Laura Adams, host of the Money Girl Podcast joins the show this week to give us eight ways to save serious cash, so we can avoid the holiday debt hangover. (Can’t guarantee that you can avoid working out, though.) She also lays out how to tackling debt and whether you should lease your car or not. Plus, the latest tax reform news, and eight ways to create tax-free income. And is Joe going to start charging his dear sweet mother Ruthie rent when she comes to visit him from Minnesota?
- (00:56) Joe & Al Recap Their Thanksgivings and Talk About the Latest Tax Reform News
- (10:13) Laura Adams, Money Girl Podcast: Ways to Save Money for the Holidays
- (22:09) Laura Adams, Money Girl Podcast: Tackling Debt & to Lease or Not to Lease
- (38:57) Big Al’s List: 8 Ways to Create Tax-Free Income (by Big Al!)
- (49:05) Email – Divorcing and Selling Primary Residence. Can Cap Losses Cancel Cap Gains?
Here’s one way to save some holiday cash from The Money Girl Laura Adams:
Look at things like gym memberships. Did you really use it this year? If you didn’t, go ahead and scrap it.
Yes! No New Year’s Resolution necessary for me!
Find another way to exercise – walking, running, swimming – if there’s anything that you can do that doesn’t cost money each month, that’s a great alternative and a great way to cut back.
Oh. Well, okay… but hey at least I never have to go back to the gym!
And it doesn’t have to be forever. Maybe you just cut back for six months or a year, enough to help you get through the holidays.
*sigh* well so much for that idea. Today on Your Money Your Wealth, 8 ways to save serious cash so we can avoid the holiday debt hangover. Can’t guarantee that you can avoid working out, though. Plus, the latest tax reform news, and 8 ways to create tax-free income. And is Joe going to start charging his dear sweet mother Ruthie rent when she comes to visit him from Minnesota? Let’s find out, here are Joe Anderson, CFP and Big Al Clopine, CPA.
:56 – Joe & Al Recap Their Thanksgivings and Talk About the Latest Tax Reform News
JA: Back from the Thanksgiving weekend, and a little sluggish. We gotta get this thing going, Al.
AC: We’ll get there. it just takes a couple of minutes, and we’re professionals, I think. Did you have a good Thanksgiving?
JA: I did. It was just fine. Ate a little bit, hung out with the fam.
AC: I know your mom was in town, awesome.
JA: It was fantastic.
AC: Yes she came out for her summer home? Winter home I should say.
JA No, she just came out for a week.
AC: Just a week this time, probably buying your tickets for January.
JA: Yeah I think she’ll be back soon. She’s got some business to take care of back in Minnesota.
AC: And I was with my cousins in Oklahoma. It was warmer than expected. It was probably mid-60s on Thanksgiving, and mid-70s on Friday, which is when I played golf, it was very nice. I think I lost a record number of balls. It’s called The Canyons. And I hit every canyon (laughs) because I bought 12 for my two sons and me, and I went through six of them. I gave them each a sleeve.
JA: You were done by six holes?
AC: Yeah and then I found one and then I lost it. And then one of my cousin’s sons gave me four, and then Ann found two – she came along too, and I ended up with two. I think by my math, I was a net 10 gone. (laughs) Net.
JA: But you still scored in the 70s. (laughs)
AC: (laughs) Well, I wouldn’t say that. But I will say my last two drives in 17 and 18 were beautiful. So that’ll bring me back. You have to have something to bring you back when it comes to the golf.
JA: Hey it’s countdown to the end of the year, and tax reform is still in loom. So what’s the latest here, Al?
AC: So this is a new bill to change our taxes, to lower our tax rates for most people. Actually, some people, Joe, will pay higher taxes, but I guess for the majority, maybe two thirds or more, will end up paying lower taxes. The House passed their version of the new tax bill. The Senate is passing their version, and the two bills have to be reconciled and agreed by both the Senate and the House, and then Trump would need to sign it. But that may happen. As recently for me, Joe, as maybe even a couple of weeks ago, I gave it kind of a slimmer chance, but now it’s looking like that may actually happen, which means we would have some fairly different tax law starting in 2018.
JA: So once all of this gets washed out, we’ll be able to give you a little bit better information, because so many things change so quickly.
AC: It changes by the moment. So anyway, we’ll have to see.
JA: So what are some of the things that we should be doing now? Because if this does go through, there are some things that we want to make sure that we’re planning on with the current tax law.
AC: Well Joe, I think that’s the key question because if this does go through, it means most of it would take effect January 1st, 2018, but we still have a chance for 2017. So I guess one of the big ones right off the bat would be, if you have any state taxes that are going to be due for 2017, please pay it in 2017 to get that state tax deduction.
JA: So even though I pay it if there’s an additional tax owed, is what you’re saying? Because I’ve already withheld a certain amount of money for state taxes that I’ll be able to still write off. But if there are additional taxes that I owe, and I pay that in April, you’re saying I won’t be able to write that off.
AC: You won’t be able to write that off against 2018 taxes. So when would that happen? So if you’re an employee and you have enough state withholding, there’s nothing you need to do. You already have your taxes withheld. But Joe, even if you’re an employee and you sold a bunch of stock at a gain, or you sold a property at a gain, you’re probably going to owe some state tax. And we’re doing the show in California, so we’re going to focus on California, but it could be anywhere. You would owe some state taxes, and the IRS and your state will likely say, you may not need to pay that until April 15th of next year, but you may want to pay it in this month of December, just so you get the tax deduction.
JA: Because the new tax reform is stating that you can’t write off state tax anymore. And so, even though the state tax was for 2017, but if I do pay it in 2018, by April, you’re stating that those dollars will not be able to be written off on my 2017 tax return.
AC: That’s right. And I know this is confusing for a lot of people, but if you pay your state taxes owed, with your tax return, 2017 return, you pay the taxes owed on April 15th of 2018, that means you paid it in 2018. So it would become a deduction in 2018, but the new tax law, both House, and Senate bill, by the way, don’t allow you to take that deduction. However, in 2017, you can take that deduction. So that’s why you’d want to pay that one early. But there is a caveat. And that is, if you’re subject to Alternative Minimum Tax, prepaying the state tax doesn’t necessarily help you, because it’s not an allowable deduction. So this is a little trickier than what I just said. You do have to determine if you’re in alt-min, and I will tell you this, for most of you, if your income is below maybe $175,000, maybe $200,000, you’re probably not subject to alternative minimum tax. There are exceptions by the way, if you have a lot of kids, for example, if you have high property taxes or something like that. But for most people, income below about $175,000, they’re not subject to alternative minimum tax. You should prepay any state taxes due in December of 2017 if, in fact, you expect to owe on your 2017 return. If your income is above that, you probably should check with your accountant, to see if it even helps you or not, because of alternative minimum tax.
