And good evening.

You've got more than money.

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

You've got Megan Smale in the wings ready to give.

You have all of us give all of us the questions that you've sent to us.

So we've got an exciting half an hour ahead of us.

Exciting.

Maybe that's an overstatement.

For most of the time, I think we're trying to just be informative, trying to give you the the information that you need to get a little further down your financial road.

And in a little smoother fashion, perhaps a little less fuss and muss.

But on occasion, yeah, we can get exciting.

We can get entertaining accidentally, of course.

But the entire opportunity here is to serve you.

And we we take that opportunity, with, with a bit of the humble side of myself.

Not a big bet, but a bit of humble.

But most importantly, we're honored.

We're honored that you trust us to help you with your financial picture.

And, the fact that you do so, means the world to us.

For those of you joining us for the very first time, and we're always happy to welcome, new folks to our audience, you will find a couple things are important.

Number one, you are the key to why we are the most relevant financial show on television today.

No matter what station you're watching, no matter what geography you find yourself in, we are the most relevant because of you.

Not just because of my answers.

780 years of experience adds a little bit of wisdom to the answers, a little bit of context, a little bit of framework.

Of course, we would certainly hope so after all those years.

But the reality is that you are far more interesting than I, and that the questions that you have are far more relevant, far more relevant.

They have a higher priority in your life.

We could be giving stock reports and you would fall asleep, and so would I, but we don't, we we try to help as much as we can in very specific ways.

And if you're just joining us, you're wondering, how do I get involved?

You send your emails to me, Jean at ask mtm.com GE and at ask mtm.com.

We answer every single question back to you.

And we select some of those couldn't possibly do all of them.

Some of those on future shows, to try to answer as broader spectrum of questions as we can and help as many people as we can.

So speaking of helping, that's a smooth segue over, to, find out what our first question is.

Megan, where do we start this evening?

Hi, Jean.

Our first question tonight comes from someone in an unfortunate circumstance, but they have a pretty positive attitude about it.

It says I unexpectedly lost my job this year at age 64.

Only one year ahead of my planned retirement.

But I am fortunate because after a fiscally conservative life, my family should be financially secure.

Sometimes an unfortunate event turns out to be best for us.

Maybe this will kickstart a new experience.

I currently have savings in an IRA and a 401 K, and will be able to collect a modest defined benefit pension next year.

My wife collects Social Security now, but I plan to wait until age 70.

We can afford to maintain our lifestyle in the meantime.

I'm aware of most of the pros and cons of an IRA versus a 401 K. My pension has several options for payout.

All else being equal, I would generally, roll the 401 K into my IRA for simplicity, reduced fees, greater flexibility, and possibly higher returns.

I am leaning toward a lump sum distribution of my pension, since it takes longevity out of the equation, assures my wife and heirs are protected, further defers taxes, and depending on my rate of return, is financially superior to the annuity until much later in life, maybe even at age 100.

But the all else being equal is where I am not clear.

So thank you for any guidance.

Oh, that makes me smile to the eyes being clear.

Yes.

Gosh, ignorance is not generally.

Hey, there's a lot of information I should know, but I don't.

Ignorance is not knowing what we don't know.

And that's where the real angst, the real anxiety comes in.

I think I've covered all the bases.

This gentleman has done a wonderful job.

Lots of detail that gives us lots of assurance that he's absolutely on the right track.

But in his heart of hearts, what haven't I thought of?

What is what is lurking out there that may cause me some concern?

Down the road that I didn't even know about, I wasn't even introduced to.

So, first of all, my kudos.

Well done.

You.

You've thought through a lot.

I really loved, the way this gentleman started.

Sometimes an unfortunate event turns out to be the best for us.

And if you've lived even a few years, approaching a few years close to as long as I have, you will find that that is almost always the case is incidents where you go, such bad luck.

Give it a little bit of time and you might look back.

You almost certainly will look back and find out that it was to your advantage.

So good for you.

So, when given lemons, you make lemonade.

And apparently this is a tasty aid.

Indeed.

So.

Well done.

You, the idea of having a 401 K that you either maintain there or rolling it into an IRA is one that faces almost everyone in retirement.

Certainly, all the folks that that we welcome into the more than money world headquarters, very, very high percentage, 85% plus have for one case.

And the answer or the question to them, do we leave it there?

Do we roll it to an IRA?

He he does mention simplicity, reduce fees, enhanced, options in terms of what you may or may not invest in, flexibility and possibly higher returns.

Could not have said it better.

These are all the reasons why you might consider, making that move.

Now, he happens to be 64.

