1 00:00:05,400 --> 00:00:10,000 Speaker 1: Tonight what rising long term care costs, tax law changes, 2 00:00:10,119 --> 00:00:14,200 Speaker 1: and new retirement data mean for your retirement plan. This 3 00:00:14,320 --> 00:00:16,680 Speaker 1: is simply money presented by all Worth Financial on Bob 4 00:00:16,720 --> 00:00:19,919 Speaker 1: Sponseller along with Brian James. Well, if you're ready to 5 00:00:19,960 --> 00:00:23,200 Speaker 1: stop working, or if you already did, you've likely noticed 6 00:00:23,239 --> 00:00:26,079 Speaker 1: your golden years aren't what they used to be. You're 7 00:00:26,079 --> 00:00:28,800 Speaker 1: not just planning for a couple of decades on the 8 00:00:28,840 --> 00:00:33,519 Speaker 1: golf course anymore. You're navigating now a complex mix of 9 00:00:33,800 --> 00:00:37,600 Speaker 1: various investments as part of a strategy. Healthcare costs that 10 00:00:37,760 --> 00:00:41,200 Speaker 1: just seemed to fly higher and higher, tax law changes 11 00:00:41,360 --> 00:00:45,479 Speaker 1: in that ever present family support. So tonight we're calling 12 00:00:45,520 --> 00:00:49,760 Speaker 1: this our retirement reset segment. Let's look at what's changed 13 00:00:50,159 --> 00:00:53,080 Speaker 1: and what you need to do now for some things 14 00:00:53,080 --> 00:00:55,639 Speaker 1: that maybe have changed or not changed. Brian, it's time 15 00:00:55,680 --> 00:00:58,000 Speaker 1: to get an update on our retirement reset. 16 00:00:58,280 --> 00:01:02,080 Speaker 2: So when I was young, my grandfather worked for what 17 00:01:02,200 --> 00:01:04,839 Speaker 2: was then known as CG and E then Synergy, now Duke, 18 00:01:05,160 --> 00:01:07,480 Speaker 2: and he was a facilities manager for the building downtown 19 00:01:07,640 --> 00:01:10,200 Speaker 2: and he had a pension, old school pension. This is 20 00:01:10,240 --> 00:01:13,759 Speaker 2: in the early eighties, and he had his thirty years 21 00:01:13,760 --> 00:01:16,120 Speaker 2: in and I would fight with my cousins over who 22 00:01:16,240 --> 00:01:19,240 Speaker 2: got to mark the red X on the calendar for 23 00:01:19,319 --> 00:01:21,399 Speaker 2: him on whatever day that was that he was going 24 00:01:21,480 --> 00:01:24,080 Speaker 2: to have his thirty years and bah, sixty five, that 25 00:01:24,200 --> 00:01:25,800 Speaker 2: was it, and his pension kicked in and he never 26 00:01:25,840 --> 00:01:28,319 Speaker 2: worked again. But that's not how it works anymore. Retirement 27 00:01:28,360 --> 00:01:30,920 Speaker 2: is no longer a finish line. That average retirement age 28 00:01:30,920 --> 00:01:33,080 Speaker 2: for men has now pushed forward to sixty four and 29 00:01:33,120 --> 00:01:36,360 Speaker 2: for women it's just over sixty two. But about forty 30 00:01:36,400 --> 00:01:39,200 Speaker 2: percent of people who are claiming Social Security, Bob, they're 31 00:01:39,240 --> 00:01:41,880 Speaker 2: still working, and a lot of them are high earners. 32 00:01:41,880 --> 00:01:44,760 Speaker 2: They're working by choice, maybe part time consulting or something 33 00:01:44,800 --> 00:01:47,080 Speaker 2: like that. But it is strategic. It's a decision they've 34 00:01:47,120 --> 00:01:49,120 Speaker 2: made because they've been a lot of them. It's just 35 00:01:49,320 --> 00:01:51,760 Speaker 2: ingrained in them. I can't turn it off, and I 36 00:01:51,800 --> 00:01:53,720 Speaker 2: can't picture myself and I think I'll probably be in 37 00:01:53,760 --> 00:01:56,320 Speaker 2: this boat too. I can't really picture myself not doing 38 00:01:56,360 --> 00:01:58,520 Speaker 2: anything because I've been working so hard for so long. 39 00:01:58,720 --> 00:02:01,240 Speaker 1: Yeah, and I see a lot of clients like this, Brian. 40 00:02:01,280 --> 00:02:04,440 Speaker 1: It's not really a financial decision at all. It's just 41 00:02:04,600 --> 00:02:06,760 Speaker 1: I don't want to sit home and do nothing. I 42 00:02:06,840 --> 00:02:09,359 Speaker 1: played golf for three or four years got that out 43 00:02:09,360 --> 00:02:11,160 Speaker 1: of my system. I don't want to sit in a 44 00:02:11,240 --> 00:02:13,720 Speaker 1: rocking chair down in Naples, Florida and stare at the 45 00:02:13,720 --> 00:02:16,839 Speaker 1: beach all day. I need something to do. I've had 46 00:02:16,919 --> 00:02:19,680 Speaker 1: more than a couple of clients call me and literally 47 00:02:19,760 --> 00:02:23,040 Speaker 1: tell me that, Bob, I'm bored to death. I need 48 00:02:23,120 --> 00:02:26,280 Speaker 1: something to do. So but that's a discussion that we 49 00:02:26,320 --> 00:02:29,400 Speaker 1: try to walk people through before they even retire. But 50 00:02:29,440 --> 00:02:31,960 Speaker 1: to your point, a lot of people are working not 51 00:02:32,240 --> 00:02:36,560 Speaker 1: because they need the money or trying to maximize their wealth. 52 00:02:36,800 --> 00:02:39,760 Speaker 3: It's a lifestyle choice. So you do have to factor all. 53 00:02:39,600 --> 00:02:43,560 Speaker 1: That in that income with an income strategy that might 54 00:02:43,600 --> 00:02:48,399 Speaker 1: include Social Security rmds from iras in taxable income. 55 00:02:48,680 --> 00:02:50,600 Speaker 3: It all has to be factored into a plan. Yeah, 56 00:02:50,600 --> 00:02:50,839 Speaker 3: it does. 57 00:02:50,880 --> 00:02:53,080 Speaker 2: And I would say in the process of getting people 58 00:02:53,120 --> 00:02:56,679 Speaker 2: through the planning process, eventually, what happens for a lot 59 00:02:56,720 --> 00:03:01,320 Speaker 2: of people is a is a really intent's realization that, oh, 60 00:03:01,320 --> 00:03:04,120 Speaker 2: my gosh, this is not a financial decision. My decision 61 00:03:04,160 --> 00:03:06,680 Speaker 2: to retire is not financial. I have enough money to 62 00:03:06,680 --> 00:03:08,000 Speaker 2: go now. I don't have to go to work tomorrow 63 00:03:08,000 --> 00:03:10,640 Speaker 2: if I don't want to. And for about ten seconds, 64 00:03:10,720 --> 00:03:13,800 Speaker 2: that is a wonderful, exhilarating revelation, and then after that 65 00:03:13,840 --> 00:03:15,880 Speaker 2: people start to think, Oh my god, the world is 66 00:03:15,919 --> 00:03:16,359 Speaker 2: open to me. 67 00:03:16,440 --> 00:03:18,480 Speaker 1: What in the world do I want? What else is 68 00:03:18,480 --> 00:03:20,760 Speaker 1: in my brain other than whatever this career is that. 69 00:03:20,720 --> 00:03:22,239 Speaker 3: I've been doing for the last few decades. 70 00:03:22,360 --> 00:03:23,880 Speaker 2: A lot of people haven't thought about that, and I 71 00:03:23,919 --> 00:03:26,359 Speaker 2: will say it is a huge psychological mountain to get over. 72 00:03:26,400 --> 00:03:28,160 Speaker 2: I would argue it's even harder to get over than 73 00:03:28,160 --> 00:03:30,560 Speaker 2: the financial The financial side is numbers on a piece 74 00:03:30,560 --> 00:03:32,520 Speaker 2: of paper, and that's black and white. They either work 75 00:03:32,560 --> 00:03:35,720 Speaker 2: or they don't. The other psychological what do I want 76 00:03:35,760 --> 00:03:37,960 Speaker 2: to do today? Discussion that is a lot squishier, and 77 00:03:38,000 --> 00:03:40,720 Speaker 2: it can be downright terrifying for some people to realize 78 00:03:40,720 --> 00:03:42,160 Speaker 2: that all of a sudden their world is going to 79 00:03:42,160 --> 00:03:43,600 Speaker 2: get a lot smaller if they let it. 80 00:03:44,080 --> 00:03:46,839 Speaker 1: Well, in a ton of folks have done everything right 81 00:03:46,960 --> 00:03:49,440 Speaker 1: in terms of the accumulation stage. I mean, the last 82 00:03:49,520 --> 00:03:52,680 Speaker 1: numbers we saw from mid twenty twenty five show a 83 00:03:52,760 --> 00:03:57,320 Speaker 1: remarkable forty five point eight trillion dollars now sitting in 84 00:03:57,400 --> 00:04:02,000 Speaker 1: iras for when K's pensions and annuities and iras Brian well, 85 00:04:02,120 --> 00:04:05,120 Speaker 1: they now hold more assets than four one K plans 86 00:04:05,480 --> 00:04:09,040 Speaker 1: mostly due to people retiring and rolling over their four 87 00:04:09,120 --> 00:04:12,320 Speaker 1: on one K balance. And this is where you know, 88 00:04:12,480 --> 00:04:15,040 Speaker 1: higher net worth families really need to start to pay 89 00:04:15,040 --> 00:04:17,680 Speaker 1: attention if they're not already. You know, if you do 90 00:04:17,839 --> 00:04:20,560 Speaker 1: retire with you know, two three, four five million dollars 91 00:04:20,600 --> 00:04:22,760 Speaker 1: in your four oh one K and you roll that out, well, 92 00:04:22,800 --> 00:04:25,479 Speaker 1: now you're faced with a choice. Do I roll it 93 00:04:25,520 --> 00:04:28,600 Speaker 1: over or leave it in the plan? Do I if 94 00:04:28,640 --> 00:04:32,880 Speaker 1: I end up rolling it to the wrong place? High fees, illiquidity, 95 00:04:33,080 --> 00:04:37,240 Speaker 1: poor investment selections, you've really thrown off, you know, gotten 96 00:04:37,240 --> 00:04:40,560 Speaker 1: into the weeds here on some things that you unknowingly 97 00:04:41,040 --> 00:04:44,160 Speaker 1: wandered into. That really and we hate to see this 98 00:04:44,320 --> 00:04:47,440 Speaker 1: because for all that work people put in to get 99 00:04:47,480 --> 00:04:51,240 Speaker 1: sold or marketed some bad products that we got to 100 00:04:51,240 --> 00:04:54,000 Speaker 1: help them unwind. It's it can be a sad situation 101 00:04:54,120 --> 00:04:57,760 Speaker 1: to try to unfold and repair. 