Let's Talk Money

I'm a Certified Financial Planner or a CFP and also a Certified Private Wealth Advisor CPWA, and I've been with Steve and the team for a little over eight years now, working with clients on their portfolio planning needs and just all the different life transitions that dot com and it's truly a great career, wonderful industry, always changing, always exciting, and our clients are our wonderful people. So I feel very,

very blessed. And at this time of year when we all start thinking about the things that we're grateful for, this is, you know, definitely at uh, you know, high on my list to have this kind of career and this kind of company and to have opportunity need to come and speak with you on a beautiful Saturday morning,

So thank you for joining me. Looks like the sun is shining, but it is chilly out there, and as I look at my calendar, I'm shocked to realize we're more than halfway through November, already less than two weeks away from Thanksgiving. I feel like I say it every year, but these last few months of the year always seemed

to fly by. I'm not sure if it's the holidays or just even you know, workwise, all the end of the year planning that comes along with with the financial industry and tax industry, but it always seems like it's such a rush to the end of the year, which is really only a little over six weeks away at this point. So it's shocking, but twenty thirty five will

be here before we know it. But hopefully you're You're somewhere, you know, somewhere cozy, somewhere warm this morning and on a truly November morning, So I'm looking forward to spending the next hour with you and talking about, you know, all things financial, the markets, the economy, financial planning, retirement, tax and whatever else might come up. I hope you have your your cup of coffee or tea. I'm sitting here with my latte. You've got a nice hour ahead

of us. And I will just say this. I have three young daughters at home, three beautiful girls. My oldest is four, my middle is turning three very soon, and my baby just turned one and as much as I never knew love so I became a mother, I also never knew sleep deprivation, and so caffeine is a big part of my morning routine. I know I'm not alone. I know a lot of people you know, love their

their cup of coffee or tea. But if if I talk a little fast, I do just want to say that I'm going to attribute it to the coffee and the lack of sleep today. So let's get into the show on that note. But before we do, I want to remind everyone that the phone lines are open and you can call in with any questions you have. That phone number is one eight hundred Talk WGY one eight

hundred eight two five five nine four nine. If you have a question, a situation, something you want to discuss about your financial life and you want to get a financial advisor's opinion on it, I would love to hear what you have to say. I'd love to hear what's going on and your your find acial world. And we also have a new and exciting way for you to

submit questions as well. We also have an email that I'll be you know, getting notifications from as the show goes on, so you can reach out to us at that and that is ask Bouche at bouche dot com a s K b o U c h e y at bouchet dot com, So we would love to hear you. If you aren't able to call, or if you prefer us to type out your questions so you can communicate it more clearly in a written format as opposed to a conversation, please feel free to utilize that. Again, that

email address is ask Bouche at bouchet dot com. Bouchet is spelled b o U c h e y, and I'll be checking that periodically, so please feel free to submit questions that way. Let's kick things off with a market recap, as they usually like to start the show with that. Looking back at the past week, we had

all three major indexes down for the week. The SMP was down two point three percent, as Deck down three and a half, and the Dow Jones down almost one and a half percent, so stock slipped a little bit off their highs this past week. We'll take a look at some of the driving forces behind that as we kind of discussed what's going on in the economy. But

first let's put the week in focus. You're to date, the SMD is up twenty four percent, NASDAK is up twenty seven percent, and the Dow's at fifteen So and this is, you know, after us slights down week that we just had, so one one week down in the markets. Of course, you know, no one likes to see themselves lose money, whether it's you know, whether it's a small amount or large amount. But it's not really taking away from the very strong year that we've had on the

equity side of things. So this is coming across against the backdrop of record highs last week, and the S ANDP actually briefly crossed six thousand following the election results. And you know, once the outcome was known, markets reacted really positively. But as the trading days tick on and you know, the election, uh, we start thinking more looking forward and she what it's going to happen, what it's

going to mean from a financial market perspective. We're seeing number one, some of the existing market drivers come back to the forefront, you know, inflation and what's going on overseas, those things that have been certainly a concern and in the mix all year. But it does seem you know, maybe this is just anecdotal from my perspective, we're talking

