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Speaker 1: You today, do you I do got to put up

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Speaker 1: these Halloween decorations?

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Speaker 2: Will it's time to do it?

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Speaker 3: Dude?

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Speaker 2: The rest I do need to know. On fifty five

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Speaker 2: KRC the.

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Speaker 3: Talk station.

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Speaker 4: Tonight, we rip apart some of the headlines, share smart

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Speaker 4: moves for open enrollment and talk about when it's time

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Speaker 4: to sell a stock. You're listening to Simply Money presented

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Speaker 4: by all Worth Financial on Bob Sponseller.

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Speaker 2: Along with Brian James.

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Speaker 4: When we went into government shutdown mode.

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Speaker 2: It's just almost comical, Brian.

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Speaker 4: The headlines that came pouring out over the last couple

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Speaker 4: of days. Here's what we found on one well known

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Speaker 4: financial website, all jammed together right on the home page.

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Speaker 4: Quote Treasury yield slide. Stock markets hold lower after the

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Speaker 4: ADP report, Dollar falls as markets digest political deadlock. Gold

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Speaker 4: hits another record as uncertainty builds. Bitcoin rises as investors

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Speaker 4: seek a global safe haven. Wall Street's Fear index jumps,

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Speaker 4: wire investors on edge.

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Speaker 2: Those are all quotes within the last forty eight hours. Brian.

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Speaker 4: Meanwhile, the market moves higher. We closed it near record

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Speaker 4: highs yesterday. This stuff is just borderline garbage, and I'll

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Speaker 4: just say it it's irresponsible journalism, if you even want to.

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Speaker 2: Call it that.

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Speaker 4: It lacks any context of the bigger picture whatsoever. And

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Speaker 4: I guess that's why you and I are here, Brian.

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Speaker 4: I know you are an astute student of history. So

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Speaker 4: remind us again what typically happens during these market shutdowns.

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Speaker 3: Hold on, I got a google a stute real quick.

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Speaker 2: I appreciate that.

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Speaker 1: I'm going I'll pass that on to mom and they'll

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Speaker 1: hang it on the fridge and on the way home.

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Speaker 1: So dogs and cats living together mass hysteria.

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Speaker 3: That's my favorite line to use from Ghostbusters.

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Speaker 1: Whenever this kind of stuff happens, we have a tendency

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Speaker 1: as a society to take one little story and blow

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Speaker 1: it into a big thing because we like big things.

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Speaker 3: We don't like calm rap thought.

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Speaker 1: So the big thing right now is our of course,

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Speaker 1: our government shut down. So let's just go back through

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Speaker 1: some history here. Why is this important? Why is it

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Speaker 1: not important? The US government has experienced twenty funding gaps

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Speaker 1: leading to shutdowns since the current budget process was established

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Speaker 1: in nineteen seventy six. Remember the whole process of this

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Speaker 1: is we have to vote on a budget. There are

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Speaker 1: about twelve votes a year where we decide how we're

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Speaker 1: going to pay the bills, and every now and then

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Speaker 1: somebody gets into a snit and doesn't want to vote

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Speaker 1: on things and doesn't want to let the country move forward,

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Speaker 1: and this happened. So shutdowns don't last that long, though

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Speaker 1: the longest was in twenty eighteen into nineteen. It lasted

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Speaker 1: about thirty four days, a little over a month. Twelve

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Speaker 1: of them have lasted five days or less, which is

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Speaker 1: pretty normal. By the way, we do want to acknowledge

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Speaker 1: it that I'm making a little bit lighter this, but

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Speaker 1: there are people out there listening to this who just

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Speaker 1: got furloughed, so be sensitive to those situations. That's horrible

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Speaker 1: that those are the ones who get hurt the worst.

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Speaker 1: The rest of us are inconvenience for a little while.

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Speaker 1: But we definitely want to recognize how hard it can

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Speaker 1: be to lose a job like that, especially when a

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Speaker 1: lot of it is politically driven to Yeah, for.

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Speaker 2: Sure, and we did mention that yesterday.

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Speaker 4: I mean, yeah, for people who don't get a paycheck

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Speaker 4: for the next week or two or what have you.

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Speaker 2: I mean, historically they end up getting that pay back.

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Speaker 4: But let's face it, at the time when You're counting

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Speaker 4: on a paycheck to buy groceries, you know, this week,

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Speaker 4: and it doesn't show up. That's extremely troubling. And that's

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Speaker 4: why I hope we get some some adults in the

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Speaker 4: room here on both sides of the aisle and get

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Speaker 4: something you know, satisfied here in the short term. Speaking

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Speaker 4: of the real impact on the economy, Goldman Sachs came

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Speaker 4: out with an estimate that a shutdown can reduce GDP

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Speaker 4: growth by approximately point two percentage points for each week

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Speaker 4: it lasts. However, much of that is typically regained later,

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Speaker 4: so you know, again it over the over the long term,

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Speaker 4: this stuff is generally meaningless. I will say that, you know,

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Speaker 4: small business loans do get I heard some people talking

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Speaker 4: this morning on various news you know, interviews from government officials.

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Speaker 4: Small business loans get on placed on hold during these

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Speaker 4: shutdowns too, So that can impact some of our friends

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Speaker 4: in agricultural states that rely on these loans and other

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Speaker 4: small businesses. So you know, if this thing continues to

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Speaker 4: go on, there will be pressure mounting from all corners

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Speaker 4: of the country here to say, hey, let's get in

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Speaker 4: a room and get this done and keep moving the

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Speaker 4: country forward. Talk about the longer term impact of the

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Speaker 4: stock market.

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Speaker 2: Brian.

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Speaker 1: Yeah, So the average S and P five hundred return

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Speaker 1: during government shutdowns since nineteen seventy six, same period we've

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Speaker 1: been talking about, it's about zero percent. Sometimes we lose

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Speaker 1: a bit, a little bit, sometimes we gain a little bit,

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Speaker 1: but overall, generally nothing happens to the market. So market

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Speaker 1: movements during these these times are usually inconsistent, not tied

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Speaker 1: to the shut down themselves, And I think this is

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Speaker 1: because there is enough history to say that we know

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Speaker 1: these things get resolved. Absolutely, no one benefits by the

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Speaker 1: US federal government simply going away and not moving money

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Speaker 1: around in a circle. That doesn't help anybody. Therefore, it

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Speaker 1: won't last. As we we're sitting here right now, S

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Speaker 1: and P five hundred up about fifteen percent for the

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Speaker 1: year and is basically at an all time high. But interestingly,

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Speaker 1: emerging markets and in other international markets are doing even better.

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Speaker 1: You're merging up about almost thirty percent, international markets up

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Speaker 1: about twenty five percent. So that's a reflection by the

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Speaker 1: rest of the world that hey, maybe there's other countries

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Speaker 1: out there that are a little bit less volatile, and

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Speaker 1: we should be paying attention as well. Hopefully you've got

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Speaker 1: that all as part of your portfolio. If you don't,

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Speaker 1: you better look at it again.

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Speaker 4: Yeah, and just one other reminder, what really moves markets,

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Speaker 4: you know, consistently, over time, forever and ever, is corporate earnings.

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Speaker 4: And we just flip the calendar in to the fourth quarter,

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Speaker 4: which means third quarter earning season is going to start

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Speaker 4: here in a week or so. That's where we get

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Speaker 4: the report cards of how companies are actually doing, and

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Speaker 4: that's what could move the market. So, as we talk

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Speaker 4: about all the time, make sure you're rebalancing, make sure

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Speaker 4: you're having your short term capital where it needs to be,

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Speaker 4: your emergency fund fully funded. Don't just assume that these

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Speaker 4: markets are gonna fly, you know, to the heavens forever,

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Speaker 4: because corrections, you know, do happen even in strong.

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Speaker 2: Economies and strong markets.

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Speaker 4: You're listening to Simply Money presented by all Worth Financial

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Speaker 4: on Bob Spuntseller along with Brian James. All Right, some

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Speaker 4: other news we're following. The SEC's Investor Advisory Committee held

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Speaker 4: a session on retail investor access to private equity markets. Brian,

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Speaker 4: We've been talking about this for several weeks, if not

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Speaker 4: several months, it's interesting to me that the SEC is

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Speaker 4: finally starting to dive into this and look at the

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Speaker 4: impact on retail investors on giving them access to some

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Speaker 4: of these private equity private credit investments and walk us

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Speaker 4: through it. But I find it interesting and I guess

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Speaker 4: good that the things the SEC is actually calling out

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Speaker 4: here are things you and I have been calling out

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Speaker 4: on the show here for weeks, if not months, So

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Speaker 4: I think that's at least a good thing.

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Speaker 2: Walk us through it.

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Speaker 1: Yeah, most of this year, I think we've been talking

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Speaker 1: about on the on these very airwaves. So traditionally, private

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Speaker 1: markets and the word private is key here, So private equity,

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Speaker 1: private credit, venture capital have been pretty much the domain

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Speaker 1: of institutions and the ultra wealthy investors out there. Regular

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Speaker 1: folks have mostly been excluded, and that's kind of for

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Speaker 1: good reason. This isn't This stuff isn't simple, and it

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Speaker 1: usually requires a good amount of assets to put into it,

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Speaker 1: and there are a lot of moving parts. As you

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Speaker 1: might expect, these are opaque, illiquid, and hard to value

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Speaker 1: types of investments. However, the market for this has grown

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Speaker 1: enormously as capital has been seeking different ways other than

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Speaker 1: the public markets and all the trials and tribulations that

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Speaker 1: go along with it to fund their business operations. So

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Speaker 1: the question now is whether the restrictions that have been

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Speaker 1: in place for decades that made it kind of more

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Speaker 1: the territory for the wealthier people. Are those restrictions still

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Speaker 1: still reasonable or do we need to change something. So

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Speaker 1: that's why the whole purpose for this meeting, the IAC

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Speaker 1: put forward a report that had some ideas and guardrails

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Speaker 1: for how to responsibly expand access. So this isn't letter

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Speaker 1: of the law, this is just more of a think

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Speaker 1: tank type of a thing. The first things that they

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Speaker 1: put together this twenty eight page report. One of the

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Speaker 1: first things on it was they basically acknowledged that there

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Speaker 1: are reasons to do this. There is a shrinking number

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Speaker 1: of public companies and more and more multi billion dollar unicorn.

