Let's Talk Money

December 6th, 2025.

Episode Transcript

Speaker 1 (00:00):
Good morning everyone. My name is Martin Shields. I'm the
chief Wealth Advisor at Bouchet Finitche Group and I'm your
host today for let's talk money. Arm out there, whatever
you're doing. We are officially in winter, folks. This is
pull up. We only got four months left to go.
We'll be into spring. We're in winter, and again, I

(00:22):
hope you're having a great day off to a good start.
And if you've been listening, you know we have a
little puppy at the house. His name is Ali, and
he's an adorable little dog. But you know we forgot
you know what that means. So basically it's like having
a toddler in your house three years old. He's up
at quarter of six pretty much every morning. So this

(00:43):
morning I got up early with him. And the thing
is he's a burnodoodle, so he, like poodles, can pretty
much stand straight up like a person and that's what
he can do. So what that means is anything along
the counter or whatever he's into, so he is NonStop.
And also the thing is he's a toddler, but he's

(01:04):
really fast, so we've got a hands full. But I
was up early this morning and went to an Elevate
Hits class at the HY. So you know, if I
know there's metabolic and there's CrossFit, there's all these Hits class.
But we've been going to the one at the Y
and it's it's great. I'm telling you. If you really
want to have a quick intense workout forty five minutes,

(01:28):
you're done. Any of these classes I think are great,
but it really my wife does these and they've started
to do with them with her, and it's I thought
I was in shape, but I'm definitely not as I
realize it and try to keep up with her, and
pretty much exhausted after that. But as always, it's great
to be here with you to take your questions regarding

(01:49):
your financial planning or investment management concerns, and I encourage
you to call in or email me with those questions.
You can reach me at eight hundred two five five
nine four nine. Again that's eight hundred eight two five
five nine four nine, or if you're too shy to call,
you can email me at ask Bouchet at Bouchet dot com.

(02:14):
That's asked Bouchet at Bouchet dot com. And as I
always say, there's no dumb or silly question except for
the one you don't ask, and you may be doing
your fellow listener or favor by asking that question that
they have as well. So give me a call or
shoot me an email and I can give you some insight.
So a lot to discuss today. Uh, certainly we'll be
talking about the markets. Another good week in the markets,

(02:36):
not back to all time highs, but very close, very
close to all time highs. So you know, we had
a little bit of volatility a week or two ago,
and our our investor team was on top of it.
They sold a few positions that had done well. One
of them was healthcare in our portfolio, and they bought
into positions in the nuclear field, into the chip field,

(02:58):
and we had a small exposure to bitcoin as well,
and those are all doing well. And as we always
say with our clients, that's what they pay us to do.
One is to take the emotion out of investing. Our
job is to make sure we have an investment team
that is constantly looking at the portfolios and making decisions
as to what to do, and then they execute on it. Right.

(03:20):
That's an important part is executing because you can have
these ideas, but you've got to go ahead and actually
put them into place, and our team does an amazing job,
so very happy with them. The other element too, and
they do an awesome job is communicating. So you know,
when those trades happen, very quickly, we're sending it out
an email to our clients. Lett in the know what

(03:40):
the trades were, what's the premise behind it. If they
have any questions, they can call us, we can chat.
But that communication to me is very important. You know,
if we have our clients really vary is to the
level of knowledge they have. Some are very astute individuals.
We have a number of of CFOs from different companies.

(04:02):
We have individuals that are involved with investment companies, finance companies,
but they want our team to manage their personal wealth.
And so with those people we have really in depth
conversations as to what's going on with the economy, with
our portfolio, with the investments. And then we have probably
the majority of our clients or individuals that are successful

(04:24):
in other ways with their own businesses or different situations,
and they don't really want to know too much.

Speaker 2 (04:30):
Now.

Speaker 1 (04:30):
They want to know what's going on broadly speaking, but
they're not going to dig down. But again with our
ability to communicate very quickly what's going on. It gives
them this kind of peace of mind. And we always
say that finances are very the psychology, the emotion with investments.