with a lot of you know, individual clients. But you know, when when we as you get closer to the election, a lot of people were so hyper focused on that, and you know, nothing occurs in a vacuum when we talk about stocks in the markets, But it is hard for a human to really consider more than just a few factors at a time. So I think as the election got closer, it really rose to the forefront of

a lot of people's minds. But now, you know, the investors are given time to digest what some of President Electron's campaign promises might mean, the implications of some of the nominations he's made. So we're just going to seeing some of the industries shift here and there, some of the positive, some to the negative. As you know, investors are digesting what is this going to mean for us

over the next four years. You know, as an example, we saw pharma stocks, which is Maderna, take a hit this past week as Truck's nominated RFK Junior as Health and Human Services Secretary. So we're kind of seeing these, you know, the outlook just sort of play out and come to us settling in the markets and that will of course continue on. There's some potentially big changes to tax legislation that will I'm sure be up for debate

in our government as time goes on. The current law would be set to sunset at the end of twenty twenty five, the tax cuts in Jobs Acts from twenty seventeen, so as we see what's going to happen with that, you know those will all affect not only the markets, especially that corporate tax rate, but it's also an affect all of us on a personal level too, So something to keep following as new developments come out. Let's go

to the phone lines here and chat with Don and Delmar. Morning. Don, how are you?

a non taxabile event. If I if I retire soon and transfer my WROTH four ol one k into that account, is the same thing apply or should I open up a separate roth Ira from the transfer from the four oh one K to keep them separate.

and a half typically would have ten percent. For other listeners out there, ten percent early withdrawal penalty unless you're taking out for very specific reasons the earnings. But if you've had it for more than five years and you're over fifty nine and a half, you can take from it, whether it's contributions, conversions or earnings. You can take any of it out without penalty or without taxes, and you

can coming all both accounts. It won't affect it won't affect the season, and you should be set either way.

a roth iray. So you can also do if you're working for a company that has a four oh and K with the WROTH option, you could do payroll deferrals right into a WROTH four to ohoe K and so you're not getting a tax benefit when you put it in there, but the money grows tax free and comes out tax free when you take it out, as long as you meet certain rules, which Don was referring to what we would call the seasoning rules. So there are

certain restrictions about it. Number one, if you're under fifty nine and a half, you are potentially exposed to an early withdrawal penalty for any earnings in the account. You can always access your contributions. So let's say you put seven thousand dollars into a WROTH and it grew to ten thousand dollars. You can always access those seven thousand

dollars that you put in. That was your contribution if you can take that out any time, But that gain that three one thousand dollars in that example, it's potentially subject to early withdrawal penalty and or income taxes if you were to take it out without meeting certain requirements about having the ROTH iry open for five years and being at least age fifty nine and a half. So there's some complexity to the way that the ROTH system works, but it is such a great benefit, especially for folks

who are younger. They have more time for that tax free growth to compound, it becomes a much bigger tax benefit. And also for folks who maybe are in a lower income bracket, whether you know they're earlier in their career, they expect to be earning more in the liber years

of their career. It's a great time to contribute. But you know, really it does work for a lot of people, and it's worth considering and talking to your advisor and or doing your own research to see if it might make sense for your situation, because that tax free growth,

especially over time, is a really powerful tool. And when we think about you know, hard to say now what the tax outcome will be in a few years, but you know, for a while it was looking like we were going to be in the lowest tax tax brackets, tax rates that might be for a long time in the future, so it was really compelling. And who knows how that may change with the election outcome. Let's go back to the phones again and chat with Leroy. Good morning, Leroy.

talk about if they allow any exceptions. UH. Some do, and especially depending on if you meet certain ages, some allow for what's called an in service distribution where they allow you to roll some or all of your account out into an IRA that you can manage and you know, easily take distributions from on your own, even while you're still technically employed there. But I would think, you know, like you said, it is probably a question for them.

It's not a federal rule. It's really defined more by the UH planned document of your specific plan.

for your tax picture. But there's no reason why you can't take take from it, especially if your four oh one k is you know, making you jump through some hoops to access that those funds. Now, IRA is a great option.

