- And good evening.

You've got More Than Money.

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

Happy to be with you this evening, and happy to say thank you.

Thank you is, goodness, something that when I was growing up, we used in polite company, "please, thank you," that seemed to be a pretty reasonable thing to do almost all day long with everyone that you met.

And now, sometimes we forget.

Sometimes we're not quite as, well, attentive as we should be, when people are doing nice things for us, and people are often doing nice things for us.

I want to say thank you to all of you who have sent your emails to us, all of you who have trusted us to give you good information.

I sincerely thank you.

You are the heart of our show.

You make us relevant.

You make us very focused on what's important to you.

That's why we invented More Than Money.

The mechanism, the intent was clear.

We wanted to serve you.

The mechanism was evolutionary, and using the emails that you have sent us have allowed us not just to serve you, but to develop relationships, to be able to form bonds.

And in at least a few cases, we've had the opportunity to meet you in our More Than Money world headquarters, which is just fabulous.

And all of that, all of that is thanks to you.

Because you are kind, caring, trusting.

So many of your emails have very kind words.

Megan has suggested that when we read them on air, we cut all that out because it takes a lot of time.

No, I'm going to drink all that in.

You are so very kind, so very appreciative.

We are... You are grateful for us.

We are grateful for you.

So if you are a loyal viewer, you know exactly why I've started this way.

If you're just joining us for the very first time, More Than Money was intended to be the most relevant financial show on television today, without exception, because we focus on what's of concern to you, and you do that by sending us your emails.

Gene@AskMTM.com, G-E-N-E, just as it appears on your screen.

And one of our tremendous team, I'm so grateful for them, that we answer every single question back to you.

And then we select questions that are representative, informative, relevant to highlight on air.

So if you've got questions about retirement or investments, certainly Social Security, Medicare, estate planning, guardianships, the list goes on and on.

Certainly send those, but those general topics don't begin to touch what we really talk about, which is you, you and your life, and your financial goals, and what's important to you.

And so for all of those reasons, I say thank you, and I encourage you, when you bump into situations where you are being served, say "thank you".

Megan, I'll say "thank you" to you.

Let's start the show with a "thank you" and a good question for us to be able to serve someone.

- Hi, Gene.

Our first question to answer tonight says, "I am currently retired.

I'm 67.

"My wife still works.

She's 66.

"I am in the cash withdrawal phase of my portfolio.

"I have one daughter who is working, she's 27, "and I assist her with her portfolio.

"I currently have a financial advisory firm that "manages my portfolio.

"However, the overall approach I feel is not holistic, and I "constantly need to instigate meetings to review portfolio "and other issues.

"I'm wondering, should I expect the same from all advisors?"

- An emphatic "no".

You should not.

And to be blunt, you should not tolerate that from your current adviser.

The... "Holistic" is a very interesting word and, for a lot of us, it could be a bit of a head-scratcher.

I'll circle back to that.

The part that causes me to say this relationship is irretrievably broken is the part where you must instigate the conversations with your financial advisor.

You're not getting a regular, consistent review and monitoring, and adjustment of your investments.

In the More Than Money world, that's a 90-day cycle.

I understand that other financial advisory firms have different models.

Some say every year, an annual review is fine.

Not my belief, but that is their belief.

And perhaps, perhaps they can be successful with their clients on that timeframe.

We cannot.

Others say every six months, we believe every 90 days, but we believe that in a proactive sense, in that as our team reaches out to you, to have that meeting scheduled, whether it's in person, a Zoom phone call, however you decide to have that conducted.

And we're happy to do so.

In the absence of that, I think your financial advisor is incompetent.

Now, that's a strong word.

I don't mean that he or she doesn't understand investments, doesn't understand portfolios, doesn't understand the bits and pieces that are tools of his trade.

He is incompetent in this sense.

He doesn't take advantage of all the information you have.

He is incompetent, she is incompetent to the extent that they have missed a huge fact of life.

I personally will never know as much about you as you do.

You will never know as much about the financial world as I do, but together, we've got it all.

And if your financial advisor's over here in a vacuum just doing what he or she wishes to do without your input, shame on them.

Shame on them.

That's incompetent.

Don't accept that.

So from where I sit, we don't put up with that.

That makes no sense whatsoever.

Is it normal?

No.

Should you be looking for a financial firm that, from the word holistic, meaning the whole of your financial existence, not just your investments, not just the withdrawal phase of your portfolio, or the accumulation phase of your daughter's portfolio, by the way, well done, helping her out.

Excellent.

Get them started young on a sound foundation.

But from the standpoint of the bigger picture, you have a daughter that you care about.