102 00:04:58,080 --> 00:04:58,960 Speaker 3: Yeah, it really can be. 103 00:04:59,000 --> 00:05:01,240 Speaker 2: And and so that forty five trillion dollar figure that 104 00:05:01,240 --> 00:05:03,000 Speaker 2: that makes me think of something. I've been thinking about 105 00:05:03,000 --> 00:05:05,000 Speaker 2: this a lot, but over the past several months with 106 00:05:05,160 --> 00:05:07,359 Speaker 2: meetings that I've had, so obviously, you know, it's not 107 00:05:07,440 --> 00:05:09,560 Speaker 2: too much of a surprise that there's a gigantic amount 108 00:05:09,760 --> 00:05:12,839 Speaker 2: in retirement accounts. Right that, because of the way compounding works. 109 00:05:12,920 --> 00:05:15,040 Speaker 2: Right until the world ends, that's always gonna happen. There's 110 00:05:15,040 --> 00:05:16,680 Speaker 2: always going to be more and more money because things 111 00:05:16,720 --> 00:05:18,599 Speaker 2: go up and not down. But what I've been thinking 112 00:05:18,640 --> 00:05:21,480 Speaker 2: about a lot lately, Bob, is the current generation of retirees, 113 00:05:21,520 --> 00:05:23,520 Speaker 2: which is pretty much the tail end of the Baby 114 00:05:23,560 --> 00:05:27,160 Speaker 2: Boom generation starting to dip into Generation acts a little bit. 115 00:05:27,400 --> 00:05:28,960 Speaker 3: But these are really the first. 116 00:05:28,680 --> 00:05:31,640 Speaker 2: Generations that retired in this environment that we have where 117 00:05:31,640 --> 00:05:34,840 Speaker 2: it's been all capitalism based and all let's build a 118 00:05:34,880 --> 00:05:37,480 Speaker 2: business and let's grow it and just create gigantic piles 119 00:05:37,480 --> 00:05:40,480 Speaker 2: of money. They're for bears, right that the generation prior 120 00:05:40,560 --> 00:05:43,400 Speaker 2: to you know, the silent generation, in the World War 121 00:05:43,480 --> 00:05:46,320 Speaker 2: two generation so forth, they did not have that. So therefore, 122 00:05:46,320 --> 00:05:48,240 Speaker 2: where we talk all the time about how they had 123 00:05:48,240 --> 00:05:51,080 Speaker 2: fewer choices, they had fewer choices. Exactly, they had pensions. 124 00:05:51,120 --> 00:05:52,400 Speaker 2: But there's only so much you can do with it, 125 00:05:52,520 --> 00:05:54,640 Speaker 2: which is a great existence, but there's not much to 126 00:05:54,640 --> 00:05:55,040 Speaker 2: think about. 127 00:05:55,080 --> 00:05:56,680 Speaker 3: You just show up to work. Are why guys like 128 00:05:56,720 --> 00:05:59,120 Speaker 3: you and I have jobs? Exactly? That's exactly right. 129 00:05:59,200 --> 00:06:02,359 Speaker 2: But where we often talk about how people are not 130 00:06:02,560 --> 00:06:04,760 Speaker 2: educated very well with regard to money in this country. 131 00:06:04,800 --> 00:06:05,520 Speaker 3: That's very true. 132 00:06:05,760 --> 00:06:08,200 Speaker 2: We mostly when we talk about that, we are mostly 133 00:06:08,200 --> 00:06:10,080 Speaker 2: talking about can you balance a checkbook? You and know 134 00:06:10,080 --> 00:06:12,240 Speaker 2: how credit card works, those kinds of things. The other 135 00:06:12,320 --> 00:06:14,640 Speaker 2: thing that happens is we really also have never trained 136 00:06:14,640 --> 00:06:17,080 Speaker 2: anybody how to have money in the first place. So 137 00:06:17,200 --> 00:06:19,039 Speaker 2: when you're on the opposite end of that, maybe you 138 00:06:19,080 --> 00:06:21,360 Speaker 2: have the mechanics down, but your parents didn't grow up. 139 00:06:21,240 --> 00:06:22,720 Speaker 3: With giant piles of money in your foural one k. 140 00:06:22,880 --> 00:06:25,960 Speaker 2: Therefore you, because they didn't have four to one case, 141 00:06:26,160 --> 00:06:28,520 Speaker 2: you are retiring with these giant piles with really no 142 00:06:28,680 --> 00:06:31,279 Speaker 2: family background for the most part on what to do 143 00:06:31,360 --> 00:06:33,960 Speaker 2: with the excess. This is what causes people to work 144 00:06:34,040 --> 00:06:36,560 Speaker 2: way too long. It's what causes people to look at 145 00:06:36,560 --> 00:06:38,160 Speaker 2: me like a nuts when I tell them they can 146 00:06:38,200 --> 00:06:40,640 Speaker 2: go spend seventy five thousand dollars on a car right 147 00:06:40,720 --> 00:06:43,120 Speaker 2: now today with money they didn't have at Thanksgiving, because 148 00:06:43,160 --> 00:06:44,760 Speaker 2: that's just what the market gave them off of a 149 00:06:44,760 --> 00:06:48,440 Speaker 2: couple million dollar portfolio. This is not everyone's situation, but 150 00:06:48,480 --> 00:06:50,520 Speaker 2: there's a lot a lot of people out there who 151 00:06:50,600 --> 00:06:52,479 Speaker 2: are seeing these giant piles of money for the first 152 00:06:52,480 --> 00:06:55,520 Speaker 2: time and really trying to struggling sometimes trying to figure 153 00:06:55,520 --> 00:06:56,240 Speaker 2: out what does it mean? 154 00:06:56,279 --> 00:06:57,919 Speaker 3: What can I do with this? Is this real? 155 00:06:58,279 --> 00:07:00,520 Speaker 1: And that is a that can be a very thing. 156 00:07:00,800 --> 00:07:00,960 Speaker 3: You know. 157 00:07:01,000 --> 00:07:02,560 Speaker 2: We spend a lot of time trying to poke holes 158 00:07:02,560 --> 00:07:04,919 Speaker 2: in a retirement plan and somebody's financial plan just to 159 00:07:04,960 --> 00:07:08,240 Speaker 2: stress test it, and oftentimes, Bob, we can't because it's 160 00:07:08,320 --> 00:07:11,520 Speaker 2: just that strong. Then our job as advisors becomes as 161 00:07:11,560 --> 00:07:14,120 Speaker 2: I as I frequently say, begging people to spend their 162 00:07:14,120 --> 00:07:14,640 Speaker 2: own money. 163 00:07:15,040 --> 00:07:16,920 Speaker 1: Well, I think I think the reason a lot of 164 00:07:16,960 --> 00:07:19,800 Speaker 1: folks are are kind of you know, redis in to 165 00:07:19,840 --> 00:07:20,840 Speaker 1: spend their own money. 166 00:07:20,920 --> 00:07:23,280 Speaker 3: Is this healthcare wild card that's out there. 167 00:07:23,400 --> 00:07:26,760 Speaker 1: The average private nursing home now costs over ten thousand 168 00:07:26,840 --> 00:07:30,440 Speaker 1: dollars a month full time home health aid well that's 169 00:07:30,480 --> 00:07:34,000 Speaker 1: about sixty five hundred dollars a month, and Medicare premiums 170 00:07:34,080 --> 00:07:37,760 Speaker 1: continue to climb sixty six percent higher than. 171 00:07:37,680 --> 00:07:41,440 Speaker 3: A decade ago. People are worried about this, Brian. 172 00:07:41,560 --> 00:07:44,880 Speaker 1: And because we talk about the Sandwich generation all the time, 173 00:07:45,640 --> 00:07:49,240 Speaker 1: Folks are retiring in their early sixties and they're helping 174 00:07:49,280 --> 00:07:53,000 Speaker 1: their parents in their late eighties to early nineties struggle 175 00:07:53,040 --> 00:07:56,880 Speaker 1: with just having enough to get through their healthcare without 176 00:07:57,000 --> 00:08:00,600 Speaker 1: completely depleting every dollar that they own. And so that 177 00:08:00,680 --> 00:08:03,760 Speaker 1: I think that strikes some fear in folks in their 178 00:08:03,840 --> 00:08:07,280 Speaker 1: late fifties and sixties, And am I going to have enough? 179 00:08:07,400 --> 00:08:10,000 Speaker 1: Or should I just keep piling and piling and piling 180 00:08:10,040 --> 00:08:13,920 Speaker 1: and saving just so I don't burden my kids and 181 00:08:14,120 --> 00:08:16,200 Speaker 1: have enough to pay for my own health care. So 182 00:08:16,560 --> 00:08:18,720 Speaker 1: you know what we do there is we model out 183 00:08:18,760 --> 00:08:21,000 Speaker 1: different scenarios. And I know you and I have been 184 00:08:21,040 --> 00:08:24,080 Speaker 1: in meetings recently where as you like to say, let's 185 00:08:24,120 --> 00:08:27,520 Speaker 1: intentionally try to blow up your retirement plan. Let's put 186 00:08:27,520 --> 00:08:30,320 Speaker 1: some numbers in there. What if somebody needs long term care, 187 00:08:30,600 --> 00:08:33,520 Speaker 1: what's it likely to cost? How's that going to impact 188 00:08:33,679 --> 00:08:36,640 Speaker 1: your long term retirement plan? And when people sit down 189 00:08:36,640 --> 00:08:40,080 Speaker 1: and actually look at the numbers, they often are surprised 190 00:08:40,080 --> 00:08:42,840 Speaker 1: at how good their plan looks, and they have the 191 00:08:42,880 --> 00:08:45,120 Speaker 1: peace of mind of knowing that if the worst case 192 00:08:45,160 --> 00:08:48,199 Speaker 1: scenario happens, they're still going to be okay, right, And 193 00:08:48,040 --> 00:08:50,280 Speaker 1: that's the whole point of stress testing. That's what everybody's 194 00:08:50,280 --> 00:08:50,680 Speaker 1: worried about. 195 00:08:50,720 --> 00:08:52,680 Speaker 2: Most people have a general concept that, yeah, I built 196 00:08:52,679 --> 00:08:55,199 Speaker 2: something pretty significant and it can generate incoming. I'm probably 197 00:08:55,200 --> 00:08:57,280 Speaker 2: going to be okay, but they won't pull the trigger 198 00:08:57,320 --> 00:09:00,480 Speaker 2: because they simply haven't looked at that stress test. You 199 00:09:00,520 --> 00:09:05,320 Speaker 2: mentioned healthcare, so obviously you know the gold standard is 200 00:09:05,320 --> 00:09:07,320 Speaker 2: to get to age sixty five then Medicare kicks in, 201 00:09:07,320 --> 00:09:09,200 Speaker 2: and Medicare is pretty good deal. I don't hear many 202 00:09:09,200 --> 00:09:11,719 Speaker 2: complaints about it at all about fifteen years away, so 203 00:09:11,720 --> 00:09:12,840 Speaker 2: I'll let you know how it goes for me. 204 00:09:13,120 --> 00:09:15,480 Speaker 1: But at the same time, that pretty much works. 