That phone number is one eight hundred Talk WGY one eight hundred eight two five five nine four nine, And as I shared earlier, we now have another channel for questions. If you'd like, you could use our dedicated email address. That email address is ask Bouchet at Bouchet dot com. If you would like to send a question and maybe you're not in a place where you can make a phone call, or you just prefer to type it out, please feel free to use that again. That email address

is ask Bouchet at Bouchet dot com. Bouchet is spelled be as a boy oh U C H E Y. I'll be monitoring that as the show goes on, so feel free to send questions there. Let's talk a little

bit about the economy. So you know, we had stocks falling yesterday and over the week, it was a downweek for stocks, although as I shared, you know, before the break that's really just against the backdrop of a really great year and the equity side, so not to you know, put all the focus on five bad days when we're really still in the middle of a very strong year on equities front. But there was some strong economic information

that came out this past week. We made a very solid retail sales report showing retail and food service sales rising zero point four percent in October from September. That's

a higher number than it was expected. So this higher spending is showing yet another side of the economy is still very strong, and that has been a story over the last few years, and perhaps you know, more so than people would have expected given the aggressive rate hike cycle that we had and rates remaining more remaining elevated for longer than we had expected probably going into that.

So we're really seeing the economy hold up incredibly well after that, and hopefully that continues and if the FED does achieve a soft landing. However, we also had kind of some good footing data there on the inflation front. So the CPI report came out this week for October and showed a two point six percent rise on an annual basis for October, this is an increase from September CPI of two point four percent, and it's the first

increase since March of this year. So housing was a big part of this kind of break it down into its compositive parts. Housing made up almost half of the monthly increase, so that's a significant part of it. But we're really just seeing inflation, you know, not not coming down in a perfectly linear pattern. And I think from my perspective, this is not strange. It would have been more strange if it ticked down, you know, by zero

point two percentage points every month without any hiccups. This is what was really expected, a few bumps in the road as inflation tries to come back down towards the feed's target of two percent. But Marcus didn't love it, of course on a short term basis, and it might put a spin on exactly when the FED cuts race and how much they cut it by. So I think that's really what markets are reacting to in the short term.

We're also seeing, you know, some of the commentary we had FED Chair Powell say that this economy is letting them take their time in deciding how to you know, loosing their policy how quickly or slowly to do that. And also we saw Boston Fed Chief Collins indicating that, you know, there's still a raight cut on the table for December, but it's not a guarantee, it's not a

done deal. I think that was a big impact or maybe a little shake to the markets who had been really pricing that in pretty you know, heavily odd rated heavily in the favor of a rate cut in December. So those are some things that are going on in the economy that are influencing what I think, you know, the market drivers were for the past week. Let's go to the phone lines again now and stat with Nancy from broad Alburn. Good morning, Nancy, good morning.

three three three three. I'll say that again in just a minute if you want to write it down. You know, for us women wealth it is so important to us, and you know for me specifically, hearing that you you know you lost your husband, I'm so sorry and we want to be able to support you. So if you have other questions, once you hear from them, please feel

free to call me. You know, my name's Harmony and that number again is five one eight seven two zero three three three three, and I'll be happy to give you some advice once you hear your options from them.

where you're able to save a larger amount. It's called like a mega backdoor WROTH or you know, just after tax funding up your four oh one K. So there's a limit to how much you can put in pre tax, but depending on your plan, and it is very planned specific, you might have an option to contribute more. However, my suggestion would be if you're already messing out your wroth and your four oh one K, my suggestion would be to consider a brokerage account, the reason being there's a

lot more flexibility there. If you're under fifty nine and a half and or still working, you're not worrying about your money being locked up in a four ROH and K where you can't get to it. You have more flexibility to get to it whenever you might need to, and then whatever amount that you want to take from. As far as tax consequences, there's no tax benefit for

contributing to it to a brokerage account. You're not getting a deduction, but you will have a tax advantage treatment of gains typically, so if you're buying something buying investments in a brokerage account, as long as you've held it for more than one year, you'll be eligible for long term capital gains rates, which are typically lower than your

ordinary income rates. So if you're paying twenty two percent ordinary income tax rate for federal you're probably only paying fifteen percent for your long term capital gains that you're realizing. So that's a great benefit, and it gives you a lot of flexibility, especially if you're you know, young, obviously still working. If you have a four oh one K, you might not be able to get to that those kind of funds and you don't want to really to

tap into your wrath. You want that to grow, So any extra cash you have, if it were me, I'd really be considering a brokerage account for the flexibility. Okay, thank you.

