Simply Money

Episode Transcript

(00:06):
Tonight, we have some major politicalnews to digest, and what does the
market think about all of this?You're listening to Simply Money, presented by
all Worth Financial, Imy Me Wagneralong with Steve Ruby. So much to
get to on this Monday. Wedon't want to waste any time. We're
going straight to all Worst Chief investmentOfficer Andy Stout. You know he manages
billions of dollars in investments from righthere in Cincinnati. Andy. We have

(00:28):
said on the show for years andyears and years, We're not red,
We're not blue, We're green.So much to digest politically, now let's
get into it. Yeah, soPresident Biden has decided to drop out of
the race. I think we allprobably saw alerts on our phones yesterday.
It's like, oh, I justdropped out, and then we probably all

(00:48):
tuned into whatever your favorite news networkwas absolutely see what was going on.
And seems that looks like, youknow, he's endorsing Kamala Harris. We
all know who the person on theticket will ultimately be. But what this
does it removes uncertainty but also addsuncertainty, and that the uncertainty that it
gets removed is will Biden run orwill he not run? And what happened

(01:11):
during that time of what's Biden goingto do is you saw really Trump take
a pretty commanding lead in the pollsand as a result, you saw the
truck trade essentially get priced in,which means stocks that would benefit, you
know, from lower corporate taxes likesmall caps as an example, or deregulation

(01:33):
like financial energy companies, they sawa bid up and they increased more than
the broad market. Also, therewould be some likely if we want to
go based on history, some increasedinternational trade tensions over the trade war,
right, So what that would meanis that would mean the technology companies they

(01:57):
they could face some challenging times dueto those heightened trade tensions just because of
all of their overseas business. Sonow that that uncertainty is removed with the
with Biden, you could see apotential reversal of that Trump trade. It
really depends on if Trump is stillexpected to win or will whoever the Democrats

(02:22):
put on the ticket. When nowshould the Trump trade unwind? You know,
you could see a little bit ofthe volatility in the near term,
but we're always going to see volatility. Volatility is pretty common in the near
term. I mean, anytime youlook at the market on any given day,
there's about a fifty five percent chancethat the stock market is higher or

(02:44):
lower. So uncertainty should be expected. Now it might be a little bit
more heightened just because the political riskthat's out there. With all that being
said, though, when you lookout over longer periods of time, like
one year, markets are up aboutseventy five percent of the time. You
look out over three and five years, we're looking at about ninety percent of
the time they're higher. So I'mnot going to even try to preddict what

(03:07):
sectors might do better over the nextfew days. Certainly, people are much
better off focusing on the financial planand making sure they have the right investment
mix, regardless of who is inoffice. Andy, I think when we
get closer to November, many people'ssort of have heightened emotions around these elections.

(03:28):
People feel really strongly about their candidate, their party either direction. Then
you kind of throw in all ofthis sort of Biden stepping out, and
you know who will the Democratic Party, you know, nominate beyond him?
Will it be Kamala, will itbe someone else? It feels like a
lot of uncertainty. And for thosepeople who are just really, really nervous

(03:49):
about politics at all, I've heardmany kind of weighing and like, I'm
just going to take my money outof the market. What do you say
to those people, especially on theheels of what Biden did this weekend.
Well, I would say taking yourmoney out of the market is not the
best of ideas. I mean,regardless of who's been in office, stocks

(04:09):
have risen. I mean, whenDemocrats have been in the Oval office,
stocks go up. When Republicans havebeen in the Oval office, stocks go
up. I mean, really,the president doesn't have as much control over
the big picture as the president mightlike to think or the news channels might
like to tell us. I mean, just here's some a few examples.

