Simply Money

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Episode Transcript

(00:00):
Up today's mess. It's a mess, so you can start tomorrow. Let's
start a for a Ryan Thomas tomorrowmorning at five on fifty five KRC.
Tonight is the sad finally finished hikinginterest rates? Well, sure sounds like

(00:20):
it. You're listening to Simple Moneyfor Them by all Worth Financial. I
mean you Wagner along with Steve Spovac. Steve. It's almost like what used
to be the headline was are wehiking or not? But it almost seems
like now we're in a place wherethe real headline comes from what fed chair
pal says after that's announced, whichtalks about maybe what we can expect in

(00:42):
the future. That is really Ithink what the markets respond to now.
Well, his his prepared statement isjust his lips are moving, But I
really he didn't really say anything.That's not an accident. I mean he's
learned his lesson as hard those beforehim have learned that, Wow, why

(01:03):
is the market down six hundred points? Oh, his lips are moving because
if he's being honest about where theeconomy is, that it hadn't been bad,
it hadn't been good news. Andwhen he comes out and says we
have to do this we have todo that, and things are pretty serious.
Markets don't like that. So really, now the bulk of the good

(01:25):
information we're getting is when he answersquestions. And he tagged one thing I
appreciate about Chairman Powell. He tendsto be pretty transparent and pretty open and
honest. But with his statements,and you know, I was watching him
talk yesterday and I'm watching the marketand I'm like, okay, market's doing
okay, Market's doing okay, Andall he really said he kind of hinted

(01:47):
strongly that the Federal Reserve may bedone raising rates and markets like that.
Well, keep in mind, right, they've raised them eleven times just in
a year and a half since Marchof twenty twenty two, so he's kind
of been on center stage since then. Not that he hasn't always been important,
obviously, it's always been an importantrole. But when you're doing something
that affects so many Americans on adaily basis, right, you're gonna get

(02:10):
a lot of attention for that.And so you know, it was like,
are they going to hike again ornot? And of course yesterday they
did not. No surprises there.There was like a ninety nine point nine
nine nine percent chance they weren't goingto hike yesterday, but there's still some
questions out there will they hike againthis year? And I think the more
we talk, the more he talkedyesterday feed Schapal, the more we realize

(02:32):
he may kind of feel like they'vedone enough. Right, there's there's two
kind of looming rate hikes out therethat we haven't seen sort of the full
lag time that you would expect forthat to continue to tighten the economy,
right there's usually about a nine monthto a year after that happens where you
can expect some tightening to continue.We haven't fully run the course, and

(02:53):
I think his point is we mayhave done enough. The data at least
that's coming in is starting to showthat maybe we have. They also those
do you have a little bit ofa bump and the form of what's going
on with some treasuries right now?Longer term, yes, it's yeah,
he got a little help on thisone. Yeah. The market, it's

(03:15):
really interesting and I don't want togo into the weeds too much in the
bond market, but the US governmentis borrowing records amount of record amounts of
money right now because of the deficit, and the national debt is the highest
it's ever been, it's around thirtytwo trillion dollars. Well, how do
you raise that money for your countryto operate? Just like a bank does,

(03:35):
a bank issues CDs. You go, when you go to the bank
and buy a CD, what you'reactually doing is giving the bank money for
them to use for whatever purpose,which is going to be lending it back
out at higher interest rates. Well, that's what the government does with treasury
bills, treasury bonds, and treasurynotes. There it's dead issued by the
government. And when you buy atreasury bond or a treasury bill, giving

(04:00):
the government money so the government canoperate. And you know when I say
you, I'm talking about the biggestbuyers, like other countries buy our debt.
Is we believe it or not,we are still the safest place to
invest in and we are the reservecurrency. All the problems in this country,
still we are the best out there. So, yeah, we're issuing

(04:20):
a ton of debt. And whenyou issue a ton of debt like that,
well, buyers want a little bithigher interest And we have seen interest
rates creep up in the open marketplacein the bond market from four and a
half to We actually hit five percentfor the first time in about fifty years
on the ten year treasury debt.So you know, when you hit five

(04:42):
percent, keep in mind this debtwas being issued at under one percent about
two years ago. So that's goodnews for investors that are trying to earn
interest on the money. Bad newsfor our country's finances because we are now
paying five percent interest when we werepaying one percent interest. And I kind
of blame a little bit of thaton Janet Yellen because just like you would

