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Information presented on this program is believed to be factual and UpToDate, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Certified Advisory Corp is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.
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Stay tuned for on the Money Central Florida’s most listened to financial call and show Bronte You by Certified Financial Group in Altamont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years. For their WDBO listeners, if you have a financial question you want answered by real fiduciaries, the lines are wide open. Call five 80 WDBO, that’s 8 4 4 5 80 WDBO and enjoy the show.
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Good morning 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. My name’s Josh McCarthy, sitting next to a couple of certified financial planners with the Certified Financial group. If you got a question for your financial future, maybe you heard something in the news, maybe you read an article about there’s a bear or a bull market right around the corner and you want to know how to prepare for it. Maybe your uncle is trying to get some money at it because you have a lot saved up and he’s always got bad business ideas. Well, you probably know the answer to the uncle, but if you want to know how to plan that money a little bit better, I invite you to listen in to On the Money. The show is brought to you by Certified Financial Group. They’ve been on the air here on WDBO for over 30 years, over 400 years of experience inside those four walls with those certified financial planners with the certified financial group. And we got two joining us today. We got Matt Murphy and Joe Bur. How are we doing today, gentlemen? We’re doing
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Great. Good to be with you Josh. As you said, we have been here for more than 30 years, not Matt and I sitting here at the same microphone, but we have at Certified Financial Group, have been with our central Florida listening audience now for more than 30 years, providing hopefully a little investment advice and maybe some entertainment here on Saturday morning. And if you’re listening to this, perhaps Sunday morning want a prerecorded programs. But anyway, we’re here to take questions that you might have regarding your personal finances, decisions that you might be making regarding your IRAA 401k real estate, long-term healthcare, life insurance, reverse mortgages, all that and more the things that Matt and I and the 14 other certified financial planner professionals deal with day in and day out, working with our clients for a fee working as fiduciaries, designing retirement planning and wealth management strategies for them. We are here for you this morning, absolutely free. So if you have any questions about anything that might be on your mind, the good news for you is the lines are absolutely wide open. All you have to do is pick up the phone and dial these magic
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Numbers. The numbers are 8 4 4 5 8 0 9 3 2 8 4 4 5 80 WDBO. And another great way you can get in contact with us and join the show is using that open mic feature inside the WDBO app. The same thing you do when you want to talk to Scott and Joe during the week. You can pick up the phone, open up your app, click the open mic button down at the bottom and send in your question inside the free WDBO app. Or you can call in, join us, talk to Matt Murphy and Joe Bird live, 8 4 4 5 80 WDBO. The topic of today’s show, talking to your kids about money.
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Josh, I have a lot of clients that have come to me recently that have expressed concern about their kids. And when I say kids the age range could span anywhere from their preteen or teenagers all the way up to kids in their twenties and thirties just getting started in their careers and learning how to budget and manage finances and manage money. There seems to be a general consensus amongst parents of all of those age children that their kids have not been properly educated through the school system as to how to manage money appropriately, how to understand basic economics and just the way that money works in general. So Joe, quick pop quiz for you. We said we were going to entertain this morning, so let’s have a little bit of fun here. How many states do you think require in high school a personal finance course in order to get your diploma
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Less than 10?
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Well, okay, so I don’t know if this statistic is alarming or encouraging, but it’s actually 21. Wow.
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Well that is more than I thought.
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I looked that up and it was more than I thought too. So I think the majority of those are pretty recently that they’ve kind of added that to
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The state
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Of Florida is one of them.
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State of Florida is one of ’em. Now just quick side note, there’s an interesting correlation between the budgetary health or lack thereof of states that require this. So there’s a few states that are curiously missing from the list that require personal finances courses. Want to take a quick guess at what those states might be?
