Tidying Things Up Before the New Year

Episode Transcript

Speaker 1 (00:03):
For ten w U I b A and Ask the Experts,
joined this morning by Nathan Plump, Certified Trust Financial Analyst Advisor.
Excuse me with an executive MBA. Of course, Nathan comes
to us from Wisconsin Capital Management and they bring you
Ask the Experts this morning. You can learn more about Nate,
you can learn more about the whole crew at Wisconsin
Capital Management. You can also start a conversation, no obligation,

(00:25):
no pressure, just heading over to wizcap dot com. That's
wy scap dot com. Get start your journey right there
without any further do Nathan, how you doing this morning?

Speaker 2 (00:36):
Doing all right? Just just trying to stay warm like
everybody else. And yeah, and just you know, client service
out there, and make sure that you're checking on people
around you. It's really cold outside. If you see someone
in trouble or it might be in trouble, you should
check on them because the temperature is going to go down,
and you know, just do the human kindness thing. So

(00:57):
I know it's easy to keep driving, but yeah, make
sure you stop and observe.

Speaker 1 (01:02):
That's and that's for sure. And even even if you're
around the neighborhood, check in on some of your neighbors
and other folks just see how they're doing this time
of your good, really good guidance there. As we talked
this morning with Nathan Plumb, of course certified trust financial
advisor with an executive NBA from Wisconsin Capital Management. So
we're getting close to the end of the year and
and we've got of course year end financial planning moves

(01:25):
that can save you not only taxes, but help boost
retirement savings and really set folks up. We're really kind
of set in the stage for twenty twenty six, aren't we, Nathan.

Speaker 2 (01:34):
Yeah, So you know it's towards the end of the year,
people are like, oh, I need to do a little
bit of you know, just a little bit of cleanup
right before the you know, year end. So you know,
financially speaking, this is kind of like halftime at the
football game. So if you're down behind by halftime, you
can make hopefully make some adjustments and pull a victory

(01:55):
and hopefully be as good as the packers in the end.

Speaker 1 (01:58):
Yes, yes, we hope. So I really little adjustment here,
a little adjustment there, and things can be absolutely good.
So let's start out, Nathan. We'll start out on retirement
accounts and you know you got folks with you know,
whether it's four oh one K or four three B,
it's important right now. In general, it's always important to
keep an eye on your pay stubs, but it's also
a good time right now to make sure you're taking

(02:18):
advantage of all the great benefits that your employer may
be offering, including that employer match. Right.

Speaker 2 (02:25):
Yeah, when you first start with your company, they give
you this dense handbook, usually just online. They don't even
give you the handbook any bar about all your all
your retirement options, and most of it looks like it's
in Swahili. It's really kind of hard to understand. But
one of the main things that you kind of have
to pay attention to you is if they have a
match to either four to one K or a four

(02:46):
or three B, or if you're there's other plans out there,
like a four fifty seven. But there's all these different
type of retirement accounts, and a lot of these employers
is an incentive to incentivize you to stay there and
keep to be a good worker. Give you free money
to add to your retirement, but make sure that's turned on.

(03:07):
Make sure that you're giving up to the match. For example,
if your employer matches three percent, so the employee gets
three percent, and then you can contribute three percent, so
six percent total a year can solve a lot of
your issues in the future. So if you're unsure to
talk to your HR person and if you're behind, hopefully

(03:27):
you can catch up. They'll tell you how you can
catch up. Also, if you're over fifty years old, there
are special provisions that help you catch up, so you
can actually put more money in if you're a little
bit older. So it's just a good maintenancing to make
sure that you're giving up to your match.

Speaker 1 (03:42):
So as we talked then about folks in the catchup
contribution the way to supercharge your savings later maximizing your
account right now. It can also help with taxes and
really build towards the build towards the future when it
comes to tax advantage growth. Am I right on that note?

