- 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.

Happy to share my 780 years of experience, and hopefully help you get just a little further along your financial path with a little less fuss and muss.

We are, in my opinion, of course, the most relevant financial show on television today for one very, very important reason.

You.

You are the ones who set the agenda.

You are the ones who pose the questions.

You are the ones who tell us what issues are most important to you, what things are most concerning to you, what are the head-scratchers in your life?

What's causing you to lose sleep or peace of mind?

And how best can we serve you?

You tell us directly, and it's a very, very simple process.

You send us your emails, Gene@AskMTM.com.

We answer every single email back to you.

Unfortunately, we don't have enough time on our shows to answer every single email on air, but every single email gets answered back to you by part of our tremendous team in our More Than Money world headquarters.

So we are happy to serve you.

We invite you to pose your questions and your concerns.

Send those emails to us.

They might be about investments or retirement.

They might be about income tax issues, standard deductions and exemptions.

Might be about a Roth conversion.

Could be about estate planning.

Should your kids be named on your deed?

Do you need a medical power of attorney?

It could be about business.

These are just big topics that might spur your thinking in terms of what you are most interested in, what concerns you have.

Send those to us.

We're happy to serve you.

So I typically would toss the camera to our financial correspondent, Megan.

She is on assignment today, so she will not be joining us.

I'm going to be going old-school today and actually running the show from right here.

So, with the assistance of our crack staff and with your assistance in terms of picking up the ideas, maybe jotting down an idea or two, and then, communicating to us, I think we're going to cover a lot of ground and give you a lot of great information this morning.

So if we're ready, let's start with our first question.

Really, are RMDs really this complicated?

That's what our emailer asks.

"I have a question regarding RMDs.

"I have several accounts that have pre-tax retirement funds.

"I have a 403, a traditional IRA, and a 457.

"I know that there is some set amount that I need to withdraw "at age 72.

The administrator from my 457 plan says I need "must take withdrawals from that account.

"I suspect his comment addresses the specifics "of a 457 plan.

I thought if I took out what the IRS calculates is my RMD "based on the total of my funds, that they are really "not concerned where the funds might come from.

"What do you advise?"

Well, you're getting good advice from your 457 plan, folks, I'm a little surprised that you have not had similar advice from the 403B folks.

In many, many cases we find our listeners, our audience members have multiple retirement accounts, and the required minimum distributions that are ascribed, are calculated for these accounts in many cases are treated very differently.

Your assumption, that as long as you take out the amount that they want to tax should put you in good stead would be true, could be true if all of the various accounts were IRAs, or were 401Ks.

In this case, they're not.

If you were all IRAs, then the rules are really simple.

I'm picking a number.

You have three IRAs.

They each have $100,000 in it for a total of 300,000.

Your initial RMD is going to be roughly 4%.

Not exactly, but roughly, that's $12,000.

You can take that 12,000 from any of the three IRAs, and you're good.

But the rules are different when you have a 401K, a 403B, and a 457 plan.

The rules state you must take the individual RMD from each of those.

So, if you had a 300,000 total, 100,000 IRA, $100,000 457, and 100,000 403B, you must take RMDs individually from each of those plans, and they're all based on calendar years.

So, if you are hearing this as we speak, you've got a little bit of time to make sure you get in under the wire, but you don't have a ton of time.

You never want to wait.

You never want to delay taking the RMD numbers until the very last moment in December, because as you might expect, there are a lot of folks who delay, a lot of folks who wait, a lot of folks who procrastinate and they want to squeeze it in on December 27th, 28th, 29th.

And there's no guarantee that your retirement plan custodian will be able to complete your request on time.

And if they can't, because you waited a bit longer than maybe you should have, then the interest and penalties are on you, not on them.

So, don't put yourself in that position.

Don't get squeezed.

Make sure that you're making your RMD requests, at the latest, the first part of December.

I hope we helped a little bit.

Are they really this complicated?

Yeah, sometimes, they really are.

What's our next question?

Ah.

Reasonable question.

This audience member says, "I have a question regarding naming a beneficiary on a CD.

"Can a named beneficiary or named in-trust for?

"If so, does that person who has access to that CD, "when the CD matures?

"If the person goes into a nursing home, would a CD with "the beneficiary named as such be the funds of the patient, "or of the beneficiary?

"And would that money be considered in the person's "assets or disregarded?"

This question has created a bit more complexity than need be.