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Go ahead. California, California, New York, New York, Massachusetts,
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Massachusetts. Correlation doesn’t necessarily lead to causation. However, I do think it speaks to the larger subject of people, not kids are going to learn by example first and foremost. And so to me, I think there’s two examples that they’re going to learn from. Number one is their parents first and foremost, and I think that’s the most important. But secondly, I think kids also learn from society in general and what’s going on around them, no question. And so if you live in a state where the budget and the finances are just a total mess, I think it just sets the precedent that if the state can overspend and basically use their credit card and use debt to finance their operations, well why can’t I? So I think that it’s incumbent upon parents to educate their kids and first and foremost by setting a good example. And so I think that’s probably the most important thing because we can control that. Now, how do you set a good example? I think first and foremost, even before you talk to your kids about money, make sure that you are saving money yourself. It’s just the basic meat and potatoes of financial planning, saving 15% of your income towards long-term savings, making sure that you have an emergency fund. Your kids don’t have to know all about your personal finances, but they should know that mom and dad
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Have their act together.
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Have their act together, are doing the right things. I think one thing that I’ve learned having a preteen and a teenager, kids don’t like to be lectured to really They do not. I’m sure you learned that along the way too, Joe, but kids will pay attention to a good example that is set. So I think every family’s a little bit different. So whatever way you can use to demonstrate to your kids that mom and dad do have their act together, whether that’s just casually mentioning things here and there about, Hey, mom and dad are doing this, we’re saving this, we’re putting this money away here. I think that’s really
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Helpful. Just mentioning the fact that you have a 401k, you get your quarterly statements just mentioned, the statement came in and maybe you don’t want to mention certainly the specifics in it, but you can talk about that. At least plant that seed. They may have never heard the term 401k before, what’s a 401k and why do we even need one?
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That’s right. And what I’ve found interestingly enough is a lot of times, and this goes even for, I say kids in air quotes here, but in their twenties and thirties, a lot of times they’re embarrassed that they don’t know what those things are. And so when they’re embarrassed or ashamed to not be educated on these things, guess what? They don’t want to talk about
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It. Exactly.
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So it’s a good point, Joe, if you could just bring up some of these terms. IRA Roth IRA 401k, and once kids are empowered with that knowledge, guess what? They get more interested in it, they get more curious, they want to learn more. They might even go online and research a little. So I think that’s kind of the seed that you want to plant there is use some of these terms, don’t overdo it, but use some of these terms so that the kids get interested and curious about learning more.
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Yeah, I think it’s critical. You start ’em at a young age as sooner you start, the easier it gets. As opposed to many folks that we see because they didn’t teach us this stuff in school and perhaps their parents never taught them and they come into our office and they’re staring retirement and five, 10 years down the road and they’re just now serious about it. Fortunately, many of ’em are earning a good income, but the question is what do I do with it? How do I make this money that I’m going to be earning for the next 10 years or so? Really accumulate to provide something more than social security is going to give for me. And it’s all a matter of education. It’s all a matter of getting started. As we’ve said time and time again, time is a great asset. If they don’t use it, you lose it and starting the kids and getting them thinking about it and don’t make Roth IRA 401k SEPs, whatever it is, the foreign language in your family, at least start those throwing those terms out and when they hear those terms, mom and dad talked about that once, and maybe this is what it’s about when they go to work for the first time and they hear the term, oh yeah, my mom and dad had one.
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That’s right. And the other thing on that point too, Joe, is if your kids get a job, even a part-time job, no matter what it is, get them in the habit of hey, 10% of that and just start small. 10% of that money that you just earned at your summer job is not yours to use right away. That’s money that needs to be set aside for the long-term for you and just get them used to that. So there’s a lot of, fortunately in today’s day and age, there’s a lot of different ways that kids can set money aside for their future. In fact, Roth IRA is a good way to do that. As long as a child has employment income, they can contribute to a Roth IRA. So if they earn $5,000 over the summer, have ’em put $500 into a Roth IRA do that every single year. It’s interesting, Joe, when I started my career, they used to have those old slide rulers where some of our listeners will remember those on
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The do the calculations. Oh
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Yeah. Oh yeah. So you pull it out and say, oh, well if I put in $50 a month at 8%, you pull a little slide thing out and you say, oh, you have a million dollars at age 65. That was the old fashioned way of doing. Do you
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Still have one of those?
