Good morning, and welcome to Let's Talk Money on a TENWGY. I want to first start off by thanking you for tuning in this morning and making us a part of your weekend. I'm John Malay and I'm going to be your host for this morning's edition of Let's Talk Money. I'm a certified public accountant and the chief financial officer, chief operating officer, and a wealth advisor at Bouchet Financial Group. Joining me this morning is my co host, Scott Strohecker.
Scott is a wealth advisor at the firm. Scott is a certified financial planner and an enrolled agent and a key member of our tax team. Scott works with our clients not only doing invaluable tax planning, but also we do a little bit of tax preparation, so Scott'll be here for any questions tax related. Scott, I want to thank you for joining this morning.
Thanks Sean. It's a pleasure to be on with everybody this morning. Feeling good, ready for a great show, you know, despite losing that hour of sleep last.
Night, absolutely absolutely here. Hopefully everybody is adjusted to daylight savings and move their clocks forward. Sunday morning, all we surprises folks. So hopefully everybody's adjusted their time and is tuning in with us this morning. And you know, one of the things I want to mention about Scott. Scott also in our firm, has the reputation he's the cold plunge guy. So not only has he participated in several community cold plunge events, he has also helped orchestrate a
little bit of an employee initiative. We did a little fundraising initiative where employees were challenged to participate in a cold plunge for a week and I was one of those who participated. I am not an adoctor. I did not love it. I did do it. But Scott is a big propose own it. Scott, what is the benefits? Why should we be doing cold plunges.
There's a bunch of different research out there, but you know, it really ranges from improving metabolism, reduced inflammation, can enhance your mood. Also it will help with multiple recovery, but also even just overall alertness. So you know, I would challenge anybody that's feeling a little flow this morning, you know, maybe just try doing a cold shower this morning and see how your alertness is and you'll probably be ready for the day.
Perfect. Perfect. There you go. So that's our health and wellness segment of the morning. So, you know, Scott and I appreciate you tuning in with this this morning. You know, we're here to answer your questions. You know, we're going
to a lot to talk about this morning. We're going to talk about the latest in the markets, some investment strategies, but also you know here we are a little bit more than a month away from tax filing date, so Scott will certainly be talking taxes and answering any questions you have, so certainly encourage listeners to call in with those questions. You can reach us at eight hundred talk WGY. That's eight hundred eight two five five nine four nine.
And I will say in the questions you know, we do say when it comes to your money, there there is no dumb question, you know, and so any question you have just reach out. I guarantee if you're thinking it, some other listener is out there. And you know, sometimes it's a it can be a little unnerving to have to pick up the phone and make that call, but trust me, will be will be kind, super kind to you. And again no such thing as a dumb question, So
don't hesitate to reach out. So you know, we'll start right out in the market. Just I mentioned, you know, a lot to talk about. You know, this week started with a bang. You know, on Monday, Presidents Trump had his address to the Joint Session of Congress, and you know, during that address, he discussed his plans to implement some major policy changes. You know, in those policy changes including you know, included some major areas you know, around trade
and tariffs, fiscal policies around taxes, government spending. He actually mentioned getting to a balanced budget and obviously doje out in front of that is certainly became has become kind of the symbol of government, uh, you know, cutting out government waste, getting to some more efficiency. Also, immigration policies and foreign policies really you know, including the war in Ukraine, are funding of NATO and really evaluating all of our
foreign aid. So you know, one the administration is doing exactly what they said they were going to be doing in the fall, which was jumping into these They said they were going to act swift, and they are and I think that's you know, what we're seeing is on a broad front, they are moving quickly. And you know, I just have to say, and you know, as a firm, I'm not saying we agree or disagree with any one
of those administrative policies. That's not our job. Really. Our job is to manage our clients' money, regardless of whether it's a Republican or Democrat in house. And so you know, and again, you know, Steve started this firm thirty five years ago. We've got a proven track record of doing that, of managing our clients' money regardless of the policies coming out of the White House, including you know, regardless of
what's happening with the markets. You know, we've got a proven track record in bull markets, bear markets, and everything in between. So, but we have to deal with reality. And the reality right now is the administration is moving forward with a broad scope and at a quick pace, and that is creating some uncertainty. There's no question about that.
