Welcome to More than money.

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

Personally, it sounds very hmhmm.

One on one is in many ways, we are.

So if you're a loyal viewer, more than money.

Go on, I get that.

I see how this unfolds.

If you're joining us for the very first time, I think you need to be prepared.

Just prepped up just a bit for what you're about to experience over the next half an hour or so on PBS 39 and beyond.

Bottom line is we are more than money.

More than money means that we are very focused on you.

We are very focused on answering questions that are at the top of your mind.

We're very focused on addressing those issues that are very, very important to you.

So if you find this to be just a little different, just a bit unusual.

Excellent.

That is exactly how we've intended it to be.

We have over six seasons, developed a I model, a financial advisory model for our audience that is unlike any across the country.

We are the most relevant financial show on any television station, on any network, anywhere within the United States.

Because of you, I would love to tell you it's because of me.

My ego would be immensely stroked to hear that, but my 780 years of experience are simply the precursor to the ability to answer your questions as best I can.

So, if you are, intrigued by that idea and wish to pose a question to, are more than money, team very, very easily done gene at ask mtm dot com G-E-N-E at ask mtm dot com.

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Now having said that, if you're very, very lucky, of all the questions that we get and we get tons of questions, thank you.

Some of those, a handful will appear on future shows.

And maybe, maybe your question will be one of those.

Now that would be fun.

That would be exciting.

That would be, invigorating, perhaps even to have your question aired on shows seen coast to coast and border to border.

However you want excitement, you want intrigue.

You want something to tell your kids and grandkids about in your dotage.

We are asking you then join us.

Join us on March 6th.

I realize it seems like a long way off.

I guarantee you it's going to go in a blink and if you don't circle it now, you're likely to have a conflict.

And you're going to be sorry about that, because we're going to give you the opportunity to join us for a behind the scenes look at how more than money is put together to live recordings as we, produce shows just like this in front of studio audience, our live studio audience, you'll be, goodness.

Well attended.

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And the opportunity perhaps to ask questions one on one.

And we haven't figured this out yet.

Maybe somebody has figured this out yet.

The opportunity, perhaps, to have your question asked by yourself live and in person, at the microphone stand for more than money.

That's going to be pretty intriguing.

So a lot of excitement, lots of fun.

Details are easily available.

PBS 39.org/events.

Get all the details.

Circle March 6th.

We would love to have you here.

I would personally love to have you here and it will be great, great fun.

And again, we talked about peeking behind the curtain.

You are going full scale in to the belly of the, the Great Oz, and it's going to be great fun.

So I encourage you, if you are, remotely available and even if you're not remotely available, you'll see if you're seeing our show from far afield.

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Fly on in and enjoy a great event.

Now, let's give you a hint of what's going to happen at that great event.

And let's go right to our first question.

And we start with we love our niece more than the IRS gentleman writes.

My wife and I are both retired.

In addition to Social Security, we have guaranteed pensions.

We also have deferred compensation, and we are required to take our RMDs.

Translation that means that they are at least 70.5, likely at least 73.

There are RMDs currently total $20,000 a year.

We'd like to have this money sent directly to our niece.

We want to avoid paying the taxes on this income if possible.

When we contacted the administrators of these funds, we were told that this was not possible through a 457 plan, but it would be possible if we converted those funds to IRAs.

We do have CDs that generate taxable income.

Our stock funds generate unexpected income.

It would therefore help to avoid paying taxes on these RMDs.

Is there any way to do this without generating income taxes?

Thank you for answering my question.

Well, you're very welcome.

You're very kind.

Let's think about this out loud.

They have money in IRAs.

If their RMDs are roughly $20,000, that means they roughly have $500,000 in their IRAs, 4% as the distribution rate, roughly.

Now their question is this 20,000 comes out, they pay tax.

Is there a way to get that money directly to their niece without paying tax?

And most of you in the audience are already doing this because most of you in our audience, very smart, very experienced, been around the block a bit and understand about R&D required minimum distributions and doesn't sound right.

And I would agree with you.

The key to that question was directly to the niece.

Dear custodian, send my RMD to, Susan.

And and I don't want to pay taxes.

Sorry, the IRS is going to tax you anyway.

Now, is there any other, combination of strategies that might end up in saving them the taxes on this 20,000?

Well, there's an obvious answer.

