(01:09):
Hello and welcome to On the Money right here on WDBO 1 0 7 3 FM AM five 80, always streaming live inside your WDBO app. This is on the money where the Certified financial group has been answering your financial questions for over 30 years. Here on WDBO, we got Joe Bur and Matt Murphy joining us today, a couple of members of the over 400 years of experience inside those four walls inside the certified financial group office. So this show can back up what they say. They provide the answers to your questions, they monitor the news, they see all the percentages, the ups and downs, and they know what exactly might be the best advice for you. If you want to hop on the air, 8 4 4 5 8 0 9 3 2 6 8 4 4 5 80 WDBO, Joe, Matt, how are you guys doing today? We’re doing great.
(02:02):
We’re doing great, Josh. Good to be with you. Good morning. As you said in the intro, we are here to answer questions that might be on your mind as we say time and time again. Unfortunately, they don’t teach us this stuff in school and we go through life trying some of this, trying some of that. Wake up at 55 years old and find out we might be looking at a collection of financial accidents. So our job is to get you on the road to patch you up, answer those questions so you don’t become a financial casualty. Matt and I and 14 other certified financiers, financial planners, do retirement planning and investment management for a fee on Monday through Friday. On Saturday morning. We are here for you absolutely free. This is not a one hour infomercial to
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Tell you
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How wonderful we are, but we are here to help you. So if you have any questions regarding your personal finances, things you’ve been struggling with, questions that you might have, things you may have heard, rumors, something your coworker said, your brother-in-Law, your mother, whatever, pick up the phone because the lines are absolutely wide open and we will entertain your calls. And those numbers are
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8 4 4 5 8 0 9 3 2 6 8 4 4 5 80 WDBO or send it your open mic using that free WDBO
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App. Push the
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Record button, give us your best 15, 20 seconds and then we’ll play it back live for you on the air.
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Today’s topic, which I feel right down to my wallet because I
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Keep hearing the news, the ups and downs,
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We’re in a recession, we’re not in a recession. Investment rates up, down, stay the same unemployment, all these things. The topic is
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This market is making me crazy. What should I do,
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Josh? I will give the listeners the same advice that I gave my 16 year old this morning, who is going to take the SATs for the first time, which is remain calm and relax. And I think that is, do I sound paranoid? Do I
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Sound
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Crazy? No, no you don’t. You just sound like the average human being really, it’s very natural to I be concerned and in some cases to panic when the market does this after all the folks that we’re talking to, by and large, this is their nest egg. This is the money that they’ve worked 30, 40 years saved and invested and it’s their hard earned money. And so it can be very troubling to see the rollercoaster ride that we’ve experienced so far in the market this year. I think most people, Joe and I were just talking off air before we started here. I think if you ask most folks what the market’s actually done so far year to date, my guess would be that most people would say that it’s been negative or it’s been down. In fact, it’s been up significantly. Now having said that, that’s been concentrated amongst a number of stocks and folks have probably heard the term, the magnificent seven.
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Those seven companies, the big primarily tech companies that you hear about have really carried the water for that. The rest of the market has really lagged and struggled, but nevertheless, the market has been positive year to date. But all of that aside, I wanted to bring this topic up today because I hear it from my clients all the time, Matt, the market is driving me nuts. What should I do about it? So we wanted to just talk about a few things that you as an investor can do to handle and deal with a volatile market. And of course, just like anything in life, there’s some things we have control over and there’s other things that we don’t. So my concern with my clients is giving them tools that they can use to take control of the things that they can control. So the first one would be, as I said, just remain calm. None of us make good decisions when we’re emotional, when we panic. So if you wake up on Monday morning and you look at your account online and it’s down significantly, that’s not the time to be making knee-jerk decisions.
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Yeah, that’s unfortunately human nature and you see it time and time again where people, we go through a rough patch and say, I’ve had it. I’m getting out. I can’t take it anymore. I’m not going to do this anymore. Only to wake up a year later and say, geez, I should not have done that. I mean, you go back to 2008, 2009, which is really when we really hit the depths. And how many people just panicked and abandoned really their long-term plans? And unfortunately in some cases they’re still playing catch up.
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Yes, they are. And you can say the same thing, Joe, about March of 2000, February and March of 2000, the market was down peak to trough within a month about 32%. And as we know, the market ended up about I think 16 or 17% for the year. So it’s funny, I’ve got a client who, and if she’s listening right now, this is going to put a smile on her face and she’ll probably call me on Monday and yell at me. But she texted me on Friday, last Friday when the market was way down. Remember we were really, really down that day and said, oh gosh, what should I do? Should I get out? And I gave her the same advice that I’ve just given so far, stay calm, remain patient. And of course on Monday and Tuesday the market shoots way back up and she said, oh, I’m so glad you told me just to settle down and relax. So I know that sounds kind of cliche and you might say, well, that’s not really specific investment advice. Well, a lot of this investing stuff has more to do, just the numbers and just what’s going on in the market. A lot of it is in our own heads and how we deal with things.