(04:50):
It's real, It is absolutely real. The more you appreciate that,
I don't care if it's about spending or saving or
pain down debt at or you know, trying to manage
their portfolio. A big element of what you're doing there
is an emotional and psychological piece to that. And with
our firm to be able to take that away from

(05:13):
our clients now to worry about that, it just makes
it a lot easier. And that really kind of moves
me into the next topic. I get a lot of questions, say, Marty,
who are your clients, where do they come from? Is
there a particular niche that you work with? What does
that look like to be a client of Bouchet. So
I just want to spend a few minutes to talk
about that. But before I do again, if you have

(05:35):
any questions, you can reach me at eight hundred eight
two five five nine four nine. That's eight hundred eight
two five five nine four nine, or you can email
me at ask Bouchet at Bouchet dot com. That's ask
Bouche at Bruche dot com and Bouchet is felled b

(05:56):
O U C H E Y and I have a
funny story regarding our email and the Bouchet name. So
I was going to the Why today and Samuel for
class and the young woman behind the desk and I
told her that our name of our firm and was
my email address at Bouchet. She's like, that's so funny.

(06:16):
I have a cat that we call him Bobby Bouchet.
And she didn't even know where that came from. But
I guess her colleague said that that is from Waterboy
because Annam Sandler's name is Bobby Bouchet. So we had
a laugh at that at six point thirty of this morning.
But I didn't know that that was the name of
the character in the Waterboy, Bobby Bouche. But let's talk

(06:41):
a little bit again. Who are our clients? What is
the general gist of what it means to become a
client of Bouchet, And I think it'll give you some
good perspective just even if you're looking at a firm
or an advisor, what to kind of be aware of
so you know, first and foremost our clients are delegators
and that's an important element, right that they're willing and

(07:02):
able to delegate the investment responsibility and even you know,
look to us for guidance on their function planning, their
tax planning. That delegated idea is very important. Every so
often we have prospective clients and as I'm talking to them,
I'm thinking, this person's not going to be able to
delegate this where they're you know again, just do a

(07:23):
lot of their own work. And you know, sometimes it works.
They're in a position in their life of like, you
know what I have done this, I've managed my own portfolio,
but I really don't want to manage this and be
responsible before this going forward. And it can work other
times less so they're always you know, kind of either
wanting to trade themselves or they're having questions and you

(07:45):
can just tell they're not willing to give it up. Now.
One of the things we do for our clients, which
I think is great to help them with that it
kind of eases them into this is, you know, we
have what's called a sandbox account, which is we manage
the bulk of our clients portfolio. But maybe it's fifty
thousand dollars or one hundred thousand dollars. We keep that
as an account where they trade on it. We don't

(08:06):
trade on it, we don't bill on it. Now it
could be on our platform at Schwabs, so we can
see it if they need help with it. But that's
their sandbox account. They can buy and sell whatever they want,
and really a lot of times that's what people need.
It's just that out right. If somebody has been looking
at the markets and looking at companies for all their life,
you know, they still like to scratch that inch once

(08:27):
a while.

Speaker 2 (08:28):
Now.

Speaker 1 (08:28):
Usually I will say it's very rare that they actually
do that well with it. And I'm not being too negative,
but it's very difficult to buy individual stocks and outperform
a professionally managed portfolio. But it gives them that great
out just to say, you know what, if I want
to buy a company, you know, and it's usually riskier
type of company, I can go ahead and do that

(08:51):
and you see what happens. So we always encourage that.
But first and foremost delegators. The other next piece this
is usually it's they're in a a life transition and
either they're planning for that life transition, which in those
cases we really like the most, which is to make
these changes before that life transition happens. Now, sometimes you
can't do that because that transition happens very quickly. But

(09:14):
if you can get out in front of it, that's
where we can help our clients the most, is in
those life transitions, whether it's buying or selling a business,
whether it's potentially preparing for somebody's spouses passing, whether it's
coming on as an executive and those executive benefits, whether
it's retiring, any of those things that we can get

(09:35):
out in front on and do planning before that transition happens.
That's the best way. But we do whether it's happening
a few years down the road or it already happened.
Those transitions are usually a situation where somebody starts working
with us. You know, as far as the size of
the client in investable assets, it's usually somewhere between one

(09:56):
to ten million dollars. You know. We do take some
clients that are smaller under that million dollar mark if
they're just you know, starting in their career or whatnot.
And we do have clients, we have clients that their
family wealth is up to fifty million dollars, So we
do work with much larger clients, but the bulk of
our clients, you know, maybe one to fifteen million something

