And good evening.

You've got more than money.

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

I'm at your service and happy to be.

So for the next half an hour, I'm all yours.

And because I am all yours and you are all of ours, you make us the most relevant financial show on television today.

So you are part of a rather elite operation that we are running here.

The opportunity to be so connected to what's most important to our audience gives us that wonderful, wonderful privilege of being most relevant, most impactful, having the most goodness opportunity, the most long range big picture, the big game, the long game view of how to serve you at the highest level.

It's a wonderful, wonderful opportunity that you supply us and we do not take you for granted.

We thank you so very much.

How does it work if you're a brand new viewer?

To our more than money adventure, you send us your emails gene and ask MTM dot com Genenie and ask and TMZ.com.

We answer every single email back to you.

We have a complete team and our more than money world headquarters and they are very diligent about answering back to you and some of those questions we can't do all of course, not enough time, but some of those questions will appear on future shows.

Again, if you're new to our show, you may find that we're a little different.

We answer holistic questions.

We do talk on occasion about individual topics for retirement or investments.

Social Security, Medicare, saving for your first home, saving for college, those types of things.

But more often, the questions bring together multiple SAG segments, multiple facets of of a person's individual life and and looking for guidance about the entirety of their situation.

That, I think is what we do best holistically.

Looking at your concerns and hopefully giving you those kind of integrated answers that solve multiple problems all at the same time.

But enough about how we do it.

Let's give you a demonstration of exactly how we do it.

Meghan Where do we start this evening?

Hygiene.

Our first email tonight says Everyone recommends a financial advisor.

But my question is, what should I expect from an advisor?

What am I paying for other than allocating assets and formulating a plan?

I already know where I stand on my finances.

We are retired so we are no longer contributing to our IRAs and there will be no buying or selling.

We have two properties and would like some advice on what would be the best strategies to minimize our taxes and or how to best manage the money.

But I'm confused about what it is an advisor does in this situation.

Our advisor said We can reach out any time, but I'm not sure what to ask about or what we should expect.

I feel like I am paying for nothing.

What is your advice, Gene?

Well, goodness.

The reality is you may be paying for nothing.

The last comment that you made about your advisor saying give us a call if you need something is not a strong indication that your advisor is holistic or service oriented, systematic on top of things.

It almost sounds as if your advisor is saying I'm here if you need me.

And that's unfortunately the attitude of a portion of the financial advisors in America today.

Hey, I'm going to do a little this little that I'll make a couple of bucks and if you need me, call me quality financial advisors, particularly fiduciary financial advisors.

Fiduciary advisors are those who are legally, ethically, morally, personally committed to putting your best interests first, putting your best interests, what's best for you ahead of even their own personal issues.

So bottom line is, if you have a trusted fiduciary financial advisor, what do you get for your money way more than you currently?

No way more than you currently expect for example, you mentioned allocation allocation.

For those of you who have not heard that term is simply the description of a process of deciding how to currently invest an investment portfolio, how much should be in stocks, how much should be in bonds, and how much should be in real estate or precious metals, gold or silver, how much should be in various pieces of that of that market and in what proportions?

So is it a 5050 balanced portfolio?

Is it very conservative, very aggressive?

You have that currently and your emails suggest that you believe that once you have that you're done?

Nothing could be further from the truth if you're working with a trusted fiduciary financial advisor because your allocation might very well change quite dramatically over time.

Your goals may change, your personal situation may change your investment impact on you may change or the required impact on you may change.

You're both retired, perhaps right now.

You don't need income, but in three years you will.

Five years, you'll definitely need income.

Those allocations have to evolve and change.

You mentioned in your email that since you are retired there will be no more contributions, so there will be no more buying and selling.

Goodness.

If you're with a trusted fiduciary financial advisor, that is not the case in every single situation, whether it's a simple rebalancing, making sure we're selling things and rebalancing, keeping things on track, modest adjustments or significant adjustments, the economy has changed.

Your situation has changed.

Something has dramatically impacted how that money should be invested.

Things might need to be sold, might need to be purchased.

So again, I think you're missing out because perhaps your experience with your current advisor is not giving you that kind of holistic approach.

Tax issues with your properties, of course, a quality trusted fiduciary advisor, I'm saying it often so that you get that full impact.

We'll be talking about your taxes, about your estate plan, about your Social Security, about your Medicare, about any other items that may come up.

So what are you paying for currently?