If he were 54, I would caution him and say, don't move it to an IRA because a 401 K has one kind of an interesting largely on talked about advantage over IRAs.

And that's if you are 55 or older but not yet 59.5, which is where the penalties drop off for IRAs in all retirement plans.

If you are 55 and over with a 401 K, you can actually start drawing that income without penalty.

It's a very special rule.

It's got to be applied using A41K, not an IRA.

And it takes some attention, some, attention to detail in this case doesn't apply.

So he could, effectively draw an income from either, putting it into the 401 K, putting it into the IRA does give him all of those advantages, without a doubt.

The idea of taking the pension as a lump sum to protect his family.

I think, is a very, very worthy one.

Now, there are a lot of folks out there that are saying, wait a second.

He can get a pension that pays him and his wife.

That is true.

That is absolutely true.

But, if you and your wife, if you and your spouse have a healthy relationship and you tend to travel together, those accidental, accidental deaths, that occur simultaneously, then the pension is gone.

Not what he wants at all, not what he intends at all.

So, taking it as a lump sum, is, a very, flexible choice to make because he can drop that into his IRA, make any kind of investment arrangements that he wishes.

And if in the future he decides, darn, I wish I had a pension, wish I had elected the pension.

He can always, always has the option of converting whatever investments he had originally chosen into a private pension, sometimes called an annuity, and it can be set up exactly as his current pension is, and in some cases, in some cases, the annuity options are far more beneficial and in a restricted number, not very many, but in some cases as well.

Some annuity companies will allow you to draw your income for the entirety of your life and yet return the original capital to your family.

So, using a simple example, I took a $500,000 number.

I spent $480,000 over my lifetime and that my passing, my family gets $500,000.

So it's a very interesting set of flexibilities that you might find yourself in.

I think, you have covered probably 85 or 90% of the bases that you needed to cover if you want to just to polish this up a little bit, sitting with a trusted, experienced financial advisor who's trusted in all of these areas, the tax areas, the 4 in 1 case, the IRAs, the legal protection area, the private pension areas, annuities.

You need someone who's got, if not 780 years of experience, a fair amount of experience to get you from point A to point B, but in reality, you're on the right track and you're doing great.

Make speaking of doing great, is there someone that we can assist in and maybe help them do great as well?

Well, our next email is hoping to do great.

They just want to know if this is true.

It says one of our friends at church mentioned that he converted an extra $12,000 to his Roth IRA this year and expects that he won't have to pay any tax.

That sounds pretty good, but is it true?

Jean?

Well, I understand why you would be skeptical.

Too good to be true is rarely good or true.

In this case, it sounds too good to be true.

But it's not.

It's absolutely the case.

If you have certain, a certain set of characteristics for you and your spouse.

So, first and foremost, this is what's referred to in the recently passed big, beautiful bill as, senior deduction.

Lots of folks said, hey, I heard Social Security is tax free.

It's not that that didn't end up being agreed upon in the big beautiful bill, but what was agreed upon is that anyone who is 65 and older will receive, in addition to the standard tax deduction, a $6,000 senior deduction.

So married couple standard deduction, roughly $31,000, each of them 65 and older, $12,000 additionally.

So the first $43,000 tax free whether the income is earned income from a part time job, Social security, income, pension, interest, dividends doesn't matter.

Wherever the income may come, it's tax free.

So painting this scenario for what this gentleman learned at church, if he was counting on or planning on his tax return, taking advantage of, standard deduction, $31,000 and was comfortable with that.

And and it created a pleasing result for his income tax return.

Now he has the option of utilizing that extra $12,000 that increment to do a Roth conversion, meaning moving $12,000 from IRAs to Roth IRAs from taxable to Nontaxable.

He has that option.

And typically doing a conversion, one of the first things a tax advisor will say be aware whatever money you take out is taxable.

Well, in this case still taxable but not taxed because you have this extra $12,000 deduction.

So paint this scenario.

Say somebody is 65 years old and they have $500,000 in their IRA and have no expectation that they're going to need that prior to required minimum distribution, which for a 65 year old now is 75 years old ages.

If you were born 1960 or above, and that 65 was 1961, if you are in that category over the next ten years, you could convert 12,000 a year, $120,000, if everything stays as is in the, in the, and the, in the tax code, and end up with not just a 120,000 into the Roth IRA tax free, but all of that money that it has earned, hopefully it has earned well over those ten years, tax free and tax free for as long as you live.

And, for the next generation, for ten years of their lives, a very, very exciting opportunity, with some good planning, looking carefully at tax returns, tax rates, etc.. You might end up finding out that what was, often described as, oh, darn.

I saved a lot of money in my IRA, but it's all taxable.

