November 18, 2025 • 39 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian ask: What happens when the Federal Reserve is flying blind? With key October data potentially lost due to the government shutdown, Allworth CIO Andy Stout weighs in on what that means for rate decisions and market volatility heading into 2026. Plus, they walk you through the brand-new retirement contribution limits, the blind spots in portfolios of high-net-worth investors, and whether it’s time to rethink dividend reinvestments and lump sum investing. Finally, what to do with that year-end bonus before it disappears on a new iPhone.
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Episode Transcript
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Speaker 1 (00:07):
Tonight, will a lack of government data impact what happens
to your portfolio by the end of the year. We're
going to investigate that. Right now, you're listening to Simply
Money presented by all Worth Financial on Bob's sponseller along
with Brian James. Well, as we all know, the government
is back open, but there might be some economic data
that the Federal Reserve will possibly never see, data that
(00:30):
it uses to determine where to set interest rates. All
Worth Chief investment Officer Andy Stout joins us tonight. Andy,
thanks as always for being with us. And Andy, is
it possible that we may never find out what the
October inflation rate in October unemployment rate even were And
if that's the case, how big of a deal is that?
Speaker 2 (00:51):
Here?
Speaker 1 (00:51):
Moving forward as we get into Thanksgiving and quickly approaching
the end of twenty twenty five.
Speaker 3 (00:59):
Yeah, Bob, wouldn't you look at what's been going on?
I mean, the government has been shut down. Workers have
not you know, been there and putting all of you know,
the obvious ripple effects aside. What that means for economists
is that there weren't employees there to actually collect the data.
They look at this data, and when they collected they
collected during certain periods. So if no one's at work
(01:22):
during those periods where they would literally like call up
and talk to people and reach out to individuals asking
them if they have a job, well, they can't go
back in time and say hey, did you have a
job when they would be normally.
Speaker 2 (01:32):
Collecting this data.
Speaker 3 (01:34):
I mean they could possibly, you know, reach out and
say hey, did you have a job during this period
of time, but it's going to be a little bit
more flawed than what it would normally be. And there
is certainly some speculation in the White House even put
this out last week saying that we may never get.
Speaker 2 (01:48):
The October unemployment rate.
Speaker 3 (01:50):
So how big of a deal is that, Well, I mean,
right around right now, we're around a four point three
percent unemployment rate, And when we get the November data,
which in theory we should get eventually, and if there's
not a big gap between the September and November data
in terms of like a spread of what it was
in September versus what it was in November, then it's
probably not a huge deal in all honesty, but it
(02:14):
does make things a little bit more challenging for the
Federal Reserve, because I mean, they want this data to
be able to say, hey, where is the labor market.
We've been hearing about these cracks. We're seeing a few
things here and there, but we would like to know
this actual official data. And if they don't have it,
it certainly makes their job more challenging.
Speaker 4 (02:33):
Well, I would say it makes their job just about impossible,
because what are you going to make a decision off
of if you don't know what you're shooting at. I'm
picturing Andy, what are these charts going to look like,
you know, say two or three years from now. I'm
looking at a line graph and there's a big question
mark right in the middle of it because we just
didn't bother to collect the data. Well anyway, so it
looks like we had some switching to the markets. We
(02:54):
had a little bit of bumping this on Thursday and
kind of felt like it came out of nowhere. Did
that have anything to do with this lack of visiBel
to what's happening, you know, under the surface?
Speaker 5 (03:01):
Can you can you talk about that a little bit?
Speaker 3 (03:04):
Yeah, when when you look at what's been going on
over the past week or so and driving markets, I mean,
first off.
Speaker 2 (03:11):
There was a lot of.
Speaker 3 (03:12):
Volatility between the opening and closing of the week, but
when you looked at it when it was all said done,
there really wasn't too much moving movement. I know you
probably saw some eye popping numbers, you know, Dow down
eight hundred points and things like that, But did you
know the doll was actually up for the week. It
was up point four percent last week in spite of
(03:33):
all this volatility. So was the S and P five hundred.
It was up like a tenth of a percent. Now,
the Nasdaq fell a little bit, and there's some AI
concerns there and we'll talk about that in a minute.
Then small caps were off a little bit more. But
when we look at what's driving the market really over
the past week, I would say it's a couple of things.
Speaker 2 (03:50):
One is the.
Speaker 3 (03:53):
Fact that, yeah, we may not have some of this data.
Speaker 1 (03:56):
Uh.
Speaker 3 (03:56):
The second is what would the FED actually be doing
into some and how would that data inform them?
Speaker 2 (04:02):
And three, what's going.
Speaker 3 (04:03):
On in the world of AI and sticking with you
know the numbers one and two on that in terms
of the data, in terms of the Federal Reserve, Yeah,
that is having an impact. I mean, I want to
rewind back to the fed's last meeting at the end
of October. Heading into that meeting, the market was pricing
in a one hundred percent chance of a or almost
(04:26):
one hundred percent chance of another quarter point rate cut
at the FED December meeting. After last week, after some
comments from a lot of Federal Reserve officials, we're now
sitting at a forty one percent chance of a rate
cut in December. So we went from about one hundred
down to forty one percent, And that's certainly been a
part of that, you know, volatility, because the market had
(04:49):
expected aurey cut and now the FED saying, yay, let's
let's pull back here a little bit. First off, we
don't have the data, we don't know where we're at,
and we're still worried about inflation. And this backpedaling has
certainly added to that volatility that we saw last week.
Speaker 1 (05:03):
Andy, as recently as you correct me if I'm wrong,
I'm saying, like seven to ten days ago, the probability
of a FED rate cut in December was around ninety
five percent. What moved that percentage down to forty Is
it concerns about the labor market. Is it concerns about
not getting that data that we already you know, talked about,
or is there something else going out there going on
(05:26):
out there that's spooking the market. I understand the volatility
on Thursday around you know, people questioning the valuation of
AI stocks, which, as you said, we'll get into it
a minute, but I want to stick with FED policy
right now. What caused that, you know, chance of a
FED rate cut in December to drop all the way
to forty percent really quickly?
Speaker 2 (05:45):
Well, to be.
Speaker 3 (05:46):
Fair, it was it really started to change on October
twenty nine, that was the fed's last meeting. That's when
it was around that ninety five to one hundred percent.
And then what happened was FED Shared's Rompal came out
even before taking Q and A basically told orders a
doll of aall Street that a December rate cut is
not a four gone conclusion. He usually doesn't come out
(06:07):
that bluntly with that sort of detail that's usually uncovered
during the Q and A. But for him to front
run that, that was pretty aggressive for the Federal reserve standpoint,
So that spook markets. That immediately caused essentially the chances
of a December rate cut to go from that ninety
five percent to about sixty sixty five percent, so a
(06:29):
quick drop there. That was on October twenty ninth, and
then just last week that's when we've seen more Federal
Reserve officials come out.
Speaker 2 (06:38):
And when you look at.
Speaker 3 (06:39):
It, basically it was on it was on Thursday when
that started to change. We started to drift from that
sixty five percent chance of a rate cut down to
fifty percent by the end of Thursday, and by the
end of Friday. You know, that's when we were right
around this forty one forty two percent chance of a
rate cut in December. So now what looked like a
coin better than a coin flips chance for a cut
(07:02):
in December is now a little bit worse than a
coin flips chance of having a rate cut. So it
was really the Federal Reserve officials pushing back. And when
you look at the actual voting from that October meeting,
it was really interesting because you had the sense, which
has become a little bit more normal lately, meaning that
some voters didn't want to do what the committee as
(07:23):
a whole wanted to do, and it was what the
most interesting thing though, was is that there were sins
in both directions. Someone wanted a fifty basis point cut
or a half a percent. Another person wanted to do
nothing at all, and what they ended up doing was
a quarter point rate cut.
Speaker 2 (07:40):
Now, the question is what.
Speaker 3 (07:42):
Does the future old when you look at the you know,
the FED fund rates and in terms of you know,
what the rate cuts may or may not be, and
it's certainly, you know, definitely been a lot less aggressive
in terms of future rate cuts. And I think what's
really going to matter though it's not necessarily the committee
composition today, but what's that committee composition going to look
(08:04):
like six seven months from now? We have someone who
just announced they're going to let their term expire in February.
Speaker 2 (08:12):
We know there's.
Speaker 3 (08:13):
Another outstanding position with another governor who's been under some
scrutiny regarding some mortgages. And then, more importantly than all
of that FED sharge, your own pal will be stepping
down in the middle of next year. That allows President
Trump to really nominate some Federal Reserve members who are
more aligned with where he wants the economy to go
(08:35):
in terms of interest rates. So I would be thinking
about the FED policy and like two.
Speaker 2 (08:40):
Different regimes regime.
Speaker 3 (08:43):
DAY, which is the one today and for the next
few months, and as it you know, starts to slowly
migrate into something different than to Regime B, which is
probably going to be more dubvish than what we're used.
Speaker 4 (08:54):
To any The whole reason we do this, of course,
with interest rate cuts, one of the things that we need,
we want to do with the.
Speaker 5 (09:00):
Federal Reserve is a control inflation. So TERR.
Speaker 4 (09:04):
Powell was not super excited about the first rate cut.
He seemed to at least been somewhat bullied into it
when we kind of shifted gears here several months ago.
Now that we're a little into this, do you do
you feel like there's any risk of really reigniting inflation.
Speaker 3 (09:18):
I mean, that's what they're worried about, because when you
look at inflation in general, I mean, obviously, you go
back a couple of years, the CPI or consumer Price
Index was around nine percent. I mean, that was just
obviously terrible on many fronts, right, and we quickly got.
