Simply Money

Episode Transcript

Speaker 1 (00:05):
Tonight we've got brand and new data on inflation. Are
we moving in the right direction?

Speaker 2 (00:10):
Advice to take from war and Buffett right now and
when to pull that trigger on a Wroth conversion. You're
listening to simply Money presented by all Worth Financial. I
mean me Wagner along with Steve Rube said this on
the show before Steve. But for years, I really, I've
been on the show for a decade now, we rarely
ever talked about inflation data. Yet now it's affecting our

(00:33):
four one keys, it's affecting our investments, and it's certainly
affecting us on Main Street every time we pay a bill,
every time we.

Speaker 1 (00:40):
Go to the grocery store.

Speaker 2 (00:41):
And so of course the Federal Reserve, our nation central bank,
has been on this odyssey to bring inflation down, which
is why we are paying such close attention to these numbers.
And we did get some new ones out today.

Speaker 3 (00:53):
Yeah, So the headline CPI yearly rate of inflation, it
did slow from two point five August to two point
four in September. So this is the lowest level since
twenty twenty one. Remember though, that that still means that
we are paying two point four percent more for everything
than we did this time last year. And aren't you

(01:13):
excited to be able to talk about inflation after this
decade that you've been doing the show. It's just so
much fun because we talk about it every day. At
this point, it's front and center and all of our minds.

Speaker 2 (01:22):
I think, well, and the reason why it wasn't even
on the radar for so long is because it was minuscule.

Speaker 1 (01:28):
I mean that the Fed's goal is two percent. It
was at or below that rate for years, so we
didn't even really think about it.

Speaker 2 (01:37):
And then when you've got things like the price of
eggs going up to ten dollars a dozen, all of
a sudden, we're all talking about it.

Speaker 1 (01:43):
Right.

Speaker 2 (01:43):
It's affecting us on a daily basis, And so yeah,
I think this is really an important thing. So we
talk about it a lot on the show. Right now,
it is definitely on our radar. And to your point,
these latest numbers or this latest number.

Speaker 1 (01:57):
Seems to be moving in the right direction.

Speaker 2 (01:59):
The FED is always the closer we get to this
goal of two percent, the harder it's going to be
to get it to two percent. This is the headline CPI.
If you look at core CPI, which is really what
the FED views.

Speaker 1 (02:12):
It's kind of a better predictor of future inflation trends.

Speaker 2 (02:15):
So it takes out volatile food in energy prices, food
and gas prices, they go up and down based on
a number of other factors obviously that the FED can't control.

Speaker 1 (02:24):
This rate actually moved up a tick.

Speaker 2 (02:27):
It was three point two percent in August, three point
three in September, you know. And I just think this
is a sign that we knew inflation was going to
be sticky, meaning it wasn't going to be easy to
bring it down to two percent.

Speaker 1 (02:40):
And I think that's exactly what we're seeing here.

Speaker 2 (02:43):
Do I think the FED is going to freak out
like their hair is on fire based on these numbers, No,
not at all.

Speaker 3 (02:48):
No, this is expected because it's that difficult to get
across the finish line. There's you know, nobody in the FED.
This isn't surprising anybody that we saw core go down
or core go up at headline go down. This is
not surprising. You know. We look at shelter, for example,
and that takes the data. It takes about a year
for it to cycle through just based on you know,

(03:11):
rent and the average length of in the duration of
how long you're in a place for for example, you
know some other highlights that fit into core CPI rate
auto insurance. I think a lot of us have probably
noticed this now up sixteen point three percent from a
year ago.

Speaker 2 (03:30):
You know what else, And this isn't anything that's necessarily
listed in something that I've seen, but this is just anecdotal.
I actually think home insurance prices are up significantly too.
And I was reading something the other day. I've always had,
you know, this dream of when I retire, having a
house or somewhere to go.

Speaker 1 (03:48):
At least part of the year in Florida.

Speaker 2 (03:50):
Certainly rethinking that based on recent weather trends, and.

Speaker 1 (03:55):
Also I think is the results of that.

Speaker 2 (03:58):
There's this whole Wall Street journal about the real estate
market in Florida, and they were saying that home insurance there,
if you can get it, is up in some cases
four hundred percent over just the past couple of years.
When you have major events like this, certainly the people
that are most affected they are going to take it
on the chin. But you know, these insurance companies are

(04:19):
then doling it out across the country.

Speaker 1 (04:21):
To all of us. We're all paying more.

Speaker 2 (04:23):
So these are the things that you know, this doesn't
necessarily impact the FED, or the FED can't impact this,
but it is real life something that we're all paying
more for, and it's going to bear out in these prices.

