Wealth For Generations
Dive into the essentials of wealth management with Ian Weiner and Todd Whatley on Wealth For Generations. This podcast brings you concise, expert insights on investment strategies, retirement planning, Estate Planning and financial well-being. This dynamic team of a Certified Financial Planner and Certified Elder Law Attorney are perfect for anyone from beginners to seasoned investors, our episodes focus on empowering you with the knowledge to make informed financial and estate planning decisions. Join us for clear, friendly guidance to navigate your financial future with confidence.
Wealth For Generations
Taxes, Tariffs Planning For Success In The Trump Era.
Brace yourself for a groundbreaking discussion on the financial and political tremors following the seismic 2024 election: Donald Trump is back in the White House. We promise to navigate the tangled web of reactions—from the ecstatic to the anxious—and shed light on the real impact of tariffs and taxes under the new administration. Our goal is to offer you a clear path through the media noise and sensationalism, focusing on what truly matters for your financial well-being. With the seasoned insights of Todd Whatley, a certified elder law attorney, and Ian Weiner, a certified financial planner, we tackle the big questions facing Americans today.
What happens when political promises clash with fiscal reality? We untangle the complexities of potential tax changes as Trump resumes office, particularly the looming expiration of the Tax Cuts and Jobs Act in 2026. Uncover the myths surrounding a Republican-controlled government and why assumed legislative outcomes might be a shaky foundation for your financial strategies. With global issues like the war in Ukraine and immigration further complicating the landscape, we emphasize the importance of staying informed and prepared. Join us for a conversation that aims to equip you with the knowledge needed to navigate these uncertain times with confidence.
Welcome to Wealth for Generations, the podcast where you learn to grow, protect and preserve your wealth for generations. Our hosts on today's show are Todd Whatley, a certified elder law attorney, and Ian Weiner, a certified financial planner. Join us and our expert guests as we uncover the mindsets, tools and strategies to help you maximize your wealth and impact. Let's embark on this journey to secure your legacy. Please note this podcast is for informational purposes only and is not intended as financial or legal advice. Always consult with a professional regarding your specific situation.
Speaker 2:Hey there, this is the Generations Wealth Partners podcast. My name is Todd Whatley and I am here with my co-host, ian Weiner. Hey man, how are you, hey Todd, doing? Well, it's been a while.
Speaker 3:Yeah, sorry.
Speaker 2:I know we've been busy man. It's just getting a lot of things done. We have our TV show starting soon. We don't know details just yet, but we were in Phoenix and we recorded six shows and so soon as those details come out we will. I'll probably do a little quick commercial within the podcast to announce that. So that's a good idea.
Speaker 3:So just stay tuned. We've transitioned to YouTube a fair bit as well with some of our, with some of our content, so we're working to get more resources out to you. So we appreciate your patience, but we felt you know, as we're, this is being recorded at the end of 2024.
Speaker 3:After the election After the election, and so we wanted to have we probably are going to have multiple updates of this, frankly, but we wanted to have one come out so we could talk about some of the results and what to potentially expect. And everyone's going to scream after this one. We can't make anyone happy with this. That's fine.
Speaker 2:I mean, we're not here to make you happy. We're just here to tell you what's happening. So we know Trump won Okay and, assuming all goes as planned, he should be in office January 20th. Sitting here beginning middle of December, there's some rumors that some things may happen, but who knows, who knows? So we're going to assume Trump takes office January 20th. What are some of the big things that you? I think, as we discussed, some people are making some mistakes.
Speaker 2:They're making some assumptions that may not be good assumptions and what are some things you think people need to know about?
Speaker 3:So I'm going to work really hard to thread the needle on this one today and our intention is not to be political and I hate that. I even feel the need to qualify any of my comments with that, because of the really polarizing times that we live in, and so I want to try to talk to Americans as Americans, across the different sides of the aisle, which feels like the gap is just enormous right now. You know, I have folks that I work with, clients, I have, you know, colleagues, I have partners that are in every part of that spectrum that you can imagine, and so the conversations that I've had since the election and the results have come in have spanned the spectrum. I want to highlight a couple of things and kind of talk to folks in a couple different parts today. Some people are elated, other people are panicked, and I think what we should expect is something in the middle. I think this is always what we want to begin to talk about.
Speaker 3:Um, you know, the, the financial press, does a great job of getting attention, getting your attention and getting you to continue to focus on it. That's how they sell ads.