205 00:09:15,480 --> 00:09:16,400 Speaker 3: That doesn't mean you have. 206 00:09:16,320 --> 00:09:18,600 Speaker 2: To get all the way into to age sixty five, 207 00:09:18,800 --> 00:09:20,760 Speaker 2: but you do have to solve for healthcare insurance one 208 00:09:20,760 --> 00:09:24,080 Speaker 2: way or another. So about twenty just under twenty three 209 00:09:24,160 --> 00:09:27,199 Speaker 2: million Americans so far it have signed up for twenty 210 00:09:27,240 --> 00:09:30,200 Speaker 2: twenty six health insurance through the Affordable Care Act marketplace, 211 00:09:30,240 --> 00:09:32,560 Speaker 2: which is basically, if I'm not old enough for Medicare, 212 00:09:32,640 --> 00:09:35,120 Speaker 2: this is me buying it off the rack. That's down 213 00:09:35,160 --> 00:09:37,200 Speaker 2: about a million and a half from twenty four million 214 00:09:37,559 --> 00:09:39,480 Speaker 2: for people who had rolled in twenty twenty five, So 215 00:09:39,480 --> 00:09:41,520 Speaker 2: there are fewer people pulling the trigger on this. But 216 00:09:42,000 --> 00:09:44,280 Speaker 2: that's an early sign of the fallout from that recent 217 00:09:44,360 --> 00:09:47,320 Speaker 2: lapse of the enhanced premium substies that the federal government 218 00:09:47,360 --> 00:09:49,240 Speaker 2: has been offering since twenty twenty one. But the point 219 00:09:49,280 --> 00:09:51,840 Speaker 2: is people are still pulling the trigger on this that 220 00:09:51,679 --> 00:09:54,360 Speaker 2: the Affordable Care Exchange is how they're doing it. 221 00:09:55,200 --> 00:09:57,600 Speaker 1: All right, Well, let's shif shift gears here to folks 222 00:09:57,600 --> 00:10:01,520 Speaker 1: that are still accumulating and planning and saving for the retirement. 223 00:10:01,800 --> 00:10:02,920 Speaker 3: A couple updates here. 224 00:10:02,960 --> 00:10:07,160 Speaker 1: For twenty twenty six, retirement plan contributions got a slight upgrade, 225 00:10:07,200 --> 00:10:10,000 Speaker 1: so to speak. Here's some good news for twenty twenty six. 226 00:10:10,400 --> 00:10:12,360 Speaker 1: You can sock away more than ever. The four to 227 00:10:12,440 --> 00:10:15,960 Speaker 1: one K limit is now twenty four thousand, five hundred dollars. 228 00:10:16,360 --> 00:10:19,960 Speaker 1: You know, that's the employee contribution limit into a retirement 229 00:10:20,000 --> 00:10:23,199 Speaker 1: plan for folks fifty to zero over. The catch up 230 00:10:23,240 --> 00:10:26,160 Speaker 1: provision is eight grand, so you can add another eight 231 00:10:26,200 --> 00:10:30,920 Speaker 1: thousand to that, and the super catchup amount is eleven thousand, 232 00:10:31,000 --> 00:10:33,640 Speaker 1: two hundred and fifty dollars. That's a carve out for 233 00:10:33,720 --> 00:10:37,240 Speaker 1: folks AIDS sixty to sixty three. So the amount that 234 00:10:37,320 --> 00:10:39,760 Speaker 1: you can save has gone up a little bit. You know, 235 00:10:39,960 --> 00:10:43,320 Speaker 1: make sure you check with your payroll provider and make 236 00:10:43,360 --> 00:10:46,199 Speaker 1: sure if you're somebody that really wants to max out 237 00:10:46,200 --> 00:10:50,400 Speaker 1: these contributions, especially on a pre tax basis. Everything's aligned 238 00:10:50,400 --> 00:10:54,560 Speaker 1: with your payroll provider going into twenty twenty six, so 239 00:10:54,600 --> 00:10:57,200 Speaker 1: you don't you know, miss out on any of those contributions. 240 00:10:58,240 --> 00:11:00,520 Speaker 1: Another twist, if you earn more than one hundred and 241 00:11:00,559 --> 00:11:05,280 Speaker 1: fifty thousand dollars a year, those ketchup contributions now have 242 00:11:05,400 --> 00:11:07,760 Speaker 1: to go into a rawth That's a big change for 243 00:11:07,800 --> 00:11:11,040 Speaker 1: this year, Brian. I think most payroll providers are on 244 00:11:11,080 --> 00:11:13,440 Speaker 1: top of that. But again we've talked about this a 245 00:11:13,480 --> 00:11:16,400 Speaker 1: couple times already this year. Make sure you look at 246 00:11:16,440 --> 00:11:20,240 Speaker 1: that January payroll statement and make sure the dollars are 247 00:11:20,280 --> 00:11:23,880 Speaker 1: flowing where they need to flow to maximize your contributions 248 00:11:24,320 --> 00:11:27,400 Speaker 1: and stay you know, stay in accordance with new. 249 00:11:27,320 --> 00:11:28,240 Speaker 3: Updated tax law. 250 00:11:28,360 --> 00:11:31,360 Speaker 2: Yeah, and different every four oh one k excuse me, 251 00:11:31,520 --> 00:11:33,920 Speaker 2: is different, meaning you may not have to do anything. 252 00:11:33,960 --> 00:11:36,600 Speaker 2: Sometimes sometimes your your payroll provider will simply lie you 253 00:11:36,640 --> 00:11:38,840 Speaker 2: to just keep plowing money into it, and your catchup 254 00:11:38,880 --> 00:11:41,079 Speaker 2: doesn't start happening until later in the year when you've 255 00:11:41,080 --> 00:11:43,840 Speaker 2: already hit the basic limit that everybody can get. Other 256 00:11:43,880 --> 00:11:46,440 Speaker 2: places will force you to declare I want this much 257 00:11:46,480 --> 00:11:49,199 Speaker 2: to be labeled as my standard contribution and this much 258 00:11:49,240 --> 00:11:51,679 Speaker 2: as my ketchup and this much as my super catchup. 259 00:11:52,000 --> 00:11:55,640 Speaker 2: So but at to Bob's point, don't be surprised if 260 00:11:55,679 --> 00:11:57,439 Speaker 2: you see all of a sudden, maybe you didn't choose 261 00:11:57,480 --> 00:11:59,640 Speaker 2: the roth side, but you're seeing ross dollars build up. 262 00:11:59,760 --> 00:12:02,720 Speaker 2: That means that's coming from that catch up side, because 263 00:12:02,720 --> 00:12:04,200 Speaker 2: you don't have a choice about that anymore. 264 00:12:04,640 --> 00:12:07,440 Speaker 1: Yeah, and then one other thing to call out, and Brian, 265 00:12:07,480 --> 00:12:09,280 Speaker 1: I'm just going back to some things that you and 266 00:12:09,320 --> 00:12:12,720 Speaker 1: I discussed with clients earlier this week. You know, don't 267 00:12:12,720 --> 00:12:15,600 Speaker 1: forget about your estate plan. And we continue to be 268 00:12:15,679 --> 00:12:19,319 Speaker 1: shocked by how many people think all their assets are 269 00:12:19,320 --> 00:12:21,360 Speaker 1: going to flow through their will and trust and then 270 00:12:21,400 --> 00:12:24,080 Speaker 1: when we look at what they actually own, ninety percent 271 00:12:24,080 --> 00:12:26,600 Speaker 1: of their assets are in iras and they haven't looked 272 00:12:26,600 --> 00:12:29,360 Speaker 1: at their beneficiary. I mean, we're talking about people with 273 00:12:29,520 --> 00:12:32,320 Speaker 1: a lot of money that don't even understand how this works. 274 00:12:32,320 --> 00:12:35,120 Speaker 2: So already, three times this week I've had conversations with 275 00:12:35,120 --> 00:12:37,040 Speaker 2: people where they say, well, we had a trust written up, 276 00:12:37,040 --> 00:12:39,120 Speaker 2: so we're all set, Okay, great, what does the trust own? 277 00:12:39,640 --> 00:12:40,720 Speaker 3: What? Yeah? 278 00:12:40,760 --> 00:12:43,600 Speaker 1: It they never retitled anything, so it does nothing, all right? 279 00:12:43,800 --> 00:12:45,640 Speaker 1: A lot to cover there to night. Here's the all 280 00:12:45,640 --> 00:12:50,720 Speaker 1: Worth advice. The financial landscape is shifting, longer lives, rising costs, 281 00:12:51,120 --> 00:12:54,840 Speaker 1: new tax laws. If your plan hasn't evolved, you could 282 00:12:54,880 --> 00:12:59,840 Speaker 1: be falling behind. Staying in control means thinking ahead, adjusting often, 283 00:13:00,000 --> 00:13:03,800 Speaker 1: and making sure your money supports the life you actually 284 00:13:04,040 --> 00:13:08,000 Speaker 1: want to have, and make sure your estate plan reflects 285 00:13:08,240 --> 00:13:10,920 Speaker 1: how you actually want it to work. Coming up next, 286 00:13:11,000 --> 00:13:13,480 Speaker 1: some of the wildest bets that people are putting their 287 00:13:13,520 --> 00:13:17,840 Speaker 1: hard earned money toward, and where should you spend your 288 00:13:18,000 --> 00:13:20,680 Speaker 1: golden years. A new list of the best places to 289 00:13:20,800 --> 00:13:24,000 Speaker 1: live is out. There's a ton of these that come 290 00:13:24,040 --> 00:13:25,920 Speaker 1: out throughout the year. We're going to talk about one 291 00:13:26,000 --> 00:13:28,439 Speaker 1: or two of them. Coming up next. You're listening to 292 00:13:28,440 --> 00:13:30,959 Speaker 1: Simply Money, presented by all Worth Financial on fifty five 293 00:13:31,040 --> 00:13:33,040 Speaker 1: KRC the talk station. 294 00:13:37,600 --> 00:13:38,800 Speaker 3: Oh I Love Elton John. 295 00:13:39,280 --> 00:13:41,880 Speaker 1: You're listening to Simply Money presented by all Worth Financial 296 00:13:41,920 --> 00:13:45,400 Speaker 1: on Bob Sponseller along with Brian James straight ahead of 297 00:13:45,400 --> 00:13:49,160 Speaker 1: six forty three. We're answering your questions about charitable bunching, 298 00:13:49,760 --> 00:13:53,600 Speaker 1: alternative investments iras and how to invest when you and 299 00:13:53,679 --> 00:13:58,320 Speaker 1: your spouse see risk quite a bit differently well Brian. 