Speaker 3 (04:36):
Now, you know, when we talk about the the prices
at a grocery store, for example, eggs are getting a
little bit ridiculous. Again, I eat eggs just about every morning,
so that's something that I noticed. But I also make
a phone call about once a year to my auto
insurance and homeowners insurance to ask questions the probe a
little bit about why I'm paying what I'm paying, and
sometimes try to make some small adjustments. So there is

(04:57):
a little bit of power that you have to have
those commonversations because you know, some of these companies are
they are inflating the costs even though they don't necessarily
need to.

Speaker 1 (05:06):
I'm so glad you made that point.

Speaker 2 (05:08):
We talked about and surify right, which is a website
that just aggregates a bunch of quotes for you so
that you can choose. It's really really easy to use.
So we were talking about it on the show and
I was like, I'm going to try this. We have
three teenage drivers in our house. I went through this process,
I was able to save four hundred and fifty.

Speaker 1 (05:27):
Dollars a month.

Speaker 2 (05:28):
That's huge on car insurance. So I'm glad you made
this point. Yes, all of us are paying more, but
if you are worried about that, if you are struggling
to make ends meet, if it is just annoying to
you that you're paying more, it.

Speaker 1 (05:41):
Might require a little bit of research on your end.

Speaker 2 (05:44):
But what I found was it is very much been
beneficial for me to do that research.

Speaker 1 (05:50):
We were able.

Speaker 3 (05:50):
To welcome mammy. I'm happy to help. Thank you so much. Yes, yeah,
dollars a month, and you're still saving two hundred dollars
a month.

Speaker 2 (05:58):
It was all on you. You're listening to simply money
presented by all Worth Financial. Let mean Wagner along with
Steve Ruby, as we are digesting these latest inflation numbers
coming out today from about the economy, certainly the Federal
Reserve looking closely at this. Nothing in these numbers that's
particularly alarming. It's kind of like, you know, worth mentioning

(06:20):
because we have been talking about inflation a lot, but
you know, nothing really to the good or the bad
in this that's really worth you know, either jumping for
joy or getting upset about.

Speaker 3 (06:30):
Well, remember that the FED has a dual mandate, and
that's not only getting inflation under control, but making sure
an employment doesn't skyrocket. So you know, I think at
this point that there's still going to be cut, that
the FED is still going to be cutting interest rates
even if inflation remains at the current levels, because now
they're looking at the weakening of labor market.

Speaker 2 (06:48):
Yeah, it's like the FED has two problem children that
it has to keep under control, one of those being
inflation in the other one being the job market. And
for the past couple of years, job market kid has
just I mean been doing whatever it's doing off to
the side because the FED has been one hundred percent
focused on the one kid with the inflation right, and

(07:09):
now it's like, oh, I got to take my eye
off of that ball and move it on to this kid,
because now this one is really starting to act up.
The latest numbers that we got right, speaking of the
labor market, a two hundred and fifty eight thousand jump
in jobless claims for the week. Now, that sounds a lot.
It was more than was expected, But I don't think
there's a ton that we can glean from these numbers

(07:31):
as far as any kind of a trend or a pattern,
because we this, you know, the hurricane, the couple of
hurricanes now that we've experienced recently, among a number of
other factors are really skewing this information. So I don't
I think this is going to be kind of a
one off, maybe.

Speaker 3 (07:47):
Pivoting here to information about the cost of living adjustment
that comes up for Social Security. It's been announced for
twenty twenty five and it will be two point five percent.
This is down from three point two percent that we
saw in twenty twenty four. Information for this just came
out today.

Speaker 2 (08:02):
Actually, yeah, and the average cost of living adjustment over
the past twenty years right in line with that at
about two point six Listen, far too many people are
living off of Social Security as their main.

Speaker 1 (08:16):
Source of income.

Speaker 2 (08:17):
I do wonder whether it's not the people that are
necessarily listening to the show.

Speaker 1 (08:21):
I think many of you got that message. Understand that
a lot of this is on you too.

Speaker 2 (08:26):
To keep in mind, the sole reason why Social Security
was set up was to keep us off the streets
in our kind of later years, and it's only ever
supposed to represent or replace forty percent of what you
were making when you were working. So for those who
live and die by these costs of living adjustments, you
may not have planned very well. I think it's definitely
worth knowing how much more you're going to get. But listen,

(08:48):
this is minimal. This is about the average that you
would typically see. And also what the government giveth it
often taketh away. What we have not yet seen or
what I haven't seen, is met care premium costs and
where they're going to.

Speaker 1 (09:02):
But often you.

Speaker 2 (09:02):
Get a little more and then you pay a little
more in the form of those Medicare premiums.

Speaker 3 (09:07):
H I say this in jest, but my guess is
about two point five percent.

Speaker 1 (09:11):
I think you're probably right.

Speaker 2 (09:13):
That's going to be the maybe two point four if
we're lucky rights.