How about estate planning?

A holistic advisor will assist you with that.

How about Social Security planning?

Are you currently taking it?

Should you be taking it?

Should you be waiting?

Should your wife be taking it?

And at what time frames?

From the standpoint of insurances, should there be life insurance?

Should there be long-term care insurance?

And so much more.

Holistic financial advice is exactly that it addresses all of your life.

So whether it's how to invest properly, how to withdraw properly, or is it a good idea for us to buy a second home?

Maybe several states away, maybe in a town really close to our daughter and grandchildren?

And that kind of discussion, I'm here to tell you, properly done, may be more valuable than how do we invest so much in the stock market?

So much in the bond market, and so much in cash?

So, yes, look for an alternative advisor.

It is not... You are not stuck, and you will find a significant number of wonderful advisors out there.

And of course, if you need assistance with referrals, just let us know.

Happy to help.

Good start, indeed, Megs, what's next up?

- Our next question says, "We have a 401k account and must take our RMDs.

"We're wondering, can we do a QCD from it "and give it to our church?"

- Oh, most excellent.

So the question is, 401K, RMDs, QCDs...

There's a lot of initials.

The answer, sadly, is no.

You may not.

The current rules do not allow RMDs from 401Ks to be directed to nonprofits under the qualified charitable distribution platform.

But it's easily fixed.

It's easily fixed.

If you take your 401K balance, roll it, with tax deferred no immediate taxes, roll it into an IRA.

You may take RMDs from an IRA and send it to your church.

So right this moment, the answer is no.

In a matter of an hour of paperwork and a couple of days of waiting, and you can do exactly what you wish to do.

And well done, you.

Well done you.

Megs, that was brief, but a positive one.

Let's see if we can keep the positivity rolling with our next question.

- Let's see.

This one also has to do with IRAs and 401Ks, but a little bit different.

It says, "I have an inherited IRA from my mom.

"She would have been 79 years old.

"I'm wondering, can I roll that over into my employer's 401K?"

- Oh, excellent question.

My condolences on the loss of your mom.

Wonderful that you've got this new asset.

IRAs that are inherited are not treated the same way as "standard" IRAs.

There are so many IRAs now.

I'm not sure the word "standard" is appropriate.

But let's assume for a second it is, traditional, the traditional IRA.

If you had a traditional IRA and a corporate 401k plan, you could absolutely roll that IRA into your 401k plan.

An inherited IRA is a different animal.

It's a different category of IRAs.

And as a result, sadly, you may not roll that IRA into your 401k.

Now, just as with our last question, where you can't do it currently, but if we change things up just a little, just a little, I think you can do it.

And here's how I'm thinking you can do it.

I'm going to make up numbers just so that everybody out there has some numbers to kind of hang their hat on.

These obviously are not your numbers.

They were not included in your email.

But I hope that they will be demonstrative of the action you might be able to take.

Let's set up the scenario that says that you're currently 50, you're in the 401k, you're allowed to put away $30,000 a year.

Wow, that's fantastic.

You're currently putting away half of that.

You're doing very, very well.

You're putting 15,000 a year away, but you have not filled up all of what you're able to contribute.

Let's, again, assume that the inherited IRA your mom has given you is $100,000.

And, under the rules, you must take that money out over a ten-year period.

What if you decided, since you have to take the money out anyway, that you take 10,000 each year out, that you adjust your 401k contributions so that they go from 15,000 to 25,000?

So the inherited IRA withdrawal will be taxable.

Nature of the beast.

Increasing your contribution to your 401k will be tax deductible.

And, while I guarantee you the numbers will not be to the penny, one will largely offset the other.

So if, over ten years, you move the entire balance into your 401k a little bit at a time, you will largely be doing that free of taxes.

And in essence, you have rolled your inherited IRA into your 401k.

It'll take a little bit of time, a little bit of planning, of course, you should likely work with a trusted adviser, financial adviser, tax adviser, or both.

On the More Than Money world, they are both under one roof.

Many places, they are not, but in our world, they are.

But planning that out, I think this could end up being a really, really wonderful opportunity.

And if indeed my numbers are correct, 15,000 is what you're doing, 30,000 is your limit, you might want to shorten it.

you don't have to wait ten years.

You could take $15,000 a year out for a little over six years.

All of it would now be in your 401k.

All of it would be... By the way, if your company matches your contribution, even better, you're putting in more money, higher match.

Oh, this could be glorious.

Make sure you do the homework.

Make sure that you get good assistance.

Pay attention, cross the T's, dot the I's.

This could be magical.