Speaker 2 (09:31):
Back down to more normal readings.
Speaker 3 (09:35):
But we've been stuck around three percent for really the.
Speaker 2 (09:39):
Past like year year and a half.
Speaker 3 (09:41):
And what the Federal Reserve looks at and First of all,
they do look at a slightly different inflation measure and
PCE core PCE actually, which is broader, but that's also
right around three percent set two point nine percent right now.
What they target, though, is a two percent inflation rate,
and we've been at this three percent level for a
(10:01):
year or so. It's this last leg of inflation that
the Federal Reserve has not been able to be and
that's what's giving them pause because they've had this restrictive
policy and there hasn't been any movement, and that's what
has them worried. And Chair Pale, he's I mean, like
it or not, he's worried about his legacy. He doesn't
not want to be remembered as the Chair who caved
(10:22):
because he was afraid of something and then all of
a sudden reignited inflation. He's more worried about, I would say,
keeping inflation under control so he doesn't go out as
the person who brought back raging inflation.
Speaker 1 (10:35):
All right, Switching gears here to corporate earnings. There's some
major companies reporting earnings this week, and Andy, obviously those
results are likely going to move this market one way
or the other. Please talk about that what you see
coming up this week in terms of earnings, and then
is there anything else keeping you up at night?
Speaker 5 (10:53):
Right now?
Speaker 1 (10:54):
That's the question, Brian and I always ask you on
Monday because you're always on top of a whole bunch
of data and you keep that beautiful recession scorecard for
us in the background. So we want to know what
you think of earnings and announcements this week and then
anything else keeping you up at night as we venture
into another week here.
Speaker 3 (11:13):
Yeah, I mean so far for earning system overall, I mean,
earning season is mostly done. There are some big names
this week, as you mentioned there, Bob, but we are about,
you know, ninety two percent of the way through earning season,
and overall it's been very solid, with almost eighty two
percent of companies reporting better than expected profits in the
year of a year growth rate sitting almost at fifteen percent,
which is about double what Wall Street expected heading into
(11:35):
earning season.
Speaker 2 (11:36):
So by and large, it's been a very good earning season.
Speaker 3 (11:39):
That's really helped to you know, keep markets growing, you know,
as they have it and when you look at what's
on the horizon, though, yeah, we got some big names.
Tomorrow is where it really starts to kick off. You
got Home deep O tomorrow, then you have Target and
Lows on Wednesday, and then you have on Thursday Walmart.
(11:59):
So you got some big retailers and that's really going
to show us how the consumer is handling everything going on.
Speaker 2 (12:06):
And then probably one of the tiny little.
Speaker 3 (12:08):
Out there is Navidia. Navidia is like the AI darling.
And when you look at what's been going on with
a market and the ballatility out there, it's really driven
by recently last week, a lot of it is AI valuations.
How are companies suspending what's their infrastructure on AI? And
so Navidia that is the AI company. I mean you
(12:30):
might think about, you know, other things that move markets,
but Navidia is the one that probably matters the most
right now. So we'll get some we'll get some good
guidance coming out on Thursday from them.
Speaker 1 (12:41):
All right, sounds great? Hey, thanks as always for joining
us tonight. Andy. Coming out next, we've got the new
retirement account contribution limits for twenty twenty six and why
your advisor should be your first call before you put
your hands on any new payroll forms. You're listening to
simply money presented by all Worth Financial on fifty five KRC,
the talk station you're listening to Simply Money, presented by
(13:09):
all Worth Financial, Umbop sponsler along with Brian James. If
you can't listen to Simply Money live every night, subscribe
and get our daily podcasts. Just search Simply Money on
the iHeart app or wherever you find your podcast. Straight
ahead of six forty three, How to spot unnecessary duplication
in your portfolio, how to possibly rethink dividend reinvestments, and
(13:32):
just overall make sure your money's truly working as hard
as it can for you. All right, if you're sort
of paying attention to the show right now, and Brian
this includes you want we want you to lock in
here because we just got the new contribution limits for
twenty twenty six for retirement accounts. Let's start with tax
deferred accounts. In twenty twenty six, you can save up
(13:54):
to twenty four thousan five hundred dollars in four to
one k's four or three b's fifty seven plans and
the federal government's Thrift Savings plan. That's an increase of
one thousand dollars over and above what you could put
away pre tax in twenty twenty five, and if you
are between fifty to fifty nine years old, you can
(14:15):
add an additional eight thousand dollars to that. It's called
the catch up contribution. So up to thirty two thousand,
five hundred dollars total for the folks between age fifty
and fifty nine heading into twenty twenty six.
Speaker 4 (14:28):
Brian, and let's yeah, let's not forget there's a new
secret catch up here for a little while. As part
of the One Big Beautiful Bill, if you're between sixty
and sixty three years old, you get to put an
extra eleven two hundred and fifty on top of all
the extra things that Bob just mentioned. And so if
you're sixty four and older, you go back to the
fifty and younger boat, because that makes all the sense
in the world. Of course, remember these the deadline for
(14:51):
these contributions is always December thirty. First, this is the
stuff you're doing through payroll. This is your four h
one case. You got to go through your payroll department.
You're not writing a check, so you want to do it,
you have to do. You need to go to your
payroll people and log in your website or do whatever
you want, but it's got to go through your paycheck.
And one final thought, remember these limits apply across all
four oh one ks four h three b's that you've had.
(15:13):
If you had multiple jobs during the year, you are
the only one who knows how much has flowed into
these accounts. You will need to make sure you don't
go over these limits or you'll have a little bit
of a messic cleanup by tax time. Not the end
of the world, but definitely an unnecessary pain in the
rear end.
Speaker 1 (15:26):
All right, In terms of traditional iras, both regular and
roth people putting money into regular iras and rath iras well,
you can contribute up to seven five hundred dollars in
twenty twenty six. That's an increase from seven thousand dollars
maximum in twenty twenty five, so you get an extra
five hundred bucks to put away, and if you're age
(15:47):
fifty or older, you get to contribute an additional one thousand,
one hundred dollars. And those contribution limits are the same
for traditional iras and rath iras. Keep in mind that
for iras there is a phase out, especially for wroth iras,
and we'll go through these numbers it's a lot of numbers,
(16:10):
but the phase out range for WROTH iras increase to
between one hundred and fifty three thousand and one hundred
and sixty eight thousand dollars for a single or head
of household filing status. That's up a little bit, you know,
three or four thousand dollars higher than it was in
twenty twenty five. Remember, if you start to get phased out,
you can still make partial WROTH contributions. So just know
(16:33):
that the the you know, these contribution limits are going
up a little bit, and make sure to take full
advantage of that heading into twenty twenty six.
Speaker 5 (16:42):
That's right.
Speaker 4 (16:42):
So and we've got you've got limits of course to
worry about with regard to the twenty twenty six year too.
And for traditional iras, right, there's there's always limits, and
the limits on a traditional IRA or whether you can deduct,
not whether you can contribute with the WROTH. You you
either can contribute or you cannot. So for twenty twenty six,
if you're looking to take that pre tax contribution and
(17:03):
you're a single taxpayer, if you have a four to
oh one K, if you have a retirement plan through
your workplace, that's going to limit you to eighty one
to ninety one thousand dollars. Merely married filing joint phases
out completely up to one hundred and fifty thousand dollars,
and there are some other limits there too, so just
be paying attention to those items because you don't want
to have to undo things by around tax time. That's
why you have all the way until tax time to
(17:25):
make a prior year contribution because a lot of people
don't know what their income is. They're modified adjusted gross
income until they've actually done their taxes, so you might
wait and take a breath, make sure that you can
get away with it.
Speaker 1 (17:35):
If you do find yourself, you know, in a situation
where you earn too much money and you get phased
out from these traditional contributions, remember you can still do
the you know, backdoor wroth contributions or in some cases,
if your plan allows it, these megabackdoor wroth conversions. Something
to check with your HR department if your plan allows
(17:56):
for that. Heading into twenty twenty six, and then there
are a hand full of new tax breaks from the
tax legislation passed earlier this year, otherwise known as the
One Big, Beautiful bill that will impact tip income over time,
and state and local tax bills, and those all have
income thresholds to come with them as well. Once your
(18:18):
income gets above a certain level, those deductions either disappear
entirely or get phased out. And that also dovetails with
how Social Security is taxed, and then the senior deduction
that impacts the taxability of your Social Security. So be
sure to review all of this stuff carefully with your advisor,
(18:40):
your financial advisor, your fiduciary advisor, your CPA heading into
twenty twenty six, and make sure you're taking a holistic
view at everything here based on what your personal situation is,
what your income needs are, and just make sure that
you can be as tax efficient as possible heading into
twenty twenty six.
Speaker 4 (19:00):
Yeah, I think some good things to remember too is
you are allowed if you have some cash laying around
and you've got the ability to pay your bills, there's
nothing wrong with putting one hundred percent of your paycheck
into your foura. Okay, you can do that and it
will not interfere with your healthcare insurance premiums and.
Speaker 5 (19:15):
All that kind of stuff. You can do that.
Speaker 4 (19:17):
So if that's something it will be advantageous for you.
Go ahead and pull that trigger.
Speaker 5 (19:21):
Why not? Here's the all Worth advice.
Speaker 1 (19:24):
See the increase limits as a tool, not just a target.
