Episode Transcript
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Speaker 1 (00:00):
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Speaker 2 (00:24):
All right, good afternoon, Syracuse and surrounding areas and all
of our listeners on iHeartRadio throughout the United States. We're
glad to be here. I'm Dave Kopek, president of the
Retirement Planning Group. I'm here with my son Christopher William
and we got a really good topic for you today, folks.
(00:47):
It's one that you need to understand. It's critical, critical
that you understand what we're talking about today, especially especially
if you have a lot of money in IRA accounts
retirement assets. In June of two thousand and twenty five,
(01:07):
my son Christopher William told what just retirement assets.
Speaker 3 (01:15):
A seventeen trillion? No, I'm talking everything. The whole enchilada. Oh,
the whole enchilada, the whole enchilada. The whole roll is
a thirty trillion, forty three point four trillion it's a
big number.
Speaker 2 (01:32):
As Billy used to say, it's huge, huge. So we're
talking about forty three point four trillion dollars of assets,
of which seventeen trillion trillion T is in IRA assets,
(01:52):
traditional irays and roth irays. It's the greatest achilles heel,
the most problematic money that you have inside your estate.
And today we're talking about it because whether your retirement
dreams are five years away twenty years away, you're currently
in retirement, the single greatest threat to you as a
(02:15):
retiree is your tax liability and also what happens if
you get sick and ill and they have to pay
those bills for a long term care facility. So today
we're going to talk about this maze of rules that
you need to understand. I want to overemphasize I want
to overemphasize that a lot of the things that we're
(02:37):
talking about will be state specific. You want to get
into that cress when I say state specific.
Speaker 3 (02:46):
Yeah, So what that means is there's going to be
different laws and different rules for how assets are spent
down in different states and counties, even on a county
to county basis. So you know, the Syracuse region is
going to be different from the Albany region or Florida's
completely different on how assets are spent down and what
(03:08):
assets are protected than New York. So it's it's you
got to just know and understand what what rules and
what guidelines these I guess the government is going to
follow as far as in these long term care facilities
are going to follow, as far as spending your assets
down if you do end up in one of their facilities, and.
Speaker 2 (03:29):
How you're going to qualify qualifying for medicaid. Basically, folks,
in order to qualify for Medicaid, you have to impoverish yourself. Okay,
So you can't have these multimillion dollar ira accounts or
one hundred of thousand dollars in iray accounts without understanding
the landscape. And when I say understanding the landscape, what
is your zip code? Where are you going to live
(03:50):
in retirement? Okay, there's going to be Assachusetts, You're going
to the Cape, going to Florida, You going to Carolina, as,
you're going to Tennessee. Well, before you do that, then
you don't long term care insurance. You better understand why
you're going there, how your assets are protected, and if
you do get sick or ill, can you impoverish yourself
so badly that you basically leave your wife, your loved
(04:13):
ones with nothing as far as at your death. So
today that's what we're talking about, protecting your IRA. There's
trillions of dollars. Uh, this is talk radio, you know.
The last time I was live on the radio, which
is a couple of weeks ago. We have a lot
of phone calls, so I'll give out our telephone number
here at WSYR. It's three one five four two ninety
(04:34):
seven ninety seven. That's three one five four two one
ninety seven ninety seven.
Speaker 4 (04:40):
Uh.
Speaker 2 (04:40):
We have a person that's there that will take your
phone call, that will basically tell me you're on the line,
and I'll be able to hopefully address your question. If
I can't, I always get the answer to you the
next week where I get your telephone number and we
call you and we let you know. You know, But
chances are we could probably give you some eline today.
(05:01):
Three one five four ninety seven ninety seven. That's three
one five four to two one WSYR. We always like
phone calls, even if it's off topic, and always I
think makes it much more interesting for you and for
us and for us. So these trillions of dollars that
we're talking about, Chris, we're going to talk about you know,
(05:23):
what does it make sense to do? Especially if you
have a pension and you have more than enough money
in order to facilitate your lifestyle, and you got large
amount of money in IRA. What happens You have this
thing called RMD requirementium distribution and when you least want
the distribution is when they become the greatest. And then
you're also battling later in life health issues, so you
(05:47):
want to make sure you understand what you have created,
and does it make sense for you to spend some
of that money down early in your retirement in order
to protect it from your loved ones so they have
a legacy and you're not sitting there trying to figure
out am I going to have enough money in order
to cover my expenses?
Speaker 3 (06:06):
Right? The the thing about the huge retirement accounts, like
he was saying, you pay into these four oh one
K plans, four h three B plans or whatever you're
contributing to at work, and that's typically the largest asset
people have going into retirement. And when he says that
you know you're going to be paying this money is
(06:28):
going to come out the door at the when you
least expect it. Through rm ds, you can facilitate through
legacy planning in different life insurance products that we'll touch
on how to create, you know, a tax preference inheritance
in retirement rather than utilizing these rm ds when you're
(06:49):
not going to need them and huge distributions are going
to be coming out and a lot of tax liability
is going to be associated with them.
Speaker 2 (06:57):
We have our first qualer, which is great. Tom broke
the ice, Tom Good, afternoon time you're on the air.
I guess Tom is out of reach. You want to
(07:18):
call back Tom? Maybe Tom's jerking around playing games with us,
but we didn't hear any voice. So again, Tom, if
you want to call back, be more than happy to
but hopefully the engineer will make sure that there's a
person on the line there. But today we're talking about
the trillions of dollars in qualified assets. You know, right
(07:39):
now it's estimated to be over seventeen trillion dollars in
high arrays, not only the traditional IRA but four O
win K. What a lot of people need to use
these moneies in their lifetime in order to have a
pension benefit. But the question becomes, how do you protect
these assets if you get sick or ill. You want
(08:00):
to make sure you understand the protection that's with WROTH
iras versus traditional irays. And as I've said over and
over again, traditional irays have a payout status, right you
have to liquidate them over a period of time based
off of R and D. As long as your ROTH
has been qualified you've had it for five years or longer,
(08:22):
you do not have to put it into a payout
status because that's one of the benefits of ROTH is
that it's tax free growth, tax free income, and no
required minimum distribution. So when I say it's states specific,
some states offer more favorable treatment for retirement accounts if
you get sick or ill. Massachusetts is a hell of
(08:44):
a lot different than New York, and Florida, of course,
is a hell of a lot different than New York.
So make sure you understand the zip code that you're
going to live in, because the distribution rules are not
only state specific, but they're also county specific.
Speaker 3 (09:00):
Right, Yeah, you definitely need to plan around where you're
gonna where you're gonna end up because all the rules change.
In understanding those laws or finding someone who understands them,
whether it's an a state planning attorney locally who knows
the who is in that realm and knows the ins
and outs, is only going to be super beneficial as
(09:21):
far as protecting those assets.
Speaker 2 (09:24):
And you know, the thing is is that, as we're
all quite well aware, most of us do not have
long term charriaturants. So what we try to do is
we try to reposition our assets later in life, whether
it's your home, non qualified assets, and put them into
a near revocable trust. And then there's a lot of
people out there that basically have quite a significant amount
of money in iras they added in a four oh
(09:47):
one K, they retire, they roll them into an IRA.
So make sure you understand what you've created, which we're
going to get into greater detail when we come back
from this break. But again we are live if you
have any questions. Three point five were to one ninety seven.
This is the Retirement Planning Show. All right, we are back.
(10:25):
We're gonna quickly go to John, who has a question.
Speaker 4 (10:30):
Hi, can you hear me?
Speaker 2 (10:31):
Okay, I can hear you, sir? Go ahead, Yes.
Speaker 4 (10:34):
The quick question. My mother felt an attorney who said
that it doesn't make any sense to get a trust
if your assets are less than five hundred thousand. I
find that very questionable. I just wanted your thoughts. At
what point, at what threshold would you say a trust
(10:54):
bakes sense to protect your assets?
Speaker 2 (10:57):
Well, I one hundred percent disagree with the attorney.
Speaker 4 (11:01):
Soon here, I'm sure by h to take that number.
I'm thinking a trust is critical to protect your assets
in general. I'm sure there's a dollar amount.
Speaker 2 (11:14):
Yeah, I mean is your father? Is your father alive?
Speaker 4 (11:18):
Yeah? My both of my parents are alive.
Speaker 2 (11:21):
Yeah, Okay, what happened? What happens if they need care
or assistance? That basically that five hundred thousand dollars is
going to go like lightning. So I don't know what
what he's thinking about or she's thinking about, but I
one disagree. I think a trust makes sense for anyone
that has any type of assets that well over six figures,
(11:43):
you have one hundred thousand dollars of assets, or over
you know, five hundred thousand dollars. I you know, basically
they're opening themselves up for a very aggressive spend down
in order to qualify for medicaid. I'm assuming that they
don't have long term care insurance.
Speaker 4 (11:59):
They do not.
Speaker 2 (12:00):
Yeah, well, I disagree. You ought to have your parents
come in and have a chat with us. We have
a new office in Syracuse, beautiful so much.