Magical.

Not Harry Potter magical.

That was pretty cool, but magic...

Financially magical.

Goodness, since I've already kind of waved my wand around the Harry Potter scenario, what other magic may I offer for our next viewer?

- Well, our next question starts magically, because it's your favorite way.

It says, "Hi, Gene.

"We love your program and have a question "we would like you to answer.

"We want to set aside an amount of $100,000 to invest "in an account, the proceeds of which would be divided equally "to our five grandchildren upon our passing.

"We're wondering how would this account be invested "and designated so that it would earn interest "until it would be time to distribute it?

"We were thinking possibly of a stock market account.

"Thank you in advance for your help."

- Oh, you're very kind.

And Megan is quite right.

I find those questions that start with those lovely words magical, magically delicious.

Sorry, that's a Lucky Charms reference.

You'll find that...it's later.

Bottom line is, what a wonderful thing you're doing.

And this process of segregating, delineating a specific sum specifically for these five grandchildren can be done rather easily, and yet still allow you to maintain control.

Now, you did not mention education.

We're not going to go down the 529 plan route.

That's not the direction I think you wish to go.

But if you set up an investment account through any reasonable custodian, in the More Than Money world, we use Charles Schwab most often.

But there are lots of good custodians out there that would allow you to establish this account.

You can put the $100,000 in.

You can name the five grandchildren as the beneficiaries of the account, even though it's not an IRA, it's not an insurance policy.

It's not an annuity.

It is an investment account.

You may use a technique called transfer on death, sometimes referred to as payable on death, sometimes referred to as entrust for... All of them say the exact same, all of them have the same intent, which is, at your passing, when the two of you are no longer with us, that money will automatically be split and sent to the five grandchildren.

So accomplishing that part, pretty easy, pretty easily done.

Now how to invest the money?

Okay, you're grandparents, they are grandchildren.

We are making the rather reasonable assumption that the age difference is pretty significant.

So if you are of an age and they are of a much younger age, you must be looking to invest this money the way someone a much younger age would invest, not how you would invest.

I have had similar requests where the instruction from the grandparents were, "I guess we'll put it in CDs and get guaranteed interest."

That's certainly a choice that you can make, and you'll make some return.

But if your grandchildren are, I'm picking the ages literally, five, six, seven, eight, nine, very, very young, that would allow you to put money in stocks.

It would allow you to put money in real estate, perhaps precious metals, or other very interesting investment opportunities, all of which have the common denominator of they're intended to grow.

And growth investments in the short term are incredibly unpredictable.

You could start with 100 and, if you had done it last year, at the end of the year, you'd be at 75, and you would have thought the world has not done well.

Bottom line is, over a longer period of time, they tend to do very well.

And if you have a financial adviser assisting you, giving you that monitoring, that 90-day review cycle, let's look at what's working, let's look at what's not, let's make adjustments, you have an even better opportunity of making sure that particularly their lifetimes, hopefully your lifetime, as well, that this money does very, very well.

Stock market can do very well, but so can others.

Now, 100,000 is a lot of money.

You can do this in a couple of different ways.

In terms of the investment side, you can kind of mentally look at it as $20,000 accounts for each, and you might invest differently for each child depending on their age.

Or you might look at it as an overall package and do an asset allocation, a recipe, a formula applied to the entire amount.

Work with a trusted, experienced financial advisor.

That part will be very, very straightforward and easy.

And I think, gosh, an hour discussion and a little bit of paperwork, you'll go exactly where you wish to go.

Well done.

Very, very well done.

And, gosh, we started our show with being grateful and saying thank you.

Hopefully, hopefully, those young ones will look back, perhaps even after you've graduated to the next dimension and go, "Thanks, Grandma.

Thanks, Grandpa."

That'd be pretty cool.

Great legacy.

Megan, speaking of pretty cool, what pretty cool question do we have next?

- Well, I think this one is pretty cool.

It is appropriately titled "Complicated Math."

So bear with me with the numbers here.

It says, "Hi, I really enjoy your show.

"A year ago, my two brothers and I sold our mother's home "in New York City.

"Seven years prior to her death, she executed a life "estate where she added our names to her property deed.

"Our mother was property wealthy but cash poor.

"She qualified for Medicaid after arranging her funeral, "which used up her remaining $13,000.

"We realize we will be responsible "for capital gains taxes.

"New York State charges 15%, New York City is 10%, "and federal 10%.

"Since the home was not the primary residence for the "three sons, only our mother, we're wondering how do we "calculate the capital gains on our inheritance?

"The house sold for $975,000 and was split three ways, "minus the legal and realtor fees, "which was $314,000 per son.

