- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial adviser.

For the next half an hour, I'm all yours, hopefully answering your questions live on air, hopefully giving you information that makes your financial life a little bit easier, perhaps a little more productive, a little more efficient, a little less stress, a bit more peace of mind.

That would all be useful.

Hopefully you have been with us in the past.

You are a regular viewer of More Than Money.

If you're just joining us, we cover all manner of topics, all driven by your concerns, all driven by what are you worried about?

What questions do you have about your financial life, either now or for your financial future?

We do that rather simply.

You send me an email, Gene@AskMTM.com, ask whatever you wish.

We can't promise you that every single email will be answered on air.

We simply get too many.

But we do promise you we will answer every single email directly to you.

We have a tremendous team, and if it's not me personally, one of my team will be in direct contact and giving you all the information we possibly can to make your life a little bit better.

Making lives better is kind of our mission.

And that's what we're here to do, to serve the needs of our clients, our audience.

Indeed, a lot of folks are under the impression that a financial adviser, if he or she is doing their job correctly, can see into the future.

"Hey, where's the stock market's going?

"Hey, where is the economy going?

"Hey, how about that tax proposal?

"Is that going to pass or not?"

They are under the impression that making a good financial plan, a good investment plan, a good plan of any type inside the financial world is based on some form of psychic ability.

And we need to dispel that misunderstanding immediately.

My wife will assure you, psychotic ability, I have in spades.

Psychic ability, none whatsoever.

It was the great American philosopher Yogi Berra who was quoted as saying, "Predicting is really, really hard.

"Especially about the future."

So, if you already know that predicting is really hard, what are we to do?

We play the probabilities, we assess the landscape, we know how things are at the moment.

We get a sense of, with all the intelligence and all the information that we have available, where we should go in all probability.

And then, we implement and monitor, monitor, monitor, always checking back, always checking back, being flexible enough to make changes.

So, you'll see no one is psychic.

Lots of folks are psychotic.

No one is psychic.

So, being psychic is not a key component of having a successful financial plan, or implementing a successful financial plan.

Go with your probabilities.

Have a good, solid plan, monitor, and adjust.

Let's give you an example.

Let's see if we can answer some questions that you've sent in this evening.

Our client advocate is Megan.

Megan's going to be sharing client questions with us.

Megan, what's our first question?

- Sure thing.

So, the first viewer asks... - Well, Megan, great question.

Fascinating.

Interesting, because it applies to so many people.

Lots of folks in our viewership have owned their homes for ten, 15, 20, 30, 40 years.

And indeed, they might have replaced a fence - he tried to say - might have replaced the fence 2-3 times, might have replaced a roof 2-3 times, might have redone a kitchen 2-3 times.

What this gentleman might be pleased to find out is that, even though you're replacing one replacement with another, it still adds to cost basis.

So, if you bought your home for 200, you've replaced the fence twice, first time for three, the second time for ten, your cost basis is now 213.

You replaced a roof many years ago for five - bless us - and now for 15.

Your cost basis is now 233.

You add all of those together.

It is absolutely understood by the IRS and everybody who's ever owned a home that, if you own it long enough, you'll end up replacing some things multiple times.

So, for the purposes of the IRS, for the purposes of calculating capital gains tax, whether it's on your own home or an investment property, adding up all of those capital improvements, not the day-by-day maintenance expenses, but all those capital improvements, they will add to your cost basis.

They will eventually reduce your capital gains, and hopefully reduce the tax bite that you might feel from the IRS, as well.

Hopefully that helped a little bit.

If you have a question for us, Gene@AskMTM.com.

Back to our client advocate, Megan, do we have another question?

- We sure do.

- This is a... well-phrased question.

Lots of folks are in that mindset of, wouldn't it be nice if I could retire before I die?

I will give you kind of an anecdotal feedback, not a academic survey, but just from the folks that I have spoken to over many, many years, the vast majority of folks who come to me saying, "I'm afraid I'll never be able to retire" are in far better financial shape than they ever expected.

The common result at the end of a first initial interview with someone who's concerned about being able to retire, is, "I had no idea we were in such good shape.

"I had no idea I should be this confident."

We've had folks come in saying, "I guess I have to work until I'm 70," and walk out knowing that at age 65, they could quit tomorrow.