(05:03):
want your thirty year mortgage at twoand a half percent, not at the
current seven and a half or higherpercent, Janet Yellen could have issued a
lot more twenty and thirty year debtat one percent, whereas now they're being
forced to pay four four and ahalf five percent. So there's a lot
going on there. But the bottomline is, as the marketplace interest rates

(05:23):
are rising, the Fed's like,well, you know what, that's going
to slow down the economy. Wedon't have to raise that one rate that
we control. The market's doing itfor us, so we can sit tight
and see how this slows the economydown. You're just seeing to simply money
presented by all Worth Financial. Herein fifty five KRS, I'm Amy Wagner
along with Steve Strovak as we talkabout what FED chair pals said yesterday right,

(05:44):
what it means for the future,what it could mean to you.
No hikes, and we don't expectmaybe any hikes in the coming days,
the coming months as we end outtwenty twenty three. You know, it's
interesting Steve too, because when wecame into twenty twenty three, there were
a lot of people that thought,hey, maybe by mid year this year
we might actually see rate cuts.Didn't happen, won't happen this year.

(06:06):
But now we're actually getting to apoint where people who are voting members of
the Federal Reserve right are saying they'restarting to talk about it and saying,
hey, maybe next year twenty twentyfour, we will get to a point
where we can loosen things a littlebit. But we do expect that the
economy is going to continue to tightenuntil we get to that point. Yeah,

(06:28):
I'm glad you brought that up,because a lot of people are looking
at their four oh one k statementsand saying, Okay, I see stocks
are down a little bit last monthor last quarter, but bonds look like
they're dan Our bonds banned or isthat something I should get out of.
Keep in mind, bonds go upand down based on one big variable,
and that's what are interest rates doingsince I bought my bonds. Okay,

(06:49):
So if interest rates went up aton, which they did in the past
year and a half, you sawbonds drop in value. If and when
interest rates come back down, youmake that money back, you'll see your
bonds go back up in value.Well, the Fed they ConTroll the interest
rates. They're already telling us whenthey when they publish their dot plot last

(07:09):
month, they already told us,Yeah, we're gonna be reducing interest rates
sometime over the next twelve to eighteenmonths. Our bed is probably midyear next
year, we may start seeing somerate cuts in the market. Is kind
of saying, yeah, most likelythree rate cuts by the Federal Reserve in
twenty twenty four. If you ownbonds, that's good news because once they
start cutting rates, bonds should startgoing back up the ladder. Well,

(07:32):
okay, so that's what it meansright for bond owners, bond investors.
Let's talk about what it means foranyone who's been looking to buy a house,
right, there's probably been sideline duringthis time because you know, interest
rates, you almost have whiplash withhow fast interest rates that went. What
went up? You know, itwent from you know, two percent,
you know, somewhere around there southof three percent certainly to I just saw

(07:56):
yesterday eight percent, you know,so maybe I believe that. Yeah,
it made a little nauseous, right, I mean, no one likes to
look at that, and I thinka lot of people now are saying,
I'm going to stay put for awhile. But if you're staying put wondering
when you can move, well,you're looking very closely at when the Federal
Reserve is sort of putting out therethat they might start to cut rates,

(08:16):
because that's when things will start toloosen up for you as well. Yeah,
there's a lesson to be learned outof this, and nothing lasts forever.
I mean, two and a halfpercent was not normal for thirty year
mortgages. But then again, eightpercent is not normal for thirty year mortgages.
So you know, everything reverts tothe mean at some point, and
okay, you missed your chance toget a two and a half percent mortgage.
But even though the Federal Reserve doesn'tdirectly impact interest rates on mortgages,

(08:43):
I mean, they're not setting mortgagerates, but they're all in a related
And if the Fed starts cutting ratesmidyear next year, and we'll be talking
to Michelle Sloan in a little bit, I think you'll see mortgage rates come
down a little bit too. Idon't think they'll get back down anywhere near
three percent, but are they goingto stay as high as eight? And
I just talked to a realtor rightbefore we went on air, and she

(09:05):
told me it's giving this current market. When I asked her if it just
shut down, she said that actually, this current market is good for people
that are trying to buy, especiallyfirst time home buyers, because they're not
seeing twenty and thirty offers in thefirst forty eight hours of a listing.
They're actually having time to look athouses and decide what's best. And you

(09:26):
know how they finance it, Well, they'll finance it however they can right
now, but they can always refineif rates come back down. So it's
kind of removed the frenzy out ofthe market a little bit, which isn't
a bad thing. Yeah, no, I agree. Also, though,
what does this mean to you?If you have if you listen to us
every day, you've been smart aboutthis, and you have an emergency fund
around, Right, we talk aboutsix to nine months of those critical expenses.

