Let's Talk Money

September 27th, 2025.

Episode Transcript

Speaker 1 (00:01):
Hi, you're listening to Let's Talk Money, brought to you
by Bouchet Financial Group. My name's Vincenzo Tesla. I'm one
of the wealth advisors here at the firm. I'm a
CPA and CFP kind of head to tax practice with
my other colleague who's joining us today, Scott Strohecker. Scott,
if you want to introduce yourself to ahead.

Speaker 2 (00:20):
Hi, good morning everybody. As Vinny said, I'm Scott Strohecker.
I'm also one of the wealth advisors here at the firm.
I'm a CFP and an EA as well. So the
EA designation may not be familiar to everybody, but it's
an IRS designation where I really just focus on taxes

(00:42):
when working with clients and their full comprehensive financial plan.
So again, with Vinnie and I both being a part
of the tax team, feel free today to reach out
with any tax questions that you may have.

Speaker 3 (00:56):
Yeah, that's right.

Speaker 1 (00:57):
So Scott and I head up the tax team slash
practice at Bouchet and I think that's something that differentiates
Bouchet Financial Group from a lot of firms in the
area and a lot of firms countrywide, is the tax
initiative that you know Steve enacted for the for his clients, right.
I came over about five years ago, now Scott came
was have been three years Scott two or three years?

Speaker 2 (01:20):
Yeah? Three years?

Speaker 1 (01:21):
Yeah, And our Kyle league, late Nicole Globel came over
run the same time I did, and we kind of
took this tax initiative with clients and enacted tax planning
and it's been so valuable, right because if you think
about it, taxes, federal income taxes, New York State taxes,
real estate taxes, there's a ton of taxes that you
pay and it's probably the number one outflow or expense

(01:45):
that an individual will have in their life. And if
we could save you on taxes, it's almost as good
as making your money in the markets, right, even better.

Speaker 3 (01:52):
One likes to save money.

Speaker 1 (01:53):
So it's really a great initiative that you know, the
firm is nactive for their clients, and you know, Scott
and I you love doing tax planning for clients and
saving clients money on their taxes. We encourage all listeners
to call in at eight hundred talk WGY. That's eight
hundred eight two five five nine four nine. Please feel
free to call in. We love callers and love answering questions.

(02:17):
So the firm hit a huge milestone the past couple
of weeks. We have one point five billion under AUM
and Steve, as good of a guy as he is,
he planned a beautiful retreat for us in Vermont, in Manchester, Vermont.
I don't think I had ever been to Vermont, even
though it's so close. But we all got shocked up

(02:38):
into a at a hotel I think it was called
the Taconican, and we had dinner, we had breakfast. It
was really a great team building event and you know,
it's really great to celebrate something that.

Speaker 3 (02:50):
We all contributed to.

Speaker 1 (02:54):
You know, we're growing fast and you know everyone is
so dedicated on the team to growing the AUM, helping clients, right,
I think the client, you know, when you put the
client first, I think the AUM comes naturally, right because
a lot of our clients come from referrals, A lot
come from the radio, a lot come from employee referrals,

(03:14):
but client referrals is really a big source of you know,
where our clients come from. And when we're putting our
clients first, and you know, it's really a great you know,
thank you without saying thanks when a client refers a
new client, and you know, as long as we're putting
our clients first, as we always do as a fiduciary,
you know, we have to do that.

Speaker 3 (03:37):
It's it's just really great when a client refers another
new client. So as we're growing.

Speaker 1 (03:45):
Steve had been the sole owner of Bouchet Financial Group
for twenty five years, thirty years, and he had, you know,
given up partnership interest to a few folks that have
been with him for a long time. So John Malay,
Marty Fields, Ryan Bouchet, and Lauren Bouschet, his son and daughter,

(04:05):
are now partners within the firm. So you know, as
a as a young guy in the firm like myself
and I could allude to us as well. I think
as a client, right, it's really important your financial advisor
has a legacy plan.

Speaker 3 (04:19):
Right.

Speaker 1 (04:20):
Some people work with the advisors that are sole practitioners
and may not have anyone else working for them besides
an admin. But our firm we have it. You know,
Steve started it thirty years ago and he's got his
management team and now partners that are under him. And
then he's got young folks with myself and Scott and
Polo and Harmony, Sam Katie, all these wealth advisors here

(04:42):
that are going to be here, you know, most likely
for the long term. And as a client, it's really
great to know that there's a legacy plan right that
you know, potentially you're not you know, that advisor's practice
isn't going to get sold to another firm and then
you know you work with some corporate antity. I mean,
Scott can allude to this. I mean, Scott, tell a
story about what happened to you.