You know. There's how exactly actually these policies will be finalized and what their impact on the economy, both US economy, global economy is yet to be unseen, and part of what will be driven by you know, how ultimately the details shakeout, and you know, when you you know, when you look at each of the policies individually, and you could definitely see the big picture merit, right, you know.
And I look at you know, his some of his fiscal policies, right, Like, who would argue that getting to a balanced budget isn't a good move?
Right?
You know, we've seen our national debt balloon to thirty seven trillion dollars. We've seen the drag that the interest obligation is having on our on our spending. Right, It's it's we spend now more on interest than we do on defense, right. And so the idea of getting to more efficient government spending, who could argue with that? That makes us getting into a balanced budget. Listen, As businesses, we have to be fiscally sound. We can't just spend
without regard for the revenue we make. And the same as individuals. I mean a big part of our financial planning process, and Scott's the big part of is this. You know, we're doing financial planning with a client. You know, if a client is spending too much money based on what they're either earning on their portfolio or earning through their wages, their financial plan is going to go in the tank and we've got to have that tough conversation.
And so certainly, you know, how this is implemented, right, so a big picture makes sense. You know, let's get some fiscal responsibility. How this is implemented, you know, we're just gonna have to see. Certainly, it was only probably two three weeks ago we saw images of Elon Musk, who's heading up DOGE, you know, for cutting out some government waste. We saw him at a rally with a chainsaw, you know, talk about slashing prices. You know, now the
rhetoric has been toned down a little bit. Now it's talking about President Trump is talking about using a scalpel, right to more strategically cut costs. But we're seeing with the administration. You know, one thing that Trump does is he comes out and he's a salesman, right, and he's making big splash. And so when he talked about you know, cutting government waste, talk about in a big way. Now, how it's ultimately implemented, We're just going to have to
wait and see. Certainly, you know, with the jobs report that came out on Friday, we are seeing some you know, I think there's a reduction of government jobs by about ten thousand. We'll see more of that, you know, take place in March, and how that ultimately impacts the job market, you know, we'll yet to be seen, i will say, and I'll talk more about it a little bit later
in this show. Is you know, the jobs report that just came out, strong labor market and solid labor market, so certainly, you know, in the February timeframe, no major impact and you get just getting back to the Trump administration's policies, you know, the same could be say, you know, said with the trade and tariff policy, and certainly that is getting a lot of airtime right now, and it is creating a lot of confusion within our markets. You know,
seems to be an on again, off again approach. But again, if you look at the core, one of the primary benefits of that, and there are several benefits, but you know, one of the objectives uh being sought is to bring factories and jobs back to the US. Right And again that makes sense, right, you know, as strong US economy is dependent on you know, growing jobs, so bring factories back is a good uh. Certainly is a good objective
and would be good for the US economy. And similarly, we've seen some bold announcements we've seen, then some delays and then some carve outs. Uh. So ultimately how those tariffs will be minute and ultimately what that impact will be, you know, we'll we'll just have to see. And I think we're seeing the markets, uh, you know, react to some of that uncertainty. Even on Friday, FED Chairman Jerome Powell, uh, you know, spoke about tariffs, and you know, really fed's
taking a wait and see approach. You know, there's a potential that some of the tariffs could be inflationary, but it's not a foregone conclusion. You know, part of it's definitely gonna depend on how it's implemented and then how those ultimately how those cost increases are dealt with. So but one thing that we know is, you know, on a several broad fronts all happening at once with great speed, it's creating uncertainty. And what do we know about the markets?
