- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial adviser, and for the next half an hour, I am at your service.

We live in challenging times.

Challenging times require us to step up, to show courage, hopefully show a little bit of creativity along the way.

And if you combine courage and creativity, we come up with answers from very unexpected places.

One of the things that we've tried to do on as many of our More Than Money episodes as we possibly can is to bring you interviews with folks who have met challenges with both courage and creativity, and maybe give you some insight into their American story that might help you along your path in 2021, and hopefully far beyond.

So, join me in welcoming to More Than Money in Our American Story, Mr. Frank Nacci of Nacci Printing.

Frank, good evening.

- And thank you, thank you for inviting me to your program.

- Oh, it's my absolute pleasure.

For folks who have not yet bumped into Nacci Printing, it's an impressive operation.

Give them just a sense of some of the things that you're doing these days.

- Well, some of the things... To start it off, this is our 47th year in business.

So, I've been very fortunate over my 47 years.

We right now are... Just a little bit about the business, we're a full service commercial print shop.

We offer from design and layout, all the way through the print process, the bindery process booklet-making process, delivery, storage, fulfillment, mailing... We do it all.

- "Full service" really does apply.

- Full service is correct.

- And in the interest of full disclosure, I've been in the facility.

It's impressive.

You've got a wonderful team.

- Thank you.

- Everybody there seems to have that... That, what, camaraderie?

That feeling of team.

We really enjoyed our time there.

So, that that says something about the business.

I appreciate you and Megan coming.

And you're absolutely right on.

Without the team... And let me tell you, in the 47 years, about the first three years, I was doing it myself, and then I hired my first, second, and third.

Our team consists... you've met Kenny Brett, who is our lead salesman.

He's been in the business for over 40 years.

And likewise, my production foreman has been over 40 years... with me 40 years.

And then, you take it on through our graphics department and through our bindery department, and through our customer service department, all of those folks have well over 25 years in the business.

Some of them, well, a lot of them with me.

- When you started this business, this is stuff that legends are made of, because so many major companies started in a garage.

And 47 years ago, if I understand the story correctly, you started in a garage.

- Funny you should mention that, I did!

- How did you get started?

- Well, actually, I went to officer candidate school in the military with a guy who owned a small print shop.

And he approached me about helping him out.

And I said, "I have no idea."

You know, I said, "What do you do?"

He said, "Offset printing."

"I have no idea what that is."

And he said, "Don't worry about it, it's easy."

Well, anyhow...

I did, I went to...

I was destined to go to work as a loan officer for First Valley Bank.

- OK. - Because I had been in the finance business, I was a manager with Household Finance.

You might have heard of them, they're an old company.

I did training with them back in...

Probably the later '60s, early '70s.

And then I got promoted to manager, and I went down to Tallahassee, Florida.

I did an office down there for about a year and a half.

Then I got promoted to a larger office in Miami.

And I did a couple of years down there, wanted to get back up north, left the company, and took a job with First Valley Bank as a loan officer.

But I asked for a 30-day leave so I can get my affairs squared away.

I met this guy from OCS.

"Help me out?

"OK, I'll help you out."

Well, within those 30 days...

This small business stuff isn't too bad.

And I thought, "I want to give it a try before I get back in," because I had work for air products, as well.

- Oh, goodness.

- Yeah.

- So you had the natural background to become a printer, finance air products, officer's candidate school, and the military ,we're going to circle back to that.

Before we get too far along, Alberta's... That's an interesting little town to start in.

Did you grow up in the area of Lehigh Valley?

Where did you grow up?

- Allentown.

- OK, great.

- But this this is where this friend of mine had his shop in a garage.

And for that...

He really did as little as possible, and as a result, I did as much as he needed, and I learned the trade quickly.

And within the 30 days, bank called me, said, "You know, Frank, we'd like to start you on Monday."

I thought, "Uh, maybe not."

I said, "I want to give this small business stuff a try."

And that's really how it started.

And then, I bought some of his equipment from him, stayed in his place, and he fed me work.

And so did my parents.

My parents played a big part in the work ethic that I have, because they owned a small grocery store for 35 years.

And I grew up in that store.

- Was that in Allentown?

- Yeah, it was in Allentown.

On Ridge Avenue.

That's where Tony delivered.

- Tony Iannelli, our good friend.

Very good.

So, you grew up, you saw your mom and dad running a business.

