October 16, 2025 • 41 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian break down what Fed Chair Powell’s latest comments mean for rates, inflation, and your money. They also dig into the 2026 tax brackets, smart Roth conversion moves, and the truth about “tax-free” Social Security.Plus, the guys answer listener questions on trusts, risk, and estate updates. Finally, Brian wraps with key year-end tax strategies to protect your wealth.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Is happening.
Speaker 2 (00:00):
It's time to end the failed experiment of open borders.
Speaker 1 (00:03):
Your countries are going to hell. Something in our country,
Charlie Kirk, I forgive.
Speaker 3 (00:08):
Them Antifa across this.
Speaker 4 (00:10):
Country would be Trump assess and Ryan Ruth guilty on
all five charges.
Speaker 1 (00:13):
Something in our world.
Speaker 5 (00:14):
Cato countries should shoot down Russian earcrafh Ricky in all
day they enter their ear space.
Speaker 3 (00:20):
It's always something yes I do.
Speaker 4 (00:22):
It's a very important moment.
Speaker 1 (00:24):
Fifty five KRC the talk station. Tonight, the Federal Reserve
Chair offers clues on where interest rates are headed, and
we'll show you how to take advantage of the twenty
twenty six tax brackets and we answer your questions. You're
(00:46):
listening to Simply Money, presented by all Worth Financial on
Bob Spondseller along with Brian James Well. FED Chair Jerome
Powell spoke to economists for the first time since the
government shut down, and of course people were all ears
wanting to know how the Fed is supposed to navigate
interesrates without having some of the necessary data that they
(01:07):
all you know, because after all, they are data dependent. Brian,
how are they going to make heads or tails of
the economy without having government data. Walk us through what
FED chair pal had to say yesterday. I found it
to be absolutely riveting.
Speaker 6 (01:24):
I'm sensing just a bit of sarcasm this morning there, Bob.
Speaker 1 (01:28):
I don't know.
Speaker 6 (01:28):
I have a sixth sense for these things. But I
don't think you met what you just said. So let's
talk about what got Bob so focused and riveted on
federal government governmental announcements.
Speaker 1 (01:38):
So on the shutdown and the data is right.
Speaker 6 (01:40):
So the big thing is we've shut down a lot
of the pipelines that we used to get information from
under the auspices of the information's no good anyway, so
therefore we must not need it at all, or we
get it from somewhere else. So any read in my mind,
I know your opinionated on that particular topic, but so
I ed reserved there. Jerome Powell did say that they've
got a good read on the economy despite the shutdown.
(02:03):
Labor market weakness is remains his biggest concern as the
key risk to the economy, and that kind of goes
without saying that's always out there lurking in the background.
If we don't have people who have jobs and we
don't have money moving in a circle and so forth.
Now that's not an immediate concern, but it's basically he's
saying it's the biggest thing on his radar screen. And
he did acknowledge that they don't have all the data
that they used to Some of the important government data
(02:25):
is simply not available anymore because of those decisions that
were made. But he did say the FED does have
access to a wide variety of both public and private data,
as well as a nationwide network of contacts who gather
their own information, and so he's using those to assess
economic conditions. Didn't really commit on the next interest rate cut,
which would be maybe at a late October meeting if
(02:45):
it happens at all, but saying that the Central Bank
is going to decide at the meeting what to do.
So that was a headline that was not a headline
at all. And also he made a big point of
saying that the FED has not predecided the outcome for
that October twenty eight, twenty nine meeting.
Speaker 1 (02:59):
Yeah, I mean I read this is chair Pal basically
said exactly almost verb beata in what our own chief
investment officer Andy Stout here at Allworth was talking about
on Monday. You know, there's concern about the labor market,
you know, all joking aside, there is concern about layoffs
and slow hiring. FED chair pal did say that there's
(03:21):
mounting evidence now that suggests both layoffs and hiring remain low.
But as Andy said, you know on Monday, the FED
has always had ways to go out and gather a
lot of this data by actually talking to companies and
talking to the private sector. In other words, they don't
need to gather this stuff, you know, via fax machine,
(03:44):
through the Bureau of Labor Statistics, which you know, we've
come to find out the data is often old news
if they get it at all. So anyway, we won't
bang home that point. But I do think that they
are watching the labor market. Let's face the hiring is slowing,
and you know, there's arguments on both sides of all
(04:06):
this that hey, you know, no kidding, hiring is slowing.
Cut interest rates make capital cheaper for companies and they'll
start hiring folks. But who knows anyway. FED chair pal
did say that on inflation, he said, quote goods prices
price increases are primarily terrif related broader rather than broader
(04:31):
inflationary you know pressures, which means and he also said
most longer term expectations are getting more aligned with our
two percent inflation inflation goal. I read that to say, Brian,
and I'd love your perspective on this. If not for tariffs,
we'd be closer to two percent inflation. I don't know
(04:52):
if that's true or not, but that's that's the story
that the Fed is going with at least as of today.
Speaker 6 (04:57):
I think we need to give everything more time to
adjust to our new world of less data and more
shooting from the hip with regard to these governmental decisions.
I don't like the idea, frankly, that that's that the
impact of these decisions is not going to be as
verifiable since we have just decided not to you know,
not to track some of these things anymore. And I
think there I think there was a lot of value
in that, Frankly, Uh, and I think we're going to
(05:19):
miss that over the over the short term here we
may we may figure out another way to do it.
Speaker 2 (05:23):
So Uh.
Speaker 6 (05:24):
The other points he brought up on the balance sheet,
so the Federal Reserve could be hitting a point in
coming months where it's gonna stop shrinking the balance sheet.
So what this is doing, what we're referring to here
is the FED has slowly but steadily been reducing the
balance sheet by about two point two trillion dollars basically
just dumping assets.
Speaker 1 (05:41):
Uh. And this is this is a quantitative tightening policy.
Speaker 2 (05:45):
UH.
Speaker 6 (05:45):
Wall Street pays attention to this because it does take
liquidity out of the markets. If there isn't as much
supply there, then that does that does have an impact.
But these are tools that the Federal Reserve uses to
achieve the goals that it has with regard to an
unemployment and the interest.
Speaker 1 (06:00):
Rate policies and so forth. Well, when we generally talk
about the Fed's balance sheet and quantitative tightening or easying,
I mean we're talking about the FED stepping in and
buying treasury securities, you know, buying government debt. And you know,
I think I think it's good that they're trimming their
balance sheet, but that means that the bond market, the
(06:20):
US bond market is going to have to stand on
its own two feet without government intervention. And I think
we'll get accurate pricing on on treasury bonds. You know,
the ten year treasury has been coming down and that's
a good thing. So it remains to be seen. And
we still you know, look, we still have to get
the president of the United States and you know, the
(06:42):
leadership of China in a room together and figure out
this you know, tit for tat, you know, tariff back
and forth. That's that's really what's going to move the
needle here in the short term. And who knows if
they're gonna meet, what's gonna be talked about. I mean,
right now, it's just social media, you know, posturing by
both parties. We've seen this story before. They'll come up
(07:03):
with something, or they'll just continue to kick the can
down the road a little bit longer.
Speaker 6 (07:08):
So, uh, hey, baba, I want to I want to
touch back on something because I feel like you and
I just both both just barfed up a bunch of
economic mumbo jumbo that doesn't really mean much to the
average person who doesn't think about this stuff all day.
So I want to go back to what what does
it mean when the FED is buying government debt? Well,
what that means is that is that the Federal Reserve
is literally purchasing treasury bonds and bills, which which are
(07:28):
those are IOUs that that it issued in the past, right,
so they're just buying it's buying its own debt back.
We borrow by selling treasuries to the general public. When
the Fed, when the government buys those treasuries back, it
is putting new money back into the financial system and
reducing its own debt.
Speaker 1 (07:43):
So think of it like this.
Speaker 6 (07:44):
The US Treasury is borrowing money to pay for government spending.
The Federal Reserve creates money electronically to buy that debt
from banks and investors. Now those sellers have cash instead
of bonds. That cash finds its way back into the economy.
So it's a trick that they we used to reduce
government debt and put that cash back into circulation to
kind of goose.
Speaker 1 (08:02):
Things a little bit. So hopefully, hopefully that explains a
little of what we just know. No, that's good, excellent clarification.
All right, let's move on to earnings, you know apps,
you know, after all, earnings is the mother's milk that
moves the stock market up and down. So far, Brian,
the news has been positive in the banking industry. You know,
most of the earnings that have come out so far
(08:23):
have been from the big banks, you know, reporting earlier
this week, yesterday, and there's more coming out today. You know,
walk us through some of the big bank results for
the third quarter.
Speaker 6 (08:34):
Yeah, banks are doing okay. Don't lose sleep over the
success of the banking industry. So so start off with
City Group. City Group beat Wall Street estimates for earnings
per share. Goldman Sachs profit for the third quarter was
up thirty seven percent from a year earlier.
Speaker 1 (08:47):
You know, it's good to see the kids make it right.
Speaker 6 (08:49):
These these tiny, little scrappy little financial institutions doing okay
here quarter to quarter. Wells Fargo everybody's favorite bank to
beat up whenever they play games with their their their
sales processes, their earnings per share beat analyst expectations. And
JP Morgan Chase, which is kind of the nine hundred
pound guerrilla in the room. That's the largest US bank
(09:09):
by assets, by the way, Well, JP Morgan's third quarter
net income was up about twelve percent from a year
ago to about fourteen point four billion dollars. And another
another big one, Black Rocks Funds, attracted about two hundred
and five billion dollars worth of net flows in the
third quarter, and that was the analyst forecast for that
was just under one hundred and seventy two billion dollars,
(09:31):
so they beat that by by a good chunk there.