Markets don't like uncertainty and uh and we saw that this week for sure, and you know, as investors, you know, we've got to look through that. We've got to be able to cut through the noise and see, you know, what is noise level and what is systemic issues that we need to deal with. So we'll be talking about that a bit. And so just to you know, encourage listeners, if you have questions, we're here for you, So reach out to US eight hundred talk WGY. That's eight hundred
eight two five five nine four nine. So markets this week, you know, as I mentioned, you know, volatile week. You know, definitely UH saw several ups and down even even Friday, you know, you know, closed out the week really posting the worst weeks since September. UH and Friday itself was a very volatile day. You know, Dow was falling more than five four hundred points at one point, both the s and P five hundred, Nasdaq were down more than
one percent at the worst point of the day. But despite of that, you know, they finished all indexes finished Friday in the positive. However they did, they did not you know, really a losing week. So you know, the SMP was down three point one percent for the week, NASDAC was down three point four or five percent for the week, and the Dow two point three seven down
two point three seven for the week. So certainly all the indexes down, and it was volatile week, ups and downs, and we saw several days where we saw, you know, the index is moving either in a positive negative direction and then major changes you know at the end of
the day. So certainly a down week. And you know, as you look at some of the you know sectors, you know, for the week, almost every sector other than healthcare down, you know, year to date, you know you are seeing you know, really you know, tech and consumer discretionary, things that you would expect to be hit hard have been hit hard. You know, financials all the way up
to healthcare have been positive year to date. But you know, there's no question is we're seeing you know, twenty twenty three, twenty twenty for definitely heavy growth years, right and we saw growth stocks, reward us particularly. We talked about the mag seven. You know, now it's concerned about you know, where where are we in a growth perspective? And remember, you know, when we look at our GDP, you know, consumer confidence, consumer spending makes up such a huge part
of that. Consumer spending makes up seventy percent of our GDP. So we look and say, you know, consumers are you know a little bit nervous right now? Is we're seeing you know, the uh seeing some of the headlines from coming out of the Trump administration. How are these changes going to be implemented? How is that going to impact me?
That that affects consumers, right, and we know, you know, consumer staples, things that we have to buy, right though, that sector is you know, is still doing good year to date, you know, up up over almost five and a half percent year to date, right, those those are those things that we as consumers, we just have to keep spending consumer discretionary right where where we can in
their discretionary purchases. That consumer is showing that they're they're a little little nervous, right, and so spending is down there. So as a consumer, spending goes down, and part of that's driven by just feelings, right, you know, just by natural feelings about what I expectations for the rest of the year. But as we look at GDP also, you know, government spending a big important component of that. Now, again, consumer spending makes up lie and share, but you know,
government spending. We're hearing government, you know, Trump being very clear is that government spending is going to come down, you know, and they're going to be more efficient, They're going to reduce the workforce, they're gonna you know, cut down spending. So that creates a little uncertainty from a growth perspective. And you know, we're seeing businesses, we are hearing about some you know large you know investments happening,
you know, particularly in the tech at AI space. But you're also starting to hear companies hold back a little bit on capital investment, kind of taking a wait and see approach. So all of that, you know, just creating a little bit of noise and uncertainty about you know, what kind of growth we're going to be seeing this year. Are we going to continue seeing two plus percent growth in GDP or are we going to see a bit of a slowdown. So certainly some of the uncertainty.
Uh.
But again, you know, we have a day like Friday where yeah, we've got some of the headline noise, but then we have you know, Broadcom come out and you know, release earnings and they beat expectations, you know, their revenue, you know, above expectations, their guidance for the next quarter above expectations, and they're rewarded for nine you know, by
a nine percent increase of Uh. Broadcom stock went up nine percent on Friday, So again it's as an investor, we need to cut through the noise and really, you know, what is it we need to worry about and not to overreact. And certainly, you know, the volatility in the
markets can create some you know, psychological fear, right. You know, as as investors, sometimes we want to avoid losses more than we want to focus on gains, right, and so certainly this type of volatility, there's things to be you know, look at with your portfolio. There's no question as an investor there are things you can do, and you know, primarily, you know, one thing we say to our clients all the times is don't panic, right. You know, we're in
this stock market for a reason. There is there is some volatility in the market. We do know on an average year, right, you can have a fourteen to fifteen we're going to on average year, you're going to see a fourteen to fifteen percent draw down from the peak of the market to the low part of the market. And that's an average year right now. The last two years, you know, we've been spared that type of fluctuation, but
it can happen. So one we say is it's just don't panic, right, and you really cut through the noise, and it's a good time when there's market volatilis just get back to basics, right and there's you know, doesn't mean you put your head in the sand, right and say I'm just not going to pay attention, but it's like, don't don't overreact, and you know, get back to basics.
