Let's Talk Money

And I will just say this month, it seems to be flying by, you know, with Thanksgiving being later in the month in November this year, it just seems like December is just on a fast track, just flying by. Hope everyone is getting a chance to enjoy this holiday season and whether that's with co workers, friends, family. Actually be attending a friend's holiday party tonight, so looking forward to that. And as a firm, we had our firm wide holiday celebration last weekend. I know Steve talked a

little bit about it on the radio last weekend. It was a great time. Steve, very generous leader of our organization. We had a great weekend Steve puts everybody up at a very nice hotel, the Adelphi Hotel in Saratoga, which if you if you've never stayed there, I highly recommend

it that the rooms are spectacular. So our associates were all put up there at the hotel, and then we took over I think one of Steve's favorite restaurants, I think many of our favorite restaurants, you know, Stereo Dandy's. We had a dinner there Saturday night with all of our colleagues, their spouses, partners, a just a great evening

of you know, unwinding with each other. You know, Steve talks about you know, you know, we manage you know, almost one point five billion dollars right now for our clients, and it's very serious work. You know, we take it very serious, you know, when we're we're managing their wealth, managing the retirement savings. So we work hard. But as a firm, we we like to play hard too, and and uh and enjoy each other's company. So last weekend was you know a great opportunity for us to do that. So,

uh so it was a great weekend last weekend. Also this week we got to celebrate yesterday, So the all. But they Business Review holds a you know, they call it the Best Places to Work, and it's based on employee input and other things. And uh, for the third year in a row, we won that award, and so there was an award lunch and so we got to celebrate with our colleagues in the morning, and then we we had a breakfast uh kind of celebration, and then we went to the event and uh several members of

the team got to celebrate. But uh, you know, I will say it's it's an important uh part of uh, you know, Steve building the culture at our firm. It's

been our ability to attract and retain great people. And you know today, you know, you have to be a great employer today to retain people because everybody there's so many options, and it's not just local options, right, you know, we worked remotely, uh in our industry, some individuals do, and so certainly Steve has always built a culture of of really hiring the best and then doing our best to retain by offering great benefits and really creating a

culture where everybody knows they matter, and and that's important. So it was a great uh, I'll say, just a great week of celebration and you know, capped it off yesterday, which which is really you know yesterday the best place to work really a an employee uh selected. Uh, you know, really the employees are the ones that provide the feedback and really get us that award. So really appreciate that, and appreciate all of our colleagues. So appreciate all of

our listeners, you know, tuning in with me this morning. Uh, you know, we've got a lot to talk about, and I just you know, encourage listeners to call in with questions. You can reach me at eight hundred talk to w g Y. That's eight hundred eight two five five nine, four nine and one. You know, I can guarantee there is no silly question if you're thinking that, I mean, I can just guarantee you other listeners are thinking that same question. And so appreciate if you pick up the

phone call in. And that's what we're here for, you know, is to really you know, provide advice and question and answer questions for the listening audience. So certainly reach out, uh and uh. For the next sixty minutes, I'll be going through you know, obviously some financial topics, the markets, and some financial planning topics and whatever questions you might call in with. So we'll kick rate off, you know, jumping, you know, right into a kind of a market update.

You know, the major US indexes mainly ended this week lower, and you know that was despite coming off record highs midweek when we got some well received CPI inflation data. We saw that NASDAC propelled to its first close over twenty thousand, but the week kind of settled down and

you know, gave back some of those gains. And you know, the Dow posted its longest losing streak on Friday since twenty twenty, and so for the past seven sessions, the NASDAK was down, you know, posting its longest losing streak since February of twenty twenty. The SMP, you know, recapping the rest of the indexes for the week, SMP closed the week down about point six percent. The Nasdaq finished

the week with a small game point three percent. They got a major major boost from Broadcom, we'll talk about that in a minute, but still finished with just a slight gain. And you know, the Dows slipped, you know,

