Let's Talk Money

going to be a fantastic week coming up. So hopefully you get out to enjoy it and do something outside, whether it's hiking, walking, biking, whatever that may be that you're out enjoying yourself. But as always, it's great to be here with you to answer any questions you may have regarding your financial planning or investment manager concerns. And as I always say, there is no dumber, silly question

except for the one you don't ask. And you may be doing your fellow listener favor by asking that question that they have. I heard that just the other day that one of our clients called. It was talking to them and they said, yeah, I was listening to the show and I had that question and somebody called in with it and I said, well, that's that's what's all about. So whatever questions you may have, you can reach me at eight hundred eight two five five nine four nine.

Again that's eight hundred eight two five five nine four nine. A lot to discuss this week, as always, chat about the markets. Wasn't wasn't a great week in the markets, folks. SP was down by about four percent, Q was down by more than that. Not a great week in the markets, but that that happens, it's still very much positive for the year. A couple of the topics we want to discuss. We'll be discussing that what's called the rule of fifty

five and a seventy two T distribution. Both these strategies allow you to take distributions before age fifty nine and a half and not incur a ten percent penalty. We'll talk about whether it is valuable to diversify your financial custodians, right, so you've heard of diversification. Doesn't make sense to diversify your financial custodians. And then we'll also talk about whether life insurance is a good vehicle for retirement planning. So

a number of things we're going to talk about. So again, if you have any questions, feel free to give us a call and we can we can chat. So you can reach me at eight hundred eight two five five nine four nine. So yesterday they came out with the labor numbers for the month of August and it was a little bit below expectations, with one hundred and forty two thousand jobs added. The expectation was more in the range of one hundred and sixty thousand jobs, so a

little bit low on that. Now, the unemployment rate did tick down, and we've talked about this before, which is it seems a little bit counterintuitive as you're adding these jobs and if it's below you know, how does that unemployment rate tick down? And you have to appreciate that couple things. One is that that unemployment rate is also function of the participation rate of people within searching for a job, right, So as you have more people looking to get a job, they get added to that group

that gets counted towards the unemployment rate. So that's what happened in part last month was there was a lot more people who were now in the participation pool looking for work, and that ticked it up. So this tickdown. You know, again you always say one month, one data point doesn't matter too much. It's really about the trend that is the most important thing. And you know the

other thing that's important, this is incredibly important. Most people don't realize this is the revisions that happened, you know, really dramatic revision. So you know, if you look at what happened for the revisions over the last several months, So June's job numbers were revised down by sixty one thousand dollars, sixty one thousand jobs to one hundred and eighteen.

So you think about that, there's an element where you're like, okay, so we have some data here for the month of August, but the real question is what is the actual data, and we're not going to find that out. So this is we're talking about June here, we're talking we're in September, three months out. We're getting revised data that is really the most more accurate element of what that data is. And it's not like it's revised, you know, by one

percent or two percent. If we're bringing it down from you were at close to one hundred and eighty thousand jobs and you're bringing it down by sixty one eighteen. That's a huge revision. It almost gets to the point where you're like, Okay, I'm not sure how much value there is in this current number. And it's certainly the problem is as they're getting revised down by significant amounts, uh, they're just showing an element of weakness that maybe wasn't

apparent when the original number came out. For the month of July, those numbers were revised down to by twenty five thousand to eighty nine thousand. Again, we're talking about productions or visions of you know, around twenty five to thirty to thirty five percent. So that's really the important thing. And you know, when look at the trend of this data, it is showing a labor market that is certainly weakening by by all means. So we'll have to continue to

see how this plays out. But again, the revisions are a very important part of this. And you know, it goes into this parlor game of what is going to happen with the fact, I think September will they cut rates by twenty five basis points fifty basis points And you know, the thing to appreciate is there won't be a meeting in October, so the next one won't be

until November, November December. So you know, if they're concerned about where things stand from an economic perspective, then you know you're going to want to probably see a fifty basis point cut versus twenty five. We're going to get the phone lines. We have a Robert from Rexford. Robert, you're there, Yes.

set of four percent downside in one week. I think you're referring to the whole market, baby, or the das deck. But any case, does it allow your investor strategy allow you to move money out into cash? Uh for this type of a week when you really could be virtually certain that you're going to get creamed in this uh? In this type of market, even though with interest rates dropping, which you would expect the opposite to happen the market

with the backs were going up. When the market, when the interest rates are going up, and now that they're coming down, supposedly the the the steam has been taken out of it. Uh and then some So UH. I just wondered if you're investing philosophy would allow you to to react, to react to what you really feel is going to happen in a week.