And you know, some of the basics you can do is you know, look at your overall asset allocation, you know, your mix of stocks, bonds, cash, make sure that's appropriate for your investment time horizon and also your risk tolerance. And you know, so that's important to do. It's a good time, you know, as we're you know, still relatively early in the year March early March, we're seeing some volatility go through. Do you you know, is your asset
allocation appropriate right for your time horizon and your risk tolerance. Also, it's a good time to you know, rebalance your portfolio if it's needed. You know, remember we just had too you know, back to back years of heavy growth in tech you know, s to be up over twenty percent both of those years. You know, if you've haven't adjusted your portfolio, you may find that your you know, your your your asset mix, right, is out of balance a little bit, and that can be just the natural what's
happened in the markets. Right, So it's a good time. Uh. You know, this is something you know, for our clients. You know, we did at the last end of last year. You know, we had such a growth in tech, we rebalanced, you know, we we made some moves into some defensive holdings, you know, seeing what some of the possibilities were for this year. So you can do a similar you know, things like you know what some of the defensive holdings
we've moved into. You know, Schwab as a US dividend equity ETF shd Uh, that's been a great holding for us. And again it's it's it's that particular ETF. It holds you know, one hundred stocks that have paid dividends for the for at least ten consecutive years. But more importantly, they're also show the health that they're going to continue that, right, and that particular holding is up over four percent this year.
So again, if you're looking at your your portfolio, and if you're looking maybe you know tech has gotten too heavy in your portfolio because of just the natural run up, you may want to look at you know, rebalancing and taking some of that, you know, those tech gains moving into some more defensive measures. So in addition to SHD, you know, one of the other holdings that we've had success with is DUHP, which is a dimensional US high
profitability ETF. And again, you know, up almost you know, over one and a half percent for the year, again going to more defensive stands. And again we're not saying make wholesale change is right, it is. It's about just rebalancing and making sure that that your asset mix right. How you're if you've decided you looked at your you know, your overall asset allocation. If you decide, hey, sixty eighty percent should be in equities. Within those equities, you want
to make sure they're well diversified, right. And if you feel, as you look back and saying, hey, just based on the natural growth, that maybe you're too tech heavy or maybe you're too focused in one area, it's okay to rebalance and it's a good time to look at that. It's also a good time to look at your cash,
you know. And and when I say cash, it might be investing in money funds, you know, which you know, based on where interest rates are right now, still yielding good rates, still you know, yielding north of four percent. But if it might make sense for you to, you know, make sure you know you you're appropriately invested in cash.
And again I certainly would not recommend, you know, moving to an all cash right and that can be a knee jerk reaction when you see some volatility, but think about how hard it is to market time getting it right going in and then you have to get it right going back out. But that doesn't mean you're not you know, A very normal part is looking of you know, reevaluating your portfolio, is looking at your cash flow needs.
And if you decide that, you know, you may need to pull some money out of your portfolio, certainly in the next you know, twelve to twenty four months, it'd be proven to set that side into a cash cash equivalent, you know, not into pure cash, but maybe into a money fund where really no principal risk, but you're still earning a yield. So and these are the you know, it's a good time to really reevaluate. And and again, more than anything, don't panic you know, volatility, you know,
it can also be our friend. Right, if you've got cash on the sidelines. You know, if we do see it pullback a further pullback this year. You know, also get a value is a good time to put that cash to work, buying at a discount. So we do know, you know, history is shown. You can you know, look at one hundred years worth of data, eighty years worth of data, fifty years worth of data. It behooves us to stay invested in the markets, right the stocks on
average will return and reward us for staying invested. It's very hard to market time, and you know, I know there can be a psychological you know kind of drive sometimes to again avoid loss. Again, we would just recommend that you know, kind of try to cut through the noise, take a approach of really looking at your portfolio and making sure you're in a good position. So going on in
the markets and you know, covered a big recap. Certainly, if I have questions and any specific questions, don't hesitate to reach out. Scott and I are here. You can courage listeners. You can call us at eight hundred talk WGY. That's eight hundred eight two five five nine four nine. We're going to be taking a break shortly. When we come back, We're gonna just recap, you know, recap the market news, and then we get into a little bit of tax conversation. You know, we're close to tax filing time,
so Scott's here to answer some of those questions. So we appreciate you tuning in with us today. Hope you will stay with us through the break. Again, courage listeners call in with questions. You are listening to 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. Again, thank you for tuning in. Hope you
stay with us through the break. Well, good morning, and thank you for staying with us through that short commercial break. I hope everyone is adjusting to daylight savings time. It has moved their clocks forward, although with most of us using iPhones or other digital Wi Fi connected device, most of us don't you have to do anything. We just
wake up and all the time is adjusted. Except for that, there's always that you know clock that's either on the microwave or the oven that is usually wrong for the next couple of weeks until we go and fix it. So appreciate you tuning in with this morning. I am John Malay. I am a certified public accountant. I'm the chief financial officer, chief operating officer, a wealth advisor at the firm, and I am joined this morning by my
colleague Scott Strohecker. You know, I'll just finished wrapping up you know, market segment, and then Scott's going to get into you know, with us being getting closer and closer to tax filing time, Scott's gonna cover or some tax topics and certainly we are here to answer any questions you have and you can reach us at eight hundred talk WGY. That's eight hundred eight two five five nine
four nine. So just wrapping up, you know, so you know, markets, US markets down for the week, and you know this is not a time to panic, and I you know, just be blunt here at a time where there is some volatiley and there's some uncertainty. Right, It's it's about how are Trump's President Trump's policies going to be implemented, how are they going to impact But you know, as we saw jobs report out yesterday, labor market's still strong.
