Let's Talk Money

October 18th, 2025.

Episode Transcript

Speaker 1 (00:01):
Good morning everybody. Thank you for joining me on this
sunny but chill you fall weekend. It's great to be
chatting with you and spending the next hour with you
talking about all things financial. We'll talk about the markets,
the economy, financial planning, and of course whatever the listening
audience wants to hear. But first let me introduce myself.
My name's Harmony Wagner. I'm one of the wealth advisors

(00:23):
at Bouchet Financial Group. Just a couple of weeks ago
I celebrated nine years with the firm, and what a
great team it is. I really enjoy my colleagues, are clients,
and the times that I have the opportunity to speak
to our our listening audience on the radio. So whether
you're a long time loyal listener or listening for the
first time today, thanks for joining me, and I hope,
as always that you get something valuable and interesting out

(00:45):
of this show today. At I mentioned the phone lines
are open and we also have an email inbox as well,
so if you do have questions, please feel free to
ask via either of those channels. That the phone number
is one eight hundred TALKWGY. It's one eight hundred eight
two five five nine four nine. And if you don't
prefer to ask over the phone you'd rather write in

(01:05):
a question, you can do that as well. The email
address is ask ask Bouche. That's b as and boy
oh U c h EUI at bouchet dot com. So
if you aren't able to call, or if you just
prefer to send an email, that's a great way to
get your questions asked as well. And as we always
say that, there are no dumb questions, and if you're
thinking of it, chances are other folks are too, so

(01:26):
so please feel free to ask. I could talk on
and ramble on all day about this stuff, but would
certainly prefer to the answer the questions that are on
your mind, so so please feel free to use either
of those channels. Well, let's kick off, as I usually do,
with a market recap for the week. Stocks did close
higher on the week, despite some ups and downs. As

(01:46):
of Friday's close, the s ME five hundred was up
point sixty three percent, NASDAK up point four five percent,
the Dow Jones up one point zero eight and the
Russell two thousand up one point two percent for the week.
And as I said, despite the fact that they arrows
ended green for the week. Volatility has returned to the
stock market a little bit after a very solid and
calm third quarter. But we're seeing some volatility reintroduced, and

(02:11):
you don't have to look too far to see why.
Right any headline that you're seeing now is casting some
doom and gloom over the markets and over investors' confidence.
Trade war, loan losses at regional banks, there's concerns about
an AI bubble, government shutdown going on, and geopolitical tensions.
A lot of reasons why markets may be faltering a

(02:32):
little bit at this point. And while these concerns weren't
enough to drive weekly losses, they did mark a pretty
abrupt end to a very calm stretch. Like I said,
we've had a very solid third quarter that just ended
a few short weeks ago, one of the best in
I thinks it's twenty twenty best third quarter. But we
did see that to come to an end, went with

(02:52):
some volatility starting last week continuing into this week, and
I would say many investors are bracing for more.

Speaker 2 (02:57):
Volatility in the days of weeks ahead.

Speaker 1 (02:59):
So when we look at you expectations for what the
market's going to do, we track the VIX or the
volatility index, and that tracks expectations for stock swings over
the next thirty days by tracking the way the options
are being priced on the SAP five hundred specifically. And
so we've seen the VIX rising, which is common when
the markets are are volatile. So certainly could be more

(03:20):
volatility through the end of the year. And that is
actually normal, right, that's not super strange. In fact, call
markets are a little bit more outside the norm. In
any given year, the average swing for the markets is
fourteen percent from top to bottom, so it is quite common.
And if we were to see more volatility, you know,

(03:40):
I would urge investors to realize that this is normal. Right.
Whatever we've had most recently feels normal. That is not
the case in the situation when we're coming off of
a very calm markets for some months in a row,
and so there certainly is the more expectation that volatility
may continue. There is quite the laundry list of things
that are going on and facing that the markets and

(04:01):
the economy in terms of challenges. I'm going to go
to the phone lines now and chat with our first caller.
Good morning, Hello, Hi, are you god?

Speaker 2 (04:15):
How are you. I'm good, Thanks and ask your name.

Speaker 1 (04:20):
Michael.

Speaker 2 (04:21):
Michael, thanks for calling in. What can I do for
you today?

Speaker 3 (04:25):
I have a question about irrevocable trust. Is it a
five year look back period? Is it all or nothing?

Speaker 1 (04:34):
Yes? It is? Yeah. So are you referring to a
Medicaid asset protection trust? Yeah? Yes, yes, it is if
a five year cliff, meaning that you could have. You know,
let's say you put five hundred thousand dollars in an
irrevocable trust to protect your assets from medicaid and you
need Medicaid or you try to apply at four and
a half years, it's going to be as if the

(04:55):
trust did not exist. It is all or nothing. So yeah,
it is a five year cliff and to consider when
you're thinking about putting one into.

Speaker 3 (05:02):
Place, and if you don't meet the five years, and
I guess that's just never mind. I guess it doesn't
make any sense past that question. If you've answered my
question sufficiently, Thank you very much.

Speaker 2 (05:17):
You're welcome. Thanks Michael for calling. Have a great.

Speaker 3 (05:19):
Day, you too, five.

Speaker 2 (05:24):
Great well.

Speaker 1 (05:25):
Thanks Michael for that great question. And for anyone else
who might be just tuning in. Now you can call
in with your questions as well. The number is one
eight hundred talk WGY one eight hundred eight two five
five nine four nine. Well, I'll switch gears a little
bit too, chatting about bonds for just a moment. We
saw the yield on the ten years settled, so just
a hair above four percent yesterday. It was a turbulent week,

(05:47):
although they did rise a little bit on Friday, but
a lot of that is driven by some troubles in banking.
You may have seen headlines on that some loan losses
that are putting to some in that sector. And we
also have the government shutdown continuing. So you know, a
lot of times as I prepare for the radio, I'm
thinking about what's going on in the economy right now,

(06:09):
and I think at this point that's the question the
FED is asking as well. Right the shutdown is going on,
and that's raising the chances that the FED is going
to have to make their next rate decision blindly without
some of this information that they typically have to, you know,
judge their decision.

