Wealth from Wisdom

9 Not-So-Obvious Year-End Financial Planning Tips

November 25, 2017
Wealth from Wisdom
9 Not-So-Obvious Year-End Financial Planning Tips
Chapters
Wealth from Wisdom
9 Not-So-Obvious Year-End Financial Planning Tips
Nov 25, 2017
Carson Wealth
Show Notes Transcript

Join Ron and Paul as they discuss 9 year-end financial planning tips starting the week after Thanksgiving! As you head into the holiday’s, you wont want to miss these tips that could save you thousands of dollars.

Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo. The opinions voiced and well from wisdom with Ron Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an sec registered investment advisor,
Speaker 2:
0:31
Doug market hit another old time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 200 the skyrocketing cost of healthcare and retirement could now run 350,000 for retirement. Today is a whole new ball game. It's loaded with challenges, obstacles, and trap doors that you can do this and we can be your guide. Welcome to wealth from wisdom with bear and tall if fame advisor, Ron Carson, straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson. It's hard to believe, but
Speaker 3:
1:11
we're on the doorstep of yet another year. I can't believe it. It seems like a, it was just yesterday, Paul. We had 2017 we're entering in here is 2018 but think about this between now and December 31st it's business as usual. For most Americans, I'll give little or no thought about their money, their investments. Let's just let the year quietly slipped by the eat, drink be merry, but there's a handful, there's a small few individual investors who will take that road less traveled and they'll take this time to take a real inventory of the events that impacted their investments from this last year. And they'll also take advantage of a handful of strategies that are available to everyone. And this is what frustrates me is so many things that people can do to save potentially thousands of dollars. Hey, welcome to wealth and wisdom. I'm Ron Carson with my cohost Paul West and thanks for joining us today.
Speaker 3:
2:11
I'm sure there are many, many year end strategies on taxes. And that seems to be the thing people do this time. You're, I'm not saying it's not important, but there are some other not so obvious financial planning strategies, Paul, they could have a significant impact on how you're actually going to end up as it relates to your wealth and hitting your goals and hitting your objectives. And due to the record setting performance of the stock market this year, plus the coming changes of taxes, it's in the news every day. Retirement accounts, even changes with social security is more critical than ever. You address this now. So today we're going to talk about financial planning tips that could potentially save you tens of thousands of dollars. And Paul, you're right. I mean, we so often. Um, and we had, you know, great discussion. We had clients in today planning, you know, what are things that you do in a whole investment committee this morning was around rebalancing.
Speaker 3:
3:08
Y'all really breed balancing risk from one strategy to the next. And so we automatically do this for a lot of clients, but there's just a lot of things that can be done that aren't being done. Yeah. People forget about often the little things, and I think about, you know, we're going through the holiday season and we'd just pass Thanksgiving and all the food on the table. This doesn't magically appear cooked and ready to go. There's little things. There's planning and I think about many of our listeners, Ron and each one of us, you make those checklists of all the things you want to do and sometimes the holidays can bring a lot of joy and excitement for people and for others. They avoid these checklists and they can be those last minute shoppers. And sometimes when you become a last minute shopper, you end up either a, making a mistake or B, not finding the thing you need, which can lead to disappointment on an emotional level.
Speaker 3:
4:01
And you don't want to, if I apply that to your financial life, to have that same level of disappointment when you had so many opportunities to rebalance your 401k Ron or to update your will. I mean, we were just had somebody in here today that was signing a will that has money and w what, what took so long. There's nothing besides just pure avoidance. So getting those things crossed off your list is going to make you feel so, so much better. Well, let's talk about rebalancing because this is one of those areas that people really don't do. It is, it's proven. It's a very effective way of balancing your risks and the way you think of the concept here. We have the market at highs are all time highs and what rebalancing forces you to do is to go back and buy into something that hasn't performed as well and sell something that's performed relatively better than whatever it is you sold each, you're rebalancing back into so it automatically lowers your risk and things that do well have their run and then they don't.
