And good evening.

You've got more than money.

You've got Gene Dickison your host, your personal financial advisor, and it's a pleasure to serve you this evening.

Hopefully, if you have seen some of our past shows, you've picked up a couple of really good ideas.

Maybe your situation is a bit different.

We encourage you to send us your questions specifically about your situation so that we may serve you at the highest level possible.

And potentially your question might end up on a future more than money show.

And thereby, not only will you be served, but you'll be helping lots of other folks be served as well.

Because if you've got a question, something really kind of bothering you, something challenging, use something concerning you.

I can assure you lots of other folks have that same question, that same concern, that same challenge.

And if you ask the question and you get help, you help them as well.

So it's a very generous thing that you are doing by seeking some assistance.

And we are very, very happy to provide that service to you.

Absolutely no charge.

Gene at ask MTM dot com works very, very well.

We have an entire team that answers questions back to you, but make sure you check your spam filter because some of you send out emails and then weeks go by and you say, I never got a response.

You did.

You just didn't find it.

So make sure you're paying attention.

Maybe include a phone number.

If we have questions and we can amplify, we're happy to serve you that way as well.

Serving you is a win win win situation because it helps you.

Of course, it helps our audience members who may have similar questions, of course, and it helps more than money.

We are the most relevant financial show on television today, without a doubt the most relevant.

And I say that sounds bold, sounds almost a little arrogant.

Not in the least.

We're not the most watched, relevant, impactful show because of me.

We're the most relevant show because of you.

You ask fascinating questions.

You're just allowing me to share some of my.

780 years of experience for your benefit.

For the benefit of all.

So you're being very, very generous indeed and helping across the board.

Let's give you a an immediate demonstration of how this works.

Let's go to our financial correspondent.

Megan, where do we start this evening?

Well, our first question tonight is pretty interesting.

I'm curious to hear the answer.

It says, I listen to Dave Ramsey on radio and watch your show on PBS.

You're both financial advisors, but your shows are very, very different.

Be honest.

Who do you think is a better advisor, Dave, or you?

What?

What?

What?

How kidding you are.

You are very correct.

For those of you who are familiar with Dave Ramsey, his show is very different than mine.

And so the question is which one is better?

I would ask I would I would give you an analogy and show you why.

The question may not be as appropriate as it seems.

And and, yes, my gut instinct is of of course, I'm better.

But bottom line is, if you have you're a doctor.

A doctor that you're you're you're you're getting excellent care from and you have a how about a dentist?

You also have a dentist.

You're getting excellent care from which one is better is silly question.

They do very different things.

At least I hope so.

That that'd be weird.

Bottom line is very different.

Same.

They're both medical profession.

Those are both caring for you.

They're both increasing the quality of your health.

They're doing great things.

Dave Ramsey has and has for decades been, in my opinion, the best financial advisory team for folks who have gotten themselves into financial trouble.

If you find yourself behind on your bills, if you find yourself deeply in debt, if you find that you've made major financial mistakes, if if you find yourself being harassed by debt collectors, if you find yourself in a financial pickle, not only do it.

Is it my opinion that that Dave Ramsey and his team are better advisors than Jean and his team?

I have personally recommended Dave Ramsey to dozens, maybe hundreds of individuals over the years.

That's how good I think Dave Ramsey is at what he does and again, what he does better than anybody I've bumped into is to assist people who have gotten themselves into financial difficulties.

He has created a a course, a program called Financial Peace University.

It is spectacular.

It is available in person.

Many churches sponsor it.

It's available online, very inexpensive.

But it takes people who have gotten into into a pickle from exactly where they are in the kind of challenges they are facing, how to deal with debt collectors, etc.. And it takes them right on through out of debt, on solid ground and in in in good shape.

Some of the best material I've ever seen for that purpose.

Now more than money team very different, very different.

Our clients, our audience certainly I think pretty reflective of PBS's generally have not gotten themselves into a pickle.

They may have challenges, they may have concerns, they may have made a mistake here and there.

But in general, very bright, very astute, very informed and and very successful on lots of different levels, either financially or personally or professionally.

They've done great things.

So our services to them are very different.

We spend no time whatsoever on how to handle debt collection.

We spend tons of time on retirement planning, college planning, buying that first house, helping determine how to to start a business, or how to liquidate a business, how to invest, how to save on taxes, those kinds of things that would be appropriate for those kinds of individuals.

