And good evening.

You've got more than money.

You've got Gene Dickison, your host.

Megan Smale, your financial correspondent.

The entire team here at PBS's bringing you the next half an hour of more than money.

If you're a loyal viewer, you know exactly how this works.

I prattle on and on for a few moments, and then we turn to your questions.

Because you are the absolute stars of the show.

Without you, there is no more than money show with you.

We are the most relevant financial show on television today.

On any station, any network.

Anywhere.

Coast to coast and border to border.

Because we focus on you.

We focus on what you've decided is the most important question, the most important challenge, the most important issue facing you today?

What could be more relevant?

So for all those big wigs out there, they're going, hey, look at us.

We do, very fancy dancy.

Lectures on television.

We're not interested.

We're interested in making a difference in your life.

If you're joining us for the first time, there's a couple things you need to know.

Number one, if you wish to be part of the most relevant financial show on television today, all you have to do is send me your email.

Send me your questions by email.

Gene at ask mtm dot com.

We have an entire team of financial advisors that answers all the questions back to you.

Some of those questions will appear on future shows.

We simply don't have the time to answer all of them, but we'll answer as many as we can.

Live on air, and you'll still get all the good information that you need.

No matter what every question answered back to you.

So again, Gene at ask mtm dot com.

Second thing you should know this half an hour thing.

So sounds like a long time.

It's not goes very very quickly.

And so you don't want to wander off or get distracted or take that phone call.

You want to focus with us?

It's going to go fast.

And third, you might consider having a pad and pen with you because we often cover topics that while they may not start sounding right, they may not start out sounding like that's your question, but then they morph into something.

You go, wow, that applies to us, and we really do want to get that good Intel.

Fortunately, our PBS partners, keep all of our shows available to you on their website so you can always go back and check.

But if you want to see how this works in, real time, let's go to the most real person I know.

Megan, where do we start this evening?

Hi, Gene.

Our first question tonight, a viewer is wondering, can I can a traditional IRA be converted to a Roth IRA?

I am 68 years old and recently retired.

I think I should have done this sooner, but thank you for your guidance.

Well, it's a short question, but it's a very important question.

Is it possible?

Legal?

Legally possible.

Does the IRS approve of converting from a standard IRA to a Roth IRA?

And the answer is yes.

Is it the right idea for everyone?

The answer is absolutely not.

So the term it depends is very, very important here.

This, gentleman happens to be 68 years old.

Is it too late for him?

Absolutely not.

There are financial advisors who say if you're going to convert, you need to do that in your 50s and 60.

The answer is that that is absolutely not the case.

They are painting with a broad brush.

They're not looking at the nuances of IRA conversions.

If this gentleman is still working, that may cause him to hesitate because converting a block of money, let's use simple numbers.

He has $400,000 in his IRA.

He wants to start converting $20,000 a year.

And, moving that over to a Roth IRA.

He must add that $20,000 to his taxable income.

Is that a good idea?

Well, in some cases, it's a wonderful idea.

He may be in a fairly low tax bracket.

He may be in there.

I'll pick a number 15% bracket.

He may find out that he's got plenty of savings to decide, that he can convert the entire 20,000, paid the $3,000 kind of out of pocket.

And all of a sudden he goes from 400 to 380 in this, traditional IRA, and he has $20,000 in a Roth that eventually will be tax free.

Is this a good idea?

If he is comfortable paying the tax year by year by year, the answer is it's a very good idea.

Now, there are folks who will say why he's 68.

He has to start taking it 73.

So he's got about a five year window.

He's going to be able to convert part of his, standard IRA using our numbers, about 100 of the $400,000.

That's not a bad thing.

But why stop at 73?

The RMDs that are required at 73, without a doubt, no question about it, cannot be converted.

But if we've done this for five years, and if his balance is again, I'm using simple numbers is down to 300,000.

His R&D is going to be about roughly $12,000.

He can take that out.

Pay the tax.

Let's assume again 15% bracket.

He's going to end up with about roughly $10,000.

If he uses that to pay the tax on another Roth conversion, $10,000 will allow him to convert about $70,000 from his standard IRA into his Roth.

And all of a sudden, this will accelerate these conversions dramatically.

There will come a time, depending on the tax brackets, depending on his instincts, depending on his goals.

But there may very well come a time where this process of conversion will eliminate required minimum distributions from his life.

It will eliminate the government insisting he take money from an IRA that he didn't really want to take money from in the first place.

