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Good morning, and welcome to the Haven Financial Group Radio Show. Thanks for listening. My name is Larry Kolbig, founder and CEO of the Haven Financial Group. Every week we talk here on the Haven Financial Group about the radio show, about discussing your retirement at the crucial decisions. Financial topics today will be no different, Kim. Listeners can give us a call at six one two five zero four eighty
four hundred or visit us at Havenfinancialgroup dot com. We'd love to hear questions concerns, and on that site, our Haven Financial Group site, you can see all kinds of retirement tools. Great to be with you, Kim.
Great to be with you as well, and I understand we have a guest with us today as we talk about the power of simple retirement principles. Kyle Thomas is with us. He's certified financial planner on the investment team there at Haven Financial.
Great to have you, Kyle, Yeah, great to be here. Thanks for having me.
Yeah, We're always glad to have you join us, that is for certain. Larry has told you if you'd like to reach out to Haven Financial Group at any point while you're listening here at six one two five zero four eight four zero zero, gentlemen, we're going to talk about the power of simple retirement principles. Let me run through some of the sub we plan to hit, Understanding
compound returns, what can dividends do to your retirement? Then we're going to discuss the power of the Wroth and finally secure Act two point oh the changes in twenty twenty five, twenty twenty five, Larry, just around the corner. Boy, it's coming fast, huh.
It is fourth quarter and Thanksgiving. We'll be here before you know it, Christmas and then twenty twenty five. Can I really believe it? But you know how fast the time flies at this time.
Of the year, Yeah, it surely does.
You know.
I feel like once we hit November one, it's like it's just a boulder that just keeps rolling until we finally get there to January. Well, let's get started and talk a little bit about the first subject that I mentioned today, which is understanding compound returns. Larry, I'm going to let you take this because this is something I'm not really, you know, all that prolific with, So I want you to get us started on this. And then of course we need Kyle to jump in with us as well.
Yeah, and again, Kyle is the certified financial planner, one of several on the team, and he knows well about compound and returns, which is so powerful that if I could go back a little bit in history, Albert Einstein called it the eighth wonder of the world. He understands it, earns it, he said, he who doesn't pays it. Compound interest is the most power powerful force in the universe, he said, And it's the greatest mathematical discovery of all time.
Now that's putting it very powerfully as he did. But as it relates to retirement and money in your finances, compounding interest over long periods of time, and of course when we're talking about retirement, we are talking about typically longer periods of time. So it's very, very powerful. And that's why we encourage, as everybody expects me to say, younger listeners, younger folks, to start this at an early age.
Even if it's just a little bit. A little bit over a long time can equal quite a bit when it comes to retirement. Because you take x amount of dollars with a certain percentage rate over thirty forty years, you'd be surprised how much you can come up with. And again understanding that there needs to be some things that go together with this. When it comes to this, you must reinvest those earnings, you know, stay on the plan.
You must generate a positive return over time. Of course, there's going to be ups and downs, and you must use time in your favor and take advantage of that. So again, encouragement would be start early, understand how it works, the concept. And I'm surprised how often when people have a negative downturn in the market that they don't understand
how much it takes to get what they lost back. Now, if you're younger, maybe that doesn't make a big deal whatsoever, because that twenty thirty thirty year timeframe is so much longer. But when you're sitting down the folks we do that, you know that timeline is maybe five years or less to retirement. And if you lose fifty percent of your investment, say one hundred thousand dollars, you need one hundred percent just to get your money back. So that's why it's
so important. Number one, you get started, you use time in your favor, be consistent, and that's why it's having a plan, and it can make a major difference for your retirement.
HM.
So, Kyle, let's talk about some of the strategies that could be employed to maximize the benefits of compounding. Yeah.
Well, compounding interest is one of the most important things that I use when I'm talking to especially young people you know in their twenties or thirties, because you can just show such the big impact that it has for them. If you start young and you have thirty or forty years of investing, well, that can make the difference of hundreds of thousands of dollars by the time you're done
investing that and you're actually taking withdrawals from that. So some of the things that are really important in that are dollar cost averaging, you know, buying in on a consistent basis into the market on a whatever, whether that
be monthly or you know, semiannual or annually. Just make sure that there's a consistent flow going into your investments because now you're spreading out these investments on an annual basis or whatever it is, and then you're putting money in for all of these years as well, So you're getting interest on your initial investment, but then you're also slowly dipping in there a little more and more, and that's gaining.