Use it in concert and in coordination with your overall
broad strategy. Coming up next, the questions high net worth
investors should ask to make sure their portfolio is built
for the next ten years, not the last ten. You're
listening to Simply Money, presented by all Worth Financial on
(19:46):
fifty five KRC, the talk station. You're listening to Simply
Money presented by all Worth Financial. I'm Bob spon Seller
along with Brian James. You and I both know and
have worked with and talk to a bunch of successful investors,
folks who've built multimillion dollar portfolios over the years, and
(20:09):
from time to time, you know, we find what's what's
really interesting is a lot of these portfolios are still structured.
Speaker 2 (20:15):
For what worked.
Speaker 1 (20:17):
Five, ten, fifteen, twenty years ago. They're still heavy. For example,
in US large cap you know, tech stocks still relying
on those same mutual funds that can really become very
tax inefficient at this point, or ETFs that help them
build their wealth. But markets do change, and we've seen
some of that change even happen this year during twenty
(20:40):
twenty five. Let's break this down into some questions folks
should be asking, because the next decade could look nothing
like the last one, and we see this happen, you know,
over the course of time, all right over.
Speaker 5 (20:53):
You know, you and I have been doing this.
Speaker 4 (20:54):
I think we've got sixty to seventy years between us
of experience guiding people through this, So we've seen some stuff.
But I think some of the things to look at
is are you overweight anywhere? The winners of the last
cycle tend to kind of linger in portfolios, and allowing
your portfolio to stay overweighted in these positions, you can
let it run for a little while, but eventually that
becomes like betting on the team that won last year's
(21:15):
World Series solely because that happened, to bet on them
again this year. Things do move around, as Bob just mentioned.
So if you have a huge position in Apple, Microsoft, Amazon,
or Nvidia is probably the big one. Now, that's been
phenomenal for you, But how many portfolios are way overweighted
to those names right now? And how many are susceptible
to the first hiccup that any of those actually have.
(21:36):
And another one that I think is really really prevalent
right now is international stocks. And I've mentioned this before,
but as we review portfolios, the international positions are really
running away and extending their lead this year over and
above the American stocks. This is a catalyst provided by
our current political situation where we've decided to basically play
(21:56):
a little more hardball with other countries, and rather than
play balls, some of them are building relationships between themselves
and working around the United States. So the market is
recognizing that that's an opportunity. If you don't have international stocks,
because there was a big movement toward the heck, with
everything else, all I need is the S and P
five hundred, then you are currently missing the boat. And
(22:16):
I'm gonna go ahead and say that I think that
relationship is going to stick around for a while. We've
been so proactive with these tariffs and all these things.
Countries are finding ways to work between themselves and work
around the United States. This is not ringing the bell
for alarm. I'm just saying you better have an allocation
in there for it.
Speaker 1 (22:31):
Well, Brian, you miss you mentioned the S and P
five hundred, and you know the winners of the past.
I mean, let's face it, regardless of the political situation,
right now, you know, just sitting on an S and
P five hundred index fund and thinking that's going to
get you where you need to go over the next
ten years. I mean, the S and P five hundred
now is well over thirty five percent almost forty percent
(22:55):
weighted to those magnificent seven tech stocks. And we talk
about this off and on this show. And as you said,
it doesn't mean you know, sell all your big cab
tech stocks. But if you're just sitting there, you know,
in an index fund, you are already way overweighted, you know,
from a volatility standpoint, to these large cap tech stocks.
(23:17):
And it is a good time as we enter into
twenty twenty six to take a look at your portfolio,
see what your allocation is to certain sectors of the
market in the US and to your point, whether you
have any exposure overseas at all, and if you can
do so, especially on a tax efficient basis, and there's
ways to do that. You know, now's a good time
(23:37):
to kind of rebalance, reallocate, and kind of stress tests
and volatility proof to some extent your portfolio. Here so
you don't get whipsawed if we do see a pullback
or sell off in some of these big names that
have really made headlines over the last you know, three four,
five years.
Speaker 4 (23:58):
Yeah, And another point to that making sure that you've
got all the you know, your ducks in a row
here is interest rates. So for a long time, you know,
many many investors who have a significant amount of wealth,
now did that during an environment where nobody cared about
interest rates because they were.
Speaker 5 (24:12):
On the floor.
Speaker 4 (24:13):
And all it meant was I could get really cheap
debt for my business or for my mortgage. But beyond that,
it really kind of robbed the ability of interest rate
based investments to really give me much that I cared about.
So then now that's not really the case. We're off
the mat with interest rates. They're back to a somewhat
respectable area where you can actually generate some yield out
of it. So the important question to ask is what
interest rate world are you built for? Because we were
(24:35):
in a rising rate environment, we're kind of back into
a declining rate environment. That means you're going to want
to pay attention to the duration of your bonds. You're
going to want to pay attention to the credit quality
those kinds of things. How do these companies borrow? What
sectors are you in? It really changes the attractiveness of
cash and CDs versus equities because now we might want
those things for a long time we spent you know,
kind of leaning away from that because of where where
(24:58):
interest rates actually were.
Speaker 5 (24:59):
So that's something else to.
Speaker 1 (25:01):
Well when speaking of bonds and just credit based investments,
you know, in general. You know what we're talking about
too here is take a look at your credit risk
exposure in the duration of your bonds, and let's stick
with credit for a little bit. You know, let's face it,
when yields go down, interest rates go down, people invariably
will chase yield, and oftentimes they will embed more credit
(25:23):
risk into their portfolio than they might have imagined because
they really, you know, it's very hard to manage. You
think managing an individual portfolio of stocks is hard, it
is very difficult to manage both interest rate and movement
and credit quality of bonds on an individual basis. So
you've got to have somebody take a look at this
(25:44):
and just make sure there's not more credit risk embedded
into your bond or fixed income portfolio than you might
have bargained for, because Brian, I can remember, you know,
points in time historically where people just went to sleep
on some of these even short term I yield bond
funds and really got their you know, rear in handed
to them if the economy declined at all, because these
(26:07):
bond funds can get whacked almost as much as the
stock market in a recession.
Speaker 5 (26:12):
Yeah, that's right.
Speaker 4 (26:13):
And again, you know some of the other things to
pivot a little bit here, make sure you're paying attention
to your tax and estate planning tools.
Speaker 5 (26:19):
Are you ready for that next decade?
Speaker 4 (26:21):
So we're gonna we're going to imagine that the tax
code is going to change just a bit over the
next ten years. Decent chance that tax rates could rise.
You need a portfolio that's going to anticipate these things.
And so that means thinking ahead, be thinking about roth
conversions so that you can protect yourself from those require
minimum distributions. You're not avoiding taxation, you're pulling it forward
so that you can spread yourself over time into a
(26:41):
higher than current but still lower overall tax bracket as
opposed to getting hit by the tax truck when you're
age seventy three or seventy five.
Speaker 1 (26:48):
Yeah, what we're really trying to call out here right
now is just your portfolio. You know. Don't treat it
like a crock pot. Don't just set it and forget
it for a decade, because markets do evolve, polished shift
your life changes, make sure your investments are keeping up.
And this is where a good fiduciary advisor can make
all the difference, because a good advisor is thinking about
(27:10):
the next ten years rather than the last ten years,
so you don't have to navigate all of this potential
volatility alone. Here's the all Worth advice. Build your portfolio
for the road ahead, not just the one that you
recently traveled. Coming up next, from overlapping ETFs to dividend
reinvestments to planning, from maybe even Florida, the real world
(27:35):
portfolio blind spots you might not even realize you have.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
Simply Money presented by Allworth Financial on Bob Sponseller along
with Brian James.
Speaker 2 (27:54):
If you have a financial question you'd.
Speaker 1 (27:56):
Like for us to answer, there is a red button
you can click while you're listening to the show. Oh,
if you're listening to the show on the iHeart app,
simply record your question and it will come straight to us.
All right, Brian Mark and Kinwood leads us off tonight.
He says, we've always used dollar cost averaging, but with
markets at all time highs, are there situations where investing
(28:17):
a lump sum actually makes more sense?
Speaker 4 (28:20):
Yeah, there can be, and there's This is really a
good You're not choosing the right path, You're choosing the
path that makes you the most comfortable. But history says
that lump sum investing usually wins about seventy five percent
of the time. Markets are higher twelve months after any
random day, even when they're already at all time highs.
Think of this anytime over the past three years. If
you face this question, the answer was throw the lump in.
(28:42):
It wasn't dollar cost average. Because the market has gone
up mostly steadily for three straight years.
Speaker 5 (28:47):
All time highs aren't all that rare.
Speaker 4 (28:49):
One out of every fifteen trading days is a new
record high. So waiting for that dip often more often
than that, means you're actually missing returns, not avoiding any
risk that said, dollar cost averaging isn't a bad thing.
Speaker 5 (29:00):
It's a behavioral tool.
Speaker 4 (29:01):
It's good if it will really really hurt you to
have gone in just before the market took a dip.
Think back in April when we panicked about tariffs initially.
You know, then that would have you know what, you
might have seen your lump sum get invested in and
then drop ten fifteen percent maybe more pretty quickly.
Speaker 5 (29:15):
It did recover quickly.
Speaker 4 (29:16):
But if that's the kind of thing that you don't
react to that you can't stay home about, then dollar
cost averaging will protect you from from throwing it all
at once and having to go through that now mathematically financially,
over the long run, it really doesn't make much difference.
I usually encourage my clients to go with a lump
sum unless unless we just really think that emotionally that's
not going to work. Should it should be in the
rare instance that it actually is going to go wrong.
(29:38):
Market goes up, not down, though, So don't don't don't
overthink it all right, Moving on to Jeff in Newtown,
Jeff says his portfolio looks balanced, but he keeps hearing
about hidden leverage in certain bonds and alternative fund So, Bob,
how do you uncover risk that's not obvious from the surface.