We'll get an inflation reading this week. Expectations are inflation continuing to come down. Right, so even fetchair poal not concerned right now, not expecting any interest rate cuts. So but it doesn't mean we put our head in the sand. Right It's time to look at our asset allocation are rebalance our portfolio if necessary, and really reevaluate cash needs. And we know markets, you know, reward us for staying invested and just making sure you're in the appropriate mix.
So at this point I'm gonna turn it over to Scott to really, you know, cover some tax topics. You know, some of us love taxes, some of us hate taxes, but as we say, it's we all face taxes, so it's a topic that's important to all of us. So thank you Scott.
Thanks John. In the words I believe of Benjamin Franklin, in this world, nothing can be certain except death and taxes. So let's jump into some taxes with about as John said a month ago before tax day, which we know is April fifteenth, question is are you prepared? But actually we do have a caller on the line, Lisa from Almony. Morning.
Lisa, A great for good more good morning, great segue into my question, what has been just recently invested post tax money. I guess non retirement money rather into a Vanguard fun one hundred fifty thousand and has like another three hundred thousand dollars to invest. And we've we've already maximized all of our we're ass for the year. We've maximized our four one k, our five twenty nine plans, all our tax like our tax savings accounts. So I don't know what else to do to save money in
tax with my investments. Those just wondering if you have any suggestions.
Great question. I'll take this fresh and then John if you have anything to add. So it's great that you've had a chance to maximize all of your different saving vehicles, you know, retirement accounts. I'm not sure if you're eligible for an HS. Say it's another great account to save two Yeah, we have that mine. Okay, great, So I would then really look, you know, if you have some surplus money it sounds like still sitting around. I mean
you could always put it into a brokerage account. I mean it's not a tactiferred or vehicle or anything like that,
but that's another place where you could put any excess money. Obviously, you want to make sure that you have an emergency fund set aside, so you don't want to invest everything that you may need for anything that comes up in the short term if you want to at least have you know, it's about three to six months worth of multi expenses, you know, set aside in this emergency we have like three to six years.
That's our problem. We have so much cash.
Yeah, then I'd probably say a brokerage account would be another place to look, especially if you know you don't have any outstanding debts at a high, you know rate, whether that's credit card or you know, if you have a mortgage, that's totally fine. A lot of people, no doubt a great rate.
Okay. So I was just like, I would say that those are some great problems to deal with it. And and Leasta just the other thing I would I would add to Scott's comments is, you know, if you're you're putting into a taxable brokerage account, right, then it's also like what kind of vehicles are you going to invest in? And so you know, we primarily use ETFs exchange traded funds, and one of the reasons is they are much more
tax efficient than mutual funds. So I would just you know, because with mutual funds many times you can get capital distributions, you know, capital gains distributions which you have to pay tax on, you know, even though they didn't sell their share. So again, you know, even in the brokerage taxable brokerage, even though you're not getting a tax benefit per se, just being cognitant of how you're investing that money. And you know, we prefer ETFs and part of it because of their tax efficiency.