(09:50):
You want this money. This isthe cornerstone of a financial plan because
if something goes wrong in your life, and it inevitably will, something's going
to break down the car vac unit, there's going to be a diagnosis that
someone wasn't expecting. And if youdon't have this emergency money, then whatever
ends up happening, usually as yougo into debt, right, you take
bad decisions there. So you havethis emergency fund well for years if people

(10:13):
come into us saying you have awhere do I put it? Because if
you head it in a savings account, you were making point zero zero zero
zero one percent on that money.Now there are options out there, and
Steve, right before the show,I got online. There are some online
savings accounts, some of them withno minimums that are north of five percent
interest. And we're not talking riskand not insured and goes up and down,

(10:39):
and I don't understand we're talking moneymarkets that they don't move. They
have no risk. You know,money market accounts and fully liquid. You
can move it into your checking accountan hour after you put money in the
money market if you want. Youknow, we're finally getting decent rates.
But I'm going to edit that alittle bit. Most of the time,
there are some big banks in town. And this is a good German town

(11:01):
where people pay attention to interest rates, and people are getting lazy, and
there are a couple of big banksin town that are still paying under one
tenth of one percent interest on moneymarkets. And if you don't know what
your interest rate is, and you'vegot an emergency fund of twenty thirty maybe
even six figures, and you're notgetting at least two to two and a

(11:24):
half percent, I think you mightwant to shop around a little bit,
or at least let your bank knowyou're shopping around and maybe they can come
up with something better. Because yesterdayI sat down with a person who just
sold their vacation home. Put themoney in their very large, very well
known bank here in Cincinnati, inthe money market, because that's what we
tell people. And she showed meyour statement point zero three percent on six

(11:48):
figures point zero three and almost anyother bank in town is going to give
her at least two to two anda half, maybe even four percent.
And if you go with like yousaid, some of the big brokerage money
markets, maybe even over five percent. Yeah, so now is a time
to shop around, do your researchif you haven't already. Here's the all
Worth advice, be strategic when you'redeciding what to do with your cash.

(12:11):
Right. Lots of takeaways from whatthe Federal Reserve has been doing lately.
Coming up next, we just foundout the amount of money that you can
contribute to retirement accounts in twenty twentyfour. Here's and for you you can
sock away more. You're listening toSimply Money presented by all Worth Financial here
on fifty five KRC, the talkstation registered investment advisory firm. Any ideas
presented during this program are not intendedto provide specific financial advice. You should

(12:35):
consult your own financial advisor, taxconsultant, or a state planning attorney to
conduct your own due diligence. You'relistening to you Simply Money presented by all
Worth Financial. I mean you Wagneralong with Steve Srevak. If you can't
catch our show every night, youdon't have to miss the thing we talk
about. We've got a Dali podcastfor you. It's called Simply Money.

(12:56):
Just search for it on the iHeartapp or whatever you turn to to get
your podcast. Send me up atsix forty three. We've got one of
the biggest misconceptions that you might haveon the road to retirement. Speaking of
retirements, one of the main vehiclesthat all of us use right to save
for retirement is now our four ohone K and often iras as well.

(13:20):
We just are getting the numbers outof how much you can say for all
of those super savers out there thatmax it out every year. Yeah,
and you know it's one of thosethings that most of these contribution limits amy
they're adjusted for inflation, as theyshould be, and we've had some pretty
high inflation, so you're able toput more money away. So right about

(13:43):
when I was starting to memorize howmuch you can put away, we're getting
in the twenty twenty four in thenumbers of change. So that's my problem,
not anybody else's. But now thegood news is if you're trying to
max out, if you're a latestarter, a late investment bloomer, and
you want to start putting more moneyaway in twenty twenty four, you're gonna
be able to do that four ohone k's that we're limited to twenty two

(14:05):
to five of your own money nowit's twenty three thousand. That's more than
a two percent increase over twenty twentythree. So you know, if you
want to increase what you're putting awayin your four oh one K, talk
to HR, talk to payroll.They can figure out how to max it.
But the answer is it's going tobe quite a bit more. And
I rais are up also, Irais are up. The limit this year

(14:28):
in twenty three was sixty five hundred. That bumps to seven thousand. And
if you're over age fifty, yep, you still get to put an extra
thousand dollars catchup. So instead ofbeing limited to seventy five hundred dollars if
you're over fifty, it'll be eightthousand dollars in twenty twenty four. By
the way, there's also a ketchupfor the four oh one K limit.