It sounds like not very much, but if you had a proper financial advisor, what you would be paying for would be a small fraction of the benefit that you would receive.

Hopefully that helps a little bit and hopefully that will motivate you to look for the appropriate financial adviser next.

Interesting start.

Where do we go next?

Our next question is a little broad, but hopefully you can give them a couple of different ideas on this.

One says I'm 60 with 1.5 million in an IRA.

How do I make sure this money lasts the rest of my life?

Thank you.

Wow.

wow.

Right back at it.

Yes, a brief question, but goodness, so much implication in this very brief question.

First of all, 60, if this individual is part of our Triple H club, happy, healthy, 140 more good years, we've got to plan for 40 more good years.

The life expectancy charts throw them out the window.

You've got to if this is your goal, never running out of money, you've got to appropriately think about a lifetime that is indeterminate.

Might as well pick 100.

Might as well pick 100.

So let's start with that.

Secondly, we don't know how big a challenge this might be, because the real key to making money lasts forever is how much you spend.

It is not what you do with the 1.5 million.

It's how much you spend in your personal life.

For example, if your current monthly budget is $4,000 and your current expected 60 not yet in Social Security, but current expected Social Security is 30 $500.

That means you'll need $500 a month from your 1.5 million.

And it means you'll need 6000 a year from 1.5 million.

1% of 1.5 million is $15,000.

So you could literally invest your portfolio, earn 1%.

Never run out of money.

That's not likely the situation, but that's an example of how that could be very simply answered.

Earn 1%.

Never worry about it.

If the reality is quite different.

I don't need 4000 a month.

I need 8000 a month.

My social Security is 3500.

Now my differential is much different.

And in order to generate that kind of supplemental income, we need to look very carefully at the options.

One option you will want to look at is the exploration of the various flavors of annuities.

Annuities are absolutely the product.

Absolutely.

The financial tool that's intended to create an income flow that you cannot outlive.

They are designed to do exactly that.

You would never be able to outlive your money if you used a some form of annuity.

But is it the correct answer?

The answer is we simply don't know.

Annuities have certain restrictions.

Annuities have certain impacts.

Certainly, it ties up your money.

Certainly, it may end up consuming your money and that may be in conflict with some other goals that you currently have.

So how do you make that money?

Last rest of your life if you never spend any of it?

It's very easy if you intend to spend some of it.

And of course you do.

Then we have to look at all the options.

Annuities.

Cash flow.

Dividend stocks.

Bonds.

CDs.

And maybe some combination of those that fit you precisely because that's the key, is making sure not just that your money last, but that it lasts and serves you very, very well as you enter our Triple H club.

Happy, Healthy.

Short question, long winded answer.

Let's see how that balances out for our next question.

Max, where to next?

Our next question is actually a snippet of a conversation with a current client, so hopefully you can fill in some blanks.

It says, I would prefer to open the 529 for my grandchildren with the $25,000 amounts instead of splitting it into two years.

Why shouldn't I do that again?

Thanks, Gene.

You are quite right.

You are reading that question perfectly.

This is a snippet of a conversation that I had with an existing client.

We did our review.

She mentioned that she had some available dollars and would like to set up 529 plans for her, for four for bless them, grandchildren.

And the idea is fantastic.

We'll talk about circle back to 520 nines in general for a moment.

But this question about whether we put 25,000 in in one block or whether we put it in two blocks over two tax years is the reason for her email.

The state of Pennsylvania, all the other states that you may be watching our show in, I guarantee you will have different rules.

But we're in this case that the the the the individual asking the question.

Liz in Pennsylvania.

And the the tax deduction that Pennsylvania permits for 529 plans is $18,000 per year.

She wishes to put 25,000 in which she absolutely can do.

But she will only get a tax deduction for the first 18.

So with four grandchildren, if we decided I just want to do it right, two checks be done with it, we will lose the tax deduction on $28,000.

We will lose somewhere in the 8 to $900 range and eight or $900 may not be enough to move the needle and may not be enough for this young lady to say, I want to go through the extra step, or it may be eight or $900.

If we're talking about 529 educational plans, five 20/29 that may pay for half the cost of books for one semester.

And if you think I'm exaggerating, you haven't been in college for a while.

That's crazy.

Bottom line is, by simply making the contribution now, waiting a few months until the next tax year, making the balance of that.

So 18 this year, seven the following year, you'll get all of the deduction.

You'll save eight or $900.

It's a pretty straightforward thing.

Now, for those who are going interesting.

529 plans.

