2023 Year-End Investment & Planning Strategies Pt. 2

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Episode Transcript

(00:00):
All topics and securities mentioned on straightTalk from the House or for informational purposes
only, and should not be usedas investment advice. T Anton Investment House
does not offer tax or legal advice. Investments or investment strategies covered are not
a recommendation or solicitation to buy orsell the securities. Past performance is not
a guarantee of future performance. Thisis straight talk from the House with servia

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by financial planner Tracynton here on thirteenten WIBA don't forgate getting know Tracy in
the whole team at the website TantonInvestment House dot com. That's t A
N t O N Investment House dotcom. Of course, Tanton Investment House
a fee only for douciary with officesright in Middleton telphon over for that Middleton
office. Six soh eight five zeroone fifteen forty nine. That's six oh

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eight five zero one, fifteen fortynine. Tracy, how you doing this
morning? I'm doing great, Sean. How about you? I'm doing really
really good and we've got a continuation. We started conversation the other week about
year end investment and some strategies asfar as PLA planning and I know that's
a big part of what what obviouslya huge part of what you do at
t Anton Investment House. Let's kindof get a little snapshot and kind of

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get everybody up to speed a littlebit of a review from last week about
like how to best save for retirement. Well, I'd say look at taking
advantage of the employer plans that youhave available. Say it's a four to
one K or a four or threeB if you work for a nonprofit,
or a four to fifty seven ora thrift savings plan. The maximum for
twenty twenty three is twenty two thousand, five hundred. If you're fifty or

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over it's thirty thousand. And fortwenty twenty four, those numbers are actually
going to go up by about fivehundred dollars to twenty three thousand and thirty
thousand, five hundred for those fiftyand over. And I would just again
take a look and say, well, am I doing at least my company
match? And if I can domore than that, the question then is

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where is the best place to putit? So I always try to really
encourage people that look to see ifyou guys have a wroth for oh one
K available or wroth for L threeB. More and more plans are making
it more available, but sadly alot of people aren't taking advantage of it.
I don't know if they don't knowabout it, or if they just

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think pre tax is the way togo. It's a great idea typically to
do some after tax money, becausetax rates are on the lower side in
my opinion, and therefore, youknow, in retirement, we all think,
oh, well, we'll we'll haveless income and therefore our taxes will
be lower, and that's just notalways the case. I've seeing more and
more people where when we do financialplans, because they have multiple sources of

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income, because they have Social Securityand some people even still have pensions.
But when you start taking a lookat the dollars that they've amassed, then
there is quite a bit that's goingto be due in taxes with their require
minimum distributions into their seventies. Soit's not always that we're going to be
in a lower tax bracket. Andagain, even so with the the way

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the tax brackets are geared right now, I think they're on the lower side.
So I would say a combination isa good idea. Sean you know,
look to doing some pretext perhaps andthen some wroth and then and then
beyond that. You know, youmight even be able to contribute to iras
and roths, but you have tobe careful because if you are considered a

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participant in a plan, you've gotincome limits for IROs and roths. So
I would just take a look andsay, you know, am I contributing
to my retirement account? And hey, if you look at the numbers and
you go, I'm really set forretirement, then take a look at a
brokerage account. Brokerage accounts I thinkare also under used. And there's such
great investment opportunities in brokerage accounts,and why do you use them. It's

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really for those dollars between now andretirement, but you can use them in
retirement too, and that's what's sogreat about them because of the capital gains.
Pretty fascinating stuff. And I we'regoing to get into brokerage accounts in
just a moment and a little bitmore in depth with them. As we
mentioned, this is also a parttwo. We started our conversation the other
week. Don't think you can alwayslisten back to this in previous shows podcasts,

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all the website Tanton investment House dotcom. That's t A N t
o N investment house dot com.It's off a number six oh eight five
zero one fifteen forty nine. That'ssix oh eight five zero one, fifteen
forty nine. So what things canyou do? You mentioned those brokerage accounts,
Tracy, what can you do inthose? Well, the end of
the year, Sean, is reallya great time to make sure that your