one point eight percent for the week. So you know, down week in the markets, and you know, Broadcom, as I just mentioned, big gainer on Friday, you know, stock up twenty four percent, kind of a massive surge there, reached the one trillion market cap and Broadcom you know, in their earnings release really uh, you know, gave some

great guidance on some surge in their AI sales. You know, broadcome beat chip Maker, so they were rewarded heavily, and it's it's amazing to see, you know, a twenty four percent increase in a company that you know, they're not a small company, Broadcom, you know, trillion dollar market cap and to see that kind of pop is you know, just shows you some of the growth potential with technology stocks. So,

you know, major boost in Broadcom. You know, we did see small cap underperformed for the week, you know, which you know, maybe investors becoming a little bit more risk adverse as we come near a year end with this most significant weakness in the small cap small stock small cap stocks being you know, in the biotech and healthcare sector in general. So that's where we saw the small

small caps some of the major declines there. So small cap certainly lags, which you know for you know, last couple of months we saw a nice broadening of the recovery and small caps were doing great, so it was nice to see so. But small caps did give back some of that recovery this this past week. But still as we you know, look here was just a few weeks left of the year. You know, we're sitting with the S and P five hundred up twenty seven percent

year to date. As I mentioned just you know, they're down slightly at four zero point six percent for the week, ASDAK up thirty three percent year to date. The Dow, even though you know, tough week to the Dow this week, down about one point eight percent for the week, they're still up sixteen percent year to date. And the Russell two thousand, you know, small cap really the biggest loser of the week with the small calfs was down two point six percent for the week, but still up sixteen

percent year to date. So you know, as we head through, you know, the final weeks of the year, you know, will we see this Santa Claus rally. Many are still predicting we will see a nice little pop at the end of the year, but certainly, you know, there are some headwinds. We've got the FED meeting next week, and we'll talk about that. We also, you know, obviously have

a lot of international news too. You've got some rate cutting international also, you know some you know, some conversation about tariffs and what will president like truck Trump do there and how is that going to impact certain sects and so certainly, you know, been a great year in the market. But you know, as there is some enthusiasm for President LEC. Trump and all that he is saying he's gonna bring, there are also some headwinds created with some of that, and so saw some mixed, mixed results

in the markets this week. You know, ten year treasury, we saw a little pop in the treasury, you know, up twenty five basis points for the week, so closed out you know at four point four percent the ten year did, and the two year treasury up a little bit too, about almost four point two four for the week. So you know, still some good year yields there in the treasury, which also could create some softening in some of the small cap and some of the equities. Is

you know, those yields look attractive for investors. So you know, overall, as we look at where we are, you know, year to date, just the stellar year and really back to back stellar years, right too, years in a row of plus twenty five percent returns in the SMP. So certainly, you know, we'll see if we can repeat that. You know, and you look historically at data and you know it is mixed when you have back to back twenty five

plus percent returns in the SMP. But certainly, you know, technology still seems to be what's driving the growth and still a lot of a lot of AI related demand, so we'll certainly see how that holds up. So encourage any listeners. You can reach me with any questions. You can call me at eight hundred talk WGY. That's eight hundred eight two five five nine four nine. So, as I mentioned a recap of the markets, you know, a slightly down market i'll say neutral on Nasdaq, but still

a great year to date. And you know this week we did get another CPI print, you know, Consumer Price Index came out on Wednesday and really showed you know, I guess overall it was a long consensus what wallst we thought would happen, analyst would happen. The inflation is proving to be a little stubborn, but you know, prices rose two point seven percent for the twelve months through November,

which was in line with consensus forecast. Now, remember our FED target is two percent, so still in that two point seven percent, you know, and it is showing stubborn, you know, getting down from that two and a half to two point seven down to the FED real target rate. So so did see a slight uptick compared to September and October. But again, what we don't like to see our surprises, and this print was not a surprise. It was rate in line with what you know, economisty consensus

forecast was, and you know, core slightly high. You know, remember core inflation excludes the you know, food and energy, which tend to be more volatile, and it came in at three point three percent. So as we we'll be heading this week into another FED meeting, right, they could be making an interest rate decision. You know, all eyes were on that CPI print. Where we're going to get any surprises that might affect what the FED is going

to do? And I'd have to say the answer is no, you know, I think inflation is showing that it is being stubborn, but no surprises, nothing that the FED is really going to be concerned about. And you know, we remember with the FED they have a dual mindate, right, so inflation is one, but also maximum employment is their second mandate. And you know, not this week, but the prior week.

