What Can We Learn From More Than A Feeling By Boston

Financial Symphony
Saturday, December 2nd

Answers to questions from listeners, and how to manage your retirement income.

00:44:04

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

No financial center and helping you. Harmonious financial plan and getting your portfolio in two weeks so sit back while always strike up the the financial simple it's starts now. Pleasure joining us this week on the financial symphony I'm Walter strolled alongside your local financial my true right here in the Charlotte metro area and he is of course Richard dutrow rally. Investment advisor at Carolina retirement resources with offices in hunter's bill. And in Rock Hill as well you can reach out to Richard at any point in time by calling 800. 6465996. Again that's 8064659. 96. Richard thanks so much for being here this week Aureus are under great Walter her beer very glad to hear that time well I am looking forward to our conversation today because. There's a lot of good things on the agenda lancer somebody your questions. Coming appear on the show we like to call our mailbag segment services where he was a listener can pepper Richard with a couple of different questions. And we'll talk about the importance of Roth conversions on today show what you need to know about them. All that and more straight ahead if he'd like to submit a question to be featured on the show you can go to. Financial symphony dot com to do that and our first one of the week Richard. Comes to us from mark in Cornelius and mark says. I'm wondering whether I'm prepared for retirement or not I've read that there are many different approaches on how best to manage my savings and retirement. What do you think is the best approach. We know mark. And most of you save money for retirement in the hope. Of eventually converting those dollars saved into a retirement income stream that will hopefully last a lifetime. You know in the past many people relied on pensions from their employers. That provided much of the income they needed to today that's not an option for most people so. You know one of the most common ways that I see that many of you save for retirement and then convert those dollars and your retirement income used to use a mix. Of financial vehicles like stocks and bonds. Your ideal mix or allocation. For the ratio stocks and bonds your portfolio depends on a number of factors such as your tolerance for risk. Are your time horizon and your income needs in retirement. And other specific financial goals say needs that you may have. You know unfortunately given today's volatile stock market you know coupled with the historically low rates of interest on fixed income vehicles for two bonds. You know it's been difficult for many retirees to generate the income they need using the strategy. In addition because of longer life expectancies. You know the risk of one out of money is increased dramatically. You know another approach that people take this with respect Q I generating income is a message that is referred to as the 4% rule. The idea being that you could comfortably Rick Roth 4% of your retirement savings each year. Then adjust that for inflation and continue to do so for approximately thirty years. Now this strategy assumed. A certain amount of income from your savings. While at the same time assume in a certain amount of growth. From the assets that are left behind but. If real return to work to decline as they have the success rate of the 4% rules on dropped dramatically. But there is another option it's an insurance option you know that option is an annuity Mike Hsu in the lifetime income option you can be assured. Then you'll have that reliable income for the remainder of your life term regardless of how long that may be. And you can choose a joint likely come option which we do provide income for your spouse over her life expectancy as well. And it doesn't matter what the market does where there goes up or down or you're still gonna received a check month after month after month. As an alternative to relying on stocks and bonds or the 4% rule you know many retirees marker including the new visas are par Burrell grounded income plan. Annuities eliminate the risk of core investment performance. And they also eliminate the risk of Livan too long so mark I favor. Taken a balanced approach for managing your savings and retirement one sure energy for income and another strategy for growth. Yeah very good question though marking glad you're thinking about things in this way people are doing the proper planning for retirement but it looks like you. Are taking the right steps to find out what's the best approach for you to prepare for retirement again if you'd like to reach out to Richard future rally and his team. And Carolina retirement resources you can do that by calling 800. 6465996. Again that's 8064659. 