(04:31):
We always hear about the importance ofdebt management or our deficeits, you know,
and then they come from different angles, whether Republican or Democrat, but
they all say it's really important tomanage our debt. But if you look
back over the last fifty years,it doesn't matter who's been in the office,
our debt has risen every single year, whether it be a Republican or

(04:57):
a Democrat, it has not mattered. It's gone up all during all of
those terms. Now, if youlook at just broad economic growth over the
past fifty years, there's really notmuch of a difference between what the economy
grew at when a Democrat was inoffice versus what the economy you're at when
the Republican was in office. Itjust doesn't matter that much. And of

(05:18):
course stocks ever isen under both regimes. So when you think about going to
cash or doing something whatever, thoseare emotional decisions, and emotional decisions can
cost you your retirement. It's justa really bad idea to not focus on

(05:39):
your financial plan and not focus onthe fundamentals, and not focus on how
much risk you need to take,and not focus on you know, if
you'll be able to sleep at nightwith this level risk, and instead focusing
on who's going to be president whatwill that mean with the wrong person get
it gets in the White House.That's not what you want to do.
That's going to cost you your retirement. Yeah, Andy, I appreciate that

(06:00):
historical perspective because I think a lotof us need to hear that. Right
now, you're listening to simply moneypresented by all Worth Financial A Mimi Wagner
Long with Steve Ruby as we arejoined by Andy Stout, our chief investment
officers. He joins us every Monday, usually to digest sort of the normal
headlines of this week. But wehave big headlines right now, of course,
with President Biden dropping out of thiselection, you know, And Andy,

(06:23):
I want to ask you because you'vetaken so much information and I've asked
you this, I don't know monthsago on the show, I said,
what keeps you up at night?Is there anything that keeps you up at
night? And if so, whatis it? I want to ask that
question again now because I think there'sa lot of things keeping people up at
night. But I love your perspectiveon how are you sleeping? I'm sleeply

(06:46):
okay, good? So what's stressful? And I mean, you know,
I have one teenager about to callit, another one going to be a
junior. Those are the I mean, you think of big picture, that's
the stuff that really matters, andyou know, but still I'm able to
sleep at night through that. Anyway, Beyond the personal stuff, is there

(07:10):
anything in the economy and the markets? I mean, you're you're managing billions
and billions of dollars here. Isthere anything that is worrying you right now?
Everything is cyclical. You need weneed to understand that. Yeah,
stocks will go up, bonds willgo up, stocks will go down,
bonds will go down. A Republicanwill be president, Democrat will be president.

(07:31):
And through the thickened then of itall, what's happened. American ingenuity
has won out. We have seenour economy and capitalism continue to grow regardless
of all of that, and thecycle will continue. So, yeah,
there might be some downs, ofcourse there is. That's part of the

(07:54):
cycle, and then there's going tobe options. Those ups are much better
than the downs, and they lastlonger than the downs, and ultimately that
allow us to see our four toone k grow to contribute to you know,
five twenty nine plans or your yourrath Ira, whatever it might be.
The ups are much longer and strongerthan what the downs are. Andy,

(08:16):
you mentioned American ingenuity. You mentionedthe fact that you will bet on
the American economy and these businesses findingways to make money every single time.
We are in the midst of earningseason. How's that looking, Well,
so far, it's pretty good.I mean it's it's early. We've only
had roughly seventy one companies I saidroughly making roughly seventy one that's very exact

(08:39):
report profits as of last week closed, and it's been pretty good so far.
Eighty three percent of those companies havereported better than expected profits when we
look at the year of a yearchange. So the second quarter earnings of
twenty four compared to the second quarterearnings of twenty three nine point nine percent
higher, and that's better than whatanalysts expected heading into this season. They

(09:01):
were looking for an eight point threepercent increase, so pretty good. On
the earnings from sales similar slightly outpacingthere, we're up four point seven percent
what's expected as four point six percent, so we're moving in the right direction,
but still it's pretty early. Thisweek, we're going to get a
lot more companies reporting profits. We'llhave one hundred and thirty one large cap
stocks reporting. The big one isgoing to be Alphabet, which is Google's

(09:24):
parent. Also, we'll get Teslathis week for eizon AT and t Ford
and GM, just to name afew. So after this week we'll be
about forty percent of the way throughearning season and we should have a better
indication. But if you look athistory, what you see as you see
companies continue to essentially lower their earningsguidance and that allows them to beat those

(09:45):
estimates. So I want to besurprised if we end up still with like
a eighty percent be rate or eightypercent of the company's reporting better than expected
profits. That won't shock me atall. And as we talk about major
political news, let's talk about theFederal Reserve, our nation central bank.
Do they ca care about this andif not, what are they focusing on
right now? Well, they saythey're politically agnostic, but I'm sure there's