Speaker 1 (09:34):
With two hundred and five billion. So anyway, these are
good stories. We're just seeing that.
Speaker 6 (09:38):
This is what chief investment Officer Andy Stout of all
Worth told us just a few days ago. We're just
seeing the numbers coming from the results that we were expecting.
So Wall Street analysts estimate that S and P five
hundred earnings are going to grow about seven point four
percent here in the third quarter, and that so far
has held up, and we've had about three quarters of
companies typically beat their earnings estimates, so we're not going
(09:59):
to be surprised to see those those posting growth numbers
about ten percent or even more.
Speaker 1 (10:04):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James Brian shifting gears
a little bit here again the number of four to
one k investors, a large number of them apparently hit
the brakes last month on stocks, dumping some stock positions
and moving into cash and bonds. And the key question
(10:27):
tonight is why there could be a bunch of reasons
behind that according to new data from All All Light
Solutions never heard of them. They track more than two million,
four to one k participants. There was a shift in September.
Investors moved heavily out of equities and into more conservative options.
(10:48):
Of the fourteen of the twenty one trading days in September,
net trading activity was moving away from equities. This marked
the highest level of investor movements and March. Why do
you think that's happened, Brian.
Speaker 6 (11:02):
Well, because a bunch of people woke up one day
and decided that they were expert market timers all of
a sudden.
Speaker 1 (11:07):
Look, this is not a good idea.
Speaker 6 (11:10):
You know, I would really want wonder as to the
age of some of these people. Right, if you're about
to retire, and you know you've got some and we
talk all the time, especially lately, you know, if you've
got expenses coming up that you need to take distributions on,
you know that's coming, then yeah, it's a good idea
to take some risk off the table.
Speaker 1 (11:25):
Prepare for that. But if these people who are.
Speaker 6 (11:27):
Doing this are twenty thirty years old, they're going to
regret it if they ever figure out that they made
a mistake. Because they're doing this at a time where
the market's where the market has had a bit of
a pullback from it's high, not very much, but just
just a little bit. We're just we're not on the
upward escalator anymore. We came down just a little bit.
But so in other words, people are doing this having
missed that peak, and they're going to miss the upside too,
(11:48):
because the market will move upward.
Speaker 1 (11:51):
Before the headlines go up.
Speaker 6 (11:53):
It'll bounce, We'll see a lot of head fakes, but
eventually one of those will be for real and it
will move back up. And at some point the role
coaster is going to be halfway up that first hill,
and people are gonna be gonna want to be running
up the steps to jump back on it. It's not
a good way to go. If you're a market timer,
please please get.
Speaker 1 (12:08):
It out of your system. It's not gonna end well
for you or or maybe Brian, some of these people
have been listening to this show where you and I
have been talking about for weeks. Now, you know, after
a good run up in the markets, now is a
good time to look at your asset allocation and make
sure you get things back in alignment. Maybe people are
(12:29):
doing the responsible blocking and tackling that we talk about
all the time. Let's hope. So for sure, Let's hope
it's more reallocation rather than market timing. Hope in one hand.
Blah blah blah. Coming up next, we'll break down the
new tax brackets for twenty twenty six and their potential
(12:50):
impact on your pocketbook. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC, the talk
station What's happening? Time for the shutdown to end? Closing
up Democrat programs.
Speaker 6 (13:05):
Bodies and Gaza Lamas continues to have the gun.
Speaker 1 (13:08):
We will diso the day's news honoring Charlie's.
Speaker 6 (13:11):
Metal a fifty five KRC talkstation.
Speaker 4 (13:16):
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 1 (13:35):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller 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 podcasts. Straight ahead of
six forty three. We're helping listeners with retirement balance, trust
(13:56):
advice although we're not attorneys, and old state plan help
and more sounds like in a state planning segment. Brian,
you better jump on chat GPT so we can figure
out what we're doing here. All right, let's talk about
something that doesn't make great dinner conversation unless you're married
to Andy Stout, but it absolutely affects your bottom line.
(14:18):
And that's the irs. Just released the new twenty twenty
six federal tax brackets. Brian, some more riveting information out
for people to digest what has changed as we head
into twenty twenty six. Because radio is.
Speaker 6 (14:33):
The best way to look at numbers on pieces of paper.
I'm just gonna read all of this verbatim, and we'll
consider ourselves stewards of good tax information. Now, we're not
gonna glaze your eyes or your ears over. We're not
gonna read all this stuff. Here's the big picture. There's
not a whole lot of surprise. Basically, the numbers are
inching up to account for inflation a little bit. That's
really all just means a little more of your income
(14:53):
gets taxed at slightly higher thresholds. For most people, this
is gonna help offset inflation some but for help. But
for folks with higher income or big retirement distributions, it's
kind of still worth paying attention to. So let's jump
into some of the details that should get your attention.
Especially this time of year. Tis the season to talk
about roth IRA conversions, because most people should have a
(15:14):
pretty good idea. We're about eighty percent of the way
through the year, so should have a pretty good idea
what the tax year is going to wind up looking like,
and you'll need these remaining couple months to decide if
you're going to do this now. For those of you
who may not have heard of what I'm talking about,
we're referring to moving money from a traditional pre tax
IRA to a WROTH meaning I want to pay taxes
now so that from here forward for the rest of
(15:35):
my life, I'll pay no capital gains, no income taxes
on this money. So this benefits people who are at
lower brackets now then they'll be in the future, meaning
I want tax free distributions so that in the future
when I'm in a higher bracket, I can take advantage
of that of tax free money. This is mainly people
who were early retirees, early in retirement, who were relatively
(15:57):
higher earners in their working years, maybe people in the
twenty four to thirty seven percent brackets, you know, the
i'd say, the three hundred thousand and upcrowd. When those
folks retired, they could drop down to twenty two percent
or lower. But if they've got significant IRA savings, which
it's usually the cases we see here. You know, at
these tables doing financial planning every day, required minimum distributions
kick indidate's seventy three or seventy five. That in turn
(16:21):
is going to force more taxes, more income taxes on
Social Security income, and it's going to could likely trigger
Medicare IERMA search charges. Meeting your premiums go up just
a little bit. So if they convert now is the
whole point you'll pay less tax on that money than
in the future.
Speaker 1 (16:35):
Brian, I want to call out a couple of examples
of actual meetings I've had with clients to talk about
this strategy over the last couple of weeks. Because the
the I found some interesting numbers when we actually dove
into the tax software and looked at the impact of
potentially doing some Wrath conversions. Here's what I mean. There
is a band of people at a certain income band
(16:57):
where even though you're in a lower tax bracket by
doing the Wroth conversion, now there are phase outs, you know,
based on your income on where you have to pay
higher Social Security taxes. And with this new you know,
social Security itemized deduction under the one big beautiful bill.
(17:18):
You know, this is one thing where you know, I
will criticize the President and the administration a little bit
on this one. They came out and said, hey, social
Security is tax free. Well it's really not tax free
for everyone. And here's what I mean. You got to
be careful if you start pulling money out thinking that
you because you might be in a lower marginal income
(17:40):
tax bracket. But if you pull too much money forward,
you could pay higher Social Security taxes and lose out
on some of that six thousand dollars for single people,
twelve thousand dollars for married folks itemized deduction for Social Security.
You got to watch that when you actually look at
(18:00):
the numbers. And I've seen that with my own eyes
here in a couple of meetings here over the last
couple of weeks, and when we actually ran the numbers,
we still did a little bit of a roth conversion,
but not quite as much as we thought we would
when we dove into the whole exercise, because you know, again,
because of these higher taxes or losses of the Social
(18:22):
Security deduction, it didn't give us as much benefit as
we thought we were going to get when we dove in.
I hope that makes sense, Brian. I know you run
numbers like this all day every day too. Are you
seeing some of the same things with your clients and
your review meetings? Yeah, for sure.
Speaker 6 (18:37):
And as you mentioned, I'm not a huge fan of
this administration's a willingness to run fast and loose with
the facts. Yes, they let the tweets run all over
the place that Social Security is now tax free. That
was never even on the table. So all there is
is a new deduction up to six thousand dollars as
you mentioned per individual or twelve thousand for married couples.
Now that's from only only in existence for twenty five
(18:59):
to two twenty eight, and that happens whether you itemize
or take the standard deduction. And here's here's the important part, though, Bob,
it phases out completely if you're modified adjusted gross income
is over seventy five thousand dollars per single or one
hundred and fifty for a joint filer.
Speaker 1 (19:13):
So we've got a brief period.
Speaker 6 (19:14):
Of time and a pretty tiny window of people who
are actually really gonna benefit from this, And yet they
let the let the announcement go out there that Social
Security is now tax free, and people took a hook
line and sacre. That stuff Absolutely makes me mad as
an American voter, because we just we have to make decision.
I don't get to do financial planning for people based
on stuff I want to be true. It has to
be based on stuff that is true. Otherwise a plan
(19:36):
doesn't work. So just be careful. You know what you
believe and what you're how you're making your decisions. Largely,
the taxation of Social Security has not changed. Most people
are going to pay taxes on eighty five percent of
those benefits. You know, some people will benefit from that
that new deduction in the right income range in for
the next couple of years, But just assume you're going
to be paying income taxes on social Security for at
(19:58):
least the foreseeable future.
Speaker 1 (20:00):
Yeah. I think the point I'm just trying to drive
home here is you do need to sit down with
your fiducial advisor and your CPA and actually run these
numbers before you start pulling the trigger on things. There
are a bunch of people that are going to benefit
from that tax legislation, But when you start factoring in
some of these Wroth conversions and other strategies that we
(20:21):
work on for i'll say higher income folks, the benefits
go away pretty quickly. And to your point, Brian, it
would have been nice if that would have been explained
a little bit clear on the front end. All right,
here's the all Worth advice. You don't have to be
wealthy to use the tax code to your advantage, but
you have to plan like you are, and planning is
(20:44):
the operative word here. Run the numbers before you just
pull the trigger on some things coming up next, How
to actually prepare your kids for a future where AI
changes everything about work. You're listening to Simply Money, presented
by all Worth Financial and fifty five KRC. The talks
The Days of Relaxing in the Drawing Room by the
radio set are long gone. These days, we're taking it
(21:07):
to go.
