You've got more than money.

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

Happy to be with you.

Happy to be with you for the next half an hour or so.

As we serve you in every way that we are able.

If you're a loyal viewer to more than money, you know exactly how this works.

I give you a little bit of an intro.

Kind of set the stage.

Kind of maybe an appetizer.

Ok, I’m already Thinking about Thanksgiving dinner.

My apologies.

Hey, food.

It's a good thing.

Bottom line is we get you all squared away, and then we answer questions that you have sent to us via email.

Gene at ask MTM dot com.

It is an absolute honor to be able to do exactly that.

And I mentioned Thanksgiving dinner for many of you as you're watching this couple of days from now, you'll be by this time in the evening out like a light at, after dinner nap sounding so wonderful.

Or some football, maybe.

But most importantly, most importantly, the term is Thanksgiving.

And hopefully you are, more than engaged in the whole process of giving thanks, in the whole process of feeling the gratitude for so much, so much good.

And yes, lots to be seen if you look around for reasons to be annoyed.

Reasons to be concerned.

Reasons to be unhappy.

And there's probably ten times that.

Many reasons to be thankful.

To be grateful.

And perhaps it starts with families, folks that you love.

Perhaps it starts with your ability to help other folks.

Perhaps it's somebody who has helped you.

And perhaps it is a gratitude that's far bigger than all of that.

But bottom line is that it's a well known, well documented, scientifically proven fact that folks that have gratitude in their lives, that feel thankful in their lives, they live longer, they are happier, and they are healthier.

Somehow that feeling of gratitude has all of that positive impact.

So if that's not your, go to maybe give it a try, maybe see where that takes you.

Maybe spend a few moments, maybe just by yourself and, maybe pad and pen in hand, say, what are some of the things I'm grateful for?

And maybe on that list will be more than money.

Who knows?

That would be fantastic.

We've had a chance to meet so very many of you as you've come through our offices, and that's, what a joy it has been.

And, one of the things I am most grateful for, this year and every year is you.

You have allowed us to become the most relevant financial show on television today, coast to coast and border to border on any station.

Because it's all about you.

You set the agenda.

We give you the benefit, perhaps, of our 780 years of experience.

You put those two things together, and it makes for apparently a rather remarkable show.

So, back from her, being away from us on assignment is our financial correspondent.

So let's start our show with our first question from Megan.

Megan.

Welcome back.

Hi.

It's good to be back.

I missed being here.

Our first email tonight says my wife and I are 73 and 74 and retired with about $1 million in IRAs.

We've been slowly converting from traditional IRAs to Roth IRAs and of course, paying our RMDs.

I'm the one who has been handling the investing over the years, mostly in ETFs, but my memory and skills are slowing down as I get older.

I'm wondering about checking out various robo services.

I'm sort of leaning against doing this, but what are your thoughts?

We've been watching for the money for about a year now and certainly have learned things from you.

So thanks.

Mike.

You're very kind.

And again, we are grateful for your your questions.

For a lot of folks.

The question is do robots make make good financial advisors?

Is it confusing when they didn't know that there were robot financial advisors now?

They're not called robots because that's not kind of, a marketing, word that works.

Well, that, gives people peace of mind.

It's kind of spooky, actually.

Robo advisors.

Oh, that sounds so much nicer.

So much nicer.

Lots of you are not aware that robo advisors exist.

They do indeed.

They came a cropper 4 or 5 years ago.

There was a great, who's, about, the the evolution of this advisory industry turning into automated and computer driven.

And we don't need people anymore.

That's that's silliness.

We are far more technologically advanced than that.

And yet that who's, has kind of faded away to just, kind of a buzz in the background because robo advisors do one thing very, very simply, they manage investments to a certain direction, and that's all that they do.

So in this gentleman's case, for example, he talked right away about doing Roth conversions.

And without going into detail.

Most of you are familiar with the term without going into detail the mechanics.

The question about whether he should be doing Roth conversions or not would certainly be one he would discuss with his financial advisor.

But a robo advisor has no opinion on that.

A robo advisor really isn't.

It's a robo manager.

It is.

Fill out a form, give them some idea of what you think you should be doing, and let the computer do its thing.

Whether you have a question about should I be doing Roth conversions or what would be the tax impact on me if I did a major Roth conversion, or what impact would it have on my Medicare premiums through Irma?

All of those questions perfectly appropriate for a financial advisory relationship.

They don't exist with a robo advisor.

So for someone who has been actively involved by 73, he's 27 years away from his happy, healthy 100 celebration, part of our triple H club.

He's got lots of experience.