And even though they may not quit tomorrow, it is a very powerful piece of information to know that you could, so that when that evil boss looks at you with cross-eyes and gives you that harsh tone and says, "You know, you've got to..." In your mind, you can say, "No, I don't got to.

"I don't got to.

"I could leave tomorrow, "and I will be perfectly fine financially."

That's a really wonderful piece of peace of mind, if you'll forgive the phrase.

So what do we do with 401K where we just don't know?

You might be surprised to find that a quality financial adviser, a trusted financial advisor, is very willing to help you with your 401k investment selections.

Typically, a 401k has anywhere from two dozen or so, to as many as 60, 70, 80 different investment options.

For the average person, looking at the spectrum, so to speak, is quite overwhelming.

If you walk up to the buffet at a smorgasbord, at least you, for the most part, had a chance to sample most of those kinds of foods in your lifetime.

Not very many of them are going to be foreign to you.

But on a 401K menu, there's going to be tons of those different types of funds that may not ring a bell, may not be something you're familiar with.

And for a lot of folks, they just default to something they do understand, quite often inappropriate or something that maybe someone else they're friends with has selected, sadly, sometimes quite inappropriate, or maybe they've done an OK job, but it could be much better because there are options withinside the 401K that could be even better for them.

Financial advisors are quite skilled at being able to identify the appropriate funds to select from, and how much of your money should be invested in each of those funds.

It's called the asset allocation.

It's kind of a fancy term for financial recipe.

How do we invest?

What do we invest in?

And how much do we invest in each of those funds?

The example I have given, 'cause obviously I like food... Goodness, is if you've got a recipe that calls for some form of baked goods, and it's flour and it's butter, and it's sugar, and it's salt, if you decide, I'll just put equal amounts in, a pound of butter, pound of flour, powdered sugar, powder, salt... What a mess!

What a dreadful creation that would be.

It is very similar inside your 401K, or any investment allocation.

You've got to not only know what ingredients to use, but how much of each of those ingredients, as well.

And again, a trusted financial adviser can help you dramatically.

For those of you watching us, if that's your question.

It's really pretty simple.

Gene@AskMTM.com allows you to send us an email.

And if you have access to the investment options that you have, you send those along and you can have a conversation with an adviser that will give you that kind of guidance and put you on the right track so that you know you're doing the very best that you can.

No guarantees, perhaps, but the very best that you can.

Speaking of the best client advocate, Megan?

Megan, you're the best.

What do you got back there?

- Well, thanks, you're the best, too!

Speaking of best... - The dreaded "when do I take my Social Security" question.

It's not as challenging as many people wish it to be.

This question, no disrespect to the individual sending us the question, but this question is adding a layer of challenge that does not need to be added.

The projections of the Social Security Administration change on a near daily basis.

There have been times in our past when the Social Security Administration had projected that they would be out of money by the year 2010.

Well, we seem to have passed that, and then, there were projections it would be out of money at 2015, 2020.

The projections, of course, were many years ago.

But we're in the same boat here.

Projections are just that, they're projections, and they have little or no true impact on the decision to be made at hand, which is, what's the best choice for you?

And, as we started our show saying that no one is psychic, you can't possibly know that you're making the exactly, exactly, the exact correct decision until... ...your time on this planet is over on the day that you leave, you can look back and go, "Yeah, I did very, very well, not so well or I was perfect."

Pretty rare, but it could happen.

So, here's the guideline.

Here's the rule of thumb that we use to start that conversation for every client.

Do you need Social Security now, the payments now, to reach your financial goals?

Simply put, if you need that Social Security benefit payment in order to pay bills so that you can be happy, healthy, and relaxed, then take it.

I don't care if you're 62, 66, full retirement age, 70, maximum Social Security, it's whenever you need to take the money.

Now 70 is indeed the maximum, so there's never a reason to delay taking Social Security past age 70.

But there's lots of reasons to delay it between 62, the earliest age at which you can take a reduced benefit, and age 70 - not the least of which is the difference between your benefit at 62, let's say, just for the sake of demonstration, that benefit would be $1,500 a month, and the benefit you would receive at 70 would be approximately double.

