And good evening.

You've got More Than Money.

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

We've been together a lot and hopefully you've been along with us for all these many weeks now, our fifth season, and you've learned a great deal.

We are the most relevant financial show on TV today.

I say that without any hesitation because of you, not because of us, not because we have some insight that special or magical, but because we put you where you belong.

At number one on the list, highest in priority.

Your questions, your concerns.

They're the most important thing to us.

So rather than coming on and doing what so many of our competitors doing, drone on and on about topics that you probably don't really have an interest in.

And of course, they have to make it sound very, very complicated.

We do the exact opposite.

We talk only about things that you are interested in because you've told us so, and we try to make things as simple as they can possibly be.

There's no genius in taking something simple and making it complicated.

The genius is in taking something complicated and making it understandable, making it available to anyone.

And hopefully that's what you'll find as you stay with us this evening.

Half an hour.

It goes very quickly.

If you have a question for us and you would like to perhaps see that on a future show, all you need do is send that to me.

Gene G-E-N-E at ask MTM dot com.

We answer every single question back to you.

The hard ones, the easy ones, the silly ones, the tough ones.

We are agnostic.

We are going to answer all your questions back so you get tons of great information and maybe, just maybe one of your questions will appear on a future show.

And wouldn't that be something that you could share with your friends and family?

Hey, I was part of the most relevant financial show on television just last night.

That would be way cool.

So half an hour goes quickly.

Any potential, even a hint that at some point you find yourself even, you know, mildly entertained.

You have my sincere apologies, but hopefully entertained or not, you'll pick up some really great ideas.

And so why don't we start with Megan, our first question of the evening.

Hi, Gene.

Our first email tonight starts off saying Great show.

Thanks for the great content and entertainment.

It says, What is a fixed income investor to do?

One of the best bond funds from PIMCO provided a 4.3% return over the last ten years after management fees, after accounting for 2% inflation, taxes and a 1% adviser fee.

There's not much left over maybe a 0.5% real return after fees and taxes.

Do you have any advice for me?

Thanks.

Goodness you are expressing what so many others have prior to and I'm sure will going forward the frustration of where do we get income?

Where do we get cash flow from our investments?

It has been so many years, excuse me, decades that we've seen high interest rates, bonds paying six, seven, 8% with capital gains included seven, eight, nine, 10%.

And that went on for 20, 25 years.

And then interest rates started to drop.

And they have been dropping for quite some time until recently.

Excuse me.

So you may see a slight increase, currently modest increase in interest rates for a fixed income investor fixed income.

For those of you listening, I'm not really sure what that is.

These are investments that are not in the stock market.

They're not in real estate.

They are designed to create a cash flow, a fixed rate of return.

So if you got, for example, right now a CD, as of this airing, it would be about a 5% return.

That's a fixed return for a period of time.

If you got a corporate bond, you might get a five and a half, a 6% return for a fixed period of time.

And if you got, interestingly enough, a ten year Treasury, it would be four or four and a half percent.

So these are fixed returns over a fixed period of time as opposed to there are lots of other ways to get income.

You could invest in stocks that have high dividends, two, three, 4% in dividends.

Those are not fixed.

And they're not over a specific period of time, but they are accessible and they do create cash flow.

Real estate investment trusts create cash flow.

Some are designed to do exactly that, and they may pay a five or six or 7% cash flow, even though their growth potential is relatively modest, their cash flow can be very, very strong.

You can get cash flow from annuities, you can get cash flow from structured notes that are intended to create that kind of of income stream.

So there are lots of alternatives to the strictly fixed income side of things.

If you are intent, I would hope you are not.

If you are intent on staying only in the fixed income arena, you should look at two types of fixed income offerings.

One is a flexible income or a variable income often offered by bank mutual funds of bank loans where they have variable rates.

As rates go up, so do their rates.

They are readjusted so that when rates go up, those values don't go down.

Currently, we're seeing rates there in that five and a half or 6% range, maybe even a bit more.

And then again, you can certainly look into areas that give you higher rates of return without necessarily FDIC insurance, but other types of guarantees overall, you blend all those together, one offering the PIMCO fund not likely to satisfy you in terms of either return or safety, but you blend all those together.

You should get a reasonable rate of return 5 to 6%.

You should have reasonable protection from FDIC and 100% down to a 15 or 20% protection.

So it could bridge the gap between now and when interest rates are more stable.

Very interesting question.

Rare that we get that kind of in the weeds, so to speak.