Speaker 6 (21:10):
The iHeartRadio powered by fifty five KRC dot com.
Speaker 5 (21:15):
If you look at the RC an iHeartRadio station, you're.
Speaker 1 (21:22):
Listening to Simply Money, presented by all Worth Financial. I'm
Bob Sponseller along with Brian James, joined tonight by our
career expert Julie Bauch. And Julie thanks as always for
joining us tonight. And you've got a pretty important topic
to cover. Real interested in your fosts, and the topic is,
let's face it, giving career advice to kids has never
(21:43):
been more difficult. Walk us through what's going on out
there in the real world with respect to helping our
kids get gainfully employed.
Speaker 5 (21:53):
No. I had to laugh when I saw that title
because my first thought was, as if they listened anyway,
my kids, I know what I'm doing, and my kids
don't listen. One of them does, one of them doesn't.
Speaker 1 (22:03):
But yeah, it's it's and this morning.
Speaker 5 (22:09):
So that the back in the day, it was it
was very easy to say go to college, something great
will be waiting for you. It's the path, it's the
firm path to success and to having the life you want.
And that is completely smashed at this point. And so
now as parents have kids in high school, kids thinking
(22:32):
about what sort of post high school education do I want,
be it trade school or just something post high school,
which pretty much everyone needs, we're at a loss as
to how to be helpful in that conversation because that
path has completely been smashed. Whether it is just gigantic debt,
(22:53):
a job market disconnect between what your your kids want
to do and what's available, just lack of job search skills.
So it's everything has changed when it comes to this area.
But I think it's an opportunity because what is going
to allow us to do is allow our kids to
(23:15):
be more involved in the conversation. And the challenge here
is going to be as parents believing that they know themselves,
understanding that we may have this dream. If they're really
great with their hands, it might be the Boomer or
gen X response might be, oh great, you could be
(23:35):
a mechanical engineer. And I think what we've got to
say as an example in that case is or you
could be a technician, you could be an hvac you
can own an HVAC company, you could be an HVAC
repair person. You could be in auto repair. You could,
you know, So there's to not just pigeonhole your kids
into something that feels like a path that felt safe
(23:59):
to us. Is going to be really critical because you
shouldn't be giving advice that worked decades ago or even
a decade ago to today because it's entirely different and so,
you know, it's I think the first thing in this
in this is to recognize that the advice that we
(24:20):
got that worked for us and worked for many others
isn't necessarily as relevant anymore. It's not that it's irrelevant,
but it's not as relevant. The kids have more options
than they used to and it's exciting, but it can
also be overwhelming. So I think our role as a
parent can be exposed them to as many opportunities, conversations,
(24:40):
and places and people as possible and help them start
to discern what sounds interesting, what they might want to
learn more about, and then explore all the various education
paths and experience paths to get there, because it's not
it's not a one and done anymore that these those
days are gone.
Speaker 6 (24:59):
Hey, Julie, So one of the topics that I wanted
to hear from you on, and that's great. I appreciate
that update. But with regard to AI, so that's everywhere,
and I kind of feel like, yeah, you can identify some.
Speaker 1 (25:11):
Jobs they clearly could be done by AI right now.
Speaker 6 (25:14):
But I have a feeling that that label is getting
slapped on a lot of jobs where you know, maybe
parents are kind of prematurely discouraging their kids.
Speaker 1 (25:22):
Do you see that happening. Do you find yourself, you.
Speaker 6 (25:24):
Know, a position where you've got to say, no, hold on,
there are still paths to go do this for a
living without AI being factor, or yeah, tell me about that.
Speaker 5 (25:30):
Yeah. So here's what I think is true. When we
hear the phrase all these jobs are going to be
replaced by AI, I think it's more. I think it's
more true to say almost every job or every job
will be affected in some way by AI, and it
might just affect the way you do the job. It
might not take the job, but it might affect the
way you do the job. So when you look at
(25:51):
what are the things that we know to be true
as we look forward everyone entering the job market. In
the job market, it has to have a comfort level
with technology, with learning technology. They have to have really
strong people skills, soft skills listening, communicating, presenting, influencing, working across,
(26:16):
working with customers. They have to have those what we
call soft skills. Now, really those saft skills are becoming
the most important. And so as you look at how
do you prepare your son or daughter for what's next.
The three buckets I would focus on is technology. Now
they're digital natives, but you are not. Everybody is as
(26:38):
comfortable as everybody else. But are they getting exposed to
the different ways that technology help us work and do
and live our lives better? And the second is really,
you know, the soft skills, the communicating, getting along with people.
You can be brilliant, but if you're difficult to work with,
you know you're not going to have the career you want.
And the third is really an openness to learning, to
(27:00):
taking feedback, to getting excited about what else can I learn?
What else can I do? Those are the kind of
people and really that applies to us of all ages.
The companies are really looking for anything that smacks up
I've always done it this way, no matter how old
you are, is going to you know, is really going
to limit I would say, your opportunities for growth.
Speaker 1 (27:22):
Julie. When I listen to you talk here, I think,
you know, I agree with you. I think the whole
paradigm here for the last five, ten, fifteen, twenty years
has been this specialization into certain areas. And what I
mean by that is we tell our kids to, you know,
get a STEM degree. Well you know you mentioned technology.
What can tend to happen is people bury themselves behind
(27:43):
a computer screen and just work with numbers all day
and they have zero people skills. They've never interacted with
a customer, They've never had to critically think and engage
in God forbid, a disagreement with another human being, and
how to resolve that. That kind of is not going
to get solved by AI. You got to get out
there and mix it up in the world. I mean, shoot,
(28:05):
even standing behind a cash register at McDonald's for a
couple of years when you're in high school, you learn
incredible skills that are transferable to any job moving forward.
I think we've lost sight of that in society today.
Speaker 5 (28:21):
We have and I just you know it's we have aired.
We have moved over to the side of I want
my kids to take as many AP classes as possible. Yes,
and then we send them off to a prestigious college
and say, Okay, they're good now, No they're not. And
I think we see the numbers of how young people
are really struggling. They're struggling because they don't know how
(28:42):
to navigate this world right now, and it is very challenging.
It's easy for us as boomers to say toughen up,
but it's bigger than that. And so what anything you
can do to expose your kids to difficult conversations. Don't
order their food for them, don't call their teachers, don't
make them step out and step into uncomfortable situations, and
(29:03):
don't get in there with a rag and try to
clean up messages. That's the kind of stuff that employers
are really struggling with you. You might be making yourself
feel better in the moment, but you're really hurting your
child's chances for career success.
Speaker 1 (29:16):
All right, good stuff as always, Julie, thanks again for
joining us. You're listening to Simply Money, presented by all
Worth Financial on fifty five KRC, the talk station. Hiks,
Ryan Thomas, Lee, Mark Levin.
Speaker 2 (29:28):
We Americans, we patrids are irrational people, irreasonable people. The
people who know good from either right from wrong. We
also know hustlers and Marxists and fascists in Islamist who
endanger our country every damn day. We're destroying our culture
into civil society, who're breeding a youth that hates America
and embraces the wrong thing.
Speaker 6 (29:47):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station.
Speaker 1 (29:57):
You're listening to Simply Money, presented by all Worth Financial
on bo sponsorer 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. Cynthia and
Mason leads us off tonight. Brian She says, our portfolio
(30:18):
has done well, but we haven't updated our risk profile
in years. How do you know when it's time to
adjust your mix? Good topic to talk about. Yeah, I
like this question.
Speaker 6 (30:30):
So when I started in this industry, there was a
rule of thumb. As our old friend Ed Fink used
to say, rules of thumb are rules of dumb.
Speaker 1 (30:38):
And the rule of thumb.
Speaker 6 (30:38):
Back then was your age in bonds that was just
the greatest balanced portfolio ever. That that's how you could
kind of set it and forget it. While I'm sitting
here at fifty one and I'm darn glad that I
don't have half my portfolio in bonds because of a
rule of thumb from thirty years ago, which is a
lifetime and several economic eras ago. So now, Cynthia, I
think it has everything to do with with how you'll
(30:59):
react to the up and ups and downs of the markets.
I have lots of clients who are I don't know
how old you are, but I have call on clients
who may very well be older than you that are
still completely one hundred percent stocks because we've talked about it,
we've done their financial plan, and the portion of that
we of the portfolio that we've got in stocks has
nothing to do with generating income for them. Their income
is covered from maybe just social security or socicurity plus
(31:22):
pension or some other business assets they've got out there,
and that means that the pile of money that is
their nest egg can still be aggressive. And if they're
okay with the headlines and they they have.
Speaker 1 (31:32):
One hundred percent, they have one hundred percent of their
emergency fund in crypto too, right bright of course, Well
that's where we start. I mean I figured that was assumed. Yep.
Speaker 6 (31:41):
We've got everybody in a place where if the if
the foundation of the plan is successful and you've got
the needs covered, then some people say, you know what,
I just want to grow it. It's going to sit here,
util it goes to my kids. So I'd like to
be aggressive and continue to grow it. So there isn't
a I would say that there's not an exact time
of life to adjust. That mixt be driven by your plan.