So, you had, maybe by osmosis, but you had a sense of what it meant to own your own business.

Do you think that encouraged you?

- It was the work ethic, my father always worked a couple of different jobs.

He worked at the store.

My mother ran the store during the day.

He was working in textiles.

He was also a part-time police officer for the city of Allentown, directing traffic, things like that.

So, the work ethic was implanted in all of us.

I have a sister and two other brothers.

And, you know, I mean, that's what you did.

You filled the shelves, you did groceries.

You know, you took the plants at Easter time and took them outside because we sold those plants.

And it was only a little grocery store.

- But it was great fun, I'm guessing?

- It was...

It was a life-learning experience and lesson.

And it was, because we got to learn a lot of things and know a lot of the people that came into the store, which is which is really good.

- Oh, that's fabulous.

- Yeah.

- In addition to your dad, your mom, the role models, was there anybody else when you were growing up that you'd say, "Boy, they really had an influence on me"?

- You know, Gene, and I thought of that coming over here because I figured that would come up.

And I'll tell you, there were so many people in my life that...

I didn't even know it.

But I was I was gaining, and they were my mentors as I grew up, as I went through different stages of my life.

I mean, in school and in high school, in some of the college that I went to, but mostly in the military.

When I got in the military, I had a couple of friends who were sergeant majors.

And they really ingrained in you the fact that, mission first, but the people were always right there.

And you need to take care of your people.

And that was throughout my military career.

I was there 26 years.

But those folks there were my mentors.

And I hung, you know, with that and learned from it.

So, I mean... - For a lot of folks who are not familiar with military life, you were an officer, you retired as a Lieutenant Colonel, Sergeant Majors...

These are not officers.

- No, but they're the top rank of the enlisted.

- Top rank of the enlisted, and talk about boots on the ground experience.

- No question.

- These people knew how to get things done, and they knew how to take care of their people.

And what a great set of lessons to pass on to you.

Your business evolves, obviously, from a garage to where it is.

Was the military background useful in your ability to do these pivots, these evolutions?

What I saw in your facility today versus where you started, it's like a different world.

How does Frank go from doing this in the back of a garage to, "I've got a $2 million machine putting out "90,000 copies an hour"?

How do you get there?

- It does evolve, and there's no question about it.

I rely heavily on the people that work with me.

- Oh, very good.

- The people that work with me, they read the trade magazines.

They're talking to other pressmen, they're talking to other supervisors, talking to their salespeople.

They're talking to our customer.

And that's where we get our lead, from is our customer.

What does the customer want?

What do they need?

And then, we format and take our company to that level of their need, not buy the equipment and then hope they come to us.

But we listen, and we come back, we get together...

I have some real smart department heads.

We get together regularly, and we talk about this stuff.

I mean, like a small business.

And you're a finance guy, you know this.

In a small business, you have to make decisions several years out.

"Well, which fork am I going to take?

"Am I going to buy this new piece of equipment, "or am I going to buy this new software that's coming out?

"And how much resources am I going to put in "that one or that one?

"And are we going in the right direction?

"Is everybody else going this way, and we're going..." There's decisions that have to be made.

The people around me are the ones that actually guide, and they are my mentors.

- In a very real sense, aren't they?

- Yeah.

- Absolutely.

The people that "theoretically" we hire to work for us, we end up being, in an essence, a resource for them.

We end up supporting them in their dreams and their ideas.

And I think the result is pretty impressive.

Speaking of results, 26 years in the military, that's quite a result from a young man in Allentown, growing up kind of scuffling, and ending up as a lieutenant colonel.

Your commitment to the community runs very, very deep, whether it's the Iron Pigs or the Phantoms, the list goes on and on where, if folks check out your website, they're going to see a lot of things that you've been doing in the community.

Did that come from your growing-up era, your military era, your service?

Where did it come from?

- All of that.

- OK. - Yeah, really, all of that.

You know, in the military, what I told you about these sergeant majors, they cared about the mission, but they cared about the people.

And when you care about the people, if you're in business, yeah, you want to make a good living and you want to make sure that your people who are working with you can make a living.

But at the same time, a lot of people out there that are unfortunate, and not as fortunate as I am.

And we always tend to gravitate toward those companies and in people that need things.

Like the one picture that I sent Megan was me in a uniform, military police uniform.

This is in the '70s that that picture was taken.

I don't know if you remember, but in Allentown here, the March of Dimes had huge walks, huge.