Speaker 1 (29:55):
Well, Jeff, this is how i'd answered this question. I mean,
when you get into the whole alternative space, especially in
the credit space, and you talked about bond funds, alternative funds.
I already mentioned, you know, in the prior segment about
high yield corporate bond funds, when you mentioned hidden leverage,
Oftentimes that can mean there are some option strategies embedded
in these investments, you know, and options can work to
(30:17):
your advantage or your disadvantage, depending on how they're being used.
So I think the important thing here is to sit
down with your fiduciary advisor, assume you have one, and
just look under the hood and see what the components
of your bond and alternative investment assets are and make
sure that you're comfortable with the amount of risk being taken.
(30:39):
Because again, as I mentioned in the prior segment, it's
awfully fun to reach for yield or more return, especially
when the when the c's look relatively calm. But I'm
telling you if and when, and it's not a matter
of if, it's a matter of when. We get into
a period of maybe a slight recession or a lot
of market volatility. You want to make sure you're comfortable
(31:02):
with what you own prior to volatility hitting the markets,
so you don't get whipsawed around and end up being
sorry that you bought what you own. And then what
we never want to see happen is somebody make that
phone call and say get me out, move me to cash.
Because to the extent that phone call needs to come
in for whatever reason, in my opinion, that means that
(31:25):
your advisor did not do his or her job to
educate you in advance about what you actually own and
have a good, honest conversation about whether you're comfortable with
the amount of risk being taken in your portfolio. I
hope that helps. Jeff, all right, Charlie and Bridgetown says,
we're holding several ETFs to track similar sectors. How can
(31:46):
you identify brian when you've accidentally created overlap or are
you just doubling up on risk?
Speaker 4 (31:53):
Well, you got to look under the hood, so sometimes
that overlap really can't hide in plain sight. To give
an ETFs exchange funds, they may have different tickers, but
they could own the same ten top stocks, especially with
in areas like technology, dividend growth or broader US indexes.
So in other words, if you're looking at Apple, Microsoft,
and Video those kinds of holdings inside your funds, that
(32:14):
is overlap. That's exactly what we're getting at here. So
look at the weight, not just the list. Don't just
do a quick glance of the top ten holdings and
then call it a day. You've got to understand how
much of the portfolio that stock makes up, because most
of them are capitalization weighted, meaning the bigger the company,
the larger portion of the.
Speaker 5 (32:32):
Portfolio makes up. Versus let's just throw.
Speaker 4 (32:35):
One hundred companies in here and then each company has
one percent of this portfolio.
Speaker 5 (32:38):
That's not how it works.
Speaker 4 (32:39):
So in other words, if a given company is seven
percent of the first ETF and that same company makes
up six percent of the second ETF, you're not really
diversifying by owning two of the same but two different ETFs.
You're just adding more of that same exposure. Remember those
top ten holdings in each one of those is going
to drive almost half of that fund's behavior. So if
you really want to get into this, lots of fun
(33:00):
companies out there will publish this sort of free portfolio
overlap calculated look on their websites. So there's plenty of
them out there, and it'll show you if you smush
these things together, what does your ultimate portfolio look like
under that surface. Anything that shows an overlap of above,
you know, say even twenty thirty percent, that's kind of
worth double checking and make sure it's going to match
with the other stuff in your portfolio. So, yeah, you're
(33:21):
right to be thinking about these things. Just because something
has a different name does not mean you are diversified.
Speaker 5 (33:26):
Look under that hood.
Speaker 4 (33:28):
One more, another one here from a Nina and Mason.
Nina's talking about dividend reinvestment today. She says they've always
done that automatically, but now they're wondering if they should
start taking them in cash instead. And what's the trade
off if I turn on my dividends bigot for a
little bit of income.
Speaker 5 (33:42):
Is there any sacrifice there?
Speaker 1 (33:43):
Bob Well, Nina, I think it all comes down to
what your income needs are, and this is where it
might be time to look at an overall income strategy
rather than just looking at an investment strategy in a silo.
Here's what I mean there are. What it really comes
down to here is how tax efficient your portfolio is
(34:04):
and make sure that you're getting you know, everybody needs
and wants a certain amount of cash flow coming in.
It all comes down to how do we create that
cash flow on the best blend of tax efficiency and
risk adjusted investing. So you know, for example, sometimes if
you've got these you know, divinends coming in, you know,
(34:25):
we first need to determine are they qualified dividends or
non qualified dividends. If you don't need or want the
income at all from a cash flow standpoint to spend,
those dividends might be better placed in your I RA
or qualified accounts so you're not taxed on them right away.
So uh, it comes down again looking at what your
income needs and wants are in structure structuring the components
(34:47):
of your investment portfolio accordingly. All right, we've got time
for one more. Brian Kevin and Florida. He says he's
a long time listener and a Cincinnati snowbird. He's starting
to notice how taxes interact with investment returns, kind of
what I was talking about here just a minute ago.
And he brings up the example and it's a good one.
How capital gains can push up Medicare premiums. How do
(35:10):
you plan these for these investments in these what he
calls stealth taxes that come up from time to time.
Speaker 4 (35:15):
Always good to hear from a podcast listener. Are I
don't think our radio waves reach all the way down there.
So he's downloading that poscat podcast every day.
Speaker 5 (35:22):
We love it.
Speaker 4 (35:23):
But yeah, stealth taxes. This is the stuff that sneaks
up on you when you're not paying attention. Capital gains,
roth conversions, requirementum distributions, all of these things, big mutual
fund distributions that happen to December can quietly shove you
into places you don't want to be with your taxes.
The big one is called IRMA. I AREMAA, and that's
your Medicare premiums. That means you your monthly part D
and B premiums might climb eight hundred bucks two thousand
(35:46):
more per year depending on the bracket.
Speaker 5 (35:48):
It's based on your income from two years earlier.
Speaker 4 (35:51):
Right, So if you're looking at IRMA now, it's based
off of something that happened in twenty twenty three, and
whatever you're doing now will surface in twenty twenty seven,
so it does change, not locked in at anytime. Also,
you might have a tax torpedo from Social Security. This
is when your investment income mixes with your Social Security
benefits and you might get a hit that zone where
every dollar of gain effectsive effectively gets taxed like two
(36:13):
dollars of gain because it makes more of your Social
Security taxbile. There's this re threshold in there too, So
the fix is planning out that income, understand where it's
coming from, spread out those ROTH conversions over several years,
harvest those gains in years with low income municipal bonds
that are tax free, or favoring ETFs over active funds.
Speaker 5 (36:30):
So you can reduce those surprise capital gains.
Speaker 1 (36:34):
Good stuff, all right, before you spend that year end
bonus on a last minute getaway or even the newest iPhone,
we'll talk about how to really put that money to work.
Coming up next. You're listening to Simply Money started by
all Worth Financial on fifty five KRC the talk station.
(36:54):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller along with Brian Chains.
Speaker 5 (37:00):
So you just got a year.
Speaker 1 (37:01):
End bonus or you're expecting to receive one very soon.
First off, congratulations, Whether that's a small surprise or maybe
a hefty chunk of change, a bonus can be a
powerful financial tool if you treat it right. Brian, why
don't you walk us through how to take all the
fun out of receiving a year end bonus and be
(37:22):
responsible with it. Be the adult in the room.
Speaker 4 (37:24):
Only be happy for the instant that that money is
hitting the bank, and then start the worry machine, of course,
because that's how we call those human beings right now,
I'm kidding, but yeah, this is These kinds of nice
little windfalls are always they always come along with little
stress because you want to say, okay, what's the right
thing to do?
Speaker 5 (37:39):
Yeah, First off, I'll tell.
Speaker 4 (37:41):
You if your situation is, if you're in a pretty
good situation and you've been a responsible adult, do something
fun with ten percent of it or something like that.
We are not here on this planet to stare at
a pile of money and not spend it. Nobody's going
to talk on your deathbed about that time you didn't
spend that money, So go do something fun with a
portion it now beyond that, or by asking what's my
weak spot? Do I have high interest debt hanging around.
(38:03):
Do I have that one credit card with several thousand
dollars on it that was maybe it was part of
a zero percent balance transfer situation and I took advantage
of that that I've kind of forgotten about it, and
now I'm paying twenty eight percent. That happens more often
than you might think, So you know, pay that down.
Just just blow it out of the water with a
few thousand bucks something like that. If you're behind on
retirement savings, maybe put a chunk of it into your
IRA or boost your four oh one K contributions for
(38:25):
the remainder of this year. There's not that much time left,
but if you've got those dollars sitting in your bank account,
you have a little more than usual. You can simply
crank up your four to one K contributions all the
way up to one hundred percent, knowing that you've already
got money in the bank to actually pay the bills.
That's a sneaky way to put a lump sum into
a four toh one K. You cannot write a check
into it, but you can filter it through your payroll
as long as you've got money to pay the bills.
(38:47):
So anyway, then beyond that, if you've got the debt
in retirement on track, then start to think tax strategy.
Maybe you use this bonus to fund a donor advice
fund before December thirty first, that'll give you a nice deduction.
If you are contributing to charities anyway, pull that forward
many years of contributions into one account, and the church
or the charity behind it doesn't have to know that
you're aware of that.
Speaker 5 (39:07):
And I'm not saying don't enjoy any of it. Treat
yourself a little bit, but put some guardrails on it.
Take ten percent for fun and the rest of it.
Look at the weak spots.
