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More than Money Newsletter - August 2019

More than Money with Gene Dickison

August 2019

Dear Friends,

 

 “Real Life Questions – Real World Answers”

 

My husband is a teacher and will be retiring at the end of this school year.  He has been in PSERS since he started teaching in 1987.  We went to a conference to review his retirement.  He has many different options to give him income and then something to me as well when he passes.  We’ve got that part pretty well figured out.

He also has almost $250,000 that he can either take out or leave it.

Which should we do?

Well, it depends.

There are a number of factors that will affect your decision.  Do you have enough income – without keeping the $250,000 in the pension – to pay your bills and be happy and healthy?   If not, strongly consider leaving it in.  If so, strongly consider taking it out.  Not sure?  Roll it to an IRA and defer the decision for the future.

 

Do you have children or grandchildren that you would like to provide for in your estates?  If so, roll the $250,000 into an IRA and explore ways to get those funds to your heirs.  If not, then the question reverts back to do you need the income.

 

Finally, a lot depends on how you think about ‘things’.  The thought of a higher guaranteed pension provided to you by PSERS may give you a warm glow and tingles all over.  Then by all means grab it.  Conversely, the thought of giving up control of a quarter of a million dollars may give you hives (and I will note that the vast majority of our clients in this situation felt this way).  If so, roll those dollars into your IRA and get good advice managing it throughout your (hopefully) long retirement.

 

 

 

My wife and I were home with my family in Macungie.  Both Saturday mornings we were here my mom had your show on the radio in the kitchen.  We listened (mostly – mom’s great breakfasts can be very distracting!) and really enjoyed it.

 

Now that we’re back home we listen most Saturday’s on the web link.  You’ve got my mom and my wife convinced, but dad and I are still a bit skeptical.  So here’s our test question for you – should my wife and I buy a house or continue to rent and save the difference?  Dad and I have one idea.  My wife and mom have a different idea.  We can’t wait to hear whose side you’ll be coming down on.

 

Thanks for not being your typical, boring, financial show.

 

You are very welcome.  And please thank your mom for me for being such a loyal listener and turning you on to our ‘non-typical’ and ‘non-boring’ show.  Tell your friends.

 

I can assume you have been married for a short period of time and have lots to learn, but I can also assume your dad and mom have been married for quite some time and therefor he has no excuse.

 

Of course, your wives are correct.  And, of course, you and your dad are incorrect.  And sadly, you’re wrong on at least three levels.  Financially, the benefits of owning a home (long term) vs. renting are substantial and increase over time.  The current ‘benefit’ you have by renting at a lower monthly cost than owning will disappear over time as you need more space for a family and as lease rates rise.

 

Practically, owning a home gives you ultimate control over your most personal space while renting puts you at the mercy of the property owner.

 

And third, your wife wants a home.  She wants to put down roots.  She wants to raise her children in their home, in their bedrooms, playing in their backyards.  She wants to have neighbors to share the dreadful T-Ball games with. She wants you to cut the grass of your home and take the trash out of your home.  She wants to look forward to the day when that mortgage (that seemed insurmountable when you bought your home) is paid off.  To your wife family and home go hand-in-hand.  And keeping your wife happy needs to be your priority.

 

By the way, your dad knew all this.  He was just messing with you.  Dads  . . .

 

 

My husband and I listen to your show as often as we can.  Over the past few months we’ve heard a lot of callers asking about the law that makes them pay for their parents nursing home cost.

 

Shouldn’t they buy long term care insurance on their parents?

 

Simply stated, yes.  But this is far from a simple question.

 

Long term care insurance (LTCi) is a rather complicated solution.  First, the health of the parents has to be evaluated.  And their age(s).  And their cognitive abilities.  These are just three of the areas that LTCi companies will evaluate prior to issuing a policy.  If, for any reason, the parents are uninsurable this option is off the table.

 

LTCi is not an in-expensive solution.  Though LTC policies come in many flavors all of them come with a cost.  Some carry annual premiums.  Some are paid for with a single, substantial deposit.  Others with a series of deposits.  However the policies are structured, the costs must be in line with what the children (and it can be shared by multiple children) are able to handle.

 

LTCi policies are challenging to understand.  They are also challenging to compare.  It is very important to have a trusted insurance advisor who can understand, compare, and evaluate a large number of companies to find the best policy for each individual circumstance.

