- And good evening.

You've got More Than Money.

You've got Gene Dickison your host, your personal financial advisor, and honored to be serving you for the next half an hour as we are the most relevant financial show on television today because of you.

You are kind enough to send us your questions, your concerns, your observations.

We pick and choose some of those to air on future shows, so you may very well be sending off an email right now that appears on a future PBS39 edition of More Than Money.

Of course, we can't put every single question on air.

We simply don't have enough time.

But we do promise, our More Than Money team promises that we answer every single question back to you.

So even the hard ones, even the silly ones, everybody gets their answer back.

So when you send off your question, be prepared.

You're going to have that opportunity to get great information to move you a little further along on your financial path.

So lots of great information about you, lots of great strategies and tactics to help you.

Common denominator is you.

So if you have joined us in the past, you know how this works.

Momentarily, our financial correspondent Megan will start us with a good question.

If you're joining us for the very first time, even though the topics, general topics are the similar agendas to other financial shows investments, income taxes, retirement planning, 401Ks, Roth IRAs, estate planning, guardians and estate executors, trustees, perhaps, businesses, those are general topics.

I think you're going to find that the questions we answer are very specific and very specific, very relevant to the lives of our listeners.

So without further ado, Megan, let's give them a demonstration of exactly how this works on More Than Money.

What's our first question?

- Hi, Gene.

Our first email tonight says, "My mother passed away in October and left her IRA to me.

"It has about $255,000 in it, depending on the day.

"I believe the new law says I have to take it out "over ten years.

I plan to work four more years until I'm 66.

"Taking that money on top of my salary is going to kick me "into a higher tax bracket.

"Do you have any suggestions to help me avoid "these higher taxes?

Thank you."

- Well, we're going to make a couple of assumptions.

You are absolutely correct about the ten-year rule, that absolutely applies to you.

The loss of your mom and the inheritance of that IRA means that the IRS treats that IRA very differently than it does your own IRA or your own 401K, or your own 403B.

The inherited IRA, for tax purposes, is not even considered a retirement plan.

I know that sounds a little strange, but that's the IRS' basis for their instructions that, yes, you must take the money out over ten years.

Now since July...my apologies, January 1st of this year, the rules have changed slightly.

If you are, I'm guessing, 62 by simple math, my assumption is that your mom was already taking her RMDs.

And under the new rules, you must continue taking RMDs, as well.

So on this amount of money, 250-plus, you will be seeing somewhere in a $12-15,000 per year required minimum distribution.

You can take out more, but you must take out that minimum amount.

And at the end of the tenth year, the entire account must be empty.

So, it used to be you could wait the entire ten years and take nothing out until the tenth year.

Now the rules have changed a bit.

How can you best use this money in a way that may be, may be tax-efficient, particularly over the next four years?

If you are employed with a company that has a 401k, if you are making contributions to that 41k, you are allowed a maximum annual contribution currently of $30,000.

You may, perhaps, not yet be maximizing, you might be putting in $15,000.

You'll see in a second why that's important.

You might have heard me mention that the RMD on this inherited IRA is likely to be in the $15,000 range.

So if you take that RMD, as you must, you will pay tax on that.

If you decide to increase your contributions to your 401K to the maximum $30,000 you're already putting in 15, you add the 15 that you now have in your hands from the inherited IRA, you are putting 30,000 away over the next four years per year for four years, tax-deductibly.

So you're taking the first four distributions out of this inherited IRA.

In essence, going into the 401Ks, there are some mechanical issues that need to be addressed, no question.

But those are relatively easy.

And as a result, money comes out taxably, goes back into the 401K tax-deductibly, it wipes it out.

So the first four years of distributions, you have a very real opportunity of eliminating some or all of the tax on those distributions.

If you have charitable instincts, inclinations, you might also be able to shift some of those dollars towards charities that you choose, get a tax deduction for some of those, and then, reduce your tax even further.

Or you may consider using some of the money that you're currently using to set up contributions, Roth conversions, for example.

So there are a number of different tax strategies that you might employ to reduce your taxes while you're "forced," the word is required, forced to take money out.

Really important for you.

We don't know your tax bracket.

You may or may not know your tax bracket.

We don't know how much you can add to your income without causing a problem, without causing a pickle.

So you likely would benefit from sitting with a trusted, experienced tax professional.

It might be a financial adviser.

More likely, it will be an enrolled agent or a CPA, someone who has lots of experience and can walk through your specific tax numbers with you, and then, do some what ifs.

What if we take money out?