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I think the real key is to first of all trust what diversification means. Diversification with quality will work for you, but it’s never a smooth ride. It’s never a straight up line that only goes up. As I say, time and time again, if dieting and investing were easy, we’d all be skinny and rich.
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That’s right.
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It’s overcoming that emotional rollercoaster. But knowing that if you have quality, and that means investing in companies using mutual funds or ETFs, we’re not stock pickers. Our job is to find the very best money managers that can find those companies for you, but investing that with a diversified portfolio. Now there’s no way to avoid having periods when you’re down. I mean that’s the price that you pay for long-term good returns, better than you can get in a treasury bill or a cd.
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That’s right. And I think I like to use analogies, Joe, just to make things kind of common sense for people. And I draw an analogy to flying in an airplane. Candidly, you look at the history of commercial air flight and it’s such a small percentage of flights where they’re going to crash or people are even going to get injured for that matter. But yet you have to have a belief that that is true. You have to know that, hey, if I get on this airplane, I’m going to get from point A to point B. Now, I don’t know exactly how smooth the ride is going to be along the way. I would draw that same analogy to investing. At the end of the day, if you don’t have a belief in the long-term success of the markets, then you really shouldn’t be in ’em at all.
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Well, let me take that one level deeper. If you don’t have a long-term belief in the success of capitalism and the world economy that companies or people will still continue to need cars and tires and sewing machines and refrigerators and iPad,
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IPads
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And cell phones and all the things that you and I buy are going to buy this weekend, then you’re right. You should not be in the market if you don’t believe in capitalism and you don’t want to own a piece of that because that’s where growth is. Owners in the long runs are the ones that prosper and make money if you don’t have the time or the energy or the ability to own your own company. Although what you want to do is own a piece of a lot of companies around the world, and that’s what investing is all about. Very simple, very straightforward. Now the key is finding the right companies and that’s where the due diligence comes in. That’s where we do a strict analysis of all the opportunities that are out there. But that’s the secret. It’s not rocket surgery as you say. It’s
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Really not. It’s really not. And I want to mention one other thing here, which is that planning, financial planning, investment planning, retirement planning, planning in general is probably where all of this needs to start. And so I see that we’ve got a call coming in here, Josh.
(10:00):
Josh is teeing it up. So let’s go to that planning idea, Matt, because really if you have an idea of where you need to go and what you need to do to get there as opposed to just shooting in the dark and trying to get the best returns you can, that really gives you an idea. It’s like a roadmap.
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It does, and I’m going to use an example here for my clients that are listening today, they’ll probably think I sound like a broken record, but you take two people, one person that’s got a million dollars in their portfolio, let’s say, and that person needs to draw a hundred thousand out each year to pay their bills, to keep themselves clothed, housed, and fed. That person irrespective of their age or even their risk tolerance, they need to be very conservative because if they’re drawing that a hundred thousand a year out and they’ve got a million dollars and the market goes way down because they’re too aggressive,
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It’s over,
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It’s over. They’re going to run out of money. Now, contrast that with the person that’s got a million dollars irrespective of age, that maybe has their income needs satisfied by other sources, pension, social security, other sources of income, and they never anticipate needing to draw income from that portfolio. That person, while they may not enjoy seeing the volatility when the market goes down, they’re not going to be jeopardized in terms of being able to pay for their housing, clothing, et cetera.
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And that’s what planning does. It sets aside what you need to meet those short-term and intermediate term needs so you don’t sell when things are down. I like to use the analogy too of real estate. We’ve been through the real estate cycles. If you had good property, the last thing you want to do is run out and sell the property. The difference between what we do and investing the way we do it and investing in real estate, you don’t see the value of your real estate property going up and down every day.
(11:36):
That’s right. That’s right. Unless you’re going on Zillow and which is kind of a fool’s errand.
(11:40):
Exactly, exactly. I see we got a call there, Josh, we want to take it after break. What do you want to do here? Let’s talk to Bob.
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Let’s talk to Bob. Bob, you’re calling in from
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Melbourne. Go ahead. Good morning, Bob.
(11:49):
Hi. Thanks. Yeah, required minimum distributions. I understand now. The age is 73 and can I take that at any time during the year I turned 73 and I understand it’s based on the balance at the end of the previous year.