economic overview here. You know, we saw both strong news this morning this week in retail sales a little waiver and inflation coming down with a little slight increase October over September and first increase in March, and we're seeing a lot of the FED commentary being the market driver for some of the performance this week, I think, among other things, but when we look at the economy, that's a main one, and anecdototally, I do feel that people

are still feeling the effects of inflation on a household level, and I think that affects people, you know, and their psyche when they're thinking about the economy, and if you look at your own situation first and how you're feeling, and you know, whether you have a job and you

feel it secure and all that stuff. So we're coming down to the halfway point here, but we'll be back with more Let's talk money on WGY in just a few minutes, and look forward to taking more of your calls and emails when we come back after the break. So we'll be back and don't go anywhere. Hi, everybody, thank you everything with me through that break. This is Harmony Wagner joining you this morning. I'm a WELP advisor at Bouchet Financial Group, a certified financial planner and certified

private WELP advisor, and today i'm your asking advisor. We've had a lot of great questions so far, and I would love to hear more from from our listening audience. If you have a question on your mind, chances are you're not the only person thinking that, so please feel free to call in and ask that. Phone number is one eight hundred talk w g Y one eight hundred eight two five five nine four nine. And we also have an email option now if you prefer that as a way to ask a question, you can email us

at Askbouche at Bouche dot com. That's ask ask Bouche b O U C H E Y at bouchet dot com. It's a great way to have have questions submitted as well. And we have a question that did commit to the email, so I will go to that now. And this email listener call email didn't at and said if one were to buy and sell the same stock in a roth

Ira triggering the wash rule, are there any penalties? Seems like you're required to keep track of the wash transactions and list them on your taxes, despite the fact that

they have no impact either way. Thank you for that question, And just as a little bit of context for anyone who might not be aware, there is a WASH sale rule which specifies that if you were to sell a security, whether it's a fund or a stock in you're in a taxable account, and you are and it's at a loss, you cannot repurchase that exact same one or a substantially similar one within thirty days before or after the sale,

and that would be considered a wash shale. If you did, you would not be able to realize that gain or that lost. So the reason being some folks were saying, Okay, you know, I hold coke stock. It's down for the year. I want to sell it and realize a loss that I can deduct against other game means. But I don't actually want to not hold this thock anymore. So I'm going to sell it and then a week later I'm going to buy it right back while the price hasn't

really changed, and I still want to keep. You know, that loss that I realized, but I still want to hold the stock. That's not not allowed. It's disallowed by by the irs. But but this person's question is about whether it occurs in a roth ira. Now I will say this and that I can't give you one hundred percent answer on whether you have to keep track of

it and list it. But I can't say that it is not really a wash sale because you sold the stock in a wroth IRA, within a wroth iray, a four to oh one k, a traditional pre tax ira. All of those are either tax deferred in this in a sense of pre tax options or tax free in the sense of a WROTH account, and so none of the transactions that occur within that account are taxable to

you in any way. So you would never be able to realize any losses that would help you for your taxes within an account like that, within a retirement account, So it is not a wash sale. I I'm not clear, and I did you know look through some of the IRS regulations over the break about this question. I did not see anything either way saying whether you had to report it or not. However, I do know that there would not be any tax impact. Now, one thing that you should know that you can't do is you can't

sell something at a loss in your taxable account. You know, maybe you have a brokerage investment account, non retirement uh, you can't sell coke stock or anything else they are at a loss, realize that loss for taxes, and then rebuy that safe position in a ROTH or in an IRA. Even though it's a separate account, you do have to track that and that that loss would be disallowed. However, if you if the sale occurs in a non taxable account, then it will have no tax impact. So sorry to

our our you know email question asker. I don't know about the reporting, and I can look that up and get back to you via email this week, but I know that it will not be a wash sale and will not be triggering any time kind of tax consequence. All right, before the break, we were chatting about inflation and you know, kind of the CPI report and the effects on what people think the feed will or will

not do and win. And I do think it's a good time to kind of shift gears here from talking about the markets and the economy on a macro you know, high nationwide or global level, and boil it down to what does this mean for the individual households. People who are saying, Okay, I understand what's going on from inflation on a big level, but how does it really affect me?