What if we put money into a 401K?

What if...?

So that's, in my opinion, your very best move to get the maximum from this inherited IRA.

Difficult way to acquire money.

Loss of a loved one.

And of course, you want to honor that gift and be a good steward of the monies, of course.

So meeting, again, trusted, experienced tax professional.

Good start.

Speaking of good start, Meg, that was a really, really good start to our show.

What's our next question?

- Our next question is also about IRAs, but this one is about gifting.

It says, "I have been taking my necessary yearly "withdrawal from my IRA.

"However, I wanted to help my daughter with the down payment "on her first house, so I have taken more than the necessary "amount for this year's withdrawal.

"My question is, must I pay taxes on this additional amount "as if it's income?

"Or is there any way to explain this as a gift "to a family member?

"I have also taken money from my savings account "for the same reason.

"Thank you for your help with my question."

- You're very kind.

I apologize.

Maybe you thanked me too early, because you're not going to like the answer.

Yes, you must pay income tax on the excess above your required minimum distribution.

Let's use our former question as kind of a demo.

We have $250,000.

We are required to take $15,000 out.

We pay the tax on that, and we gift it to our daughter.

Now we're in a position where we're saying, "What I really need is to gift her, oh, 50,000 or so, "I want to take out an additional $35-40,000."

Is a "gift" then not taxable?

And the answer, sadly, is no.

It is taxable.

And as a result, if you want to give her an additional 35,000, you must take out enough to not only fund the 35, but the income tax.

If you are very, very fortunate and you have the funds outside the IRA to pay the income tax, you can instruct your custodian to simply write the check for 35.

And then, when tax time comes, you can complete the transaction by paying the IRS the monies on the 35,000.

That's something that you need to look at very carefully.

But sadly, contrary to what many people believe, gifts are not tax deductible.

Only gifts to nonprofits, recognized nonprofits, charities are tax deductible, not to family members, basically under any set of circumstances.

So, yes, help your daughter, of course, father of three daughters.

Of course, we're going to help.

But along the way, you'll pay some tax.

Megan, that was a sad answer.

Hopefully our next question has a little lighter piece to it.

- I hope so, too.

This one says, "We have recently sold a rental house "that we've owned since 1984.

"After we pay the capital gains tax, we will have about "$100,000 to invest.

"I am 80 years old.

My wife is 78.

"We're wondering, is there a good investment for this money "where the principal is safe and we can still get "a return on our money?

"We don't need any of this money for our monthly expenses.

"Thank you."

- Well, congratulations on the sale of the property and having a net profit.

That's fantastic and good for you to be thinking about, what are some of the alternatives?

The key word here, my opinion, it's on the screen, "safe".

At your age, you want to keep money safe.

If you said to me, "We must generate income, "this is something that's very, very vital for us to be able "to pay our bills," that would change the answer dramatically.

You said the exact opposite.

You're saying, "We don't need the money for our day-to-day "expenses, but we do want to make sure "that we're not worried.

"We're not concerned that we have lost principal."

And the answer is, yeah, there are a number... Well, yeah, technically, yes, there are a number of very safe options that you can consider.

Which one you pick will depend very much on your personal feelings, both about safety, how you interpret the word safe, and longevity.

Some investments require a commitment that's a little bit longer.

Others are very, very brief.

So, simply put... gosh, two years ago, money markets were paying 0.0%.

And now, certain money markets are paying one half of 1%, in some cases 1%, and in some cases, slightly more.

So if you said to me, "I'm 100% liquid and 1% does it for us," we're done.

Money market will likely be your choice.

If you're saying, "Well, no, wait a second, we don't need "all that liquidity, we don't need easy access, "is there something that if we extend ourselves out just "a little bit, we could get a higher rate of return?"

The answer is yes.

There are a number of mutual fund money markets.

These are mutual fund base constructed where they invest in short-term investments, and they are currently paying, yield-wise, a little over 2%.

So if 2% is your number, again, we're done.

But if you said to me, "We don't really need even that "much easy access, is there something "a little further out?"

The answer is yes.

There are CDs currently being issued, and when I say currently, it's very important to know that CD rates change daily.

So if you're listening, watching this show and saying, "That's not the rates that I know about," it's because they have changed.

But under this current set of circumstances, 4.5% on a six-month CD is a relatively easy rate of interest to achieve.

So if 4.5% CD, FDIC-insured does it for you, again, we are done.

And then, finally, not finally as in it's the only other option, but finally, as a pretty reasonable spectrum of very safe investments, would be a single premium in media...