Speaker 2 (06:25):
Now.

Speaker 1 (06:25):
This past week, FED shared Jerome Powell suggested that their
position has not changed during this blackout period for economic data,
and meaning that the FED make could maintain their position
to cut rates another quarter a quarter percentage point twenty
five basis points at their meeting at the end of
this month. The CPI data was expected to come out

(06:46):
this past week typically, but because of the shutdown, it's
now expected to come out on the twenty fourth, which
is pretty late for only a few days before the
Fed's meeting. So as the shutdown continues and it becomes
harder to have access to data in a timely way,
it does make the Fed's job harder as they're trying
to weigh what's going on with inflation in the labor market,

(07:07):
the expectations. If you were to look at the surveys
of economists, it's expecting a three point one percent twelve
months pace for inflation, which would be up from August
which was at two point nine percent, and the core
is expected to stay about three point one now. The
Fed's target is two percent, but they are trying to
judge whether rate cuts continue to make sense at this

(07:27):
point and without that data that they normally have, so
it does make things a little bit cloudy when we
think about the economy. We're trying to see what's going
on in the inflation side. What's going on on the
labor market and how that drives the Fed's decisions, and
especially if the shutdown continues longer, it will certainly make
the Fed's job more difficult as they're trying to make
these decisions. Another interesting market tidbit from the past week

(07:50):
is that bitcoin prices fell eight point seven percent this
past week, which was its worst weekly performance since February.
So bitcoin has had a great run this year. It
is always a very volatile asset class, but we did
see a real steep decline this week with a lot
of the volatility going on.

Speaker 2 (08:08):
Now.

Speaker 1 (08:08):
I talk to clients every day and part of my
job is to help them, you know, pull out the
emotion from investing, and as humans, we can't totally remove it,
although that would be nice, but it is very difficult,
and especially when it comes to our money and finances,
the emotions can.

Speaker 2 (08:23):
Be really high.

Speaker 1 (08:24):
When you see your portfolio down, that is an emotional experience,
a psychological experience, especially when it's down significantly. And you know,
part of our job as advisors for our clients is
to talk them through those times and to help them
continue to make the right decisions regardless of how they're
feeling at the moment and really to identify what those

(08:44):
emotions are and what the rational decisions are and how
those things play together. Now, because investors are are humans,
we have to incorporate the emotions into it and think
about peace of mind. Right, So that's something I think
about a lot when I'm talking to clients about their
risk tolerance. If someone wanted to get the best return
over time, you know, they would invest As far as

(09:05):
asset classes are concerned in stocks, we see that historically
over a long term time, horizon stocks are the best
asset class to be invested in. But that is not
appropriate for everybody because if the peace of mind element
does not always align with the volatility that comes with
investing in an all equity portfolio. And so it is
an important part of the client experience and in the

(09:27):
investor experience. And as I'm talking to clients, and you know,
each time we sit down, we look at the portfolio,
we review and we say, what's going on in the world,
and how does that boil down and affect you, as
you know, individual or a family. And what I would
say is that the read I'm getting off clients now
is that even though markets are really not far off
of their highs. The volatility is really just you know,

(09:50):
started to show itself again. But there is still a
lot of concern in people's minds right now. And that's
completely normal. Right when there's a whole list of reasons
that you could be worth about the markets, it is
very normal to feel that concern, that's uncertainty about what's
coming down the line. The tendency of investors, and I've
seen this time and again in my you know, nine

(10:12):
years in the business, is that everyone wants to feel
like this time is different. They their tendency when you're
in the moment and you see, okay, there's you know,
trade war, there's banking issues, there's the government shut down. Right,
we look at all these things and we say, well,
that's just too many things that the market cannot overcome this.
And what I would say to someone who's feeling that

(10:32):
way is just that there have been many times in history,
recent history, even that there was a list like this
of challenges of things that just seemed insurmountable and it
felt like they you know, voted doom and gloom for
the markets, and the market has always gone on to
make new all time highs to recover and so all
the only thing that's different about this time is that

(10:53):
we don't have hindsight yet to shed the clarity on
the outcome. But we do believe that, just like it
has every other time, the markets will go on to
make new all time highs, whether this volatility is very
short lived or more drawn out. And so that's what
I would encourage people who are feeling nervous right now,
right that is normal, But when we take a step back,
there have been many times that we felt nervous before

(11:15):
and everything always did work out in the markets, and
so we have to maintain that same optimistic approach. To
be invested, you have to have a level of optimism.
You have to have that belief that the reward is
worth the risk when it comes to investing, and so
that is something that we're advising clients on now. Whether
the market, you know, takes an upward turn from here
or down. Either way, it's that long term approach that

(11:37):
really makes a good investor and a calm investor. We're
going to go to a quick break right now, but
we'll be right back with more. Let's talk money right
here on WGY. Thanks for saying may through that brief break.
As you just heard that phone number. The phone lines
are open and if you want to call in with
a question or something to discuss, you can call it
one eight hundred talk WGY one eight hundred eight two

(11:57):
five five, nine four nine. If you can call, or
aren't comfortable calling, you can also email a question to
ask Bluche. That's ask b O U C H E
Y at Bouche dot com and I'll do my best
to feel whatever questions you might have. Well before that
brief break, we were talking about volatility and how we're
really starting to see it reintroduced into the markets after

(12:18):
a calm stretch. And you know what I like to
do when I'm talking to clients or when I get
the opportunity to talk on the radio, is think about,
you know, how do we translate what we're seeing on
the macro level into our own personal finance lives. And
so as we're taking some of these things into consideration
and we're saying, okay, we're seeing a little bit of volatility.
I cannot tell you whether it will continue or peter out.