JA: What about the 121 exclusion? So right now, you got two out of the last five years. So if you lived in your house two of the last five, you can write off $250,000 if you’re single, $500,000 if you’re married. Now that’s changing to five out of eight? Is that in the new Senate bill?
AC: That is in the Senate bill, as the House bill. So should some form of this tax bill go through, I would expect that to happen, because it’s consistent both bills. So now you still get the $250,000 exclusion if you’re single, which just simply means if you bought a home for $500,000, and you sell it for $750,000, and your gain is $250,000, the IRS says you don’t have to pay any tax on that gain. That’s what an exclusion is. So it’s tax-free income to you. If your gain is higher than that, then you have to pay some capital gains tax. But if you’re married, then it’s $500,000, that’s your exclusion. Realize though, that if you’re married, both of you need to have lived in the home for two years and owned the home for two years. You can’t marry someone on the day before the sale and get another $250,000, it doesn’t work – unless they’ve been living with you for two years, and they actually own the property for two years, then that could work.
JA: Right, then both of them could take it.
AC: Then both of them could take it. But here’s the change, is that they’re changing it to five years out of eight, meaning that you have to live in your home five years out of the last eight years that you look back. It’s not clear to me, Joe, what happens if you only live in the home four years. I’m assuming you don’t get any exclusion, but we don’t know what the final regulations are going to be. So I would make an assumption that you’d have to live in your home for five years out of eight in a look back period. And if you do that, you would still qualify for this exemption. Something else is at certain income levels, the exemption is phased out under the new law. Under existing law, it doesn’t matter how much income you make, you get this exclusion. And I think, I don’t have it in front of me, but I think that gain, the exclusion starts phasing out at somewhere around half a million dollars of income, something like that.
JA: For married and maybe 250 single?
AC: I think it’s closer to 400, maybe. Don’t quote me, but let’s just say your income is $150,000, don’t worry about it. You’re going to be lower.
There are only a few short weeks of 2017 left, the House and Senate have passed their respective tax bills and are now working on reconciliation. However it shakes out, tax reform is going to affect us all. How will it change your strategies for retirement account contributions and distributions, collecting Social Security, withdrawal rates, estate planning and charitable giving? Make an appointment right away to find out – it won’t cost you a dime. Visit YourMoneyYourWealth.com and click Free Assessment, call 888-994-6257 or email firstname.lastname@example.org. Learn how tax reform will affect you personally. Find out what strategies make the most sense for you in retirement. Make sure you’re making the most of your situation. There are three ways to make an appointment for your no cost, no obligation appointment: visit YourMoneyYourWealth.com and click Free Assessment, call 888-994-6257 or email email@example.com.
10:13 – Laura Adams, Money Girl Podcast: Ways to Save Money for the Holidays
JA: Alan, it’s that time of the show.
AC: It is, Joe. We’ve got Laura Adams, she has a great podcast called Money Girl, and there’s an exhaustive list here. She’s been quoted on NBC, CBS, ABC, Fox, Al-Jazeera, Bloomberg, NPR, MSN, USA Today, Wall Street Journal, should I keep on going? New York Times, U.S. News and World Report, Consumer Reports, Forbes, Money Magazine, Kiplinger, and many other fine radio shows such as Your Money, Your Wealth.
JA: Millions of listeners listen to her. We get five listeners on this show, she gets millions. (laughs) But the best part about her resume is that she has an MBA from the only university that anyone should ever go to, the University of Florida. Laura welcome to the show.
LA: Thank you so much, what a nice introduction.
JA: Hey, it’s great to have you back. We’re in December. And let’s talk about this a little bit because the holidays are coming up, and sometimes we forget about saving and we might overspend. What type of tips can we give our listeners? No one likes to be put on a budget because we got the sales going on, what should we do here?
LA: Yes. So if you are not in a good position for spending this holiday, and as you mentioned, a lot of people are not budgeting, they really have not put money aside to spend on holiday gifts. You want to make sure that you’re cutting back in other places, otherwise, you’re going to have a really bad hangover of debt after the holidays and you don’t want to start the new year that way. So what I recommend, is looking at what you can do right now. How can you save money today, this week, like immediately, in order to make your holiday go a little bit more smoothly when it comes to your finances? So what I recommend is looking at the types of expenses that you have every single month. One biggie is our cell phone plan. We’re all on our phones. We don’t want to give up our cell phones but we don’t want to pay an arm and a leg for them either. So shop it. That’s really the only way that we can save money as consumers are to look at what our options are and to shop. So look at a site like TracFone.com. This is a plan that is going to allow you to have talk, text, and data and you can stay connected for less. You don’t even have to buy a phone, you can bring your own phone with you to the plan. Look at things like auto insurance, can you save money there? Go to a site like InsuranceQuotes.com and see if you can find a plan that’s just as good, but maybe less, with another carrier. Look at things like gym memberships. Did you really use it this year? If you didn’t, go ahead and scrap it. Find another way to exercise – walking, running, swimming, if there’s anything that you can do that doesn’t cost money each month, that’s a great alternative and a great way to cut back. And it doesn’t have to be forever.Maybe you just cut back for six months or a year, enough to help you get through the holidays, and you can re-evaluate.
JA: Alan, his workout is he runs up and down his living room stairs. (laughs)
AC: (laughs) That is one of them. I actually did 100 flights in a row a couple of weeks ago.
JA: See, there ya go.
AC: I’m probably burning out my knees.
LA: That’s a great way to get some exercise. I live in a building, I’m on like the 21st floor – sometimes I walk up and down 21 floors. And it’s cheap, and boy it’s a great workout.
AC: I’ve got a great idea for Joe, instead of instead of watching his college football and basketball in the bar, go get a six-pack of Coors Light on the way home, and go home. Save lots of money. (laughs)
JA: Wow. I would. Thank you, Alan. (laughs) What are some other tips? Those are awesome. Save you a few hundred bucks. There you go. When it comes to shopping, are there some things that we can do to find better deals? To save some money on the other end?
