0:05

Three hours radio. For a

0:07

really great future? We're talking

0:09

real money will? It's another

0:11

Saturday as we gather together

0:13

around a. Good

0:16

communal radio and microphone to spend

0:19

a little time trying to do

0:21

something important and that is. Make.

0:24

Money easier to deal with. Because

0:27

money. Is. Really important

0:29

to all of us. It's something we

0:31

all use all the time we have

0:33

a job. Most. Of

0:35

us to earn it. We spend it. We

0:38

hope to save it and invested and then

0:40

live off of it in retirement and do

0:42

some nice things along the way. And

0:44

we want to help you do all those things that

0:46

you do Now the part you're really good at, we're

0:48

not going to help you much. With that, you're really,

0:50

really good at the spending bark. Congratulations. You're

0:53

reasonably good at the job bart most of

0:55

you grant. Ah, the saving

0:57

and investing all putting enough away for

0:59

retirement near know the numbers don't speak

1:02

well for yeah, so that's that's the

1:04

Erie where we have to spend a

1:06

lot of our time And the biggest

1:08

reason Will First, let me give you

1:10

a phone number because you may need

1:12

to call us because we know you

1:14

need help. Eight Five Five Ninth, Revive

1:16

Talk is our number. Eight Five Five

1:19

Nine Three Five Eight To Five Five.

1:21

One of the reasons you have such

1:23

a hard time with the investing part

1:25

is you believe. That events.

1:28

That the. Of events

1:30

themselves impact investments.

1:33

After the fact that investments

1:35

move in reaction to events.

1:38

And nothing could be farther from the

1:40

truth. I'm gonna go Tom

1:43

Cox over there and the event were talking

1:45

about. This. Year. Is

1:48

presidential elections. We all think

1:50

they are more important than

1:52

they really are. Tom. Well

1:55

when it comes your investments a may be very

1:57

important when it comes to your holiday. I'd are

1:59

you. Well I target air question that one

2:01

too. I assume we just do a can

2:04

we just like. Call This

2:06

went off. To. Get a

2:08

waiver. Just wages were loyal of we're gonna

2:10

have a couple of old guys both croak

2:12

soon. And when the you know when they're

2:14

gone though we can start over with young people again. What's

2:17

young? Under. Seventy.

2:20

Underscore for really get down to

2:22

a our at our age where

2:24

the young phrases yeah the young

2:26

thirty about it is fascinating arms

2:28

and this comes from a survey.

2:31

Done. By Janice Henderson investors of

2:33

of a thousand people. And

2:36

they ask people what is stressing you

2:38

out, What are you concerned about? Over

2:40

the next twelve months now, some people.

2:43

Said rising interest rates, risk of recession

2:45

persistent in place and those you could

2:47

have young children, others with all of

2:50

those are ongoing. Good. At people

2:52

think it's just right now know you're always try

2:54

to think about those things were always there. They

2:56

might not always be the headlines but they're always

2:58

there. But the one that always surprises me. Is.

3:00

This one. And. It's. Already

3:03

out there, you're hearing about it today.

3:05

Seventy eight percent of the people they

3:07

pulled are either very concerned or somewhat

3:09

concerned. About the Twenty Twenty

3:11

Four Us Presidential Election. Eight out

3:13

of and of us are worried

3:16

about this and what it will

3:18

mean home Harve Investments and what

3:20

it will mean. You know

3:22

really at the end of the day to

3:24

what kind of returns we at this is

3:26

and people respond to this that were to

3:29

give you couple people that I think this

3:31

gives some idiotic people in the business the

3:33

gave out idiotic suggestions I'm and I think

3:35

it's because they're promoters again like hey listen

3:38

to me wave I'm a flag over here

3:40

but. If. You're one of

3:42

the say that a ten. And. Imagine some of

3:44

your author or can we just give you one

3:46

word right now. You're.

3:49

wrong august two words relax

3:51

do told me you told

3:53

me that people do not

3:55

respond well to being told

3:57

to rely was my mom

3:59

just tell me never tell somebody

4:01

that because they'll tune out rather than

4:03

talking back to them. Another mom-ism. I

4:06

know. Never tell somebody right now. You

4:08

know, my concern isn't about the elections.

4:10

My concern is about being unable to

4:12

talk about the elections. Honestly,

4:15

it feels like for the first time ever, you

4:17

don't know to be able to talk about them

4:19

in advance, to be able to talk about the

4:22

election itself. I

4:24

remember in the old days I used to be able to do

4:26

that. You were able to

4:29

discuss the election without people hating you.

4:32

Without the tomatoes and rotten eggs. No, no.

4:34

Death threats and things. Not even that.

4:36

There's that. I mean, oh my gosh.

4:39

Anyway, there's

4:42

no reason for investors to

4:44

be concerned about the election. No,

4:46

there isn't. The numbers bear out the

4:48

fact that, okay, let's talk

4:50

about your fears because you do fear things

4:52

more than you get excited about

4:55

the upside. We'll talk about Daniel Kahneman in a few

4:57

minutes. But the thing is, 83% of

4:59

the years, and I know, okay, that means 17% aren't, but 83% of

5:03

the years in presidential election years, guess

5:06

what? The market goes up. Yep. Kind

5:09

of like they do in every other year. Exactly.