Speaker 2 (05:05):
So prior to joining the team here at Bouche, been
with another firm for about eight years prior, really enjoyed
all the experiences and working with clients there. You know,
we were feel only just like Bouche, you know, we
always put our clients interest first. But again it was
a smaller shop than Bouche, and unfortunately the sole owner

(05:31):
Uh ended up passing away suddenly and there wasn't a
full transition plan in place. So that's, you know, an
unfortunate situation. But I was, you know, lucky enough to
join the team here at Bouchet. So having a long
term plan really is important, not only for a business,

(05:51):
but really you know for individuals, you know, their financial
plan that is, you know, what we work on with
all of our clients to make sure that they're set
up for the long term, no matter where they are
in their financial life, whether they're just getting started you know,
they're accumulating assets, or even if they're approaching retirement or

(06:12):
in that retirement. It's really about planning for you know,
what's up ahead. Nobody's got a crystal ball, but having
a plan in place, you know, really helps avoid any
undo uh issues that may arise.

Speaker 1 (06:27):
Yeah, I mean, you know, especially with a firm like
ours that has so much expertise and specific niches and
areas like you know, I'm a CPA, I have the
tax expertise. Scott's an EA, he has that tax expertise.
We have advisors, you know, with deep investment knowledge, you know,
macroeconomic knowledge. Not a lot of firms have the expertise
we have. So, you know, especially with the legacy plan,

(06:49):
if you know, you were to have to move advisors,
you know that new firm might not have the expertise
that your current firm has. So it's really great.

Speaker 3 (06:58):
You know.

Speaker 1 (06:58):
The partnership announcement is good for clients, it's good for employees,
it's you know, personally, I think it's really a great thing,
and you know, really eager to see where the firms
at ten years down the road. And obviously I'm optimistic
I wouldn't be here, so things are great. Another initiative
Bouchet Financial Group takes is really putting an emphasis on

(07:22):
women and wealth, right. You know, more often than not,
you know, you have you know, the male spouse coming
for meetings and a lot of the times the female
spouse won't really get that involved. But we really you know,
make an emphasis on the female spouse getting involved. And
we have some you know, great women that we work with,

(07:43):
and you know, I love them all, and they're putting
together this women in Wealth initiative that we started last year.
And the late Nicole Goebel, who we love very much,
kind of you know, took the horns on this thing.
But now Katie Buck and Harmony and Sam are kind
of rolling it out in her honor. So you know,
we are holding an event on October twenty second, which

(08:05):
is a Wednesday, from eleven thirty am to one thirty pm.

Speaker 3 (08:09):
Saw Harmony Wagner.

Speaker 1 (08:10):
Who's a wealth advisor here, she's a CFP, is teaming
up with Claire mccare and Claire McCrae, who is a
lawyer at Lamary Grisler, and then Leah Henderson who's a
CPA from Tilbecker and Kiramonte CPA firm. They're gonna they're
putting on a little presentation and you know, we really
the aim is to get women there and kind of

(08:31):
just here's some perspective and you know, how to manage
their personal finances. And you know, there's gonna be financial
planning talk, there's gonna be tax planning talk, state planning talk,
and I really think it's a great opportunity for anyone
who's kind of, you know, for lack of a better word,
clueless on what they should do moving forward. And you know,
young women especially or you know even older professionals just

(08:53):
get in there and kind of hear what they have
to say. And especially you know, these three intelligent, great
women that are putting on this presentation. You know, I
know them all personally. You know, it's really a great opportunity.
So you can sign up on our website, you Buchet
Financialgroup dot org. And like I said, it's an October
twenty second, which is a Wednesday at two fifty seven

(09:14):
Washington Ave Extension, Albany, New York from eleven thirty am
to one thirty pm. It's gonna be great. So to
follow up on all that, let's talk about the markets.
Let's do a market recap, so equities. I'm gonna kind
of review the major indo season the equity market. So
the S and P five hundred was up point six
percent yesterday. Year to date, it's up thirteen point two percent.

(09:36):
The Nasdaq one hundred is was up zero point four
to four percent yesterday. Year to date, we're up almost
seventeen percent. The Dow Jones was up point sixty five
percent yesterday. Year to date we're up nine percent. So
obviously we're having a great year in the equity markets.
There was a little bit of a dip back in April,
but we have since rebounded. We've had some rake. You know,

(09:58):
we had a ray cut in twenty t twenty five.
You know, the thought processes, as rates go down, equity
is supposed to go up, right, because you know, bond
yields go down. You know, there's really not a ton
of places to put your money other than equities. Right,
So back in twenty twenty and twenty twenty one. Really
there was phenomenal years in the markets, and that's when
if you guys remember rates were at like three you know,

(10:20):
you can get a mortgage for less than three percent
back then, So late rates were really low, and you know,
COVID shut down the world, so they they the Federal
Reserve decreased interest rates significantly back then, kind of just
to stimulate the economy, right, because if borrowing costs are
low for the consumer, then you know they're gonna be
more inclined to purchase things, right, And what's I gonna

(10:41):
do That's gonna grow the economy and.

Speaker 3 (10:44):
Ensure that we get got out of that recession. Right.

Speaker 1 (10:48):
So we're having a great year in the markets this year.
It's really driven a lot by AI technology, you know
as usual over the past fifteen years or so, or
is kind of driving the markets. The Nasdaq being up
more than S and P five hundred by about three
hundred basis points is really you know, leading that charge.