LA: Absolutely. I love shopping online because you can really stay focused. I tend to get a little distracted if I go to a mall or go to stores, and I’ll end up buying things that I don’t need. Now you can always do that online too, but I think it’s a little easier to stay focused. So start with a list. Figure out what you want, and stick to that list. And you’re also going to get the opportunity to take advantage of some nice deals. Sometimes if you visit the site and you put some things in your shopping cart but you don’t buy, you’ll get that e-mail later on that says, “hey there’s something in your cart. Why don’t you come back and buy for 10% or 15% off?” That’s a little trick that I use a lot. And then I’ll go back once I’ve got the promotional code and buy it for less. (laughs) So sometimes a waiting a little bit can work in your favor.
JA: Oh that’s awesome because technology is so crazy. If you go on Nordstrom’s and you look for a tie. If you go on my computer, 95%, it’s just “ties here” you know? Then you can get it for a little bit cheaper, so that’s a phenomenal idea.
LA: Yeah. So there are all these tricks that we can use. And the idea is really to make a plan. If you’re not sure what your income is and your outgo is, what your expenses are, it’s very easy to overspend. So make a plan. If you don’t have a budget, maybe this is a good time to do it. Think about how you can spend next year in a way that’s going to keep you under budget. Think about all the things that we talked about, cell phone plans using a site like TracFone.com, looking at insurance, looking at all the recurring expenses that you’ve got. Cell phone, whatever it is that you’re spending on a monthly basis. That’s where you can really cut back. And even things like housing. Could you cut back on your housing? Could you downsize? Maybe take in a roommate? There are really some radical things that you can do if you want to cut back, but you don’t have to do anything radical, you can make a few small changes every month, and over a year’s worth of time, you’re going to see some substantial savings. If you do a little something each month to decrease expenses and increase your income. You can do both of those things at the same time. That’s the secret to being able to put away more money for retirement or the future. The key is – don’t start spending more when you make more.
JA: Yeah. Easier said than done. We live in Southern California, how many times, Al, have we seen people that have a million dollar income and they have nothing saved.
AC: They got nothing. And I’m still thinking about this plan. I like the idea because I will go to Costco to get some coffee and lettuce and some berries, and then walk out – $200 or $300. And then what do you got? I got a sweater, I got a video, Christmas Vacation. (laughs)
JA: Well, we got New Year’s resolutions coming up here at the end of the month, because a lot of people, they don’t take sound advice, some people are going to overspend, and then they’re going to have this hangover. What are some tips that we could give to say let’s put it in a budget? No one likes the budget, but what are some easier ways, maybe, that we could budget a little bit better and save a little bit more money?
LA: Yes, there are some really easy ways to plan, it doesn’t have to be complicated. I like the 50-30-20 rule, and what that is is, you’re going to spend 50% of your income on necessities. So these are things like your housing, food, your debt payments. You’re going to spend 30% on variable items, so things that you’ve got some ability to change on a monthly basis, so variable things. Maybe that’s dining out, clothes, some things that you have a lot more power over. 20%, put that away in savings, either in an emergency fund, or putting that away for retirement. If you think about it in a big picture sense, 50-30-20, it can be a lot more manageable. You don’t have to manage every penny of your budget. But if you can think about it in big chunks, that will help you get a handle on it, and understand the big picture of what’s happening with your finances.
JA: Would you to look at net pay, after you get your paycheck, or would you look at gross?
LA: I like to look at your net because that’s really showing what you’ve got coming in. Now, however, if you’re doing, let’s say a 401(k) at work, then you might want to look at gross, because that’s going to be coming off the top, pre-tax. So it really depends on your situation. If you’ve got a 401(k) at work that you’re contributing to, you might want to go for gross and look at it that way. Either way to tackle it is is a good plan, it’s a good place to start. If you can get up to 20% savings, man that’s just fantastic. You’ll be able to really set yourself up for a very comfortable retirement if you get started with 20% savings.
JA: Would you do that first? Would you say, I’m going to put 20% in savings, and then kind of figure it to back everything else out? What order would you look at?
LA: Yeah that’s a great way to do it. First, you want to make sure that you’ve got some emergency savings set aside. If you put money in a retirement account, that’s wonderful, but if you pull it out of the retirement account you’re going to get hit with some early withdrawal penalties. So make sure that you’ve got enough savings on hand first, so that’s where I start. Make sure we’ve got at least a few thousand dollars in savings. Ideally, you’re going to have several months worth of living expenses on hand. Once you’ve got a little bit of savings under your belt, then it’s time to begin getting really aggressive with your savings, so make sure that you’re putting away at least 10%. That’s a great goal, if you can do more, that’s fantastic. Putting away a regular amount each month in either a 401(k) at work, or an IRA, once you’ve got that going, then I like people to really get aggressive on their debt – start paying down some of these credit card debts and other things. And in some cases, you’re going to be doing that simultaneously. You’re going to be saving a little bit for retirement, and you’re going to be putting money aside to pay down those debts. So if you can do a little bit of that all at once, a little savings, a little retirement, a little bit of debt payment, you’re going to really put yourself in a great position. Cutting out that interest expense, and making sure that you’ve got plenty set aside for the future.
AC: So there are some financial planners out there that would say, start with the emergency fund, a small one, pay off the debt, then build your emergency fund, and then go to retirement savings. But would you advocate more kind of a little of each? Do you think that’s a better approach?
LA: I really do. I feel like if you don’t get started with retirement savings, even if it’s just 1%, even if it’s just $50 a month if you don’t get started, it’s hard to get the motivation to pick it up. So if you can put away even small amounts, what you’re doing is creating the habit of saving, and you’re creating the infrastructure, so that you’ve got those accounts open, you’ve got them, and you’ve got the money flowing in, even if it’s just a small amount. So the debt repayment is very, very important, and certainly, you’ve got dangerous debts, like tax liens or child support that is unpaid, or some really dangerous debt, you definitely need to tackle those first. But if we’re just talking about regular consumer debt, like credit card debt, you want to pay that down first, certainly, but also make sure you’ve got a little bit going toward the retirement at the same time. You’re going to be so glad that you did that because you can never make up that lost time if you start too late.