When you name a beneficiary, it might be a traditional beneficiary of a life insurance policy.

It could be an annuity, a 401K or an IRA.

These are all traditional beneficiary designations.

Or it could be, as the audience member suggests, a CD where you've attached a "transfer on death" designation, a "payable on death" designation, or an "in trust for" designation.

They all do exactly the same thing.

They operate as a beneficiary designation.

In any of these events, in all of these events, the named beneficiary has no legal rights to those assets until you pass.

So, all the questions, all the complexity about, can they get to my money?

No.

Will the nursing home look at that CD as mine, or the beneficiary's?

Yours.

The beneficiary has no legal rights.

Can they tap or reach into your accounts for any reason as the named the beneficiary?

And the answer is, absolutely not.

What you may be conflicting is the opportunity, many people do it, of placing someone's name on a CD as a joint owner, or on a bank account, on a checking account as a joint owner.

For seniors, it's often done for the purpose of simplicity, often done for the purpose of mechanical advantage.

It's just easier to write checks out of an account rather than writing "POA," power of attorney, after every signature simply being on the account.

In that case, absolutely.

Your joint owner has complete access to those assets, bank account, savings account, CDs, or whatever.

And in most cases, not every case, in most cases, not a good idea.

In most cases, there are better ways to do this.

So named beneficiaries have no legal rights to your accounts, your assets until you pass, so you can sleep well at night and hopefully have a bit of peace of mind.

Our next question, please.

Hmm.

That's pretty open-ended.

Let's see what the question actually addresses.

"I have an IRA account, and an estate IRA account."

I should step back for a moment and say it is not typically referred to as an estate IRA account.

It is typically, and the IRS refers to it, as an inherited IRA account.

"I realize I need to withdraw all the monies from the estate "account over ten years.

"Does the withdrawal from the estate account to count towards "my yearly RMDs for my regular IRA each year?"

Goodness.

Well, I'm seeing a pattern for this evening already with RMDs, and, are they really this complicated?

And the answer can be, yeah.

Yeah, they really are.

An inherited IRA comes to you from someone who has passed away and had the IRA originally in their name.

You have been named as the beneficiary, and if it is done correctly, the re-titling of that account will be very clear that it is an inherited IRA.

Any other titling of that account would cause a real problem because the IRS would interpret that as you have violated the rules, and you must pay tax on the entire inherited IRA at that moment.

So, assuming, we believe from the email that this is true, assuming that it was done correctly and the inherited IRA is designated properly, you are correct.

You have a ten-year window within which to take out those funds.

Ny the end of the tenth year following the passing of the original IRA holder, all the funds must be out of the account, or there will be penalties, interest.

Yuck.

"Yuck" being a technical term the IRS uses to, "You should not have done it that way."

And they want more of your money.

So, you, over that ten-year period, can take money out immediately.

You can take up to 100% at any time.

So a month in, take it all out, pay the tax, and go home.

You can wait until the very last day of the tenth year, take all the money out, pay all the tax in that one year, and go home.

You can spread it out during the course of that ten-year time period, basically, in any way that you wish, as long as, again, by the end of the tenth year, you have withdrawn all of the money and, of course, declared that as taxable income on your return.

Now the question, if we take out, I'm picking a number, $10,000 from the inherited IRA, does that count towards the RMD for your traditional IRA?

And the answer is, no.

The IRS looks at these as very separate types of accounts.

In fact, there have been a number of IRS court rulings, revenue rulings that seem to indicate the IRS does not even consider an inherited IRA as a true IRA.

It's an inherited account, but they don't treat it as identical to your IRA in any way, shape or form, including the ten-year rule, including you cannot commingle the RMDs.

So, be very clear about the rules and how they best fit you.

If you happen to come to a year where your income might be lower, or if you're projecting you'll retire, say, in five years, you might want to take nothing out of your inherited IRA, and then, begin taking chunks of that out in your retirement years, when perhaps, perhaps, your income tax bracket has actually dropped a bit.

So, work with a trusted tax professional, work with a trusted financial advisor to look carefully at your projected pattern over the next ten years.

Figure out when best to take money from the inherited IRA.

And keep in mind that the RMD required minimum distribution from your traditional IRA is separate and distinct from the monies you take from the inherited IRA.

"What are the rules," indeed.

And there's lots of them.

And the "yuck" factor has to be in there, as well.

Again, technical terms, I hope you're following.