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portfolio in your brokerage account as wellas your retirement accounts, is still aligned
with your goals. And again makesure you're comfortable with your allocation between stocks,
bonds, and cash. And youknow, some people throughout all the
bonds because they, you know,had a poor year. But things are
starting to change and I think thebonds will likely do well both from an

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appreciation potential but also from an incomepotential. They are paying out quite a
bit. So that's just a sidenote, But I would say when you
look at your brokerage account, it'sa good idea to look at your portfolio
and see if there are any investmentsthat you can sell that might offset any
capital gains that you might be incurring. Sometimes people own these mutual funds and

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then the mutual funds create a capitalgain. You think, well, I
didn't sell anything, No, butthe mutual fund died and they had to
pay it out. So what youdo is take a look at your portfolio
and have your advisor help you,or you know, just talk with someone.
If if it's just an eight hundrednumber you call, give them a
call and say, okay, doI have any losses in this brokerage account
that I could take now? Andwhat this is called is called tax lost

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harvesting. So basically, the investmentsthat you held have held for less than
one year, those are texts atordinary income tax brackets. But investments that
you had for over a year,they qualify for what they call capital gains
rates. So again, why doI like brokerage accounts? I like them
because they get capital gains rates andthose rates are lower than your ordinary income

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tax rates. And it's a greatway to save. It's a great way
to use money then, and youdon't have to wait till fifty nine and
a half to access the money.It is liquid and it's just it fluctuates
with the market. That's the onlyrisk that's in my opinion, that you
have. And you get again,lower capital gains rates with brokerage accounts important
stuff there, and of course it'salways great to have options and learn more

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about these options. It's a greatdata start that conversation. Maybe you're looking
for money management or portfolio management tracing. The team at t Anton Investment House
love to chat with you and makeit super easy to do. When you
head on over to Tanton Investment Housedot com, little widget pops upviously Tracy's
face and it says let's talk.And from there you can schedule appointment at
a time and a date that's convenientto you. Again, just head on

(06:44):
over to t Onton Investment House dotcom. You can of course as well
pick up phone, get me acall six oh eight five zero one,
fifteen forty nine. And that's sixoh eight five zero one, fifteen forty
nine. So how do you thenoffset your gains in a brokerage account if
you've got losses, Tracy, that'sa great quest question. So Sean,
after you match your short term lossesagainst short term gains and long term losses

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against long term gains, any excessloss between those two can then be used
to offset the opposite kind of gain. So basically, they all kind of
offset each other. So if youend up, say you end up with
an overall net loss, then threethousand of those dollars can be used to
offset ordinary income and then the restyou roll over for the following year to

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use in subsequent years. So youcan only take up to three thousand against
ordinary income, but you can totallylike if you had a large capital gain,
you could totally wipe out that capitalgain if you had enough losses so
against tax loss harvesting, and it'sjust a great way to try to minimize
your capital gains for that year.But you have to do it before December

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thirty. First. Other things tobe watching off for Tracy, for people
who you know create those losses inthe brokerage accounts, things they should probably
keeping an eye on. Watchout werethere. Yeah. The only thing you
want to make sure, Sean,is that you remember what they call the
wash sale rule, which states thatonce you sell an asset at a loss,
you must wait thirty days before repurchasingit or buying a substantially identical investment.

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So just make sure that you're notturning around selling it and then buying
it right back. You've got towait thirty days and you don't you don't
want to do you don't want tomess that up. That's the only thing.
It's called the wash sale rule.I love the terminology wash sale rules,
and I know it makes me thinkI'm doing laundry. Yeah. As
we're talking this running with certified financialplanner Tracy and Ton, always a fun

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time, always a lot of greatinformation for you. Forget if you're looking
for money management or portfolio management.Tracy and the team at Tanton Investment House
they'd love to get to know you, they'd love to work with you.
All I got to do is,of course head on over the website Tanton
Investment House dot com. You canschedule appointment right from the site or pick
a phone call the office right inMiddleton. Six so eight five zero one

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fifteen forty nine. That's six oheight five zero one, fifteen forty nine.
We're gonna talk a little bit aboutwhy why Tracy likes brokerage accounts.
Will also talk about some important thingswhen it comes to our iras and and
of course taking out those r mds. We'll get the details from Tracy on
that and so much more. Nextas straight talk from the house continues right
here on thirteen ten double U IB A. This is straight Talk from

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the House with certified financial planner TracyOnton here on thirteen ten double U I
B A. Picking up a conversationwe started the other week about year end
investment and planning strategies. Don't forgetif you miss any part of today's program,
or listen back to the previous partsof this show or other shows,
you can always head on over toTanton Investment House dot com listen to the
podcast there also on the radio station'swebsite. Another great opportunity for you.