And anecdotally I talk to, of course a lot of clients every week, and even in my own personal life, I feel people are really still feeling the effects of inflation on an individual level, you know, talking with clients and you know, even just myself, I feel my grocery bill has gone up more in the last six months than it was a few years ago when an inflation was at its peak. So it kind of goes to

show the impacts of your personal inflation rate. And I talked about this on the radio and with clients a lot a few years ago, when again on inflation was I think over nine percent in the summer of twenty twenty two. And it's something that you know, of course, we understand what's going on in our country, but when you look at how your own inflation is affected, that has more of an impact to you and to what you do in your own personal financial life and the

way you manage it. So I think it's a good time for people as we come to the end of the year. If you are retired, and especially if you're taking money from your portfolio, it's a good time to kind of review how's my cash flow. You know, is the money that I've been taking out this year or maybe for the past few years, if it's still covering my needs or my finding that I have to really pinch pennies now because you know, my distributions aren't going as far as they used to, and you know, groceries

have gone up, house and costs have gone up. Insurance, you know, property casualty insurance have gone really crazy, it seems in the past year. So how is your personal what is it costs you to maintain your same kind of lifestyle now as we head into twenty twenty five, and is it time to make an adjustment? And I think as you're looking at that, one thing to keep in mind as far as making sure that you're protected

is your overall distribution rate. So again, this is this is for folks who are in retirement and who are living off of their portfolio on some level, well you know, taking out whether it's annually, monthly, quarterly, some other frequency that you take money from your own savings accounts to live off of. Keeping that distribution rate as kind of an overarching theme, overarching guardrail for you. It's a really

healthy way to look at it. And I talked about this before a lot of folks say the four percent rule, the four percent rule will keep you very safe. That is a very conservative as long as you have a diversified you know, well invested portfolio that's suitable for your age and your needs. Then a four percent rate of

distribution is you know, typically very safe. And when we look historically, we see that you can actually almost all the time you can run it closer to five percent without putting yourself at a serious risk of running out of money later in life with certain you know, caveats in play. So you know, if you're taking five percent of your portfolio on a gross basis, that's you know, actual money coming out. You might receive less if it's coming out of an IRA and you have some tax withholdings.

But if you're taking out five percent. If we looked at someone taking five percent of their portfolio for over a thirty year timeframe, for every rolling thirty year period since you know, the seventies, there was only two or three that that person would ever run into trouble in terms of running out of money down the road. So five percent is a pretty safe distribution rate. You could often take that over a thirty year timeframe. Again, as

long as your portfolio is invested. If it's in cash, then you can only do that for twenty years the money's not growing, But if it's growing then you can typically take between four and five percent out every year safely without running the risk of running out of money later in life. Other important caveat is to always be monitoring that and making sure that your distribution rate isn't significantly increasing and that you are willing to make adjustments

if you need to. If there are a few really bad market years, especially towards the beginning of your retirement, you might have to make some adjustments in order to protect your future self down the road. So it's definitely one of those times, you know, it's really helpful to work with a financial advisor, someone who can model things for you, someone who can monitor your spending in an objective way and let you know when there's cause for

concern and what you can do about It. Much easier to make small adjustments early on than to, you know, go five or ten years overspending your portfolio and realize you have to make some really major adjustments for a longer period of time. But I do think that as the approach the end of the year, as you're starting to think about next year, maybe you're planning some trips, planning some home improvement projects, planning to make some significant

gifts to family members. It is a good time to say, Okay, how has inflation affected be what do I think I'm going to need this next year? And is my portfolio going to be able to support that? And to start asking yourself those sometimes hard questions, but it's the questions that you need to ask to you know, make sure you're protected. You certainly don't want to put yourself in a situation where you're going to be running out of

money later in life. But you also don't want to put yourself in a situation where you're not getting enjoyment out of the wealth that you worked really hard to accumulate and invest and save over time. And you know, it's really important to consider that risk as well. And that's our goal as financial advisors for our clients is you know, we don't necessarily want to maximize someone's wealth, right and that might sound shocking to hear, but we