(12:06):
That’s correct. As long as you have it withdrawn by December 31st. However, the first year, you can defer that until April 1st of the following year, but however, you’ll have to take two that year. You follow what I’m saying?
(12:20):
Yeah, for tax purposes, I don’t think I would do that. Okay.
(12:24):
Yeah, but you are 100% correct. You have to take it out by the end of the year or April 1st of the year following the year in which you turn 73 for the first go round. Then as I said, you have to take two hits that following year
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And there is some strategy around that, Bob. Some people will take it monthly to kind of spread out the risk of, because if you wait until the end of the year to take your minimum distribution, and let’s say the market goes way down during the year, now you’re stuck in a situation where you’ve got to sell investments at a low point in order to produce your minimum distribution. There’s no right or wrong to that. Really depends on your situation and how much income you need from your portfolio, whether you’re going to spend that distribution or if you’re going to reinvest it. So good question though Bob, we appreciate that call.
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It’s taking it out as another. Go ahead.
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What I’ve done is have enough in my stable value fund that would cover any RMDs in case there was a loss.
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There you go.
(13:19):
Then it really doesn’t matter when you take it,
(13:21):
Right?
(13:22):
Yep.
(13:23):
Alright Bob, appreciate the call. We’re up against the break here. Take it away, Josh.
(13:26):
Thank you so much. Bob. If you want to get your question answered by the team at Certified Financial Group, the number to call is five eight zero nine three two six eight four four five eighty WDBO or sending in your open mic using that free WDBO app you’re listening to on the money we’re planning tomorrow.
(13:42):
Today with
(13:43):
The certified Financial group.
(13:50):
40 years ago I had a dream of building the best personal financial consulting firm in central Florida. Now with 14 certified financial planners acting as fiduciaries, I believe we’re there, but don’t take my word for it. As we approach retirement, we have the freedom of choice,
(14:04):
Peace of mind that we now have.
(14:07):
That’s
(14:07):
Everything to us. The people that work here are honest and caring and I feel like I can go to sleep at night. So
(14:15):
Schedule your no obligation. Visit today@financialgroup.com where we’re planning tomorrow today. Did you know anyone can call themselves a fiduciary but only certified financial planners are required to work in your best interest? And we have 14 of them right here in Elmont Springs. So when you’re ready to plan for retirement, give us a call
(15:17):
Just knowing that my money’s here with Certified Financial Group. I feel relaxed and comfortable. They’re smart, they watch the market, they take care of you. You can depend on them.
(15:29):
So schedule your no obligation. Visit today@financialgroup.com or we’re planning tomorrow. Today. What is a fiduciary when it comes to investing? A fiduciary is legally required to act in your best interest. For 40 years, planners at Certified Financial Group have been guiding our local clients toward financial peace of mind. The rest of the world is still catching up, but our team of certified financial planners are the local experienced fiduciaries you can trust. Certified Financial Group are your central Florida planners. Call us today.
(16:05):
Your Confident Forever Plan is possible with ACFP Professional at Certified Financial Group. We can help you build a complete financial plan. Visit financial group.com to find your CFP professional.
(16:50):
40 years ago I had a dream of building the best personal financial consulting firm in central Florida. Now with 14 certified financial planners acting as fiduciaries, I believe were there, but don’t take my word for it.
(17:01):
As we approach retirement, we have the freedom of choice,
(17:04):
Peace of mind that we now have. That’s everything to us. The people that work here are honest and caring and I feel like I can go to sleep at night.
(17:15):
So schedule you no obligation. Visit today@financialgroup.com or we’re planning tomorrow. Today. Did you know anyone can call themselves a fiduciary but only certified financial planners are required to work in your best interest? And we have 14 of them right here in Altamont Springs. So when you’re ready to plan for retirement, give us a call just knowing that my money’s here with Certified Financial Group. I feel relaxed and comfortable. They’re smart, they watch the market, they take care of you. You can depend on them. So schedule your no obligation. Visit today@financialgroup.com where we’re planning tomorrow. Today, what is a fiduciary when it comes to investing? A fiduciary is legally required to act in your best interest. For 40 years, planners at Certified Financial Group have been guiding our local clients toward financial peace of mind. The rest of the world is still catching up, but our team of certified financial planners are the local experienced fiduciaries you can trust. Certified Financial Group are your central Florida planners. Call us today
(19:03):
On the money right here on WDBO 1 0 7 3 FM AM five 80, always streaming us live on the WDBO app. Take your favorite financial advice with you on the go no matter where you are in the world. Just open up the WDBO app, push play and listen to on the money brought to you by this certified financial group, Joe Burt, Matt Murphy answering our calls today. If you want to join the conversation, 4 5 8 0 9 3 2 6 is the number to call 8 4 4 5 80 WDBO. If your question is a little more personal, you want get down to specific numbers or specific information that you’d rather keep off the air they do have a feature for. That’s who Rodney OBE with the certified financial group of standing by to answer your questions. Call that number at eight six nine nine eight zero zero four oh seven eight six nine ninety eight hundred or if you want to swing by their state-of-the-art Office building at the Certified Financial Group. There are plenty of workshops coming up for you to tickle your fancy.