Your retirement savings may already be well underway – but do you know when you’ll be ready to use it? Visit the White Papers section of the Learning Center at YourMoneyYourWealth.com to download your gift from Joe and Big Al, our Retirement Readiness Guide. With little-known secrets about creating income to last a lifetime, making the most of your investing strategy in retirement, controlling your taxes and much more you’ll learn 7 plays to help you get retirement ready, despite the uncertainties we may face. Download the FREE Retirement Readiness Guide from the White Papers section of the Learning Center at YourMoneyYourWealth.com – and happy holidays from Your Money, Your Wealth!
22:09 – Laura Adams, Money Girl Podcast: Tackling Debt & to Lease or Not to Lease
JA: Welcome back to the show, the show’s called Your Money, Your Wealth. Joe Anderson here, Certified Financial Planner, Big Al Clopine, he’s a CPA. We’re talking to the Money Girl Laura Adams. Laura, do you have any suggestions or advice on what is the best way to chip away at consumer debt? The snowball effect I think is one term, an avalanche, or something like that. Is there a better way than others to take a look and to tackle the debt?
LA: Yeah, you definitely need to list them all out, and I do like to list them out in order of interest rate, so highest to lowest rate. You want to tackle the highest rate debts first because they are costing you the most. Now some people say, “well, what if I’ve got a little tiny debt, and it’s small a smaller interest rate?” And I say yeah, if it makes you feel better and that debt is really just driving you nuts, and you want to get rid of it, by all means, go for it and get that debt finished first. But for the majority of people who have a lot of debt on multiple credit cards, look at it from highest to lowest interest rate. As you chip away, you’re going to find that you’ve got more savings to put toward the next debt and the next debt. So in general, I like to look at it from highest to lowest rate.
JA: What about a mortgage? What do you think? If I’m approaching retirement let’s say, and if I have a mortgage, does it make sense for me to try to pay that off, or is it all right to have a mortgage in retirement? Ideally, I think it’d be great if we were all debt free, but in some cases, that’s just not possible. What’s your advice on home mortgages?
LA: Yeah, mortgages are one of the least dangerous debts out there, mainly because they’re fairly cheap. Interest rates are fairly low. They also come with tax advantages. If you’re able to claim the home mortgage interest deduction, that makes it even cheaper on an after-tax basis. So the mortgage is the absolute last debt to pay off. Certainly, it’s great if you can, but I don’t ever want people to prioritize that ahead of a credit card debt, or ahead of other types of debt that may be more dangerous debts in the grand scheme of things. Think about debt on kind of a ladder of high to low-interest rate, and high to low danger, and mortgages at the very bottom. So hold that off, and when you are comfortable in retirement, and you do have extra money to put aside for that, to prepay that mortgage, go ahead and do it. But don’t do it if you haven’t paid off other more dangerous debt first.
JA: Yeah, I think what we see some mistakes happen is that they’re so focused on being debt free that they forget about saving. So they refinanced to a 15-year mortgage, and they’re putting everything towards the mortgage, but they’re not saving anything for retirement. So they might have a house that’s debt free but they have no other liquid assets to live off of. So eventually they’re going to have to sell the house or refinance it and pull the money out, do a reverse mortgage or something like that.
LA: Absolutely. Don’t ever pay off the mortgage if you are not in a great financial position. You can’t eat that house, right? You need money coming in to live on for everyday expenses. So while the idea of being mortgage free sounds good, in practicality, it’s really not a bad debt to have in the grand scheme of your personal finances.
AC: So I got a question, Laura. You just did a podcast on cars – buying versus leasing, and I thought you did a really good job, maybe you could sort of summarize for our listeners?
JA: Yeah, what should I do? Should I lease or buy?
LA: Yeah. So it’s funny. I have done both. Right now, I’m actually leasing a car, because I got a really, really great deal. But for many people, it’s going to come down to what your goal is. So is your goal to pay the absolute least amount of money for a car? If that’s the case, what you want to do is find probably a used or pre-owned vehicle in good shape. You want to buy it, and then you want to pay that off and drive it for years after you pay it off. But on the other hand, if that’s not your goal, if your goal is more about convenience, and you’re somebody like me, who does not like to do maintenance on the car, you don’t even want to think about the car, getting a lease can be a pretty good deal. You do have to shop around. You do have to think about it in smart terms, because you are financing the lease of a car, just like you finance a car loan. You do have to negotiate. You have to go into that deal with a good bit of knowledge about what the value of the car is. So it depends on your goal. If you really just are looking more for convenience and lifestyle, a lease might be a good option for you. But don’t get a lease that you can’t afford – keep it affordable. Don’t go out and get some huge fancy car just because the payment seems to be a little bit lower right now. Get an affordable lease. That’s what I did. And I’ve been really happy with it.
JA: I think too, with technology changing so much. I have a year and a half, I think is when I got my last car. And I leased as well. just the upgrade of technology – it drives itself.
AC: Yeah your next car is going to drive itself. So why buy one and use it for 20 years?
JA: Yeah my old car was a ’84 Toyota Tercel. (laughs) It doesn’t have Bluetooth in that thing!
LA: Yeah, if you want to drive a new car every couple of years, you really can’t beat a lease. And this is a way to make sure you’ve got up to date safety equipment on the vehicle, and maybe you’re like a mom that’s carrying around a bunch of kids, and you want to make sure that you really have a dependable vehicle that’s safe. In that case, a lease can really work well. I find that for older people too, who just don’t like the idea of maintenance on a car, or they don’t really want to have to think about it. That can be a great option too. But if you’re young and you’re just starting out, buying a car that you pay for in full, and then keep driving it, and then send the payment that you used to make to the car loan, send that to your retirement fund, and you can really save a lot of money if you keep that car a year or two, or even three years past the date that you pay off the loan.
JA: It’s great advice, we’re talking to Laura Adams. Laura, thanks so much for joining us. Where can our listeners find you?
LA: Come to my website at LauraDAdams.com. You can also search for the Money Girl podcast, and if you’re looking to save money on cell phone plans, we talked about TracFone, you’ll find that information at TracFone.com.
JA: All right that’s Laura Adams. Hey, happy holidays. Thanks so much for coming on.
LA: Same to you. Thanks so much for having me.
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Time now for Big Al’s List: Every week, Big Al Clopine scours the media to find the best tips, do’s and don’ts, mistakes, myths and advice to improve your overall financial picture – in handy bullet-point format. This week, 8 Ways To Create Tax-Free Income
29:22 – Big Al’s List: 8 Ways to Create Tax-Free Income
AC: You like tax free income, right? I think most people do.