 

All that being said, exploring LTCi with a qualified, experienced, and trusted insurance advisor is a wise first step in building a long term care plan to protect both the parents who may lose their health and the children who may lose their wealth.

 

 

“Talk about being shocked. 

I am working full-time and contribute to the 401(k).  I turned 70 ½ in January and HR said they are sending me an RMD.  I explained to them that I didn’t want it and the IRS doesn’t require it.  They explained that this is ‘what they do.’

Is this legal?

What can I do about it?”

Sadly, this is legal.

However, according to the IRS these are not technically RMDs since they are not mandated by the IRS but are rather policies of the 401(k) plan administrator.  So you do have some options.

First, you could/should ask your H/R department to get out of the stone ages and changes their policies to reflect the IRS regs.  You are certainly not the only employee this affects.  It’s no skin off their nose if they change the policy.  Any reasonable person would.  If you wish some assistance with your request, please let us know.  We’ve had some very good success working the companies (both the owners directly and the H/R departments) in bringing the quality of both their policies and their investment menus up to an excellent standard to benefit their employees.

Second, you can roll these distributions over into an IRA outside the 401(k).  This will prevent the distributions from being taxable in the year you receive them.  However, this addition to your IRA will increase the RMDs you do have to take from your IRA.

If none of this works for you and you like your work and continue to add to your 401(k) then simply accept the situation as it is.  And rock on.

 

More than Money Radio and Television

 

Have Breakfast with Gene every Saturday Morning at 8:06 as

More than Money with Gene Dickison airs on AM790 WAEB.

Two Full Hours – 8:06 through 10:00 AM.

 

 Words are Powerful Tools for American Freedom

 

I was recently asked to return to the little town where I grew up to speak about my school.  The local historical society has a very active following interested in all things ‘historical’.  Apparently, I have reached the age where things I experienced in my lifetime are historical.  Who knew?

 

I’ve spent some considerable time reflecting on my memories of that elementary school.  The building itself.  The teachers.  My classmates.  The things I learned.  But I keep coming back to my memories of what I heard.  And some of the things I heard in those formative years students today never hear.

 

We started each day with a reading from scripture followed by a prayer.  And then:

 

I pledge allegiance to the flag of the United States of America. 

And to the Republic for which it stands. 

One nation, under God, indivisible, with liberty and justice for all.”

In 1963 prayer and Bible reading was banned in our public schools.  And more than a few insightful folks have pointed to that very time and event as the turning point in what feels like a continuous downward slide in the quality of our schools and the near elimination of personal responsibility of the students they serve. 

There is a small, but vocal, group of ‘public servants’ in Congress who – given the opportunity – would certainly ban the Pledge as well.  And the flag would soon follow.

I read my Bible.  I say my prayers.  I stand for the flag, our national anthem, and the Pledge of Allegiance.

I hope you all do as well.

Please allow us to serve you and those you love.

 

Thank you,

Gene

 

P.S.  What outrageous prayer request will you make that can help save America?

 

Remember 9/11

 

Join your More than Money family on Wednesday September 11th as we remember the events of 9/11.  And help us use these memories to fuel positive results in the lives of our military veterans.

Last year we raised more than $32,000 to benefit the Keystone Warriors.  We can only pray to match that record with your help.  We will be accepting donations at the More than Money offices.  We will be accepting pledges by phone and email.

 

Wednesday September 11th

 

  • Bobby Gunther Walsh and his WAEB AM790 team broadcasting live from 5 AM to 10 AM
  • Gene Dickison and the entire More than Money family will be taking your pledges from 6 AM until 5 PM
  • Honor Guard, 21 gun salute, and the playing of Taps at 8:45 AM

 

The More than Money World Headquarters (in the Holy Lands)

4505 Hanoverville Road Bethlehem, PA  18020

610-746-7007

Connie@AskMtM.com or Gene@AskMtM.com

 

Stop in and enjoy great food, an exciting radio show, and wonderful people and help us make a difference in the lives of our military veterans.

If you wish to be an event sponsor please email Connie.  If you wish to send your donation prior to the event, please draw your check to ‘Keystone Warriors’ and send it to the More than Money office.

 

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