(11:09):
The mag seven you know, doing well as usual. So
there was an inflation report that was given recently, and
you know the August CPI report came out at two
point nine percent versus two point seven percent in July,
there was a small optic but getting closer to that target.

Speaker 3 (11:31):
Right.

Speaker 1 (11:31):
You know, if you guys can remember a couple of
years back after COVID, you know, inflation was close to
ten percent, right, So we're kind of staying steady here.

Speaker 3 (11:41):
At a reasonable inflation rate.

Speaker 1 (11:44):
From on a month to month basis, and it's something
to you know, be optimistic about when it comes to
the economy. So we are we are staying steady with
that inflation rate. So I'm going to transition to Scott
so well. As all of you may have heard, there
was tax legislation that was passed on July fourth. It

(12:05):
was called the One Big Beautiful Bill. So there's a
lot of changes that were made to individual taxes, and
I'm going to let Scott.

Speaker 3 (12:13):
Kind of review some of the things that were enacted.

Speaker 2 (12:18):
Thanks Anny says most of you. I'm sure where The
One Big Beautiful Bill was passed right on the fourth
of July. So that did enact a lot of tax changes,
really kept in also a lot of the provisions we
saw from the Tax Cuts and Jobs Act. It really

(12:39):
just pushed it on and put some provisions into place
permanently made other ones temporary. So I'm just gonna hit
some of the highlights that you maybe have heard about.
So first we'll start with the additional senior Deduction. This
is a six thousand dollars temporary deduction for each individual

(13:03):
that is sixty five years or older. So if it's
a married couple and both of you are over sixty
five sixty five or older, then you would get a
twelve thousand dollars deduction on your tax return. Again, this
is temporary, just goes from twenty twenty five through twenty
twenty eight. There is an income phase out, so you

(13:24):
definitely want to be aware of that. For married filing
joint the phase out starts at one hundred and fifty
thousand dollars and for a single individual it's seventy five
thousand dollars. And this is an addition to whether or
not you take the standard deduction or itemize. Next, there

(13:48):
will be an additional charitable deduction for non itemizers that
will be starting next year twenty twenty six. Deduction is
limited to two thousand dollars if you're married filing joint
and one thousand dollars for single filers. The next big

(14:10):
one that we see is the salt cap, which is
the state and local tax for itemized deductions that used
to be set at only ten thousand dollars didn't matter
you whether or not you were married or also single filer,
but now that cap has gone up to forty thousand dollars,

(14:34):
and again similar to the senior deduction, there is an
income phase out for that as well. Also with the
One Big Beautiful Bill, we did see a slight increase
to the Child Tax Credit, So for each qualifying child
on your tax return that is seventeen or under, the

(14:56):
deduction went from two thousand dollars to twenty t to
one hundred dollars. This is starting in twenty twenty five
and going forward it will be start starting to be adjusted
for inflation, and similar again to a lot of deductions,
there is a income phase out as well, which for

(15:19):
single individuals is from two hundred thousand two hundred and
forty thousand and for married filing joint four hundred thousand
to four hundred and forty thousand. And then a couple
of the other new provisions that we saw from the
One Big Beautiful Bill is the overtime deduction, the tip

(15:41):
income deduction, and the new vehicle loan interest deduction. Again,
similar to most things, there is you know, different phase
outs there. For the overtime deduction, you can get up
to a twenty five thousand dollars deduction for overtime pay.

(16:01):
And I'll just use a quick example so you better
understand what that's all about. So it's just your amount
that you're getting paid for overtime. So if your regular
pay is twenty dollars an hour and then your overtime
is thirty dollars, it's just that difference of ten dollars

(16:22):
that you would be able to take as a deduction
up to that twenty five thousand dollars cap. And then similarly,
for the tip income deduction, you could take up to
twenty five thousand, though this has to be tips that
were reported to the IRS. And also there is a

(16:42):
phase out as far as income. And then for the
new vehicle loan interest deduction, it's for new vehicles that
were assembled in the US. You could take up to
a ten thousand dollars deduction for interest that you've paid
on the loan of this new vehicle. And I'll just

(17:06):
actually with going over all of that, we did Vinnie
and myself do a webinar on a lot of these
individual provisions about actually two months ago. Now it's up
on our website if you want to take a look,
and we even have a four page fact sheet that
really goes deeper into each one of these provisions, gives

(17:28):
you all the phase outs really to give you a
better idea of what is going on. And I guess, Vinnie,
let me just transition it back to youth just to
give a highlight to everybody of really the differences between
tax planning and tax preparation. I think it would be
helpful for the listeners to understand what the main differences are.

Speaker 1 (17:52):
Yeah, I mean, you know, we obviously are staying up
the date on tax provision changes like the one big
beautiful bill, and it's going to affect all of you
out there most likely, right, especially for the salt cap increase.

Speaker 3 (18:06):
Right.