(10:17):
in that range. That's the bulk of where our clients are.
Where our do our clients live. Gi Radley speaking, well,
most of our clients are in the Kapa region now
because we've been doing WGUY for over thirty plus years
that we have clients all the way down the Hudson
in the Vermont up to the Adroonics down to Oneana

(10:40):
because that's where WGUI is heard. So we have clients
in a wide area there. But really over the last
ten plus years and certainly since COVID, we have more
and more clients around the country and around the world.
We have clients in over forty states and even overseas.
And again because of technology, we can work with those

(11:01):
clients via zoom and and everything else. And just like
you would, you know, meeting with a client in person.
And I think people are becoming more and more comfortable
with that idea of perhaps never meeting us in person.
We love clients that we've never met in person, and
I will tell you some of them are finding us
in Google searches or AI searches in different cities. We

(11:25):
have a client coming on in d C who just
look was look, was looking for a fiduciary wealth manager
and we came up. So h you know, that's that's
more and more of the case these days. I mean,
I will say in general, we like to meet with
our clients, and sometimes even in those situations, uh, you know,
we'll try that if we're in d C or out California,

(11:46):
we'll try to meet with our clients that are over
in those areas because that's always very beneficial, right as
great as zoom is and you know, all this technology
to be able to sit across from somebody can be
very valuable. And then you know, as far as where
do they come from, you know, many times it's to yourself,

(12:06):
or they've been managed from their own portfolio or four
and K or maybe even you know, through Schwab or Fidelity.
That's a big bulk of them. But you know, a
lot of our clients do come from other advisors, whether
it's from the brokerage world, whether it's from uh you
know these now national ri as, whether it's from ris
that have been rolled up by private equity or sometimes

(12:28):
it's local ris. You know, I always say that those
are the ones that I mean, We're always willing to
help anybody out, but you know, a lot of the
local ris. We know some of these people and you know,
we have connections with them. So in general, those are
we don't like taking clients from those arias they are
small businesses like we are. But our clients do come

(12:49):
from a wide swath of different situations as far as
either working with an advisor who they work with, and
or maybe doing it on their own. You know, as
far as you know, I always say what's our differending factor?
And you know, again we do you know, personal CFO work,
we have investment management. But to me, the differentiating factor

(13:12):
one is team. We have over twenty colleagues right now.
We manage about one point six billion for our clients.
And that team is invaluable. And you know, we always
say that, you know, if you're working with me, but
you have a very unique situation, maybe it's a question
regarding charitable giving or taxes, or you know, you're selling
a business. We have our team is such that we

(13:34):
have individuals that have expertise in those areas and we
pull them in to work with our clients in that regard.
So to me as an advisor, I always say, I've
been with the firm for thirteen years. When I first joined,
it was just Steve and then it was me and
Steven Ryan, And you know, the fact that we've been
able to grow over time has really been a value
to our clients, just to the extent that we have

(13:56):
access to more experts within the firm, We have us
to more tools from a software perspective, So really it's
been really just valuable for our clients to continue to
grow and add colleagues, human capital, but also just even
what our technology is that we use with our clients.
And then the one thing I always tell folks is

(14:17):
they're looking at our firm is you know right now
we've in the last three months, we've added we basically
have put this kind of program out there to get
client testimonies. And you know, back three years ago, we
were not allowed to have that. The SEC would not
allow a firm like ours to have client testimonials, but

(14:38):
that has changed and it's allowed now. There's certain restrictions
with this. They have to obviously be a client of ours,
and there's a few other things that we've got to
make sure they go through. So we use a firm,
a software by the name of wealth Tender. But if
you go out there and just you know, you can
look under wealth tender with Bouchet or if you just
google Bouchet Financial Group, wealth tender actually comes out pretty quickly.