96. Answering your questions on who we like to call the request line here on the financial symphony in the next when comes to us from bill in Charlotte. They'll says I'm retiring soon and worried that I don't have enough money to save for retirement is there anything I can do to ease my concerns. That. Well you can always save more publicity and this is not a year uncommon concern. The share of work in households that will not have enough money to maintain their pre retirement standard of living in its increased dramatically. It's even more shocking when you add to end the need for a retirement health care expenditures. As richer shows that though the percentage of retirees and able to maintain understand and Livan could increase another 15%. And what they're comes down chooses you really means that there you have it almost 67% chance about living your money and retirement. But you know it doesn't have to happen do you you can make sure you never run out of money in retirement simply by allocating a portion of your retirement savings to a fixed index annuity. Which can guarantee an income relying even if you live to our cash you know the interest credited to fixed index annuity is partially determine. By the upsides of market index. But when the market turns down as it eventually does. You know your premium and any interest credit in previous years won't suffer because of the index have a negative here. He'll most recently we've seen a few years of growth in the markets. But what you gonna do no actually no I don't think anybody really knows what's gonna happen but there is some trepidation now they're here this on a regular basis from individuals. Who are concerned about on the market crash like 2008. You know I. How would you feel if you're retired today. And you lost 20% of your money has many didn't 2002. Or 3740%. Of the money that they lost in 2008. You know fixed indexed annuities are the evolution of traditional fixed annuity in that they both have a guaranteed minimum interest rate and tax per kick in relation. In addition of the index annuities adds an interest credit in method. Which credits interest to your account when the index to which you're newly complaint does well. While at the same time it's safeguard your principal from index declines. You know the insurance companies taken on all the investment risk in this situation. And they guarantee that your principal as well as you curse that was credited in previous years. He's protected from market downturns so while you can't create. Your own employee pension plan the good news is is that there are vehicles available that can be used for generating the similar guaranteed lifetime income in retirement. And that vehicle is a fixed index annuity but listen not all fixed indexed annuities or life. Therefore it's important to choose the one that will fit your specific circumstances. Your means and your goals. That way you can match up with a fixed and Nixon knew that fits into. Your overall retirement income point another great question here on the request line thank you bill for submitting that when yet. You're not alone a lot of people are trying to ease their concerns about Al living. Their retirement savings luckily for us there's a lot of strategies out there that can help you reach the finish line. And even look beyond if you would like to talk about those strategies and how Richard culturally and his team here in Charlotte metro area can help you. The number to dial 806465996. That's 80646. 5996. And you can request a review. I've your financial plan Mary in Concord as our last question of the day and says I met with a financial advisor and she suggested I purchase an annuity. But there seems to be a lot of negativity on the Internet concerning annuities and I'm concerned she could be steering me. In the wrong direction what are your thoughts and is an annuity a good product for a retiree Richard this kind of dovetails right off what you're just talking about. You know what many people don't realize that I knew he's married he's is that they're not a single product. In fact there are many types of annuities and each has a different function and purpose. Some annuities pay you an income right away while others deferred pay out what your money accumulates. Some deferred annuities to clear guarantee interest rate on your money wallet grows. Others can participate in their returns a market index and credit interest based partly on how bad and there's performs. You know but the most important quality. Four and a new is that annuities offer guaranteed income for life. They guaranteed lifetime income generated by new tees it's a main reason why salesman duties in recent years are on the rocks. You know annuities provide a solution. In a time when company pension plans have become less common. In fact a recent press release by the US treasury recognized deferred income annuities. As an important option to protect against longevity risk that's the risk of how living your savings and retirement. You know senior advisor to the secretary of treasury and deputy assistant secretary tougher retirement health policy said. That has boomers approach retirement. And life expectancies increase. Income annuities can be an important point into first secure retirement. He continued ensure that all Americans deserve security in their later years and need effective tools to make the most of their hard earned savings. You know in their ongoing effort to increase retirement income options. The treasury is now given special tax status to certain longevity annuities that they call. He also has the economic environment changes. Retirement income options involved so it's important to examine all your options carefully and decide how best to address your longevity risk. You know annuities can provide principal protection from market downturns. They give you contractual guarantees an income for life. If you're concerned about not living your money. You might