Hey.

Good evening.

You've got more than money.

You've got Gene Dickerson, your host.

You've got Megan Smale in the wings waiting to give you the best questions ever.

Certainly the, penultimate questions for 2025 as we're looking to a new year.

Hopefully you're excited about that as well.

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

You have made us the most relevant financial show on television, no matter where.

No matter when.

24 over seven 365.

Because of you, you ask the most interesting questions.

You send those to me.

Jean at ask MTM dot coms.

The email address Jean at ask mtm.com.

You figured it out?

Ask more than me.

You got it.

Okay Jean and ask him Time.com.

You send us his questions.

We answer as many as we can on air, and that makes us the most relevant because we're absolutely focusing on what's most important to you.

And I've got to be honest, having been, on air now, gosh, I've lost track.

I've, I've done approximately 3000 TV shows that that's a lot.

It is far more.

You are far more interesting than any show I would just come up with out of thin air.

So hopefully you're appreciating that as well.

And you appreciate all of the other members of the audience that are making sure that their information is interesting.

Indeed.

So, hopefully you have been with this in the past.

If you're joining us for the first time, half an hour goes very, very quickly.

Patton and Pen.

Very good idea.

Jot down a couple ideas, couple notes, so that when you send us your email, you've got the background that you need to make it, specific and, inappropriate for you.

Certainly.

Then, certainly, if at any point in time you find yourself being even mildly entertained, you have my most sincerest apologies.

Often we look behind the curtain here, we let you peek behind the curtain here.

I'm going to ask to peek behind your curtain.

Gosh, that sounded rude.

It truly isn't.

I mean that in the most, benevolent of ways, coming up on a new year are you the kind of person that, quite adamantly says, it's just, just another day on the calendar.

It really doesn't mean anything starting a new year.

Or are you the kind of person that says, wow.

Kind of feels like a fresh start every year.

Kind of feels like we've got another bite at the apple, another opportunity to be a bit better, have a bit more, enjoyment, perhaps accomplish a few more things that are important to us, maybe mend some fences along the way.

Are you that kind of person?

I confess I'm I'm the latter.

I'm.

I'm the person.

I'm not glass half full kind of guy.

Glass overflowing kind of guy.

So when I see a fresh calendar start.

Oh, it's exciting.

Absolutely exciting.

I hope it is for you as well.

And I hope you pick up a couple of ideas in our show this evening that makes you start your new year with, with some real, real smiles, real positivity.

So where do we start?

Where do we positively start?

This evening?

Hi, Gene.

Happy New Year, everybody.

Our first question tonight says I am a school teacher with about two years until retirement.

I'm in the program.

When I retire, my pension is broken into two parts.

What will stay with me?

Oh, sorry.

What will stay with the state and my contributions and interest?

I have basically two choices.

One, I can keep all of my contributions and interest with the state and have a more secure, higher monthly check from the state or to transfer out my contributions and interest to another product of some sort, and have a smaller check from the state, and possibly another check from a private company.

My wife and I need to maximize our monthly check because of remaining debts and expenses.

I have heard you talk about other options and products and no reflection on you, but my fear is there are many advisors who are like sharks looking for those contributions and interest because they get a big commission.

Teachers are constantly being emailed and marketed to by advisors who want that chunk of a teacher's retirement in their assets under management, or the commissions from products they sell.

My question is, why should I take the risk and transfer out my contributions and interest to a private company when I can keep it with the security of the state of Pennsylvania, which will be guaranteed unless the state of PA collapses, private companies are not secured and are open to future risk.

With the security and future of the company.

Corporations and CEOs have been known to take their money and run.

So what are your thoughts, Jeanne?

Thank you and God bless.

Well, thank you for your question.

God bless you.

Of course.

This is either much easier than the length of the question appears, and certainly the length of the headline appears, or much more complicated.

And and let's go with the easy part first.

A wise man once said that, easiest answer is usually the correct one.

Gentleman talks about his retirement, through Peter's Pennsylvania State Employee Retirement System.

Yes.

For those of you in other states, I'm sure your teachers pensions, will work differently.

So indulge me for a moment as we, zone in on what happens in the state of Pennsylvania.

Indeed, the vast majority of the pension is provided by the state.

A portion of the pension might be provided by contributions from the employee.

This individual, this gentleman.

So, yes, the state gives every employee upon retirement the option they can, take the contribution.

Generally speaking, for long term teachers, the pension benefit amount is going to be between 3 and $4000, the amount that they have put in themselves, if it's typical, relatively typical, about 150.

So let's use those as, as example numbers.

If you allow the state to keep the 150, that's 3 to 4000 might go to 35 to 4500.

So, indeed, higher monthly income, guaranteed by the state of Pennsylvania, yada, yada, yada.