(20:03):
We’ve got one as a matter of fact, Matt’s doing one here as soon as he gets off the air at 10 30. Why don’t you tell our listeners what it’s about? This one is filled or almost standing room only for this one, but it’s very popular and you cover the
(20:14):
Four how tax planning changes through the four stages of retirement. So Joe, I’ve done that one a number of times this year. It’s been standing room only every single time. And I think that speaks to the fact that folks like to learn how to plan out their taxes, save on taxes, invest in a tax efficient fashion, but more importantly what I’ve gathered from it is we talk about two things in particular and that is social security and Medicare. And there’s two tax traps associated with those decisions really. And what I’ve found is that most everybody does not understand how the entirety of their financial planning picture, specifically their income and withdrawals from retirement accounts and things like that will affect how much of their social security is taxable, number one. And number two, how that feeds into what their Medicare premiums
(21:02):
Will be, right? Yeah, the interplay all along the board. And as you said, we’ve got some really great software that will illustrate that and keep you from the traps that we see people falling into. So that’s when’s filled. You’re going to do that again next year, you tell me?
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Yes,
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The first of the year.
(21:17):
Yep. Yep.
(21:17):
And a week from Wednesday
(21:20):
We’ve got Charles Curry that’s doing social security planning, basic rules and claiming strategies. So that’s Wednesday, November the 15th from six 30 to eight o’clock. And I read a statistic recently and I don’t remember the exact number, but it was some overwhelming percentage of number of people that claim Social Security in retrospect are our suboptimal. In other words, they’re not really taking it correctly. They’re not claiming the social security amount to optimize their benefits. And once you make that decision, Joe, it’s pretty much irrevocable.
(21:54):
Oh yeah.
(21:54):
You can’t go back and change it.
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And as I say in the ad, social security cannot tell you what to do. They can only tell you what your options are, but they can’t tell you what’s optimal for you and that’s where planning comes in.
(22:06):
That’s right.
(22:06):
And once you make those decisions, you can’t go back and change ’em. There’s a lot of choices in that regard. So that’s going to be covered on Wednesday, a week from Wednesday, November 15th here at our offices in Altamont Springs. And from six 30 to seven 30 or eight o’clock, Charles is going to provide some light refreshments to give you some information that you can use or your parents can use when you got to walk that minefield. That’s called Social security. So we look forward to seeing you there. And Matt’s got his big production coming up here in less than an hour.
(22:33):
Yes, I do.
(22:33):
About just about an hour
(22:35):
Of any of our workshops by the way, Joe Good to our website, financial group.com. And there’s a tab called workshops you can click on there. You can see not only those two but all upcoming workshops. You have a chance to RSVP on there as well to reserve your spot.
(22:49):
So we look forward to seeing you Take it away. Josh,
(22:52):
Thank you so much. We also look forward to hearing your calls. If you want to pick the brains of Joe Bird and Matt Murphy, a couple of certified financial planners with the Certified Financial Group, the number to call is five eight zero nine three two six eight four four five eighty WDBO or send in your open mic using that free WDBO app.
(23:09):
Josh
(23:10):
You’re listening to On the Money Where We Are Planning Tomorrow. Today
(23:14):
Before we run, I want to tell our listeners we’re going to announce the new 4 0 1 k and IRA limits for 2024. So stay tuned after the break we’ll be coming back with that info.
(23:22):
Thank you so much. You’re listening to On the Money on WDVO.
(23:32):
Your Confident Forever Plan is possible with ACFP professional at Certified Financial Group. We can help you build a complete financial plan. Visit financial group.com to find your CFP professional.
(24:17):
40 years ago I had a dream of building the best personal financial consulting firm in central Florida. Now with 14 certified financial planners acting as fiduciaries, I believe we’re there, but don’t take my word for it. As
(24:27):
We approach
(24:28):
Retirement, we have the
(24:29):
Freedom of choice,
(24:30):
Peace of mind that we now have. That’s everything to us. The people that work here are honest and caring and I feel like I can go to sleep at night.
(24:41):
So schedule your no obligation. Visit today@financialgroup.com where we’re planning tomorrow. Today. Did you know anyone can call themselves a fiduciary but only certify financial planners are required to work in your best interest And we have 14 of them right here in Elmont Springs. So when you’re ready to plan for retirement, give us a call
(25:43):
Just knowing that my money’s here with Certified Financial Group. I feel relaxed and comfortable.