Speaker 2:And that's the main purpose of their show is to stay in business and sell ads. And they sell ads when they get the people all riled up and they can't turn away. You keep watching, keep watching, you know. And so look and sell ads. And they sell ads when they get the people all riled up and they can't turn away.
Speaker 3:Keep watching, Keep watching, and so, look, we understand that. We hope that you do that as well. You decide how you want to spend your time, but there's a couple of really key issues that I think we need to talk about. I think the first one that we should talk about are tariffs. So we're going to talk about tariffs. So we're going to talk about tariffs, we're going to talk about taxes, and then we're going to talk about just what the sort of process looks like from here.
Speaker 2:So we haven't talked about this. So I don't know exactly what your take is on it. But I've followed a few people who have discussed this and just because there's a 25% tariff doesn't mean that item's going to go up 25%. It's not a direct. It's not a direct. Sometimes the companies can absorb some of that and I mean to be honest, a lot of the people that he said he's going to throw a tariff on have come to him and said how do we not do this? And they've done things to make sure that that doesn't happen. So I think it was a huge shot over the bow kind of a. You know, hey, it got their attention and now they're talking and so I think that's this is.
Speaker 3:This is my take on it, this is how I feel about it. You know we've had one, we've had one term with Trump so far. Obviously, there's been a lot of life that's happened in between there, and so my goal is to try to be as balanced as I can about this. And this is to me this is one of the hardest things to talk about right now because of the emotions are really high. Trump does bluster really well. He can get people riled up in a way that I don't know anyone else in the world that can do that. Frankly, and I think you're right, a lot of his comments about tariffs are meant to bring the conversation to the forefront. Really, in the early days of his first campaign, that's where some of the immigration conversation came up. First campaign, that's where some of the immigration conversation came up. You know he really wanted to raise that conversation and that kind of swept into what has, what has come, and so you know tariffs in a technical sense are we've had this, is this goes back forever. This is the way that commerce works internationally, and so you know there are tariffs on things all the time that you don't realize, and so I don't want folks to think that this is a new thing and that they need to be really concerned about it. One of the best examples of tariffs and so we have to. What we have to think about is you know, how does this, how does this work in the short term and in the long term? And really what we need to drive at is should it change your behavior? Do you need to panic about this? This is what we need to answer. Frankly, in my opinion, I don't think that anyone needs to really panic about this. I do think that we need to pay attention.
Speaker 3:The purpose of tariffs is really to do two things. It's to incentivize certain behavior. When we think about behavior change, we have the carrot and we have the stick, and so this is an example of kind of both. Frankly, it's to incentivize behavior in the short term and in the long term. One of the things that the incoming administration wants to do is really try to revive American manufacturing in a lot of ways, and so the goal here is to change the buying habits of US consumers. That doesn't happen overnight, but this is a method of trying to steer consumer behavior, and so a great example of this historically is I forget the exact year, I won't tell you where I was when this happened, but LBJ said that I'm joking because I wasn't alive when this happened. But there were auto manufacturers were required to certain trucks had to be made in the United States. This is why, for example, the Toyota, certain light Toyota trucks, are not available in the United States, even though we'd like them, because there's a tariff on them. So what did Toyota do? Well, toyota built plants in the United States, and so Toyota trucks are the ones that are available in the US market are essentially assembled and finished in the United States.
Speaker 3:This has been going on for decades. Right, we've become used to it. We don't even think about it anymore. And what happened? We were trying to help a particular sector. Now, do I love all of this tinkering? Not necessarily. I'm kind of a non-interventionalist personally, sure, but we understand what's happened and we've been used to this for decades, and so there's going to be other examples of this happening. Personally, I'm concerned about wine imports and the terrifying. Is that going to change my buying habits? Maybe a little bit. No-transcript, we don't know what's going to happen, but we don't know how these are going to be enacted. If they are. But what I've heard so far from the incoming administration and spokespeople is that it's not going to be blanket tariffs on everything. They want to have these be targeted things designed to change behavior and manufacturing practices.
Speaker 2:Pretty straightforward change behavior in manufacturing practices. Pretty straightforward. Well, a slight rabbit hole here is you know your position. Our position is you should not chase certain stocks and you should not try to time the market. The people who have all the information in the world, who can study this. They're about 50-50 success rate and so, particularly in this time frame, it's just not wise to try to time what's going to happen. Who's going to do this? That's why we recommend balanced funds, balanced things.