(15:00):
Under our firm, and right now, I think we have
close to forty client referrals. And you know, to me,
you know, you want to know what it means like
to work with our company, firm and our advisors. When
you read those client testimonies, it's just fantastic, you know that.
That's really I get such appreciation both for clients I

(15:23):
work with, but when I see with our team members
what these clients have to say about them and how
important they are in their lives. That's why I love
this industry and I love our firm because it's real.
I mean, the relationships we have with our clients, it's
become very important, very valuable, and I love to read
those client testimonies, So it would encourage you to look

(15:46):
at those, and again it's under wealth Tenders the firm.
But as far as you know, our firm is big
enough again, we managed about one point six billion that
we don't have any real niches as far as clients,
and you know, if you're a smaller sometimes clients have
you know, they really just work with doctors or they
just work with executives. But because of the broad spectrum

(16:08):
of expertise that we have, we work with a lot
of different niches. So you know, one of them is
business owners. Just had a couple of great meetings this
week with some business owner clients, and you know, I'll
tell you those meetings I love because here's there. We're
a small business. I'm a partner of the firm, and
they're a small business, and so we're going through some

(16:28):
of the same challenges they are, uh you know, with
managing people, with growing the firm, you know, with making
decisions to what the future of the firm looks like.
So it's really very relatable and you know, I just
love it. This one company that they're going to be
transitioning the business to their family and you know, they
just did. They had no idea when they started this

(16:49):
business that they're going to be so successful, and to
see how successful they've become and then to be able
to transition this to their their kids and have their
family take it over. And you know, again this is
what we get attorneys involved and CPAs to make sure
it's done in the most efficient and effective manner. And
you know, this family is very successful. They actually have

(17:10):
to worry about not only New York state inheritance but
also federal state taxes. So you know, it's over thirty
million dollars and you know, so we've been giving them
guidances to you know, things like GST generation skipping trust
that allow them to move assets from their parents down
to their kids and it really helps them potentially avoid

(17:33):
having to pay any estate taxes in their own personal
estate and to give them guidance on that, it's just
so valuable. The only thing I will say again, these
are situations where if you are a small business owner,
you really should be working with an investment fiduciary, a
wealth fiduciary firm sooner an later. It takes a lot
of time to get this in place, and we've been

(17:54):
working with this family for a long time. And you know,
sometimes we start working with a client where they're looking
at to sell the business within a year or two.
But the best way to do this is to start
with a kind of a runway of five to ten years.
And if you can do that, really can make sure
that we go through and say, hey, what are you
looking to do right, what is the goal of this,

(18:14):
because there's a lot of different approaches for a small business,
right you know, you might be selling to outside private equity,
you might be selling to a competitor, maybe you're selling internally,
maybe you're moving it to a family business. You know,
when our firm, when we made the decision to bring
partners on, you know, there's both families members involved, and
myself not a family member, and John Malay as well.

(18:36):
So there's a lot of complexities that exist. The more
time you have to plan for it, really you're going
to be better off. You're going to make sure that
the end result is what you want. And you know,
for most business owners, they're really looking I mean there's
an element of trying to maximize some of the wealth
with it, but we're really looking, hey, what's best for
our customers and our clients and what's best for our

(18:57):
team members. I will tell you in probably nine five
percent of the small businesses we work with, those are
the primary concerns that these small businesses have not Hey,
how do I maximize my wealth? So it's that to
me again, just show us what great people these individuals are.
The other category are executives. So we work with a
lot of executives, and again in this situation, probably the

(19:22):
primary thing we work with them on is stock compensation
and you know, or executive benefits, and you know, they
get very complicated. The tax situations get very complicated. And
that's why I appreciate all of our team members. There's
a few of my colleagues that have real expertise in
stock compensation. Whether it's restricted stock units, whether it's stock options,

(19:44):
whether it's a deferred comp all these areas come into play.
And you know what we always tell executives, which is,
you know, when you're talking about stock compensation, it's as
much about risk management and tax planning as it is
investment management. It really is. And you know, the best
situations we can do is start to change executive's mindset about, yes,

(20:10):
trying to maximize their benefit, but also trying to minimize
the risk with that company. Because you think about it,
if your work for that company and you're an executive there,
then you know, not only do you have all your
stock conversation with them, but you have all your income
with them. Yes, say, everything's tied to that. So if
things go well phenomenal, this is great. But sometimes things don't.

(20:32):
And you know, if you have the situation where you
have socially stock options where they're in the money and
they're doing well, that's where you want guidance to be
smart about exercising those and removing some of that concentrated
stock risk. We're going to take a little break here.
We're going to go to an email. It's from James.
This is kind of a big one. It says, I

(20:53):
realized that I'm unfortunate scenario, so I'm a bit hesitant
to even ask this question. My wife and I have
been super safe for the last thirty years. I just
love that right there. Let's just stop right there, all
super savers maxing out our four and K catchups and
additional defer comp I have been fortunate to have held
a job that paid me two and fifty K. Our
healthcare costs are all sorted. As my wife is a teacher.