Yes, indeed.

529 plans are more interesting now than ever before because we are talking about setting up educational plans.

That's their intent.

For infants, for toddlers.

How are we to know that in 15, 18, 20 years that they're interested in college, they're interested in school at all?

The answer is we can't know.

We can't possibly know.

But 529 plans have been broadened now.

So not only do they cover education from preschool through graduate school, basically everywhere you can turn both academic and goodness.

A culinary school, a welding school, carpentry school.

All of the trades are covered as well.

But interesting icing on the cake item.

If 20 years from now, this student says Grandma college is not for me, education is not for me.

I have a great job.

I don't expect to ever need this money.

Under current rules, that money can now be taken from the 529 and placed into a Roth IRA for that child.

Child now 25 years old.

So whether it's used for education, that might be your first opportunity or your first objective of tax free or later used to start out this young person with a tremendous leg up on their retirement, putting money into a Roth IRA.

Either way, tax deductible pension in your return tax sheltered for federal tax free for federal if used appropriately.

And gosh, what a tremendous, tremendous gift grandma is making for these babies.

And she will be remembered for decades, generations to come for the impact that she is making.

Well done, you.

And again, all these little wrinkles, all you have to do is send us your questions.

Gene, and ask MTM dot com.

We're happy to answer those as well.

Wow.

Outstanding mags.

Where to next?

Our next question has a few questions, but we have some background to go over first.

It says My wife is 73.

I am 74.

We're both retired.

We each have a will that gives everything to the other spouse.

When we are both dead, our two children will each get 50% of everything left in our state.

We enjoy good health and plan to age in place in our own house, which is worth about $350,000 with no mortgage.

Our retirement savings include two IRAs, a41k, a jointly owned high yield savings account.

Shares of stocks in I Bonds, a jointly owned Vanguard investment account and a jointly owned investment account.

These all total about 3.5 billion million.

Sorry, the beneficiary designations for each of these accounts are listed above are the same as we have specified in our wills.

Here are the questions.

Do you think we need to set up trust accounts in addition to our wills?

Would trust be worth the extra time and money?

If so, what would be the purpose of the trust?

And should the trust be revocable or irrevocable?

Who should be the trustee for these trusts?

Should it be the other spouse?

One or both of our children?

An independent trustee such as a bank or attorney?

Thank you for any help you can give us.

We watch your PBS show regularly and really enjoy the show.

You do a great job of explaining some very complex topics to laymen like us.

Thank you.

Well, goodness, you're very kind.

Your words are very much appreciated and your viewership is very much appreciated.

PBS 30.

I very much appreciate that.

So thank you.

Okay.

Lots of detail.

My answer might be a little disappointing with all that detail.

It is, in my opinion, very unlikely that you will need a trust for any purpose.

Very unlikely.

Now, having said that, that's a pretty bold statement.

I would strongly encourage you, as in please, please, please consult with a trusted experienced estate planning attorney, an attorney that has the kind of experience that that that can appreciate the magnitude of not just the dollars, but the intent of planning your estate.

All together, we're looking at 4 million plus in terms of assets.

That's a lot of dollars.

But I suspect that the conclusion that the attorney will draw, unless there is information that's not included in your email and your email was very detailed.

But if there's not, I suspect that an attorney would say, I see no need for a trust.

The purpose of establishing a trust is most often driven by one of a couple of different motivations.

It could be a tax issue in recent years that's largely gone by the wayside because the federal income tax applies to so few people.

A married couple can pass over $25 million of assets.

There's no federal tax.

So the motivation to have a trust is rather limited.

If your estate is indeed above 25 million now we're into a whole different realm.

And that trust in all likelihood would be mandatory.

Secondly, if you children, one or both of your children were unable or unwilling or unable to manage their own affairs, so receiving roughly $2 million and yet not able to handle it and for any number of reasons would require a trust.

And then establishing one that would follow your guidelines as to how that child would receive distributions from that trust over the balance of their life is a mandatory issue.

It may be a child that has disinterest.

It may be a child that is incapable, has a cognitive challenges.

Perhaps it may be a child that has special needs and the trust has to be very carefully drawn.

So it doesn't impinge upon the programs, typically governmental programs that that special needs child may rely on.

So if there were challenges with your children, that would be a very reasonable expectation of a trust if you were in that situation.

It does not sound that you are.

Two things are very, very important.

Number one, you don't pick a person, in my opinion, don't pick a person to be the trustee alone.