JA: I do. I definitely do.
AC: Hard not to like it. I’ve got a list today, eight ways to create tax-free income. Very excited about this list, it was written by yours truly. Alan Clopine, CPA, co-host of Your Money, Your Wealth. So Joe, should we hop right in?
JA: Let’s do it.
AC: The first one is Roth IRAs. And Roth IRA, if you don’t know, it’s a special kind of retirement account that you do not get a tax deduction when you put money into it as a contribution, but it grows a 100% tax-free. So you put $5,000 into a Roth IRA. And over time it grows to $20,000, and when you pull that $20,000 out, it’s a 100% tax-free. It’s tax-free forever – for you, your spouse, your kids, your grandkids, whoever ends up inheriting it if you don’t use it. So it’s a Roth IRA. Now, the current limits are $5,500 is what you can put into a Roth IRA unless you’re 50 and older. They let you do another $1,000. They call that a catch-up. So you can do $6,500. But there are income limitations, if you make too much money, Joe, you can’t actually do a Roth contribution. And I think it’s – I forget.
JA: $116,000 to $132,000 and $186,00 to $196,000.
AC: Yeah. So if you’re single, making less than $116,000, you can do the full $5,500, or $6,500. If you make more than $132,000, you can’t do any, and if you’re in between, there’s a phase-out period. And as far as a married couple, $186,000 to $196,000, something like that. So you make less than $186,000, you can do the Roth contribution. If you are under those levels, it’s a no-brainer. Make the contribution. And if your spouse is working, or not working, it doesn’t matter, your spouse can use your income, or you can use their income if you’re not working. So the two of you can do $5,500 each or $6,500 each if you’re 50 and older, as long as one of you is working and you’re under those income levels.
JA: Right, and I think why you’re saying that’s a no-brainer is because it doesn’t matter how old you are, you have access to those dollars day one. It’s FIFO tax treatment, first in first out, because it’s an after-tax contribution. So you put in your $6,500, $5,500, whatever it is, and then the next day you’re like, “oh man, I need it.” Well, take the money out. There are no taxes, there are no penalties. No matter what your age is, you will always have access to the contribution. Now the earnings need to season in the Roth for five years or till you turn 59 and a half, whichever is longer. So if I’m 65 years old, never started a Roth IRA before, I have always access to the money that I put in. But if it grows to a certain dollar level, those dollars need to season until I’m age 70 to pull out. That’s the same as if I’m 40 though. Now I’m 40, and I put in my $5,500, next year I need that money for a down payment on something, I have access to the $5,500, even though I’m not 59 and a half.
AC: Right. And a lot of people don’t realize. The $5,500 grew to $7,000, you can’t take the extra $1,500 out, but you can always take the original $5,500. And there are actually some financial planners that will say, heck, maybe this is a kind of another way to fund colleges. Because you put money in, and even though it’s for a retirement account, you can always take your contributions out, and then, of course, you have to leave the growth in there. But let’s say you put – just to do the easy math – you put $5,000 in for 10 years, so you got $50,000. Now it’s worth $80,000. And now your son or daughter is going to college. We wouldn’t necessarily have you taking money out of your Roth if you have other ways to fund college, but you could. You could take $50,000 out of the Roth and pay for anything you want to, including college, without a penalty, without taxes.
JA: Exactly. So there’s full utilization of the contributions. Conversions are a little bit different, and that’s probably on your list.
AC: Yeah, conversions are a little bit different. Now you already have an IRA or a 401(k), and you got a tax deduction already. So this is the difference. Now when you convert it to a Roth, you have to pay tax on it, because you got a tax deduction in the first place. And a conversion, anyone can do a conversion. Contrary to popular belief, you don’t have to be 59 and a half, you can do this at age 20 if you have money to convert.
JA: If you have an IRA or retirement accounts.
AC: Exactly, you can do this at age 95. If you’re over 70 and a half, it doesn’t matter. You don’t have to be working to do a Roth contribution, you have to be working. To do a conversion, taking money out of an IRA, 401(k), converting it to Roth. You don’t have to be working, and there’s no limit as to how much you want to convert. It’s not the $5,500, it’s any amount you want. So now you got to get a little bit smarter. You have to look at your tax return to figure out what tax bracket you’re in. That’s going to guide you a little bit on maybe how much you should be converting. For example, let’s say you’re in the 15% tax bracket, you’re a married couple, your taxable income is 50 grand. And let’s say you think you’re always going to be in the 15% bracket. Well, you can convert $25,000 and still stay in the 15% bracket, that might be a really good idea for you. You probably don’t want to convert more, because then you’d pay more tax than you would otherwise in retirement.
JA: Now the accessibility of those dollars on conversions is that there’s a five-year clock to take the dollar from the conversion if you’re under 59 and a half. So there are two rules with conversions on the accessibility of the money. So I’m 40 years old, I do a Roth IRA conversion. I have to wait five years to have access to those converted dollars, so I converted $20,000. So I’m 40. At 45, I have access to that $20,000 that I converted. I can’t touch any of the earnings until I turn 59 and a half. So there’s a five-year clock if you’re under 59 and a half that you cannot touch any of the converted dollars until five years. Then you cannot touch any of the growth dollars until you turn 59 and a half. Once you are over 59 and a half and you do a conversion, you have access to those dollars right away that you converted. But then again, if you don’t have any other Roth IRAs established, you have to wait five years until you get the earnings.
AC: Yeah. And what people don’t realize is the five-year clock, as long as you’re over 59 and a half, it’s satisfied with the very first Roth that you ever did. So if you did one when you were 30, put a dollar in, that’s all you put in it. And then a 59 and a half, or 60, whenever, you do a gigantic Roth conversion – you have access to the entire amount any time you want.
JA: It’s the first dollar that hits the first Roth IRA starts your five-year clock. So again, start a Roth IRA before the end of the year. If you don’t qualify for a contribution, then do a small conversion.
AC: Even if you’re in a high tax bracket, just to get the five-year clock started.
JA: So then you have that five-year clock started, that five-year clock starts January 1st of 2017. Another end of year tax tip, some things that you might want to consider over the next month.