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I don’t.
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I wish I had a saved mine too. Those are collectors
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Items. I know. I mean they work just as well as calculators,
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But it did illustrate the point that, like you said, Joe, even a small amount starting early, it does two things. Number one obviously sets money aside, but number two, it gives you some confidence and it gets people excited, Hey, I’ve got some money set aside. I did it. I was able to forego some immediate consumption in order for some longer term gain. So I think it’s just really important that particularly somebody, if a child has a job that you tell them right up front, Hey, we’re going to save 10% of this. Set it aside. Now it’s interesting, Josh, before we were on air here, we had talked about this a little bit and you had brought up the idea that you were going to save some money or your son was going to get some money for his birthday and I think you had a great idea which was, hey, maybe what I’ll do is I’ll match some of that money.
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And I think that’s a fantastic idea. So that’s something that parents can do. If a child has a job, let’s go back to my example. You make $5,000 over the summer or whatever the amount is, you saved the $500. Why don’t you as the parent go in and match that for them as a reward? Hey, if you’re going to put in $500 into that Roth ira, guess what? I’m going to put 500 in for you as well. And they can do that as long as just like anybody, they can contribute up to a hundred percent of their earned income for the year. And it really doesn’t matter whether it comes from their pocket or it comes from yours.
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Yeah, as we said, time is a great asset and compounding is the eighth wonder of the world. Unfortunately, they don’t teach us this stuff in school and when we’re in school we think, well, that’s 20, 30, 40, 50 years away, but I got plenty, plenty of time. And before you know what time is here and you’re staring at retirement in 10 years that, geez, I wish somebody you would’ve told me, I can’t tell you the number of times over my career that I’ve had parents bring in their children or grandparents, bring in their children and just talk to them. Just show ’em the magic of compound interest, what it means and how if you save a dollar today, what it means in 10, 15, 25 and 30 years and show ’em that that dollar could be worth 25 or $30 down the road if you don’t spend it today. And it’s all about education. And that’s what we do for our clients and now our client’s, children and grandchildren. So I hear the music there, Josh, take it away,
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Buddy. That’s right, you talked about it, man. It’s my son’s sixth birthday today. So while we can’t open happy IR, oh, sorry, forgive me on Monday, it’s a sixth birthday, but the cash and the cards or prizes are all coming in. And so I talked about that and I remember when I was a kid, there was nothing better than that post birthday trip to Toys R Us and I could have a hundred bucks to spend that Toys R Us. I wish my dad would’ve said, you know what’s almost as good as that $90 that Toys R put, 10% Amen. And saving. So thank you so much. If you got a question for Matt Murphy and Joe Bur couple of certified financial planners with the Certified Financial Group, I invite you to pick up the phone right now, dial (844) 580-9326. That’s 8 4 4 5 80 W dbo or send in your open mic your question using the open mic feature inside the WDBO app you are listening to on the Money where we’re planning tomorrow. Today with the Certified Financial Group
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Sunshine,
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Welcome back to On the Money here on WDBO 1 0 7 3 FM a M five 80, always streaming live in your WDBO app. This is like a unique opportunity where you’re going to a house warming party and you make up small talk and the person sitting next to you on the couch says, well, I’m a financial advisor. And then at that moment, all the questions start flooding your head of how you can get the most out of this conversation. Well, the good thing is this house party happens every Saturday morning at 9:00 AM here we have two certified financial planners with the Certified Financial Group, Matt Murphy and Joe Bur here joining us today answering your questions. If you want to sit on the couch next to us, you can call 8 4 4 5 8 0 9 3 2 6 8 4 4 5 80 WDBO or send in your open mic using the free WDBO app. Joe. Matt, we actually got an open mic earlier this morning. Are you ready for
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It? We are here, let’s
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Do it again. You can find the open mic inside the free WDBO app. Send them in, Joe,
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I’ll be 64 in the summer. Is there a penalty if you take Social security and continue to work at the same time?