5:11

That's as the markets go up 75% of the

5:13

time. 75% of the years. So

5:17

they're likely to go up in an election year

5:19

and it doesn't matter who gets elected. Which party?

5:22

855-935-talk. Tom and John are talking real money. Your

5:25

guys do a really great financial future. Tom and John are talking real money. This

5:29

program, this radio show, this podcast

5:31

is designed to

5:33

both be educational and interactive. That

5:45

is why we invite you to call us during the show

5:47

at 855-935-talk to talk about your money,

5:51

concerns, worries, questions, concerns,

5:55

confusion, all that kind of stuff. And

5:57

We've got someone who just called in. Calvin

6:00

and Calvin your on! Welcome to

6:02

talking real money. Oh

6:05

thank you. So I

6:08

turned sixty six this this week.

6:10

Happy Birthday! Or before

6:12

they do, I have a.

6:15

A. Four O One K with fidelity. And

6:18

then we have some. Broth.

6:20

And traditional Ross also active

6:22

low price. And

6:24

the together Mumbai fum I have about

6:27

six hundred and seventy thousand. A

6:30

year on this one and if it's

6:33

time to. Not.

6:35

Be so aggressive and the market I

6:37

guess. and also. Have

6:40

been getting a pitch from or Fisher

6:43

Investments? Ah yeah, but you have. those

6:45

are two different things our way. As

6:47

a matter of fact, Fisher Investments will

6:49

likely be more aggressive than what you're

6:51

doing, but I don't know what you're

6:53

doing. What are you invested in that.

6:56

With. Fidelity and Zero Bright Mutual Funds.

6:59

And. Everything Our mutual funds.

7:03

Will Cable What kind of funds? All that doesn't

7:05

mean anything to us because you get stuck. Mutual

7:07

funds? You come on. Mutual funds. You get real

7:09

estate mutual funds to get gold. That the all

7:11

the things. Like. What give us a break

7:13

it down or more for us if he would. The.

7:17

Got a with Fidelity I'm in

7:19

the their Five Hundred Fun, The

7:21

Growth Fund, their O T C

7:24

on a low price on the

7:26

ballot fun and some a Federal

7:28

or Freedom Twenty five during How

7:30

Bout With Zero and the. With.

7:33

Piero I have communication technology,

7:36

global growth start fun how

7:38

fighters spectrum and crumb and

7:40

then I max it in

7:43

my. Both My traditional

7:45

and Roth it. Have you been at

7:47

zero price? You been working too hard

7:49

on you, but you been picking too

7:51

much? Yeah, yeah, that. This is all

7:54

of. this is a classic hodgepodge, classic

7:56

case of odd vagina, mostly. as

7:59

long as i can Yeah. You could simplify

8:01

this with like two or three funds

8:03

and just be done with it. I

8:06

mean, you could, you could, what you could do, I mean,

8:08

think about this for a second. You're

8:10

66. Have you sat down and

8:12

determined what you want this money to do for you in

8:15

the future? What do you need it to do? How much

8:17

money you need this money to make for you? Have you

8:19

done that yet? Yeah. You

8:22

have? A little bit. Yeah, there's

8:25

no little bit here, Calvin. I'm going to interrupt you.

8:27

You really need to know the rate of return you're

8:29

trying to achieve on the money. That's the first thing

8:32

because that then allows you to

8:34

build the correct, as we hate, I hate

8:36

this term, asset allocation, the

8:38

right balance between riskier things like stocks

8:40

and less, it's less risky things

8:42

like bonds. It doesn't sound like you got a lot of bonds

8:44

to me because all those first ones you read off were all

8:46

stock funds. Yeah. You got the three to 2025. And

8:50

so that does, because your first words were, am I

8:52

being too aggressive? It sounds like you very well may

8:54

be, but I don't know that because if

8:56

you say, look, I need to make 8% a

8:58

year on my money, well, then you need to be more

9:00

aggressive. If you told me I only need to make 4%,

9:02

then you could be less aggressive. But that's

9:04

the starting part of anybody

9:07

who invests. By the way, that's true of 1888. You

9:11

got to know what your, as Don said, what

9:13

you're trying to do with the money. That is

9:16

at the core of it because after that, you

9:18

can clean up the hodgepodge. Don's right. You

9:20

could have far fewer funds and we don't think you should hire Fisher.

9:23

We could go into that if you want a little bit

9:25

more, but- He's a stock picker. Yeah, he

9:27

is a picker. And the only track record you can

9:29

really see of his is a mutual

9:31

fund he ran for a period of time that underperformed

9:34

the indexes. Though, not very

9:36

helpful for him to say, here's how great I've

9:38

done when nobody can really measure that performance. So

9:42

here's what I would do at 66. And

9:44

by the way, congratulations on being 6. According to

9:46

Don, you're now eligible for the next generation of leadership

9:48

in the country. Yeah, you could be president now. You

9:50

could be president. I heard that.

