And good evening.

You've got more than money.

You've got Jean Dickerson, you've got Megan, our financial correspondent, ready in the wings, and you've got the next half an hour with us as we serve you.

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Send those emails to me, Jean at ask MTM, dot com, GE and E at ask mtm.com.

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So if you, again have some interest in your financial future and wish to have a financial advisor that is, willing to help you, willing to serve you and serve as being the keyword you're on, you're in the exactly the right spot.

You're right where you should be.

Now, a little peek behind the curtains.

We do that on occasion.

We craft our shows carefully a couple of weeks in advance of their airing.

And as we're crafting this show, in eastern Pennsylvania, there is impending snow, some say, coating to an inch, some say 21in.

So for those of you who are seeing this after the effect, after the, after the event, email me and let me know.

How did we make out?

In my head, that was way smarter than it actually came out, but you'll get the idea.

So where do we start this evening, Miss Megan?

Hi, Jean.

Our first question tonight has lots of detail, so let's see how we can help.

This one says we are a healthy, retired couple, 69 and 64 years old.

We've always managed our own investments.

We currently have a 60% in stocks and 40% in cash equivalents in our investment portfolio, based on the 100 minus your age rule.

We would be considered overweight in stocks even at the newer version of 120 minus your age, we are still pushing it.

Our total net worth is 4.2 million.

We have 300,000 in non retirement funds, 60% cash, 1 million in a home retirement accounts with 1.1 million in CDs and 1.8 million in stock funds.

We have no debt and live comfortably on $150,000 per year.

My husband will be taking Social Security of $55,000 per year in 2025, and I will collect $28,000 in 2027.

We fear a stock market bust one could occur, or at least a significant downturn.

In that case, we have ten plus years of cash we can draw upon as the market recovers.

Otherwise, we could continue to benefit from market growth and slowly whittle down the percentage of stock ownership as we age.

Please let me know what I may have left out of our consideration, but thank you for your help.

Well, you're very kind.

Your question indeed.

Detailed.

Outstanding.

That helps me a great deal to give you the kind of guidance that you most, wish.

For those of you who are listening, who may not be familiar with the rule of, 100 minus your age.

We'll talk about that here for a moment.

Only for a moment, because in my mind, it has very little relevance either to this question or to most of you.

Watching this evening.

So in the past, the, the academic guidance of, financial advisory world said, as you get older, your investments must become more conservative.

And 100 minus your age says that your stock market exposure should be 100 minus your age.

So if you are 2100 minus your age says that 80% of your money should be in the stock market.

Well, that sounds pretty reasonable.

If you are 70, it says it only 30% of your money should be in the stock market.

I'm not clear how reasonable that might be for a number of reasons.

That will outline here momentarily.

So bottom line is that that's the rule that's been the academic, rule of thumb for many, many years, probably originally written on parchment with a feather pen.

That's how long that rule's been in effect.

And the rule was always stocks and bonds.

So if you weren't in stocks, you were in bonds.

This, question talks about cash equivalents, money markets, CDs, etc.

that's not what the rule originally was intended to say.

It would say that traditionally stocks are going to make roughly 10% a year.

Traditionally, bonds are going to make roughly 5% a year.

So if you, mash those together, have them as a nice hybrid.

And at age 50, you're going to have half and half.

You're going to get about 7.5%, roughly.

An average annual rate of return on all of that is, is is fascinatingly inappropriate, fascinatingly near irrelevant, because none of that addresses the specifics of an individual's, consideration and individual circumstance.

So if we're looking at any particular, individual versus a group of retirees, this doesn't apply in almost every case.

It's not going to apply.

Setting up, an investment portfolio as a rule of thumb, is is almost guaranteed to be incorrect.

Setting up an investment portfolio based on specific needs of the client that's almost always guaranteed to be successful.

And in most cases, the needs of the client, being addressed is really what the investment, what the investor or what the client is, is looking to have happened.

The impact that they're looking for is not a particular rate of return, because isn't it great to make a lot of money?

They're looking for a particular rate of return because that will allow them to be retired confidently, with peace of mind for the rest of their lives.

Without that, that then cloud hanging over them of you're probably going to run out of money, or at least the fear that I will run out of money because I just don't know.

So in this case, now that we know the rule, we know that the rule generally doesn't apply.

We know that the rule in this case, they're using it as, as stocks versus, cash equivalents, CDs and money markets.

That's okay.

It's not a great idea, but it's okay.

So let's talk about the need, the fear, the concern about having, that block of capital drop should they need that cash flow.

