And good evening.

You've got more than money.

Wow.

That's very orange.

It's a spooky show we bring to you this evening.

It's the right time of year.

Let's enjoy ourselves a bit.

A little bit of color, a little bit of.

Ooh, scary stuff.

You enjoy it.

Go with the flow.

Don't be so serious.

Actually, we're going to be very serious, as we often are.

We aren't seriously answering your questions.

With a little trick or treat kind of a theme to it.

So hopefully you'll appreciate a little creativity along the way.

We are at the MTM, world headquarters are more than money advisors.

I pride ourselves on taking our work very seriously.

We don't take ourselves very seriously at all.

So, we'll have a little fun with our show.

Hopefully you'll enjoy the fun as well.

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

Orange.

The color of pumpkins colored Halloween.

A little bit of scary stuff.

It's just part of the ambiance that we offer you this evening.

But we offer your ambiance every single week because we are the most relevant financial show on television today, without a doubt.

Coast to coast.

And border to border.

We are the most relevant show.

And some would say that's quite a bold statement, Mr. Dickison.

That is quite a statement.

There are a lot of competitors out there.

What makes you think you are the most relevant?

It's very simple.

It's because of you.

It's because of you.

You set the agenda.

You determine what your priorities are.

You determine what the topics are that we discuss.

What pieces of your life are most important to you that are causing you the most AG, the most concern, the most fear and dread?

Yes.

All of that or the most excitement.

The most opportunity.

You decide what those ideas are, what those challenges are, what those concerns are.

You send those to us, email Gene at ask MTM dot com.

Gene at ask MTM dot com.

We answer every single question back to you, directly to you, even the hard ones.

And we pick some of those to air on our shows.

And maybe you'll get to see your question discussed live on air.

That's kind of fun.

Speaking of kind of fun, we're having some Halloween fun.

So where do we start with our Halloween fun?

All right, well, our first, email tonight says I'm in my early 70s and I'm suddenly widowed.

My husband had life insurance, so I have money.

I just don't know what to do with it.

I have always stayed out of debt.

Saved.

And yet I also spent money, too.

We did pretty decently.

I don't follow the market as we never knew how any of that worked, but a financial advisor from a big institution where we kept our four one K's, Roths, etc.

over the years is working with me for 20% of what I have.

He's suggesting it should go to a single premium immediate annuity.

I do need the additional monthly income and with and it would be good to have with my pension and Social Security.

For the record, next year will be my first year for required minimum distributions.

My husband never got to that age and there are no children to consider.

Wondering is that a safe, normal amount to use?

The rest will be invested very conservatively and or safe.

I'm slowly learning.

Better late than never.

Thank you for your advice.

Well, first theme is trick or treat.

This young lady has already suffered the trick.

The treat is she's on the right path.

She's heading in the right direction.

We just need to adjust that just a little bit.

First of all.

Good.

Our our hearts, our condolences go out to you.

Suddenly widowed is a very difficult place to be.

We encourage you to take your time.

One of the most important pieces of advice as a financial advisor that wo over my many, many years, 780 so claimed years of counseling, so many folks who have lost spouses, in many ways, and often quite suddenly.

Take your time.

Don't feel pressured.

Don't feel like you've got to make a quick decision about almost anything.

Certain things, of course.

Final.

Arrangements, etcetera have to be done, but most everything else can be put off at least a little bit.

Making major decisions when you're under, that kind of stress, that kind of strain, that kind of challenge, emotional, spiritual challenges, is, is often not the best.

So, you're asking, for a second opinion.

That's a very, very good thing.

You're asking for some direction, and you're giving us enough information that we can give that to you.

So, here's the treat.

I think you're on the right track with the use of a type of annuity.

I think your advisor is making a reasonable attempt to get you in the right direction.

I think the type of annuity that he or she has chosen is incorrect.

So, in order to give us a little bit of context, why would you take 20% of your money and put it into any type of annuity?

That's producing an income?

It it's it's in essence, you're you're creating your own pension, a private pension.

Some folks call it pension izing your savings.

You are converting a piece of what you've accumulated, what you and your husband accumulated into a personal pension, a private pension.

That's good.

It guarantees you an income stream for as long as you live.

That guarantees you that, at least initially, all the expenses and monthly expenses that you're facing, you'll be able to take care of, without any worries.

And I say, at least initially, for this reason, you're mentioning, what's often referred to as a spear.

Single premium, immediate annuity.

One block of money goes in and immediately you start getting monthly checks.

Single premium.

Immediate annuity.

The monthly checks are determined at the moment that they start, and they are fixed for the rest of your life.

That on the surface sounds very, very good.

It is a guaranteed amount, so to speak, guaranteed based on the company that you're using, the ability of the company to make those payments.