Speaker 4 (12:08):
I really need to share that.
Speaker 2 (12:10):
Well, I hope, I hopefully I can help you.
Speaker 4 (12:13):
Give me a call, We'll get in touch. I appreciate
you all about you.
Speaker 2 (12:18):
Thank you sir. You agree?
Speaker 3 (12:20):
Yeah, I mean, I don't know where that number is
coming from. Half a million dollars, but they're.
Speaker 2 (12:24):
Basically saying it's not a lot of money, see you later.
I mean, if you you know, a long term care
facil is going to crust you two hundred grand, it's
not going to take long before that five hundred thousand
dollars is gone. I mean, they're fine, you know, depending
on how the assets are titled and where they are.
It's when the first spouse passes away that all hell
breaks loose that you got to spend down for, you know,
for the home. Right.
Speaker 3 (12:46):
Yeah, but if you if like you were saying, if
you have non qualified assets like bank account money, if
you have two hundred thousand dollars in the bank, and
then you have your house which is valued at two
hundred and fifty thousand dollars, so you're all in for
four hundred and fifty thousand dollars that could go into
an irrevocable trust for protection. I don't see why I
don't either. That would be a bad idea.
Speaker 2 (13:07):
I don't understand where that number comes from. But you know,
I've said this a million times, folks, and don't I
don't want any of the attorneys that are listening to
this to take it in a neggive way. You know,
you get five attorneys in a room, you're going to
get five different answers and how to protect your estate
in different rules and regulations and what's you know protected,
what isn't protected? And as I said, I'm going to
(13:29):
overemphasize this again and again and again. Where you reside
in your retirement, your zip code is critical. Are you
going to stay in New York? Then you understand how
you need to understand the county, how aggressive are they
in regards to going after assets as far as medicate
eligibility if you do not have long term care. Basically,
what we're talking about is protecting everything that you've worked
(13:50):
for in your lifetime, right right, that's what we're talking about,
that it doesn't evaporate and go away before you go away.
Speaker 3 (13:59):
Yeah, that's the whole purpose. I mean, that's what you
know that you plan for. You want to make sure
that the money you've accumulated goes to the people you
wanted to go to, versus where the government wants it
to go to, or the nursing home wants it to
go to, or anybody else. I mean, that's the that's
the purpose of buttoning everything up and setting up legal
(14:19):
documents so that everything is orchestrated how you want it
to play out.
Speaker 2 (14:24):
Now, you know a lot of people don't realize in
New York State you can do spousal refusal. So for
that gentleman that just called that, his parents basically said
they got to have five hundred thousand dollars or more
or whatever however you know, they it's a valid way
(14:44):
in order for you to get eligibility through Medicaid, the
spouse can refuse to pay, and then you also have
the ability to do other type of tactical planning. So
you know, I'm not an attorney, I don't profess to
be an attorney, and but I work with attorneys every
single week, right because of the work that we're in
elder law, estate planning, investment management, that's the arena that
(15:08):
we work in. So it's important for us to have
a relationship, a relationship with attorneys that we know can
dot their rise and you know, cross their t's. So
make sure you understand that the attorney that you're working
with has the expertise in order to facilitate what you're
looking for. So, uh, we appreciate phone calls. I give
(15:30):
out the telephone number again if you have a specific
question about your own per your post retirement three one
five four to two one ninety seven ninety seven three
one five four two one ninety seven ninety seven, and
I have my son talk a little bit about how
you can get rid of some of that problematic money,
uh during your lifetime as far as gifting assets.
Speaker 3 (15:54):
Yeah, so qualified charitable distributions is one of the one
of the main ways that you can get rid of that.
I know this is something that had come up in
an appointment, and that is you know, you got to
be seventy and a half for twenty twenty five in
order to qualify for a qualified charitable distribution and that
(16:15):
is up to I believe one hundred and eight thousand
dollars what you're saying that can be sent off of
your IRA account that can go directly to a qualified charity,
so it satisfies the rm D requirements for the year,
which is important to note. And then it keeps the
donation out of your taxable income, so it's not you're
(16:37):
not going to be this in the money that's sent.
If you send one hundred thousand dollars, it's not regarded
as taxable income for you for the year if it
goes directly to a qualified charity.
Speaker 2 (16:46):
And it's satisfied your R and D, so you can
satisfy your requiredment of distribution. And you have a husband
and wife both could do up to two hundred and
sixteen thousand dollars to a charitable organization. It's a great
way for you to lower your tax liability with your
IRA and fulfill your charitable intentions in your lifetime and
(17:09):
basically see the pleasure in the organization. You can get
a smile on your face in order to see this
dynamic that's happening. You don't have to be, you know,
in the graveyard in order to basically pass money on
to for your charitable intent. So the other thing is
is that there's another option available to you that basically
what you're trying to do is reduce that tax liability,
(17:33):
you know, the larger the I mean, people love to
look at their four on one k's and four or
three b's, you know, deferred compensation whatever it may be.
But I'm telling you, folks, that is the greatest achilles
hell in your retirement because there's never a step up
in basis, it's always taxes ordinary income and when you
least want the distribution is when it becomes the greatest.
(17:53):
So you've got to make sure you understand that you've
created on the tree because as great as it is
to look at those big numbers, for a lot of you,
it's not going to be a big number because you
have a friend and it's called the irs and the
State of New York and they're going to take their share.
Speaker 3 (18:11):
Yeah, And there's a couple other options that you can
try and mitigate this before RMD start at age seventy
three or seventy five, you know, if for.
Speaker 2 (18:23):
Money depending on the age.
Speaker 3 (18:25):
Right for people born in nineteen sixty or later, I
think it's going to be seventy five, so you can convert.
You can do Roth conversions. So the bulk of that
you know, large IRA, rollover IRA that used to be
a four oh one K or four h three B,
whatever you contributed to before you hit RMD age, you
can start converting those assets to ROTH. So maybe you
(18:47):
retire at sixty two, Well, now you have from sixty
two to seventy three or sixty two to seventy five
to make these conversions over to ROTH. And you pay
the tax up front. But then that money that sits
in these in these WROTH dollars is not susceptible to
rm ds, and you already paid the tax on it,
so you're going to let it grow in the account
(19:09):
and then all the distributions you take from this are
non taxable.
Speaker 2 (19:14):
Now here's here's here's the double edged sort. Okay, you
know this is the frickin fract. Here the pros and
the cons. If you're doing a WROTH conversion, do you
have long term care insurance? Do you know is the
WROTH and the county or the state that you're going
to be living in protected from a medicaid spend down right?
P because remember what I said, there's different rules and
(19:36):
regulations dending on the state. As far as the strategy
your payout what they call payout status right, Well, hear
a lot of attorneys talk about as periodic payments. As
long as the IRA is in a periodic payment, then
you know they're not going to go after the corpus.
The question becomes, what are the rules? Is it based
off of rm D? Is based on life expectancy? So
(19:58):
if you got a six seven, eight hundred dollars the
dollar IRA in the county saying yeah, now you got
to take the payments, but you're not going to take
it based off of R and D anymore. You're gonna
basically take it on your life expectancy. You got four
years to live. You've got six hundred thousand dollars one
hundred and fifties coming out, whether you want it or not.
That's what's happening. We get letters from the counties and
(20:20):
they basically say, this is what we need, this is
how much has to come out, and there's not a
thing you can do about it. Because the money's got
to come out. You've got to do some additional nine
to one to one planning I've had attorneys say, yeah,
you know, we told them the IRA was protected, right,
but now we're gonna have to take it all out.
We're gonna take the distribution in one year and we're
(20:41):
gonna basically do what they call half loaf planning. We're
gonna give the other half to the children of the elevens. Well,
that's good, especially if you're in a situation where mom
or dad depending on the spouse, needs to have that
income in order for quality of life. So, know your
zip code? Where are you going to live? If you
(21:02):
get sick or ill, which we're talking about right now, right,
are you going to have to liquidate the roth IRA
which you just spent all the tax on in order
to qualify. Would it have been better to stay in
a qualified traditional IRA. It's very complicated.
Speaker 3 (21:17):
Yeah, there's no there's no easy answer, but it's it's
just things to consider and plan around.
Speaker 2 (21:24):
You know, there's well the easy answers don't get.
Speaker 3 (21:26):
Sick, right, Well, you can't say that, how do you
not get sick?
Speaker 2 (21:33):
I mean that's the easy answer. And the other thing
is is that you know, for most people, there are
options available to you in order for you to purchase
long term care insurance. Most of you will not do
it because of the cost of long term care. Some
of you will do it, but as you're quite well aware,
in New York State, the cost of long term care
is astronomical. Depending on where you are major metropolitan I
(21:56):
mean we're throughout New York State, they range anywhere from
two hundred to two hundred and fifty thousand dollars a
year for a long term care facility. How many people
have that kind of money? And if it's in an IRA,
if you need two hundred, how much do you really
need to take to forty fifty in order to net
R two hundred after tax? So we're going to come back.