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Speaker 3: Businesses so think Google, Facebook, and so forth.

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Speaker 1: Also noted that fund manager's eagerness for this type of

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Speaker 1: retail money also coincides with a waning appetite among the

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Speaker 1: institutional investors. So the big money is losing interest, they're

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Speaker 1: wanting to pull in the small money.

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Speaker 4: That's a Brian a little red flag. Maybe Brian I

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Speaker 4: talked about this. I think four months ago. I mean,

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Speaker 4: let's face it, this is how business works. You and

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Speaker 4: I have been in this industry now for decades upon decades.

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Speaker 4: These money managers, like everyone else, when they're trying to

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Speaker 4: build their business, what are they gonna do. They're gonna

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Speaker 4: look go look for where the money is.

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Speaker 2: Yep.

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Speaker 4: And so when this appetite from institutional investors is starting

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Speaker 4: to wane, as this report said, well we got to

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Speaker 4: find a place for new business. Let's co find all

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Speaker 4: the four to one K plans and embed these funds

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Speaker 4: in there.

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Speaker 3: Right, Yeah, that's exactly right.

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Speaker 2: Now.

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Speaker 1: What you're referring to is what we've been talking about

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Speaker 1: all year long, because that's what made it a topic

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Speaker 1: in the first place. There's twelve trillion dollars with a

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Speaker 1: tee inside four O and k's and similar retirement plans.

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Speaker 1: The markets or the organizations and companies who who support

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Speaker 1: private equity and provide these business opportunities obviously would love

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Speaker 1: to tap into that.

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Speaker 4: Yeah, let's look at some good things, at least I

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Speaker 4: think are positive things in this report. The report suggests

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Speaker 4: that small investors need to be told how the non

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Speaker 4: traded assets and private funds are valued. Since those values

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Speaker 4: can be hard to pin down, and yet they drive performance.

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Speaker 2: Fees for the managers.

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Speaker 1: They're so funny to me because I got to think

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Speaker 1: that these wealthier and institutional investors are well aware of

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Speaker 1: these things are valued. So why do we need to

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Speaker 1: call this out for small investors? But please carry on?

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Speaker 4: Another thing they put in the report that I think

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Speaker 4: is a good thing. They said retail investors should be

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Speaker 4: allowed more liquidity. Today, a lot of these funds you

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Speaker 4: can only redeem shares, you know, every quarter, sometimes every

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Speaker 4: a year, and so they want more liquidity if we're

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Speaker 4: going to dive into retirement plans and things like that.

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Speaker 2: I think that's good.

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Speaker 4: And yeah, so the the other thing, you know, right now,

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Speaker 4: a lot of these private equity private credit funds are

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Speaker 4: limited to what are called accredited investors, those with one

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Speaker 4: million dollars of net worth not counting their home and

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Speaker 4: with household incomes of you know, above two to three

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Speaker 4: hundred thousand dollars. Obviously, if we're going to get widespread

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Speaker 4: adoption of these private equity private credit things in retirement plans,

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Speaker 4: you're gonna have to relax those requirements. So these are

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Speaker 4: all things that they're looking at. Right now, and I

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Speaker 4: know you've got a couple others.

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Speaker 2: To go over.

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Speaker 1: Yeah, I want to go back to the point real

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Speaker 1: quick about the liquidity. So yes, any type of private equity,

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Speaker 1: private credit is not a bank account. We always talk

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Speaker 1: about to our clients about how most of the investments

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Speaker 1: we're going to talk to you about are not bank accounts.

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Speaker 1: They're going to go out, they're gonna go down. We

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Speaker 1: can't treat it like an ATM. Anything with the word

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Speaker 1: private in it is even more so those dollars are

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Speaker 1: tied up. The high up of liquidity is not necessarily

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Speaker 1: itself a bad thing because think about what you're asking

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Speaker 1: to do. A lot of these businesses are smaller organizations.

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Speaker 1: They're looking to grow something from the ground up. That

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Speaker 1: might mean it's two, three, four, five, even longer years

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Speaker 1: before they've got liquid cash they could distribute if they

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Speaker 1: wanted to. So simply demanding I need a couple thousand

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Speaker 1: dollars because we want to go to the beach on vacation,

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Speaker 1: that's not what these types of investments are for.

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Speaker 3: These are really really long term holds.

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Speaker 1: They can benefit an overall portfolio, but they are one component,

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Speaker 1: not the only, not the only game in the box.

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Speaker 4: And that's why historically, you know, wealthier investors that have,

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Speaker 4: you know, put money in these type of things understand

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Speaker 4: how it works because a lot of them are working

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Speaker 4: with fiduciary advisors where it's like, hey, if you're whatever slice,

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Speaker 4: you're gonna put in private equity that needs to be

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Speaker 4: longer term capital. To your point, Brian, that's not the

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Speaker 4: money we're going to use to buy a new car.

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Speaker 2: Next year or go on vacation.

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Speaker 4: So it's just interesting to watch all of this adapt

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Speaker 4: It looks like the SEC, at least for now, is

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Speaker 4: looking at the right kind of topics. We'll see, we'll

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Speaker 4: see how this all shakes up. Here's the all Worth advice.

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Speaker 4: While the SEC does appear to be making progress in

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Speaker 4: this area, we employ you to work with a fiduciary

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Speaker 4: financial advisor when it comes to evaluating whether these private

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Speaker 4: assets belong in your portfolio. Coming up next, an eye

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Speaker 4: opening look at just how many parents with great nest

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Speaker 4: eggs are supporting their adult children. And we aren't just

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Speaker 4: talking about cell phone bills. You're listening to simply money

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Speaker 4: presented by all Worth Financial on fifty five KRC, the

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Speaker 4: talk station to day's news the Schumer shutdown to give

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Speaker 4: taxpayer funded benefits to illegal That is true.

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Speaker 2: They want to give healthcare benefits to illegal aliens. Checky

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Speaker 2: in each out.

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Speaker 4: That's why Chuck Schumer shut the government down. The Path

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Speaker 4: of Dysfunction fifty five KRC the talkstation.

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Speaker 5: All Worth Financial a registered investment advisory firm. Any ideas

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Speaker 5: presented during this program are not intended to provide specific

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Speaker 5: financial advice. You should consult your own financial advisor, taxsultant,

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Speaker 5: or a state planning attorney to conduct your own due diligence.

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Speaker 2: You're listening to simply money? Is that a buy?

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Speaker 4: All Worth Financial? On bob'sponseller along with Brian James, what

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Speaker 4: do you do if you've built a solid portfolio but

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Speaker 4: feel like it's just sitting there? Plus how to handle

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Speaker 4: a big pile of cash and the smartest way to

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Speaker 4: give to charity. We'll answer all those questions and more

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Speaker 4: straight ahead at six forty three. If you ask a

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Speaker 4: lot of parents whether they'd ever stop supporting their kids,

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Speaker 4: almost all of them will say never, never, ever, ever.

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Speaker 2: But here's the problem.

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Speaker 4: This support and the numbers around that are really starting

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Speaker 4: to add up fast.

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Speaker 1: Brian The new study from Amerprise Financial surveyed five hundred

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Speaker 1: and fifty four parents, and these are people with an

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Speaker 1: average of about seven hundred and fifty thousand dollars of

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Speaker 1: a vestable assets, So people in a comfortable situation. About

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Speaker 1: three quarters of them say they're footing the bill for

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Speaker 1: their adult underline bold face adult children's big ticket items.

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Speaker 1: So we're talking about down payments on homes graduate degrees.

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Speaker 1: About two thirds of these are covering ongoing costs like

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Speaker 1: phone bills and other living costs, and about ninety eight percent,

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Speaker 1: you know what, let's round that up to one hundred

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Speaker 1: percent are willing to let adult children live with them

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Speaker 1: after they turn twenty one. So some of these is

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Speaker 1: just reality. These are just numbers behind some of the

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Speaker 1: antecdotal stories we already know. Right, this is just the

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Speaker 1: situation for young people getting started. It's tough out there,

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Speaker 1: but about sixty five percent of parents believe they haven't

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Speaker 1: they have enough money for themselves to live comfortably in retirement.

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Speaker 1: About a third of them a little more worry that

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Speaker 1: supporting those adult children are going to hamper their plans.

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Speaker 1: And you and I can both attest to the number

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Speaker 1: of times we've had conversations with clients about how exactly

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Speaker 1: how much they can afford to to continue supporting their

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Speaker 1: kids at this level.

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Speaker 4: It happens quite often. I mean that those are alarming numbers,

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Speaker 4: at least to me. You know, two thirds of parents

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Speaker 4: believe they're going to have enough money to live comfortably

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Speaker 4: in retirement. But then when thirty six percent of them

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Speaker 4: are a little over a third worry that the support

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Speaker 4: for adult children could throw that whole plan out a whack.