Speaker 2:Now you can pick sectors, and that's probably a good idea, but just don't think that you can time this, because the guys who study this for eight hours a day, plus and have all the resources in the world are 50-50 at best, and so it just kind of this reinforces your philosophy of pick something and just stick with it and let it do its thing you need to have a portfolio that's built for every environment and every scenario, not one that you hope works as an addendum to your bunny trail.
Speaker 3:People are just going to get what they want, more than they came for in this one. I don't know that some folks know this. For probably a couple of decades now, hedge funds have used satellite imagery. They will so. For example, like we're in Bentonville, they will monitor the, like the HQ, they will monitor the traffic at the headquarters and the cars, and they will try to I mean various companies all over the world. Right, sure, and they will try to determine whether or not the company is doing. Well, based on things as seemingly obscure as the corporate headquarters parking lot, to be able to determine earnings or these types of things. Right, and so if you think that you're going to do great sitting on E-Trade and you're going to be able to outfox these people that have satellites that are tracking traffic, I'm sorry, statistically it's not going to work in the long run. Pretty fascinating, and they've been doing that for 20-plus years.
Speaker 2:Really, I didn't know that.
Speaker 3:Oh yeah, I mean the information, the big data that they have is incredible, and is it effective? I don't know, not really, probably, but that's the game.
Speaker 2:Well, another kind of bunny trail is this guy on TikTok. I've seen it's public record somehow that you can get anyone's cell phone and know where they're at, and so they could even track if you know the CEO is doing this or that or who is showing up at those meetings?
Speaker 3:Trevor Burrus. Yeah, people track planes. I mean consumers track planes. They were Trevor.
Speaker 2:Burrus, but they can. I mean, like I saw before the election, they were able to analyze who showed up at a Harris campaign, who showed up at a Trump campaign, and they can see percentage of people that have never been to a Harris campaign, a percentage of people who lived within 10 miles and a percentage of people who were from more than like 500 miles away. It's so scary.
Speaker 3:Data is terrifying.
Speaker 2:That's a whole other thing.
Speaker 3:Okay back to our topic. So tariffs we don't know exactly what's going to happen, but the goal is to try to change consumer and corporate behavior in the long run. Most Americans typically tend to be overweight US stocks. This is what I even in portfolios that we build. This just tends to be what people are comfortable with and there's a ton of reasons for it. You trust what you can see, kind of yes, and so we. You know we don't want to take that too far, but that tends to be the case and I think that's not an unreasonable thing to expect, you know, to work well over the next few decades. So you know there's tariffs. Hope we didn't make too many people mad on that one. That to me, feels like the easy one.
Speaker 2:Alright, I hope we didn't make too many people mad on that one. That to me feels like the easy one. All right, so taxis are going to go down, right.
Speaker 3:Well, 2026. I love when we do events and we ask folks to raise their hand. Hey, who thinks taxis are going to go up and like 99% of people do? There's always one guy who's like I don't know and you're like, I've got some oceanfront property in Arizona to sell to you, buddy, exactly. Sorry, if you're that person, you can email me, but this is an interesting one and this is one that I really wanted to talk about because I think the folks that are really excited about the incoming Trump administration you know, this is really. I'm talking to you here, ok, really I'm talking to you here, ok. We cannot assume that everything is just going to be hunky-dory exactly the way that you expect it to go in any way, especially on the tax front. You know, a lot of folks are really hoping that you know some of the tax proposals, really hoping that some of the tax proposals eliminating taxes on Social Security, eliminating taxes on tips, some of these things eliminating tax on overtime are going to come into play and happen immediately. There is a legislative process.
Speaker 2:There is.
Speaker 3:And so sometimes I think folks forget that.
Speaker 2:Well, and even though Republicans control the House and the Senate and the presidency, there are some fairly liberal Republicans, particularly in the Senate, that have been there for quite some time, and so just because the Republicans control it, I think there's going to be some. It's a slim majority right now. It's a very slim majority and I think some of those can flip that. A lot of the things you may think would pass may not pass, so it's going to take some.
Speaker 3:American politics is something that is, you know, exceedingly complex, and we were talking before this. We're both fairly at you, you're far more educated than I am. We're both fairly educated people and you know we read these articles and read I mean, I read bills and I'm like I don't understand half the stuff that's going on. How can the average American right? But you know there's always a trick or a loophole or this or that, and so you know what we know right now for sure is that the current tax system that's in place the Tax Cuts and Jobs Act, the you know first, trump tax cuts is that, sometimes colloquially called is going to sunset in 2026, the end of 2025. It's going to revert back to what it was in 2017. We expect adjusted for inflation. So there's really three keys here. One, as far as income taxes go, we expect it's about a 30% increase in your marginal effective rate. We should do a whole show on this, unfortunately.