I know we have another question.

What do we have back there?

Hmm.

Sounds like a theological question.

No, I'm kidding.

Our audience member writes, "I recently found your show "while flipping through the channels."

That's fabulous.

"I really enjoy it.

"I have a couple of questions.

"I inherited my husband's Schwab IRA account.

"It's worth about $500,000.

"I am soon to be 57 years old.

"Should I convert it to a Roth, or should I... "Or should I convert it to a brokerage account?

"I currently have a Roth IRA in my name "and a brokerage account.

"Question number two, Should I take my husband's "Social Security when I turn 60?

"Also, my husband died in 2016.

"Not sure if this is a factor in what I can and can't do, "living in New Jersey."

Well, what are the rules?

And the rules are different for spouses.

The rules are very different for spouses.

One of the wrinkles that comes into play, when looking at a spousal IRA that's been inherited is that you have a couple very interesting options.

You can leave it as an inherited IRA.

I'll circle back to that in a moment.

Or you can make that IRA your very own.

As a spouse, you're one of the few exceptions to the rules where they have to be kept separate.

So if you have...

The end result of the exploration of your financial situation calls for it to be pushed off the deferred tax, deferred for quite some time, you can put that IRA, $500,000 or so, in your very own IRA, and it is as if it was always yours.

Now you mention you're 57.

Typically, any withdrawals from IRAs prior to 59-and-a-half are exposed to a penalty.

In addition to the taxation, the IRS will reach in and take about 10% as a penalty as well.

So if you, currently at age 57, need an income stream from the amount that you inherited from your husband, I'm picking a number out of thin air, $50,000 a year for the next few years, if you leave it as an inherited IRA, there's no penalty.

The IRS rules for Inherited Ira say that whether you're a spouse or not, whether you're 59-and-a-half or not, you can take the money out, no penalty.

You still pay income tax, of course, but there's no penalty.

So there would be a distinct advantage, if you need cash flow, to leaving your husband's IRA in his name as an inherited IRA, with you as the beneficiary, because you could take dollars out and not pay a penalty.

The key issue here, one I promised we would circle back to, is cash flow.

What cash do you need so that your bills are paid, you're happy, you're healthy?

If you need cash flow from any of these assets, then be very, very cautious.

Work with a trusted financial advisor, a trusted and experienced tax professional to make sure you know all of your options before you start taking money.

The difference could be rather dramatic.

If your cash flow is such that you don't need current income, current cash flow from these accounts and don't expect to need for several years, then we turn our attention to the next question, which is survivor benefits, Social Security survivor benefits.

Indeed, they are available to you when you turn 60.

Should you take them?

Very different question.

And again, it circles back to what we've already determined to be the heart of this question.

Cash flow, at age 60, will you need that Social Security in order to pay your bills, be happy and healthy?

If you do, take it, absolutely no questions asked.

If you're not sure or you don't think so, then delaying your survivor benefit will cause it to rise month by month.

It rises month by month.

So even delaying six months, eight months, a year could produce a significant increase in your survivor benefit.

And of course, once you take your survivor benefit, you'll need to make sure you're comparing that to your own Social Security benefit to see when it will be to your best advantage to shift from a survivor benefit to your own benefit, if ever.

There are certainly circumstances where the spouse, the husband in this case, who has passed away, is providing a survivor benefit on the Social Security side that is far higher than what the surviving spouse would have earned on their own.

So you may be on the survivor benefit path for the rest of your life.

No way for us to know that until you sit down with, again, trusted advisor, trusted tax professional.

And if you have available, fortunately in our More Than Money world headquarters, we do, if you have a Social Security expert, we happen to have a partner who is indeed a Social Security expert, knows all the ins and outs, knows all the options.

You should sit with that individual and make sure you've gone through all of those.

You're very, very young.

Retirement for you, 40 years would only take you to 97.

50 years is certainly not out of the question.

And with the advances in modern medicine, who knows after that?

So you've got to be very careful, very thoughtful, explore all of your options and make sure you're choosing the options that best fit you.

There is no general answer.

There's no one-size-fits-all answer to these questions.

Please, please, please make sure that you're looking at the entire picture before you make irrevocable choices.

Fantastic.

Very, very interesting.

Another one back there, I'm sure.

What a dreadful title that is.

I wonder how bad can this be?

The writer says, "Wondering about a municipal bond series "that defaulted in the 1990s.