He's needed to make decisions about taxes, about estate planning, about insurances, none of which would have been assisted by a robo advisor.

This is not for you in my opinion.

I think you would do far better to work with a human being and have those kind of conversations that only people can have back and forth.

Are there certain circumstances where a robo advisors make sense?

Yes.

If you're a relatively young, you have relatively small amount of money to invest, and you have little or no interest in how the investments are done yourself, a robo advisor may make sense for you.

In this particular case, I would say no thank you Megs, great start.

Very interesting.

Lots of folks out there gone, robo.

Never heard of that.

Is there something else?

Something new we might be able to add to our next question?

Well, our next email also comes from another person who's been handling their finances by themself.

They said, we enjoy watching your show.

A past show indicated I could transfer index funds into ETF alternatives without tax consequences.

As a 50 plus year old individual self-directed investor, I have acquired almost $1 million in index funds which are not ETFs.

My own personal year end review indicates that their annual returns are nearly identical with the supposed tax.

Savings of ETFs warrant this transfer, and how much would I actually save?

Annual adjusted income approximately $220,000.

Thanks for your advice.

Well, you're quite welcome.

Thank you for the question.

And, the title that we've created here, The Devil and the Taxes are in the details.

Details matter pool.

And basically everything in life details matter.

In this particular case, the detail that's missing or the detail that's been missed, misinterpreted.

Let's use that as, as a as our label is the fact that this gentleman believes that he heard someone myself say that he has $1 million in indexed mutual funds and that he can convert those into exchange traded funds with no tax consequences.

And that's not true.

That's not true at all.

So the premise here is that he could go from a, significant block of capital in mutual funds into something totally different exchange traded funds.

They sound so similar, but they're not that he could go from one to the other without paying taxes along the way.

And the answer is, that's not true.

If he went for mutual funds through real estate, he would pay taxes, mutual funds to putting money into a pension fund.

He would pay taxes.

So liquidating his mutual funds will cause capital gains.

Perhaps significant capital gains if he's been successful for many, many years, not likely in his best interest.

Not likely.

Now, there are situations where maybe it is in his best interest for a.

How can it be in his best interest to pay taxes?

He doesn't have to.

What if his mutual funds, with lots of gains, lots of profits, cause him anxiety?

Now that he has come, a bit further down the path, and he has, goodness, successful, in accumulating these dollars.

Now, perhaps his worry is what happens if there's a dip in the market.

What happens if the stock market slides?

What happens if there's a 50% loss?

Is there a way to be protected?

The answer is yes, but you must move from where you are to a different type of investment.

And that might be might be worth paying the tax.

In general, this is not a decision that can be made without knowing exactly how much tax there will be.

Exactly the tax bracket this gentleman finds himself in.

It is unwise to make that move, or even consider that move without knowing in advance exactly what that impact would be on your 1040 in a subsequent year.

As you file.

So the final question, which becomes moot, or as my friend Joey would say, it's a moot point, is whether or not being in ETFs with their tax advantages would, offset some of his concern about moving from mutual funds.

The ETFs have significant tax advantages, but that means nothing to us until we've determined that we should make the move at all.

So are there ways to protect investments?

Of course.

Are there ways to move from one investment type to another?

Of course.

Do they usually involve taxes?

Of course.

Be very, very careful.

Make sure you're working with a trusted, experienced financial advisor who also has both the ability, permission, and the skill to give you good tax advice along the way.

Outstanding.

Very, very interesting indeed.

Megan, where do we go next?

Well, moving from taxes, but sticking with mutual funds.

Our next question says we are downsizing in September.

The house we are considering is $330,000.

Our house is priced at about $430,000.

Our house has good bones, but needs minor repairs for someone who can do the repairs themselves.

It would be inexpensive, but if I have to pay someone to do the repairs, the cost of labor labor would make it expensive for us.

I have received a cash offer from a flipper for 369,369, $900,900.

I'm so sorry.

I am tempted to take it so I won't have to do the repairs.

But what do you think?

If we could sell the house quickly, it would pay for the next house.

But if the house doesn't sell quickly, we have $412,000 in a mutual fund that would cover the cost of the next house.

But the mutual fund is performing very well right now.

Wondering would it be a good idea to withdraw these funds when they are performing so profitably?

If we invest the funds from the sale of the house in the same mutual fund, would it continue to earn at a higher rate?

Thanks for your answers.

Well, don't thank me yet.

Some of the answers are going to be very straightforward.

Some of them are going to be a bit of a head scratcher.

So let's reserve our gratitude.

See, there's a theme for the show.

Before we have until we have wrapped this a bit, downsizing.