(14:50):
Yeah, that's gonna be pretty nice. Also, an extra seventy five hundred
dollars if you if you're over agefifty. You know, they announce these
new thresholds every year. This iskind of right in line with what I
would have expected, don't you think? For what next? It usually ticks
up about five hundred bucks on everylevel. Another thing to keep in mind,
though, we talk about wroth options, right, and that's where you

(15:11):
pay taxes. Now, you lockin today's tacks, right, and then
whenever you need to access that moneyin retirement, you pull that money out
tax free as opposed to kind oftax deferred traditional four one K. Well,
the thing about wroth iras is whenyou get to a certain income threshold,
you can no longer put money intoa roth ira, right, and
so they are also increasing that amount. If you're an individual filer and you

(15:35):
make between one forty six and onesixty one, right, that might limit
your roth ira contributions. For marriedcouples, you can make up to two
forty now and still put money intoa wroth. So that's you know,
crept up quite a bit over thelast several years in a great ve has,
especially for single individuals that might geta nice year end bonus. Yeah,

(15:56):
you go to your account in Apriland they say, oh, you
put money in a wrong you aren'teligible. Oh my goodness, they can
be fixed. Okay, it's nota big deal, but you have to
be aware. Just because it's awrong, it doesn't mean you're allowed to
put money in. If you're luckyenough to make some serious dollars, check
with an account and check with thetax advisor before you make that contribution.
The things that we are still waitingfor from the IRS the adjustments for tax

(16:19):
brackets for next year standard deduction amounts. Right, hold your breath. We
will get back to you on those. Get around it. We'll get back
to you on that one as soonas the IRS gets back to us on
that one. One thing that youdo not have to wait around for is
making some money on cash. Talkingabout this earlier in the show. But
see if this is the time whereif you have your money sitting in a

(16:44):
savings account somewhere and it's making pointszero zero one percent or whatever it has
been for years, you need toshop around now because there are options.
This is the kind of one ofthe best benefits of rising interest rates.
You know, and for the longesttime, well, when if our reserves
started to raise interest rates, wekept saying, eventually these banks will start

(17:07):
to raise the interest that you're makingin your accounts. It took a while
to get there, but we're there. And if you've got an emergency emergency
fund with fifty sixty eighty, maybeeven north of one hundred thousand dollars in
it, and you look at youryear month end statement and you see h
five dollars, I guess interest ratesare pretty slow to move up. Now,
talk to your bank, because youshould be getting a lot more than

(17:30):
that, and some banks are holdingback and seemingly don't care if they lose
you. It's not unusual to seeless than one percent on a money market
at a bank, but they're notall like that. You can go to
other banks that have the same insurance, the same FDIC limits, and they're
paying two and a half three percenton the exact same type of investment.

(17:52):
It's called the money market fund,and you can move it into checking from
the money market anytime you want.It just pays better interest, and some
banks pay a lot more than others. I'll tell you. The other thing
that you want to take a hardlook at is brokerage money markets, and
there are some big mutual fund companiesthat pay even higher amy I'm seeing north

(18:14):
of five percent with zero risk.Now they don't have the same insurance.
So you want to just see ifyou're comfortable with that. But if you're
looking to keep a decent amount ofcash on hand that you need to be
fully liquid, five percent is notout of the question. Yeah, just
keep in mind, right, there'sa slight difference if that money is in
a brokerage account, it's not ensuredthe same way. When we had some

(18:34):
banks failing earlier that year, thatwas a you know, huge thing.
If you've got up to two hundredand fifty thousand dollars in an account with
the bank and something happens that bankgoes under, you're fully insured. You're
going to get that money back.So it works a little bit differently.
But you know, I will say, that's obviously not the norm that these
banks are major brokerage firms would begoing under. But something to keep in

(18:56):
mind here. But yeah, Ithink finally, as an investor, you
have it used to be Tina,We used to talk about Tina, there's
no alternative. The only place toput your money is the stock market.
Now you've got options you do andyou know, investors have seeing the volatility
in the stock market, volatility inthe bond market. So you know,
okay, well I can get fouror five percent with no risk. You

(19:18):
know, I might pull some moneyout and play sit on the sidelines for
a while. Guess what We're atalmost record amounts in money market funds for
investors. We're at five point sixtrillion. That's close to as high as
it's ever been in money markets.Asset managers on average have about a fifth
of their money on the sidelines.Believe it or not. Yeah, that's

