October 9, 2025 • 41 mins
On today’s episode of Simply Money presented by Allworth Financial, Bob and Brian explain why your emergency fund might be the most powerful part of your financial plan — no matter your net worth. Then, learn how to keep the IRS from eating away at your stock gains with smart cost-basis and timing strategies. Plus, Better Business Bureau President Jocile Ehrlich warns about new scams — from fake tax refund texts to “ghost tapping” card thefts — and the guys tackles deferred comp plans, 1031 exchanges, and early retirement withdrawals.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
You got a lot today, do you I do got
to put up these Halloween decorations?
Speaker 2 (00:04):
Will It's time to do it, dude? The rest I
do need to know on fifty five KRC the talk station.
Speaker 3 (00:16):
Tonight, The underestimated power of an emergency fund, how to
protect your stock gains from the taxman, and more. You're
listening to Simply Money, presented my all Worth Financial on
Bob Sponseller along with Brian James. We've talked for some
time now about the fact that the labor market seems
to be softening, and it appears, Brian, that real people
(00:38):
are starting to worry about it. According from a recent
survey done by the New York Federal Reserve, walk us
through some.
Speaker 4 (00:45):
Of these numbers, more fascinating survey numbers. We love listening
to radio shows to talk about survey numbers, don't we, Bob.
They're mostly garbage, but please continue. But there's somebody's opinions.
So here's what we're talking about today. So the New
York Federal Reserve did a survey and one of the
results that came from it was that Americans have a
perceived likelihood of losing their job in the next twelve months.
(01:06):
Up to fifteen percent. So Americans are also see greater
odds about forty percent that the US unemployment rate is
going to be higher one year from now. So, in
other words, numbers numbers numbers, but the sentiment is that
jobs are going to be a little bit more scarce
than they've been. That projection is up two percentage points
since August, so that's kind of gaining a little bit
of steam. That said, our spending habits don't quite match
(01:28):
with this supposed perception that we're all going to lose
our jobs soon.
Speaker 5 (01:32):
Because this is where we look at consumer sentiment.
Speaker 4 (01:35):
This is the University of Michigan's sentiment index has yet
to rebound to the levels before the pandemic. But at
the same time spending has been up. Consumers have been
relatively confident and still living their lives the way they live,
and I can verify that dismain interactions with my clients.
Everybody's griping about the price of eggs, but nobody's eating
less eggs.
Speaker 3 (01:52):
And the parking lots of all our favorite restaurants every
night are filled.
Speaker 4 (01:56):
The capacity still bother going out on a Friday or
Saturday without a reservation.
Speaker 3 (02:00):
Brian I'm going to use an analogy that may or
may may not make sense here, and this harkens back
to my high school baseball coaching days when kids used
to come to me before the season and talk about
how great their year is going to be, how much
harder they're gonna work, and they're gonna do this, and
they're going to do that. They're telling me everything that
they're going to do and how their behavior is going
(02:22):
to change, and then that same kid happens to be
the one that doesn't show up for team lifting at
five point thirty in the morning because he's tired. In
other words, I always pay attention to what people actually do,
not what they say they're going to do.
Speaker 5 (02:38):
That's my reaction to this survey.
Speaker 4 (02:40):
Yeah, and I kind of have the same So I've
been in a lot of different marketing groups and things
over my thirty years doing this, and it's interesting even
the companies that do the research and.
Speaker 5 (02:49):
Take the survey, as we'll say that.
Speaker 4 (02:51):
You know, oftentimes what people do doesn't match how they
check a form on a box. So anyway, but regardless,
so a little bit of a disparity course between the
perception of the economy and our spending behavior.
Speaker 2 (03:03):
You know.
Speaker 5 (03:03):
The suggestion is is that while we're worried about the.
Speaker 4 (03:05):
Future, current household, household finances are doing pretty well. And again,
Bob and I can both tell you that anyway from
our interactions we've got with our clients. Yes, individual families
have their specific situations that sometimes things are out of
their control. But as we're sitting here right now, things
look pretty positive and we don't see anything on the
horizon that should cause for any significant alarm other than
(03:25):
there are always storm clouds somewhere. Don't let it get
you too much of us wet.
Speaker 3 (03:30):
All right, Switching gears here to the emergency fund topic,
and I do think this is an important one. I
and I do resonate with a couple of these studies
that came out. Bank Rates twenty twenty five Emergency Savings
report indicates that only a quarter of adults have enough
savings to cover six months worth of expenses. And let's
(03:51):
take this a step further. Vanguard researchers surveyed more than
twelve thousand, four hundred Vanguard investors, so this is a
pretty good survey. They did that back in July of
twenty twenty four to understand the impact of emergency savings
on their overall financial wellbeing. I love this study. This
is actually helpful. This is things that people should be doing.
(04:14):
And their survey found that emergency savings are the strongest
predictor of financial wellbeing. The impact of just having at
least two thousand dollars in emergency savings is remarkable, meaning
that those that have set aside this amount report over
a twenty percent increase in overall financial wellbeing. And if
(04:36):
you increase that emergency fund to three to six months
of expenses, you can tackle on another thirteen percent of
well being. This is the basic blocking and tackling good
financial planning. Irrespective of somebody's net worth, that really does
show an indicator of how they're going to actually behave
and treat their investments. Not selling a down market, not
(04:59):
pay I make all the things we talk about all
the time that people should not do.
Speaker 5 (05:04):
So it's really important.
Speaker 3 (05:06):
It sounds elementary and boring, but this basic emergency fund
savings vehicle is really important to have in place.
Speaker 4 (05:14):
Yeah, and I want to share a quick story here
because I was thinking about this the other day for
whatever reason, and maybe this happens to you. But my
client's adult children tend to children tend to come in waves.
We certainly help them out like we help out our clients,
but I just have a bunch of them right now.
And the younger ones always come with this notion of, hey,
I want to start throwing money in the market so
I can turn it into a big pile. And they
(05:34):
never come with the notion and I was there too,
They never come with a notion of how do we
build a foundation?
Speaker 2 (05:38):
Right?
Speaker 4 (05:38):
If I'm going to build a house, I'm not just
throwing bricks directly on the dirt. I need a foundation
that's going to support everything. So my quick story here
is this is me. So about fifteen years ago, I
got a little bored with working directly with clients and
just wanted to make a change, and I took it too,
sort of an executive consultative role with the bank, educating
advisors how to do planning and those kinds of things.
And that lasted about that maybe three years before I
(06:00):
realized that my true calling was sitting down at tables,
looking people in the eye on a one on one basis,
making them feel comfortable with their finances and helping them
understand the opportunities in front of them, so I went
back to client facing role that involved a huge pay cut.
I was okay with it because I had that emergency fund.
Speaker 2 (06:16):
You know.
Speaker 4 (06:16):
So our producer Jason puts this show together and he
asked us to share stories.
Speaker 5 (06:19):
Well, here's mine.
Speaker 2 (06:19):
This was all me.
Speaker 4 (06:20):
We survived on that while I was building up a
practice again for the second time in my career, and
I've been there ever since.
Speaker 5 (06:26):
But we could not have done that.
Speaker 4 (06:28):
I could not have made that career pivot without that
emergency fund to be able to bridge the gap between
what the what life was costing and what the income
was until I got that business back up off the ground.
So I can speak from the heart to say that, yes,
don't start with throwing money in the market and creating
a giant pile, start with that foundation.
Speaker 2 (06:46):
Brian, that's a great story.
Speaker 3 (06:47):
I can share another one from my own family involving
my oldest son and his wife. They're coming up on
being married for about three years and they you know, these.
Speaker 5 (06:56):
These are the two kids.
Speaker 3 (06:57):
They're both oldest children, so they tend to be followers,
follow the rules. Their process oriented very disciplined, and they
actually came to me after they got married and said, hey,
will you help us sit down and build a financial plan.
And their first question is, you know, can we afford
to buy a house? And I told them, I said,
don't even think about looking at a house until you've
(07:18):
got three to six months worth of money put away
in an emergency emergency fund. And they followed the advice.
They first looked at me, like, are you nuts? And
I said no, I'm dead serious. Don't go buy a house.
Do you got this? Fast forward? They go buy a house.
My oldest son is a college baseball coach, so that
can tend to lead to some transient moves. They bought
(07:42):
a house in Loveland, and they got it into a
good price and lo and behold. About sixty days later,
he took a different coaching job down in Nashville, so
they needed to sell the house. They were able to
sell it in a day and make good money on it,
so you know, they were blessed in that way. But
had that not worked out, and had they had to
(08:02):
sit on that house for a while while it sells,
they would have had to dip into that emergency fund.
So this stuff does work when you put it in
practice and you eliminate having to make these snap moves
based on a short term financial emergency that can really
derail your long term financial emergency.
Speaker 5 (08:20):
Fund is oil in the engine. Don't ignore it.
Speaker 4 (08:23):
It is the most important component to your planet allows
you to do all the other bigger things.
Speaker 3 (08:27):
Wonderful analogy you're listening to Simply Money, presented by all
Worth Financial on Bob Sponseller along with Brian James. All right,
let's talk about gold as an opportunity. The price of
gold just hit four thousand dollars an ounce for the
first time, and we don't want to get into market
timing buying and selling gold. But we all know gold
(08:47):
is known as the age old hedge against inflation. But
we also know that history shows that the stock market
is the one asset that beats inflation over a long
period of time. And if you want to have gold
as part of your portfolio, by all means, do it,
but do it responsibly and have a good, you know,
small allocation your in your portfolio. But today we want
(09:09):
to talk about, you know, flipping this around a little bit.
Do you have any gold laying around your house that
you never use in the form of jewelry? Now, might
be a good time to, you know, scoop some of
that stuff up and generate some cash from it.
Speaker 4 (09:24):
Bran, Yeah, I'm sure I don't. Somehow, I don't see
commercials much anymore. But I remember the last time we
went through this cycle, we had all those companies saying,
stick your gold in a ziplock bag and send it
to this address and we'll tell you people are doing it.
So I'm sure that's out there somehow.
Speaker 2 (09:38):
I think Dave Hatter would hate that advice.