(10:09):
some thoughts percolating in the back oftheir mind. There's no question about that.
You know, what the Federal Reservesays they care about are stable prices
and full employment. That's their dualmandate, if you will, that's what
they're trying to achieve. Now.On the stable prices, that's inflation.
I'm we haven't had stable prices inyou know, a couple of years,

(10:30):
obviously, but it is moving inthe right direction. What the Fed likes
to look at is what's called PCEinflation, which is a broader inflation measure
than just CPI, which is yournormal consumer inflation you hear about. Anyways,
we're actually going to get an updateon PCE and what the Fed is
looked this week. And what theFed is specifically looking at is core PC,
which excludes food and energy prices,and it's expected to come in at

(10:52):
about two and a half percent.So while it's so higher than the fed's
two percent target, if you lookat a trend, it is moving in
the right direction. Here's the allWorth advice. Politics is center stage right
now. Predictions about crashes, ofcourse, are going to be on the
rise, but if you have adiversified portfolio, please stay the course.

(11:13):
You're listening to Simply Money presented byall Worth Financial. Here in fifty five
KRC the talk station. You're listeningto Simply Money presented by all Worth Financial.
I mean you Wagner along with SteveRuby. If you can't hit the
show every night, you do nothave to miss a thing. We've got
a daily podcast for you. Justsearch Simply Money on the iHeart app or
wherever you get your podcasts, andcoming up at six forty three common tax

(11:37):
mistakes one group of people are makingand it is costing them thousands of dollars
let's make sure this is not you. So did you know that the IRS
is actually sitting on more than eightbillion dollars of tax refund money? And
it's not that they're not willing toshare it with you, it's that you
don't even know that it could becoming to you. It might be yours

(11:58):
or someone you know. Yeah,and the clock is ticking to collect that
billion dollars that's left on the tablefrom twenty twenty. You could risk missing
out on cash if you are entitledto some of this money. There's about
a million people nationwide that face aMay seventeenth deadline to submit tax returns for
unclaimed refunds for the twenty twenty taxhere. That's a week from today,

(12:22):
guys, Yeah, not a lotof time. And in Ohio there's thirty
one thousand taxpayers who have unclaimed fundsnine hundred dollars. Plus Kentucky about ten
thousand people also owed, probably ninehundred dollars or more. How do you
figure this out? Right? Becausemost of us we're like, oh,
I don't know three years ago,did I did I not? What does

(12:45):
that look like? So go tothe IRS and set up an account and
once your information is on their site, they can tell you whether you are
owed any money. This blows meaway year after year that there's just this
huge discrepancy between how much money peopleare owed in why it's not exactly getting
to them. But this happens.I got to talk about this next story

(13:07):
because it's a crazy one. Sothere's this twenty seven year old dude.
I won't get into details here,but apparently he was going down a rabbit
hole on his phone while in therestroom, and he apparently somehow ended up
on Cardier's website. Cardia is avery very high and luxury goods jeweler,

(13:28):
and he came across these Cardia earringson the jeweler's website that said they were
selling for less than fourteen bucks,right, thirteen dollars ninety one cents.
He thought, this is a deal. Maybe a mistake, but I'm going
to buy two pairs of these earrings. Yeah, eleven six hundred dollars.
So it's kind of funny because wespend time every morning as a group kind

(13:52):
of preparing for each day's show.And I have a confession to make.
I either am losing my mind orI truly have not heard of Cardia.
Maybe that's a testament to my upbringing. There was never any fancy jewelry around
me. But it boggles my mindthat you can spend this much money.

(14:13):
Amy and I were talking about thisearlier and she explained to me that there's
for their bracelets. There's a specialtool that you need to use to take
on and off these bracelets. Yeah, I mean this is high end stuff,
right, Cardier Watches, there's Cardiabracelets that you have to have.
Yeah, that's little like golden toolto put them on and off. And

(14:35):
I'm sure that probably cost an additionalseveral thousand dollars. So you can imagine
why this guy and I don't spendtime on Cardia's website. So I completely
missed this deal of a century here. You mentioned those earrings were actually worth
eleven six hundred. Once Cardia sawlike, oops, these were actually listed
for the wrong price, they wentback to him and said, actually,