Speaker 3 (09:17):
In your Medicare Part B premium, it'll be a wash
with your your cost of living adjustment for Social Security.

Speaker 2 (09:22):
I want to also bring up something because you know,
we are very passionate, we feel very strongly about when
we see headlines that could lead investors awry, pointing that
out to you so that you're smarter than that. And
there was an article in Barren's Man. We wish it
was just never written in stokesphere. The headline is scary,
The beginning of it is scary, and then as you

(09:43):
read on, these.

Speaker 1 (09:44):
Start to make sense. Right but who reads down that
far a lot of the time? And the article is
October is known for stock market crashes? What to expect
this month.

Speaker 3 (09:56):
It also reads welcome to shock Tober for stocks. Oh
it's a good it's a good. Proud of them for
that one, and continues to say, here's why investors are spooked.

Speaker 1 (10:06):
Aren't they creative?

Speaker 3 (10:08):
You know, you dive into the article, meaning you actually
read the thing, and it shows that you know, October
is known for occasional occasional market crashes. It happened in
October of twenty twenty nine, October of eighty seven, October
of two thousand and eight. So apparently that means that
October of twenty twenty four is going to be absolutely awful.

Speaker 4 (10:30):
Yeah.

Speaker 1 (10:30):
I think it's interesting.

Speaker 2 (10:31):
I think if you were to break down the calendar
each month and say, you know, how many times have
we gotten a crash in any particular month, it would
probably look.

Speaker 1 (10:40):
Somewhat like this.

Speaker 2 (10:41):
I mean, who knows we just stood a natural part
of the market cycle. What scares me is that an
investor could look at this headline and say, either I've
had money on the sidelines. Maybe I was going to
put it in, but now I'm scared. Now this article
is telling me sh October and I shouldn't. Or for
those who have money in the market, you are nervous

(11:01):
about volatility, this article isn't telling you. I mean, they
don't have a crystal ball. And so I just think
headlines like this are so irresponsible for investors because if
you read this and you think you should be doing
with something with your investments based on this, oh makes
me scared.

Speaker 3 (11:18):
And just to be clear, you read the whole article
and eventually you get about halfway through and it says,
what should investors do next with this information? To start
resist the earage to panic? Come on, I mean that's
what we tell people. We just try not to spook
you with the scary headline, which is exactly what is
happening with this particular headline.

Speaker 2 (11:36):
Yeah, and then you know, actually the article then goes
on like probably below halfway down to talk about all
the good things going on right now. Right We've got
these disinflationary trends in the US, China's markets doing well,
there's a new injection of stimulus over there, kind of
a mostly global push that we've seen not only here
in the US, but toward interst rates.

Speaker 1 (11:55):
Around the world. Corporate earnings seem to be strong, you know,
all of these things pointing toward strength in really no
reason to worry about a potential october.

Speaker 2 (12:08):
And you know, but listen, that's how these articles are written.
They're written to grab your attention, to scare you. And
if you only read the beginning, maybe you don't get
to the bottom part about there's no reason.

Speaker 1 (12:17):
To worry, because you're already then jumping onto.

Speaker 2 (12:20):
Your four OL and K and changing things. And that's
my concern. Here's the all Worth advice. The minute you
think about making a financial decision based on what you're reading, seeing,
or hearing, please take a step back ask why you
suddenly need to stray from your original plan coming up next,
by taking one piece one piece of Warren Buffett's stage
advice is really important, especially right now you're listening to

(12:43):
Simply Money presented by all Worth Financial here in fifty
five KRC the talk station you're listening to Simply Money,
presented by all Worth Financial. I mean you Wagner along
with Steve Ruby. If you can't listen to our show
every single night, you don't have to miss a thing
we talk about. There's a daily podcast where you just
search Simply Money. It's on the iHeart.

Speaker 1 (13:05):
Up or wherever you find your podcast and coming up at.

Speaker 2 (13:08):
Six forty three specific situations, what it might make sense
for you to do a Wrath conversion. I feel like
this is kind of a buzzword or a buzz thing
that's going around a lot in kind of the investing community.

Speaker 1 (13:20):
Right now.

Speaker 2 (13:20):
I've got a lot of people coming to me asking
about Roth conversion. So we're going to explain to you
if this might make sense to you. But first, I
love Warren Buffett. I am a major Warren Buffett fangirl.
I don't think there's been anyone in the investing realm
that you can pattern your investing on his. You can

(13:41):
listen to his words of advice and it's going to
make a difference. In my favorite quote and about Stout,
Andy Stout is a close second, que close second to
Warren Buffett. Yes, yes, and he probably would say the
same thing here's the quote, be fearful when others are greedy,
and be greedy when others are fearful.

