And good evening, you've got More Than Money, you've got Gene Dickison, your host, your personal financial adviser.

780 years of experience, how does he do it?

It's one of life's great mysteries.

Oh, goodness.

And if you'll bite now, we're that's an old joke.

We're not going to use that tonight.

Welcome to More Than Money.

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

We try to get you as much information as we possibly can jammed into a very short period of time.

I would suggest pen and pencil.

Not a bad idea.

Pad and pen.

Not a bad idea.

Take a couple notes, you may find something that you want to make sure you follow up on.

And of course, the first thing that you should write down is the e-mail address Gene, just as you see it on the screen, at askmtm.com.

Gene@askmtm.com is your opportunity to connect directly to us and our entire More Than Money team.

We got, goodness, some of the best people that you will ever, ever interact with and some of the smartest, sharpest, most informed experts at our behest as our partners.

So if you send us your questions, we guarantee we answer every single question, even though some of them make us scratch our heads.

The vast majority are fantastic and there's a lot of great give and take back and forth to get you the information that will best serve you.

We are happy to do that.

You pick the topic.

If it's connected to your life and the dollar sign is in there someplace, investments, income taxes, estate planning, perhaps business, it doesn't have to be deep in there.

After all, the show's title is More Than Money, so we answer lots of interesting questions about family dynamics, etc.

We are happy to help.

So indeed, join the show as you are able.

Now, as some of you are aware, I think most of you, especially loyal.

listeners know, we put our shows, they're called live to tape.

That means all the mistakes I make you get to see.

We just keep the tape rolling and then we broadcast several weeks in advance.

So at the time that I am talking to you, energy prices have hit historic highs.

Crude oil that just 18 months ago was $36, $37, $38 a barrel, closed recently at $120 a barrel.

There are some experts, you have the advantage of several weeks on me, so you will know whether they are correct or not.

Some experts are predicting that it will go to $150 a barrel.

It perhaps could go to $200 a barrel.

At previous gas prices records, we were at $2.50ish a gallon.

in some areas, $2 a gallon for regular, as I am broadcasting to you, $4.50 a gallon.

And if the price indeed does hit 200, we could see, buckle, in eight or $9 a gallon.

This ends up being one of the most draconian taxes and make no mistake about it.

It is a tax on the folks who are least able to afford it.

For many of you, blessed as I am.

Yes.

Inconvenient?

Yes.

Unhappy, yes.

Frustrated, but does not mean that we can't fill up the tank, does not mean we can't go to work.

It does not mean we can't visit family.

It does not mean that because we are blessed to be able to endure that.

For a lot of people, they don't have such blessings.

For a lot of people, their income is fixed, their income is set in such a way that going from I can fill my tank for $25.

I can't afford to fill my tank for $100.

And if you have a two income family, a young family just making by, just getting by, If you go from 25 to 100 times two a week, you're losing $150 a week.

$600 a month.

This is a budget buster.

So my prayer this is my personal prayer, is that by the time you see this that this issue has been addressed, it has been confronted head on, that the taps on the American energy industry have been loosened and that that price has dropped like a stone off a cliff.

And I pray that when you fill up tomorrow that you're filling up at much more reasonable prices than we're currently faced.

Inflation is a nasty, nasty thing, and if we are faced with long term high energy costs that will affect every other piece of our supply chain because everything's got to be delivered somehow, generally by truck.

And generally, those are gas or diesel powered.

This is going to be a challenge.

Hopefully, by the time you see this, it's been met and you get a smile on your face because they listen to Gene and his prayers were answered.

I guess we'll find out.

Let me know.

Let me know.

Shoot me an e-mail as soon as you see the show and let me know how we made out.

Are we on the positive curve?

Dropping off or not so much?

Your questions have been sent to me.

It's my job to answer them as best I can.

Megan, what's our first question this evening?

- Hi, Gene, our first question is definitely a head scratcher.

To start things off, it says I watch you More Than Money show on PBS and I'm hopeful you will be able to explain the perplexing reality concerning the US economy.

Why is it that although the unemployment rate is 3.2%, the help wanted signs are everywhere?

Where are those unemployed and not counted in the unemployment rate and also not getting jobs, getting the money to live?

It baffles me because I cannot find an answer.

I'm hopeful you can help.

It's a very fair question.

We've got to be clear that there's a disconnect in the question between the unemployment rate and help wanted, we'll come back to that in the second.

For folks who are choosing, and for some folks, it is a choice, for a lot of folks, let's be clear, we have to have compassion for a lot of folks.

It's not a choice.

They are unable to work for whatever reason.

There are a thousand reasons why that might be the case, and they deserve our compassion.

For other folks, they are choosing not to work.