Speaker 4 (09:40):
Yeah, that's not the most secure, you know, an opaque
ziplock bag. Right, we don't expose our our actual assets here,
but no, this is this is a real if you've
got something you inherited and you and you don't plan
on keeping it.
Speaker 5 (09:52):
Right, We're not talking about center mental value here.
Speaker 4 (09:54):
We're talking about something that if you've always thought, you
know what, maybe we should get rid of that we
don't really need it doesn't have that much value to it.
Else the time go figure it out. Find a reputable dealer.
You can find jewelers out there who can help you
value things those kinds of things. But now is the
time to take that action. And if you've been sitting
on a lot of people just own gold and don't
know why exactly. I got We've got all this gold
(10:15):
in the safe. Grandpa gave something to us.
Speaker 5 (10:17):
We are great.
Speaker 4 (10:17):
What does it mean to you? Does it do you
any good in the safe? Is it helping you with
your finances? If it's sentimental, that's a whole different conversation.
But if you truly treat it as an asset, and
we have people that tell us, yes, this is part
of my networth, that's fantastic. But if you're never gonna
liquidate it, it doesn't do you a darn bit of good.
I'm not going to count it as part of your
cash flow.
Speaker 3 (10:35):
I had that same conversation with my wife's uncle at
a family wedding we were at over the weekend. He
came up and asked me about gold, and that was
my first question. I'm like, why, because depending on depending
on your why, you get completely different answers. And you know,
he talked about it going up in value, and I said, hey,
(10:55):
he talked about these armageddon scenarios if the Internet goes down,
And I'll tell you what, if all that stuff goes
you know to you know what in a handbasket, and
you're sitting there with a gold bar, and we truly
are in a situation where we got to find a
means to buy milk and bread and meat. And you know, Firewood,
I got news for you. I said, somebody will just
(11:18):
come up and beat you over the head and take
your gold bar. You can't break it up into any
amount of denominations to barter with it. So again, your
why is really important. We're getting off the topic here,
but you think you made a good point. I My
next advice was find a good reputable dealer if you
want to talk about buying small denomination coins or what
(11:41):
have you. It's better than having your money in a mattress.
It's better than having your money, if it's long term money,
then having it sit in and checking account or savings
account earning nothing. But go, like to you what you said,
Go talk to your network of people, get referred to
a reputable coin dealer.
Speaker 2 (11:58):
Do not walk into a pond.
Speaker 3 (12:00):
Shop, you know, or the quickest web put it in
a bag, lastic bag, you know. Go go work with
somebody that that you can trust, that can actually help
you transaction gold in denominations that makes sense for your
overall plan.
Speaker 2 (12:14):
And again to your point, know your why in the
first place.
Speaker 3 (12:19):
Coming up next, how to keep taxes from gobbling up
the gains from your next stock sale. You're listening to
Simply Money presented about all Worth Financial on fifty five KRC,
the talk station.
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From the UCLL.
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Here's what's happening at Texas National Guard troops you deployed
to the Windy City.
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Listen to what I'm about to say.
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James Comy has pleaded not guilty to both of his
federal charges.
Speaker 1 (12:40):
Checking in each our and this shutdown Israel and them
off closer.
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To a piece agram. In fifty five KRC, the talk station.
Speaker 6 (12:48):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 3 (13:07):
You're listening to Simply Money, presented by all Worth Financial,
umbob sponsller along with Brian James. If you can't listen
to Simply Money live every night, subscribe and get our
daily podcasts. Just search Simply Money on the iHeart app
or wherever you find your podcast straight ahead of six
forty three, What to do with too much cash in
your late fifties, smart moves for a deferred comp payout,
(13:30):
and whether to keep or cash out of those rental
properties before retirement. All Right, the last couple of years
have been fantastic if you've had money in the stock market.
But here's the catch. When you need to or want
to go sell some of this stuff, the irs is
waiting with their hands out, waiting for their cut. And
(13:50):
those games aren't just free money, you owe taxes on them.
So tonight we're going to delve into a very helpful topic,
in my opinion, walk through how these stock gains are taxed,
why your cost basis matters, and some simple strategies to
manage you know, those stock sales to keep your tax
bill as low as legally possible. Brian, let's walk through it.
(14:13):
Some good stuff here. Yeah, so I think there's ways
to keep this simple.
Speaker 4 (14:17):
So there's there's several types of tax right today, we're
going to talk about capital gains versus ordinary income, and
it's all the difference between those is really just timing.
The magic time between that is one year. So if
I buy something and I sell it with it. You know,
this could be a stock, it could be a collectible something,
it could be a lot of different things. But and
I sell it within one year of having bought it
in the first place, that gain is going to be
(14:39):
taxes ordinary income. Right, So you can kind of, in
a round about way, you can kind of banish from
your thought the notion of long term capital gains tax
If you're holding something under year, it's just income, and
that is taxed exactly the same as your salary, exactly
the same as interest you're getting on your CDs and
you and your checking account. If you have something like that,
it just gets lumped into your ordinary income. So anything
under a year taxes ordinary income, whatever your bracket is. Now,
(15:01):
when you get to a point where you've held something
longer than a year, now it's a long term gain.
That's all long term means. It means one year, you're
either three hundred and sixty four days or three hundred
and sixty five days. That's all there is to it. Now,
you get preferential capital gain rates. Typically, and I'm going
to circle back to this, sometimes you can be in
a zero percent rate or fifteen percent, which is where
where we most commonly see people land or twenty percent for.
Speaker 5 (15:21):
Our higher income earners.
Speaker 4 (15:23):
Now, I know I got somebody's attention out there with
that zero percent capital gain situation. So if here's that situation.
If you are married filing jointly, this is twenty twenty five.
If you are married filing jointly, you can have taxical
income up to ninety four thousand dollars and pay zero
percent on your capital gains. Now, remember this is where
it gets confusing. That gain itself is going to get
included in your income. So you can't take a million
(15:44):
dollar gain and claim you only had ninety four thousand
dollars worth income.
Speaker 5 (15:47):
That's not going to work.
Speaker 4 (15:48):
But if you truly have a situation where you've got
very little income, maybe you're spending down savings and you
just don't have any income, no so security, no work,
no nothing, then you can generate a ninety thousand dollars
capital gain believe it or not, and not pay taxes
on it. For a single that's forty seven thousand, roughly.
Speaker 3 (16:03):
Half and Brian, A lot of people don't know you
can do this. I mean, I'm shocked at how many
people haven't looked at it.
Speaker 5 (16:09):
It's not being talked about.
Speaker 3 (16:11):
It's not being mentioned a lot of times, you know,
unless you're sitting down and doing some proactive tax planning.
So you know, when we do that with folks, we
can often find times, you know, for good reason, diversify
the portfolio, raise some needed cash, and sometimes do this
at zero percent tax rates. It's beautiful, all right, let's
shift gears into you know, it sounds, it sounds, you know,
(16:33):
elementary long term versus short term, but it's not that simple.
You do have to calculate and know what your cost
basis is. Most most broke all brokerage firms now are
are doing that calculation automatically every time you buy and
sell something. For folks that have owned mutual funds for
ten years, twenty years, fifty years, you know, those calculations
(16:55):
weren't made automatically by the mutual fund companies. So you
got to you got to have somebody come in there
and help you if you don't want to do it yourself,
to figure out what your cost basis is. And more specifically,
every time you buy anything, you create what's called a
new lot, a new tax lot. That all that word
lot means is you know, it's another batch of stock
(17:18):
or mutual funds that got bought, either by buying it
directly or reinvesting dividends and capital gains. And it's very
important to delineate which lot you are selling when you
go to liquidate some stocks.
Speaker 2 (17:31):
I know you want to say something.
Speaker 4 (17:32):
Yeah, because a lot of people get confused by this.
We talk about cost basis. Most people their brains go
to that original purchase. I wrote a check one time
you bought Apple when it was a tiny little company. Yes,
that's true, but if you reinvested the dividends and I'm
realizing Apple is not a great example because they have
a big dividends for that long but regardless, let's change
that to P and G. If you bought P and
G one time thirty years ago and you told it
to reinvest the dividends, which is what most people do,
(17:55):
then each and every one of those little, tiny purchases
every quarter for the last thirty years is its own lot.
As Bob just said, you have to add up all
of those to figure out your cost bases. It is
not the original purchase that you put into it. You
don't want to mess up that calculation because you're going
to pay way too much in capital gains tax.
Speaker 5 (18:11):
You're not liable for that, but that's where all that comes.
Speaker 3 (18:14):
From, all right, And brokerage ferns often have a standard
default method like FIFHO, which stands for first in, first out.
If you don't direct otherwise, it's going to sell the
first shares that you bought first, and as Brian's just
pointed out, those might end up being the lowest cost
base of shares that you own, which trigger the highest
(18:35):
capital gains tax. You have a choice in the matter
if you can calculate and know what your tax lot,
your cost basis is per tax lot. And this is
where getting some good fiduciary advice from a good advisor
CPA or a combination that two can help you with there,
because when we put the cell order in, we can
(18:57):
and should be very specific about which lot we're selling,
and that can make a huge difference in the tax bill,
you know, when it's all said and done.
Speaker 4 (19:06):
Yeah, and I want to kind of circle back and
connect two points that we've made here in the last
couple of minutes. You just said that that first in,
first out well will force you to use probably the
lowest cost based stef that. That's absolutely correct, of course,
but that is not necessarily a bad thing if we
combine that with the notion that, hey, sometimes I'm in
literally a zero percent practice. If you celebrate the fact
that you landed in a zero percent bracket for a
(19:28):
tax year, then you missed an opportunity that is the
year to sell those really low cost base to shares
and pay the lowest taxes you're ever going to pay.
So don't ever spike the football and say we're not
going to pay any taxes this year. That's not a
good idea. Take advantage of the things do roth conversion,
sell those low cost basis assets, and take advantage of
the fact that now you're not in a zero percent bracket.
You might only be in a ten percent bracket. Still
(19:49):
pretty awesome, and it's going to protect you from a
thirty five percent bracket later in life.
Speaker 5 (19:54):
That's an excellent point, bro, Thank you, Bob.
Speaker 2 (19:56):
How smart? I'm being serious. You are smart.