want to maximize the impact of their wealth. My goal for a client is not that they have the highest dollar value in their portfolio at the end of their life. That would actually be a miss in my opinion. You know, I want to make sure that they maximize the impact of their wealth they get to use it to the fullest, enjoy it, you know, rape the rewards of their hard work, whether that's you know, a lot of travel and investing in experiences for themselves or their spouse or their family,

investing education for the next generation. There's so many things that it could could mean. Making the home a place where you love to be, you know, investing in a new kitchen or a new you know, garage, for work on cars, whatever it might be that would really add a lot of value to your life. You know, money in it itself isn't worth anything. It's what it can do for you and the freedom it gives you and

the way it can improve your life. So that is my goal for our clients and our financial planning, and I would encourage our listeners to look at it that way too. Maximize the impact. You don't want to always maximize, you know, the wealth. If there's no impact to you, it's it's kind of meaningless. Another thing that you might be thinking about as we approach the end of the year is tax planning. There are some things that you really have to do before December thirty. First, if you

want that benefit for the tax year. Some things you don't. Actually, some things you can wait until tax deadline, like funding a raw thier or a traditional IRA. You have some things that you have some time to do, but some things do have to occur within the calendar year, such as you know, tax loss harvesting. Given a year like this one, you might not have a lot of red in your portfolio, there might not be a lot of

losses to harvest. But if you do have some things, and especially if you're realizing gains and you say, I don't really want to pay taxes on these Necessarily, if I have losses to offset, you have to do those trades within the calendar year. If you wanted to offset income for this year capital gains, I should say. So that's something to certainly be aware of. Another important thing

is required minimum distributions or rmds. If you are either in your R and D phase of life or approaching it, you want to make sure that you are taking that before December thirty first. IRA owners are required to take rmds required minimum distributions from their accounts once they reach a certain age. So right now, if you reach age seventy three with in the tax year, so if you had your seventy third birthday in twenty twenty four had

birthday to you. You have to take an R and D this year from any pre tax accounts that includes traditional iras. Does not include roth iras. It includes traditional iras pre tax four to OH one k's four or three b's, deferred comp accounts, thrift savings planned, if you're a government employee, any of those pre tax accounts where

you received an income tax deduction for funding them. You now are going to have to pay Uncle Sam take money out, pay the ordinary income tax on it, and you can do what you want with the money after. If you want to reinvest in a brokerage account, you could do that. If you want to spend it, you could do that, but it has to come out of the IRA, and it has to you have to pay

the tax dollars on it. So if you're seventy three or older, you are on the eligible for any of those kinds of accounts that you might own in your own name. If you have a spouse, their accounts are under their own birthday, So if you have a younger spouse they're not quite seventy three yet, then you know that person is not RMD eligible. For their iras four oh one KS four or three b's. It's only based on the individual, but you do have to take it

out inherited IRA owners. It's a much more cloudy on that side of things, but the important thing to know is that there's certainly a chance you might have to take or require the minimum distribution if you inherited it from someone who passed away before twenty twenty, which is when there was a significant new piece of legislation passed. It's that person passed away before twenty twenty. Chances are you're taking r and ds, and you probably have been

for a long time. You're taking them out based on your own life expectancy. If you inherited it from someone ask who passed away after twenty twenty, you're going to have to start taking r and ds as well. If the original owner was taking r and ds that they're passing. The requirement is waived for twenty twenty four. For that, it's taken four years or I guess almost five for the IRS to really come out with clear guidance on that.

So if you are an inherited IRA owner, that person you inherited from pass away after twenty twenty you will not be penalized if you don't take an R and D this year. Starting next year that's different. Starting next year, you are if you if you're required to take an R and D and you miss it, there will be a penalty for that. But you have an one last

grace period this year. But like I said that, that kind of arena, the inherited I raise is much more confusing, So read up on it and if you need to, you know, pull on your advisor or you know, find someone you can ask, because the laws are even for you know me, I work in this every day and it's it's still quite the you know, complex kind of system of the are you're required to and how do

you calculate it and all this stuff. So, you know, I'll kind of leave it at that for for now, But if you have more questions, feel free to call in about that. But if so, it is your if it is your first year going back to you know, traditional non inherited accounts, just regular iras or four to one case, if you have to take an R and D and this is your first year, you know your seventy third birthday was this year, you actually have a grace period they're not going to work whire you to

do it by December thirty first. You haven't ntil next April to do your first one. However, that being said, in almost all cases, not all, but many many cases, it makes sense to take it before December thirty first, still, even though you have the grace period. The reason being, if you are supposed to take one this year, you say you know you're gonna wait, You're gonna use your grace period. You're gonna take it next year in March

or April. You are gonna have to take two rm ds next year because you're not gonna get the same grace period. So you're twenty twenty five, rm D has to come out before December thirty first, you're gonna be doubling up. So unless you have really high income this year and you're gonna have no income next year and you say I want to take two next year and then this year, that could be the case for you.