Speaker 3:
5:06
But I want to go back to 2009 if it 2009 you allocate it to a 70 30 split between stocks and bonds and you reinvest it all your gains, but you failed to rebalance this run up that we've had so far means you would be 90% in stocks, 10% in bonds. In short, you'd be sitting on a far more aggressive portfolio if you were 70 30 back in oh nine and here we are going into 18 so several more years, arguably maybe some less risk. You've gone and taken a lot of additional risk and it's not just equities and equities. There's some pockets of things that you want to own out there, but if you're just going to own the entire market, the market is not cheap. So back when you, and 70% it was on,
Speaker 4:
5:58
you know, on valuations that were, that were really reasonable at the time. Yeah, well I think about everyone's new 401k dollars that are going in Ron, and you are putting this dollar amount every week or every month, whatever your frequency is, and now they're potentially coming in at a high level. So think about it. If they're coming in what you thought was 70% now they're coming in 90% and if there is a downward movement in the market, you're double hit. Actually at that standpoint. So our challenge to all of you is when's the last time we've even gone out and looked at your 401k, your or your any retirement plan and seeing what the current allocation is and you knew actually quoted in a recent USA Today article, Ron talking about making adjustments in your plans and what to do. And I think about if you're not in a target based fund or if your plan doesn't allow on, you're taking more risk than others because at the end of the day you're ignoring it.
Speaker 4:
6:51
I mean, very few of, I shouldn't say all of you, but very few people actually go out there and look at it. And then to take the next step of actually calculating the right adjustment for you. Besides what it most people do run. They go immediately to the performance section of their retirement plan, see who's done best and they move more money into that because they're chasing returns. And this is actually the contrary of rebalancing, which is the absolute opposite of rebalance and right Paul. Yeah. The human behavior chases those types of things. Also, number two, and I added this today because the list is a static, it changes based on what's going on in the world. And right now you should be handicapping whether tax reform's going to happen. And, uh, and I think, you know, personally I just am working with my tax advisor.
Speaker 4:
7:37
Um, you know, we're betting that it is. So we're actually, um, we're, we actually ended up taking less deduct. Well, the strategy is we ended up, assuming we were pushed more income into this year thinking we're going to have lower taxes next year. So it's a calculated risk, but at least we're proactively thinking about, you know, what's tax form going to mean? What's it mean to me personally? And this is something you should be doing with your tax team that's like, doesn't make sense. Take more income to this year because you're going to have, you know, have possibly even a different tax rate next year. I mean tax planning is one of the most important things that we do and most people are comfortable with taxes being a recording transaction. They just record numbers down. But let me give you an example. There is a family that we're talking to here on the wealth from wisdom show and they said, hey, I got a lot of built up gains.
Speaker 4:
8:34
The markets run up. Is it better for me to take chips off the table now because of potential tax reform or should I wait? And so they went and we worked with their CPA and their CPA came back and gave guidance, said yes, you should take chips off the table. Yes, it's better for you to pay taxes than to take losses. Something happens to market. So that's tip number one from their trusted tax professional. That's tax advice working with their wealth planner. But too, if you can hold off 30 days or 45 days here to push that into 2018 it's going to be better for you, sir, because you have so much income here in 2017 due to a retirement package they had. So that's tax planning, that's making decisions. Not Saying, oh, wherever the chips lie. Well that's what I'm going to do and not have to do anything with it. And it needs to be a coordinated effort. If you have to be your own quarterback making these decisions, you're not making the complex simple at all. You're making it challenging and you've got to make it so much
Speaker 3:
9:37
flare for yourself. Yeah, and I actually just said the opposite. We pushed in common to next year. I said, yeah, so we could have a, hopefully a lower tax rate. Let's, here's something that's interesting that I want to share with our group, our investment committee meeting, I think it was on, was it Monday or yesterday? Just yesterday where our group was like, we think tax, you know the market's running up because they believe tax reform's going to go through. But we sh we think there's a real chance it could be a net negative for the market. And I'm like, wow. And um, BC, one of our very thoughtful, uh, portfolio manager said, well, I think tax reform we'll bring the will will ignite for more growth in the economy, but it's going to bring the Fed to raise interest rates a lot faster than expected. And that could be a net net negative. So interesting.
Speaker 4:
10:27
It's interesting to think about it. I mean, uh, most people assume, hey, if this tax reform goes through, uh, everybody's going to be extremely happy. And yeah, there's some certain corporations that absolutely could benefit, uh, some individual stocks that from the lowering of their tax rate. But I think about two things around what if the tax reform doesn't go through or the key changes like corporate tax don't go through. Um, but the other thing I think people have to remember is we're on these tax breaks are great and they can help a lot of people in businesses, but still we're dealing with tears. We're dealing with, it's helpful. But there's other fundamental things that are important. Like you just said, interest rates. And that brings up a great point. If interest rates go up immensely, businesses borrowing money potentially goes down, people moving into new homes, they're no longer going to be as excited because interest rates are so low. Um, and there's just record number of loans out there right now. So many banks are trying to figure out how do they have enough deposits. So it'll be really wild to watch. Um, if we have a fast moving interest rate environment, how the financial markets react to all of that.
