More than Money with Gene Dickison
Please join us on 9/11 at our More than Money World Headquarters as we again work to turn one of America’s
darkest moments into positive light for Pennsylvania’s military veterans and their families who need our help.
Please see this letter’s insert for details.
“Real Life Questions – Real World Answers”
“My wife and I just turned 70 and will begin our RMDs in January of 2020. We have no debts. We both have pensions and social security that more than covers our expenses. We have three children. Each of them is married and each has two children. A perfectly matched set!
We have two concerns. The first is our goal to leave each of our children and grandchildren a substantial sum of money when we pass.
The second is to minimize the income taxes they will have to pay on our IRAs when they get them.
Can you help?”
Congratulations on your beautiful family! We are happy to offer you a couple of ideas that may help.
With the facts you’ve provided, I would ask you to explore the use of life insurance to help you reach your goals. You should meet with a trusted life insurance advisor (not a company salesman, but an advisor that represents many, many different companies at the same time). Your life insurance advisor will assist you in answering a number of important questions. Are you insurable at reasonable rates? What level of premiums (perhaps using your RMDs) would best fit your situation? What amount of life insurance coverage meets your wishes for your family? What life insurance companies best meet your needs? How should you efficiently apply to multiple companies with one application?
Your life insurance advisor might also be able to help with your second question. Your family will pay income tax on your IRAs unless you convert them to Roth IRAs and pay the tax yourself. If that is not an option, life insurance (income tax free to your family and potentially inheritance tax free as well) might be available to provide the funds to pay the tax on your IRAs.
Should you need a referral to a life insurance advisor, we will be happy to assist you.
“Thank you for sending me the filial support article attorney (Keith) Strohl wrote. It was very informative and also very unsettling.
My parents are just turning 60 and they’re both in great health. They own their home free and clear, have no debts, but very little in savings. They expect they will live comfortably on their two social security checks.
My parents would be wiped out if either of them went into a home. Now I know my brothers and I would be hit hard as well. They gave everything to me and my two brothers including great educations. We are all doing very well and we want to help them now.
Where do we start?”
You might very well want to start with a family meeting.
Bring your parents and your brothers together to discuss what mom and dad expect will happen should one or both of them need care. Hopefully, this is something they’ve discussed and have a plan in place. Based on your question, this is not likely. If that is the case, you and your brothers will need to assist them in crafting a plan that best fits.
One idea you will likely want to explore is Long Term Care Insurance (LTCi). You and your brothers may find that LTCi is the least expensive and most reliable way to shift some/all of the potential costs of your parent’s care.
Another idea to explore is the use of a Reverse Mortgage (RM) to utilize the equity they have in their home to provide funds to either LTCi premiums or for actual care provided to your parents.
Of course, a combination of these ideas or other plans may be most appropriate. They only way to find out is to bring the family together and explore. Be sure to enlist the help of a trusted advisor to guide you to the answers you’re looking for.
“My aunt is 90 and has been a client of yours for many years – at least 20. I recently retired and asked her about her experience with you. She said she is very happy and has gotten good rates of return even though she is very conservative.
She showed me her investments. I was surprised to see that you had invested some of her money in the stock market. With her age and her conservative nature I can’t see where the stock market is the place for her.
It’s important that I understand if I should be concerned about this.
I am considering becoming a client and would wonder why things are being done the way they are.”
Thank you for asking these important questions. I’m sure your Aunt appreciates your concern as well. As you might expect, I can only answer in ways that will not violate your Aunt’s privacy. But I think we can be quite clear.
Your Aunt is a lovely lady with a very sharp mind. Over the more than twenty-five (25) years we worked together she has been an active participant in all of our financial and investment decisions. And I must say she is every bit as clear and quick witted today as ever.
Many conservative investors are surprised to find that conservative investment portfolios are both more productive and more consistent with a small allocation to equities – the stock market. Comparisons of portfolios that are 100% allocated to fixed income (cash, bonds, mortgages, etc.) are a bit more volatile and provide a bit less return than portfolios with a touch (15% seems to work quite well) of exposure to the stock market.
It is important for all investors to understand that ‘the stock market’ is not one thing. It is tens of thousands of companies traded on multiple stock exchanges. Within that universe, there are stock investments that are little better than putting money in the slots at the casino. And within that universe, are stock investments in companies that have exceptional track records of strength and stability. Focusing a small portion of a conservative portfolio in that small section of the stock market that represents what we used to call “Blue Chip’ stocks has worked very well for your Aunt and many other conservative investors.
As always, past performance is no guarantee of future results.
As a potential client, continue asking questions that concern you. No advisor can provide you with the best advice possible without excellent lines of communication. Being comfortable in your relationship with an advisor to ask questions – even hard questions – is critical. And having an advisor who answers your questions clearly and appropriately is equally critical.
Perhaps we’ll have the chance to serve you as we have your Aunt these many years.
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 read. Actually, I read a lot. I’ve read two books recently that may appear to have nothing in common. But . . . I think there is a connection there.
Digital Minimalism by Cal Newport (an associate professor of computer science at Georgetown) makes a compelling argument for dramatically reducing the amount of interaction we have with personal technology. Cell phones, laptops, workstations, Facebook, Instagram, Youtube, Google, NetFlix, and many, many more personal technology tools make an already noisy world much noisier.
Newport, who also wrote Deep Work (fascinatingly helpful book for people who need and/or want to do important work), gives us practical advice on how to get less ‘connected’ and more grounded. How to get less data and more information. How to create less time with electronics and more time with people.
Questlove, is a Philadelphia born musician, drummer and frontman for The Roots – the house band for Jimmy Fallon’s tonight show. He is also an author. Creative Quest is his exploration of the creative process. His interaction with so many impressively creative musicians, writers, artists, chefs, and many others makes him eminently qualified to share ideas on creativity.
Questlove observes that creativity (across all spectrums of the word) have at least one thing in common – they require silence to begin and grow the creative process. It seems to me that silence may actually be the ‘blank slate’ that creative people use to create.
So drawing from my readings of Questlove, Cal Newport, and the Bible, might I offer:
“Whenever possible, disconnect a bit from the world of electrons and go silent. Meditation. Prayer. A walk in the woods.
A notebook and a pen. Reflective reading. Listen for that voice of the Creator. It is most often soft-spoken, quiet.
Silence will give you the best opportunity to hear those words of creation and create a wonderful life full
of rich human relationships for yourself and those you love. ”
Please allow us to serve you and those you love.
P.S. Where will you find silence in your life?