9:52

But I was born out of the

9:55

country. Sorry. Darn it. Okay,

9:58

but these days, no really follows the- rules

10:00

anyway. What rules? We got no

10:02

rules. It doesn't really matter. So

10:04

you need, but he really needs

10:06

is to at least talk to

10:08

somebody first and they're 100% the

10:10

only fiduciary, put together the plan.

10:12

Then if you want to say, look, I'll go manage

10:14

it on my own, at least you have a starting

10:17

point. Yeah. And if you want to talk to Fisher,

10:19

talk to Fisher, but just don't go with them without

10:21

checking with some other people first because one,

10:24

they do buy individual stocks. So they're acting

10:26

like a money manager. They're acting like a

10:28

mutual fund manager, which we don't think

10:30

anybody can do anywhere. And

10:33

you've got a lot of actively managed funds in

10:35

your portfolio and we don't like those either. But

10:38

again, here are the basics. You

10:40

need to understand your risk tolerance.

10:42

That's critical. But before

10:44

you do that, you need to understand your

10:47

risk need. As Tom said, if

10:49

you don't need any more than

10:51

3% or 4% off your portfolio,

10:53

why be more risky? Why? Just

10:55

to win the money lottery you've

10:58

lost. I guarantee you've already lost.

11:01

So you need to know your risk need, then

11:03

your risk tolerance, then you could just, even

11:06

without going to an advisor, you

11:08

could create a portfolio using something

11:10

as simple as the Vanguard total

11:13

stock index and the Vanguard total

11:15

bond index in the correct proportion.

11:17

Your portfolio could be that simple

11:20

and I believe it would be far better

11:22

than what you have today. And

11:24

I'll make one more suggestion to that. I

11:26

would have one custodian. I talked to a

11:28

nice couple yesterday. They had five different custodians.

11:30

It just gets to be too confusing and

11:32

retirement to try to wear. I got this

11:34

there. That's none in a one

11:36

because because it one custodian, you could buy anything

11:38

you like anyway in today's world. Yeah.

11:43

Yes. That was something that I was

11:45

wondering about too. I thought, you know, consolidate

11:47

one, consolidate it all. No, not

11:49

T-row consolidated all its fidelity. Fidelity

11:52

is a very quality place. But then get out

11:54

of, just start working your

11:56

way out of all those funds. You

11:59

don't have a tax. problem to deal with

12:01

because there will be no taxable event. Start

12:03

working your way out of all of those

12:05

funds and if you do want to do

12:07

it on your own, work toward a portfolio

12:09

that is two or three or

12:11

four really good, broadly

12:13

diversified, unmanaged, exchange-traded

12:16

funds. Cheap. Cheap, cheap,

12:18

cheap. Go cheap. Save your money. Yep, yep.

12:22

All right, sir? So,

12:24

can I do ETS within my 401k?

12:26

Absolutely. No, not in this 401k. Oh,

12:29

no, not necessarily, yeah. You can only do,

12:31

but only do Fidelity Index funds in your

12:33

401k. But if you retire, you can move that money

12:35

to an IRA and then you can use exchange- Exactly. What are you

12:38

going to retire? I

12:41

think in two years. Okay. So, you go

12:43

with Fidelity Index funds for now. You can

12:46

use it, Fidelity Total

12:48

Market and a Total International and

12:51

then the Fidelity Total Bond Fund, just those

12:53

three in your 401. So, that's

12:56

the way I'd go. I'd appreciate

12:59

it. All right, Calvin. Appreciate your time. Thank you

13:01

for the call, sir. You take care. 855-935-TALK

13:05

is our phone number here, 855-935-8255. And AJ, you're next. Welcome

13:07

to the show. Thank

13:13

you very much. I'm calling back because I

13:15

spoke with you a few weeks ago and

13:17

you did tell me, give me some advice,

13:19

but now I need some additional advice to

13:22

the advice you get me. Okay. And

13:25

I have to make one comment and this has

13:27

nothing to do with money. It has to do

13:29

with if women ran the world, we would be

13:31

a much better place. I'll give

13:33

it to you guys. Like, actually, right now,

13:35

this- No. Where we've got the guys that

13:37

got you. That's not hard. AJ,

13:39

will you take the gig? I'll give it to

13:42

you right now. If

13:44

I had that comment. So, yeah,

13:46

well, anyway, anyway, when

13:50

I spoke with you the last time,

13:52

I had mentioned about having all these

13:54

individual bonds and

13:56

I recommended putting them

13:59

into- I was hoping to put

14:02

them into a mutual fund, a bond

14:04

mutual fund. Now, this

14:06

is my question. When

14:09

they do mature, should it save $30,000

14:11

if the bond were $30,000? Hold

14:14

on. I'm going to need

14:16

to interrupt you because, AJ, we have to

14:18

go to a break and we'll finish the

14:20

question afterwards. We'll be right back. Tom and

14:22

Don are cooking real money. For

14:26

your real life and real future, Tom

14:28

and Don are talking real money. Hey,

14:31

welcome back. I'm Don. Tom's

14:33

over there. 855-935-talk is our phone number and

14:35

that's how AJ got in touch with us.