Speaker 3:So what the Trump tax cuts did is they expanded the brackets, the size of the bracket, the amount of income you could have in each bracket we have a marginal system, not every dollar is taxed at the same amount and it also lowered the. You know what the, what the. So, for example, the 24% is pretty, is pretty wide on on the previous, the previous one in 2017, it went from 25 to 28 in the same in the same breadth. Okay, and so you could. You could have more income at a lower rate under the current rules. That's going to, on average, based on my calculations, it goes up about 30% for folks.
Speaker 3:So, if you're paying 20% now, your effective rate is 20%. It's going to go up to about 27%. Wow, best case scenario. So that's meaningful, that's substantial, and then capital gains is kind of tricky. That could get pretty nasty, frankly, capital gains brackets are pretty generous right now, and so I think the highest one is 25 percent. Twenty three point eight, so almost nearly 25. Let's round up, and how they work is fairly tricky, but that would get muddier than it is now, which is challenging.
Speaker 3:The big one that we want to talk about too, though, and this is one where so all of these are material. Frankly, a lot of folks that we work with that are approaching retirement or in retirement. A lot of the work that we do is based on paying some of the taxes now and letting the money grow tax-free through a Roth or something like that, and a lot of folks that I've talked to are like well, maybe we're not so worried about this now with the incoming administration and I'm going, guys, this is not a foregone conclusion that the tax system is going to get extended. It just doesn't work that way. It was pulling teeth to get it done the first time, and so you know we can't just assume everything's going to be fine. But the other area that really no one's paying attention to that I think is a big mistake is the estate tax situation. We've had shows about estate taxes. You know that's going to get cut in half, best case scenario in 26.
Speaker 3:I just need you to imagine, just think through this and whether or not you think this could be possible. This would have to get done. Extending the Tax Cuts and Jobs Act would have to get done really in the next 12 months. Essentially, there's a lot of things on the agenda in 12 months. You know we've got a war in Ukraine. You know Syria is getting pretty exciting right now. You know we've got Elon Musk and you know all of these kind of things Like there's a lot.
Speaker 3:Immigration is a big thing. You know there's a lot going on and I'm not saying that taxes aren't important, but you know there's a list and you know Congress meets when they feel like it and you know if it's the second Tuesday after a full moon. You know, they don't get together for a month. You know, I do not think it is unreasonable that we see an upgraded tax code in 27. Wow, late 26, early 27.
Speaker 2:So it's going to revert back to 2017.
Speaker 3:I think we're going to have a year or two where we have a hike and part of me I'm going to say something that's going to be unpopular Okay. And part of me I'm going to say something that's going to be unpopular Okay, it wouldn't surprise me as a political strategy to let that happen and go look, if you don't keep us in office, yeah, that's going to be perfect timing.
Speaker 1:It's not like our friends in.
Speaker 3:Washington would ever do this, right? Hey, if you don't vote us? Because we've got a Senate election coming up in 26. If you don't vote us, you know, because we got a Senate election coming up in 26,. You know, hey, if you don't vote for this party, we're. You know taxes are going to, are going to be up and there's nothing we can do about it. You got to, you got to vote us in so that we can deal with taxes.
Speaker 2:Yeah, the entire House and a third of the Senate gets voted for in 26. And if these start in 26, yeah, it's going to hit people's pocketbook about the middle of 26.
Speaker 3:And yeah, that's a call me, call me cynical, but gosh, I would not be surprised if that happened. And so? So what's the takeaway from this? We need to be proactive and we cannot assume that everything is going to be fine or that taxes are going to go down. I mean, everything is against taxes going down right now. We have an automatic sunset clause. We've got an extremely divided legislature on a number of issues. Washington is in turmoil dramatically right now.
Speaker 3:This is not going to be simple. I don't think. No, I would love to be wrong, and if I'm wrong, great, you can throw this in my face. We'll come back and say thank God, you were wrong. Yes, but you know what? If I'm going to be, I would rather. This is my approach to planning and this is my approach to dealing with these things. If I'm going to be wrong, I want to be wrong in. Everything would be fine, and I did. That's not to me, that's not good planning. And so you know we need to. We need to be dealing with estate taxes, we need to be dealing with Roth conversions, I think, more aggressively than ever. And look, I know I'm talking my book here a little bit, but we have, we've got to make sure that we don't get, we don't get caught with the tide coming out.