Robert's talking about. And you know, what I will tell you is what you're describing right there is you know, at the end of the day, stocks go up because of expectations for increase in profits and cash flow. And what you saw is even with rates higher, these companies were coming out with incredible profits. You know. You now you add in there in the video and the profitability of these companies and AI and what that's going to

mean for them and their businesses. So what I would say to you is from our perspective, as we manage portfolios, we don't get caught up into what's happening from day to day or week to week. And I will tell you, in hindsight, and I'm not saying you can't, you know, sometimes get this stuff right. But in hindsight it may seem like it's an absolute given that you know these these stocks were set to go down, but so many

times it's not the case. Right. You know, you can, you know, you know, you look in the very mirror you're like, okay, of course I do that, But when you're actually going through it and you're making decisions for a portfolio, it's not. It's not always that clear. And you know, we don't get caught up again on week to week. It's just there's two you have to move

too quickly, and you get it wrong too easily. But what I will tell you is there are times, like with COVID, where we saw something we said, hey, this looks like a real concern here. We don't know what's going to happen. But let's just kind of increase our cash amount just in case this goes south. And sure enough, it did go south. And so in those circumstances where we have a you know, a significant issue out there, we're gonna want to just raise some extra cash, even

if we give up something on the upside. That's what our clients appreciate, is you know, us doing that. We'll do that, but we're not going to try to figure out, hey, from week to week, you know, what's what's going to happen, because let's face it, uh, you know, those tech companies they could continue to do very well. I mean, you know, they're having some volatility, but that's that's normal for an

investor perspective. What I will tell you though, Robert, is one of the best ways if you want to time the market, one of the best ways to be successful in doing that is to buy low. That is one of you know, if the market's in a bear market, you want to become more aggressive in that. That is one of the best ways where I you know, market can keep going down when it's down twenty percent or twenty five percent, but at some point here it's going to hit that bottom. And at some point here, it's

going to go higher. And if you wanted to really find a way to really add value to your portfolio over time, that is the one way you can do it. It gets much more difficult to time it on the top side, because you know, it's you know, quite often you think, oh, I think we're at a market top and you're wrong, and it keeps going higher, and if you play that game, it's it's going to go against you at some point.

And you know, the only thing we do from a market perspective is when the market keeps railing and our equity positions are over our target by a considerable amount, we'll rebalance back to target, right, And that just prudent investment management. But we don't get too fancy to try to say, hey, I think you know this week the market's going to go down by you know, you know, some percentage points. And it doesn't mean you can't get

it right. And if you want to do that with your own portfolio, go ahead, but you have to appreciate that as many times as you get that right, you get it wrong. And now now you've got to decide do I go back it? Go ahead? Go ahead?

percent decline in an index. I mean, it's going to happen, but not that often. If youvessed in an individual company, you're going to see twenty percent declients, you know, probably somewhat common and it's just you know, like a great company like Apple, I mean, boy, it's done so well over the last you know, well, twenty years, twenty five years. But over that time period, it probably there's been time periods where it's lost thirty forty percent of its value.

And you know, if you again, if you're going to try to time that now to your point, let's say you bought Apple or whatever and it's done incredibly well. I always say it's in. It starts to become a larger and larger part of your portfolio. It's not a bad idea to take some time and trim it right. You know. It's like I always make it an analogy. It's like you have a tree or a bush in your front yard. You just don't let it grow crazy.

You trim it back. And that's about managing risk. So you know, we always say you don't want single stock risk. You know, so one holding that makes up certainly more than ten percent, but even five percent of your portfolio value. So you know, a company like Apple, you feel comfortable with it, You want to go to ten percent, great, but you know you got to make sure that you you bring it back. And here's the other thing, too.

I mean, you know, I think you can make an argument that when the video was hitting, you know, one thirty after the run it had, you know, you could do a little bit of trading and you know, trim it back just because it's the right thing to do, but also maybe free up a little bit of cash that if there was a pullback, you buy back into it.