Speaker 3 (13:59):
I thought that was a Sprovac quote.

Speaker 1 (14:02):
He tried to make it his own.

Speaker 3 (14:03):
Yeah, maybe dependent, Yeah, he took he took that one.
So you know, this always seems to ring true. And
obviously that's the case right now bullmarket. You know, did
you know that we were actually approaching a two year
mark of our current bullmarket? The S and P five
hundred roughly up sixty percent since Corober twenty third of
twenty twenty two. Yeah, sixty percent.

Speaker 1 (14:24):
Yeah.

Speaker 2 (14:24):
And you know, I think for those who are like, oh,
should I be nervous or you know, I've seen people
kind of on both sides of the coin here. I
remember several several years ago there was a time like
this where markets just seemed like they could do no wrong.
We had a client, I think he was in his
late eighties early nineties, was like called us up and
was like, I think I should go all in on
stocks right now.

Speaker 1 (14:46):
It's like, hmmm, probably not. Probably not, you.

Speaker 2 (14:49):
Know, and this is where, hey, don't change the way
that you would invest based on, you know, the current
place that we are in the cycle. But I will say,
you know, to Warren Buffett's point, the worst days of
the market for those who have money on the sidelines,
those are when I jump in, you know. I mean,
I don't understand why we don't look at it this
way as Americans. I don't buy clothes that is that

(15:11):
are not on sale.

Speaker 1 (15:12):
I like a good sale. I like a good discount.

Speaker 2 (15:14):
When markets are down, stocks are on sale, right, it's
a great opportunity. I remember in twenty twenty during the pandemic,
when things were going down, down, down, down, people were
jumping out of the market.

Speaker 1 (15:26):
I was putting chips in during that time.

Speaker 3 (15:28):
You know, that's the absolute worst time to sell, when
the markets are down. I mean, that's why a lot
of fiduciary financial planners and firms like all Worth, for example,
we build financial plans to show people that volatility is
a normal part of the market cycle. Here's why you
need to stay invested to meet your financial goals. That
you know, all my meetings, when we're having an annual

(15:50):
review meeting, we're updating the financial plan. We're looking at
the data, we're checking on financial situation needs and goals.
To highlight the fact that you know, even though the
markets are up right now and everything fine and Danny
and everybody's happy, at some point they're going to go down,
and it's important to set those expectations so that people
actually stay invested during those down times.

Speaker 2 (16:09):
Yeah, and you were just mentioning that this current bull
market has lasted two years, right, so should we be
freaking out?

Speaker 1 (16:15):
Well, since the end of World War.

Speaker 2 (16:17):
Two, there have been twelve bull markets that lasted at
least two years. This current one would actually be the thirteenth,
the thirteenth of those barring a massive sell off between
now and the twenty third of this month, And in
seven of those bull markets actually made it to the
end of the third year. So you know, I think
this is just a reminder of, hey, don't pay attention

(16:39):
to these market cycles or change your financial plan based
on Oh, markets have been good for a while now,
nobody has the.

Speaker 3 (16:47):
Crystal ball, and you know, lessons that we need to
pull from this. Obviously, stay invested. If you were somebody
that pulled money from the stock market when it was
down in twenty twenty two and you never put it
back in, that means you missed out on roughly a
sixty percent gain, just you know, off the S and
P five hundred up sixty percent, and if you sold
and was down, that was also money that you realize.

(17:09):
Those are losses that you realize by selling it a loss.

Speaker 2 (17:13):
Yeah, And I think, you know, I just from a
practical standpoint. Remember a few years ago talking to a
friend of mine who was getting ready to fund a
wedding for his daughter, and it was a year away,
and he was like, you know, I think I should
keep this money in the market.

Speaker 1 (17:27):
You know, we know exactly how much she needs. We've
got it sit.

Speaker 2 (17:29):
Aside, but markets are on a tear right now. You know,
maybe we could even grow that money more. And it's like, Okay,
this is the greedy aspect of this, right, you need
the money. It's earmarked for something. We don't know what
will happen tomorrow, you know. And so I think this
is where you have to say, if this money is
earmarked for something and I need it soon, rather than
trying to grow it and grow it and take advantage

(17:51):
of the fact that we are in this bull market
right now, I'm going to pull that money out to
safety so that I have every dime of.

Speaker 1 (17:57):
It when I need it.

Speaker 3 (17:59):
Yeah, And you know, one of the other reasons why
we say stay invested is because even during long term
bull markets, we still have corrections on averaged usually about
down fourteen percent per year at some point during the year,
meaning the markets will correct down fourteen percent but spring
back up to still finish higher. And that's on average
since nineteen eighty. You know, since nineteen forty nine, there's

(18:21):
been just as many bear markets as bull markets. So
it's it's not something that we need to react to
because over the long term, it's just like walking up
the stairs while playing with the yoyo. The markets are
going to go up. They're going to bounce back to
all time highs. You know. Another lesson to focus on
here is that the calendar is not a market timing tool.
You know, the longest bull market was twelve years. The
shortest bear market lasted just one month.