Speaker 1 (39:15):
Brian, you already brought up the big guardrail, and again
it bears repeating. If you are sitting out there with
a credit card balance or this zero interest loan that
turns into a pumpkin here in the next month, where
you will be paying high interest rates, you do need
to forego the fun here and get that stuff taken
care of, make it, make that debt go away. Thanks
(39:35):
for listening. You've been listening to Simply Money, presented by
all Worth Financial on fifty five KRC, the talk station
Tonight, will a lack of government data impact what happens
to your portfolio by the end of the year. We're
going to investigate that. Right now, you're listening to Simply
Money presented by all Worth Financial on Bob's sponseller along
with Brian James. Well, as we all know, the government
is back open, but there might be some economic data
that the Federal Reserve will possibly never see, data that
(00:30):
it uses to determine where to set interest rates. All
Worth Chief investment Officer Andy Stout joins us tonight. Andy,
thanks as always for being with us. And Andy, is
it possible that we may never find out what the
October inflation rate in October unemployment rate even were And
if that's the case, how big of a deal is that?
Speaker 2 (00:51):
Here?
Speaker 1 (00:51):
Moving forward as we get into Thanksgiving and quickly approaching
the end of twenty twenty five.
Speaker 3 (00:59):
Yeah, Bob, wouldn't you look at what's been going on?
I mean, the government has been shut down. Workers have
not you know, been there and putting all of you know,
the obvious ripple effects aside. What that means for economists
is that there weren't employees there to actually collect the data.
They look at this data, and when they collected they
collected during certain periods. So if no one's at work
(01:22):
during those periods where they would literally like call up
and talk to people and reach out to individuals asking
them if they have a job, well, they can't go
back in time and say hey, did you have a
job when they would be normally.
Speaker 2 (01:32):
Collecting this data.
Speaker 3 (01:34):
I mean they could possibly, you know, reach out and
say hey, did you have a job during this period
of time, but it's going to be a little bit
more flawed than what it would normally be. And there
is certainly some speculation in the White House even put
this out last week saying that we may never get.
Speaker 2 (01:48):
The October unemployment rate.
Speaker 3 (01:50):
So how big of a deal is that, Well, I mean,
right around right now, we're around a four point three
percent unemployment rate, And when we get the November data,
which in theory we should get eventually, and if there's
not a big gap between the September and November data
in terms of like a spread of what it was
in September versus what it was in November, then it's
probably not a huge deal in all honesty, but it
(02:14):
does make things a little bit more challenging for the
Federal Reserve, because I mean, they want this data to
be able to say, hey, where is the labor market.
We've been hearing about these cracks. We're seeing a few
things here and there, but we would like to know
this actual official data. And if they don't have it,
it certainly makes their job more challenging.
Speaker 4 (02:33):
Well, I would say it makes their job just about impossible,
because what are you going to make a decision off
of if you don't know what you're shooting at. I'm
picturing Andy, what are these charts going to look like,
you know, say two or three years from now. I'm
looking at a line graph and there's a big question
mark right in the middle of it because we just
didn't bother to collect the data. Well anyway, so it
looks like we had some switching to the markets. We
(02:54):
had a little bit of bumping this on Thursday and
kind of felt like it came out of nowhere. Did
that have anything to do with this lack of visiBel
to what's happening, you know, under the surface?
Speaker 5 (03:01):
Can you can you talk about that a little bit?
Speaker 3 (03:04):
Yeah, when when you look at what's been going on
over the past week or so and driving markets, I mean,
first off.
Speaker 2 (03:11):
There was a lot of.
Speaker 3 (03:12):
Volatility between the opening and closing of the week, but
when you looked at it when it was all said done,
there really wasn't too much moving movement. I know you
probably saw some eye popping numbers, you know, Dow down
eight hundred points and things like that, But did you
know the doll was actually up for the week. It
was up point four percent last week in spite of
(03:33):
all this volatility. So was the S and P five hundred.
It was up like a tenth of a percent. Now,
the Nasdaq fell a little bit, and there's some AI
concerns there and we'll talk about that in a minute.
Then small caps were off a little bit more. But
when we look at what's driving the market really over
the past week, I would say it's a couple of things.
Speaker 2 (03:50):
One is the.
Speaker 3 (03:53):
Fact that, yeah, we may not have some of this data.
Speaker 1 (03:56):
Uh.
Speaker 3 (03:56):
The second is what would the FED actually be doing
into some and how would that data inform them?
Speaker 2 (04:02):
And three, what's going.
Speaker 3 (04:03):
On in the world of AI and sticking with you
know the numbers one and two on that in terms
of the data, in terms of the Federal Reserve, Yeah,
that is having an impact. I mean, I want to
rewind back to the fed's last meeting at the end
of October. Heading into that meeting, the market was pricing
in a one hundred percent chance of a or almost
(04:26):
one hundred percent chance of another quarter point rate cut
at the FED December meeting. After last week, after some
comments from a lot of Federal Reserve officials, we're now
sitting at a forty one percent chance of a rate
cut in December. So we went from about one hundred
down to forty one percent, And that's certainly been a
part of that, you know, volatility, because the market had
(04:49):
expected aurey cut and now the FED saying, yay, let's
let's pull back here a little bit. First off, we
don't have the data, we don't know where we're at,
and we're still worried about inflation. And this backpedaling has
certainly added to that volatility that we saw last week.
Speaker 1 (05:03):
Andy, as recently as you correct me if I'm wrong,
I'm saying, like seven to ten days ago, the probability
of a FED rate cut in December was around ninety
five percent. What moved that percentage down to forty Is
it concerns about the labor market. Is it concerns about
not getting that data that we already you know, talked about,
or is there something else going out there going on
(05:26):
out there that's spooking the market. I understand the volatility
on Thursday around you know, people questioning the valuation of
AI stocks, which, as you said, we'll get into it
a minute, but I want to stick with FED policy
right now. What caused that, you know, chance of a
FED rate cut in December to drop all the way
to forty percent really quickly?
Speaker 2 (05:45):
Well, to be.
Speaker 3 (05:46):
Fair, it was it really started to change on October
twenty nine, that was the fed's last meeting. That's when
it was around that ninety five to one hundred percent.
And then what happened was FED Shared's Rompal came out
even before taking Q and A basically told orders a
doll of aall Street that a December rate cut is
not a four gone conclusion. He usually doesn't come out
(06:07):
that bluntly with that sort of detail that's usually uncovered
during the Q and A. But for him to front
run that, that was pretty aggressive for the Federal reserve standpoint,
So that spook markets. That immediately caused essentially the chances
of a December rate cut to go from that ninety
five percent to about sixty sixty five percent, so a
(06:29):
quick drop there. That was on October twenty ninth, and
then just last week that's when we've seen more Federal
Reserve officials come out.
Speaker 2 (06:38):
And when you look at.
Speaker 3 (06:39):
It, basically it was on it was on Thursday when
that started to change. We started to drift from that
sixty five percent chance of a rate cut down to
fifty percent by the end of Thursday, and by the
end of Friday. You know, that's when we were right
around this forty one forty two percent chance of a
rate cut in December. So now what looked like a
coin better than a coin flips chance for a cut
(07:02):
in December is now a little bit worse than a
coin flips chance of having a rate cut. So it
was really the Federal Reserve officials pushing back. And when
you look at the actual voting from that October meeting,
it was really interesting because you had the sense, which
has become a little bit more normal lately, meaning that
some voters didn't want to do what the committee as
(07:23):
a whole wanted to do, and it was what the
most interesting thing though, was is that there were sins
in both directions. Someone wanted a fifty basis point cut
or a half a percent. Another person wanted to do
nothing at all, and what they ended up doing was
a quarter point rate cut.
Speaker 2 (07:40):
Now, the question is what.
Speaker 3 (07:42):
Does the future old when you look at the you know,
the FED fund rates and in terms of you know,
what the rate cuts may or may not be, and
it's certainly, you know, definitely been a lot less aggressive
in terms of future rate cuts. And I think what's
really going to matter though it's not necessarily the committee
composition today, but what's that committee composition going to look
(08:04):
like six seven months from now? We have someone who
just announced they're going to let their term expire in February.
Speaker 2 (08:12):
We know there's.
Speaker 3 (08:13):
Another outstanding position with another governor who's been under some
scrutiny regarding some mortgages. And then, more importantly than all
of that FED sharge, your own pal will be stepping
down in the middle of next year. That allows President
Trump to really nominate some Federal Reserve members who are
more aligned with where he wants the economy to go
(08:35):
in terms of interest rates. So I would be thinking
about the FED policy and like two.
Speaker 2 (08:40):
Different regimes regime.
Speaker 3 (08:43):
DAY, which is the one today and for the next
few months, and as it you know, starts to slowly
migrate into something different than to Regime B, which is
probably going to be more dubvish than what we're used.
Speaker 4 (08:54):
To any The whole reason we do this, of course,
with interest rate cuts, one of the things that we need,
we want to do with the.
Speaker 5 (09:00):
Federal Reserve is a control inflation. So TERR.
Speaker 4 (09:04):
Powell was not super excited about the first rate cut.
He seemed to at least been somewhat bullied into it
when we kind of shifted gears here several months ago.
Now that we're a little into this, do you do
you feel like there's any risk of really reigniting inflation.
Speaker 3 (09:18):
I mean, that's what they're worried about, because when you
look at inflation in general, I mean, obviously, you go
back a couple of years, the CPI or consumer Price
Index was around nine percent. I mean, that was just
obviously terrible on many fronts, right, and we quickly got.
Speaker 2 (09:31):
Back down to more normal readings.
Speaker 3 (09:35):
But we've been stuck around three percent for really the.
Speaker 2 (09:39):
Past like year year and a half.