(21:15):
I'm setting up my young children with up my accounts
in New York five twenty nine's which would be paid
out end up paying for two to four years of college.
They are both in the medical fears field, so they
are running off and running and really have not had
a tough situations. Out of touch with money this see here,
I am going to retire in twenty twenty six. I

(21:37):
have acquired in the range of seven to ten million dollars.
It amazes me that it's accumulated this much. Yeah, this
is very common, but it's years of being frugal. Great job,
absolutely compounding assets and I still drive a fourteen year
old vehicle. Awesome. In all my income plans I have run,
the amount per month available to me in retirement is

(21:58):
almost two x what I have normally spent. When R
and DS kick in, it gets crazy, Yes it does.
I know I need to look at roth conversions net net.
I need to go from a savor to a spender.
Life is good, right, James, After living I'm drilled in
my mind at early age. I know I will struggle
with this. You have advice to house to allow me

(22:20):
to loosen up and start accepting the fact that it's okay.
I mean, listen, let's just start right there. We may
have to go to break care folks, but James One.
Congratulations to your wife. This is awesome. This is why
I love working with you, know, clients like yourself. You've
done all the right things to get yourself in this
spot and you deserve it. And all I'm going to

(22:41):
tell you is a couple things. One is, you know,
if you don't spend it, somebody else will. I mean,
it is just a fact of life. And whether it's
your kids, your grandkids, a charity, So your mind's get
comfortable spending it and start thinking about, hey, what would
be fun that you guys would like to do that? Like,
for example, I always say that if you're going to travel,

(23:01):
what about traveling in first class? Right that if you
I don't know if you travel in first class or not,
but if you travel in first class now with all
the lounges, it's pretty nice. My wife and I have
done it a few times more recently, and it is
definitely something that you might want to do. What about
you know, maybe a nicer car, right, I mean, you

(23:22):
don't have to go and get a Mercedes, but maybe
you get something a little bit nicer that you not
having to worry about it breaking down, right, because as
you get older, you don't want to have that happen.
What about a vacation home. All these are things that
you know with our clients. Really, this is a fun time.
You get to plan what this is. And yes, remove

(23:43):
the guilt. Listen, I'm Irish Catholic. I got enough guilt
for everybody here. But remove that guilt. There's no guilt,
you know. And again maybe it's terrible giving, right, you know,
there's even less gill. You spend that money on charities.
But here's the thing, spend it now. Don't give un
people a big pile of money when you're dead, right,
that's very important. You really want to appreciate this money now,

(24:06):
whether it's spending on your kids, your family, your friends,
or charities. Do it now and not with you're dead,
because that you don't get to enjoy them. Well, folks,
we're gonna go commercial break, but come back and join
us as we take your question, Let's talk money. Come
back and join us, folks. Welcome back, folks. For those
of you who just joining us, my name is Martin Shields.

(24:28):
I'm the chief wealth Advisor at Bruchet Finance Group and
I'm your host today for Let's Talk Money. It's great
to be here with you on this chili, but I'm
looking out the window now getting to be sunny, gorgeous
winter morning, and as always is great to take your questions.
You can either call me at eight hundred eight two
five five nine four nine or email me at Askbouchet

(24:52):
at Bouchet dot com with your question, whether it's investment management,
finance planning, tax planning, whatever it is. Give me a
call and I gave you guidance. We're gonna go to
the phone lines we have, Phil. Are you still there?

Speaker 3 (25:04):
Yeah, I'm still here, Thanks for holding on.

Speaker 1 (25:07):
How you doing?

Speaker 2 (25:10):
Yeah, I've got a question on a mutual fund I
have held for a long time, quite a quite a
holding into it, and I just checked this morning. It's
up nineteen percent overnight and it is the baron's partner's fund. Okay,
having the information on why on up nineteen percent overnight? Girl? Yesterday?

Speaker 1 (25:30):
I should say, no, I'm actually googling right here. That
seems very odd. I'm looking at it. It's not showing.
Are you sure there's not a mistake on that.

Speaker 2 (25:49):
It could be through the Eternal Swab website because I'm
actually one of your clients.