So but again what I described right, there is a there's an element of you know, trading, short term trading versus our firm is you know, tactical management and long term investing. And and there really are two different things.

the bulk of our money. And that's because we feel that's strongly behind you know, what our firm does with our clients and how we manage portfolios. Uh, you know, we've been very effective with that. But we have what's called a sandbox account on the side, which is you know, uh, you know, if we want to go ahead to make some trades and as Roberts describing, you know, buy a

particular stock or something. You know, we don't spend a lot of time doing that, but you know, we have that out that we're you know, it's a fairly marginal amount of money, and that way, if we make a mistake, no big deal. And if we do well, hey that's this is great. And you know, you just got to appreciate that, you know, as you think you're smarter than

the market. And I'm not saying Robert in this case, but just in general, if you think you're smarter than the market, you have to appreciate some really really smart folks across the country, across the world, you know down in New York City who this is their job, this is all they do, and and you you got to appreciate if you're selling that means somebody else is buying

on the other side of that position. So if you think it's the right time to sell, somebody else thinks it is the right time to buy, and vice versa. And so you know, I'll just say, you know, it's one of those things where you want to do this on a little bit money on the side. They have some fun with it, great. You know. The one thing I would tell you is really track to see how you do. Because most people, you know, if they're the cocktail party, they love to tell you about the winners.

My guess is they're not telling you about the losers. And I've seen this, you know, from prospective clients that come in and they were managing their own portfolio. They have some great winners, I mean phenomenal winners. They have some huge losers, some really huge losers too, and so you know, at that point it kind of offsets each other. And the other thing I have to appreciate. It's one thing if you just love doing this, you want to

do it as your hobby and for fun. But you know, if you're putting all this time and effort in there, that's a cost, right that that is an absolute cost, whether it's taking away from doing other things you like to do, or spending time with your family, or or spending time in your job where you can perhaps spend more hours and make more dollars. So you just got

to appreciate that. And you know, so many of our clients used to manage their portfolio themselves and at some point they say, you know what, between the emotional stress between the time and the effort, and also as their portfolios grow, they just don't want to make that mistake

that something goes wrong. And in particularly as you move into retirement, right there's you know, you manage portfolio and you're trying to stay on top of things, especially when you're in retirement, because you know, those headlines impact you more, especially when your portfolio goes down. Outsourcing that to a fiduciary investment management like our firm can be very valuable. You know, we see that a lot when we're talking

with clients. Because the other thing too is when you're going into retirement, you have to appreciate that you need you probably need to take distributions from your portfolio, and it's usually going to probably be more than just what your income is. It's going to be capturing some gains and so for our clients, what we do is we put away two years with about two years up to two years with the distributions. And uh, that that is,

you know, very important to that strategy. So again, if you're going to manage your own portfolios, you've got to figure out how you're going to do that, and that could be very difficult. We're going to go back to the phone lines. We have a nonsarrow from Albany. Uh. Now, so that that pronounced that correctly. I apologize for my I'm not that good at English.

What I can tell you this is, you know we I'm not going to talk about this over the radio, just it's from an SEC perspective. But you know, if you come in and talk to as a client, we'll go in a little more detail as to what our performances versus our benchmarks and everything. I've been with a firm for twelve years. I was with other firms down in Virginia that were actually at the time bigger, you know, investment produceries. We do very well versus you know, the

equity benchmarks. And that's all I can tell you. I mean, the big element. And this is an important statement, which is I don't care what investment from you're talking about. You know, returns are historical, so I would be how we did historically. You got to if you work with anybody, it's a function of what is their their strategy and what is their approach and does that line up with what you want? And we always tell clients, and this

is also very important new clients coming in. If you are simply hiring us for you know, outperforming particular benchmarks, this is probably not going to be a good fit. And I just say that because again, we do very well versus benchmarks. But you know, you know, we we are more than inst but you don't answer my question. Well I did ask you question. Now, sorry, I'm one.

a private be more than happy to do that. All I can tell you this is this. You know, right now, we managed more than one point three billion dollars. When I joined Steve twelve years ago, we were managed about one hundred and fifty million. And you know, you don't grow like that without you know, doing the right things for your clients. And the investment pieces is incredibly important.