Speaker 3:
11:34
I, I, I agree and that's why someone needs to be paying attention to it. And we do that. That's what we do at the Carson group because that's what we do and how we think about money and how it relates to you. How will you avoid all the traps that are potentially out there and you look at your investments and you need a steady stream of income. How are you going to do that for retirement? There so many pitfalls in so many things that can really hamper you could throw money away. We have answers to simple questions. Our five step retirement master plan. It's where you'll learn five very simple strategies to get help you make the most out of every single dollar you saved. Our advisors are standing by to schedule your initial analysis at (888) 419-8513 what you learn literally can save you thousands and thousands of dollars every year. (888) 419-8513 that's (888) 419-8513 is there anything you could do with your vest of us between now and you're in that could save you tens of thousands of dollars? I'll have the answer coming up next. I'm Ron Carson with my cohost Paul West, and you're listening to wealth and wisdom radio.
Speaker 2:
12:51
He seemed good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom with Barron's hall, the same advisor,
Speaker 3:
12:59
Ron Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to, well from wisdom with Barron's hall of Fame Advisor, Ron Carson. What can you do between now and the end of the year with your investments? It could help you save thousands of dollars. Hey, welcome back. I'm Ron Carson with your cohost Paul West and you're listening to wealth from wisdom and thanks for joining us today. There may be some urine tax strategies that can save you a few bucks and we think you ought to be able to do that. That's fine, but the big planning items today maybe aren't so obvious that could have a huge impact. Paul and I were talking about rebalancing. Really we're balancing that risk down as if you did nothing, just going back to 2009 you had a 70 30 split today be 90 10 and Paul, that's something we're seeing a lot of these days.
Speaker 3:
13:51
People are coming in and they're taking a lot more risk than they think in their portfolio. We can do an analysis to show you what your downside risk is. Um, and most of the time it shocks people. The other is, this is a time before you go into 2018 is to really check your investments for fees and expenses. I know we talk about this a lot out of Waltham wisdom, but it is, it makes a difference. It makes a huge difference. You've heard us share the, the expenses, what kind of compounding impact that it can have over a long period of time. You first talk on this show about Merrill Lynch and hidden fees, backdoor payments. It's time to demand total transparency from the France financial professionals you're actually working with and a, and make sure that they understand and so they can explain to you, make the complex simple on how everybody's getting paid. Yeah. You always want to want figuring out what you're being paid it be in charge, what expenses you have. It's that makes me think Ron. So we're
Speaker 4:
14:52
just finishing a remodel in our basement. It never had been finished. We put some carpet in, we ordered, um, you know, so furniture here in Omaha. Well, who's one of the biggest players? Nebraska furniture mart. So many of us though, you go done. You're done with your negotiation and you make your order. So I say, okay, I want to get it delivered. And they said, Paul, that'll be $90 so it was $89 is the current rate. So I'm like $89 well, am glad they told me they'd be, and I've shared this story with several people, like would you actually pay $89 for delivery? Well, I look at the value my time. I don't have a truck. Is that worthwhile for me? But that's a lot of money for delivery that people aren't willing to pay. And many of you, what were they going to deliver the couches? So couches to my home, it's worth $89 I don't disagree. I don't disagree with that. But many people, I'll pay you 89 to move me. I'm not going to do that.
Speaker 4:
15:46
But many people are going to do that and that's okay. And maybe $89 means a lot. Maybe you have a truck, maybe you have close by. But my point is run. People will hyper analyze fees like that and they will not go look at the most important fees they have. So let me give you an example. We saw a recent statement for someone said, I don't understand my fees. So they actually had a statement and it said, this was fascinating to me was it was from an Edward Jones statement. Yeah. And so it had an account for them that had the same investment registration. So the same type of account for them, but had two different actual lines on there. And one was pre changes, one was post changes and it was all related to how much they were getting paid. And it was fascinating to me because you were sitting there and we asked this family, I said, well, what does that mean?