(12:40):
I don't have that crystal ball, But what do we
do and how do we make our plans ahead of time,
and that is what I see contributing to people's success
financially speaking, is saying I don't know exactly what the
future holds, so I'm going to have my web of
plans of what I'm going to do with each situation,
and having that predetermined really gives people a lot of
peace of mind even when there are times where things

(13:00):
are uncomfortable, and so especially when it comes to making
market moves during times of volatility, it's much easier when
you're mentally prepared. You've thought about it before, you know
what you're going to do, and you have your action
plan because a lot of times those moves are quite
uncomfortable to do, right, you think about when the time
to become more aggressive is when markets are down. That
is a quite uncomfortable move to make, but it is

(13:23):
the move that would benefit you the most in that
situation as opposed to becoming more conservative historically speaking. So
these are the kind of things that it helps to
you know, hash out beforehand before you get into that situation,
so you know what you're going to do and you
have a plan.

Speaker 2 (13:36):
Ready to execute.

Speaker 1 (13:38):
Now. I will also give a disclaimer that with just
a few, you know, brief bouts of volatility the last
few weeks. It's not necessarily the time to do anything now,
and I'm not urging that. I'm more setting the stage that,
you know, investors should be prepared for whatever direction the
market's taken the short term and to be ready to
capitalize either way. So a couple of things that you
can be thinking about as we approach the end of

(13:59):
the year. We just have about two and a half
months left, and so something to think about it if
you are RMD eligible is have you taken your rm
ds yet? And if you have not, do you have
a plan for them before the end of the year.
So individuals who own iras or four oh one k's
and who had a seventy third birthday this year, you
are going to be rm D eligible this year. You

(14:21):
have to take your first required minimum distribution from those
tax deferred accounts like iras four oh one k's, four
or three b's. If you're not sure what that amount is,
you know there are many rm D calculators out there.
It's based off of your last year end balance, so
December thirty first, twenty twenty four, and there's a factor
that's based off of your your age and that will

(14:42):
tell you what the amount is you have to take
from your IRA or four oh one K four three
B this year. Other people who might be rm D
eligible who maybe aren't seventy three is folks who have
an inherited IRA. So if you inherited an IRA from
a non spouse, you will have to take most likely
in rm D from that account. Now, there is some
complexity to inherited iras. In fact, the legislation in the

(15:05):
past few years have only made them more complex unfortunately.
So it can be worth either you know, doing a
lot of research or working with an advisor that you
trust to really understand what the options and requirements and
implications are for inherited IRA accounts.

Speaker 2 (15:19):
But just as a general.

Speaker 1 (15:21):
Statement, you may be leaving to take an rm D
from your inherited IRA, even if you're not seventy three
and you wouldn't have to take it under your own
IRA if you inherited one, there's certainly a possibility, So
for any of those, you'll have to take it before
December thirty first. Now, the caveat to that is if
it's your first year having to take an rm D
from your own account, you do technically have until April

(15:44):
the following year. So if you turn seventy three this year,
technically you do not have to take your first rm
D until next April twenty twenty six. That you do
have a grace period for the first one. However, that
is often not prudent because you're going to have to
take another one next year. So if I had to
wait till after December thirty first, you're going to have
to double up your rm ds next year, and that

(16:05):
can be create some tax consequences. All those dollars coming
out are taxable as ordinary income to you, so it
usually makes sense, even though you have the grace period
not to use it. There are sometimes where you might
consider it, but for most people it's more prudent to
take it by December thirty first, so that only leaves
us two and a half months. That's not a long time,

(16:25):
and so if you haven't taken it yet, I would
urge you not to wait until the last week of December.
That can create some headaches with actually executing on it
and getting it done by the deadline. To be thinking
about it now, perhaps to be setting aside the cash
if you haven't yet so that it's not exposed to
any short term volatility. That could be a prudent step
at this point in the game.

Speaker 2 (16:47):
So that is something that.

Speaker 1 (16:48):
I would suggest if you are RMD eligible and you
haven't done it yet, is to think about it at
this point in time. Another thing to consider is ROTH conversions.
So I work with a lot of clients who do
Roth conversions each year, or those who might be looking
to do it now because their tax situation has changed
and it makes more sense, and a lot of those
individuals are waiting for a good moment, right So with

(17:11):
Roth conversions, I'll just explain them briefly. You take money
from your IRA where it's tax deferred, but every time
you take money out of that IRA, it's going to
be taxable to you. And you say, I'd like to
instead of letting this grow in a place in an
account where I'm going to have to pay tax on
every dollar I'd like to pay taxes on a portion
of it now and have that converted to a WROTH IRA.

(17:32):
That way, any future growth on those converted dollars is
going to be in a tax free account. With the WROTH,
it's going to grow tax free and come out tax free.
That's for you and your beneficiaries down the road, So
it can be a great strategy. It works great for
folks who have a long time to let it compound,
so that's one one time. It makes a lot of sense.
The power of compounding on a tax free basis will

(17:53):
be amplified. It makes sense for people who have low
income now but might have higher income in the future,
or their air might have higher income than them, So
you want to pay lower tax rates now and then
let the growth be tax free so that you don't
pay any higher tax rates later. So there are a
lot of compelling reasons to consider a Wroth conversion. It
is not right for everyone, but it does make sense

(18:14):
for many people. And it doesn't have to be all
or nothing. So even if you have a million dollar
IRA and you say, I don't want to convert this,
I'm going to pay ordinary income on a million dollars
of income, Well you wouldn't do the whole thing, but
maybe you move over, you know, small chunks, and you
do a small chuck next year and the year after that,
and little by little you can move some dollars out
of a taxable area of your wealth and move it

(18:35):
into an tax free account. So there are a lot
of times that it does make sense, and it tends
to be especially impactful when markets are down, right, So
when markets are down, you convert a portion of your
IRA over to the wrath and then the market recovery
is in a tax free location.