You might be able to see a chunk of that money, moved into the tax free world and wouldn't that be loverly?

It's from a Broadway show that I have no idea which one was, but wouldn't that be lovely?

That is a lovely question.

And I think the results kind of give him or the answer is going to give him some some real food for thought and maybe end up with a big chunk of money tax free.

Who do we help next?

Well, our next emailers trying to help their mom.

This one says.

I have been toying with the idea of using some of my 401 K money to secure my mom's house.

My mom took out a reverse mortgage with a balance of $560,000.

The home appraisal value is 1.5 million.

We can sell her home, but the capital gains and real estate fees are horrible.

I am nearing retirement age myself and once my income drops due to taking Social Security, I think I can start bleeding off some of my RMDs early to reduce a tax hit when I turn 73.

In eight years, I figure a 15 or 20 year mortgage will make it realistic.

And when my mom passes, the home can be divided by the family members.

I can then get my money back out of the investment that preserved the property.

A couple questions can I legally take my RMD money and refinance that 560,000 to a conventional loan, even though it's in my mom's name?

The interest deduction on the mortgage is of value to my RMDs.

I think, would I be a co-owner if I were able to do this?

And are there any repercussions with the IRS?

That may be a gotcha later on that I need to be aware of.

Thanks in advance.

Nobody likes gotchas or nobody, and they're never pleasant.

So we want to for the to the greatest extent possible, make sure that this individual understands all of the, the nuances of what's a very wonderful instinct.

He's trying, not just to help mom, but the entire family.

He mentions that at some point at mom's passing, the siblings, the family will be able to, to take advantage of the value of this property, which, in, in his estimation, currently, if they were to sell it, would, would cause some, some real struggles.

And of course, if it's in the estate, there are some tax advantages.

We'll circle back to that here in a moment.

If he, intends to finance the, the, payout on the reverse mortgage, this $560,000, is is he eligible to take that money out and and, and pay the mortgage is the answer?

Sure, absolutely.

You can use an RMD required minimum distributions from an IRA for any purpose.

The IRS doesn't care as long as you reported as taxable income.

That's the reason for the requirement that you start taking money out at any point anyway.

So let's assume for a second that mom has no, earned income and would not qualify on her own, for a mortgage, but perhaps a joint, mortgage, a co-ownership of the house, perhaps, or, not my recommendation.

A, what?

Cosigner on a mortgage.

Sure.

It stays in mom's name.

The mortgage is in mom's name, but you're paying the mortgage with your RMD.

I think that works.

I think that works.

The fact that you are, making the, the payments gives you the possibility that the interest on that mortgage will be deductible.

Possibility.

It is not a guarantee.

It is highly likely, even using a 5% number as the interest on a almost $600,000, mortgage gives us close to $30,000.

If you are married, your standard deduction is 31,000.

So added to other, in, deductible, schedule deductions.

You might get above that standard deduction if you are, single and your standard deduction 1616 five or you will definitely get some advantages.

But it may not be substantial.

And it is extremely important that you counsel, accept the advice and the insight of a professional tax preparer, CPA, etc., so that that you can understand exactly what the impact would be if you're counting on a substantial tax advantage, as as part of the value of all of this, you may be, you may be disappointed.

The rise in standard deduction.

I don't think we ever your age.

Oh, we do have your age.

You turn 73 in 8 years, so you're 65.

Quick math.

I mean, you'll get a senior deduction, and that should help as well.

But bottom line is that you may not get a substantial value out of the tax deductions.

And if that's a critical piece that may change this, this picture a bit.

The second thing, in terms of, can you recoup these assets, this investment, in essence, at a later date when perhaps when your mom passes and, and these things need to be settled up.

The answer is, of course you can.

If you have properly documented this entire transaction, if you and your mother.

And I would strongly suggest that your mother be represented by her own attorney in this entire process, a trusted, experienced, estate and elder law attorney, to, to represent her and make sure that everything that's being done is in her best interest.

This is an extremely important point.

Should there be some concern down the road by any member of the family saying, hey, this doesn't seem right.

We've got to pay you the first five, six, $700,000 of this that, Now, now I'm unhappy not knowing the backstory, not knowing that it was well planned.

Make sure this is documented.

If you are well documented and your your mom is is, well represented, independently, well represented.

You should be in on solid footing.

And lastly, a state taxes, in general, federal state taxes.

Now, for a single person, perhaps your mom, annual gifts are irrelevant.

The estate tax exclusion federal exceeding $15 million.

So there will be no federal estate tax.

I don't know that we know what state you are in.