Where they get their money?

Your theories are every bit as valid as mine.

In some cases, they are being supported by government programs, whether they are deserved or not.

In some cases, they are supporting themselves through activities that maybe are not reported to the IRS.

And I don't mean to suggest that they're all illegal, but perhaps they're just off the grid a bit.

Or perhaps they spend a lot of time dealing in the cash side of the economy.

So explaining why or how people live if they're not employed is goodness, it's a fascinating question, but not particularly interesting for our purposes.

The first part of your question, though, is very interesting for our purposes.

As we record this show, we have about nine and one half million jobs unfilled and we are creating jobs at a tremendous pace.

The most recent month reported 678,000 new jobs, bringing the total over the last four most recently reported months to over two million jobs created.

The unemployment rate drops, but slowly because the employment participation rate is not growing as fast as we need it to, meaning the number of people who could work who have not yet returned to the workforce is still very, very substantial.

So we have millions of jobs unfilled.

We have a fair number of folks who could fill those jobs if the system would provide them with that incentive.

And yet at the moment, that's not the incentive that they're receiving.

So in order for our economy to continue to expand, we have to find other ways to fill those jobs.

I have suggested in the past that the US Immigration Service would be fulfilling a very valuable role in our economy if instead of deciding we're not going to do any screening at all or are we going to do screening at such a high level that only a few thousand people a year can get through the immigration process?

I think they should team up with the capitalistic side of our economy, work with the major employers, identify the kinds of jobs that need to be filled and then screen vet and welcome to America, those folks from across the world that have those skills.

Could we see the value in bringing in a million or two million or three million people from around the world that have skills that could go to work tomorrow, not be part of a system that says don't work, but be part of a system that welcomes them because they have skills that can be valuable to the entire American economy and help us continue to grow and help us help the rest of the world as well.

It's my own thought.

It may have some holes in it.

I'm sure you've got some thoughts of your own.

You may want to shoot me an e-mail and let me know what you're thinking, but the Immigration Service is the world's biggest job screening organization.

I kind of like it.

Megan, I went pretty far afield there.

Maybe I can get more focused on our next question.

- I think so.

This one says I have four grandchildren, all under the age of four.

I would like to help them with their education, so I'm thinking about 529 plans.

If I understand, right, I can still control these funds and even take them back in the future if I need to.

Does this mean that they will be taxed in my estate?

Thank you.

- Oh, very good.

Very interesting question.

It's not one that we get often.

529 plans have been around a long time.

They were originally designed to be college funding plans.

As a matter of fact, the rules when 529 plans were first developed were that they could only be used for what's referred to as post-secondary, post high school.

The reality is that they can be used for a tremendously wide variety of educational experiences post high school.

But now recently, I think 2020 was when the rule changed.

They can be used for basically any educational experience starting from preschool.

So for many people who would have traditionally waited until they had a baby, now we have a baby, we have to start saving money for college.

They might very well want to start their 529 plans even earlier if they plan on private school, parochial school, etc, that they need to pay out of pocket prior to college.

So 529 plans have a tremendous amount of flexibility and a tremendous amount of impact.

They are tax sheltered until the money is spent and if the money is spent on qualified educational expenses, tax free, so pretty darn attractive.

But the emailer asks a very different question, asking about the issue of control, if indeed they have control and the owner of a 529 plan, whether they be a parent, a grandparent, an aunt and uncle or a friend, a family friend, they indeed have complete control.

100% control over these funds, quite right, even to the extent that they can take that money back under certain circumstances, paying tax and perhaps a small penalty as well.

But can they take the money back?

Yes.

Can they change the student beneficiary?

Yes.

Could they change the beneficiary to themselves and spend it on education for themselves and get the same tax free advantage?

Yes, there are lots of ways that this control can be fantastically exercised.

Now, logical question, with all that control, isn't this money included in the estate of the owner of the 529 plan?

And the answer is no.

It's a rather remarkable answer, considering the IRS is almost always pretty draconian, and they usually try to get as much of their pound and a half of flesh that they possibly can.

But in this case, they found that allowing people to fund education privately, personally versus relying on governmental grants and loans, loans particularly, don't get me started, allowing people to self-fund in some cases or provide for their families through 529, is such an advantage to society as a whole that they wanted to make it as accommodating as possible, including 529 plans are not included in the estate of the owner.

So for young ones under the age of four, can you imagine how much fun they're having?

I would love if they had sent us pictures.

Four little ones.

Are you kidding me?

Fantastic.

So you've got to know their hearts are exploding.

They want to help.

They set up four accounts, they're in control right on through.

Money doesn't leave until they decide, but every penny they put in is out of their state, even though they control it.