Speaker 2:Yeah, If your advisor has not brought this up to you at this point, or your attorney, frankly, or your attorney has not brought this up to you, you should be concerned.
Speaker 2:I mean you need to seek advice and, ideally, call us, please let us know. We'll schedule an appointment and we can talk about this with you. But if your, if your advisor particularly has not brought up this and, as always, long-term care, I'm just, I'm just amazed. We were kind of another rabbit trail real quick. We were looking at some new software and I noticed one of those tabs of the things you should it's like 10 tabs you should talk to your client about as an advisor and one of those is long-term care.
Speaker 2:And I get people all the time and thank God I don't know that this is going to be on the books of things that Trump's going to address, but it's just amazing that advisors don't bring up long-term care to their clients. And when they go into the nursing home and I start pulling all the funds to do things with it to follow the Medicaid rules, the advisors throw a big, huge fit and I'm like, but you've been their advisor for 20 years, what was your plan for long-term care? Oh no, they never bring it up and so, anyway, all right.
Speaker 3:Rabbit trail. Sorry, that's my kind of thing. This is important, though, because this is stuff that we talk about. You have a plan, you have a financial plan, you have an estate plan, you have a plan for long term care, and what most people have is the default plan, which is never good, the government's plan, never good it's. I cannot think of a situation that it's in your best interest to follow that plan. Yeah, and so you know we. Yeah, it's work and it's change, but do you want to do that on your terms or do you want that to happen to you? Do you want it to be forced upon you? I feel that I have to use this strong of language, you know, because, um, most people their, their advisory relationship is oh, don't worry about it, you have enough money, you'll be fine Like. If my advisor someone I was paying said that to me, it would be a pretty short conversation after that.
Speaker 3:It is so dismissive and it is so, and it's just. It's incredible to me how often we see that. So, anyway, don't get me on that soapbox. But if these aren't conversations that you feel comfortable about your plan to address, let's have a conversation about it. And look, one of two things can happen. One you become more educated about your situation and find out that your plan is perfect. That's never happened in my practice that's been the case. Or you'll find out that there's some. That's the truth. There's some the case. Or you'll find out that there's some. This is just that's the truth. You'll find out there's some huge gaps, but we can look at that as an opportunity to get what you want to happen to actually happen and to do it right. And wouldn't that feel, couldn't you imagine that that would potentially feel? I have to say things in such a friendly, compliance manner. My clients who address these issues report to me that they feel much better about having a plan to address these things, typically Very well said.
Speaker 2:So is there any other post-election issues you want to talk?
Speaker 3:about right now. Oh gosh, I mean we need to have a whole other one on investing too and just kind of a state of the market type of thing. I think there's a lot to talk about there. You know, I think a lot of folks have been tremendously, have gotten tremendously comfortable with the way that the market has performed over the last little while, and I think that we need to be really thoughtful about how we address some of these things, especially if you're approaching retirement Yep, I think that's going to be our next podcast.
Speaker 3:I think we should do it.
Speaker 2:Yep. So okay, Well, I hope this helps. Hopefully you will hear this before it gets too far into 2025 and you can make some decisions and address that. And, as always, we would love to hear from you. You can go to our website Wealth, the number four Generations Wealth for Generations and be looking for the announcement of our TV show starting soon. It's Ian and I and Spike Spike Spangle Sp. Spike Spike Spangle, Spangle, Spike Spangle Our host. Very energetic guy, Super cool guy.
Speaker 3:We had a good time with him.
Speaker 2:He kind of looks like a spike yeah, Not spiked hair, but he's very professional and a lot of fun and keeps us moving. And so, yeah, be looking for that coming up Hopefully early January, February of 2025. And so, yeah, be looking for that coming up hopefully early January, February of 2025. And you can learn some stuff and we'll be TV stars.
Speaker 3:I don't know about all that. It makes me uncomfortable.
Speaker 2:Thank you all very much and we will see you next time.
Speaker 1:Thank you for joining us on Wealth for Generations. We hope today's insights inspire and guide you in your financial journey. Remember, the path to wealth and legacy is unique for each of us and we're here to help illuminate your way. Before we part, a quick reminder this podcast does not provide financial or legal advice. The content discussed is for informational purposes only. Please consult a financial planner or legal advisor for advice specific to your situation. Visit us at wwwwealth4generationscom for more resources and don't forget to subscribe to Wealth for Generations. Until next time, keep building your legacy, one decision at a time.