thank you for joining us here today i stopped my crisis with vivian gas but i'm your host vivian das for and today i have with me had rehearsed of harry h thank you for joining me today and to educate my viewers here on what is going on now and in the future with affordable care act harry please tell me what the elections coming up for a new president in a mere matter of five maybe six months tell me how do you see the future of the fordable care act depending upon who our next president will be democrat republican what is the outlook well hopefully the outlook has to be positive the campaign the platform that the our republican candidate is running is that currently it's not working and people are in trouble and i would as an agent i would certainly agree with that i would agree that it's we are we're having difficult times so he's essentially stating that he's going to revamp exactly what that means i don't know but i do know what we currently have is not thousand three hundred million dollars to implement is not working how do you mean by that what i'm hearing from the business owner is help we're being devoured i paid three thousand dollars a month last last year now the insurance carrier once forty five hundred dollars a month boy that's a thirty percent increase i can't that's that's unconscionable and so that's what i mean the small business that the ada way was calculated is really really adverse to them and put some of the disadvantage and i understand the rationale is that quote older people cost the insurance carrier more money so these are a couple of examples of situations that are not working as well as they should be i need to ask what exactly does age reading and insurance from what health insurance mean how does that help people or hurt people a lot of people don't understand what it was prior and what it is currently especially in the aspect of age rating great question how does that change things how we changed is essentially we used to use what's called a median rate so if you have someone that's fifty five and someone that's fifty in one someone's it's thirty and someone that's twenty five you have a median rate let's say of age forty today you don't have that the surgery your old is rated as a certain year old to forty it's a forty year old and the sixty year old is a sixty year old so everyone's paying their own rating and what i stated previously is that someone that's older is paying considerably more and it's if you take a look at the rates for example  proverbial sixty year old today is probably paying nine hundred to twelve hundred dollars a month for health insurance so when a thirty year old say well that's only fair why should they be penalized if someone is older if you want to look at the shoe on the other side of this or the other side of the year old is probably saying that but the thirty year old to sing while i'm paying too much also so everyone's everything is relative if the thirty year old is paying five hundred or six hundred dollars a month they're not happy with studies  are now i understand that about forty five percent of the workforce is employed by the small business owner isn't that how your clientele is the small business owner and event how many employees do you see that the average client of yours has a small business owners that you work with i work with small business owners commonly called mom and pops generally speaking to have less than ten employees in many cases they have less than five from ploys and it becomes very very important  them to close someone has three or four employees the employer wants to make sure that they have health insurance they may have a family to me have cereal for children or more and it's very important for them to make sure that that they're covered now is this to me ask you under the affordable it more if expensive or is it less expensive for the typical family of four or five and the four used to be you know the head household spouse and children then that's the card is the one child or five children but now isn't it explain this to me and everyone else i just want to go back to a question you just mentioned a moment ago used to be for children now you pay for up to three children so if you have four children you're going to pay for the first three and that's going to really really put a burden on it so yes the affordable care act the affordable care act was at the simplest level design to make sure that everyone that someone was uninsured is now insured because it is how do you ensure make sure that happens because if most people are employed by a small business on at least half the population on the average and they're making it more difficult for the small business owners to afford health insurance isn't there another downside to it that you that's what most the small business owners will tell you the public in this verse is a democrat says that's politically right and well that's what the republicans are absolutely stating and then they would they're saying that it's very very forceful and because that's what they're saying it's the system is broken and that's why i keep saying it's not working and it's not working well that's a republican candidate without getting too political i would democratic candidate this essentially somewhat happy with done affordable care act if you will i'm not sure what her position will be or platform at this point is stated that she's essentially going to keep it essentially the same there may be some some minor changes but she hasn't verbalized what those well those techniques like what those tweaks may be because of course one would hope a relatively new program would make adjustments to account for the big complaint so what would you find is the majority forms that weren't there before a business owner has to have a payroll has to have a new jersey a w or thirty