Speaker 3 (09:41):
And what the Federal Reserve looks at and First of all,
they do look at a slightly different inflation measure and
PCE core PCE actually, which is broader, but that's also
right around three percent set two point nine percent right now.
What they target, though, is a two percent inflation rate,
and we've been at this three percent level for a
(10:01):
year or so. It's this last leg of inflation that
the Federal Reserve has not been able to be and
that's what's giving them pause because they've had this restrictive
policy and there hasn't been any movement, and that's what
has them worried. And Chair Pale, he's I mean, like
it or not, he's worried about his legacy. He doesn't
not want to be remembered as the Chair who caved
(10:22):
because he was afraid of something and then all of
a sudden reignited inflation. He's more worried about, I would say,
keeping inflation under control so he doesn't go out as
the person who brought back raging inflation.
Speaker 1 (10:35):
All right, Switching gears here to corporate earnings. There's some
major companies reporting earnings this week, and Andy, obviously those
results are likely going to move this market one way
or the other. Please talk about that what you see
coming up this week in terms of earnings, and then
is there anything else keeping you up at night?
Speaker 5 (10:53):
Right now?
Speaker 1 (10:54):
That's the question, Brian and I always ask you on
Monday because you're always on top of a whole bunch
of data and you keep that beautiful recession scorecard for
us in the background. So we want to know what
you think of earnings and announcements this week and then
anything else keeping you up at night as we venture
into another week here.
Speaker 3 (11:13):
Yeah, I mean so far for earning system overall, I mean,
earning season is mostly done. There are some big names
this week, as you mentioned there, Bob, but we are about,
you know, ninety two percent of the way through earning season,
and overall it's been very solid, with almost eighty two
percent of companies reporting better than expected profits in the
year of a year growth rate sitting almost at fifteen percent,
which is about double what Wall Street expected heading into
(11:35):
earning season.
Speaker 2 (11:36):
So by and large, it's been a very good earning season.
Speaker 3 (11:39):
That's really helped to you know, keep markets growing, you know,
as they have it and when you look at what's
on the horizon, though, yeah, we got some big names.
Tomorrow is where it really starts to kick off. You
got Home deep O tomorrow, then you have Target and
Lows on Wednesday, and then you have on Thursday Walmart.
(11:59):
So you got some big retailers and that's really going
to show us how the consumer is handling everything going on.
Speaker 2 (12:06):
And then probably one of the tiny little.
Speaker 3 (12:08):
Out there is Navidia. Navidia is like the AI darling.
And when you look at what's been going on with
a market and the ballatility out there, it's really driven
by recently last week, a lot of it is AI valuations.
How are companies suspending what's their infrastructure on AI? And
so Navidia that is the AI company. I mean you
(12:30):
might think about, you know, other things that move markets,
but Navidia is the one that probably matters the most
right now. So we'll get some we'll get some good
guidance coming out on Thursday from them.
Speaker 1 (12:41):
All right, sounds great? Hey, thanks as always for joining
us tonight. Andy. Coming out next, we've got the new
retirement account contribution limits for twenty twenty six and why
your advisor should be your first call before you put
your hands on any new payroll forms. You're listening to
simply money presented by all Worth Financial on fifty five KRC,
the talk station you're listening to Simply Money, presented by
(13:09):
all Worth Financial, Umbop sponsler along with Brian James. If
you can't listen to Simply Money live every night, subscribe
and get our daily podcasts. Just search Simply Money on
the iHeart app or wherever you find your podcast. Straight
ahead of six forty three, How to spot unnecessary duplication
in your portfolio, how to possibly rethink dividend reinvestments, and
(13:32):
just overall make sure your money's truly working as hard
as it can for you. All right, if you're sort
of paying attention to the show right now, and Brian
this includes you want we want you to lock in
here because we just got the new contribution limits for
twenty twenty six for retirement accounts. Let's start with tax
deferred accounts. In twenty twenty six, you can save up
(13:54):
to twenty four thousan five hundred dollars in four to
one k's four or three b's fifty seven plans and
the federal government's Thrift Savings plan. That's an increase of
one thousand dollars over and above what you could put
away pre tax in twenty twenty five, and if you
are between fifty to fifty nine years old, you can
(14:15):
add an additional eight thousand dollars to that. It's called
the catch up contribution. So up to thirty two thousand,
five hundred dollars total for the folks between age fifty
and fifty nine heading into twenty twenty six.
Speaker 4 (14:28):
Brian, and let's yeah, let's not forget there's a new
secret catch up here for a little while. As part
of the One Big Beautiful Bill, if you're between sixty
and sixty three years old, you get to put an
extra eleven two hundred and fifty on top of all
the extra things that Bob just mentioned. And so if
you're sixty four and older, you go back to the
fifty and younger boat, because that makes all the sense
in the world. Of course, remember these the deadline for
(14:51):
these contributions is always December thirty. First, this is the
stuff you're doing through payroll. This is your four h
one case. You got to go through your payroll department.
You're not writing a check, so you want to do it,
you have to do. You need to go to your
payroll people and log in your website or do whatever
you want, but it's got to go through your paycheck.
And one final thought, remember these limits apply across all
four oh one ks four h three b's that you've had.
(15:13):
If you had multiple jobs during the year, you are
the only one who knows how much has flowed into
these accounts. You will need to make sure you don't
go over these limits or you'll have a little bit
of a messic cleanup by tax time. Not the end
of the world, but definitely an unnecessary pain in the
rear end.
Speaker 1 (15:26):
All right, In terms of traditional iras, both regular and
roth people putting money into regular iras and rath iras well,
you can contribute up to seven five hundred dollars in
twenty twenty six. That's an increase from seven thousand dollars
maximum in twenty twenty five, so you get an extra
five hundred bucks to put away, and if you're age
(15:47):
fifty or older, you get to contribute an additional one thousand,
one hundred dollars. And those contribution limits are the same
for traditional iras and rath iras. Keep in mind that
for iras there is a phase out, especially for wroth iras,
and we'll go through these numbers it's a lot of numbers,
(16:10):
but the phase out range for WROTH iras increase to
between one hundred and fifty three thousand and one hundred
and sixty eight thousand dollars for a single or head
of household filing status. That's up a little bit, you know,
three or four thousand dollars higher than it was in
twenty twenty five. Remember, if you start to get phased out,
you can still make partial WROTH contributions. So just know
(16:33):
that the the you know, these contribution limits are going
up a little bit, and make sure to take full
advantage of that heading into twenty twenty six.
Speaker 5 (16:42):
That's right.
Speaker 4 (16:42):
So and we've got you've got limits of course to
worry about with regard to the twenty twenty six year too.
And for traditional iras, right, there's there's always limits, and
the limits on a traditional IRA or whether you can deduct,
not whether you can contribute with the WROTH. You you
either can contribute or you cannot. So for twenty twenty six,
if you're looking to take that pre tax contribution and
(17:03):
you're a single taxpayer, if you have a four to
oh one K, if you have a retirement plan through
your workplace, that's going to limit you to eighty one
to ninety one thousand dollars. Merely married filing joint phases
out completely up to one hundred and fifty thousand dollars,
and there are some other limits there too, so just
be paying attention to those items because you don't want
to have to undo things by around tax time. That's
why you have all the way until tax time to
(17:25):
make a prior year contribution because a lot of people
don't know what their income is. They're modified adjusted gross
income until they've actually done their taxes, so you might
wait and take a breath, make sure that you can
get away with it.
Speaker 1 (17:35):
If you do find yourself, you know, in a situation
where you earn too much money and you get phased
out from these traditional contributions, remember you can still do
the you know, backdoor wroth contributions or in some cases,
if your plan allows it, these megabackdoor wroth conversions. Something
to check with your HR department if your plan allows
(17:56):
for that. Heading into twenty twenty six, and then there
are a hand full of new tax breaks from the
tax legislation passed earlier this year, otherwise known as the
One Big, Beautiful bill that will impact tip income over time,
and state and local tax bills, and those all have
income thresholds to come with them as well. Once your
(18:18):
income gets above a certain level, those deductions either disappear
entirely or get phased out. And that also dovetails with
how Social Security is taxed, and then the senior deduction
that impacts the taxability of your Social Security. So be
sure to review all of this stuff carefully with your advisor,
(18:40):
your financial advisor, your fiduciary advisor, your CPA heading into
twenty twenty six, and make sure you're taking a holistic
view at everything here based on what your personal situation is,
what your income needs are, and just make sure that
you can be as tax efficient as possible heading into
twenty twenty six.
Speaker 4 (19:00):
Yeah, I think some good things to remember too is
you are allowed if you have some cash laying around
and you've got the ability to pay your bills, there's
nothing wrong with putting one hundred percent of your paycheck
into your foura. Okay, you can do that and it
will not interfere with your healthcare insurance premiums and.
Speaker 5 (19:15):
All that kind of stuff. You can do that.
Speaker 4 (19:17):
So if that's something it will be advantageous for you.
Go ahead and pull that trigger.
Speaker 5 (19:21):
Why not? Here's the all Worth advice.
Speaker 1 (19:24):
See the increase limits as a tool, not just a target.
Use it in concert and in coordination with your overall
broad strategy. Coming up next, the questions high net worth
investors should ask to make sure their portfolio is built
for the next ten years, not the last ten. You're
listening to Simply Money, presented by all Worth Financial on
(19:46):
fifty five KRC, the talk station. You're listening to Simply
Money presented by all Worth Financial. I'm Bob spon Seller
along with Brian James. You and I both know and
have worked with and talk to a bunch of successful investors,
folks who've built multimillion dollar portfolios over the years, and
(20:09):
from time to time, you know, we find what's what's
really interesting is a lot of these portfolios are still structured.