"Is there any way to get back this principle?

"I was told there was, but the broker would not help unless "I signed with his firm.

"I didn't fall for that, but I was wondering if you knew "any way how to get any of the principal back and..." Interestingly enough, he mentions the municipal bond issuer.

I see no need to share that.

I'm not even sure why we're asking the question.

As I mentioned several times, we answer every single email back to the sender.

In some cases, interestingly enough, our responses go off into the great black hole of the unknown Internet, where we never get a response back.

Fascinating.

Sometimes weeks, sometimes months later, we'll get a snarky response from someone saying, "Hey, you say you always answer my emails.

"You didn't answer mine," but indeed we did.

And either they didn't open it, they didn't pay attention, or they're just being snarky.

We don't really know.

I'm not sure how much... ...credibility I give this question.

Number one, if you've waited 30 years to find out whether you can get principal back on an investment, you have waited too long.

I wouldn't even begin to theorize the reason you would've waited so long.

But my hope of hopes is that the money is gone.

That's my hope of hope.

Because if you've waited 30 years, and then, when you ask for help from a broker, they say, "We offer that service for our customers, "so if you want to become a customer, we'll help," your suspicious nature says, "Oh, I didn't fall for that."

Well, it appears that your judgment in these matters isn't operating at the highest level.

So, a couple of ways that you can resolve this potentially.

Number one, the Internet's amazing.

You can Google these very specific bonds and see if there are principle values still available.

You can reach out to the Pennsylvania Treasury, Department of Treasury, often accounts that have been abandoned, accounts that perhaps you moved and you didn't move your address, they will show up there.

So you can certainly check there.

But the reality is, it is in all likelihood, and in all probability, gone forever.

How about one more?

What have we got back there that might be one more?

"I really enjoy your show."

Thank you.

"Could you tell me how secure my guaranteed "fixed annuities are?

"For example, number one, the stock market crashes.

"Number two, the government crashes.

"Number three, world war.

"Number four, we get invaded by Martians."

Oh, my goodness.

"Again, I enjoy your show.

"Thank you for your sound advice, and God bless."

Well, God bless you, indeed.

Guaranteed annuities are as safe as the company issuing the annuity.

It's that simple.

When you are analyzing, when you are investigating, placing your money with a guaranteed annuity company, you must, or have someone do it for you, you must investigate the financial strength of that company, because the only guarantee is that of the company.

There is no FDIC insurance.

There's no other governmental body standing behind you.

And they're not connected to the stock market.

So what happens if the market crashes?

Nothing.

As long as the annuity company is intact, you're fine.

What happens if the government crashes?

Nothing.

As long as the annuity company is intact, you are intact.

World war?

Theoretically nothing.

As long as the annuity company is intact, your money is intact.

And finally, Martians.

I have no idea.

I'm just spitballing here.

I think you're going to be okay.

So there are hundreds of annuity companies issuing annuities, many of which are tremendously strong financially.

A fair number of which are not.

And yet somehow, they still sell annuities.

Salesmen, make sure you're not dealing with a salesman.

Make sure you are specifically not dealing with an annuity salesman.

If the annuity salesman says to you, "I earn a commission "and I'm pretty excited about this, this is perfect for you," that's a red flag.

You should be dealing with an independent annuity broker, one that represents lots of different companies and one that can give you really strong financial assurances about the financial strength of the company that you're considering entrusting your money to.

So, interesting question.

Great fun.

I know you had a little bit of tongue-in-cheek in there.

So did I.

But the reality is that if you've got a strong financial company, you should be just fine.

Speaking of just fine, I hope you found tonight's show just fine and dandy in terms of not only interesting, but maybe a couple of those questions applied to you.

Maybe there's a variation on the theme of those questions that's a little different for you.

So that's how we've invented our entire agenda-setting program for More Than Money.

You send us your emails, Gene@AskMTM.com.

And no matter what the topic, we can absolutely get you the information that you need to make the best decision that's in your best interest.

And of course, if you're lucky, if it's a great question, or if it's just got a little tongue-in-cheek to it, you might hear your question asked on a future show.

I hope that you enjoyed tonight's show.

I hope there was a little bit of an entertainment value along the way, and I hope most of all that you learned a great deal.

We thank you for your participation.

We thank you for making us the most relevant financial show on TV.

And I hope that you'll return right here when we're back next week on More Than Money.

Goodnight.