And good evening - you've got more than money, you've got Gene Dickerson, your host, your personal financial adviser, I'm at your service for the next half an hour.

I'm all yours and happy to be.

So it is always an honor to be back on the set of More Than Money and answering your questions.

If you're a loyal viewer, you know exactly how this works.

We collect your questions via email... "vie-a" email?

You knew what I meant - and when we answer every single one back to you, we select out a sampling of the more interesting questions, perhaps, or the more representative questions, perhaps, so that we can give as much great information back to the entire audience as we possibly can.

For those of you who are kind, often start with an email that says, "I'm sorry to bother you," or, "This is a brief question," or something that maybe they're not comfortable answering or having answered on air.

I assure you, we respect your privacy, and I assure you, if it's a question you have, hundreds or thousands of other folks who are watching this evening have exactly the same question.

So before we turn to our financial correspondent, Miss Megan, we're going to talk about a topic that has been asked hundreds of times in the last few weeks, and that's about inflation.

Inflation is a very real concern.

If you filled up a gas tank at any point in the last few months, you know that gasoline has nearly doubled in price in a very short period of time.

The cost of fuel affects everything.

Virtually everything that you consume has been delivered somewhere from somewhere else.

So whether you're having the the FedEx and the UPS drivers drop by your home or office on a regular basis, or whether you're simply grocery shopping, all of that had to get somewhere else.

That's all fuel costs.

Those are all rising dramatically, which means that it is a domino effect.

We have higher prices in certain areas, higher prices in other areas, and sadly, the folks that we trust project that these inflationary numbers are going to continue for not weeks or months, but likely years.

So concerns?

100%.

Are there ways that you can respond either personally or from an investment standpoint, so that you're reacting in the most reasonable way, potentially the most profitable way in an era of high inflation?

The answer is, of course, of course.

And of course, if you have questions about just those things, send those to me: And we're happy to bring all that information to specifically answer the questions that are appropriate for you.

Speaking of very specific questions, let's turn our attention now to Megan.

Megan, to whom may we respond this evening?

Our first email this evening says, My wife and I are 67 and retired.

Most of our savings are in traditional IRAs, about $1.8 million.

for tax purposes, I'd like to convert $70,000 of our traditional IRA to a Roth IRA in order to reduce the amount of future required distributions.

We would continue yearly conversions going forward.

We won't need the converted money for five years.

I have three questions.

First, does the conversion preclude our 7,000 individual yearly investment in a Roth or can we do both?

Second, when do we pay estimated income tax on the traditional IRA funds being converted?

And lastly, if we convert in December of 2022, can we pay the tax with our 1040 in April of 2023?

Thank you for your help.

Very good.

Very interesting set of questions and ones that will apply - different numbers, of course - but could apply to you.

The conversion from a traditional IRA to a Roth IRA is a very effective way to start feathering a tax free nest for your future.

It's also a very effective way to start creating a legacy for the generations that you wish to benefit when you are no longer with us.

So this whole concept of conversion is a very, very good idea indeed.

70,000 a year could very well over the course of time move a very substantial block.

I say over the course of time, if we're using simple numbers, 70,000 a year, ten years, $700,000 - some would say, "Wow, they have a 1.8 million "now it's down to 1.1," it isn't really, because if their average investment return on their IRA is 5% on 1.8 million, that will be approximately $70,000.

So in essence, they're converting the growth.

So it's very possible that ten years in when they are 77, their Roth IRA has something well in excess of $700,000.

Hopefully, the investments have done well enough to help it grow.

And yet their IRAs still have 1.8 million, perhaps even more, if their average annual rate of return is even higher.

So excellent idea.

Very well planned.

Number two, can you still contribute the 7,000 per year per person, so 14,000 total for the two of them into their Roth while they're doing conversions?

The answer is yes.

A contribution and a conversion are very different and treated very differently by the IRS, and you can certainly do both - with one caution, you may not contribute to a Roth unless you have earned income and earned income could be you're an employee, you are employed by someone and receive a paycheck.

Earned income could be you're self-employed.

You have your own company, your own side hustle, if you will, your own part time endeavor and you earn an income that you declare on your tax return.

So if you have earned income either self-employed or through an employee status and it is equal to at least 14,000, you can do up to that $14,000 maximum on the IRA contributions.