(22:17):
We're going to talk about the what I considered to
be one of the greatest risks for individuals right now
is qualified assets and what is your plan for these
large amounts of money that are in iras four o
one ks. But don't forget we offer a complimentary consultation
in our Saratoga or Saratoga in our Syracuse office Saratoga
(22:40):
also talk WGY if you have any questions. That's the
wrong one too, I'm going out the wrong telephone number.
I'll come back after this break.
Speaker 3 (23:19):
Alrighty, we're back jack and we were just touching on
qualified retirement plans. So the majority of people they invest,
you know, twenty thirty, forty fifty maybe years another four
(23:40):
oh one K, four h three B. What do they
then do with all this pre tax money? How do
they structure it? How are distribution is going to be
paid out? What can they do to protect it? You know,
that's these are all questions that we hear on a
day to day basis and see and try and structure around.
Speaker 2 (24:01):
Well, it's a huge there's no easy answer. Everybody seems
to think that if I put my money into an
irrevocable trust, I'm just gonna fly away and government's going
to pay for my care and I'm not going to
have any out of pocket expense. Telling you, folks, if
you think that's the case, you're fooling yourself. It's not
(24:21):
the deal. I don't care where you are, what state
you're in, You're going to pay something. It's just a
question what magnitude. And the other thing is is that
one of the things that we try to overemphasize to
people is that you know, there's no easy answer because
everybody has a different way of utilizing these assets in
(24:42):
the retirement years. And also, do you have a pension,
how you know strong is your social Security benefit? I
just met with some people the other day. They've got
I don't know, a few million dollars with money that
we're managing. They're living on their Social Security, don't even
have to take distributions off of their I raise. Now
(25:05):
they're trying to figure out what do we do with
this money? Right, But they don't have long term care.
And that's really you know, when I talk about the
three biggest things that will come back to hurt you
in retirement, it's large amounts of money that's pretax and
not having a plan when you get sick or ill.
Speaker 3 (25:24):
Right, Yeah, and we touched on that, you know, prior,
but the setting up the portfolios as well, for like
those people, it all depends on, you know, how how
much money you're going to actually spend in retirement, because
you could have millions of dollars like you were just saying,
and live off your social security, so you don't even
(25:45):
really utilize all these funds. So if you have a
strong pension benefit and strong social security, well that's where
it opens up a different avenue of well, what are
you really looking to do with all this? You now,
how do you want this structured? Are these legacy assets?
Do you want these to be spent down in your lifetime?
(26:07):
Do you want to go travel and do things you've
always wanted to do with your life? Or you know,
it's just having these conversations where you're trying to figure
out what the game plan is. And that's why you know,
it's a tricky, Like you were saying, it's because everybody's different.
There's no cookie cutter approach to this that you can
just blanket over everybody and say, you know, this makes
(26:28):
sense for everyone, because it really, it really is customized
to every once personal situation.
Speaker 2 (26:33):
Do you hear people all the time calling you, I
want to do a wroth conversion? You know, does it
make sense for me to do a wroth conversion? Maybe? Maybe?
It depends. It depends on where you live, It depends
on the size of your estate, It depends do you
have long term care coverage? Have you already done a trust?
(26:54):
Do you understand what you have at risk in regards
to your assets? If you need to have home care,
assistant living or a long term care facility. Right. You know,
we got a client of ours right now that's paying
over eighteen thousand dollars a month for a long term
care facility. Eighteen thousand dollars a month. It's a whole
(27:16):
heck of a lot of money, right, So if you're
in that situation, who's going to pay the bill? And
where's it going to come from? And if you don't
have that answer, what I always talk about is the domino.
When the first domino drops, you got to know where
the rest of them are going to go. So if
you have any specific questions, we have open lines. We
(27:38):
always like telephone calls because this is not babble radio,
it's talk radio. And our telephone numbers three one five
four seven ninety seven WSYR three one five four two
one ninety seven ninety seven. You got a question about
iras wrowin k legacy planning, asset protection, I've been doing it.
(28:01):
This is my going into my twenty six year on radio.
I've been in the business now for forty three years.
So as I say, there's not too many things that
I haven't seen. My son is a graduate of Siena
College and financial planning, and it's been with us now
for what three years four seems like yesterday. Really, yeah,
(28:22):
it goes by so quick. But you know, what we
try to do is to educate you and inform you
we have a brand new office. It's completed or it's
going to be completed, hopefully by the end of the week.
It's at six seven zero zero Kirkfield Roads one A.
We're excited about it and it's taken us a while
(28:44):
to get it completed. But six seven zero zero Kirkfield
Roads one A. If you want to come in for
a consultation, we offer a complimentary consultation at any time
we want to come in. When we're out there in Syracuse.
You can call our office eight five eight zero and
(29:04):
find out. We do a lot of work with National Grid.
We do a lot of work with major corporations ge
Et cetera, Bluckheed, Martin Carrier. And as I said, if
you want to give in for a chat, first meeting,
we have a conversation. Second meeting, we give you suggestions
and if you go back in the third meeting, it's
typically that's when we're putting the rubber.
Speaker 3 (29:25):
To the road, right, yeah, and it's it's it's different
for everybody. You know, some people come in on the
first meeting and it seems like they're already ready to go.
We don't. We don't ever sign paperwork on meeting one.
It's always just a cup of coffee and an introductory
meeting because we're looking to figure out what you're looking
to have facilitated. So that's always meeting one.
Speaker 2 (29:44):
All right, we have another phone call. We have Jim, Hi, Jim,
good afternoon. How are very good, sir? How are you?
Speaker 5 (29:53):
I'm good. So I have a TSP at traditional TSP
and from our retirement, I have the three legged stool
with the retirement pension and my social Security and I
didn't really well the the We actually have an option
for a ROTH TSP. It wasn't available I think until
(30:14):
around eight years ago, and I actually didn't even know
about it until about a year ago. And I'm planning
on retiring in about two to three years. Yeah, so
my question go ahead.
Speaker 2 (30:26):
Oh go ahead, you're retiring.
Speaker 5 (30:28):
So my question was I know that with a with
a ROTH and I believe it's the same with the
Roth TSP that's been there for at least five years
before it can be access and so my question is
because of this late in the career, when I have
only about three years left, is it too late or
is it wise to invest any part of my TSP
(30:52):
into the ROTH TSP or should I just keep it
where it is in the traditional because I've been doing
it for like, I don't know, thirty years or so
like that.
Speaker 2 (31:01):
No Roth, get into ROTH. You're gonna watch tax preference
money in your retirement years. Uh, you're fortunate, you got
a pension, you got social Security. But if you want
to go to the well, you know basically that WROTH
when you retire, you can allow that to accumulate for
as long as you want without subject to rm D.
(31:22):
It's a great vehicle for healthcare cost as you age.
Speaker 5 (31:29):
So if I was to want to make withdrawals, say
monthly withdrawals, once I'm retired, do they pull from that?
I thought I didn't know. I have to probably look
into it. But do they pull from partial from the
traditional and partial from the Roth?
Speaker 3 (31:46):
No?
Speaker 5 (31:46):
Or can I specify which one I wanted to come from?
Speaker 3 (31:50):
No, there's no, it's it only comes from the traditional.
So there's no RMD on the WROTH. That's a benefit
of it is that you can invest in ROTH, I
raise and then let it sit and grow, and then
pull from it whenever you want on a tax preference basis,
so there's no tax liability to you on distributions, and
then for your beneficiaries as well. Like the benefit of
(32:11):
the ROTH is that, yes, it has to come out
in ten years, but it's not taxable at all to
any of your beneficiaries.
Speaker 4 (32:20):
So you think it's a.
Speaker 5 (32:21):
Good idea to get in there.
Speaker 2 (32:23):
Are you working with somebody now, Jim.
Speaker 5 (32:28):
No, I'm not like I said, though. I mean, I'm
at the end of my career and I do work
for the government, so I don't have The rules are
different when it comes to withdrawals from the CSP, Traditional
TSP and the ROTH DSP.
Speaker 2 (32:43):
Well, I'll tell you. We got to take a hard
break for a commercial. You should give us a buzz.
Come on and have a chat with our brand new
office in Syracuse. I'll do that, Okay, brother, we'll be back.
Katie and Kathy pulled on. We'll be with you right
after the break and FM. All right, we are back,
(33:10):
and I'm going to go quick because we have three
people waiting. Let's go to Katie first.
Speaker 6 (33:15):
Hi, Katy, but I have a question about converting and
traditional ira to a roth I have to start taking it.
I turned seventy three next year. Most of mine are
roth iras, but I do have up to it's only
(33:36):
like fifty thousand dollars in traditional iras. I do talk
to a financial person and he suggested that I should
change it to a roth ira. I mean, I think
the casters are quite substantial if you do that all
at once.
Speaker 2 (33:53):
Yeah, why, well, it sounds like you got roth. Do
you have a pension?