I've got an investment question, but I think one, it's very important for so many of you if you're in retirement or soon to be in retirement, one of the things you will want your investments to do is to produce an income for you and knowing how to do that, pretty useful.

Megan I thought that was a really good start.

How can we be useful to our next e-mailer?

Well, our next email says My daughter is settling on her first house to help.

I gifted her two $10,000 cash gifts.

These are both gifts for which there is no repayment.

But now her mortgage leader is asking us to fill out a gift letter.

Can you briefly explain how a gift letter is used?

Its purpose, and if there is an impact on her accounts or mine?

Thank you for your help.

Interesting.

For gosh, many of us, of my generation starting out in and buying your first house, it's a challenge, maybe this generation more challenging than ever.

Prices are extremely high.

Putting together down payments can be a real challenge.

It is not uncommon at all that family members help out in this case, Dad is helping his daughter.

I have three daughters.

Could I help my daughter?

Sure.

Can I make a gift?

Did he make a gift?

Yes.

Will it affect their accounts?

The answer is no.

So we start at the tail end of that email.

Will this gift affect his account or his tax situation?

No.

Will it affect her account, Her tax situation?

No.

So it's a very simple impact, almost nothing negative whatsoever.

Why, then, is the lender interested in determining that this amount of money is a gift rather than a loan?

It's really very simple.

In order for a bank to approve a particular borrower, in this case his daughter, for approval for a mortgage, they have to be very confident, overly confident, if possible, that she can very easily meet her financial obligations if they are lending her a 100, 150, $200,000.

They don't want to default.

They don't want a foreclosure.

They don't want her to run into problems.

So they have created some very specific guidelines in terms of how much of a person's income, monthly income is should be committed to their living expenses.

In this case, the mortgage, the real estate taxes and the insurance in very round numbers, 25% of your income can be devoted to that direction and the bank would feel comfortable.

Banks have varying standards, so your bank may be slightly different, but that's a good guideline.

So if you're earning $4,000 a year, 4000 a month, 1000 of that committed to your mortgage payment, your your real estate taxes and your insurance is about right and you can do the math thereafter if you're at 6000, it goes to 1500, etc., etc., If you have additional debt, many young people do might be student loans, it might be a car loan, etc.

They also have a secondary standard.

If you have additional payments added to your mortgage, real estate, taxes and insurance, that total should be below one third of your monthly income.

You make 4500, one third is 1500.

If you add up your mortgage, your real estate taxes, your insurance payments to your car loan, to your student loan, it should be 1500 or less, if indeed, in this case, instead of a loan I'm sorry, instead of a gift, it were a loan that repayment amount would be factored in to that second standard to see if it's over the limit.

And if it's over the limit, it increases the risk that this young lady will not be able to meet.

Her obligation will go into foreclosure, and nobody wants that.

So making it a gift, making it a requirement, absolutely fine, clean, simple, should have no negative effects on anybody, certainly not from a tax standpoint.

And hopefully, hopefully put in this case the this gentleman's daughter in a position, strong position to buy her first home.

It's a very, very exciting.

Speaking of exciting, perhaps our next one's exciting.

Perhaps not.

Let's find out, Megan, where to next?

Well, there's a chance that there might be some snarkiness with this next one.

It says, I met with a financial advisor who wanted to know every detail of my financial life, even looking at my tax return.

I just want her to invest my money, not be nosy.

So where do I go to just get investment advice, Gene?

Okay.

Yeah, There's a real risk of snark.

Okay?

If you want to be unquestioned in terms of your investment decisions, you should do it on your own.

You should open an online account.

Many of the online purveyors of these accounts, Schwab and and E-Trade, etc., etc., offer online research tools that you can teach yourself how to use and gain some insights into what types of investments might work best for you.

If your intent, however, is to get professional investment advice, then you should suck it up, Buttercup.

Buckle in and stop being a weenie because a weenie says Oh, I don't want to answer all these questions.

The analogy I would give is you go to the doctor, you say, Doctor, my elbow hurts.

And the doctor says, okay, sit on the table.

Let me take your temperature.

Oh, no, no, no.

Don't be taking my temperature.

It's my elbow.

No one in their right mind would stop a doctor from taking temperature.

Blood pressure, doing a complete examination.

Did you get anything strange?

What are you talking about?

It's my elbow, etc..

Blood work.

Why are you taking blood work?

It's my elbow.

It's because the big picture is what allows a a qualified, a trustworthy, an experienced physician to better understand what the possibilities are, what the the options are in terms of what's happening here that might be sourced somewhere very, very differently.

A financial advisor is legally required to make investment recommendations to you that fit you that are appropriate to you, that are in your best interest.