Well, first and foremost, kind of hidden in their question, was a very powerful, statement about guaranteed income.

Guaranteed income within a two year period over the next three years.

Their social security that they turn on will total more than $83,000 a year, $83,000 a year.

It's a tremendous income stream that's independent of any of their investments, any of their dividends, any of their rates of return interest.

It doesn't matter.

So 85,000, in addition to, their current income.

Pretty powerful thing, indeed.

Pretty powerful piece of information, indeed.

So it allows us to say, now, wait a second.

From a standpoint of protection, that adds a tremendous amount of protection.

Now, their answer for protection or their strategy to protect themselves is to keep a tremendous amount of money in cash, a tremendous amount of money in cash, and when we say, hey, if the market drops, we've got ten years worth of of capital is our shock absorption.

I absolutely understand that that will work and likely will work beautifully.

And if they are comfortable with that understanding that the vast majority of their money is invested in a way that will sadly not keep up with inflation.

See, these money markets generally underperform inflation, so they will be hanging on to principle, but they will be losing purchasing power year by year by year.

And that big block of capital that they've committed at 69 and 64, if they are prayerfully part of our triple H club, happy, healthy 100, they've got 31.

And what, 36 years to go?

That's a long time.

And if you're inflation's eating into your purchasing power year by year, that's probably not in your best interest.

Now protection is in your best interest a couple ways to do that.

One, you might look at some of the newer, investment platforms that offer the opportunity to invest in the stock market but still be protected.

And you can dial that protection from relatively modest.

Hey, if the market goes down 10% uncovered, I don't lose anything.

If it goes down more than 10%, yes, I've got some losses all the way up to if the market goes down 100%, I lose nothing.

So those types of investments that are readily available, allow you to stay in the market, get potentially, at least potentially better rates of return than you're going to get in a money market or, in a CD over time, keeping pace with inflation, at least, at that level, maybe even a bit higher on average over many, many years.

But having very, precise protection for your for your capital, that may work out as well.

There are also, one other idea just to consider, there are investment, platforms inside annuities that guarantee you an income, but not just an income, but an income that grows with inflation.

So you can have a guaranteed, in essence, an inflation proofed pension.

Private pension.

So a couple ideas.

You've got one idea.

Keeping tons of money in cash may or may not be in your best interest.

There are alternatives that can give you great returns and, potential great returns and lots of protection.

And then finally, there's a, I say finally, it's just one other idea annuities that will give you income that grows with inflation.

So outstanding.

Lots of detail, lots of information to be covered.

Hopefully you picked up a couple ideas.

Just from that first question, Max, where do we go for our second question?

Well, our second question is definitely staying on theme.

This next, emailer says, I've always heard that as you get closer to retirement, you should move more of your investments into bonds.

I'm 63, planning to retire in two years.

Wondering how much of my 401 K should I have in bonds?

Thanks.

All right.

Very much the same theme.

Exactly.

The variation here is that the question is how much?

So let's assume for a second that, this questionnaire, this this, this viewer has, just heard my response for the first question and goes, oh, I get it, I get it.

Bonds, CDs, probably not in my best interest at this point.

So if it's not bonds and I understand now, it's not, if it's buffered ETFs, if it's structured notes, if it's annuities that provide some sort of cash flow, inflation adjusted if it's not, if it is one of those, if it's not bonds, How much how much.

Well, the importance of this question is not that I can answer specifically a percentage for this individual.

But the importance of this question is that there is a percentage.

There is a percentage for this individual and for you and for you.

What piece of your portfolio needs to be, safe, secure so that you can be confident?

This gentleman is 63, that you will reach, triple H status 37 years from now, having enjoyed a long, healthy, happy retirement and never run out of money.

For some folks, that answer is zero.

They've got other sources of income.

Their needs are, well tended to by their Social Security, perhaps pensions, and all of a sudden, investing in bonds at all makes no sense whatsoever because they're growing this capital for two reasons.

Number one, as a cushion for their future years in case, in case they need it, perhaps a health issue, perhaps travel, perhaps any number of opportunities for them, or they can look at it.

As for the next generation or generations, if, their children, grandchildren, that kind of thing.

So that investing in bonds in either of those events doesn't make any sense at all.

Investing in protected investments in either of those senses may not make sense at all.

Nearly 100% of their investments should likely be in some, platform that has growth involved in it, whether it's stocks, real estate, gold, silver, precious metals.

You get the idea.

Conversely.

Conversely, Social Security is modest.