Speaker 2 (18:43):
Yeah, So trying to make a decision right with your
money getting in and getting out, you have to get
two decisions right, and it is very very rare that
anyone makes that decision correctly. In fact, what I find
is if someone pulls their money out of the market,
they are so afraid about the timing that it can
either take months or years or they never put it
back in because they're still waiting for the perfect.

Speaker 1 (19:04):
Time to come along. In the meantime.

Speaker 2 (19:06):
To your point, they've missed out on, you know, the
insane growth that we've seen.

Speaker 1 (19:10):
Over just the past couple of years.

Speaker 2 (19:12):
So stay invested, stick with your plan, and yes, understand
that the calendar is not a market timing tool. The
best tool is your own financial plan and understanding how
history works with these things. Here's the all Worth advice.
Bull markets last longer than bear markets and provide way
greater returns. Please stay invested, let history play itself out.

Speaker 1 (19:34):
Coming back.

Speaker 2 (19:34):
So we're going to help you navigate the world of
becoming the executor of an estate. You're listening to Simply
Money presented by all Worth Financial here in fifty five
KRC the talk station. You're listening to Simply Money presented
by all Worth Financial.

Speaker 1 (19:49):
I mean me wagen you're along.

Speaker 2 (19:50):
With Steve Ruby. Years ago, my very best friend asked
me if I would be executor of their estate someday,
and I was like, of course, they will anything for.

Speaker 1 (20:02):
You, right, And then we started to talk in more detail.

Speaker 2 (20:05):
To my good friend Mark Reckman from the law firm
of Wood and Lamping, our estate planning.

Speaker 1 (20:09):
Expert about what actually is required.

Speaker 2 (20:13):
I haven't said no, I'm not going to do this anymore,
but I do appreciate the detail of what I have
signed up for.

Speaker 1 (20:20):
Mark.

Speaker 2 (20:20):
I think you know from many people it's like, of course,
of course I'll do that for you. But really what
you need to be thinking through is, first of all,
if you're the person who's asking someone to be executor
of your estate, are they a good.

Speaker 1 (20:30):
Fit for this? And for that person, am I a
good fit for this? Right?

Speaker 4 (20:34):
Well, that's right. You know, the job is not easy,
it's not hard. It's somewhere between. It's making difficult decisions.
It's about being able to follow up and follow through
getting things done. You know, there's an old expression, if
you want something done, give it to a busy person,
which I always found humorous, But over the years I've

(20:55):
learned the wisdom of that. Yeah, people who are effective
and getting done are the kind of people you want
to ask to be your executor. It's partly about good judgment,
it's a largely about honesty. But there's a big part
of this is people who get stuff.

Speaker 3 (21:13):
Done so let's talk about some of the broad duties
of an executor. Let's say somebody comes to you and
asks you, just like happening to Amy, to be an
executor in the event that something happened to them with
their family. You know, what are what are you really
signing up for in that situation when you agree to it.

Speaker 4 (21:28):
Well, most most people who die with the will, they
leave specific instructions and they leave authority to do those
things in their will. So the first thing to do,
of course, is to read the will and follow the
instructions in the will. There are also lots of laws
on the books in all of the three states in
the tri state area that also give you insight as

(21:50):
to what your duties are. But I think the most
important thing to place to start is hiring professionals. Call
your lawyer, your CPA to need a relator. If there's
real estate involved, you're going to need an appraiser. If
there is unusual assets involved, like artwork or antiques or
perhaps real estate, you may need an auctioneer. You may

(22:12):
need someone, you may need a mover. There are all
kinds of jobs you don't need. An executor does not
need to personally do all the work. The executor is
the boss, and so the executor needs to know how
to delegate, how to manage people, how to get after
people when they're not doing their job, and to get
the job done. So hiring professionals is the starting point.

Speaker 3 (22:36):
So you ready to do that.

Speaker 2 (22:37):
I was just going to say, actually, I'm a bossy person,
so bossing people is.

Speaker 1 (22:40):
Actually now I'm starting to understand why she chose me
for this role.

Speaker 2 (22:46):
You know what, Mark, when you think about it, you're
tying up the loose ends of someone's life and there's
a lot involved in that. And this is not going
to be I'm going to get this done in a
day type of a situation. I think you've got to
have a lot of patience. You've got to be someone
who's extremely organized. It's something you've got to stay on

(23:06):
top of.