On Friday, the jobs report came out for November and it was a very positive jobs report, added more jobs, two hundred and twenty seven thousand jobs created in November. That was more than estimates of a little over two hundred thousand. Also had some upward revisions of October's jobs report. Remember October's jobs report was very very low, really impacted by the Boeing strike in some two major hurricanes. So

we did see an upward revision to those numbers. And then November, you know, jobs jobs coming in higher than estimate, so you know, positive news there. Did see a slight uptick in the unemployment rate to four point two percent, but again nothing concerning that. That's very very low overall employment rate, unemployment rate, so you know, from a FED perspective, you know, I think some good news there. So you got a combination of a good jobs report, good CPI print,

and remember that that's the FEDS. You know, we've been talking so much about the Fed's fight on inflation. It's almost now. I think more of their focus is really going towards and they want to you know, you know,

make sure that there's no surprises on the unemployment front. Now, I don't think they're celebrating thinking that inflation is totally in the range they want, but it's certainly come down significantly from the nine point two percent that we saw a while ago, and that was you know, very concerning. So certainly inflation number is much closer to where the

FED wants to see them. And so inflation seems to be you know, getting in check, and now they just want to make sure that, you know, we don't have any surprises on the unemployment front. And and I think so that jobs report a little over a week ago was a positive indication there. And so this week we head in, you know, to the Fed's final meeting of the year, and yeah, I would say the likelihood of a twenty five basis point reduction in the FED rate

is highly likely. I think, you know, some consensus would say it's close to ninety five percent likelihood that that's that will happen. And you know, there could be a lot of debate of should they at this point. But I think, you know, the belief is that FED is going to continue on and reduce interest rates by a quarter point. And what will be interesting is as we get guidance of what to expect for twenty twenty five, you know, how many rate cuts will be look at?

Looking at for twenty twenty five, what will the FED really be focusing on. I think we'll we'll hear a lot through the minutes and you know, discussion from FED Chairman Powell after the meeting as to what to expect for twenty twenty five and how that's going to get priced into the markets. You know, some analysts are indicating, you know, maybe only two more rate reductions in twenty

twenty five. I think, you know, what this FED has shown is they're going to be very data driven and so making it very clear they're going to continue to look at how inflation numbers come down and then just how how job markets, how the unemployment rate fares in twenty twenty five. So I will you know, I think no data came out in the last few weeks that

should be concerning to the FED. So I think all expectations are is this week at the FOMC meeting, the FED will continue with their rate reduction and reduce rates by twenty five basis points. So certainly that is the being built into the markets. And as always, you know, if markets get what they expect, it should be already built in. And if any surprise is there, though, then

we could certainly see volatility. But again, nothing in the data that's come out is pointing to the FED having to do anything more dramatic from a rate cut perspective or pause at this point. So expectations are we will see another twenty five basis point cut. So I want to encourage listeners. You can reach me at eight hundred talk WGY. That's eight hundred eight two five five nine

four nine. You know, one of the things I want to talk a little about is, you know, at this time of year, you know, if you're still working, most likely your employer might be going through open enrollment season, and it's at annual time where you're making your benefit

elections for the upcoming year. Not every business has a calendar fiscal year, but a lot do, and so you know, as a part of those elections is many working individuals are are electing health insurance plans and we're seeing you know more and more individuals into high deductible health plans, and we certainly encourage if you are enrolled in a high deductible health plan, it's also you have an investment vehicle that we think is better than none, and that