You may pick a person as a co trustee, but because these trusts are likely to last for 20, 30, 40 years, it's important that you have a trustee that will also last 20, 30, 40 years.

There are a number of trust companies that do an excellent job for very reasonable fees, taking care of all the accounting, all the tax reporting, all the distributions, etc.

And yet, because they are companies, they're not individuals.

They will last for decades in all in all likelihood.

You can name one of those as a co trustee where the human being and that may end up solving the problem.

Again, in your case, doesn't look like you need the trust, but you would need a corporate trustee, in my opinion.

Now, having said that, if you indeed needed a trust, you don't.

It doesn't appear.

But if you did, you're going to have to change a lot more than just creating a trust, because the vast majority of what you own, 90% plus is already set up to be split equally between your children automatically by beneficiary or by payable on death designations.

This would be done automatically.

Your children would There would be nothing other than the home and your personal property to go into the trust.

So in my expectation, you don't need it.

If you do need it for some reason, it's not included in your email.

You as a corporate trustee.

And if you're absolutely in that position, make sure you're working with a trusted, experienced estate planning attorney to rework the beneficiaries so that all those accounts can be used most efficiently.

Very interesting.

Next, do we have another interesting one back there?

Of course, this question says, I have been taking my minimum annual distribution as as required by law with probability of income taxes rising for retirees.

Would this be a good year to take double my minimum and pay tax at this year's rate even if I do not change the investment?

Thank you.

This is a very interesting question.

For those of you who are not of an age, the issue of required minimum distributions has not yet gotten to your radar.

For those of you who are of an age, it's on the radar.

Because if you have certain retirement accounts, particularly IRAs for one case for a three B's and at a particular age it used to be 70 and a half, then it went to 72.

Now, at 73, eventually it will be 75.

If we get that far along, you are required to take a minimum distribution from those accounts.

Typically, in the first year it runs right around 4%.

So if you have been very diligent at saving and you have $600,000 in an IRA that is intended for your for your retirement, you now turn 73.

You will expect you will be required.

You can expect to take about $24,000 from that account in a in that first year.

It is required that you take it at is required that you claim it as taxable income and you will pay tax at whatever your tax bracket happens to be.

For some folks, it's so annoying that they really try hard to figure out how to avoid it.

If this individual had asked the question and said that they were 60, 62, 65, I would have suggested they do some Roth conversions.

You can convert your standard IRA 600 grand in pieces over a long period of time into a Roth IRA and Roth IRAs do not have RMDs.

So if they had done this years ago, 600 transfers, 300, they pay tax on 300,000 to go into the Roth that can now cook for as long as they wish.

And the original 300,000 now has an armed year, 12,000, not 24.

So you can see the advantage there.

This individual apparently did not do that.

But is asking a very appropriate question based on what we see in the government today, based on what we see and particularly Washington, D.C. today, based on the numbers that we are facing with the federal deficit approaching $40 trillion, with the interest on the deficit approaching exceeding our defense budget, the opportunity, the likelihood, the probability that tax rates will go up seems to be very high.

He asks.

She asks, Should I take out more now if I'm in a low bracket?

In my opinion, yes.

It makes perfect sense if you can keep yourself in a relatively low bracket, one that you appreciate when you're saying, Hey, I'm only losing 20%, I'm only losing 15.

I'm only losing ten.

Yes.

Take out as much as your heart can stomach.

Your heart and stomach.

I'll work on that later and take out as much as you can handle and put that to the side that is now free for you.

You can do anything that you wish with that.

Doing that over a number of years, you may very well end up working your IRA down dramatically and avoiding future tax increases on those RMDs.

Lots of moving parts.

Make sure that you do a thoughtful approach to to this plan.

It's going to take tax issues, income tax issues, of course, interest rate issues, rate of return issues.

It's a lot of moving parts, but you can do it.

Speaking of, you can do it.

You can accept our gratitude or our thanks for being part of our show.

You got through the entire show and hopefully didn't run off, not even once.

Hopefully you also picked up a couple ideas, maybe even something that stimulated your own question so that you'd like to get some information specifically on your situation and for you and your family.

Gene at Ask MTM dot com works very, very well for exactly that purpose.

Send us your emails.

We'll make sure we answer every single one back to you.

Maybe you'll see yours on a future show.

Speaking of future shows, next week, we'll be back behind this podium for another edition of More Than Money.

We hope that you'll join us and we would welcome you for that edition of More Than Money.

Goodnight.