Speaker 4:
16:41
I said, I don't know. It just means uh, uh, something. They just had to separate them for one reason or another. So no matter what the advisor told them what it means, the reality was it was separated because that firm was getting paid a lot more on the, the initial one versus what they're paying now. I would have loved to sit in the room to see what the advisor actually told this client because what the client heard was, oh, don't worry about it. This is just something we have to do from a regulatory perspective. That's not the reality is, and so guess what this client said, okay, now granted they have trust in that advisor, but probably this type of person also would have scrutinized and $89 fee. But I can assure you the difference on these two accounts is way more than $89. That's an excellent point because he'll, those fees and things, I do the same thing, you know, sit there and it just tears me up to pay what I think is a high price for something and $89 is not, don't get me wrong, but you're just cheap. Hey, there is a big one though, Paul is make sure your financial planner and your tax advisor on the same at
Speaker 3:
17:50
the Carson group, we have those, you'll have their tax advisers that are, uh, many of the clients we can do through their returns or do their planning. But many of our clients we don't. And the risk is that they make sure you understand who is responsible for having communication in between your tax advisor and your financial advisor and even said an email. I expect you guys to get together. I expect you guys to talk. If you're the one, you're the connector. If it's part of what your holistic service offering is, you don't have to worry about it cause they have information. They're probably sharing all the time. We had some clients in today, um, and we were talking about how well they're, uh, that they're tax adviser actually works with us and communicates with us and great and kind of two way communication. These always giving us information. We're sharing information and we're allowed, the client actually authorizes that. So make sure the financial planner, your tax advisor now when you can do something about it, are absolutely on the same page.
Speaker 4:
18:50
Yeah, they have to be wrong. There's just no ifs, ands, or buts about it. And if you're not in that scenario. So I'm curious, you know, as we have all of our listeners, how many people have paid a penalty or paid more than they expected pay. And by the way, no one likes paying more than they want to pay with taxes. And I've run across two scenarios lately, Ron, where people have ended up paying penalties because of lack of preparation and communication from their tax professional. But the problem is, is all of you listening today, you don't know that. And so if you don't have trusted professionals communicated with each other, you're not going to catch that. And guess whose pocket book it Hits Yours. Yeah. Not, not, not theirs. And yes, they may be chasing you and yes, you may be someone who's slow or delayed in providing your information to your tax professional, but if they're not hounding you to make sure that you get all the things done to avoid those late penalties or fees, you don't really have someone who's in your camp looking at
Speaker 3:
19:48
it's pain and consequences. We talk about it a lot. A little planning eliminates a lot of pain and consequences and getting your financial advisor and your tax advisor on the same page as critical. This next one is as well make makes your financial advisor and your legal team is on the same aunt, same page and update your legal documents. How often Paul do we see people come in, we're reviewing legal documents and we notice that you set this entity up, but what? Nothing ever happened. No assets were actually transferred there. And a lot of times there's a complete lack of follow through. I, you know, I know the attorney will give them, uh, you know, all these instructions are what they're supposed to do and the clients just thinks the attorney's going to handle it and you'll make sure you know who's doing what. And also a lot of change sometimes happens if people don't update their plants, but at least take a look at it and make sure you've got the proper beneficiary. As we catch that all the time, we review beneficiaries of clients like, oh no, no, that's not right. Well that's, it says so
Speaker 4:
20:48
you can't do anything about it. After you're gone, you can do something about it today. Yeah, I think about Ron all the time and it's, you know, unfortunately been a few funerals lately and I sit there and think about, you know, the grief the family's going through and actually was just talking with someone literally the other night and they were sitting down at the table, the siblings, um, and the, and the family that is left is trying to make sure the financial house was in order. And as they've said to me, I don't want to deal with this. This isn't something I want to think about. This is that I want to get back to some sense of normalcy. It was hard enough grieving through the process and that, and you know, luckily for some people it is in good order, but if it's not thinking about the pain, everyone would go through that.
Speaker 4:
21:31
If you didn't have it in order and they're sitting around your kitchen table and they're like, how am I going to squirt through mom's thing here? How am I going to sort through dads and all of these documents and we're in the world are them. I know for me, Ron, I want my kids and my wife to be able to sit there and say, you know what? It's all in order. It's all taken care of. It's easy for them and if I spend the time now, it's going to be easy for them. If I don't, then I don't want to put them through that pain and it's just something simple. I know it's the last thing we want to do. We want to go home, we want to have meals with their family, watch a crate and game or do whatever we want to do, but we've got to invest the time to get those things done because you're going to feel so, so much better.
Speaker 4:
22:08
This next one, charitable donations, Paul, how often? Sometimes clients will say, well, I just gave them cash. You'll take if you have, especially if you have, if you're going through the rebalancing process or you have a stock that's really done well, make that donation in kind the equity, the stock to the charitable, and they'll have a way of transferring it and setting that up and you will get the fair market value of the date that it actually transferred and you're not paying taxes on those gains, but you're getting the deduction for the full amount. Yeah, that's a great idea and it's such an easy thing to do and especially right now is the markets are up. Take advantage of those highly appreciated securities. If you're gifting money to your church or another charity, go ahead and do that. But there's also other techniques, Ron, so one you can donate to a donor advised fund if you're not sure yet where you want it to go, but you want the benefit of donating to that.