Speaker 6 (33:58):
No, I don't know.
Speaker 2 (34:00):
Why don't you just turn it into another pension benefit,
turn it into an income stream?
Speaker 6 (34:05):
Oh well, I don't have a pension currently though.
Speaker 2 (34:08):
Yeah, I know. But the thing is is at fifty thousand,
I'm not saying it's not a small amount of money.
It's substantial enough. But I would probably just turn that
into a lifetime payment and just basically have a you know,
you don't have to compress it and take it over
a short period of time. You know what I would
do is Katie, we have a new office in Syracuse.
Come on in. We'll have a chat. It doesn't obligate you,
doesn't obligate us, but we can get a little bit
(34:30):
more details as far as how we can help you.
Speaker 6 (34:33):
Yeah, that might be a good yeah.
Speaker 3 (34:34):
Thank you, or or another option too. If you're looking
to convert it to roth and you have most of
your assets in wroth is just spread it out. You know,
we're coming up on the end of this year. You
can do part of it in this year and part
of it next year, as far as you know. If
you don't want to pay the full yeah, get to
full tax it on one.
Speaker 2 (34:53):
Yeah, well, we could run some calculations for you and
be not already meet with you.
Speaker 6 (34:59):
Okay, okay, yeah, thank you.
Speaker 2 (35:02):
Okay, kat Katie, I like Katie. We have a daughter, Katie.
All right, your sister Kathy. How can we help you?
Speaker 3 (35:10):
Well?
Speaker 7 (35:10):
Hi, yeah, Well I'm I have reached full retirement in
June of next year. I'm still working full time. I
have I'm a widow and I basically what I have
is a rollover. I r a from his I ra
(35:30):
A and I have just a small borrow, one k
at work, and just equity at my home. Basically, that's
that's it.
Speaker 4 (35:40):
It's just me pleasure.
Speaker 2 (35:43):
Plus you have social yeah, but plus you're going to have.
Speaker 7 (35:46):
Social right what I would my my husband I would
probably choose, Yeah, the.
Speaker 2 (35:54):
Higher the two. What I would say to you, you
need a plan. That's what we do. You need to
come in and have a chat with us, and we
give you some direction as far as the opportunities that
are available to.
Speaker 6 (36:07):
Okay, well that sounds great.
Speaker 2 (36:09):
We give our we give our we give our number out.
We're at sixty seven hundred Kirkfield Roads. We want to
one a our brand new office. It's all nice and
all spiffed up, so you can come in and we
can give you one of our horrible cups of coffee.
Speaker 3 (36:23):
Yeah, if he's making it, it's horrible.
Speaker 7 (36:26):
Once a question, what is transfer on death? What is that?
And does that applying on a dog account?
Speaker 2 (36:33):
Yeah, it's just it's just titling of an account. It
basically avoids probate and lets the money go right directly
to the individual that's on the account. To d it's
still in your name. You don't have to worry about it.
No one has any kind of constructive ownership to it
beside you. It's just simplifies, simplifies it death the transfer
of wealth. Okay, very good, Okay, God bless you. Okay,
(36:57):
and I guess we have another caller, Mike, Hey, Mike,
how you doing all right?
Speaker 8 (37:08):
I'm up in the sligo and I'm retired a couple
of months away from seventy two. I'm married. My wife
is about fifty seven, now fifty five, excuse me. So
she does not work and I do not work. So
(37:31):
I'm retired. So about two years ago I thought it
would be best to go down and get a lawyer
and get the whole revocable trust, the irrevocable trust, you know,
all that stuff, which we did, and primarily I was
(37:55):
a contractor in the nuclear industry, so I always took
out a lot of money to put it into my IRA.
Now my IRA is with Fidelity, So that's.
Speaker 2 (38:09):
Who we're That's who we're with investment. Excuse me, that's
who we're with Fidelity.
Speaker 8 (38:16):
Okay, Well, what I'm saying is, you know, it's all
invested and with the way the market. Of course, I'm
a conservative Republican and this doesn't surprise me. But as
the market has shot up, okay, I haven't been withdrawing
any money out of that account, right because that money
(38:39):
is making money real fast. So I don't know what's
wrong with that theory. I don't understand the WROTH.
Speaker 2 (38:48):
Ira, Well, you're not going to be You're you're not
going to be eligible to make contributions. You can do
the conversion. You have to have earned income, Mike, in
order to do the Roth contributions. But what you ought
to do if you have, you know, we work with Fidelity,
so we can work with you if you want to
come in for a complimentary consultation. I told you that
(39:09):
we're at sixty seven hundred Kirkville Road, Suite one A.
We'd love to sit down with you, have a chat
and see if we can help you.
Speaker 8 (39:16):
Okay, Well, the other money that I have, I only
have one sister, yeah, and my mother. My father had
passed a few years back, and my mother finally passed
away she was ninety five. But at any rate, when
her estate became liquidated, then my sister got half and
(39:39):
I got half of whatever was left after taxes and
this and that. But my parents had prepared legally to
make sure that because they lived in California, that that
government was going to rob everything they have after they passed,
and they were good at it. They were good at
it because the laws didn't allow that. So I'm saying
(40:04):
I don't know if New York is the same.
Speaker 2 (40:07):
We can get the assets to your wife and your
family members a tax efficient way. The thing is is
that if you get sick or ill, that's that's your gidea.
Because New York State is getting pretty aggressive going after assets.
If you don't have long term care insurance?
Speaker 8 (40:27):
What does that mean?
Speaker 2 (40:29):
That means that if you have a large IRA non
qualified assets a house, they're going to make you spend
that money in order to pay for your care inside
a Medicaid facility. And that's.
Speaker 8 (40:40):
Five years.
Speaker 2 (40:42):
Yes, yes, because the IRA because after well, not the house.
If the house is inside the trust, you're okay. It's
the IRA money that we're talking about. I rays they're
going to make you spend income. Right, It's just a
question does the county aggressively go after the corpus because
some of the counties now are making you spend that
(41:02):
money based on life expectancy, not on periodic payments or
what they call the uniform lifetimetable. So what I would
say is, come on in. We can describe it in
greater detail, but you need to understand that because that
is really I I consider probably your greatest Achilles Hill.
Speaker 8 (41:18):
Right, it's what now that the government can New York
can come in and take my IRA.
Speaker 2 (41:24):
They take a portion of it, Yes.
Speaker 8 (41:27):
Even though it's protected by all these wills and everything.
It's not my lawyer, and find out if that's true.
Speaker 2 (41:33):
But that doesn't sound well, I'll tell you what. I
call your attorney. I live, I work, I do this
on a daily basis, so God bless your attorney. But
I do know. We get letters all the time from
counties that basically say, now you need to change the
distribution based on life expectancy, non on periodic payments. So
(41:54):
you got anything to say.
Speaker 3 (41:56):
Yeah, it's just it's different. You know, IRA assets are
you know they may take your RMD and then, like
he's saying, county by county, now they're doing it subject
to life expectancy rather than the RMD schedule. So that money.
If you end up in a nursing home, the nursing
home can then take that money.
Speaker 2 (42:15):
And there's an allowance for the community, spouse, the wife.
It's a complicated landscape. I don't want you to think
is that they're just gonna go grab the whole thing.
But if you get sick or ill, right, they're gonna
go after income. Okay, they're not going to give you
a Medicaid bed for free. No such thing. Okay, no
(42:38):
such thing as a free Medicaid bed. So, like I say,
it's important for you to understand the landscape, how it
works and what you can do, especially especially if you
don't have long term care insurance. I mean, it's it's
the reality, folks. We're living a hell of a lot
longer than what we anticipated, and the greatest risk for
most retirees is not only not having enough money to live,
(43:01):
but not protecting the money from a health event. And
that's the world that we live in today.
Speaker 8 (43:07):
So again, thanks for that, but I'll check with my attorney.
Speaker 2 (43:11):
Okay, God bless, God bless. The bottom line is this,
we have a new office. We have a new office
in Syracuse. Six seven zero zero, Kirkfield Roads, Sweet one A.
I think what we need to do is bring an
attorney next week for the Syracuse Show, sure to talk
about elder law on estate planning. Not a bad idea, yeah,
(43:32):
I think so to give people some clarity. Bottom line
is is that if we can be of assistance, we
will do everything within our power to help you out.
Six seven zero zero, Kirkfield Roads, Sweet one A. It's
our brand new office and again if we can be
of assistance, it's eighty eight five eight zero nine eight
(43:54):
eight eight five eight zero one nine nine. We are
the Retirement Planning Group and our website is rpgretire dot com.
If you want to see how pretty.
Speaker 3 (44:03):
We are, yeah, you can go check out his twenty
year old picture.
Speaker 2 (44:10):
By twenty years old it is, it's twenty five years old.
God bless everybody. We'll see you next week for another
retirement planning show. And have a great weekend and enjoy
this day. Go cues, Go cues,
The information our services discussed on this show is for
informational purposes only and is not intended to be personal
financial advice. The investments and services offered by US may
not be suitable for all investors. If you have any
doubts as to the merits of an investment, you should
seek advice from an independent financial advisor.