wanna consider pass and that longevity risk off to an insurance company by using an annuity can generate income throughout your retirement years. A portion of your money earmarked for retirement can be used when did our contract that will generate a predictable monthly income. The rush your life. You know Walt Social Security it was never designed to be the sole source of income retirees. And when you look at the numbers you know today useful security represents about 38%. Of a typical retirees and come. But you know your living longer your longevity often roads other sources of income you know making it tougher for you make ends meet as you age. You know this challenge isn't unique to any one individual it's a challenge that we all face. But he increases your risk of remember money in retirement and contribute achieve becoming dependent on Social Security as your main source of income. You know with more than 101000 baby boomers retiring daily this issue must be addressed. And you know this is why I'm so very passionate about ensuring that you well prepared. Come offer a couple married financial review to anyone who called in the next fifteen minutes and has at least 200000 more safe retirement. I'll talk about your retirement income needs. Where bankable come from how he'll outpace inflation. Pay as little as possible taxes and make sure that you don't outlive your money. Now you might say I don't really have to call on the next fifteen minutes and yes it's true you could probably take care of it next week or even take care of next month. But here's the deal. Having coaches people on retirement planning for a long time. And I've learned that it's easy to procrastinate or get distracted. So we don't start the process now there's a very good chance you're not gonna do it at all so the first coach and then I'm gonna give used to encourage you to take that first step right now. For almost everybody that's the hardest part from there it's not a painful process so you're ready to finally get a plan in place go and give us a call right now. And here's that number to dial to reach Richard putra rally and take advantage of that complementary review. Your financial plan 806465996. Is your number to call again that's 8064659. Nine at six if your here in the Charlotte metro area and thinking about. Your financial future about retirement the things that you can improve that you can do better. Down the line will Richard can help you uncover maybe some of the problems that exist in your portfolio and had to correct some how to fix them. Going forward Richard we'll take a close look at what's going on inside that portfolio and make recommendations on what changes you might want to make. 8064659. 96 is your number to call that's 8064659. 96 though but she directly in touch with Richard and allow you to set up that time to meet for a review of your financial plans. If you wanna get too and all the way through retirement this is a great opportunity for you today. 806465996. This year number to call that 80646. 5996. Thanks so much for tuning into the financial symphony today there is more on the way we'll talk about Roth conversion so much more straight ahead on the financial simple. It's time for a fireside chats. As we get to know you're local financial symphony maestro. This part of the show we called getting to know you where I kind of ask Richard a random question each week trying to to know his personality a little bit better and Richard here's a good question for you kind of a different when I think this week. If you could have a video. A memory you know video they could just you know popular dvd player I guess in today's world just you know digital file to pull up on the computer. Of any event in your life for which you don't already have video of what event would you choose. You know I choose my way and we didn't have video are women interest and there would be nice if we had come that. We have pictures that we don't have video site I would say. Haven't video of our our way and. You know the the compromise there would be you can get a video made. Like a slide show with all of your pictures to stand little deflator was some music in the background you get one of those next again. That's my view and it's not the same thing as actually having footage of like the ceremony and stuff that. I know that my AM my wife so we do have some footage of our wedding. But the thing that my wife loves the most is watching the video that actually one of the other posts that you hear on the financial symphony mark. Who host the show with you sometimes Richard that he put together for us it's all of our pictures and he put our. Our first dance you know song and mixed into the background put together the streets like the fourth. The other committee descendants of your pictures you can have a problem. We just took it and they get past that responsibility on. Who have. Possible Ella thanks Karen that that is a logical choice sir and I think score you some brownie points in the process as well that's getting to know Richard drew purely a little bit better here on the financial symphony there is more on the way stated we. It's time for another musical connection. Where we blend the worlds of music and finance together. Here is a friend of the show financial advisor and musician mark glory. We have Ron has done it's it is time now for another musical connection with mark Lloyd on rats that's and