It depends on your you know, circumstances, of course, but for most people, if your income's relatively the same year to year, you want you want to probably take your first R and D in the year that it's required and not utilize that grace period. There's a penalty for missing the the IRA or the R and D, so you really want to make sure you're hitting it by the death line, and it is important just to make sure that you have a plan for managing it, you know.

So for our clients, it's something that we are on top of for them. Angela Sesney and our service team, Andrea Gearing, Jamie Dirky, Shelley By Tore Lauren Bousche, they are wonderful. They have a very precise system for managing it and they make sure that every single client is

taking their R and D before the deadline. But if you're on your own, if you're not having someone manage it or look over that section for you, you want to make sure that you have the number calculated, that you know exactly how much tax to withhold, that you are making sure it happens before the deadline. If you're having it sent as a check from your account, make sure you're cashing that before December thirty. First, don't wait end of the year to have the check sent and then

you know you run into a timing issue. So it is really important to manage it, and especially as we get towards the end of the year. You know, for a lot of these big financial institutions, the last month of the year is really busy for them. They've got a lot of people trying to tax loss harvest, a lot of people trying to take distributions, make contributions squeeze

in all these ends of the year things. So give yourself enough time, call you know, your financial institution now and make a plan for how you're going to take that R and D. If you haven't yet, you certainly don't want to miss it, and it's really important if you are taking your rm D. It's also a good time to consider rebalancing, right so, you know, we just rebalanced our client Qualify accounts within the last few months because we're saying, hey, markets are near all time highs.

The last two years especially have been excellent for equities. So if you started out at the beginning of twenty twenty three with you know, a sixty to forty portfolio and you were right on target, if you haven't made any changes, you know, chances are your equities are overweight pretty significantly at this point in time. So if you're taking money from an IRA to meet your required minimum distribution.

It can be a great time to take from the equity side, you know, there's sell from that side, and kind of rebalance and get yourself back to target. I'm not saying the market don't keep going up. I don't know what the market is going to do. My crystal ball is out of commission. But regardless, it's a we know right now, Hey, markets are out in your all time highs. It's a good time to kind of rebalance

and get back to target. You don't want to get greedy, right especially two years into a really great you know, equity bull run. You don't want to get greedy and think that you're more tolerant for risk than you really are. You know, be realistic. Think about, Okay, what's my real long term comfort level in terms of allocation to equities

versus fixed income? And if you're taking an R and D even if you're not, but if you're taking an R and D, it's a great time to say, I'm going to pull from the equity side for these funds so that I can so that is that I can rebalance back to my my risk tolerance that's appropriate for me over the long term, not just in a good year. For the markets, but knowing that bad years will come in the future, you know what's my long term risk tolerance. I want to stay pretty close to that most of

the time. Let's take another quick break here, but we'll be right back to finish the show here on WGY. Don't go anywhere. Hi, everybody, thanks again for hanging with me through that break. This is Harmony Wagner joining you for Let's talk money this morning. And it's been a great conversation already, a lot of great calls. You know, a lot of things kind of going on, and especially as we approach the end of the year, a lot of actionable things that you could be doing. Let's finish

out the program. We have just a few minutes left, but I do want to talk a little bit more about tax planning. And you know, before I even launch into this, I have some tips that I think are great general and guidance for people. But on our team at Bouchet, we do have some seller tax planners. We have CPAs an I R. Rest En World agent, people who are really really experts in this. I know enough

to be dangerous. It's not necessarily my field of expertise, but some of those colleagues that I have that are in that tax side of things are going to be doing a webinar this coming week on some tax planning tips for the end of the year. So if you want to tune in hear from the real experts and you know, see what kind of action steps you might want to take might be applicable for your situation, you could tune in. You could register for that right on