The gentleman says very clearly, my wife and I need to maximize our monthly check because of remaining debts and expenses.

So leave the money there.

That's the simplest thing you can do.

And yes, it's backed by the state of Pennsylvania.

Lots of guarantees.

Is it the wisest thing to do if indeed your priority is, as you've stated it, maximize our monthly income?

It's the wisest thing to do.

So this question, was with a lot of its observations about the Sharkey's salesman, I agree.

Gosh, some companies go under, understandable.

There are answers to those.

That might be important.

And here's why.

If we leave everything in and take the higher monthly pension and someone's plan for his life is cut short after one monthly payment, even though he has the option, he may decide to spread it out for his life and his wife's.

If they're going to maximize the income, it's going to be on his life.

Only one payment, and the bus decides to take him out.

There's nothing.

There's nothing left.

If he decides it's for him and his wife and sets it up as a joint and survivor.

Fantastic.

Hopefully fantastic.

And the bus takes out both of them.

If they have any interest in leaving money to the family, any interest in legacy, any interest that's not already covered outside this decision, it's gone.

It's absolutely gone.

And while he is absolutely right, the annuity, industry has had a very, uneven reputation for many, many years because, yes, indeed, the commissions on annuities are extremely high.

And sadly, there are a fair number of annuity salesmen who have fallen prey to the greed factor of if I can convince this individual to give me $150,000 into a private annuity outside of the, the state's pension fund, the commission might be eight, ten, 12 or higher, but even at 10%, that's $15,000 of commissions for a transaction that will take this, annuity salesman.

Maybe.

Maybe not this much, but maybe two hours.

And and to be blunt, I don't know any annuity salesmen worth $15,000 for two hours.

Just that simple.

Are there companies that are incredibly financially secure?

Some would say more secure than the state of Pennsylvania?

The answer?

Sure.

So yes, while there are companies that you would be at risk, there are other companies where the risk is equivalently low or nonexistent as far as you're concerned.

And there are some, what provisions in many states, certainly in the state of Pennsylvania, that if an annuity company goes under, if your losses are in the state of Pennsylvania, I believe it's 300,000 or less.

The state will guarantee the principal.

It will not necessarily guarantee that you have, the interest rate or the interest that you might receive.

But, all of that is very interesting for folks who don't have the most pressing objective of maximizing their monthly income.

If you have some flexibility, you, you have that, you have those questions that you need to answer.

Legacy questions and competence questions, diversification question.

Liquidity questions.

Once you lock in that, monthly, pension amount where the state it's it's irretrievable.

Irrevocable.

If you take your piece out and decide six months are not cash, I wish I had that extra monthly payment.

You can always go to a private annuity and get that, additional payment.

So simple answer.

Leave it with the state of Pennsylvania.

And don't expose yourself to any of your concerns.

More complicated answer for lots of you out there is what best fits you, and that's what you should decide to do.

Thanks.

Oh, that was, that was a trip.

Trip and a half.

Where to next?

You did?

Well, our next question comes from a generational fan, and you'll see what I mean in a second.

This one says when my dad passed away, he left me his IRA of over $100,000.

I was pretty upset at first because I thought it should go to my mom.

When I told her I didn't want to take the IRA, she said that was dad's plan.

She says she has plenty of other investments, and dad wanted to help me get my retirement savings up to speed.

Apparently, dad's advisor told him, I can put this IRA into my 401 K. I'm 52, have a good job, but I've been a single mom for almost 20 years, and helping my kids through college has put me behind on my savings.

They are now graduated with good jobs.

I don't understand how this is all supposed to work.

My friend at work says you can't do this.

My dad loved your show and now I'm hoping you can help me too.

Thanks.

That's pretty special.

Thank you, thank you.

As the father of three daughters and a granddaughter, that means a lot.

That means a lot.

Means a lot.

Gosh, your relationship with your dad, and, I'm sad for his passing for you.

And I'm glad that he did watch the show.

And I'm glad that you're now part of the family.

Your mom's very, very sweet.

And obviously, she and your dad talked about this, and this was his intention.

You've made him very, very proud, being a single mom for many, many years and, making sure that your kids are A-okay.

Sure I am.

I guarantee you, he was very, very proud of you.

Remains very proud of you, even to this moment.

So, his option or his, decision to convert this $100,000.

It could have gone to his wife, to your mom, to you, to direct it in your, to to to, to send it in your direction.

Is was very intentional.

Now, his intent was for you to get that into a position where it would, most benefit you for your retirement.

So let's think about this.

You're in a in a job that has A41K.

At your age, you're allowed to put approximately $30,000 a year into your 41K.

You probably have not been doing that.

If you have had the expenses for college, etc., it is very likely that you've been putting in far less.