You know, Ryan is our chief investment officer. Steve was our has been our chief investment officer for many years. We just have done very well with it. But again there's there's a different team marketing those numbers and being able to meet all the requirements from the SEC perspective versus you know, having a conver station with a prospective client separately. So and it's you know, it's it's a good question. I don't think there are many for any

rias that they do that. I mean, me meet register investment advisors that market the returns. You know, it just we're not set up to do that. We're not a mutual fund. So hopefully that answers Nonstar's question. But let's let's move on. One of the things I want to talk about is how to take money out of an ira H if you have if you're below age fifty nine and a half. Right, so if you're not fifty nine and a half and you try to take money out, you're going to be hit with a ten percent early

witch rawle penalty along with ordinary income tax. And you know that's kind of a problem. So there are two strategies that you can utilize. One is called the rule of fifty five and the other is called the seventy two T distributions. And the rule of fifty five is simply, if you are in a foremn K plan and then you retire from that company and you're after fifty five, you can use that plan to take distributions and not

pay the ten percent penalty. The other is a rule of seventy two, which is if you take what they call large distributions from your IRA and you do it for either five years or into your fifty nine and a half, you can also then take those distributions and pay ordinary income tax on the distributions, but not a ten percent penalty. And these are both good strategies and important to know because you know, we have many people that think, hey, I'm not fifty nine and a half,

Can I actually retire without getting hit with this? And the answer is yes. Now, you had to kind of plan it out because there's different ways to approach this, so it's not one that size fits all, but you can do that. Well, folks, we're gonna go to commercial break, but come back and join us as we continue to take your questions. You're listening to Let's Talk Money, brought to you by Bouchet Finance Group. Well, we help our clients prioritize their health while we manage their wealth for life.

Welcome back, folks for those of you who are just joining us. My name is Martin Shields. I'm the chief wealth Advisor at Bouchet Finance Group and it's great to be here with you today on this now increasingly cloudy day. So I'm looking out the window. Our sun is leaving us, and I think we're gonna get some rain showers. But I do think tomorrow and the rest of the week are going to be nice, so hopefully you'll get out to enjoy it. I may try to go for a

hike with my daughter. She doesn't know the ship, but she's, uh, we've said too off to college, so we're down to hersh as a junior, and so maybe do a hike with her tomorrow and get out and enjoy it. So I hope that you do as well. You can reach me if you have any questions at eight hundred eight two five five nine four nine. Again that is eight hundred eight two five five nine four nine. So let's just dive right back into a little bit of a discussion on the final reserve in the economy and what

we're seeing. You know, I think I've said all along, which is uh, I think you're better off not getting ray cuts, right, that that is the not getting ray cuts scenario is one where kind of in that goldilocks environment and that you know, when you get ray cuts, you can have opportunities where, uh, you know, the market keeps going up. You know, you think about that if you are going to go out and buy a house now, or if you are borrowing to buy buy a car

or business. You know, as those rates go down, things become more attractive. And you know, certainly if you're in the house purchase arena right now, you know that. You know, in the Albany area or around the country, housing prices have remained stubbornly high and that has definitely confounded most economists, right they thought, hey, if the FED raises interest rates by five hundred basis points, that's five percent over just over a year, that is going to have a huge

negative impact on the housing market. And the interesting thing is that it did slow down sales, but it's not

because of by lack of buyers. It's because people were not inclined to put their house on the market either, you know, if they're moving to a bigger house or maybe a different location, because you know, they had a rate on their current house of under three percent, So you know, you start looking at that making that decision, you say, boy, even if we buy the house of the same price, it's going to cost us substantially more uh to make that change. So that they held off,

and that's what's kept housing prices so much higher. And there's you know, I have a blog out about this as well. You know, there's the number of other reasons as well. Uh. You know, builders are a little bit reluctant after eight to get too far out over the

skis uh. And that's you know, basically, they had so much inventory that they were putting together in seven, eight oh nine, and you know some of them didn't make it through that, and so they want to make sure that if they're building houses and uh, you know, putting together neighborhoods, that they're going to have demand for that. So the other thing is the banks are much more conservative with their lending. You think about both for individual