our Facebook page. So if you go to our social media Bluchet Financial Group, there's a link to register for our upcoming webinar for end of your tax planning items. It's, in my personal opinion, one of the most useful and practical webinars that we do all year. We put webinars out every month, so you can go on our website under the Insights page and navigate to the webinars if

you want to see any replays. We do quarterly economic updates, We do financial planning style webinars about maybe college planning or estate planning, charitable giving. So there's a lot of different themes and content. There are something for everyone, but I do think that the end of your tax planning is, you know, one of our more practical ones and when you think about taxes, it's such a great way to

add value to your portfolio. So you know, you could save real dollars by doing the right things, some of the things that they're going to talk about or that we're talking about with clients as well as we look at the situations before we come to the end of

the year. I mentioned tax loss harvesting, which is not necessarily a big thing this year or last year, although you know, not to say you couldn't have some positions that are at a loss, but you know something that you might not think about as much as tax gain harvesting, and you know you're thinking, well, why do I want to harvest a gain that's taxable to me? When we look at the tax minimization approach from a lifetime perspective, right, so we don't look at tax minimization from how do

we minimize your taxes pay this year. We want to minimize the taxes that you pay over your life, the taxes that your errs pay over their lives when they inherit this money from you, And so we look at it that way. And if you're in a low income tax bracket, now, if you're in the ten twelve percent, even twenty two percent. Sometimes you can use you want to use up those low tax brackets. So let's say

you're low on the twelve percent. You just crossed that border into the twelve percent tax bracket, and you have some gains to realize. Number one, you might even be paying zero percent long term capital. So that's worth looking into.

Certainly that's for federal purposes. Of course, New York won't give you that kind of mercy, but you can, you know, realize gains and use up lower tax brackets to say, I'd rather pay at zero percent, twelve percent, fifteen percent than have my airs someday pay at you know, twenty four,

twenty percent, you know, much higher amount. So Klau looking at us strategically and saying, hey, can I realize a little bit of gain this year and use up lower income tax brackets so I can minimize taxes paid over the lifetime. That's something that would be prudent to do often. So that's something that you can do looking into tax gain harvesting if you have positions you want to trim, saying Okay, I'm going to give myself a capital gains

budget of ten thousand. I want to use that this year, so I can kind of control my gain picture overall and you know, keep it within a good range that I'm comfortable with for my future and for my kid's future if they're inheriting my wealth or my spouse's future. A lot of that is is really key for you know, using up each calendar year, because once December thirty first has gone and passed and we're in twenty twenty five, there's not much you could do anymore for twenty twenty four.

So it's something to be to be aware of. Also, if you're considering a roth conversion, you have to do that before the end of the year. We get a lot of questions about that, as I said, a lot of interest in it, so it's something to consider and make a plan for how you want to do it right, determine how much you want to convert this year, and you know, figure out the logistics of that. Like I said, these financial institutions they get really busy as we get

closer to the end of the year. So don't wait till the day after Christmas to start thinking about these things. You know, now is really the time to do. So to make sure that you're thinking about capital gains right. If you use mutual funds in your portfolio, those typically distribute capital gains at the end of each year. It's hard to predict. It's one of the reasons why we

prefer exchange traded funds over mutual funds. ETFs are much more tax efficient because you don't get these capital gain distributions that get you know, put off to the shareholders like a mutual fund does. So that is something to be aware of. If you hold the mutual funds and you're expecting capital gains, you know, think about maybe I'm going to trim some of those positions if I have

some gains to realize. So, you know, all those kind of things are things you can look at again if register for our webinar on our Facebook Bouchet Financial group. You can register for that link. It's this coming week. But you know, be thinking about these things now and talk to your advisor about them. As we come to the end of the show, I just want to say thank you for tuning in as we approach the Thanksgiving holidays. You know, we're grateful for all of our listeners who

call in, who listen each week. We appreciate the opportunity to share with you, and you know we just appreciate your time and you're listening. We'll be back here on WGY tomorrow at eight am with more Let's Talk Money, brought to you by Bouchet Financial Group, where we help our clients prioritize their health while we manage their wealth for life. Stay safe and healthy. Thanks for joining me this last hour. Have a great weekend, everybody,