Interest on itself as well.
So just keep in mind of different saving strategies that can also add to your compounding interest because this interest, it builds on the balance each year. So if you have if you start with one hundred dollars in one year and you get ten percent returns, well, now you're starting with one hundred and ten the next year, and if you get another ten percent on that, well the next year, then you have one hundred and twenty one. So that compounding interest can really add up quickly.
So what kind of strategy changes do you make when there's market issues?
So strategies that we make are just rebalancing the portfolios and making sure that we have good allocations for all of our portfolios, just because we don't know which types of asset classes are going to perform the best. And so if we can have our portfolios modified in a way where we can handle volatility and you know, we could strategically rebalance when some things are up and maybe some things are down, well, that gives us the best
capabilities to maximize our potential returns on portfolios. Because the ultimate key to success in investing is buying low and selling high. And when you properly rebalance when it's the right time to do so, that's when you create that efficiency in the portfolios.
Yeah, and cam, if I can be add to that, you know, we're not against people doing it themselves. If that's what they like to do, but we find as a comedynominator, those that do it themselves oftentimes miss opportunities of the rebalancing, the timing of those also having the right recipe and the right types of tax classification accounts, the right investments in roths compared to non qualified brokerage accounts compared to I er raise. Tax efficiency plays into
that conversation significantly, and I can't stress even enough. Even the smallest differences in compounding returns can lead to very substantial differences. Small differences, substantial differences in the amount that your final portfolio can have in retirement over these long periods of time. We're not talking one to two year, but we're talking longevity in many years.
Well, Larry and Kyle Alesk, both of you, what happens when someone comes in to see you and they're, you know, unfortunately in their late forties and maybe they haven't taken advantage of this. Is it just too late?
No, it's not too late, And there's always there's always a way that we can help fix, you know, someone from who hasn't saved previously, and it might be just more aggressive savings strategies, maybe some more aggressive allocations to try and and you know, get their account balances up a little higher than someone typically at that age, But it all depends on their situation, what they're comfortable with and what desires they have for their life and the future.
And that's why it's important to sit down with someone and you can map out a plan like that because we'll help put together a saving strategy, will help put together a financial plan and you know, an asset allocation that best suits them to fit their goals that they need.
And I'm assuming that you guys start to really protect these kinds of investments as people start to draw closer to their retirement because of volatility.
Yeah. At Haven Financier Group, you know, we're not limited in scope to those that are close to retirement or in retirement, and we help lots of our clients' kids at younger ages that wouldn't be our demographic that we speak to because we do a lot of public education. It's really geared towards retirement planning, which should be done at an early age because a lot of people get behind the eight ball and they get behind and then
they're playing catchup. So yes, we tend to be a little bit more conservative because of our media and a being in the sixty to seventy range. That doesn't mean we have to be because everybody gauges risk a little
bit different. But what we find is most people, lots of people, high percentage of people, aren't really aware of how much risk they are taking and there should be some awareness and understanding because that can lead to surprises that may not be positive surprises, but a negative surprise, especially if the market takes a downturn at the round time at the wrong time. So again, it takes a discipline and use of financial strategies. It's what we use
financial products. You know, we manage wealth with Fidelity investments in Charles Schwab In the market, we look at the big picture. What are your goals, what are your objectives, what are you working towards? How do we get there? And is that a ten year timeline a twenty year timeline. Again, I stress and people here all the time. It's never too early to start, even if it's on a small scale.
You got to start somewhere to get somewhere. So if you're listening and go, wow, we're not doing very good, give us a call. Start somewhere, have a conversation. Maybe you're on better track than you think you are, or no better time than the present to figure it out, all.
Right, So that number of six one two five zero four eight four zero zero, that's how you get hold of the folks at Haven Financial Group. Set up a free consultation, talk to them about what your goals are and if you have not gotten this kind of investing, put this kind of investing into your portfolio. Now is the time to do so. Six one two five zero four eight four zero zero. You can also go to
Havenfinancialgroup dot com. When we come back, we're going to talk to Kyle and Larry about what dividends can do for your retirement. In the meantime, you're listening to the Haven Financial Group Radio Shop.