300 00:13:58,400 --> 00:14:03,720 Speaker 1: People are pouring hundreds of millions of dollars into prediction markets. Essentially, 301 00:14:03,800 --> 00:14:07,600 Speaker 1: they're betting on whether something will happen or not, and 302 00:14:07,679 --> 00:14:10,680 Speaker 1: we aren't just talking about sports. Some of these bets 303 00:14:10,880 --> 00:14:15,400 Speaker 1: seem a bit outrageous. Talk about where some of the 304 00:14:15,440 --> 00:14:17,920 Speaker 1: money flowed in twenty twenty five, Brian. 305 00:14:17,720 --> 00:14:20,840 Speaker 3: This makes me sad, Bob. This might be why the 306 00:14:20,960 --> 00:14:21,720 Speaker 3: terrorists hate us. 307 00:14:21,720 --> 00:14:25,280 Speaker 1: And there's obviously too much money flowing around this country. 308 00:14:25,320 --> 00:14:27,200 Speaker 3: So let's start off with the stupidest. 309 00:14:27,480 --> 00:14:30,840 Speaker 2: People spent three point two million dollars on whether Jesus 310 00:14:30,920 --> 00:14:34,200 Speaker 2: Christ would return in twenty twenty five. I can't imagine 311 00:14:34,200 --> 00:14:36,720 Speaker 2: who the house is behind this bet, But how are 312 00:14:36,720 --> 00:14:39,280 Speaker 2: they going to declare that the crazy guy yelling standing 313 00:14:39,360 --> 00:14:40,800 Speaker 2: on top of a bucket on the corner of a 314 00:14:40,800 --> 00:14:43,920 Speaker 2: street corner downtown, yelling that he is Jesus Christ. Somebody's 315 00:14:43,920 --> 00:14:46,080 Speaker 2: gonna have to argue against that, because now there's money 316 00:14:46,120 --> 00:14:46,840 Speaker 2: riding onto it. 317 00:14:47,120 --> 00:14:50,080 Speaker 3: So another sounds like a lawsuit waiting to have I would. 318 00:14:49,920 --> 00:14:52,960 Speaker 2: Think so, right, So, because we are a litigious society 319 00:14:52,960 --> 00:14:55,720 Speaker 2: of nothing else, two hundred and forty two million dollars 320 00:14:55,760 --> 00:14:58,880 Speaker 2: spent on whether Volodomir Zelenski, the leader of Ukraine, would 321 00:14:58,920 --> 00:15:01,560 Speaker 2: wear a suit before July of last year. These are 322 00:15:01,600 --> 00:15:04,400 Speaker 2: the important things, Bob. Now we're getting down to really 323 00:15:04,400 --> 00:15:05,200 Speaker 2: what matters. 324 00:15:04,960 --> 00:15:08,760 Speaker 1: Aren't we? Well, and he had he did wear a suit. 325 00:15:08,800 --> 00:15:10,720 Speaker 1: He didn't wear a tie, but he wore a suit. 326 00:15:11,160 --> 00:15:13,600 Speaker 1: So I think he said to President Trump, I'll meet 327 00:15:13,640 --> 00:15:17,280 Speaker 1: you halfway. Came in with the black suits. So everybody's 328 00:15:17,280 --> 00:15:21,000 Speaker 1: shirt at home. Yeah, all right. People even gambled almost 329 00:15:21,040 --> 00:15:25,440 Speaker 1: three hundred thousand dollars on whether South Park characters would 330 00:15:25,480 --> 00:15:28,840 Speaker 1: say the word quote unquote hell in the next episode. 331 00:15:28,960 --> 00:15:29,640 Speaker 3: Do we just violate? 332 00:15:29,680 --> 00:15:31,160 Speaker 1: Are we going to get a quarter million dollar fine 333 00:15:31,200 --> 00:15:34,320 Speaker 1: from the FCC? I'm just is that an okay word? 334 00:15:34,400 --> 00:15:37,840 Speaker 1: I'm just reading the news, all right. Hey, Traditional financial 335 00:15:37,880 --> 00:15:45,760 Speaker 1: firms have bought in CME Group, Intercontinental Exchange COB CBOE 336 00:15:46,000 --> 00:15:50,000 Speaker 1: Global Markets, for example, are among the many firms committing 337 00:15:50,080 --> 00:15:54,440 Speaker 1: billions of dollars to this whole betting prediction game. It's 338 00:15:54,520 --> 00:15:57,520 Speaker 1: big business. People are throwing money at it. And let's 339 00:15:57,520 --> 00:16:01,360 Speaker 1: face it, Brian in capitalistic a Mayamerica, if there's money 340 00:16:01,360 --> 00:16:03,920 Speaker 1: to be made, people are going to participate. 341 00:16:03,480 --> 00:16:04,840 Speaker 3: In these these names. 342 00:16:04,840 --> 00:16:07,240 Speaker 1: You just rattled off CMEME, Intercontinental and CBOE. 343 00:16:07,360 --> 00:16:09,320 Speaker 2: These might not be household names, but these are big, 344 00:16:09,360 --> 00:16:10,920 Speaker 2: big players in the financial industry. 345 00:16:10,960 --> 00:16:14,000 Speaker 1: CBOE is the College Board of Options Exchange. These are 346 00:16:14,080 --> 00:16:14,760 Speaker 1: huge players. 347 00:16:14,800 --> 00:16:17,480 Speaker 2: And I cannot imagine some of these crusty old guys 348 00:16:17,520 --> 00:16:19,600 Speaker 2: who have been on the board forever going what people 349 00:16:19,640 --> 00:16:21,080 Speaker 2: want to bet on this crap? Okay, how are we 350 00:16:21,120 --> 00:16:22,840 Speaker 2: going to make money off it? And then sure enough, 351 00:16:22,880 --> 00:16:24,200 Speaker 2: here we are so. 352 00:16:24,360 --> 00:16:27,240 Speaker 1: Well in the and they rationalize their entry into this 353 00:16:27,360 --> 00:16:30,960 Speaker 1: market by saying, we've got to let normal people basically 354 00:16:31,000 --> 00:16:34,760 Speaker 1: participate in something that they want to, paying opportunities for 355 00:16:34,800 --> 00:16:36,280 Speaker 1: normal people to make bad decisions. 356 00:16:36,320 --> 00:16:37,200 Speaker 3: That's the American way. 357 00:16:37,320 --> 00:16:40,200 Speaker 1: Yeah, we should be teaching how people how to save 358 00:16:40,800 --> 00:16:44,080 Speaker 1: or spend less than they make and put money away further. 359 00:16:43,960 --> 00:16:46,800 Speaker 4: Gambling our cartoons. Bob, it's the future. All right, let's 360 00:16:46,840 --> 00:16:49,480 Speaker 4: switch gears here. Let's talk about the best state in 361 00:16:49,560 --> 00:16:52,920 Speaker 4: which to retire. A new analysis from care Scout look 362 00:16:52,960 --> 00:16:57,160 Speaker 4: at all fifty states and Washington, d C. Weighing factors 363 00:16:57,200 --> 00:17:01,040 Speaker 4: like healthcare access, cost of living, taxes, and quality of 364 00:17:01,040 --> 00:17:04,560 Speaker 4: life whatever that means to determine which states come out 365 00:17:04,560 --> 00:17:08,080 Speaker 4: on top and which lag behind care Scout, by the way, 366 00:17:08,160 --> 00:17:11,960 Speaker 4: is a company that helps families find you know, aging 367 00:17:12,280 --> 00:17:13,920 Speaker 4: care facilities. 368 00:17:13,280 --> 00:17:16,080 Speaker 1: And resources, so you know they're a very respectable firm. 369 00:17:16,119 --> 00:17:19,560 Speaker 1: But anyway, where did their data shake out? Where should 370 00:17:19,600 --> 00:17:21,720 Speaker 1: we be moving to today, Brian, Well, at. 371 00:17:21,640 --> 00:17:24,320 Speaker 2: The very top of the list, Wyoming was number one, 372 00:17:24,359 --> 00:17:27,040 Speaker 2: So why is that? Well, no state income tax, pretty 373 00:17:27,080 --> 00:17:29,240 Speaker 2: moderate cost of living, some great steaks out there in 374 00:17:29,280 --> 00:17:32,560 Speaker 2: Cyen too, some of the lowest rates of chronic health conditions, 375 00:17:32,560 --> 00:17:35,880 Speaker 2: including eating too much red meat among older adults there, 376 00:17:35,960 --> 00:17:38,320 Speaker 2: So Wyoming's at the top. And then rounding out the 377 00:17:38,320 --> 00:17:42,320 Speaker 2: top five, New Hampshire, Vermont, Montana, and South Dakota. So 378 00:17:42,440 --> 00:17:45,000 Speaker 2: New Hampshire's up there because they kind of mirror Wyoming's 379 00:17:45,000 --> 00:17:47,760 Speaker 2: tax friendliness. Again, no personal income tax, and they have 380 00:17:47,840 --> 00:17:50,560 Speaker 2: the second highest Social Security income in the United States. 381 00:17:50,560 --> 00:17:52,720 Speaker 2: Now that that's a little strange statistic to me. That's 382 00:17:52,720 --> 00:17:54,719 Speaker 2: just a factor of how long somebody worked and how 383 00:17:54,760 --> 00:17:55,280 Speaker 2: much they earned. 384 00:17:55,320 --> 00:17:56,159 Speaker 3: But okay, whatever. 385 00:17:56,760 --> 00:17:59,359 Speaker 2: Vermont is up there because the one of the country's 386 00:17:59,400 --> 00:18:02,840 Speaker 2: highest purport of older adults, the robust community for older adults, 387 00:18:02,840 --> 00:18:05,879 Speaker 2: lots of leadership and governmental decisions being made to support 388 00:18:05,880 --> 00:18:06,720 Speaker 2: an aging population. 389 00:18:06,800 --> 00:18:09,360 Speaker 1: Up there, so you too can retire, move to Vermont, 390 00:18:09,520 --> 00:18:12,240 Speaker 1: and spend your days hanging out with Bernie Sanders. 391 00:18:12,520 --> 00:18:13,199 Speaker 3: Sign me up. 392 00:18:13,520 --> 00:18:16,240 Speaker 1: Don't forget about the maple syrup, Bob. You're overlooking things 393 00:18:16,680 --> 00:18:19,280 Speaker 1: all right. On the other hand of the spectrum, New 394 00:18:19,359 --> 00:18:23,359 Speaker 1: Jersey finished last in the survey. High living cost and 395 00:18:23,359 --> 00:18:26,000 Speaker 1: one of the steepest state income tax rates in the 396 00:18:26,040 --> 00:18:29,000 Speaker 1: country pushed it to the bottom of the rankings despite 397 00:18:29,480 --> 00:18:33,480 Speaker 1: relatively strong social Security income levels. They got to pay 398 00:18:33,480 --> 00:18:35,280 Speaker 1: all those guys who pump gas for you, because you're 399 00:18:35,280 --> 00:18:37,080 Speaker 1: not allowed to do that in New Jersey. Yeah, and 400 00:18:37,119 --> 00:18:39,320 Speaker 1: you've heard it a hundred times. We talk about all 401 00:18:39,600 --> 00:18:42,040 Speaker 1: We talk about this all the time. When people retire, 402 00:18:42,520 --> 00:18:45,960 Speaker 1: you know, they immediately think of moving to Florida or 403 00:18:46,000 --> 00:18:49,800 Speaker 1: Arizona or Tennessee. And like this survey, this thing seems 404 00:18:49,840 --> 00:18:52,960 Speaker 1: to skew towards low tax states. You've got to factor 405 00:18:53,040 --> 00:18:56,439 Speaker 1: in a lot of other things. And I think in 406 00:18:56,520 --> 00:18:59,600 Speaker 1: talking to people over the years and just from personal experience, 407 00:19:00,119 --> 00:19:03,040 Speaker 1: you know, living in good old Cincinnati, Ohio is or 408 00:19:03,080 --> 00:19:06,199 Speaker 1: northern Kentucky or Southeast Indiana not a bad place to 409 00:19:06,280 --> 00:19:09,720 Speaker 1: live as long as you've got an out provision from 410 00:19:09,840 --> 00:19:12,359 Speaker 1: January to April to get away from some of this weather. 