(09:46):
I been looking for money management toportfolio managements. Schedule appointment to right online
at Tanton Investment House dot com.That's t A N T O N Investment
House dot com or pick up phonecall the office right in Middleton six oh
eight five zero one, fifteen fortynine. That's six soh eight five zero
one, fifteen forty nine. AndTracy, we left off that last segment
talking about brokerage accounts that I gotasked, what do you like about brokerage

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accounts? Well, I do reallylike them. So brokerage accounts or retail
accounts or taxable accounts or non retirementaccounts. They go buy a lot of
different names, but basically there areaccounts that you put money in that you've
already paid taxes on and you chooseto invest it. And since currently we
have capital gains taxes at preferential taxtreatment, you can have investments that are

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growing for you and pay little tono tax. So, for example,
say gains you make from selling assetsyou've held for a year or less,
they're called short term capital gains,and they're generally taxed at the same at
your same ordinary income anywhere between tenand thirty seven percent. But gains from
sale of assets that you've held fora year or longer, those are called

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long term capital gains, and youget law long term capital gain rates,
which are typically taxed at lower ratesthan short term gains in ordinary income.
So those for most people, it'szero percent, fifteen percent, or twenty
percent, depending on what your taxableincome. For most people that I see,

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it's either zero or fifteen percent.That's tax and they might be in
say in the twenty two percent taxbracket or twenty four and they're paying fifteen
percent on tax. For those peoplethat are in the lower brackets, like
twelve percent. They might have abrokerage account. They're paying nothing in taxable
income in their dividend with their dividends. They've held it for over a year,

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and because they're in the lower bracket, they're not paying anything in taxes.
I do see that, So again, I think it's something that don't
most people don't think about. Theythink, well, I'm doing my four
oh one K, I'm doing myretirement accounts, and that's good. But
you could also do a brokerage accountand you could use those money for retirement
or use it now. So Ilike them a lot. That is great

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to hear ears perk up when theyhear zero percent. Yeah right, Yes,
you don't have to pay taxes yetyet incomes flow through on your taxes.
It's pretty cool. Sign me up. Talking this morning with certified financial
planner Tracy Anton here on thirteen tenwui b A. So when we talk
about kind of makeups, what's kindof the ideal mix of accounts when when

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folks retire, Tracy, Well,I think it would be great if most
people who had middle to high incomehad a WROTH account, which is basically
after tax, an IRRA which ispre tax and a brokerage account when they
retire. That way, they wouldbe able to strategize basically on how and
when they were going to take outmoney in retirement and at what rates makes

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sense based on current tax code.So you know, when all your money
is in a four to oh oneK or it is in a you know,
pre tax vehicle, the government canchange what those tax rates are as
well as what the brackets are,so you might find yourself in a much
higher bracket retirement instead of a lowerbracket as you had originally planned. Oh's

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and that's important. As we talkwith certified financial planner Tracy Aton right here
on thirteen ten doubu ib A talkingabout having options and understanding what's available to
you. That's the great thing aboutstarting that conversation. It's a great day
to learn more about Tracy and theteam. At the website Tanton Investment House
dot com. That's t A Nt O N investment House dot com.

