Good evening.

You've got more than money.

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

Happy to be with you.

Happy to serve you.

And for the next half an hour at your service, indeed, half an hour goes very quickly.

So don't wander off.

You'll miss a lot.

We cover a lot of ground in a very short period of time.

And generally we do it with good spirit.

On occasion, Jane gets snarky.

That happens and it's unpredictable.

So although there has been a suggestion, just a peek behind the curtain, how we produce our shows, there has been a suggestion that perhaps one day soon will produce a snark week show and just get all the questions that annoy Jean, bring them together and see if we can get them to just stroke out right on camera because some folks make decisions that make me lose my mind.

But for the most part, 98%, you guys are fantastic, unbelievably fantastic.

Not only really, really smart, but in general, amazingly, a grateful and and kind and considerate and in many ways are in many cases trying to help other folks.

We love all of you.

We love all of you, even the snarky ones, because they're great fun.

And hey, I'm I'm about fun every now and then.

If you're joining us for the very first time, you're gone.

What is going on?

What's going on is that we are the most relevant financial show on television today, without a doubt, because you make us so your questions, they tell us what's most relevant to you.

What are your highest priorities?

Where are your biggest concerns?

And we address all of those and in my own inimitable style, which some folks find quite, quite, quite useful, others not that impressed.

And you'll decide whether which category we fall in tonight.

But let's give you a sample of our work so that you have something to judge.

Meghan, where do we start this evening?

Well, we're starting off strong with the first question.

There's a lot of detail in this.

It says, I turned 72 this past February and my wife turned 71 this coming November.

Looks like I'll face an R&D next year and she will in 2026.

Our current joint income Social Security is 65,000 55,250 of that taxable municipal pensions equal 50,000 about 95% of that taxable and W2 income of about 24,000.

That will wind down this year.

As I move toward full retirement, I have $615,000 in TIAA-CREF funds.

I've taken nothing out of that.

My wife has $265,000 in 2403b accounts and a prudential annuity account, all managed by Kate s Margolis, which were set up when she retired from teaching in 2015.

Our home is debt free and has an estimated value of $330000 to $350000.

We have $40,000 in cash and expect to inherit about $250,000 from my mother's estate before year end.

Here are my major concerns.

TIAA-CREF.

Although I'm happy with the returns on my account, I'm not crazy about dealing with their complex system.

I'd like to find a way to start a monthly income of about $3,500 a month and then invest the balance in something more conservative that could guarantee 5 to 6%.

Kate Margolis We'd like to consolidate her accounts and then do something similar whereby she draws down about 1500 dollars a month and with an assumed return of 5 to 6% and has something left after 15 to 20 years.

CASH I'd like to identify some other perhaps more liquid assets to invest our our excess cash to more things.

We have three successful kids with their own growing families, and I'm getting more nervous about the stock market's ability to stay above the fray.

That includes growing deficits from federal overspending and other national and international affairs.

Thank you for your advice, Jean.

Well, you're very welcome.

And thank you for the detail.

It helps a great deal to have the full picture and give you more specific advice.

Simplify, simplify, simplify.

I'm not my memories.

Gosh, I'm on PBS.

I should know this.

This is American literature.

These are Thoreau or Emerson.

I'm thinking Thoreau makes more sense.

That's the quote.

Simplify your life.

Simplify your life.

You've got a lot of moving parts and for the most part, not necessary.

You have significant assets, you have very precise goals, and yet the numbers don't work exactly the way you've outlined them for example, you mention that you've got in your particular account craft A been around forever, predominantly school districts, colleges, nonprofits, etc.

You've got about 600,000 roughly.

You would be happy if you could generate 30 $500 a month and get into something that's conservative making six or 7% per year.

Simple math at 6%, 600,000 is going to make 36,000 a year.

3000 a month, 7% is going to give you 42,000 a year.

Almost exactly what you're looking for in terms of cash flow with little or no excess.

So these objectives of I want designated cash flow, I want six or 7% returns and I want a conservative.

You can get probably two out of those three things, but you are unlikely to get all three and your wife's collection with Kate is my goal is annuities in general have certain restrictions not unlike TIAA-CREF.

You're looking for 18,000 a year off of 265, 18,000 offered to 65 is seven, maybe 8% return per year.

And again, we're in the realm of.

Is it possible?

Yes.

Is it possible with guarantees?

Not likely, unless you're willing to give up complete control.

And complete control comes into the form of annuities.

Are you able are you willing to invest everything you've got to produce the cash flow?

You want that when you are no longer with us neither is your money.