So, if you take it at 62, 1,500 a month, if you take it at 70 something in excess of $3,000 a month, the differential is staggering, and it's for the rest of your life.

Now, there is sadly one factor that has to be addressed, even though it's not necessarily a comfortable discussion to have, and that's health, life expectancy.

If someone - my dad passed just shy of his 63rd birthday, he received Social Security for less than a year.

His father died at age 62, as well, prior to Social Security being part of the process.

So, bottom line is, if the theory was that that was my end date, got to take it early, because if my life expectancy truly was - fortunately it's not - long past, If it truly was very diminished, you want to take it as early as you possibly can.

If, on the other hand - and we have lots of folks like this, "Hey, mom's doing great, she lives on her own, "she's 96 years old.

"Hey, Mom's got some assistance, "but she's doing great.

She's 99.

"She just turned 100."

If you've got that kind of longevity in your future, you want to get the maximum income that you can from Social Security for the maximum number of years at least, playing the probabilities which likely will take you to full retirement age 70 for Social Security.

Those are some of the parameters.

Obviously, your situation is very, very specific.

So, it has to be an answer that's specifically for you.

If you're married, for you and your spouse, you've got to have that kind of guidance.

Fortunately, on our More Than Money team, we have a wonderful partner in Mark Bacak, who has 40 years of experience with Social Security Administration, and has become part of our team in recent years after his retirement from Social Security to become our resident expert.

So, again, if you have questions specifically about your Social Security or Medicare, let us know.

Megan, speaking of questions, hopefully you've got another question for us.

- I hope so, too.

- Goodness, are you on the right path, young lady?

You could be a guide for the right path.

The things that you are doing are precisely correct.

You have literally taken the bull by the horns and decided to check-list all the boxes of what a person should do to put themselves in the best possible position to be successfully retired.

And when I talk about being successfully retired, I mean being able to retire so that our bills are paid, we're happy, we're healthy, and we never run out of money, never run out of money.

Number one fear of folks retiring is, what if I run out of money?

Well, a successful retirement means you never run out of money, and you've put yourself in a very strong position.

The fact that you've got 35 years in one job, something that today's generation likely will never be able to achieve.

We have seen resumes for young folks in their early 30s who have been on their fifth, sixth, even seventh job already since leaving college or high school.

So, the idea that you'd be 35 years into the same job, it gives you a tremendous leg up in terms, not just of your pay, but your ability to accumulate money in your 401k.

That's the second thing that you've done remarkably well, is committed a tremendous percentage of your income, 18%, tremendous, into your 401k.

Now, is it the maximum?

The answer is maybe.

Maybe.

At your age, you are allowed to put away, I'm going by memory, about $26,000 a year into your 401k.

If 18% gives you that maximum contribution, then you're good.

If it does not, then you might consider, if your cash flow permit, adding a little more money into your 401k.

18%'s impressive right off the bat.

But could it be more?

The answer is, I don't know.

If you're at 26,000 - 18% of 100,000's only 18, if you're making 150,000, you're probably right there.

If you're not maxing out, I would consider, if at all possible, maxing out.

You bought a home later in life.

Some folks say, "Wow, at 50, she bought her own home."

That's fantastic.

Again, building equity, building asset base.

An asset base that, in your retirement, in your 60s, 70s, 80s, perhaps, could very well come back to fund a very healthy addition to your retirement if you use a technique called a reverse mortgage, accessing your equity in your home without actually having any monthly payments.

I'm sure you've seen Tom Selleck.

He's been everywhere touting the benefits of reverse mortgages.

Indeed, there are many.

It's not perfect.

There isn't a financial tool that is.

So, being familiar... it's too early for you, you've got plenty of time.

But for folks who are looking at retirement or in retirement, particularly if you're in your 60s, this would be something that you'd want to explore, get lots of good information about reverse mortgages, and tuck that maybe inside your vest so that that's there when you may need it.

Young lady, you should be congratulated.

You have accomplished a tremendous amount.

You've put yourself in a very, very strong position.

You're a role model, and other folks should follow your lead.

I will follow Megan's lead, if she has another question for me.

- I do.

This one says... - It's a very interesting question.

And, as I'm reading that question along with Megan, not all the questions are phrased from our viewers in ways that kind of flow.