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Yes, there is unfortunately, and you need to know what that limit is for 2024. If you are not full retirement age, you can earn up to $22,320 and everything over that. You give back $1 for every two you earn above that limit. And then the year in which you turn full retirement, the threshold amount is 59,520. So you want to be careful there. Many people unfortunately think right Matt, that they can grab the social security and continue in their full-time job. It’s not necessarily the case. However, there is some provision there.
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There is. So I guess the silver lining here is that money is not lost. So when they withhold the social security because you’re taking social security while you’re still working prior to full retirement age, what will happen is that money will be returned to you
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Not in a lump sum,
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Not in a lump sum, but it’ll be kind of baked into your monthly payment once you do reach full retirement age. So it’s not lost, it’s just kind of deferred. But if you’re not prepared for that, I mean I’ve had clients do that before and if they don’t realize that they are going to get it back and kind of be a shock.
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And some people unfortunately think that they can still continue to work. They’re full in income. I’m going to grab my social security at 62, so I had this little extra money coming in. We could take that vacation, do all the things you want to do and they find out that you’re not going to get it. So you want to be prepared and that’s why of course we are here on a Saturday morning. You’ve heard our ad that we ran during the break there about the upcoming workshop. Matt, tell us about that. You’re doing that next Saturday morning at 10 o’clock.
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Next Saturday morning, 10 o’clock here in our offices in Altamont Springs, that’s 1111 Douglas Avenue. The subject of that workshop is how tax planning changes through the four stages of retirement. This is one that I’ve done that’s always well attended. So we’re going to cover, we talk about social security here. We’re going to cover how social security taxation works. A lot of people don’t realize that your social security, how it’s factored into your taxes is dependent upon your income and there are ways that you can control that. You want to keep an eye on that. I’m going to talk in depth about that. And then another big topic that we discuss is Medicare premiums. There’s a thing called Irma Income related monthly adjustment amount that I’m sure the government paid somebody a million dollars to come up with that acronym. Our tax money well spent.
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Irma is not your friend,
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It is not your, nor is it the hurricane that swept through here a few years ago, but Irma really is another tax and your Medicare premiums will be dependent upon your income two years prior. And so I discuss exactly how that works and some of the pitfalls that you can hopefully avoid by doing a little bit of planning ahead of time. We also touch on things like how to properly do charitable gifting, qualified charitable distributions. We talk about the current tax code, what’s set to happen in a few years with the tax code. Also the standard deduction that’s going to schedule to go down anyways here in a couple of years, as well as Roth conversions is another big topic that I discussed.
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So this would be absolutely free. Go to our website financial group.com, financial group.com, click on events we found this morning. There’s a handful of tickets left available, but you just need to go to our website. This will be held as Matt said in our office next Saturday morning, right up here in Altamont Springs at 10 o’clock. And if you get here a little early, you can see the monkeys behind the glass doing the radio program and we encourage you to come on by. So that’s financial group.com, financial group.com. We hope to see you here.
(19:01):
Just don’t feed those radio monkeys. They get kind of relying on those and they’ll start following you home. It’s a whole thing. But if you want to join the conversation, dial 5 8 0 9 3 2 6. Matt Murphy, Joe Bur Certified Financial Planners with the Certified Financial Group answering your financial questions 8 4 4 5 80 WDBO or send in your question via the open mic using the free WDBO app you are listening to on the money where we’re planning tomorrow. Today with the Certified Financial
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Group.