(19:40):
a sign of the volatility and thefrustration in stocks and bonds. Amy,
It's also one of the most bullishsigns out there because that money has to
go back to work at some point. Money managers are not going to keep
that money sitting in the money marketforever. And when it goes back into
the stock market supply and demand,guess what goes up. Here's if your

(20:00):
long term portfolio has too much cashin it, you could lose out on
thousands and thousands of dollars over time, right, So just make sure money
is where it needs to be andto be working as hard for you as
it possibly can. Coming up next, We've got an update on the local
housing market. Are there some cracksfinally emerging? You're listening to Simply Money
presented by all Worth Financial here infifty five KRC, the Toxic and iHeartRadio

(20:22):
station. You're listening to Simply Moneypresented by all Worth Financial. I mean
you Wagner along with Steve Skrovac.We were just talking earlier in the show
about the fact that the Federal Reservemet this week, big announcement, no
hiking of interest rates. In fact, maybe they're starting to telegraph that sometime

(20:42):
in the next year or so wemight actually see rates being cut. Joining
us tonight as our real estate expertMichelle Sla Michelle, is that music to
your ears? Maybe music to buyer'sears? Absolutely, because the biggest thing
is a lot of buyers are buyingall of the headlines and they're a little

(21:03):
bit scared or maybe they can't affordthe home that they want, so they
are waiting for those interest rates togo down. Mortgage interest rates right now
have hit the eight percent mark,which is another kind of watermark that we
have not seen. It's actually thehighest point, the highest mortgage rate we've
seen in twenty three. Wows.Yeah, isn't that crazy? Yeah,

(21:29):
So you can see why some peoplewill be scared because for the last twenty
years their rates have been lower thanthat. So people must have expectations.
Absolutely, Just two years ago itwas three percent, So imagine eight percent
and imagine you just can't buy asmuch house as you used to be able
to, even just a couple ofyears ago. Well, but two and

(21:52):
a half percent for thirty year mortgages, that wasn't normal. I don't I
can't believe eight percent is normal yet. My first house and this was I'm
thinking nineteen eighty five was eleven percentbecause we went through almost exactly back then
what we're going through right now,the Federal Reserve increasing interest rates because of
high inflation, they come back down. Are you expecting Yeah, are you

(22:15):
expecting a significant drop over the nextsix to twelve months or do you have
any any guests rate will be Here'sthe thing. I don't know that it
will be significant, but eight percent. We might get to eight and a
half, and we're actually seeing alittle bit of eight and a half right
now as well. But so alittle history for you thirty year mortgage rate
in the United States averaged seven pointseven four percent from nineteen seventy one until

(22:41):
twenty twenty three, so really weare right there in that average. But
you're right, so the last fewyears have been really low three and four
percent kind of crazy, but thehighest rate ever recorded eighteen point sixty three
percent nineteen eighty one. Yeah,so those are great statistics that we can

(23:07):
look at and realize, you know, we're not in Well, it's fine,
We're gonna be fine. People arekind of actually getting used to it,
which is something that I love becausewe've had some challenges over the last
few months of buyers just kind ofretreating and trying to figure out what's going
to happen, trying to understand wherehow much their money can how far your

(23:30):
money could go? And yeah,so it's we will if the cycle will
continue, people will still buy homes, and if you can afford it,
now is actually a great time becausethere are opportunities for you that there isn't
for some buyers. Are there opportunitiesbecause every month we have you on the
show, and the crazy thing hasbeen there's just no inventory in Cincinnati,

(23:55):
right, So is it's starting tokind of ease up a little bit where
hey, if maybe you are aand willing to pay that eight percent up
front, you know you can alwaysrefinance. Absolutely, is there are there
properties out there that you can buy? There are? And surprisingly I went
out just this week and I showedone buyer seven properties in one day.

(24:18):
Wow. I haven't done that.I haven't been able to do that for
years since since the pandemic. Youknow, usually we're doing one and gun
and one and run. But Iwas able to show this client in a
specific price range seven properties in theCincinnati area. That was really exciting to

(24:38):
me, and it actually kind ofit was a little nostalgic because that was
the way it was five, six, ten years ago. We were able
to show multiple properties. So thereare opportunities out there. Is it a
grand amount, No, But atthe same time, there's If you're not
in, you're not looking, You'renever gonna to find what you're looking for.