The answer is probably not.

Now, your phrase at one point is, and we'd like to have a little something left in 20 years.

That makes sense.

You're not exactly volunteering for our Triple H Club.

Healthy.

Happy 100.

You'll be early nineties.

Not bad.

Not bad at all.

But having a little something left is probably pretty doable because if you have a reasonably conservative approach, you're likely to make five or 6% a year in terms of cash flow.

And if you're spending six or seven, you're spending more than you're making.

That is true, but you're eroding your principal at a relative awfully slow rate.

Now it's going to accelerate because later you're going to have less money to make up your cash flow.

But even after 20 years, you should have a fairly substantial sum of money still in balance.

So not a bad result at all.

But you need you absolutely need to sit with a trusted financial advisor, one that has experience with TIAA-CREF, one that has experience with the products that Cato's Margolis offers your wife as a teacher, I'm guessing you were a professor.

These are the kinds of experiences that someone with 780 years of experience has had many, many times.

Lots of advisors are able to do that and analyze exactly what you've got, give you the options so that you can get as close to your ultimate goal as possible with with the greatest amount of of certainty.

And certainty is really what you're looking for.

By the way, congratulations.

Three successful kids, their own growing families.

Fantastic.

The fact that you're a little nervous about things that are going on shows that your thinking shows you.

Yes.

You're looking around the globe and around the country and going and anyone with a brain is agreeing with you.

That doesn't mean that we run away in fear.

That is not what that means.

What it means is that we must hope for the best and plan for the worst.

And a good financial advisor can help you do exactly that.

Meg And that was a lot.

Where to next?

Our next e-mail says, I enjoy your show and you are welcome for making MTM the most relevant financial show on television.

I'm picturing like a. I retired in June of last year at age 63, but my company was kind enough to give me a pro-rated bonus last month, i.e.

the money received in the 2024 tax year of just over $8,000.

Wondering, can I contribute $8,000 to my Roth in 2024?

Or can I only contribute the net after taxes or some other amount?

I have no other source of income.

Thanks again and keep up the good work.

All right.

Let me get this straight.

I compliment my audience for allowing us to be the most relevant financial show on television and and on behalf of the audience, this guy is saying you're welcome.

Is is thank you very much.

And he's quite right.

Absolutely.

There's no question about it.

You make us incredibly relevant.

If there's any entertainment value, it's because you ask very interesting questions.

If there's any educational value, it's because the questions you asked so many other folks have in common.

This is an interesting question because what this gentleman has is an opportunity.

He has retired, in essence.

But whoa.

Extra money and extra money is great fun.

His question is about what is actually the income that the IRS is considering that he is eligible to put into a Roth 401k I'm sorry, a Roth IRA.

And it's not the post-tax, it's the pretax.

It's the $8,000.

So could he put $8,000 into a Roth IRA?

I don't think so.

I don't have my chart with me in terms of what the maximum are.

I think 7500 might be the maximum if the max for 2024 is 8000.

He has is yes, you can put the entire amount into the Roth.

You will still pay taxes on the 8000.

That doesn't that should not be a problem.

That should not be an issue.

It doesn't sound like it will be an issue.

You have no other earned income, but you will have to pay that because it's a Roth.

But then that money goes in and can grow tax sheltered and eventually it can come out.

You are 63, so in 37 years as as you enter the Triple H Club, we'll have a ceremony.

There'll be certificates, I'm sure a lighter d'oeuvres and an open bar.

So in 37 years, when you go through that service, you're going to have all this money compounded for all that time and you can take it out tax free.

Or if you decide somebody else decides that you graduate from this planet prior to, then the next generation, whoever receives your Roth can take it out tax free as well.

So very good idea.

Very, very excellent idea By the way, if if the limit isn't 8070 500 sticks in my mind for some reason, if the limit is 7500, if you are married, you can do a small $500 Roth IRA for your spouse.

Spousal IRAs, when IRAs were invented, were huge age, and they've largely fallen away.

They've largely fallen kind of off the radar screen for lots and lots of folks.

But keep in mind that if there's one person earning income, let's say in retirement, he wants to continue to work and he makes $15,000 a year and his wife is retired.

She does not work.

She can still have a Roth IRA.

The entire 15,000 can go away, half for him, half for her.

It's fantastic.

Spousal Ira, if you haven't looked into it, maybe you should.

Next, what do we look into next?

Next up, we have a house question.

It says, My wife and I are 77 and retired.

We have a little more than $81,000 in savings and have IRAs totaling around $950,000, which we have been withdrawing the RMDs from since required.