14:38

And AJ called us before. She has

14:40

a lot of bonds in her portfolio

14:42

and is trying to simplify the management

14:45

thereof. And your question is, when those

14:47

bonds mature, fill in

14:52

the bonds. Should I

14:54

put all the money immediately

14:56

into the bond mutual fund

14:58

or should I do it

15:00

a staggering, like every month?

15:04

All at once. Because

15:06

it's a lateral move. You're

15:09

moving from a bond into

15:11

bonds. So it's a lateral

15:13

move. You don't want it because if

15:15

you do it slowly, now you're market

15:18

timing. You're betting on what

15:20

the future is going to look like and nobody knows that. So

15:24

that's true. I understand that. So I'm hoping

15:26

that, I was hoping that that was what

15:28

you would recommend because I didn't want to

15:30

have to deal with, you know, that gradually.

15:33

It's so much easier. I know. I

15:35

got to get it all in. Yeah. We

15:37

are big fans of keeping it simple. Thanks

15:40

AJ. Yeah. You

15:42

know, just. Unfortunately, I didn't learn that until late

15:44

in life. It doesn't really matter. You learned

15:46

it. I mean, I didn't either. Well,

15:48

we do want to remind people that like

15:51

stocks, you want to be diversified

15:53

in bonds. A bond fund holds, geez, what did we

15:55

just look up? Vanguard total bonds, like 15,000. 15,000

15:58

bonds. Yeah, you just

16:00

get diversification. So if something goes wrong with one

16:02

of them, then that doesn't really matter because you've

16:04

got a lot more. You got 14,999 more. So

16:09

try singing that song. 15,000

16:12

bonds on the wall. If

16:14

one of those bonds should happen to go bankrupt, 14,999

16:16

bonds on the wall. I

16:20

was going to say take a fall because it kind of goes

16:22

down. Oh, that rhymes. 855-935-TALK. Larry,

16:26

it's your turn. Welcome to the show.

16:30

How are you doing, guys? Good. Larry,

16:32

what's up? Good, good. Hey,

16:35

I just retired and I'll

16:37

be turning 57 this July.

16:42

Me and my wife have over

16:44

a million dollars in our 401k

16:46

and like another 30,000 in IRA

16:50

funds. And

16:53

we just got news that her daughter is going

16:55

to be having twins and she's out in Utah

16:57

and we're in the Midwest. So we'd like to

16:59

be traveling out there a little bit more. What

17:03

is the best way? First

17:06

of all, should I leave the money in my 401k plan

17:10

with my work as I'm under 59 and a

17:12

half or should I move it out? And

17:14

then how do I take money out of that? We'd like

17:16

to take out about 200 to 250,000 to do a ...

17:18

I got ... My house was paid off. I

17:23

have no bills. And

17:26

I'd like to take some money out to

17:28

buy a camper and a decent truck and

17:31

do a couple house projects. What

17:33

is the best way to do this? Okay,

17:36

first. Wow. First, first, first, first.

17:38

Last thing. I got about ... Don't

17:41

just buy a junky old trailer. Get

17:43

yourself an Airstream. I don't know

17:45

where you could get one. That's what we're looking at.

17:47

I've been listening to you. But

17:49

let me give you a little

17:51

Airstream advice because I've discovered now

17:53

what a great idea this is.

17:56

A new Airstream is going to cost you $110,000 to $140,000. roughly.

18:02

You buy a used one, you get it

18:04

inspected, make sure it has good bones, and

18:06

then you take it to one of these

18:08

places that does refurbishment, not remodeling, but they

18:10

they clean it up. The

18:12

most you're gonna spend on that is probably fifty

18:15

or sixty thousand dollars. So you're gonna

18:17

have a hundred thousand dollar

18:19

Airstream for like fifty or sixty thousand

18:21

bucks. I hate to break in on

18:23

trailer talk here. Trailer talk! It's about

18:25

money. I don't mind. Okay, first

18:29

of all Larry, and congratulations

18:31

on early retirement. You're not even old enough

18:33

to be in leadership in this country because I

18:35

think Don limited it to people. I said people

18:37

under 70. I said under 70. There's a minimum

18:40

age. Okay, but this is that's a lot

18:42

of money to take out of a million

18:45

dollars. So here's a couple questions for you. Number

18:47

one, have you done any planning about this?

18:49

Have you sat down and kind of looked

18:52

at the numbers? Spoil sport, kill and joy.

18:54

The bad bunny today here on the Easter

18:56

weekend. So I mean that would be part

18:58

one for me. I would want to run

19:00

that very carefully because retiring at 57,

19:03

do you have any other sources

19:05

of income other than taking money

19:08

out of this individual retirement account?

19:10

I do get over four thousand

19:12

dollars every month for

19:14

a pension. Wow! So you have a pension

19:17

of 50 grand. Okay, wow! And

19:19

what's your cost of living in retirement?