So our audience is Dave and I call him Dave.

We're buds.

Dave's audience, my very different our service is very different.

We are both financial advisors.

One of the major differences, of course, is that Dave is a financial visor.

He buy by proclamation.

He declares himself a financial advisor.

Not licensed necessarily, certainly not a certified financial planner or anything like that.

But he has a tremendous team, very skilled, similar, very different.

And goodness, I, I think if you've seen or heard Dave's productions and seen or heard Gene's, I think the the the differences are pretty obvious, but better wouldn't wouldn't lay that claim.

I tip my hat to Dave Ramsey and his team for the good that they do for folks who have real financial problems.

Very interesting Thanks nice even put me in the category.

Megan, where do we serve next?

Well, now we have a regular email question.

This one says I am turning 73 in August.

My IRA has almost $300,000 in it.

What is my RMD?

When should I take it and what are my taxes?

Thank you.

Know, thanks.

Kind of a return to normalcy.

R&D is indeed required minimum distributions for those of you who have not yet reached either 70 or above, you may not even have heard the term, but if you have money in an IRA and a41k in a retirement plan of almost any kind, the IRS has allowed you to accumulate funds for many, many years, probably with no taxes, in some cases tax deductibility and or in almost every case, tax deferred.

All the profits are growing without being taxed.

So you you have accumulated far more than you might have if you were paying taxes year by year by year.

Now, having said that, the IRS has been remarkably patient with you.

All that money they could have been getting in taxes they have been waiting for, well, they don't intend to wait much longer.

Currently, the age of R&D trigger is 73.

So you mentioned you're turning 73 in August.

All of these rules apply to calendar years.

So the year you turn 73, even though for your in your case, it's August, January is just as good as August.

December is just as good as August.

It's the calendar year.

So the year that you turn 73, the IRS says time to start paying the piper and the rules are reasonably straightforward.

The guidance is that I'm about to give you are reasonably straightforward or they're approximations and they're not intended to be precise, but you'll get the idea rather easily.

On roughly $300,000, you will pay roughly, you will be required to take roughly $12,000, roughly 4% in your initial required minimum distribution R&D.

The amount that you precisely pay is based on the IRA balance.

At the end of last year, December 31st of the prior year, you could have calculated your amount January 1st because the amount does not change throughout the calendar year.

It is based on December 31st or prior year.

It is based on the chart that the IRS has published roughly 4%, not precisely, but roughly 4%.

So 300,000, 4%, 12,000.

You could have taken it almost instantaneously January 1st.

Most businesses are closed.

So maybe you take it January 2nd, you could take it.

Please don't do this.

You could take this on.

Jane, on December 31st, the very last day of the year.

Don't do it that way, because many IRA custodians are overwhelmed at that time of the year, and there's no way they can guarantee that it's going to work.

So most folks who are going to push it off do it on the second or third week of December.

And generally that works out very well.

And you can take it anywhere in the middle and you can take it in pieces if you wish, or all in one.

So 12,000 happens to be a fairly easy number.

You might decide you'll take $1,000 a month.

Very nice, divided up equally and nicely.

You might decide I'm going to take 6000 in the beginning of the year, 6000 around August, when those real estate tax bills come.

The bottom line is you're in control.

The IRS says as long as you take the money out in the calendar year, as long as you pay the tax, they are happy.

They are happy indeed.

Now, how much tax will you pay?

It depends.

It depends on you.

Your tax bracket, the tax brackets, well published by the IRS available online rather easily.

You can simply look up what your expected taxable income will be.

Add the $12,000 on top of that.

Check out where that takes you on the tax bracket chart.

And if, for example, is it's the 22% bracket, you're going to end up paying, what, about 20 $500 in tax?

And most IRS custodians, most I, I would love to say or I don't know that for a 100% fact so I will stick with most 98% plus will allow you encourage you to have taxes withheld.

So if you're getting it on a monthly basis, you can have it direct deposit to your local bank account.

You can have the federal tax withheld in the state of Pennsylvania.

There is no state or local tax on IRA distributions.

Other states are very different.

So make sure you're checking with your tax professional in your state since we have audience.

Coast to coast and border the border, check in your state.

But you can have whatever taxes are required.

You can have them withheld.

So the following spring you're not caught unawares by your tax preparer.

Pretty straightforward stuff, pretty easy stuff.