is a health savings account. So if you do enroll in a high deductible health plan, we highly encourage you to also enroll in a health savings account and really max out your contribution. I mean, there is no vehicle other vehicle like a health savings account. It is triple tax advantage. So money goes in tax free, it grows tax free, and as long as you use that money for qualified medical expenses, you never pay tax on that money,

which which again think about it. You know when we think about on the retirement side, you know for one K plans you do, money does grow go in tax free. If you do it traditional, it grows tax free. But when you take that money out, as we all know, you then pay tax on it. You also will be

subject to RMDS required minimum distributions. With a health savings account, again you get the benefit of the upfront tax deduction's right, so money goes contributions you make into your health savings account go in tax free, the account grows tax free, and whatever you take out of there as long as you use that for qualified medical expenses. And that's a big list. You know, the IRS publishes a list. It's it's an exhaustive list, as long as you use that money.

And the fact is is in retirement, you know, generally our out of pocket medical costs go up. As long as you use that for qualified medical expenses. You never pay tax on that money. So, you know, like anything, if it's too good to be true, what does the IRS do? They live in how much you can put into that. So there are limits as to how much you can contribute to an HSA. There is not any limits on how large it could grow to or how much you have to take out of it, or how

much you can take out of it. There is just a limit as to how much you can contribute. And so for twenty twenty five, and the limits depend on what type of health insurance coverage you have, So if you have single coverage, the limit the contribution. The max limit is four thousand, three hundred and for a family it's eight five and fifty and there is a catch

up provision. So if you're over fifty five role then you can contribute additional thousand and So we are seeing more and more of our clients who have been able to contribute hsas. Now hsas have become more popular, i would say in the last ten to fifteen years. So you know, it's not that we're seeing, you know, clients with huge balances, but certainly those who've been in for ten fifteen years have been able to accumulate some nice balances.

And you think about it. If you're in retirement and you have an unusual medical expense, you know, many times you're faced with if I pull it out of my IRA, I'm going to pay tax on it. This way, if you're pulling it out of your HSA, that's totally tax free money. You're never paying tax on that. So certainly we encourage individuals if they are enrolled in a high deductible health plan. That is one of the requirements is

to have a health savings account and do well. To contribute to a health savings account, you have to be

enrolled in a high deductible health plan. Now, if you have an HSA, and let's say you've had an HSA account for five six years, and you've contributed money, and then you enroll in Medicare or you're no longer in a high deductal health plan, you can't contribute any more money to the health savings account, but you can spend out of that without any and so again you let's face say you enroll in HSA for ten years, you contribute, you build up that balance, and then you retire, you

get on medicare, and now you can't put any more money into the HSA count. But now you've got this pool of money, and HSA providers let you invest that money. Right, So you know, many of our clients keep a little bit liquid, you know, what they expect to spend in a year. The rest they invest, let it grow, and again it's growing tax free, and then you can continue. You can spend that HSA down as you're retired and in Medicare. Again, the Medicare makes you ineligible to contribute,

but you can still spend that money down. So a great vehicle, nothing else like it. That's triple tax advantage. You know, even to wraw iras, which we love wrath iras, you know, because they do grow tax free and the money comes out tax free. But you don't get that tax benefit when you're contributing into the raw, so HS it gives you the combination of all that. So just a great vehicle. And I know there's many employers this time of year that are in the open enrollment season.

So if you have that ability, if you're enrolled in a high deductible health plan, certainly encourage you taking taking advantage of that plan. But not everybody's enrolled, and again you have to be enrolled to contribute into that health savings account. Well, we are halfway through today's show already and we're going to be taking a short commercial break. I want to thank you for tuning in with me today. I hope you are enjoying the show. I hope you

will stay with us through the break. We encourage listeners to call in with any questions. You can reach us at eight hundred Talk WGI. That's eight hundred eight two five five ninety four nine. You are listening to Let's Talk Money, brought to you by Bouchet Financier Group, where we help our clients prioritize their health while we manage their wealth for life. Thank you for tuning in. Hope you stay with me through the break and reach out