(14:58):
this was a mistake. They triedto cancel the order. They said the
item was no longer available. Hesaid, nope, we're not canceling this
order. Then he started to callhim and offer him other things. I
bet they did. It. Actuallyalmost went to court. This guy,
though, knowing that he truly hadgotten the deal of the century, stuck
it out. Ultimately they gave him. You know, it would have been

(15:20):
twenty eight thousand dollars essentially worth ofearrings are close to that twenty four thousand
for twenty eight dollars. By theway, he bought them for his mom.
Heck of a Mother's day for her. Maybe my kids, maybe my
kids were in the Cardier website whenthis happened, and I'm about to open
these this weekend. I wonder whatthe odds of that are. No,
I mean this guy, this guywas in Mexico, I guess, and

(15:43):
he was like, like you said, just scrolling through their website for whatever
reason and noticed that deal that happenedto be at Target once a Blu Ray
DVD. I saw it listed forlike twenty six cents, and I took
it up to the counter and theysold it to me for that, and
I was like, you know,this is listed and the person in line
who's like, I don't care.Not not quite the same as as what

(16:06):
Cardier tried to do by by comingback and saying, hey, we're going
to give you this leather jacket anda bottle of champagne or something. I'm
glad he's stuck to his guns.Yeah and escalated this because he really did
strike hold. Yeah, his mother'sgetting one heck of a Mother's Day gift.
Right for all of you who arelistening tonight, we expect Mother's Day

(16:26):
gifts on par with this with Cardierearrings. Just kidding. I just hope
my kids remember that it's Mother's Dayand respond accordingly. We'll see how that
turns out. Speaking of Mother's Day, every Sunday, you're gonna find our
all Worth Advice in the Cincinnati Inquire, but we like to give you a
preview. I wish we were talkingabout moms instead, we're talking politics this
week. Gordon Highland Heights says whowill be better for the economy? Trump

(16:51):
or Biden. So we've said ittime and time again that we are not
red or blue, we are green. It's important to try to remove own
personal biases from from advice when whenyou're a fiduciary financial planner and this type
of conversation. Obviously, it's inan election year, so it's going to
keep coming up between now in November, and it's a hyperpartisan era with social

(17:15):
media. So it's it's important totake a step back and look at things
through the lens of data rather thanemotions via politics. So there's two big
factors that affect the economy. Thefirst, and we've talked about this significantly,
is consumer spending. That's how muchwe all spend, your friends,
your family, neighbors, infusing cashinto the economy, and that makes up

(17:37):
about seventy percent of the US's economicoutput GDP, that is, and that's
driven by bank lending standards, inflation, interest rates, the job market,
corporate profits, profits, a lotof other things. Next biggest factor is
government spending. And this is wherethere could be some differences. Yeah,
well here, listen, guys,I know people whoevery year or every presidential

(18:00):
election will say, if this personis the one that's put in over the
Oval office, I'm moving to Canada, I'm leaving the country. Nobody ever
does that. Let's think about this, honestly. Do you change your spending
habits? Do you go out toeat less? Do you buy less for
your kids for Christmas? Do youspend less on vacation depending on who's in

(18:21):
the Oval office? Absolutely not.The government doesn't spend any differently. So
what makes up the vast amount ofgross domestic product, which which is how
healthy is the American economy, ishow much we're spending. And this just
does not change based on who's inthe Oval office. And we also,
you know, as at all WorthFinancial, get calls from people every time

(18:42):
there's a big election saying this veryquestion, which one's best for my four
to one k or if this persongets into office, I'm pulling all of
my money out of the stock market. What we go back to nineteen forty
nine, right, looking at thedata and it shows you said, not
red, not blue, not green. Your money staying in the market is

(19:03):
just going to grow over time regardless. Now there's slight discrepancies between if it's
a Democrat in the year that they'reelected versus the years after that if it's
a Republican, but over time itjust kind of evens out. And that's
the good thing. The American economyis always going to be bigger than who
is in the Oval office. Soplease don't make financial decisions based on this.