411 00:19:12,720 --> 00:19:16,399 Speaker 1: Great people here, great access to healthcare, good you know, 412 00:19:16,520 --> 00:19:17,280 Speaker 1: cost of living. 413 00:19:17,800 --> 00:19:19,679 Speaker 3: We're blessed to live here, at least I feel like 414 00:19:19,720 --> 00:19:20,640 Speaker 3: I am, yeah, because. 415 00:19:20,680 --> 00:19:22,080 Speaker 1: You can always leave here and go away for a 416 00:19:22,080 --> 00:19:23,160 Speaker 1: little while and then come back. 417 00:19:23,240 --> 00:19:23,480 Speaker 3: Yeah. 418 00:19:23,480 --> 00:19:26,040 Speaker 1: Now, in spite of that, Ohio finished thirty eighth in 419 00:19:26,119 --> 00:19:29,040 Speaker 1: the survey and Kentucky finished forty four. Well, all those 420 00:19:29,080 --> 00:19:31,240 Speaker 1: people going to Florida and Vermont, all they're all coming 421 00:19:31,240 --> 00:19:33,439 Speaker 1: from somewhere. So I think that's why we're on the 422 00:19:33,440 --> 00:19:35,520 Speaker 1: other end of the way. All right, Every Sunday you'll 423 00:19:35,520 --> 00:19:38,639 Speaker 1: find our all Worth advice in the Cincinnati Inquirer. Here's 424 00:19:38,680 --> 00:19:41,640 Speaker 1: a preview, Brian, we got to move quick. Steven Deerfield 425 00:19:41,680 --> 00:19:44,480 Speaker 1: Township says, I'm already over the income limit for roth 426 00:19:44,520 --> 00:19:48,800 Speaker 1: IRA contributions. Will the twenty twenty six limit increases help 427 00:19:48,880 --> 00:19:49,600 Speaker 1: me at all? 428 00:19:49,800 --> 00:19:51,400 Speaker 3: Well, yeah, I mean if you're already over. 429 00:19:51,400 --> 00:19:53,280 Speaker 2: If you're over the income limit, remember you can always 430 00:19:53,280 --> 00:19:55,440 Speaker 2: do a backdoor roth Ira. We don't have enough time 431 00:19:55,440 --> 00:19:56,880 Speaker 2: to get into it right now, but go. 432 00:19:56,680 --> 00:20:00,399 Speaker 1: Google backdoor or roth Ira. All Right, here's a big question. 433 00:20:00,440 --> 00:20:03,080 Speaker 1: When the time comes and it's time to move. What 434 00:20:03,320 --> 00:20:06,960 Speaker 1: makes better sense a house or a condo. We'll explore 435 00:20:06,960 --> 00:20:09,800 Speaker 1: that question next. You're listening to Simply Money, presented by 436 00:20:09,840 --> 00:20:13,119 Speaker 1: all Worth Financial on fifty five KRC, the talk station. 437 00:20:18,320 --> 00:20:20,919 Speaker 1: You're listening to Simply Money, issented by all Worth Financial 438 00:20:21,000 --> 00:20:24,440 Speaker 1: mops On Seller along with Brian James, joined tonight by 439 00:20:24,480 --> 00:20:29,920 Speaker 1: our real estate expert Michelle Sloan, owner of Remax Time. Michelle, 440 00:20:29,920 --> 00:20:33,040 Speaker 1: thanks as always for making time for us tonight, and 441 00:20:33,080 --> 00:20:35,760 Speaker 1: we want to get into the pros and cons of 442 00:20:35,960 --> 00:20:40,200 Speaker 1: buying a house or you know, traditional home versus maybe 443 00:20:40,240 --> 00:20:44,800 Speaker 1: a condo or a town a townhouse situation. Walk us 444 00:20:44,840 --> 00:20:46,960 Speaker 1: through some of the decision points we need to work 445 00:20:47,000 --> 00:20:49,159 Speaker 1: through and some of the pros and cons as we 446 00:20:49,280 --> 00:20:50,920 Speaker 1: navigate that kind of a decision. 447 00:20:52,320 --> 00:20:55,040 Speaker 5: Yeah, it's very interesting because I have a lot of 448 00:20:55,200 --> 00:20:59,359 Speaker 5: new clients who are in their sixties. They're looking to 449 00:20:59,480 --> 00:21:04,400 Speaker 5: downside or right size their home and with that they 450 00:21:04,480 --> 00:21:09,280 Speaker 5: have options. Do you want a single family home again? 451 00:21:09,400 --> 00:21:11,760 Speaker 5: Do you want what goes with a single family home? 452 00:21:11,840 --> 00:21:15,320 Speaker 5: And really, if you look at the when you want 453 00:21:15,359 --> 00:21:18,879 Speaker 5: to buy a house, do you want space? Do you 454 00:21:18,920 --> 00:21:20,840 Speaker 5: want your own yard? Do you want to be able 455 00:21:20,920 --> 00:21:24,639 Speaker 5: to control like the color of your front door, and 456 00:21:25,680 --> 00:21:30,199 Speaker 5: you know, you have fewer rules, and technically when you 457 00:21:30,240 --> 00:21:34,800 Speaker 5: buy a home, most often there's more long term growth. 458 00:21:34,960 --> 00:21:39,679 Speaker 5: A single family home historically appreciates a little bit faster 459 00:21:40,440 --> 00:21:44,760 Speaker 5: than a condo would. But the cons of buying that 460 00:21:44,840 --> 00:21:48,040 Speaker 5: single family home is you have to consider all of 461 00:21:48,080 --> 00:21:52,119 Speaker 5: the maintenance. You have to do your own yard work. Still, 462 00:21:52,320 --> 00:21:56,639 Speaker 5: you have to maintain the entire home and take on 463 00:21:56,720 --> 00:22:01,400 Speaker 5: the responsibilities of maintaining the home home. The nice thing 464 00:22:01,520 --> 00:22:04,479 Speaker 5: is with a single family home, your HOA or your 465 00:22:04,520 --> 00:22:09,840 Speaker 5: homeowners association costs are usually one time annual fee if 466 00:22:09,840 --> 00:22:14,040 Speaker 5: you're in a neighborhood and you don't have a monthly 467 00:22:14,119 --> 00:22:17,920 Speaker 5: fee like you would a condo. So then you're looking 468 00:22:18,000 --> 00:22:21,520 Speaker 5: on the flip side of do you want to buy 469 00:22:21,560 --> 00:22:25,160 Speaker 5: a condo? And the pros of that are certainly it's 470 00:22:25,400 --> 00:22:29,800 Speaker 5: lower maintenance living. It's not like you have you're completely 471 00:22:30,000 --> 00:22:32,679 Speaker 5: like you're renting, you have no maintenance. You still have 472 00:22:32,800 --> 00:22:36,280 Speaker 5: maintenance on the interior of the home. You just may 473 00:22:36,320 --> 00:22:39,320 Speaker 5: not have all of the maintenance on the exterior of 474 00:22:39,359 --> 00:22:41,439 Speaker 5: your home. So that could save you a little bit 475 00:22:41,480 --> 00:22:46,200 Speaker 5: of time and energy. Also, it could be and again 476 00:22:47,000 --> 00:22:49,679 Speaker 5: depends on where you're looking and what you want. A 477 00:22:49,760 --> 00:22:53,520 Speaker 5: condo could have a lower price point and have more 478 00:22:53,560 --> 00:22:58,000 Speaker 5: amenities like a swimming pool, a fitness center, clubhouse, walking path, 479 00:22:58,160 --> 00:23:02,199 Speaker 5: you know, all those kinds of great things. But you 480 00:23:02,320 --> 00:23:06,159 Speaker 5: have a monthly homeowner's association fee. So you may have 481 00:23:06,680 --> 00:23:09,960 Speaker 5: a lower mortgage or a lower price point, but you 482 00:23:10,040 --> 00:23:13,879 Speaker 5: may need to add on two, three, four hundred dollars 483 00:23:13,920 --> 00:23:18,240 Speaker 5: a month for all of those extra amenities. So it's 484 00:23:18,320 --> 00:23:22,679 Speaker 5: certainly a lot to consider, and in the end, it 485 00:23:22,800 --> 00:23:25,000 Speaker 5: ends up to be right about the same price if 486 00:23:25,000 --> 00:23:28,520 Speaker 5: you buy a single family home or a condo because 487 00:23:28,560 --> 00:23:31,560 Speaker 5: you have to factor in the homeowner's association fee. 488 00:23:32,080 --> 00:23:34,760 Speaker 1: So along those lines, can you share some stories of 489 00:23:34,800 --> 00:23:38,720 Speaker 1: where you've seen buyers remorse in either of these situations. 490 00:23:38,720 --> 00:23:40,240 Speaker 1: I think that would be helpful for our listeners to 491 00:23:40,280 --> 00:23:42,119 Speaker 1: kind of identify when they might be heading down on 492 00:23:42,160 --> 00:23:44,080 Speaker 1: a path where they might regret a decision. 493 00:23:45,440 --> 00:23:51,600 Speaker 5: Absolutely, I do. I feel like there is more pushback 494 00:23:51,720 --> 00:23:55,639 Speaker 5: or more regret when it comes to moving from a 495 00:23:55,680 --> 00:23:57,840 Speaker 5: single family home that you've been in for a really 496 00:23:57,880 --> 00:24:01,600 Speaker 5: long time, having that auton of me going into a 497 00:24:01,720 --> 00:24:06,000 Speaker 5: condo where everybody's in your business. You know you have 498 00:24:06,320 --> 00:24:10,480 Speaker 5: HOA fees, you have rules, you have restrictions. You can't 499 00:24:10,520 --> 00:24:13,800 Speaker 5: just let the dog out in the backyard do their business. 