we're talking about Boston. Our earlier in dead more than a feeling specifically. Were discussing what we can learn from that classic Boston songs. And day you know by I don't know about you mark good to Boston's a great band in debt Brad dealt the guy who is a lead singer of the band. He committed suicide this couple years ago I didn't know flag and yes he did and they did he have a high voice or what yeah. His range was phenomenal he can hit some high notes Mattingly joins us. For all the years Boston was the bestselling debut album in the United States. With seventeen million copies sold new and I had to level. Trend setters I guess I goes I think we're probably two of the earliest people to buy that album. I got it yeah I got that album before anyone knew what the song more than a feeling was a little radio yet there I somehow got an early as well. Being just a music fan I don't know I got tipped off to it with him I went and bought it embedded in ice tool of get an album I mean I'm serious just holding my hand out of the material thing you know you hold that your him read the liner notes sealed pictures and all that kind of stuff and that was just a terrific album as I said it was a bestselling debut album in the United States with seventeen million sold. However that record was broken. In 2008. And September of 2008 when the recording industry. Association of America. Certified Guns 'N Roses debut album appetite for destruction sold eighteen million copies so Axl Rose has the record act yeah I can't go as far as I know still does I don't know it. I don't you feel like Guns 'N Roses but Boston mean and that's that's an incredible album and stood the test of time for a long time was number one for a long time. But no that would have been seven B was 77. Yeah. The eight yeah that was a long time it was 7676. That came out yet was like you're over thirty years nimble so pretty amazing stuff. What kind of connection can we make here as far as financial matters go well there's a season for everything that's what that tells me there. You know there's a season for everything you can't expect to stay at the top forever I don't get me off on the birds and turn turn turn oh yeah. Yeah that kind of after dazzling that you're you're quick on the that's good. Same is true with a investments that would different investments same is true it's inevitable that the investment that perform well last year. Will trade places this year with the investment that did poorly. There's actually this this chart that we use in the financial world where it shows different as the bass chemicals normally get on an asset classes like big companies big blue chip companies are called large cap stocks and we can see when it did the year before it would does the next here and you can see where one year might be all the way down from the top to be the top producer that it here might be that down the list all the way down that close to the bottom of that event back up top again. And it's inevitable that whatever it did last year will probably trade places this year with something that did poorly last year coming up lips. Why my town that's the key is having enough different things working in your favor but you're always enjoying upside no what are we call that the financial world. Diversification. Folks not having all of your eggs in one basket. But unfortunately. People around here today trying to chase sectors were Biden only certain stocks. Or put all their money and bit coal means. You know trying to chase the next bubble. Feet I can Nabil avoided if you have diversification. It's not about getting rich quick build those successful investors that I know. Are the kind of investors that are making money steadily they're consistent. And their consistent because they're diversified. They're not putting all their eggs in one basket and that way they're never too exposed to the downside. But here's the problem. We have had the second longest bull run in the history of Wall Street. Have you been making any. Any adjustments any rebalancing. Any changes. And any modifications. To your portfolio have you. If the answer is no. Folks. You're leaving yourself exposed. To more downside in the future. It's not too late here's the good news this is an easy fix. But you need to learn how to fix it so Ron share with the folks how they can get in touch without the fix it. To speed up the phone call 806465996. That's 806465996. You can get a complimentary review of your financial plan. It's called now at a take advantage. 806465996. You want to be sharpened not to be flat and retirement. Is that financials than any. This is the financial simply won't restore to a field alongside Richard I'm thrilled he is an investment advisor. At Carolina retirement resources serving you in the Charlotte metro area. As a soldier earlier it's got convenient office locations hunters flew into the rock feel and swim he'd like to come in and have a conversation about your financial plan. It's easy to set that up just dial 800. 