the business owner has to show ownership which is a k one so they've made it much more cumbersome so what i hear from a business owner so then my question is do you see from all the clients you've had for many years that it actually hinders them to hire more people or is that the way it is is it easier for them to hire more people and put them up on payroll and of course health insurance or do you see them keeping to part timers to make if they don't have to have those employees full time to provide them with health insurance i can say i see a lot more and i want to give you one example because i see a lot more of employees being pa time people that the average american is w two not business owners are trying to find gainful employment doesn't that hurt them so they tell the employee just for example you can work monday to serve so you don't have to work on friday that makes him a part time employee depending on the was so now they don't have to offer health insurance and i can give you a couple of real life examples where it's really really hurt and one particular example the individual said but i've been with you for seventeen years and i'm just changing the part time and all of a sudden it's comes down to affordability and so yes in that particular situation and these are the employers stated when when the situation gets better and the cash flow improves on make you full time again but in the interim now the person has to pay for their own health insurance the person has to have health insurance because they have preexisting conditions and so my question to you would be have you seen the affordable care act or someone's a since january or last november and all of a sudden between saying maybe in june they could have been saying wait a second my offsets changed the government's not helping me as much as they did last month and i have no idea why have you heard th increase once a year many cases it's anniversary which calendar year or it could be a fiscal year july first or depending on the anniversary generally speaking it it only increases once a year however in reality it in many cases it increases much more than that so if someone has an h change for example and moves to what i call the box over so they were forty nine and now the fifty random with bracket where you live in new jersey for example we have six zones so if someone their coverage well it dictates to cost certainly residing in this great state of new jersey and new cannot tell you that living in new jersey is an expensive  if you cross the bridge for to pennsylvania for example rates statewide in pennsylvania are by percentage wise or at least about fifteen percent less expensive as a or now it doesn't sort of new york if you take new york the metro new york area which consists consists of the five boroughs westchester rockland that's quite expensive as well if you go to some of the more upstate counties again the demographics do change so if you take the twenty one counties in new is mercer county and this vicinity how do we fare here right here versus other parts of new jersey for costs for health insurance relatively high relatively high mercer county for the most into your saws and counties you can see at this price disparity you know i ask you this is someone getting more of a benefit from working with you as a broker member thirty five years experience because obviously i have people coming today all the time and what i do and say hey do you know somebody who's great and does this why does someone need a broker and to you know rescue them from an emergency how does that help me i've always wanted to give a good answer when someone asked me to refer them to someone that's a great question  claims overturned if someone's deny coverage for a reason you can get that overturned we will put in the peel that you know yes it helps i can tell you that every claim gets paid but we have a fairly fairly good we do we put an appeal to  for a particular person and they coded as a different procedure so you know i'm you know the decor to definition person had a operation on the right leg but unfortunately it did on the left like so i guess not real life  all of which has happened but but but back to the question at hand yes it's a broker really really advocates and we pay a portion roll to the consumer and  carries a finally recognize that and see our role as being extremely important so my next question i have to ask this is about the cost and of course is it really the affordable care act or the un affordable care act especially how  comes to the upcoming whoever is going to be president so my next question is going to be what do you see the future being as we wrap up our time together between who is coming up next and let me know it is what happens if the next president decides to overturn the affordable care act what do you foresee will be the next town for health insurance for us all well hopefully it'll be it will be more fordable the platform that a republican candidate is running on is basically stating that he is going to overhaul the the affordable care act because it isn't working what do i see for the future i really can't see hopefully cause a school ating much higher than they are right now so i really hope that they will revamp the system and excuse me and make it much more affordable for the small business owner so that you see the future if we end up having a republican president next do you see the v a vamping taking place within what period of time one year three years how long do you think that will take place i wish i could well be the next term if they have another term or will that take that long that's a very good question i wish i had a crystal ball but in my opinion no probably take the better part of about two years two years to see any significant change in my opinion and so then we have pretty