If it's less than 14,000, you can do up to 100% of the amount that you've earned.

So say in total you've earned 10,000 that becomes your new maximum.

So very good idea.

Conversions and contributions are separate, and indeed you can continue to make those as long as you have earned income.

Fascinating question.

Well done you.

You've accumulated a substantial sum of money.

And for those folks out there who say, "Gosh, the world is so crazy, it's impossible to succeed, "it's impossible to accumulate "substantial assets in this world," Apparently not.

Congratulations.

Megan, excellent.

That's a great start to our show.

What's next on the agenda?

Our next email is short and sweet.

It asks, what is direct indexing and should I be interested?

Goodness, that was short.

Good thing I wasn't ducking out.

Bottom line is, direct indexing - fascinating topic.

I'm a very interested that we're getting questions about this already.

Direct indexing was originally constructed a number of years back for the most wealthy investors that are out there.

Wealthy as in, if you didn't invest a minimum of ten million or so, then you really weren't in the direct indexing game.

A very simple explanation of a direct index is this - think of the S&P 500, one of the most popular indices that's out there, 500 of the largest companies based in the United States, you may very easily invest in the S&P 500 index.

There are dozens of indexes index funds, mutual funds and ETFs that you can choose from that give you the entire S&P 500 quite easily.

Direct indexing says I start with an index and then I start pulling out the ones that I don't want.

Now, why would you pull stocks out of the S&P 500?

What might cause you to not want a particular stock?

Well, one of the most common catchphrases in investments today is ESG investing - environmental, social and governance investing.

Translation it's investing according to a particular set of value systems.

If you are of a mind that says that the environment is the key issue, then you would want to invest only in companies that are environmentally sensitive.

If you are concerned about societal issues, whether that be racial issues, issues based on sex or on equal treatment, you can absolutely want to pull out companies then that are not accommodating to that value system, and governance is very much an issue of employee respect and how a company upholds its elements of integrity.

So you could very well look at those 500 companies and say, don't want that one, don't want that one, don't want that one.

In years past, it would have been prohibitively expensive.

The commissions on the buying and the selling of the stocks alone would have been dreadful, tracking this would have been nearly impossible - and with technology, all of that is easy.

And not only is all of that easy, but it's inexpensive.

Most direct indexing platforms actually charge fees that are lower than mutual funds.

Fascinating, much higher, by the way, than the index itself.

If you are investing in a S&P 500 index, say through Vanguard, your management fee might be five one hundredths of a percent.

If you're doing direct indexing, where you're picking and choosing, that fee might be 40 one hundredths of a percent, four tenths of 1%.

Sounds like a lot more - it could be, or it could be a very reasonable number because direct indexing allows for what's called tax loss harvesting - translation, you may end up paying far less in your income taxes than you would if you were in a direct index.

So it's a fascinating idea.

It's available basically to anyone out there.

If you're watching our show and you have an investment account or if you have an investment interest, most of the direct indexing are available, direct indexing platforms are available, with relatively modest minimum investment amounts.

So if that seems to be something that attracts you, do some investigation, do some homework.

If you have additional questions, send those to us, GENE@ASKMTM.COM, and go to it.

Fascinating.

Well done.

Ah, interesting, indeed.

Megan, what's interesting next?

This email says, I got a letter from my life insurance company.

They offered me extra money if I would surrender my life insurance.

I've had the policy for years and don't know that I really need it.

Should I take this free money and be done with it?

Ah, this surprises people.

Insurance companies go through cycles.

Very profitable cycles, not such profitable cycles.

High interest rate cycles where they can make an awful lot of money.

Low interest rate cycles.

Kind of what we've been in for a number of years now, where it's very challenging for them to make money.

And of course, with life insurance.

The real risk to the life insurance company is that a lot of their insured pass away, die, at relatively the same time, and they're paying out tremendous amounts of benefits.

So let's use very simple numbers, obviously not accurate for the emailer.

They were not in his email or her email, but the demonstration, I think, can be useful.

We have a $100,000 life insurance policy, we've been paying $1,000 a year for 20 years, we've paid 20,000 into it, and the cash value currently is 24,000.

The insurance company reaches out and says, "Hey, we'll give you 30,000 bucks.