Speaker 2 (18:51):
So something to be watching.

Speaker 1 (18:52):
If you're someone who's thinking about a Roth conversion this year,
you may want to set a threshold in your mind
and say, Okay, if we see the market go down
to you know, five, ten percent, fifty percent, whatever it
might be, that you would be comfortable in saying, this
is a good Wroth conversion opportunity. To be ready for that,
to have the plan in place, to have your wroth
IRA open if you don't already, to have the logistics

(19:13):
coordinated so that when we do see if we do
see I should say, the markets reach that threshold, then
you have the ability to execute on it and take
advantage of you know, it might feel like a negative
in the short term, to really take advantage of it
and use it for your your own game. I have
referred to it a little bit earlier. But there are
also folks who maybe have decided that they'd like to

(19:33):
be more aggressive for one reason or another. Maybe this
past you know, run up in the markets has made
them feel, hey, I'd like to be, you know, more
participating in market growth.

Speaker 2 (19:44):
And so the time to become.

Speaker 1 (19:46):
More aggressive is when markets are down. So you could
be waiting for a moment like that. And again I
encourage people to have parameters in place ahead of time
so that you're not having to weigh the.

Speaker 2 (19:56):
Emotions in that moment.

Speaker 1 (19:57):
Instead you are able to say, Okay, when I said
when the market was down ten percent, I was going
to become a little more aggressive, buy into the equity
side at a discount, and so as soon as I
see that threshold crossed, I'm going to act on it.
So that could be something to do as well for
folks who have dollar cost averaging strategies ongoing. Right, maybe
you have had cash to invest, you're nervous to invest

(20:20):
it all in a lump sum fashion when markets were
near all time highs. So maybe you're investing little by
little over a period of time, right, maybe a fifth now,
a fifth next month, And you have this strategy ongoing
where you're getting cash into the market over time, be
ready to move up some of those tranches.

Speaker 2 (20:37):
Right.

Speaker 1 (20:37):
The flexibility that DCA dollar cost averaging gives you is
that if you do see a market downturn, you still
have some cash available to buy in at a more
favorable point. So if you are in the middle of
that and you have some cash that's waiting to be invested,
be ready. And again, you know, I'm going to sound
like a broken record today, think about that parameter of

(20:58):
what threshold you want to see and be ready to
ask when you see that, and watching it that way
can help you take more of a disciplined approach. When
the market, let's say you pick fifteen percent down and
the market hits that point, it is not going to
feel good to put money to work in there because
most things are going to be saying the market has
further to fall, right, That's what we see historically. If

(21:18):
it were the opposite, then you know you'd see exuberant
return to the stock market and the markets would be
going back up quickly. So when people are fearful, when
there's blood in the streets, that is the time that
you want to be taking advantage of it. From a
rational perspective and from an emotional perspective, it's the time
where you want to go you know, high under your blanket.
So it's something to think about now saying Okay, there's

(21:40):
a possibility for more volatility, there's some challenges facing the markets.
What am I looking for and at what point am
I going to take certain actions? So those are awesome
examples of things that you can consider doing that would
be beneficial to you and would allow you to take
advantage of again short term negatives, short term uncertainty and fear,
and to use it for your own advantage in your

(22:03):
own personal finance life. So those are the kind of
things that we're talking to clients about that we're you know,
talking about on the radio, that we're just sharing with
people because you know, it is the most prudent way
to handle these types of things.

Speaker 2 (22:16):
We're coming to a break at the.

Speaker 1 (22:18):
In the halfway point in the show here, but before
we get there, I'd like to take just a quick
moment to talk about two events that we're holding in
the next few weeks. There's information about these on our website,
which is www dot Bluche dot com if you'd like
to go and check out more information. But we have
an event this coming Wednesday at DOO at the Dunes
in Albany. It's a her legacy event, so it's our

(22:40):
second annual Women in Wealth Seminar, and it's a luncheon.
I'll be one of the panelists and I'll be joined
by a couple other experts and attorney and a CPA
to talk about strategies to protect your loved ones, maximize
your opportunities, and build confidence for the future, specifically through
life's transitions, is the focus of this particular one. So
it's open to ally one who would like to comment

(23:03):
and listen and enjoy a complimentary lunch. It's free, but
the seating is limited and it is this coming week,
so go ahead and reserve your spot if you'd like
to come on our website. We also are going to
have Planning with Purpose seminar on Wednesday, November twelfth as well,
at five point thirty at the Hotel Brookmere and Saratoga,
and I'll share more about that when we come back
from the break. But it's gonna be a great seminar again,

(23:24):
open to it to anyone. Admission is free, but seating
is limited, so you can sign up on our website
so hopefully if you if you're interested, you can go
to our website and check those things out so that
you have a chance to attend if you'd like. We're
coming to the halfway point here, but we'll be back
with more. Let's talk money, brought to you by Bouchet
Financial Group, where we help our clients prioritize their health

(23:46):
or we manage their wealth for life.

Speaker 2 (23:48):
We'll be back in just a few minutes. Don't go away.