Hmm, that's great advice. I do have some old MITEOL funds from like twenty years ago and that I want to catch out, and I'm nervous. I don't know what the cost basis. It wasn't tracked at the firm at the time, so I want to actually get rid of those and put those into ets. That's also a non retirement account. But it's a good problem they have, but it's not as far as taxes, right. I don't want
to pay a lot, I'll be honest. And it's scary to put three hundred thousand dollars into a brokerage account, invest it and then be stuck with this huge tax burden. I just don't want that.
Well, I would just and I do appreciate that you're right, and nobody that likes to pay taxes. The only thing I would say, though, is what's the alternative? And do you what's the opportunity? Right? But what's the opportunity?
Right?
But what's the opportunity cost? You're giving up on that, do you know what I mean? So, yes, a lot, a lot a lot, right, right. And so if you're you know, if you invest that in the market, you're right,
you're gonna pay tax. But you only get pay tax on it if you get the return, right, and so if that you know, grows, and uh so I think you just, you know, don't get don't get so focused on the tax right that you're making the wrong long term decision, which is to provide you the best long term return.
Okay, that's some good advice there, and I feel like embarrassing that, But I just don't want to pay so much taxes. You know, Let's say you do have one hundred thousand dollars gain. That's a lot of tax money you're you're forking over the to the government.
I feel, you know.
For for being a good saver. I've already been taxed on my income. I y I'm mean tax on you ask being tax on, being tax on everything you know, post tax, and I'm saving so much money. I don't understand where's the benefit in that?
Yeah, it's so one thing I would say, taxes, tax you know what I mean, right, And one thing I would say and scock get you know, say a lot more on this is that you know that that's a big part of what we do with our clients is tax planning. And I will say, like tax tax, So first and foremost we manage our clients money, but then financial planning and tax planning, which really go hand in hand, is a huge part of what we do. And so it's not, uh, it's not you're not in an unusual situation.
So how do you then if you generate these gains, how can you then exit them in a tax efficient manner? And there are strategies for doing that, and that that really becomes tax planning, and that is a really important part. Yeah, it's an important part of what we do with our clients because there are ways of doing that. You're right, you don't wanna you don't want to pay too much taxes, but again, you don't want to give up that potential return, right, So how do you how do you do both? How
do you generate return? And we're not saying make taxes go away, but through some planning, right, you can do it in a in a morefficient manner.
Okay, that's some really good advice. And what I said is like really significant to me is after paying Social Security tax, Medicare do is it Medicaid, Medicaid tax, paying your New York state tax, paying your federal tax, then you get your money, after your you know, you get your paycheck. Then then you have your money, you invest into the market, nipping another fifteen percent. It's just I feel like there's no good benefit for savers other than the what you mentioned, the HSA, the four K, the
five twenty ninth plans, the ROSS. Those are all great tax deferther tax savings methods than any excess cash you're taxed done, And there's really no way around that, I understand right right, And as our savings account they HS say a friend said, oh, you can invest that money, I said, no, I researched it and I haven't taken a penny out in four or five years. That's six seven thousand years, growing and growing and growing. Tech three. It's amazing, that's right, and.
You're you can invest it within your HSA, do you know what I mean? So I'm not.
Sure how Yeah, that's what I've done. I took it out of I put into a CD, you're gonna laugh, a five percent CD, and then I ended up putting into more of a like a total stock market funded Great, yeah.
Great, great, you know. And and the only thing I would say, and I certainly understand the feeling of a taxes, so I'm not the only thing I would say is that, hey, as a as a saver and a long term saver, if you can make nine in the stock market, right, and yes, knowing that at some point you're gonna have to pay some tax on that, right, it's you're still beneficial. It's still beneficial to put that money to work and trying to trying to generate the highest total return you can.
And then you know, part of what part of planning is is and this is a again, it's a big part of what we do is Okay, then how do you tap into that money trying to minimize taxes? And there's strategies you can do and I'm not saying there's things you can do to make it all go away, right, But there's strategies you can do to then say, how do I access that in the most tax efficient manner possible?
Okay, and may I have one last follow one follow up question.
If you had a.
Choice between, meaning a client had a choice or a person between putting money into a five twenty nine plan or a WROTH, and you're gonna be touching the money at the same time, do you recommend one over the other?