Speaker 1 (18:06):
I remember back when I was first starting, you know,
I went to CNA, my bachelor's and Masters from CNN,
and I my first job out of CNA was doing
taxes at Bst and Company, which is a big CPA
firm in Albany. And it was the first year after
the Tax Cuts and Jobs Act, where they enacted that
ten thousand dollars you know, state and local income tax

(18:28):
cap on itemized eductions. Right, so if you had state
income taxes and real estate taxes before that, you were
able to deduct, sorry, to deduct as much as you wanted.

Speaker 3 (18:41):
But then they put a ten.

Speaker 1 (18:42):
Thousand dollars cap on that. But they also decreased the
tax rates. So the expectation was that, you know, on
the surface, you decrease the tax rates, you're going to
pay less than taxes.

Speaker 3 (18:52):
But it was.

Speaker 1 (18:54):
Really you know what I saw when I started preparing
some of the taxes, what is that people were paying
more than they did the year or prior because of
that salt cap. So now that the salt cap isn't
raised the forty thousand dollars, right, we live in New
York State. There's state income taxes. Real estate taxes are
relatively high in places especially like Troy, Schenectady, e scream bushers.

(19:14):
You know, they have high taxes real estate purposes. If
you own a home, you might get up to twenty
thirty thousand dollars in you know assault deduction that you
were once not allowed to take for a couple of
years there. So it's going to be beneficial to you.
There's a small increase in the child tax credit. I mean,
there's a lot of great things for you know, middle class,

(19:36):
higher middle class folks that they're going to see some
tax savings from with this one big, beautiful bill. But
before I get into tax planning and tax preparation and
the differences between the two, we're gonna take a quick break.
You were listening to Let's Talk Money, brought to you
by Bouchet Financial Group, where we help our clients prioritaries
their health while we manage their wealth for life. Thank
you you're listening to Let's Talk Money. This is Vincenzo Testa,

(20:01):
one of the wealth advisors here at Bouchet Financial Group,
and I'm joined by Scott Strohecker. Again, we encourage all
listeners to call in at eight hundred Talk WGY. That's
eight hundred eight two five, five, nine four nine. We
talked a lot about taxes on the show so far,
and like I said, Scott and I kind of head
up the tax planning initiative and tax practice here at Bouchet,

(20:23):
So you know, I wanted to get into tax planning
versus tax preparation, right and they're really different.

Speaker 3 (20:30):
In a lot of ways.

Speaker 1 (20:33):
So preparation is what I would call reactive filing, and
planning is what I would call a proactive strategy.

Speaker 3 (20:40):
There's major differences between the two.

Speaker 1 (20:42):
And I know we just took a commercial break, but
we're going to go on another one a little bit,
so just kind of stay tuned, and again we encourage
all listeners to call in at eight hundred talk WGY.

Speaker 3 (20:53):
That's eight hundred eight.

Speaker 1 (20:54):
Two five five nine four nine. So, like I said,
tax planning and tax operation are much different. There's a
couple of strategies. I mean, there's tons of strategies that
we implement for our clients, right that can save them
tens of hundreds of thousands of dollars, and we do right.
And one of the major strategies that we take on
for our clients is Roth conversions, right. And Roth conversions

(21:18):
are basically a way to get tax deferred money into.

Speaker 3 (21:24):
A tax free account. Right. So for those folks that
are contributing to four to one k's.

Speaker 1 (21:30):
You're putting money in your four oh one K, the
tax deferred portion, the amount that you put in comes
directly off your tax income in that given year. A
lot of four to one k's have a WROTH option.
Some folks are putting half tax deferred half WROTH, right,
But a lot of folks, you know, especially older folks,
older clients that we work with. ROTH wasn't always an option.
Roth I think came back in two thousand and you know,

(21:54):
people really didn't know much about it. So they're continuously
contributing to four to one K that was taxed the
third or four three b those tax deferred and when
they retire, especially, the money rolls over to an IRA,
and you know, we manage it.

Speaker 3 (22:07):
That's a lot of the times how we work with
our clients.

Speaker 1 (22:11):
And you know, maybe the client is in their sixties
and they're not at you know, required midom distribution age
yet and maybe you know they're still working at a
different job, but they have a large IRA with a
ton of tax deferred money in it. You know, we'll
plan around doing WROTH conversions with them, right. And these
Roth conversions are really beneficial for a lot of reasons,

(22:33):
and when you do them, you know, really can make
a major difference. Right, So you want to do them
when you're in a low income year, right, tax brackets
are marginal so as you make more money, the higher
your tax bracket may g it. So it's ten percent,
twelve percent, twenty two, twenty four, and thirty seven. So

(22:55):
as you move up an income, the more you're going
to pay, the higher tax bracket's going to be. But
the thing that you know, the common misconception is with
tax brackets is that if you're in the twenty four
percent tax bracket, all of your incomes.

Speaker 3 (23:06):
Getting taxed at twenty four percent. And that's not true.

Speaker 1 (23:09):
So some of your incomes getting taxed at ten, some
it's getting taxed at twelve, some of it's getting taxed
at twenty two and something. Just to pay attention to
and we pay attention to it when we're doing tax planning,
especially for roth conversions. And before I go on, we
are going to take our middle of the show break.
You were listening to Let's Talk Money brought to you
by Bouchet Financial Group, where we help our clients prioritize

(23:30):
their health while we manage their wealth for life.