Speaker 1 (25:54):
Okay, Yes, yeah, I don't know that. It seems very odd. Again,
I'm looking at it and just you know, pulling it
up on Google Finance and not seeing anything. You know,
it's up thirty five percent year today or past six months,
which great, twenty five percent for the year. Now, I

(26:14):
don't know. Now, you know what can happen. Sometimes it
can go the other way, right, which is mutual funds
provide capital gains distributions at this time of year, like
right around now, and so when those distributions go ahead.

Speaker 2 (26:31):
Act I went on a website and it's not going
to be distributed to December twenty third.

Speaker 1 (26:36):
Okay, yeah, so but that usually is a the value
of the fund can lower from that, right, because it's
actually getting distributed out, not within the fund anymore, it's
getting moved out. So yeah, it seems very odd that
you'd have any large jump like that. And you know,
as you know, mutual funds trade at the end of

(26:57):
the day, so they're not trading during the day. But again,
the price I'm seeing here is two hundred and fifty
five dollars fifty two cents, So that looks about the
range that it's been in for a while, right, Yeah,
so I.

Speaker 2 (27:12):
Think as of Monday it was two hundred and fourteen
dollars a year. Where I was looking at ith.

Speaker 1 (27:18):
Yeah, actually, that is really interesting. I don't without digging
into it. I can check afterwards for you. But uh, yeah,
because i'm seeing you're right, it's here it's two fourteen,
but it's saying here now it's two fifty five. So
the quick spur of the moment, I don't have an
answer for you, but I will actually, after I get off,

(27:40):
I'll do some digging in there. That's uh, that is interesting.
I have no idea why that would jump. Let me
just see here. I wonder I had something to do
with SpaceX. They don't look like they owned some some
of that. I know SpaceX was reporting some news. But
let's uh. I'll look at it after and we could chat.

(28:02):
But I don't. I don't have an answer for it.
But that's that's interesting.

Speaker 2 (28:06):
So okay, okay, I was very curious.

Speaker 1 (28:11):
Yeah no, that's well, that's good news. So it's better
than it goes up. So let me ask you this
I just thought of quick quickly. It's schwab is it
what's the value of that position? Is it up by
that amount? As well, or is the value of that
position the same.

Speaker 2 (28:30):
Well, according to schwab website, yesterday was one day total
of nineteen point so not just not.

Speaker 1 (28:40):
Just the price of the security, but the overall value
of that position went up nineteen percent.

Speaker 2 (28:47):
Nineteen percent yesterday.

Speaker 1 (28:49):
Yes, yeah, I mean again, I guess maybe something in
there really took off. And again it says they're they're
holding SpaceX. So you know, I did see some news
about Basic getting a new valuation that put it close
to a trillion dollars. So it does.

Speaker 2 (29:07):
Hold forty five percent to the steak in Tesla.

Speaker 1 (29:10):
So yeah, so I mean, that's uh, that's my I
g I give you my own guess as to what's
causing that. But that's that's good news.

Speaker 2 (29:19):
So it is.

Speaker 1 (29:21):
Yeah, there are worse problems to have, all right, take
care philp Yep, that's interesting. Yeah, it's I don't know
off the top of my head. But listen, anytime you
wake up and a position that's up nineteen percent in
your portfolio, life is good. And one day life life
is good, so and then you know it.

Speaker 3 (29:41):
Goes Welcome back, folks. Sorry about that. We had a
little technical difficulty, but yep, technology is great when it works,
not so great when it doesn't. And sometimes it doesn't work.
But we're back and let's do this. So as always,
if you have any questions, you can give me a call.

(30:04):
You can reach me at eight hundred eight two five
five nine four nine, or you can email me at
ask Bouchet at bouchet dot com. That's ask Bouche at
Bouchet dot com and Bouchet is spelled b o U
c h e y, So whatever route you want to go,

(30:26):
give me a call or ask me a question. One
of the things I was talking about before we were
cut off is just this idea that when we go
into retirement there's a lot of emotional changes. We've got
to come to terms with them. And one of them
is spending money. Because you're so used to having that
paycheck come in. When that's not coming in anymore, it

(30:46):
really throws you off. So you've got to be That's
where working with a firm like ours helps you to
make that step to be able to change your mindset
because it's okay to spend the money, right, That's that's
what it's there for. And oh, by the way, if
you've done a great job like James, it's okay to
spend even more money. That's okay, so let's embrace that