"We will increase the cash value that you have accumulated "by over $6,000, if you will take that money and go away."

Well, now why in the world would they give you free money?

Well, I think it's fairly obvious - they want you to go away.

Why would they want you to go away?

Well, currently, if you've got 24,000 of cash value and you have a $100,000 death benefit, the 24,000 is part of the 100, so that's going to come to your beneficiary at your passing, and the insurance company is on the hook for 76,000 bucks.

So should you pass away in the next day, week, month, year, they are on the hook for 76,000.

If, on the other hand, you accept their generous offer of free money and you take your 30,000 away, they have converted a potential liability of 76,000 into 6,000.

They have converted a long term potential big hit to their bottom line to a current, quite modest hit to their bottom line.

So should you do that?

Well, in the email itself, you say, I don't really know that I need the life insurance at this point.

If that is indeed the case, you're going to have some options.

You can take the cash out.

You will pay some income tax, not a lot, but some.

You can exchange it from your current life insurance to a new life insurance contract that would have no premium payments so that you would perhaps - 30,000 would pay for a $50,000, what's called a paid up policy, or you might exchange it into an annuity that could provide you with income or other guarantees for the balance of your life.

So you're going to have some options.

You certainly want to review those options with an independent insurance expert, not a person who is affiliated with one company.

You are as familiar as I with all the various life insurance companies that have their own salesmen, and they would be very motivated to sell you one of their products.

You should consult with an independent, that is an insurance expert that represents dozens and dozens and dozens of companies, all the major names that you would recognize, as well as dozens and dozens of annuities.

They can analyze the offer you're being given and your options so that you're picking exactly the right one for you.

Now, one suggestion that you're going to perhaps not necessarily bump into, but I would suggest to you, you don't need the life insurance, depending on your age and depending on your charitable instincts, if there is a charity, a church, for example, that you are committed to, a non-profit - Laughing At My Nightmare, Folds Of Honor - you are deeply committed to, you might consider doing a beneficiary change to the nonprofit.

So at your passing, the 100,000 that we've been using as our demonstration number goes to this nonprofit, that is very important to you.

It's something that you should look at carefully.

You may even decide to make the life insurance policy a gift to that charity now, and you will receive a tax deduction, perhaps on your Schedule A.

That could be quite valuable to you.

So if you don't need it and you have an organization that you would like to benefit, make sure that you explore that option as well.

You have lots of options.

Make sure you pick the one that fits you and your financial goals.

Megs, one of my financial goals is to answer our next question, please.

OK, let's do it.

This one says, you previously talked about an investment on your show where the husband can take out all the money in his IRA when he's alive and his wife gets it all back when he dies.

How does that work, and why wouldn't everyone do that if it's real?

Well, it's a fair question, and yes, indeed, we've talked about that very thing right here on our show.

The concept is really very straightforward.

There is an investment platform typically provided through a variable annuity platform, variable annuity company, and it allows the investor, we'll pick on the husband at this point, where it allows the husband to invest a block of money into the annuity.

I'm going to use 100,000 again as an example, just for demonstration purposes, and elect, choose, what are called riders, and one rider he could choose is a guaranteed lifetime income for him.

Typically, right now, depending on age, it would be between a 4% and a 5% guaranteed lifetime income.

He invests 100,000, he's guaranteed - we'll do the average, 4.5 - he's guaranteed $4,500 a year for as long as he lives.

Let's paint this scenario, the hopeful scenario.

He lives 20 years.

He has invested 100,000.

He has pulled 90,000 out already, and passes away.

If he had also elected a rider that provides for the full refund of the original investment to his beneficiary, in this case, his wife, she would go back to $100,000.

And the question is, too good to be true?

The answer is no, it's not.

It is, in essence, insurance.

You are electing a rider that the variable annuity company charges you, a certain percentage, not a dreadfully high percentage.

Generally one half of 1% per year or so.

So that one half of 1% provides for the lifetime guarantee.

Translation, he invests 100, takes 4,500 out for 40 years, he has taken out $180,000.

The cash value is zero and the very next year he gets another check for 4,500.

He has paid for that - and the ability for that investment amount to be fully reconstituted, so to speak.

Reforested is kind of a fun word.

In other words, the original amount is fully restored for her.