(25:49):
They’re smart, they watch the market, they take care of you. You can depend on them. So schedule your no obligation. Visit today@financialgroup.com or we’re planning tomorrow. Today. What is a fiduciary when it comes to investing? A fiduciary is legally required to act in your best interest. For 40 years, planners at Certified Financial Group have been guiding our local clients toward financial peace of mind. The rest of the world is still catching up, but our team of certified financial planners are the local experienced fiduciaries you can trust. Certified Financial Group are your central Florida planners. Call us today.
(26:32):
Your Confident Forever Plan is possible with ACFP Professional at Certified Financial Group. We can help you build a complete financial plan. Visit financial.com to find your CFP professional.
(27:16):
40 years ago I had a dream of building the best personal financial consulting firm in central Florida. Now with 14 certified financial planners acting as fiduciaries, I believe we’re there, but don’t take my word for it. As
(27:27):
We approach retirement,
(27:28):
We have the
(27:29):
Freedom of choice,
(27:30):
Peace of mind that we now have. That’s everything to us. The people that work here are honest and caring and I feel like I can go to sleep at night.
(27:41):
So schedule your no obligation. Visit today@financialgroup.com where we’re planning tomorrow. Today. Did you know anyone can call themselves a fiduciary but only certified financial planners are required to work in your best interest? And we have 14 of them right here in Elmont Springs. So when you’re ready to plan for retirement, give us a call
(28:43):
Just knowing that my money’s here with Certified Financial Group. I feel relaxed and comfortable.
(28:49):
They’re smart, they watch the market, they take care of you.
(28:54):
You
(28:54):
Can depend on them. So schedule your no obligation. Visit today@financialgroup.com or we’re planning tomorrow. Today. What is a fiduciary when it comes to investing? A fiduciary is legally required to act in your best interest. For 40 years, planners at Certified Financial Group have been guiding our local clients toward financial peace of mind. The rest of the world is still catching up, but our team of certified financial planners are the local experienced fiduciaries you can trust. Certified Financial Group are your central Florida planners. Call us today.
(29:31):
Your Confident Forever Plan is possible with ACFP professional at Certified Financial Group. We can help you build a complete financial
(29:42):
Visit financial group.com to find your CFP professional.
(30:16):
40 years ago I had a dream of building the best personal financial consulting firm in central Florida. Now with 14 certified financial planners acting as fiduciaries, I believe we’re there, but don’t take my word for it. As we approach
(30:28):
Retirement,
(30:28):
We have the freedom of choice,
(30:30):
Peace of mind that we now have. That’s everything to us. The people that work here are honest and caring and I feel like I can go to sleep at night.
(30:41):
So schedule your no obligation. Visit today@financialgroup.com or we’re planning tomorrow today
(30:46):
Back to On the Money right here on WDBO 1 0 7 3 FM AM five 80, always streaming. Live in the WDBO at my name’s Josh McCarthy. Join today with Matt Murphy and Joe Burt, a couple of certified financial planners with the Certified financial group. If you want to join the conversation, the lines are wide open for you. 8 4 4 5 8 0 9 3 2 6. That’s 8 4 4 5 80 WDBO. We’ve been talking about the market right now and Joe, Matt, we are the Orlando is one of the theme park capitals of the world, but that’s not the only rollercoaster going on right now.
(31:22):
Yeah, the market is so unfortunately does what it does, but that’s all part of life. It’s never been a smooth straight line. And our job is to get you to and through it your retirement years. And Matt wanted to wrap up the discussion on the market about how you can turn the negatives in the market to a positive.
(31:36):
That’s right. Yeah. So the one other thing that I wanted to mention was tax loss harvesting. And to me, I always like to any negative situation, try and make a positive out of it, making the proverbial lemonade out of the lemons. And this is a good opportunity to do that. So if you have investment accounts that are not in retirement accounts, so it might be a trust account, could be an individual account, a joint account, we would classify those as taxable accounts. One of the things that you can do is when you have investments that have realized a loss, in our terminology we call it harvesting those losses. So let’s say that you’ve got an investment that’s got, I dunno, say, a $5,000 loss in it. This is the one time when it’s okay to violate the rule of buy low and sell high, where you may want to go in and actually sell that investment for a loss. And the benefit of doing that then is you can use that $5,000 to offset up to $3,000 of your income, but then you can also use whatever you haven’t used to offset your income to offset any capital gains that you have either this year or in any subsequent year. And there’s no expiration date on those losses.