(31:11):
and not be afraid of it. We're going to go
to a question. This is from Norm in delmar Hi. Marty,
thank you for the very informative program. Could you go
over the witch rol rate for a raw following K account,
especially for someone who is less than fifty nine years old,

(31:31):
About forty five percent of the account value is gained
and the rest is a one time conversion. Okay. So Norm,
without knowing exactly some of the details here, I'm assuming
maybe that you want to take a distribution. So let's

(31:51):
just kind of go and take this in two steps.
One is it's called the rule of fifty five, which is,
if you are fifty five year years old and you
leave a company after the age of fifty five, then
you can access your follwing K count and not pay
any taxes on the distribution and not also pay any

(32:16):
penalty on the distribution as well. That's the important thing
because otherwise it's fifty in the age of fifty nine
and a half. So in regards to a row, all
those dollars that are in the raws come out tax free.
That's both the principal amount and any gain and any
conversion amount. So once you put those dollars into a

(32:37):
ROW I don't care if it's a row form and
K or I don't care if it's if it's a
wroth IRA, then you can do that now in general
with a row form K. It's the same concept, which is,
as long as you've been putting moneys in there for
at least five years, you shouldn't have any problems if

(32:58):
you're going to try to do this again Rule fifty five.
Now you know that rule fifty five again. To go
through that, that requires you to have been working at
the company until you're fifty five. The company's plan has
to allow the rule of fifty five distributions. And really
what you're doing is you're taking the distribution between age

(33:18):
fifty five and fifty nine and a half, So it's
a four and a half year period, and unlike a
seventy two T distribution, which I'll talk about, there's no
requirement you take it out for an extended period of time,
meaning that seventy two T you have to take it
out for five years or until you turn st nine
and a half, whichever is longer. So the rule fifty

(33:39):
five is very nice. It provides a lot of flexibility
for individuals that are retiring before age ft nine and
a half. And again, with the raw of all those dollars,
the dollars you put in there, they gain and even
the conversions, those are all going to come out tax free.
And as long as you've had that count for five years,

(33:59):
you're good good with that, so no concerns. The other
thing to remember is this is why I always tell
so many people to start a row very early in life.
Is one you're in a lower tax bracket than you
ever be. Right, So I would say for your first
ten to fifteen years, all of these considered, all those
dollars should be going into a row four and K

(34:21):
or a wroth I ray. You know, for my kids,
they've been having some great summer jobs. We've been trying
to put as many dollars in a wroth as possible.
And here's the thing to appreciate, which is all the
principal amount you put into a wroth IRA you can
access at any point. Right, So even you put it

(34:42):
in this year and then turn around next year you
need it, you can access the principal amount at any point.
Now the games there are restrictions on it without incurring
taxes in a penalty. But you think about it, if
you're putting in, you know, five thousand and six thousand,
seven thousand dollars for next year will be seventy five
one hundred dollars is the maximum that you can put

(35:02):
in of you're hundred and fifty. So when you're putting
that amount of money in, if you need to, you've
got a large amount of money you could access the
principle on it. And here's the other thing too, is
most often people who are younger, they use those dollars
first and foremost to buy a house. That's quite often
the first thing they'll use those dollars for. And the
WROTH allows for a first time home purchase of ten

(35:25):
thousand dollars that can come out without paying gains. Let
me just repeat that, if you're buying a house, is
the first time home purchase, and you have the WROTH accounts,
you could take out ten thousand dollars of gains, not
paying any taxes on it, tax free and use it
for that home. So again there's almost no reason when

(35:46):
you're younger that you shouldn't be maxing out your wroth
to the extent you can. And I was just helping
a young client yesterday. You know what you want to
do is you really want to sock it away. Even
in your former K plan, and now pretty much every
form of K plan is going to have a row component.
You just kind of put it away in the raw.
And that way, when you get to be your mid thirties,

(36:07):
mid forties and you're making more dollars higher income, you're
the higher income bracket, then you can start using the
pre tax and get the tax deduction right And oh,
by the way, it's gonna be really nice because you
think about it. If you're just cranking away money twenty
three twenty four thousand dollars and you're paying taxes on
that when you're younger, now when you're forty, maybe you're