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Speaker 4: That's not a high probability of s success in my mind.

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Speaker 4: In other words, we got to find a way to

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Speaker 4: responsibly and lovingly get these kids off the payroll. Let's

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Speaker 4: talk about why these adult children are going to the

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Speaker 4: bank of mom and dad. Young people. Let's face it,

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Speaker 4: they're achieving major life milestones such as full time work, marriage, homeownership,

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Speaker 4: and parenthood all later in life. For example, in twenty

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Speaker 4: twenty one, about forty percent of twenty one year old

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Speaker 4: we're working full time. That compares with sixty four percent

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Speaker 4: back in nineteen eighty according to Pew Research. So, you know,

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Speaker 4: I think more and more people have gone to college.

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Speaker 4: You know, culturally, we just got you know, pumpled into

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Speaker 4: our brain that if you don't go.

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Speaker 2: To college, you're a failure.

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Speaker 4: So guess what, We send everybody to college, even if

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Speaker 4: it meant borrowing the money and getting degrees that don't

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Speaker 4: necessarily lead to a career that pays the bills. So,

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Speaker 4: you know, I blame the overall culture for some of this,

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Speaker 4: and it's just moving these quote unquote adult children later

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Speaker 4: in life until they're actually going out earning a living

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Speaker 4: and taking on the responsibility of paying their own bills.

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Speaker 3: Yeah, and then another factor of this is the wealth

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Speaker 3: of older Americans.

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Speaker 1: That also explains some of this trend because today's baby boomers,

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Speaker 1: that's that's the richest generation we've ever seen in the

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Speaker 1: in the universe. So they've got more resources to dedicate

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Speaker 1: to their children. So put differently, prior generations may have

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Speaker 1: loved to do this, the resources simply weren't there to

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Speaker 1: do it with. But because of the abundance of wealth

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Speaker 1: that exists in the world today, it is now an

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Speaker 1: option to support your kids a lot longer than you

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Speaker 1: have to or than.

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Speaker 3: You could before.

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Speaker 1: So a lot of people are choosing to give their

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Speaker 1: kids a leg up, and that that means you know,

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Speaker 1: sometimes co signing for a credit card or a mortgage.

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Speaker 1: By the way, these are terrible ideas because you're gonna

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Speaker 1: wind up stuff with the debt.

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Speaker 3: And if if that, if that adult child.

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Speaker 1: Can't pay the bills on their own, then maybe that's

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Speaker 1: the reason that they can't get that mortgage in the

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Speaker 1: first place. So be really really thoughtful about about just

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Speaker 1: assume you're gonna have to pay that bill, if you're

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Speaker 1: gonna take that step.

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Speaker 4: You're listening to Simply Money, presented by all Worth Financial

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Speaker 4: on Bob Sponseller along with Brian James. All Right, Brian,

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Speaker 4: we kind of defined the potential problem here. What are

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Speaker 4: the things that we need to be doing, you know,

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Speaker 4: both as parents and as advisors and clients and people

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Speaker 4: out there to kind of tackle this potential problem head

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Speaker 4: on before it really derails our long term financial diability.

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Speaker 1: Well, and it far be it for us to say that, no,

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Speaker 1: you shouldn't support your children, end all, be all, because

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Speaker 1: of this spreadsheet we're looking at here. So a lot

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Speaker 1: of times it's just a fact of life and people

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Speaker 1: are gonna prioritize and that's completely understandable. If you're gonna

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Speaker 1: do that, don't ignore it. Make it a budget item.

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Speaker 1: Just like everything else. Treat it like travel though, something

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Speaker 1: you can afford, but it's not open ended, and it's

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Speaker 1: gonna be one of the first things that has to

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Speaker 1: get cut. If you yourselves need to figure out how

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Speaker 1: to kind of tighten the purse rings a little bit.

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Speaker 1: You also might be clear upfront put a time living

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Speaker 1: on it. Hey, well, we're gonna help you out for

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Speaker 1: a couple of years, but you really need to have

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Speaker 1: a target getto of mine to be stable in the

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Speaker 1: next two or three years.

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Speaker 3: We cannot do this forever, so don't fall in love

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Speaker 3: with it.

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Speaker 1: You can also tie this to milestone, so maybe maybe

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Speaker 1: that there's graduation, they land a new job, or just

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Speaker 1: helping them get to a certain target of savings so

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Speaker 1: that you can kind of say, all right, it's time

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Speaker 1: to let go of the vine and move.

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Speaker 3: On to your own world. What ideas do you have, Bob.

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Speaker 4: Well, I just think it comes down to communication and Brian, look,

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Speaker 4: you know my wife and I have three adult children,

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Speaker 4: you know, between ages twenty four and thirty, so we're

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Speaker 4: living this right now. Two of them got married in

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Speaker 4: the last couple of years. One of them just had

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Speaker 4: their first child. The youngest child is engaged in getting

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Speaker 4: married next year. So we're watching all this unfold, buying

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Speaker 4: the first house, having baby, you know, buying cars, all that,

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Speaker 4: And I think I just come back to what I

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Speaker 4: always say on this show all the time.

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Speaker 2: I firmly believe this.

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Speaker 4: Human beings, all human beings respond to incentives. So you

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Speaker 4: got to incentivize people, even if it's hard sometimes, and

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Speaker 4: even if it's our own kids, you have to incentivize

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Speaker 4: them positively and negatively toward long term healthy behavior that

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Speaker 4: is going to be in their best interest for the

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Speaker 4: long term, to say nothing of mom and Dad's best

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Speaker 4: interest from a financial viability standpoint. So you got to

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Speaker 4: sit down and have some of those difficult conversations, and

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Speaker 4: then also a company that with some good wisdom and help,

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Speaker 4: you know, teach, you know, teach people how to do

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Speaker 4: this rather than just hand edicts down or write checks,

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Speaker 4: get to sit down and do some of the heavy

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Speaker 4: lifting with them and equip them to move into self sufficiency.

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Speaker 1: Yeah, and I think one good way to do this

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Speaker 1: you can treat it as a loan, right, So just

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Speaker 1: tell them I'm going to help you out with this,

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Speaker 1: but I want to be paid back at a reasonable

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Speaker 1: interest rate now. But then what you can do is,

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Speaker 1: once they settle into the that loan is working out

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Speaker 1: from a cash flow standpoint, give.

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Speaker 3: Them the money back.

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Speaker 1: Don't tell them you're going to do that in advance,

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Speaker 1: but that'll be a nice surprise for them when they

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Speaker 1: have got themselves into a discipline where they can pay

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Speaker 1: all their bills, including what they owe you.

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Speaker 2: Here's the all Worth advice.

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Speaker 4: Even if you've built a great nest egg support for

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Speaker 4: adult children needs guard rails, love your kids, but try

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Speaker 4: not to sacrifice your own financial independence just to fund theirs.

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Speaker 2: All Right, open enrollment is upon us. We'll walk through

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Speaker 2: the benefits that could make the biggest.

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Speaker 4: Difference in your retirement plan, your investment strategy, and even

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Speaker 4: your legacy. You're listening to Simply Money, presented by all

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Speaker 4: Worth Financial on fifty five KRC, the talk station.

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Speaker 3: I've been tuning in list the election.

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Speaker 2: Thanks for giving us Democrats our voice.

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Speaker 5: You guys are making me think twice about sing.

440
00:20:37,400 --> 00:20:39,160
Speaker 2: This talk about it here.

441
00:20:39,280 --> 00:20:43,919
Speaker 5: I feel like that I can be heard KARC the.

442
00:20:44,280 --> 00:20:46,760
Speaker 3: Talk station, iHeartRadio station.

443
00:20:51,080 --> 00:20:53,680
Speaker 4: You're listening to Simply Money, presented by all Worth Financial

444
00:20:53,680 --> 00:20:57,080
Speaker 4: on Bob Spondseller along with Brian James. All right, let's

445
00:20:57,080 --> 00:21:01,679
Speaker 4: be honest. Nobody circles the calendar waiting with baited breath

446
00:21:01,680 --> 00:21:05,879
Speaker 4: and anticipation for open enrollment. Most people, Brian, and I

447
00:21:05,960 --> 00:21:08,920
Speaker 4: know I'm in this category. I know that that dreaded

448
00:21:09,119 --> 00:21:12,280
Speaker 4: hr webinar webinar is coming where they're going to spend

449
00:21:12,280 --> 00:21:14,919
Speaker 4: an hour and a half walking through things that I

450
00:21:14,960 --> 00:21:18,199
Speaker 4: can figure out in about twelve minutes. But you know,

451
00:21:18,440 --> 00:21:21,080
Speaker 4: it's an important time of year because sometimes we just

452
00:21:21,240 --> 00:21:24,560
Speaker 4: gloss over open enrollment and we just checked the box

453
00:21:24,600 --> 00:21:27,280
Speaker 4: saying put me in everything I had last year. And

454
00:21:27,359 --> 00:21:31,000
Speaker 4: I've been guilty of this before. That's not the best strategy.

455
00:21:31,280 --> 00:21:35,080
Speaker 4: It really makes sense to spend some time walking through

456
00:21:35,119 --> 00:21:37,959
Speaker 4: this because some of these benefits that you have available

457
00:21:38,000 --> 00:21:41,680
Speaker 4: to you are significant and can make a big difference

458
00:21:41,680 --> 00:21:43,200
Speaker 4: in your overall financial plan.

459
00:21:43,560 --> 00:21:45,320
Speaker 2: So let's take this topic seriously.