"Capital expenses since the life estate was executed "were minimal, just a new brick staircase, which was $11,000.

"There was regular house maintenance, which my brothers "and I took care of for her.

"We're wondering if you can advise us on this situation.

"We each use different tax preparers for our income "tax filing, and we live in three different states, "I in Pennsylvania, my one brother in New Jersey, "and the other in New York City.

"Thank you for your help."

- Help!

Yeah... Actually, I took very careful notes, and this complicated math scenario is much simpler than it appears.

Much simpler than it appears.

When Mother gifted her home to her three sons, she also gifted them her cost basis.

So in order for the three sons to understand what their capital gain is, they must know what their cost basis is.

And it must start with if mother and father bought the home at some point, and they did at some point in the past, what did they pay?

That's the starting point.

It sold for 975, let's start with the demonstration says they paid 200.

Secondly, we need to know, were there are any capital improvements while they owned it?

So, up until the point where Mother transferred the home to the three sons, did they put capital improvements in?

And if the answer is yes, those are added to the 200.

Let's, for sake of argument, say it was 100,000.

And then, the 11,000 that you spent is added to that cost basis as well.

We're up to 311.

There are some deductions both for and depending on how you look at it, either deductions or additions to the cost basis for legal and accounting, for final expenses, for transfer taxes, commissions, etc.

Let's, for the sake of argument, total up all of our cost basis, original purchase, cost to buy, cost to sell, capital improvements.

And watch how I do this.

It's 375, and the house sold for 975.

So our net gain, $600,000.

You know, when you get to set up your own numbers, math isn't that complicated.

So we now have 200,000 per owner, per brother as a capital gain.

How is that treated?

Not the way the email suggests.

The email is suggesting that there's New York state tax, there's New York City tax, there's federal tax.

The federal tax will apply to each brother.

The New York and New York City tax will apply to the brother who lives in New York.

New Jersey has their own rules about what capital gains are, how capital gains are taxed in the state of New Jersey.

In the state of Pennsylvania, their own rules, as well.

A resident of the state of Pennsylvania will not pay a New York state inheritance tax and a New York City inheritance tax... Or, I'm sorry, a capital gains tax because they're not residents of New York or New York City.

So, each, thank God you each have your own tax preparers, because each of you will be using different rules.

To be fair, most professional tax preparers can handle any state rather easily.

That's why God invented computer software.

But the reality is, roughly 200,000 of capital gains apiece in the state of Pennsylvania.

You're going to be depending on your tax bracket, anywhere from zero, gosh, to as much as $60,000.

So do your homework.

Get it done.

Get it squared away.

You'll be fine.

Megs, what do you got back there?

- Our next question asks, "Is there any downside to "converting to a Roth, other than paying "the income tax up front?

"I have $460,000 in my IRA.

"I'm 76 years old.

"I plan to convert just enough each year to stay in "the 12% tax bracket, and I'm wondering, can the converted "amount count as my RMD?"

- Well, let's start with the answer you don't want to hear first.

No, the converted amount cannot count as your RMD, that is specifically exempt.

So you have to take your RMD and, at your age, approximately 5-5.5%, that's the RMD, and then, converting just the way you described it.

Brilliant.

Well done.

Just the way you described it.

In converting just enough to stay in the 12% bracket, I think most people would think a 12% income tax bracket is lovely.

Wonderful.

Unlikely to stay that low for any long period of time, considering the spending patterns of the federal government, so I think the plan is brilliant.

You might even look at extending how much you convert a little bit, staying, say, within the 15% bracket, and that would accelerate how much you can convert.

460 is a substantial number.

The opportunities for you to convert all of it during a lifetime is certainly very, very real.

But you're on the right track, keeping in mind that you'll handle your RMDs just as they need to be.

And everything else is a conversion.

You'll pay a little extra tax now, but either you or your beneficiaries will avoid income taxes on that Roth conversion amount for decades.

Very well thought.

Very well thought, indeed.

We had such good questions tonight.

I appreciate the fact that you hung in with us.

Complicated math, head-scratchers, some good answers, some not such good answers.

I want to thank you for that.

And again, in keeping in our theme of gratitude, I hope you're grateful for all of the gifts that you are given.

I know that it can be a challenging world.

I get that it is for all of us.

Maybe that's why we're here.

But there's also so much beauty, so much joy, so much love.

I hope you enjoy all of it.

Thanks for spending part of your evening with us.

I hope that you enjoyed it enough that you'll come back next week and be with us again, when we're back with another edition of More Than Money.

Goodnight.