Very common.

Guys, 20 years ago, you went from a four bedroom, two and a half baths, center hall colonial to a three bedroom, one and a half bath rancher.

You would sell your home for half a million, and you'd buy the new home for a quarter of a million.

You'd have a lot of money in the bank.

Life is grand these days.

The types of houses that baby boomers are downsizing to are every bit as expensive as the home they are selling.

So it is not uncommon at all to downsize, and it cost you money out of pocket.

Now, that's not necessarily the case here.

They have identified a home 330,000.

Their home is currently, or at least in some way, shape or form estimated to be worth 430.

But they've received an offer from a flipper that is $60,000 less than what they believe their home is worth, because their home needs some repairs.

$60,000 would cover a lot of repairs.

So while I absolutely understand their concern about, being able to do the repairs themselves, that it would be expensive.

Well, if someone could do it on their own inexpensively, then even if it were very expensive, it might be 10 or 15 or $20,000.

Let's say $20,000 to bust the place up.

All of a sudden giving up 60,000 to save 20.

That makes no sense.

At the very least, you should have someone that you trust go through your home.

Show them, what needs to be done and get an estimate of the, the cost.

You may be pleasantly surprised to find that it's not that difficult.

It's not that expensive.

And in many ways, it could be to your advantage.

So let's put that aside for the moment.

If your home sells quickly, you have the opportunity to buy the new home basically with cash, because you have proceeds from your current home.

But your concern is what if it doesn't?

What if it doesn't?

Well, there are a couple things to keep in mind that you might find useful.

The first is, there are programs that are certain real estate brokers throughout the country that have programs where they will buy your home and allow you to stay there for a certain period of time, typically a month or 2 or 3, a relatively short period of time.

So you sell your home, you have your cash in hand, you buy your new home.

You have time to settle in on that new home, perhaps, a month, six weeks, in order to get everything in order to settle.

And then you move from your current home.

So that's one option that you might want to consider.

A second option that you might want to consider is the use of a reverse mortgage.

Reverse mortgages are very, often advertised particularly on financial shows.

But bottom line, for many of you, a reverse mortgage still remains a mystery.

And for some of you, a reverse mortgage is something that you should become educated about.

Whether you're downsizing and buying a new home that's available, a reverse mortgage is available to do that.

Or whether you're staying in your home and you want to pull some of the equity out without needing to make monthly mortgage payments.

That's one of the beauties of reverse mortgages.

Lots of details.

Devil's in the details.

We've already covered that.

But bottom line is that if you have, these at least two options, you might be able to avoid the third option.

The third option is your mutual funds.

If you've got mutual funds that have done well, that means that probably you've got some embedded capital gains.

And in order to get that money out and help you with the new home, you would have to pay tax on those gains.

And if we can avoid doing that, we would like to do so.

One way you might avoid doing that.

But again, it needs to be explored to see if it fits your situation is using that block of mutual funds and the equity in your home as collateral for a short term loan, a collateral, in this case, over $800,000 collateral.

In order to borrow the 330,000, you need to buy your new home and have a short term, hopefully less than six months by the time your your current home sells and the loan is paid off.

But a relatively short term, even if you're at current rates, 7 or 8% a year, if you're only going to have it for six months, you'll end up borrowing the money, paying 4% for six months for 4% actual, rate of return, or rate of interest.

And in this case, about $14,000 of cost to get from point A to point B, but you pay no tax.

So lots of different options.

Which one is best for you?

Your email certainly doesn't give us enough details to tell you that, but it does give us enough details to tell you that what you really need is to sit with someone you trust, who has experience across all of these types of strategies, and take.

It'll take less than two hours to compare all these options and pick the one that's best for you.

Good luck with that circle back.

Let us know how you make out and how that new home goes for you.

Megs, what's next?

Well, our next question.

The viewers want to know if they can help out their grandchildren with college.

This one says I've managed our investments and done pretty well, I think.

But now I've run into something that confuses me.

My wife inherited an IRA from her mom last year.

We haven't taken anything out, and everything I read says we should leave it in as long as possible.

Ten years?

I guess.

But we have three grandchildren, our daughters, children in college, and that's putting quite a burden on their family.

My wife is asking why we just don't take the money out over the next three years and pay down or off their college.

From my reading, I'm not even sure that's allowed, but I guess I finally need some help.

So thank you in advance.

You're very welcome in advance again.

Gratitude.

Is my wife thinking straight.

I’ve been on air, radio and television for well over 30 years now.

I, I added it up once.

I think I've done something in excess of 4000 shows.