460
00:21:45,359 --> 00:21:48,040
Speaker 4: Brian, walk us through some of these big items we

461
00:21:48,080 --> 00:21:49,240
Speaker 4: need to be paying attention to.

462
00:21:49,600 --> 00:21:50,399
Speaker 3: That's right, Bob.

463
00:21:50,440 --> 00:21:53,359
Speaker 1: It's October, which means it's time for Christmas decorations on

464
00:21:53,400 --> 00:21:56,080
Speaker 1: the hardware store and a review of our healthcare benefit.

465
00:21:56,160 --> 00:21:58,760
Speaker 1: So let's talk about the big one is health insurance

466
00:21:59,359 --> 00:22:01,040
Speaker 1: because Obviously, this is the one where you're gonna run

467
00:22:01,040 --> 00:22:04,080
Speaker 1: across the most. All year long, healthcare premiums are their

468
00:22:04,160 --> 00:22:07,600
Speaker 1: single largest annual workplace benefit costs out of the paychecks

469
00:22:07,640 --> 00:22:09,440
Speaker 1: of workers out there on the average.

470
00:22:09,640 --> 00:22:11,560
Speaker 3: So you've got options here.

471
00:22:11,600 --> 00:22:13,639
Speaker 1: A lot of times people don't understand the differences of

472
00:22:13,640 --> 00:22:15,440
Speaker 1: what all these things are. So let's start with a

473
00:22:15,520 --> 00:22:19,000
Speaker 1: high deductible health care plan. Sometimes those can look scary

474
00:22:19,040 --> 00:22:20,800
Speaker 1: and they sound you know, the word high deductible can

475
00:22:20,800 --> 00:22:23,480
Speaker 1: be a little terrifying. But they also come with the

476
00:22:23,560 --> 00:22:26,080
Speaker 1: ability to fund a health savings account.

477
00:22:26,080 --> 00:22:27,640
Speaker 3: That's where the magic is for investors.

478
00:22:27,680 --> 00:22:30,440
Speaker 1: If you, yeah, who would have thought that one day

479
00:22:30,440 --> 00:22:34,280
Speaker 1: we'd be looking at our health insurance plan for investments opportunities.

480
00:22:34,280 --> 00:22:37,040
Speaker 1: So the reason that's important, health savings account hsas are

481
00:22:37,080 --> 00:22:40,479
Speaker 1: triple tax advantage. The money goes in before tax if

482
00:22:40,720 --> 00:22:43,760
Speaker 1: as long as you get those invested right, don't sit

483
00:22:43,800 --> 00:22:45,520
Speaker 1: on those dollars. A lot of times if you just

484
00:22:45,560 --> 00:22:47,719
Speaker 1: open it up with whoever your employer has set up

485
00:22:47,720 --> 00:22:50,520
Speaker 1: for you, that's just a bank account, and you're gonna

486
00:22:50,520 --> 00:22:52,880
Speaker 1: want to look for better investment options than that. Look

487
00:22:52,920 --> 00:22:54,680
Speaker 1: for something that looks like a mutual fund. You should

488
00:22:54,680 --> 00:22:56,200
Speaker 1: be able to invest in something looks like a four

489
00:22:56,200 --> 00:22:58,200
Speaker 1: to one K. You may have to move your dollars

490
00:22:58,480 --> 00:23:01,520
Speaker 1: out of that account to another financial constitution entirely, which

491
00:23:01,520 --> 00:23:03,600
Speaker 1: can be a pain, but that's very well worth it,

492
00:23:03,640 --> 00:23:06,639
Speaker 1: because now you've triggered tax free growth. It's happening inside

493
00:23:06,640 --> 00:23:08,440
Speaker 1: an HSA. You're not going to pay taxes on. It's

494
00:23:08,440 --> 00:23:10,399
Speaker 1: similar to an IRRA four O one K, No different

495
00:23:10,400 --> 00:23:13,280
Speaker 1: dividend distributions anything like that. And then if you want

496
00:23:13,280 --> 00:23:16,720
Speaker 1: to pull those dollars out for health care expenses, those

497
00:23:16,800 --> 00:23:18,960
Speaker 1: are going to come out tax free. But here's the

498
00:23:19,000 --> 00:23:22,840
Speaker 1: fun thing, Bob. If you simply pay your healthcare expenses

499
00:23:22,880 --> 00:23:25,920
Speaker 1: now out of your regular cash flow, out of other

500
00:23:25,960 --> 00:23:29,080
Speaker 1: resources than the AHSA, hang onto those receipts and you

501
00:23:29,119 --> 00:23:31,120
Speaker 1: can build them all up. Let it grow for ten,

502
00:23:31,200 --> 00:23:33,399
Speaker 1: fifteen to twenty years, and then you can cash in.

503
00:23:33,480 --> 00:23:35,680
Speaker 1: Think of those receipts as gift cards. You can cash

504
00:23:35,720 --> 00:23:37,720
Speaker 1: them in twenty years worth of health care expenses.

505
00:23:37,720 --> 00:23:38,480
Speaker 3: If you have those.

506
00:23:38,320 --> 00:23:40,560
Speaker 1: Receipts and pull the money out tax free, then too,

507
00:23:40,600 --> 00:23:42,040
Speaker 1: you do not have to do it in the same

508
00:23:42,080 --> 00:23:43,199
Speaker 1: year you incurred the expense.

509
00:23:43,640 --> 00:23:46,160
Speaker 4: That doesn't sound like very much fun. Brian, I wanted

510
00:23:46,200 --> 00:23:48,919
Speaker 4: to take three cruises next year, not two, And if

511
00:23:49,000 --> 00:23:52,040
Speaker 4: I give up one of those cruises, I can't not

512
00:23:52,160 --> 00:23:53,600
Speaker 4: spend my HSA account.

513
00:23:53,720 --> 00:23:55,560
Speaker 1: Why do I want to introduce you to a fiduciary

514
00:23:55,600 --> 00:23:57,439
Speaker 1: financial planner who can help you get your head out

515
00:23:57,480 --> 00:23:59,960
Speaker 1: of your rear end and make responsible financial decision.

516
00:24:00,080 --> 00:24:01,880
Speaker 2: I need. I need one of those. I might need

517
00:24:01,920 --> 00:24:02,360
Speaker 2: three of those.

518
00:24:02,359 --> 00:24:05,320
Speaker 4: All right, let's talk about life insurance options through work.

519
00:24:05,960 --> 00:24:10,360
Speaker 4: Employer provided life insurance is often very cheap, but it's limited,

520
00:24:10,480 --> 00:24:14,240
Speaker 4: usually only one or two time salary. Sometimes the company

521
00:24:14,280 --> 00:24:17,000
Speaker 4: covers the first you know, the first time your salary,

522
00:24:17,080 --> 00:24:19,800
Speaker 4: so it's great, but a lot of people need more

523
00:24:19,880 --> 00:24:23,200
Speaker 4: coverage than just one or two times they're pay and

524
00:24:23,320 --> 00:24:25,520
Speaker 4: so you know, the thing to remember here is if

525
00:24:25,520 --> 00:24:29,320
Speaker 4: you just default and go buy a bunch of supplemental

526
00:24:29,560 --> 00:24:34,560
Speaker 4: term insurance through the company, you're paying standard underwriting rates

527
00:24:34,760 --> 00:24:38,320
Speaker 4: and for people that are healthy, are not overweight, don't

528
00:24:38,359 --> 00:24:40,919
Speaker 4: have a bunch of diseases, and could qualify from an

529
00:24:41,000 --> 00:24:45,359
Speaker 4: underwriting standpoint, for cheaper coverage. On the outside, it behooves

530
00:24:45,400 --> 00:24:48,720
Speaker 4: you to take the time, make the small effort involved

531
00:24:48,720 --> 00:24:51,600
Speaker 4: to sit down and determine how much life insurance you need,

532
00:24:51,960 --> 00:24:53,840
Speaker 4: and oftentimes you can go out and get that on

533
00:24:53,880 --> 00:24:58,200
Speaker 4: the outside, getting preferred or super preferred underwriting rates and

534
00:24:58,560 --> 00:25:00,280
Speaker 4: pay less than you do through the company.

535
00:25:00,560 --> 00:25:02,439
Speaker 1: And establish it and get to sit on it for

536
00:25:02,440 --> 00:25:05,600
Speaker 1: the rest of your life, regardless of you of your employment,

537
00:25:05,640 --> 00:25:07,439
Speaker 1: if you if you've stepped outside and done your own

538
00:25:07,520 --> 00:25:10,480
Speaker 1: term policy. So let's talk about another thing that comes

539
00:25:10,520 --> 00:25:12,679
Speaker 1: up this time. A lot of people are looking at benefits.

540
00:25:12,680 --> 00:25:14,240
Speaker 1: You got to log into that website and your eyes

541
00:25:14,240 --> 00:25:16,840
Speaker 1: will be drawn to your retirement plan. So there's hidden

542
00:25:16,880 --> 00:25:19,600
Speaker 1: opportunities there. A lot of people stop at the four

543
00:25:19,680 --> 00:25:21,680
Speaker 1: oh one K match. My company matches up to six

544
00:25:21,720 --> 00:25:23,879
Speaker 1: percent some percentage of that. That's all I'm gonna do.

545
00:25:24,520 --> 00:25:25,800
Speaker 1: There are other options there.

546
00:25:25,800 --> 00:25:26,440
Speaker 3: If you are a.