That's an exciting possibility for the right person, for the right people who have that as their goal and who have relatively low tax brackets.

There are some who would say not necessary to have a low tax bracket.

We think tax brackets right now are low, but they're going to go higher.

I'm not sure that's the case.

It kind of requires that you be psychic.

Psychic.

Not so much psychotic on occasion, but psychic, not so much.

And any plan, any strategy that kind of requires you being psychic.

Probably not the best plan.

Probably not the best strategy.

This process of moving from a standard IRA into the Roth over a number of years is not, does not require you be psychic.

It requires that you be systematic, that you be thoughtful.

You put a good plan in place, and you are patiently executing that plan.

I think you're going to do really, really well.

Megs, great start.

Where do we go next?

Well, our next question, is about family.

This one says my parents own a residence in Philadelphia and Ocean City, new Jersey.

The Philadelphia home is their primary residence.

They bought these houses in 1970 and 1968.

They are now 81 and 82 years old.

And of sound, body and mind.

We want to ensure the new Jersey property stays in our family.

We do not want the house to go to the state if long term care is needed.

I am one of three siblings and we all live in Philadelphia.

We are 50, 52 and 54 and we're all on board with a plan.

We have heard of your vocal trusts and living trusts, etc., but we don't know what is the best way to go about this to transfer ownership and minimize tax burdens and such.

Any advice from your 700 years of experience is welcomed, and thank you for your program.

Well, you're very kind.

Your words are very kind.

They're inaccurate.

780 years of experience.

Let's be clear.

Just kidding.

This is an interesting, not uncommon, challenge.

It requires the balancing of, a good solution against what many people are prayerful will be a perfect solution.

We want to protect the property.

We want to make sure, Medicaid doesn't, attached to it.

If something should go wrong with mom or dad.

We want to avoid taxes.

We want.

Yeah.

You want a lot.

The reality is, you're going to have to pick, you're gonna have to select where your priorities are.

What is your highest priority?

Fill that and then kind of accept what goes along with the rest.

For example, looking at the new Jersey property, probably a shore property, you want to keep it in the family.

That's, by the way, a very challenging, intention.

Keeping vacation homes that would be shared by three families.

Very challenging.

I hope you, work with it in a real estate attorney who's had great experience in putting together these kind of partnership agreements that allows us to minimize, minimize, not eliminate, minimize the kind of friction that might occur.

Hey, I wanted it that week.

That can be a real issue.

Hey, I don't think the roof needs to be replaced.

I think you're spending too much money.

That's all.

These are all possibilities.

That was.

Luck can be addressed before anything actually occurs.

And keep as much peace in the family as humanly possible.

Now, having said that, the simplest way to accomplish a lot of what you're trying to do is for your mom and dad to gift the three of you the new Jersey property by gifting the property, they have eliminated the their ownership.

It will not be taxed in their estate.

Assuming that the waiting period is met.

It will not be accessible by Medicaid.

You will have ownership of that property immediately.

So you'll have a bit more control.

You might end up actually benefiting your parents, in in doing it this way, because the three of you will now take over property taxes, insurance, maintenance, etcetera.

And maybe that removes a bit of a burden from your mom and dad.

And wouldn't that be wonderful?

Wouldn't that be wonderful?

The fact that you want to try to keep this in the family for generations is, is an important, component of the income tax issue.

Because other financial advisors, given this set of facts, would warn you if they give it to you, you're also getting their cost basis.

The home was purchased somewhere 50 years ago.

The cost base is very low.

If you receive it as a gift, you will end up having a very low cost basis.

And when you sell the property that the capital gains will be very large, potentially.

You don't intend to sell the property.

So if indeed you are successful at creating a partnership that works and functions well for everyone in the family.

This might end up staying in the family for generations.

You don't need to worry about selling it.

You don't need to worry about those income tax issues.

You will have solved the major problems and you will have accepted that if indeed the property ends up needing to be sold.

There may be an income tax issue that isn't the best, but at the very least, you will be converting whatever tax there is from ordinary income into capital gains.

I would suggest that in irrevocable trust, etc., those kinds of of legal entities, probably not in your best interest, certainly not a living trust or a revocable trust.

It doesn't solve any of the problems, at all.

And so, bottom line, work with, your mom and dad and their estate attorney work with a, a very skilled, experienced, real estate attorney.

Make sure that your partnership agreements are in good shape.

Make sure that the transfer and the gift is done appropriately.

I think, I think that answers that.

That collection of strategies answers most of what you're hoping to do.

A little bit of complexity there.