(13:24):
You can make an appointment at atime and a date that's convenient to you
right at the website or call theoffice right in Middleton six oh eight five
zero one fifteen forty nine. That'ssix oh eight five zero one fifteen forty
nine. A lot of people havequestions about r mds. What are they?
What do we need to know?We'll get the details from Tracy on
that next Straight Talk from the Housewith certified Financial Planner Tracy Anton continues right
here thirteen ten wuib A. Thisis straight Talk from the House with certified

(13:48):
financial Planner Tracy Anton here on thirteenten dou w ib A. Great program
this week if you missed any partof the show. As always, by
the way, if you missed anypart of the show, you can always
listen back at Tanton Investmenthouse dot com. That's t A N t O N
Investment House dot com. Or callthe office right in Middleton get to know
Tracy and the team. Set upappointment six SO eight to five zero one

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fifteen forty nine. That's sixt soheight five zero one fifteen forty nine.
Shifting gears a little bit, Tracy, but it's an important thing. It
does tie in a bit with whatwe were talking about earlier, which is
the amounts you required to take fromyour IRA or other retirement accounts. What
do people need to know? Andof course it is important time a year
to be thinking about those things,isn't it. Yeah, So once you
reach age seventy three, you arerequired to take an annual requirementimum distribution or

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like you, i'd use RMD fromyour retirement accounts. What's interesting to note
though, is beginning in the yeartwenty thirty three, that number actually goes
up to seventy five, so that'sinteresting. But the amount of your RMD,
basically, sean is calculated by dividingthe value of your IRA by a
life expectancy factor and that's determined byan IRS chart. So you need to

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calculate your RMD for each IRA separately, but you have the flexibility to take
your total RMD amount from either asingle IRA or a combination of iras,
so that's kind of interesting. Andrmds from qualified retirement accounts or inherited iras
must also be calculated separately and canonly be taken from their respective accounts,

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so that's also interesting. So ifyou have an rm D from say a
four to one K, you can'ttake it from your IRA and say no,
that was my that was my fourtoh one k RMD. No,
you have to take it from thatfour oh one K. Another interesting thing
to know is you do not needto take rm ds from the a wroth
irays and you do not need totake them out for four one k.

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Well you do actually for four oneks for twenty twenty three. For Wroth
four one ks you do, butnot after twenty twenty four or twenty twenty
four and beyond, so they changethe rule. It's a weird rule.
Typically wroth irays you do not haveto take require minimum distributions why because the
money is after tax in there.But for Wrath, for oh one case,

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you actually have to take a requireminimum distribution in twenty twenty three,
but not going forward in twenty twentyfour. They just recently changed that law.
Interesting, it's always something new thatis for you know, well that's
me. I guess it's always havea job because they're always changing stuff exactly.
I know, me and tax preparea tax attorneys. I mean,

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we'll always have a job. That'sone of the obviously don't we don't have
to do all We could probably doa whole couple shows on it. But
I don't think people realize kind ofbehind the scenes, in the amount of
the amount of edge continuing education andkeeping up on all of this stuff that
you do. I know, yeah, every really yeah, I mean we
have thirty credits for a certified financialplanner, but then the state just required

(16:55):
another twelve credits. Oh wow forall registered investment advisors. So yeah,
I'm getting my smarts on basically.Yeah, sure, Tracy. We were
talking about talking about those rmds andpeople say, okay, that that's all
good. Well what if I don'tare there is there a punish? Is
there is there a penalty? What? Folks? Yeah? So the Secure
Act actually improve that a bit.The penalty is still expensive. It's twenty

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five percent tax on the amount thatyou should have been taken out. It
used to be fifty percent though,so they've made it a bit better.
And they also say if the requirementumdistribution is corrected timely quote unquote whatever that
means, the penalty can be reduceddown to ten percent. What we do
at the investment house is we lookat all the clients. We review all

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of our people that are of agethat need to take requirementium distributions, and
we say have they taken them?Have they taken all of it? And
then we just make sure. Butyou can always you know, obviously take
more out of your ir ray thanyou need to, but you have to
take out the minimum. And againit's based on a life expectancy chart from

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the IRS and the value of youraccounts for the year previously. You know,
as we talked this morning with certifiedfinancial planner Tracy Anton's, we look
towards the end of the year,and you know, one of the great
things about about planning right and savingright and building many great things. But
one of the great opportunities is ifyou do things right, you have an