AC: Number two is municipal interest. Municipal bonds, which are state, let’s say California state bonds, or maybe your city or county has bonds. Those are tax-free. If it’s a bond that’s within your state, not only is it (not) taxable on the federal return, it’s (not) taxable on the state. But you could live in California and get a Minnesota bond. Maybe you want to do that, because you’re from Minnesota, Joe. (laughs) In that case, it would be federal tax-free, but you would still pay tax in California because you’re a California resident. So if you want to avoid all taxation, you would buy bonds in the state that you live in.
JA: Yeah there’s a couple of different types: general obligation and revenue bonds. Revenue bonds are backed by the particular project. Let’s say there’s a tram or something they’re building, then you’re looking at getting paid back on that bond via the revenue of whatever project. Or general obligation is backed by the issuer. So the municipality is guaranteeing that.
AC: Which would you say is safer? (laughs) What did you say?? I would say in general, general obligation bonds.
JA: But not in California potentially! (laughs)
AC: (laughs) It depends on the issuer. But I’m just going to say, in general, because the general obligation is backed by whoever issues it, whereas the revenue bond would be backed by the project itself.
JA: (laughs) Got it. Yes. So just look under the hood a little bit to figure out what is appropriate for your overall situation.
Check out Your Money, Your Wealth and Pure Financial Advisors on YouTube for educational videos on the proposed tax reform and avoiding estate planning mistakes, a webcast on Investing 101, and the latest episode of the Your Money Your Wealth TV show, Planned Giving: Strategies for Creating Charitable Tax Deductions. Brush up on your personal financial literacy with hundreds of educational videos to get you up to speed on just about every money topic that affects you. Just search YouTube for Pure Financial Advisors and Your Money, Your Wealth and start binge-watching with purpose! And check back regularly, we’re always adding new videos.
38:57 – Big Al’s List: 8 Ways to Create Tax-Free Income (by Big Al!)
JA: Back to your list, Big Al.
AC: Yeah we’re talking eight ways to create tax-free income. We left off, Joe, at Roth IRAs and municipal interest. The third one is tax loss harvesting, which is this: if you sell a stock or even a piece of real estate at a gain, that’s a capital gain, if you hold it for at least a year, it’s a long-term capital gain, you get preferential tax treatment. But if you also sell a stock at a loss, they’ll loss nets with the gain, and if you have let’s say a $10,000 gain and you sell another position with a $10,000 loss, those two net together and you pay no tax whatsoever. Interestingly enough, you can use a stock loss even on a real estate gain. $50,000 real estate gain, you’ve got $25,000 stock loss, as long as you sell those stocks – you have to sell those stocks before December 31st to create that loss – those two will net together. And for people that really pay attention to this, the stock market is volatile, goes up and down throughout the year. And any time the stock, your position, could be a stock, could be a mutual fund, could be an ETF, doesn’t really matter, any time it goes down enough where that loss is meaningful to you, go ahead and sell it to create that loss. Make sure you reinvest in something similar, so you’re still invested in the market. But then that loss will be available to net against any gains. And if you don’t have any gains, the IRS says you can take $3,000 loss against ordinary income, and all the rest of the losses carry over. And if you have gains next year, you can use them against next year’s gains.
JA: I think that’s the biggest misconception: if I have a $50,000 loss, it’s going to take me quite a few years to use it. Well no, there are two different taxes, you got capital gains tax, and ordinary income tax, that $3,000 is against ordinary income. And then you can continue to carry over those capital losses versus capital gains until you use them all up.
AC: Number four is tax gain harvesting. If you’re in a low tax bracket…
JA: What’s this list, the eight things that Joe and Al talk about every week? (laughs)
AC: Yeah, well, first three out of four… But actually, we did talk about number five already too. (laughs) Anyway, tax gain harvesting is, well, let’s say you’re in a low tax bracket.
JA: These are all new ideas! (laughs)
AC: Brand new. I haven’t thought of this for an hour. (laughs) So, you’re a low tax bracket, defined as a married couple. Your taxable income is $75,000 or less. And if you’re single, it’s about $37,000 or less, roughly. So that’s a low tax bracket, that’s a 15% tax bracket. So you can sell enough gains in your stocks, up to those levels, and pay no taxes. I think a lot of people don’t realize this – when you sell a stock at a gain, and you’re in the 15% bracket, you pay no tax, no federal tax, you will pay a little bit of state tax. Now if you sell a lot of gain, the part that gets you up to $75,000 is tax-free. Everything else would be taxed at 15%, or 20%, depending on your bracket.
JA: Tax gain harvesting.
AC: Number five. Actually, we haven’t done this one. Renting a room in your house. You know that rule?
JA: (laughs) I need to know it. Ruthie.
AC: (laughs) You’re always doing that. Nobody pays rent but you got a lotta tenants.
JA: Right. (laughs) Squatters.
AC: But if you were to have someone that paid the rent, like let’s say you do AirBnB. You can do it 14 days or less per year, and that income is not taxable.
JA: It doesn’t matter? How about if I charge $100,000 a day?
AC: If you can get it, it’s tax-free.
JA: No way! It’s not a dollar figure?! Is it just 14 days? That’s cool. How about if someone’s stuff is in my house all year, but only sleeps there 14 days?
AC: I don’t care about the stuff, if they’re paying you a payment for staying, like a nightly rate, and it’s 14 days or less, that’s tax-free. So a little idea for you, Joe. (laughs)
JA: I don’t get paid anyway, so it doesn’t matter. I’m gonna start charging my mom, though.
AC: But if you wanted to be like Airbnb. Have your mom sign up your house on AirBnB. (laughs) “Mom I’ll give you a discount rate as long as you’re here less than 14 days.” (laughs)
JA: She won’t buy that. She needs to stay two months at least.
AC: Well just charge for 14 days. And then the rest is free. And then it’s little tax-free income. Then you’ll have to gift it right back to her. (laughs)
JA: Exactly I’m going to have to gift it to her to have it get back to me. (laughs)
AC: (laughs) Okay here’s another one. Selling your home. 121 exclusion.
JA: Oh yeah, that’s a good one. We talked about that already. (laughs)
AC: That’s what I said, four out of eight we’ve already talked about. (laughs) So if you live in your home two out of the last five years, you live and own your home, you get an exclusion of $250,000. And if you’re married, it’s $500,000. So when you sell the home, you basically look back five years, as long as you’ve lived in that home, and owned it two out of the five years, you qualify for this exclusion, which means the first $250,000, or married, $500,000 of your gain is tax-free. 100% tax-free, which is actually probably – besides a Roth IRA – probably the single best tax gift the IRS has given us.