Speaker 2 (20:15):
For what worked.
Speaker 1 (20:17):
Five, ten, fifteen, twenty years ago. They're still heavy. For example,
in US large cap you know, tech stocks still relying
on those same mutual funds that can really become very
tax inefficient at this point, or ETFs that help them
build their wealth. But markets do change, and we've seen
some of that change even happen this year during twenty
(20:40):
twenty five. Let's break this down into some questions folks
should be asking, because the next decade could look nothing
like the last one, and we see this happen, you know,
over the course of time, all right over.
Speaker 5 (20:53):
You know, you and I have been doing this.
Speaker 4 (20:54):
I think we've got sixty to seventy years between us
of experience guiding people through this, So we've seen some stuff.
But I think some of the things to look at
is are you overweight anywhere? The winners of the last
cycle tend to kind of linger in portfolios, and allowing
your portfolio to stay overweighted in these positions, you can
let it run for a little while, but eventually that
becomes like betting on the team that won last year's
(21:15):
World Series solely because that happened, to bet on them
again this year. Things do move around, as Bob just mentioned.
So if you have a huge position in Apple, Microsoft, Amazon,
or Nvidia is probably the big one. Now, that's been
phenomenal for you, But how many portfolios are way overweighted
to those names right now? And how many are susceptible
to the first hiccup that any of those actually have.
(21:36):
And another one that I think is really really prevalent
right now is international stocks. And I've mentioned this before,
but as we review portfolios, the international positions are really
running away and extending their lead this year over and
above the American stocks. This is a catalyst provided by
our current political situation where we've decided to basically play
(21:56):
a little more hardball with other countries, and rather than
play balls, some of them are building relationships between themselves
and working around the United States. So the market is
recognizing that that's an opportunity. If you don't have international stocks,
because there was a big movement toward the heck, with
everything else, all I need is the S and P
five hundred, then you are currently missing the boat. And
(22:16):
I'm gonna go ahead and say that I think that
relationship is going to stick around for a while. We've
been so proactive with these tariffs and all these things.
Countries are finding ways to work between themselves and work
around the United States. This is not ringing the bell
for alarm. I'm just saying you better have an allocation
in there for it.
Speaker 1 (22:31):
Well, Brian, you miss you mentioned the S and P
five hundred, and you know the winners of the past.
I mean, let's face it, regardless of the political situation,
right now, you know, just sitting on an S and
P five hundred index fund and thinking that's going to
get you where you need to go over the next
ten years. I mean, the S and P five hundred
now is well over thirty five percent almost forty percent
(22:55):
weighted to those magnificent seven tech stocks. And we talk
about this off and on this show. And as you said,
it doesn't mean you know, sell all your big cab
tech stocks. But if you're just sitting there, you know,
in an index fund, you are already way overweighted, you know,
from a volatility standpoint, to these large cap tech stocks.
(23:17):
And it is a good time as we enter into
twenty twenty six to take a look at your portfolio,
see what your allocation is to certain sectors of the
market in the US and to your point, whether you
have any exposure overseas at all, and if you can
do so, especially on a tax efficient basis, and there's
ways to do that. You know, now's a good time
(23:37):
to kind of rebalance, reallocate, and kind of stress tests
and volatility proof to some extent your portfolio. Here so
you don't get whipsawed if we do see a pullback
or sell off in some of these big names that
have really made headlines over the last you know, three four,
five years.
Speaker 4 (23:58):
Yeah, And another point to that making sure that you've
got all the you know, your ducks in a row
here is interest rates. So for a long time, you know,
many many investors who have a significant amount of wealth,
now did that during an environment where nobody cared about
interest rates because they were.
Speaker 5 (24:12):
On the floor.
Speaker 4 (24:13):
And all it meant was I could get really cheap
debt for my business or for my mortgage. But beyond that,
it really kind of robbed the ability of interest rate
based investments to really give me much that I cared about.
So then now that's not really the case. We're off
the mat with interest rates. They're back to a somewhat
respectable area where you can actually generate some yield out
of it. So the important question to ask is what
interest rate world are you built for? Because we were
(24:35):
in a rising rate environment, we're kind of back into
a declining rate environment. That means you're going to want
to pay attention to the duration of your bonds. You're
going to want to pay attention to the credit quality
those kinds of things. How do these companies borrow? What
sectors are you in? It really changes the attractiveness of
cash and CDs versus equities because now we might want
those things for a long time we spent you know,
kind of leaning away from that because of where where
(24:58):
interest rates actually were.
Speaker 5 (24:59):
So that's something else to.
Speaker 1 (25:01):
Well when speaking of bonds and just credit based investments,
you know, in general. You know what we're talking about
too here is take a look at your credit risk
exposure in the duration of your bonds, and let's stick
with credit for a little bit. You know, let's face it,
when yields go down, interest rates go down, people invariably
will chase yield, and oftentimes they will embed more credit
(25:23):
risk into their portfolio than they might have imagined because
they really, you know, it's very hard to manage. You
think managing an individual portfolio of stocks is hard, it
is very difficult to manage both interest rate and movement
and credit quality of bonds on an individual basis. So
you've got to have somebody take a look at this
(25:44):
and just make sure there's not more credit risk embedded
into your bond or fixed income portfolio than you might
have bargained for, because Brian, I can remember, you know,
points in time historically where people just went to sleep
on some of these even short term I yield bond
funds and really got their you know, rear in handed
to them if the economy declined at all, because these
(26:07):
bond funds can get whacked almost as much as the
stock market in a recession.
Speaker 5 (26:12):
Yeah, that's right.
Speaker 4 (26:13):
And again, you know some of the other things to
pivot a little bit here, make sure you're paying attention
to your tax and estate planning tools.
Speaker 5 (26:19):
Are you ready for that next decade?
Speaker 4 (26:21):
So we're gonna we're going to imagine that the tax
code is going to change just a bit over the
next ten years. Decent chance that tax rates could rise.
You need a portfolio that's going to anticipate these things.
And so that means thinking ahead, be thinking about roth
conversions so that you can protect yourself from those require
minimum distributions. You're not avoiding taxation, you're pulling it forward
so that you can spread yourself over time into a
(26:41):
higher than current but still lower overall tax bracket as
opposed to getting hit by the tax truck when you're
age seventy three or seventy five.
Speaker 1 (26:48):
Yeah, what we're really trying to call out here right
now is just your portfolio. You know. Don't treat it
like a crock pot. Don't just set it and forget
it for a decade, because markets do evolve, polished shift
your life changes, make sure your investments are keeping up.
And this is where a good fiduciary advisor can make
all the difference, because a good advisor is thinking about
(27:10):
the next ten years rather than the last ten years,
so you don't have to navigate all of this potential
volatility alone. Here's the all Worth advice. Build your portfolio
for the road ahead, not just the one that you
recently traveled. Coming up next, from overlapping ETFs to dividend
reinvestments to planning, from maybe even Florida, the real world
(27:35):
portfolio blind spots you might not even realize you have.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
Simply Money presented by Allworth Financial on Bob Sponseller along
with Brian James.
Speaker 2 (27:54):
If you have a financial question you'd.
Speaker 1 (27:56):
Like for us to answer, there is a red button
you can click while you're listening to the show. Oh,
if you're listening to the show on the iHeart app,
simply record your question and it will come straight to us.
All right, Brian Mark and Kinwood leads us off tonight.
He says, we've always used dollar cost averaging, but with
markets at all time highs, are there situations where investing
(28:17):
a lump sum actually makes more sense?
Speaker 4 (28:20):
Yeah, there can be, and there's This is really a
good You're not choosing the right path, You're choosing the
path that makes you the most comfortable. But history says
that lump sum investing usually wins about seventy five percent
of the time. Markets are higher twelve months after any
random day, even when they're already at all time highs.
Think of this anytime over the past three years. If
you face this question, the answer was throw the lump in.
(28:42):
It wasn't dollar cost average. Because the market has gone
up mostly steadily for three straight years.
Speaker 5 (28:47):
All time highs aren't all that rare.
Speaker 4 (28:49):
One out of every fifteen trading days is a new
record high. So waiting for that dip often more often
than that, means you're actually missing returns, not avoiding any
risk that said, dollar cost averaging isn't a bad thing.
Speaker 5 (29:00):
It's a behavioral tool.
Speaker 4 (29:01):
It's good if it will really really hurt you to
have gone in just before the market took a dip.
Think back in April when we panicked about tariffs initially.
You know, then that would have you know what, you
might have seen your lump sum get invested in and
then drop ten fifteen percent maybe more pretty quickly.
Speaker 5 (29:15):
It did recover quickly.
Speaker 4 (29:16):
But if that's the kind of thing that you don't
react to that you can't stay home about, then dollar
cost averaging will protect you from from throwing it all
at once and having to go through that now mathematically financially,
over the long run, it really doesn't make much difference.
I usually encourage my clients to go with a lump
sum unless unless we just really think that emotionally that's
not going to work. Should it should be in the
rare instance that it actually is going to go wrong.
(29:38):
Market goes up, not down, though, So don't don't don't
overthink it all right, Moving on to Jeff in Newtown,
Jeff says his portfolio looks balanced, but he keeps hearing
about hidden leverage in certain bonds and alternative fund So, Bob,
how do you uncover risk that's not obvious from the surface.
Speaker 1 (29:55):
Well, Jeff, this is how i'd answered this question. I mean,
when you get into the whole alternative space, especially in
the credit space, and you talked about bond funds, alternative funds.