(19:31):
Welcome back to On the Money Central. Florida’s most listened to financial call and show Bronte. You buy Certified Financial group in Altamont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years. For their WDBO listeners, if you have a financial question you want answered by real fiduciaries, the lines are wide open. Call five 80 WDBO, that’s 8 4 4 5 80 WDBO and enjoy the rest of the show.
(20:30):
Welcome back to On the Money here on WDBO, A couple of certified financial planners with the Certified Financial group and me walking you through your financial future today. If you want to join the conversation, Matt Murphy and Joe Bird answering any financial questions you may have. The number to call is five eight zero nine three two six. That’s 8 4 4 5 80 WDBO or you can send in your open mic using that free WDBO app. Open up the app, push record, give us your best 10 to 15 seconds and don’t worry if you mess up a few times, there’s a do over button if you want to give us your best shot. If not, I can always play it back for him. I’m sure we can figure out what you’re trying to say. Open up that open mic feature inside the WDBO app. Matt, Joe, what do you say? We rejoin that app.
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Let’s do it. Here we go.
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Hey Joe, how is your social security amount calculated?
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Well, it’s calculated based on your highest 35 years of income. So obviously most of us in our later 35 or later earning years have our highest income and that’s what it’s based on. And so the earlier years drop off of course and the highest 35 years and then it’s adjusted for inflation and so forth. Anything you want to add to that?
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Well, I mean just to kind of reiterate what you just said, I think in practicality, oftentimes clients will say, well, should I work another year? Should I work another two years? And assuming they’re willing to do that, like Joe said, let’s say you’re 60 years old and you’re making $150,000. What might happen is if you work one more year that $150,000 of income then may kick out one of the years when you were 25 and making $20,000 a year. And that’s why you’ll notice Joe, towards the end of your 10 year of paying into the social security system, if you’re making good income, you’ll see that number increase pretty significantly, dramatically, dramatically each year because again, those big numbers of income are kicking out the earlier years when you weren’t making
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Too much. And what you’re looking at is compounding because you add the 8% per year increase on that, you got that going for you. And then if you defer from your full retirement age to age 70, you get another 8% per year compounding plus cost of living. And that’s big money. It can be big money. And unfortunately some people claim social security real early say, I want to get it now because I don’t think it’ll be there. I want to put that myth aside, folks, social security will be there in some way, shape or form if you’re a baby boomer like I am. You’re not a baby boomer, are you? I am not. No. I can tell you don’t have the gray hair. Well, you get a little,
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I’m missing some of the hair
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Fortunately, but the baby boomers don’t have anything to worry about as a younger generation, not even Matt’s generation, but your children, you have to probably wait longer, maybe get a little bit less. But for those of us that are in retirement age or near it, don’t worry about social security not being there. Don’t rush to claim it because you don’t think it will be there. It will be there. They say it’s the fifth rail in politics and they say that because they know that the older folks vote and you’re not going to mess with the social security. But back in the eighties and President Reagan changed that. It affected the younger folks, affected my generation and we didn’t squawk because hell, that was 30 years from now and that’s what’s going to happen. And there’s some other minor tweaks that can be done. We’ve spent a lot of time on previous programs talking about that, but so don’t rush out and grab Social security today. You don’t think it will be there. I can guarantee you it will be there for at least our generation and perhaps yours as well. But it’s that younger generation, the Zs, Ys, Xs, I can’t even keep track anymore. But that’s a generation really then that’s the generation that really needs to be saving.
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Yes, it is for sure. Kind of pertinent to today’s topic
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Without question. Without question. Yep. So we’ve got a text question that floated in there, Josh, I saw what’s up.
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Again, if you want to join the conversation, you can call in five eight zero nine three two six. Send in your open mic using the W-D-E-B-O app. This question comes to us from Ben, and Ben says that Ben has an IRA Roth and brokerage accounts and he’s about to retire in the next year. Which accounts should he draw from first to generate his retirement income?