We currently live in a two story home and thought it was time to go to a single level home.

My question has two scenarios.

We've been looking at homes for some time and found that those that have everything we want in a home would require us to use about $50,000 of cash on hand or of our cash on hand to make up the difference between what we will get for our house and the cost of the newer one.

The other option is homes lacking all the things we want in a home.

Of course, there are many options in between the two of these, but my question is that our age, should we consider using any of our cash savings to purchase a home?

Thank you.

Wow.

That that's an outstanding question.

In times past, different generations, we would say, Dude, you're 77.

It's a year or two.

Stay where you are.

The reality is Triple H, happy, healthy, 120, 30 more good years.

Of course, quality of life is incredibly important.

It's incredibly important now, what you're facing here is something that shocks a lot of people.

They the term downsizing was was meant to be.

We had a four bedroom, two and a half bath colonial on a full acre, and we went to a two bedroom, two bath ranch, and we sold our house for 500 and we bought the new house for 250 and we saved a lot of money and we've got money in our pocket.

And what this gentleman and his wife are finding, it's it's not true.

It's certainly not true at the moment because the demand for downsized house is off the charts.

Houses that have exactly what you're looking for, the single level, the master bedroom suite, easy access, yada, yada, yada are in huge demand as a result.

Supply and demand.

You remember that from from high school economics, a huge demand.

Prices go high and so do the carrying costs.

So moving from a bigger house to a smaller house is penalizing you financially.

So, yes, the question becomes, do you take money out of your cash and go into this new home and then life is grand.

If you are very, very careful, you must sit with someone.

Financial advisor, CPA, tax accountant, that can that can map out for you.

Many financial advisors have software programs where they can project out your retirement income expenses, cash flow for the rest of your life.

So you can map this out to see if not only are you using part of that cash that you currently have, but also undoubtably increased monthly expenses, will that be enough?

Will that be enough of a burden that by the time you are approaching happy, healthy 100, you're out of money and that's incredibly important to know.

The reality is that could be true.

The other reality is it might not be true at all.

Might not be true at all.

If you have 950,000 in your IRAs, you're getting Social Security.

Obviously, you're you're getting roughly 50,000 a year from your R&D fees.

You may have enough cash flow that you can do that quite easily.

And if the answer is you do, I'm a huge believer in quality of life.

You've got 23 more years, your wife, probably longer before you enter the Triple H Club.

And if you can have those years in a home that makes you very, very happy, gives quality of life, safety, security, enjoyment, you absolutely should do it.

But be sure you have run all of this through the lens of someone as a financial adviser who's being very cautious, very critical.

One thing I would suggest, and I really like the one phrase that you use, there are lots of options between these two.

A house I don't really like and one that's pretty expensive.

You're absolutely right.

One of the more interesting options is for many people owning a home that's larger than they want.

It's it's a lot of work.

It's a lot of stress.

There are companies that will now manage all of that for you.

You could literally stay in your own home and have all the work taken care of.

And yes, it's going to cost some money, but in all probability way less than moving.

So lots of options to look at, including reverse mortgage options, including cash.

There's there's care in home options.

You need to look at all those before you pull that trigger and do this.

Pick the choice that fits you and makes you happy.

You certainly deserve that.

And 27 more years.

20, 23 more years plus of of of quality of life.

Absolutely.

Pick the choice that makes your quality of life the best it can be.

Makes what we offer this next person.

This they can be the best they can be more.

Next person is an entrepreneur.

It sounds like.

It says I have a small business and I'm working on liquidating assets and possibly retirement.

Should I sell my business assets that may total between 200 and 300,000?

Or should I wait to sell after I retire?

And what would the difference in taxes be?

Thank you.

No idea.

One of the reasons this kind of question is important is for what it cannot do to many folks, even entrepreneurs, business owners, who you might suspect that over the years have become very familiar with the IRS code, not necessarily, particularly if they have had accountants help them, particularly if they've had tax professionals help them, They may have dealt again to that.

And they're really in a position where they they don't really know, like, how does that work?

We don't know their tax bracket.

We don't know how long they've been in business.

But I'm going to give you kind of two ends of the spectrum and and give you a demonstration of of of how this might unfold.

Two or $300,000 is a very large sum of money.

It may be that most of that is taxable.

It certainly could be.

I started a business years ago.

I have very little money that I invested, but I've built it over the years to a very large number, in which case this person is facing potentially $60,000 in capital gains taxes.

Ouch.

And you got to figure that out.

You got to figure that out because 60,000 is just way too much.