Don't go too far.
We're gathering more important insights and retirement please government. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kulvig and Kim Karrigan. No back to the show.
Good morning, and welcome back to the Haven Financial Group Radio Show again. Thanks for listening this morning. Talking about compounding interest dividends. Feel free to give us a call six one two five zero four eighty four hundred, or of course Havenfinancialgroup dot com set up a time. There's no cost, no obligation. You have nothing to lose, only things to gain. You have nothing else of good valuable information and it can. Of course, we do lots of education.
You can find our classes on our site and we just had one that was full this week in New Prague with forty some people well attended, eight people eager to learn. And because how many times do you remember growing up all the classes that taught you how to make all the perfect retirement decisions. Probably not many people remember.
So can you do it yourself online? Yes, But we're very big into education because educated decisions lead to better decisions which ultimately, hopefully, hopefully leads to a solid retirement.
Absolutely. Kyle Thomas is with us today. He's a certified financial planner on the investment team at Heaven Financial. Always good to have Kyle along with us. Solemen, we're gonna talk a little bit about dividends and what kind of impact they can have on your retirement. I mean, dividends actually are a means by which to live for some people who are in retirement.
Correct, Yeah, it certainly can be.
It's it's not like a fixed product by any means at all, but it can be in a way. You know, if a company gives you a five percent dividend, well someone could count on that for income, that is they receive from a stock. But those dividends can change over time, and it's always important to know what it is and the full capabilities of the investment that you have.
Hell, oh, I'm sorry, Kryle to be the rupt you. I was just going to say, let's talk just a little bit, if we could back up just a second here and talk about you know, some of the products that offer dividends. Where where might that come from? Savings accounts, CDs, that kind of thing.
Yeah, well, dividend when I think of it traditionally as a stock, right, So there's dividends that companies will give out as a reward to their investors attract new investors or show strength in the company. But then there's also you know, dividends slash interest that you can get from CDs, UH savings accounts and that that type of thing as well. So there's there's multiple ways to look at what a dividend is, and there's multiple different vehicles that you can get it from.
Yeah, and if I could add, you know, dividend stocks are shares of companies, you know that pay investors some of their profits, if you will, typically maybe on a quarterly basis, We see that most common not all company companies pay dividends on their stocks, so not all stocks could be considered dividend stocks. But at the end of the day, Investipedia defines it as a dividend is the distribution of a company's earnings to its shareholders and is
determined by the company's board of directors. And we always look we like to look at the pros and cons of what you're doing. Dividends is one way to do it, there's other ways to do it. It could be a combination of a variety of things, and that's what we look at as we evaluate individual situations. You know, dividend stocks can be a great source for passive income. They can be flexible, you can maneuver on the fly and make some adjustments. They usually are value stocks, which we
are relatively stable and safe companies per se. You know, your Coca Cola's your Pormel's, Johnson and Johnson, some of those real stable companies, utility companies, those type of things. But there's always there's always a catch. Not everything is perfect. You know, individual stocks which were typically referring to can be more risky. And again we get back the word risk, not saying that's bad, but evaluate it doesn't make sense in your portfolio. You need to really choose these dividend
stocks carefully. You know, some people get hung up and I'm not saying there's anything wrong with it. Well, Larry, I just only do dividend producing types of investments. Well, make sure you weigh with the good and the bad and the ups and the downs. Don't get overexposed to a certain area that could be problematic. And then look at other avenues to generate income, because income is the name of the game in retirement. Where is it going to come from? What is social security going to be?
Are you blessed to have a pension, what additional moneies do you need to supplement those sources of income? And how do we do that in the most tax efficient way possible managing risk at the same time, so we're not overa conditions.
So Larry or Kyle whichever. Many of these dividend stocks, when they pay dividends out, they are tax correct. So would it change if you decide that you're going to reinvest that money versus taking out as income.