Speaker 4 (23:07):
And it's helpful to have someone who has some experience,
who understands how to review a bank statement or a
financial statement with stocks and bonds, how to read a
life insurance policy. All of these kinds of things have
to be followed up on. You've got to take an inventory.
An inventory, of course, is a list of all the
assets the person owned at the time of their death.

(23:30):
You've got to send the notification out to all the beneficiary.
Generally the lawyer will do for you, but you signed
that letter. You've got to check to be sure that
all your valuables are insured. One of the first things
I tell all of my executors call to be sure
that the insurance is paid up on the house. If
the person who died died following an extended illness, there

(23:54):
may be some outstanding problems like that, like lapsed taxes
or lapsed insurance. Please, So the starting point is to
be sure that they're current on their taxes and that
everything is properly insured before you proceed. Because that house
is now empty and it could be burned to the ground,
or it could be robbed that things stolen from in it.
So we want to be sure everything's insured. So that's

(24:15):
a starting point at the beginning. Secure those assets, get
them under control. Do an inventory, which is a list
of all the assets. Determine if there are any non
probate assets meeting assets that don't go through probate court.
The common ones are life insurance, annuities, retire Most retirement

(24:36):
accounts don't go through court, but Frankly, retirement accounts are
often the biggest asset in the entire state.

Speaker 3 (24:43):
Yeah, you got to make sure that beneficiary is on
there in life to avoid probate. That's extremely important. So
you know the person that you choose as the executor.
If you agree to be an executor, it's important to
realize that there's going to be a lot of major
responsibilities here. You know, managing finances is a big part
of that as you're helping with this transition.

Speaker 4 (25:05):
And the starting point for managing your finances I think
is collecting the credit cards. Be sure you get all
your credit cards collected, you get them cut up and
destroyed so that there can be no abuse of credit.
And be sure that you get the credit card bills
so that you can get them paid. During the administration
of the estate, be sure to freeze bank accounts, terminate

(25:25):
any outstanding contracts. Let the bank know that there's been
a death. Now, you have to be wise about when
and how you let the banks know. It may not
be the first all you make. You may want to
wait a week or so to let some checks clear
so that everything gets into the accounts and get settled.
But at some point you've got to put the bank

(25:45):
on notice. You want to give notice to the creditors.
You want to at some point put a value on
the property and start the process of liquidating. Either the
assets will go to a beneficiary or in most cases,
some of the assets are going to be sold, and
that could involve a real estate ags and it could
involve in an auctioneer or in a state appraiser, or

(26:09):
it can involve a jump man mark.

Speaker 2 (26:13):
I also want to bring up the point that this
can be sometimes an emotional position from the standpoint of
if you're the executor and there's a large family, several children, siblings, whatever,
that looks like the person who made the decisions about
how everything is dispersed is no longer here, and you

(26:34):
have now become the punching bag. I mean, you are
the person who is left behind. And I have actually
seen this become kind of sticky sometimes, right when people
aren't happy about how this is you know, how the
estate is distributed, or what they're getting, or it's not
what they thought.

Speaker 1 (26:49):
You're the person who's left.

Speaker 2 (26:50):
Behind to manage those expectations with the rest of the family,
and it's not always easy.

Speaker 4 (26:57):
It's not easy, and often it requires absorbing some of
the grief and misbehavior of the beneficiaries. People who may
be disappointed in what they got, or many people who
are upset because they have unresolved emotional business with the
deceased that may be played out against the executor. A
wise executor will take the punches, absorb it and move on,

(27:21):
not make it worse. Not exaggerate. Now, I'm not suggesting
that you give in to people who don't have a
right to receive things, but you don't have to fight
back if they misbehave mark.

Speaker 2 (27:32):
Quickly for someone who is maybe setting up their estate
plan for the very first time thinking through this, like,
what would you say, hey, listen the top three criteria
or where you should be looking to find an executor?

Speaker 1 (27:42):
Where what should they be thinking through?

Speaker 4 (27:45):
I think you start with people who are financially involved,
so that I would start with my list of beneficiaries.
Do you have beneficiaries who were good at this? And,
by the way, your favorite people, your most honest people,
the people who you were closest to may not have
the call of these that you need. The qualities you
need would include decisiveness, It would include thoroughness and follow up.

(28:06):
I've done a number of estates over the years where
we've had favorite brothers or daughters or sons who were
just wholly not qualified emotionally to do the job and
things just dragged out for you know, sometimes over a year.
These things amy take minimum of six months, generally more
like nine to twelve. You don't normally extend things past

(28:29):
a year unless you've got some unusual property you can't sell,
maybe you've got an unresolved dispute with the irs, something
like that that takes time, But generally you'd like to
get these estates done in a year or less. You
need people who are going to keep at it and
not lose interest about halfway through. So if you don't
have a family member who is good at follow up,

(28:52):
then you want to look at professional executors like the
banks and trust companies around town.