Speaker 3 (23:33):
Thank you. Hiight.

Speaker 1 (23:37):
You were listening to Let's Talk Money brought to you
by a Busset Financier group. This has been said out
for one of the wealth advices here at the firm,
joined by my colleague Scottacker, we encourage all listeners to
call in at eight hundred talk WGY. That's eight hundred
eight two five five nine four nine. Before the break,
we're talking about ROTH conversions and moving money from tax

(23:57):
deferred accounts to tax free accounts. And I was talking about,
you know, when is the best time to do this,
and it's low income years, right when your tax brackets low.
You move the money out from the IRA. It's taxbile
to you, gets taxed at a low rate and then
moves into the tax free account and grows tax free.
And the thought process is that down the road you're

(24:18):
going to be in a higher tax bracket potentially, and
if you were to ever take out the money out
of the WROTH, that would be the most beneficial way
of doing it.

Speaker 3 (24:27):
During market dips are a great time to do ROTH conversions.

Speaker 1 (24:31):
When the equity markets take a dip, you're moving a
percentage of your funds out of your IRA into a
tax free account, and when they rebound, the growth is
tax free. And you know, it gets more complicated than that.
I mean, we had a client who has you know,
probably ten million with US, and they had some you know,

(24:51):
technology positions, right, and earlier this year, technology really took
a major dip back in April, and we do Roth
conversions for this client every year. They have a charitable
contribution deduction that's pretty significant, you know, in the multi
million dollar range, and we want to you know, in
that charitable deduction carries over year after year, and we

(25:15):
use up that deduction by doing Roth conversions. Right, So
it's complex tax planning. But in addition to that, I
targeted these technology positions, right, there were individual positions Microsoft, Amazon, Tesla,
and when they took a dip back in April, they
were down you know, twenty thirty percent. I moved those

(25:36):
positions from the IRA over to the WROTH and since
the rebound has been significant, as you all know, and
that was beneficial to that client because all that growth
is now tax free rather than tax deferred. So when
the market takes a dip, and you know, moving over
a diversified fund even when there's a market dip is

(25:56):
great too, but this specific strategy was so benefit official
because of how much the dip was, right, So, you know,
we're doing complex tax planning here for clients and looking
that deeply into client situations to determine, you know, what's
going to be most beneficial for the client. And you

(26:17):
know the major reason why ROTH conversions are so important
is for a multitude of reasons. Right, Folks that are
seventy three this year, if you have an IRA or
tax deferred account, you're required to take what's called a
required minimum distribution.

Speaker 3 (26:31):
Right.

Speaker 1 (26:31):
So that's the IRS saying, hey, you saved money back
when you contributed these funds to the tax deferred account.
We want our money back. You have to take out
about four percent of what the account balance was December
thirty first of the prior year. So all of that
money that you take out is taxable, right, depending on
where you and you have no control over it, right,

(26:52):
unless you planned ahead of time, right, being you know,
proactive instead of reactive. So if you have all of
this in come at age seventy three, and let's say
you have a two to three four million dollars dollar IRA,
you're going to be forced to take out eighty thousand,
one hundred and twenty thousand, one hundred and sixty thousand.
You have no control over it, right. And I was
talking about tax brackets earlier you might push yourself into

(27:16):
an extremely high tax bracket because you don't have control
over what your requirement of distribution is, and doing Roth
conversions ahead of time helps you reduce that require minimum distribution.
That way, you're not in this situation when you hit
rmd AH. Your Medicare premiums are also based on how
much your income is and your tax return from the

(27:37):
prior two years.

Speaker 3 (27:38):
So if your.

Speaker 1 (27:39):
Require minimum distribution is sort of what I would say,
out of control because you have so much in tax
deferred retirement accounts, your Medicare premiums can range from one
hundred dollars based on your income to six.

Speaker 3 (27:51):
Hundred dollars a month for each spouse.

Speaker 1 (27:54):
Right, So you know, when I look at that, I
could say about an extra tax and that's every single year.
So these are the main, you know, two of the
main reasons why doing Roth conversions is really important and
not having a ton of money and tax deferred accounts
and how that could help you. The other reason is
a state planning. Right, Let's I'll give you an example

(28:16):
in a situation where having so much money and tax
deferred accounts can be brutal for your for your family's
tax situation, right, And just picture a single mother. She
maybe she worked for Google for an extended period of time,
and she retires and she's got four million dollars in

(28:37):
a four one K. She rolls it over to an IRA.
In two years after retirement, she passes away, and she's
got one son. So her one son has to inherit
the IRA. That has to I'm sure it's kind of bittersweet,
but he has to liquidate that IRA in ten years.
So four million dollars in ten years. So on the surface,