I'm sorry, a single premium deferred annuity.

Deferred annuities typically issued 3-5-year maturities.

I would suggest three-year maturities are currently paying right at 5%.

So guaranteed by the annuity company.

So you need to select, of course, a company that's very financially strong.

You want their assurance to mean something.

You want them to actually be there when you get your money back, wish to get your money back.

So very important that you deal with very highly-regarded, very highly-ranked annuity companies.

And as a consequence, you've got some a nice spectrum from roughly one half of 1%, very safe, very liquid, to roughly 5%, very safe, reasonably safe, and less liquid three years or so, and everything in between.

What's interesting, kind of fun, something that you might enjoy or might take advantage of, is that it is not an all-or-nothing choice that you need to make.

You have a substantial sum of money.

100,000 is nothing to sneeze about.

So you could rightfully say to yourself, your adviser, "I would like to split this up into pieces.

"Maybe I'll take 25%, 25,000, put it in that mutual fund "money market and get 2% or so.

"Maybe I'll take 50,000 and put it in a CD and get 4.5, "and maybe I'll take 25,000 and put it into a "three-year annuity and get five."

You can mix and match kind of to your heart's content.

So two years ago, people say, "Safe money."

I say, "So sad.

You'll make nothing."

Now I say, "You can make a very reasonable "rate of return."

And which reasonable product fits you?

It certainly depends.

It depends on you and your personal choice of what fits you best.

- Megan, very, very good.

Very, very good.

Took us down a very interesting path that I think will appeal to a lot of people, will apply to a lot of people.

Perhaps the next question will do the same.

- Well, we try to pick questions that do.

This one says, "This is a friendly debate among "my friends and I.

"We're wondering, in what order should investments "be used for retirement?

"Those investments, including traditional IRAs, "Roth IRAs, savings bonds, pension, 401K, "and other securities?

Thank you for your input."

- Well, it's an interesting question, one that's asked quite frequently.

As financial advisors, of course, we work with hundreds of clients, gosh, collectively, thousands of clients.

And so, it's a pretty comfortable discussion to have one-on-one.

It is a very uncomfortable discussion to have in general terms.

In general terms, I'm not going to be able to... What, satisfy anyone in your friendly group discussion as to what is...goodness, always a standard for everyone to follow, in terms of what accounts they should use and in what order.

Because in this case, again, it depends.

It very much depends.

And, you know, logically ask the question, "Depends on what?"

Well, it depends predominantly on two things.

Number one, your cash flow needs.

Your cash flow needs.

If you need maximum cash flow from everything you own, then the answer is pretty simple.

We take it from everywhere.

If your cash flow needs are more modest, if you can pick and choose, then it gets a bit more interesting.

We'll circle back to that.

The second point, really important.

Taxes, your tax bracket, your tax scenario, your tax posture, and what impact removing money from these various types of accounts might have on you.

Let's use the Roth IRA as an example of both a good and bad choice, depending on your circumstance.

For lots of folks, they say, "I hate paying taxes.

"I don't want to pay even a dollar more than I have to.

"So I absolutely want to take my money from "my Roth IRA first, "because that will then be tax-free immediately.

"And that's very exciting to me.

That's my priority."

I would suggest that could be the case, but it would likely be short-sighted.

One of the benefits, larger benefits of the Roth IRA is, indeed, it is tax-free to you, but it could also be tax-free to your children, perhaps even your grandchildren.

So, by allowing the Roth IRA to exist for as long as possible, there is the possibility, in some cases the high probability you'll never touch it and you will pass it on to someone you love, who will then spend the money tax-free because you were wise enough to set it up that way.

Keeping in mind also that sometimes taking money out of an account that increases your taxes is a good idea.

How in the world could that be?

Well, your IRAs, your traditional IRAs, 401Ks, etc, will require you to take money out at age now, 73 and above.

So in order to reduce your taxes in the future, when some folks are theorizing that tax rates will be much higher, kind of, they may have to be much higher to cover all our federal deficits that we're currently facing, if we spend some money now on taxes at a relatively, or what we hope to be a relatively low rate, we will then lessen our tax burden when we take money out at a later age.

So that's something to be considered, as well.

Putting all this together requires a little bit of work.

Not terribly hard to do, not terribly challenging, but it does require a systematic approach determining cash flow needs, determining tax brackets, looking at the various types of accounts and the requirements of those accounts so that we can construct a logical progression for you specifically.

Specifically.