547
00:25:26,440 --> 00:25:28,400
Speaker 1: Higher earner and you've got the cash flow, you're gonna

548
00:25:28,400 --> 00:25:30,359
Speaker 1: want to look for things like after tax four oh

549
00:25:30,400 --> 00:25:33,359
Speaker 1: one K contribution, which could introduce the idea of a

550
00:25:33,400 --> 00:25:36,840
Speaker 1: mega backdoor WROTH. This is its own entire show to

551
00:25:36,880 --> 00:25:39,240
Speaker 1: go over here. But what I would suggest that everybody

552
00:25:39,280 --> 00:25:41,639
Speaker 1: do is go get your summary plan description from your

553
00:25:41,640 --> 00:25:43,520
Speaker 1: four oh one K. That's like the instruction manual for

554
00:25:43,840 --> 00:25:45,280
Speaker 1: your four o one K or your four or three

555
00:25:45,359 --> 00:25:47,880
Speaker 1: B whatever you have, and see if you are able

556
00:25:47,920 --> 00:25:50,680
Speaker 1: to make after tax contributions. The benefit here is those

557
00:25:50,680 --> 00:25:53,600
Speaker 1: dollars could ultimately wind up in a wroth situation and

558
00:25:53,640 --> 00:25:56,400
Speaker 1: you can put in in the area of seventy thousand

559
00:25:56,440 --> 00:26:00,200
Speaker 1: dollars away, including your own contributions. We've always made your

560
00:26:00,200 --> 00:26:03,640
Speaker 1: employer contributions via matches and profit sharing and these after

561
00:26:03,720 --> 00:26:04,600
Speaker 1: tax contributions.

562
00:26:04,600 --> 00:26:06,240
Speaker 3: So again, lots of moving parts there.

563
00:26:06,240 --> 00:26:07,879
Speaker 1: But if you are a higher income earner and you

564
00:26:07,960 --> 00:26:10,920
Speaker 1: have money piling up, congratulations. First of all, don't look,

565
00:26:10,960 --> 00:26:13,320
Speaker 1: don't miss the opportunity to do a megaback door. Look

566
00:26:13,359 --> 00:26:14,600
Speaker 1: it up and see if it works in your four

567
00:26:14,600 --> 00:26:14,960
Speaker 1: oh one K.

568
00:26:15,960 --> 00:26:19,600
Speaker 4: All right, here's another area of employee benefits. This is

569
00:26:19,840 --> 00:26:23,679
Speaker 4: often overlooked, and I want to highlight this tonight, and

570
00:26:23,680 --> 00:26:27,640
Speaker 4: it's the area of disability insurance. Let's face it, your income,

571
00:26:27,720 --> 00:26:30,600
Speaker 4: your ability to earn a paycheck might be your most

572
00:26:30,720 --> 00:26:35,919
Speaker 4: underappreciated yet most valuable resource of all your future earning power.

573
00:26:36,240 --> 00:26:39,280
Speaker 4: It's your biggest asset. Even if you already have millions

574
00:26:39,280 --> 00:26:42,520
Speaker 4: of dollars put away. A disabling event could wipe out

575
00:26:42,640 --> 00:26:45,479
Speaker 4: not just your income, but it could cause you to

576
00:26:45,520 --> 00:26:48,280
Speaker 4: deplete some of those savings and investments that you've worked

577
00:26:48,320 --> 00:26:52,240
Speaker 4: so hard to build and briant this group disability.

578
00:26:51,680 --> 00:26:54,080
Speaker 2: You know, you get guaranteed, you know issue on this.

579
00:26:54,240 --> 00:26:57,800
Speaker 4: Everybody can get it, and it tends to be pretty inexpensive.

580
00:26:58,720 --> 00:26:59,679
Speaker 2: People need to take.

581
00:26:59,560 --> 00:27:04,120
Speaker 4: Advantage that, even if you do the group policy, which

582
00:27:04,119 --> 00:27:07,919
Speaker 4: I recommend everybody does, especially if you've got you know,

583
00:27:08,000 --> 00:27:11,680
Speaker 4: twenty thirty, twenty five, thirty thirty five years left to work,

584
00:27:11,760 --> 00:27:15,960
Speaker 4: or even fifteen or twenty. Group disability is great, but

585
00:27:16,040 --> 00:27:19,520
Speaker 4: it's not comprehensive. You might want to look at supplementing

586
00:27:19,560 --> 00:27:21,800
Speaker 4: that if you need to, if you don't have enough

587
00:27:21,800 --> 00:27:24,760
Speaker 4: assets built out on the outside, but at least at

588
00:27:24,760 --> 00:27:28,560
Speaker 4: a minimum, especially for younger folks that have a long

589
00:27:28,720 --> 00:27:33,200
Speaker 4: runway you know, left to work, don't overlook that disability insurance.

590
00:27:33,240 --> 00:27:36,080
Speaker 4: It could be a real game changer. All right, here's

591
00:27:36,119 --> 00:27:38,840
Speaker 4: the all Worth advice. Open enrollment is a chance to

592
00:27:39,320 --> 00:27:44,040
Speaker 4: optimize your financial plan. Don't just click repeat and move on.

593
00:27:44,480 --> 00:27:47,200
Speaker 4: Make sure your choices are working as hard as your

594
00:27:47,240 --> 00:27:50,480
Speaker 4: money is. Coming up next, we'll tackle your real life

595
00:27:50,600 --> 00:27:54,760
Speaker 4: money dilemmas like investing four hundred thousand dollars in cash

596
00:27:54,960 --> 00:27:58,720
Speaker 4: making tax savvy, charitable gifts, and what to do when

597
00:27:58,720 --> 00:28:02,120
Speaker 4: you inherit an ira and more. You're listening to Simply Money,

598
00:28:02,200 --> 00:28:05,359
Speaker 4: presented by all Worth Financial on fifty five KRC, the

599
00:28:05,600 --> 00:28:10,520
Speaker 4: Talk Station. It's the main event for the importance events

600
00:28:10,520 --> 00:28:11,040
Speaker 4: of today.

601
00:28:11,160 --> 00:28:13,720
Speaker 1: Every day we discover something new and important.

602
00:28:13,800 --> 00:28:15,160
Speaker 2: It's control our capital.

603
00:28:14,840 --> 00:28:17,160
Speaker 3: City, direct federal control.

604
00:28:16,880 --> 00:28:18,879
Speaker 2: Check in throughout today, summit.

605
00:28:18,920 --> 00:28:21,040
Speaker 5: With putin, there will be land swaps.

606
00:28:21,160 --> 00:28:21,960
Speaker 1: We can make a deal.

607
00:28:22,080 --> 00:28:25,639
Speaker 4: The everyday event, what is happening, the most important things,

608
00:28:25,960 --> 00:28:28,280
Speaker 4: events in my day to day and tracking our next weather, event,

609
00:28:28,359 --> 00:28:30,040
Speaker 4: events affecting my money, events in the.

610
00:28:30,040 --> 00:28:33,760
Speaker 1: Middle East, happen, events happening now important.

611
00:28:33,440 --> 00:28:37,480
Speaker 3: At this moment. Fifty five KRC, the Talk Station.

612
00:28:38,120 --> 00:28:40,920
Speaker 2: Your opinions are welcome to here. I do think he

613
00:28:41,080 --> 00:28:42,280
Speaker 2: is too old to run.

614
00:28:42,480 --> 00:28:43,440
Speaker 5: In twenty twenty.

615
00:28:43,200 --> 00:28:46,160
Speaker 3: Four, fifty five KRC the Talk Station.

616
00:28:50,800 --> 00:28:53,440
Speaker 4: You're listening to Simply Money, presented by Allworth Financial on

617
00:28:53,560 --> 00:28:56,520
Speaker 4: Bob Sponseller along with Brian James. Do you have a

618
00:28:56,560 --> 00:28:58,800
Speaker 4: financial question you'd like for us to answer. There's a

619
00:28:58,840 --> 00:29:01,000
Speaker 4: red button you can click while you're listening to the

620
00:29:01,040 --> 00:29:04,760
Speaker 4: show right on the iHeart app. Simply record your question

621
00:29:05,200 --> 00:29:08,440
Speaker 4: and it'll come straight to us, all right, Brian Martin

622
00:29:08,480 --> 00:29:12,000
Speaker 4: and Florence says, We've built a solid portfolio. But I

623
00:29:12,040 --> 00:29:15,920
Speaker 4: feel like every advisor pitches annuities to us. How do

624
00:29:16,000 --> 00:29:18,680
Speaker 4: we know if one actually fits our plan or if

625
00:29:18,680 --> 00:29:21,680
Speaker 4: it's just a sales pitch. Well, there's that p word again, Bob.

626
00:29:21,720 --> 00:29:23,360
Speaker 4: We run into that pa word all the time, and

627
00:29:23,600 --> 00:29:25,760
Speaker 4: clients are using this. They know they're being pitched.

628
00:29:25,800 --> 00:29:28,520
Speaker 1: You know products that that's that start with here, you

629
00:29:28,520 --> 00:29:30,400
Speaker 1: should buy this product and then we'll figure out how

630
00:29:30,440 --> 00:29:32,200
Speaker 1: it fits into your financial plan, if we ever get

631
00:29:32,200 --> 00:29:34,200
Speaker 1: around to talking about a financial plan. Now, I don't

632
00:29:34,240 --> 00:29:36,080
Speaker 1: mean to bash in nudies. The nuities are tools like

633
00:29:36,120 --> 00:29:38,240
Speaker 1: anything else. Like as I always say, if I have

634
00:29:38,280 --> 00:29:40,160
Speaker 1: a hammer in my hand, I can build a birdhouse or.