500 00:24:14,160 --> 00:24:17,479 Speaker 5: Most often in a condo situation, you're going to have 501 00:24:17,520 --> 00:24:19,560 Speaker 5: to take your dog for a walk, You're going to 502 00:24:19,680 --> 00:24:22,480 Speaker 5: have to pick up after it. You know, it's going 503 00:24:22,520 --> 00:24:27,960 Speaker 5: to be not as free like free wheeling in a 504 00:24:28,040 --> 00:24:30,680 Speaker 5: condo as it would be in a single family home. 505 00:24:31,240 --> 00:24:34,879 Speaker 5: And occasionally, you know, the price goes up. So with 506 00:24:35,000 --> 00:24:39,080 Speaker 5: an HOA, just like taxes, you know the fees may 507 00:24:39,119 --> 00:24:42,720 Speaker 5: go up as well. So I find more people that 508 00:24:42,800 --> 00:24:47,679 Speaker 5: get into condos that aren't really ready to be told 509 00:24:47,760 --> 00:24:52,080 Speaker 5: what to do all the time saying, Okay, I need 510 00:24:52,080 --> 00:24:54,760 Speaker 5: to sell this condo. That's just too small, it's too tight, 511 00:24:55,119 --> 00:24:57,679 Speaker 5: the world is closing in on me. I need my 512 00:24:57,800 --> 00:25:01,919 Speaker 5: own space, and then they go back to looking for 513 00:25:01,960 --> 00:25:04,520 Speaker 5: a single family home. So those are some of the 514 00:25:04,560 --> 00:25:05,680 Speaker 5: things that I have seen. 515 00:25:06,400 --> 00:25:08,720 Speaker 1: Hey, Michelle, correct me if I'm wrong here. But there's 516 00:25:08,760 --> 00:25:13,320 Speaker 1: another big, potentially huge component to condo ownership, and that's 517 00:25:13,400 --> 00:25:17,560 Speaker 1: the reserve fund of the HOA that's designed to accumulate 518 00:25:17,600 --> 00:25:21,520 Speaker 1: some money over time to help pay for these ongoing 519 00:25:21,560 --> 00:25:24,679 Speaker 1: maintenance repair issues. And I think one of the big 520 00:25:24,720 --> 00:25:27,200 Speaker 1: parts of due diligence is to look at the health 521 00:25:27,320 --> 00:25:30,320 Speaker 1: of that reserve fund so that you don't go buy 522 00:25:30,359 --> 00:25:34,000 Speaker 1: a condo with one set of expectations only to turn 523 00:25:34,040 --> 00:25:36,159 Speaker 1: around a year or two later and get hit with 524 00:25:36,240 --> 00:25:39,200 Speaker 1: some huge assessment where you've got to write a big 525 00:25:39,320 --> 00:25:42,520 Speaker 1: check to help you replace the roof on the whole 526 00:25:42,520 --> 00:25:46,000 Speaker 1: building because the HOA, you know, over years and years, 527 00:25:46,000 --> 00:25:48,480 Speaker 1: did not manage money correctly. You ever run into that, 528 00:25:48,680 --> 00:25:52,360 Speaker 1: and how do you advise your clients accordingly? Oh? 529 00:25:52,520 --> 00:25:56,399 Speaker 5: Absolutely, And that's a tough one because we have seen 530 00:25:56,480 --> 00:26:00,240 Speaker 5: that situation over and over. If you are paying in 531 00:26:00,280 --> 00:26:05,600 Speaker 5: cash for the condo, oftentimes you don't have the maybe 532 00:26:05,640 --> 00:26:10,480 Speaker 5: the wherewithal or the knowledge to look at those documents 533 00:26:10,520 --> 00:26:14,719 Speaker 5: and see what that reserve is and what it means 534 00:26:14,800 --> 00:26:18,280 Speaker 5: and how healthy it is. When you are getting a mortgage, 535 00:26:18,320 --> 00:26:24,040 Speaker 5: the mortgage company is looking at the health of that reserve. 536 00:26:24,720 --> 00:26:27,800 Speaker 5: So that's one of those things that you know, you 537 00:26:27,920 --> 00:26:32,600 Speaker 5: really don't know until you get into that situation. A 538 00:26:32,600 --> 00:26:36,080 Speaker 5: lot of times now you could do that extra due 539 00:26:36,080 --> 00:26:40,359 Speaker 5: diligence and talk to the HOA, which is smart before 540 00:26:40,600 --> 00:26:45,440 Speaker 5: or talk to the neighbors ask them how the HA functions. 541 00:26:45,600 --> 00:26:49,160 Speaker 5: Is it helpful? Is it difficult to get things done 542 00:26:49,160 --> 00:26:52,080 Speaker 5: on the exterior of the home. Are you seeing a 543 00:26:52,200 --> 00:26:55,400 Speaker 5: lack of maintenance and then all of a sudden, Now 544 00:26:55,520 --> 00:27:00,360 Speaker 5: it's really interesting because you know your HOA fee are 545 00:27:00,440 --> 00:27:05,600 Speaker 5: usually lower on a newer property, but then they start 546 00:27:05,640 --> 00:27:08,760 Speaker 5: to go up pretty quickly. Those monthly fees go up 547 00:27:08,800 --> 00:27:12,960 Speaker 5: pretty quickly when you need exterior maintenance. And so if 548 00:27:12,960 --> 00:27:16,400 Speaker 5: that reserve is not strong enough, yeah, you definitely are 549 00:27:16,400 --> 00:27:19,919 Speaker 5: going to see a huge increase of potential for a 550 00:27:20,000 --> 00:27:25,359 Speaker 5: one time assessment that could be pretty hefty. Definitely important 551 00:27:25,400 --> 00:27:29,040 Speaker 5: to look at all of the latest minutes and try 552 00:27:29,080 --> 00:27:31,080 Speaker 5: to gauge the health of that HOA. 553 00:27:32,480 --> 00:27:35,080 Speaker 1: All right, great stuff as always, Michelle, thanks so much 554 00:27:35,119 --> 00:27:39,359 Speaker 1: for spending time with us receiving, especially during this busy 555 00:27:39,480 --> 00:27:40,399 Speaker 1: holiday season. 556 00:27:40,520 --> 00:27:41,960 Speaker 3: Great stuff as always. 557 00:27:42,280 --> 00:27:44,920 Speaker 1: You're listening to Simply Money, presented by all Worth Financial 558 00:27:44,920 --> 00:27:53,439 Speaker 1: on fifty five KRC the talk station. You're listening to 559 00:27:53,440 --> 00:27:55,520 Speaker 1: Simply Money because I have buy all Worth Financial on 560 00:27:55,600 --> 00:27:58,399 Speaker 1: Bob Sponsller along with Brian James. Do you have a 561 00:27:58,440 --> 00:28:01,000 Speaker 1: financial question you'd like for us to answer. There's a 562 00:28:01,040 --> 00:28:03,560 Speaker 1: red button you can click if you're listening to our 563 00:28:03,600 --> 00:28:06,960 Speaker 1: show from the iHeart app. Simply record your question and 564 00:28:07,040 --> 00:28:11,280 Speaker 1: it will, as always, comes straight to us. Kyle M. 565 00:28:11,359 --> 00:28:14,320 Speaker 1: Anderson leads us off tonight, Brian. He says, our advisor 566 00:28:14,400 --> 00:28:19,240 Speaker 1: set our portfolio is overfitted to the last decade. I 567 00:28:19,320 --> 00:28:21,439 Speaker 1: love how he phrased that. How do you build an 568 00:28:21,480 --> 00:28:26,040 Speaker 1: allocation that can survive a completely different market environment? Yeah, 569 00:28:26,040 --> 00:28:27,880 Speaker 1: that's and he put that in quotes for us too, 570 00:28:27,880 --> 00:28:30,119 Speaker 1: So that must literally be the way the advisor said that. 571 00:28:30,200 --> 00:28:31,720 Speaker 3: So it's an interesting way to phrase that. 572 00:28:31,880 --> 00:28:34,720 Speaker 2: So I think what they're talking about here is what 573 00:28:34,720 --> 00:28:36,639 Speaker 2: they're saying, is that this was built for the world 574 00:28:36,680 --> 00:28:40,160 Speaker 2: we just finished, you know, low rates, cheap money, mega 575 00:28:40,200 --> 00:28:42,400 Speaker 2: cap tech dominance, you know, rather than the world we 576 00:28:42,440 --> 00:28:44,680 Speaker 2: may be moving into. So how do we build an 577 00:28:44,720 --> 00:28:47,680 Speaker 2: allocation that's going to be robust across these multiple changes 578 00:28:47,720 --> 00:28:49,719 Speaker 2: that are coming. Well, first off, let's let's figure out 579 00:28:49,760 --> 00:28:54,000 Speaker 2: where we're They're saying your portfolio is implicitly concentrated. It wouldn't 580 00:28:53,960 --> 00:28:58,200 Speaker 2: surprise me if it's long duration growth stocks, US large caps, you. 581 00:28:58,160 --> 00:29:00,320 Speaker 1: Know, even bonds that benefited from following rates. 582 00:29:00,480 --> 00:29:02,560 Speaker 2: If most of your returns came from those factors, you 583 00:29:02,640 --> 00:29:04,200 Speaker 2: might be exposed if we're going to be in a 584 00:29:04,200 --> 00:29:06,520 Speaker 2: different rate environment, just a kind of different, you know, 585 00:29:06,600 --> 00:29:09,360 Speaker 2: different stock market environment too, so you know this could 586 00:29:09,440 --> 00:29:12,920 Speaker 2: be make sure you're looking to diversify this correctly. That 587 00:29:12,960 --> 00:29:16,240 Speaker 2: means pairing assets that can win in different environments. Value 588 00:29:16,280 --> 00:29:17,920 Speaker 2: in small cap stocks are where we want to be 589 00:29:17,960 --> 00:29:21,600 Speaker 2: for inflationary periods for example international or emerging markets, for 590 00:29:21,640 --> 00:29:24,040 Speaker 2: global growth cycles, and that's definitely happening here in twenty 591 00:29:24,080 --> 00:29:27,840 Speaker 2: twenty five. Shorter duration bonds or tips for rising rate scenarios, 592 00:29:27,880 --> 00:29:30,040 Speaker 2: so those are just generally speaking, the kind of moves 593 00:29:30,080 --> 00:29:33,240 Speaker 2: you want to make in those different markets. So you know, finally, 594 00:29:33,240 --> 00:29:35,680 Speaker 2: and then stress test this whole mix. Run the portfolio 595 00:29:35,720 --> 00:29:38,200 Speaker 2: through periods like the nineteen seventies. There are tech tools 596 00:29:38,200 --> 00:29:39,960 Speaker 2: out there to help you do this, the two thousand 597 00:29:40,240 --> 00:29:42,600 Speaker 2: technology blow up and of course the two thousand and 598 00:29:42,640 --> 00:29:46,160 Speaker 2: eight credit crisis. If that strategy only works in one era, 599 00:29:46,280 --> 00:29:48,000 Speaker 2: it's not durable. So you have to make sure that 600 00:29:48,520 --> 00:29:50,760 Speaker 2: you have the buildy to be flexible. If not understand 601 00:29:50,760 --> 00:29:52,720 Speaker 2: what you already mentioned, you have an advisor. He or 602 00:29:52,720 --> 00:29:54,479 Speaker 2: she should be taking care of this for you, so 603 00:29:54,560 --> 00:29:56,560 Speaker 2: really push on them to get to be more clear 604 00:29:56,840 --> 00:29:59,200 Speaker 2: as to what they're asking you to do. All right, 605 00:29:59,240 --> 00:30:01,920 Speaker 2: So we're gonna move on to Brian and Westchester, who's uh, oh, 606 00:30:01,960 --> 00:30:04,720 Speaker 2: here's our favorite topic. He's talking about bunching charitable gifts 607 00:30:04,720 --> 00:30:05,520 Speaker 2: every few years. 