Speaker 1 (23:53):
Thanks everybody for staying with me through that brief break.

Speaker 2 (23:56):
For those who might be just.

Speaker 1 (23:57):
Joining, my name is Harmony Wagner. I'm a wealth advisor
at Boosh Financial Group. I'm a Certified Financial Planner or
CFP and also a Certified Private WELP Advisor CPWA, and
I get the pleasure of spending my days during the
week talking with clients about financial planning and investment management,
and every now and then I get the opportunity to
talk to our listening audience on the radio as well,

(24:19):
So thank you for tuning in. If you have a question,
please feel free to call and ask. That phone number
is one eight hundred talk w g Y one eight
hundred eight two five five nine four nine, and we
also have an email inbox if you prefer to send
a question that way you can to ask Bouche. That's
a sk B O U, C H E Y at

(24:39):
Bouche dot com. And I'm actually going to go to
the email inbox.

Speaker 3 (24:42):
Now.

Speaker 1 (24:42):
I have two great questions that came in and so
I'll go through those. So first, David asks if there
is an ETF that he could use to invest money
for short term use and throughout the idea of a
ultra short term bond fund. That's a great question. I
think it is. It's very prudent for folks who are
going to need fund, need to spend cash in the

(25:03):
next one to two years.

Speaker 2 (25:05):
To not have it invested in the markets.

Speaker 1 (25:08):
Markets can be vital in the short term, as we
all know, and so long term great place to put
money for long term growth. Short term you want to
typically pursue a different strategy, and so whether you want
to leave it in cash where it may be earning
next to nothing if it's just sitting in your bank,
or have another option is something that you should be considering.
So there are a few ets that we use for

(25:31):
short term cash flow needs for our clients. The first,
and you know when we've commonly used in the of
the past few years, just given the interest rate environment.
The first is swv x X. It is a Schwaub
money market fund. Now, there are many money market funds
that could do a very similar job, so you know,
it's not the only one out there, but it's the

(25:52):
one that we like for our clients when we know
they're going to need cash in the short term, and
so as a money market fund, it's not going to
be exposed to equity market volatility. It's just going to
you know, get through that nice yield. Right now, it's
yielding almost exactly four percent, so it has been yielding
a high amount when you look even historically a few

(26:12):
years ago, when when rates were historically low, you couldn't
get that in a money market fund. But now you
can get four percent for a very conservative holding with
you know, really no market risk. So that's a great
place to park cash. Short term ultra short duration bond
funds is something.

Speaker 2 (26:27):
That we do use as well.

Speaker 1 (26:28):
There's one a Vanguard fund, the USB. Again, there are
others out there, but it does tend to really limit
volatility because the duration is so short, so it can act,
as you know, very similar to a money market fund.
And it's another great place to park cash that you
may need in the short term, but you don't want
it sitting in pure cash doing nothing. So that those
are two great options. And again there are many options

(26:51):
out there, but either money markets or ultra short duration
bond funds are excellent choices for cash you may need
in the next you know, a few months, even too,
you know, a year or more, anything less than that
two years. It's good to be thinking ahead and putting
it somewhere where it's protected from volatility.

Speaker 2 (27:07):
I'll go to the.

Speaker 1 (27:08):
Phone lines now and chat with Jim.

Speaker 2 (27:10):
Morning, Jim, how.

Speaker 3 (27:10):
Are you hig? Good morning, Thank you and thanks for
your nice program. I listen every chance I get. Thank you.
Back to roth. If you're doing a wroth conversion, is
there a minimum amount that you can convert? You know,
because there are minimums to invest in a wrath, But

(27:33):
when you're converting, is there a minimum amount of money
that or a maximum I should say, this is what
I'm really interested.

Speaker 1 (27:42):
No, that's a great question. Yeah, Now there may be minimums.
Let's say you opened a wroth at you know, Charles Schwab.
They might have a minimum balance, so you you know,
but it's typically very small. I mean maybe fifty or
one hundred dollars, and I would imagine that's similar across
all the major institutions. Beyond that, there's no real restrictions
on the conversions. You don't have to have any earned income.

(28:04):
There's no amount of earned income you could have that
would be too much. You can do all of your IRA,
you can do a small portion, and I've seen clients,
you know, really run the gamut. They could do five
thousand dollars conversion, they could do a two hundred thousand
dollars conversion in any one year, and there's really no
restrictions on that. So retirees are eligible, young people are eligible.

(28:26):
There's so many use cases for it. And yeah, there's
no minimum and there's no maximum. Besides that, you couldn't
convert more than you have in your IRA, obviously, but yeah,
a very flexible strategy.

Speaker 3 (28:37):
Okay, well, thank you very much. That answers my question.

Speaker 1 (28:41):
Yeah, thank you for calling. I have another email question
from Steve who asks how many holdings a typical client
account would have, And that's a great question. You know,
now I can speak for our clients. It doesn't mean
that it's the right approach for everyone, but We typically
build our portfolios using you know, primarily exchange traded funds

(29:04):
or ETFs, and on the equity side, we might hold
anywhere from ten to fifteen ETFs. Now, there are some
clients who have a lot of legacy positions, meaning stocks
that they either brought over from a previous advisor, they
might have inherited them, they might just be interested in
and buy some stocks on their own. Wouldn't be part
of our model portfolio necessarily, but it's, you know, a

(29:26):
way they can customize their accounts to what's appropriate for
them and what they want to own. So there are
definitely times where it's more or less, but that's kind
of the standard the way that we invest. We're very
much long term investors, so we believe in the long
term growth of the stock market, and so we have
some holdings that we'd consider our core holdings, where our

(29:48):
investment committee is evaluating everything that our clients hold every week,
but there are some that really rarely change and those
would be considered our core holdings, the sections of the
market that we want long term exposure to. Then there
are other holdings that we'd consider more on the tactical side.
Those is the you know, around the edges where we're
making changes and trying to be strategic and tactical so

(30:11):
that we can help our clients' accounts outperform the way
to benchmark, those you might see changing more often, right,
those are the ones that as we're evaluating what we
see in the markets, what we see in the economy,
we're more likely to make changes on those tactical holding
side of the portfolio, again trying with the goal of
helping our clients achieve that best risk adjusted rate of

(30:31):
return that they can for what they're comfortable with. So
long answer to your question, Steve, but I would say
that typically between ten to fifteen on the equity side,
and then on the bond side you know, to be
four or five bond ETFs. And we also often put
treasury ladders in depending on the client situation, so you know,
in that case they might hold many treasuries that mature
in a staggered format over the coming months to years.