Speaker 3 (19:58):
You know sometimes you want want to have the large
capital gain when you can have it happen in a
zero percent tax bracket.
Speaker 2 (20:06):
Give it to me all day long. Excellent point. All right,
here's the all worth advice.
Speaker 3 (20:10):
The market may be doing the heavy lifting, but you
do the fine tuning. Pick witch shares to sell, use
your losses smartly, and don't give the irs any more
money than you legally have to. All right, scammers are
getting smarter and your money is the target. The Better
Business Bureau joins us next with the latest tricks criminals
(20:32):
are using and how to spot them before it's too late.
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the Talk Station.
Speaker 2 (20:41):
A series of events the most important events make four
eventful days.
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Political violence in this country.
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Following these events every day fifty five KRC the Talk Station.
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You're listening to Simply Money? Is that a buy all
Worth Financial? I'm Bob sponseller along with Brian James, joined
tonight by our longtime guest and we're always thrilled to
have her on the show. Joe seal Rlick, President of
our Better Business Bureau, Joe Sial, thank you for making
time for us tonight and Joe Seal. It seems like
these scammers and criminals out there are just always reinventing
(21:28):
new ways to try to steal our money, and you
always seem to be one step ahead of them, which
is great. Fill us in on their latest little trip
tricks and schemes and how we can avoid getting you know,
our money stolen.
Speaker 7 (21:43):
Well, I've got a couple for you, and a couple
of them might be new to some of our listeners.
You know, if you have filed for a text extension
for the year, the deadline to file your return is
coming up pretty soon. It's going to be October fifteenth.
But like always, scammers are on time of the headlines,
and a lot of people who filed for an extension
(22:04):
then did file their taxes. Many of those guys are
still waiting for your refunds, and scammers, of course are
standing by to try and take advantage of that. Now,
while this scam is targeting the people who are waiting
for a refund, it's going out to a lot more.
You know that cast a wide net mentality. I filed
my refund by April fifth, or for my refund by
(22:25):
April fifteenth, but I got this scam so be on
the alert for a text that looks like it's from
your state's taxation department saying your tax refund has been approved,
but you have to quote confirm your payment info to
get your refund. Of course, there's going to be a
link that they want you to click on which takes
(22:46):
you to a website which looks really official, but it's
designed to steal your personal and banking information. Now, the
text you may get will even tell you to reply
why you've seen that? On texts, salt and reopen the
text to quote activate the link. There is no such
thing as activating a link. Once a link is there,
(23:08):
it's a link. This is just a trick to get
you to engage with the scammers. The text also might
say if you don't respond by a certain date, you're
going to forfeit your refund under your state's revised code.
These guys are counting on your confusion around tax deadlines
and especially your fear of missing out on your refund. Now, remember,
(23:32):
the actual department of taxation, be it the state or
the federal, will never text you asking for banking information,
and that revised code that they're referencing in the text
that's a real code, but it doesn't say anything about
forfeiting your refund. Now, if you fall fit a scam,
you could see your bank account drained, and you are
(23:53):
giving scammers access to all kinds of personal information that
could set you up to be targeted for few your scams. Now,
if you get any communication, text, email letter regarding taxes
and you are confused about that in Ohio, go directly
to tax dot Ohio dot gov or in the case
(24:16):
of the federal go to the IRS dot gov to
check the validity of the communication.
Speaker 4 (24:23):
So okay, So Josie, as you as you're saying this,
this is great information. What's occurring to me is I
sometimes do get texts related to this, and yes a
lot of.
Speaker 5 (24:32):
Them are fishing. But it realized.
Speaker 4 (24:34):
You know, if you use like a tool like TurboTax
or some of these online providers, those intermediaries will send
you a text update. That's something you opt in through
as part of that process. So don't get confused or alarmed.
If you use TurboTax or something similar and you opted
in for that, that service may send you a text
to say that your refund was processed or accepted or whatever.
But so that's legit. It's the ones asking you to
(24:56):
click and do something. All three states Ohio, Indiana, Kentucky
have read references on their websites saying that they do
not do this, but those intermediaries met.
Speaker 3 (25:04):
This is all making me so glad I have a
fantastic CPA that does all this.
Speaker 2 (25:08):
But go on, Josie, sorry for the interuction.
Speaker 7 (25:11):
Glad you brought up turbo tax and the like. You
are expecting that text. It is not an unexpected text,
and therein is the huge difference.
Speaker 4 (25:23):
Yeah, and yes, I just wanted to make sure that that, yes,
that is an opting. In fact, you will be asked
specifically to use that through that process.
Speaker 7 (25:31):
Right. Another interesting one in the spirit of the season,
ghost tapping. This is cap to pay with your credit card.
You know, that's fast, it's easy, it's contactless. You just
wave your card or your phone in front of the
little machine and you're done. But there's a new scam
(25:51):
making the rounds, and it's called ghost tapping. Ghost tapping
is when scammers use wireless devices to secretly charge your
CAP enabled card or your mobile wallet without ever touching it.
That's a huge threat and now it works through NFC technology,
which is near field communication. That's the same technology that
(26:13):
powers tap to pay. Normally, it only works at close range,
but that's exactly what scammers are counting on.
Speaker 2 (26:21):
Think about this.
Speaker 7 (26:23):
You're in a crowded place, maybe you're in Octoberfest or
in some other festival or a concert, or you go
to a market, you're even on a crowded bus and
somebody bumps into you and suddenly your card has been charged.
Or maybe somebody's going door to door selling candy or
whatever and they insist that you pay with tap to pay,
(26:47):
You tap and you end up with a charge of
hundreds of dollars on your card because they never showed
you the screen before you tapped. They had already programmed
it for some other amount besides the five dollars for
the candy bar. These guys are slick, you know. They
often pretend to be vendors at events or pop upstands,
(27:09):
or they ask you to support some cause but charge
way more than you agreed to, or they might rush
you into tapping your card without showing you the total
amount you're going to pay or giving you a receipt.
To protect yourself from this kind of scam, use the
RFID blocking wallets or sleeves to shield your cards from
(27:29):
this wireless skimming all with check the screen before you
tap to pay. Make sure that the business name is
listed there and the total amount that you are going
to pay is listed there before you tap. Don't use
tap to pay in crowded or unfamiliar places. If you
question this, always insert or swipe your card instead of tapping.
(27:54):
And of course a questions about statements every month. Sorry,
go ahead.
Speaker 4 (27:59):
The instance is where somebody could steal this from me
while I'm you know, standing in a crowd of people
or whatever. Aren't there systems in place where where they
have to where I have to accept something or you know,
because if I'm if I'm at a regular store or
restaurant or whatever, I have to look at it and
and confirm that it's okay. Or but because I thought
the financial institutions behind all this had security in place.
But you're saying there's a way to get around that
(28:21):
for these cameras.
Speaker 7 (28:22):
That is what that is what we have seen that
people are saying that they did not participate at all
in this particular charge. It just appeared on their statement.
Speaker 2 (28:31):
Got it?
Speaker 5 (28:32):
Thank you?
Speaker 2 (28:33):
All right? We're gonna have to leave it there for tonight.
Speaker 3 (28:35):
Joe Cil, thank you so much for these helpful tips,
and we're always so appreciative of you coming on. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk station.
Speaker 4 (28:46):
This is insane and they think it's funny, you know,
the saying my head hurt.
Speaker 2 (28:51):
The mind is a terrible thing to waste around here.
It's absurd. Be careful, idiot, just might lose it at
the straight jacket. I'm going crazy. Go ahead, lose your
mind today.
Speaker 5 (29:08):
I'm a norm injury.
Speaker 2 (29:09):
We'll give it back. You feel like a nut. This
is why I drink fifty five KRC the talk station.
Hey is Brian Thummas was a series of events. The
most important event. Make four eventful days political violence in
this country. More events like this in any event they
Trump shut down. Check in. We'll check it out following
(29:30):
these events every day. Fifty five KRC, the talk station.
Speaker 3 (29:39):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsller along with Brian James. Do you have
a financial question you'd like for us to answer. There's
a red button you can click while you're listening to
the show right on the iHeart app, simply record your
question and it will come straight to us. All right, Brian,
this one's for you. Bob and Elaine and Madeira say,
we're in our late fifties and still saving aggressively, but
(30:02):
we worry we're not investing efficiently. How do you know
if your tax drag is eating too much of your return? Brian, Yeah,
so let's talk about tax drag. Right.
Speaker 4 (30:11):
A lot of people kind of don't don't really pay
attention to where all this stuff appears and what's happening
with their ten ninety nine's and that with it.
Speaker 5 (30:17):
What is a ten ninety nine exactly?
Speaker 4 (30:19):
Well, every year, a lot of your investments are spitting
out activity. Whether you're doing anything or not, this is happening.
So you're going to get a ten ninety one, by
the way, referring to investments outside of iras, not four
oh one k's and what have you. If you have
something in a joint account of trust or an individual
non retirement account, then this is happening to you. Dividends, interest,
capital gains, all those things are happening systematically. You may
(30:41):
be reinvesting every one of them. But that means it's
all getting accounted for on your ten ninety nine and
you get in January. That's what's known as tax drag,
meaning it's going to spit out some activity that you
got to write a check to the irs for in April.
That can shave off one percent or more a year
of your performance, and over time that can reduce your
wealth by twenty to twenty five percent, you know, over
a lifetime of investing. So the fix for this is
(31:03):
to get strategic. Ask that location, what type of an
account do I own? What type of investment in? So
if it's something that generates a lot of interest, you
might want to consider using that inside of an IRA.
So this would be bond funds, real estate investment trusts,
four to one K tax sheltered things. And if it's
a more tax efficient index type fund, keep those in
your tax of taxtable accounts like a growth oriented fund
(31:26):
that's going to spit out a lot less activity. Take
a look at those ten ninety nine's and make sure
you understand where it's all coming from. All right, So
let's move on to Tom and Loveland. Tom's company offers
deferred deferred complan, but they're confused by the options. How
do they know if it's worth using or if it
just ties up too much money.