Speaker 2 (00:24):
All right, good afternoon, Syracuse and surrounding areas and all
of our listeners on iHeartRadio throughout the United States. We're
glad to be here. I'm Dave Kopek, president of the
Retirement Planning Group. I'm here with my son Christopher William
and we got a really good topic for you today, folks.
(00:47):
It's one that you need to understand. It's critical, critical
that you understand what we're talking about today, especially especially
if you have a lot of money in IRA accounts
retirement assets. In June of two thousand and twenty five,
(01:07):
my son Christopher William told what just retirement assets.
Speaker 3 (01:15):
A seventeen trillion? No, I'm talking everything. The whole enchilada. Oh,
the whole enchilada, the whole enchilada. The whole roll is
a thirty trillion, forty three point four trillion it's a
big number.
Speaker 2 (01:32):
As Billy used to say, it's huge, huge. So we're
talking about forty three point four trillion dollars of assets,
of which seventeen trillion trillion T is in IRA assets,
(01:52):
traditional irays and roth irays. It's the greatest achilles heel,
the most problematic money that you have inside your estate.
And today we're talking about it because whether your retirement
dreams are five years away twenty years away, you're currently
in retirement, the single greatest threat to you as a
(02:15):
retiree is your tax liability and also what happens if
you get sick and ill and they have to pay
those bills for a long term care facility. So today
we're going to talk about this maze of rules that
you need to understand. I want to overemphasize I want
to overemphasize that a lot of the things that we're
(02:37):
talking about will be state specific. You want to get
into that cress when I say state specific.
Speaker 3 (02:46):
Yeah, So what that means is there's going to be
different laws and different rules for how assets are spent
down in different states and counties, even on a county
to county basis. So you know, the Syracuse region is
going to be different from the Albany region or Florida's
completely different on how assets are spent down and what
(03:08):
assets are protected than New York. So it's it's you
got to just know and understand what what rules and
what guidelines these I guess the government is going to
follow as far as in these long term care facilities
are going to follow, as far as spending your assets
down if you do end up in one of their facilities, and.
Speaker 2 (03:29):
How you're going to qualify qualifying for medicaid. Basically, folks,
in order to qualify for Medicaid, you have to impoverish yourself. Okay,
So you can't have these multimillion dollar ira accounts or
one hundred of thousand dollars in iray accounts without understanding
the landscape. And when I say understanding the landscape, what
is your zip code? Where are you going to live
(03:50):
in retirement? Okay, there's going to be Assachusetts, You're going
to the Cape, going to Florida, You going to Carolina, as,
you're going to Tennessee. Well, before you do that, then
you don't long term care insurance. You better understand why
you're going there, how your assets are protected, and if
you do get sick or ill, can you impoverish yourself
so badly that you basically leave your wife, your loved
(04:13):
ones with nothing as far as at your death. So
today that's what we're talking about, protecting your IRA. There's
trillions of dollars. Uh, this is talk radio, you know.
The last time I was live on the radio, which
is a couple of weeks ago. We have a lot
of phone calls, so I'll give out our telephone number
here at WSYR. It's three one five four two ninety
(04:34):
seven ninety seven. That's three one five four two one
ninety seven ninety seven.
Speaker 4 (04:40):
Uh.
Speaker 2 (04:40):
We have a person that's there that will take your
phone call, that will basically tell me you're on the line,
and I'll be able to hopefully address your question. If
I can't, I always get the answer to you the
next week where I get your telephone number and we
call you and we let you know. You know, But
chances are we could probably give you some eline today.
(05:01):
Three one five four ninety seven ninety seven. That's three
one five four to two one WSYR. We always like
phone calls, even if it's off topic, and always I
think makes it much more interesting for you and for
us and for us. So these trillions of dollars that
we're talking about, Chris, we're going to talk about you know,
(05:23):
what does it make sense to do? Especially if you
have a pension and you have more than enough money
in order to facilitate your lifestyle, and you got large
amount of money in IRA. What happens You have this
thing called RMD requirementium distribution and when you least want
the distribution is when they become the greatest. And then
you're also battling later in life health issues, so you
(05:47):
want to make sure you understand what you have created,
and does it make sense for you to spend some
of that money down early in your retirement in order
to protect it from your loved ones so they have
a legacy and you're not sitting there trying to figure
out am I going to have enough money in order
to cover my expenses?
Speaker 3 (06:06):
Right? The the thing about the huge retirement accounts, like
he was saying, you pay into these four oh one
K plans, four h three B plans or whatever you're
contributing to at work, and that's typically the largest asset
people have going into retirement. And when he says that
you know you're going to be paying this money is
(06:28):
going to come out the door at the when you
least expect it. Through rm ds, you can facilitate through
legacy planning in different life insurance products that we'll touch
on how to create, you know, a tax preference inheritance
in retirement rather than utilizing these rm ds when you're
(06:49):
not going to need them and huge distributions are going
to be coming out and a lot of tax liability
is going to be associated with them.
Speaker 2 (06:57):
We have our first qualer, which is great. Tom broke
the ice, Tom Good, afternoon time you're on the air.
I guess Tom is out of reach. You want to
(07:18):
call back Tom? Maybe Tom's jerking around playing games with us,
but we didn't hear any voice. So again, Tom, if
you want to call back, be more than happy to
but hopefully the engineer will make sure that there's a
person on the line there. But today we're talking about
the trillions of dollars in qualified assets. You know, right
(07:39):
now it's estimated to be over seventeen trillion dollars in
high arrays, not only the traditional IRA but four O
win K. What a lot of people need to use
these moneies in their lifetime in order to have a
pension benefit. But the question becomes, how do you protect
these assets if you get sick or ill. You want
(08:00):
to make sure you understand the protection that's with WROTH
iras versus traditional irays. And as I've said over and
over again, traditional irays have a payout status, right you
have to liquidate them over a period of time based
off of R and D. As long as your ROTH
has been qualified you've had it for five years or longer,
(08:22):
you do not have to put it into a payout
status because that's one of the benefits of ROTH is
that it's tax free growth, tax free income, and no
required minimum distribution. So when I say it's states specific,
some states offer more favorable treatment for retirement accounts if
you get sick or ill. Massachusetts is a hell of
(08:44):
a lot different than New York, and Florida, of course,
is a hell of a lot different than New York.
So make sure you understand the zip code that you're
going to live in, because the distribution rules are not
only state specific, but they're also county specific.
Speaker 3 (09:00):
Right, Yeah, you definitely need to plan around where you're
gonna where you're gonna end up because all the rules change.
In understanding those laws or finding someone who understands them,
whether it's an a state planning attorney locally who knows
the who is in that realm and knows the ins
and outs, is only going to be super beneficial as
(09:21):
far as protecting those assets.
Speaker 2 (09:24):
And you know, the thing is is that, as we're
all quite well aware, most of us do not have
long term charriaturants. So what we try to do is
we try to reposition our assets later in life, whether
it's your home, non qualified assets, and put them into
a near revocable trust. And then there's a lot of
people out there that basically have quite a significant amount
of money in iras they added in a four oh
(09:47):
one K, they retire, they roll them into an IRA.
So make sure you understand what you've created, which we're
going to get into greater detail when we come back
from this break. But again we are live if you
have any questions. Three point five were to one ninety seven.
This is the Retirement Planning Show. All right, we are back.
(10:25):
We're gonna quickly go to John, who has a question.
Speaker 4 (10:30):
Hi, can you hear me?
Speaker 2 (10:31):
Okay, I can hear you, sir? Go ahead, Yes.
Speaker 4 (10:34):
The quick question. My mother felt an attorney who said
that it doesn't make any sense to get a trust
if your assets are less than five hundred thousand. I
find that very questionable. I just wanted your thoughts. At
what point, at what threshold would you say a trust
(10:54):
bakes sense to protect your assets?
Speaker 2 (10:57):
Well, I one hundred percent disagree with the attorney.
Speaker 4 (11:01):
Soon here, I'm sure by h to take that number.
I'm thinking a trust is critical to protect your assets
in general. I'm sure there's a dollar amount.
Speaker 2 (11:14):
Yeah, I mean is your father? Is your father alive?
Speaker 4 (11:18):
Yeah? My both of my parents are alive.
Speaker 2 (11:21):
Yeah, Okay, what happened? What happens if they need care
or assistance? That basically that five hundred thousand dollars is
going to go like lightning. So I don't know what
what he's thinking about or she's thinking about, but I
one disagree. I think a trust makes sense for anyone
that has any type of assets that well over six figures,
(11:43):
you have one hundred thousand dollars of assets, or over
you know, five hundred thousand dollars. I you know, basically
they're opening themselves up for a very aggressive spend down
in order to qualify for medicaid. I'm assuming that they
don't have long term care insurance.
Speaker 4 (11:59):
They do not.