If your needs are covered elsewhere, then maybe you don't
(32:03):
have to adjust that mix. It's not again, let's not
go by rules of thumb. Let's build specific plans for
specific situations. So I hope that helps their Cynthia Paul
and Milford Bob. Paul says they've built most of their
worth and retirement accounts and he's wondering if there's any
smart ways out there to create some more tax diversification
before they hit that RMD age of US seventy three
or seventy five. Don't know when Paul was born, but
(32:24):
it'll be one of those two for him.
Speaker 2 (32:27):
All right.
Speaker 1 (32:27):
Well, Paul, we just covered some of this in the
prior segment today talking about WROTH conversions. That's one strategy.
Another strategy that you might consider, and I know Brian
likes this strategy and uses it a lot, is you know,
start to build that WROTH bucket. Now, you know, if
you are still working and still contributing to retirement accounts,
flip some of those savings over to the WROTH bucket
(32:49):
and create that second bucket of assets from which you
can take income during your retirement years. And the other
thing is, once you've tapped out all of your retire
hirement account savings and you've got some discretionary income left
to save, put that in a non IRA, just taxable
brokerage account. And again you're just creating buckets from which
(33:10):
you can draw money and play the tax bracket game.
Here wants it's time to convert this into actual spending
during retirement years, because you don't want to just let
these rm ds get out of whack. You know, for
reasons we talk about all the time. It could end
up causing you to pay higher Medicare premiums, It could
(33:30):
bump you into a higher tax bracket. So there's a
couple of thoughts to consider. Sit down and work with
somebody to help you run some scenarios on how to
make this the most tax efficient situation as possible. All Right,
Tom in Westchester says, we've got several trusts and accounts
spread across many different institutions. How do we simplify this
(33:52):
entire structure without losing the benefits?
Speaker 6 (33:55):
Brian, So, yeah, I mean, I guess the first question
I'd have for you, Tom, is what is the benefit
of you having your accounts spread across several institutions? Is
that is that? Was that a purposeful decision? You know,
a lot some people believe that that's part of diversification.
Just have some different brains working on my money, And
that's understandable. It's not the worst idea in the world,
but it does literally put you in this situation. You're
gonna have lots of you know, each institution has to
(34:16):
have its own account accounts for you, owned by the
entities you need. So you mentioned trusts and all these
different types of accounts where you're gonna have that set
of ownership for every institution. So I would look under
the hood for what these institutions are doing for you.
And if if you've duplicated a lot of the of
what if they're kind of doing the same thing, which
in today's day and age, they're probably not far off.
(34:37):
There aren't magical solutions out there for financial investment management
that don't exist anywhere else. Despite what these various institutions
might really really want you to believe, everybody still is
stuck in the same stocks and bonds market, within the
same investment world.
Speaker 1 (34:50):
So you might find there's a lot of duplication already.
Speaker 6 (34:52):
If that is the case, then it might be okay
to simply pick the one that serves you the best,
that you have the strongest relationship, and consolidate all those assis.
Speaker 1 (35:00):
It's into one.
Speaker 6 (35:00):
The important thing is that you've got the ownership structure,
the taxation structure. It sounds like that you need. Now
you're just literally, to use your words, you're just trying
to simplify. So just be sure you are actually benefiting
from the fact that you've got multiple institutions in the
mix there. If you don't, if you don't feel like
you're benefiting, then yeah, pick a good one and consolidate.
Speaker 1 (35:19):
Mark and Green Hills.
Speaker 6 (35:20):
Bob Mark says they have an estate plan, but it
was written when their kids were little, and now that
those kids are growing and on their own, they've got
one that's good, pretty good with money, in the.
Speaker 1 (35:28):
Other one maybe not so much.
Speaker 6 (35:29):
So how do they update things without creating any resentment
between the two? What are some steps they can take
to handle that kind of situation?
Speaker 1 (35:36):
Well, Mark, first of all, it's always great to talk
to a fellow pioneer. Go Greenhills Pioneers. In reference to
your question, green Hills means Johnny's toys to me, that's well,
and hey, God blessed Johnny's toys in the green Hills pool.
How about that? All right? Hey, to Mark's question, you know,
(35:58):
it's important that you reckongnize this, you know, and you're
getting on top of it, first of all, and I
would say you don't. You don't have to treat the
kids unequally just because one's good with money and the
others not. You don't have to treat them unequally to
help them and set them up so they can responsibly
handle their estate once they inherit it. Here's what I mean.
(36:20):
If one of the kids, you know, or you're worried
that they're just not gonna be good with this money.
They might blow it, they might make some big mistakes.
This would be a great opportunity to put that child's
inheritance in a trust. Sit down with a good attorney,
a good financial advisor, talk through all the pros and
cons of that and construct a strategy where the assets
(36:41):
could be protected for that child but they still have
access to them. And you know that tends to work
out pretty well in those kind of situations. I hope
that helps. Coming up next, Brian has his bottom line
and he's got some prudent advice here to do some good,
proactive fourth order tax planning. You're listening to Simply Money,
(37:02):
is that to buy all Worth Financial on fifty five
KRC the talk station.
Speaker 3 (37:07):
In order to live your dream doesn't always involve.
Speaker 1 (37:09):
A pay cut, invest your time.
Speaker 3 (37:11):
Yes, sometimes it involves a pay cut to get moving
and then move.
Speaker 1 (37:15):
Up and invest in your future.
Speaker 3 (37:17):
But I would want a path to make more than
I made, not less than I made. Dave Ramsey, There's
a lot of people need help in this world. I
want you to get clear. I want you to spend
some time very carefully going through what are your talents,
what are your passions for your skills. You know what
is it you value?
Speaker 4 (37:33):
Week Days at seven on fifty five KRZ, the talk
station ed that is all us we believe home.
Speaker 5 (37:40):
I'm so worried that next month I have to choose
between groceries for my kids or gas for my car.
Speaker 1 (37:44):
Talk about it here fifty five krs the talk station
you're listening to simply money. Is that to buy all
Worth Financial? I'm Bob Sponseller along with Brian James, and
tonight Brian shares some good fourth quarter tax planning thoughts.
What do you have for us tonight, Brian, Well, it's October.
Speaker 6 (38:06):
It's time for pumpkin spice lattes and that pumpkin beer
that shows up at all the bars everywhere. And it's
also prime tax strategy season, Bob, especially if you're somebody
with a significant portfolio or business interest that kind of thing.
The wealthy don't just file their taxes in April and
look away. They design them in the fall to dictate
what it looks like in the spring. So here's the
kind of things that we talk about here. So in
(38:28):
Q four you want to be looking for things harvesting
losses and potentially gains with intention. If you've got some
positions in your portfolio that lost value this year, well
that's not the end of the world. We want everything
to gain. We like paying capital gains taxes because it
means we had capital gains to begin with. However, life
doesn't work that way all the time. We lose money
from time to time. The silver lining is you get
a tax benefit, so you can liquidate some of those
(38:50):
positions incur the loss, got to stay out of it
for thirty days, don't fall into the wash sale rules,
and you can either take that deduction up to three
thousand dollars off your ordinary income, or you can sometimes
this is more important, you can offset some other gains
somewhere else. So maybe you've got a concentrated position somewhere
that you've always wanted to get rid of or kind
(39:10):
of pair back a little bit, but you didn't want
to pay the taxes. Well you can sell off the
position that's at a loss and offset the one that's
at a gain. Fix a couple problems at once without
paying taxes at all. Another one is just charity. So
giving is good, but do it strategically. If you do
it the right way, you can get some tax benefits
despite the change that came a few years ago when
we made the standard deduction significantly higher, so you didn't
(39:32):
have to work as hard for it. So what you
might consider is, instead of writing checks, donate appreciated stock instead.
Maybe you've got PNG that grandma and grandpa gave you
from a bazillion years ago, and it's got a lot
of really low cost basis, therefore decent capital gains built
into it. Well, rather than selling it off and paying
the taxes and writing a check to the charity, give
the shares directly. That charity will have a brochure with
(39:55):
their logo on it that's going to have account numbers
and DTC numbers and all this other stuff. It'll be
a step by step process to tell you and your
advisor exactly where there's dollars need to be sent.
Speaker 1 (40:03):
That charity will sell the shares themselves. You will not.
Speaker 6 (40:06):
Charity doesn't pay taxes anyway as long as it's a
five oh one C three, So therefore money benefits a
group of people that you want to support. Nobody pays taxes.
That's generosity with a strategy behind it. So one more,
let's use these exemptions before they shrink. Now, this doesn't
affect everybody, but this one is kind of critical. There's
about thirteen point six million dollars per person that you
(40:28):
can set up to go to your errors without paying
any estate taxes. So if you've been considering trust, family gifting,
those kinds of things, you've got some you've got something
to think about and sure in terms of making sure
this is structured properly, because you do need to make
sure that's a per person setup. So you want to
make sure you've got those assets spread across you and
a spouse correctly using trust. Talk to your CPA and
(40:50):
talk to your attorney one last night.
Speaker 1 (40:52):
Nineteen thousand per person, right, so husband and wife could
give away thirty eight thousand dollars to anyone they.
Speaker 6 (40:58):
Want annual gifting strategy. Yes, they can do that without
no harm, no foul. So there's a bunch of things
to go chase down here in the remaining months of
this year.
Speaker 1 (41:06):
Thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC the
talk station.
Speaker 4 (41:14):
I'm super grateful that I was able to leave him.
Speaker 3 (41:17):
Financially giving thanks.
Speaker 1 (41:19):
It wasn't a good situation for me and my kids,
and I just have you to think for that. For
all the advice I feel myself, I wasn't going to cry, and.
Speaker 3 (41:27):
The guidance to make good decisions. You got control of
your life and I gave you choices.
Speaker 1 (41:31):
I'm proud of the Ramsey Show.