No, it doesn't change the tax status of that dividend. So rather, whether you reinvest it or just leave it in cash, or reinvest it in some other type of investment, the tax status remains the same. So it doesn't make a difference to be doing that. And typically, if you're going to be, you know, wanting to live on dividend income, you don't want to reinvest that anyways, because well, now
you already have the tax from the dividend. But if you reinvest it and you need to sell some of that stock later to get some more income, well now you're going to have more tax issues, right, or not issues,
but you have more of a taxable burden. And some things that I like to point out is that you want to control your income as much as possible in those years of retirement, and when you when you have a dividend that's reliably coming in, that's not as much control, especially when you have you know, social security and pensions as well. And if you're able to sell your securities when you need them. That gives you more control rather than when with this company that you own, their stock
pays out a dividend to you. So that's just that's one of the drawbacks to that as well, even though there is a reliable source of income from these dividend pain companies.
So am I hearing you say that you don't love dividend stocks or for people who are in retirement, or it's just this is just one of the pros and cons that you have to think about.
I think about it.
It's definitely a pros and cons thing, and I like to look at all the trade offs of it because I certainly do think that there are really great dividend pain stocks out there, but also I like to look at the stocks that aren't dividend pain or they're very
minimal dividend pain stocks. And there are big companies that you know, Navidia, Tesla, Apple, Google, Facebook, Amazon, those are the hot stocks of the last five years, and if people didn't invest in any of that they were all dividend stocks, well, they really missed out on a lot of gains.
So that's an opportunity cost.
I like to look at it and say, we need to make sure that we're properly diversified and investing in all asset classes because these dividend stocks they can be a tool and they take place in a portfolio, but you need to have a complete portfolio to have the best efficiency.
Kim near retirese that have a more limited timeline, if you will, they may want to focus on a combination approach of different types of ways to generate income. One thing that we caution, and we've seen this over the years, is you know, some of these high yielding investments, like you know, business developed corporations really stress rates, real estate investment trusts and other types of limited partnerships, they can
be very appealing. I remember in two thousand and seven to two thousand and nine, though, a meeting with three tyrees that had rates, and they had I rais and rates, and there was a shortage of money and income. The stock market was down, and because real estate was really doing bad, these rates are these are alternative of investments. They could not access their money even if they wanted to access their money. Larry, I need the money of it, yes,
but you can't have it because they've ceased distributions. You want to be very cautious, You want to have a good balance, make sure you understand the upside of the downside. But some of these can get quite risky. They make them sound really really good. But I always say, if something sounds too good to be true, ask a lot more questions first before you make a decision like that. So just things to be aware of.
So I think what I hear both of you saying is diversify, diversify, diversify.
Correct diversification, the right recipe, the right balance. And it may sound complicated, it's not for us because we do it all the time. But if you're not paying attention, and for some of you that maybe have four to one k's and you have limited investment options, that might be the best place. And we'll give you our opinions and make some recommendations and suggestions. It's just they added value that we bring to the overall big picture. And
then with our clients as they have questions. Uh, just this past week, on a couple different occasions, people mentioned, well, nobody's ever spent the time to actually explain it to me in layman's terms. At least I have an understanding and that requires more than a meeting once a year for forty five minutes to an hour retirement as all these other pieces that go with it, and people should be getting the attention they deserve.
Absolutely an things shift, that's for sure, and you need to be meeting and to discuss and discuss six one two five zero four eight four zero zero. That's how you get hold of the folks at Haven Financial Group. And if you have a portfolio that maybe it's diversified, but you need someone to look over, or maybe you're not sure if it's diversified or not, why don't you give the folks that Haven Financial Group a call six
one two five zero four eight four zero zero. Call them and tell them that you heard us here on the radio and that you'd like to come in and you'd like to talk to some of their experts, some of the members of the team talk maybe about dividend stocks, maybe you'd like to talk about tax issues, you'd like to talk about other kinds of investments. They have the folks there who can talk to you about it. Six one two five zero four a four zero zero with
the number. You can also go to Havenfinancialgroup dot com to learn more. When we come back. We want to talk about the power of the WAWT right here on the Haven Financial Radio Show.
