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Visit dafgiving360.org the New Year is the perfect opportunity to reset your space and get back into an at home routine you love. Wayfair makes it easy to do just that. With everything you need for your home all in one place. From bedding and bath essentials to storage, decor and furniture, Wayfair has it covered. You know I bought my little in home desk at Wayfair and it is amazing has served us so well. What makes Wayfair so convenient is the massive selection. With so many styles, price points and categories to choose from, it' easy to find exactly what works for your home. Upgrading a work from home or study setup or adding smart storage throughout the house. Wayfair makes shopping simple and stress free. Get organized, refreshed and back on track this new year. For way less. Head to Wayfair.com right now to shop all things home. That's W-A-Y-F-A-I-R.com Wayfair every style every Home welcome to the Jill on Money Show. It's Thursday, February 26th. And why does that date sound so familiar to you? Because this is the date that we are conducting our live webinar with Ed Slot. Oh by the way, this is the program that takes the mystery out of your financial life. And one of the biggest mysteries of life is conducting your tax planning and tax prep in a methodical way. And our guest for our webinar tonight is Ed Slott, the one, the only. He is a CPA. He is an expert in IRAs, in Roth IRAs, in Medicare planning, in Social Security planning. He's got it down. He's so entertaining. He is so much fun. And we have always been delighted that he is a man who can absolutely just drill through questions that you may have. And you need the assistance. If you're asking a Roth question in your head, Ed's the guy. You've got to join us tonight. The only way you can do that to join us live is to subscribe to Jill on Money Live. And that will cost you 45 bucks. For the next 12 months. You'll get tonight's webinar with Ed three more. The back catalog of the webinars, bonus audio and video content. Again, 45 bucks. That's it. Now you've got to subscribe by 3pm today if you want to join us live. Let's say you forget. Let's say you're busy. All of a sudden you're at work, it's lunchtime, you are going to subscribe and you're like, oh, I can't make it. We're going out drinking tonight. Okay, be with your colleagues. That's fine. You can always pay for the webinar after it is conducted. 15 bucks as a standalone, you can do that. So check it out. Jill on Money Live, all the information is on the website. You know what else is on the website? The contact us button. That button will be the magic way to get in touch with us. A form pops up when you click that contact us button. That is the email we receive. And once we get that email, we try to do some email shows, of course. And if you would like to join us live, just check the box. Mark will do everything else. All right, let's do some emails. All right, let's rock and roll. Cause I got, I got. I'm prepping for tonight. I'm excited. So let's do it. First up, Rebecca, who writes Jill under no obligation. I've spoken with a financial planner about retirement planning and funding a home renovation. My husband and I each have brokerage accounts, Roth IRAs and 403B's. The planner cautioned me about the need to mitigate risk as we approach retirement in nine to 14 years. 14 years. Oh my God. Okay, here comes the next sentence where I'm laughing because I'm reading ahead. Instead of going the bonds route, you know, the one that would actually make sense and keep me liquid. I'm adding that as an editorial. The insurance salesman recommends insurance backed annuities. I'm just. You see how I'm pausing there, Mark? He spoke very highly of the company that he recommends, the one that's going to Pay him a big commission, I presume. He explained that we could remain invested in the market while having peace of mind that we'll never lose money in the annuities contract, no matter how much the market might fall. The flip side is the insurance company takes a portion of any profit the fund earns in a bull market. However, the Internet largely portrays annuities as predatory. What are your thoughts? Let's stick with that term, predatory. Annuities aren't predatory. The people selling them are predatory. Now, not all annuities are bad. And some annuities are low cost. And some annuities have a use case. This is not a use case. So, Rebecca, run, do not walk. Also, by the way, she also wanted to know about the insurance salesman. Oh my God, this guy's a piece of work. He also suggested the funding of a $300,000 renovation with a securities based line of credit instead of a home equity line of credit. What are your thoughts on this? Rebecca, I want you to come on the air. I don't know who this guy is, but if you've got brokerage accounts and you're going to do like asset baselining against that account, it all is except when the market goes down. And when the market goes down, guess what happens? They actually force you to sell a portion of the portfolio. So I don't always think this is the smartest thing and I may want to talk to you a little bit more about the actual assets that you own and the way to finance this. Maybe it's a home equity line of credit, but maybe it's some combination of using some of the money in the brokerage account and a home equity line of credit. Let's talk this through. Please get back in touch with us. No to the annuity guy. How's that? No to annuity man. Okay, Terry writes, I'm looking for confirmation. I'm moving on to my next chapter. Terry's got $1.6 million in retirement assets, 50 grand in cash, 93 grand in a health savings account, whole life insurance, $120,000. Oh, I'm ready to get rid of that. Taxable brokerage account. $50,000. Okay. Own a condo, no mortgage, worth 775. Terry and spouse 6768. Wife will have income of 40,000. Social Security, pension, part time job, no pension for Terry, and says although a half a million dollars of retirement funds is a cash balance plan that could be annuitized. No, Cola, I don't want to. I agree with that, by the way. Most of These cash balance plans, unless they have a cost of living adjustment, it's kind of tough to take the annuitization. Sometimes it works, but many times it doesn't. Terry still works and says Social Security, four grand a month now or five grand a month at age 70. I plan to wait till 70. Expenses. Terry says 6900. Can we just say 7000? Okay. Terry thinks they can retire this year and pull 4% of the money out of retirement assets currently. Mark, this one's for you. My current income is $200,000, which will mean IRMAA for Part B Medicare for the first year of retirement. Guys, stop with the Irma. I can't believe how many people focus on this, Mark. It's really shocking.
