Your Money, Your Wealth

Pensions in lump sum vs monthly payments, 401(k) rules, the fiduciary standard, and more as Joe Anderson, CFP® and Big Al Clopine, CPA answer listeners' investing and personal finance questions on episode 60 of the YMYW podcast. Original publish date August 27, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

02:00 - "Does the early withdrawal penalty on my IRA apply to me?"

04:40 - "Never use your IRA (individual retirement account) for anything other than retirement."

05:23 - "Do 401(k) contributions have any effect on MAGI (modified adjusted growth income)?"

08:40 - "Think of 'above-the-line' as things like income and direct expenses to that income whereas 'below-the-line' is generally personal expenses."

11:14 - "Which should I take, a monthly pension or lump sum buyout?"

16:56 - "Why should I hire a fiduciary advisor?"

20:03 - "Everybody needs a financial plan, but not everybody needs a financial planner."

23:08 - "If you can save money on taxes, your money is going to grow that much further and you can take less risk."

23:51 - "Are high-yield bonds a good investment?"

26:26 - "A high-yield bond is going to be ordinary income, and you have to pay ordinary income taxes at the highest rate."

29:50 - "Do I need to pay capital gains tax on the sale of my retail space?"

33:27 - "Which income option is best for a 70-year-old?"

35:45 - "You have to look at so many different options, you can't look at this stuff in a bubble or you might make big mistakes."

Did you know there are strategies you can use to reduce your required minimum distributions (RMDs) from your individual retirement account? In episode 56 of the YMYW podcast, find out six ways to do this so you can keep more of the money you've earned, saved, and invested through your entire working life. Original publish date August 27, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

01:45 - "Once you turn 70 ½, you have to start pulling money out of an IRA (individual retirement account). If you are 70 ½ and still working, and own less than 5% of the company, you can delay your required minimum distribution until you retire."

04:13 - "Once you turn 59 ½ you can withdraw money from your tax-deferred accounts without paying a 10% penalty."

06:54 - "A lot of people don't realize that you can do these Roth conversions even before 59 ½. You could be any age and do a conversion."

10:45 - "This is a valid way to reduce your RMDs – invest in a QLAC (quality longevity annuity contract)."

12:20 - "You can invest in your IRA up to 20% of your IRA or 401(k) or $125,000 – whichever is less."

13:04 - "Another way to lower your RMDs is to use tax-deferred accounts for bonds and bond funds, and use taxable accounts for stocks and stock funds."

16:30 - "If you invest in stocks outside of your retirement accounts and you hold a stock or stock mutual fund for at least a year and you sell it, it's subject to a special long-term capital gain rate."

23:38 - "(Another option is to) donate your required minimum distributions."

29:42 - "A lot of men and women are living into their nineties and hundreds…if you haven't really thought this through, it sort of messes up your retirement plan."

32:30 - "If we're living a lot longer, how do we adjust our retirement plans to be able to accommodate that?"

34:43 - "The old rule used to be 'save 10% of your income.' A lot of advisors are now saying 15%, that's what we say."

Joe Anderson, CFP® and Big Al Clopine CPA answer personal finance questions about real estate investments, financial planning in your 20s, retirement, and controlling income taxes from Investopedia in episode 58 of the YMYW podcast. Original publish date August 20, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

02:49 - "I have 2 town home units, 9 & 10. I lived in #10 since 2006 and rented #9. I want to sell both and buy a new larger home using capital gains. I will have approximately $200,000 from #10 and $150,000 from #9 in capital gains. The new home will cost approximately $500,000. If I use these gains as down payment for a new home, do I qualify for capital gain exclusion under Taxpayer Relief Act of 1997?"

07:21 - "If you're in a divorce situation and this applies to you, you want to be careful how you do the property selling."

08:10 - "How do I become financially strong and independent at 22 years old? I have one full time job ($10,800 annually before taxes). I am 22 years old, single, and have no kids. I have no establish credit. I need to buy my first car and get an apartment or trailer before 2016 ends. Where should I start investing with $1,000? Should I put it in savings or look into binary options?"

09:38 - "Try to set aside 15% of your income at any age and keep doing that throughout your career; you'll have plenty of money when you retire."

11:39 - "My mother-in-law is in her 70's. She will live comfortably on her monthly social security check and has 1/3 of her assets in the bank. She will come into the other 2/3 when she sells her home. What do you suggest she does with the money she gets from the sale? Should she get an inflation hedge and some appreciation while being conservative at her age?"

15:52 - "A lot of times, people put investments in front of the planning, and that's where they fall into problems."

16:53 - "My father sold a piece of property that he inherited in order to pay for assisted living expenses. He passed away the year of the sale. His income was less than $15,000. Does his estate pay capital gains on the property, which gained $144,000 in value from the date of inheritance?"

24:05 - "Do I qualify for backdoor Roth IRA?" I own a 403b, 457b, and DCP account. Do these count towards the pro-rata rule?"

27:36 - "How should I manage my extraordinary tax year?"

35:40 - "Unfortunately, tapping your nest egg comes with all sorts of new rules but also opportunities if you understand the strategies."

In episode 57 of the YMYW podcast, Joe Anderson, CFP® and Big Al Clopine, CPA shed light on scary statistics regarding the rise of healthcare costs and share strategies to show how listeners can protect themselves. Plus, how traditional retirement planning has changed over the years. Original publish date August 20, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

01:43 - "The typical inflation rate has been around 3% historically; we use about 3.7% to be conservative. Medically right we do about 5.7% because that's what it's been growing at."

02:55 - "If you want to get an hour full of Medicare [education] go to purefinancial.com and check out our recent webinar."

05:33 - "A lot of people don't realize that Medicare does not cover [all] long-term care stays."

9:00 - "Age 70 ½ is when you have to start taking your required minimum distribution out of your IRA and 401(k)."

15:45 - "When it comes to parents' children and how much they're spending on athletics…how much are they spending?"

25:25 - "A 25% tax bracket means you pull $100,000 out of your IRA and you pay $25,000 in tax."

29:10 - "You have to make sure you understand what's going to come to you as a guaranteed income source."

30:59 - "When we're trying to reduce taxes in retirement, probably one of the first things you have to know is your tax bracket."