Let's say you've been putting in $5,000 a year because the company match is $5,000, and you're at least wanting to get the free money.

So that was very wise of you.

You put in five, they put in five.

So at least you've had 10,000 a year working for you.

I'm using that as an example.

So is it possible to write a check into your 41K.

The answer is no.

No.

So your colleague at work is on the right track in that regard.

But are there steps that you could take maybe 1 or 2 intermediate steps that will end up or the exact same impact?

And the answer is oh heck yes.

Oh heck yes.

We're coming up on a new year, so it's a fresh start for your 41K contributions as well.

So again, using my examples you've been putting in five.

We'd like you to put in 30.

Where is the extra 25,000 going to come from.

It's going to come from your paycheck 401 K contributions are almost always almost always 99.99% payroll deductions.

So they're coming out of your paycheck and you're saying, whoa, wait a second.

You want me to to take another $25,000 a year out of my paycheck to go into my 4k?

How am I supposed to live?

Where is the money coming from?

To pay my bills?

It's coming from your dad's IRA.

If you're using a standard 401 K, a traditional 41K, where the money going in is tax deductible, and in your case, it's almost certainly the right way to go.

If you're using that standard traditional for one K, you're putting 25,000 more dollars in tax deductible to make up your cash flow.

You're pulling $25,000 out of your dad's inherited IRA, and putting that into your bank account to help pay your bills.

That would be taxable.

The money going into the 41K is tax deductible.

In essence, it's a wash.

So your dad's instruction to put this in your 41K was spot on.

It's just the mechanics making sure the mechanics work well.

You might want a financial advisor to to guide you for the mechanics.

If you have $100,000 in inherited IRA, that's a substantial sum of money.

I am hopeful that you're not kind of running off trying to do all this yourself.

You're getting opinions from colleagues at work.

Not terribly accurate opinions.

So.

But that's not unusual for colleagues at work.

So we're in a position where, mechanically, is this possible?

Yes.

Is it possible, then, that over the next, say, four years, picking a number is likely to be a little bit longer, say five?

We move all of the money from your dad's IRA without paying any income tax into your tax sheltered 401 K, so that whatever your current balance is, it will grow by at least $100,000 over the next 4 or 5 years.

The answer is yes.

Yes.

And it's a beautiful idea, and it's a wonderful gift from your dad because by the time you are safe, 5556 your, your 41K balance will be increased by at least $100,000.

But let's just pick a number and say you had a couple hundred thousand dollars in addition going into that.

So now you're at 56.

Let's give us ten years to retirement if you have a reasonable rate of return.

Over that ten years, eight, nine, 10%, no guarantees, of course.

That that that 200,000, maybe it becomes 400,000, maybe 500,000.

Maybe you continue to make contributions to your for one K and that's another 100,000.

The opportunity here is magnificent.

And your dad set you up to do that if you're concerned.

Hey, I'm not really sure how to do it.

Make sure you circle back to us.

We are happy to help continue your dad's legacy and make sure that his daughter could be my daughter.

Goodness.

We'll make sure you're taking care of.

Speaking of daughters.

Hey, babe.

Hi.

What's next?

Our next question is about taxes.

This one says I am close to 68 years old and planning to take my Social Security at 70.

My wife is seven years younger than me, still working and not sure how long she will continue because she started working later.

What are the best ways to reduce taxes on my Social Security, which may go up to 85%?

Can I invest in real estate?

My only real property is the condo that I live in and it's paid off.

Can I buy something to reduce Social Security taxes?

I do have taxable investments.

IRA of which I am planning to move to Roth based on my tax bracket.

Does it sound like I could use the help of a financial advisor?

Thanks.

Yes, yes, you need the help of a financial advisor.

You are conflating a number of ideas that actually conflict with each other.

Which makes me think that either, you're you're not fully aware of all the impacts of what you're asking, or, you you simply misunderstand the impacts of of of what you're asking, having a wife that's younger than you are.

Good for you.

Thumbs up.

Congratulations.

Hopefully she feels the same way.

That's a lovely thing.

Marrying way over a man's head is every man's every intelligent man's objective.

So if you've got a wife that's young and beautiful, good for you, good for you.

And she's still working, good for you.

And now you've got this issue of, I'm planning on taking my Social Security, in two years.

That's your max.

Good for you.

That's that's that's a good start.

But if she's still working, it's very likely that your income will push, your your total income will, expose your Social Security to, full taxation, which for Social Security is 85% of the benefits.

And to that I say so.

So that's, that's that's a beautiful thing.

The way to, for everyone out there, just in terms of basics, fundamentals.

You don't want to pay taxes, don't make any money, loaf around, don't earn anything, don't invest, spend money, lose money, make sure your investments lose money.