I already mentioned, you know, in the prior segment about
high yield corporate bond funds, when you mentioned hidden leverage,
Oftentimes that can mean there are some option strategies embedded
in these investments, you know, and options can work to
(30:17):
your advantage or your disadvantage, depending on how they're being used.
So I think the important thing here is to sit
down with your fiduciary advisor, assume you have one, and
just look under the hood and see what the components
of your bond and alternative investment assets are and make
sure that you're comfortable with the amount of risk being taken.
(30:39):
Because again, as I mentioned in the prior segment, it's
awfully fun to reach for yield or more return, especially
when the when the c's look relatively calm. But I'm
telling you if and when, and it's not a matter
of if, it's a matter of when. We get into
a period of maybe a slight recession or a lot
of market volatility. You want to make sure you're comfortable
(31:02):
with what you own prior to volatility hitting the markets,
so you don't get whipsawed around and end up being
sorry that you bought what you own. And then what
we never want to see happen is somebody make that
phone call and say get me out, move me to cash.
Because to the extent that phone call needs to come
in for whatever reason, in my opinion, that means that
(31:25):
your advisor did not do his or her job to
educate you in advance about what you actually own and
have a good, honest conversation about whether you're comfortable with
the amount of risk being taken in your portfolio. I
hope that helps. Jeff, all right, Charlie and Bridgetown says,
we're holding several ETFs to track similar sectors. How can
(31:46):
you identify brian when you've accidentally created overlap or are
you just doubling up on risk?
Speaker 4 (31:53):
Well, you got to look under the hood, so sometimes
that overlap really can't hide in plain sight. To give
an ETFs exchange funds, they may have different tickers, but
they could own the same ten top stocks, especially with
in areas like technology, dividend growth or broader US indexes.
So in other words, if you're looking at Apple, Microsoft,
and Video those kinds of holdings inside your funds, that
(32:14):
is overlap. That's exactly what we're getting at here. So
look at the weight, not just the list. Don't just
do a quick glance of the top ten holdings and
then call it a day. You've got to understand how
much of the portfolio that stock makes up, because most
of them are capitalization weighted, meaning the bigger the company,
the larger portion of the.
Speaker 5 (32:32):
Portfolio makes up. Versus let's just throw.
Speaker 4 (32:35):
One hundred companies in here and then each company has
one percent of this portfolio.
Speaker 5 (32:38):
That's not how it works.
Speaker 4 (32:39):
So in other words, if a given company is seven
percent of the first ETF and that same company makes
up six percent of the second ETF, you're not really
diversifying by owning two of the same but two different ETFs.
You're just adding more of that same exposure. Remember those
top ten holdings in each one of those is going
to drive almost half of that fund's behavior. So if
you really want to get into this, lots of fun
(33:00):
companies out there will publish this sort of free portfolio
overlap calculated look on their websites. So there's plenty of
them out there, and it'll show you if you smush
these things together, what does your ultimate portfolio look like
under that surface. Anything that shows an overlap of above,
you know, say even twenty thirty percent, that's kind of
worth double checking and make sure it's going to match
with the other stuff in your portfolio. So, yeah, you're
(33:21):
right to be thinking about these things. Just because something
has a different name does not mean you are diversified.
Speaker 5 (33:26):
Look under that hood.
Speaker 4 (33:28):
One more, another one here from a Nina and Mason.
Nina's talking about dividend reinvestment today. She says they've always
done that automatically, but now they're wondering if they should
start taking them in cash instead. And what's the trade
off if I turn on my dividends bigot for a
little bit of income.
Speaker 5 (33:42):
Is there any sacrifice there?
Speaker 1 (33:43):
Bob Well, Nina, I think it all comes down to
what your income needs are, and this is where it
might be time to look at an overall income strategy
rather than just looking at an investment strategy in a silo.
Here's what I mean there are. What it really comes
down to here is how tax efficient your portfolio is
(34:04):
and make sure that you're getting you know, everybody needs
and wants a certain amount of cash flow coming in.
It all comes down to how do we create that
cash flow on the best blend of tax efficiency and
risk adjusted investing. So you know, for example, sometimes if
you've got these you know, divinends coming in, you know,
(34:25):
we first need to determine are they qualified dividends or
non qualified dividends. If you don't need or want the
income at all from a cash flow standpoint to spend,
those dividends might be better placed in your I RA
or qualified accounts so you're not taxed on them right away.
So uh, it comes down again looking at what your
income needs and wants are in structure structuring the components
(34:47):
of your investment portfolio accordingly. All right, we've got time
for one more. Brian Kevin and Florida. He says he's
a long time listener and a Cincinnati snowbird. He's starting
to notice how taxes interact with investment returns, kind of
what I was talking about here just a minute ago.
And he brings up the example and it's a good one.
How capital gains can push up Medicare premiums. How do
(35:10):
you plan these for these investments in these what he
calls stealth taxes that come up from time to time.
Speaker 4 (35:15):
Always good to hear from a podcast listener. Are I
don't think our radio waves reach all the way down there.
So he's downloading that poscat podcast every day.
Speaker 5 (35:22):
We love it.
Speaker 4 (35:23):
But yeah, stealth taxes. This is the stuff that sneaks
up on you when you're not paying attention. Capital gains,
roth conversions, requirementum distributions, all of these things, big mutual
fund distributions that happen to December can quietly shove you
into places you don't want to be with your taxes.
The big one is called IRMA. I AREMAA, and that's
your Medicare premiums. That means you your monthly part D
and B premiums might climb eight hundred bucks two thousand
(35:46):
more per year depending on the bracket.
Speaker 5 (35:48):
It's based on your income from two years earlier.
Speaker 4 (35:51):
Right, So if you're looking at IRMA now, it's based
off of something that happened in twenty twenty three, and
whatever you're doing now will surface in twenty twenty seven,
so it does change, not locked in at anytime. Also,
you might have a tax torpedo from Social Security. This
is when your investment income mixes with your Social Security
benefits and you might get a hit that zone where
every dollar of gain effectsive effectively gets taxed like two
(36:13):
dollars of gain because it makes more of your Social
Security taxbile. There's this re threshold in there too, So
the fix is planning out that income, understand where it's
coming from, spread out those ROTH conversions over several years,
harvest those gains in years with low income municipal bonds
that are tax free, or favoring ETFs over active funds.
Speaker 5 (36:30):
So you can reduce those surprise capital gains.
Speaker 1 (36:34):
Good stuff, all right, before you spend that year end
bonus on a last minute getaway or even the newest iPhone,
we'll talk about how to really put that money to work.
Coming up next. You're listening to Simply Money started by
all Worth Financial on fifty five KRC the talk station.
(36:54):
You're listening to Simply Money presented by all Worth Financial
on Bob Sponsller along with Brian Chains.
Speaker 5 (37:00):
So you just got a year.
Speaker 1 (37:01):
End bonus or you're expecting to receive one very soon.
First off, congratulations, Whether that's a small surprise or maybe
a hefty chunk of change, a bonus can be a
powerful financial tool if you treat it right. Brian, why
don't you walk us through how to take all the
fun out of receiving a year end bonus and be
(37:22):
responsible with it. Be the adult in the room.
Speaker 4 (37:24):
Only be happy for the instant that that money is
hitting the bank, and then start the worry machine, of course,
because that's how we call those human beings right now,
I'm kidding, but yeah, this is These kinds of nice
little windfalls are always they always come along with little
stress because you want to say, okay, what's the right
thing to do?
Speaker 5 (37:39):
Yeah, First off, I'll tell.
Speaker 4 (37:41):
You if your situation is, if you're in a pretty
good situation and you've been a responsible adult, do something
fun with ten percent of it or something like that.
We are not here on this planet to stare at
a pile of money and not spend it. Nobody's going
to talk on your deathbed about that time you didn't
spend that money, So go do something fun with a
portion it now beyond that, or by asking what's my
weak spot? Do I have high interest debt hanging around.
(38:03):
Do I have that one credit card with several thousand
dollars on it that was maybe it was part of
a zero percent balance transfer situation and I took advantage
of that that I've kind of forgotten about it, and
now I'm paying twenty eight percent. That happens more often
than you might think, So you know, pay that down.
Just just blow it out of the water with a
few thousand bucks something like that. If you're behind on
retirement savings, maybe put a chunk of it into your
IRA or boost your four oh one K contributions for
(38:25):
the remainder of this year. There's not that much time left,
but if you've got those dollars sitting in your bank account,
you have a little more than usual. You can simply
crank up your four to one K contributions all the
way up to one hundred percent, knowing that you've already
got money in the bank to actually pay the bills.
That's a sneaky way to put a lump sum into
a four toh one K. You cannot write a check
into it, but you can filter it through your payroll
as long as you've got money to pay the bills.
(38:47):
So anyway, then beyond that, if you've got the debt
in retirement on track, then start to think tax strategy.
Maybe you use this bonus to fund a donor advice
fund before December thirty first, that'll give you a nice deduction.
If you are contributing to charities anyway, pull that forward
many years of contributions into one account, and the church
or the charity behind it doesn't have to know that
you're aware of that.
Speaker 5 (39:07):
And I'm not saying don't enjoy any of it. Treat
yourself a little bit, but put some guardrails on it.
Take ten percent for fun and the rest of it.
Look at the weak spots.
Speaker 1 (39:15):
Brian, you already brought up the big guardrail, and again
it bears repeating. If you are sitting out there with
a credit card balance or this zero interest loan that
turns into a pumpkin here in the next month, where
you will be paying high interest rates, you do need
to forego the fun here and get that stuff taken
care of, make it, make that debt go away. Thanks
(39:35):
for listening. You've been listening to Simply Money, presented by
all Worth Financial on fifty five KRC, the talk station
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