Ready to find your financial safe Haven. Your dream retirement is in reach. Don't go away. The Haven Financial Group Radio Show will be right back. Are you worried that your financial strategy might be missing something, Well, you're in the right place. Larry Kolvig is back and ready to help you find your financial safe Haven.
Good morning, and welcome back to the Haven Financial Group Radio Show. I'm Larry Kolvick, founder and CEO of the Haven Financial Group, with Kyle Thomas, a certified financial planner on the Haven Investment Team, talking about power of compounding returns. We're going to talk with Kim about ROTS. Listeners can give us a call at six ' one two five zero four eighty four hundred or Havenfinancialgroup dot com. We
encourage it. That's what we're here for and as it relates to retirement, that's where we help people in a variety of different ways.
Kyle Thomas is with us today. He's a certified financial planner with on the investment team with the Haven Financial Always great to have Kyle along. Yeah, we're gonna talk about Roth accounts. You know, they come in a couple of different forms. They sometimes are iras, sometimes they're in the form of four one case, and they do really have some unique opportunities, don't they larry. But there's some things people also need to be aware of.
For sure. You know, we're big fans of Wroth. On a weekly basis, people come in and they kind of kick themselves. Why don't I have more money in Wroth. Why didn't somebody tell me ahead of time? You know I have all this in pre tax. You know you've been preached to for years to put them in the pretax. What's important to understand is the timeline hasn't been forever they put money in Wroth. They haven't been in employer sponsored plans for that many years. Yes, the more money
you can get in Wroth, the better. It's fourth quarter. And if listeners haven't talked about I rate of Wroth conversions, you know it's the fourth quarter. Everybody should have the discussion whether it's applicable to you or not. But we're big fans of ross for a variety of reasons. Pay now or pay later. You know, many of the clients, you know we have had low tax brackets that will sunset the end of twenty twenty five. You know, it goes in, you pay the taxes, and then when you
take it out, it's tax free. Well, what do you think taxes are going to be ten years from now when you have to be if you're sixty three or whatever you're at and you have to take required minimum distributions, so tax you know, pay hour, pay later. But then you have to look at yes, but is there more value in getting the tax benefit in the given year, you know, the tax free withdrawals. It's great if you need some additional income and your income's already high. So
there's so many benefits to it. However, how do you do it? Larry, I make too much money, there's income limits. I can't do it. Where there's a will, there's a way. And people may have heard of backdoor roths, which we won't get deep into the weeds, but there's certain restrictions. You want to make sure that you're worrying again the
does it make sense? You know with these I RATEA roth conversions, there's some time limits, you know, the five year rule on every conversion where you can't really access their earnings. So again, what are the drawbacks, what are the pros? What are the cons? The problem is many people are not tax planning, they're not having these conversations. The year will go by, and then next year we'll have a conversation. Did you take advantage of this, Larry?
Nobody told me, nobody instructed me, nobody even pointed it out. Those are the things we want to avoid, unforced airs, missed opportunities because the conversation was never had.
So you've said there's pro and cons. So Kyle, why don't you talk us through, like the scenarios that would be good for someone to invest in ROTH.
Yeah, so there's many good scenarios for someone to invest in WROTH. And the people that come to mind when I think about that right off the bat is the younger generations, you know, those peoples in the twenties and thirties again, because those are going to be some of the lowest earning years of your lifetime. And the thing with ROTH is that it's after tax money, So it's money that's already been taxed at whatever your tax rate is.
So if you're in the cheapest tax rates of your life, well that's a good time to put money into ROTH.
Maybe not necessarily.
If you're in the thirty or forty percent tax rate, you're getting close to retirement because those are your highest earning years, and so that might be a spot where you want to do pre tax traditional IRA traditional four one K. That's the same kind of bucket right there in tax status because that's going to low your income. You're going to have a tax deduction on that amount. So those that's that's a positive to doing a wroth and then you know positive to doing pre tax IRA.
You know when you're in those higher income years.
Let's talk about if you do put your money in, what are the restrictions and what are the rules about starting to draw that money off?
So you have to wait until you're fifty nine and a half In most cases for a roth ira, you are able to take out your principal contributions at any time and without penalty. It's only the earnings that you have to wait until you're fifty nine and a half and you have to wait five years at the minimum, so that that's when you have to wait on those.