(19:26):
Yeah. Andy Stout, chief investmentofficer of all Worth Financial, is
put together a nice little chart thatsometimes I bring up in meetings when I
feel like I need to. Thatshows when one party wins in that given
year, the economy tends to dobetter, But it's a reciprocal for what
the next four years look like.But at the end of the day,
it's growth over the long term,no matter who controls the White House.

(19:48):
The race for president is bringing uplots of emotion right now, but there
is one thing you need to becareful of if you want to keep your
job. We'll talk about that naturallistening to Simply Money presented by all Worth
Financial here on fifty five the talkstation. You're listening to Simply Money present
of my own financial Imani Wagner alongwith Steve Ruby. We are in a

(20:12):
major political year and there is somuch going on. We've had an assassination
attempt. We've had President Joe Bidendropping out of the race. You might
have lots of opinions and feelings aboutthat. The question is should you post
it on social media? Joining ustonight was some great perspective on this.
Our good friend Julie Balki with Julieon the Job. Julie, my gosh,

(20:33):
Yes, people are very emotional.People have opinions, but we have
seen people posting about them on socialmedia and losing their jobs as the results
of it. Yeah. You know, when I when I'm driving down the
road and I see a service truckwith some you know, someone whatever they've
been his name, and then theyhave political stickers on it, I just

(20:55):
flap my forehead and I say,why would you alienate or potentially alienate half
your customer base And you're not goingto change youbody's mind. And I think
we have to Although that that thatline between our work lives and our personal
lives just keeps getting smaller and thinner, I still think we have to pause

(21:17):
before we take a stand publicly thatmight hurt our career business. Now that
being said, there are plenty ofpeople who post things and there I always
say, post whatever you want,be prepared for the consequences. And if
people say, yeah, I'm goingto post, I don't care what the
consequences are, or maybe I canchange the mind of one person or whatever,

(21:38):
it is fine, but post.If you're going to post something,
especially something really incendiary about either side, this is not one fire or the
other. You have to know thatthat is your digital footprint and that will
be with you forever, and itmay keep you from getting certain opportunities.

(22:00):
Is because and not necessarily because ofyour political beliefs. I think it is
more a question of did you exhibitgood judgment in posting that? And as
a fantastic point, there really,if not necessarily, that someone agrees or
disagrees with what you're posting. Itis the fact that is there good judgment
behind taking such an incendiary stance insuch a public way. So I think

(22:25):
about let's bring it home to likean internal work. So let's say that
you hire some younger people and youknow they're doing great, and one of
them comes in one day or Idon't have to be a younger person on
Monday and says man, I thinkI was drunk all weekend. In fact,
I still might be drunk now andha ha ha. So I'm a
decision maker, I'm higher up,I'm paying attention, and I've got maybe

(22:48):
some influence over this person's career.So then this great assignment comes up with
a really really key customer of ours. Am I going to put that person
on that project? Or will Ibe afraid that he or she will exhibit
same core judgment when showing up atthe customer site. So this is all
under the same umbrella. Do youthink, Julie, that people would be

(23:08):
surprised? Right? I mean,there has been fallout from when people in
the past week or so have takento social media in response to the attempted
assassination of from President Trump. Right, big feelings about that, and people
post about it. We're talking collegeprofessors, we're talking fire chiefs, all
kinds of people, really high jobsall over the place lost jobs because of

(23:32):
that. Is there some sort offeeling of like, well, this is
my personal Facebook page. I canput whatever I want on there. Yeah,
of course you can. But weare all smart enough at this point
to know that you can post whateveryou want, but it doesn't mean that
you're free from consequences. And ifyou think of the worst case scenario that

(23:55):
might arise from your post and yousay I can live with that, go
for it. And so I knowthere's plenty of people who I mean,
there's you know, it's everything fromthis company called sticker Mule that lost a
bunch of their customers because they're CEOsand not a letter supporting former President of
Trump, and then Harry's Banana Farmin Florida in the in Florida, for

(24:15):
God's sake, in the heart ofRed State, got posted a really really
really in poor taste put up onhis sign out front of his business,
and so that went viral. AndI'm sure his business has suffered greatly,
and I bet you well, I'mwondering if he regrets it. And then
individuals who post horrible things other peopleonline, they look you up and they

(24:38):
go find your employer and they reportyou and they you know, so it's
it's is it right? No,but it's what's happening, And so we
can only operate in what is.And you the one thing you have to
protect. You have to protect yourreputation. You have to decide what you
want that to be. And youknow, I'm a fairly public figure.