Speaker 5 (41:33):
It's definitely hard to get started, but once you get going,
it's super duper easy to pack your lunch every day
Speaker 4 (41:39):
And not drink Starbucks weekdays at seven on fifty five KRC,
the talk station,
Is happening.
Speaker 2 (00:00):
It's time to end the failed experiment of open borders.
Speaker 1 (00:03):
Your countries are going to hell. Something in our country,
Charlie Kirk, I forgive.
Speaker 3 (00:08):
Them Antifa across this.
Speaker 4 (00:10):
Country would be Trump assess and Ryan Ruth guilty on
all five charges.
Speaker 1 (00:13):
Something in our world.
Speaker 5 (00:14):
Cato countries should shoot down Russian earcrafh Ricky in all
day they enter their ear space.
Speaker 3 (00:20):
It's always something yes I do.
Speaker 4 (00:22):
It's a very important moment.
Speaker 1 (00:24):
Fifty five KRC the talk station. Tonight, the Federal Reserve
Chair offers clues on where interest rates are headed, and
we'll show you how to take advantage of the twenty
twenty six tax brackets and we answer your questions. You're
(00:46):
listening to Simply Money, presented by all Worth Financial on
Bob Spondseller along with Brian James Well. FED Chair Jerome
Powell spoke to economists for the first time since the
government shut down, and of course people were all ears
wanting to know how the Fed is supposed to navigate
interesrates without having some of the necessary data that they
(01:07):
all you know, because after all, they are data dependent. Brian,
how are they going to make heads or tails of
the economy without having government data. Walk us through what
FED chair pal had to say yesterday. I found it
to be absolutely riveting.
Speaker 6 (01:24):
I'm sensing just a bit of sarcasm this morning there, Bob.
Speaker 1 (01:28):
I don't know.
Speaker 6 (01:28):
I have a sixth sense for these things. But I
don't think you met what you just said. So let's
talk about what got Bob so focused and riveted on
federal government governmental announcements.
Speaker 1 (01:38):
So on the shutdown and the data is right.
Speaker 6 (01:40):
So the big thing is we've shut down a lot
of the pipelines that we used to get information from
under the auspices of the information's no good anyway, so
therefore we must not need it at all, or we
get it from somewhere else. So any read in my mind,
I know your opinionated on that particular topic, but so
I ed reserved there. Jerome Powell did say that they've
got a good read on the economy despite the shutdown.
(02:03):
Labor market weakness is remains his biggest concern as the
key risk to the economy, and that kind of goes
without saying that's always out there lurking in the background.
If we don't have people who have jobs and we
don't have money moving in a circle and so forth.
Now that's not an immediate concern, but it's basically he's
saying it's the biggest thing on his radar screen. And
he did acknowledge that they don't have all the data
that they used to Some of the important government data
(02:25):
is simply not available anymore because of those decisions that
were made. But he did say the FED does have
access to a wide variety of both public and private data,
as well as a nationwide network of contacts who gather
their own information, and so he's using those to assess
economic conditions. Didn't really commit on the next interest rate cut,
which would be maybe at a late October meeting if
(02:45):
it happens at all, but saying that the Central Bank
is going to decide at the meeting what to do.
So that was a headline that was not a headline
at all. And also he made a big point of
saying that the FED has not predecided the outcome for
that October twenty eight, twenty nine meeting.
Speaker 1 (02:59):
Yeah, I mean I read this is chair Pal basically
said exactly almost verb beata in what our own chief
investment officer Andy Stout here at Allworth was talking about
on Monday. You know, there's concern about the labor market,
you know, all joking aside, there is concern about layoffs
and slow hiring. FED chair pal did say that there's
(03:21):
mounting evidence now that suggests both layoffs and hiring remain low.
But as Andy said, you know on Monday, the FED
has always had ways to go out and gather a
lot of this data by actually talking to companies and
talking to the private sector. In other words, they don't
need to gather this stuff, you know, via fax machine,
(03:44):
through the Bureau of Labor Statistics, which you know, we've
come to find out the data is often old news
if they get it at all. So anyway, we won't
bang home that point. But I do think that they
are watching the labor market. Let's face the hiring is slowing,
and you know, there's arguments on both sides of all
(04:06):
this that hey, you know, no kidding, hiring is slowing.
Cut interest rates make capital cheaper for companies and they'll
start hiring folks. But who knows anyway. FED chair pal
did say that on inflation, he said, quote goods prices
price increases are primarily terrif related broader rather than broader
(04:31):
inflationary you know pressures, which means and he also said
most longer term expectations are getting more aligned with our
two percent inflation inflation goal. I read that to say, Brian,
and I'd love your perspective on this. If not for tariffs,
we'd be closer to two percent inflation. I don't know
(04:52):
if that's true or not, but that's that's the story
that the Fed is going with at least as of today.
Speaker 6 (04:57):
I think we need to give everything more time to
adjust to our new world of less data and more
shooting from the hip with regard to these governmental decisions.
I don't like the idea, frankly, that that's that the
impact of these decisions is not going to be as
verifiable since we have just decided not to you know,
not to track some of these things anymore. And I
think there I think there was a lot of value
in that, Frankly, Uh, and I think we're going to
(05:19):
miss that over the over the short term here we
may we may figure out another way to do it.
Speaker 2 (05:23):
So Uh.
Speaker 6 (05:24):
The other points he brought up on the balance sheet,
so the Federal Reserve could be hitting a point in
coming months where it's gonna stop shrinking the balance sheet.
So what this is doing, what we're referring to here
is the FED has slowly but steadily been reducing the
balance sheet by about two point two trillion dollars basically
just dumping assets.
Speaker 1 (05:41):
Uh. And this is this is a quantitative tightening policy.
Speaker 2 (05:45):
UH.
Speaker 6 (05:45):
Wall Street pays attention to this because it does take
liquidity out of the markets. If there isn't as much
supply there, then that does that does have an impact.
But these are tools that the Federal Reserve uses to
achieve the goals that it has with regard to an
unemployment and the interest.
Speaker 1 (06:00):
Rate policies and so forth. Well, when we generally talk
about the Fed's balance sheet and quantitative tightening or easying,
I mean we're talking about the FED stepping in and
buying treasury securities, you know, buying government debt. And you know,
I think I think it's good that they're trimming their
balance sheet, but that means that the bond market, the
(06:20):
US bond market is going to have to stand on
its own two feet without government intervention. And I think
we'll get accurate pricing on on treasury bonds. You know,
the ten year treasury has been coming down and that's
a good thing. So it remains to be seen. And
we still you know, look, we still have to get
the president of the United States and you know, the
(06:42):
leadership of China in a room together and figure out
this you know, tit for tat, you know, tariff back
and forth. That's that's really what's going to move the
needle here in the short term. And who knows if
they're gonna meet, what's gonna be talked about. I mean,
right now, it's just social media, you know, posturing by
both parties. We've seen this story before. They'll come up
(07:03):
with something, or they'll just continue to kick the can
down the road a little bit longer.
Speaker 6 (07:08):
So, uh, hey, baba, I want to I want to
touch back on something because I feel like you and
I just both both just barfed up a bunch of
economic mumbo jumbo that doesn't really mean much to the
average person who doesn't think about this stuff all day.
So I want to go back to what what does
it mean when the FED is buying government debt? Well,
what that means is that is that the Federal Reserve
is literally purchasing treasury bonds and bills, which which are
(07:28):
those are IOUs that that it issued in the past, right,
so they're just buying it's buying its own debt back.
We borrow by selling treasuries to the general public. When
the Fed, when the government buys those treasuries back, it
is putting new money back into the financial system and
reducing its own debt.
Speaker 1 (07:43):
So think of it like this.
Speaker 6 (07:44):
The US Treasury is borrowing money to pay for government spending.
The Federal Reserve creates money electronically to buy that debt
from banks and investors. Now those sellers have cash instead
of bonds. That cash finds its way back into the economy.
So it's a trick that they we used to reduce
government debt and put that cash back into circulation to
kind of goose.
Speaker 1 (08:02):
Things a little bit. So hopefully, hopefully that explains a
little of what we just know. No, that's good, excellent clarification.
All right, let's move on to earnings, you know apps,
you know, after all, earnings is the mother's milk that
moves the stock market up and down. So far, Brian,
the news has been positive in the banking industry. You know,
most of the earnings that have come out so far
(08:23):
have been from the big banks, you know, reporting earlier
this week, yesterday, and there's more coming out today. You know,
walk us through some of the big bank results for
the third quarter.
Speaker 6 (08:34):
Yeah, banks are doing okay. Don't lose sleep over the
success of the banking industry. So so start off with
City Group. City Group beat Wall Street estimates for earnings
per share. Goldman Sachs profit for the third quarter was
up thirty seven percent from a year earlier.
Speaker 1 (08:47):
You know, it's good to see the kids make it right.
Speaker 6 (08:49):
These these tiny, little scrappy little financial institutions doing okay
here quarter to quarter. Wells Fargo everybody's favorite bank to
beat up whenever they play games with their their their
sales processes, their earnings per share beat analyst expectations. And
JP Morgan Chase, which is kind of the nine hundred
pound guerrilla in the room. That's the largest US bank
(09:09):
by assets, by the way, Well, JP Morgan's third quarter
net income was up about twelve percent from a year
ago to about fourteen point four billion dollars. And another
another big one, Black Rocks Funds, attracted about two hundred
and five billion dollars worth of net flows in the
third quarter, and that was the analyst forecast for that
was just under one hundred and seventy two billion dollars,
(09:31):
so they beat that by by a good chunk there.
Speaker 1 (09:34):
With two hundred and five billion. So anyway, these are
good stories. We're just seeing that.
Speaker 6 (09:38):
This is what chief investment Officer Andy Stout of all
Worth told us just a few days ago. We're just
seeing the numbers coming from the results that we were expecting.