But you can get access to your contributions at any time, and there is you know, exceptions for hardships and first time home buyers and all that for iras, and so there are ways to get access to it, but in reality, we want to keep that money in WROTH there until we're in retirement as long as we can.
And are the rules related to when you have to draw it.
Came. The beauty of the wrath is there's no rm ds necessary. The taxes have already been paid. There's always exceptions. Kyle mantioned first time home purchase, qualified education expenses. I think last week or the week before, you and I talked about using roths to help plan for those kids or grandkids college expenses, and I think that's a great way to do it. You know, if certain emergencies come up,
it can be accessed. Another really big benefit if legacy is important to anybody, the roth IRA is very powerful because oftentimes when beneficiaries receive IRA funds pre tax moneys from mom or dad, whoever it is, they're in oftentimes their highest tax bracket and they better be thankful mom and dad for what you're giving them. However, they might be acts at a higher rate because they're making more money. The beauty of the wrath is it's tax free to
the beneficiaries. Although I had one couple say, well that means that I paid the tax and the kids don't have to pay the tax. Yes, that is correct. If that's important to you, they're going to really appreciate it if it's Wroth money. So for estate planning purposes and legacy, it's a great way because, of course many many of us know that several years ago the stretch IRA or the multi generational IRA that you know across the country Ed Slott and East Coast CPA. He's a guru in taxes.
I've heard him. He's a speaker and he gets giddy about taxes. And I'll tell you what. He wrote books on multi generational stretch iras that are obsolete because the rule and the laws change. Now now you have to accomplish those goals if it's important to you, through other measures or through through some other planning processes. So big fans of the Wrath for sure.
What are some of the what are some of the limits do you know? For educate for income? I'm sorry, what are some of the limits?
Well, there is a phase out for the amount of income that you can have, and off the top of my head, I'm not sure what those are. But for someone married finally jointly, I believe it's around one hundred and eighty thousand or so, so it's upwards of that amount. And you know, like Larry said, there are ways to
get around that, like the back door wroth. Sure, and that's something that you should definitely talk to a professional about if if you don't qualify to do a traditional wroth IRA contribution, because we can, we can get a little fancy with it and get you some backdoor wroth money because that makes sense when you have a non deductible IRA contribution, because that non deductile IRA contribution isn't tax deductible, and then it's also a tax free roth conversion.
So that's where it makes sense for that stuff. But there's always a way to try and get it done.
Like Larry mentioned, yeah, because even though there are the income limits, the back door wroth, even though you might not get the upfront tax benefit, again, that's maybe okay because you get the benefit on the back end. So what you have to do is, just like I've said several times, is way the benefits Does it make sense to have it in a traditional pretax? Now? Tax wise, is there more of a benefit in the future. I
can't stress enough the fourth quarter. Now's the time we're having the IRA Wroth conversion, because it at the end of the year. If you don't have it done and don't wait till the end of the year, we should really have it done, you know, by the first week of December, and no later than that. Otherwise it's a
good chance it's not going to get done. And I say that not only on the conversion of that discussion, but if you have an inherited IRA, if rmds are coming to if you're needing withdraws or distributions before the end of the year, do not wait till the second half of December. And again not saying it's bad, but there's always the procrastinators out there. It's okay, it's human nature. But we want to avoid not being able to confirm that things are going to be done because the end
of the year things get extremely hackic. Ask yourself, does it make sense? Has anybody had this discussion with you educated decisions? Yes, it does and here's why, or no it doesn't and here's why. If you have that in depth conversation, it'll be crystal clear as to why you did what you were supposed to do.
Sure, absolutely well. If you want to know how to best utilize a WROTH into your portfolio, or maybe you would like to introduce that strategy into your portfolio, then give Haven Financial Group a call that number six one two five zero four eight four zero zero. Let me give you it again. It's six ' one two five zero four eight four zero zero. You can also go to Hanfinancialgroup dot com. You'll learn about some of those educational some of ours that are coming up. They are
open to the public and they are free. They just need folks to sign up. Go to Havenfinancialgroup dot com. Gentlemen, when we come back, secure Act two point zero. There's gonna be some changes coming up in twenty twenty five, and we'll talk all about that right here on the Haven Financial Group Radio Show.