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Instead, focus on all of the unnecessary subscriptions you have in your life.
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I mean, when you think about this. Okay, so wait, Terry's at 200, right? So we're talking about like five grand for the year. For one year. Calm down, Terry. It's good. We're all good. Can also access cash value of life insurance. That I would do. I would definitely do that. If I had a. I'd be interested in that anyway. Policy there's got some long term care. Wife's. There's a lot of longevity all over the place. Estate planning and legal documents updated, executed, healthy, active. We volunteer, Mark. We want to get Terry to retirement.
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Yeah, he can retire. He's 60. He's going to be 68 this year. Wait two years, take your Social Security. That's like the bulk of what you're going to need. Then you factor in your wife. You guys are there. You have all the money in retirement.
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Yeah, you can retire. Rock and roll. It's funny. You thought Terry was a man. I was not. I was saying I wasn't sure.
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I just assumed.
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I don't know. Don't assume.
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I know you can't assume.
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Terry, I think you're good. Don't worry about Irma. Come on, guys. Come on. I want to ban Irma from the show, but I can't. Diane is following up with questions and she says, I hear from your podcast and a lot of others that Roth conversions make sense. Especially if you have a lot of traditional IRA assets and non retirement assets to pay the taxes due. But why isn't it advisable to convert a Roth even if you have the money for taxes withheld from the withdrawal? It doesn't work. The math doesn't. Math, that's why. Because now you actually have to. Okay, so let me just get back to this Diane is 65, single, retired, $300,000 in investment accounts, 300 a grand in a Roth, small pension, an immediate annuity, another annuity that I'm drawing and taking to get me to 70 before I claim Social Security. All right, so at 70, Diane's going to have $4,000 a month and expenses are $5,000. I have about a million dollars in a non taxed 401k that I rolled over. I don't need the money, but I plan to start withdrawing from the account now so that my RMDs aren't so large later. Wouldn't it make sense to go ahead and convert some of the 401 into a Roth? And even if I pay taxes on the withdrawal by having the amount withheld from the withdrawal, isn't that better than just taking the withdrawal and investing it in a taxable account? Mark, would you like to answer this?
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I mean, my head's kind of spinning on this one. When you do a Roth conversion, they're not going to withhold, I mean, 99% of the time they're not going to withhold the taxes for you. You're going to have to pay the taxes on your own. So either way you're paying a bill, you're paying the bill on the conversion or you're paying a bill on the withdrawal when you take it out.
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But here's the more interesting thing. She says, I have $300,000 in investment accounts. What is that? Is that because that you have money outside of retirement accounts if you wanted to convert? That's what I don't get. So she's got a million dollars in a traditional Rollover, she's got $300,000 in investment accounts. If you want to convert, go crazy, sell some stuff out of the investment account and pay the tax bill, or as you are planning to do, just pull the money out and pay the tax that's due. And by the way, you can still pull the money out until you know what did she say she was 65? Is that what she was?
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Yeah, but the thing is that I don't know if she gets, is like if she does a conversion, all that money is going to get added to her ordinary income that's going to be taxed. In order to pay the taxes, she's going to have to sell it at a brokerage account, which is going to trigger capital gains, I'm guessing. So she's paying taxes twice.
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Although, although, although she, maybe she can do that. I don't know what the investment account is, but it's more like even if. Let's pretend she didn't have the investment account and she's just saying, she's saying, oh, I would just take more money out of my retirement account. Use that, pay what's due, add it to your taxable income, it doesn't work as well. So you're 65, you're single, and you're retired. Let me refocus this. So you get this, Diane, you've got a million bucks that is in non taxed retirement accounts, right? Pull as much money as you can every single year. Do not convert to a Roth. Just pull the money out, reduce that account, pay the tax that's due, and shove it into your investment account as a single person. And you know, even once you claim Social Security, it's still fine. But like, you can get this all taxed at, let's say, 24%, you can pull out enough money to make a dent in this thing. So again, you've got 10 years to get the money out, right? So take out 150 grand a year. Fine, do it. And then you have a bigger investment account and a smaller retirement account. All right, I think that's it. But people, you got to remember, everything you take out of those accounts that is taxable to you. So even if you have to take the money out and pay tax on it, it's not like, oh, can I just do. Yeah, of course you can do it. It just doesn't make the math work as well. Okay, next. Ken writes, I personally think charities are something that should be considered when planning for your financial future. I know you periodically discuss them on your show when they are specifically on the agenda. However, I've never heard you bring them up as something to consider when planning for the future. Many of your callers are not in the position, but some are in a position with a solid financial future. And while you rattle through a checklist of possible uses for money, I think you should sometimes add the possibility of charity giving to those more in need. Should not be political or controversial. Anyway, I always enjoy your shows and I wanted to share my $0.02, which, by the way, Ken wrote at his dollar sign point zero two. I like that. Hey, Ken, I'm with you, man. But as the great Ed Slott said, and he'll say again tonight, you cannot make people charitable. I mean, you either are, you're not. And I love. We've talked a lot. I mean, we even had a guest that just spoke about donor advised funds in isolation. We talk a lot about qualified charitable distributions. A great way to get money out of retirement accounts once you're 70 and a half. Let's make sure we do that, Mark. We should try to say, are you charitably inclined? We'll put that on the list. I like that as an idea. Yeah.