(25:00):
So go ahead. So my questionis, all right, if your
budget is whatever, fifteen hundred bucks, i'month for a mortgage at three percent
that bought a house at a lotmore higher price than an eight percent mortgage
will buy you. So are youexpecting home prices to drop because of higher

(25:22):
interest rates. We are definitely seeinga bit of a leveling off and just
a slight down tick. But forthe most part in the Cincinnati market,
we haven't seen a whole lot ofchange. It's not going up as rapidly
as it was last year in thelast couple of years, which is actually
really really good and if we stayconstant and even I think that's a win,

(25:47):
I really really do. And sellershave to also be realistic in the
fact that they may not be ableto list their home the same as their
neighbor did a year or a yearand a half ago. It may have
to be slightly lower a few thousanddollars, and again it may take a

(26:07):
little bit longer also to sell becausethere aren't as many buyers out there looking.
That's why I say buyers, getyour butts out there and keep looking.
Well, you know, Michelle,it has been a heck of a
time for first time home buyers,right because they're usually in that lower price
range. One of the things I'vefound really interesting that you've said is it's
kind of across every price point thatthere just wasn't much inventory out there.

(26:29):
Even if you get up to youknow, half a million dollar homes and
a million dollar homes. What aboutnow? I mean, if there was
opportunity in one sort of price point, where would you say that is?
I believe the opportunities are still ina little bit of a higher price point.
I do think anything below two hundredthousand and the Cincinnati market is going
to get snapped up really quickly.It's interesting too that my sister quick story.

(26:56):
My sister called me and said thather son, my nephew, called
and said, I can't believe mom, I'm never going to be able to
afford a house because I need tomake more money, I need to get
a second job, and I can'tfind anything for less than two hundred thousand.
And my sister, who hasn't purchaseda home for a really long time,

(27:18):
she said, oh, that's silly. You can get something for one
hundred or one hundred and twenty five. And I said, call my nephew
and tell him he's right, you'rewrong. This is your wake up call,
sister. It is you know,life has changed, and it's changed
dramatically over the last ten years.So if you haven't bought or sold in
the last ten years, you reallydo need that wake up call. You

(27:41):
need to listen to the experienced agentwho is going to help you through the
process and have you realize where weare because it has changed a lot.
Well. One of the things thatI just I'm so happy I'm not in
this position first time home buyers.I mean when I was, you know,
just starting out and my wife andI were looking at our first home,

(28:04):
it was bad enough, you know, because you're you're broke, and
you know, maybe you just gotmarried or just started a family, or
whatever the case happens to be,and money is an issue. You need
a mortgage, you can't pay cash, and in this market, it was
so crazy that you're up against allthese cash buyers that are making offers with
almost no contingencies in the first dayof a listing. I would hope that

(28:26):
this slowdown is helping first time homebuyers. Is are you seeing that?
Well? No, I think there'salways going to be a challenge for first
time home buyers over the course ofthe next few years. I don't see
that that's going to change a wholelot. The one thing that I would
encourage my best advice for first timehome buyers, figure out what your credit

(28:48):
score is and make it better.Find out ways to make it better.
Save as much as you can fora down payment. The more you have
in a down payment, the betteryou're overall payment is going to be.
If you can do twenty percent down, now, you can certainly buy a
home with a lot less. Youcan buy a home with three percent down,
but then you're gonna have additional moneybeing taken out for private mortgage insurance.

(29:14):
So your best bet is to save, save, save, and then
understand your debt to income ratio.If this is all like foreign to you,
if you're a first time home buyer, you know someone who's a first
time home buyer, they should talkto an agent, They should talk to
a lender. They should ask thequestions, how much do I need?

(29:34):
How much do I need to save? How what should my credit score be?
How do I find my credit score? These are some kind of basics
that we don't talk about enough.As far as I'm concerned, I don't
think we learn this. I don'tthink first time home buyers have even have
no knowledge on what to do andhow to get started. Great advice as

(29:56):
always from Michelle Sli. Michelle,I'm marking this down on my CA the
first time we've talked to you ina long time that you said there is
some opportunity out there for buyers.If you've been on the sidelines, maybe
it's time to jump in. You'llseen to Simply Money presented by all Worth
Financial here in fifty five krs,the talk for the general public. You
know, of course it's ridiculous forthem to actually mandate a vaccine. Your

(30:18):
voice on fifty five KARC you'll listeningto your Simply Money presented by all Worth
Financial. I mean you Wagner alongwith Steve Scuback. If you've got a
financial issue you can't figure out,maybe you and your spouse just aren't on
the same page. There's a redbutton you can click on while you're listening
to the show. It's right thereon the iHeart app. Record your question.