And I was a military police company commander, and I brought, on an all-volunteer basis, we brought that whole company out to do traffic control, crowd control, maneuvers, that kind of stuff.

And I'm telling you, I did that for many, many, many years.

And that gives you kind of a sense of, after you get done with it, there's really a lot of pride in it.

- Oh, without a doubt.

- So there's self satisfaction that goes along with it.

- And, of course, today, 2020-21, the idea that we need satisfaction in our work, not just something to do in a paycheck, but to feel like we're making a contribution is considered very cutting edge.

And yet for you, over 47 years, it seems like that's how you've built your entire process, not just earning a paycheck, but giving back and giving the people that work with you the opportunity to give back, as well.

- We're very lucky.

Our people, some of them are on boards, I was on several boards, gave back your time, the church, you know, you give back there.

Agencies that need things.

And we're very fortunate in that we have some prime seats at the ballpark.

So, you know, we're constantly donating those out to different organizations that are trying to raise money.

- Your phantom box isn't too shabby, either.

Not too shabby.

- The phantom box... - The center... - You know, I'm so fortunate, Gene.

I really am.

You know, just things...

I've been blessed, really.

- We thank God.

We thank God.

- If you had a young person in front of you today that's thinking about starting a business, what one or two things would you say, "Keep in mind this"?

What would you tell them to keep in mind as they start their...

They're starting their 47-year journey that you've been on.

What would you tell them?

- Be honest.

- Very good.

- Be honest.

In your dealings, be honest with people.

Make sure that you're telling what you can do.

If you can do that, they'll trust you and they'll come back and deal with you.

But if you don't tell them the truth, you say one thing and do the other, it's not going to work.

- Tremendous.

Frank, thank you so much.

- My pleasure.

- Folks, a great American story based right here in Allentown, started in a garage and now absolutely making a difference not just in his business, not just in printing, but in the community and beyond.

I hope you enjoyed Frank's story.

I know I did.

We're going to answer your questions, the part that you really enjoy most in.

And, to tell you the truth, I think so do I.

We're going to go to questions and answers in the email bag here right now.

Well, thank you.

Well, thank you very much.

I value your question.

You're very, very kind.

For everyone listening this evening, if you have a question for us, you send the emails directly to me, Gene@AskMTM.com And, as we always do, we promise that while not all of your questions will appear on our show in the future, all of your questions absolutely will be answered directly to you.

So, let's turn our attention to this situation.

Let's use simple numbers, they're not included in the email, I'm using them just as a demonstration.

Let's say mom and dad bought their home many, many years ago for $75,000.

It's now worth $475,000.

They've done wonderfully, wonderfully well.

Should they decide to sell it, they will have a capital gain of approximately $400,000.

That's a lot of money.

They will pay no income tax.

That's not very much money at all.

Isn't that interesting?

For some of you, you're finding that, hey, I'm not sure I understand that correctly.

Well, the IRS code gives a married couple a profit up to $500,000 on the sale of their primary residence, and they pay no income tax.

Not a bad number at all.

So, in our example, 75 in, 475 out, they have no tax to pay.

That makes it easy.

We don't need a trust.

We don't need any fancy planning.

It just is.

It just is.

We're playing the game according to the rules.

So the first answer is, is the gain based on the current value?

The answer is yes, but in my example, it simply doesn't matter.

Now, the second question is quite different.

What if mom and dad don't sell it?

They leave it in their estate and, at their passing, it goes on to the children?

The children would pay capital gains, if there are any.

The IRS code is really interesting in this regard.

It says that the cost basis for someone inheriting a home, receiving it through an estate is the value of that property on the day that the decedent passed away.

So, using the very same numbers, let's say that mom and dad paid 75, it's worth 475, and instead of selling it, they pass away, the children inherit it, but their cost basis is now $475,000.

So, if they turn around and sell the house rather quickly rather shortly thereafter the date of death, likely it's going to sell for right around that 475 number.

No there's no gain, there's no tax.

It actually works rather well.

Now, a trust, would a trust affect any of this in a positive sense?

And the answer is likely no.

From an inheritance tax standpoint, a trust of the type that might you might consider for holding this house would have no effect whatsoever.

The state of Pennsylvania inflicts, proper word, "inflicts" a 4.5% inheritance tax on the assets that are passed directly to bloodline, children, grandchildren, etc.

Trust will do little or nothing to affect that, will not improve that.