(28:59):
you take out four hundred thousand dollars a year. Let's
say he's a young professional. Let's say he's an attorney
who's making four hundred thousand dollars already every single year
for ten years. He might be in the thirty seven
percent tax bracket, the highest tax bracket. When he inherits
this IRA, when his mother could have done roth conversions,

(29:20):
and you know, the roth IRA could have been inherited.
You know, maybe half of the funds were in there,
half of the funds are in the IRA, and she
did it in low income years and he inherited both.
But now the tax situation is not as brutal. The
family saves federal and state income taxes as a whole
because she was proactive and did Roth conversions. It's really

(29:41):
a tough situation, guys, when you have a ton of
money and tax deferred accounts because of all these multiple
multitude of reasons. Tax bracket management, you know, your management
of your medicare premiums, the state planning, ross conversions are huge,
and at the firm, you know, we are planning so
strategically for our clients. We're looking so deeply into things,

(30:01):
and like I said, even from the investment standpoint of
what funds we're moving over from an IRA to a
roth IRA, we're looking that deeply into it. So I'm
going to move on quickly and let Scott kind of
talk about social security. I'll talk more about tax planning later,
but Scott, why don't you take over social security here?

Speaker 3 (30:22):
Yeah?

Speaker 2 (30:23):
Thanks, Finny. Whether you're at the point of, you know,
approaching social security age, which you know you can start
collecting as early as sixty two and delay as late
as age seventy, it's really important to understand, you know,
what social security is, how it works. So let's go

(30:43):
over some of the basics for you to understand again,
it has been in the headlines definitely this year. You know,
we've seen things reports coming out saying that it'll be
underfunded by the year twenty thirty three, which essentially just
means what is coming into the system will be less
than what is going out. That doesn't mean that it's

(31:07):
the system is completely going to be imploating, but obviously
there's you know, corrections, there are things that need to
be changed. You know, anytime you have more going out
than what's going in, whether that's for your own personal
budget or for Social Security itself, it's not a good thing.
So I'll just go over some of the basics as
it stands right now for Social Security. So it really

(31:30):
starts with, you know, making sure that you have an
account with Social Security. You can start by going to
SSA dot gov and creating an account for yourself. You'll
just need some prior your information from your tax return
to create that account and also some other verifiable information

(31:52):
about yourself to create the account. You can also do
it using their one eight hundred hotline. Really it's a
bit more efficient and fast. If you create the accounts online,
you can get an idea of what your benefits are,
make sure that the Social Security Administration has proper earnings

(32:13):
records for you. So again doesn't really matter where you
are in your life, it is a good thing to
have an account and just make sure everything is looking
good and then so you can plan accordingly. Also, as
I said, you can start collecting as early as age
sixty two. For people born after nineteen sixty, your full

(32:38):
retirement age is age sixty seven. So each year between
full retirement age, so let's just say that's sixty seven
for you and sixty two. Every year you collect early,
you actually take about a seven percent hit to your benefit.
So if you collect as early as sixty two, that's

(33:00):
a thirty percent reduction for claiming early. Conversely, from full
retirement age sixty seven, let's say up to age seventy.
By delaying, you're actually increasing your benefit by eight percent
each year, or twenty four percent if you were to

(33:21):
wait until age seventy. While these are, you know, just percentages,
and it does equate to actual dollars. It doesn't mean
that you know one strategy is better than the other.
It's really case specific as to when you start collecting
your benefits. We often have people come in and they

(33:43):
do ask us that question, when should I start collecting,
And there's not really a general answer that you can
put out there. It's we you know, look at the
client specific situations, see what they have going on before
being able to give a you know, recommendation. It's really
tailored to their situation. It's really important, you know, to

(34:07):
incorporate that with your financial plan. You know, you know,
this in conjunction with your rm ds taking distributions from
your portfolio is very important. And again this is really
one of the many areas we focus on when working
with clients on their financial plans. So we definitely, you know,
don't want to take it lightly, and we do keep

(34:29):
an eye on, you know, the system as a whole,
and you know, think about what may happen in the future.
But again we can't really control that, so we just
want to plan with the current back some circumstances that
whatever it may be, and just come up with the
best plan for your specific situation going forward. With social Security,

(34:53):
we also you know, will help clients with their overall
retirement planning. We also again you know, so it's not
directly a piece of a client's financial plan, but you know,
nowadays cyber security is a really big area of concern
for people. I mean, you can look at the headlines

(35:13):
briefly and just see that there's a number of cyber
attacks and data breaches. But I'll go more into this
after our break, so I'll just hand it off back
to Viny.

Speaker 1 (35:26):
Thanks. You're listening to Let's Talk Money. We encourage all
listeners to call in at eight hundred Talk WGY. That's
eight hundred eight two five five nine four nine. This
is brought to you by Bouchet Financial Group, where we
help our clients prioritize their health. Will we manage your
wealthare life?

Speaker 3 (35:43):
Hi?

Speaker 1 (35:43):
You were listening to Let's Talk Money, brought to you
by Bouchet Financial Group. This is Vincenzo Testa again joined
by Mike colleague Scott Strohecker.

Speaker 3 (35:50):
Again encourage all listeners to call in.