(32:47):
And the thing you have to be careful of is what’s called a wash sale rule, which means that you would lose the ability to use that tax deduction if within 30, 31 days you went out and purchased the same or similar form of investment. So you can’t sell it on Monday and then turn around and buy it back on Tuesday. However, you can still make other investments and do that.
(33:06):
That’s right. Yeah. So you may, just to put a sharper point on that, what you may do and what we’ll often do for our clients is let’s say we may sell, I don’t know, a Vanguard 500 index fund that’s at a loss. Well, you can bank that loss but then turn around and perhaps buy a Fidelity large cap value fund or something as Joe said, that’s not the same or not substantially similar by the IRS’s definition and still kind of keep your asset allocation consistent but not violate those wash sale rules. So that particularly come year end, I’ve found with clients, if we’re paying close attention to that, that can come in handy when it comes time to either take some gains off the table. So you may be able to take gains off the table in your other investments without paying any taxes or at the very least, like I said, you can use up to $3,000 of that to offset your income for the year. So that’s real money in your pocket
(34:03):
That I’ve got you sitting here. I was just thinking about, we were talking about the tax loss harvesting and the other stuff that we do here. Matt Murphy is one of the charter members of our investment committee, and I don’t think we’ve really spent any time on their air telling our clients what that’s all about and how we did it and really what you all went through to put that together.
(34:23):
Yeah, so there’s about not about, there are five of us on the investment committee here at Certified Financial Group and our mission really was to build out portfolios that were comprised of not only the appropriate allocations, so the percentages to stocks and bonds and international and large cap and value and small cap and bonds and everything else, but also to find the best available high quality investments in each one of those categories. And so on the surface, I don’t know, that may seem like not that big of a task, but we have spent hours and hours and hours sifting through data in conversations not only amongst the five of us, but we’ve also reached out to several larger institutions to get their feedback on the portfolios that we’ve put together. One of the things I think that’s unique about us here at CFG and I always tell my clients is we have neither a direct nor indirect relationship with any large institution. So when we’re gathering that data and feedback from these various firms, that kind of comment on the portfolios that we put together.
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And you can mention the firms.
(35:40):
Yeah, well, I mean, so we’ve talked to JP Morgan, we’ve talked to Fidelity, we just talked to them this week. State Street is another one. BlackRock. BlackRock is another
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One. Vanguard’s been in here.
(35:50):
Avantis is a firm that a lot of folks haven’t heard about that weve spent considerable amount of time with. Very unique, pacer is another one. So there’s a lot of firms out there that maybe the average investor hasn’t heard of, but they have very, very unique and innovative ideas. And so that’s our job really is to find those investments that are unique but that will fit into a properly diversified portfolio.
(36:16):
When you talk about building a portfolio, I like to use an analogy as you’d like to use analogies of baking a cake. Standard recipes calls for so much sugar and flour and eggs and milk and whatever it is. And you could take the off the shelf stuff and use the generic ingredients and you have the cake. However, the real sizzle comes in is when you spend the time to find the very best ingredients to bake that cake. So that’s what it’s all about. First of all, knowing what kind of cake you want to bake, and that’s a function we’ll talk about much how aggressive or how conservative you need to be, how much fixed income versus equities you need to be. And that’s we’re going to decide what kind of cake we’re going to bake. But the next step is, and I think the value that we bring to the table is being able to find the very best ingredients to then bake that cake.
(37:04):
That’s right. And also paying attention to the little things. And believe me, I’m no professional baker here, so I may be speaking out of turn, however I know that that little drop or two of vanilla extract is going to make a difference. And so sometimes clients might say, well geez, why do we have this 1% or 2% allocation to this particular sector or that fund? Well that’s the vanilla extract that kind of maybe brings everything together. So it’s a lot different than just buying one fund for a portfolio. And we could go on and on about that subject, but it isn’t very important that you have visibility into the types of investments that you’re owning and that they’re properly diversified. And as Joe said, kind of like the stock and bond mix. If you have too much flour in a cake or not enough eggs or whatever, the cake’s going to be no good. So that’s been our job on the investment committee is to track that down. We meet every Thursday in addition to the meetings we have with these larger firms to discuss our portfolios. We meet every Thursday to discuss the markets, the economy, our portfolios, and so on.
(38:15):
Alright, so let’s talk about the text question that floated in there.
(38:17):
Josh, you got that teed up.
(38:19):
I got it here for you and they’re ready for your answer question comes to you now I noticed a, wait,
(38:25):
Take two.