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Aha, that’s just based on your workshop on Saturday, right? You’ll be covering that. Where to take it from and
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Why It sure is. So tell
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Us, tell
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Ben right up my alley. Well, it’s going to be the most disappointing answer of the year, Ben. It depends and it depends on a number of factors. It depends on your age, your income. So lemme just run through a couple of scenarios here. First of all, let’s keep in mind that in the absence of some sort of congressional action in two years, the income tax brackets will revert back to what they were prior to 2017, meaning that taxes will go up across all income levels. And if that’s the case, then if you kind of think strategically about it, sometimes it makes sense to go against the conventional wisdom of continuing to defer all your pre-tax retirement accounts like your IRAs, your 4 0 1 Ks and so forth. It might make sense to start drawing some money from those accounts now knowing that the income tax brackets are lower today than they probably will be in two years and maybe even going forward from there.
(25:36):
So that’s one of the things like you said, Joe, that I do cover in the workshop in more detail next Saturday. But that’s one thing to consider is it’s very possible that it makes sense to actually start paying some taxes. Now, generally speaking, what we advise, not always but generally is that you defer those Roth IRAs as long as possible. And really the reason for that, the purpose of that is every year, keep in mind what a Roth IRA does a Roth IRA generates tax-free income down the road. So every year that you continue delaying drawing from those Roth IRAs, that status, particularly if tax rates go up in the future, becomes more and more valuable. And then the last thing that I would say about that is I think he had mentioned brokerage accounts and I’m assuming he means like a trust account or maybe a joint account or individual account meaning money that’s after tax that’s not in a retirement account.
(26:34):
There’s a couple of considerations there. Number one, when you take money out of those types of accounts, if they’re invested in mutual funds or stocks or ETFs, you’re paying capital gains taxes. When you sell investments inside of those accounts, capital gains taxes in general are lower than income taxes. But the second piece of that is if you have beneficiaries that you’d like to leave some money behind for when you pass away with a brokerage account like that, if you have a lot of capital gains inside of those accounts, those capital gains under current tax law will go away. So oftentimes those can be good accounts or assets to leave behind for kids down the road.
(27:17):
So getting back to the Roth question, we’ve talked about this in previous programs and I know you do it when you do your planning with your clients as we do with ours. If you’re in that situation now where you’re not working, you’ve got Roth accounts and you’ve got taxable accounts, retirement accounts, what you may want to do is start taking some of that money out. Now when you’re in the lower tax bracket, do your Roth conversion. So if you’re in the 10 or 15% tax bracket, this is the time to do it. But you want to be careful that you don’t bump up against the limits and all of a sudden find yourself paying a lot of taxes on that money and perhaps mess up your Irma.
(27:48):
That’s right. So those
(27:48):
Are all the things that you want to consider and that’s why we do financial planning, working with our clients to look at, okay, what’s the optimal way or time to do those Roth conversions? You don’t want to do that big lump sum conversion as unfortunately we’ve seen clients come in or I shouldn’t say they weren’t clients, they are clients today, but they came into us with a tax headache because they didn’t realize the impact of taking that a hundred fifty, two hundred, two hundred $50,000 conversion. Somebody told ’em I converted to a Roth because it’ll be tax free. It’s one of the worst things you could possibly do if you don’t understand the implications to it.
(28:18):
And what’s kind of insidious about that too, Joe, is oftentimes, particularly with the Medicare and the Irma, you don’t know it until two years later. Yeah, exactly. And all of a sudden somebody will come in and say, well, my social security went down by a whole bunch. Well actually it’s not really that your social security went down and said your Medicare premiums being deducted from your social security probably skyrocketed.
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Irma stopped in.