Its ability to stay financially solvent, etc., etc..

So make sure whatever annuity you're using, you're you're dealing with a company that's extremely financially solid.

Here's my concern.

You are by your email, I figured out you're 72 years old.

If you are a part of our happy, healthy 100, club, expecting to get to age 100, healthy, vigorous, vital and and very, very happy.

28 years, 28 years of a fixed income means that over a relatively short period of time, eight, nine, ten years, you will already be pinched by inflation.

Even if inflation were at a relatively normal rate, 2 or 3% a year.

If, you're getting $2,000 a month by the end of ten years, it's worth somewhere in the order of $1,500 a month.

Goodness.

I'm not able to spend as much as I used to, because it doesn't go as far because it's fixed.

What I would recommend is that you consider certainly compare.

Do your homework.

Use a trusted, experienced annuity advisor.

Many financial advisors out there are very, very, adept at the use of various types of annuities, fixed annuities, single premium annuities, single premium deferred annuities, variable annuities with guaranteed lifetime income.

That's what I'm specifically referring to for you, because a variable annuity where they guaranteed lifetime income, or a fixed indexed annuity where they guaranteed lifetime income, gives you a guaranteed base income for as long as you live.

And that can go up as performanc It can respond to inflation.

So over the course of ten years, for example, if we started with 2000, as we did with our spear, it might very well end up at 27 or $2800.

Bottom line is, although there's no guarantees of that.

The analysis that we've done shows that most of the registered index linked annuities released RILAS as they're referred to, that provide lifetime income, can do it in a way that you're about 90% guaranteed of getting annual income increases much better than living on a fixed income.

So while the basic idea of the annuity is a good one, I think the type of annuity that your advisor is looking at is probably not the best for you.

Do a bit more research.

Make sure you be willing to reach out and get, second opinions as you have done with us and, choose what's best.

Best for you.

Makes.

Excellent.

Excellent, indeed.

Not spooky at all.

Where do we go next?

Well, our next email definitely has some spooky elements that I think the viewer is a little nervous about, but maybe we can give them some peace of mind.

This one says I enjoy the show, and I look forward to.

And each week.

I'm 67 years young and my wife is 62.

We are struggling with which accounts to draw from first.

The common wisdom is taxable then tax deferred, then Roth.

I was wondering how that may change if the bulk of our nest egg is in tax deferred.

We have 350,000 in taxable and cash, 30,000 in Roth and 4 million in tax deferred.

I'm concerned about RMDs and Irma.

Our yearly expenses are around 160,000, and our expected Social Security will be around 80,000 per year when we start collecting in three years.

We can also consider Roth conversion, but not sure there is much difference at this stage without triggering substantial income tax liability and Irma surcharges.

I appreciate any advice that you may have.

Thanks.

All right.

I think some spooky sounds are in, in in, appropriate at this point.

This this is a constant spookiness to it.

There's a lot of moving parts.

There's a lot of dollars involved.

And incorrectly deciding on the strategy could end up that this is not a treat.

It could be a trick on not necessarily these folks, but the family making inappropriate strategic decisions on such large amounts of money.

Could very well have, goodness significant impact when you have saved $10,000 and your account balance goes down 1%.

That's a thousand bucks.

I'm sorry.

That's 100 bucks.

And and it really is, not too disturbing, but when you say $4 million and it goes down 1%, you're looking at 40 or 50 GS, just kind of going up in thin air.

That's scary stuff.

So we've got to be much more precise, not just in terms of the investments, but more importantly in this particular case, for the questions that are being asked here, more more precise in terms of strategy, in terms of strategy.

So let's let's start with some real, fundamental, strategy, which is if this couple needs 160 a year, and they've already got 80 taking care of with Social Security and pensions.

Translation, they need 80,000 or so, from their investments from 4.3 $4.4 million.

They need 80,000 or so, to make their bills now.

80,000 off of 4 million to make it a nice, simple, mathematical, result.

2%.

2%.

So could we, reasonably create an investment portfolio that would generate 2%?

The answer is standing on our heads 100% guaranteed.

But does that really solve the problem for them strategically?

They are very young.

She in particular, 62, has 38 more years to graduate from the triple H club.

And as a result, inflation is something that they need to pay close attention to.

Inflation, certainly is something that over the course of a relatively short period of time, I'm picking ten years can have an impact, one that can absolutely be felt over 38 years.

If you're not really sure how to get a handle on on on the impact of inflation, if you think today that $5,000 a month is a very solid income, to retire on, if you go back 38 years, what would that be?

Somewhere in the 1980s, if you had half of that, even a little bit less, if you had 2000 a month, 2500 a month for retirement, everybody thought you were set for life.

And if you were lucky enough to be, then in the triple H club, right now, you're gone.