Don't go too far. We're gathering more important insights and retirement Please government, The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kolvig and Kim Karagan. No back to the show.
Good morning, and welcome back to the Haven Financial Group radio show. I'm Larry Kolvig, founder and CEO of the Haven Financial Group. Thanks for listening, and please give us a call with any questions, concerns, anything you may have heard. We can shed some light on it. Six one two five zero four eight four zero zero or Havenfinancialgroup dot com. Set up a time to come visit with us. There
is no cost, no obligation. We take people through the same process and you get to know us, We get to know you, and maybe you haven't done that in a while, or maybe you're concerned and you're listening and go, wow, I'm not so sure what position I'm in? Good, better, and different, and hey, no better time than right now.
Hey, you pat, this is the time to do it. Twenty twenty five just around the corner, and there are some changes coming in lots of different financial areas, some you've actually heard us talk about here on the show, this show and in shows past. Secure Act two point zero that is changing. So first off, Larry, why don't you start by telling everybody what the Secure Act is.
Well, it was signed in the law into twenty twenty two. You know it expands retirement savings options. I mean twenty twenty five workers age sixty to sixty three can do some more catchup contributions, which you know, in itself is probably a good thing because you know, if you've been lack and not been disciplined, now's the catchup time. Maybe those kids are off the payroll and you finally took them off paying their cell phone bill and to sell.
Maybe the college expenses aren't as high. I'm not sure when kids go off payroll, but please let if you're listening, please let me know. Anxious to hear, or maybe that's just my problem. No, I'm just kidding. But these changers are going to be coming into effect. There's going to be some forced savings accounts and employer plans you know, automatic enrollment and really increase retirement you know savings participation.
Because there's a lot of people that have it available to them in their employer, through their employer, yet they're not taking advantage of it. And when I hear that, you know, it's really sad. Now, I know, life happens, but if there's any match from your employer, you're losing opportunity, You're losing free money. I don't know why you want
take advantage of it now In this. You can opt out of it if you choose to, but again, encouragement, just like we do on a weekly basis, to get these get these plans going through your work or on your own, and catch up if you're getting behind. So you let Kyle talk a little bit more of some of these other changes as well.
Sure, Kyle, Kyle Thomas with us this morning. Kyle talk. First off, this is not necessarily these changes don't affect every single plan, right.
No, they don't affect every single plan because ultimately the employer has to implement these changes. They're the planned sponsor and they have to adopt these changes. The IRS just made it available for them to do.
So, all right, talk to us about some of the other changes that you're anticipating in twenty twenty five.
So some of the big ones.
Well, first of all, on Friday, the IRS came out with the new limits for contributions and so for next year it's going to be twenty three thousand, five hundred for regular four to one K contributions, and then the catch up for age fifty is going to be seventy five hundred, and then that age sixty to sixty three that Larry mentioned earlier, they're going to be able to do eleven and fifty. So it's it's one hundred and fifty percent of the of the regular age fifty is
what they're going to be able to do. And so that's a huge benefit to be able to maximize your savings in those later years of your work. And everyone is going to be participating hopefully, right I hope that the people who haven't been saving so much can automatically get enrolled into these plans and they can start saving and getting that compound interest that we were talking about earlier at younger ages, and they can get their savings
going for them. And you know, some of the best practices that I like to tell people is to increase your savings rate by one percent each year because that's going to be a minimal difference that you see on your paycheck. But those are some of the changes that are going in there. And the contribution rate for those people that are going to be automatically enrolled are three percent.
Okay, And obviously, because you said this earlier, this is really up to your employer. So if you're listening right now and you're wondering if this is an opportunity for you, You'll have to go to your employer to learn.
That, yeah, that is correct, console your age are, whoever you're working with, through your employer, that's the place to start. Another benefit. I think for those that are maybe not saved enough or SA they have several four to one k's all over the place, or have low account balances, there's a portability factor here where they'll be able to roll these all into their current four O one k. You know, you don't have to think make things complicated.