(30:41):
It's coming straight to us. We'dlove to help you figure it out
or maybe weigh in on that situation. And straight ahead, we're looking at
the tax breaks that you can getjust by fixing up your home. All
right, So there's a lot ofthings. I think, Steve, when
people start thinking about retirement and theycome in and start talking to us and
We're like, that's not exactly right. Right. There's a lot of misconceptions

(31:03):
out there that people have, andone of them is what the retirement age
is going to be for them.And one of the I think also big
things is that they have control overwhen they're going to retire. Sometimes you
do, often you don't. Ilove the Woody Allen quote. Woody Allen
said, Hey, if you wantto make God laugh, just tell them
about your plans. There are somany, so many people that you know,

(31:27):
when you sit down and say,okay, let's you know, what's
your preferred retirement age? Oh yeah, yeah, I'm going to go until
sixty seven, or I'm going togo till seventy, or you know,
whatever the case is. I hopethey don't say, well, the way
it looks, I might have towork forever. You know that that's not
a good one. But the averagedesired retirement age is about sixty six.
That's one people want to hang itup. It's close enough to full retirement

(31:51):
age for Social Security that okay,I'll go that far, but I don't
want to go to seventy. Butunfortunately the reality is the average actual retirement
age is more like sixty two,which tells me, okay, maybe the
majority of people aren't exactly having theirdreams the way that they had hoped on

(32:14):
how long they're going to work?They were snatched away from them. Well,
yeah, there's a retirement confidence surveythat's at almost half of retirees said
they left the workforce force earlier thanthey had planned on. Right, So
maybe you go in you work witha financial planner. They say, okay,
what's your goal when you want toretire? Oh sixty six? Okay,
great. Here's the problem. Thereare four different kinds of sick that

(32:35):
a lot of people can come upagainst. Right. One of them is
that you get sick, right,You had no idea, you didn't see
the diagnosis coming, but suddenly youcan't make it in every morning anymore.
It's exhausting, you're not feeling well, You've got doctor's appointments, treatment,
whatever it is, it's not workingfor you. Also, someone you love
get sick, right, and youhave to leave your job in order to
become a caregiver for them. Thathappens pretty often too. But there's other

(32:58):
kinds of six sick as well,and one of them is your boss gets
sick. Of you. You've gotno control over that, right, your
boss is you're done. There's aseverance package whatever that looks like. And
you could get sick of that job. You may love it right now,
and next Monday morning you may walkinto a brand new boss, brand new

(33:19):
situation. Right, you've got nocontrol over and all of a sudden that
job that you love for decades oryears, you can't stand going in and
you need some flexibility. Then aboutwhen you can walk away? Yeah,
you want some stress in your life. Most people have not sat down with
the financial planner, you know,in their fifties and really mapped out this
sort of thing. So you know, if you're like most people and haven't

(33:40):
done that, you're chucking along doingfine. Okay, there's cycles and businesses
and sometimes there's a downturn and there'snothing like hearing from your boss or a
company announcement. Yeah, we're goingto be laying off ten percent of the
workforce and you may be part ofa class that it's going to be impacted.
It's voluntary, and if we don'tget a certain amount of people to

(34:05):
sign up, it may become involuntary. That goes on all the time.
Unfortunately, and I've dealt with peoplethat you know, hey, I don't
want to take this, but Isure don't want to give up this package
because they may cut my job ifI don't take it. That's between a
rock and a hard place, andit happens all the time. So I
think the answer is it's always goingto be do the work. Get your

(34:30):
financial plan drawn up so you knowwhat it looks like if you retire at
sixty seven, sixty six, sixtyfive, sixty four, and if a
retirement offer comes down the pike,and you already know that you can afford
to retire at your current age,there's no stress. I mean, you
already know it works. So youknow this is where being ahead of the
curve, just doing the work aheadof time to make a huge difference.