I have probably fielded hundreds of questions where husbands and wives have a, difference of opinion, not a disagreement.

Difference of opinion.

And the question is, who's right?

Husband or wife?

And as a as a married man myself, the answer is quite obvious.

The wife is always right.

Get used to it, buddy.

Suck it up, buttercup.

Here's the issue.

Not only is that a good rule of thumb in general to be correct about 98% of the time in this particular case, your wife is very right.

She is very right from your reading.

You've been introduced and that that's that's the correct word.

You've been introduced to the idea of the ten year rule.

When your wife inherited the IRA from her mom, her, the clock began.

The timer started on a ten year run.

And the IRS says by the end of ten years that money's got to come out.

There have been some confusion.

There has has, as has been confusion from day one.

January 1st of 2020, when these this rule theory went into effect, that, whether can you wait until nine years and 364 days, must you take something out each year for ten years?

Is there a minimum, etc., etc.?

The IRS has caused so much confusion that to date, as we are, nearly celebrating Thanksgiving, Thanksgiving in 2024, four years have gone by.

They have said, don't take any money out if you don't have to, because we don't know what our rules really mean.

And you're not required to, even though it says you're supposed to.

You don't have to.

So lots of confusion.

There's certainly a ten year rule, but the ten year is the maximum.

You can go under some set of circumstances.

It is not a restriction.

It doesn't mean you can't come out earlier.

It can't.

That money can't come out more quickly.

Your wife is suggesting that the money come out more quickly, not ten years, but over three years.

And she's suggesting to do that in order to help her grandchildren, which would thereby also help your daughter.

Indeed, it would also connect your wife's mom to your wife's grandchildren that that connection, that benefit, that goodness.

Link is a beautiful thing.

And I am, suggesting to you that while there may be, financial reasons plus or minus, if we take it out a little longer, do we gain a little more?

Maybe we take it out.

Now, do we maybe lose some tax benefits?

Maybe.

And and and my my gut says so what?

This, the timing of this, the the loss of a mom, the need of her daughter and her and your grandchildren, three, having recently become a grandfather myself, the the love and joy is unbelievable.

The the connection that your wife sees between the generations, I think is clear as a bell.

And and I think your wife's instincts are so spot on that you need you need to get on board.

You need to get on board.

Now what?

The kind of the last line of reunion I was like, I she wants to take it out early, and I don't even know if that's allowed.

The answer is, of course it's allowed.

Yes, it's allowed.

If you have any concerns whatsoever, I'm here to put those concerns to rest because just like required minimum distributions coming out of IRAs, people go, I'm 73 and I have to take, I need my RMD and it's $21,000.

I wish I could take 24, but it's 21.

Whoa.

Required minimum distribution.

The IRS is saying on an inherited IRA you've got ten years, but there's there's no restriction.

There's no, prevention, nothing preventing you from taking it out earlier and and paying the tax earlier.

Yeah, we get that.

We understand that.

The IRS understands that's a no.

They have no objection whatsoever.

So doing this in this way and for many of you who have inherited IRAs throughout the years, particularly the last 2 or 3, this this how best to get the money from the inherited IRA to something valuable or worthwhile if if it's to benefit you, maybe you move it from they inherited IRA into, a 401 K contribution, a Roth IRA contribution.

There's lots of different things that you might do for yourself.

This is very different.

And and in my opinion, it's a humble opinion.

It's not humble at all, but it's my opinion.

I think your wife is so spot on.

I think her instincts are fantastic.

I think the generational connections are magnificent.

Timing couldn't be better.

Get on board.

Support her with a smile.

Not just with a smile.

Be joyous.

Be thankful that this opportunity came for you and your wife to make an impact on your family.

That will be felt for generations.

Absolutely felt for generations.

I know I've maybe gone, a bit too verbose, a bit too wordy, but I'm hopeful that some of my words have convinced you that not only is your wife thinking straight, she's brilliant, she's brilliant.

Folks.

Thank you so much for spending part of your evening with us half an hour ago.

So very quickly.

We cover as much ground as we can, but sometimes she goes to the soapbox.

If you would be willing to risk having your question be answered by a gentleman on the soapbox.

That's a would be, a blessing to us.

Send us your emails, Gene at ask mtm dot com.

We answer every single email back to you some up here on future shows.

We don't have time to do all them, of course, but every single one.

We have a tremendous team of advisors that are willing to take the time to help you.

There's no cost, there's no obligation.

It's just our opportunity to serve you and your opportunity to keep us the most relevant financial show on television.

Thank you again, and hopefully you'll return next week when we're back with another edition of More Than Money.

Good night.