barrows or for lending two developers and builders. There's a lot more restrictions. Some of that is regulatory base, meaning that uh, you know, there's there's certain additional rules they need to follow from a capital perspective. But other than that is just again they obviously many of them suffered and didn't make it through eight nine as well, and they want to make sure that they're in a good

spot and so they're not lending as much. The other thing that's you know, I find this really interesting is the cost to build a house, whether it's because of labor or materials, it's gone up so much that in many cases it's it can be hard to build a house with with those materials and actually make money on it and be able to sell it at a price that people want to buy it. And you know, you see that you start, we have some clients that are building houses and the price per square foot, it's kind

of mind boggling how high that is. And again there's a number of things driving that. But all that has come together, uh and you know, made for a housing market that's very resilient. But with that said, you know, if you can start lowering interest rates, that's gonna be a real positive. So you can't have the FED lower rates and you know, have it continue to stimulate the economy. Now again they're on that balancing act of making sure

they can do that without having inflation flare up. And you know, we talked about this, this idea, this concept of a soft landing. And you know, we've also talked about the fact that the economy different lands right, it's always going. So we know where do you where do you declare victory with this? And you know, I think you know, the federal reserve is getting closed. I think

it's over the next six to nine months. If if they're able to lower rates and keep inflation at bay, but at the same time keep the economy doing reasonably strong, they will have been successful. I think you're kind of this. This to me is the real telltale sign, which is, you know, get inflation to that two percent target or in that realm, and keep the economy going wrong because the the you know, the the six to nine months,

maybe a year. What's going to be very important in this is that you know, I talked about the labor numbers steadily declining, that's the trend. Well, now you've got to see them start to plateau off and you know, stay in this range. If you're adding you know, one hundred thousand jobs every month, that's a good number. That's that's not a bad number. Now it's maybe not a robust number like you saw before, but it is a sustainable number that you can do that and not cause

inflation to really spark up higher. So if they can do that, if they can start to lower rates, keep the economy going, and keep inflation to bay, then I will say at that point they will have successively landed the economy. And you know what the achievement for that is, really it's never happened. Right in particular, they've never raised rates by five hundred basis points. That's a huge amount of rate increases in a very short period of time.

So we'll see if that happens. But that's you know again, we'll see if the Fed cuts rates by twenty five or fifty basis points and where we go from there. As I've said before, you know, trying to predict where the Fed goes with instrates, it's not an easy game.

And we've talked about this with our clients. You know, back when just even a year ago, when money markets were yielding up over five percent, we were buying long dated bonds and getting back into bond funds for our clients, whereas in number of them, you know, they just wanted to begin into money market funds, and you know, it was about constantly them that Hey, listen, you know you might be able to get some better yield in money

market funds. But if we can lock into a bond for five, six, seven, eight years, ten years, that's yielding in some cases, we will buy a ten year bond yielding five percent. That's not in all the cases, but let's say it was in the four percent range. That that was a good rate, and you're locking it in for a long period time, whereas the money market rate, the CD rates are going to fluctuate very quickly once the Fed starts cutting rates. So you know it's by

locking that in. Yeah, you maybe go for you went for a little bit of a lesser rate or yield, but you had it locked in for a long period of time. If we do get into an environment with a FED does continue to cut rates dramatically, you know, the yield on a money market fund is going to drop quite a bit. So those individuals that went out and bought bonds and were in bond funds, even where those bond managers are buying longer data funds, are going

to be in a much better spot. You know, last year was a good year for bonds, but it was you know two years ago where they were down so much. A year to date, the Bloomberg Aggregate bond index is up four point four percent, so you know it's we're in September and it's doing quite well for a conservative asset, right. So I don't think it's too late if you are

in a money market fund. I certainly don't think it's too late to go ahead and either buy some individual bonds and or to buy into a bond fund, you know, versus just keeping your money in a money market fund. So that's that's important to remember if you're if you're in a money market fund, don't think you'd like you missed the boat. It's still a possibility to go ahead and uh to get those dollars into a bond fund yield,

get a better yield. Then you're gonna be if not right now, that you're going to be able to get in that money market fund. And also perhaps see price appreciation if interest rates continued to go down. Let's move on to another topic. But before I do, if you have any questions, feel free to give me a call. You can reach me at eight hundred eight two five five nine four nine. Again it's eight hundred eight two