There may be state inheritance taxes that need to be addressed, but the most important part of this estate planning piece is that, yes, if your mom were to sell the property today, there would be capital gains taxes.

There's no question about that.

How much is not 100% clear?

Goodness gracious.

It could be tax on $1 million.

And that's a couple hundred thousand bucks is a lot.

Receiving the home through the estate creates a stepped up basis so that when the heirs end up selling the home, likely that they will, their basis is the the value of the home on the date that mother passes away.

So if we use 1.5 million as the example, right now, mom might pay $200,000 in tax if we get it through the estate in a stepped up basis, the tax will likely be zero.

It may even be a slight negative number because the cost to sell the home would also be tax deductible.

You're trying to do a wonderful thing here.

You're trying to do an absolutely wonderful thing here.

And and just take your time, get your mom well represented, document everything.

It should turn out just fine.

That's so much and so willing to help.

Good for you, Meg.

Who do we help next?

Our next email is a little unsure about annuities.

This one says I am a 64 year old male with about $900,000 in total savings, including my 400, one K and IRAs.

My question to you is there's a lot of talk about annuities.

They're good, they're bad.

But I don't know the difference between them.

Is this something that I should be looking at in my portfolio?

Thanks.

Annuities are bad.

Oh, and annuities are good, and annuities are kind of so-so.

Annuities have, or not earned.

They've been, labeled as as bad by lots of folks annuities by annuity salesmen, are considered to be the only thing that you should have.

Everyone should have them and put all their money in.

Neither of those things are true.

Neither of those things are true.

Annuities are simply tools.

They're financial tools, to be sure, but they are tools.

So let's use an analogy that you have, a project, you're doing some trimming around your property, and there's a tree to be cut down and you decide that you're going to take out, a paintbrush to help you take down a tree.

Makes no sense whatsoever.

That's not a useful tool.

You say, how about a chainsaw?

Now we're on the right track.

That could be a very useful tool to accomplish what you're trying to do.

Conversely, if you're painting your deck, you get the idea.

Annuities, are either appropriate or inappropriate based on what you're trying to do.

What's important to you?

What are your financial goals?

For example, this young man has $900,000 in his, IRAs.

I'm sorry for all in case.

And IRAs.

And the question is, how are we going to invest this as we, as we retire?

If, the what, scenario, I got plenty of money, I got a pension, I got Social Security.

I don't really need this money.

Then an annuity seems fairly inappropriate.

It doesn't bring a lot to the table.

Annuities typically bring two very valuable, perhaps three very valuable.

Benefits tax deferral.

If you put money in an annuity, as long as it's in the annuity, you don't pay income tax.

It's already in A41K, it's already in an IRA.

It's already tax deferred.

No annuity.

The second opportunity is to get investments inside the annuity that are protective either guaranteed investments.

As of the crafting of this show, a fixed rate three year annuity would pay about 5.3%.

A pretty reasonable rate of return compared to CDs.

If that's floating your boat, there's a good reason.

If, on the other hand, you're looking at higher returns with with some protection, annuities do not fit the bill.

Lastly, annuities can create, in essence, a private pension.

They can create a cash flow, that will be good for the rest of your life.

It comes in lots of different flavors, lots of different, variations of the theme.

But the reality is an annuity can be very, very powerful to an individual who says, I'm 64 and I really don't ever want to run out of money, and I need to know I'm going to get at least $1,000 a month to add to my Social Security and pension.

So I will always have the cash flow I need.

That's the definition of an annuity, and that might very well work with inside your 41K or your IRAs to give you that confidence that guarantee.

Of course, you're looking for that kind of long term guarantee, that long term assurance.

You're going to need to work with a very highly respected company, one that's very well known, very financially stable, and is offering you exactly the kind of guarantees that you're looking for.

So could annuities be useful for this gentleman?

Could be.

We simply don't know.

We don't have enough information from the email.

But I can assure you that we will have some exchange of emails and get him on the right track.

And if you have similar questions, an exchange of emails might very well get you on the right track as well.

Speaking of being on the right track, we've almost come to the end of this show, which means, first of all, thank you.

You could be doing so many other things and you chose to spend this half hour with us, and we appreciate that very much.

Number two, if you're listening and going, that's that's an interesting question.

But my question is different.

Send those to us.

Jean at ask mtm.com GE and e and ask on mtm.com.

And number three we have recently established a more than money newsletter.

So if in addition to enjoying our show, you would like to also receive a it's a bi monthly newsletter every two months, information about us, all you have to do is ask, send me that request for the newsletter.

It's absolutely free to jean and ask mtm.com.

Thanks very, very much.

You mean the world to us.

And hopefully you want to return next week for another edition of more Than that to that.