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I feel like it comes up on a pretty regular basis. Yeah, but like you said, not everyone wants to give away their money. And you know what? That's fine.
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Yeah, it is fine. No, it's not, you selfish scrooges. Sorry. As someone who shakes people down for charity all the time. Okay, Bill, last question. Bill has a home equity line of credit through Citizens Bank. They hold all of my accounts, my mortgage, my kids, student loans, savings account. The bank messed up. Oh, my gosh. The bank messed up and seemed to confuse his name with his son's name who just got out of school with student loans. And they said all of a sudden that. That dad's credit had fallen below where it should have been when it was actually my son's credit score. And I talked to several people. Nobody seems to help now that they're investigating through a fraud department when it was their complete error by swapping out their name. Should I take my money and go with another bank or is there anything I can do legally to get it fixed? You know, if the bank knows that, they then have to report that to the agencies. That's the issue. The credit score doesn't just magically happen. It's their reporting. And so even if you go to a different bank, unless Citizens corrects that mistake, it's going to still be a ding to your credit. So I'd keep banging and. What a pain in the neck. This seems like such a weird. How does this happen in this day and age? You know what I mean, Mark? Like, there are two different Social Security numbers. How did you mess this up, gang? And. And I would just keep going up into the ranks of citizens and try to keep. I mean, this is like you're going to get a persistence merit badge for doing this, but you got to get it fixed there. They have to report it to the credit reporting agencies, who will then report it up to the FICO folks. That's how it usually goes. What a cluster. You know what this reminds me of? When I was applying to college way back when. And oddly enough, Mark, there was another Jill Schlesinger in my high school, and somebody at a university where I was applying, also known as my alma mater, called and said to me, your transcript doesn't look so good. And I was like, What? And they sent the wrong transcript. So things happened like that a hundred years ago. It's hard to believe it's happening now, but there it is. It's happening now. All right, Mark, are you excited for tonight? Are you going to eat before or after the webinar?
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No, I will have to eat before and figure out a way to distract Theo for an hour or so.
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Where is your wife? Can she do the distraction?
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She's on the road. She's on the road? Oh, she's in the. The Windy City.
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Oh, all right. I hope it's not too windy for her. Anyway, we're psyched, guys. You gotta join us. This is like for me and Mark. It is probably true that Ed Slott is our favorite guest that we have consistently. Although I love Mike Quincy. We just had Mike Quincy on from Consumer Reports. You can only get that behind the paywall. Also, I just love these guys who are so enthusiastic about their, about their topic, about their coverage area. Right. It's just so much fun. We got to get Heather back on for Social Security. We. I feel like if we do Ed and Heather once a year, we are so good because everybody wants to know about retirement Social Security, then we have to have two other ones that are intriguing to people. So I don't know who those are going to be. If you have ideas, gang, maybe you want like a career person. Maybe you want an AI person. I don't know. What do you think? Tell us. Go to jillonmoney.com, hit the contact us button, say here's what we think you should have on your next webinar and send it to us. I know it's not like a markets person which is so dreadfully boring. Get in touch with us. Love to hear from you. Jillonmoney.com is the website you can subscribe to us on the Odyssey app or wherever you find your favorite podcast. We ask that you please lift someone up. Change your work, change your wealth, change your life. We'll talk to you tonight on the webinar. Otherwise, thanks for listening and we'll chat with you tomorrow. Need contract help for those workload peaks and backlog projects? You're not alone. Robert half found that 67% of companies surveyed said they will increase their use of contract talent. That's why their recruiters leverage their experience and use award winning AI to quickly find the skilled candidates you want. Learn about their specialized talent in finance, accounting, technology, marketing, legal and administrative support at Robert Half. They know talent. Visit roberthal.com talent today. Go behind the scenes of one of TV's most watched true crime series with the 48 Hours Postmortem podcast, where correspondents and producers take you inside each case. Every Monday, listen to a new episode of 48 Hours and then join me, 48 Hours correspondent Anne Marie Green every Tuesday for a new episode of Postmortem. Follow and listen to 48 Hours on the free Odyssey app or wherever you get your podcasts.