five five nine four nine. One of the questions that we get is this concept of diversifying but with your financial custodian. And all I mean by that is, you know, people talk about the concerns of putting all their eggs in one basket. And you know, we talked about the importance of diversifying from an asset class perspective, you know, whether it's be stocks, bonds, alternative investments, cash, and there's

certainly value to that for most people. When you look at long term returns, you know you can actually get better returns with less volatility by diversifying. But you know, I hear concerns with individuals about diversifying with a custodian, to the extent that, hey, if I have all my eggs in one basket, what happens if that custodian has a problem. What does that mean to me? And you know what I would say is, these days we use

Charles Schwabers our custodian. You know, they have ten trillion dollars in assets, and you have Fidelity that is also of that bake, or you have Vanguard that is in that size, and all things considered, you know, these companies make fractions of fractions of pennies on cash that's in individual's accounts. And you know, I think we look at overall risk that exists just in our lives, the idea that these companies you know, go out of business and oh, by the way, when they do, you somehow lose any

element of your investments. It's about as close to zero as you can get. I'm not saying it's zero, but it's as close to zero as you can get. And you know, if you look at it, there was Meryll Lynch back in the financial crisis. They were uh, you know, a custodian for their client's accounts, but they were also trading. They hit traders that were trading, you know, making money

for Meryl. Well, they made some bad bets and really put Meryl in a very very bad spot and Bank of America had to come in and step in and take them over. Well, you know, if you were a mayoral customer, you I mean, there was no you might have been concerned when you saw Meryl stock price go down, but there was no concern to your accounts. And as you know, as quickly as there was issues, you had Bank of America step in. So again you don't have

Fidelity or Schwab or Vanguard. They're not trading. They don't have traders out there. They're just a financial custodian that's out there. And there's so much value to consolidating your accounts.

one of the big three that I just mentioned. From a financial perspect you know, I think to help you understand what their goal is, State Street Bank is also a financial custodium now State Street is out of Boston. They really work more into the institutional space with retail investors or registered investment advisors like we are, or endowments of full and K plans. They work more with big

companies and other banks. They've been around since seventeen ninety seventeen ninety, so that's you know, they'd be a BROBD for another five hundred years. And the same concept with Schwab or Fidelity. I'm pretty confident, willing to make a bet that they will be around for the hundreds of years from now, and god forbid if I'm wrong on

that that somebody else. I'm sure if Schwab got into trouble, Fidelity would be more than happy to take them over and bring over all their clients accounts onto the Fidelity platform. So you know, I would really recommend to any buddy that if you're going with one of the big three, there's really no risk to consolidating your accounts and it makes life a lot easier to do that versus having

you know, accounts splattered everywhere. It's it's a very smart move, especially as you approach retirement, and even if you don't, because we see this occasionally that people forget to have these accounts, right, maybe it's a smaller account, they lose track of it, they're moving, they've got things going on in the life, and then they forget that they had, you know, five thousand dollars, ten thousand dollars in a form and K plan and you know that's there's a

lot of people that have that. You know, so you know again the value of consolidating one way or the other with your accounts. Well, let's move on to a couple of other topics I want to talk about before we wrap up here. But if you have any questions, you can give me a call. It eight hundred eight two five five nine four nine. Again, that's eight hundred eight two five five nine four nine. As always, I want to highlight the blogs that we have on our website.

You can go to Bouchet dot com and under insights and Blogs, we have a number of blogs out there. One of my colleague, Scott Strohiker, did a great one on Medicare. Again, as you get closer to Medicare Agent, which is sixty five, you really need to be educated at what's going on. We work with a number of outside companies that kind of specialize in Medicare and Medicare insurance and we always try to connect our clients with them. But you know, I would recommend that you read through

that blog if you're getting closer. You know, there's some complexities that exist that you need to be aware of the other thing is another colleague, Nicole Globel, wrote a blog on inherited I rays and rmds with those and I'm telling you, you know, we see the complexity that exists just in general with our financial system, and in particular when we're talking about require minimum distributions. It's not easy.

