Your Money, Your Wealth

In episode 76 of the YMYW podcast, Joe Anderson, CFP® and Alan Clopine, CPA answer investors' questions about bond returns, how interest rates affect bond prices, the difference between short term vs. long term bonds, and more. Original publish date October 22, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

00:44 - "Is it sensible to live on my own?"

04:06 - "Will I be penalized for a 401(k) withdrawal?"

04:59 - "I am about to turn 21 and currently in my junior year of college. I have budgeted my income so that I have a portion of it stashed in my savings every month. What sort of investments should I look into to generate more income with the excess income I receive?"

11:36 - "We should stress that we are going to talk taxes and strategies, not politics."

12:12 - "Should I invest in bonds now or after the presumed interest rate hike?"

17:05 - "The shorter term of the bond, the less risk that you're taking, hence less volatility."

18:12 - "What's the advantage of going into a short-term bond versus staying in cash?"

24:20 - "With bonds, there are two sides to this: the price and the coupon rate."

29:40 - "If you have a SIMPLE plan, can you still contribute to an IRA?"

34:16 - "Should I move my 401(k) into a money market account?"

Joe Anderson, CFP® and Alan Clopine, CPA discuss Social Security strategies for couples claiming spousal benefits in episode 75 of the YMYW podcast, as well as strategies for single people to consider. "Big Al" closes the hour discussing the downsides of annuities. Original publish date October 22, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

02:25 - "Many Americans will be living solely off Social Security... people are going to need to play catch-up."

04:50 - "There are new law changes that happened with Social Security last year when it comes to restricted application and file and suspend."

06:24 - "There are two different benefits that you claim from Social Security if you're married: you can claim your own or you can claim the spousal benefit. The spousal benefit represents 50% of your spouse's benefit."

10:10 - "Just a couple of years deferring your Social Security and deferring your overall retirement means added savings and added benefits."

11:10 - "The full retirement age right now is age 66…but you can delay it as late as age 70. Every month you delay Social Security you get an increased benefit."

11:58 - "If you look at us collectively, it makes sense to wait. But if you look at us individually, it's a whole different matter. Even though we try to tell people to wait until they're 70, there are situations when you should take it early. One situation is if you're disabled."

13:38 - "If you push it (your Social Security benefit) out three years, it adds 30% more income."

21:45 - "Which annuity is better for a hands on investor?"

25:25 - "Variable annuities are very expensive…understand that variable annuities have high internal costs…and people are purchasing them for guaranteed income."

29:19 - "You have to look at the present values of those future cash flows to figure out what your internal rate of return is."

30:34 - "In most cases I would not recommend a variable annuity, I would recommend an immediate annuity. An immediate annuity means you're going to give your money to an insurance company and immediately receive income. That's the cleanest way to receive guaranteed income."

37:35 - "When it comes to retirement accounts, one of the things that is often overlooked is taxes."

In YMYW podcast episode 74, Joe Anderson, CFP® and Alan Clopine, CPA answer questions about investing for retirement, covering investment options for 403(b) accounts, tax implications of moving part of your IRA and how to avoid tax penalties when withdrawing from an IRA. Original publish date October 15, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

06:30 - "If you have a 401(k) that has a Roth option, you can put $18,000 (per year) into that Roth 401(k)."

07:51 - "If you have a 401(k) that allows you to put yet more money into the 401(k) after you max out, some plans allow you to put after-tax money into that 401(k)... here's why this could be such a good idea, particularly if you're close to retirement…"

11:11 - "How should I invest my 403(b)?"

14:38 - "Our advice is always to maximize those (employer's retirement) plans."

22:05 - "What are the tax implications of moving a portion of an IRA to open a new IRA with a different firm?"

27:17 - "With a 401(k) by law it's mandatory to withhold 20% in taxes if you do that with the 401(k)."

28:44 - "Taxes don't stop when your paycheck does – once you start tapping that retirement nest egg for your living expenses, there are all kinds of new rules and opportunities."

30:14 - "Will I be penalized for an IRA withdrawal?"

32:08 - "There is no age limit for Roth IRA conversions …so if you take money from your IRA and move it into a Roth IRA, there is no 10% penalty on that conversion. The IRS classifies that as a rollover. There would be a 10% penalty if you're under 59 ½ and you withheld taxes when you did the conversion."