(24:59):
By you could go through all mysocial media and you could never tell same
what my politics are. And Ido that on purpose, not do my
friends. No, of course,with my phone blowing up last Saturday,
yes, and this weekend, yes, but those are all those are all
private conversations between us and our friends. It's not out there for the world

(25:21):
to see. And so I thinkyou've got to check yourself really before you
post anything, Julie. I lovehow you said check yourself before you post
anything, because I was going toask about that. Okay, So something
happens politically, the election, whateverit is, and someone has a strong
feeling about that, and they pullout their phone immediately and they pull up
Facebook and they're getting ready to postabout it. What would you say they

(25:44):
need to ask themselves or filter whatquestions they need to filter through that before
they make that post. So thefirst thing I would do is, if
you can write the post, saveit drafts, don't post it till tomorrow.
The second thing is run it bysomebody who generally has really good judgment
and is not afraid to push backon you, and you just get their

(26:08):
input and or I just ask yourselfwhat is because we think sometimes when we
post that everybody in our world agreeswith us. And so what could be
the ramifications to my personal life,my business, my career by posting this?
And what am I trying to accomplish? Because you know, by posting

(26:29):
something in send the area on Facebookabout one side or the other, you
aren't changing anybody's mind. For Haaven'ssake. Yeah, you're just not.
So if you really feel the needto express yourself, express yourself among your
friends, and just really ask yourself, you know, is whatever I put
out there today or tomorrow, doI want people reading it intend to twenty
years And it's you know, Ijust think it's just that that self regulation,

(26:52):
that ability to self manage and thinkabout the impact of everything we do,
seems to be missing a lot ofpeople. But now, especially because
they're in such emotional times, Ithink it's gonna it's only going to it's
only going to escalate. And lastyear, last week was just a feast
of people losing businesses, losing theirbusiness, losing parts of their business,

(27:15):
losing their jobs, losing job offersbecause of what they post on social media.
And if you think your future employersor people who could hire you for
a consulting gig or whatever it is, aren't reading that, of course they
are, which is why it makesme crazy anytime somebody posts political things on
LinkedIn, that's not the place forit. Gosh, I was going to
ask you and quickly, because we'vegot less than a minute left, are

(27:37):
hiring managers looking at our social mediabefore they hire us? Yes, absolutely,
a lot of times before they eveninterview you, so you won't even
know about it. That's the problem. It's like you can't you won't even
know that your stuff's being looked atbecause it's not like they're going to call
you and say, hey, we'regoing to hire you, but we look

(27:59):
at your social media yet, oryou're in the hiring process and before they
make an offer, they look atyour social media. So yeah, people
want to make a good hire andgreat perspectives from Julie Bausch as we talk
about Julie Bauki, as we talkabout should you think through things right before
you make these political posts and thepotential impact you could have on your career.

(28:19):
You're listening to Simply Money presented byall Worth Financial here in fifty five
KRC the talk station. You're listeningto Simply Money presented by all Worth Financial.
I mean you Wagner along with seeRuby. If you've got a financial
question that is just stressing you out, there's a red button you can click
on while you're listening to the show. It's right there on the iHeart app.

(28:40):
Record your question and it's coming tous. We'll help you figure it
out. And straight ahead, I'vegot major feelings on this, we're talking
tipping. The wild amount of moneypeople tip based purely on guilt. I'm
starting to get to the point wherei don't feel so guilty about this.
We'll get to that in just afew minutes. We've spoke in time and
time again about the troubles with theSocial Security program and that it's trust fund

(29:03):
is going to run out of moneyin about a decade. But I think
that information has led to a lotof misinformation, and I think the problem
with that, Steve, is peopleare making uninformed decisions that will affect them
for the rest of their lives whenit comes to claiming Social Security. Yeah,
so pay close attention because we don'twant you to be one of the
uninformed that are making decisions based onmisinformation. So myth number one social Security

(29:27):
is or will be bankrupt. Thatis not the case. Social Security is
not going to run out of moneybecause it's the program is financed by payroll
taxes, so as long as peopleare working, then money is going into
the system. The problem with thetrust fund is when Social Security was first
set up in the nineteen thirties,the full retirement age was sixty five.