Speaker 2 (12:00):
Yeah, well, I disagree. You ought to have your parents
come in and have a chat with us. We have
a new office in Syracuse, beautiful so much.
Speaker 4 (12:08):
I really need to share that.
Speaker 2 (12:10):
Well, I hope, I hopefully I can help you.
Speaker 4 (12:13):
Give me a call, We'll get in touch. I appreciate
you all about you.
Speaker 2 (12:18):
Thank you sir. You agree?
Speaker 3 (12:20):
Yeah, I mean, I don't know where that number is
coming from. Half a million dollars, but they're.
Speaker 2 (12:24):
Basically saying it's not a lot of money, see you later.
I mean, if you you know, a long term care
facil is going to crust you two hundred grand, it's
not going to take long before that five hundred thousand
dollars is gone. I mean, they're fine, you know, depending
on how the assets are titled and where they are.
It's when the first spouse passes away that all hell
breaks loose that you got to spend down for, you know,
for the home. Right.
Speaker 3 (12:46):
Yeah, but if you if like you were saying, if
you have non qualified assets like bank account money, if
you have two hundred thousand dollars in the bank, and
then you have your house which is valued at two
hundred and fifty thousand dollars, so you're all in for
four hundred and fifty thousand dollars that could go into
an irrevocable trust for protection. I don't see why I
don't either. That would be a bad idea.
Speaker 2 (13:07):
I don't understand where that number comes from. But you know,
I've said this a million times, folks, and don't I
don't want any of the attorneys that are listening to
this to take it in a neggive way. You know,
you get five attorneys in a room, you're going to
get five different answers and how to protect your estate
in different rules and regulations and what's you know protected,
what isn't protected? And as I said, I'm going to
(13:29):
overemphasize this again and again and again. Where you reside
in your retirement, your zip code is critical. Are you
going to stay in New York? Then you understand how
you need to understand the county, how aggressive are they
in regards to going after assets as far as medicate
eligibility if you do not have long term care. Basically,
what we're talking about is protecting everything that you've worked
(13:50):
for in your lifetime, right right, that's what we're talking about,
that it doesn't evaporate and go away before you go away.
Speaker 3 (13:59):
Yeah, that's the whole purpose. I mean, that's what you
know that you plan for. You want to make sure
that the money you've accumulated goes to the people you
wanted to go to, versus where the government wants it
to go to, or the nursing home wants it to
go to, or anybody else. I mean, that's the that's
the purpose of buttoning everything up and setting up legal
(14:19):
documents so that everything is orchestrated how you want it
to play out.
Speaker 2 (14:24):
Now, you know a lot of people don't realize in
New York State you can do spousal refusal. So for
that gentleman that just called that, his parents basically said
they got to have five hundred thousand dollars or more
or whatever however you know, they it's a valid way
(14:44):
in order for you to get eligibility through Medicaid, the
spouse can refuse to pay, and then you also have
the ability to do other type of tactical planning. So
you know, I'm not an attorney, I don't profess to
be an attorney, and but I work with attorneys every
single week, right because of the work that we're in
elder law, estate planning, investment management, that's the arena that
(15:08):
we work in. So it's important for us to have
a relationship, a relationship with attorneys that we know can
dot their rise and you know, cross their t's. So
make sure you understand that the attorney that you're working
with has the expertise in order to facilitate what you're
looking for. So, uh, we appreciate phone calls. I give
(15:30):
out the telephone number again if you have a specific
question about your own per your post retirement three one
five four to two one ninety seven ninety seven three
one five four two one ninety seven ninety seven, and
I have my son talk a little bit about how
you can get rid of some of that problematic money,
uh during your lifetime as far as gifting assets.
Speaker 3 (15:54):
Yeah, so qualified charitable distributions is one of the one
of the main ways that you can get rid of that.
I know this is something that had come up in
an appointment, and that is you know, you got to
be seventy and a half for twenty twenty five in
order to qualify for a qualified charitable distribution and that
(16:15):
is up to I believe one hundred and eight thousand
dollars what you're saying that can be sent off of
your IRA account that can go directly to a qualified charity,
so it satisfies the rm D requirements for the year,
which is important to note. And then it keeps the
donation out of your taxable income, so it's not you're
(16:37):
not going to be this in the money that's sent.
If you send one hundred thousand dollars, it's not regarded
as taxable income for you for the year if it
goes directly to a qualified charity.
Speaker 2 (16:46):
And it's satisfied your R and D, so you can
satisfy your requiredment of distribution. And you have a husband
and wife both could do up to two hundred and
sixteen thousand dollars to a charitable organization. It's a great
way for you to lower your tax liability with your
IRA and fulfill your charitable intentions in your lifetime and
(17:09):
basically see the pleasure in the organization. You can get
a smile on your face in order to see this
dynamic that's happening. You don't have to be, you know,
in the graveyard in order to basically pass money on
to for your charitable intent. So the other thing is
is that there's another option available to you that basically
what you're trying to do is reduce that tax liability,
(17:33):
you know, the larger the I mean, people love to
look at their four on one k's and four or
three b's, you know, deferred compensation whatever it may be.
But I'm telling you, folks, that is the greatest achilles
hell in your retirement because there's never a step up
in basis, it's always taxes ordinary income and when you
least want the distribution is when it becomes the greatest.
(17:53):
So you've got to make sure you understand that you've
created on the tree because as great as it is
to look at those big numbers, for a lot of you,
it's not going to be a big number because you
have a friend and it's called the irs and the
State of New York and they're going to take their share.
Speaker 3 (18:11):
Yeah, And there's a couple other options that you can
try and mitigate this before RMD start at age seventy
three or seventy five, you know, if for.
Speaker 2 (18:23):
Money depending on the age.
Speaker 3 (18:25):
Right for people born in nineteen sixty or later, I
think it's going to be seventy five, so you can convert.
You can do Roth conversions. So the bulk of that
you know, large IRA, rollover IRA that used to be
a four oh one K or four h three B,
whatever you contributed to before you hit RMD age, you
can start converting those assets to ROTH. So maybe you
(18:47):
retire at sixty two, Well, now you have from sixty
two to seventy three or sixty two to seventy five
to make these conversions over to ROTH. And you pay
the tax up front. But then that money that sits
in these in these WROTH dollars is not susceptible to
rm ds, and you already paid the tax on it,
so you're going to let it grow in the account
(19:09):
and then all the distributions you take from this are
non taxable.
Speaker 2 (19:14):
Now here's here's here's the double edged sort. Okay, you
know this is the frickin fract. Here the pros and
the cons. If you're doing a WROTH conversion, do you
have long term care insurance? Do you know is the
WROTH and the county or the state that you're going
to be living in protected from a medicaid spend down right?
P because remember what I said, there's different rules and
(19:36):
regulations dending on the state. As far as the strategy
your payout what they call payout status right, Well, hear
a lot of attorneys talk about as periodic payments. As
long as the IRA is in a periodic payment, then
you know they're not going to go after the corpus.
The question becomes, what are the rules? Is it based
off of rm D? Is based on life expectancy? So
(19:58):
if you got a six seven, eight hundred dollars the
dollar IRA in the county saying yeah, now you got
to take the payments, but you're not going to take
it based off of R and D anymore. You're gonna
basically take it on your life expectancy. You got four
years to live. You've got six hundred thousand dollars one
hundred and fifties coming out, whether you want it or not.
That's what's happening. We get letters from the counties and
(20:20):
they basically say, this is what we need, this is
how much has to come out, and there's not a
thing you can do about it. Because the money's got
to come out. You've got to do some additional nine
to one to one planning I've had attorneys say, yeah,
you know, we told them the IRA was protected, right,
but now we're gonna have to take it all out.
We're gonna take the distribution in one year and we're
(20:41):
gonna basically do what they call half loaf planning. We're
gonna give the other half to the children of the elevens. Well,
that's good, especially if you're in a situation where mom
or dad depending on the spouse, needs to have that
income in order for quality of life. So, know your
zip code? Where are you going to live? If you
(21:02):
get sick or ill, which we're talking about right now, right,
are you going to have to liquidate the roth IRA
which you just spent all the tax on in order
to qualify. Would it have been better to stay in
a qualified traditional IRA. It's very complicated.
Speaker 3 (21:17):
Yeah, there's no there's no easy answer, but it's it's
just things to consider and plan around.
Speaker 2 (21:24):
You know, there's well the easy answers don't get.
Speaker 3 (21:26):
Sick, right, Well, you can't say that, how do you
not get sick?
Speaker 2 (21:33):
I mean that's the easy answer. And the other thing
is is that you know, for most people, there are
options available to you in order for you to purchase
long term care insurance. Most of you will not do
it because of the cost of long term care. Some
of you will do it, but as you're quite well aware,
in New York State, the cost of long term care
is astronomical. Depending on where you are major metropolitan I
(21:56):
mean we're throughout New York State, they range anywhere from
two hundred to two hundred and fifty thousand dollars a
year for a long term care facility. How many people
have that kind of money? And if it's in an IRA,
if you need two hundred, how much do you really
need to take to forty fifty in order to net
R two hundred after tax? So we're going to come back.