Speaker 3 (31:45):
Well, Tom, you know, let's just define what I think
we're talking about here. Deferred compensation plans in general are
just another opportunity to put money away pre tax, on
top of what you'd normally do in your four oh
one K plan or company retirement plan. So these tend
to be a great thing for people that are high
earners now and expect their tax bracket to be lower,
(32:08):
you know, after they retire. So you sock some money,
additional money away pre tax, it grows tax deferred, and
then when you take the money out, you're hopefully paying
taxes on the gains and the principle at a lower
tax rate.
Speaker 5 (32:21):
So that's how it works.
Speaker 3 (32:22):
I realize these things can get a little bit confusing
because when at the time, you you got to make
two decisions when you sign up for this thing. Number one,
how much of your pay in a percentage basis or
dollar amount do you want to defer, which means not
take in the form of a current paycheck. And then second,
usually up front, you've got to define, all right, when
do I want to pay out and over what installment
(32:44):
period do I want it? So it's important before you
pull the trigger on these things to sit down and
scope out what the you know, the current situation and
your future income needs are before you sign up these things.
For these things, it can be a great planning tool,
but just go into it with your eyes wide open
to make sure that you get the full benefits of
(33:07):
the tax deferral and growth and don't put yourself in
a short term cash pinch. You know, if the payout
scheme isn't matching up with what your income needs are
actually going to be, either now or in the future.
Hope that helps, all right, Kevin and Lebanon says, We've
got several rental properties that have appreciated a lot. Would
(33:27):
a ten thirty one exchange help us consolidate or upgrade
without paying a fortune in taxes?
Speaker 5 (33:34):
Brian, Yeah, so these are fun topics.
Speaker 4 (33:36):
I love being able to do these tax planning type
discussions because nowadays that's that's kind of our job, I think,
because you know, it's just things have got more complicated.
There are opportunities buried in the text code if you
know how it works. So what is a ten thirty
one exchange. Bob, Well, this is if you if you
own an investment property and you decide you want to
get rid of it, and you want to take the
proceeds and reinvest them in, you know, another piece of property.
(33:58):
You can do this without paying capital gains. You can
basically roll the gains forward into another like kind property.
Now there are rules here, of course, Bob. It seems
like we've talked frequently about that this question comes up,
and it always comes with the question of, well, we
sold a property a couple months ago, now we want
to do a ten thirty one exchange.
Speaker 5 (34:14):
I can't do that. You do have some time, though,
you do have.
Speaker 4 (34:18):
Forty five days after selling your original property. You've got
forty five days to identify, not close, identify a replacement property.
Then once you've identified it, you have to close on
it with one hundred and eighty days. So there is
a little bit of timing of flexibility there. Because real
estate transactions don't happen quickly. You do have to have
a qualified intermediary. This isn't something that you just go
(34:39):
do and tell the irs you did it and trust
that they're gonna help you do it. You've got to
find an organization that will help you keep the records.
But that is a way to use that ten thirty
one exchange. Lots of moving parts to that, Kevin, But
I'm glad you're asking the question at the right time,
which is before you sell. The answer to your question
is yes, a ten thirty one exchange can help you
consolidate upgrade without paying not only a fortune to use
(35:02):
your question, but no taxes at all. If it's the
right situation, just get that timing right, find it within
forty five days, close on it within one hundred and
eighty days, and best.
Speaker 5 (35:10):
Of luck with that. Hey, colls back and tell us
how that went.
Speaker 4 (35:12):
Dan in Westchester says they're looking to retire early, but
most of their stuff is in retirement accounts, So, Bob,
they want to know how to create an income stream
before fifty nine and a half. With that, don't they
have to pay penalties or something?
Speaker 2 (35:23):
Generally? Yes, there, here's a couple of opportunities here, Dan.
Speaker 3 (35:27):
One is called the rule of fifty five, and this
applies to folks that leave their job if you retire
in the calendar year in which you turn.
Speaker 5 (35:36):
Fifty five or later.
Speaker 3 (35:37):
Yeah, and This is again taking money from your employer
sponsored plan, the employer you are currently with. So we're
talking about your four to one K or four or
three B. You can pull money out of there without
paying the ten percent penalty tax early. You know, you
could take it out before fifty nine and a half
without penalty, but it's got to be in the year
you turn fifty five or later. Again, this only applies
(36:02):
to the employer that you're about to leave.
Speaker 2 (36:05):
This does not apply to old four one.
Speaker 3 (36:07):
Ks or iras, all right, So that's one option to
keep in mind.
Speaker 5 (36:12):
Now there is an exception for iras.
Speaker 3 (36:14):
And now we're getting into something called substantially equal payments
and you can sign up and it's based on a
government formula think.
Speaker 2 (36:24):
About r MD payout payment.
Speaker 3 (36:26):
The key is once you start these payments, you have
to continue them and they have to stay the same
for the later of five years or until you turn
age fifty nine and a half. So there's two opportunities
to work with there. I think it's important to sit down,
you know, with an advisor and a CPA or both
(36:47):
and just sketch this out to make sure that you
have a good financial plan in place.
Speaker 5 (36:52):
But these are two good you know.
Speaker 3 (36:54):
Exceptions to that penalty tax rule that we find often
work for people. Now here's one caveat here's one danger
thing not to do. What you can't do is you
can't roll your current four oh one k into an
IRA and then think you're going to take a big
lump sum out and not pay a penalty tax. So
(37:15):
you got to figure out what you need to take
out of that four oh one K plan. First, take
the withdrawal, pay the income taxes and not the penalty tax.
And then if you decide to do a rollover later,
that's when you want to pull the trigger. All right,
hope this helps. Coming up next, Brian has his bottom line.
H Brian, what are you talking about tonight?
Speaker 4 (37:37):
We're gonna talk a little bit about tax planning opportunities
here in twenty twenty five tis the season, Bob, It's
Q four.
Speaker 5 (37:43):
They can tax planning, can't wait.
Speaker 3 (37:45):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the talk station.
Speaker 2 (37:50):
It's all in the everywhere.
Speaker 7 (37:53):
I want to thank you guys.
Speaker 2 (37:54):
You're like my radio neighbors.
Speaker 7 (37:56):
You guys are making me think twice about saying like.
Speaker 2 (37:58):
A sound then, and I love it.
Speaker 4 (38:02):
Thanks for giving us Democrats this it boys.
Speaker 2 (38:05):
Listening to the station, I feel like I matter here.
Speaker 4 (38:08):
We all matter this.
Speaker 2 (38:09):
In I've been tuning in since the election. It's gonna
have a full talk about it here, I get heard.
I'm fifty five KRC the talk station.
Speaker 7 (38:20):
Here.
Speaker 2 (38:21):
If you're looking for a financial partner.
Speaker 4 (38:22):
I am so worried that next month I have to
choose between groceries for my kids or gas for my car.
Speaker 2 (38:27):
Talk about it here, fifty five KRC the talk station.
Speaker 3 (38:34):
You're listening to Simply Money, presented by all Worth Financial
movespont Sellar along with Brian James. And it's time for
Brian's bottom line and Brian is going to share some
always helpful year end tax planning tips as we are
well into the fourth quarter.
Speaker 2 (38:49):
Lay it onnest, Brian.
Speaker 4 (38:51):
Tis the season to be jolly and do some tax planning.
It's kind of the last round up here in Q four.
So one of the big changes, of course that came
to be was the obed BBBBBB Act that solidified a
lot of the twenty seventeen tax cuts, but some of
them are still going away. So let's talk about those
items that they're still going to expire in twenty twenty six,
(39:12):
because twenty twenty five, this year could be your last chance.
So here's the things you should be thinking about. Think
about roth conversions. If you're retired, semi retired, or you're
sitting in a lower bracket than you're gonna have later,
then taking advantage of those lower brackets like we were
talking about earlier. Don't spike the football on a zero
percent tax here, you're missing opportunities. Use those to convert
traditional IRA dollars. Also, look at long term capital gains.
(39:33):
If you've got something that's sitting at a really high gain,
you got low cost basis, that low, low tax year
is the time to liquidate some of that. You might
even get away with a zero percent tax rate or
maybe only a fifteen percent tax rate. Married couples under
ninety four thousand dollars can pay a bunch of nothing.
So if you're charitably inclined, this is a great year
to bunch your donations. If you know you're going to
give a certain amount of money to charities over the
(39:55):
you know every year for the next five years will
lump all those together, and this can help you in
the op posite situation. If you've got a high tax here,
use a donor advised fund to front load those donations
while giving away to those charities that you're supporting anyway.
New rinkle here. The twenty twenty five law added a
small senior bonus deduction for those sixty five and older.
Not huge, but every dollar counts while you're trying to
(40:17):
stay in a lower bracket or avoid Medicare ERMA charges.
And of course, don't let the tax whale tail wag
the dog. If you're realizing gains or converting too much,
that can push you into higher brackets and cost you
these irma premiums too. That's why it's kind of smart
to make sure you're talking to your CPA as well
as your financial planner, make sure the income, taxes and
the investments are all pulling in the same direction.
Speaker 3 (40:38):
Brian, you mentioned spiking the football, so I have to ask,
will Joe Flacco be able to come in here and
lead the Cincinnati Bengals to their first ever Super Bowl title?
Speaker 2 (40:48):
Will that happen? In twenty twenty five?
Speaker 5 (40:50):
This was such a good show until you sucked us
right into that.
Speaker 4 (40:53):
We're going to end with that now yet, let's let's yes,
let's let's say that that Joe Flacco can support this
team and get us maybe to five time for Joe
Burrow to come back right before Christmas and we'll have
a Christmas miracle.
Speaker 3 (41:04):
Let's go with that book it. I love it all right,
thanks for listening. You've been listening to Simply Money, presented
by All Word Financial on fifty five KRC, the Talk station.
Speaker 1 (41:14):
Mark Levin, you know, America, we spend an awful lot
of time in this country responding to an unreality created
by the people who hate America, created by people who
get sucked into the narratives that are pushed out there
each and every day. And they're posting, and they're posting,
and they're posting, and they'll move on to the next thing,
and the next thing and the next thing.
Speaker 2 (41:34):
That's what the media enemy do. Mark Levin tonight at
ten oh six on fifty five KRC, the talk station.
This is the Bloomber
You got a lot today, do you I do got
to put up these Halloween decorations?
