And good evening.

You've got more than money.

You've got Jean Dickerson, you have Megan Smale, you have an entire PBS team bringing you this edition of More Than Money.

Half an hour of answers to your questions.

So when I boldly make the stage, the statement to claim that we are the most relevant financial show on television today.

I'm not whistling Dixie.

I can't whistle anyway.

But I'm not.

I'm not blowing smoke, as they say, or sunshine.

But that's a different question.

Bottom line is you set the agenda.

You tell us what's most important to you.

We just happen to be in a position to give you great information about the things that are most important to you.

So unlike our competitors and there are legions of them coast to coast and border to border, who wish to take your time and lecture you, or get excited or throw chairs through windows or some silliness about the stock market.

I mean, I know this is up or this is down and this is predictions.

Predictions.

Really hard, especially about the future.

Bottom line is we don't do any of that.

We provide you with information that you can use, practical information that makes some real sense and can make a real difference, in your life.

That's the whole idea.

That's why we are in this position, to be able to make differences in your lives that make, your lives better.

Give you more confidence, more peace of mind.

And to be blunt, we like doing that.

It's a it's a lot of fun.

Now, on occasion, I will give you a peek behind the curtain of the financial advisory world.

On occasion, I'll tell you what's going on here.

PBS tell you how we're putting things together on occasion.

Two, two issues that I wanted to share briefly.

Number one, the last couple of shows that we've, aired have been specials, live studio audiences, lots of folks involved.

The feedback we got was fantastic.

If you're a loyal viewer and, you haven't yet kind of emailed us how you felt about the shows, I would very much appreciate that.

That gives me a lot of insight into how we craft future shows and how we might be able to best serve you.

So far the response has been outstanding, but I'd really love to hear from you what you think.

The second thing I'd like to hear from you about what you think.

I have a fistful.

Literally a fistful.

I should not put these, sake really quick.

You didn't see anything?

Those are just fliers inviting me in this particular case.

And my wife, Diane, if that is her real name to a dinner seminar put on by other financial advisors.

You say?

Why?

Why are they inviting you?

It's a mailing list, and they're just trying to get my money, that's all.

Bottom line.

And and for a lot of you, you're getting the similar, the similar invites.

My question to you, if you would be kind enough to email me your answer at Jean and ask em, TMZ.com is do you go to these seminars?

Are you interested in the free meals?

Is it the restaurant that would attract you?

Is it the list of questions?

Most of which I look at and go, oh please, I can answer that for anyone on air in four minutes, and yet they're going to, kind of lock you in a room and, give you an expensive meal and then hope that you feel obligated enough to sit down with them.

So my question is, do you respond to this?

How do you feel about this?

So those two questions, you will be doing me a great favor.

Jean and ask him TMZ.com, if you wish, to submit your own question to us.

Question questions?

That's fantastic.

Love to have those.

And of course, if you'd like to receive our newsletter, same issue, same email.

Your response would be deeply appreciated.

Speaking of.

Deeply appreciated.

I deeply appreciate Megan and Megan.

Where do we start?

I appreciate you, too.

Our first email tonight is very kind.

It says, First, we are glad to see Megan back on the show.

We've missed her.

Very sweet.

We've been watching your show for just over a year now and really enjoy it.

My wife and I have been converting our traditional IRAs into our Roth accounts for the past five years.

Currently, all of my wife's retirement $360,000, is in her Roth account.

I'll have 1 million in my Roth and 350,000 in my traditional IRA.

At the end of this year.

Our combined Social Security, plus my pension will be enough to meet our spending needs.

Our house is valued at $350,000 and is paid off.

And we're completely debt free beginning in 2026.

We're planning to start distributing some of our money about $5,000 a month to nieces and nephews.

Since we have no children while they are still young enough to need it, instead of making them wait until we've passed and they've already been financially secure.

I think that we will have more than enough income and savings to do this, but what do you think about keeping some money in my traditional IRA to pay for either possible future long term care costs or house modifications in order to be able to age in place if we ever need a long term care.

We'll just donate the IRA to charity when the last of us passes.

I would rather give the money to a charity than to the government.

I also don't like the idea of paying for long term care insurance that we may never need.

How much money would you suggest that I should leave in my traditional IRA and since I just turned 69 this month, I still have a few years before I'll have to take RMDs.

Thank you.

Fascinating question.

I have to confess, when I first received this email, I was, I was a little taken aback.

I had not considered, up to that point.

The possibility that that having a pool of assets left, intentionally left, in an IRA, a taxable IRA might be an alternative to, long term care, either insurance or long term care, payments made out of a Roth that where we've already paid the tax or out of cash flow.

Interesting.

I found it very, very interesting.