608 00:30:05,840 --> 00:30:06,000 Speaker 5: Uh. 609 00:30:06,040 --> 00:30:08,400 Speaker 1: Their CPA, though, is concerned that that's going to impact 610 00:30:08,440 --> 00:30:12,040 Speaker 1: medicare premiums. How do you coordinate these giving strategies without 611 00:30:12,080 --> 00:30:17,520 Speaker 1: triggering these tax cliffs? Well, without understanding the nuanced details 612 00:30:17,560 --> 00:30:19,880 Speaker 1: of Brian's question. And here's what I'm you know, it's 613 00:30:19,960 --> 00:30:23,920 Speaker 1: it's difficult to answer this question, you know, specifically because 614 00:30:24,320 --> 00:30:26,440 Speaker 1: I don't know the source that you're. 615 00:30:26,360 --> 00:30:28,440 Speaker 3: Using, Brian to make these charitable gifts. 616 00:30:28,480 --> 00:30:31,480 Speaker 1: So, you know, charitable gifts can come in many ways, 617 00:30:31,560 --> 00:30:35,680 Speaker 1: cash gifts, uh, qualified charitable distributions from your IRA, or 618 00:30:35,800 --> 00:30:39,320 Speaker 1: giving away appreciated assets either directly to a charity or 619 00:30:39,320 --> 00:30:42,280 Speaker 1: in a donor advice fund. And depending on where those 620 00:30:42,360 --> 00:30:45,120 Speaker 1: charitable gifts come from or the source of them, that 621 00:30:45,240 --> 00:30:50,240 Speaker 1: can impact as your CPA called out Medicare premiums, and 622 00:30:50,280 --> 00:30:54,320 Speaker 1: I think he's talking about, you know, avoiding that irmat tax, 623 00:30:54,400 --> 00:30:56,720 Speaker 1: which we all want to avoid if at all possible. So, 624 00:30:57,400 --> 00:31:00,120 Speaker 1: you know, getting back to your question about coordination, you 625 00:31:00,120 --> 00:31:03,120 Speaker 1: you have to sit down and run different scenarios on 626 00:31:03,600 --> 00:31:06,080 Speaker 1: how to do this charitable giving and how much to 627 00:31:06,160 --> 00:31:09,640 Speaker 1: do every year. And this is where a good fiduciary 628 00:31:09,640 --> 00:31:13,160 Speaker 1: advisor can run those scenarios for you. And you know 629 00:31:13,200 --> 00:31:15,720 Speaker 1: what Brian and I always do. After we've done all 630 00:31:15,760 --> 00:31:18,760 Speaker 1: our work, we always go back to the client's CPA 631 00:31:18,920 --> 00:31:22,320 Speaker 1: and say, hey, here's what we're seeing. What are you seeing. 632 00:31:22,480 --> 00:31:24,680 Speaker 1: Let's all get on the same page so that we 633 00:31:24,720 --> 00:31:29,000 Speaker 1: have a coordinated strategy to help the client accomplish their 634 00:31:29,080 --> 00:31:33,760 Speaker 1: charitable giving objectives in the most efficient tax manner possible. 635 00:31:33,880 --> 00:31:38,360 Speaker 1: So it does require a little bit of coordination in planning, Brian, 636 00:31:38,440 --> 00:31:42,680 Speaker 1: because this stuff is getting more complicated every year in 637 00:31:43,080 --> 00:31:45,880 Speaker 1: terms of making sure you take advantage of what deductions 638 00:31:45,880 --> 00:31:48,680 Speaker 1: are out there and avoid some of these triggers like 639 00:31:48,760 --> 00:31:53,400 Speaker 1: the CPA called out medical Medicare premium adjustments. All right, 640 00:31:53,520 --> 00:31:56,880 Speaker 1: Karen and mount lookout, Brian says, we are being pushed 641 00:31:57,440 --> 00:32:01,240 Speaker 1: toward alternative investments, but I want to understand what problem 642 00:32:01,400 --> 00:32:04,360 Speaker 1: each of those solves. How do you imagine an alternative 643 00:32:04,480 --> 00:32:09,120 Speaker 1: asset to a specific weakness in your portfolio? Yeah, this 644 00:32:09,160 --> 00:32:11,880 Speaker 1: is another common when we've had all your long jobs, 645 00:32:11,920 --> 00:32:14,000 Speaker 1: What do alternatives? What are alternatives and what do they 646 00:32:14,040 --> 00:32:16,800 Speaker 1: mean to me? So a smart way I think to 647 00:32:16,840 --> 00:32:19,560 Speaker 1: think about alternatives carent not a shiny new category, but 648 00:32:19,600 --> 00:32:22,200 Speaker 1: these are tools that can address very specific weaknesses in 649 00:32:22,240 --> 00:32:25,080 Speaker 1: a traditional sixty forty type portfolio, which we still believe 650 00:32:25,120 --> 00:32:26,560 Speaker 1: is the core of where you ought to be. 651 00:32:26,600 --> 00:32:28,720 Speaker 2: But that doesn't mean you can't season it a little bit. So, 652 00:32:28,800 --> 00:32:30,840 Speaker 2: you know, start by looking at the gaps of these things. 653 00:32:30,840 --> 00:32:33,560 Speaker 2: So a lot of portfolios struggle with three things. Too 654 00:32:33,640 --> 00:32:37,000 Speaker 2: much reliance on equity markets for returns, too much sensitivitied 655 00:32:37,040 --> 00:32:38,600 Speaker 2: interest rates, and too much volatility. 656 00:32:38,680 --> 00:32:41,560 Speaker 1: During these stress periods, each of those weaknesses can be 657 00:32:41,600 --> 00:32:43,720 Speaker 1: matched to it to an alternative that can address it. 658 00:32:43,760 --> 00:32:46,600 Speaker 1: So maybe if you're overly dependent on you know, on stocks, 659 00:32:46,800 --> 00:32:49,600 Speaker 1: private equity or venture capital can add some return drivers 660 00:32:49,840 --> 00:32:52,400 Speaker 1: that will not be moving in lockstep with public markets. 661 00:32:52,400 --> 00:32:54,000 Speaker 1: That's the whole point of alts in the first place. 662 00:32:54,520 --> 00:32:57,040 Speaker 1: For example, if interest rate sensitivity is the problem, then 663 00:32:57,120 --> 00:33:01,320 Speaker 1: real assets like commodities, infrastructure, real estate, those historically will 664 00:33:01,360 --> 00:33:04,120 Speaker 1: respond better in inflationary or rising rate environments. 665 00:33:04,480 --> 00:33:06,840 Speaker 2: You know, if volatility is the problem, look at the 666 00:33:06,840 --> 00:33:10,480 Speaker 2: strategies themselves rather than the assets. There are market neutral strategies. 667 00:33:10,480 --> 00:33:13,360 Speaker 2: These are different things that use more traditional stocks and 668 00:33:13,400 --> 00:33:17,840 Speaker 2: bonds underneath, but are positioning derivatives against them to manipulate 669 00:33:17,840 --> 00:33:21,000 Speaker 2: the markets in certain ways to support, you know, whatever 670 00:33:21,000 --> 00:33:22,920 Speaker 2: that weakness might be. And then, and here's a big 671 00:33:23,000 --> 00:33:26,120 Speaker 2: question you should ask finally before you pull the triggering 672 00:33:26,120 --> 00:33:28,640 Speaker 2: into one of these in which historical environment would this 673 00:33:28,680 --> 00:33:30,640 Speaker 2: have helped out the most? If you can't tie an 674 00:33:30,680 --> 00:33:33,640 Speaker 2: alternative to a specific problem you're trying to solve, such 675 00:33:33,640 --> 00:33:36,240 Speaker 2: as rate risk, concentration risk, or draw down risk, then 676 00:33:36,240 --> 00:33:38,520 Speaker 2: it's not a solution. It's just going to add complexity 677 00:33:38,560 --> 00:33:41,040 Speaker 2: to your portfolio. So that's a lot of information, but 678 00:33:41,480 --> 00:33:43,640 Speaker 2: I hope that helps. Also going to be a continued 679 00:33:43,680 --> 00:33:47,000 Speaker 2: headline I think throughout twenty twenty six Larry and cold Spring. 680 00:33:47,080 --> 00:33:49,239 Speaker 2: Larry says, part of our IRA money Bob is going 681 00:33:49,280 --> 00:33:51,280 Speaker 2: to eventually go to charity, but part's going to go 682 00:33:51,320 --> 00:33:54,040 Speaker 2: to their kids. How do you invest differently for beneficiaries 683 00:33:54,080 --> 00:33:55,920 Speaker 2: with completely different tax outcomes? 684 00:33:56,800 --> 00:34:00,800 Speaker 3: Well, Larry, my answer might surprise you. I don't think 685 00:34:00,880 --> 00:34:02,760 Speaker 3: you should invest differently at all. 686 00:34:02,800 --> 00:34:04,560 Speaker 1: I don't think you should focus on this at all. 687 00:34:04,600 --> 00:34:07,120 Speaker 1: I think you should focus first of all on you know, 688 00:34:07,200 --> 00:34:11,200 Speaker 1: investing this IRA money for your lifetime and if you're married, 689 00:34:11,280 --> 00:34:14,280 Speaker 1: for your and your spouse's lifetime. Make sure this money 690 00:34:14,320 --> 00:34:17,840 Speaker 1: is invested appropriately to take care of you first, because 691 00:34:17,880 --> 00:34:19,640 Speaker 1: at the end of the day, whatever you leave to 692 00:34:19,719 --> 00:34:22,960 Speaker 1: charity isn't it isn't going to be taxed anyway. So 693 00:34:23,200 --> 00:34:26,120 Speaker 1: I don't care whether you invest in all bonds, all stocks. 