I would say WROTH over a five twenty nine plan, because really those wraths are a retirement account, and you know, there's not really any backstop for funding your retirement other than really what you've put away. As far as the five twenty nine you know, these are college savings accounts, so there's a lot of options out there. You know,
you can fund yourself. There's a lot of student loans out there, whether that's from the government, there's scholarships out there, so again there's a lot of options to pay for college in the future for somebody, but not as many for you know, helping you fund your retirement. So if it's one or the other that you could contribute to, I'd say the row would be the first place to look.
Okay, and then would you recommend for the five twenty nine from a tax perspective, maxing out to ten thousand a year For I think, guess what New York State allows for the tax right off? Stopping at the ten thousand a year, then a bit of like twenty or thirty thousand.
A year for a married couple of Yes, the maximum New York State deduction you can get is ten thousand dollars. It really comes down to your cash flow again. You want to focus on your retirement maximizing all of those accounts.
If you do have extra money you could put in you know up to the ten thousand dollars, you could put even more above that into the five twenty nine, but you know, at least trying to get that maximum ten thousand dollars in New York State deduction is the first, you know target.
I would say, yeah, I do that like the first week of the of the year, because a couple of times I didn't do that and I put it in the end of the year, but I mixed that whole year of growth. If I had the money in January, why wait till December? So I wait, I've been doing it the first first week of the year and it's grown one or two thousand over the you know, over the year. It's a I believe it's the Vanguard five twenty nine plan with yours.
Yeah, that's great.
Yeah, as John talks about you, it's about time in the market, not timing in the market. So you know, having the money invested and letty it work for you is really a great strategy.
Thank you, and it's part of being one of your clients. Do you sit down with your charge up obviously, see you know that's honorable, and then do you also to sit down and do tax planning as part of that fee or is it a separate service? Do you offer talking about taxes and you know accounting, et cetera.
Yeah, that is all included in our fee. So we are the the only advisors, so we just charge and assets under management fee and with that comes you know, not only will we review your various accounts, you know, retirement accounts, any accounts they have in their investments, but we'll also do you know, financial planning with you, which includes looking at tax planning, you know, social security planning, cast flow planning. All of that is included in our assets under management fee, and we.
Put our assets with your company or we keep assets with us, and then we pay you a advisory fee.
So go ahead, John.
So we use Charles Schwab as a custodian, so our clients money. Yeah, yeah, so and we've we've worked with them, you know for a long, long time, great firm. We don't get any compensation out of that, and uh but it's you know, they're a great custodian. And so your money is held there at Charles Schwab.
So you transfer it from your current yan financially place to Charles Swab. Okay, yep, well thank you.
Yeah, you're both eligible.
And I love your program. I listened to it every weekend and it's extremely Now you're extreaming eligible both of you.
Thank you, well, thank you, Lisa. We appreciate you listening, appreciate the questions, you know, and then you know you certainly sounds like you're doing a lot of a lot are the right things. So it's it seems to be you're in a great position.
Well there you go, Scott, you Lisa. Yeah, I'm gonna dive into some more taxes, you know, looking at twenty twenty four you know what moves you could still make uh to tax You're twenty twenty four, and then look at twenty twenty five, so you know, you still have time to make some contributions to a couple accounts that we had actually talked about with Lisa. So you still could make contributions to your IRA or rawira IRA until
April fifteenth. For twenty twenty four, the maximum contribution is up to seven thousand dollars for those under fifty years old and eight thousand dollars for those fifty year older. And there's again a lot of different eligibility rules to whether or not you can contribute to either an IRA
or raw FIRA. One of the biggest ones that you want to make sure is you have to have earned income to contribute to these accounts, so really make sure that you're eligible before you make any sort of contribution to those accounts. Additionally, you could make if you're a self employed individual, you can make contributions to a step IRA, which you have until the due date of your business
tax return to make these contributions. Often, you know, if you're self employed, you file on a schedule see which goes with your personal tax return, so you have until April fifteenth. There then then the final account is your HSA, which is a help savings account. You have until April fifteenth to make contributions for twenty twenty four as well.