JA: Or life insurance – if you die then the beneficiary gets all that money tax free too, that’s pretty good.
AC: True. That’s good. Although you don’t get to deduct the life insurance premiums, so it should sort of even out. Should be a zero-sum game.
JA: No, well there’s leverage.
AC: Leverage? Of life insurance?
JA: Yeah. The whole reason why you buy life insurance is because of leverage! I’m paying a premium of let’s say $1,000 a year for a million dollar policy. And I die one premium in. The beneficiary would get a million dollars tax-free.
AC: True. I guess when it’s a zero-sum game, I mean the other hundred people that didn’t die lost a thousand bucks. That’s what I’m saying. So anyway, we’re just having a discussion, don’t listen. Makes no difference. (laughs) But I will say this, under the new House and Senate bill, they want to change this to five out of eight years, so in other words, now you’ve got to look back eight years, and if you lived there at least five of those eight years, then you get the exclusion. So that would be a pretty different rule than two out of five.
JA: So I bought my house two years ago. So I’m going to have to wait another six years to sell it?
AC: No, just three. Because even if you owned it only five years, as long as it’s five years. Five out of eight. So you only owned it five but you lived in it and owned it for five.
JA: So I live in at five and then I rent it out for three, I still sell and get the 121.
AC: Yeah that’s right. Now you’re going to get married someday. I’m pretty sure.
JA: She might be out there. Still looking. (laughs)
AC: Your new spouse, she’s going to have to live and own it for five years. So you better get busy, if you ever want to sell that home. If you want the full exclusion. (laughs)
JA: That’s the total reason why I’m not getting married. Can’t do it, babe. 121 exclusion. Never heard of it? Look it up. It’s a big deal. (laughs)
AC: When you get married, ask her, have you used your exclusion yet in the last two years, or next year, maybe five years.
JA: That goes over well on dinner dates. (laughs)
AC: Don’t worry about it. Big Al will help. (laughs) OK number seven, we’re almost done with this list, rental property depreciation. When you buy property, IRS says you have to split it between land and building, but the building part can be depreciated over time. Residential is 27 and a half years, a commercial is 39 years, which means even though you hope or even expect, in some cases, your property to go up in value, the IRS lets you pretend it’ll become worthless after 27 and a half years or 39 years. You get to write off a piece of that every single year. So some of your rental income will be tax-free, because of depreciation.
JA: But then you have to recapture the depreciation that you took when you sold it.
AC: If you sell. If you hold the property forever, and you die, then your heirs get a step up in basis and no one pays the tax, how about that. And number eight, Joe, is I’m sure one of your favorites, setting up a health savings account. (laughs)
JA: It is. (laughs)
AC: So this is for people that have a high deductible health insurance plan that are not enrolled in Medicare. So if you’re enrolled in Medicare, you can’t do this
JA: You can’t have an HSA after 65.
AC: But, if you’re in a high deductible health insurance plan, then as a single person, you could put $3,400 into it for 2017, married is $6,750. And then there’s a $1,000 catch up if you’re 55 and older. And you can fund it all the way until April 15th or the following year. So it’s still available. Now this will hopefully grow, you invest in how you want to grow. But then as long as you use those dollars for medical expenses, and there’s a whole list of what counts and what doesn’t count. As long as you use it for qualifying medical expenses, then it’s tax-free.
JA: There you go. Eight Ways to create tax-free income by Big Al Clopine. We’re going to blog that, we’ll get that on the website. (laughs)
AC: Pretty proud of it. (laughs)
So there you have it, eight things Joe and Al talk about every week. Now if you have a burning money question about something the fellas haven’t covered today, just call 888-994-6257 for your chance to talk to Joe and Big Al and have your question answered live during Your Money Your Wealth. That number again is 888-994-6257. 888-994-6257. Of course, Joe and Big Al are always willing to answer your email questions – firstname.lastname@example.org, or send them directly to email@example.com, or firstname.lastname@example.org Now, speaking of things Joe and Al talk about all the time, here’s areal-life tax loss harvesting situation.
49:05 – Email – Divorcing and Selling Primary Residence. Can Cap Losses Cancel Cap Gains?
JA: I got a question, or email for you, Big Al. “I am getting divorced, and we are selling our primary residence. After the $500,000 exemption, I estimate we will have to pay tax on about $300,000 worth of capital gains from the sale. However, I am carrying forward approximately $400,000 in loss from trading stocks. A combination of short and long-term losses.” Hence that’s why they’re getting a divorce. (laughs)
AC: (laughs) That’s your first clue.
JA: Do not trade stocks. You’ll blow yourself up.
AC: You lost $400,000. It was probably her money. (laughs)
JA: “Hey honey, we need a glass of wine.” (laughs) “Can I use those losses to cancel out the taxable gain on the sale of the house?”
AC: Easy question to answer. First of all, I’m sorry for your divorce situation, but the answer is yes, you can. And a lot of people don’t realize that. You can take stock losses, and net those against real estate losses because they fall into a bucket called capital gains, real estate gains. Real estate gains are capital gains, stock gains are capital gains, and/or losses if you have losses in them. So the answer is yes. And, guess what, it doesn’t matter whether they’re short term or long term, you can net a short-term against a long-term, and vice versa. And I know some of you don’t think it’s true, but it is true. The way it works, if you look at your tax form, is long-term gains get net with cap long-term losses first, short-term gains get net with short-term losses first. But if there’s still extra short-term gains and long-term carry forward losses or vice versa, those net together before you have to pay tax, and in this case, there will be no tax to pay.
JA: So that’s all capital assets.
JA: If I have collectibles, because of collectibles, let’s say I have gold. Because that’s taxed not at the capital gains rate of 15%, it’s 25%.