For many of you, who are, again, of the age where RMDs are, are required for you, or who have watched our show for more than just a handful of, of, of, of shows, because we've talked about one technique to reduce taxes, quite often a q, c d qualified charitable distribution, qualified charitable distributions says, I want to send this $20,000, some or all of it directly to the charities of my choice, whether that be my church or synagogue, whether that be, Folds of Honor or the Red cross, whether that be any, approved, any, registered charity that, and there's, there's tens of thousands of them.

So making the assumption that you're choosing all charities that that are A-okay, the $20,000 does not come to you.

It goes directly to those charities.

Q CDs, checks drawn by your custodian at your direction directly to these charities.

Fantastic.

And you can take the standard deduction now almost $30,000 for a married couple and this goes on top.

So you pay no tax.

It is lovely.

Does it apply to this situation.

Well, without any more information, the answer would seem to be no, but seem to be now, they they must pay the tax in their case.

Pick a number.

20% bracket, 4000 bucks.

The niece gets 16.

The only, not option, but the only scenario, that I can come up with where this might go to benefit the niece.

Not directly to the next, but to benefit the niece is if she's being cared for by a charitable organization.

So if in this particular scenario and we don't know this, but if we're if we're coming up with some, possibility, where this might work with some scenario, it would be that the niece is indigent.

The niece has no, ability to provide for herself, and she is either sponsored by an or a charitable organization, received support from a charitable organization, or is being cared for by a charitable organization.

Then the $20,000 could go directly to the charitable organization for the benefit of the niece.

She would receive that benefit indirectly and you would pay no tax.

In all honesty, I pray that's not the case.

I pray your niece is healthy, happy, successful, all, doing fantastically.

And, this, this tax issue is just minor.

Just a little something, just a little blip.

That's my prayer.

That's my prayer.

My prayer next would be where you have a an interesting second question.

Where do we where do we go now?

Eliminating RMDs?

We just talked about RMDs and, lots of folks, very annoyed.

They're just annoyed.

They saved diligently their entire lives.

In the couple, we just, spoke about $500,000 saved.

They want to keep that as their ace in the hole.

They want to keep that as their.

I never want to run out of money.

They want to keep that as I have peace of mind.

I have financial confidence.

I have financial independence.

And the IRS says we don't care about that.

We insist we require that you take money out year by year.

And by the way, you don't have to.

We're going to tax you anyway whether you do or don't.

And if you don't, it's going to be worse because it's still going to be in there.

It's going to get taxed again and again and it's dreadful.

So yes, you're going to take it out.

Is there a way to eliminate RMDs without giving the money away?

We talked about Q CDs giving the money to charities, and the answer is there is a strategy that, over time, will allow you to evolve away from a $500,000 IRA that creates RMDs every year and is going to get worse and worse and worse to a Roth IRA where there are no R&D.

So the complete conversion of your current 500,000 or IRA into a Roth IRA with no more R&D, how might that look?

We'll use $20,000 as their example.

They have a 500,000.

Our IRA, they have a 20,000 RMD.

They have to pay tax, and they have $16,000 left in their hand.

And assuming a slightly different facts that they are not giving it to their knees, they're trying to figure out how to get rid of these RMDs.

They could look at that $16,000 as an opportunity, an opportunity to pay the tax on a conversion from their current IRA into a Roth IRA.

Translation.

How much could they pull out of their IRA?

Current IRA put into a Roth IRA and then use the 16,000 to pay the tax?

It will be roughly 80,000 bucks, $80,000 additional income taxable to go from the standard into the Roth and a 20% tax bracket.

They have 16,000 in hand that they really don't want anyway.

But they have now taken their 500,000, our IRA, from 500 to 400.

Interesting.

First of all, they took the 20,000 out.

They paid the tax.

They weren't happy, but they did it.

Secondly, they took the net amount from, their distribution and paid the tax on a conversion of $80,000.

So now we've gone from 500 to 400.

Now, that's does not eliminate RMDs.

We have 80,000 in a Roth, no RMDs, but we still have 400,000 in their IRAs.

Well, roughly 4%, $16,000.

You see how they're armed?

He's already down dramatically.

Not bad.

20% tax on 16,000.

Roughly 3000.

They've got 13,000 left.

That's going to allow them to convert roughly to an excuse me, 60,000 by $65,000.

So again, they had 400.

They took 16 out.

They now take out another 64.

You'll see why I did that adds up to 80,000.

Now they're down to 320.