(28:39):
Yes,
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Irma dropped in and took some of your social security
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An unwelcome guess. And the other thing too, Joe on that is it can affect, if you’re drawing social security, how much of your social security is taxable. Taxable. And boy, if you’ve ever seen, and I cover this in the workshop next Saturday, but if you’ve ever seen the calculation that goes into determining how much of your social security is taxable, good luck figuring that one out on your own right. It requires some careful planning, and we talk about this in the workshop too, but the items that you need to pay attention to from a tax perspective in retirement are very different than those that you need to pay attention to when you’re accumulating all of these things. And so that’s why we talk so much about this critical time right before you retire. It requires not only from an investment standpoint, shifting your mindset to investing in a different way, but it requires a whole new knowledge base of particularly on the tax side of things, of understanding what things you’re going to be needing to pay attention to once you get into retirement.
(29:43):
So once again, the title of your workshop next Saturday morning at 10 is
(29:47):
How tax planning changes through the four Stages of Retirement. So
(29:51):
It’ll be at our offices up here in Altamont Springs next Saturday, 10 o’clock. If you’d like information, we’d like a ticket or two, go to our website financial group.com, financial group.com, click on events, you can make your reservation right there. There’s a handful of seats left and we hope to see you there and I see another text question float in there, Josh, so take it
(30:06):
Away. Of course, if you want to join the conversation, 8 4 4 5 8 0 9 3 2 6, send in your open mic using that WDBO app. Fred wants to know, Fred has a brother who has a charitable fund that through his, I’m going to start over now. Fred’s brother has a charitable fund through his brokerage house and recommended that he sets one up too. What are the benefits?
(30:26):
Well, Joe, I know I work through Fidelity, as do you and Fidelity has one of these charitable funds,
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Donor-Advised Fund,
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A donor-advised fund that’s right, called the Fidelity Charitable Gift Fund. Fidelity is not the only one. There’s lots of ’em out there. I think Fidelity is actually the largest. But the benefit of that is you can donate directly into that account securities. So stocks, mutual funds, really pretty much anything and get a tax deduction for it. So one of the strategies, and it’s kind of in depth, but one of the strategies you can utilize there is, for example, if you have maybe some stocks that you bought 30 years ago that have a lot of capital gains and you don’t want to sell those stocks and pay the capital gains tax, you could actually donate those stocks directly to the Fidelity Charitable gift fund. Now, not to get too technical, but you’ll get a deduction on stocks of up to 30% of your adjusted gross income for that year.
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So it’s a way to, if particularly if you’re giving to charity otherwise and you’re just writing a check to them, a better way to do that could be to just donate some of these stocks or mutual funds or ETFs that have lots of capital gains directly into that charitable gift fund. And if just as a quick side note, if you were to contribute or donate more than 30% of your adjusted gross income in any given year, that can actually carry forward into future years. So it’s not lost, it’s just deferred and then applied to your taxes for subsequent years up to five years. You can carry those
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Over. And the nice thing about the donor-Advised fund is it’s flexible. Many folks have charities that they give to on a regular basis and so on and so forth. But the beauty of the donor-Advised Fund, you could put the money in today and you don’t have to give it away for years.
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And you can invest it too, by
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The way. Exactly. And you get the tax deduction today and then ultimately down the road then you can tell Fidelity where you want the money sent and the charity gets the funds. Very, very flexible. I use it. It’s a great, great tool. I hear the music, Josh, so take it away.
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That’s right. If you want to join the conversation, get your question, ask the number to call live on the air is 8 4 4 5 8 0 9 3 2 6. If your question comes to your head about 10 0 1 or after that, then I’d recommend you calling Rodney OBE in the certified Financial Group office at this number. Give you a second to grab your pen and paper. 4 0 7 8 6 9 9 8 0 0 Rodney standing by in the office of CFG Certified Financial Group at 4 0 7 8 6 9 9800. One more segment coming up with on the money and you are listening to that on the Money where we help you Plan tomorrow today with the Certified Financial Group.
