- And good evening.

You've got More Than Money.

I salute you, indeed, as I do every week, I thank you for spending part of your time with us.

Gene Dickison, your host, your personal financial advisor.

We've been doing this a long time.

Some have said, suggested 780 years.

That seems a bit much, but it's one of life's great mysteries.

How has he done it and still look this fresh and vintage?

Outstanding.

It's like a classic car plate on a car that you know is 60 years old, you go, "Oh, not bad."

Not bad at all.

Fantastic.

So happy to serve you.

Happy to bring all that experience to you, and happy to be the most relevant financial show on television today.

And I say that with absolutely no qualms whatsoever.

No one can object to that claim because, not because of me, it's because of you.

You ask the best questions, you ask the most interesting questions, and we dig in, try to give you as much information as we possibly can to get you going down the right path.

Now, I confess that many of your questions that we use on air are a little thin on all the details that we would normally have to make a perfect recommendation.

But they are open-ended enough that many of you in our audience can say, "Well, that's not exactly my question, "but it's really close.

"Yeah, I wondered about that Social Security issue.

"I wondered about my Roth IRA rollover.

"I wondered about taking Social Security, "at what age is the best?

"I wondered about Medicare premiums.

"I wondered about all those kinds of thing, "how to invest money, how to avoid taxes.

"I've wondered about general topics," but specifics is what makes us relevant.

This is obviously the most relevant to whomever we're answering the question to, but also to so many of you.

We are blessed.

We have been receiving feedback from all around the United States.

Apparently PBS's footprint is quite impressive, so we appreciate that very, very much.

And every single email is answered, every single question, the hard ones, of course, easy ones, they go a little easier, of course.

Even the silly ones, even the tough ones.

Not all of you are impressed.

And actually, those are the ones I like the best, because everybody else enjoys the fun ones and the complimentary ones.

I enjoy the ones that have a little more texture to them.

Speaking of texture, goodness, our world is challenging, there's no question about it.

Prayer is required from every direction that we can find.

I encourage you to do that as many times a day as you can find time.

But challenges, goodness, that's a forever thing.

There has never been a time in the history of humanity, from the moment that Adam got them kicked out of the garden, there's never been a time when there haven't been challenges.

Does that make it impossible to do things that give you a better chance of success?

Absolutely not.

Let's give you a demo of exactly what we mean.

We go right to Megan, our financial correspondent, to find out who do we help first this evening?

- Well, our first email tonight says, "I really enjoy the PBS program "and I'm writing to ask you for your opinion.

"I have worked with a financial advisor for over ten years, "and I am now getting within a few years of retirement.

"Unfortunately, I think my advisor has done a poor job "of managing my money, along with my own "less-than-stellar 401k management.

"So I find myself in a spot where I may have to work "longer than I hoped.

"My advisor has turned out to be a glorified "annuity salesperson, and their rosy projections "have not panned out.

"I'm wondering, should I just stay the course, "or should I change advisors?

"Also, are there any changes I should make to position "myself for retirement in 3-5 years?

"Here is my situation.

I have 305K in my 401k.

"My wife's Roth IRA has 80K.

"My IRA has 100K, annuity, 100K with lifetime income rider.

"Cash, about 125K, home, 425K, and 4K of debt.

"I currently earn 140K per year, and I'm able to save "about $3,500 per month towards my retirement.

"Thank you for your opinions."

- Well, goodness, thank you for all the detail, that helps a great deal.

Let's cut right to the chase.

Should you make a change?

Yes.

Why has it taken you ten years?

Perhaps you've just come to that realization.

Perhaps you're just getting the numbers.

Perhaps it's because your current "advisor", please, annuity salesman, doesn't provide you with enough information to be able to identify the weaknesses in what has been occurring over the ten years.

There was, for many years, particularly among salesmen, whether they were stock brokers or annuity salesmen, life insurance salesman, kind of the traditional pattern was sell it, collect the check, and blend into the background.

Try not to answer any questions.

Try not to be around when something goes off the rails.

Because sadly, often things did go off the rails and they didn't want to be blamed, because they earned their commission, they got their commission about an hour after you wrote the check.

So, whether it was an annuity, you gave them 100 grand and they made $8,000 in an hour-and-a-half, two hours, that's it.

They have no more income.

There's no recurring revenue to them.

So they're onto the next victim, uh, onto the next client.

Bottom line is, salesmen have little or no motivation to demonstrate to you their performance, because in all likelihood, it stinks.

Advisors are very, very different.

And as the financial advisory world began to evolve away from salesmen, away from, "I make as much as I can possibly stuff into my pockets "as quickly as I can," to, "We're going to be paid "a very small percentage of your portfolio per year "over what we hope to be 20-40 years."