635
00:29:40,160 --> 00:29:41,600
Speaker 3: I can hit myself in the head with It's just

636
00:29:41,640 --> 00:29:42,000
Speaker 3: a tool.

637
00:29:42,480 --> 00:29:45,080
Speaker 1: Uh but uh, but every tool has the right it

638
00:29:45,080 --> 00:29:47,040
Speaker 1: has to have a purpose. So a lot of annuities

639
00:29:47,080 --> 00:29:49,920
Speaker 1: are attracted because of the guarantees that they that they provide.

640
00:29:50,080 --> 00:29:51,920
Speaker 1: They'll say, you get the growth of the stock market,

641
00:29:51,960 --> 00:29:53,240
Speaker 1: but there will be a floor. So if the stock

642
00:29:53,280 --> 00:29:56,040
Speaker 1: market comes crashing down, it'll only go so far down.

643
00:29:56,640 --> 00:29:58,560
Speaker 1: But Bob, the thing that occurs to me with these

644
00:29:58,600 --> 00:30:00,560
Speaker 1: and Martin speaking to you is your quot I guess.

645
00:30:01,320 --> 00:30:04,160
Speaker 1: But every time the market comes back to a new high,

646
00:30:04,280 --> 00:30:06,840
Speaker 1: those guarantees were worthless because you're paying for it. So

647
00:30:06,880 --> 00:30:08,800
Speaker 1: you might have gotten all of the participation of the

648
00:30:08,800 --> 00:30:11,040
Speaker 1: market or some percentage of it, but you paid for that.

649
00:30:11,720 --> 00:30:13,240
Speaker 1: And if it's you know, if it's an index type

650
00:30:13,240 --> 00:30:15,360
Speaker 1: of annuity, you're gonna get maybe eighty percent of the upside,

651
00:30:15,480 --> 00:30:17,640
Speaker 1: none of the downside and so forth, but you're paying

652
00:30:17,640 --> 00:30:19,680
Speaker 1: an extra layer of fees. And when the market comes

653
00:30:19,720 --> 00:30:22,520
Speaker 1: back every time, as it has done again today we're

654
00:30:22,560 --> 00:30:25,000
Speaker 1: at an all time here high again here today, those

655
00:30:25,040 --> 00:30:27,360
Speaker 1: guarantees just aren't worth it. You're paying the insurance company

656
00:30:27,400 --> 00:30:29,800
Speaker 1: for a guarantee that they've never ever, ever, ever had

657
00:30:29,800 --> 00:30:31,640
Speaker 1: to pay out on. So I'm not a big fan

658
00:30:31,680 --> 00:30:34,880
Speaker 1: of annuities, except in situations where maybe we've got somebody

659
00:30:34,920 --> 00:30:37,840
Speaker 1: who just isn't really responsible with money and just needs

660
00:30:37,880 --> 00:30:40,120
Speaker 1: a much more mechanical plan that has to account for

661
00:30:40,160 --> 00:30:42,680
Speaker 1: growth as well. That's a great place for an annuity.

662
00:30:42,760 --> 00:30:44,440
Speaker 1: But if you're a person who understands the ups and

663
00:30:44,440 --> 00:30:46,719
Speaker 1: downs of the market, don't start there. Look at what

664
00:30:46,760 --> 00:30:48,960
Speaker 1: your plan can look like and stress test it with

665
00:30:49,000 --> 00:30:50,480
Speaker 1: the ups and downs of the market, and if you

666
00:30:50,520 --> 00:30:52,360
Speaker 1: feel like you can handle the headlines as you have

667
00:30:52,480 --> 00:30:54,720
Speaker 1: thus far, an annuity might add a bunch of guarantees.

668
00:30:54,760 --> 00:30:55,920
Speaker 1: They'ren't really even guarantees.

669
00:30:56,560 --> 00:31:01,800
Speaker 3: Let's move on it. Go ahead, go ahead, So we'll

670
00:31:01,800 --> 00:31:03,120
Speaker 3: move on to ED and Westchester.

671
00:31:03,800 --> 00:31:07,120
Speaker 1: Ed says he's heard about qualified charitable distributions from iras,

672
00:31:07,400 --> 00:31:10,440
Speaker 1: otherwise known in the industry as qcds, and he's wanted

673
00:31:10,440 --> 00:31:13,160
Speaker 1: to know today really make a meaningful difference. If somebody's

674
00:31:13,160 --> 00:31:14,720
Speaker 1: already giving, does it help them or is it not

675
00:31:14,720 --> 00:31:16,600
Speaker 1: worth looking into ED?

676
00:31:16,680 --> 00:31:20,640
Speaker 4: Depending on your situation, these could make an incredible, incredibly

677
00:31:20,720 --> 00:31:23,960
Speaker 4: meaningful difference. So let me just explain everything that comes

678
00:31:23,960 --> 00:31:26,680
Speaker 4: out of an IRA that goes directly to charity.

679
00:31:26,720 --> 00:31:28,760
Speaker 2: And you can only start doing this after you're age

680
00:31:28,800 --> 00:31:29,520
Speaker 2: seventy and a half.

681
00:31:29,560 --> 00:31:32,640
Speaker 4: By the way, every penny that goes directly from your

682
00:31:32,680 --> 00:31:38,320
Speaker 4: IRA to your chosen charity completely avoways income taxes. You

683
00:31:38,360 --> 00:31:41,000
Speaker 4: don't get the deduction like people are used to an

684
00:31:41,040 --> 00:31:44,200
Speaker 4: itemized deduction, But you know what, not having the income

685
00:31:44,240 --> 00:31:47,120
Speaker 4: even show up on your tax return is better than

686
00:31:47,160 --> 00:31:50,640
Speaker 4: an itemized deductions. It's tax free distribution from your IRA

687
00:31:51,160 --> 00:31:53,360
Speaker 4: doing the charitable giving that it sounds like you want

688
00:31:53,360 --> 00:31:56,240
Speaker 4: to do anyway, So you know, sit down and look

689
00:31:56,280 --> 00:31:58,600
Speaker 4: at some numbers, you know, compare your goals with your

690
00:31:58,600 --> 00:32:00,680
Speaker 4: overall plan. But if you're a you're seventy and a

691
00:32:00,720 --> 00:32:03,440
Speaker 4: half years old, and certainly if you're in a required

692
00:32:03,520 --> 00:32:08,120
Speaker 4: minimum distribution situation, these do make a meaningful difference. And

693
00:32:08,160 --> 00:32:11,960
Speaker 4: I can tell you virtually without exception, I'm having all

694
00:32:12,000 --> 00:32:14,920
Speaker 4: of my clients that are in this age category start

695
00:32:15,000 --> 00:32:18,440
Speaker 4: there with their charitable giving because it does make such

696
00:32:18,440 --> 00:32:22,200
Speaker 4: a difference. All right, Eric and Fort Thomas says, I

697
00:32:22,240 --> 00:32:25,040
Speaker 4: inherited an IRA from my father, and the ten year

698
00:32:25,120 --> 00:32:29,200
Speaker 4: withdrawal rule is confusing. What's the best way to minimize

699
00:32:29,200 --> 00:32:30,320
Speaker 4: the tax impact?

700
00:32:30,800 --> 00:32:33,280
Speaker 1: Well, Eric, condolence is to your family on the death

701
00:32:33,320 --> 00:32:35,240
Speaker 1: of your father. I'm sorry to hear that that happened,

702
00:32:35,440 --> 00:32:36,960
Speaker 1: but yeah, so you're running into what a lot of

703
00:32:36,960 --> 00:32:41,480
Speaker 1: people do, which is what happens to my parents' retirement money,

704
00:32:41,560 --> 00:32:44,200
Speaker 1: those tax advantage dollars when I inherit them. So what

705
00:32:44,320 --> 00:32:46,160
Speaker 1: Eric is referring to here is a rule change that

706
00:32:46,240 --> 00:32:49,920
Speaker 1: happened that affects anyone who passed away after twenty twenty.

707
00:32:50,280 --> 00:32:52,080
Speaker 1: If you inherit an IRA or a four to one

708
00:32:52,160 --> 00:32:54,800
Speaker 1: K or some kind of pre tax retirement arrangement, then

709
00:32:54,840 --> 00:32:55,960
Speaker 1: you basically.

710
00:32:55,520 --> 00:32:57,000
Speaker 3: You have to pay the taxes on it, but not

711
00:32:57,080 --> 00:32:57,600
Speaker 3: all at once.

712
00:32:57,960 --> 00:33:01,000
Speaker 1: You have ten years to pull those out and pay

713
00:33:01,000 --> 00:33:02,120
Speaker 1: income taxes on them.

714
00:33:02,480 --> 00:33:03,680
Speaker 3: There is a minimal amount.

715
00:33:03,440 --> 00:33:04,880
Speaker 1: You got to take out every year, but otherwise you

716
00:33:04,920 --> 00:33:07,040
Speaker 1: do have some flexibility for the bulk of it. So

717
00:33:07,360 --> 00:33:10,640
Speaker 1: the simplest solution, Eric is is to basically figure out

718
00:33:10,680 --> 00:33:12,560
Speaker 1: when or your ugly tax year is going to be

719
00:33:12,640 --> 00:33:15,080
Speaker 1: versus whin or your your more friendly tax year is

720
00:33:15,080 --> 00:33:16,800
Speaker 1: going to be. If you if you if you feel

721
00:33:16,800 --> 00:33:18,360
Speaker 1: like you're in the situation you're going to be in

722
00:33:18,400 --> 00:33:20,040
Speaker 1: and your taxes aren't going to change much over the

723
00:33:20,080 --> 00:33:22,840
Speaker 1: next decade, then the simplest answer is divide that that

724
00:33:22,880 --> 00:33:25,680
Speaker 1: dollar amount by ten, take that amount every year. That way,

725
00:33:25,680 --> 00:33:28,000
Speaker 1: you'll spread it out over the decade and keep yourself

726
00:33:28,040 --> 00:33:30,360
Speaker 1: in the lowest tax brackets each of those ten years.