But goodness, complexity doesn't scare us.

Does it Megs?

Not at all.

Our next question.

Just wants a little bit more detail of things you've said previously on the show.

This one says you have mentioned several times that there are funds that insure against various levels of investment loss.

My internet searches have not found anything like that.

So can you give a name of 1 or 2?

You've also mentioned on several shows that there are new investment products that limit or eliminate downside market risk.

Can you please identify any of those products?

Thank you.

This is seemingly a pretty benign question.

We have discussed on this show, a number of times the types of investments that you might decide to make that would allow you to profit from the, activities of the stock market, but limit your losses.

If the stock market should go against you.

We have talked, in in general terms.

The reason I think this is an important question to answer on air.

The, Google search says I can't find what you're talking about.

Apparently this individual is, in essence, a do it yourself for and and relies on, Google searches, for, collecting data, collecting information.

That's perhaps one of his first mistakes.

Or her first mistakes.

Google searches can turn up all manner of things if you know what you're looking for.

Apparently, he does not.

Google searches can turn up all manner of information, some of which is so far outdated.

It's painful.

And many people, when they're trying to get educated, through Google searches, are, are quoting facts and figures.

IRS code regulations that are eight, ten, 12 years old and and no longer appropriate.

So it is a very, what, fearful path that you follow, by thinking that you're going to, grab an idea, you're going to go on Google, you're going to come back with some ideas and start plugging it in with a certain name, a certain fund, a certain company, etc.

that's a big issue and a big caution.

The second is is more of a professional caution for me.

If I said to you, oh, indeed.

The, the one that we would recommend is ABC, xyz fill in the blanks.

Particularly if I said anything like that on air.

Our shows are intended to be what's referred to in In My World as evergreen.

They're referred to.

They're intended to be, valuable for a very long period of time.

They're intended to be, information that does not expire does not does not spoil, for lack of a better term.

Sour cream.

How do you know sour cream spoil?

Well, anyway, bottom line is I might mention a name that at the time that we're recording this show.

Perfect.

And two weeks later we find out it's not perfect or there's something better.

And yet, that is for all eternity.

Gene’s recommendation.

And we're not going to do that.

It makes no sense.

It's not a good service to you.

Now, obviously, conversely, if you were sitting in the more than money world headquarters and or if you were conversing by phone or by zoom or by email was one of our, advisors, and you became a client, or if you were a client of a quality, experienced financial advisor almost anywhere.

Of course, they're going to give you specifics, of course, because they have the advantage of knowing your situation extremely well, knowing that whatever they're saying to you is appropriate, and they have the advantage of a long term relationship with you, so that if, for example, you were doing your quarterly reviews and a fund that was very good for you for a year or two has no longer is no longer appropriate.

Your financial advisor can, with a lot of confidence, say, I know it's been very good, but we're going to pull that out, put something new in all of that is lost.

All that is lost by simply saying, hey, you mentioned some stuff, can you give me some names?

It doesn't serve the, the, the questioner well at all.

And in many ways is a detrimental long term, detrimental to where they may end up wishing to be financially.

Now, having said all that, are there investments where you can be in the stock market have a significant upside potential and dramatic downside protection?

Yup.

Gene at ask mtm dot com for your specifics.

Megs.

Where to next?

Well, our next question.

We have a couple questions within it.

But it's about, grandparents helping their grandkids with college.

This one says I love your show.

My husband and I both retired and want to start funding a 529 plan for our grandson.

He is for, Pennsylvania has contributions deductible up to $36,000 from PA state taxes.

And is a parody state.

Wondering, does this mean we can contribute to my daughter's Utah 529 plan and claim the deduction on our Pennsylvania state taxes?

If so, here's the other questions.

Can we still use the standard deduction, or must we itemize where in the tax form do we insert our contribution?

Must the money come from a traditional IRA to be deductible and can we take the full $36,000 from one IRA, or must it be 18,000 from each spouse's IRA?

Thank you so much for your wonderful program and thanks.

In anticipation for your answers.

You're so very kind.

Your words are very, very kind.

We have a bit of a pickle here.

We have very appropriate questions that are, conflating two very different topics.

They're conflating 529 plans and IRAs.

These, can be connected, but in this particular case, I don't believe that's the intention of this individual asking the question.

This this young lady, they want to help out with their grandson, who is now four years old.

I am assuming adorable beyond all belief.

Perhaps the most perfect grandson ever.

I can say that with great confidence, because my granddaughter.