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opportunity to do some things with yourmoney that really helps not only yourself,
but helps the future as well.And I know people this time of ear
think charities. What about gifting moneyto charities? What should people be thinking
about right now? Tracy, Well, it's such a great idea. We
have such wonderful charities in this town, and I know even nationally there's some
great charities, so lots of goodthings that you can do. So basically,

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in general, you can deduct cashdonations or two qualified charities up to
sixty percent of your adjusted gross income. But another great way is to donate
appreciated stock or mutual funds that havelarge capital gain sean because you can avoid
paying taxes on the gain and receivea tax deduction for the full full market

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value of the donation, and thecharity turns around, they receive it and
they don't have to pay the taxeseither on that appreciated asset. So it's
obviously really great. You can donatecash or you can donate it appreciated securities,
and it's such a wonderful way tosupport the charities that we have available
to us. That is an amazingtool that I hope a lot of folks

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look into. As we talk withcertified financial planner Tracy Onton this morning,
a lot of great ideas and alot of great conversation and a lot of
great information as always from Tracy.If you've kind of sparked your interest,
you're saying, you know what Iwant to talk with Tracy. Maybe you're
looking for money management to portfolio management. It's a great day to start that
conversation. All I got to dois head on over to Tanton investment House
dot com. That's t A Nt O N investment House dot com.

(19:55):
From there, con schedule appointment ata time and a date that's convenient to
you or pick up the phone,call the office right in Middleton. Six
oh eight five zero one, fifteenforty nine. That's six soh eight five
zero one, fifteen forty nine.Tracy. We talked about gifting to charities.
What about gifting to family? Isthere something in some nuances there folks
need to be aware of. Yeah. It's funny, Sean because people will
say, well, I want agift to my family. I'm like,

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okay, that's good. But it'snot tax deductible, you know, so
it doesn't reduce your taxable income forthe year. And they're like, oh,
okay, but still and I stillthink it's a nice thing to do.
I mean, many people gift andthe gift because they would rather see
their kids use the money now thanyou know, kind of miss that opportunity
right once they pass. So it'sa really great thing to do. It's

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not tax deductible, but a lotof people also do it for estate tax
purposes. Currently, though, theestate tax deduction is thirteen point six one
million per person and twenty seven pointtwo two million per couple, and that's
set to decrease apparently in to fivemillion per person by year twenty twenty six.

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So it'll it will go down byabout half, but that's these numbers
are still large. Not a lotof people have estates over ten million,
I would say. So you know, it might not be a catalyst for
you, but still you might wantto see your kids use the money.
You might feel like, you know, we have plenty of money, we

(21:21):
have plenty of income. And sothe amount that you can gift per person
is seventeen thousand per person per yearwithout having to file a gift tax return.
And it also doesn't count towards thislifetime a state and gift tax exemption
that I was mentioning, which isabout thirteen point six million. So again,

(21:44):
it's just a really nice way.I have clients who will gift,
and they'll gift, you know,say they have a son or daughter who's
married. They might gift to bothpeople, or they're you know, both
people might gift to one person.It's pretty cool how much you can gift,
you know, per person, seventeenI was in per year, so
and you don't have to worry aboutit. You can give cash or securities
and you don't have to file anykind of gift techs return or anything else.

(22:10):
So it's a great way to give. That is great to hear,
and so many great options. Andof course I know this time a year
a lot of folks are taking assessmentand you may be thinking about, you
know, whether it's planning for retirementor making sure your money's managed and properly.
And of course as we're talking andwinding up about talking about charitable and
gift giving, what a great timeof year to start that conversation. Great
thing to do if you want totalk with Tracing, the team at Tanton

(22:33):
Investment House make it real easy todo. Just head on over to the
website Tanton investment House dot com.That's t A N t O N investment
House dot com. From the site, you can schedule a litle appointments at
a time and a date that's convenientto you. Again the website Tanton Investment
House dot com, or pick upphone call the office six oh eight five
zero one, fifteen forty nine.That's six oh eight five zero one fifteen

(22:55):
forty nine. Tracy, it's alwaysgreat chatting with you. You enjoy this
most beautiful of days. Thank you. You take care