Social Security is one of those scenarios that causes the greatest amount of head-scratching, because the longer you wait for your Social Security, the higher your monthly benefit rises, right on up to age 70, when it maxes out.

Assuming you reach age 70.

That's a projection that none of us has a lot of control over.

But if you are playing the probabilities, and if you are, as one of my clients I recently spoke to, likely the recipient of excellent genetics, as he has an aunt that's currently 96, 97, she has a sister in her early 90s, he may very well be with us at 100 or 105, pushing off his Social Security will maximize his cash flow for decades, but we don't know.

We play the probabilities.

We do the very best we can.

And then, someone else is in charge.

In our case, in the More Than Money case, the person that's in charge is the one asking the questions.

Megan, back to you.

- It's a little intimidating.

This question says, "My question is about I-bonds.

"My family and I have $41,000 in I-bonds.

"We are concerned about the safety of the investment, "though, because of all the current talk concerning "the debt ceiling and possible default of the government.

"If the government defaults, do we lose our principal?

"Thank you for your advice."

- Theoretically...yeah.

When you lend money to an institution, could be a corporation, could be a bank, it could be the government, and that institution goes bankrupt, defaults, could you lose your money?

Of course.

Is the current debt ceiling dustup likely to produce a default on the part of the federal government?

The folks that we trust, the folks that we counsel with don't believe so.

They believe that the current political climate in Washington is such that there will be some form of agreement, there will be some form of compromise that will be reached that will allow the government to continue to function, continue to pay their bills, etc.

Is it possible that they are all wrong?

Sure.

If we turn our vision to Washington and we look carefully for wisdom, common sense, public service, we could be looking a long time and still not find it.

So, is it possible that there's a risk?

The answer is yes.

You have lent money to the federal government.

They have promised to pay it back full faith and credit.

And if they default, you could lose your money.

If it's of any comfort at all, although my crystal ball is not functional, my crystal ball is actually a snow globe, it's kind of cute anyway, my feeling, my opinion is there will not be a default.

And even if there is a dustup over the debt ceiling where there is an interruption, it will be resolved relatively easily, relatively quickly, I should say.

And I think you'll be okay.

Megan, do we have one more?

- We do.

Our last question says, "My husband left me ten American Eagle 2012 Gold Coins, "ten 1989 Gold Coins, ten 1990 sets of gold coins, "and about 20 Eisenhower dollar silver coins "from the mid-1970s.

"I'm wondering, is this a good time to sell them?

"Thank you for your help."

- Well, goodness, there seems to be a theme to tonight's show.

I know that the basic theme is that we're the most relevant financial show on TV, but in this case, I think this is either the third or fourth question where the answer starts with, "It depends."

It depends.

Is it a good time to sell gold and silver?

In recent weeks, weeks, gold and silver have gone up, gold nicely, silver very nicely.

In recent years, gold has been flat.

Silver has been relatively flat.

So with a recent modest rise, but rise, is it a good time to sell?

Maybe.

How do we know?

My first question to you would be, "Do you need the money?

"Do you need the cash flow from the sale of these coins "in order to pay bills or meet some sort of obligation?"

If that answer is yes, then yes.

Sell the coins.

Now's a great time.

It's not a dreadful time.

It may not be the best time.

There may be forces afoot that will push those prices higher in the future.

But if you need the money, it is irrelevant.

You must sell the coins because that allows you to pay your bills.

If you don't need the money and don't foresee needing the money, I would suggest hang on to them.

Allow them to stay in your estate.

Allow them to be in a position where someone you care about could inherit them and be in a position to then not have to pay tax on any gains.

If your husband gave these to you, there is a cost basis involved, there will be taxes involved if you decide to sell them.

If you decide not to sell them and they are left to someone you care about in your estate, or left to a charity that you support in your estate, there will be no income taxes.

So if you need the money, sell it.

Don't worry about if it's the right time or not, it'll be okay.

And if you don't need the money, don't sell it.

Allow situations to unfold.

Speaking of unfolding, we've unfolded an entire half hour show very, very quickly.

I hope you learned a lot.

I hope you picked up some ideas.

I hope you got the strong impression that the term "it depends" really does apply to any discussion around a general financial question, because without knowing the specifics, no financial adviser can be confident that his or her answer to a question is correct without knowing the details.

So if you have questions and you wish to have those details addressed, make sure you send us your emails, Gene@AskMTM.com... We'll answer all of your questions right back to you.

And hopefully you've learned enough that you're going to want to follow us again when we return to the studio next week for another edition of More Than Money.

Goodnight.