Speaker 1 (35:52):
A eight hundred Talk WGY eight hundred eight two five
five nine four nine. One of the major initiatives we
take at the firm, especially you know, for the protection
of our clients and our data is a big focus
on cybersecurity. And you know, our compliance officer Dave Clark,
who we love, you know, really heads this and make

(36:15):
sure that we stay diligent and that we're scanning for threats,
you know, on a continuous basis, and cybersecurity is something
that you know, we take very seriously. I think a
lot of companies stack seriously nowadays. It's something that you
know has gained traction and it's an industry that is
really in the up and up for a multitude of reasons.
There's a lot of people trying to you know that

(36:36):
scan people for a living, and firms like ours, are
you going to be a major target? Right, So I'll
let Scott talk a little bit more about cybersecurity and
it's why it's.

Speaker 3 (36:45):
Important and what we do.

Speaker 2 (36:48):
Yeah, like Finny said, we really have an emphasis on
it here at the firm, all employees here. You know,
we're taking weekly trainings on different tactics that are out
there and that mids are trying to use really just
to again to get ahead of any issues and to
try to avoid it. But you know, as we can
see from headlines, you know, it's companies are susceptible to it.

(37:13):
You know, there's data breaches all the time, there's information
that's out there. You know, there's the you know, used
to be the phone calls people would you know, try
to convince you to give them information. We still see that,
you know, it's the case of calling in pretending to
be somebody's you know, child or grandchild and saying that
they need immediate help and have money wired or get

(37:35):
gift cards. We have also started to see you know,
text messages you know, trying to impersonate not only a
family member but also maybe Amazon saying that your package
is undeliverable unless you provide certain information or even click
on a malicious link. So you really have to be

(37:56):
vigilant out there.

Speaker 3 (37:58):
You know.

Speaker 2 (37:58):
We're always you know, here to help as a resource
with our clients. If they think something is off, you know,
immediately reach out to us and we'll just help, you know,
track down what is going on and come up the
you know, hopefully a solution, you know, immediately before it
really impacts your finances. We've got a great partner in

(38:19):
Charles Schwab, who's also our custodian. They're really diligent in
you know, making sure that fraudulent transactions aren't occurring, and
we actually this past week on Wednesday, did a great
webinar on this I was put on by Dave Clark,
as Vinny said, our chief compliance officer and John Malay

(38:41):
who's our chief financial officer, who's also an advisor and
CPA here at the firm. So they really hit you know,
what is going on in cybersecurity today, some of the
latest fraud and crime tactics that you need to look
out for and also how to recognize it. You know. Again,

(39:02):
they're coming out with new strategies it seems like every
day to try to convince you to give up personal information,
so that webinar is really useful. And again our partner,
Charles schwab Is really works hand in hand with us
to avoid issues before we get there. So it's about
being has been used the word before, being proactive rather

(39:25):
than reactive for you know, really all financial financial areas
of your life and just planning accordingly to avoid it.

Speaker 3 (39:35):
Yeah. Absolutely, you know, cybersecurity is huge.

Speaker 1 (39:38):
People are going to continuously be trying to steal money
from people for time, you know, for years to come.

Speaker 3 (39:43):
So we got to be on top of it.

Speaker 1 (39:46):
It's very important and something you should all be paying
attention to to in your personal lives. So before cybersecurity
and before solid security, a lot of securities here we
were talking about tax planning, and I went deeply into
roth conversions and again we encourage all listeners to call
in at Talk eight hundred Talk WGY that's eight hundred
eight two five, five, nine, four nine. We discussed roth

(40:08):
conversions and why they're so important, right, and that's really,
you know, one of the most basic tax planning initiatives
that you could take to help better your financial life.
But again doing it strategically, right. You know, you do
it on your own, right, But if you're a layman
when it comes to taxes and investment management and all
the things that might come into play with roth conversions,

(40:28):
then you might not be doing your be doing yourself
with disservice if you weren't working with a professional, right,
And that's what we do here at Bouchet Financial Group.
We work with our clients. We do financial planning, investment management,
tax planning, but we do it very strategically and with
the expertise that we have. We make sure that all
the taser, DOTTA and the eyes are crossed right. So
roth conversions are important. But one of the other things that.

Speaker 3 (40:50):
We do.

Speaker 1 (40:52):
Is deduction optimization, right, So now you know, specifically when
it comes to deduction optimization, you know, potentially can be
talking about charitable deductions. So there's something called the donor
Advice Fund, right. The donor Advice Fund is basically a
charitable account that you could contribute stock to cash to

(41:16):
and invest. But the contribution to the Donor Advice Fund
is considered a charitable contribution. And then subsequent to that,
you can write checks out of the Donor Advice Fund
to the charity of your choice, but when you write
the check, it's not considered a charitable deduction. When you
initially contribute to the account, it's considered a charitable deduction.

(41:40):
So let's say you have somebody who contributes five thousand dollars.

Speaker 3 (41:44):
A year to their church or some charitable organization or.