(34:52):
I'll tell you who makes me nervous. The kind of people who come in
and say, I'm going to workuntil I'm seventy or I'm never ever going
to retire. I love my job, so I don't need to tuck money
away in a floor one, okay, because I'm just going to work forever,
okay. One third of workers saythey expect to retire at seventy or
later. Six percent of retirees thatactually pull that off, right, and

(35:14):
so there's just a huge discrepancy there. So that's what I say, Hey,
if you plan for sixty two,which is the current age, and
then you can work longer, great, It's gravy on the boat, it's
you know, icing on the topof the cake. It's all the things
that make your life far less stressful. And yeah, the longer you can
work, the better it is.You're not pulling out of savings. Right,
even if you're working part time andyou cannot pull off a savings every

(35:37):
year that goes by, you're betteroff. In some cases, you're going
to have healthcare benefits, health insurancebenefits for longer. All of those things
can make a ton of sense.But I think the key here is you
have to know you may not beable to control that retirement age. Yeah,
and I'm living proof. I mean, I wasn't expecting to have a
triple bypass at sixty one. Youknow, I figured I'm in peak physical

(35:58):
condition. Well, no, Iwas far from it. I just didn't
know it. But you know,having something like that happened to you makes
you reevaluate what are your long termwork plans and you know it certainly plays
into my retirement decision. So yeah, get your plan done. Know where
you stand. Here's the all Worthadvice. If you work longer because you
can and you want to, well, the financial benefits are great, but
don't bank on that happening. Savenow. Coming up next, it's a

(36:22):
win win fixing up your home andsaving money and taxes. At the same
time. You're listening to Simply Money, presented by all Worth Financial. You're
on fifty five KRC, the talkstation. My kids don't listen to me,
but they listen to your ideas,even though they're the same ideas.
Your voice on fifty five KARC,you're listening to you Simply Money, persented

(36:45):
by all Worth Financial. I meanyou Wagner along with Steve Sprovac. Okay,
So for those of you who arecompletely scared off by eight percent interest
rates and you're saying I am notmoving anytime soon, you may be looking
not only at staying put but doingsome upgrades around your house. Well,
it's good to know that some ofthose things you might be able to do,
you might also get a tax breakon. Yeah, and some of

(37:07):
these tax breaks are tax credits andwell, yeah, I've got some deductions.
No no, no, no taxdeductions. Yeah, they help.
Tax credits are awesome. The taxcredit is if you've got a credit of
one thousand dollars and you owe UncleSam one thousand dollars, you don't owe
them that money anymore. If you'vegot a thousand dollars tax credit, it
comes right off of what you owe. And there are some things you can

(37:29):
do around the house that will giveyou tax credits. I think the biggest
one out there is still solar panels. I mean, these things are not
cheap to put up. I meanthey're definitely not cheap, but you can
get they'll sit in, you know, for a whole house. They can
save you as much as fifteen hundredbucks a year on electricity. But over
and above that, you can getsome significant tax credits out of it,

(37:51):
depending on how much and how expensivethe panels are. Yeah, so they're
say, at least according to Forbes, you can save up to about fifteen
hundred dollars a year right by usingso panels. But not only that,
the government in most cases will giveyou a thirty percent tax credit. Yeah,
to cover the cost of that insulation. It's funny. Years ago,
I remember seeing solar panels in thehouse for the first time and being like,
what is that? You know,it looks different obviously you see them

(38:15):
on the roof, and all ofa sudden, now I see them all
the time. And that's fine.I got the kind somebody else paid for
and I bought their house. Ohbrilliant, right, that's fantastic. And
the President just announced this last year, the Inflation Reduction Act, and it
does have some nice tax breaks forspecific renovations that make your house more energy
efficient. One of the things thatyou can do really easy is just getting

(38:37):
your home audited. Right, energyaudits. You get one hundred and fifty
dollars tax credit just for doing that. Doesn't take a lot of time.
What it can do, though,is open your eyes to, oh,
we're losing a lot of energy anda lot of heat in here through doors
or windows or insulation, and sosome of those things you can you know,
replace and then save a lot moremoney on. Yeah, if you

(38:59):
get an energy audit done, it'sprobably it might be a little more than
one underd and fifty bucks, butthat person doing the audit probably knows what
the deals are so if you replacewindows, he might be able to point
you towards Yeah, this is eligiblefor tax credit, or that's eligible for
tax credit. It can help.Yeah, and if you're looking at your
kitchen right as far as updates,look at energy efficient appliances. There's a

(39:19):
lot of them out there. Wegot some new ones recently. You might
actually get new appliances, qualify fornew appliances if you meet certain criteria.
There so lots of options. Thanksfor listening tonight. We hope you're going
to tune in tomorrow. We're talkingabout ways to help your aging parents manage
their money. You've been listening DisimplyMoney presented by all Worth Financial here in
fifty five KRC the Talk station withfall In