Speaker 2 (28:57):
So lot goes into this pot process right, whether you're
deciding for your own estate planning or you've been asked
to be an executor, it's good to know exactly what's required.
Here a great perspective as always from our estate planning expert,
Mark Reckman from the law firm of Wood and Lamping.
You're listening to Simply Money presented by all Worth Financial.
Here in fifty five KRC the talk station you're listening

(29:23):
to Simply Money presented by all Worth Financial. I mean
you Wagner along with Steve Ruby. Do you have a
financial question you need help with. There's a red button
you can click on while you're listening to the show.
It's right there on the iHeart app record your question.
It's coming straight to us.

Speaker 1 (29:37):
Maybe it's just me. I don't know.

Speaker 2 (29:39):
Do you feel like you're having more conversations right now
about roth conversions? Which, first of all, let me say
I'm glad that people are paying attention. This is a
fantastic tool for a lot of people if it makes
sense for you. And I think maybe there's just more coverage,
more talk about this right now.

Speaker 3 (30:00):
More people are asking about them than ever before. But
this is something that I talk about with every single
person that it makes sense to discuss this with, because
they're they're beautiful, they really are. It's an opportunity to
diversify the future tax liability filling up a current tax
bracket by moving your pre tax dollars into WRATH and

(30:23):
then removing them from required minimum distributions and getting tax
free gains for life, they're really great, and the timing
of them, especially if you're retiring before you collect Social Security,
or you're a high earner transitioning to not making as
much in retirement, that there's some real opportunities. But you know,
to look at it on a more generalized basis, when

(30:44):
when the market is down, it is a good time
to explore wroth conversions because during that conversion, you are
you're moving those investments into the same investments, but you're
changing the tax status of it so that when the
markets you turn around and pick back up, you're getting
all those gains tax free, but.

Speaker 2 (31:04):
You have to pay the taxes at that point, right
at the point of conversion, and so you would be
paying less because your portfolio being down means it's worthless.

Speaker 1 (31:14):
Right.

Speaker 2 (31:14):
So that's one time when, hey, if you are in
this situation, which we're not right now. Right markets aren't down,
but if they are and we see kind of a
period of time where it looks like maybe they'll that'll
stick around, you know, great time to look into that.
Another time is when you're anticipating a change in tax brackets.
You know, one reason why I think so many people

(31:35):
are interested in this right now is because we know
there's like a legislative risk here, right that the Trump.

Speaker 1 (31:42):
Tax cuts expire at the end of twenty twenty five.

Speaker 2 (31:45):
Who knows what Congress will do, but for most of us,
the Trump tax cuts put us in a lower tax
bracket than we had been before. And so what you
can do by by doing a Roth conversion is you're
locking in the current tax rate that you have, assuming
that maybe it will go up in the future.

Speaker 3 (32:03):
Yeah, and to be clear here that the twenty two
percent tax bracket is slated to increase to twenty five percent,
the twenty four percent is going to go up to
twenty eight percent. So locking in on those lower tax
rates now are, like you said, probably one of the
primary drivers for folks asking me proactively questions about Roth
conversions with this on the horizon, because yeah, tax rates

(32:23):
are they're probably going up in twenty twenty six. You know,
I mentioned this a minute ago, But when you're between
retirement and RMD age, which right now is seventy three,
it'll be seventy five here in the next several years,
is another good time to start exploring these conversions. That
there's plenty of folks that I work with that we
are doing smaller conversions just about every year between retirement

(32:45):
and required minimum distribution age.

Speaker 2 (32:48):
It's kind of like this golden period where these roth
conversions can make a ton of sense. First of all,
you're likely you could be, I guess, in a lower
tax bracket if you're not making what you were before
when that paycheck was coming in. And so then if
you're converting them, you don't have Uncle Sam at the
age of to your point seventy three or seventy five
telling you here's how much you have to take out

(33:09):
and here's when, and so once you make that conversion,
you are fully in control of that money. Right, Uncle
Sam can no longer stick his nose in this situation
and ask you to make payments because you've made them
at the point of conversion, which can be a great tool.

Speaker 1 (33:26):
If you are going to pass on this money to
your children.

Speaker 3 (33:31):
Yeah, tax efficient transition of your estate to children is wonderful.
Now you know in this point in time kids do
have or whoever your beneficiaries are, do have ten years
to drain those accounts, but still they grow tax free
over that time period. Now, these conversions are not just
for when you're retired. You can do them when you

(33:53):
are still working. If you're in a low income year,
for example, and normally you're in the twenty four percent
tax but you found yourself lower in the twenty two
percent tax bracket, maybe you could explore working with a
fiduciary financial planner an accountant to help you map out
what it would look like to fill that tax bracket
the twenty two percent while you're still working for that conversion.