Speaker 4:
23:01
Also, we're very fortunate here in the Omaha community. We have a wonderful community foundation that can help you figure out ways to disperse that, but talk to a trusted professional to help you figure out what's the right thing to do because there are methods to help you, but it doesn't have to be cash. Everyone assumes I got to go write a check to make a donation. There's so many other ways to approach it and quite frankly from a tax perspective is you get the full value of the market runup we've seen over the last eight years, but you don't have to necessarily pay taxes on it and you get a tax deduction for your donation that you're making, so everybody wins in that scenario. You made money, you gifted it, you feel good, the charity gets it and you pay minimal taxes
Speaker 3:
23:47
on those types of events. That sounds to me like a winning formula. What it is, you know, I know we were years ago used to have garage sales and and said like, let's just go give it to salvation army to dock it. It probably end up about the same. You were able to get rid of everything. You could pay fewer taxes in retirement, but what's most efficient way to withdraw money from Your Ira or four zero one k and how are you going to get the most out of your social security benefits? You have questions about money and investments. Let us prove to you how we can make the most out of every single dollar you save for retirement. If you don't know who the Carson group is. We are one of the top independent advisory firms in the country according to bear. As a matter of fact, for the longest tenured from on the barons hall of fame, blessed, we were selected as one of the top advisors by Forbes, often featured all over the place.
Speaker 3:
24:36
Fox, CNBC, just recently, USA Today, and of course we're fiduciaries, which means we're required by law to put your interests ahead of our own. You've think everybody does. Everybody does it. Our advisers can make a difference. Get a second opinion on what you're doing. Give us a call at (888) 419-8513 if you don't pick up the phone and you don't get a second opinion, you're going to be the one that pays a price or has a painted consequences. We're good at what we do. Most of the time we can add tremendous value. If you have an advisor right now get this opinion so you know where you stand, give us a call. Eight eight eight 41985138884 nine 85 13 I'm Ron Carson with Paul West and you're listening to wealth and wisdom.
Speaker 2:
25:22
How could you make your money go further in retirement? Learn how next unwell from wisdom with Barron's hall of Fame Advisor Ron Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to from wisdom with Barron's hall of Famer Divisor Ron Carson. We're on the cusp of another year,
Speaker 3:
25:45
2018 I can see it from here. Most Americans will pay little attention to their investments between now and December 31st. You're so busy with parties eating, drinking, you know what the drill is. But some people are going to take the road less traveled. They'll use this time, take inventory of the events that impacted their investments from this last year and they'll look at the handful of strategies that is available to everyone, but very few people will use it will make a huge difference and how they do, not only in 2018 but in years to come. I'm Ron Carson and you're listening to wealth and wisdom with my cohost Paul West. We're going to continue going through all the ideas and we've had some really good ones here. Paul. A lot of times you don't hear about them. You don't think about, um, um, this next one though, is it tax loss harvesting. I mean, I think that's one that's pretty obvious, but what you may not know is you, even if you can't use it, it doesn't hurt to harvest them. Cause you can take 3000 against ordinary income, but you can carry them forward forever. So you go ahead and capture that asset after 30 days, you can find that asset back, but you've got something that's worth something that you can carry forward into the future.
Speaker 4:
26:57
Yeah, I mean, as much as the markets run up, Ron, there are still losing investments that have happened here in 2017 so if you got a chance and you do have a loser, it's okay, you can sell that individual stock or fund or bond or whatever it is and take advantage of the capital loss and maybe apply it against some capital gain on something that's gone really well for you. And you want to cross each other out there. But you know, thinking about tax loss harvesting on, and I know you're recently on Fox business, so it was fun to see you on the TV there and I thought they asked you a really fascinating question. They said, you know what, I've got a lot of net worth in one individual stock and it's run up. So take, you know, the big runners that we've seen, you know, through the Fang stocks, Facebook, Amazon, Netflix, Google or Microsoft or whatever it is. And what if that constituted 30% of my portfolio and it ran up like that. What would you do? Run the question posed to you
Speaker 3:
27:51
Stuart Varney and you can Google Ron Carson, Fox business to our Varney should come up. It was about an 11 minutes segment. And the reason I say that is he, he was really interesting and maybe because he was actually sharing his personal stuff with millions of Americans. But yeah, 30% in one sock name Microsoft. And I was like, man, I would diversify. Not that I don't like Microsoft. It never makes sense. It, here's what I said to him, if you can tell me that 30% can go away and you don't care and you're just going to be disappointed but it's not going to impact your life then maybe, but I would reduce it to 5% if you, if you absolutely have to have more, maybe 10% and sell, sell your your highest cost basis shares that you have. And let the rest ride, but then he followed up because we were seeing it.