(30:55):
So and then we also have an alternative sleep where
we're holding things that at another level of diversification outside
of just you know, peer equities or peer bonds, trying
to you know, either combine some elements of the two
or put other things in as a alternative investment, so that,
you know, even in years like we saw him back

(31:16):
in twenty twenty two, where both stocks and bonds were down,
the alternative sleeve was outperforming by you know, seven eight
percent because it's diversified. Even further, it's it doesn't always track,
it's not always correlated with with stocks or bonds. So
we have alternative sleeve with maybe two, three, four.

Speaker 2 (31:33):
Hold things in that as well. So that's kind of
how we structure our portfolios.

Speaker 1 (31:37):
You know, again, it's not right for everybody, but if
you know, anyone wants to reach out for a free
consultation and have us kind of take a look and
see if it might be right for you, we're certainly
open to that. And Steve also asked in his email,
I love the way he put this. He says, as
a planning assumption, what real return do you assume for
a sixty forty portfolio? The planning assumption that we use

(31:57):
with when doing financial plans and projecting out cash flow
over someone's retirement timeframe, which quite often is thirty plus years,
we are very conservative when we're doing that, and so
our planning assumption does not align with what the typical,
historically accurate rate of return would be for that portfolio.
If you look at a sixty forty portfolio, just looking

(32:19):
at you know, long term averages for the S and
B five hundred and the Nasdaq and the Barcleay's Aggregate
Bond Index, you might expect that a sixty forty would
return round seven percent on an annual basis over the
long term. We scale that back for our planning and
we use five and a half percent return. Now, he
also mentioned real return, so we're subtracting three point two

(32:42):
five percent inflation on that. Again, inflation is conservative, that's
higher than the long term average that figure that we use.
So our goal in planning is to be very conservative.
Is to be sitting down across from a client showing
them their projection going out to the future, and to
be able to look in their eyes and say, hey,
even if the next thirty aren't as great as the
last thirty when it comes to inflation, when it comes

(33:03):
to you know, the market returns and what you can
expect in your portfolio, we still want you to feel
comfortable in your decision to retire or to buy a
second home or whatever that planning scenario is that we're
looking at and so we're very conservative, so I hope
that answers your.

Speaker 2 (33:20):
Question, Steve.

Speaker 1 (33:20):
We use five and a half percent as the portfolio return,
three point twenty five percent as the inflation, so that'd
be only two and a quarter of real return. Very
conservative when you look at how the market has performed historically,
but that is very much by design. So thanks everybody
for these great questions, and you know, please feel free
to keep sending them. I really love hearing from the

(33:41):
audience and talking about what you all want to hear.
I'm going to go to a quick break here, but
we'll be write back with more. Let's talk money on WGY.
Don't go away. Hi, everybody, thanks for staying with me
through that brief break. This is Harmony Wagner. Well, it's
advisor at Pluchet Financial Group, CFP and CPWA and it's
a pleasure you for this hour. I hope that you're

(34:01):
getting something valuable or at least interesting from the program
so far. And if there's anything you want to talk about,
please feel free to call in or email. The number
is one eight hundred Talk WGY one eight hundred eight
two five five nine four nine, or you can send
your questions an email to Askbouche at Bouchet dot com.
You know, as I think about our clients, and especially

(34:22):
clients who are are engaging our services for the first time,
one of those huge financial life transitions that drives a
lot of people to seek outside financial advice is retirement
and it's something that we do so much planning for
with our clients. It marks such a major milestone in
someone's life from the accumulation phase financially where they're saving,
they're you know, putting money away. They're not typically pulling

(34:46):
down from their portfolio to the spending phase. Right, they
flipped that switch. They no longer have earned income and
now their portfolio that they've saved and invested and grown
over the years is what's going to support them. And
so it is a huge transition mentally and emotionally and
also financially, and something we plan a lot for and
have a lot of conversations with clients about. And one

(35:07):
of the most rewarding parts of my job truly as well,
is to you know, plan for this huge milestone for
years often with clients. Right, A great time to sit
down with somebody is you know, five ten years out
from retirement if you can, because if things need to
be changed, it is a much smaller adjustment ten years
before than one year before in terms of if you

(35:27):
need to be saving more or being more aggressive, and
you know, any number of different adjustments you might have
to make to get where you want to be. So,
you know, oftentimes we're sitting down way ahead of time
and starting to plan. And something that we talk with
the clients about a lot. Is this idea of it
early retirement appealing to a lot of people. Maybe you know,
your career has you know, made you a living, but

(35:49):
it's not a passion. It's not something that you want
to continue. For some folks, it causes a lot of stress.
For some folks, they just say, hey, I want to
enjoy the time that I have, enjoy you know, good
health for as long as I have it, and retire
as soon as I can so I can really take
full advantage of that. So, you know, you might be
asking me, well, if you're talking about early retirement, what
do you even mean what's that retirement age that it's