Speaker 2 (03:57):
Exactly right? So the more money that you can pump
into your four oh one K, especially when you're younger,
but it's never too late if you can get put
a little bit extra money each year or a little stuff.
So essentially give yourself a little bit of bonus boy,
that can make such a huge difference. So on this
show we always preach that you always had to start,
you had to get out the inertia. And once you start,

(04:20):
you know, you can put it in something like the
S and P five hundred in your retirement program. And boy,
you're really well on your way. I mean, you've really
I mean, you're doing a great job. You should pat
yourself on the back. So but yeah, you gotta start,
and you got to get in there or else it's
really hard to catch up when you're in your sixties
or seventies.

Speaker 1 (04:40):
Talking this morning with our good friend Nathan Plumb. Of course,
Nate comes to us from Wisconsin Capitol Management. Their website
whizcap dot com. That's wiscap dot com. Great website to
learn about Nathan, learn about Tom, learn about the whole
team at Wisconsin Capitol Management, all the different services that
they offer. Also a fantastic opportunity to start a chat,
start a conversation as a little conversation bubble that pops up.

(05:03):
From there. You can ask questions, you can schedule appointment
and start that conversation. No obligation to you. Just head
on over to wizcap dot com. That's wis cap dot com.
And as we look towards the end of the year
as well, Nathan, I think roth conversions and being in
that window, what do folks need to know in that area?

Speaker 2 (05:23):
Yeah, if you listen to the show at all, I
am the huge, biggest fan of roth iras. I am
a fanatic, So I apologize if I keep saying this,
but there are an absolute wonderful thing. So you put
money in. This is the money out of your checking account
and a tax deferred so that means there's no taxes

(05:44):
on capital gains or on dividends. It grows and grows
and grows with a powerful compounding right, and then when
you take the money out, you don't have to pay taxes.
So it is just a beautiful thing. So there's different
things you could do at the end of year. So one,
if you could start a wroth Ira, that'd be lovely.
But if you do make quite a bit of money,

(06:05):
So if you make over one hundred and sixty five
thousand dollars if you're single, or two hundred and forty
six thousand dollars if you're married, there's something that you
could do that's a little bit special. It's called a
backdoor wroth. So what essentially is you open up a
traditional ira, you put money into that traditional ira, and
then the very next day you convert it into a

(06:28):
roth ira. So that way you can even if you're
over the income limits, we can start a roth ira
for you. So yeah, it's just one of the many
little financial planning little tidbits that could really make a
big difference for you.

Speaker 1 (06:42):
That is fascinating stuff. So we talked tomorrow with Nate
Plump with Wisconsin Capital Management Online wiz cap dot com.
That's wiscap dot com and Nate. People think it's all
or nothing and that's just not the case. When it
comes to converting. You can you can convert a slice
of it in a roth conversion. It's kind of like
prepaying taxes during a sale on the rates lower than
you expected for later.

Speaker 2 (07:04):
Yeah, so what you do is we can help you
do this too, is what your expected tax bracket is. Right,
So remember these are tiered, so it's a little bit difficult,
but to do it just there's not one circular calculation,
but you can really make a difference if you're if
it's not going to jump a tax break, it bracket.

(07:25):
It may make sense to just convert a little bit
that old I Ray money that's down in a digital
are to convert that into a raw so you'll pay
taxes on it. But again it may be something that's
just been for the future. So if you're if you're
not gonna you know, pay more taxes doing it, it
may make sense for you. But as we say in
the show, everyone's individual, everyone's you know, everything needs to

(07:47):
be personalized. But uh, that's something that we kind of
look for if we talked with somebody here at Wisconsin
Capital Management.

Speaker 1 (07:53):
And that's and that's a good point to mention as
well as we talk about everybody being unique and every
approach is personalized. That's one of the great things when
you work with Nate and Tom at Wisconsin Capital Management,
they are working directly with you there, working for you
and of course giving you that personalized plan. You can
start that conversation right online at wizcap dot com. That's
wiscap dot com. There's a little chat bubble there. You

(08:15):
can start that conversation, no obligation, no pressure, just a
great place to kind of get to know Tom and Nate.
They'd love to get to know you again, just head
on over to wizcap dot com. That's wiscap dot com.
And of course, as we look towards the year's end,
I know charitable giving is another opportunity, kind of a
win win, and instead of giving maybe small amounts each year,
some people may benefit by bundling donations Nathan every few

(08:39):
years so they can itemize deductions. Is that correct?