Speaker 3:
28:43
Now's the time to measure your risk budget. He said, I've got an IRA and you know back in, I think he said, oh one he bought into the Nasdaq. I think the triple qs in and why should I do with that? It's run up. It's worth a lot of money. While there's no tax ramifications for making that adjustment and you know, people think that the market always have to come back and you know what, I'm an optimist. I believe in America. I believe they're going to come back, but in the back of my mind, I remember that we still have Japan in December 89 1989 the Nikkei was at 40,000 the Nikkei isn't anywhere close to that. How many years later are we talking going on 30 years and take, if you protect the downside, the upside will take care of itself. If remember that protect the downside, the upside will take care of itself. If you can quantify, I be, it's your behavior. You're doing the wrong thing or the wrong time as can influence how you, how well you do really not what you own. And that's why both of those examples were, and he maybe has so much money. I don't know what Stuart Varney makes. Um, but it, it doesn't matter if both of them went away. All that's a different discussion. But if it matters, you shouldn't be taking that amount of risk.
Speaker 4:
30:04
Yeah, I think it's a great point Ron. I mean I think people are going to say to you immediately, hey, I don't want to reduce from 30% down to 5% cause I don't want to pay taxes on, I don't even care how many Zeros are bind it Ron, because people hate paying taxes. But I think you're right. The end of the day is if you're willing to lose that whole amount, then you can stay there. You can be comfortable. But we can remind many people, even those, you know, and, and our local city here at Omaha, Ron and Ron loosened and there's other examples of many people out there that could say, you know what? I would have gladly paid taxes instead of being in the fiscal situation I am today. There's just no reason. At some point you make an investment you, there's two sides to every investment, the buy and the sell and at some point, most of us, right, you don't have to have buy low, sell high, so it was selling high. That often means pay in taxes. So it's okay. And certainly if that percentage of that specific stock you may have or a couple stocks constitute a large part of your portfolio, you're taking way more risk than you ever want to. I mean, you are now driving 35 miles per hour over the speed limit and you don't need to be doing.
Speaker 3:
31:14
Yeah. Or in some cases they're going 120 miles an hour, right? Yeah. You just have no sense of that. This next planning idea is one that sometimes people have a hard time doing. Paul converting to a Roth Ira from a traditional IRA. Now the difference here is when you put money in a traditional Ira, you get the deduction upfront. Roth, you don't get any deduction, but it grows tax free and you can actually do a conversion, you know, of Your Ira and pay the tax and you just got to crunch the numbers. We've had clients actually do that. Um, it's, it's hard to pay the tax. I mean, I guess part of me is a little bit skeptical. It's like, okay, I pay these taxes today and I'm relying on 10 or 20 years down the road that the rules, they're not going to flip the rules on me. So that's the only thing that would make maybe make me pause.
Speaker 4:
32:04
Yeah, I hear you're on, but I think a lot of people, and I'm certainly in this camp, that messing with a Roth IRA is a huge mistake by the government and the administration because they put out these rules for everyone and we know they've never made a stupid decision. Right. Never. Never, ever, ever. You're exactly right. That's why we're doing so well as a country. But it's a, when I look at it, especially when you're in your sixties you have more control over your tax situation than any other time in your life. And so if you're looking at retiring and many of you start, you get in your late fifties or early sixties should I start retiring? If you're not going to work for those periods of years and you don't need as much money, why wouldn't we look at doing a conversion and even a partial every year because you're at a lower tax bracket then because when you get age 70 and a half, and maybe you had a lot of money in your 401k that you had a role in your Ira all sudden your taxable income changes.
Speaker 4:
32:58
And that's really our next one, Ron, which is income streams. And as I think about it, your sequencing of those is so important. The one other thing on the Roth Ira, yeah, a lot of people don't know this. You need to have a Roth IRA at least five years before you take the money tax free. So don't do this. And then think you can start taking the money out if there's not an immediate benefit or instant gratification, you don't get a medal for doing it. It had been able to access your money. But I think the other thing people have to remember all the time, it's like we talk about those RMDs here is it can make a big difference in your overall financial game plan. So Ros are simple but they're not quite that simple and you need to work with an advisor who can help make the complex simple in those types of scenarios for you.