That evolution, fantastic.

Putting the advisor on the same side of the table with the client makes a great deal of sense.

As that evolved, annual reviews became very, very popular, and you would sit down over ten years, you would have had ten, excuse me, reviews with your annuity salesman, and they would have given you a report and said, "Hey, you gave us 100.

It's now worth $81,000."

And you would say, "Hey, that stinks."

And there would be at least some feedback, some information that you could process, that you could then make decisions on.

Likely you've had few, if any of those, but if you were with a legitimate advisor, you would have been ten years of those ten different reviews.

And many advisor models, ours included, that has evolved to a quarterly review.

So, over a ten-year period, you'd have had reports on performance up, down, sideways options, alternatives,, 40 different times or more, versus zero or ten.

And that gives you far more information to process, far more data to absorb, and far more information that you can use to make informed decisions.

So, that's a business model, that's a service model that certainly we endorse.

I think many, many of the highest quality advisors do as well.

There are lots, coast to coast, in terms of giving you extremely high service.

So, by the way, the cost of a really high-quality adviser and the cost of a schlep is the same, basically the same.

Literally within percentage points, like, hundreds of a percentage point, one might charge 1%, one might charge 1.1, one might charge 0.9.

You could drop a tissue over them and cover them, so that you're paying basically the same for incompetence as you would for a very, very effective adviser.

So, yes, you've got to change.

Are you on track?

There's no way to know.

Sorry.

There's no way to know, because we don't know what you need.

I don't know what your cash flow will be in retirement.

I don't know what your Social Security will be.

I don't know if you have any pensions.

I don't know what the 100,000 annuity is guaranteed to spin off.

If you said to me, "Hey, I'm going to need at least "5,000 a month," my gut says you can retire today, because 5,000 a month, if you're of a proper age, and if you are married, you will probably get 3-4 of that already from Social Security.

And you've got collectively here, 600,000, not counting your home.

600,000 would spin off about $2,000 a month.

So, you're retired if your goal is 5,000.

If it's ten, you're going to have to work longer.

If it's three, retire tomorrow.

We don't know that.

So, until we know what our time frames are and what our goals are, we can't give you good advice on air about how best to invest.

Because, number one, we don't know exactly what the constraints are on your current investments, what you're locked into.

And number two, we don't know what our time frames are or what our target is.

For all we know, you could cash all of this in, put it in CDs, and be happy and healthy for the rest of your life.

I don't know that.

For all we know, you've got another 15-20 years.

I don't know that either.

But reach back out to us, give us a little more information.

We'll be happy, happy to help.

Megan, who do we help next?

- Well, next up, we have a grandparent trying to help their grandson.

It says, "I'm considering cashing in a $4,000 529 plan "and using the proceeds to fund a car for our grandson.

"His college costs are basically covered.

"Example total, $4,000, contributions, $1,600, "earnings, $2,400.

"I expect to receive a 1099Q.

"No taxes on our contribution of $1,600, but taxes on the $2,400 earnings.

"And a penalty of 10% on the earnings only, "or is it on the entire 4,000?

"Do the federal tax forms lead one through how "to calculate the penalty?

"Is it similar for the PA income tax?

"Thank you for your help."

- Well, certainly our pleasure.

And it's very, very kind of you to help your grandson out on a car.

Yeah, I remember being that age.

Car meant a great deal.

I would caution you, I would not be in a hurry to do this.

And when I say "in a hurry", I don't mean wait five years.

I mean, if you have two weeks, you might want to do a little bit of exploring.

You might want to find out, for example, by the way, the answers are easy.

Yes, the penalty is only on your profits.

So, it's not, your 10% penalty's not on 4,000.

It's on 2,400.

The tax is only on the 2,400.

It's roughly similar, federal and state.

Yes.

So, those are easy answers.

From a strategy standpoint, or a tactical standpoint, you might very well want to explore if there are ways for you to get this money out of the account, or accomplish what you're trying to accomplish, getting this young man 4,000 bucks for a car in a more advantageous way.

More advantageous way.

For example, if he is currently being educated, and if there are currently expenses, whether they're out of your pocket, Mom and Dad's pocket, somebody's pocket, that total more than $4,000 a year, it might very well be wise to shift the direction of those cash flows so that your 4,000 goes for the educational expenses.

No tax, no penalty, which in your case is going to save you probably a $500 bill, maybe more, or there may even be a case, it's very common in college students, good students get some level of scholarships.

The 529 plan permits money to come out without tax, without penalty, if it's offset by a scholarship.