Speaker 2 (34:14):
We have a great tool at all Worth that I love,
which kind of gives us your effective tax rates, you know,
meaning you might be in a certain tax bracket, but
you may not be very high in that tax bracket,
which would give us kind of some room to breathe
and making those conversions before you would be kicked into
the next tax bracket. It can sound really complicated, but

(34:36):
if done correctly and and to your point, even a
series of these over the course of several years can
be incredibly beneficial. So I'm grateful that people more and
more people are interested. I've had a lot of people
who are not necessarily clients, but just walking through the
door for the first time, and this is one of
the first questions they ask about.

Speaker 1 (34:56):
So they're either listening to us here on the show.

Speaker 2 (34:59):
Or in their research, which they should just be listening
to us because they're going to learn.

Speaker 3 (35:04):
That give them all they need.

Speaker 1 (35:06):
Why would you need to look anywhere else for this information?

Speaker 2 (35:09):
Here's the all Worth advice the timing of doing a
Wroth conversion. It could save you thousands of dollars and taxes.
Of course, the key is to make sure you get
it right. Coming up next, mister Ruby has a gem
of advice for all of us. You're listening to Simply
Money presented by all Worth Financial here in fifty five
KRC the talk station Blacktop. You're listening to Simply Money

(35:35):
presenting my all Worth Financial imm Me Wagner along with
Steve Ruby. Rhinestone Cowboy means yes, I know you all
are waiting with baited breath for the most recent version
of Ruby's gems.

Speaker 3 (35:48):
Steve Ruby, what do you have for if somebody wants
to call in or send an email to recommend a
different song on all Writers? I love it for now.
I think that's going to stand. So you know, I
just want to explore that the quote from Buffett be
fearful when others are greedy and greedy when others are
fearful to maybe expand on it and say, how about
don't be fearful. Now that may sound a little strange,

(36:10):
but when it comes to your investments, the idea of
sitting down with a fiduciary financial planner and building that
financial plan is to you know, the financial plan is
the blueprints. Your investments are the building blocks. The building
blocks are obviously a very important part of the overall
financial plan, but it also helps you find the sweet
spot for how much risk and reward you expose your

(36:33):
portfolio to. So when I say don't be fearful, you
need to find how much risk you need to take
to meet your financial goals, how much you can afford
to take based on your financial situation such as your
fixed income sources, and then the comfort level for taking risk,
because that's the important part of an annual review meeting.
When you have a financial advisor and you're pulling up

(36:53):
with them on an annual basis, you're sitting down and
you're having that conversation. Has anything change in your financial
situation if it hasn't need to be reflected and maybe
how your investments are being handled. So it's important to
remember that when we inevitably go through periods of volatility.
If you're working with a financial planner, they should be
able to justify why you're invested a certain way and

(37:14):
help you stay invested so that you're not making mistakes
that could essentially derail the longevity of your assets.

Speaker 2 (37:21):
When you have a financial plan, when you are working
with a financial advisor that you trust, I think it
takes any need of being fearful off the table. I
can't tell you how many times I've seen the look
of relief, you know, on someone's face when you know
they were worried do I have enough? Or have I
made the right decisions? And we do this financial planning

(37:42):
process and it's like, yeah.

Speaker 1 (37:44):
You're going to be good.

Speaker 2 (37:45):
Right, there's dollars left in that account when you get
to the age of ninety five, which is the goal.
That's what we consider a successful plan. So I think
when you have a plan, you don't have to be fearful.
Markets will go up, they'll go down, but you've planned
for that.

Speaker 3 (37:59):
There's plenty of folks I work with that come into
meetings very nervous and leave very happy. That's part of
what we do is financial planners.

Speaker 1 (38:06):
I love those days.

Speaker 3 (38:07):
Yeah. We help people understand and level set why they're
they're invested a certain way and that things will be
okay because your financial plan is going to look at
different scenarios such as the market's getting kicked in the
teeth at the wrong time, you living too long, lower returns,
and if we stress tests the heck out of your
plan and we still find success, then that gives you
an opportunity to just simply not be fearful.

Speaker 2 (38:29):
Yeah, so, rather than being greedy when others are fearful,
and fearful when.

Speaker 1 (38:32):
Others are greedy, just don't be fearful.

Speaker 2 (38:35):
And I would also say don't necessarily be greedy.

Speaker 1 (38:40):
That just makes smart long term decisions.

Speaker 2 (38:43):
Not to say, I love this quote and I think
it gives us all something to think about, but I
do appreciate you taking it a step.

Speaker 1 (38:49):
Further for us. Thanks for listening.

Speaker 2 (38:50):
E've been listening to Simply Money, presented by all Worth
Financial here on fifty five KRC, the talk station