Speaker 4:
33:45
So let's talk about the next one. These income streams for you. Finding out the right sequencing of those have to happen. You cannot, you know, as we always talk about have a single source in retirement. Yes, social security's great and many of you are dependent upon it. Um, yes, you may have rental income. Yes, you may have a taxable account, you might have a part time job, you might want to work wherever it is for a retailer, for a golf club or whatever that is. You got a lot of different choices. And when I think we need to do is spend some time with every individual family run, helping them figure out what's the right sequencing for them. There's no magic or silver bullet here. There is the right plan for everybody. Got To pay attention to it because the last place you want to be is 85 years full of life and absolutely flat broke and we have record low interest rates and I'm not going to say a fully value market, but it's not an inexpensive market.
Speaker 4:
34:38
So which challenging and all we set up these von ladders and I was talking about that on Fox with Stuart Varney. That was a very, very effective way of, of getting um, getting exactly what they need in an income. Think about what you're doing, planning how much downside you actually have in your portfolio. I guess said if you protect the downside, the upside will take care of itself with the market at the level it is today, you owe it to yourself to know what your downside risk is. We have advisor standing by that can help you with this. (888) 419-8513 call now, (888) 419-8513 protect the downside. The upside will take care of itself just to get a second opinion. See how much risk you really are taking in your portfolio when you can do something about it. When markets are at, I'm not going to say fully valued, they're certainly much higher
Speaker 3:
35:38
than they were. Eight eight eight four nine 85 13 advisors standing by eight eight eight four nine 85 13 I'm Ron Carson with Paul West and you're listening to Walton wisdom,
Speaker 2:
35:48
trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Is it possible you could pick fewer taxes in retirement and keep this money for yourself? You could learn right here and right now on wealth and wisdom with Barron's hall of Fame Advisor, Ron Carson, social security taxes,
Speaker 3:
36:16
adjusting your asset allocation and managing those mutual fund distributions, which are a pain in the backside this time of year because you don't get any value, but you certainly get the taxes. Well, can you do between now and the end of this year before we get to 2018 that could save you tens of thousands of dollars potentially. Welcome back. I'm Ron Carson with my cohost Paul West, and you're listening to wealth from wisdom. Sure, there may be some tax in strategies and we're suggesting you do that. But the strategies we talk about today, you can have a much bigger, more profound impact on how you do, not just in 2018 but beyond the middle. They go, we're talking about my segment last week with Fox was Stuart Varney and we're wondering what his net worth was. So Andrew Rogers are Hebrew, actually produces this show for us. Um, pulled it up. He made, I've already make more than that. Actually 608,000 a year.
Speaker 3:
37:11
Net worth of $10 million. So that means $3 million is for folio is in Microsoft. I just seems like a lot I have in, in, you know, 30% now if he lost it, he could probably, although he lives in New York City, New York is a very expensive place to live. Yeah. Well a very, so let's just take a zero off. We're in one of your friends this place. I want to, I mean, Bruce, yeah, we were in New York about a month ago and we went to and he was telling us how, what this thing sold for and what it rented for and we looked at each other like, no way.
Speaker 4:
37:49
Yeah. I mean it was a two bedroom small condo in the middle of the city and it was over six grand a month. Yeah. I mean, it's amazing. Uh, the expenses that are out there. And you know, I think a lot of times, and we're lucky to be here in the Midwest, I was actually at the Omaha Chamber event the other day and they're giving the economic outlook, and I had some stats I wrote down was one here in the Omaha Metro area, our average home is 178,000 are unemployment here. This is a phenomenal statistic, is now been less than 3% for the last five months. So congrats to the city on the good things. But what is happening there is people are fortunate and there now because of unemployment, people aren't making money and we've got to avoid people making mistakes with this money. So there's more questions than ever before to the wealth from wisdom network about how do I help protect myself?
Speaker 4:
38:47
And there's also people around that are making money that are afraid to get into the market because they think, are we at the top? And so there's strategies and techniques that need to have be to be reviewed. I want people to be able to sleep at night. The number one thing you should be able to do is be confident that how your money's working for you is allowing you to achieve your dreams goals, but also that you're comfortable. If you can't afford or can't bear risk. That's all right. There's techniques to solve that problem. Just you need to sit down and talk with a professional. Yeah,
Speaker 3:
39:19
about that. Paul, you're right, man. I, you know, I'm 53 years old, grow up on a farm just north of here. There's no place like Omaha. There's no place like Nebraska and I've covered the world and I appreciate it. You know, the older I get, the more I love this place. The people are amazing and that's why I say, you know, our stakeholders here, you know, we do interviews all the time and they'll always ask, how do you guys grow to the size you were in Omaha, Nebraska. I said, our stakeholders, our secret weapon there, care factor is so high. Their work ethic is so strong. Many of the people here at the Carson Grove actually grew up in rural Nebraska from small towns and, and I know Andrew, you're from Sacramento, but you come across us is exactly like you could've come from Nebraska, won't tell anybody.