AC: It’s taxed at a 28% tax rate, yeah. Collectibles and the answer is yes, you can take stock losses against your collectibles gain, which is actually a really important strategy if you have gold or coins or something like that, art. And you’ve got these gains, and you would otherwise pay 28% taxes on it. But if you also have some stock losses that you were just sitting on, you might want to sell those stocks or mutual funds, create the losses, reinvest the money, so you’re still invested. But now those losses will net with your collectibles gain. So yeah, it’s a good answer. Maybe with that answer, maybe you’ll patch up…
JA: “Hey honey! I did this on purpose! Because I knew we would have this huge gain.” (laughs)
AC: “I knew we’re going to sell anyway because we talked about it.” (laughs)
JA: Right now too, we’re approaching the end of the year, and you should be doing this all year long. But tax loss harvesting is something that firms only do at the end of the year, and what that means is that you take a look at any holdings that you currently have within your portfolio that is outside of a retirement account, and if there are losses, you might want to sell those stocks at gains. So tax loss harvesting is that you sell it and like Al just mentioned, you buy something similar. You don’t sell and go into cash. So end of year tax strategy is tax loss harvesting, which might makes sense for all of you, even if you’re not selling the house, because then those losses will carry over for the rest of your life, or if you don’t have any gains the following year, you’ll still be able to write off $3,000 of that loss against ordinary income. So you can still save a couple of bucks.
AC: Yeah, and something else that actually could be gigantic to between now and year-end. So we’re talking one month, the month of December is this: in the Senate tax bill, they are going to start making you, when you sell stocks or mutual funds, if you’re not using average cost, they’re going to make you use the first in first out method. Which means, imagine you bought SDG&E’s stock, a little bit each year, for the last 30 years. And so the stuff you bought recently if you sold it, there’s not much gain. But the stuff you bought 30 years ago because it’s gone way up, there’s a ton of gain. If you sell half of that, let’s say, this year, you can designate the more recent purchases, and you have a lot less gain. If you sell half of it next year, under the Senate tax bill, you have to use the first in first out – you have to sell the oldest stuff. So your gain will be much, much bigger. So here’s the strategy: if you want to take some money out of your portfolio anyway, you really might want to do that this year, before December 31st. So you can pick and choose what shares you actually sell.
JA: Right. Or even just looking at, for those of you that have concentrated positions just like that, that you purchased the stock over several years, so you have large embedded gains on some stocks, but on the same stock, on some purchases, you have large embedded gains. But other purchases you don’t, because you just purchased it. So before the end of the year, you might want to take a look and say, “let’s look at blocks of shares that I currently own. What is the bases on each of these different blocks, and at some point I’m going to have to start creating income from this.” And right now the capital gain rule is that if you’re in the 15% tax bracket or less, there is no capital gains. So you could sell the stock and buy it back to the same day, and not pay any tax, so you’re just increasing your basis. So some of those ones that have large embedded gains, if you’re in a low enough tax bracket, it might make sense to sell those issues, and buy them back at a higher price. Then you take the gain, but if you are in a low tax bracket, you’re not going to pay a lot of tax. So you’re just increasing your overall basis within the overall portfolio if you do have concentrated positions.
AC: Yeah. So to give an example, let’s say you’re single, and by the time you look at your income minus all your deductions, your taxable income is zero. Just as an example. If you have stock gains, you can accommodate about $37,000 of gains. In other words, you sell enough stock to create gains of $37,000, and you stay in the 15% bracket, and your capital gain rate is zero. So you pay no tax. Realize, you will pay a little bit of tax for the state of California, but it’s pretty minimal. And then you can buy back the stock. It’s not like loss harvesting, the wash sales rule is when it’s a gain, you can recognize the gain and buy back the stock immediately if you want to. And what you’ve done now, is now you have a higher tax basis, so that when you do eventually want to sell out of that stock, you’ll have less gain.
JA: Yeah you have less gain, and less tax, depending on what your income needs are.
AC: I think that’s one of the most underutilized strategies available, hardly anyone ever talks about it, and maybe it’s because of a lot of talk shows, they focus on the ultra-wealthy, or the upper middle class, or whatever. But even folks that have a lot of money, but if they have low income, because maybe they’re not 70 and a half yet, so they don’t have to take a required minimum distribution, and maybe they are deferring their Social Security, and they don’t have a pension, and they can live off their savings for a while. If that’s you, gosh, you’re in a low bracket. You’ve got some things you can do. You can either harvest gains and pay no taxes, or you can do some Roth conversions in very low tax brackets. And those are the things you have to do before December 31st. So time is of the essence on that.
JA: Because, most of the time, when things happen, it’s already too late. How many e-mails and calls do we get, “well, I’m turning 70 and a half this year. How do I reduce my required minimum distribution?”
AC: Yeah, it’s like, “Gosh, I wish we would have talked 10 years ago. Or even two years ago.”
JA: Exactly. But if it’s out of sight out of mind, they don’t think about it. Didn’t really care about it until it’s right here, now. So now what do I do?
AC: Well and I think this whole required minimum distribution, it’s relatively new because IRAs and 401(k)s are relatively new. So it hasn’t been around a lot. So our parents’ generation, they didn’t see their parents having problems with these higher tax brackets, so they never worried about it. Now the baby boomers have started watching their parents, complaining about their tax brackets. And so if you’re paying attention and savvier, if you’re in your 60s and retired, and if your income is low because you haven’t started receiving your required minimum distributions, maybe you should be doing the Roth conversions. Because once it’s in a Roth IRA, any time you pull money out of that it’s tax-free, as well as, you don’t even have to take a required distribution.
JA: Right. You don’t have to take the RMD out of the Roth so it reduces the RMD in your retirement account because you have less money in the retirement account. It’s now in the Roth. Alright, hey, that’s it for us, hopefully, you enjoyed the show. Go to our website, YourMoneyYourWealth.com. We’ll see you again next week. For Big Al Clopine, I’m Joe Anderson. Show’s called Your Money, Your Wealth.
So, to recap today’s show: Cutting back on your monthly expenses like a gym membership, insurance, and cell phone plans are a great way to save up some money for the holidays, and paying off debt while you put money away is a great way to save up some money for retirement. Joe and Al talk about tax loss and gain harvesting, Roth IRAs, selling your house and muni bonds a lot, but that’s because they’re a great source of tax-free income – and that’s important in retirement too. And renting out a room in your house for 14 days a year may offer tax-free income, but think first before you charge your Mom to stay with you over Christmas.
Special thanks to our guest, the Money Girl Laura Adams. For more money saving tips and to check out the Money Girl podcast, visit LauraDAdams.com.
Subscribe to this podcast at YourMoneyYourWealth.com, through your favorite podcatcher or on iTunes, where you can also check out our ratings and reviews. And remember, if you have a burning money question for Joe and Big Al to answer on Your Money, Your Wealth, just email email@example.com, or call 888-994-6257! Listen next week for more Your Money, Your Wealth, presented by Pure Financial Advisors. For your free financial assessment, visit PureFinancial.com
Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.