It could also be that depending on how this business has unfolded, that investments over the years have been far greater than the owners memory might suggest.

And instead of even selling the assets for two or 300,000, let's use 300,000 is is the real number the cost basis instead of being near zero, maybe it's a near 300,000, maybe the entire sale will be virtually tax free.

And there's absolutely no way to know until and please don't sell until you sit with someone who understands your accounting system very, very well and can determine really clearly what is your cost basis in this business.

If it's very low, your taxes might be very high, and waiting until you retire might make some sense because your income could be lower.

Not everybody's income in retirement drops.

We have a fair number of our clients whose income rises in retirement.

We have a fair percentage of clients whose income rises several times in retirement because they start with a basic income.

Then they add a Social Security.

Another benefit, another pension, higher RMDs, and their income goes higher and higher, as does their tax bracket.

So the urban myth that well, in retirement you have a lower tax bracket, maybe you will and hopefully maybe you won't because you've done so very well.

So this can only be answered by determining right now in advance of sale the sale of this business what your cost basis is.

That's a tax professional and now that we're coming into the spring and summer season, you might be able to get one of those that's not overburdened.

We're doing tax returns.

Very interesting.

I wish I could have been more specific.

Maybe on the next question, I guess we're going to find out Meg's.

Next email says, I'm 63, my wife is 62.

We would like to retire in 2 to 3 more years.

She is self-employed.

I have been working for the Commonwealth of Pennsylvania for the last 23 years and was self-employed for 20 years prior to that.

We have $138,000 each in a traditional IRA and $33,000 each in a Roth IRA, along with other investments and for rental houses.

I hear a lot of talk about converting traditional IRAs to Roth.

Should I be making future contributions to a Roth, and would it benefit me to convert some or all of our traditional IRAs to Roth?

Thank you.

Fascinating.

Very, very good question and an appropriate question.

Age wise, the idea that we we have a choice.

We can leave our money in a traditional IRA, and then when we start taking dollars out, we pay tax or we can move some all of it into a Roth IRA.

And when retirement comes, we don't pay tax.

Well, if those were the only moving parts, the answer is easy.

Put it all on the Roth.

Very, very simple.

Those are not the only moving parts.

The other moving parts are taxes.

Every dollar that you convert from a traditional IRA, they each have 133, They currently have 33 and then in a Roth.

So if I want to move $10 from the traditional over to the Roth, it's a convert virgin.

It's not a contribution, it's a conversion.

Very important.

There are limits on contributions.

There are no limits on conversions.

So if I move $10 from the traditional to the Roth, I got to pay tax on it that year.

And if my tax brackets relatively high, I'm going to pay a lot of taxes.

If my tax bracket brackets relatively low, I'm not.

And so this gentleman has to be very clear about what his current tax bracket is and what tax he might pay on a certain amount of money.

As most of you are aware, tax brackets are progressive.

So the higher your income, the higher your tax bracket, the more tax that you are required to pay on a percentage basis.

Knowing that means that if he were to convert the entire 138 for each of you, you'd be adding $276,000.

He calculated very quickly on top of your current income and it would push you into a much, much higher bracket.

Not likely a good idea, but it's unnecessary as well.

You are 63.

Your wife is 62 at current age is you don't need to take out RMDs for another 12 or 15 years.

12 or I'm sorry, 13 or 14 years.

You've got all that time.

You could convert pieces year by year, keep the amount of money that you're converting in a reasonable tax bracket, pay those taxes, and then allow that to cook for the next ten, 12, 15 years until you need to draw the income.

This process can be very, very beneficial to you.

Something you need to take a serious look at.

Spend the time either with a financial adviser or a tax professional and map out exactly what you would be faced with to make sure that you're comfortable, make sure that the taxes that you do end up paying are what agreeable?

They're not fun, but they're agreeable and then look forward to having as much money tax free in retirement as possible, because in the future, tax brackets are going to go up and you can take that to the bank.

Speaking there to the bank, we have gone to the bank and back and investments and legacies and families.

Your questions are fantastic.

If you have a question, send it to me, Gene, and ask MTM icon Jeanie and ask MTM dot com.

We have an entire team.

I answer all the questions back to you and then we we sort through and pick out ones that we think would be beneficial to our listeners in general and an interesting at the at the very least educational hopefully.

So hopefully you picked up some great ideas.

But if we're going to stay relevant, you've got to send us specifically what's important to you and we'll be happy to address that both off air and on.

So hopefully you learned a lot.

Hopefully you're entertained a little and hopefully you're going to want to return next week when we're back right behind this podium for another edition of more than money.