And and their Roth IRA went from 80 to 145.

Pretty interesting stuff.

Now hopefully, hopefully.

Not to get too far into the weeds, but some of the fun stuff when we move the money over to the Roth IRA, since we don't want to take RMDs and we don't expect to take RMDs or any distributions at all, we can now invest maybe a longer time frame in mind.

So instead of I got a produce income, so I have to take it out anyway, we can put it into a Roth that maybe we don't expect to ever touch.

Or if we do touch it, we're going to need it in 10 or 15 years.

We might be able to put that into a slightly more aggressive investment.

So instead of planning on making 3 or 4%, we might make 6 or 7.

No guarantees, but 6 or 7, maybe 8%.

So if we put 80,000 in and we made 8%, we made over 6000 bucks first year.

So yes, we've paid syntax.

We had to anyway and we've moved some money over it.

That's our elective.

And now we're in a position where we've gone from $500,000 in a never ending R&D that after two years alone, we have built our, a Roth IRA up to over $150,000.

We have reduced our, standard IRA, by $180,000.

So we're down to 320.

You see how this will accumulate?

You see how this will snowball?

It snowballs in two different directions.

Snowballs downward in reducing the account balance in your IRA.

So reduces your RMDs, reduces your tax.

Fantastic.

And it snowballs upwards, if that makes any sense whatsoever.

In the Roth IRA, because more and more capital goes over there, more and more capital is available to earn more and more, returns.

And so maybe six, seven, eight years, I haven't done my current math on on that exact number, but six, seven, eight years, the IRA balance is down, down to zero or near zero, and the Roth IRA is back up to maybe where we started.

500,000 and RMDs are gone.

A little bit of work, a little bit of patience, some calculation, some willingness to, see the big picture over time can bring you to a point early in your life.

If you started this at, say, 73, maybe by age 80, no more RMDs.

And if you're part of our triple H club, happy, healthy, 100.

If you're 80 years old and no longer have RMDs, you have 20 years to look forward to.

Two things that are really, really nice.

They aren't going away.

The IRS no longer having the power over you to insist that you spend your money.

And number two, if you do want to spend your money from the Roth, it's tax free.

Pretty powerful stuff.

And that's a strategy.

We're, we're big on strategy around our way, around our our our office.

And, through this, perhaps we should look at our next question and see what strategies we can apply to that.

A most excellent sister and a most urgent concern.

Let's see what, what challenges we have.

I have been recommended to more than money by my sister is a big fan of, Mr. Dickerson.

Mr. Dickerson, please.

Please, Gene.

Show on PBS 39.

Oh, fantastic.

Looking for help to determine if if I can comfortably retire and if I can.

How do I minimize my tax burden?

And if I can, can I figure out ways to get health benefits between when I retire and when I turn 65 and go on Medicare, Medicaid, Medicare?

I had it right the first time.

In a nutshell, I have no idea what I'm doing.

Actually, it sounds to me like he's had a pretty good handle on this, but let's go on.

I'm 59.

I have 1,055,000 in my retirement account through my employer.

I have worked there just shy of 40 years.

That's fantastic.

Do you realize that our Gen Zs.

In 40 years, they are likely to have a resume that has 11 different jobs on it.

And you've been there for 40 years?

Fantastic.

Married my husband, who is 72, retired ten years ago.

Interesting.

And he draws a modest Social Security benefit.

I put the maximum allowable contribution into my retirement plan.

Oh, goodness.

That's fantastic.

And my employer matches.

Are you sitting down 11%?

Oh my goodness.

So let's pick a number and say that her maximum is 11%.

She instantly doubles her money because her employer matches 11% tax.

Deferred guaranteed 100% return instantly.

There's no better invest that warehouse if I claimed on air that I had an investment where you give me 100 grand, I make it 200 grand.

Instantly guaranteed.

You would say, call the police.

The guy is crazy.

Lying.

It's it's.

This is all.

This is true.

All this is a true fair to.

And she's taking advantage of it beautifully.

Good for her.

I expect to receive $26,500 Social Security if I were to retire early at 62.

We have expenses monthly of about $5,000.

But I'd like to cover more than that, maybe 6000 a month, so that we have a little bit of flex ability.

Good for you.

We own our own home.

I'll put a pin in that and circle back because that may end up being very important.

Can you help me decide when it is best to retire?

Well, first of all, it's a fantastic story.

Good for you.