(29:51):
Nobody was living to sixty five,So it was like this great idea,
but no one actually claimed it.So the money piled up and piled up
because people were working and paying intothe system, yet very few people,
because of healthcare at the time,made it to the age of sixty five.
Well, now full retirement age issixty six sixty seven in most cases,
and we have had all these amazingadvances in healthcare and medical breakthroughs.

(30:15):
We're living longer. People are livinglonger, and they are retiring in droves
right. The baby boomers are retiringin record numbers, and we don't have
a large enough population that are payinginto the system now, so there's this
imbalance. You've got people paying intothe system, but more people claiming these
benefits that ever have before. Ifnothing has done to fix that. We

(30:38):
just saw the new Social Security Trusteereport come out in just the past few
days. Now they're saying in twentythirty five, that trust fund looks like
it will be depleted. Okay,if that fund is depleted doesn't mean you're
not going to get any money.It means you're going to get the latest
projection I saw eighteen percent reduction andbenefits. Yeah, so to be clear.

(30:59):
It is the trust fund reserves thatare projected to become depleted. In
the analogy there would be if youif you personally have a financial crisis in
your household and you use up youremergency fund, but you're still working and
still bringing in money. That's theanalogy here. So there would still be
benefits, and we've talked about itbefore, it would be a reduced benefit
for everybody collecting and set to collectin the future. One thing I do

(31:25):
want to bring up, and thisis something that I think we're just starting
to get some clarity around in thepast when there has been an issue with
Social Security. Right when we sawthis years ago when they raise a full
retirement age to sixty seven, andthis was a cross partisan lines, there
was sort of a miracle. Idon't know if Washington can pull that off
yet again, but one of thethings it did was it said we're not

(31:45):
going to change anything for people whoare already claiming these benefits. It now
appears that those even claiming benefits wouldhave a reduced benefit at that time,
not just those that are years awayfrom claiming, you know, millennials and
in gen z ers, but thiscould have a larger impact. Again,
though, this is if Congress hasnothing to touch this plan. I can't

(32:07):
imagine anything that Americans are more investedin. Yeah, it's than Social Security.
I gotta think Congress is going todo something. But we've had several
Congress We've had several Senators on theshow in the past, really grateful that
they've come on when I ask themabout Social Security, and I'm telling you,
I fit them every which way fromSunday. Nobody has a lot of
clarity on what's going to happen hereor even what they think should happen here.

(32:30):
The problem is whatever decision they make, it's going to make some people
angry. That's the key here.So something. Maybe I'm just naive,
but I do. I'm with you. I do believe that something will happen.
But politicians they're not going to pulltheir head out of the sand until
they absolutely have to, until theeleventh hour. So myth number two young
adults won't benefit from Social Security it'snot accurate. Now there's going to be

(32:52):
some kind and again maybe that's justthe optimist in me for some of this,
and you know, there's still goingto be some benefits available for younger
generations. It's just at this pointwithout any changes reduced. And I think
that's the number one myth that wesee in so many people coming into our
office. Is here at all worthsaying, you know, does not count

(33:15):
on Social Security because I know I'mnot going to get any Well, that's
fine, you can build a planthat way, but it's just not the
truth. No one's saying you're goingto get zero percent. We're saying you're
going to get probably eighty percent.And that again is if Congress does nothing,
if no changes, yes, andI can't imagine that voters are are
going to allow that to happen withoutCongress having to take a stab at fixing

(33:37):
this some way. I agree they'regoing to kick the can down the road
as long as they possibly can,but at the eleventh hour they're going to
have to address us. And whoknows what they're going to do. Right,
They could raise full retirement age,they could means test it mean those
who've saved more, longer, better, right, might have to take a
reduce benefit and those who don't haveas much money. Doesn't sound fair,

(33:58):
right, And again this is backto someone's going to be upset about this.
You know, but who knows whatthe ultimate plan is. But so
many people then are saying, becausewe don't know what they're going to do
the first day that you can possiblycollect social Security benefits at the age of
sixty two, you should. Yeah, this is this is myth number three
that you're getting into here, Andthere are different viewpoints on this perspective.