So picking very large numbers, let's just have fun and say they have a two or $3 million estate.

If they were to pass today, all that's tax to the state of Pennsylvania, even if it goes directly to the state of Pennsylvania, I'm sorry, to beneficiaries in the state of Pennsylvania.

It's still going to be an inheritance tax.

120 to 150,000 bucks.

If they would like to take a big chunk of that out, say, 100,000 apiece.

Drop that into 529 plans that they still control, that would cut their estate tax by $18,000 or so.

A lot of money.

And yet they still have control over that right on through.

So a very interesting idea.

There is a little wrinkle on the 529 plan that would actually allow you to fund a tremendous amount of money, all in one block.

And again, it's completely out of your estate, so we congratulate you on a growing family, four young, beautiful babies and your instinct to help them.

And, of course, their moms and dad, because anything that helps kids helps their moms and dads, and the IRS fully supports you with tax sheltering and tax free income most likely and the ability to have those assets passed without estate taxes.

Pretty good deal.

If you need more information about 529s, absolutely send us that e-mail, Gene@askmtm.com.

Get very specific as this gentleman did, and we'll answer that question, perhaps on a future show.

But on this show, we go back to Megan.

Megan, what do you got?

- This next question comes from a viewer.

They said, I'm so happy I found your show.

I'm retired for two years.

I get a pension and Social Security, and my wife gets Social Security as well.

We have a mortgage with $130,000 left, some credit cards, 250,000 in the bank and no investments.

Our question is should we pay our house off?

Your help is much appreciated.

- Well, you're very kind.

OK. A couple of things come to mind.

This is traditionally a pretty straightforward yes.

If you were to read the, again, traditional standard operating procedure manuals and textbooks for financial advisers, in retirement, pay off your house.

Pretty straightforward, the idea being that you're saving all that monthly payment.

In this case, I would hesitate.

I would hesitate for two reasons.

Number one, 250,000 is a lot of money.

115,000 is not nearly as much.

Duh.

That's what they would end up with if they paid off their mortgage, so their financial cushion would drop rather dramatically.

That would cause me some hesitation.

It may cause them some hesitation.

In the absence of any alternatives, that may be what we're stuck with.

You either continue making the payments or you reduce your savings.

Your cushion, your safety net by a dramatically large amount of money.

Hmm.

There may be an alternative, maybe, assuming that there's enough equity in the home.

There is a device, a tool, a financial tool known as a reverse mortgage.

And when I say assuming there's enough equity, if we were to pay off $130,000 on our mortgage, we would need under these circumstances the home to be worth about 260.

So if it's worth 260 or more, this may be, may be an option to take a look at.

If it's worth less than that, I think then we put that aside, and I don't think that's a viable alternative.

But assuming that the home is worth 260 or more, a reverse mortgage would allow them to indeed pay off their mortgage, have no more monthly payments, but not need to dip into their life savings.

That's a pretty interesting alternative.

Now, for some folks who are listening, they're going to go, Gene, that makes no sense.

All you have to do.

Take the money out.

Pay off your mortgage and then get a line of credit against the home for, say, $100,000 or $135,000.

And then if you need money in the future, you just borrow it.

There's two problems with that approach.

Number one, if you borrow it in the future, you must also assume to pay it back, you must have monthly payments that perhaps your cash flow will permit.

Perhaps it will not.

The second thing is one that surprises some people.

If you attempt... Now, I'll change that word.

If you are successful in obtaining a line of credit at this moment in time, at this moment in time, two things could happen in the future that would cause you some real concern.

Number one, the interest rate can go up, unlike a mortgage that is typically not always, but typically a fixed interest rate.

Lines of credit have typically adjustable rates, so currently you might get a line of credit at 4%, perfectly wonderful, perfectly agreeable and a year or two or three down the road when you need it, it might be 8% or 9%, and the entire strategy gets the pins knocked out from under it.

Secondly, again, surprising to a lot of people about lines of credit, the bank can revoke your line of credit.

The lender can decide that at some point in the future, they don't want to extend that risk.

So if you are 65, you set up a line of credit and at 75, you need money, it may come at a time when, because of higher interest rates, because of lower real estate prices, because of some concern about your personal credit history, your credit score, the bank says, we apologize, but we've got to take that back.

And now you don't have access to your own home equity.

So a reverse mortgage is a very interesting idea to explore.

Make sure you're dealing with a trusted, experienced reverse mortgage expert, someone who knows the programs inside and out.

There are pros and cons, of course, to any strategy.

So when you're sitting with a financial adviser, you're going to need the information from the reverse mortgage expert.

You may need information from a banking expert.

You may definitely need an information from a retirement expert or retirement income planning expert.