Speaker 2 (08:42):
Yeah, that's correct. So yeah, if you're charitab inclined. So
there's different nonprofits around, like for example, at Dane County,
at United Way here, but there's hundreds by me, thousands
of in the Medisine area. Or if you just want
to give it to your church or your synagogue, are
your mosque right, So you know it's to sometimes it
makes sense to like, you know, I want to put

(09:04):
my h I want to give away, but I'm not
exactly sure sure right now and I'm not exactly when.
So something called a donor advice fund could be really beneficial.
So that way you can take the whole charitable deduction
this year for you and then you could just make
plans in the future how to best allocate. So, you know,

(09:24):
I was thinking about my elderly neighbor when I did this,
so you know, they would pull out a check book
if you know, people still remember what that is, and
she would write out things two different charitable organizations in
the town of Middleton, and uh, that's the way that
she did it. But that might not be the best way. Like,
so if you're over seventy a half, probably the best

(09:46):
way if you have an IRA is to give away
from your IRA. So if you take money from your
IRA put it in your check account, you get taxed.
But if you have money in your IRA and you
give it directly to the charity, you don't get tax
So that's a one way we could actually, you know,
give donations to someone you really want to, but doing
a smarter and more tax efficient way.

Speaker 1 (10:08):
Are we talking there about qcds has qualified charitable distributions there.

Speaker 2 (10:12):
Nate, Yeah, so we'll come if you get your return
from your IRA, it'll come as a QCD. I'm sorry
all these acronyms on qualified charitable distribution and alf you
older seventy eight. We've also and other episodes talk about
r mds. Those also come out, so you'll get the
different tax forms of that. If you're over seventy and
a half.

Speaker 1 (10:31):
Really great information to know. Thanks to keep on your
radar as we get towards gosh, we are almost a
twenty twenty six. It's been great chatting with Nate Plumb
this morning. You can continue that conversation if you head
on over to wizcap dot com. That's wiscap dot com.
From the website, you can start a conversation, no obligation,
no pressure. If you've got any questions. Nate, Tom and
the whole crew at Wisconsin Capital Management love to get

(10:53):
to know you again. Just head on over to the
website wiz cap dot com. That's wiscap dot com. We're
gonna talk about something called tax loss harvesting. You've probably
heard about it. What exactly is it? We'll get the
details from Nate. We will do that next as Ask
the Experts with Wisconsin Capital Management continues right here on
thirteen ten Double U I B A thirteen ten double

(11:18):
U I B A and Ask the Experts with Wisconsin
Capital Management talking this morning with Nathan Plumb of Wisconsin
Capital Management. Nate is a Certified Trust Financial Advisor as
well with his executive MBA. Talking this week about putting
putting stuff in your off and four oh one, cas
we get towards year end some of those financial planning
things that you want to check off the list and

(11:40):
and nate. Just before the break, tax lost harvest tax
loss harvesting came up, and it's a good time of
the year to be to be taking advantage of that.
If you've if you've got some some things out there
that you may wanna, may want unload, now maybe the
time to do it, might do correct.

Speaker 2 (11:57):
Yeah, So you know this may be a hard to believe,
but the IRS essentially lets you lose three thousand dollars
every year in your investment portfolio. Really, so this is
your taxable account. This is something that would be in
your brokerage, so something in your Charles Schwab or your
Robinhood account, so something like that. So every year, usually

(12:20):
tax professionals and people like us, they look at your portfolio.
They make some recommendations. I usually try to rebalance the
portfolio because you know, sometimes these portfolios get a little
of a whack, especially this year when the market went
down the spring and then came back charging up. You
might have some you know, anomalies in your portfolio that
you might want to, you know, think about correcting for

(12:42):
the long term. So so for example, if you have
if you lost money on a stock, I'm trying to
think of one that's gone down. Oh there's not that many.
But yeah, so your stock went down and then you
lost three thousand dollars, you should sell it right and
so that way and take the tax loss for that.