(33:25):
Welcome back to On the Money here on WDBO 1 0 7 3 FM AM five 80, always streaming inside your WDBO app. If the question just popped into your head, Matt Murphy and Joe Bur are nearly wrapping up their show for the day, but Rodney OBE is standing by for a few more minutes in the office at Certified Financial Group and you can call him at eight six nine nine eight zero zero four oh seven eight six nine ninety eight hundred. Just tell Rodney, Josh sent you over there from the radio show from WDBO and he’ll take care of you as only a certified financial planner at the Certified Financial Group. Can Joe, Matt, we got one more segment here about four or five minutes left. We got one more text question. What do you say? Alright, this one comes to us from, Ethel wants to know what is the best way to balance enjoying her retirement and not running out of money? The know all question.
(34:18):
Well, there’s a one word answer for that planning. This is probably the question that everybody asks when they come to see us because I would just say over the years I’ve had folks that have underspent and of course there’s people that overspend interestingly enough, and maybe it’s just a generational thing, but a lot of the older people tend to underspend in retirement. And I think that’s primarily a function of yes, maybe they just tend to be conservative in their spending by nature, but that they had not done planning early on in their retirement to really understand what their capacity or threshold to spend over the course of their retirement was. So there’s always a balance. Sure, you don’t want to run the risk of running out of money, but one of the things that the sophisticated software programs that we use now can do is basically take your information, all your income, your expenses, the money that you have saved up, how it’s invested, your taxes, inflation markets, all those different things, and kind of put them into this calculator, if you will, and spit out some scenarios of what is the probability that you are going to either run out of money or have money left over at the end.
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And I think without going through that process, and we would call that planning without going through that process, you’re really just shooting from the hip.
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You’re flying blind, you really are. You kind of hope it all
(35:43):
Works. Yeah. And that may result in you spending too much. It may result in you spending too little. It also could result Joe in you being either too conservative or too aggressive in your investment portfolio. So what we do here at Certified Financial Group is we help clients really pinpoint exactly what it is that you can afford to spend on a monthly or a yearly basis and then devise a plan around that and have your investments accommodate that as well. I think that’s really the answer is to do some planning.
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And I think the beauty of the software that we use is dynamic. So when you do the plan, it’s a snapshot in time. This is based on what you have, what you’re spending, what taxes are, what inflation is, so on and so forth. But it allows us to update it on a daily basis if you like. And you can do that at your own from home. So once you’re a client of ours, you’re in the system, you can see exactly how you’re tracking exactly what’s going on, what changes and modifications you want to make. It’s the beauty of technology and fortunately we have the best tools around, I think to be able to accommodate that. But planning is the key and Underspending is a Travis. The worst thing that can happen is you’re 85 years old and you look back and you’ve got all this money piling up and that’s a wonderful thing. You’ve got the comfort, but you say, we could have taken those trips that we wanted to take and now we can’t do it. Or we could have bought the cars, we could have done this for the grandkids or whatever, whatever, whatever. And on the other side is, geez, we shouldn’t have spent all that money We did gone to Las Vegas 13 times
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And Joe, I tell clients all the time, particularly in the early years of retirement, those are the years where more than likely you’re healthy, you’re more active, your body’s more capable of doing travel and so forth. You have to spend those years doing the things that you dreamed of during your working years. But in order to feel comfortable doing that, you got to have a
(37:26):
Plan. You got the Go-go years, the slow-go years, and then the No-go years. So we got a plan tomorrow, today. That’s what we do here. Yeah. Alright Josh, take it away buddy. Don’t forget the workshops coming up. Go to our website, financial group.com, make your reservation. Matt will be hosting them next Saturday morning at offices right here at 10 o’clock. I guarantee you you’ll be walking away with some information that’ll be very helpful to you and your family in the future. That’s financial group.com
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And we’ll have fun too, Joe.
(37:53):
I know you always do.
(37:54):
Every episode is a good time. So I thank you Matt. Thank you Joe for joining us today. Rodney Oden, be standing by off the air, 4 0 7 8 6 9 9800 you’re listening to On the Money Where We Hope You Plan Tomorrow
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Today
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With the Certified Financial Group.