Speaker 3:
40:06
You're kind of California, but uh, it is, it is a great place and I couldn't be more proud to be here. Hey, we do. On that note though, we want to give great advice and we address all kinds of scenarios and questions on this show, but I can guarantee you that no two people are alike. Every situation is different. So if you want email as a question on anything and we'll read it and answer it here on wealth and wisdom, it can be an IRA. 401K it could be you know about how to, how to handle money with your kids. I think that's a big one that people make a lot of bad mistakes early on. They don't allow their kids a struggle enough. They don't have responsibility. Just drop me an email, ron@carsonorwealthfromwisdomradio.com that's ron@wealthfromwisdomradio.com or ourCarson@carsongroup.com either one will get to me and we'll answer your question on the next available officer. Wisdom Shell.
Speaker 4:
41:06
Here's a great survey we read. So a recent Gallup survey found that fewer than half of investors bothered or restore their portfolios back to their target mix that they need to have at least once per year. And he even more fascinating from the survey. 30% yeah, that's three zero claimed that they'd rather be stuck in traffic for an hour. Then rebalance. So you're telling me you'd rather be sitting out on the dodge expressway stuck in traffic either early in the morning or late at night when you want to go somewhere. Then spending the five minutes or 10 minutes or 20 minutes rebalancing your portfolio that could make you thousands of dollars. They really goes back to my Nebraska furniture mart delivery fee example from earlier on is people hyper analyze fees that they think are important in minimize fees that are hidden or s or smaller may be in the decibel points but have a greater and profound impact
Speaker 3:
42:03
done your life. Well, I mean, think about if you ask most people, what are you paying at the bank for a fee? It's about 98% yeah, because I get virtually getting no return and they're alone in that money out. Can you imagine if they had gross and then they took back 98% of it? I mean, not that I'm suggesting that you know, banks are unreasonable, but when you think, okay, what is the real fee that I'm not seeing? What's the spread between what they're keeping and what I'm actually getting? Some money market funds today, um, are keeping 30, 40% of the return. It's just because there isn't a lot of return there and they're keeping a fixed amount just doesn't make, it's just their high fees.
Speaker 4:
42:43
Yeah. Right. We've given people a lot of ideas. And with the holiday season coming up here, I mean there's certainly a lot of things people can do, but you got to do one thing at a time. We actually recently had an advisory council of our clients come in here and one of the things they helped us make sure we remind them is, is you've helped us solve many problems over time, but we solve one at a time. So maybe for you listening today, it's the rebalancing, get that rebalance done here before the end of the year. Maybe it's update my will or get my trust completed or do that Roth conversion that I've looked at. Maybe there's other examples. What do you have?
Speaker 3:
43:17
Yeah, well social security, there's actually, we've talked about it a lot, but there's some changes. The about claiming new rules about claiming your social security in 2018 and these changes include just about everyone. So be careful. We have a whole process that we can help you evaluate this. A difference between the best scenario and the worst scenario. The delta. The spread is about $300,000 and there's $10 billion left every year on the table. $300,000 per person. Yeah, I mean that's a big wow. Yeah, it is. It's a lot. And you think claim your social security is easy. It's absolutely not. This decision is riddled with trap doors that could cost you thousands of dollars in benefits and trigger higher taxes and double your heard me right? Double your medicare premiums. The one way you can avoid this is with our customized social security analysis. This analysis reveals that optimal time to claim your benefits, how to reduce your taxes on these benefits, and if you're eligible for even more benefits, I could mean thousands of dollars in pocket every single year for the rest of your life and you might expect to pay hundreds of dollars for this for a limited time. There's absolutely no cost. You heard that, right? Zero costs, it's absolutely free to get your free customize analysis. Call eight eight eight four nine 85 13 we have advisor standing by now. Don't potentially cheat yourself out of these benefits of lifetime dollars that are rightfully yours. (888) 419-8513 (888) 419-8513 I'm Ron Carson with my cohost Paul West. And you've been listening to Walton was in radio
Speaker 2:
45:14
risks, social security, income taxes, estate planning. Every week we talk about how to make your money go further in retirement right here on wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson.
Speaker 1:
45:28
Okay. And here's the legal Mumbo jumbo. The opinions voiced and wealth and wisdom with Rod Carson know for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory services offered through CW m l l LLC, an SEC registered investment advisor. Yeah.