(13:03):
And then the key thing about that is you don't
want to buy it back right away. There's something that
the SEC has about wash sales. So once you sell
a stock and a tax will count, you can't buy
it back within thirty days. So if you sold the
stocks for a tax loss and you really want to
own it in the future, you just got to wait
a little bit. So and it's easy to forget you

(13:25):
always people usually if you don't set a calendar reminder
to yourself, it's a hard thing to remember some of
these washhot rules. So if you do a wash sale,
then negates the tax loss harvesting.

Speaker 1 (13:36):
You know, one of the for folks who don't know
you and I talked a bit before the show and
kind of go over some of the notes, and one
of the things you had mentioned is it's like turning
lemons into tax lemonade, and I thought, what a perfect
what a perfect description for that. Nate, Hey, while we're
while we're kind of in this area too, it's probably
a good time as well. And I think you had
mentioned this. The word rebalance comes into play this time

(13:57):
of year, doesn't.

Speaker 2 (13:58):
It, right, So usually when you get older, you want
to type of a mixture of stocks and bonds in
your portfolio. So the reason you do this is because
stocks and bonds aren't exactly correlated with each other. So
the way that we design our portfolios at Wisconsin Capital
Management is we have bonds in the portfolio and we

(14:19):
try to make them act like a shock absorber during
down markers down market. So it doesn't always work, but
historically it works really well because the usually these assets
are different, not correlated, and the main thing is that
you can you need to reset it. So usually the
stocks when most normal year, stocks run more than bonds,

(14:41):
but it's important to rebalance. You want to avoid that
big down year. You want to still be balanced and
make sure that your shock absorber and your portfolios up
the stuff. And that as our especially with Scottson Portfolio Manager,
we are known as balanced managers.

Speaker 1 (14:56):
Oh, it's great to hear, as we talked this morning
with Nathan Plumb, certified Trust and Financial Advisor with an
executive MBA. Of course Nathan comes. So it's from Wisconsin
Capital Management. Getting to known eight and getting to know Tom.
It's really easy to do. You, of course, can head
on over the website whizcap dot com. That's a wiscap
dot com. No only you can get to know the guys.
You can set up an appointment, start that conversation right online.

(15:17):
No pressure, no obligation to you is heading over to
whiz cap dot com. That's wiscap dot com. Something I
was unaware of until I had a child, which was
a five two nine plan, and then oh my goodness,
you start learning all about these things. What are they? Nate? Obviously,
they are an amazing tool for folks that aren't aware.
Not only is it good for parents, good for grandparents

(15:39):
to help out the grandkids, isn't it?

Speaker 2 (15:41):
Yeah, So the requirements or a five twenty nine, they
always had these funny names, so it's usually some an
IRS code, So that's why I got that kind of
silly name. But they're a beautiful tool for someone that
if you know that someone had a baby or having
a baby shower. It is really an incredible gift. So
ultimately need the child's legal name and their Social Security number,

(16:03):
and you can open a five to twenty nine account
for them. So when you do this, and so this
is money that they can save for their education. When
they first had their iteration on the plan, they essentially
for college savings. But then as most parents found out,
they found out their preschool and other things are really expensive,

(16:24):
then they kind of opened up and'll let you take
money out for that. So you get a small tax
deduction on it. It's not that much, but the state
of Wisconsin has a plan called Dvest which you go
through or you could go through someone privately like us
and we would custody something like Charles Schwab. If the
tax deduction doesn't make that much sense for you, but yeah,

(16:46):
it's a great way. So the thing will grow and grow,
It will grow tax deferred. It should be aggressively invested
so that because the college and inflation costs are pretty high.
But you know, people's drawback is like, well what if
the child doesn't end up going to college or end
up using the education, Well, you can actually change it
to somebody else you can change to another sibling or

(17:08):
another person, or if you don't use it, we probably
advise more. Is that ultimately can be converted into a
wroth Ira. So it's almost like triple tax exempt. And
it's a beautiful way to let someone know you're thinking
of them and thinking of their education. And if you're
a grandparent or if you're you know, someone that really

(17:29):
wants to focus on, you know, giving your kid the
best possible future as most people want. Boy, I cannot
advocate these enough. So yeah, if I twenty nine is
wroth iras yeah, Wisconsin cable management, he might get tired
of me talking to them. But uh yeah, there are
beautiful gifts, and especially around Christmas time. Boy, if you
can think of doing something like that and it's an

(17:50):
incredible gift.