727
00:33:30,560 --> 00:33:32,600
Speaker 1: On the other hand, maybe your you yourselves as we

728
00:33:32,640 --> 00:33:35,360
Speaker 1: often are when when our parents pass we ourselves are

729
00:33:35,360 --> 00:33:36,720
Speaker 1: in our highest earnings years.

730
00:33:36,840 --> 00:33:38,720
Speaker 3: Maybe you're in a fatter bracket. Then you'll then you'll

731
00:33:38,760 --> 00:33:39,200
Speaker 3: see here.

732
00:33:39,600 --> 00:33:39,719
Speaker 2: Uh.

733
00:33:40,040 --> 00:33:41,880
Speaker 1: Then then maybe you hold off and only do those

734
00:33:41,920 --> 00:33:45,360
Speaker 1: minimal distributions. Wait until year three or four, when perhaps

735
00:33:45,400 --> 00:33:48,240
Speaker 1: you are retired, then you start hitting that account first.

736
00:33:48,640 --> 00:33:48,760
Speaker 2: Uh.

737
00:33:48,880 --> 00:33:50,680
Speaker 1: And you want to try to do this of course,

738
00:33:50,760 --> 00:33:52,480
Speaker 1: you know maybe when you're you're in your most favorable

739
00:33:52,480 --> 00:33:55,080
Speaker 1: tax years, before you yourself have turned on Social Security,

740
00:33:55,280 --> 00:33:58,640
Speaker 1: before you yourself are in required minimum distribution stage. So

741
00:33:58,680 --> 00:34:00,840
Speaker 1: I would bring these accounts to the forefront if I

742
00:34:00,880 --> 00:34:03,800
Speaker 1: need money for something, Let's look at the inherited IRA first,

743
00:34:03,800 --> 00:34:04,240
Speaker 1: because that.

744
00:34:04,200 --> 00:34:05,240
Speaker 3: Clock is ticking.

745
00:34:06,040 --> 00:34:09,279
Speaker 1: Seth in Montgomery has a mortgage it's almost paid off, Bob,

746
00:34:09,320 --> 00:34:10,959
Speaker 1: But they have a bunch of cash sitting in a pile,

747
00:34:11,040 --> 00:34:12,880
Speaker 1: not earning very much, and they're just wondering, how did

748
00:34:12,880 --> 00:34:15,040
Speaker 1: they make the decision of blowing up that loan completely

749
00:34:15,200 --> 00:34:16,919
Speaker 1: or should they put that money to work in other ways?

750
00:34:16,920 --> 00:34:17,359
Speaker 3: What do you think?

751
00:34:18,440 --> 00:34:21,560
Speaker 4: Well, Seth, I usually evaluate this, you know from two standpoints.

752
00:34:21,600 --> 00:34:23,040
Speaker 2: One is a cash flow decision.

753
00:34:23,080 --> 00:34:26,560
Speaker 4: And first of all, congratulations on almost having that mortgage

754
00:34:26,600 --> 00:34:28,360
Speaker 4: nearly paid off. I'm sure you put a lot of

755
00:34:28,360 --> 00:34:30,799
Speaker 4: work into doing that. But you know, we got to

756
00:34:30,800 --> 00:34:33,000
Speaker 4: look at what your interest rate is on the mortgage,

757
00:34:33,000 --> 00:34:36,080
Speaker 4: and if the mortgage truly is almost nearly paid off,

758
00:34:36,080 --> 00:34:39,879
Speaker 4: you've already almost all your payments right now are going

759
00:34:40,000 --> 00:34:40,640
Speaker 4: pretty much.

760
00:34:40,520 --> 00:34:41,680
Speaker 2: To principle anyway.

761
00:34:42,560 --> 00:34:44,600
Speaker 4: And then you want to look at the opportunity cost

762
00:34:44,680 --> 00:34:46,239
Speaker 4: from a cash flow standpoint.

763
00:34:46,360 --> 00:34:47,240
Speaker 2: If you just don't.

764
00:34:47,080 --> 00:34:49,839
Speaker 4: Want to make that mortgage payment anymore, paying it off

765
00:34:49,840 --> 00:34:52,000
Speaker 4: with some of that cash could free up some cash

766
00:34:52,000 --> 00:34:56,080
Speaker 4: flow and then maybe dollar cost average that cash flow

767
00:34:56,120 --> 00:35:00,920
Speaker 4: that now has become newly discovered back into it investment portfolio.

768
00:35:01,000 --> 00:35:02,239
Speaker 2: That's one way to go about it.

769
00:35:03,160 --> 00:35:05,680
Speaker 4: If you've got a large bunch of cash that's earning

770
00:35:05,719 --> 00:35:08,719
Speaker 4: next to nothing and you are paying interest, you know,

771
00:35:08,800 --> 00:35:11,000
Speaker 4: whether it's three, four or five percent on the mortgage,

772
00:35:11,000 --> 00:35:13,520
Speaker 4: I say knock the thing out and then do double duty.

773
00:35:13,560 --> 00:35:16,399
Speaker 4: You're get You'll love the cash flow benefits. And from

774
00:35:16,440 --> 00:35:20,360
Speaker 4: an opportunity cash standpoint, you're paying off a higher interest

775
00:35:20,400 --> 00:35:23,520
Speaker 4: rate loan with a cash balance that's earning a lower

776
00:35:23,560 --> 00:35:27,000
Speaker 4: interest rate. So hope that helps. Let's move on to

777
00:35:27,200 --> 00:35:30,359
Speaker 4: Heather in Westchester. She says, we're sitting on about four

778
00:35:30,440 --> 00:35:35,000
Speaker 4: hundred thousand dollars in cash because we're nervous about the markets.

779
00:35:35,120 --> 00:35:37,960
Speaker 4: Is there a discipline way to get that money working

780
00:35:38,000 --> 00:35:41,000
Speaker 4: for us Brian without going all in at once.

781
00:35:41,360 --> 00:35:44,120
Speaker 1: Lightning, Heather and Seth should meet somewhere between Montgomery and

782
00:35:44,160 --> 00:35:46,439
Speaker 1: Westchester for a cup of coffee because this is the same,

783
00:35:46,600 --> 00:35:48,880
Speaker 1: same opportunity. So not a lot of time here to

784
00:35:48,920 --> 00:35:51,840
Speaker 1: get into too many details. But the easy quick answer

785
00:35:51,960 --> 00:35:54,040
Speaker 1: is do exactly what you just said. Don't invest it

786
00:35:54,080 --> 00:35:56,440
Speaker 1: all at once. Break it into chunks you can invest

787
00:35:56,600 --> 00:35:58,920
Speaker 1: and make up some number five maybe it's fifty thousand

788
00:35:58,960 --> 00:36:02,880
Speaker 1: dollars a month for for however many months that would be.

789
00:36:02,960 --> 00:36:05,080
Speaker 1: The math is throwing me anyway, Just don't throw it

790
00:36:05,080 --> 00:36:07,200
Speaker 1: all at once. You're you're trying, you're trying to avoid

791
00:36:07,239 --> 00:36:09,759
Speaker 1: a two thousand and eight type situation or twenty twenty two.

792
00:36:10,040 --> 00:36:12,680
Speaker 1: Those types of things don't happen very often. Dollar cost

793
00:36:12,760 --> 00:36:14,640
Speaker 1: averaging is a way to go. It can help you,

794
00:36:15,040 --> 00:36:16,680
Speaker 1: but it can also work against you if the market

795
00:36:16,719 --> 00:36:18,600
Speaker 1: goes up, but the pain will be be a little

796
00:36:18,640 --> 00:36:19,799
Speaker 1: bit a little bit less there.

797
00:36:19,840 --> 00:36:21,040
Speaker 3: So that's one way to think about.

798
00:36:21,040 --> 00:36:22,760
Speaker 1: Another way to think is put all put one hundred

799
00:36:22,760 --> 00:36:24,400
Speaker 1: percent of your four one of your paycheck into your

800
00:36:24,400 --> 00:36:26,680
Speaker 1: four O one k, spend that cash down, get some

801
00:36:26,719 --> 00:36:29,360
Speaker 1: tax advantage investing going Coming.

802
00:36:29,160 --> 00:36:32,399
Speaker 4: Out next a refresher on the reasons why and when

803
00:36:32,840 --> 00:36:36,320
Speaker 4: you should consider selling a stock. You're listening to Simply

804
00:36:36,320 --> 00:36:38,960
Speaker 4: Money presented by all Worth Financial on fifty five KRC

805
00:36:39,440 --> 00:36:40,320
Speaker 4: the talk.

806
00:36:40,120 --> 00:36:44,920
Speaker 3: Station, Mark Levin, let me tell you absolutely reliable information

807
00:36:45,400 --> 00:36:47,719
Speaker 3: and of course not just one sided views.

808
00:36:47,960 --> 00:36:50,080
Speaker 4: Use that affects you at the top end to bottom

809
00:36:50,120 --> 00:36:59,439
Speaker 4: of the hour fifty five KRZ the talk station. You're

810
00:36:59,440 --> 00:37:02,200
Speaker 4: listening to Money presented by all Worth Financial on Bob

811
00:37:02,239 --> 00:37:05,160
Speaker 4: Spon Seller along with Brian James. Well, every now and

812
00:37:05,200 --> 00:37:07,760
Speaker 4: then we like to revisit a topic we talk about

813
00:37:07,800 --> 00:37:11,239
Speaker 4: often here on this show, Brian, when and why to.