We're all about simplifying, consolidating, still maintaining a good level a good level of efficiency and diversification in the portfolio. But you know, in this this past week I had it consultants, both him and heard. They had about eight different forour to one k's. Six of them were not even their orphan for a one k's. We helped them roll that in and consolidate and they go, we didn't
know we could do that. Now they it's either severed employment or that's applicable to if you're fifty nine and a half, maybe you're concerned about the market, maybe you're not. That is an option that we'd help a lot of people with. Not that you have to roll your four one ks, but you might want to entertain all investment options. You're closer to retirement, you may want to reduce your stock market investments. It comes back to the balanced approach.
And I can't tell you how many times folks come in they're closer in retirement, they have very little in the bank, liquid and everything at risk in the market, and somehow they think that's a good recipe for retirement. I can tell you the market, and Kyle will attest the market doesn't go up forever. So if you're in that position, although most people don't know that position, you may want to get your portfolio stress tested number one
to alleviate the stress. So if the market doesn't cooperate that you're not going down with the ship.
So very important, absolutely, Larry. If let's go back to that catch up contribution idea from sixty to sixty three, if you participate in that, how much could that possibly impact your retirement.
Oh, we talked to the first segment about power of compounding. You know, if you're sixty and depends upon you if you plan on working, but if you live till ninety, it can be very powerful. Like I said earlier, even the little bit of difference can make a big difference. So I encourage that if that is an option, and it reduces your tax liability by that amount if you're a high income earner. So there's major advantages, but it
does take a discipline. You know, there's a lot of changes that go on in the financial space, and they're going to continue, you know, the landscape shifting. We'll see what happens. You know in the upcoming year. You don't have to be the expert, but rely on a partner to help you navigate through these retirement years or planning years. You know, all the retirement puzzle pieces. Do you have
all the pieces? Do you have all the tools? You know, we talked frequently about that, and I'll just outline kim our process with anybody listening that wants to come in, anybody we meet that wants to come in from our classes, anybody that comes in, We're going to sit down again, have a discovery, get to know us. We get to
know you, ask a lot of questions. From there, we can develop a strategy or evaluate stress tests your portfolio, give some suggestions, recommendations if you choose one chooses too, which we help a lot of people. We help implement the strategy, the initial strategy, the changes, the adjustments, and then it's not just set it and leave it. It's monitor it, make adjustments. We get older. Life happens, you know.
Sadly enough. What I see just this week is I had a client to lose his job at Cargill as a consultant, and it's sad to see you mid sixties, no names attached, and he had racked up thirty one thousand dollars of credit card debt. And you know what, life happens. I get it. Those are tough conversations. And then I'll just you know. Carol Anne, who's a new client of ours, been to all of our Havin events because all our friends are with us. But she was
so cute. She goes, Larry. I've come to your events for five years and I really like you guys. But here's the reason why I haven't chose to go with you until now. She goes. Lester was my husband of twelve years. We got married in our fifties and sixties. Lester handled the finances and our financial guy was in Rochester and as much as I wanted to come over, and this is where we're not a all or nothing five year, ten year. It's whatever life put position, life
puts you in. She goes, I've wanted to come here, but I couldn't leave my guy in loyalty of my late husband. You know what. I respect that, but you know what she goes. Now, I know I've made the right decision, and she goes, I need your help. That's somebody being openly honest, and we appreciate her. We appreciate
all the personalities that we get to help. But that's what makes our job so fulfilled, and it's why we come to work five days a week and really enjoy what we do because we can make a very big difference in all of these or some of these retirement areas.
T two five zero four eight four zero zero. That is the number you call, set up an appointment, go in and talk to Larry and members of his team about what you're thinking about when it comes to retirement, what you hope to accomplish six one two five zero four eight four zero zero. You can also go to Havenfinancialgroup dot com. There you'll learn more about some of those educational seminars. A Seminar two learn a little bit
or find out what you don't know. Sometimes that's what we need to do, go to educational events to find out what it is we don't know. Six one two five zero four eight four zero zero. All right, Larry, Well, you've taught me a few things this weekend, both you and Kyle Well.
Thanks, Kim, always good to be with you and again, listeners feel free to give us a call six one two five zero four eight four zero zero or Havenfinancialgroup dot com look forward to next week, Kim have a blessed week.
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