Just do all kinds of dreadful things that are not very useful.

Certainly not very profitable to you.

But you won't pay taxes if you're paying taxes.

And if you're paying a lot of taxes, it's because you're doing well.

And for those, who say, there's got to be a way I should buy a piece of real estate.

Well, first of all, you got to come up with the money for the real estate.

You will get certain deductions.

They will certainly, almost certainly not offset the tax on your Social Security.

And yet you'll be an investment that you may or may not really want to be in.

You're simply motivated by driving taxes lower.

What makes this totally confusing is your indication that you're looking at doing Roth conversions or Roth conversions increase your taxable income, so you are trying to figure out what investment will lower your taxes while you're trying to figure out how to do Roth conversions, which will raise your taxes.

Yeah.

All these are moving parts that don't fit together.

So please make sure.

Yes.

Certainly a financial advisor.

Absolutely.

A financial advisor.

Tax advisor.

Many financial advisors are not in a position, maybe not even legally permitted to give you tax advice.

Make sure you're working with a financial advisor, perhaps a family wealth advisor that has, tax planning and tax preparation.

Details inside their company so that you, you are understanding how these pieces fit together.

The Social Security piece, the tax piece, the investment piece.

You may also want you may want, depending on how your estate is currently set up, you may want, to consult with an estate attorney as well.

There's lots of reasons to do that.

All the positive reasons that we've talked about over many, many years here, on this show, certainly family protection, etc., etc.

but it also may impact your decision to do Roth conversions very often.

In the scenarios that we see most often, the Roth conversion motivation is not so that we will have more income later.

We won't, we'll have less income later, but it will be tax free.

It is more likely the motivation that the next generation, my children, my grandchildren will have that income from a Roth IRA, tax free for an additional ten years after my passing.

So lots of different moving parts, some of which you're suggesting conflict with each other don't make any sense putting those things together.

Kind of like jumbo shrimp.

Well, makes no sense.

Bottom line is get somebody to assist you that can help you make sense of this, and you'll be fine.

He'll be fine.

Next, we have a short one.

We do.

Our last question tonight says, I enjoy your show often.

Very helpful information and perspective.

I saw an episode where a person didn't want to leave any money to a daughter.

I understand the importance of a will.

But what about naming beneficiaries to a bank account?

Retirement account, brokerage account, etc.?

Won't those beneficiary declarations supersede any language and a will?

Thanks.

You are absolutely correct.

You are 100% correct.

You are describing a scenario that most people, the majority of people that we encounter and we encounter some of the best, some of the brightest, some of the most successful folks that you will ever encounter.

We are blessed beyond belief and our more than money world that the folks that are part of our audience, the folks who reach out to us with emails of folks who come through our doors, they are fantastic.

And yet they are not necessarily aware.

Most are not aware that setting up a will, carefully, outlining exactly what percentage dollars goes to what people or what organizations can be completely negated by beneficiary designations.

It is absolutely.

Typical of the folks that we counsel, that the vast majority of the money that they own is in an IRA or a Roth IRA or an annuity, or they purchased a life insurance contract, or a, cash, Roth 401 K 4 or 3 B all of these all of these have beneficiary designations.

So I have a million, $1.2 million estate.

200,000 is my house, a million is my IRA.

I have three kids.

I want to split it up three ways.

They each get 400,000.

And my IRA, in my IRA, my beneficiary says it goes to my wife.

The IRA beneficiary goes first.

So instead of the kids splitting 1.2 million, the kids will split, will split, split.

He tried to say $200,000 because beneficiaries go first, they supersede the will.

It is very common that we encounter estate plans.

That are thwarted.

That's a fun word to say.

Thwarted, by the beneficiary designations.

There's no coordination involved.

Quality trusted, experienced estate planning attorney a quality, trusted fiduciary financial advisor will be very aware of this, very cognizant and very proactive in making sure that you coordinate your beneficiary designations with those that you make inside your will, if they are in conflict.

The beneficiaries, when making sure they're not in conflict is extremely important.

Well done you.

Thanks for the help.

Hey, two bright minds.

Way better than one.

Speaking of bright minds, there's so much excitement going on.

If you're in your life, you're the type of person that a new year is.

Like a fresh slate, a fresh chalkboard, the whiteboard, hosed down and clean so you can start with a new idea and make things even better and brighter.

One of your best ideas might be to send us your questions.

Jean at ask mtm.com ge any and ask mtm.com.

That might be a great idea to start your year off just the best.

So ask the tough questions.

Ask the questions are most important you most relevant to you.

And that makes it the most relevant for us and allows us to stay in our own humble opinion, the most relevant financial show on television today.

Thank you for spending part of your evening, part of your year with us.

We'll see you next year for anot