Speaker 2 (00:04):
Will It's time to do it, dude? The rest I
do need to know on fifty five KRC the talk station.
Speaker 3 (00:16):
Tonight, The underestimated power of an emergency fund, how to
protect your stock gains from the taxman, and more. You're
listening to Simply Money, presented my all Worth Financial on
Bob Sponseller along with Brian James. We've talked for some
time now about the fact that the labor market seems
to be softening, and it appears, Brian, that real people
(00:38):
are starting to worry about it. According from a recent
survey done by the New York Federal Reserve, walk us
through some.
Speaker 4 (00:45):
Of these numbers, more fascinating survey numbers. We love listening
to radio shows to talk about survey numbers, don't we, Bob.
They're mostly garbage, but please continue. But there's somebody's opinions.
So here's what we're talking about today. So the New
York Federal Reserve did a survey and one of the
results that came from it was that Americans have a
perceived likelihood of losing their job in the next twelve months.
(01:06):
Up to fifteen percent. So Americans are also see greater
odds about forty percent that the US unemployment rate is
going to be higher one year from now. So, in
other words, numbers numbers numbers, but the sentiment is that
jobs are going to be a little bit more scarce
than they've been. That projection is up two percentage points
since August, so that's kind of gaining a little bit
of steam. That said, our spending habits don't quite match
(01:28):
with this supposed perception that we're all going to lose
our jobs soon.
Speaker 5 (01:32):
Because this is where we look at consumer sentiment.
Speaker 4 (01:35):
This is the University of Michigan's sentiment index has yet
to rebound to the levels before the pandemic. But at
the same time spending has been up. Consumers have been
relatively confident and still living their lives the way they live,
and I can verify that dismain interactions with my clients.
Everybody's griping about the price of eggs, but nobody's eating
less eggs.
Speaker 3 (01:52):
And the parking lots of all our favorite restaurants every
night are filled.
Speaker 4 (01:56):
The capacity still bother going out on a Friday or
Saturday without a reservation.
Speaker 3 (02:00):
Brian I'm going to use an analogy that may or
may may not make sense here, and this harkens back
to my high school baseball coaching days when kids used
to come to me before the season and talk about
how great their year is going to be, how much
harder they're gonna work, and they're gonna do this, and
they're going to do that. They're telling me everything that
they're going to do and how their behavior is going
(02:22):
to change, and then that same kid happens to be
the one that doesn't show up for team lifting at
five point thirty in the morning because he's tired. In
other words, I always pay attention to what people actually do,
not what they say they're going to do.
Speaker 5 (02:38):
That's my reaction to this survey.
Speaker 4 (02:40):
Yeah, and I kind of have the same So I've
been in a lot of different marketing groups and things
over my thirty years doing this, and it's interesting even
the companies that do the research and.
Speaker 5 (02:49):
Take the survey, as we'll say that.
Speaker 4 (02:51):
You know, oftentimes what people do doesn't match how they
check a form on a box. So anyway, but regardless,
so a little bit of a disparity course between the
perception of the economy and our spending behavior.
Speaker 2 (03:03):
You know.
Speaker 5 (03:03):
The suggestion is is that while we're worried about the.
Speaker 4 (03:05):
Future, current household, household finances are doing pretty well. And again,
Bob and I can both tell you that anyway from
our interactions we've got with our clients. Yes, individual families
have their specific situations that sometimes things are out of
their control. But as we're sitting here right now, things
look pretty positive and we don't see anything on the
horizon that should cause for any significant alarm other than
(03:25):
there are always storm clouds somewhere. Don't let it get
you too much of us wet.
Speaker 3 (03:30):
All right, Switching gears here to the emergency fund topic,
and I do think this is an important one. I
and I do resonate with a couple of these studies
that came out. Bank Rates twenty twenty five Emergency Savings
report indicates that only a quarter of adults have enough
savings to cover six months worth of expenses. And let's
(03:51):
take this a step further. Vanguard researchers surveyed more than
twelve thousand, four hundred Vanguard investors, so this is a
pretty good survey. They did that back in July of
twenty twenty four to understand the impact of emergency savings
on their overall financial wellbeing. I love this study. This
is actually helpful. This is things that people should be doing.
(04:14):
And their survey found that emergency savings are the strongest
predictor of financial wellbeing. The impact of just having at
least two thousand dollars in emergency savings is remarkable, meaning
that those that have set aside this amount report over
a twenty percent increase in overall financial wellbeing. And if
(04:36):
you increase that emergency fund to three to six months
of expenses, you can tackle on another thirteen percent of
well being. This is the basic blocking and tackling good
financial planning. Irrespective of somebody's net worth, that really does
show an indicator of how they're going to actually behave
and treat their investments. Not selling a down market, not
(04:59):
pay I make all the things we talk about all
the time that people should not do.
Speaker 5 (05:04):
So it's really important.
Speaker 3 (05:06):
It sounds elementary and boring, but this basic emergency fund
savings vehicle is really important to have in place.
Speaker 4 (05:14):
Yeah, and I want to share a quick story here
because I was thinking about this the other day for
whatever reason, and maybe this happens to you. But my
client's adult children tend to children tend to come in waves.
We certainly help them out like we help out our clients,
but I just have a bunch of them right now.
And the younger ones always come with this notion of, hey,
I want to start throwing money in the market so
I can turn it into a big pile. And they
(05:34):
never come with the notion and I was there too,
They never come with a notion of how do we
build a foundation?
Speaker 2 (05:38):
Right?
Speaker 4 (05:38):
If I'm going to build a house, I'm not just
throwing bricks directly on the dirt. I need a foundation
that's going to support everything. So my quick story here
is this is me. So about fifteen years ago, I
got a little bored with working directly with clients and
just wanted to make a change, and I took it too,
sort of an executive consultative role with the bank, educating
advisors how to do planning and those kinds of things.
And that lasted about that maybe three years before I
(06:00):
realized that my true calling was sitting down at tables,
looking people in the eye on a one on one basis,
making them feel comfortable with their finances and helping them
understand the opportunities in front of them, so I went
back to client facing role that involved a huge pay cut.
I was okay with it because I had that emergency fund.
Speaker 2 (06:16):
You know.
Speaker 4 (06:16):
So our producer Jason puts this show together and he
asked us to share stories.
Speaker 5 (06:19):
Well, here's mine.
Speaker 2 (06:19):
This was all me.
Speaker 4 (06:20):
We survived on that while I was building up a
practice again for the second time in my career, and
I've been there ever since.
Speaker 5 (06:26):
But we could not have done that.
Speaker 4 (06:28):
I could not have made that career pivot without that
emergency fund to be able to bridge the gap between
what the what life was costing and what the income
was until I got that business back up off the ground.
So I can speak from the heart to say that, yes,
don't start with throwing money in the market and creating
a giant pile, start with that foundation.
Speaker 2 (06:46):
Brian, that's a great story.
Speaker 3 (06:47):
I can share another one from my own family involving
my oldest son and his wife. They're coming up on
being married for about three years and they you know, these.
Speaker 5 (06:56):
These are the two kids.
Speaker 3 (06:57):
They're both oldest children, so they tend to be followers,
follow the rules. Their process oriented very disciplined, and they
actually came to me after they got married and said, hey,
will you help us sit down and build a financial plan.
And their first question is, you know, can we afford
to buy a house? And I told them, I said,
don't even think about looking at a house until you've
(07:18):
got three to six months worth of money put away
in an emergency emergency fund. And they followed the advice.
They first looked at me, like, are you nuts? And
I said no, I'm dead serious. Don't go buy a house.
Do you got this? Fast forward? They go buy a house.
My oldest son is a college baseball coach, so that
can tend to lead to some transient moves. They bought
(07:42):
a house in Loveland, and they got it into a
good price and lo and behold. About sixty days later,
he took a different coaching job down in Nashville, so
they needed to sell the house. They were able to
sell it in a day and make good money on it,
so you know, they were blessed in that way. But
had that not worked out, and had they had to
(08:02):
sit on that house for a while while it sells,
they would have had to dip into that emergency fund.
So this stuff does work when you put it in
practice and you eliminate having to make these snap moves
based on a short term financial emergency that can really
derail your long term financial emergency.
Speaker 5 (08:20):
Fund is oil in the engine. Don't ignore it.
Speaker 4 (08:23):
It is the most important component to your planet allows
you to do all the other bigger things.
Speaker 3 (08:27):
Wonderful analogy you're listening to Simply Money, presented by all
Worth Financial on Bob Sponseller along with Brian James. All right,
let's talk about gold as an opportunity. The price of
gold just hit four thousand dollars an ounce for the
first time, and we don't want to get into market
timing buying and selling gold. But we all know gold
(08:47):
is known as the age old hedge against inflation. But
we also know that history shows that the stock market
is the one asset that beats inflation over a long
period of time. And if you want to have gold
as part of your portfolio, by all means, do it,
but do it responsibly and have a good, you know,
small allocation your in your portfolio. But today we want
(09:09):
to talk about, you know, flipping this around a little bit.
Do you have any gold laying around your house that
you never use in the form of jewelry? Now, might
be a good time to, you know, scoop some of
that stuff up and generate some cash from it.
Speaker 4 (09:24):
Bran, Yeah, I'm sure I don't. Somehow, I don't see
commercials much anymore. But I remember the last time we
went through this cycle, we had all those companies saying,
stick your gold in a ziplock bag and send it
to this address and we'll tell you people are doing it.
So I'm sure that's out there somehow.
Speaker 2 (09:38):
I think Dave Hatter would hate that advice.
Speaker 4 (09:40):
Yeah, that's not the most secure, you know, an opaque
ziplock bag. Right, we don't expose our our actual assets here,
but no, this is this is a real if you've
got something you inherited and you and you don't plan
on keeping it.
Speaker 5 (09:52):
Right, We're not talking about center mental value here.
Speaker 4 (09:54):
We're talking about something that if you've always thought, you
know what, maybe we should get rid of that we
don't really need it doesn't have that much value to it.
Else the time go figure it out. Find a reputable dealer.
You can find jewelers out there who can help you
value things those kinds of things. But now is the
time to take that action. And if you've been sitting
on a lot of people just own gold and don't
know why exactly. I got We've got all this gold
(10:15):
in the safe. Grandpa gave something to us.