6465996. Again that's 806465996. Richard I teased a little earlier we're gonna talk about Roth conversions and what's interesting is that the idea of a Roth conversion. Is intriguing to a lot of people and for some people can be a great strategy. To enact others haven't really heard much about the concept so. Let's start with the basics explain what a Roth conversion is and why it might be worth considering. But I know simply put a rock hiring conversion is the process of transferring your money from a traditional higher rate or your 401K. In to a Roth firing. Conversions into Iran firing from a traditional IRA or four point K you know this came to the forefront. In 2010 and due to a change in the tax law you know before 2000 and that tax loss stated that to complete conversion into Iraq fiery. He had to happen adjusted gross income of 100000 dollars or less so with that threshold repealed. Anyone could choose to convert tax murder count to a tax free account. And the reason you might want to or consider Roth conversion is simply to achieve a zero tax bracket in retirement you know realistically. But should we know spending cuts. Our tax rates will eventually have to rise dramatically. For the government can meet its unfunded liabilities so how high can taxes go well your guess is as good as mine but the former comptroller general of the Government Accountability Office David Walker. He said that based on the country's fiscal path future tax rates would have to double now he said that almost seven years ago and since then our fiscal house is in worse shape now than it is. But it was in January 2011 so you know right now taxes are low compared to historical rates. On the tax code includes several tax strategies you can use to create tax free retirement but QB take advantage of them. So in my opinion now's the time to convert as there will likely never be a more cost effective time to leverage your current assets into tax free assets so. If you should decide to move your tax deferred funds to a tax free environment he reduced the impact of future tax hikes. On your retirement savings in my opinion again taxes will have to rise and tax deferred accounts. Of those accounts that you haven't paid taxes on yet. Are the low hanging fruit waiting to be picked by a local fan so the only way to protect yourself from the potential impact of rising taxes. Is to adopt a strategy that quick Q and as you're per cent tax bracket in retirement besides tax free is always better I love it and people love it as well. Richard I've heard it said before is that Sanath I don't know the reasons why don't hoping you'll be able to shed some light on this event. High income earners especially might see a Roth conversion as helpful why would that be the case. Well you know most. I income murderers Alter you know they have tax challenges and and they want someone to find ways to lower their income taxes. You know qualifier razor tax free accounts so that should make four perfect marriage no unfortunately. I find that high income earners are reluctant about doing Roth conversions but when it comes to Roth conversions. You have to remember there's no income limitations as there are withdraw fiery contributions. But conversions trigger an upfront tax bill and high income earners find it particularly difficult. To right large checks to ERS many years before it's necessary even so. Paying tax now on today's balance may be preferable to pay in future tax. On a much larger shown year after year when distributions are required an age seven and a half. Nobody paying your taxes today. He could take advantage of those low historically low tax rates while they're still around and if you have plenty of deductions or investment losses. You know these events could help offset the taxes or if you have access to tax free dollars such as your home equity or maybe a large taxable account. You could consider using those funds to pay those taxes. Regardless if you're at the apex of your earning years you likely have plenty of surplus capital with which to pay those taxes. And you know many high income earners are high net worth individuals with gift and estate tax concerns. You know for these clients Roth fiery conversions can offer additional benefits and in some research I recently review indicates that high income. Taxpayers. They tend to have. High income offspring if a high bracket beneficiary. Must take traditional retiree withdrawals when they inherit those accounts. They'll host keep taxes and inherited Roth diary on the other hand can deliver tax free legacy without trigger and any gift tax. You know I like to think of Roth hiring conversions. As tax insurance you know high income murder probably hold life insurance. A disability insurance property insurance liability insurance all these different insurance is that they have to protect themselves. You know in the tax paid. Or the taxes you pay. On Roth conversion can be likened to the premium pay for that tax insurance or with a rough higher rate. A remember you'll no longer have to worry about the uncertainty of future tax rate on your retirement income. So you're retired especially if you're younger than seven and a half and you do not need the income from your higher res. He should consider convert them portion of your taxed for higher rate to a tax free. Roth fiery sure you have to pay the tax to get the money into the rough wiry but even if you converted 5% 10% of your counsel on an annual basis. You know in just five years you can potentially have 25 to 50% of your retirement assets in a tax free Roth hiring for the rest of your life. And the lodge your beneficiaries. So pay the tax now and then reap the rewards forever. He's seen it all boils down to the fact that all the pieces of your financial puzzle need to fit together so I'd like to