32:36 - "Here's another mistake: don't withhold taxes when you do a conversion – pay the tax the following year in April when you do your taxes. If that tax bill is too high, re-characterize some, part or all of the IRA that you converted back into the IRA."

Most women take their Social Security benefits early causing them to lose out on an increased benefit amount. Joe Anderson, CFP® and Alan Clopine, CPA discuss Social Security claiming strategies so you can get the most out of your benefit in episode 73 of the YMYW podcast. Original publish date October 15, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

10:34 - "According to Investment News, most women claim Social Security early (before full retirement age)."

12:14 - "The answer we'll always give you is to push it [your Social Security benefit] out to age 70 if you have normal life expectancy."

15:39 - "It's especially important for women because women live on average four to five years longer than men. If you can wait and take those benefits later, you'll have a lot more money to work with in retirement."

17:38 - "Social Security benefits are based on your highest 35 years of earnings."

22:30 - "When you put a tax strategy or tax plan into place with your retirement savings, you can stretch those dollars out more than you think."

26:31 - "Worst case is 15% of your Social Security income is 100% tax-free…California does not count Social Security as taxable income."

33:41 - "When you do a Roth IRA conversion… set up a separate Roth IRA."

37:51 - "When someone makes a mistake, they finally get serious about getting advice. The truth is you can save more in taxes than you think."

Your 401(k) plan options probably include at least one target-date fund. Joe Anderson, CFP® and Alan Clopine, CPA discuss this one-step strategy for investing for retirement in episode 72 of the YMYW podcast, then answer listeners' investing questions. Original publish date October 8, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

02:47 - "Unfortunately, a lot of you are not using these target-date funds correctly…first of all, a target-date fund has its own allocation."

07:53 - "There are two expenses in any investment: expense ratios and then the other cost is risk."

11:32 - "Should I withhold my taxes when purchasing a home?"

17:06 - "Will I be taxed if I don't touch the funds in a transferred IRA?"

19:21 - "We now have a monthly standing lunch n' learn; it's called Road to Retirement…it's an introduction to financial planning and the key areas you should look at. We'll go into some specific strategies when it comes to taxes, Social Security, investments."

22:02 - "What are the pros and cons of investing before/after tax dollars into a 401(k)?"

26:34 - "If we were disciplined enough to save those tax savings and invest it, we'd probably come out ahead…but most of us don't do that and we just spend whatever we have."

28:59 - "What should I do with my portion of my ex-husband's IRA?"

32:47 - "I am 51 years old and finally in a job which offers a 401(k) option…should I invest in my 401(k) or pay off my debt?"

35:58 - "Even if I don't have an [employer] match, I still want to save for retirement and I don't want to ignore it. The longer you give that money to compound, the more you're going to have. So the sooner you start saving, the better."

A reverse mortgage gives you the opportunity to tap into your home equity to generate retirement income. Joe Anderson, CFP and Big Al Clopine, CPA discuss whether a reverse mortgage is the right move for you in YMYW podcast episode 71. Original publish date October 8, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

01:02 - "I've got a lot [to explain] about retirement that you need to be aware of, some new tax plan strategies, pros and cons of retiring in your seventies…"

04:44 - "Part of the reason why college is so expensive is because you can borrow money so now colleges are charging more and administrators are paid more."

13:57 - "Have you ever considered how you will use your home equity in retirement? If you're going to stay in your home, will you tap into that?"

18:42 - "Home equity has not always been part of the retirement income discussion."

22:10 - "What happens is either you borrow a lump sum or a payment stream or just a line of credit that you can draw when you need it; so then what happens is you don't actually make payments – the interest that you would have normally paid just keeps accruing and adding to your loan so when your house is sold, whatever your loan is gets paid off by the equity."

24:55 - "How do you use a reverse mortgage properly?"

25:28 - "Here's a way to get cash flow: if you don't have any in your savings, you can get a home equity line on a reverse mortgage and pay for your bills that way…"

28:54 - "If all your money is sitting in traditional retirement accounts, it's 100% taxable. For a lot of you, that's where the majority of your savings are. If there were a way to get control over your taxes, the home equity loan can be a tool if you utilize it with other strategies so you pay less taxes for the rest of your life…there are a lot of ways to reduce taxes in retirement."

32:55 - "With an IRA or individual retirement account, you can buy stocks, bonds, mutual funds and ETFs. With a MyRA (my retirement account) you're buying U.S. treasuries."