19:21

Yeah, what's your what have you done

19:23

done the calculations? Actually,

19:27

I don't spend more than I make. We

19:29

don't spend that much money. Okay, hang on with

19:31

us a minute. Everything's paid off. You know the

19:34

news when we're doing the live show, the news

19:36

always sneaks in and takes precedence over you. I'd

19:38

rather just keep you straight through but they say

19:40

we have to go. We'll be right back with

19:43

you though Larry, don't go away. Tom and

19:45

Don are talking real money. Reality

19:53

radio or a really great future?

19:56

We're talking real money. If

19:58

you ever deal with money in your life... life, then you

20:01

need this show, this radio show

20:03

on Saturdays or this podcast every weekday.

20:06

And you can call us on the Saturday show at

20:08

855-935-TALK, 855-935-8255, just

20:12

like Larry did. And we're talking to Larry. Larry's got

20:15

about a million bucks. He retired early. He's got a

20:17

million bucks in the 401K, a little bit of money

20:19

in an IRA. Is that all

20:21

the monies you have, Larry? Yes.

20:26

Paid off house or house by a worth about

20:28

$250,000, $300,000. Okay.

20:32

And you now want to get some

20:34

sort of a means by which to

20:36

travel back and forth to

20:39

Utah to visit the grandkids. Yeah.

20:41

Yeah. He said he wanted to pull $250,000

20:43

out of his retirement account. Did I have

20:45

that number right? Yeah.

20:50

$250,000. That would be to do

20:52

a couple of home projects too.

20:55

But one little thing, I've got 125 of that in

20:59

the Roth and over $950,000

21:01

in the traditional. Okay. That's helpful. That

21:03

makes a difference. It does make a

21:05

big difference. Because if you just pull

21:07

$250,000 out, that makes me nervous in

21:09

terms not just the balance, but also the taxes. Yeah.

21:11

And I say, you know, 30%, I

21:14

mean, it's going to be, you know, I always forget

21:16

the tax rates, but it's going to be pretty high

21:18

at that. They

21:21

pull out 20%. Well, I mean,

21:23

yeah, you'd be in the 24% bracket. I

21:25

mean, so that would be pretty hefty. I'd

21:27

hate to see that. So I mean, and

21:29

here's the other thing I kind of thought about,

21:31

but borrowing money now is not cheap. I mean, if

21:33

this is a few years ago, I might be tempted

21:35

to say, you know, take out, get a mortgage or

21:37

something and take it out at 2.5% or 3%. But

21:40

now you're going to be looking at, what,

21:44

6.5%? Yeah, 7%. Whatever it is. 7%.

21:48

Yeah, so that's not ideal. So here's probably what I would do.

21:51

Part one is I would try to pull

21:54

the money out over, bridge

21:56

it over a couple of years. In other words, do some in 20,

21:58

if you can, 20, 25. to

22:01

reduce the tax hit, to keep your

22:03

bracket creep down to a dull road.

22:05

And then number two, try to balance

22:07

it between the pre-tax, the traditional, and

22:09

the post-tax like Roth. Again,

22:11

so the taxation is a bit lower.

22:14

Because it sounds like you're going to, I was also

22:16

very worried when you said you're going to take basically

22:19

25% of your money out and do this. But now

22:21

that we know the pension supplies most of the income

22:23

you need, and at some point you'll

22:25

be eligible to file for Social Security, etc., that

22:28

will help make up the difference. So I'm not as

22:30

worried about that. And my advice then

22:32

becomes even more important because you won't have

22:34

to take out as much if you get

22:37

the used Airstream and a

22:39

used tow vehicle. Thank you for joining

22:41

us for trailer talk today. So yeah, we never miss

22:43

it. Are you handy? Are you

22:45

handy? Are you handy? Yeah. Hey,

22:49

you can do some of the work yourself. There's all

22:51

kinds of guides online. You just... Actually, maybe you could

22:53

do some of the work on... On Don. Yeah, I

22:55

can bring it through Utah. Actually, we're coming through... My

22:57

name's Nate. Coming back, we're going through... Oh, no, he's

23:00

in Illinois. You're in Illinois, right? Yeah, you're in Illinois.

23:02

That's not going to happen. All right. Sorry. Thanks,

23:05

Larry. Thanks, guys. All

23:07

right, sir. We wish you well. 855-935-TALK.

23:09

Dave, you're next. Welcome to the program.

23:14

Hey, guys. Hey, Dave. Well, long-time listener.

23:16

Pick your brains often. But I think

23:19

I might have gotten ahead of the

23:21

game. My stepson

23:24

came back from his years in the Navy

23:26

and had some cash sitting in a bunch of

23:29

individual stocks. When

23:35

I said, come on now. You can do better than

23:37

this. Let's get diversified.

23:39

Let's drop that into a Roth.

23:41

You're young. Let it grow. So

23:44

on and so forth. He's using

23:46

his veteran's benefits going to school and lo

23:48

and behold, end of the

23:50

year, we're working on his taxes. He

23:53

didn't have enough income, W-2

23:56

income, to contribute to the

23:58

Roth. So not only...

