standard deduction.

A fabulous result.

You're giving, as you always wished to.

You're giving as you always did.

You're just gaining a tremendous amount of tax advantage to that.

If even if you're in a modest tax bracket, a 10% bracket and you're doing $8,000, you have saved $800.

Where I come from, $800 is real money where you come from.

It might be a light lunch at the club.

I don't know.

But bottom line is, that's 800 that's in your pocket, not the government's pocket.

And let's be honest, your pocket is better.

I hope I helped a little bit there.

I hope I gave you a kind of a sense of, gosh, it's IRA, RMD, QCD.

There's a lot of a lot of what alphabet soup in there.

But again, if you have any concerns, hey, I'm not really sure I got that.

Send us an email, Gene at ask MTM dot com will clarify it for you, will walk you through it.

You're on the right track.

You're going to do some really, really wonderful things.

We're glad to help.

Speaking of helping, that's a kind of a nice segue to what I hope is our chance to help our next emailer.

Megs?

Well, you do love segues.

And this one segue is from the last question.

We have another RMD question.

It says This year was the first year I had to take my RMD from my 403b, while I still have the security of a full time job, I'd like to start a small consulting business that I could pivot to once I retire.

I'm wondering, are there any tax implications if I spend my RMD on the startup costs of my new business?

Do I need to prove how I use the RMD?

And if so, how do I do that?

Thank you so much for your help.

This is an interesting question.

I'm I'm not sure that I have enough information to give a definitive answer, and here's why.

Individual mentions, I don't know, male or female, Megs did it indicate male or female?

No.

Okay.

So this young lady is still working full time, but she's taking her RMD.

My my interpretation of that is her 403b was from a former job and her current job does not have a 401k or 403b, because if you are still employed after age 73 and you're contributing to a 401k or a 403b, you don't have to make any, you don't have to take any RMDs So why would you and pay the tax?

So that's my interpretation.

She has one, but her current job does not.

By the way, if her current job does, let's let's paint this scenario kind of the same.

She used to have a job.

It had a 403b, she has a new job as a 401k, but up till now she hasn't really participated or she doesn't want to take the RMD.

She can roll the old 403b into her new 401k, make modest contributions, even just 100 bucks a year and not have to take an RMD.

So that's an interesting wrinkle, but it doesn't answer her question.

And for those of you out there going, that wasn't her question.

Her question was what documentation does she have to do to demonstrate how she spent her RMD?

And the answer is none.

There is no requirement by the IRS that you document in any way, shape or form how you use your RMD.

The only requirement is that the IRA custodian report to the IRS.

What amount came out of the IRA or in this case, the 403b that is reported and that it is taxable, whether the custodian withholds the tax or whether you report it yourself on your tax return, and then you pay the tax, the IRS doesn't care as long as they get paid.

Their only concern is how they get paid.

So I'm going to make another interpretation of what I've heard in this in this email.

The second interpretation is she's talking about starting her own consulting business.

Good for you.

Retirement is highly overrated.

You've got tremendous skills.

Keep using them to serve people, make their lives better, Stay active.

Stay engaged.

Fantastic.

You're doing a great job.

A very, very good idea.

This is a business and you're going to have startup costs in a consulting business May be modest, but still you're going to have maybe I need computers, maybe I need phones, maybe I need printers, maybe I need business cards and stationary or maybe I need marketing.

All of those startup costs are deductible are deductible.

If you have a paper trail, if your accountant, your tax preparer, your CPA, whomever, whoever is guiding you from a tax standpoint, if they give you the right guidelines and you track all these expenses and they are documented, they're tax deductible.

So you spend 10,000 bucks setting up your business, you might end up saving a thousand, $2,000 $3,000 on your tax return because those expenses are deductible.

That's where the documentation really comes in.

I hope I helped a little if you need more clarification, don't hesitate.

Send it right out to me.

We're be happy to help.

Megs, can we have one more person?

This one says, My wife and I are both 54 years old.

I am the primary earner with a six figure salary, an equal bonus opportunity.

My wife works part time for extra income.

For the purposes of this, we can assume that our primary savings vehicle is my bonus and that we live off of the paychecks.

There's a couple numbers here.

We have about 1.4 million in 401k IRA money.

We have about 750,000 in cash and investments.

We do have a $400,000 low interest rate mortgage on our home, which is valued at approximately $900,000.

We have $30,000 in various pensions when the time comes.

And obviously Social Security when it comes around, estimated at around $70,000 at age 70, if we do not strike earlier, we own our cars and have no credit card debt.

Professionally, I am exhausted.

I want to downsize my career in 2026 when we are 57.

Finances aside, my biggest concern is health care for us and bridging that gap.

I'm not retiring, in fact, but would look for a different job that perhaps offers health care, part time work and private insurance is always an option.

We are both generally healthy.

My modeling shows that all of this is possible, but what am I missing?

Is my focus in the right place?

Thank you.

You're not missing anything and your focus is indeed in the right place.

You have plenty of assets.

The only piece I don't have is what your monthly income target would be.

But I'm going to pick in the monthly income target of 8000 a month, including your health care.

100 grand a year at your age, 70.

That's the amount that you're going to get from your pension and your Social Security.

You need to bridge for 13 years, but you've already said you're likely to work part time.

Your wife is already working part time, so you don't need a hundred a year to bridge.

Let's say that you make 60, you need 40,000 a year for, what, 13 years?

You've got something over $2 million If your investments are in zero and you spend 600,000 over the next 13 years to bridge to retirement, you still have a million four and you're retired and you're not exhausted and you're happy and you're healthy.

You're on the right track.

Speaking of on the right track, I hope you were on the right track through the whole show.

I hope you learned a lot.

I hope you picked up some great ideas.

I hope some of our answers fit you.

But if they didn't if those are not the answers that you need, please send those to us.

Send us your emails, Gene, G-E-N-E at ask MTM dot com.

It allows us to serve you specifically with answers that are directly and customized to you at no charge whatsoever.

It allows us to be the most relevant financial show on television today.

Thank you so much for spending part of your evening with us.

We hope that you'll do it again next week.

When we return with another edition of More Than Money.

Good night.