These accounts are really, you know, one of the best out there just because of the triple tax advantage that they offer, which means your contributions are tax deductible, and then the investment growth and earnings are tax free or tax deferred, and then withdraws for qualified medical expenses you know in the future are also tax free. So really great accounts to have for you.
You know.
With having you know, presumably your taxes for twenty twenty four are already done wrapped up or about to be, we want to start taking a look at twenty twenty five see if there's any changes that you should make for yourself to have yourself set up properly. And really one of the first things is you want to look at doesn't make sense to adjust your withholding based on your prior year's taxes and also what you're projecting for
the current year twenty twenty five. You want to pay in enough to avoid an underpayment penalty, but also you on the other side, you want to make sure that you're not getting back too large of a refund. You know, you're essentially just giving the government an interest free loan, So the best place to really aim for is break even. Another thing you want to look at for twenty twenty five, if you haven't already done so, you want to adjust
your four to oh one K contributions. You know, for twenty twenty five, the maximum you can contribute to a four to one K is twenty three thousand, five hundred, which is just an increase of five hundred dollars from last year. So if you haven't already done so at the beginning of the year, make sure you adjust that amount to either max it out or at least aim for you know that ten to fifteen percent putting away
of what you're earning. Also, as John had talked about, you know, now is definitely a great time to review your allocation and your various accounts of you want to make sure you know, am I in the right allocation? Am I you know being a bit too aggressive or maybe conversely, maybe you're a bit too conservative based on
your time horizon. Also, if you know retirement accounts, you know, maybe you've been set into a default fund when you first got into the account, and you've never really done anything with it, so you want to take a closer look at your overall allocation and just what funds are being offered within the account. And then also one other
piece related to retirement accounts. There are now i'd say most or a lot at least, of retirement plans for one ks where there's also now a row component that's being offered, So it may make sense for you to see to start contributing there in addition to your traditional four oh one K. But it's something you really want to analyze, you know, with a financial advisor or your CPA or you know, John and I are really anybody here at the firm, we can really take a closer
look at your exact situation to see doesn't make sense, you know, if your employer offers a roth piece with your four to oh one K, should I be putting some money into that bucket as well? And then with twenty twenty five and beyond, I'll just highlight you know, as of the end of this year, we will be seeing the Tax Cuts and Jobs Act that had gone
into place during Trump's first presidency. They will be sunsetting at the end of this year, you know, without any changes, you know, if they don't get passed, So we will be going back to the old packed laws and provisions, meaning we'll have different rates, we'll see a few of the other you know, the standard deduction will be going down. You know, some people may go back to itemizing again.
So that's just one thing to be aware of, in addition to all of the things that have been thrown out, such as you know, not taxing on tips over time, you know, social Security. These are all just things that have been thrown out. Nothing's been passed yet, so we you know, are constantly keeping an eye on that for clients to see what sort of changes we need to make or help clients be aware of. And then just you know, it's all really comes down to the planning.
So I think those are really some great things to look at for your twenty twenty four taxes. And then beyond.
Perfect scot that that was a great segment, a lot of information there, very timely information as we are a little bit more than a month away from tax filing day, and great question by Lisa, and so you know, so even on the tax front, you know, Scott said, there's a lot of Trump policy changes that are up in the air, and certainly we'll have more clarity and as we get more definition on some of those tax changes for twenty twenty five, and they all would be twenty
twenty five forward issues, we'll certainly share that. But you know, President Trump has been clear that you know, his objective is to extend those job cuts, I'm sorry, those tax cuts, and also pushing for some others. Is Scott mentioned regarding Social Security and in tips whether you know where this funding gap is going to be covered? Right, because you know, as I mentioned, you know, his goal is to get to a balanced budget and uh, stop adding to our
national debt. So uh, you know, any kind of a tax cut is going to be giving up some significant revenue. So but there, you know, that's that's the why they have the budget process, and he'll be working hard, you know, with Congress. So you know, we are coming up near the end of today's show, and I hope you enjoy the show. I know that Scott and I certainly did. Scott appreciate all the great info. I hope you enjoy the rest of your week ahead and have an amazing
rest of your Sunday. Also, be sure to tune in next week for another great show. Check out our website Bouchet dot com for great content and information you have been listening to 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. I want to thank you for tuning in with this morning. Hope you enjoy the rest of your morning and have a great week ahead. Thank you.