with any questions. Well, good morning, and thank you for staying with us through that commercial break. I'm John Malay and I'm the host of this morning's show, so i appreciate you tuning in, and yes I'm one of those twenty colleagues that was just mentioned in the spot there. And as I mentioned earlier in the show, you know, the last week has been a great week for the firm. Last weekend, we celebrated our annual holiday party right here in Saratoga, had a great time really with our colleagues,

their family and partners. And then yesterday we were recognized by the Albody Business Review as one of the best places to work, and we certainly agree with that designation, so our colleagues also, you know, we had a celebratory breakfast yesterday and then several of us attended a luncheon at that the Already Business Review held, So it was a great day to celebrate. So appreciate you tuning in and listen to me on this CRISP December morning. I'd like to go to the phone line at this point.

I got Mike. Mike, appreciate you listening this morning, and how can I help you I hope it's a simple question for the Healthcare Savings Account. What qualifies as a high deductible insurance plan? Perfect and that Yeah, yeah, Michael, appreciate,

appreciate you reaching out to that. And so to qualify as a high deductible health plan, it really depends on what the deductible level is and so and so the deductible level has to be reached a certain minimum, right, and so the IRS basically indexes that every year, but for twenty four and twenty five minimum deductible has to be sixteen hundred and for a family thirty two hundred. That's the minimum, and then there's certain out of pocket

max is. But I would say that, you know, health insurance plans have carriers have devised some you know, unique plans, and so some plants have a deductible, but then they might have some things that are subject to a copay

before the deductible kicks in. So to be a qualified high deductible plan, it's not only has to meet those minimum deductible levels against sixteen hundred for an individual, thirty two hundred for a family, but it's got to make sure that everything other than like preventive care is subject

to that deductible. And one thing I would say, if you have any question, if you're looking at a plan and you're not sure if it's qualified, the carrier, whatever health insurance carr is will be able to answer, is this considered a qualified high deductible plan? But if you have you know there's some health plans where some costs are subject to the deductible but some are not. There might be co based that would make it a non

qualified plan even though it has the minimum deductible. So I would say, if you can't tell from the materials, reach out to your employer, and ultimately, if the health insurance carrier have we'll be able to answer if is this a qualified high deductible plan? Okay, thank you so much. I appreciate it all right, thank you, Michael Yep. And again is as Mike talks about, there you know if it is a qualified plan. And again simple thing is most of the plan materials will indicate right on it

whether it's HSA qualified. But if you're not sure, definitely reach out to the carrier. Typically your employer would know, but ultimately the carrier will know that information. And certainly if you is a qualified high deductible that makes it eligible for you to put money into it. HSA and strongly recommends you to that. So Mike appreciate that question. Also have a caller, Richard from delmar Richard, appreciate you listening this morning. What can I help you with?

not making a wigion all. So, but I also I also have a brokerage account, so it seems like when I have a brokerage account, and in most of them, these are in mutual funds that have been I've been I've held down to them for like twenty five years, so there's sizeable capital gains with them, so I'm not really touching them. But it appears like when they pay

a dividend. Let's say they pay a three thousand dollars dividend, and my account value was one hundred thousand, and it goes up to one hundred and three because I paid the dividend. When the capital gains gets distributed in the brokerage in the brokerage account, that's let's say it's a five percent, So they declare the capital gains. I get five thousand dollars. I take my I'm living off of these, so taking I see that in my in my account.

But then the share price goes down. It seems like for some reason, the share price when they declare the capital gains, the share price goes down. So therefore the total value didn't really go up, whereas the dividend it actually went up. I don't know if that makes any sense to you, if I'm articulating it well enough, But does that seem to make any sense?

so they both hold baskets of stocks, but mutual funds have to distribute out all their capital gains and losses.