much the same as we've had with the i get asked this one as a broker can you help save money yes i can that's all i want to know you're going to hear of anyone who reaches out to you save money because the biggest complaint you know that comes out of a small business owners  is salaries and health insurance that's correct where the second loan like to not have health insurance try to try to be hospitalized for a few days and not have health insurance share with me one thirty second tragedy that you can h overturn what we can take a look at is essentially taking a look at someone's policy making it more affordable perhaps adding or deductible adding a co payment taking a look by the new jersey work environment how welcome back to start my crisis with vivian gaspar i'm your host vivian gaspar and here with me today is brian cody certified financial planner in new jersey as well as a retirement planning specialist he is a former u s nuclear engineer and therefore the smartest and the highest i q financial planner anyone can ever have welcome here today brian and thank you for joining me to educate my viewers on what i deem to be one of the most common mistakes i've seen as a specialist helping people with foreclosure hardship since two thousand and eight people make a horrible mistake taking their retirement assets out to save themselves in appropriately so i'd love for you to explain to my audience how do you do that appropriately so let's say someone is in a rears with their mortgage and they think to themselves i don't know where else to get money from let me take a look at my retirement account what you would you say to that person right usually when somebody comes into my office and they have that type of a question the question might be reworded a little bit th road just like to me a favor tommy should i do it or should i not do it and my answer to them as do what the right what is that they're looking to accomplish what is that they're looking to accomplish should i take money out of my retirement account and order to have that money pay off my debt that i owe it's an rears on my mortgage and i'm afraid of getting kicked out of my house so if they ask me that question then i say to them well truthfully i can't give you the answer alone just just yes or no what i have to do is i have to tell you the pros and the cons on both sides of it and the pros of paying a mortgage off to keep it fresh is that you're making a nice home for your family and a lot of these people will have children they want to have stability because when you're a young adolescent there are many things going on in your life and one thing you don't want to do is to have the challenge of having to move from one house to another and that stigmatism the michael along with it so that's the first pro of actually paying off the mortgage but then the cons come in and there's a lot of cons of so say with paying off the mortgage with a retirement plan asset let me please clarify something with you when you say off pay off the mortgage you need to rescue someone from four cushion not pay off the entire balance to be mortgage free you're right i'm sorry yes i do i just want to make sure we're clarifying that for everyone right i would like to make sure we mean rescuing a foreclosure not just to pay off and be completely mortgage free that's right we're talking about rescuing the mortgage paying off that arrears amount of debt and making sure that the loan is current the challenge with that is is that you're creating a tax consequence that is going to affect you for your tax return for that year and if you're under fifty nine and a half and this is a qualified for one k plan traditional plan or a traditional ira plan you're going to find out that there's also since you're under fifty nine and have a ten percent penalty attached to the patrol ten percent can be quite substantial when you're adding it to the taxes you're paying it can be onerous so if you don't want to know the dollar amount we talk about is a lot of people i encounter who have the mortgage foreclosures the idea with their average four time an account is about one hundred thousand dollars and i have seen mortgage companies tell people to go ahead and liquidate their retirement accounts to get their mortgage current so they can keep their home but what does it look like in an average one hundred thousand dollars situation of a retirement account that's let's say someone's only forty five or fifty and they're liquidating and that's a pretty round number to work with what was that translate to so if the person was told liquidate your full one hundred thousand of those are an account approximately i'm not a tax professional they'd have to talk with their tax professionals about that however it's very traditional that that's the penalty that's incurred so you'd have a huge reduction in what you thought was one hundred thousand dollars portfolio and it is one hundred thousand dollars portfolio if it was the kind that i think you know that's exactly what happened a major mortgage company told them to do it and they did it because they were so afraid of being homeless with their four kids right and that is the sad part is to not have the homes that your children are used to but they also have to think about how are they going to plan for the retirement future and not only did they get a punch in the show say a black guy from this financial move today seeing one hundred thousand dollars go down to sixty but they've also greatly reduced their chances of having retirement success because the money in that qualified retirement plan is tax deferred they don't pay any money on taxes to will they pull it out so this family was in their forty when this happened because it was a joint situation and their tax penalty not even counting the temper some portion of early withdrawal