(22:17):
We're going to talk about the what I considered to
be one of the greatest risks for individuals right now
is qualified assets and what is your plan for these
large amounts of money that are in iras four o
one ks. But don't forget we offer a complimentary consultation
in our Saratoga or Saratoga in our Syracuse office Saratoga
(22:40):
also talk WGY if you have any questions. That's the
wrong one too, I'm going out the wrong telephone number.
I'll come back after this break.
Speaker 3 (23:19):
Alrighty, we're back jack and we were just touching on
qualified retirement plans. So the majority of people they invest,
you know, twenty thirty, forty fifty maybe years another four
(23:40):
oh one K, four h three B. What do they
then do with all this pre tax money? How do
they structure it? How are distribution is going to be
paid out? What can they do to protect it? You know,
that's these are all questions that we hear on a
day to day basis and see and try and structure around.
Speaker 2 (24:01):
Well, it's a huge there's no easy answer. Everybody seems
to think that if I put my money into an
irrevocable trust, I'm just gonna fly away and government's going
to pay for my care and I'm not going to
have any out of pocket expense. Telling you, folks, if
you think that's the case, you're fooling yourself. It's not
(24:21):
the deal. I don't care where you are, what state
you're in, You're going to pay something. It's just a
question what magnitude. And the other thing is is that
one of the things that we try to overemphasize to
people is that you know, there's no easy answer because
everybody has a different way of utilizing these assets in
(24:42):
the retirement years. And also, do you have a pension,
how you know strong is your social Security benefit? I
just met with some people the other day. They've got
I don't know, a few million dollars with money that
we're managing. They're living on their Social Security, don't even
have to take distributions off of their I raise. Now
(25:05):
they're trying to figure out what do we do with
this money? Right, But they don't have long term care.
And that's really you know, when I talk about the
three biggest things that will come back to hurt you
in retirement, it's large amounts of money that's pretax and
not having a plan when you get sick or ill.
Speaker 3 (25:24):
Right, Yeah, and we touched on that, you know, prior,
but the setting up the portfolios as well, for like
those people, it all depends on, you know, how how
much money you're going to actually spend in retirement, because
you could have millions of dollars like you were just saying,
and live off your social security, so you don't even
(25:45):
really utilize all these funds. So if you have a
strong pension benefit and strong social security, well that's where
it opens up a different avenue of well, what are
you really looking to do with all this? You now,
how do you want this structured? Are these legacy assets?
Do you want these to be spent down in your lifetime?
(26:07):
Do you want to go travel and do things you've
always wanted to do with your life? Or you know,
it's just having these conversations where you're trying to figure
out what the game plan is. And that's why you know,
it's a tricky, Like you were saying, it's because everybody's different.
There's no cookie cutter approach to this that you can
just blanket over everybody and say, you know, this makes
(26:28):
sense for everyone, because it really, it really is customized
to every once personal situation.
Speaker 2 (26:33):
Do you hear people all the time calling you, I
want to do a wroth conversion? You know, does it
make sense for me to do a wroth conversion? Maybe? Maybe?
It depends. It depends on where you live, It depends
on the size of your estate, It depends do you
have long term care coverage? Have you already done a trust?
(26:54):
Do you understand what you have at risk in regards
to your assets? If you need to have home care,
assistant living or a long term care facility. Right. You know,
we got a client of ours right now that's paying
over eighteen thousand dollars a month for a long term
care facility. Eighteen thousand dollars a month. It's a whole
(27:16):
heck of a lot of money, right, So if you're
in that situation, who's going to pay the bill? And
where's it going to come from? And if you don't
have that answer, what I always talk about is the domino.
When the first domino drops, you got to know where
the rest of them are going to go. So if
you have any specific questions, we have open lines. We
(27:38):
always like telephone calls because this is not babble radio,
it's talk radio. And our telephone numbers three one five
four seven ninety seven WSYR three one five four two
one ninety seven ninety seven. You got a question about
iras wrowin k legacy planning, asset protection, I've been doing it.
(28:01):
This is my going into my twenty six year on radio.
I've been in the business now for forty three years.
So as I say, there's not too many things that
I haven't seen. My son is a graduate of Siena
College and financial planning, and it's been with us now
for what three years four seems like yesterday. Really, yeah,
(28:22):
it goes by so quick. But you know, what we
try to do is to educate you and inform you
we have a brand new office. It's completed or it's
going to be completed, hopefully by the end of the week.
It's at six seven zero zero Kirkfield Roads one A.
We're excited about it and it's taken us a while
(28:44):
to get it completed. But six seven zero zero Kirkfield
Roads one A. If you want to come in for
a consultation, we offer a complimentary consultation at any time
we want to come in. When we're out there in Syracuse.
You can call our office eight five eight zero and
(29:04):
find out. We do a lot of work with National Grid.
We do a lot of work with major corporations ge
Et cetera, Bluckheed, Martin Carrier. And as I said, if
you want to give in for a chat, first meeting,
we have a conversation. Second meeting, we give you suggestions
and if you go back in the third meeting, it's
typically that's when we're putting the rubber.
Speaker 3 (29:25):
To the road, right, yeah, and it's it's it's different
for everybody. You know, some people come in on the
first meeting and it seems like they're already ready to go.
We don't. We don't ever sign paperwork on meeting one.
It's always just a cup of coffee and an introductory
meeting because we're looking to figure out what you're looking
to have facilitated. So that's always meeting one.
Speaker 2 (29:44):
All right, we have another phone call. We have Jim, Hi, Jim,
good afternoon. How are very good, sir? How are you?
Speaker 5 (29:53):
I'm good. So I have a TSP at traditional TSP
and from our retirement, I have the three legged stool
with the retirement pension and my social Security and I
didn't really well the the We actually have an option
for a ROTH TSP. It wasn't available I think until
(30:14):
around eight years ago, and I actually didn't even know
about it until about a year ago. And I'm planning
on retiring in about two to three years. Yeah, so
my question go ahead.
Speaker 2 (30:26):
Oh go ahead, you're retiring.
Speaker 5 (30:28):
So my question was I know that with a with
a ROTH and I believe it's the same with the
Roth TSP that's been there for at least five years
before it can be access and so my question is
because of this late in the career, when I have
only about three years left, is it too late or
is it wise to invest any part of my TSP
(30:52):
into the ROTH TSP or should I just keep it
where it is in the traditional because I've been doing
it for like, I don't know, thirty years or so
like that.
Speaker 2 (31:01):
No Roth, get into ROTH. You're gonna watch tax preference
money in your retirement years. Uh, you're fortunate, you got
a pension, you got social Security. But if you want
to go to the well, you know basically that WROTH
when you retire, you can allow that to accumulate for
as long as you want without subject to rm D.
(31:22):
It's a great vehicle for healthcare cost as you age.
Speaker 5 (31:29):
So if I was to want to make withdrawals, say
monthly withdrawals, once I'm retired, do they pull from that?
I thought I didn't know. I have to probably look
into it. But do they pull from partial from the
traditional and partial from the Roth?
Speaker 3 (31:46):
No?
Speaker 5 (31:46):
Or can I specify which one I wanted to come from?
Speaker 3 (31:50):
No, there's no, it's it only comes from the traditional.
So there's no RMD on the WROTH. That's a benefit
of it is that you can invest in ROTH, I
raise and then let it sit and grow, and then
pull from it whenever you want on a tax preference basis,
so there's no tax liability to you on distributions, and
then for your beneficiaries as well. Like the benefit of
(32:11):
the ROTH is that, yes, it has to come out
in ten years, but it's not taxable at all to
any of your beneficiaries.
Speaker 4 (32:20):
So you think it's a.
Speaker 5 (32:21):
Good idea to get in there.
Speaker 2 (32:23):
Are you working with somebody now, Jim.
Speaker 5 (32:28):
No, I'm not like I said, though. I mean, I'm
at the end of my career and I do work
for the government, so I don't have The rules are
different when it comes to withdrawals from the CSP, Traditional
TSP and the ROTH DSP.
Speaker 2 (32:43):
Well, I'll tell you. We got to take a hard
break for a commercial. You should give us a buzz.
Come on and have a chat with our brand new
office in Syracuse. I'll do that, Okay, brother, we'll be back.
Katie and Kathy pulled on. We'll be with you right
after the break and FM. All right, we are back,
(33:10):
and I'm going to go quick because we have three
people waiting. Let's go to Katie first.
Speaker 6 (33:15):
Hi, Katy, but I have a question about converting and
traditional ira to a roth I have to start taking it.
I turned seventy three next year. Most of mine are
roth iras, but I do have up to it's only
(33:36):
like fifty thousand dollars in traditional iras. I do talk
to a financial person and he suggested that I should
change it to a roth ira. I mean, I think
the casters are quite substantial if you do that all
at once.