And so what happens is just as you mentioned, and so that's one of the prime you know, there's several reasons we actually hold ETFs in our portfolio versus mutual funds, and and you know one is cost is just you know, generally ETFs are much less expensive you know, to manage and mutual fund and they're much more tax efficient because there's nothing worse than than getting hit with uh, you know, capital gains in a situation like that. And so that's

exactly what happens. And that's one of the reasons we we we invest in ets and our models and highly recommend that individuals really consider investing in ets instead of mutual funds.

the total financial picture. But it may not benefit taking you know, being taxed on a massive gains, right, just to avoid this, right, you know, part of it is what's the level of the gain it's kicking off every year versus the capital gain You're gonna have to realize,

you know, to do that. And so again and everything, i'd kind of look at, you know, what total total return picture, right, and say, are there opportunities where you have capital losses where you could start to over time, right, reduce reduce the mutual fundholding, and then have the capital gain being generated offset or largely offset by other capital losses. Right. And also but you know, and looking at the mutual funds because the other things I would be looking at

too is what's the expense ratio? Right, what's the cost of the expense ratio of that mutual fund? Because that is tempering the total return you're receiving in that investment. Right. And so what I we would do is look at whatever mutual fund that is look at what their expense ratio is. That would be one factor, right, and say hey, when we're looking to exit, because sometimes you know, we have clients come over and they might have just as you do a taxable account with a mutual fund with

a large capital gain. Well, we're not going to just sell that with you know, without regard to say, hey, we're going to generate this large capital gain just to get out of the mutual fund. But we would look at really a couple of factors and saying, okay, what's the cost of this, right, So sometimes you have mutual funds costing over well over one percent, and the ETF you might say, well, I can get a similar structured, you know, similar ETF with a similar exposure maybe atzero

point two five percent. So now it's not just the fact that it's kicking off capital gains, but it's also costing more and and we would kind of do an analysis that that factored all of that, and so.

do you know what I mean? Like baby in November, you can start to see what what's being anticipated, so at least from a tax consequence, or if there was a time you want to shed it, you know, shed that holding, you'd want to do that before you know, the dividends were issued, so or you know, before the capital gains were issued, so you could avoid that.

largest non financial companies, low expense ratio, great holdings. And as you know, you look at a day like yesterday and you see Broadcom, you know, large tech company popping twenty five percent, you know, and you know obviously on on AI Chip Information, but you know, they had a great earnings release, great forecast, and so it feels like technology is going to be the leading uh factor as we look at twenty twenty five and beyond. So as a firm, we're still very bullish on uh you know,

large cap large growth stocks. You know, QQQ is a holding we've it's been one of our core technology holdings, you know, for a long time. I know, van Card also has a Vanguard Growth et F, and then Schwab has a large cap growth et F s e h G VUG for Vanguard, but you know, we really like QQQ. We've been in that for a long time. Still feels

a great, a great holding going forward. So you know, certainly I think small caps it's been nice to see they're they're broadening, but but you know, even as we're finishing out the year, it is a large cap growth that is really uh, you know, leading the charge. So we're still very bullish large cap growth as we look into twenty twenty five.

to diversify beyond QQQ. But you know, again, you know, we we do believe very strongly in the Nasdaq one hundred and the QQQ is not is not delivered there is not not failed to deliver for a long time. So we're still very very bullish with that as well.

think we kind of put that to rest. Know the other thing that you know, as we come near the end of the year open enrollment related. You know, many firms are also if you're working, you know, it may be a good time to kind of readdress your four oh one K. One thing that we're seeing is more and more employers are adding a ROTH component of their four oh one K, which we think is is a great,

great option. You know, as you head into retirement, you really want to diversify the buckets that you have your money in, right, and you think of like a traditional four oh one K or traditional IRA is that's pre tax money, right, So it's money that you've got a tax benefit on the way in right, it was not taxed as income to you. It's growing tax free, which is great, but really you think about it, it's a

big deferred tax liability. Right. So at some point you're going to be taking that money out and you're going to be taxed at it. And the other part is not is not only is it a future tax library, it's a future tax liability at a rate that you don't know what the tax rate's going to be, right, because you're going to be taxed when you pull money out of your IRA at the tax rate that is in effect at that point, right, And so there's that