And the only way a quality financial advisor can do that is by asking a lot of questions, including looking at your tax return.

What's your tax bracket?

How painful will it be if you're in a a fixed income fund giving you interest that's fully taxable or whether you should be in a mutual fund of stocks that gives you capital gains that might be taxed at a much lower rate?

That's a very important distinction to for a financial advisor to make in terms of what he or she might recommend to you in terms of an appropriate investment.

So if you are if you are working, it doesn't sound like you wish to, but if you are working with a quality financial advisor, certainly a fiduciary, you should be comfortable, you should appreciate, you should welcome about 45 minutes to an hour.

A very specific questions, including maybe most importantly, what are your goals?

What are you trying to do with your investments?

That's not being nosy, that's getting good guidance, that's getting the lay of the land.

Hey, I. I need this money for my retirement in 25 years is a very different investment objective to I need this money in 12 months as the down payment on my first home.

Those differentials are dramatic and again quality financial advisor they're not optional the regulators whether it be the SCC or FINRA or the Pennsylvania Department of Banking and Securities, are insistent, as in you don't do it, you can lose your license, you can be barred from the industry.

You can cost a financial advisor his or her career because they will be tossed out.

Because you said to them, I'm not answering any of your questions.

Just tell me what's a good stock?

Should I invest in Apple.

Just give me a yes or no.

All of those are inappropriate on your part, certainly not appropriate from a financial advisor standpoint.

And if it were uncovered that a financial advisor had done that their career is in is in tatters, for what purpose?

You were not well served.

They did not do the job they were supposed to, but you you insisted because you thought they were nosey.

Yeah, Not appropriate.

You you need to you need to rethink how you're going to interact with your financial advisor or and bless you.

It's your money.

If you don't feel willing to act as part of a team with your financial advisor, then don't.

Open up your own account.

Do your own research.

There's tons of places online that will give you investment advice and mess up your own investments.

All right.

I threw that in as a little snarky, but you probably will know.

Speaking of probably will, we probably will have a really good answer for our next question.

Megan, where to now?

Our next question.

I don't think there'll be any snark.

This is a nice question.

It says I'm 71.

I have a regular IRA worth about 380.

I'm wondering, can I move money from my IRA to a 529 for my two grandchildren without paying any taxes?

Thank you.

Gosh, I wish I could tell you that you could.

That in my mind that that makes a lot of sense.

You're moving it from a retirement plan that apparently you don't think that you're going to need, although 71 is very young.

Yeah, I would.

I'm going to circle back to the very young part.

Excuse me.

The IRS does not permit transfers or contributions or withdrawals from an IRA to go into a 529 plan without being taxed.

So sadly, that answer is no.

Pennsylvania, however, allows for a tax deduction to a certain limit.

I think it's $12,000 per year per student, but up to a certain limit on your Pennsylvania return.

So it's kind of interesting.

It's going to help a little.

It's not going to help a lot, but it's kind of interesting.

Let's say you're in the 15% federal bracket.

You take the money out of your IRA, you will be taxed at that 15% federal bracket, but you will not be taxed in the state of Pennsylvania.

Now, we have viewers from across the country.

Please, please, please make sure you touch base with your personal professional tax advisor to see in your state whether that that income is taxed to the state or not.

In the state of Pennsylvania, it is not.

So you've got a 15% federal tax, but you are moving some all of that money into a 529 where you have a Pennsylvania deduction.

And in very simplistic terms you save 3%.

So if you are saving three, costing you 15, the cost to go from point A to point B might be 12%.

Now, I've picked those numbers literally out of thin air.

You might very well be in a very low income tax bracket.

It might be the 5% federal bracket.

You save three, you spend five, it may only cost you 2%.

So even though the answer is it is taxable, it may not be taxable at a very high rate, or conversely, it may be taxed at a dreadful rate because the highest rates state, federal, all put together.

And again, depending on your state, if you're in New York City, you put federal, state, local city, oh geez, way over 50%.

It's so incredibly painful.

But you've got to look at that specifically for you.

Specifically for you.

Now, I almost forgot.

Promise that I would circle back to you're very young, 71 years old, to start giving away assets that you will likely need to live on for what I pray will be at least 29 more years.

I want you to be happy.

I want you to be healthy.

I want you to hit 100.

After that, it's up to you.

But me personally, I want you to be happy.

Healthy.

Hundred.

29 years is a long time.

That's a lot of life.

That's a lot of life that's going to have some cost to it.