Speaker 1 (41:47):
They're choosing, but they're not receiving a tax benefit for
it because they don't itemize their deductions. They're itemized deductions
that don't exceed their standard deduction. So what we'll do
with clients is have them contribute seven to ten years
worth of those adductions to a donor Advice fund, and
they'll have fifty thousand dollars of charitable deduction. And now

(42:08):
they're itemizing. They are receiving a tax benefit for it. Right,
maybe it's in a high income year. We know they're
gonna have a large bonus this year, and we're playing
and saying, hey, you know, let's bunt you know, bunch
together ten years worth of those contributions to put into
a donor advice fund. And you know you're in a
high tax bracket. The tax benefit, the tax savings from it,

(42:30):
it's going to be beneficial for you. And again, these
are the things that we're doing for clients. And when
the donor Advice fund, it could give you double the
benefit because we have clients that have you know, maybe
they bought Apple back in two thousand and eight and
they have Apple stock with a significant built in game.
Maybe it's up you know, ten, fifteen, twenty times what
they bought it for. You can contribute stock to the

(42:52):
donor Advice fund, avoid paying taxes on the gain on
the stock, and also receiving the charitable deduction from the
initial contribution. And so there's a lot of ways to
plan around charitable contributions and this is one of them
that we really focus on at the firm. You know,
we manage donor advise funds for clients and the donor
advice fund gets invested, right, and that's another benefit of it, Right,

(43:17):
you're getting that deduction, but it's also sitting an account
where you're getting you know, a yield or growth on it,
and you might get an extra one, two, three, four,
five years of you're playing charitable deductions with the initial
contribution that you wouldn't have had if you just straight
up gave it to the charity in that year. So
donor advise funds are a great tool and we're utilizing

(43:39):
them often for clients. Tax loss harvesting is another initiative
that we take naturally with our clients. And tax loss
harvesting is when you have a taxable brokerage account, right,
so you have an accountant.

Speaker 3 (43:58):
It's not a retirement account. It's an account that you've.

Speaker 1 (44:00):
Invest with and you've received dividends and interest and short
term capital gains and long term capital gains and they're
all taxable in the year that you recognize them, and
when the market takes a dip, you utilize the losses
on the equities within that account to offset other gains

(44:22):
within that account.

Speaker 3 (44:25):
And it's beneficial.

Speaker 1 (44:26):
I mean, it's called tax loss harvesting for a reason,
you're wiping out taxble income and taking advantage of it
when the market's down. But the only caveat is something
called a wash sale loss, which is when you sell
a stock at a loss or an ETF or a
mutual fund at a loss and buy it back within
thirty days the same or similar position to the position.

Speaker 3 (44:49):
That you sold.

Speaker 1 (44:50):
That loss is wiped away, so you have to kind
of navigate it the correct way. And if you're doing
it on your own, to make this mistake, you're going
to be upset at at the end of the year,
especially if we're talking you know, big gain numbers that
you're trying to offset and you make this mistake, it's
going to be crucial because you can't go back and
fix it right. It has to be within that year.

(45:13):
So again, working with the professional that has done this
before and you know is doing this strategically, it could
be very beneficial for you. More tax planning items are
ten thirty one exchanges and Delaware statutory trust. So a
ten thirty one exchange, for those of you who don't know,
is when you sell a piece of rental real estate

(45:36):
commercial residential and then subsequently by another piece of rental
real estate using those funds, and by doing that, you're
deferring your taxes from the initial sale and putting them
into a new piece of property, right versus selling a

(45:57):
rental property and just paying the taxes, because the tax
could be pretty significant. If you've owned the rental property
for an extended period of time, you could pay significant
federal and state income taxes because you depreciated that property
from a tax perspective for so many years, and you
have to recapture all that depreciation as income. So folks
that have owned rental real estate for an extended period

(46:19):
of time, you know they could be seeing themselves pay
thirty thirty five percent of the sale price, and it's
like it's almost makes you ask yourself why, Well, you know,
what was the point of even selling? Because if you
told on to the property and upon your death, your
beneficiary is going to get a step up in basis, right,

(46:40):
which means that the cost basis of the property when
your beneficiary receives it is the same as the market value.
So if they were to sell the property, there would
be no tax consequences whatsoever. So doing this ten thirty
one exchange allows folks defer the taxes from the initial
sale and move on and buy another property of their
choosing and Delaware statutory trusts are also a great tool.

(47:02):
We work with a company that manages DSTs and basically
it's a way to do a ten thirty one exchange
from a tangible piece of rental property to a fund
which is managed and owns rental property. So you know, again,
tax planning, it's what we do. It's really valuable, it's
extremely valuable, and you know, we're really big on it

(47:22):
here at the firm, So.

Speaker 3 (47:26):
That is what we do.

Speaker 1 (47:29):
You were listening to Let's Talk Money, brought to you
by Bouchet Financial Group. I appreciate everyone, have a great weekend.
This is Vincenzo Tesla and Scott Strohecker. Appreciate everyone listening.

Speaker 3 (47:39):
Thank you,