(34:22):
If there's going to be a shortfalland you have the means and collect as
soon as you can so that youjust capitalize on getting that cash flow.
Now, if you're depending more onSocial Security then and you don't have a
lot of other savings, then maybeit is a good idea to continue to
differ. Another thing, another mythhere that we need to talk about,
and I've heard this one too.The federal government has rated the trust fund.

(34:45):
By law, every dollar of incomecoming into the Social Security Trust Fund
has to be invested in interest bearingSecurity is backed by the full faith and
credit of the US. Right.I mean they it's by law what that
money has to be used for.Not saying that money hasn't been spent for
other government for other government needs,but it means social Security is not worthless.

(35:06):
Right, Those IOUs that are inthere. They have to be paid
for, yeah, and backed bythe full faith and trust of the US
government. Hopefully that means something.Hopefully that means something. Here's the all
Worth advice. Social Security was onlymeant to cover forty percent of your income
and retirement. Please remember that.Remember that when planning your financial plan.

(35:28):
Coming up next, how to overcomethe guilt around tipping. You're listening to
Simply Money presented by all Worth Financialhere in fifty five KRC the talk station.
You're listening to simply Money presented byall Worth Financial. I Meani Wagner
along against Steve Ruby. Things inrecent years have gotten my blood boiling as

(35:49):
much as this debate over tipping.You know, we were just talking about
the fact that during the pandemic,you know, the people who are working
in restaurants trying to provide meal forpeople going in, not sure whether it
was safe or not. I hadso much gratitude for them, and I
think people were really generous during thattime of tipping. But now people have

(36:10):
gone back to work, society hasopened back up, right, things have
become a little more normal. Isthe result of that. Though everywhere you
go now they're asking for a tip. Someone is putting ice cream on top
of a cone and they want twodollars tip for that. They're putting donuts
into a box and they're flipping thattip screen around in my face like enough

(36:31):
is enough? Yeah. Research froma pulling agency called Talker Research. They
pulled two thousand Americans with questions aboutwhat we're calling tipflation and found out that
Americans are spending about five hundred dollarsa year more than they would like to.
You bring up guilt. That's whatthis is fueled by. Just like

(36:52):
you. When everything was shut downas far as you know, COVID shutdowns
were concerned. I was going torestaurants and getting carry out to support local
businesses, and guilt was causing me. You know, I look around and
be like, wow, I reallydon't I wouldn't want to be here,
and these people they are and thenthey're enabling this business to stay open.
They're they're working for themselves to geta paycheck. They're giving me a delicious

(37:12):
hamburger whatever it is, and Iwas tipping graciously. But when it comes
to where we are today, we'renot there. I went to a Reds
game last week or the week beforeand they changed arounds. How some of
the cafeteria situation works and they havepre made food and then you ring it
out yourself and then a tip screencomes, so you're serving yourself. You're

(37:35):
getting the food yourself, and theywant you to tip. I took a
plunge, Amy, you know whatI did? How would you do?
Didn't tip? Yes, that's myfirst time. It felt wrong. Still,
well, but here's the difference.You don't have someone on the other
side of that screen looking at you. There was an attendance standing around in
case we had issues looking. Didyou just like try to distract them,
like, hey, look at thatover there? And then I took the

(37:57):
plunge and I did it. Shewas looking and I hit zero. You
felt a little guilty. My palmsare sweaty just talking about it. We're
spending about forty dollars a month onaverage due to the pressure of tipping.
You know these screens that they turnaround in your face. And it always
surprises me because all of a sudden, it's places that never asked for tips
before are suddenly asking for tips,and at least my thought processes. Okay,

(38:21):
I understand that in restaurants, thehourly wage is lower because of the
expectation of tips, but at otherplaces they're not. If you're making ice
cream or donuts or whatever it is, why are you asking me to tip
on this if you're already paid.It just took you thirty seven seconds to
put those donuts in that box.Yeah, I'll throw them a dollar maybe,
but at the days of giving fivedollars to put a donut a box

(38:43):
or over for me. We've gotlots of thoughts on this. Thanks for
listening tonight. You've been listening toSimply Money Present I'm all worth Financial here
on fifty five KRC, the talkstation