(36:30):
starting having kids. You know, they just have more expenses.
Now you make that pre tax. Guess what Now, because
it's pretax, you're not paying any taxes on it. It's
going to really improve your cash flow. I mean, in
the in the neighborhood of thousands of dollars improves your
cash flow, if not more so. That's a really nice
thing to flip it there, because you know myself, I'm

(36:52):
fifty six. The raw thing come out so much later.
So all my early dollars that I saved in a
form and K were all atax. And that's the problem.
We see clients with literally millions of dollars in iras
and so when they have their rm ds, they really
pay through the nose on that. So yeah, really the

(37:16):
rocks is great. And you know, whether it's the rule
of fifty five to retire early and take distributions from
a four and K plan or the seventy two T distribution,
which again is basically allows you to take a distribution
before age fifty nine and a half from an IRA.
And many of our clients use this rule. They don't

(37:37):
incur the ten percent penalty. And what about it is
this great is that you know you've got to commit
to it for either five years or to turn fifty
nine and a half. But you can break your IRA
into two to get the exact amount because there's a
formula they have to use to figure out what that
seventy two T distribution is. So in midicate is it

(38:00):
might be too much for people. So what we do
is we break it, we break it into either one, two, three, four.
We've had four different I raise for clients because they
have these different seventy two T distributions, and that's really nice.
It works out very nicely for them. And I just
want to go back to Norm's question just to also
follow up on this. Just in general, folks, you really

(38:24):
want to delay taking your off distributions until the latter
part of retirement, right because you want those dollars to
grow tax free for as long as you can. So again,
it's sometimes tempting to want to take it out sooner
because they're tax free, but I would really be encouraging

(38:45):
you to delay taking those out in the early part
of retirement and waiting until you get much older. And
if you have kids, it's a great way to transfer
assets to them because guess what, even when they get it,
they'll be allowed them to grow ten years in that row,
and then when they take it out, there's no taxes
on that, whereas with an ordinary IRA, when your kids

(39:07):
get it, they'll have to take it out about one
tenth every year, so they have to pay ordinary income
on all those distributions out over ten years. And you
think about it, if you've got iras that are in
the million dollar range, that's going to be a pretty
hefty tax bill for them, you know, So just something
to consider on that. The one last thing I want

(39:28):
to talk about when we talk about where do our
clients come from? You know, a lot a lot of
our clients come from either pay people preparing that God
forbid something to happen to a spouse. And again, the
earlier you can do this, the better. We just talked
with a potential client the other day and they have
a very complex financial situation and I just said to
the gentleman, he manages all the investments. You know, really,

(39:50):
the suitor you can start working with a firm, the
better off your in case something happens. And you know,
I'll just I want to do a kind of a
memory of a gentleman. His name was John Anordoc. He
was a partner at Mosaic Architects down in Troy and
just a great guy. I knew him from professionally but
also personally. His the daughter went to Saratoga and was

(40:14):
in a play with my daughter. And he passed away
at age fifty eight, you know, in the last few weeks.
And he had an aggressive form of cancer. And you know,
I just bring him up one because he was just
a great individual, great professional, and so very sad to
hear of his passing. But if you don't need a reminder,
I'm telling you it's a reminder every day that you
don't know. Nothing is guaranteed in life, folks. And you

(40:37):
know we're here right now enjoying this gorgeous day, but
you don't know what tomorrow breaks. So make sure you're
doing that planning. Make sure you're thinking about, you know,
how do you take care of each other and from
a you know, from from a planning perspective, whether it's
life insurance, whether it is estate plans, whether it's working

(40:59):
with a you share a firm like ours, you know
you want to plan to do that sooner rather later,
because otherwise it gets to be very problematic if you don't,
and you know, I've just would really encourage you to
do that, it becomes very problematic. And because the thing
is when when that person dies, not only is the

(41:21):
remaining spouse having to make all these decisions on their own,
but they're also dealing with the grief, and that's all
that compounded together becomes very problematic, so try to be
ahead of that and make the plans before something happens,
because you don't know what tomorrow holds. It's very special.

Speaker 1 (41:40):
Well.

Speaker 3 (41:40):
As always, it's great to be here with you to
answer any questions you may have regarding your financial planning situation.
You're listening to Let's Talk Money, brought to you by
Bruchet Financial Group, where we help our clients prioritize their
health well we manage their wealth for life. Folks, take
care of yourself and take care of each other.