Things are really, really tight.

I can't spend what I used to be able to spend.

So inflation becomes key.

So making 2% is not the goal.

Making 5 or 6 or seven is a much more appropriate goal because we're taking money out.

We're spending it.

And we're allowing what I refer to as the golden goose, what they have saved to grow.

So year by year on average, year by year, we can increase our spending, keep pace with inflation.

It makes a great deal of sense.

The real key issue here, however, concern about how to best take this money out.

Yes.

Typically we refer to, the process or the system of providing a retirement income stream come first from your taxable account, then tax deferred, then your Roth hopefully never taking it out of the Roth because if that goes to the next generation or beyond, it's tax free for them.

It might end up being tax free for decades and decades and decades.

That's powerful compounding.

And it avoids any future tax increases that might crop up with the government spending.

What the government spends.

Having said that, this makes no sense for you to focus in that way.

You've got to look at your tax deferred account.

That's the biggest account.

It's basically 90% of what you saved.

So 90%, actually 95% or more of what you're going to be spending will come out of your tax deferred account, not your tax, taxable account.

So that's a little different strategically.

That's the only thing that makes sense strategically.

Does it make sense to continue making Roth contributions.

My apologies.

Roth conversions very important difference at 67, 33 years left in triple H 62, 38 years left in triple H, you have another kind of interim, deadline that you're faced with, which for you is 75.

That's the age at which you'll start RMDs.

I know some of you were saying, hey, it's 73 for younger folks who were born later, 75 becomes the appropriate RMD age.

So we'll pick on your wife for a moment.

If she has IRAs, she's got 13 years before she has to start her RMDs, even though you will be paying more in dollars in terms of taxes, if you do conversions, moving money from your taxable account tax deferred account IRAs into the Roth tax free account, certainly over the next 12 years, is likely to be a very, very good idea.

I am fully aware that increasing your income, taxable income, may also increase your Medicare premiums.

Fully aware of that, you must sit with a trusted, experienced financial advisor, one that understands or has partners in the Medicare or Social Security and tax piece of this.

Many financial advisors will not touch taxes in any way, shape or form.

They're not conversant on Medicare and Social Security issues.

They only invest money.

Those are not the advisors that will be useful to you.

You must work with an advisor that has that complete picture available to him or her, so that they can give you the counsel to show, hey, yes, your dollars, the dollars out of pocket will go up for the next ten, 12, 15 years, but you will move tremendous amounts of money into a tax free environment that will either assist you in the future dramatically, or assist those that you love.

Far into the future.

Very, very significantly indeed.

Outstanding question.

Lots of interesting parts.

A little spooky along the way, but I think we got to a point where with the right strategy, yeah, you're going to like it.

Pretty good stuff.

Speaking of good stuff.

Who do we serve next?

Our next email says my brother will soon receive his inheritance from our dad's estate.

He is older and not in good health, so I don't expect he'll ever be employed again.

He does not manage his own bills, and he does not in any way provide for himself at this point.

He'll be applying for Social Security soon, so he will have that very small income, and he will have our dad's farm equipment so he could do some small jobs.

An insurance guy advised me that he could put his inheritance into an immediate payable annuity.

My other brother, who understands finances much better than me, says no one likes annuities.

I've also seen enough stories in your column to beware of them.

I've been paying my brother's bills for two years.

Wondering what would be another way to park his money somewhere and make a monthly income available for him?

Thank you.

Well, God bless you.

Yeah.

There's some trick or treat aspects to this.

Indeed.

There's a lot of tricks along the way that you've got to navigate.

Yeah, it's feels a little bit like walking through the cemetery late at night.

And the full moon is now behind the cloud because you're getting advice.

It's scary.

Annuities are scary.

Annuities are inappropriate.

Annuities should not be considered.

That's scary talk, but it's not accurate talk.

There are types of annuities that are scary in my opinion.

This might be one of them.

This might be an advisor, that has perhaps minimal, experience on the annuities side.

Annuities are very complex.

They come in lots of flavors.

So the fact that an advisor may not be very familiar with all the different nuances is not shocking.

It's inappropriate.

It's not professional, but it's not shocking.

Your willingness to assist your brother is fantastic.

It speaks very, very well of you.

The challenges that he faces financially are significant.

Your question kind of the summary question was, is there some way to make a monthly income available to him without in an annuity?

And the answer is, of course there is.

Of course there is.

Annuities in general require a long term commitment.

The other options that you might look at, something as simple as CD's Laddered, CDs, Laddered bonds, etc.

are not, intended to provide you with that lifetime assurance.

They might very well End up doing that.

They might very well end up crashing and burning.

There's no way to know in advance.

I don't think.

No, I don't see your brother's, age.