Speaker 1 (17:51):
Well you think about you think about other things that
you can get for the kiddos and grandkids. They you know,
toys and our things. They play with them for a
week or two and then they're broken in the trash
and a landfill somewhere. Whereas this is something that Gosh,
as they age, they will appreciate more and more on
seeing that growth and Nathan, as we talked to this
morning about kind of some family stuff for kiddos and families.

(18:14):
Annual gift limit's something that should be on folks radar
as we wind up the year as well, is aren't they.

Speaker 2 (18:19):
Yeah, so I don't have this problem. But you can
give seventeen thousand dollars to any one you want, so
of course, if you're married, you can double that. So
if you want to gift to a child and things
like that, you can. That's the limit right there. So
if you do anything over seventeen thousand dollars a year,
you have to give a special notice for your annual

(18:41):
gift tax exclusions, so because the government wants to track
if you're doing that. But that's one way you could
think about things. But the major issue that really comes
up in these retirement account planning is that these you know, annuities,
these iras, these four oh one k's, these four or
three you have to actually pick your beneficiary and you

(19:03):
got to keep it updated. So if you're single, now married,
you should probably change it. If you were married and
now divorced, you probably need to change it. Especially if
you're married, divorced and now remarried. You will not believe
how many ex spouses come to these are on these plans,
and so sometimes you find out too late and you

(19:26):
cannot undo it, right, it doesn't matter what your will says,
and so yeah, and it definitely make your current partner
pretty upset. So's to make sure that you keep your
beneficiary designations updated. And you know also with your insurance
makes things are titled correctly. So in our financial planning world,
how things title things are key. So there's nothing that

(19:49):
supersedes that.

Speaker 1 (19:50):
Really important time a year to be reviewing all of
that stuff. And speaking of reviewing, and you know it's
looking towards the new year with a fresh start, I've
been looking for some great folks to work with. Definitely
check out Nathan and Tom on the team at Wisconsin
Capital Management. Is a prime time to start that conversation.
They really make they make it easy really for you
to get started. If you head on over to wizcap
dot com. That's wi scap dot com, little chat bubble

(20:13):
that pops up from there, you can start a conversation.
I have no pressure, no obligation, gets no Nate and
Tom and everyone at Wisconsin Capital Management, they would love
to get to know you again. The website whizcap dot com.
That's wi scap dot com and Nata. As we kind
of wrap up this week, I know there's probably a
lot of folks that are saying, you know, I should
probably be looking into that stuff I mentioned going online

(20:34):
to wizcap dot com. You and Tom do this each
and every day, and you guys really love doing this stuff,
don't you.

Speaker 2 (20:40):
Yeah, we get a lot of people that come in.
They feel a little bit nervous, are a little bit
you know, embarrassed that there's like, oh I wish I
had more, but you know that that really doesn't matter.
It's just where you start. So a lot of people
just bring in their whatever financial statements they can find.
They bring in their tax return off. This is online,
so we have a secure portal you can email in

(21:02):
advance and we go there and yeah, usually people find
it kind of quick, easy and painless. So so yeah,
we usually, uh, you know, make people feel comfortable and
and really, you know, it's something that can really help
your future and you'd be amazed so much having that
kind of future plan set out how much it can
help you in the present.

Speaker 1 (21:23):
The best day to start the planning was yesterday. The
second best is today, and today is that day. To
get on over to the website whizcap dot com that's
wi scap dot com. Take action today as we look
towards twenty twenty six, making it a productive future. It
all starts with a stop at wizcap dot com. That's
Wi s cap dot com. Nate, it's always great chatting
with you. You enjoy this, great Dan. We'll do it

(21:44):
all again real.

Speaker 2 (21:45):
Soon, all right, stay warm out there.

Speaker 1 (21:47):
Oh yeah, and again the website for Wisconsin Capital Management,
whizcap dot com that's wi scap dot com News comes
your way next here on thirteen ten Wui b a