You just wonder who makes up these laws and rules because it just seems like they make it more and more complicated. Now, I'm not going to go too much detail on what the blog talks about, but one of the things that you have to be aware of is

that they're changing the rules. It used to be that if you had a traditional IRA and it was inherited by your kids, there was a rule that came out in twenty eighteen that said, hey, that's got to be distributed within ten years, but you can wait until year ten. And they've been going back and forth on whether it's require distributions to come out every year. Well, the new rules say, yes, you do. You've got to take distributions out and there's a formula to do that every year

so that it's fully depleted within ten years. Now that's not every case. That's the vast majority are in that situation. The thing to remember, though, is for twenty twenty four, they're waiving that requirement. So if you inherited an IRA from your father or an uncle or whatever non spouse ira you do not need to take and you received it after twenty nineteen, you do not need to take

your distribution this year. Now, in general, I would still recommend doing it, because all you're doing is pushing it off one year and you're probably gonna have a larger distribution next year or the years after, and that's going to probably increase you over a tax bill. But let's just say for your own personal situation, it just is

not good timing to take it out this year. It is being waived this year for inherited iras that were inherited after twenty nineteen, that you cannot have to take that distribution this year, but that they will kick back in next year. And again read through the blog. If you have any questions, you call in, but just so complicated. They just don't make things easy whatsoever. So let's move on to another topic. But again, if you have any questions, you can reach me at eight hundred eight two five,

five nine four nine. So one of the things I just want to talk about, which is, you know, we see this with perspective. Clients come in, uh, you know, they have an insurance product that they use as it sold as a retirement product or retirement solution, and you know, I'm going to tell you is just very rarely does that work well? And you know, you start I remember in one case, you know, somebody came in with very large life insurance, whole life insurance product, and that's how

they were sold. And I said, well, let's let's call your advisor and let's see how they would use it. Well, very quickly what we found out is, yeah, you'd be borrowing against the life insurance uh, and there could be some issues with keeping the policy UH enforce and you know, it's just not a great way to plan for retirement. And all I would tell you is I believe in the concept of KISS all right, And that's an acronym for keep it simple, stupid, or just keep it simple.

And you know, once you start combining life insurance with some element of income and retirement planning, you're not keeping it simple, You're making it complex. And with most people, there's definitely a role for life insurance and there's even a role for whole life insurance or universal life insurance for certain people. But you've got to make sure that you really understand what that role is and really in many ways trying to keep it simple. We're going to

go to the phone lines. We have Terry from Glenn's Falls. Terry you there, Yes, what can I help you with today?

And you know, if you thought you needed it in the next uh, let's say two to three or four years. Then I would say, okay, let's keep it in cash and let's get a CD that would get some income or you know, again a treasury bond or build that would get you some income for that time period. But I would also say, you know, maybe you can be a little more aggressive with that money and put it in a diversified portfolio. Right that it's let's say sixty forty.

That's sixty percent stock and forty percent bonds.

So that's that's the only question. I want to make sure that you know this is cash that you think you need, either for emergencies or for some project coming it up.

versus let's say the last five years. It's not a bad interest rate, but it's certainly below what you're getting a year or two ago.

because they're just the custodian. So you know, even if something went wrong with Bank of America, it doesn't affect your your portfolio. I think you were.

the same thing would happen. I mean, let's face, if something were to happen that we had Ana nine situation, the Federal Reserve is going to make sure that somebody takes over now a Bank of America, and that would be Merrill as well. But the one caveat I do want to put out there, which is if you have your money in Bank of America and you're over the FDIC limits of two hundred fifty thousand dollars per account, that money is potentially at risk, right because it's now

greater than the amount that's ensured. Now that's with a bank, now with a financial custodian like Schwab or even Merrill. In that regard, it's two different buckets. And it's a little bit complicated in that regard, but it's really two different bucket. But even with that, yeah, you know, we

always recommend to keep it below the FDIC limits. But even with that, the Federal Reserve ninety nine point nine percent of time, if something would happen at a Bank of America, they're going to find somebody like JP Morgan

Chase to step in and take it over. And you think about it, if you're JP Morgan Chase, all things consider, you're getting a you're getting a bargain, right, You're you're like, I'll take this over, and yeah, so I don't think again, if you're talking about these big financial studients, I would say it's not much risk, but I would if you have bank accounts, I would try to keep them below the FDIC insurance limits, which is two hundred fifty thousand dollars per account.