So that's something to explore.

I have suggested to an individual in this exact circumstance very, very similar, who had stock in a well-known company, very well-known company, that he has owned for many, many years.

So the capital gains are huge.

He hates the thought of selling because the capital gains are so big, the taxes are going to be painful.

I understand.

What he needed to understand was that he can gift shares of that company stock to his grandson.

The grandson can then sell it and, in all likelihood, he will pay zero tax.

That's pretty cool!

So, instead of grandad being out of pocket 500 bucks, grandad could transfer, at no cost, no tax, no penalties, no nothing, $4,000 worth of stock to grandson, leave the 529 plan as it is.

Grandson sells the stock.

Huge capital gain.

But in his tax bracket, his capital gains tax rate is zero.

It's pretty cool.

It's actually amazingly cool.

If we can keep that 529 plan intact for a number of years, the new rules allow that that could then later be contributed to a Roth IRA for this young man.

So he ends up with a car tax advantage, Dad, Granddad paid no tax, he paid no tax.

And the contribution to a Roth IRA that might come out, gosh, in 50 years for him, tax-free, as well.

So, it takes a little bit of thought.

It takes a little bit of conversation with, gosh, a financial adviser or tax adviser, the child's parents, etc., etc.

But running through a couple of options, you might end up saving not just the $5,000, or $500 on this relatively small 529, but you might save the capital gains tax on an additional $4,000.

Could be pretty cool.

If you have questions around those, send them to me.

Just as someone, someone very kind, someone who wants us to remain the most relevant financial show on television today has sent us this following email.

Megan, what's next?

- "I am a 70-year-old retiree from a school "district teaching position.

"I was receiving a pension of 125,000.

"To avoid a large federal tax, "a salesman who was allowed into my workplace to pitch "their products in exchange for providing the staff with free lunch, convinced me to take this amount and put it "into an annuity which would return 13,000 a year.

"With this amount, I was to take 3,000 to pay taxes "and send the 10,000 into a life insurance product.

"He showed me tables that I really did not understand, "but assured me that after ten years, I'd be able to withdraw "the 100,000 free and clear.

"Being busy with work and taking care of my ill husband, "I took his word and diligently sent the 10,000 a year "for five years before I was able to investigate "what I had really signed on to.

"When I looked into closing the policy after five years, "I found that I'd be out $12,000 if I were to close it.

"After ten years, I'm sure it will be more than that.

"I met with the salesperson again who said "I had misunderstood him.

"I finally read the entire policy and still do not see "any benefit to it unless I were to die before 85.

"There are long-term care options that will also detract "from the final distribution.

"I have saved over my work life and feel this policy "may detract from the amount my children will inherit from me.

With longevity in my genes, "I am afraid I'll outlive this policy.

"The salesperson spoke of a tax advantage to my descendants "by over-funding it.

But I don't understand this.

"Could you please explain it to me?

Also, since I feel I was deceived, "do I have legal recourse to recoup my full investment?

"Thank you."

- Goodness.

First of all, my apologies.

And my apologies to particularly teachers.

This happens to teachers all the time.

All the time.

Annuity salesmen through the school districts.

And if you're on a school board and you're upset with what I'm saying, change it!

Fix this.

Our school teachers deserve better.

In exchange for free lunch, they give easy access to a wolf in sheep's clothing coming, "I'm just buying you lunch, just trying to help."

This individual, by giving this young lady this counsel, generated two very substantial commission streams for himself and his company.

Initially, the investment of 125 into the annuity likely produced the commission to himself and the company 5-8%.

If it's 8%, they made $10,000 in about an hour-and-a-half conversation and some paperwork.

And since that point, five years have provided no service whatsoever, no guidance, no value, zero.

Oh, it's sadly far worse.

The life insurance premiums that she's been paying $10,000 a year would not be unusual if this salesman, it's all...

This person is a salesman, is making a commission of half of that.

So, over five years, made 10,000 bucks up front, has made 25,000 more dollars based on selling.

an individual, this woman, two contracts, most likely, neither of which she needed, and allowing her to "misunderstand" along the way.

You heard her email.

This is a bright person.

This is not, "Hey, I don't read well."

She obviously has training, education, experience.

So if you want to be upfront and honest, transparent, explain it to me, and explain it to me in ways that I get.

If she is now $5,000 underwater after five years of putting in $10,000 a year, where did she benefit?

And the answer is, she didn't.

And you should be ashamed.

And so should your company.

And is there recourse?

Certainly there is.

The recourse is never easy.

These companies operate with the tacit approval of school districts coast to coast.

They operate with large marketing budgets.