There's no pension.

And I have a very straightforward amount that I must have.

This gentleman must have so that his bills are paid.

He's happy.

He's healthy.

That's a critically important number that cannot be violated.

So it may mean that 100% of his investments must be, placed into assets that produce income, whether it's interest, dividends, capital gains, some form of income, some combination that produces, the maximum income, the maximum reasonable income that this gentleman can achieve, within his risk tolerance.

So, this these are these are two ends of a very, wide spectrum of I don't need any safe, investments, quite, quite literally to I need, 100% safe investments, even to, situations that we have seen where 100% has to be going, has to be directed into perhaps an annuity that gives a guaranteed lifetime income.

Guaranteed.

You cannot outlive, in essence, it's a private pension that may be the ultimate in, in, in, that end of the spectrum, totally safe, investments.

And of course, for the average person, the average person, the answer is somewhere in between.

So the key is that if you're dealing with a financial advisor, great.

If you're doing it on your own, you've got to determine specifically the rate of return required for your investments to get you from point A, in this case, 63 to triple H, happy healthy 100.

And determine reverse engineer from the rate of return, we need back it into the type of allocation the type of recipe, if you will, of investments that produces the income that you need.

That's a very brief question, but it was a nice corollary.

Nice addition, a nice, take off on our first question, to give you an idea of how precise this design should be and how precise this design can be, either with good work on yourself or on your part, or in working with a financial advisor.

Outstanding.

Nice connection.

Next, let's make another nice connection, if we can.

I was going to say we're segueing very smoothly tonight.

Our next question is wondering if their savings are safe.

We said they said we watch your show regularly, and it's led us to have questions about an annuity product offered by a well known company.

Our financial advisor, who manages our IRAs, recommended it, as a hedge against stock market downturns, corrections because it guarantees we won't lose our principal, although we'd only see conservative earnings.

That's my watered down interpretation of the presented product.

The prospectus is a difficult read.

I found the contract much the same.

We initially thought as a hedge product.

It might be worth it considering the economic volatility under Trump.

But after listening to your show, I got cold feet and we nixed it.

We wonder if the fees and six year lock on the money is worth the hedge.

I'd feel more at ease if you would evaluate this type of annuity product and tell me if I've misunderstood its essence, reliability and cost before investing.

We live simply and take moderate vacations.

I had a serious health scare in 2024 that will be monitored forever.

My husband's health is okay.

When our late 60s enjoying retirement, it would put our minds at ease.

If you could review this and suggest practical, practical options to safeguard our assets.

Thank you in advance.

Well, you're quite welcome.

And, goodness, health scares.

That does catch your attention.

Making sure that you have, the solid foundation, your solid financial foundation is such a, such a positive, such a benefit when other parts of your life are challenging.

It could be health.

It could be, family relationships.

It could be business there.

The the life.

Life is challenging and and, and exciting and adventure, son.

And some of those adventures are, are very straightforward and very positive and others that we have, we've got to put our prayers together and make sure that we battle through it.

Yeah, I understand that.

And if we can have our financial picture, much more, predictable, much more reliable, that takes some of that pressure off, some of that.

We don't need to be as concerned over here.

We can focus our energies on, those areas of our lives that that demand them currently.

So, I'm very familiar with this, annuity company.

I'm very familiar with.

This annuity contract is a very interesting contract.

It has a lot of moving parts.

So when this young lady says, I tried to read the prospectus.

Bless you.

Bless you.

Professionals try to read prospectuses and quite often find them too dense to actually get to the the answers that they absolutely need the contract themselves for.

Annuities always can be challenging, but particularly in this type of investment, this type of annuity, it's referred to as a Rela registered index linked annuity.

It is a registered, investment platform that's connected to indices, indexes.

The S&P 500 is very common, but there are typically 4 or 5 different indexes that they may use under that annuity umbrella.

And they give you various time frames that you can commit your investments to.

You're absolutely right.

It is a six year contract.

But within that contract time frame, you can have somebody mature in six years, somebody mature in a year, and various spots in between so that you've got some control over, when money comes due, when money, can be repositioned or reallocated, there are a lot of moving parts.

I would, rarely, maybe, if ever, I would rarely recommend that an investor, acquire these, this type of annuity, from any company, without a strong second opinion.

So, yes, your request of hey, can you take a look at it and tell me really kind of what's going on?

The answer is sure.

Lots of quality financial advisors are across this country that have lots of experience, fiduciaries acting in your best interest, not salespeople.