(36:10):
early and there's actually a few different milestones that could
you know, categorize something as an early retirement. So if
you are younger than sixty five when you retire, I'll
work backwards here, so we'll start with sixty five, right,
that is the magic age where you're eligible for Medicare.
Before that, you're going to have to think how you're

(36:31):
going to cover yourself from a healthcare perspective, and the
private healthcare tends to be very expensive. So some folks
have great benefits offered through their employer that might continue,
not not everyone. And so if you're retiring before sixty five,
especially you know, considerably before sixty five, and you're not
eligible for Medicare yet, you're going to have to really
plan from a cash flow standpoint, how am I going

(36:53):
to cover potentially much higher expenses on the medical side,
and what are those expenses going to be? And how
am I going to pay for that? Can I support
that for any length of time? So that's you know,
one thing you might say, if you're tiring before sixty five,
I might consider that an early retirement and that you
have this healthcare nuance that you have to address before
sixty two. Another age, at sixty two you can start

(37:15):
collecting Social Security. Uh, it doesn't always make sense to
do it right away. A lot of folks choose to
delay until either full retirement age, which is typically between
sixty six and sixty seven. Some folks choose to delay
till as long as age seventy, which can make sense
in some situations. But either way, if you're you've been
sixty two, you know, in most cases, unless you have

(37:36):
disability or you know, sometimes you're espouse, you can get
benefits earlier. But for most people before sixty two, you're
not going to be able to collect Social Security. So
that's something to think about. If that big part of
your cash flow planning is having that income stream, then
you're retiring before that age, you have to support your
lifestyle from somewhere else until at least that point.

Speaker 2 (37:59):
Then you're third eight nine and a half.

Speaker 1 (38:02):
The IRS does at times like to throw these half
half birthdays into the numbers. Fifty nine and a half
is the age where the IRS says you can withdraw
from your retirement accounts, your your IRA without penalties. Now,
there are ways to get around it, and I'm gonna
talk about that in just a minute, But if you
are younger than fifty nine and a half and you retire,
you're going to have this other consideration, how do I

(38:25):
access my money? Where where am I going to get
the cash that I need to support my lifestyle when
I can't necessarily just go go easily and tap into
my IRA. So any one of those milestones, if you're
retiring before that, you know, you can consider it an
early retirement in the sense that you have some other
considerations that maybe the retirees and the sixty five and
older crowd don't have. So you know, I'll talk a

(38:48):
little more about if you are retiring before fifty nine
and a half, what your options are now. For many people,
iras are a big portion of their wealth. Maybe they've
saved it to a four oh one K, they've added
these pre tax dollars to these retirement accounts throughout their careers.

Speaker 2 (39:03):
But they.

Speaker 1 (39:05):
They might have other assets as well, so it's not
typically the only asset that they have. So perhaps you
have a brokerage account or a cash reserve. You might
be selling a business and so you have a lot
of cash coming in that's not going into a retirement account.
You know, you're gonna have to put it somewhere else,
like an investment account. And so for those folks, it
may make sense just to pull from these other sources first, right,

(39:26):
especially if it's a short time. You know, you're a
fifty eight, you've only got a year and a half
before you can touch the pre tax dollars. Well, you know,
pulling that cash from somewhere else maybe a simple solution
to that problem. Another option is that there is something
that we would call the rule of fifty five from
a four to oh one K. So iras are individual

(39:47):
retirement accounts. They are not tied to an employer. You
can open one at the major financial institutions. You can
you know, contribute to it on a certain basis every
year as long as you qualify, you can roll previous
four to oh one case four or three b's into
it and they roll over. Maintains the tax deferred nature.
But there's also the four to one K which you
may have and that is tied to your employer, and

(40:09):
typically you fund it through payroll deferrals, and you know,
your employer decides what fund options are available and things
like that. Let's say you're retiring and you're at least
fifty five and you're retiring, if as long as you
keep those assets in the four oh one K with
your employer. You do not roll them out to an IRA.
You got to keep them in the four o one K.
But you can access those at age fifty five instead

(40:30):
of fifty nine and a half. And so what we
see sometimes for clients maybe they're retiring at you know,
fifty six fifty seven and they have a significant four
oh one K from the employer that they're retiring from.
Instead of having them roll it over to an IRA,
which will make sense down the road, they can keep
palm dollars or all of them. However, you know the
numbers are working out in the four to oh one
K plan, and that way they're able to take a

(40:52):
penalty free withdrawals before that fifty nine and a half milestone.

Speaker 2 (40:57):
So if you're.

Speaker 1 (40:57):
Retiring, you have a four oh one K and you're
over fifty, you have that ability to access that early.
So that's a great provision that helps early retirees a lot.
A third and final way, if none of the other
two apply to you, right, maybe you don't have other
you don't have brokerage accounts that you can tap into
you maybe you're younger than fifty five, or you know,
you don't have significant asset in you're current four oh

(41:19):
one K. There's this other rule called the seventy two
T distribution from an IRA, and there are a lot
of stipulations about this, and I'll be honest, we don't
see it commonly, but I do see it sometimes with
clients making the most sense, and a seventy two T
says that as long as you take equal payments from
your IRA over a period of at least five years

(41:41):
or until you reach fifty nine and a half, whichever
is longer, So you're going to be doing it for
at least five years, potentially more. If that five years
doesn't get you to fifty nine and a half, you
have to take out these substantially equal payments from your
IRA every year, and you can do so and you
can avoid the ten percent penalty. Now, in any of
these cases, you're still paying ordinary income. There's really, you know,
no way around that. You got the tax deductually when