814
00:37:11,280 --> 00:37:12,040
Speaker 2: Sell a stock.

815
00:37:12,120 --> 00:37:15,800
Speaker 4: It's a common question and something that many investors struggle

816
00:37:15,840 --> 00:37:19,640
Speaker 4: with and sometimes get this completely wrong. So let's talk

817
00:37:19,680 --> 00:37:22,760
Speaker 4: about all the reasons you want to consider on why

818
00:37:22,840 --> 00:37:25,400
Speaker 4: you would want to sell all or part of a

819
00:37:25,440 --> 00:37:26,160
Speaker 4: stock position.

820
00:37:26,440 --> 00:37:29,600
Speaker 1: Well, the first reason, Bobb said is to rebalance your portfolio.

821
00:37:29,719 --> 00:37:30,879
Speaker 3: Sometimes things get out of whack.

822
00:37:30,880 --> 00:37:32,880
Speaker 1: When the market's been on great, great runs like it

823
00:37:32,920 --> 00:37:35,640
Speaker 1: has been recently, things grow a little faster than other things,

824
00:37:35,640 --> 00:37:37,560
Speaker 1: and then all of a sudden you have you have

825
00:37:37,640 --> 00:37:40,120
Speaker 1: an imbalance in your portfolio, So that can be a

826
00:37:40,120 --> 00:37:43,360
Speaker 1: great reason to take some to carve it off a

827
00:37:43,400 --> 00:37:45,800
Speaker 1: little bit and take some of that position down. Another

828
00:37:45,840 --> 00:37:47,960
Speaker 1: one is tax loss harvesting. So if you have a

829
00:37:48,040 --> 00:37:50,399
Speaker 1: losing position, right, if there's something that maybe you bought

830
00:37:50,440 --> 00:37:52,120
Speaker 1: didn't quite work out for the reasons that you bought it,

831
00:37:52,120 --> 00:37:55,000
Speaker 1: and it's sitting at a lost position, don't just ignore it.

832
00:37:55,080 --> 00:37:57,920
Speaker 1: Sometimes that can be a great tax planning opportunity to

833
00:37:57,960 --> 00:38:01,120
Speaker 1: offset a gain elsewhere sell the loser, and you can

834
00:38:01,160 --> 00:38:03,000
Speaker 1: also pair back something where maybe you want to take

835
00:38:03,040 --> 00:38:05,160
Speaker 1: profits and then you can avoid some of the taxes there.

836
00:38:05,680 --> 00:38:07,640
Speaker 1: And again speaking of taking profits, well that's kind of

837
00:38:07,640 --> 00:38:10,520
Speaker 1: the point. If an investment has actually accomplished what you

838
00:38:10,560 --> 00:38:12,560
Speaker 1: wanted it to, then it might be time to go

839
00:38:12,560 --> 00:38:14,840
Speaker 1: ahead and spike the football and sell it. If it

840
00:38:14,920 --> 00:38:17,480
Speaker 1: is significantly appreciated and all of a sudden, now it

841
00:38:17,520 --> 00:38:20,080
Speaker 1: has more risk because it's a bigger part of your portfolio.

842
00:38:20,200 --> 00:38:21,720
Speaker 3: That can be a great reason to back.

843
00:38:21,560 --> 00:38:25,280
Speaker 2: Off a little bit. Brian, this I run into this often.

844
00:38:25,360 --> 00:38:28,360
Speaker 4: This is one of the biggest mistakes that self directed

845
00:38:28,400 --> 00:38:31,320
Speaker 4: investors make that want to think they can pick stocks,

846
00:38:31,400 --> 00:38:33,719
Speaker 4: and you know, our ego gets in the way. We

847
00:38:34,320 --> 00:38:38,560
Speaker 4: never buy something and ever assume that it's going to

848
00:38:38,640 --> 00:38:41,520
Speaker 4: lose money, so we can't sell it in a downturn.

849
00:38:41,600 --> 00:38:43,799
Speaker 4: And even if it goes down, what do a lot

850
00:38:43,840 --> 00:38:46,360
Speaker 4: of people do. They just double down and they buy

851
00:38:46,400 --> 00:38:49,680
Speaker 4: more of it instead of just, you know, admitting that

852
00:38:50,040 --> 00:38:51,879
Speaker 4: it was a great idea at the time, but it's

853
00:38:51,880 --> 00:38:54,799
Speaker 4: not working. Take the loss, and then carve out some

854
00:38:54,880 --> 00:38:58,000
Speaker 4: of the games. Like you said, great tax planning strategy

855
00:38:58,080 --> 00:39:01,400
Speaker 4: and great way to rebalance your portfolio and get rid

856
00:39:01,440 --> 00:39:03,920
Speaker 4: of those losers and get some winners back in play,

857
00:39:04,520 --> 00:39:08,680
Speaker 4: because company fundamentals do change no matter how you evaluated

858
00:39:08,719 --> 00:39:11,279
Speaker 4: this at the time that you bought the stock. And

859
00:39:11,480 --> 00:39:17,160
Speaker 4: another topic, Brian, is stock concentration risk, especially with corporate executives.

860
00:39:17,239 --> 00:39:19,800
Speaker 4: We run into this all the time that have built

861
00:39:19,800 --> 00:39:24,080
Speaker 4: their entire world and net worth on one company. It

862
00:39:24,160 --> 00:39:27,320
Speaker 4: is not sacrilegious, It is not disloyal to take a

863
00:39:27,400 --> 00:39:30,160
Speaker 4: little bit of money off the table and not have

864
00:39:30,320 --> 00:39:34,480
Speaker 4: the proverbial too many eggs in one basket and one more.

865
00:39:34,600 --> 00:39:36,040
Speaker 3: We didn't mention right this movie.

866
00:39:36,080 --> 00:39:37,719
Speaker 1: This might have been kind of loud in us, not

867
00:39:37,840 --> 00:39:40,920
Speaker 1: mentioning as an emotional attachment, right. Sometimes we have inherited stock.

868
00:39:40,960 --> 00:39:43,319
Speaker 1: Grandma and grandpa gave this to me, and it's part

869
00:39:43,360 --> 00:39:44,520
Speaker 1: of their legacy for.

870
00:39:44,560 --> 00:39:46,320
Speaker 3: Me, and I want to hang on to it forever.

871
00:39:46,440 --> 00:39:48,960
Speaker 1: I don't know anybody's grandma and grandpa who their lifelong

872
00:39:49,040 --> 00:39:53,320
Speaker 1: dream was to for everyone to hold XYZ Bank stock indefinitely.

873
00:39:53,400 --> 00:39:55,400
Speaker 1: They wanted you to have a financial asset to benefit

874
00:39:55,400 --> 00:39:57,560
Speaker 1: you and your family. So maybe keep a token piece,

875
00:39:57,680 --> 00:39:59,279
Speaker 1: but treat it like it like what it is. It's

876
00:39:59,320 --> 00:40:01,080
Speaker 1: something to support your financial situation.

877
00:40:02,280 --> 00:40:02,920
Speaker 2: And we need to.

878
00:40:02,880 --> 00:40:06,080
Speaker 4: Call out one thing that you should virtually never do,

879
00:40:06,640 --> 00:40:09,279
Speaker 4: and that's just never act on what you read in

880
00:40:09,320 --> 00:40:12,799
Speaker 4: the headlines or here on CNBC while you're walking to

881
00:40:12,880 --> 00:40:16,879
Speaker 4: the kitchen. That those are emotionally driven decisions based on

882
00:40:16,880 --> 00:40:20,359
Speaker 4: one talking head's opinion. Usually that's bad advice if it's

883
00:40:20,400 --> 00:40:22,160
Speaker 4: really meant to be advice at all.

884
00:40:22,200 --> 00:40:23,000
Speaker 2: Thanks for listening.

885
00:40:23,000 --> 00:40:25,399
Speaker 4: You've been listening to Simply Money, presented by all Worth

886
00:40:25,440 --> 00:40:28,520
Speaker 4: Financial on fifty five KRC, the talk station.

887
00:40:29,239 --> 00:40:31,000
Speaker 2: This is for your information.

888
00:40:31,280 --> 00:40:36,200
Speaker 4: Everything we do we keep you informed is FYI you information.

889
00:40:36,400 --> 00:40:39,560
Speaker 2: We'll have the latest information on the whole situation in guys,

890
00:40:39,800 --> 00:40:41,000
Speaker 2: release the sausage.

891
00:40:40,840 --> 00:40:43,320
Speaker 5: Eliminated on info on the Russian Summit. They would like

892
00:40:43,360 --> 00:40:43,960
Speaker 5: to meet with me.

893
00:40:44,280 --> 00:40:45,640
Speaker 2: Check in throughout the day.

894
00:40:45,680 --> 00:40:51,440
Speaker 4: We have information for your information, my news, traffic and weather, information.

895
00:40:50,960 --> 00:40:52,720
Speaker 2: About my money, on tariffs and trade.

896
00:40:52,840 --> 00:40:56,440
Speaker 5: This is important information for Are you listen just Fyi'm

897
00:40:56,560 --> 00:40:59,560
Speaker 5: fifty five KRC the talk station.

898
00:41:00,360 --> 00:41:01,719
Speaker 2: He i am Brandt and her name