So Wall Street analysts estimate that S and P five
hundred earnings are going to grow about seven point four
percent here in the third quarter, and that so far
has held up, and we've had about three quarters of
companies typically beat their earnings estimates, so we're not going
(09:59):
to be surprised to see those those posting growth numbers
about ten percent or even more.
Speaker 1 (10:04):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller along with Brian James Brian shifting gears
a little bit here again the number of four to
one k investors, a large number of them apparently hit
the brakes last month on stocks, dumping some stock positions
and moving into cash and bonds. And the key question
(10:27):
tonight is why there could be a bunch of reasons
behind that according to new data from All All Light
Solutions never heard of them. They track more than two million,
four to one k participants. There was a shift in September.
Investors moved heavily out of equities and into more conservative options.
(10:48):
Of the fourteen of the twenty one trading days in September,
net trading activity was moving away from equities. This marked
the highest level of investor movements and March. Why do
you think that's happened, Brian.
Speaker 6 (11:02):
Well, because a bunch of people woke up one day
and decided that they were expert market timers all of
a sudden.
Speaker 1 (11:07):
Look, this is not a good idea.
Speaker 6 (11:10):
You know, I would really want wonder as to the
age of some of these people. Right, if you're about
to retire, and you know you've got some and we
talk all the time, especially lately, you know, if you've
got expenses coming up that you need to take distributions on,
you know that's coming, then yeah, it's a good idea
to take some risk off the table.
Speaker 1 (11:25):
Prepare for that. But if these people who are.
Speaker 6 (11:27):
Doing this are twenty thirty years old, they're going to
regret it if they ever figure out that they made
a mistake. Because they're doing this at a time where
the market's where the market has had a bit of
a pullback from it's high, not very much, but just
just a little bit. We're just we're not on the
upward escalator anymore. We came down just a little bit.
But so in other words, people are doing this having
missed that peak, and they're going to miss the upside too,
(11:48):
because the market will move upward.
Speaker 1 (11:51):
Before the headlines go up.
Speaker 6 (11:53):
It'll bounce, We'll see a lot of head fakes, but
eventually one of those will be for real and it
will move back up. And at some point the role
coaster is going to be halfway up that first hill,
and people are gonna be gonna want to be running
up the steps to jump back on it. It's not
a good way to go. If you're a market timer,
please please get.
Speaker 1 (12:08):
It out of your system. It's not gonna end well
for you or or maybe Brian, some of these people
have been listening to this show where you and I
have been talking about for weeks. Now, you know, after
a good run up in the markets, now is a
good time to look at your asset allocation and make
sure you get things back in alignment. Maybe people are
(12:29):
doing the responsible blocking and tackling that we talk about
all the time. Let's hope. So for sure, Let's hope
it's more reallocation rather than market timing. Hope in one hand.
Blah blah blah. Coming up next, we'll break down the
new tax brackets for twenty twenty six and their potential
(12:50):
impact on your pocketbook. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC, the talk
station What's happening? Time for the shutdown to end? Closing
up Democrat programs.
Speaker 6 (13:05):
Bodies and Gaza Lamas continues to have the gun.
Speaker 1 (13:08):
We will diso the day's news honoring Charlie's.
Speaker 6 (13:11):
Metal a fifty five KRC talkstation.
Speaker 4 (13:16):
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 1 (13:35):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponseller 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 podcasts. Straight ahead of
six forty three. We're helping listeners with retirement balance, trust
(13:56):
advice although we're not attorneys, and old state plan help
and more sounds like in a state planning segment. Brian,
you better jump on chat GPT so we can figure
out what we're doing here. All right, let's talk about
something that doesn't make great dinner conversation unless you're married
to Andy Stout, but it absolutely affects your bottom line.
(14:18):
And that's the irs. Just released the new twenty twenty
six federal tax brackets. Brian, some more riveting information out
for people to digest what has changed as we head
into twenty twenty six. Because radio is.
Speaker 6 (14:33):
The best way to look at numbers on pieces of paper.
I'm just gonna read all of this verbatim, and we'll
consider ourselves stewards of good tax information. Now, we're not
gonna glaze your eyes or your ears over. We're not
gonna read all this stuff. Here's the big picture. There's
not a whole lot of surprise. Basically, the numbers are
inching up to account for inflation a little bit. That's
really all just means a little more of your income
(14:53):
gets taxed at slightly higher thresholds. For most people, this
is gonna help offset inflation some but for help. But
for folks with higher income or big retirement distributions, it's
kind of still worth paying attention to. So let's jump
into some of the details that should get your attention.
Especially this time of year. Tis the season to talk
about roth IRA conversions, because most people should have a
(15:14):
pretty good idea. We're about eighty percent of the way
through the year, so should have a pretty good idea
what the tax year is going to wind up looking like,
and you'll need these remaining couple months to decide if
you're going to do this now. For those of you
who may not have heard of what I'm talking about,
we're referring to moving money from a traditional pre tax
IRA to a WROTH meaning I want to pay taxes
now so that from here forward for the rest of
(15:35):
my life, I'll pay no capital gains, no income taxes
on this money. So this benefits people who are at
lower brackets now then they'll be in the future, meaning
I want tax free distributions so that in the future
when I'm in a higher bracket, I can take advantage
of that of tax free money. This is mainly people
who were early retirees, early in retirement, who were relatively
(15:57):
higher earners in their working years, maybe people in the
twenty four to thirty seven percent brackets, you know, the
i'd say, the three hundred thousand and upcrowd. When those
folks retired, they could drop down to twenty two percent
or lower. But if they've got significant IRA savings, which
it's usually the cases we see here. You know, at
these tables doing financial planning every day, required minimum distributions
kick indidate's seventy three or seventy five. That in turn
(16:21):
is going to force more taxes, more income taxes on
Social Security income, and it's going to could likely trigger
Medicare IERMA search charges. Meeting your premiums go up just
a little bit. So if they convert now is the
whole point you'll pay less tax on that money than
in the future.
Speaker 1 (16:35):
Brian, I want to call out a couple of examples
of actual meetings I've had with clients to talk about
this strategy over the last couple of weeks. Because the
the I found some interesting numbers when we actually dove
into the tax software and looked at the impact of
potentially doing some Wrath conversions. Here's what I mean. There
is a band of people at a certain income band
(16:57):
where even though you're in a lower tax bracket by
doing the Wroth conversion, now there are phase outs, you know,
based on your income on where you have to pay
higher Social Security taxes. And with this new you know,
social Security itemized deduction under the one big beautiful bill.
(17:18):
You know, this is one thing where you know, I
will criticize the President and the administration a little bit
on this one. They came out and said, hey, social
Security is tax free. Well it's really not tax free
for everyone. And here's what I mean. You got to
be careful if you start pulling money out thinking that
you because you might be in a lower marginal income
(17:40):
tax bracket. But if you pull too much money forward,
you could pay higher Social Security taxes and lose out
on some of that six thousand dollars for single people,
twelve thousand dollars for married folks itemized deduction for Social Security.
You got to watch that when you actually look at
(18:00):
the numbers. And I've seen that with my own eyes
here in a couple of meetings here over the last
couple of weeks, and when we actually ran the numbers,
we still did a little bit of a roth conversion,
but not quite as much as we thought we would
when we dove into the whole exercise, because you know, again,
because of these higher taxes or losses of the Social
(18:22):
Security deduction, it didn't give us as much benefit as
we thought we were going to get when we dove in.
I hope that makes sense, Brian. I know you run
numbers like this all day every day too. Are you
seeing some of the same things with your clients and
your review meetings? Yeah, for sure.
Speaker 6 (18:37):
And as you mentioned, I'm not a huge fan of
this administration's a willingness to run fast and loose with
the facts. Yes, they let the tweets run all over
the place that Social Security is now tax free. That
was never even on the table. So all there is
is a new deduction up to six thousand dollars as
you mentioned per individual or twelve thousand for married couples.
Now that's from only only in existence for twenty five
(18:59):
to two twenty eight, and that happens whether you itemize
or take the standard deduction. And here's here's the important part, though, Bob,
it phases out completely if you're modified adjusted gross income
is over seventy five thousand dollars per single or one
hundred and fifty for a joint filer.
Speaker 1 (19:13):
So we've got a brief period.
Speaker 6 (19:14):
Of time and a pretty tiny window of people who
are actually really gonna benefit from this, And yet they
let the let the announcement go out there that Social
Security is now tax free, and people took a hook
line and sacre. That stuff Absolutely makes me mad as
an American voter, because we just we have to make decision.
I don't get to do financial planning for people based
on stuff I want to be true. It has to
be based on stuff that is true. Otherwise a plan
(19:36):
doesn't work. So just be careful. You know what you
believe and what you're how you're making your decisions. Largely,
the taxation of Social Security has not changed. Most people
are going to pay taxes on eighty five percent of
those benefits. You know, some people will benefit from that
that new deduction in the right income range in for
the next couple of years, But just assume you're going
to be paying income taxes on social Security for at
(19:58):
least the foreseeable future.
Speaker 1 (20:00):
Yeah. I think the point I'm just trying to drive
home here is you do need to sit down with
your fiducial advisor and your CPA and actually run these
numbers before you start pulling the trigger on things. There
are a bunch of people that are going to benefit
from that tax legislation, But when you start factoring in
some of these Wroth conversions and other strategies that we
(20:21):
work on for i'll say higher income folks, the benefits
go away pretty quickly. And to your point, Brian, it
would have been nice if that would have been explained
a little bit clear on the front end. All right,
here's the all Worth advice. You don't have to be
wealthy to use the tax code to your advantage, but
you have to plan like you are, and planning is
(20:44):
the operative word here. Run the numbers before you just
pull the trigger on some things coming up next, How
to actually prepare your kids for a future where AI
changes everything about work. You're listening to Simply Money, presented
by all Worth Financial and fifty five KRC. The talks
The Days of Relaxing in the Drawing Room by the
radio set are long gone. These days, we're taking it
(21:07):
to go.