And one thing that does confuse people occasionally is, hey, I'm married.

Do we put my my spouse and my IRAs together?

The answer is absolutely not.

Remember, IRS stands for individual retirement account.

So all of these rules that we've discussed apply to each person individually.

Gosh, I hope that helped.

It's a very common question.

Lots of folks turning 73, lots of folks, they tell me 10,000 a day, turning 73.

Pretty amazing.

So if you are curious, hopefully that helped Meg's Where to next?

Well, next, we have a CD question.

This one says, I've been hearing that interest rates are going to drop in the past few years.

Are CDs about $180,000 have gone from paying us almost nothing to over $9,000 a year or last year.

What can we do with our money when the CD rates drop?

Thank you for your advice.

Well, this may sound familiar.

It depends on CD rates have begun to drop as of the moment that we're recording this show, 5% Plus has been a pretty common CD rate, even going out as far as two or three years.

Currently 5% plus is pretty common up to about a year.

And then it starts to tail off.

Now, tailing off does not mean going from 5% to one or 5% to zero.

Tailing off literally means that in an 18 month CD, as of this recording, about 4.94.85, so not dreadful.

So yes, there was a time when $180,000 of CDs produced literally nothing, a few hundred dollars in interest.

That time has long passed.

And yes, right around 5%, 9000 a year going from 0 to 9000.

It's got to be fantastic.

Of course, most of that sadly has been eaten up in recent years with price increases, inflation being pretty strong, pretty negative, but still a great advantage.

Will you go from 9000 back to zero in the blanket answers?

No.

And you may find that 4.8 is not dreadful.

It's not fine, but it's not dreadful.

You may even find it.

Four is not dreadful or three and a half is not dreadful.

You may find that you will not need necessarily to make any major choices away from CDs for quite some time.

Quite some time.

Our interest rates dropping, They absolutely are.

Some folks counsel us that the Federal Reserve this year, perhaps three 2024 of course depends on when you see our show.

But this year of 2024, the Fed will drop short term bank rates two or three times between now and the end of the year.

That's that's the projection.

That's the the thinking of the best and the brightest.

That is not a direct impact on CDs, but it's an indicator and they will likely start to drop over what time frame?

We don't know.

Currently, for example, if you would like to lock in a high interest rate and avoid what you believe to be dropping interest rates, you can achieve a five and a half percent return locked in per year for five years, but it's not in.

It's not a CD, it's a fixed annuity and it is five years.

CDs have early withdrawal penalties.

They're pretty benign.

They're not terrible.

Fixed annuities have terrible early withdrawal penalties.

They're called surrender charges.

And they can be quite painful.

So the it depends part.

Should you lock in five and a half percent?

If you think interest rates are dropping, it might be a very good idea if it fits your time frame.

Hey, I don't think we're going to need this money for that five years.

It could be a very idea.

It depends.

It depends on you.

It depends on what you're trying to accomplish.

There are lots of alternatives.

There are bonds, alternatives.

There are Treasury alternatives.

And what you need to do is to be curious as your CDs come due.

I'm guessing they're not all in one CD as they come due.

You should request of your financial advisor and update what currently is available.

That might give me a slightly better or significantly better cash flow for my money.

And keeping in mind that not all things are created equal.

FDIC insurance on it on a CD says you can't lose your money is safe.

A high quality bond very high could triple A-rated bond.

Could it lose money?

Yep.

Yes, it could.

And an incredibly successful bond fund like a Vanguard bond fund.

Could it lose money here?

So there are very different significant differences between risk and return.

But at each stage as as these CDs kind of unwind, you should examine carefully the number of alternatives that you're looking at.

And I think you're going to find there are a fair number and you'll find one that fits you quite well.

I'm sure.

Megs, can we get an answer for our next question That fits them quite well?

Sure.

We have a question from a husband and wife.

It says, My wife and I are both 35.

We have two children, ages five and two.

My job gives me a41k and they match what I put in.

So I put in enough to get the match I can put in more, which would really help out our retirement.

But then we wouldn't be putting very much into the kids college funds.

What should I be doing?

Both of of.

Yes, logically, of course, a financial person is going to go.

You should fully fund your retirement in education and let's be realistic.

You have a young family and two young ones.

And I've heard a rumor.

It's just a rumor.

I haven't confirmed it that raising children is expensive.

Yeah, it truly is the best expense.