(42:02):
you put it in, and Uncle Sam wants his tax
when you take it out. But as far as avoiding
this ten percent early withdrawal penalty, the seventy two T
can can function in that way. So there's kind of
some nuanced even to that you cannot alter the payment amount,
You cannot alter the schedule. If you do, not only
could you be subject to the ten percent penalty for
that year, but all the previous years that you took

(42:23):
as well. So the penalties are steep, and it's really
important to understand all the risks before you start a
seventy two T schedule. It is one of the more
you know, rigid strategies in terms of you really have
to go by the book and the terms of the
way it's calculated and all that. But it is an option.
And you know, a lot of times when we're sitting
down with a client, they're they're ready to retire in

(42:44):
the sense that their portfolio is enough to sustain them
for an early retirement. And you know that they have
the desire too. They don't want to work anymore, they
have things they want to do outside of you know,
a typical career. This is a great way to make
it work. And so I say these to emphasize that
if you're thinking about it early retirement, but some of
these barriers are weighing on you or they just seem

(43:07):
to be limiting you in that there are things that
you can do to strategize around it, and so you know,
again what they're doing more research or sitting down with
your advisor, finding an advisor you trust. Those are great
ways to address these problems that to get you where
you want to be. There's usually a way, a way
that you can work around these kind of things, and

(43:28):
early retirement is is no exception. The other, you know,
kind of overarching element of planning for an early retirement
is that you're expecting and hoping, you know, for good
health and longevity, and that means that you'll have to
sustain your portfolio for a longer time. Right, So in
our financial planning, we have all of our client's plans

(43:49):
running out to age ninety five.

Speaker 2 (43:51):
We plan for longevity, right.

Speaker 1 (43:52):
That is one of the risks of the plan is
outliving your funds, and so we want to say we
want to make sure you can make it so at
least ninety five. If you're retiring at fifty five, well
that's forty years that your portfolio has to sustain you.
That's probably more years than you were working, which is
kind of crazy when you really sit down and think
about that. And so it does have more implications, right.

(44:14):
It means that you may need to take on more risk.
You may need to pursue a more aggressive saving plan
before you retire, and right it really tuck dollars away
as much as you can to build up that portfolio
balance while you still have income coming in to fund
those savings. It could mean taking a closer look at
distributions rates. Right, we talked a lot about what's that
safe amount that I could take from my portfolio? Well

(44:36):
over a thirty year timeframe, between four and even closer
to five percent is generally safe in most cases to
withdraw from a portfolio that's well invested in, well diversified
forty years, that might be a lower rate, right, And
are you okay with that? Are you okay only taking
three and a half to four percent of your portfolio?
Is that going to give you the life that you're

(44:57):
trying to achieve. When we're thinking about a PORTFOLI lasting
forty years as opposed to thirty, that's a big increase
and really important. So all these things are our conversations
questions to ask planning to be thinking about if you're
thinking about an early retirement and retirement in general. But
you know, the early retirement does have, of course some

(45:17):
additional implications that require an extra level of planning and forethought. Well,
we are coming down to the bottom of the show here,
so again before I go, I just want to share
about some of the events that we have coming up
in the community the next couple of weeks. This coming Wednesday,
the twenty second, at dou at the Dunes, we have
a Woman in Wealth Seminar. It's our second annual her

(45:38):
Legacy event and this year the topic is about navigating
life's transitions. The topics are tailored towards women. We're very
passionate about our Women and Wealth initiative here at Bouchet,
but all are welcome to attend and to bring guests.
So if you have someone you think could benefit from
the conversation or from talking with us, we would love
to have you tend. You can sign up on our
website Www.

Speaker 2 (45:59):
Buche dot com.

Speaker 1 (46:00):
There's a gold bar at the top with the seminar
link where you can see more information about the panelists,
the topics, the time and location, and you can register there.
And we're also having a Planning with Purpose seminar in
the evening at five point thirty on Wednesday, November twelfth
at the Hotel Brookmere in Saratoga that's coming up soon,
and this seminar will cover how to invest during the

(46:21):
current market environment, three ways to reduce your tax burden
and your investment portfolio, ways to provide income from your
retirement portfolio, and whether you need a trust in your
estate plan. So it's going to combine those elements of
retirement and financial planning as well as estate and trust planning,
which really do go hand in hand, and it's going
to cover that. So for both of these events, like

(46:42):
I said, you can register on our website www. Dot
buche dot com the gold bars right at the top.
We'll give you links with more information and sign up
and we would love to see you. Their admission is free,
but seating is limited, so certainly sign up as soon
as you can if you're able to, and we would
love to see you there. We're very passionate about education

(47:03):
and the community involvement, and so we really enjoy when
we get the opportunity to, you know, put on these
seminars and talk to people who you know, might want
more information on some of these financial strategies and ways
they can best protect themselves. And as I always focus on,
you know, maximize the impact of your wealth. It's such
a key thing that you know, we really take seriously.

(47:24):
As I said before earlier in the show, it's one
of the most rewarding parts of my job and something
I really appreciate when I get to sit with clients
and plan for their future and then see it, you know,
come to fruition as they go through life. Their retirement
planning and a state and legacy planning. All those things
are really important and just such such a blessing and

(47:45):
the gift that I get to do that every day.

Speaker 2 (47:47):
Well, thank everybody for tuning in for today's show.

Speaker 1 (47:49):
I enjoyed spending the hour with you, and I hope
you gained something valuable from today's discussion. I appreciate all
the callers and questions. Don't forget to join us right
here on WGUI every Saturday at ten and Soudays at
eight am for more. Let's Talk Money, brought to you
by Bouchet Financial Group, where we help our clients prioritize
their health, where we manage their wealth for life. Have
a great weekend, everybody, Thanks so much.