Now, as of this taping, nine months old, the most perfect granddaughter ever.

So I'm I'm making the broad assumption that we all feel exactly that same way.

So why not?

Why not help and why not be able to if you're able?

Gosh, why not be able to enjoy the helping while you're here?

What is this, waiting people?

I'll put it in my will.

How about enjoying it while you're here?

Good for you.

You're on the right track, and you're absolutely right.

If you are putting money into a 529 plan.

Pennsylvania, Pennsylvania allows you to deduct up to $18,000 per student per parent.

So could you do 36,000?

Yes.

Can you deducted on your Pennsylvania tax form?

The answer is yes.

If you do, do it yourself, my, TurboTax, that kind of thing.

You simply fill in that you're doing it.

It will take you to the right form.

Easy peasy, lemon squeezy.

There are no deductions, however, on your federal form.

So if you're contributing, 18,000 from each of you, $36,000 to the 529 plan.

Yes, it can go to a Utah plan.

An out of state plan, still deductible.

No worries whatsoever.

You'll get, what a something in excess of a thousand bucks back, on your taxes.

That's fantastic.

Sadly, the way college is going, that's, what, about one semester of books?

But.

But still thousand bucks.

That's real money for simply being aware that you can deduct this on your Pennsylvania return.

Then when we go off track just a bit, can we still use the standard deduction or must we itemize?

Standard deduction is predominantly the focus of your federal return, not your state return.

So these two things are not connected basically in any way, shape or form.

Don't worry about itemization.

There's a separate form.

You'll do fine on your Pennsylvania return.

And then we go way off track in terms of taking the money from the IRAs.

So if indeed this the funding has to come from an IRA, that's fine.

It will be taxable.

It can come from one IRA or each of your IRAs.

That's not terribly important.

As long as you're under the $36,000 limit for the tax deductibility of your contributions to the 529.

The Pennsylvania doesn't really care where the money came from.

You will care because all that's going to be taxed to the federal government and federal government tax brackets are much higher.

Much higher than Pennsylvania.

So the real consideration that you've got to examine here is whether you're comfortable paying that income tax, federal income tax, in exchange for a relatively small tax deduction on your Pennsylvania return.

Make sure you're working with a trusted, experienced tax preparer.

Could be a CPA, could be an E. The bottom line is that you've got to make sure you're doing this carefully and do that consultation in advance.

Don't just start taking money out of accounts and putting money in the accounts, and then ask your advisor to fix it and ask for advice in advance.

Megs, do we have one more back there that we can, we can address before we go.

Sounds good.

Our last question says I watch your show every week, and I figured if anyone could help me, it would be you.

I have $3,500 left in a foreign K, and only take $100 a month to make it last.

I don't expect miracles, but where can I put my remaining money to stretch it a little further?

Right now it is in a cash account.

Thank you.

Oh, goodness.

Sometimes it's important to have questions asked that the answer is.

There is no good answer.

Sometimes it's important that, when we hold ourselves out to be financial experts.

That we also are honest enough, transparent enough to acknowledge that we're not miracle workers.

And we're not magicians.

There are realities that we all must deal with.

This, young person is asking about $3,500 where they are taking out only $100 a month.

100 a month is 1200 a year off of 3500.

It's about a 30% plus, withdrawal rate.

What rate of return might you be able to achieve if you go from currently a cash account into a money market, maybe 3% into a higher paying CD, maybe 4%?

It simply doesn't make a dent in the reality of a $100 a month, $1,200 a year off, a $3,500.

The answer is no.

You should leave your money right where it is.

The urge or the instinct to try, to find an investment that will make you 30 or 40%, sadly, might also cause you to lose all of the money that you currently have.

It looks like you're good for about three years.

If you lost, in a month, most, if not all of your investment, now you're good for zero years.

Stay on track.

Don't expect miracles.

Don't expect magic.

Deal with the reality and and maybe look elsewhere.

Bless us.

Bless us.

Indeed.

It is the season of God blesses everyone.

There's no question about that.

My favorite show of all time, Christmas Carol.

And I hope that this has become one of your favorite shows of all time that you watch every single week, and you pick up good information.

We want to serve you.

We want to provide you with specific, useful, practical, actionable information that you can use to make your financial life better.

Send us your questions, your concerns, your emails.

Gene at Ask mtm dot com.

We're happy to do exactly that.

If you've learned a little something, and if you haven't been dreadfully bored, maybe even slightly entertained, maybe you will return next week as we return to this program for another edition of More Than Money.