Speaker 5 (10:17):
We are great.
Speaker 4 (10:17):
What does it mean to you? Does it do you
any good in the safe? Is it helping you with
your finances? If it's sentimental, that's a whole different conversation.
But if you truly treat it as an asset, and
we have people that tell us, yes, this is part
of my networth, that's fantastic. But if you're never gonna
liquidate it, it doesn't do you a darn bit of good.
I'm not going to count it as part of your
cash flow.
Speaker 3 (10:35):
I had that same conversation with my wife's uncle at
a family wedding we were at over the weekend. He
came up and asked me about gold, and that was
my first question. I'm like, why, because depending on depending
on your why, you get completely different answers. And you know,
he talked about it going up in value, and I said, hey,
(10:55):
he talked about these armageddon scenarios if the Internet goes down,
And I'll tell you what, if all that stuff goes
you know to you know what in a handbasket, and
you're sitting there with a gold bar, and we truly
are in a situation where we got to find a
means to buy milk and bread and meat. And you know, Firewood,
I got news for you. I said, somebody will just
(11:18):
come up and beat you over the head and take
your gold bar. You can't break it up into any
amount of denominations to barter with it. So again, your
why is really important. We're getting off the topic here,
but you think you made a good point. I My
next advice was find a good reputable dealer if you
want to talk about buying small denomination coins or what
(11:41):
have you. It's better than having your money in a mattress.
It's better than having your money, if it's long term money,
then having it sit in and checking account or savings
account earning nothing. But go, like to you what you said,
Go talk to your network of people, get referred to
a reputable coin dealer.
Speaker 2 (11:58):
Do not walk into a pond.
Speaker 3 (12:00):
Shop, you know, or the quickest web put it in
a bag, lastic bag, you know. Go go work with
somebody that that you can trust, that can actually help
you transaction gold in denominations that makes sense for your
overall plan.
Speaker 2 (12:14):
And again to your point, know your why in the
first place.
Speaker 3 (12:19):
Coming up next, how to keep taxes from gobbling up
the gains from your next stock sale. You're listening to
Simply Money presented about all Worth Financial on fifty five KRC,
the talk station.
Speaker 2 (12:32):
From the UCLL.
Speaker 4 (12:33):
Here's what's happening at Texas National Guard troops you deployed
to the Windy City.
Speaker 2 (12:36):
Listen to what I'm about to say.
Speaker 3 (12:37):
James Comy has pleaded not guilty to both of his
federal charges.
Speaker 1 (12:40):
Checking in each our and this shutdown Israel and them
off closer.
Speaker 2 (12:44):
To a piece agram. In fifty five KRC, the talk station.
Speaker 6 (12:48):
All Worth Financial a registered investment advisory firm. Any ideas
presented during this program are not intended to provide specific
financial advice. You should consult your own financial advisor, tax consultant,
or a state planning attorney to conduct your own due diligence.
Speaker 3 (13:07):
You're listening to Simply Money, presented by all Worth Financial,
umbob sponsller along with Brian James. If you can't listen
to Simply Money live every night, subscribe and get our
daily podcasts. Just search Simply Money on the iHeart app
or wherever you find your podcast straight ahead of six
forty three, What to do with too much cash in
your late fifties, smart moves for a deferred comp payout,
(13:30):
and whether to keep or cash out of those rental
properties before retirement. All Right, the last couple of years
have been fantastic if you've had money in the stock market.
But here's the catch. When you need to or want
to go sell some of this stuff, the irs is
waiting with their hands out, waiting for their cut. And
(13:50):
those games aren't just free money, you owe taxes on them.
So tonight we're going to delve into a very helpful topic,
in my opinion, walk through how these stock gains are taxed,
why your cost basis matters, and some simple strategies to
manage you know, those stock sales to keep your tax
bill as low as legally possible. Brian, let's walk through it.
(14:13):
Some good stuff here. Yeah, so I think there's ways
to keep this simple.
Speaker 4 (14:17):
So there's there's several types of tax right today, we're
going to talk about capital gains versus ordinary income, and
it's all the difference between those is really just timing.
The magic time between that is one year. So if
I buy something and I sell it with it. You know,
this could be a stock, it could be a collectible something,
it could be a lot of different things. But and
I sell it within one year of having bought it
in the first place, that gain is going to be
(14:39):
taxes ordinary income. Right, So you can kind of, in
a round about way, you can kind of banish from
your thought the notion of long term capital gains tax
If you're holding something under year, it's just income, and
that is taxed exactly the same as your salary, exactly
the same as interest you're getting on your CDs and
you and your checking account. If you have something like that,
it just gets lumped into your ordinary income. So anything
under a year taxes ordinary income, whatever your bracket is. Now,
(15:01):
when you get to a point where you've held something
longer than a year, now it's a long term gain.
That's all long term means. It means one year, you're
either three hundred and sixty four days or three hundred
and sixty five days. That's all there is to it. Now,
you get preferential capital gain rates. Typically, and I'm going
to circle back to this, sometimes you can be in
a zero percent rate or fifteen percent, which is where
where we most commonly see people land or twenty percent for.
Speaker 5 (15:21):
Our higher income earners.
Speaker 4 (15:23):
Now, I know I got somebody's attention out there with
that zero percent capital gain situation. So if here's that situation.
If you are married filing jointly, this is twenty twenty five.
If you are married filing jointly, you can have taxical
income up to ninety four thousand dollars and pay zero
percent on your capital gains. Now, remember this is where
it gets confusing. That gain itself is going to get
included in your income. So you can't take a million
(15:44):
dollar gain and claim you only had ninety four thousand
dollars worth income.
Speaker 5 (15:47):
That's not going to work.
Speaker 4 (15:48):
But if you truly have a situation where you've got
very little income, maybe you're spending down savings and you
just don't have any income, no so security, no work,
no nothing, then you can generate a ninety thousand dollars
capital gain believe it or not, and not pay taxes
on it. For a single that's forty seven thousand, roughly.
Speaker 3 (16:03):
Half and Brian, A lot of people don't know you
can do this. I mean, I'm shocked at how many
people haven't looked at it.
Speaker 5 (16:09):
It's not being talked about.
Speaker 3 (16:11):
It's not being mentioned a lot of times, you know,
unless you're sitting down and doing some proactive tax planning.
So you know, when we do that with folks, we
can often find times, you know, for good reason, diversify
the portfolio, raise some needed cash, and sometimes do this
at zero percent tax rates. It's beautiful, all right, let's
shift gears into you know, it sounds, it sounds, you know,
(16:33):
elementary long term versus short term, but it's not that simple.
You do have to calculate and know what your cost
basis is. Most most broke all brokerage firms now are
are doing that calculation automatically every time you buy and
sell something. For folks that have owned mutual funds for
ten years, twenty years, fifty years, you know, those calculations
(16:55):
weren't made automatically by the mutual fund companies. So you
got to you got to have somebody come in there
and help you if you don't want to do it yourself,
to figure out what your cost basis is. And more specifically,
every time you buy anything, you create what's called a
new lot, a new tax lot. That all that word
lot means is you know, it's another batch of stock
(17:18):
or mutual funds that got bought, either by buying it
directly or reinvesting dividends and capital gains. And it's very
important to delineate which lot you are selling when you
go to liquidate some stocks.
Speaker 2 (17:31):
I know you want to say something.
Speaker 4 (17:32):
Yeah, because a lot of people get confused by this.
We talk about cost basis. Most people their brains go
to that original purchase. I wrote a check one time
you bought Apple when it was a tiny little company. Yes,
that's true, but if you reinvested the dividends and I'm
realizing Apple is not a great example because they have
a big dividends for that long but regardless, let's change
that to P and G. If you bought P and
G one time thirty years ago and you told it
to reinvest the dividends, which is what most people do,
(17:55):
then each and every one of those little, tiny purchases
every quarter for the last thirty years is its own lot.
As Bob just said, you have to add up all
of those to figure out your cost bases. It is
not the original purchase that you put into it. You
don't want to mess up that calculation because you're going
to pay way too much in capital gains tax.
Speaker 5 (18:11):
You're not liable for that, but that's where all that comes.
Speaker 3 (18:14):
From, all right, And brokerage ferns often have a standard
default method like FIFHO, which stands for first in, first out.
If you don't direct otherwise, it's going to sell the
first shares that you bought first, and as Brian's just
pointed out, those might end up being the lowest cost
base of shares that you own, which trigger the highest
(18:35):
capital gains tax. You have a choice in the matter
if you can calculate and know what your tax lot,
your cost basis is per tax lot. And this is
where getting some good fiduciary advice from a good advisor
CPA or a combination that two can help you with there,
because when we put the cell order in, we can
(18:57):
and should be very specific about which lot we're selling,
and that can make a huge difference in the tax bill,
you know, when it's all said and done.
Speaker 4 (19:06):
Yeah, and I want to kind of circle back and
connect two points that we've made here in the last
couple of minutes. You just said that that first in,
first out well will force you to use probably the
lowest cost based stef that. That's absolutely correct, of course,
but that is not necessarily a bad thing if we
combine that with the notion that, hey, sometimes I'm in
literally a zero percent practice. If you celebrate the fact
that you landed in a zero percent bracket for a
(19:28):
tax year, then you missed an opportunity that is the
year to sell those really low cost base to shares
and pay the lowest taxes you're ever going to pay.
So don't ever spike the football and say we're not
going to pay any taxes this year. That's not a
good idea. Take advantage of the things do roth conversion,
sell those low cost basis assets, and take advantage of
the fact that now you're not in a zero percent bracket.
You might only be in a ten percent bracket. Still
(19:49):
pretty awesome, and it's going to protect you from a
thirty five percent bracket later in life.
Speaker 5 (19:54):
That's an excellent point, bro, Thank you, Bob.
Speaker 2 (19:56):
How smart? I'm being serious. You are smart.
Speaker 3 (19:58):
You know sometimes you want want to have the large
capital gain when you can have it happen in a
zero percent tax bracket.
Speaker 2 (20:06):
Give it to me all day long. Excellent point. All right,
here's the all worth advice.