Speaker 6 (21:10):
The iHeartRadio powered by fifty five KRC dot com.
Speaker 5 (21:15):
If you look at the RC an iHeartRadio station, you're.
Speaker 1 (21:22):
Listening to Simply Money, presented by all Worth Financial. I'm
Bob Sponseller along with Brian James, joined tonight by our
career expert Julie Bauch. And Julie thanks as always for
joining us tonight. And you've got a pretty important topic
to cover. Real interested in your fosts, and the topic is,
let's face it, giving career advice to kids has never
(21:43):
been more difficult. Walk us through what's going on out
there in the real world with respect to helping our
kids get gainfully employed.
Speaker 5 (21:53):
No. I had to laugh when I saw that title
because my first thought was, as if they listened anyway,
my kids, I know what I'm doing, and my kids
don't listen. One of them does, one of them doesn't.
Speaker 1 (22:03):
But yeah, it's it's and this morning.
Speaker 5 (22:09):
So that the back in the day, it was it
was very easy to say go to college, something great
will be waiting for you. It's the path, it's the
firm path to success and to having the life you want.
And that is completely smashed at this point. And so
now as parents have kids in high school, kids thinking
(22:32):
about what sort of post high school education do I want,
be it trade school or just something post high school,
which pretty much everyone needs, we're at a loss as
to how to be helpful in that conversation because that
path has completely been smashed. Whether it is just gigantic debt,
(22:53):
a job market disconnect between what your your kids want
to do and what's available, just lack of job search skills.
So it's everything has changed when it comes to this area.
But I think it's an opportunity because what is going
to allow us to do is allow our kids to
(23:15):
be more involved in the conversation. And the challenge here
is going to be as parents believing that they know themselves,
understanding that we may have this dream. If they're really
great with their hands, it might be the Boomer or
gen X response might be, oh great, you could be
(23:35):
a mechanical engineer. And I think what we've got to
say as an example in that case is or you
could be a technician, you could be an hvac you
can own an HVAC company, you could be an HVAC
repair person. You could be in auto repair. You could,
you know, So there's to not just pigeonhole your kids
into something that feels like a path that felt safe
(23:59):
to us. Is going to be really critical because you
shouldn't be giving advice that worked decades ago or even
a decade ago to today because it's entirely different and so,
you know, it's I think the first thing in this
in this is to recognize that the advice that we
(24:20):
got that worked for us and worked for many others
isn't necessarily as relevant anymore. It's not that it's irrelevant,
but it's not as relevant. The kids have more options
than they used to and it's exciting, but it can
also be overwhelming. So I think our role as a
parent can be exposed them to as many opportunities, conversations,
(24:40):
and places and people as possible and help them start
to discern what sounds interesting, what they might want to
learn more about, and then explore all the various education
paths and experience paths to get there, because it's not
it's not a one and done anymore that these those
days are gone.
Speaker 6 (24:59):
Hey, Julie, So one of the topics that I wanted
to hear from you on, and that's great. I appreciate
that update. But with regard to AI, so that's everywhere,
and I kind of feel like, yeah, you can identify some.
Speaker 1 (25:11):
Jobs they clearly could be done by AI right now.
Speaker 6 (25:14):
But I have a feeling that that label is getting
slapped on a lot of jobs where you know, maybe
parents are kind of prematurely discouraging their kids.
Speaker 1 (25:22):
Do you see that happening. Do you find yourself, you.
Speaker 6 (25:24):
Know, a position where you've got to say, no, hold on,
there are still paths to go do this for a
living without AI being factor, or yeah, tell me about that.
Speaker 5 (25:30):
Yeah. So here's what I think is true. When we
hear the phrase all these jobs are going to be
replaced by AI, I think it's more. I think it's
more true to say almost every job or every job
will be affected in some way by AI, and it
might just affect the way you do the job. It
might not take the job, but it might affect the
way you do the job. So when you look at
(25:51):
what are the things that we know to be true
as we look forward everyone entering the job market. In
the job market, it has to have a comfort level
with technology, with learning technology. They have to have really
strong people skills, soft skills listening, communicating, presenting, influencing, working across,
(26:16):
working with customers. They have to have those what we
call soft skills. Now, really those saft skills are becoming
the most important. And so as you look at how
do you prepare your son or daughter for what's next.
The three buckets I would focus on is technology. Now
they're digital natives, but you are not. Everybody is as
(26:38):
comfortable as everybody else. But are they getting exposed to
the different ways that technology help us work and do
and live our lives better? And the second is really,
you know, the soft skills, the communicating, getting along with people.
You can be brilliant, but if you're difficult to work with,
you know you're not going to have the career you want.
And the third is really an openness to learning, to
(27:00):
taking feedback, to getting excited about what else can I learn?
What else can I do? Those are the kind of
people and really that applies to us of all ages.
The companies are really looking for anything that smacks up
I've always done it this way, no matter how old
you are, is going to you know, is really going
to limit I would say, your opportunities for growth.
Speaker 1 (27:22):
Julie. When I listen to you talk here, I think,
you know, I agree with you. I think the whole
paradigm here for the last five, ten, fifteen, twenty years
has been this specialization into certain areas. And what I
mean by that is we tell our kids to, you know,
get a STEM degree. Well you know you mentioned technology.
What can tend to happen is people bury themselves behind
(27:43):
a computer screen and just work with numbers all day
and they have zero people skills. They've never interacted with
a customer, They've never had to critically think and engage
in God forbid, a disagreement with another human being, and
how to resolve that. That kind of is not going
to get solved by AI. You got to get out
there and mix it up in the world. I mean, shoot,
(28:05):
even standing behind a cash register at McDonald's for a
couple of years when you're in high school, you learn
incredible skills that are transferable to any job moving forward.
I think we've lost sight of that in society today.
Speaker 5 (28:21):
We have and I just you know it's we have aired.
We have moved over to the side of I want
my kids to take as many AP classes as possible. Yes,
and then we send them off to a prestigious college
and say, Okay, they're good now, No they're not. And
I think we see the numbers of how young people
are really struggling. They're struggling because they don't know how
(28:42):
to navigate this world right now, and it is very challenging.
It's easy for us as boomers to say toughen up,
but it's bigger than that. And so what anything you
can do to expose your kids to difficult conversations. Don't
order their food for them, don't call their teachers, don't
make them step out and step into uncomfortable situations, and
(29:03):
don't get in there with a rag and try to
clean up messages. That's the kind of stuff that employers
are really struggling with you. You might be making yourself
feel better in the moment, but you're really hurting your
child's chances for career success.
Speaker 1 (29:16):
All right, good stuff as always, Julie, thanks again for
joining us. You're listening to Simply Money, presented by all
Worth Financial on fifty five KRC, the talk station. Hiks,
Ryan Thomas, Lee, Mark Levin.
Speaker 2 (29:28):
We Americans, we patrids are irrational people, irreasonable people. The
people who know good from either right from wrong. We
also know hustlers and Marxists and fascists in Islamist who
endanger our country every damn day. We're destroying our culture
into civil society, who're breeding a youth that hates America
and embraces the wrong thing.
Speaker 6 (29:47):
Mark Levin tonight at ten oh six on fifty five KRC,
the talk station.
Speaker 1 (29:57):
You're listening to Simply Money, presented by all Worth Financial
on bo sponsorer 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. Cynthia and
Mason leads us off tonight. Brian She says, our portfolio
(30:18):
has done well, but we haven't updated our risk profile
in years. How do you know when it's time to
adjust your mix? Good topic to talk about. Yeah, I
like this question.
Speaker 6 (30:30):
So when I started in this industry, there was a
rule of thumb. As our old friend Ed Fink used
to say, rules of thumb are rules of dumb.
Speaker 1 (30:38):
And the rule of thumb.
Speaker 6 (30:38):
Back then was your age in bonds that was just
the greatest balanced portfolio ever. That that's how you could
kind of set it and forget it. While I'm sitting
here at fifty one and I'm darn glad that I
don't have half my portfolio in bonds because of a
rule of thumb from thirty years ago, which is a
lifetime and several economic eras ago. So now, Cynthia, I
think it has everything to do with with how you'll
(30:59):
react to the up and ups and downs of the markets.
I have lots of clients who are I don't know
how old you are, but I have call on clients
who may very well be older than you that are
still completely one hundred percent stocks because we've talked about it,
we've done their financial plan, and the portion of that
we of the portfolio that we've got in stocks has
nothing to do with generating income for them. Their income
is covered from maybe just social security or socicurity plus
(31:22):
pension or some other business assets they've got out there,
and that means that the pile of money that is
their nest egg can still be aggressive. And if they're
okay with the headlines and they they have.
Speaker 1 (31:32):
One hundred percent, they have one hundred percent of their
emergency fund in crypto too, right bright of course, Well
that's where we start. I mean I figured that was assumed. Yep.
Speaker 6 (31:41):
We've got everybody in a place where if the if
the foundation of the plan is successful and you've got
the needs covered, then some people say, you know what,
I just want to grow it. It's going to sit here,
util it goes to my kids. So I'd like to
be aggressive and continue to grow it. So there isn't
a I would say that there's not an exact time
of life to adjust. That mixt be driven by your plan.
If your needs are covered elsewhere, then maybe you don't
(32:03):
have to adjust that mix. It's not again, let's not
go by rules of thumb. Let's build specific plans for
specific situations. So I hope that helps their Cynthia Paul
and Milford Bob. Paul says they've built most of their
worth and retirement accounts and he's wondering if there's any
smart ways out there to create some more tax diversification
before they hit that RMD age of US seventy three
or seventy five. Don't know when Paul was born, but
(32:24):
it'll be one of those two for him.