(38:26):
I noticed I had a lot of non-qualified dividends on my tax return this year. What makes a dividend and what does that mean? That is a very good question. So I’m guessing this came from somebody who looked at their tax return for 2022 and probably noticed this. Okay, so it’s a good thing in a sense that interest rates have gone up. So people are earning more in their fixed income investments, their bonds, bond funds, et cetera. I think what a lot of people don’t realize is those dividends typically from bond funds in particular, and even some money market funds are classified as non-qualified dividends. And what does that mean? That means that it’s taxed at your ordinary income tax rate. So if you’re in a low tax bracket, really probably doesn’t make too much difference, but if you’re in a higher tax bracket, those non-qualified dividends can really, I won’t say blow up your tax situation, but they can flow into other things kind of like I’ll be talking about at 10 30 this morning, whether it’s taxability in your social security, making your Medicare premiums more taxable, so non-qualified dividends.
(39:29):
And then you also have qualified dividends, which generally are either not taxed or taxed at 15%. Generally speaking, those are dividends that are paid by US companies and so they receive that favorable tax treatment, but mutual funds and even some ETFs receive some different tax treatment on that. So just something to be aware of, something that a planner can help you sort of identify throughout the year and at the end of the year, how do we, yes, it’s great that we’re getting maybe 5% on our cash or our fixed income, but really all that matters at the end of the day is how much of that you get to keep. And if it’s highly taxed, you’re getting to keep less of it.
(40:05):
Right, right. Next text question there, Josh.
(40:09):
You got it. Question now I will turn 73 next year and I have a rollover IRA and a Roth IRA. Do I need to take distributions from both accounts? Ah, another good one. We get that question a lot. So required minimum distributions only apply to rollover traditional ssep, simple IRAs. They do not apply to Roth IRAs. That’s one of the benefit of the Roth IRA. So the answer to the question is no, it does not apply to your Roth ira. It would only apply to any of your pre-tax IRAs such as the rollover, the traditional, et cetera.
(40:46):
And if you’re still working and have a 4 0 1 K or 4 0 3 B or 4 57 and are less than a 5% stockholder, you don’t have to take your required distributions. In fact, what you may want to do is roll over any IRAs that you have, roll them into this four oh K to continue the tax deferral deferral if you’re so inclined. So these are some of the things we look at when our clients come in that love working, love doing what they’re doing, they still have a 4 0 1 K at their company and they’re still contributing to it, but they say, I’ve got these IRAs out here, they got to take these RMDs. Well why don’t we take those IRAs, roll ’em into your current 4 0 1 K and continue the tax deferral if that works for you. So those are some options that we consider when we do retirement planning for our clients. That’s what it’s all about. It’s not just a matter of picking investments, investments, of course drive the train, but knowing how you need to put it together is what it is about.
(41:34):
Good call Joe. So before we wrap up this segment as promised, we did want to talk about the limits that just came out regarding 4 0 1 Ks and IRAs. So for 2024, the 4 0 1 k max contribution limit is now 23,000. And for IRAs it is 7,000. Now if you’re over age 50, you also have a catchup provision and I’m not there yet, but man, I’m getting close, Joe. The catchup provision, it’s
(42:02):
Just a new 30 man.
(42:04):
I keep getting these emails from ARPI guess.
(42:07):
Welcome to the club.
(42:08):
Yeah, I guess in, they’re expecting me to turn 50 soon. So anyways, the catch up on 4 0 1 KS is 7,500. So if you’re over 50, that means that you can contribute a total of 30,500 into your 4 0 1 K and then the catch up amount on the IRA is an additional thousand dollars. So if you’re overage 50, either traditional or Roth IRA, you can contribute up to a total of $8,000 per
(42:33):
Year. Alright, that’s a contribution limit for the tax return that you will file in 2025. 2024 is going to be a function of the 23 numbers that are a little bit less than what you just quoted.
(42:46):
Yeah, good call. And of course IRAs also have some eligibility rules regarding whether they’re deductible or not, whether you can even contribute to a Roth ira. So that’s something that you want to consult with your tax advisor or with a financial advisor like us, we can help you with those questions.
(43:01):
Right. Alright, Josh, it’s all you man.
(43:04):
You got it. I’ll take it away. 4 5 8 0 9 3 2 6 is the number to call if you want to join the conversation. 8 4 4 5 80 WDBO Rodney Oby standing by in the office off the air if you want to pick the brains of the experts after the show ends. Or if you want to get a little more
(43:19):
Specific
(43:20):
And detailed and personal with your question, then Rodney
(43:23):
Oby is standing
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By 8 6 9 9 8 0 0 4 0 7 8 6 9 9800 you are listening to On the Money where we’re planning tomorrow
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Your Confident Forever Plan is possible with ACFP Professional at Certified Financial Group. We can help you build a complete financial plan. Visit financial group.com to find your CFP professional.