So, we do the very best we can.

And I'm trying to figure that out, too.

And if I've got the question correct, if I've correctly interpreted the question, this person has sold their home.

They've got a block of money, but they're not ready to repurchase.

They're not ready to jump back into the market.

The reference to we hope the market has dropped by then within the next year or so.

Not clear that that's going to be a hope that you're going to realize.

The market is extremely hot, still not really an end in sight.

Now, will the market cool down?

The answer is, of course it will.

Will it go through that down cycle in real estate?

Of course it will.

When?

I have no idea.

How far down will it go?

I have no idea.

But the answer to your question is remarkably simple.

The fact that you've got a short period of time, a year or so, and the fact that you absolutely must keep that money safe and secure so that it's available should you need to make that move or wish to make that move, maybe you find the perfect house tomorrow - the only place that it belongs is in the bank.

Bank/credit union, something that's insured, I understand it's going to make 0.1% or maybe 0.01%.

It doesn't matter.

It's safe.

It's secure, it's liquid.

It is available.

When you need it, it will be there for you.

So, the answer to your question, putting aside all the probabilities of what might happen in real estate, interest rates going up, values going up, people bidding multiple prices, auctioning off their properties, in essence - all that aside, the only place for you to put your money...in the bank.

But I'm going to guess we have another question in the bank.

- You're correct.

OK, so... - Hmm.

Hmm...

This is a bit of a head-scratcher.

Let's go to the center of that question first.

One spouse does not qualify for long-term care insurance.

I'm reading between the lines to assume that one does.

So the idea would be, I have long-term care insurance, perhaps on the wife.

I do not have it on the husband.

And the husband wants to make sure that the wife is not left with no resources if he should need care, and all of their money needs to be directed, needs to be spent for his care.

I got it.

So, the question is, is the irrevocable trust the way to go?

Well, in most of my conversations, thousands over the years with folks around estate planning, when we talk about the word "irrevocable" and the real impact of irrevocable, the answer is almost always, "I'm not interested".

Irrevocable means that, once it's in, it's in, and it's not to be changed.

So, crafting that irrevocable trust, it demands an estate planning attorney, very experienced, very skilled, very knowledgeable.

In my opinion, the vast majority of folks listening this evening, watching this evening should not consider an irrevocable trust.

They should consider any number of other strategies that might help them out in the event of a long-term care issue.

But looking at the - being in literally a straitjacket with your finances on the irrevocable trust side, I would be very, very hesitant to do that.

The advantages are obvious, if you can protect a tremendous amount of money from being spent for the care of a spouse, yes, it means that the surviving spouse is not an impoverished.

Sadly, what it does mean, as well, for the spouse who needs care, it's called Medicaid.

Medicaid, Medicaid in its proper term is medical welfare.

And the care that somebody gets on Medicaid, in terms of nursing home or institutional care, et cetera, is not the same as they would get if they were a private pay or an insurance paid patient.

It simply isn't.

I wish I could tell you it were.

It is not.

It simply is not.

So, one spouse, in order to protect themselves financially, might in essence doom their partner to being cared for in a way that they're not really happy with, that they would not be happy with, certainly for themselves or if they had a choice.

So yes.

Meet with a trusted estate planning attorney.

Yes.

Make sure that you have laid out all of the issues that you're trying to address.

And yes, follow his/her counsel and guidance in terms of getting you where you wish to be.

Very, very tough.

No easy answers.

There's nothing perfect here.

Make it the best it can be.

I want to thank Megan for being our client advocate - again, he tried to say.

I'll do again.

I want to thank Megan for being our client advocate and expressing our audience questions.

Lots of good information.

Hopefully you picked up something there that will be of use to you.

If you have a question that you would like to have answered, whether it's very detailed or very brief, all you need to do is send those to me, Gene@AskMTM.com We're happy to answer your questions.

Again, we don't promise that they'll all be on a future show, we simply get too many.

But we do promise that your question will absolutely be answered by a More Than Money adviser, most likely myself.

So, hopefully that helps you in the future.

Thank you for being part of our show this evening.

We hope you picked up a lot of good ideas, and we hope you'll come back next week and rejoin us right here on More Than Money.