It is rare that this product is offered by a salesperson, but it could have been.

But getting a second opinion makes good sense, and particularly since it's clear that whoever's presenting this to you has not communicated in a way that you feel comfortable, that you, obviously, since you decided against that at the moment.

Now, one of the things that, extremely important for you to be aware of, is the alternative to this kind of, investment platform, this registered index linked, annuity.

Raiola.

There are significant number of alternatives found now in the in the arenas of buffered ETFs, exchange traded funds that have similar protections.

That have, investments in an S&P 500 index, for example.

And you get to dial in how much protection you want, just as you would in a Raiola.

But you're not committed.

You're not locked up for six years.

There are no surrender charges.

There are no, Raiola fees.

You have liquidity.

You have easy access to your money.

So if you like the idea of protection, but you're uncomfortable with the idea of being locked up for six years, that's one opportunity that you might look at if you like the idea of six years, but you don't like the idea of the annuity side.

There are structured notes that are produced by major banks across the country JP Morgan, Morgan Stanley, Chase, etc.

that can produce similar types of, protection and opportunity again without being inside that annuity wrapper.

So lots of things that you can compare to second opinion makes perfect sense a trusted experience fiduciary financial advisors in your best interest make sure you reach out.

If you're having trouble identifying one.

Reach back out to us.

We're getting a good referral.

Outstanding outstanding.

God bless.

Next we have time for one more.

I think we do.

Our last question tonight is from siblings that are helping their mom, but in two different ways.

This one says my brother and I are both helping our mom with some of her expenses so she doesn't have to worry about the house, her car, and some other things.

I've been writing checks for my part of the expenses.

My brother is giving my mom some shares of stock, which she then has to sell.

It's not terrible, but it does take some extra time and effort.

Wondering, should I talk to him about changing this so it's easier for our mom?

Thanks.

The answer, the easy answer is no.

You should not talk to him about changing this.

He has a very good reason for doing this, and it's a reason that you might want to consider yourself.

But before we get there, let me say thank you to both of you.

We hear so much.

Negative, everywhere these days, that, we often miss the fact that there's far more positive, there's far more wonderful children is far more wonderful parents.

There's far more wonderful families than there aren't dysfunctional families, but dysfunctional in whether it's family or community or state or a nation.

It gets all the attention, gets all the hoopla.

So here's two folks who are caring for mom, taking some of the financial pressure off of her through, no legal obligation just because it's the right thing to do.

Good for you.

Good for you.

And, and and when I say good for you, I'll bet it is good for you.

I bet you feel fantastic that you're in a position to help and that mom appreciates that.

Now, having said that, why is your brother doing this?

Well, let's use a simple example.

Let's say he had some stock that he paid $2 a share for.

It's now worth $22 a share.

He could sell that.

He would pay income tax on $20 of profit, likely of 20% or so for every share he's going to pay $4, in in tax, if we do 100 shares, he's paying $400 in tax.

And if he gives 100 shares to mom and she sells it, it is very likely that she will pay nothing.

There are taxpayers for whom capital gains taxes are zero.

There are other taxpayers for whom capital gains taxes are quite high.

So by giving stock that he would pay substantial taxes on to his mom, who has a lower tax bracket, likely a zero capital gains rate, she can sell the family gains.

In my simple example, 100 shares, it's only 2200 bucks.

But let's use that as the example.

The family gains $400.

That would have gone to Uncle Sam.

So who do we want the money to go to, Mom or Uncle Sam?

That answer's easy.

Of course, you may wish to look for a similar opportunity in your situation.

You may have stocks, mutual funds, exchange traded funds that have gained in value that if you sell them to help mom out, you end up paying the tax.

And mom might very well not end up paying the tax and the whole family benefits.

The only person loses his Uncle Sam.

And let's be honest, I'm not really worried about Uncle Sam.

Right?

The second he's got a lot of money.

Just figure out how to spend it better.

Goodness.

Congratulations.

Well done.

You.

We just have a moment left in this edition of More Than Money.

I want to thank you.

I want to thank you for spending part of your time with us.

You could be doing anything.

And yet you'll spend your half an hour this evening with us.

That's fantastic.

You honor us.

Number two, I want to thank you for your emails.

We are very proud to be the most relevant financial show on television.

Not because of my immense knowledge, as substantial as it is, but because of you.

You ask the most interesting questions.

You ask the most relevant questions to you.

So if you have a question, if you have a concern, if you have an observation you want to share with me, please do so.

Jean GE and E at ask mtm.com.

That's very very welcome.

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