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So schedule your no obligation. Visit today@financialgroup.com or we’re planning tomorrow. Today. Did you know anyone can call themselves a fiduciary but only certified financial planners are to work in your best interest? And we have 14 of them right here in Elmont Springs. So when you’re ready to plan for retirement, give us a call
(47:36):
Just knowing that my money’s here with Certified Financial Group. I feel relaxed and comfortable. They’re smart,
(47:43):
They watch the
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Market,
(47:45):
They take
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Care of you.
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You can
(47:47):
Depend on them.
(47:48):
So schedule your no obligation. Visit today@financialgroup.com where we’re planning tomorrow. Today, what is a fiduciary when it comes to investing? A fiduciary is legally required to act in your best interest. For 40 years, planners at Certified Financial Group have been guiding our local clients toward financial peace of mind. The rest of the world is still catching up, but our team of certified financial planners are the local experienced fiduciaries you can trust. Certified Financial Group are your central Florida planners. Call us today.
(48:24):
Your Confident Forever Plan is possible with ACFP professional at Certified Financial Group. We can help you build a complete financial plan. Visit financial group.com to find your CFP professional
(48:50):
Back to the final segment of this episode of On the Money right here on WDBO 1 0 7 3 FM AM five 80, always streaming. Live in your WDBO at Matt Murphy. Joe have been walking us through this hour of financial advice. If you want to call in right now, the number is 5 8 0 9 3 2 6, but this show is coming to an end. So a better number for you to write down right now is their office number where Rodney Obi is standing by at the certified financial group to take calls live off the air. And that number is 4 0 7 8 6 9 9 8 0 0 4 0 7 8 6 9 9800. Josh, I think we had one more text question that came in. Let’s hit it here. This question comes to you now. Can I still take a tax break for making charitable contributions even if I don’t itemize them on my tax returns? Well, that’s another good question. No, but what you can do, and usually the first thing that you’d want to look at, if you are at age 70 and a half, and this is where it gets a little tricky with the IRS code, but if you’re, you’ve attained the age of 70 and a half, you can do what’s called a qualified charitable distribution Q-C-D-Q-C-D.
(50:03):
And so what a qualified charitable distribution does is it takes all or a portion of your, what would otherwise be your required minimum distribution and you can donate that directly to a charity. So you say, well, why would I do that? Well, if you think about making a charitable contribution right now, if you just write a check for that and you are just taking the standard deduction each year, which right now is pretty high, particularly if you’re over age five, you’re getting close to $30,000. So you’d have to have a lot of deductions in order to itemize. If you’re doing that and you write a check to a charity, you’re not going to get a tax break for it. With the QCD, if you donate that money from your IRA directly to the charity, that money never hits your tax return in the first place. So really, if you think about it in your 4 0 1 k, your IRA, that’s money that’s never been taxed before and now you’re donating that money directly to the charity. And so that money is not taxed ever at that point and it counts towards your minimum distribution also.
(51:05):
And what does that mean for you in the taxation of your Social security and Medicare, my friend?
(51:08):
Well, that’s a great question too. Joe flows right into our discussion at 10 30 here this morning. So those are the types of things. I find it all the time clients at the end of the year, they want to donate to a charity or even take money out of their retirement accounts to give gifts for the holidays or what have you, or take a trip and they do that unwittingly and they realize that all of a sudden it blows up their Social security taxation. It blows up their Medicare premiums two years from now. So by doing the QCD, you totally avoid those problems and don’t have any tax taxable income to you from that distribution.
(51:42):
So the key is, is that need to go directly
(51:44):
To the
(51:44):
Charity. It can’t pass through your fingers, you can’t get the money and then write the check and think you’ve done AQCD. There are forms that need to be filled out. We’re doing a lot of that in our office right now because the last quarter of the year and people are looking at their charitable contributions. So this is what we do for our clients as well. You ought to talk to your advisor if he or she is not discussing that with you as a way for you to minimize your taxes and still be charitably inclined.
(52:05):
That’s right. One more reminder about our workshops coming up. As Joe mentioned, I’ve got one here this morning at 10 30. We got standing room only for that, so it’s too late for that. How Wednesday, November the 15th, Charles Curry Social Security planning basic rules and claiming strategies from six 30 to eight. Again, that’s Wednesday, November the 15th, six 30 to eight o’clock. Hop on our website, financial group.com, go to the workshops tab, reserve your spot. That’s going to be some great information and it’s probably going to fill up quickly, so don’t wait
(52:34):
And enjoy your weekend. And may your football team win.
(52:37):
Thank you so much. That is on the Money Show where we’re planning tomorrow today with the Certified Financial Group.