Speaker 3 (20:10):
The market may be doing the heavy lifting, but you
do the fine tuning. Pick witch shares to sell, use
your losses smartly, and don't give the irs any more
money than you legally have to. All right, scammers are
getting smarter and your money is the target. The Better
Business Bureau joins us next with the latest tricks criminals
(20:32):
are using and how to spot them before it's too late.
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC the Talk Station.
Speaker 2 (20:41):
A series of events the most important events make four
eventful days.
Speaker 5 (20:46):
Political violence in this country.
Speaker 2 (20:48):
Events like this.
Speaker 1 (20:49):
In any event they Trump shutdown, check in, We'll check
it out.
Speaker 2 (20:52):
Following these events every day fifty five KRC the Talk Station.
More than a few of our patients have talked to
me about I heart radio station.
Speaker 3 (21:04):
You're listening to Simply Money? Is that a buy all
Worth Financial? I'm Bob sponseller along with Brian James, joined
tonight by our longtime guest and we're always thrilled to
have her on the show. Joe seal Rlick, President of
our Better Business Bureau, Joe Sial, thank you for making
time for us tonight and Joe Seal. It seems like
these scammers and criminals out there are just always reinventing
(21:28):
new ways to try to steal our money, and you
always seem to be one step ahead of them, which
is great. Fill us in on their latest little trip
tricks and schemes and how we can avoid getting you know,
our money stolen.
Speaker 7 (21:43):
Well, I've got a couple for you, and a couple
of them might be new to some of our listeners.
You know, if you have filed for a text extension
for the year, the deadline to file your return is
coming up pretty soon. It's going to be October fifteenth.
But like always, scammers are on time of the headlines,
and a lot of people who filed for an extension
(22:04):
then did file their taxes. Many of those guys are
still waiting for your refunds, and scammers, of course are
standing by to try and take advantage of that. Now,
while this scam is targeting the people who are waiting
for a refund, it's going out to a lot more.
You know that cast a wide net mentality. I filed
my refund by April fifth, or for my refund by
(22:25):
April fifteenth, but I got this scam so be on
the alert for a text that looks like it's from
your state's taxation department saying your tax refund has been approved,
but you have to quote confirm your payment info to
get your refund. Of course, there's going to be a
link that they want you to click on which takes
(22:46):
you to a website which looks really official, but it's
designed to steal your personal and banking information. Now, the
text you may get will even tell you to reply
why you've seen that? On texts, salt and reopen the
text to quote activate the link. There is no such
thing as activating a link. Once a link is there,
(23:08):
it's a link. This is just a trick to get
you to engage with the scammers. The text also might
say if you don't respond by a certain date, you're
going to forfeit your refund under your state's revised code.
These guys are counting on your confusion around tax deadlines
and especially your fear of missing out on your refund. Now, remember,
(23:32):
the actual department of taxation, be it the state or
the federal, will never text you asking for banking information,
and that revised code that they're referencing in the text
that's a real code, but it doesn't say anything about
forfeiting your refund. Now, if you fall fit a scam,
you could see your bank account drained, and you are
(23:53):
giving scammers access to all kinds of personal information that
could set you up to be targeted for few your scams. Now,
if you get any communication, text, email letter regarding taxes
and you are confused about that in Ohio, go directly
to tax dot Ohio dot gov or in the case
(24:16):
of the federal go to the IRS dot gov to
check the validity of the communication.
Speaker 4 (24:23):
So okay, So Josie, as you as you're saying this,
this is great information. What's occurring to me is I
sometimes do get texts related to this, and yes a
lot of.
Speaker 5 (24:32):
Them are fishing. But it realized.
Speaker 4 (24:34):
You know, if you use like a tool like TurboTax
or some of these online providers, those intermediaries will send
you a text update. That's something you opt in through
as part of that process. So don't get confused or alarmed.
If you use TurboTax or something similar and you opted
in for that, that service may send you a text
to say that your refund was processed or accepted or whatever.
But so that's legit. It's the ones asking you to
(24:56):
click and do something. All three states Ohio, Indiana, Kentucky
have read references on their websites saying that they do
not do this, but those intermediaries met.
Speaker 3 (25:04):
This is all making me so glad I have a
fantastic CPA that does all this.
Speaker 2 (25:08):
But go on, Josie, sorry for the interuction.
Speaker 7 (25:11):
Glad you brought up turbo tax and the like. You
are expecting that text. It is not an unexpected text,
and therein is the huge difference.
Speaker 4 (25:23):
Yeah, and yes, I just wanted to make sure that that, yes,
that is an opting. In fact, you will be asked
specifically to use that through that process.
Speaker 7 (25:31):
Right. Another interesting one in the spirit of the season,
ghost tapping. This is cap to pay with your credit card.
You know, that's fast, it's easy, it's contactless. You just
wave your card or your phone in front of the
little machine and you're done. But there's a new scam
(25:51):
making the rounds, and it's called ghost tapping. Ghost tapping
is when scammers use wireless devices to secretly charge your
CAP enabled card or your mobile wallet without ever touching it.
That's a huge threat and now it works through NFC technology,
which is near field communication. That's the same technology that
(26:13):
powers tap to pay. Normally, it only works at close range,
but that's exactly what scammers are counting on.
Speaker 2 (26:21):
Think about this.
Speaker 7 (26:23):
You're in a crowded place, maybe you're in Octoberfest or
in some other festival or a concert, or you go
to a market, you're even on a crowded bus and
somebody bumps into you and suddenly your card has been charged.
Or maybe somebody's going door to door selling candy or
whatever and they insist that you pay with tap to pay,
(26:47):
You tap and you end up with a charge of
hundreds of dollars on your card because they never showed
you the screen before you tapped. They had already programmed
it for some other amount besides the five dollars for
the candy bar. These guys are slick, you know. They
often pretend to be vendors at events or pop upstands,
(27:09):
or they ask you to support some cause but charge
way more than you agreed to, or they might rush
you into tapping your card without showing you the total
amount you're going to pay or giving you a receipt.
To protect yourself from this kind of scam, use the
RFID blocking wallets or sleeves to shield your cards from
(27:29):
this wireless skimming all with check the screen before you
tap to pay. Make sure that the business name is
listed there and the total amount that you are going
to pay is listed there before you tap. Don't use
tap to pay in crowded or unfamiliar places. If you
question this, always insert or swipe your card instead of tapping.
(27:54):
And of course a questions about statements every month. Sorry,
go ahead.
Speaker 4 (27:59):
The instance is where somebody could steal this from me
while I'm you know, standing in a crowd of people
or whatever. Aren't there systems in place where where they
have to where I have to accept something or you know,
because if I'm if I'm at a regular store or
restaurant or whatever, I have to look at it and
and confirm that it's okay. Or but because I thought
the financial institutions behind all this had security in place.
But you're saying there's a way to get around that
(28:21):
for these cameras.
Speaker 7 (28:22):
That is what that is what we have seen that
people are saying that they did not participate at all
in this particular charge. It just appeared on their statement.
Speaker 2 (28:31):
Got it?
Speaker 5 (28:32):
Thank you?
Speaker 2 (28:33):
All right? We're gonna have to leave it there for tonight.
Speaker 3 (28:35):
Joe Cil, thank you so much for these helpful tips,
and we're always so appreciative of you coming on. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk station.
Speaker 4 (28:46):
This is insane and they think it's funny, you know,
the saying my head hurt.
Speaker 2 (28:51):
The mind is a terrible thing to waste around here.
It's absurd. Be careful, idiot, just might lose it at
the straight jacket. I'm going crazy. Go ahead, lose your
mind today.
Speaker 5 (29:08):
I'm a norm injury.
Speaker 2 (29:09):
We'll give it back. You feel like a nut. This
is why I drink fifty five KRC the talk station.
Hey is Brian Thummas was a series of events. The
most important event. Make four eventful days political violence in
this country. More events like this in any event they
Trump shut down. Check in. We'll check it out following
(29:30):
these events every day. Fifty five KRC, the talk station.
Speaker 3 (29:39):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsller along with Brian James. Do you have
a financial question you'd like for us to answer. There's
a red button you can click while you're listening to
the show right on the iHeart app, simply record your
question and it will come straight to us. All right, Brian,
this one's for you. Bob and Elaine and Madeira say,
we're in our late fifties and still saving aggressively, but
(30:02):
we worry we're not investing efficiently. How do you know
if your tax drag is eating too much of your return? Brian, Yeah,
so let's talk about tax drag. Right.
Speaker 4 (30:11):
A lot of people kind of don't don't really pay
attention to where all this stuff appears and what's happening
with their ten ninety nine's and that with it.
Speaker 5 (30:17):
What is a ten ninety nine exactly?
Speaker 4 (30:19):
Well, every year, a lot of your investments are spitting
out activity. Whether you're doing anything or not, this is happening.
So you're going to get a ten ninety one, by
the way, referring to investments outside of iras, not four
oh one k's and what have you. If you have
something in a joint account of trust or an individual
non retirement account, then this is happening to you. Dividends, interest,
capital gains, all those things are happening systematically. You may
(30:41):
be reinvesting every one of them. But that means it's
all getting accounted for on your ten ninety nine and
you get in January. That's what's known as tax drag,
meaning it's going to spit out some activity that you
got to write a check to the irs for in April.
That can shave off one percent or more a year
of your performance, and over time that can reduce your
wealth by twenty to twenty five percent, you know, over
a lifetime of investing. So the fix for this is
(31:03):
to get strategic. Ask that location, what type of an
account do I own? What type of investment in? So
if it's something that generates a lot of interest, you
might want to consider using that inside of an IRA.
So this would be bond funds, real estate investment trusts,
four to one K tax sheltered things. And if it's
a more tax efficient index type fund, keep those in
your tax of taxtable accounts like a growth oriented fund
(31:26):
that's going to spit out a lot less activity. Take
a look at those ten ninety nine's and make sure
you understand where it's all coming from. All right, So
let's move on to Tom and Loveland. Tom's company offers
deferred deferred complan, but they're confused by the options. How
do they know if it's worth using or if it
just ties up too much money.