Speaker 2 (33:53):
Yeah, why, well, it sounds like you got roth. Do
you have a pension?
Speaker 6 (33:58):
No, I don't know.
Speaker 2 (34:00):
Why don't you just turn it into another pension benefit,
turn it into an income stream?
Speaker 6 (34:05):
Oh well, I don't have a pension currently though.
Speaker 2 (34:08):
Yeah, I know. But the thing is is at fifty thousand,
I'm not saying it's not a small amount of money.
It's substantial enough. But I would probably just turn that
into a lifetime payment and just basically have a you know,
you don't have to compress it and take it over
a short period of time. You know what I would
do is Katie, we have a new office in Syracuse.
Come on in. We'll have a chat. It doesn't obligate you,
doesn't obligate us, but we can get a little bit
(34:30):
more details as far as how we can help you.
Speaker 6 (34:33):
Yeah, that might be a good yeah.
Speaker 3 (34:34):
Thank you, or or another option too. If you're looking
to convert it to roth and you have most of
your assets in wroth is just spread it out. You know,
we're coming up on the end of this year. You
can do part of it in this year and part
of it next year, as far as you know. If
you don't want to pay the full yeah, get to
full tax it on one.
Speaker 2 (34:53):
Yeah, well, we could run some calculations for you and
be not already meet with you.
Speaker 6 (34:59):
Okay, okay, yeah, thank you.
Speaker 2 (35:02):
Okay, kat Katie, I like Katie. We have a daughter, Katie.
All right, your sister Kathy. How can we help you?
Speaker 3 (35:10):
Well?
Speaker 7 (35:10):
Hi, yeah, Well I'm I have reached full retirement in
June of next year. I'm still working full time. I
have I'm a widow and I basically what I have
is a rollover. I r a from his I ra
(35:30):
A and I have just a small borrow, one k
at work, and just equity at my home. Basically, that's
that's it.
Speaker 4 (35:40):
It's just me pleasure.
Speaker 2 (35:43):
Plus you have social yeah, but plus you're going to have.
Speaker 7 (35:46):
Social right what I would my my husband I would
probably choose, Yeah, the.
Speaker 2 (35:54):
Higher the two. What I would say to you, you
need a plan. That's what we do. You need to
come in and have a chat with us, and we
give you some direction as far as the opportunities that
are available to.
Speaker 6 (36:07):
Okay, well that sounds great.
Speaker 2 (36:09):
We give our we give our we give our number out.
We're at sixty seven hundred Kirkfield Roads. We want to
one a our brand new office. It's all nice and
all spiffed up, so you can come in and we
can give you one of our horrible cups of coffee.
Speaker 3 (36:23):
Yeah, if he's making it, it's horrible.
Speaker 7 (36:26):
Once a question, what is transfer on death? What is that?
And does that applying on a dog account?
Speaker 2 (36:33):
Yeah, it's just it's just titling of an account. It
basically avoids probate and lets the money go right directly
to the individual that's on the account. To d it's
still in your name. You don't have to worry about it.
No one has any kind of constructive ownership to it
beside you. It's just simplifies, simplifies it death the transfer
of wealth. Okay, very good, Okay, God bless you. Okay,
(36:57):
and I guess we have another caller, Mike, Hey, Mike,
how you doing all right?
Speaker 8 (37:08):
I'm up in the sligo and I'm retired a couple
of months away from seventy two. I'm married. My wife
is about fifty seven, now fifty five, excuse me. So
she does not work and I do not work. So
(37:31):
I'm retired. So about two years ago I thought it
would be best to go down and get a lawyer
and get the whole revocable trust, the irrevocable trust, you know,
all that stuff, which we did, and primarily I was
(37:55):
a contractor in the nuclear industry, so I always took
out a lot of money to put it into my IRA.
Now my IRA is with Fidelity, So that's.
Speaker 2 (38:09):
Who we're That's who we're with investment. Excuse me, that's
who we're with Fidelity.
Speaker 8 (38:16):
Okay, Well, what I'm saying is, you know, it's all
invested and with the way the market. Of course, I'm
a conservative Republican and this doesn't surprise me. But as
the market has shot up, okay, I haven't been withdrawing
any money out of that account, right because that money
(38:39):
is making money real fast. So I don't know what's
wrong with that theory. I don't understand the WROTH.
Speaker 2 (38:48):
Ira, Well, you're not going to be You're you're not
going to be eligible to make contributions. You can do
the conversion. You have to have earned income, Mike, in
order to do the Roth contributions. But what you ought
to do if you have, you know, we work with Fidelity,
so we can work with you if you want to
come in for a complimentary consultation. I told you that
(39:09):
we're at sixty seven hundred Kirkville Road, Suite one A.
We'd love to sit down with you, have a chat
and see if we can help you.
Speaker 8 (39:16):
Okay, Well, the other money that I have, I only
have one sister, yeah, and my mother. My father had
passed a few years back, and my mother finally passed
away she was ninety five. But at any rate, when
her estate became liquidated, then my sister got half and
(39:39):
I got half of whatever was left after taxes and
this and that. But my parents had prepared legally to
make sure that because they lived in California, that that
government was going to rob everything they have after they passed,
and they were good at it. They were good at
it because the laws didn't allow that. So I'm saying
(40:04):
I don't know if New York is the same.
Speaker 2 (40:07):
We can get the assets to your wife and your
family members a tax efficient way. The thing is is
that if you get sick or ill, that's that's your gidea.
Because New York State is getting pretty aggressive going after assets.
If you don't have long term care insurance?
Speaker 8 (40:27):
What does that mean?
Speaker 2 (40:29):
That means that if you have a large IRA non
qualified assets a house, they're going to make you spend
that money in order to pay for your care inside
a Medicaid facility. And that's.
Speaker 8 (40:40):
Five years.
Speaker 2 (40:42):
Yes, yes, because the IRA because after well, not the house.
If the house is inside the trust, you're okay. It's
the IRA money that we're talking about. I rays they're
going to make you spend income. Right, It's just a
question does the county aggressively go after the corpus because
some of the counties now are making you spend that
(41:02):
money based on life expectancy, not on periodic payments or
what they call the uniform lifetimetable. So what I would
say is, come on in. We can describe it in
greater detail, but you need to understand that because that
is really I I consider probably your greatest Achilles Hill.
Speaker 8 (41:18):
Right, it's what now that the government can New York
can come in and take my IRA.
Speaker 2 (41:24):
They take a portion of it, Yes.
Speaker 8 (41:27):
Even though it's protected by all these wills and everything.
It's not my lawyer, and find out if that's true.
Speaker 2 (41:33):
But that doesn't sound well, I'll tell you what. I
call your attorney. I live, I work, I do this
on a daily basis, so God bless your attorney. But
I do know. We get letters all the time from
counties that basically say, now you need to change the
distribution based on life expectancy, non on periodic payments. So
(41:54):
you got anything to say.
Speaker 3 (41:56):
Yeah, it's just it's different. You know, IRA assets are
you know they may take your RMD and then, like
he's saying, county by county, now they're doing it subject
to life expectancy rather than the RMD schedule. So that money.
If you end up in a nursing home, the nursing
home can then take that money.
Speaker 2 (42:15):
And there's an allowance for the community, spouse, the wife.
It's a complicated landscape. I don't want you to think
is that they're just gonna go grab the whole thing.
But if you get sick or ill, right, they're gonna
go after income. Okay, they're not going to give you
a Medicaid bed for free. No such thing. Okay, no
(42:38):
such thing as a free Medicaid bed. So, like I say,
it's important for you to understand the landscape, how it
works and what you can do, especially especially if you
don't have long term care insurance. I mean, it's it's
the reality, folks. We're living a hell of a lot
longer than what we anticipated, and the greatest risk for
most retirees is not only not having enough money to live,
(43:01):
but not protecting the money from a health event. And
that's the world that we live in today.
Speaker 8 (43:07):
So again, thanks for that, but I'll check with my attorney.
Speaker 2 (43:11):
Okay, God bless, God bless. The bottom line is this,
we have a new office. We have a new office
in Syracuse. Six seven zero zero, Kirkfield Roads, Sweet one A.
I think what we need to do is bring an
attorney next week for the Syracuse Show, sure to talk
about elder law on estate planning. Not a bad idea, yeah,
(43:32):
I think so to give people some clarity. Bottom line
is is that if we can be of assistance, we
will do everything within our power to help you out.
Six seven zero zero, Kirkfield Roads, Sweet one A. It's
our brand new office and again if we can be
of assistance, it's eighty eight five eight zero nine eight
(43:54):
eight eight five eight zero one nine nine. We are
the Retirement Planning Group and our website is rpgretire dot com.
If you want to see how pretty.
Speaker 3 (44:03):
We are, yeah, you can go check out his twenty
year old picture.
Speaker 2 (44:10):
By twenty years old it is, it's twenty five years old.
God bless everybody. We'll see you next week for another
retirement planning show. And have a great weekend and enjoy
this day. Go cues, Go cues,
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CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.