24:00

did he contribute maximum to

24:03

the Roth for 23 being ahead of the

24:05

game? He's already done that

24:07

for 24 and I

24:09

need some ideas on how to get that out

24:12

without getting hit with either the 10% penalty

24:15

or the 6% penalty

24:17

for leaving it in. I

24:19

have a question. He has zero earned

24:21

income? Yes. Oh,

24:24

okay. Okay. So,

24:26

yeah, then he cannot make a Roth contribution. So, he

24:28

had zero income in 2023 as well? 2023

24:35

and unless he picked

24:37

up for this internship, he's not going to have any

24:39

for 24. Got

24:42

it. Yes. You can't even

24:44

move that to an IRA, right? No. You're

24:46

going to have earned income for that too. Yeah.

24:48

See, that's a problem. Yeah. That

24:51

money is going to have to come out and yes, there's going

24:53

to be a penalty involved and it's going to be a tad

24:55

unpleasant. The sooner you

24:57

do it, the better off you are

24:59

because there's a 6%

25:01

excise tax for every year it

25:04

remains in the Roth. Oh,

25:06

is that what it is? Yeah.

25:08

Oh, God. I mean, you could

25:10

go online and type it in and figure it out.

25:12

It's not going to be complicated. The 2024, you

25:15

said there's a chance of him having earnings this

25:17

year, right? I

25:20

just unwind the 23 right now and bite the

25:22

bullet and pay it sooner than later because it

25:24

just keeps growing if you don't. So get it

25:26

done. You've got to pay him. There's no trick

25:28

that I am aware of. There's somebody who's aware

25:31

of a trick. We'd love to hear it, but

25:33

I don't know of one. Thanks for the call.

25:35

855-935-TALK. Call it.

25:39

Tom and Don are talking real

25:41

money. Your

25:44

guys do a really great financial future.

25:48

Tom and Don are talking real money.

25:51

And lucky for us and lucky for

25:53

you. The calls just keep rolling in.

25:55

2855-935-8255, which spells... talk

26:00

on those little letters on the

26:02

keyboard there on the phone pad. We

26:05

still have phone pads on our phones. We do.

26:08

I've seen them. Yeah, we do. You're gonna laugh today. I

26:10

was doing a little spring cleaning. Guess what kind of phone

26:12

I found? A dial phone? No,

26:15

not that old. Oh, just

26:17

a blackberry. Oh, a blackberry.

26:19

I hope it's worth something.

26:21

Oh yeah, it's not. Maybe

26:23

in Canada it would be

26:25

or something? Not even there.

26:27

Not even there. Ladies and

26:29

gentlemen, welcome to Blackberry Live.

26:31

Yeah, I remember those days.

26:35

I was the voice of those

26:37

conventions. Jim, ball

26:39

silly, and it was ball silly at the

26:41

time, not baldly. It changed

26:43

it for the show. I did. Anyway,

26:45

moving along, our next caller

26:47

is, well, Chris. Chris,

26:50

welcome to our program. Hello.

26:54

Hey, Chris, what's

26:56

up? Hello. My

27:00

parents died about a year and a half,

27:02

two years ago, and I

27:04

really don't have any financial background.

27:07

I've usually been living paycheck to

27:09

paycheck, and I have

27:11

about 800,000 in inherited IRS,

27:13

and I'm not really

27:15

sure. Is

27:20

there some sort of calculator or

27:22

something that would help me with

27:24

being able to pull that

27:26

out? I've been told I have to

27:28

remove it over a seven-year period. Well,

27:31

you've been told wrong. You have 10 years to

27:33

take it out of inherited IRA, a

27:36

non-spousal. This is from your parents, correct? Yeah, so

27:38

it's a non-spousal. So it's a 10-year term. Yeah.

27:42

Yeah, and you could take it all out in the 10th year if you

27:44

wanted. Right. There's

27:46

no timeframe. I

27:49

think it was in a trust. My brother

27:51

was the executor, and so

27:55

he dealt with it for the first

27:57

three years and just recently transferred everything

27:59

to my office. name and okay that's

28:01

why I'm thinking in seven

28:05

plus three right so you have seven left

28:07

seven but there's no calculator because you can

28:09

take that when you want according to your

28:11

tax situation let me ask you so do

28:15

you have regular income today are you

28:17

employed yes

28:19

I'm employed I make

28:21

about 75,000 a year okay and is that

28:23

likely to change in the next seven years

28:28

it could depending on how much I'm

28:31

having to pull out for the iris

28:34

I'm 65 recently this year and

28:36

I'm hitting 20 years with my

28:38

employer and so I'm considering retiring

28:40

in the next two or three

28:42

years so here's what I would

28:44

do under that circumstance I would

28:47

take out only some each

28:49

year maybe up to the next tax

28:51

bracket because it's 75 yeah let me go back let

28:53

me go back a minute let

28:55

me just go back in the bracket yeah

28:57

where is this money now it's

29:02

in a couple of counts in

29:04

fidelity and a couple counts in

29:07

Vanguard and who is helping you

29:09

are you managing them on your own or do you

29:11

have help I'm

29:14

I've just been given them

29:16

my brother said he'd help me if I

29:18

need okay good he's not in okay

29:21

well because one of the things that

29:23

we talk about this a lot we're

29:25

big believers in people being able to

29:27

manage their own portfolios it's not that

29:30

hard until you get to

29:32

this point in life that's

29:34

when it becomes complicated when you've got withdrawals

29:36

you've got to make when you've got tax

29:38

planning you need to do when you've got

29:41

income streams you need to create I really

29:44

think and and I think this will be a

29:46

huge help to you if

29:49

you find a true I mean I

29:51

love that you have fidelity in Vanguard

29:54

you could even go to them and

29:56

get a fee ask for a fee

29:58

only financial advisor someone to help you

30:00

there. Or locally, find your own fee only.