Speaker 2 (32:27):
All right.
Speaker 1 (32:27):
Well, Paul, we just covered some of this in the
prior segment today talking about WROTH conversions. That's one strategy.
Another strategy that you might consider, and I know Brian
likes this strategy and uses it a lot, is you know,
start to build that WROTH bucket. Now, you know, if
you are still working and still contributing to retirement accounts,
flip some of those savings over to the WROTH bucket
(32:49):
and create that second bucket of assets from which you
can take income during your retirement years. And the other
thing is, once you've tapped out all of your retire
hirement account savings and you've got some discretionary income left
to save, put that in a non IRA, just taxable
brokerage account. And again you're just creating buckets from which
(33:10):
you can draw money and play the tax bracket game.
Here wants it's time to convert this into actual spending
during retirement years, because you don't want to just let
these rm ds get out of whack. You know, for
reasons we talk about all the time. It could end
up causing you to pay higher Medicare premiums, It could
(33:30):
bump you into a higher tax bracket. So there's a
couple of thoughts to consider. Sit down and work with
somebody to help you run some scenarios on how to
make this the most tax efficient situation as possible. All Right,
Tom in Westchester says, we've got several trusts and accounts
spread across many different institutions. How do we simplify this
(33:52):
entire structure without losing the benefits?
Speaker 6 (33:55):
Brian, So, yeah, I mean, I guess the first question
I'd have for you, Tom, is what is the benefit
of you having your accounts spread across several institutions? Is
that is that? Was that a purposeful decision? You know,
a lot some people believe that that's part of diversification.
Just have some different brains working on my money, And
that's understandable. It's not the worst idea in the world,
but it does literally put you in this situation. You're
gonna have lots of you know, each institution has to
(34:16):
have its own account accounts for you, owned by the
entities you need. So you mentioned trusts and all these
different types of accounts where you're gonna have that set
of ownership for every institution. So I would look under
the hood for what these institutions are doing for you.
And if if you've duplicated a lot of the of
what if they're kind of doing the same thing, which
in today's day and age, they're probably not far off.
(34:37):
There aren't magical solutions out there for financial investment management
that don't exist anywhere else. Despite what these various institutions
might really really want you to believe, everybody still is
stuck in the same stocks and bonds market, within the
same investment world.
Speaker 1 (34:50):
So you might find there's a lot of duplication already.
Speaker 6 (34:52):
If that is the case, then it might be okay
to simply pick the one that serves you the best,
that you have the strongest relationship, and consolidate all those assis.
Speaker 1 (35:00):
It's into one.
Speaker 6 (35:00):
The important thing is that you've got the ownership structure,
the taxation structure. It sounds like that you need. Now
you're just literally, to use your words, you're just trying
to simplify. So just be sure you are actually benefiting
from the fact that you've got multiple institutions in the
mix there. If you don't, if you don't feel like
you're benefiting, then yeah, pick a good one and consolidate.
Speaker 1 (35:19):
Mark and Green Hills.
Speaker 6 (35:20):
Bob Mark says they have an estate plan, but it
was written when their kids were little, and now that
those kids are growing and on their own, they've got
one that's good, pretty good with money, in the.
Speaker 1 (35:28):
Other one maybe not so much.
Speaker 6 (35:29):
So how do they update things without creating any resentment
between the two? What are some steps they can take
to handle that kind of situation?
Speaker 1 (35:36):
Well, Mark, first of all, it's always great to talk
to a fellow pioneer. Go Greenhills Pioneers. In reference to
your question, green Hills means Johnny's toys to me, that's well,
and hey, God blessed Johnny's toys in the green Hills pool.
How about that? All right? Hey, to Mark's question, you know,
(35:58):
it's important that you reckongnize this, you know, and you're
getting on top of it, first of all, and I
would say you don't. You don't have to treat the
kids unequally just because one's good with money and the
others not. You don't have to treat them unequally to
help them and set them up so they can responsibly
handle their estate once they inherit it. Here's what I mean.
(36:20):
If one of the kids, you know, or you're worried
that they're just not gonna be good with this money.
They might blow it, they might make some big mistakes.
This would be a great opportunity to put that child's
inheritance in a trust. Sit down with a good attorney,
a good financial advisor, talk through all the pros and
cons of that and construct a strategy where the assets
(36:41):
could be protected for that child but they still have
access to them. And you know that tends to work
out pretty well in those kind of situations. I hope
that helps. Coming up next, Brian has his bottom line
and he's got some prudent advice here to do some good,
proactive fourth order tax planning. You're listening to Simply Money,
(37:02):
is that to buy all Worth Financial on fifty five
KRC the talk station.
Speaker 3 (37:07):
In order to live your dream doesn't always involve.
Speaker 1 (37:09):
A pay cut, invest your time.
Speaker 3 (37:11):
Yes, sometimes it involves a pay cut to get moving
and then move.
Speaker 1 (37:15):
Up and invest in your future.
Speaker 3 (37:17):
But I would want a path to make more than
I made, not less than I made. Dave Ramsey, There's
a lot of people need help in this world. I
want you to get clear. I want you to spend
some time very carefully going through what are your talents,
what are your passions for your skills. You know what
is it you value?
Speaker 4 (37:33):
Week Days at seven on fifty five KRZ, the talk
station ed that is all us we believe home.
Speaker 5 (37:40):
I'm so worried that next month I have to choose
between groceries for my kids or gas for my car.
Speaker 1 (37:44):
Talk about it here fifty five krs the talk station
you're listening to simply money. Is that to buy all
Worth Financial? I'm Bob Sponseller along with Brian James, and
tonight Brian shares some good fourth quarter tax planning thoughts.
What do you have for us tonight, Brian, Well, it's October.
Speaker 6 (38:06):
It's time for pumpkin spice lattes and that pumpkin beer
that shows up at all the bars everywhere. And it's
also prime tax strategy season, Bob, especially if you're somebody
with a significant portfolio or business interest that kind of thing.
The wealthy don't just file their taxes in April and
look away. They design them in the fall to dictate
what it looks like in the spring. So here's the
kind of things that we talk about here. So in
(38:28):
Q four you want to be looking for things harvesting
losses and potentially gains with intention. If you've got some
positions in your portfolio that lost value this year, well
that's not the end of the world. We want everything
to gain. We like paying capital gains taxes because it
means we had capital gains to begin with. However, life
doesn't work that way all the time. We lose money
from time to time. The silver lining is you get
a tax benefit, so you can liquidate some of those
(38:50):
positions incur the loss, got to stay out of it
for thirty days, don't fall into the wash sale rules,
and you can either take that deduction up to three
thousand dollars off your ordinary income, or you can sometimes
this is more important, you can offset some other gains
somewhere else. So maybe you've got a concentrated position somewhere
that you've always wanted to get rid of or kind
(39:10):
of pair back a little bit, but you didn't want
to pay the taxes. Well you can sell off the
position that's at a loss and offset the one that's
at a gain. Fix a couple problems at once without
paying taxes at all. Another one is just charity. So
giving is good, but do it strategically. If you do
it the right way, you can get some tax benefits
despite the change that came a few years ago when
we made the standard deduction significantly higher, so you didn't
(39:32):
have to work as hard for it. So what you
might consider is, instead of writing checks, donate appreciated stock instead.
Maybe you've got PNG that grandma and grandpa gave you
from a bazillion years ago, and it's got a lot
of really low cost basis, therefore decent capital gains built
into it. Well, rather than selling it off and paying
the taxes and writing a check to the charity, give
the shares directly. That charity will have a brochure with
(39:55):
their logo on it that's going to have account numbers
and DTC numbers and all this other stuff. It'll be
a step by step process to tell you and your
advisor exactly where there's dollars need to be sent.
Speaker 1 (40:03):
That charity will sell the shares themselves. You will not.
Speaker 6 (40:06):
Charity doesn't pay taxes anyway as long as it's a
five oh one C three, So therefore money benefits a
group of people that you want to support. Nobody pays taxes.
That's generosity with a strategy behind it. So one more,
let's use these exemptions before they shrink. Now, this doesn't
affect everybody, but this one is kind of critical. There's
about thirteen point six million dollars per person that you
(40:28):
can set up to go to your errors without paying
any estate taxes. So if you've been considering trust, family gifting,
those kinds of things, you've got some you've got something
to think about and sure in terms of making sure
this is structured properly, because you do need to make
sure that's a per person setup. So you want to
make sure you've got those assets spread across you and
a spouse correctly using trust. Talk to your CPA and
(40:50):
talk to your attorney one last night.
Speaker 1 (40:52):
Nineteen thousand per person, right, so husband and wife could
give away thirty eight thousand dollars to anyone they.
Speaker 6 (40:58):
Want annual gifting strategy. Yes, they can do that without
no harm, no foul. So there's a bunch of things
to go chase down here in the remaining months of
this year.
Speaker 1 (41:06):
Thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC the
talk station.
Speaker 4 (41:14):
I'm super grateful that I was able to leave him.
Speaker 3 (41:17):
Financially giving thanks.
Speaker 1 (41:19):
It wasn't a good situation for me and my kids,
and I just have you to think for that. For
all the advice I feel myself, I wasn't going to cry, and.
Speaker 3 (41:27):
The guidance to make good decisions. You got control of
your life and I gave you choices.
Speaker 1 (41:31):
I'm proud of the Ramsey Show.
Speaker 5 (41:33):
It's definitely hard to get started, but once you get going,
it's super duper easy to pack your lunch every day
Speaker 4 (41:39):
And not drink Starbucks weekdays at seven on fifty five KRC,
the talk station,
Simply Money News
Popular Podcasts
CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.