You've got this team assembled to give you the very best answer to your question.

I know it seemed like a pretty straightforward question and it was, but the answer is not.

The answer says you must do a lot of homework.

You must do your research first and then make your decision that best fits you.

Outstanding.

Outstanding indeed.

Megan, another one, please.

- Yes, our next question says a ten year factor was mentioned on one of your shows stating that funds are to be withdrawn within a ten year time period.

I was uncertain as to this requirement being applied, only to inherited IRA funds.

If IRA funds are not inherited, is there a timeframe when funds must be totally withdrawn?

- The answer is yes, I think that's going to surprise some folks that that that's the answer, because a lot of you out there are very well informed.

You've been watching our show for years, you've learned a great deal and you're going, whoa, whoa, no, Gene.

The ten year rule only applies to inherited IRAs.

I would agree with you, but that wasn't the question.

The question was if it's not an inherited IRA, is there a timeframe over which you must empty the account?

The answer is yes.

But you might be surprised to find that when you start your required distributions at age 72, you've got to have the money completely out of there by the time you're like 105.

The RND rules do indeed have a timeframe that carries you through.

It used to be 105.

It may be 107, 108 now.

They changed the rules recently, but in effect, it's a period of time in this case, what, 33 years that you have to empty your account?

And just like the ten year rule, you could take it all out up front.

You could take a lot of it over time and then a great deal more in the back end.

But if we're talking about the ten year rule, it does indeed apply to inherited IRAs, and it does give you the option, the flexibility of saying I want to take one tenth each year for ten years, or I want to take it all in three months, or I want to take it all on the last day of the tenth year.

You pay tax when you take it out, so you may want to customize it to minimize your tax.

There's no rule that says you have to function process your own personal finances in such a way that Uncle Sam gets a ton of money.

If you can create a system that minimizes your tax, I'll give you a simple example.

Let's say you have ten years and you expect to work for the next five and then retire.

And if your expectation is that your tax bracket is going to drop dramatically, don't take anything for five years and then take the balance out over the remaining five years at a much lower tax bracket.

That's a good strategy.

So ten year rule inherited IRAs, RMD rule, non-inherited IRAs, but they're all rules.

Meg, is this next question going to require me to remember a rule?

Oh, apparently it does.

What do you got there?

- This one says I am 62 and a half years old.

My wife just turned 64 in January.

I am retired and we have 525(k) in IRAs.

We have not begun collecting Social Security yet.

My question is, can I or should I start taking monies from my IRAs, formerly 401(k)s and converting it to Roth IRAs now to lessen the tax implications later?

We have been drawing about 35(k) a year from our IRAs and adding that to available savings to live off of for the past five years.

The 35k is the only taxable income we have, so it's been a negligible tax effect for us thus far.

I greatly appreciate your time and thoughts.

- This individual has done some real thinking, This is a very interesting question based not on, gosh, I'm lost, but based on I've done some pretty interesting things, some very good things.

And is it possible to make those good things better?

And I think the answer is yes.

I think the answer is yes.

They've been taking 35,000 out per year to bridge between now and potentially age 70 to maximize out their Social Security benefit.

Should they take more?

The answer is they certainly can take more.

Married couple filing jointly, 35,000 of taxable income.

He's right.

Will provide almost no tax liability at all.

If they decided to take out double that, take it up to 70,000 a year.

They could convert that additional 35 a year over into a Roth platform that would reduce their IRAs and potentially before they hit age 70.

In ten years or so, they could potentially move the entire amount out, which means at age 70, they have no required minimum distributions.

All of the income that would come out would be tax free.

I think this is a real opportunity.

I think this gentleman has come up with a very sound idea.

How do you confirm that?

You sit with an experienced estate planning, or income tax planning professional, make sure that they understand your tax brackets projected out.

And I think with real confidence, you're going to find that this is an outstanding approach and you and your wife are going to be well served.

By the way, I fully endorse spending the money now, pushing out your Social Security, maximizing that lifetime, can't outlive it for you and your wife.

I think that's a very, very wise idea that you've already implemented, and I think this will add icing to the cake.

I understand you'll pay a little extra tax along the way, but at a very low income tax rate.

And who knows, in the future, tax rates might be significantly higher.

I think you will look back and say wise choice.

Indeed.

Speaking of wise choices, thank you so much for making the wise choice of being with us.

If you have a question of your own that you would like us to consider and give you counsel on, send that directly to me, Gene, Gene@askMTM.com, we answer every single question back to you.

Even if they don't all end up on a show they all get responded to and we give you the very best that we have to offer.

Again, thank you for being part of this show.

I hope you'll return next week and return here for more More Than Money.

Goodnight.