30:02

Well, it doesn't even have to be locally.

30:05

Find a true 100% fiduciary fee only

30:07

advisor. And if you want help doing

30:10

that, just go to talkingrealmoney.com/help. And we've

30:12

got all kinds of resources to help

30:14

you find one. But you're to that

30:16

point where you really

30:19

need that to manage the tax

30:21

situation and to create that income

30:23

plan for the future. And

30:25

to have the right portfolio moving forward. Right,

30:27

that too. And that could be very helpful

30:30

to your retirement handled properly, invested properly. You

30:32

could be comfortable for the rest of your

30:34

life. Yeah, so what I was

30:36

saying around that is that you're in a low

30:38

tax bracket today. You want to kind of stay

30:40

in that tax bracket. And if it looks like

30:42

you're going to retire along the way, then that

30:44

would be the time to pull the money out,

30:46

right? Because your taxes would actually be a little

30:48

bit less. But Don's right.

30:50

Professional help at this point probably makes

30:53

very good sense. Yeah, and as you

30:55

get closer, as you get past retirement,

30:58

that's when you start accelerating the withdrawals.

31:00

But again, tax

31:02

planning is critical because you want to hold

31:04

back as much as you can until the

31:06

last couple of years. Because if you take

31:08

it out, you lose the opportunity to make

31:11

money on the money you're going to have

31:13

to give to the government. So

31:16

there's a balance. And this is why

31:18

it gets so complicated. There's a balance

31:20

between keeping your

31:22

tax bracket reasonable and losing

31:24

the earning power of that money. So

31:26

this is where life gets

31:29

fiscally tricky in nearing

31:32

retirement. It really does. I think

31:35

that's why so many older people have advisors. I

31:38

really do. All

31:41

right. Thank you very much. All right. So thanks for the

31:44

call. We wish you well. If

31:46

Congress would do what I suggested, other

31:48

than fixing the AM radio debacle. Oh,

31:51

gee. Thank you, Congress, for

31:53

that. If they would

31:55

move everything to Roth, this would not be an issue.

31:58

I know. I think actually. It

32:01

makes it so much simpler. But

32:04

the people who take the big

32:07

deductions are going to complain like

32:09

everybody complains about

32:13

everything all the time. I'm telling

32:15

you, I'm now the

32:17

president of my HOA board. What

32:20

idiocy was that? You asked? I

32:23

already served five years on that board years ago and

32:25

then eight years on another board and now I'm back

32:27

on it. On the other day, a group

32:30

of people come in and complain about

32:33

the tenant, a whole group of them,

32:35

nonstop complaining about the fact that it's

32:37

hard to get on the tennis courts

32:40

early in the morning or in the

32:42

evening. And it's fine during the

32:44

day. Yes. Yes.

32:47

And they all had the same exact... Let me get to

32:49

organize the group. Tennis players. Probably your wife. No, no. She's

32:52

a big organizer. She does not play tennis. She's a

32:55

big organizer. She doesn't play tennis. But she's a big

32:57

organizer. She might have done it just before. She's

32:59

a big organizer but not a big tennis player.

33:01

Not a big tennis player. Fair enough. Oh, you

33:03

know, we were talking about the presidential elections. And

33:06

so here we have a... I

33:09

just did the numbers. I just crunched some numbers

33:11

because this is a number oriented show. Did

33:13

you know that the two of them... I didn't

33:16

realize it was this close. The

33:18

age difference between the two of these people is

33:20

three and a half years. That's

33:23

all. Three and a half years.

33:25

So literally we have practically an

33:27

octogenarian election. How... And

33:30

that... Is

33:32

there a Trump and Biden trade going on

33:34

right now? Yeah, there is. And in fact,

33:37

if you see headlines like this, I

33:39

urge you to tune them out immediately.

33:41

This one says, I'm a financial advisor

33:44

for moves I'll make if I think Trump

33:46

will win the election. Right?

33:49

And this is the... Wait a minute. You

33:52

won't know until election day, right? But you're going to be

33:54

out ahead of this because you're going to know. I'm going

33:56

to be ahead of this. Let's

33:58

see. Here's a good one. He says

34:01

target stocks benefiting from tax cuts.