So I started doing some research, and there are pros and cons, without a doubt.

There are reasons this works very nicely.

Kind of already outlined in the, in the email, but we'll we'll look at them and, briefly the alternatives though.

The, the extension of this idea might end up being even more interesting than the idea itself.

We shall see.

First of all, having moved the dramatic amounts of money into the Roth IRA, in my opinion, very good idea.

You now have big blocks that will be tax free for the rest of your lives.

What a wonderful place to be.

Our income tax rates are likely to go down.

They have gone down in recent memory.

In the last couple of years, the big, beautiful bill brought the tax rates down.

That is true.

But over the long haul, are they likely to go further down or maybe creep back up I think creep back up.

So tax free is going to be even more valuable.

My opinion is going to be even more valuable in the future than it is now.

And since you are 69, you have 31 more years to hit, triple H, happy, healthy 100.

The likelihood that you're going to be very happy, with, tax free income is high.

Fantastic.

You mentioned giving nieces and nephews about $5,000 a month.

That's an interesting number for a couple of reasons.

Number one.

Lovely, generous.

Good for you.

God bless you.

I'm sure it will be deeply appreciated.

And and number two, it's not a commitment.

It's it's not etched in stone.

You're not giving up $1 million.

You're giving up cash flow.

And since we're talking about the cost of long term care, that cash flow that you're currently going to send to, loved ones could be redirected to care.

Now, no one believes that $60,000 a year would be sufficient to pay for care in any reasonable institution.

But let's say your Social Security is I'm picking a number $40,000 a year.

Now you're at 100, and could you pull some dollars off of your investment?

You would almost have to.

So the bottom line is, by redirecting those, could you conceivably, meet the needs of care, particularly if the care was a fairly typical care?

Yes.

There are folks who are in institutions for, eight, ten, 12, 15, 20 years, but the average is somewhere in the two and a half to three year range.

Could that be handled?

The answer is yes.

However, if your health is in, in reasonably good shape, if you would qualify for a long term care insurance program, you might consider taking not just leaving your IRA intact and, and, and hoping it's enough.

But consider drawing from that IRA on an annual basis to fund the premiums.

The premiums for a long term care program that might, might needs to be explored.

Lots of pros and cons.

Underwriting.

You've got to qualify.

Your bride would have to qualify as well.

If you are looking to cover both.

I think you should.

But you may find out that instead of sitting on, $350,000 in an IRA, that hopefully.

Gosh, I hope it's going to be enough.

If it ever happens, you might be able to draw off some of that.

I'm picking the number out of thin air.

$20,000 a year.

What would that be?

6% or so.

So?

So you'd be able to fund long term care for probably 25 years.

Long term care premiums.

And most quality long term care programs.

Do they have a a refund feature?

So if all that money that you're putting out isn't necessary for long term care, you might very well end up getting that back with a life insurance.

Proceeds or with cash flow that could also be directed to the charity of your choice.

So a couple different variations on that theme.

And I think if you do some education, do some exploration, you end up with a solution that spot on fit you.

Well, you have thought through this very, very well.

And, I thank you because it brought up a couple ideas that we had not yet used for some clients, and I already have.

So I'm learning from you as well.

Speaking of learning from you, may I always learn from you like I learn?

What's our next question?

Yes.

Our next question wants to know if this situation is complicated or not.

It says I am aware that a traditional IRA to Roth conversion of funds is subject to a penalty if I withdraw within five years.

But I'm wondering, are the earnings from those converted funds also subject to that five year rule?

If so, what is the best way to track those earnings?

If the conversion was invested into an existing Roth IRA mutual fund that has its own earnings?

Thank you.

Makes my head hurt.

Wow.

That's really complicated.

Actually it isn't.

And that's kind of the fun part of this.

The, IRA to Roth conversion is is going to happen in one of two ways.

Actually, in this case, apparently one of three ways.

But let's go with one of two ways.

We're either either going we're going to choose to go from the Roth I'm sorry, from the IRA traditional into an existing Roth IRA.

Or we're going to go from a traditional into a new Roth IRA.

It sounds to me as if this individual has decided to go from the traditional into a new Roth IRA.

That's fine.

Let's use a simple number.

Let's call it $50,000.

Great.

So now we've gone from here to here.

We've paid the tax.

That's not the question.

The question is, do I have to wait five years to get everything out tax free?

And the answer is no.

It's not that complicated.

In a brand new Roth, you have to wait 10s, because all your contributions, $50,000, are eligible to be withdrawn instantly with no tax.

The question is about the earnings.

That's your second piece that that has kind of added to the complications.

No, it really hasn't.

Are the earnings taxable if they come out before the end of five years?

Yes.

Just that simple.