offer you an opportunity comes for complete financial review and will offer this review for free to all listeners who have at least 200000 dollars saved for retirement. Are talking to all these different puzzle pieces. That you should consider you know for instance is a Roth conversion beneficial strategy for your unique circumstances. And is there a way to save money in taxes down route by a plan and proactively today. Here's how much risk. Are you taken in your portfolio. And is that amount of risk appropriate for your page and for the amount of return that your actual again. You have an income plan in place to be sure that you aren't in danger of run out of money if you end up living thirty more years in retirement. Do you have a plan to address inflation in future decades as the cost of everything continues to rock. Obviously there's a lot that we need to discuss and we found that most people just have a plan to early enough to address these issues. Again this review is complementary to anyone who has at least 200000 dollars saved for retirement. But the calendar does fill up quickly so go ahead and give us a call right now that you can be short get a spot reserved for you. This is the number to dial to reach Richard who drilling and take advantage of that complimentary. Financial review 806465996. Again that's 8064659. 96 Richard is an investment advisor at Carolina retirement resources serving you throughout the Charlotte metro area. Offices of hundreds fill another in Iraq he'll also there's a convenient spot to come and say hello and have a talk. About your financial plan and that's what it is it's a problem solving mission to seat. Anywhere some of the pain points with your financial plan and how Richard might be able to help alleviate those paint points with. Solutions and strategies that are a good fit to yield. No plan is alike it's customized to your individual needs goals and wants in retirement. And Richard can help you put that plan together but yes we do when that starts the conversation again that number to call. Is 80646. 5996. Just call and say that you'd like to have a conversation about your financial plan he'd like to set up time to meet for that complementary review. 806465996. Again that's 80646. 59. 96 this is the time of year where you're thinking about your finances. Planning for the future so make sure that you're making the right choices. And do it with an advisor on your side who can help guide the way. Call 806465996. That's 806465996. You're listening to the financial symphony with. Richard with the rally and coming up we'll continue talking about Roth conversions and everything that you need to know about that strategy in overtime that's coming up on the simple. Well it's time for in the news this is the part of the financial simpler we take a look at maybe a recent event that has happened in the in the markets or in the financial landscape maybe a recent article. Something that's happened in the news that you might have seen and we get Richard's reaction and opinion. On what's been going on and one economics magazine recently Richard ran an article titled ten reasons the stock market will have a good. 28 team. Now the very same day in a business news website ran an article about the impending market crash of 2018. So as our financial. Guru here on the show who which is it. But the recruitment effort. Well I don't know I mean I don't think anyone knows in fact if you were to ask a dozen experts if the stock market will plunge. You'll likely get a dozen different answers so listen no one knows I mean what we do know is that the stock market will go up it will go down and you go flat. Now keep in mind that if you want to get higher returns. You know stocks can deliver. But it's important to understand that there is no way to avoid the risk of laws so. You can limit your losses but avoid them entirely is impossible so the key is simply be prepared you know certainly. There are numerous indicators on how the market may perform in the short term. But the bottom line is that indicators of predictions of any economic conditions are their best educated guesses. Ended delicate balance of the US in the world economies today. I mean helping some small event you know like maybe a missile. Being fired and explode and I mean I can upset almost overnight. The dynamics that exist today I mean these unfortunate events they can occur and if you're not. Prepared. And that's a problem so should she can't accurately predict what's gonna happen you need to prepare for both. Good and bad economic conditions and the question is is how do you prepare. Well give me call I'll provide you their comprehensive financial review. And I'll share with you some risk management strategies that are designed to limit losses in the severe market downturn. And again this is that number to call to reach Richard future Elliott's 8064659. 96 and again that's 806465996. If you're tired of kind of worrying about where the market's gonna go. The rest of this year the entirety of next year and thirty years from now when your retirement where the market's going to be you can. Eliminate a lot of that worry from the equation a lot of them frustration to by having the right plan in place were African talking about some of those strategies that might be a good fit. For you but don't know until you can't have a conversation. And find out 806465996. That's 800. 