I'm going to pick a number and say he's 60 over a 40 year time frame.

That he may be, with us to to graduate from triple H. We're in.

We have that challenge of, we can manage the money.

We can put best efforts.

And in spite of our best efforts, if we're not using something that's guaranteed, we may end up failing in in our in our wishes, in our efforts to assist our brother.

Are there, buffet ETFs that provide exchange traded funds that provide, income?

Yes.

Are there structured notes to providing.

Yes.

Are there bond portfolios that provide income?

Of course.

Can you mix that with CDs to provide some form of, of, of assured income?

The answer is yes.

However, you must again, evaluate all of those options and any combination of those options, with the pros and the cons of using some form of annuity.

If the advisor that you're currently working with is, is, is kind of, dedicated to the idea of annuity.

And if your brother, who is not a financial expert, is dedicated to not having an annuity, you might very well benefit from a second opinion meeting with a neutral, a third party, financial advisor who's not dedicated to any one answer, who has the, knowledge, the experience, and the capacity for any of those answers and has no, dog in the fight, so to speak.

No, interest in what direction you go is a fiduciary, which is a legal term meaning must, do what's in your brother's best interest.

So evaluating the pros and cons of all of those options and then coming to a conclusion is far better than having a conclusion presented to you.

Hey, you should do an annuity.

And then trying to figure out if it fits or not.

And that's again, that's a scary place.

And and you're kind of being put in the middle.

And it's almost like you can hear the wolves baying in the background of this is scary stuff.

And they they want me to make the decision.

Which way do we go?

Do we go into the barn with other chainsaws, or do we get into the car and drive away?

I'm thinking you should get in the car.

Megs, that was fantastic.

Hopefully I helped a little bit.

It's a real challenge for her.

Who do we serve next?

That's a very good spooky analogy to, our next question says I watch your show weekly, and I always walk away with more knowledge.

My son has a 30 year fixed mortgage as of March 2021.

He is 42 years of age and has a small home improvement business.

He's divorced with two children, 50% custody, and pays child support.

His children will be ten and eight soon.

Would it be wise for him to pay additional mortgage payments to reduce his mortgage, to take about ten years off the 30 year term?

Can you offer advice and guidance of how to do this without having a negative effect on the interest deductions for his personal annual taxes?

Thank you so much for your advice.

Well, sadly, if we're a trick or treat theme, we like to give treats.

Well, that's who we are.

We're we're not glass half full people.

We're a glass overflowing people.

That's who we are in this case.

Not so much of a treat.

The summary line, which is, can we, reduce, and additional payments, reduce his mortgage more quickly without having a negative effect on the deductions?

No, no, that's how that works.

If you have $100,000 and you're paying 5% interest, you have a $5,000 deduction, perhaps.

Standard deduction aside, because most folks don't deduct their their mortgage payments because they are better off taking the standard deduction.

But even assuming that that he's taking itemized deductions $5,000.

If you pay ahead, next year, you don't owe 100.

You might only owe 95% is 4500.

Oh, my gosh.

My deductions are going down.

I'm being I'm being, I'm being ravaged.

Ravaged by by the vampires that are that are exactly that scary.

The IRS.

Oh, vampire.

That's as good as I got.

And obviously, I should have prepared.

Bottom line is, you can't allow the tax werewolf to scare you into what's a very wise thing to do.

If you can add a few dollars per month and cut ten years off a mortgage, if he took it out at 30 years in 2021, and can get it down to 20 years, his, kids will be out of school.

But they may have, additional, efforts, or, loans that they need.

Support in helping to pay.

Having extra money would be lovely.

Being, he is 42.

He'll be 62.

His mortgage will be paid going into retirement.

These are all good things.

These are good things.

My hesitancy.

It's a very serious one.

Is nothing in here talks about his preparations for college.

Nothing in here.

I should say forget college education.

Getting his children started on a career.

Whether it be college, community college, community college, fantastic.

Work, study programs, internships, apprenticeships, all of those are on the table as far as I'm concerned.

Knee jerk college?

No, but if he is confident that he is well prepared to assist his kids in getting started down their, their professional road, then paying ahead on his mortgage.

Forget the tax deduction.

It's a really good idea.

Speaking of a really good idea.

It's a really good idea that I pay attention to the fact that we just have seconds left in this edition of More Than Money.

We covered a lot of ground.

I'm a little scared that I may have overrun my time.

Now I'm really scared.

So I will run fast through the cemetery and tell you.

If you have a question for us, please send it over, Gene at ask MTM dot com.

It allows us to be the most relevant financial show on television, and maybe you'll see your question on a future show.

Speaking of future shows, we hope you enjoyed a little bit of the fun we had tonight and the answers, and you'll want to return next week when we're right back here behind this podium for another edition of More Than Money.