So you've kind of morphed a couple different pieces of this Roth IRA idea, into one should not have the contributions to a Roth can come out at any time.

There's no five year limitation out.

Easy.

No tax.

It's the earnings.

The earnings have to be there at least five years.

Now if and he goes on to mention an existing Roth wow.

What if we mix them up.

Wow.

What a mess.

No.

Absolutely not.

The establishment of a Roth starts the five year clock.

So let's assume for a second that this gentleman had a Roth IRA kind of sitting over here.

Maybe not very much money, but now the big money's coming out of this traditional IRA.

If he were to direct it into an existing Roth one that he had established in 2020, there are now no waiting periods.

None.

You've already met the five year rule.

So everything that would come out, earnings, contributions, it would make no difference.

All tax free.

And you don't have to track earnings or contributions because it's in a a vested five year met the five year rule into an existing IRA Roth IRA.

It's it's it's ideal.

Now a corollary I sometimes say cornering.

No corollary, to this idea is this many of you are involved in 41K plans.

Many of you many of you have substantial funds in those 4 or 1 K plans.

Many of you have at least some thought that they may wish.

You may wish to convert those to Roth at some point.

If you are age 55 or older.

It would behoove you.

Fun word doesn't mean anything about cars, but fun word.

It would behoove you to establish a Roth IRA right now, even if you only put 100 bucks in it.

Establish it now at 55.

You established the Roth IRA.

By the time you are eligible to move money without penalty.

60 ish, 59.5, 60 ish.

You've got your five year rule net.

You could do a Roth conversion.

All that money could go into the Roth, and you would have instant access to it.

Because you've met the five year rule.

Pretty cool.

Now, I gave credit to the first gentleman for, sharing an idea that I learned from.

Now I'm giving myself credit for sharing ideas.

This gentleman needs to learn from.

Well done.

You.

Outstanding.

That was great fun.

Megs, where to next?

Well, we have another potential complication.

And this one might actually be complicated.

This one says I am 73 and have some accounts with Vanguard.

I received a letter from them stating that I must start taking RMDs for the IRA I have with them, since I don't really need the money at this time.

Is there anything I can do to not have to take the rounds if I need to take them?

Should I have them put them, put the RMD into one of the Roth IRAs I have with them?

Or is there something else that I should do?

Thank you.

Interesting question.

Yes.

More complicated than it appears.

Let's let's talk about what you can't to do.

You said, well, maybe I can take that and just put it in my Roth IRA.

Now, you can, then you can't.

The R&D rules are, remarkably clear about this point.

Anything that comes out of a traditional IRA that is, R&D related.

Let's pick simple numbers.

I have $1 million in the IRA.

This year, I have to take out $40,000.

Pay the tax.

Uncle Sam says, thank you very much.

That 40,000 is now ineligible to go into the Roth IRA.

Can't unless you are working.

And then there's a different set of issues that we'll talk about here in a moment.

But assuming that you are retired and this does not say just as you're 73, you could very well still be working.

We'll talk again about that in a second.

But assuming you're retired, can't do it.

So that's a no.

That's a no.

Is there a way to eliminate, taxes back to are you employed if you are employed?

If you have A41KA lot of ifs if you're employed, if you're in A41K, if you're still contributing to the 41K, you can actually roll your million dollar IRA into your 401 K. And the rules about R&D say you do not have to take RMDs from a retirement plan for one K for A, three B, etc.

if you are still contributing.

Doesn't count IRAs.

So so it's got to be A41K43B4 57 retirement plan.

If you're employed still contributing.

You don't have to take RMDs.

So this million dollars could be rolled into A41K plan.

The $40,000 disappears.

No RMD.

And as long as you keep working and contributing, people say, you mean if I. If I work part time and put a thousand bucks a year into the 41K, I could be 80 and haven't and have taken no armed leave.

The answer is yes.

That's how it works.

That's the rule.

Now, let's assume for a second you're not still working.

You don't have A41K.

That would apply.

I'm guessing the 20% of the folks who are, watching this evening.

80%?

No.

73 RMDs.

The only other method that I am aware of, that allows you, to avoid paying at least the tax on RMDs, is what's referred to as a QCD qualified charitable distribution.

And a QCD says if you instruct the IRA to send this money directly to charity, upwards of $100,000 a year is your limit.

Nice limit.

All of that money, will be untaxed to you.

It will not affect your tax bracket.

It will not affect your your Medicare premiums.

It will not affect Irma.

It won't affect anything.

It is a very generous, provision that allows you, above and beyond your, standard deduction.

So typically, if you're going to make contributions to charities, they've got to be substantial because, the standard deduction for a married couple right now, around $31,000.

And with the new tax laws, $6,000 per senior, taxpayer.