6465996. That's what's happening. In the news and this is the financial system with a Richard. You're listening to the financial company that show that makes your your financial plan at that perfect fit. Thanks for joining us on the financial symphony today hooker finding the show helpful and we're trying to guide you down the right path not only to retirement but remember. You wanna get all the way through retirement as well it's not just about getting to that destination is just another step in the life. Indeed make the right financial choices. Throughout the process Richard preacher alias here. To help dynasties and investment advisor with Carolina retirement resources serving the Charlotte area with an office in hunter's bill another one in Rock Hill. In case here in that neck of the woods the number to call if you have questions about your financial plan to 800. 6465996. Though which are directly in touch with Richard. 806465996. We've been talking on today show about Roth IRA conversions what are they. Why do them in a Richard won the east take place I guess especially if people are gonna try and do these types of convergence on their own. Are there common mistakes that you see folks make when they go through these steps. When I certainly don't want to purge from Roth conversion haphazardly. It was best to take the time to get a comprehensive review of your financial situation. And look at your options you know. First you want to be aware. That if you do rock version before you're 59 and a half he'll have to wait five years or until 59 and a half whichever comes first. Before you can touch the principle without tax and penalty. If you're already 59 and a half when you make a conversion you can touch the principal immediately. But you must wait five years before you touch any of their earnings without penalty you know one mistake I see frequently. Is is that those of you over Serbian half you forget to take your required minimum distribution prior to the conversion. Which could result in a 50% penalty if you're at least seven and a half. You wanna take your required minimum distribution first and then convert the balance to a rock you know you cannot convert your required minimum distribution to a Roth firing. If you have converted your arm detour Roth IRA you now have an access contribution in Iraq hire ray. And you'll have until October 15 of the following year to tell your raw tiring custodians you need to remove funds as an access contribution. Another mistake walker is happened taxes withheld on the conversion to reason you don't want to withhold taxes. Is that you should have to re characterize conversion you know situation develops. And you want to just go backwards you wanna go from the rock firing back to your higher rate that's called they re characterization. You know you won't be able to re characterize those taxes that were withheld. Because there are no longer at the custodian. But with the IRS if you should convert you should be able to pay the taxes with other funds not take them from the conversion distribution. And finally. The biggest mistake a ball is not happen Roth. You know you're never too old to do conversion and you're never too young star contributor and either to a Roth IRA or to an employer Roth account. Well Richard you know I always like it kind of out Prague nasty for any example on these different topics that we get into each week here. On the program so how about an example somebody that would really benefit. From a Roth. Convert option you know I think everybody would benefit from a Roth conversion or series of Roth conversions. If there at least fifteen hour and a half nor everyone's situation is unique. And it follows then that there can be no fit rule that applies at all. You know whether or not you should convert how much to convert when to do so here that needs to be evaluated considering the circumstances of your unique situation. Gary just wanna be careful not to convert too much too soon. Because it could populate to a higher tax bracket fortune you pay more taxes than intended on the other hand if you convert your diary to a raw. Too slowly. I mean there's always a possibility that taxes to rise. And you know you'd you don't get it done all conversions requires strategy that will allow you to convert the right amount. At the right time or paying as little taxes possible now for myself. I'm 2010 when they get away with a 100000 dollar income limitation I convert everything I had I just decided that the best solution for me was to go ahead and borrow the money you know you could borrow money if you have equity in your home home home equity line of credit. That's tax free dollars and just paid taxes off now to a recession that appears close to seventy or so breaking event. But now all those accounts are country. That's a good example something that I think is very helpful to shear wind hey this might be a good fit for me York. This is something that I might consider it's good to know that there are other kind of locking. This same path. How about an example you said that almost everybody would probably benefit from a Roth conversion but. There's always exceptions to the rule can you think of an example who shouldn't do a Roth conversion is there a time when it doesn't make cents. Well let's say your age fifty and you have 500000 dollars in your traditional higher ranked let's also say you're strangling anxious to convert this IRA