creates a little uncertainty, right. And and one thing we do know when we look historically, we are at historically low tax rates for individuals. And although we all feel we're paying too much in tax and I appreciate that feeling, really when you look historically they are they're low tax rates. So what's going to happen in the future. And I'm not an alarmist, and but and I'm just, hey, what a couple data points that do know? Right? Our national

debt is increasing and increasing at a high rate. Budget deficits are there, and we've got to close those. And so is it likely that that tax rates could go higher? If I was a betting man, I take a bet that's more likely they're going to go up. They'd go down. And so certainly the benefit of a wroth is and I'm saying we've talked about the roth ira, but the wroth for OH and K is you don't get the tax benefit when you put money into your wroth four oh and K, but it grows tax free and you

don't pay tax when you withdraw. You're also not subject to r mds, right, and so in some ways you're paying tax under a certain tax rate. You know what today's tax rate is, you know what that liability is now generally, right, when we're working and earning our tax rate with all else equal, we're paying a higher tax rate than when we're retired. Right. But now you add the uncertainty of where our tax rates going, right, that

just creates some uncertainty. So we're we're definitely seeing more and more employers adding a WROTH component to their four oh and K. And we just believe it's a great you know, it's a great benefit and a great vehicle to take advantage of, even if you decide to split some of your contribution between traditional four oh and K in wroth, we highly encourage individuals. And you know, one of the benefits is, you know, with a with the

WROTH IRA, right, there are relatively low limits. Right, you can only contribute again, get back to the HSA's and roths like it when things are really good. The IRS limits how much you can take advantage of it. So with a WROTH IRA, they the max contribution for twenty

twenty four twenty five, so seven thousand dollars. You know, if you're fifty year older, you can make a thousand dollars contribution, you know, catch up contribution, but there's income phase out level, so you've got to make income below us certain amount. Whereas with the four to oh one K component if you are eligible, if your plan does have a WROTH component to your four oh one K,

much higher contribution limits. You know, you can contribute in twenty twenty five up to twenty three thousand, five hundred plus catchups of seventy five hundred if you're over fifty, plus a mega catchup if you're over sixty to sixty three. So much higher contribution limits available to the WROTH four oh one K. So again we would just say if you're in a four oh one K, you know, many times employees just kind of put it on autopilot, right,

they're contributing a certain percentage. They've got their allocation. But I would just say, you know, pay attention. See if your plan has changed. See if you have a WROTH component now as part of your four oh one K, And if you do, I strongly recommend you really evaluate that and consider are putting at least a percentage of your four oh one K contribution into the raw component. And again, you you will give up some of the immediate tax benefits. And that's where you have to make

a determination. You know, I'm giving up some immediate tax benefits, but I am getting a bucket of money that's not going to be taxed. And really, as we work with clients, really that's what we we strive for, right, is we're striving for, you know, having diversification of what bucket your retirement money is in. Right, So you've got a taxable bucket, which is you know a little typical taxable brokerage account.

You know you're going to get taxed on dividends, if you sell investments, you're going to get taxed on capital gains. Then you've got your qualified bucket, right, your tax deferred bucket, and that's typically your four oh one K four or three B and IRA where you've got a tax benefit up front when you put money in, but now when you tart start taking distributions, that's when you're gonna pay tax. And remember the irs, they want their money, right, so

they that's where they force the required minimum distributions. Right, So at a certain age and typically be seventy three for most folks, could be if you're older, it's going to be lower, but you have to start taking money out and that's when you're gonna be taxed. And so uh that that comes along with that with that tax deferred bucket, and then the non tax bucket, right, which is where we're seeing. I'm gonna say HSA's fall nicely in that bucket. Also wroth iras wroth or ow and

K's right. You're you didn't get the tax benefit up front, although the HSA you did, but with the roths you did not get the benefit. But it's growing tax free, and uh, there are not required minimum distributions. You're not required at a certain age to start taking money out, and when you do take money out, you're not going to pay tax. So certainly want to see some diversification of those buckets. Well, we are close to coming to the end of the show. I really appreciate you tuning

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