Speaker 3 (31:45):
Well, Tom, you know, let's just define what I think
we're talking about here. Deferred compensation plans in general are
just another opportunity to put money away pre tax, on
top of what you'd normally do in your four oh
one K plan or company retirement plan. So these tend
to be a great thing for people that are high
earners now and expect their tax bracket to be lower,
(32:08):
you know, after they retire. So you sock some money,
additional money away pre tax, it grows tax deferred, and
then when you take the money out, you're hopefully paying
taxes on the gains and the principle at a lower
tax rate.
Speaker 5 (32:21):
So that's how it works.
Speaker 3 (32:22):
I realize these things can get a little bit confusing
because when at the time, you you got to make
two decisions when you sign up for this thing. Number one,
how much of your pay in a percentage basis or
dollar amount do you want to defer, which means not
take in the form of a current paycheck. And then second,
usually up front, you've got to define, all right, when
do I want to pay out and over what installment
(32:44):
period do I want it? So it's important before you
pull the trigger on these things to sit down and
scope out what the you know, the current situation and
your future income needs are before you sign up these things.
For these things, it can be a great planning tool,
but just go into it with your eyes wide open
to make sure that you get the full benefits of
(33:07):
the tax deferral and growth and don't put yourself in
a short term cash pinch. You know, if the payout
scheme isn't matching up with what your income needs are
actually going to be, either now or in the future.
Hope that helps, all right, Kevin and Lebanon says, We've
got several rental properties that have appreciated a lot. Would
(33:27):
a ten thirty one exchange help us consolidate or upgrade
without paying a fortune in taxes?
Speaker 5 (33:34):
Brian, Yeah, so these are fun topics.
Speaker 4 (33:36):
I love being able to do these tax planning type
discussions because nowadays that's that's kind of our job, I think,
because you know, it's just things have got more complicated.
There are opportunities buried in the text code if you
know how it works. So what is a ten thirty
one exchange. Bob, Well, this is if you if you
own an investment property and you decide you want to
get rid of it, and you want to take the
proceeds and reinvest them in, you know, another piece of property.
(33:58):
You can do this without paying capital gains. You can
basically roll the gains forward into another like kind property.
Now there are rules here, of course, Bob. It seems
like we've talked frequently about that this question comes up,
and it always comes with the question of, well, we
sold a property a couple months ago, now we want
to do a ten thirty one exchange.
Speaker 5 (34:14):
I can't do that. You do have some time, though,
you do have.
Speaker 4 (34:18):
Forty five days after selling your original property. You've got
forty five days to identify, not close, identify a replacement property.
Then once you've identified it, you have to close on
it with one hundred and eighty days. So there is
a little bit of timing of flexibility there. Because real
estate transactions don't happen quickly. You do have to have
a qualified intermediary. This isn't something that you just go
(34:39):
do and tell the irs you did it and trust
that they're gonna help you do it. You've got to
find an organization that will help you keep the records.
But that is a way to use that ten thirty
one exchange. Lots of moving parts to that, Kevin, But
I'm glad you're asking the question at the right time,
which is before you sell. The answer to your question
is yes, a ten thirty one exchange can help you
consolidate upgrade without paying not only a fortune to use
(35:02):
your question, but no taxes at all. If it's the
right situation, just get that timing right, find it within
forty five days, close on it within one hundred and
eighty days, and best.
Speaker 5 (35:10):
Of luck with that. Hey, colls back and tell us
how that went.
Speaker 4 (35:12):
Dan in Westchester says they're looking to retire early, but
most of their stuff is in retirement accounts, So, Bob,
they want to know how to create an income stream
before fifty nine and a half. With that, don't they
have to pay penalties or something?
Speaker 2 (35:23):
Generally? Yes, there, here's a couple of opportunities here, Dan.
Speaker 3 (35:27):
One is called the rule of fifty five, and this
applies to folks that leave their job if you retire
in the calendar year in which you turn.
Speaker 5 (35:36):
Fifty five or later.
Speaker 3 (35:37):
Yeah, and This is again taking money from your employer
sponsored plan, the employer you are currently with. So we're
talking about your four to one K or four or
three B. You can pull money out of there without
paying the ten percent penalty tax early. You know, you
could take it out before fifty nine and a half
without penalty, but it's got to be in the year
you turn fifty five or later. Again, this only applies
(36:02):
to the employer that you're about to leave.
Speaker 2 (36:05):
This does not apply to old four one.
Speaker 3 (36:07):
Ks or iras, all right, So that's one option to
keep in mind.
Speaker 5 (36:12):
Now there is an exception for iras.
Speaker 3 (36:14):
And now we're getting into something called substantially equal payments
and you can sign up and it's based on a
government formula think.
Speaker 2 (36:24):
About r MD payout payment.
Speaker 3 (36:26):
The key is once you start these payments, you have
to continue them and they have to stay the same
for the later of five years or until you turn
age fifty nine and a half. So there's two opportunities
to work with there. I think it's important to sit down,
you know, with an advisor and a CPA or both
(36:47):
and just sketch this out to make sure that you
have a good financial plan in place.
Speaker 5 (36:52):
But these are two good you know.
Speaker 3 (36:54):
Exceptions to that penalty tax rule that we find often
work for people. Now here's one caveat here's one danger
thing not to do. What you can't do is you
can't roll your current four oh one k into an
IRA and then think you're going to take a big
lump sum out and not pay a penalty tax. So
(37:15):
you got to figure out what you need to take
out of that four oh one K plan. First, take
the withdrawal, pay the income taxes and not the penalty tax.
And then if you decide to do a rollover later,
that's when you want to pull the trigger. All right,
hope this helps. Coming up next, Brian has his bottom line.
H Brian, what are you talking about tonight?
Speaker 4 (37:37):
We're gonna talk a little bit about tax planning opportunities
here in twenty twenty five tis the season, Bob, It's
Q four.
Speaker 5 (37:43):
They can tax planning, can't wait.
Speaker 3 (37:45):
You're listening to Simply Money, presented by all Worth Financial
on fifty five KRC, the talk station.
Speaker 2 (37:50):
It's all in the everywhere.
Speaker 7 (37:53):
I want to thank you guys.
Speaker 2 (37:54):
You're like my radio neighbors.
Speaker 7 (37:56):
You guys are making me think twice about saying like.
Speaker 2 (37:58):
A sound then, and I love it.
Speaker 4 (38:02):
Thanks for giving us Democrats this it boys.
Speaker 2 (38:05):
Listening to the station, I feel like I matter here.
Speaker 4 (38:08):
We all matter this.
Speaker 2 (38:09):
In I've been tuning in since the election. It's gonna
have a full talk about it here, I get heard.
I'm fifty five KRC the talk station.
Speaker 7 (38:20):
Here.
Speaker 2 (38:21):
If you're looking for a financial partner.
Speaker 4 (38:22):
I am so worried that next month I have to
choose between groceries for my kids or gas for my car.
Speaker 2 (38:27):
Talk about it here, fifty five KRC the talk station.
Speaker 3 (38:34):
You're listening to Simply Money, presented by all Worth Financial
movespont Sellar along with Brian James. And it's time for
Brian's bottom line and Brian is going to share some
always helpful year end tax planning tips as we are
well into the fourth quarter.
Speaker 2 (38:49):
Lay it onnest, Brian.
Speaker 4 (38:51):
Tis the season to be jolly and do some tax planning.
It's kind of the last round up here in Q four.
So one of the big changes, of course that came
to be was the obed BBBBBB Act that solidified a
lot of the twenty seventeen tax cuts, but some of
them are still going away. So let's talk about those
items that they're still going to expire in twenty twenty six,
(39:12):
because twenty twenty five, this year could be your last chance.
So here's the things you should be thinking about. Think
about roth conversions. If you're retired, semi retired, or you're
sitting in a lower bracket than you're gonna have later,
then taking advantage of those lower brackets like we were
talking about earlier. Don't spike the football on a zero
percent tax here, you're missing opportunities. Use those to convert
traditional IRA dollars. Also, look at long term capital gains.
(39:33):
If you've got something that's sitting at a really high gain,
you got low cost basis, that low, low tax year
is the time to liquidate some of that. You might
even get away with a zero percent tax rate or
maybe only a fifteen percent tax rate. Married couples under
ninety four thousand dollars can pay a bunch of nothing.
So if you're charitably inclined, this is a great year
to bunch your donations. If you know you're going to
give a certain amount of money to charities over the
(39:55):
you know every year for the next five years will
lump all those together, and this can help you in
the op posite situation. If you've got a high tax here,
use a donor advised fund to front load those donations
while giving away to those charities that you're supporting anyway.
New rinkle here. The twenty twenty five law added a
small senior bonus deduction for those sixty five and older.
Not huge, but every dollar counts while you're trying to
(40:17):
stay in a lower bracket or avoid Medicare ERMA charges.
And of course, don't let the tax whale tail wag
the dog. If you're realizing gains or converting too much,
that can push you into higher brackets and cost you
these irma premiums too. That's why it's kind of smart
to make sure you're talking to your CPA as well
as your financial planner, make sure the income, taxes and
the investments are all pulling in the same direction.
Speaker 3 (40:38):
Brian, you mentioned spiking the football, so I have to ask,
will Joe Flacco be able to come in here and
lead the Cincinnati Bengals to their first ever Super Bowl title?
Speaker 2 (40:48):
Will that happen? In twenty twenty five?
Speaker 5 (40:50):
This was such a good show until you sucked us
right into that.
Speaker 4 (40:53):
We're going to end with that now yet, let's let's yes,
let's let's say that that Joe Flacco can support this
team and get us maybe to five time for Joe
Burrow to come back right before Christmas and we'll have
a Christmas miracle.
Speaker 3 (41:04):
Let's go with that book it. I love it all right,
thanks for listening. You've been listening to Simply Money, presented
by All Word Financial on fifty five KRC, the Talk station.
Speaker 1 (41:14):
Mark Levin, you know, America, we spend an awful lot
of time in this country responding to an unreality created
by the people who hate America, created by people who
get sucked into the narratives that are pushed out there
each and every day. And they're posting, and they're posting,
and they're posting, and they'll move on to the next thing,
and the next thing and the next thing.
Speaker 2 (41:34):
That's what the media enemy do. Mark Levin tonight at
ten oh six on fifty five KRC, the talk station.
This is the Bloomber
Simply Money News
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