but i do remember they came back to me and told me that they were ended up owing the i r s sixty three thousand dollars and this actually happened because i've been a mortgage modification specialist since two thousand and eight and i actually encountered this failing two thousand and ten i heard from them actually last year two thousand and fifteen and they still unable to pay that sixty two thousand dollars back to iraq because each year they're not paying that full there's additional penalties and interest from the i r s right so that's why i really want people to know if they do have retirement assets and they are in foreclosure or another very severe situation what is it that would be a more intelligent way to access those monies what would you recommend is a good alternative borrowing from the president great leading questions i love it yes absolutely it was a great handoff to me and i appreciate that  you mentioned it loans are available only on for one k come plans so if the person has assets at their employer even if they only started working with the employer recently and it's a small portfolio but they have an ira account somewhere else they can roll the ira assets into their four a one k of account at their employer and you're allowed to take fifty percent of the assets within your four one k plan up to fifty thousand so you can't take more than fifty thousand but and you can pay it back a thousand dollars a month probably over five years in the be paid back the best thing about taking a loan from your own for one k at the interest rates nowadays are usually between four and a half to five percent very reasonable because it's your own money that's a benefit right there's a unique characteristic and that interest rate you're not losing it all but it is interesting because you pay the interest with after tax money and then our partner uncle sam gets a ta again when we pull that money out of the qualified plan however even with that what i call double taxation penalty for when you when you're paying interest on your own for one k it's still a great advantage to have that money to pay for this  situation of course you want to make sure that you've corrected your financial situation that created this whole problem before you take out the loan because heaven forbid you wind up not being able to pay back the loan they considered a clear withdraw from your four one k and you're stuck with that ten percent penalty and taxes apply there is an alternative though and sort of this clear out liquidation to begin with yes absolutely what please tell me what is the difference between a four one k and a roth ira in this type of a hardship money access situation well a roth ira instead of a four a one k a traditional four a one k or a traditional ira is unique because the money going into it is all post tax you did not get that wonderful tax deduction when it went in but the reward for that is if you keep your a fire a for more than five years and you're over fifty nine and a half you could to take the money out tax free down the road so it's a it's a very nice program specifically well suited for people that are younger and have lots of years for that money to compound you get a great reward for that but i'm wondering are you wondering that are you asking that some of your clients might be looking at the r twenty six thousand dollars in a rears but that's it they haven't paid their mortgage since january right now we're in june so but it's not the end of the month yet so as you know the mortgage month goes till the end so even if your payments due june first you actually have a thirty day grace period or twenty nine days depending on the month so right now they're still classified as five months in a rear they currently you know twenty six thousand however they're self employed and they have a roth ira so they're asking me do i know if the best thing is for them to take the money out of iraq to catch up on the arrears of twenty six thousand or would say you well you know what they could do since are self employed and they create their own tax return have a ten ninety nine perhaps what they could do is they could actually create a one person for one k it's a four one k plan for self employed businesses so if they could take that roth ira and creating a four one k with that same money yes it would be called a roth four a one k that's a great answer is how long does that take to roll into that is that is that a rollover is that the profit considered a rollover ok probably do it as a direct roll over which is what i usually recommend and the money's in the account it takes probably about three or four weeks to facilitate that three of our being are still better and they still have the same access of fifty percent they got money fifty percent is a loan exactly so that's the right weight for a self employed individual to access t that's currently of wealth and they still need someplace to get emergency funds from truth truthful yes normally when i'm talking with somebody i actually ask them or rushes to see if there's any chance that there's other ways they can get access to money people sometimes people are embarrassed to do it but they have loving family members that are more than willing to help them out because unique situations happen in life so i ask them to tough questions have you asked your parents for help if you asked a brother for help and when they say i've gone all these routes and nothing more is available then we open the can to see what what methods can be utilized to safely pull money out of a qualified retirement plan and be able to put it back in not hurting their retirement future it's a great way to know and thank you very much in helping my viewers better access their retirement savings to help them in emergencies that are happening right now thank you brian thank you