You'll ever best Chex you'll ever write, best credit card statements.

You ever feel that it's the best?

Obviously.

But this is a very serious question and a very significant challenge.

I'm guessing I've done no research.

This is a guess, but I bet I'm close 80%, 80% or more of the families in exactly this circumstance.

Young, working hard, young family have this same question is, is it wise to balance where your money goes?

Put some in the for one case, some in retirement.

I'm sorry, the 529 plan maybe.

Is it better to put everything in the retirement plan?

This is the opinion of many, many academically driven financial advisors.

Put everything in the retirement plan because, as they say, you can't borrow your way into retirement.

That's not exactly true.

I'll circle back to that in a moment.

You can borrow for college, there's no question.

But most folks again, my opinion, 85% plus, they would say I just don't feel right, not saving anything for the kids.

And that's true.

Now, couple possibilities.

Have a conversation with both sets of grandparents.

Unbeknownst to you, they may already be providing in some way, shape or form for your children out of love.

I've been told that being a grandparent creates a great deal of love for those grandbabies.

I can confirm that.

That that's exactly how that works.

So it may it may be that you're you're you're creating this friction, this angst over something that it's already taken care of or may be largely taken care of.

Of course, you may find out that that is not true, that that is that is not their plan.

That is not what they're doing.

In which case, now we're back to, in my opinion, you largely fund your retirement plan, particularly if you're putting a41k investments in a41k in a traditional 41k, you're getting a tax deduction for doing that.

So let's say you're putting $10,000 in and it's saving you 20 $500 in taxes.

Take the 2500 and put that into a 529.

So you're funding both not equally.

I understand that, but you're funding both.

And at least that gives you some or what?

Peace of mind.

Peace of mind.

Now, some folks will tell you you can't borrow your way into retirement.

My friends who are experts in a in a area called a reverse mortgage with which suggest that maybe you can because folks who are in retirement age, age 62 and over, is most traditionally the reverse mortgage area often will have a home worth significant money, great equity.

Often they will have that home paid off for free and clear.

And as a result, they have this this asset that is not terribly productive perhaps for them in their retirement, but it might be a reverse mortgage allows them to borrow that equity.

It can be done in many different fashions, lump sums, monthly amounts, lines of credit.

These are details that you'll need to explore.

But you can access that equity in in many, many different ways tax free.

And you are not ever required to make a monthly payment.

So using a simple example, 300,000 our house, if you had a reverse mortgage of, say, $150,000, you can take that out 1000 a month for 150 months.

That would supplement your Social Security and your retirement that may get you over the hump and you never need to repay that.

It will be repaid when you leave the home, either heavenly or you decide, My home is not where I wish to be anymore, either because of health concerns or maybe you're relocating.

And then, like any other mortgage, it's paid off.

So we need to look at the big picture and we need to play a bit of the long game in terms of determining what's best for you.

You must continue to at least put in enough here in your fallen care to get the match.

That's called free money.

And if you're putting in a dollar and they're giving you $0.50, that is an instant 50% return on your investment guaranteed.

You can't avoid that.

Should you put more?

In all likelihood?

Sure.

But your balance set out and again, involving the grandparents or someone else who has concern or love for your children might very well help out.

We've covered a lot of ground already in this show.

A couple of things just to keep in mind.

I've used the phrase it depends a couple of times this evening.

It's one of my favorite phrases, particularly when I'm addressing either our radio audience or our television audiences, because the specifics a short email does not tell me about grandparents.

It does not tell me about kids.

It does not give me an insight into the parents philosophy in this world today.

Do I think everybody should go to college?

No.

Are there lots of ways to get college educated for almost nothing?

Yes.

So we're talking about how to fund a traditional college education that once I know more, might not even apply.

So bottom line is, it depends so much on you.

Depends so much on your specific goals, your specific philosophies, value systems, and and the moving parts and the moving parts.

So I hope you do appreciate it depends as a really appropriate way to address the entire audience, and you need to customize that for you.

Speaking of customizing for you, we're happy to do that for you.

Send us your questions, your challenges, your observations, your concerns to Jeanne and ask.

AM-T And kind of have our entire morning money team available to you to answer your questions and give you guidance and happen to do so.

And maybe we'll see your question on a future show.

And as we dig into that, maybe we'll pick up a couple new ideas then hopefully enough that you'll want to return each and every week as we're back here in the studio to produce another edition of more than one.