You have done so many wonderful things, so many smart things.

You and your husband are in a very solid financial situation now.

He has a modest, Social Security benefit.

Retired ten years ago.

He was.

He retired early.

So let's assume that his retirement benefits are, Social Security benefits, roughly equal to what she will get.

And she says 20, 65.

That's that's that's too many uneven numbers for me to calculate live on air in front of a camera.

So we're going to call it 24 for her, 24 for him.

You'll see why here in a moment.

You already see why it's 2000 a month each as 4000 a month, that they will get from Social Security should she retire early.

I'm not saying she should, but if she chose to, her $6,000 target will have 4000 of it covered by their respective Social Security benefits.

Translation.

We will need 2000 and month 24,000 a year, from her savings, in order to supplement her Social Security and have her successfully reach her $6,000 a month goal.

So how in the world is that even humanly possible?

Let's circle back to she has $1,055,000 in her retirement plan and three years to go before a retirement.

So just for the sake of fun, if we said she puts nothing else in and the, the retirement account investments go up modestly, goes up to, from 1,000,055, goes up to 1,200,000.

That would be, 150 grand over three years.

Four and a half, 5% return.

I'm using, demonstration numbers.

None of this is meant to be a guarantee of any kind, but you get the idea.

A million to we need 24,000 a year to meet her goal on a million to.

That would be roughly.

It's not roughly.

I did it on purpose.

2%.

2%.

Is it, reasonable to expect that she could they could generate.

We don't have a clue if he has any savings.

We don't care.

Come back to the house here in a moment.

I promised I will indeed.

We don't know if there's any other savings.

Let's assume there isn't 1 million to 2%, is it?

Is it reasonable to expect that that an investor could achieve a 2% return on, on his or her investments?

Yeah.

Guaranteed.

There are currently guaranteed investments that provide guaranteed return 3%.

4%.

There are some if you're willing to commit your money for five years, that a guarantee over 5%.

So if she were so inclined in her first five years of retirement, she could take her entire retirement account.

A million to put it in a five year commitment spend 2% of it 24,000 a year, so that she has all the income that she wishes and have the account continue to grow at 3% per year for five years.

So it would grow at another almost $40,000, 35,000 a year.

So over five years, it's going to pick up another 150,000 plus.

So at the end of five years, her first five years of retirement, she has had all the income she needs.

She's now into, Medicare.

She's life is fantastic.

And and her million two did not disappear.

It did not erode.

It did not decline.

Her million, too, is now a million.

350 oh my goodness.

Lovely.

She has done so many wonderful things.

I promised I would circle back to the home.

I have no idea what it's worth.

She does not say I'm going to pick a number and say it's worth $300,000 in retirement.

Equity in a home becomes that ace in the hole, that ace in your vest, that you you just tuck away there knowing that we can always tap into that if necessary.

In my opinion, based on everything that I know from this.

The details that this young lady has shared, she'll never need to tap into it.

But should she?

Should she need to.

There is a technique called a strategy reverse mortgage that would allow her to access a big chunk of that equity, maybe 100, 150,000 of that, and never have to repay it during her lifetime.

Very, very interesting.

So her first line of defense is she's got Social Security benefits for the two of them that provide two thirds of everything that she needs.

Her second line of defense is that she has been saving diligently for 40 years.

And then a beautiful job.

She has become a millionaire.

She has a millionaire mindset.

You're harking back.

Bottom line is she has all the assets she needs to generate all the income that she wishes with never running out of money for the rest of her life.

But if indeed there's a, a hiccup, she has her home that she can fall back on as her ace in the hole.

This is beautiful.

If she wants more details, there's lots of, tools that we use in our more than money world headquarters, software projections, etc., etc.

to make her see it in black and white.

But in terms of off the top of my head, this is beautiful.

Speaking of beautiful, not me in particular, but our entire team will be beautifully at your service on March 6th, as we invite you to attend live taping of two More Than Money shows right here in our, on Sesame Street.

As a matter of fact, and our PBS 39 studios, you will be treated to, lovely, tasty.

hor d’oerves, lovely, tasty wine.

But most importantly, the chance to mix and mingle with 780 years of experience.

Maybe, maybe even have your question asked and answered on a subsequent show.

So circle March 6th.

Please, put that on your calendar and, for details.

PBS 39.org/events, folks, thanks for spending part of your evening with us.

We'll see you next week when we return with another edition of More Than Money.