to a Roth before income taxes rock so you decide to convert all 500000 dollars and one year and let's assume your tax rate. On the conversion is 40%. Now you oh the RS 200000 dollars. We'll let presents a bit of a problem not only do you have to work out Mahler just final round that you would love to send the IRS will probably not. And somebody suggest. You paid it 200000 dollar pact over ride out of your higher rate itself. Well you'd be so you do Kurt Kemp sent penalty for early were crawl. And that would be a 20000 dollar mistake so unless you have a lot of money sitting in your taxable account earmarked for tax is you'll likely want to postponed the conversion until you're at least 59 and a half and you don't need to convert all of your higher rate to a rock as it's still and then cages. To leave some money in your tax per account that you still have your standard deduction and your personal exemptions into retirement. This will help offset any distributions come in out of your tax deferred account. So you shift all of your tax deferred money to a tax free account. He won't be able to utilize your standard deductions and your personal exemptions that means you may have needlessly pay tax to reposition your assets. It's preferable to have a higher rebalance the large enough for the U require minimum distributions at 87 and a half or equal to your standard deductions from your personal exemptions. Paying taxes on hiring before the Irish required you pay them. You know it's somewhat of a leap of faith for most of you. It just seems counter intuitive. You know why not postpone the payment of taxes until the Irish forced to pay them later in life you know it makes sense but is that what is best for you in the long run. In order to read good mathematical reasons for paying taxes today first. We haven't had tax rates this low in many years. And we know what tax rates are today and we don't know what tax rates will be in the future second if you're still working I have quite a few deductions left your itemized deductions makes you substantially higher than your standard deduction and personal exemptions. Meaning and he'll have an opportunity to offset a lot of whose taxes. And finally if you utilize a 72 T you could spend a distributed money anywhere you want. This gives you the option of paying the taxes on the distribution out of the distribution itself. This is especially helpful for those who are younger than 59 and a half. Remember paying taxes is not the end of the world. What is the end of the world is finding yourself in retirement would no deductions. I'm paying taxes at double today's race. When you can least afford to do so to give me a call the next fifteen minutes and our custom designed for you and easy to understand financial review that will indicate if you're in need of a full blown financial plan. There's no obligation or cost for this initial review to all callers who have at least 200000 dollars saved for retirement so if you meet those qualifications here's what you can expect first I'll run a Morningstar analysis and comparison report. To help you untangle what is cost you work with your current planner advisor as well as how your portfolio may perform Dora from your market downturn. We'll show you how to protect your assets and keep more of your money in your accounts next will perform a tax analysis and show you how you could possibly reduce your taxes. And accretion cash flow. And finally we'll create customized lifetime income plan using proven strategies and techniques that could Turbo charger retirement income. In short. We'll take the guesswork out of financial planner for you so for all the caller to call next fifteen minutes Walter among offer a comprehensive financial review. And that offer being made with no obligation. And here's the number to call or reach Richard future LE. 806465996. That's 80646. 5996. Pull free call will get you on the calendar to have a conversation about your financial plan here in the near future. But you've got to make the right choices now I mean if you're approaching retirement or even recently retired you know the times no longer on your side to recover. From investing and saving mistakes some make the right choices now get an investment advisor on your side you can help you walked on the right path. To not only get to retirement but all the way through it as well. 806465996. Is your number to call to reach Richard that's 80646. 59. 96. You hear us each and every week here on the radio show talking about what it takes the put together. The best financial plan possible. But in all sorts with you making the phone call and having a conversation. About your plan. Get that customized review of your finances and a plan in place for now in the future by calling 80646. 5996. Again if you call right now Richard can set up this review for you complimentary no cost no obligation. 8064659961. Mortality that number 80646. 5996. Richard that's all the time that we have four on today's show that is always greatly appreciate your assistance and they'll do it all again next week. Pretty good thank you Walter thank you that's Richard pitcher earlier local financial maestro right here in the Charlotte metro area one more time that number to call to reach him is 800. 64659. 96 thanks for tuning into the show and we'll talk again next time right here. Financial center. 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