I wouldn't be in a hurry to give away substantial amounts of money unless here's the unless part perhaps you have already determined that you have Social Security at a very high level.

Perhaps you are married to someone who equally has Social Security at a very high level.

Perhaps you and your bride both have very high pensions.

Let's say that in aggregate you've got $15,000 a month coming through the door direct deposit to your bank account, and it's never going to end.

These are guaranteed for the rest of your life.

And let's say just for the sake of making it as as secure as I can, that you're only spending five.

So the likelihood that you're going to run out of money is zero.

The likelihood that you will eventually have expenses higher than your current income is very low.

Social Security is adjusted for inflation, etc.

and you still have some savings to decide.

There's a scenario where gifting, whether it's to a family member or a charitable qualified charitable distribution, those are wonderful, wonderful options because you've put yourself in that strong position.

But we don't know that.

So simply put, don't make any moves until you sit with a trusted, experienced financial advisor and lay it all out, lay it out on paper first before you actually do it, and then hopefully prayerfully, it all works out beautifully.

Good for you.

Your instincts are lovely.

Fantastic.

Speaking of fantastic, Megs, you're doing a fantastic job tonight.

Where next?

Thank you very much.

So are you.

Our next question is also family members helping family members.

It says, I'm trying to understand whether or not I can safely help my son with his money troubles.

I'm 78.

I lost my husband two years ago, but I have no debts.

Live on my social Security and my husband's pension and still have a few dollars, still save a few dollars every month.

I have about $60,000 in the bank and about 280,000 in two IRAs with my financial adviser.

My son is 52 and married.

My grandchildren are both out of the house, graduated college and working in good jobs.

My son's wife has told me how tight money is for them, though I know they still have a mortgage.

I think they have two car payments and I'm not sure what else.

I'm sure there's a lot of stress on them, but what can I safely do to help them and also not put myself in a tough spot?

Thank you.

God bless you.

God bless you.

You are frugal.

I can tell you're hanging on to dollars your even saving a few dollars while spending not nearly what many people would consider an absolute minimum.

And you're a mom and you're sweet beyond belief and you just want to help your son with his money troubles.

If you were sitting in front of me, I would say this to you as one person, to another, as one parent to another.

I am certain without any further explanation that your son has had money troubles.

However you define that basically since he's become an adult.

My guess is he's not very good with money.

My guess is his wife is also not very good with money, but she's very good at dangling the carrot of money’s tight.

Money should not be tight for two people that now that their children are out of the home, if they have conducted themselves in a financially responsible way as the expenses of having children have dropped away, they have added to their savings, reduce their debts, they have done what responsible people have done for eons.

As your expenses fall away, as your income grows, you make it easier and easier and easier.

I would suspect it's been the exact opposite.

I would expect that what we would find is that they have increased their expenditures every spare dollar they've got.

Spend it another car payment.

Absolutely.

Two cars, of course, as opposed to the folks, many, many folks, many of you in our audience.

I'll bet we could have an interesting, fun kind of feedback loop of how old is the oldest car you're currently driving in your family?

And if it was only ten years old, I'd be surprised.

But so many of you 12, 15, 16, 18 years.

You guys are amazing because you're frugal.

So what is the one thing you can do to help your son and his wife with their money troubles and not get yourself into trouble?

That actually is pretty simple.

You can connect them to a financial adviser that can assist them in changing their ways.

There are many, many quality financial advisers, so it really doesn't matter where your son and daughter in law live.

They they are they are within driving distance easily of someone that can help them budget, help them understand investments, help them understand how to be a bit more frugal, be more creative with how they spend their money and not not put their mother at risk, not put their mother at risk.

Just as I said to this gentleman, our last caller, you are 78.

I pray for you 22 more happy, healthy years, 22 years is a long time.

You have substantial savings, but not unlimited.

Do not put yourself at risk financially.

Put yourself out there as a supportive mom, refer them, help them secure a financial advisor that they can work with.

52 is a child.

They've got 48 more good years.

They can turn this around and make you very, very proud and not put you at risk.

Gosh, that's hard parent to parent, but necessary.

Hopefully.

You heard a lot of stuff tonight that was not necessarily hard, but necessary good, useful, practical information that makes your life a little bit better.

I appreciate everything that you do by watching our show.

If you have a question and you'd like to be part of that or at least would like to take advantage of good information.

Gene at ask MTM dot com works beautifully and it gives me a great honor, great pleasure to serve you in any way that I can.

So if you did indeed pick up a couple of ideas, I hope you'll return to us next week in this studio.

As we come back to you with another edition of More Than Money.

Good night.