Won't hurt it, but won't affect that at all.

So, in most cases, if you're looking to reduce the estate, mom or dad can sell the property, and then gift the assets to the kids if they are so inclined.

And then, if they're passing, those assets are not in the estate and they're not taxable.

Which direction to go?

Sell now?

Give it away, keep it in the estate?

And then, create a will that sends it directly to their beneficiaries?

The answer is it depends.

It depends on mom and dad's circumstances.

It depends on mom and dad's goals.

It may very well depend on mom and dad's health.

Because health comes into this factor, so make sure that before mom and dad decide anything, that they sit with an adviser they trust, go over their situation in detail, and come up with a plan that best fits them.

Let's go to our next question.

I think you're going to be pleased to find out that the answer to both of those questions is, yes, you can absolutely do that.

Survivor benefits, even though this young lady has been widowed for seven years, they don't start until age 60.

Now, at age 60, they are reduced.

Those benefits are going to be rather modest compared to what she might collect as a survivor at a later age, 65, 67, 70, etc..

But her plan is absolutely accurate in the sense that she can take it now, perhaps that supplements her current income and makes the next few years a bit more agreeable, and then, allow her own benefits to grow year by year by year until she switches over whenever she decides to retire, her normal retirement age roughly 70, between 60-70, her own benefit is going to grow dramatically.

And between 67-70, it will grow dramatically again.

So perhaps if her retirement plans and the addition of her survivor benefits allow her to continue to push off taking her own Social Security until she is 70, she will max out.

She will get the maximum amount that Social Security provides.

And goodness, not a bad plan at all.

Another question.

Very good question.

Seemingly pretty straightforward.

In reality, almost as straightforward as it seems.

A Roth conversion, for those of you who are not familiar with the term, is a process where you take money from a current typical standard original IRA, or 401K, and we drop that into a Roth IRA or Roth 401K.

It is converting from a standard to a Roth.

In that process of going from the standard to the Roth, taxation!

So, if you decide I'm going to convert $10,000 into a Roth because a Roth then in the future will be tax-free, perfectly acceptable plan.

The IRS says, "I agree, it's fantastic, but you've got "to pay tax along the way."

So, in the year you do your conversion, that 10,000 goes on to your tax return.

And bottom line is, your taxes will go up.

Is it better to take it from the 10,000 that you're converting, or out of the bank?

The answer is always out of the bank.

The more money you can keep intact, going into the Roth is more money that will be tax-free later in your life.

And keep in mind, you can do conversions in pieces.

If you have a $500,000 IRA and you want to convert it over ten years, you can take ten pieces.

If you want to convert it over a longer period of time, multiple pieces, you can customize this to fit your tax situation and your available cash flow.

It's a good idea.

One last one.

I'm going to make you a really, really happy person.

You don't have to cash in, and you don't have to stay in your 401K.

At your age, you can do what's referred to in the IRS code as an in-service rollover.

You can take money from your 401k, roll it to an IRA.

Once it's in the IRA, you can take advantage of the exact type of annuities that you are considering.

These annuities indeed provide a lifetime of guaranteed income.

They also provide you with, in many cases, lots of good investment options that you can take advantage of.

These types of annuity platforms can indeed give you a tremendous peace of mind and confidence going into retirement just in case the stock market or the real estate market, or all the markets indeed take a dump right as you retire.

You'll be locked in, and you'll be protected.

So, you don't have to pay massive taxes.

You don't have to worry about being kind of locked out of this scenario.

You can do this in-service roll over.

Once it's in the IRA, you're going to be a happy, happy camper.

Folks, we just have seconds left in this edition of More Than Money.

I want to thank you for sharing part of your evening with us.

I want to thank Frank Nacci of Nacci Printing.

What a wonderful story.

Starting up with helping out mom and dad at the corner grocery store in Allentown to the military, to lieutenant colonel, 26 years in the army, to owning a business that not only thrives in the Lehigh Valley, but benefits to Lehigh Valley in as many ways as they can possibly conceive.

A real American story that you can connect to.

If you have questions for us that you would like to have answered, whether it's on a future show or directly to you, send those directly to me by email.

Gene@AskMTM.com.

Whether they're investment questions, retirement questions, income tax questions, estate planning questions, Social Security questions, it really doesn't matter.

Send those to me.

We'll make sure we get the answers to you.

And stay well.

We'll see you next time on More Than Money.