So assuming this gentleman is married, that's another 12.

He's got $43,000 of standard deduction.

He could.

Let's assume the the again our example 40,000.

Our distribution RMD.

If he direct all of that to exceeds qualified charitable distributions.

In essence his first 100,000 bucks no tax.

That's pretty cool stuff.

Does it all fit.

We don't know.

The only way to find out you got to sit with a financial advisor that you trust is, well-versed on the tax side of life, not just investments.

And, run the numbers.

Complicated.

Some things sound complicated.

And in this case, they probably are.

But.

But an hour.

Hour and a half.

Easy peasy, lemon squeezy.

Megs.

Do we have another?

We do.

Our next email is from a couple that's looking to the future and what they need to figure out.

This one says my husband is 55 and I'm 58.

We both work.

He has a pension that will bring $4,000 per month, starting in about a year when he retires from his current position after 30 years.

If something happens to him, I will receive the pension.

After he retires, he will likely get another job due to his age.

Our home is valued at $450,000 and the mortgage is paid off.

Our children are all done with college and on their own.

We have $500,000 in IRAs.

Our only life insurance is through our jobs that will go away when we retire, and I don't feel there is a need to buy term life policies.

I still plan to work for ten years and we will continue to max out on 401 K contributions.

We will not be downsizing our home, but we do have rental income of about $1,500 per month.

We are covered by health insurance under my husband's pension.

Wondering what are your thoughts on all of this?

And where do you think we're vulnerable?

Thanks.

This is challenging.

Where are you?

Vulnerable.

You have, described what for many people would be the answer to a prayer.

Guaranteed lifetime income from pension for both of you.

Lifetime health care for both of you.

Connected to the pension.

Husband that can retire at 55 and not only is likely to go back to work, he darn well better.

Way too young to be sitting on the barcalounger, popping a beer, beer and watching Oprah.

Can't be doing that.

If you're going to watch something, watch PBS.

Especially the BBC stuff.

Fantastic.

Oh, and alma.

Bottom line is.

There's so much good here.

A lot of folks here.

Well, 4000 a month.

That's really nice.

No, it's way better than nice.

Guaranteed for life for both of you and the medical.

My guess?

Rough guesstimate that package is worth somewhere between one and a half and $2 million.

And guaranteed.

Guaranteed.

And you've got $500,000 in IRAs.

Now.

And.

And, goodness, you've got another ten years.

That's likely to be a million, million.

Five.

Gosh.

Fantastic.

Absolutely fantastic.

So what have you missed?

I haven't heard anything in here about legacy.

I don't hear anything I hear about.

The children are through college, and they're growing.

That's fantastic.

Maybe grandchildren are not yet on the on the, in the formula and and goodness, Lord knows that that would change your thinking, perhaps rather rather dramatically.

Is there someplace you're vulnerable?

In, on the surface, absolutely not.

Fantastic.

Is unjust under the surface.

Are you vulnerable from that nagging feeling of, gosh, are are there other things that we could do that would that would not just benefit us, but but would benefit our family and our the generations to come and the people we love and care about so very much.

I would strongly advise you to sit either with trusted, experienced estate planning attorney.

That's a that's a that's a fine way to start or, in my opinion, maybe more appropriately, a trusted experience.

Not not investment advisor, but family wealth advisor, financial advisor who looks at the bigger picture for the entire family.

Generationally, I think you may find I think your husband may find at 55 that going going back to work, becomes exciting if he knows that in the big picture, it's going to benefit his children, his grandchildren, maybe make an impact.

And, goodness, if it's not family, I understand that not everybody is wired that way.

Maybe it's charity.

Maybe it's making an impact on society.

On your community.

Something that you care about, some organization that you care about.

The opportunity over the next 45 years.

Happy, healthy, hungry, to be, impactful.

What a great word.

Impactful is in front of you.

That might be your greatest opportunity.

Financially vulnerable?

I don't think so.

Emotionally, legacy wise, your opportunities, your potentials are there.

You need to explore those.

That might be where you should start.

Well, we started, but now we're close to finishing.

So if you've, found any of our answers interesting, and you're saying what?

My question is a little different.

Send us your questions.

Jean, at ask mtm.com.

You're saying I really like the show.

I'd like to learn more.

Our newsletters are free newsletters, too.

You, Pretty fascinating stuff.

I write some of it.

Lots of great contributions.

Ask for that.

That's easy and free, Jean.

And ask him TMZ.com.

And goodness, the questions I posed early in the show.

If you have answers for those, I'd appreciate that as well.

Thank you so much.

You could have been anywhere you spent your last half hour with us.

That means the world to us, and hopefully that's important enough that you're going to want to be back next week for another edition of More Than Money Club.