34:04

What are those? I

34:06

love that one. H&R

34:09

Block? Real estate

34:11

because it's Trump's own

34:13

playground, he says. This

34:16

is real estate. I can't invest in that. So

34:18

Trump is going to be able to turn around

34:20

the horrible office space market. He's just going to

34:22

buy it all. He's going to go back to

34:24

work. You're going to get back to work right

34:26

now. Go back to work, Darn you. Get

34:29

in that office. Ignore that

34:31

kind of stuff. Ignore that stuff and we're going

34:33

to talk a little bit more about some of

34:35

this kind of stuff in a minute. You're welcome

34:38

to call us anytime at 855-935-TALK because well, we

34:40

talk real money. Tom

34:45

and Don are talking real money.

34:48

For your real life and real future,

34:50

Tom and Don are talking real money.

34:54

This time of year, every

34:57

four years, the

35:00

crazies come out of the woodwork with

35:03

presidential investing advice

35:06

as Tom just illustrated. When

35:10

the reality is, and this is

35:12

what you need to focus on, you're

35:15

going to read articles. If

35:17

you read, of course, maybe some of you don't read. You

35:20

might hear them on the radio. I don't

35:22

know. Maybe even on television. You might hear

35:25

people saying, well, if so and so gets

35:27

elected. And by the way, just

35:31

personal note, I'm so

35:33

unhappy with all of our choices, all

35:35

three of them. Oh, that's right. There

35:38

are three. I keep forgetting that. This

35:40

is voices from the past, back to

35:43

the future. What is wrong, ladies and

35:45

gentlemen? We

35:47

don't have that much time. What is wrong with

35:49

America? Why

35:52

can't we get somebody... The Octotocracy? Is that what

35:54

they call it? The Octotocracy? That's a good one.

35:56

Did you just go up with that one? No,

35:59

I did not. The octetocracy. Yeah. That's

36:01

kind of what it is. I

36:04

mean, 78 and 81 will be their ages on election

36:06

day. 78 and 81. How

36:08

old is Mr. Kennedy? He's early 70s, mid 70s. Oh,

36:12

great. No, he's not an old guy either. Is he

36:14

an old guy too? I think he's ...

36:16

Let's see. I could probably figure it out. No, no, no. Hold

36:19

on. Robert. I'm going to say 76. This

36:23

is a wild guess. I just looked up. I just

36:25

took Kennedy age and it gave me JFK at 46. I

36:27

went, well, no. Okay. It was

36:29

like a while ago, yeah. Permanently stuck at 46. Robert

36:34

Kennedy, Jr. 76, I'm going to predict.

36:37

All right. I'm going to see how

36:40

... Oh, you're off. You're off by about ... How

36:42

far? Almost 10%. He's

36:44

70. Jesus. Young guy. He's

36:47

really ... But he doesn't meet the criteria that Don McDonald

36:49

has. No, the under 70. The under

36:51

70. I'm sorry about that, sir. What is it?

36:53

We kept the records and you don't make ... Anyway, I'm not happy about

36:55

that, but the point I was getting ... I'm getting to a point. Yes,

36:58

I'm always happy for that. I'm always happy for that. Yeah. The

37:01

markets, particularly the

37:04

stock market, does

37:07

not react to

37:09

most news. People

37:13

think just like you do about

37:15

the future and lots

37:17

and lots of people all

37:20

thinking the same thoughts about the

37:22

future move the markets in

37:24

advance of the event. The

37:26

only time you're going to

37:28

get a huge impact from

37:30

an event is when the

37:32

event is unexpected. Yeah. I'll

37:35

give you an example of this. In the boat crashing

37:38

into the bridge. No one expected it. Well,

37:40

yes. Buy some infrastructure stocks. No, but

37:42

November of 2016, because I remember this

37:44

clear as day, because for a

37:46

while it looked like Hillary Clinton was going to

37:48

be elected and all of a sudden it turned,

37:50

right? Upper Midwest, et cetera, and Mr. Trump. The

37:53

market declined by 800 points, literally

37:56

the futures, literally within minutes.

37:58

I remember sitting there thinking, I'm about to get on

38:00

the phone. tomorrow. Now it's reacting. And then overnight it

38:02

turned and went back up because they're like, well, wait,

38:04

Trump's going to be business front. You

38:07

are not going to profit from that unless you're really

38:09

quick. You can't. You can't

38:11

because there are too many people playing

38:14

with too much money for

38:16

you to beat them. I

38:19

looked up Robert F. Kennedy Jr. on Google

38:22

and I got to tell you, there

38:25

are two presidential candidates though that are in

38:27

really good physical shh. RFK

38:30

Jr. is in, look at that

38:32

guy. But it always sounds

38:34

like something's wrong. You don't want to

38:36

see Trump shirtless like this. There's a

38:38

shirtless picture of RFK Jr. And I

38:40

guarantee you, finally somebody can match up

38:42

with Vladimir Putin. We got our Vlad.

38:44

Look at that guy. That is just

38:46

making me look like a big old

38:48

fat guy. All right.

38:50

Well, anyway, thank you so

38:52

much. The

38:55

opinion you've expressed on this podcast is recurrent on the date recorded.

38:58

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39:00

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39:02

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39:04

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39:06

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39:12

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39:14

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