694 00:34:26,160 --> 00:34:28,680 Speaker 1: The charities don't care. They're gonna be able to take 695 00:34:28,719 --> 00:34:31,239 Speaker 1: whatever you leave them, convert that to cash on a 696 00:34:31,280 --> 00:34:34,279 Speaker 1: completely tax free basis, and go on with life and 697 00:34:34,320 --> 00:34:36,960 Speaker 1: benefit the people that you want them to benefit. And 698 00:34:37,000 --> 00:34:39,000 Speaker 1: in terms of your kids, it's kind of the same way. 699 00:34:39,040 --> 00:34:42,560 Speaker 1: They're gonna be taxed either way they're gonna have they're 700 00:34:42,560 --> 00:34:45,480 Speaker 1: gonna be subject to those IRS rules on you know, 701 00:34:45,520 --> 00:34:48,200 Speaker 1: pulling that money out over their lifetime or over the 702 00:34:48,239 --> 00:34:51,200 Speaker 1: ten year period, whatever the case may be. So again, 703 00:34:51,400 --> 00:34:54,800 Speaker 1: focus on what you need to be doing during your lifetime. 704 00:34:54,880 --> 00:34:59,360 Speaker 1: Don't just by default change the investment objectives of your iras, 705 00:34:59,480 --> 00:35:02,239 Speaker 1: because some of this money is eventually going to go 706 00:35:02,320 --> 00:35:06,560 Speaker 1: to charity. Coming up next, Brian has his ever popular 707 00:35:06,719 --> 00:35:10,400 Speaker 1: bottom line segment You're listening to Simply Money, presented by 708 00:35:10,400 --> 00:35:12,680 Speaker 1: all Worth Financial on fifty five KRC. 709 00:35:13,160 --> 00:35:14,440 Speaker 3: The talk stage. 710 00:35:18,000 --> 00:35:18,200 Speaker 5: Moment. 711 00:35:18,320 --> 00:35:20,720 Speaker 1: You're listening to Simply Money up by all Worth Financial 712 00:35:20,760 --> 00:35:23,759 Speaker 1: on Bob Sponseller along with Brian James. And speaking of 713 00:35:23,800 --> 00:35:27,360 Speaker 1: Brian James, it's time for Brian's bottom line and he's 714 00:35:27,400 --> 00:35:32,240 Speaker 1: got a high net worth financial planning playbook to discuss 715 00:35:33,320 --> 00:35:38,040 Speaker 1: in periods where we might have a potentially slowing economy. Brian, 716 00:35:38,239 --> 00:35:38,879 Speaker 1: I can't wait. 717 00:35:39,719 --> 00:35:41,640 Speaker 2: Well, yeah, so as Evan, you know, kind of paying 718 00:35:41,640 --> 00:35:44,960 Speaker 2: attention and just thinking about how there are different periods 719 00:35:45,000 --> 00:35:47,640 Speaker 2: of time throughout the you know, where the market's going up, 720 00:35:47,640 --> 00:35:49,319 Speaker 2: things you're going down. Today we're going to talk about, 721 00:35:49,360 --> 00:35:51,680 Speaker 2: you know, how do I react when the economy is slowing. 722 00:35:51,719 --> 00:35:53,720 Speaker 2: I'll tell you in a few years. Whether it's actually 723 00:35:53,719 --> 00:35:55,560 Speaker 2: slowing right now, it doesn't really matter. We should still 724 00:35:55,560 --> 00:35:56,480 Speaker 2: have a playbook for it. 725 00:35:56,840 --> 00:35:59,239 Speaker 1: So you know, when in a slowing economy, this means 726 00:35:59,280 --> 00:36:02,120 Speaker 1: growth is cool, hiring and slowing down corporate earnings or 727 00:36:02,160 --> 00:36:04,560 Speaker 1: being revised lower and so forth. This doesn't mean we're 728 00:36:04,560 --> 00:36:06,120 Speaker 1: on the way to a recession. It just means the 729 00:36:06,120 --> 00:36:08,680 Speaker 1: foot's coming off the gas a little bit, and so 730 00:36:08,719 --> 00:36:12,280 Speaker 1: that's going to have impacts on markets, the volatility will increase, 731 00:36:12,560 --> 00:36:16,319 Speaker 1: and wealthier households need to be particularly thoughtful about their 732 00:36:16,400 --> 00:36:20,120 Speaker 1: risk management. So for affluent families, economic slowdowns aren't only 733 00:36:20,120 --> 00:36:22,080 Speaker 1: felt first in the job market, they're first felt in 734 00:36:22,120 --> 00:36:25,279 Speaker 1: the markets. With those overall asset swings through the portfolio, 735 00:36:25,600 --> 00:36:28,680 Speaker 1: liquidity tightens up, asset valuations change, and so forth. 736 00:36:28,719 --> 00:36:30,400 Speaker 3: So we got a little bit of a playbook here. 737 00:36:30,239 --> 00:36:32,719 Speaker 2: Today things you should be looking at. One of the 738 00:36:32,719 --> 00:36:36,640 Speaker 2: biggest vulnerabilities for our wealthy investors is both over concentration. 739 00:36:36,719 --> 00:36:38,680 Speaker 2: This could be a single stock, maybe it's a company 740 00:36:38,719 --> 00:36:41,719 Speaker 2: you've worked for, or just in a single sector or 741 00:36:41,760 --> 00:36:44,000 Speaker 2: real estate or something like that. So this is the 742 00:36:44,080 --> 00:36:47,040 Speaker 2: time to review your exposure to those single stock positions. 743 00:36:47,200 --> 00:36:49,440 Speaker 2: How much of your net worth is tied to your company, 744 00:36:49,480 --> 00:36:52,040 Speaker 2: your industry, one type of asset. Remember if your four 745 00:36:52,080 --> 00:36:54,080 Speaker 2: oh one k is all one big company, that may 746 00:36:54,160 --> 00:36:57,240 Speaker 2: that may be wonderful, but remember your paycheck is also 747 00:36:57,280 --> 00:37:00,000 Speaker 2: tied to that company, So if it hits the skids, 748 00:37:00,120 --> 00:37:02,279 Speaker 2: your job as well as your portfolio could be tied 749 00:37:02,320 --> 00:37:05,080 Speaker 2: to it. So think about how you can strategically diversify 750 00:37:05,160 --> 00:37:07,839 Speaker 2: or maybe some hedging strategies to protect that stock if 751 00:37:07,880 --> 00:37:10,040 Speaker 2: you can't unload some of it in the first place 752 00:37:10,040 --> 00:37:12,520 Speaker 2: and put it into a more diversified portfolio. The goal 753 00:37:12,640 --> 00:37:15,200 Speaker 2: is not to eliminate concentration. You're probably always going to 754 00:37:15,239 --> 00:37:17,719 Speaker 2: be overly concentrated in some of these situations. It's just 755 00:37:17,719 --> 00:37:21,359 Speaker 2: to make sure you're not unintentionally making it worse. Next 756 00:37:21,360 --> 00:37:23,640 Speaker 2: play here is let's talk about liquidity. So high networth 757 00:37:23,680 --> 00:37:26,080 Speaker 2: clients a lot of times have pretty complex balance sheets 758 00:37:26,120 --> 00:37:29,719 Speaker 2: with private investments, business interest, real estate, taxbile accounts out 759 00:37:29,719 --> 00:37:33,160 Speaker 2: there in a slowing economy. You guessed that liquidity is king, 760 00:37:33,239 --> 00:37:36,279 Speaker 2: So make sure you're twelve to twenty four month cash 761 00:37:36,280 --> 00:37:38,359 Speaker 2: flow needs are fully funded. That's going to protect you 762 00:37:38,560 --> 00:37:41,959 Speaker 2: from needing to have a fire sale if some bill 763 00:37:42,000 --> 00:37:44,080 Speaker 2: comes due and you didn't have the liquidity to handle it. 764 00:37:44,520 --> 00:37:45,640 Speaker 3: This liquidity can be. 765 00:37:45,640 --> 00:37:48,640 Speaker 2: Cash, short duration bonds, high quality fixed income types of 766 00:37:48,680 --> 00:37:51,360 Speaker 2: things that aren't really going to suffer too much as long. 767 00:37:51,200 --> 00:37:53,520 Speaker 1: As a as long as. 768 00:37:52,200 --> 00:37:55,920 Speaker 2: The price is hold up so much. So liquidity that's 769 00:37:55,920 --> 00:37:58,279 Speaker 2: that shock absorber. We want to make sure we've got flexibility. 770 00:37:58,320 --> 00:37:59,920 Speaker 2: I can see you want to have a reaction by 771 00:38:00,200 --> 00:38:00,959 Speaker 2: go ahead. 772 00:38:01,080 --> 00:38:03,000 Speaker 1: No, all, it's going to add is here is you 773 00:38:03,040 --> 00:38:05,799 Speaker 1: could kind of kill two birds with one stone. Sometimes 774 00:38:05,840 --> 00:38:11,040 Speaker 1: avoiding that over concentration risk by default solves that illiquidity risk. 775 00:38:11,160 --> 00:38:14,120 Speaker 1: So you know, I think you're making two great points 776 00:38:14,160 --> 00:38:16,400 Speaker 1: that should always be talked about. But they kind of 777 00:38:16,440 --> 00:38:18,400 Speaker 1: work hand in hand, is what I was thinking as 778 00:38:18,440 --> 00:38:20,240 Speaker 1: you as you were sharing that great advice. 779 00:38:20,400 --> 00:38:22,440 Speaker 2: Oh absolutely, these are this isn't pick one thing and 780 00:38:22,480 --> 00:38:23,799 Speaker 2: do it. These are all the things I ought to 781 00:38:23,800 --> 00:38:25,799 Speaker 2: be looking at. So so yeah, and so evalue look 782 00:38:25,800 --> 00:38:28,359 Speaker 2: at private market and alternative investments. If you haven't yet, 783 00:38:28,400 --> 00:38:30,680 Speaker 2: these are things that can move in different directions than 784 00:38:30,719 --> 00:38:33,480 Speaker 2: your other types of assets. Learn about them, maybe maybe 785 00:38:33,520 --> 00:38:35,359 Speaker 2: make a commitment in twenty six to learn what those 786 00:38:35,360 --> 00:38:38,160 Speaker 2: are and whether they might help you. Tax efficiency always 787 00:38:38,160 --> 00:38:41,200 Speaker 2: important thing, tax loss harvesting strategies if you have If 788 00:38:41,239 --> 00:38:43,000 Speaker 2: you if you haven't done that yet, take a look 789 00:38:43,000 --> 00:38:45,200 Speaker 2: to see if there's any opportunities for you there for 790 00:38:45,280 --> 00:38:47,480 Speaker 2: a little bit of savings, and then finally reinforce that 791 00:38:47,520 --> 00:38:49,440 Speaker 2: long term plan. Figure out what you were trying to 792 00:38:49,520 --> 00:38:51,160 Speaker 2: do in the first place, which you probably knew at 793 00:38:51,200 --> 00:38:53,040 Speaker 2: some point. Make sure you're still on that path. 794 00:38:53,840 --> 00:38:56,120 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 795 00:38:56,160 --> 00:38:59,279 Speaker 1: presented by all Worth Financial on fifty five KRC the 796 00:38:59,640 --> 00:39:00,320 Speaker 1: talks patient