They often, gosh, I'm surprised you're still talking to the same person after five years.

So often, they'll recruit young people out of college, give them modest training, dump them into this workplace environment, and hope that they make a lot of money.

And if they don't, they leave.

You have recourse.

Every state is slightly different, so I will only describe what I know to be clear about the state of Pennsylvania.

State of Pennsylvania is very, very interested in hearing exactly this kind of story.

There is a department of banking and securities that also covers the insurance industry, regulates licenses.

So this individual who says you "misunderstood," who in essence has gutted your $125,000, could very well have his or her career on the line.

The license removed, not able to function in their chosen career forever, perhaps.

They have lots of power, and they are incredibly committed to protecting particularly senior citizens, particularly people in exactly your circumstance.

"Hey, I'm about to retire.

Hey, I've been retired.

"Hey, I'm a little more senior, "and I feel like they took advantage of the fact that, "as a senior, I didn't understand."

The state of Pennsylvania in particular, I've had great experiences with them, would be very interested.

I would insist that you start there, rather than start with an attorney.

Now, there are lots of great attorneys out there, many of them watching our show every week, writing notes furiously, collecting good information for their clients.

But in this particular case, the legalities are likely better examined, better enforced by the authorities that are put there for that exact reason.

For that exact reason.

The Chamber of Commerce, you can complain to them.

These companies don't care.

Better Business Bureau, you can complain to them.

They don't care.

But it doesn't mean you shouldn't.

That email that you sent us is very clear.

And it's very clear that something here is dreadfully wrong.

So, should you issue a letter to the Better Business Bureau?

Yes.

Even if it dissuades 1-2 people, if they look them up and go, "Oh, geez, maybe we shouldn't deal with that," you've helped someone.

The Chamber of Commerce, if they get a pattern, yes!

As we discussed, the regulators, the Department of Banking and Securities, has to be high on your list.

There may be others, as well.

We have recently had very, very good response from local counties.

And I apologize, I won't get the title right, but there are organizations, part of the county government, that are there to protect those who are aging.

I think they're the county agency, or area agency on aging, that kind of terminology.

And they're very vigilant about seeing our senior citizens protected.

And, yes, we don't think of ourselves as senior citizens.

You're obviously very vital and moving forward, and have great vigor.

But the world does, and the world stands ready to assist you.

Employ all of those, all of those, and if, bottom line, the best that you can do is kind of bump this person out of that career path and hurting other people, then you've accomplished something very, very substantial.

If you can elbow that company out of that school district so that other teachers that I know you worked with over many, many years are not falling victim, that's good, as well.

Now let's turn our attention to a very specific topic, and that is you.

Your life insurance, your annuity.

These still have value.

We don't know exactly how much value.

You are absolutely right, you may be in a position where you're going to outlive your life insurance, because all life insurance is not straightforward.

You can make your payments for a lifetime and still have no life insurance.

It sounds crazy, but it can happen.

Or there may be benefits to that life insurance that you don't currently understand, or have had properly explained to you.

You mention long-term care, that might be incredibly valuable, even though the life insurance policy as an investment has been very disappointing, there may be other reasons why you want to hang on to those policies.

You cannot afford to simply go, "I hate them, I'm canceling them," and then do your investigation.

You must sit with a third-party insurance and annuity expert, someone that has no commission to generate, no axe to grind, but that can examine these policies, tell you exactly what you have, exactly what you should expect for the future, and whether they are valuable to you in some way, shape, or form.

This has started dreadfully.

We need to make the very best of this situation that we possibly can.

And, despite the fact that it started dreadfully with the salesman, if we can, in some way, shape or form, put these two contracts, the annuity and the life insurance to your advantage, maybe there's adjustments to be made, maybe there's changes to be made, but if we can turn them to your advantage, we absolutely want to do that.

So, be sure you don't do anything with those policies until you talk to somebody you trust to do the analysis and recommendations for you.

Goodness.

We've covered so much ground.

It's so much fun to be able to serve you on a weekly basis.

I hope that something in what we talked about tonight connects to you specifically.

If it doesn't, what are you waiting for?

Send the emails, Gene@AskMTM.com.

Send them directly to me.

We answer every single question back to you.

We have a tremendous team that helps us do exactly that.

All of them based in our world headquarters, in the Holy Lands between Bethlehem and Nazareth.

So, wherever you are, if you're seeing our show, we are nationwide.

All you have to do is reach out.

We're happy to serve you in any way we can, and maybe you'll see your question on a future show.

Gene@AskMTM.com.

Thank you so much for spending part of your evening with us.

Hopefully you'll want to return with us next week with another episode of More Than Money.

Goodnight.