That's a rider as well.

Generally, roughly one half of 1% per year.

So is there a give up?

There is a give up.

There's a small cost that's deducted from the investment returns.

But if these two riders, or either rider, meets your financial goals, it's a very reasonable cost - and conversely, if they don't meet your financial goals, if they're not either necessary or desirable, it's wasted money.

It's money you should not be spending.

So is it possible?

Yes.

Too good to be true?

Absolutely not.

Is it right for you?

It depends.

It depends.

Kind of what my answer to the next question might be, it'll just depend on the question.

Miss Megan.

I think you're going to be right, Gene, this question says, or asks, is it imperative to have a will?

That's it.

Goodness.

Barely had a chance to sip!

Is it imperative... imperative to have a will?

Easier to answer than it is, apparently, to repeat.

The answer for 95% of you is, oh, heck, yes.

Oh, my goodness, yes.

For 5%, I think less, the answer is maybe not.

95% of you, you have assets that you want to pass to people you care about or organizations you care about.

Sounds like a will.

You have people that if they are left behind, need some assistance, perhaps a will and a trust - absolutely.

Powers of attorney, medical directives, estate planning documents are imperative for 95% or more of you.

The objection that we will sometimes get is from young folks.

"Hey, I'm 25.

"I've been married a year.

"We're hoping to have a family.

"I don't really see a need for a will, "spend a few hundred bucks on the will."

The answer is, that's a really bad idea.

If you are married, you have responsibilities and you have someone who is part of who you are, part of your marriage, and you need to provide for them, even though you may have very modest assets in terms of investment accounts and savings, You likely, or at least should have, pretty substantial assets in terms of life insurance.

So wills and trusts, etc, for that scenario is very important.

If you have children, if you have minor children, or if any of the people you care about for your estate beneficiaries would be a minor child under the age of majority, in Pennsylvania, 21, you must have a will.

You must have a will.

You say, "I have no money, "but I have two... We have twins.

"They're three years old."

You must have a will to name a guardian for those children, trustee for the trust that you will create to help support them should you and your spouse be lost.

About the only scenario I can think of where a will is nice but not necessarily necessary is if you have no assets to speak of and you have no beneficiaries that you really have any concern about.

If that is your case, you might be off the hook, but I strongly suspect not.

Megs, how about one more?

OK, this last one says, I am 65 years old, my wife is 61, I'm looking to plan an income stream upon retirement at age 66 and a half and I'm wondering what advice you have.

What you're looking to create is, as you see from the headline, a retirement paycheck, and, for many people, going from a lifetime of employment and probably the last 20 years plus of direct deposit, paychecks going directly to your checkbook and for many of you, especially in recent years, direct debits, automatic bill pay.

It is a lovely system that causes you very little anxiety and provides for both an income stream and for payments to be made on an autopilot basis.

Beautiful.

Your retirement income stream should be created in exactly the same way.

You may have various accounts - IRAs, non IRAs, Roth IRAs, it could be a TOD, transfer on death account, it could be stock investments, bond investments, cash, savings in the bank.

It's not terribly relevant where the money is.

It's the fact that technology will allow you to design exactly the dollar amount that you need, either on a monthly basis or quarterly basis, however you wish - lots of folks do it on a monthly basis - and then we set up a stream of income coming from those accounts that total the amount that you need for your paycheck and it drops directly into your local bank account, and then you can continue just as you always have with your auto debits and your auto bill pays.

It will work very, very smoothly.

A little bit of work on the part of either you or your financial advisor for a lifetime of peace, and peace of mind, and ease of use.

You'll be creating your own retirement paychecks.

It'll work wonderfully well.

We have covered a tremendous amount of ground.

I want to thank Megan for bringing us all those great questions.

We have just seconds left in this edition of More Than Money, so I will encourage you if you'd like to be part of a future show.

Send us your emails: And whatever the topic, we're going to answer every single question directly back to you.

Someone on our More Than Money team, will be - either myself or one of our teammates - will reach out to you and give you an answer directly and potentially on a future show you might find your question being asked and answered right here as well.

We thank all of you for spending part of your evening with us.

We hope you picked up a couple ideas, something interesting that might help, and we hope you'll return again next week when we're here on More Than Money.

Goodnight.