Podcast 111: Navigating Retirement Finances – Strategies to Help Secure Your Future with CPA Jude Heath

Are you approaching or already in retirement? Join us for this informative podcast as we explore practical strategies to help you manage your finances and secure your financial future. We’ll cover topics such as maximizing your Social Security benefits and understanding tax implications, effective debt management and building an emergency fund, smart investment approaches to help grow your retirement savings, navigating healthcare costs and insurance options, and estate planning and protecting your assets.

Whether you’re just starting to plan for retirement or already enjoying your golden years, this podcast is designed to provide you with the knowledge and tools you need to confidently manage your finances and work towards a fulfilling retirement. Tune in and take control of your financial well-being.

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Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 02704682 – 11/24

SUMMARY KEYWORDS

Overtime Tax-Free, Social Security Tax-Free, Credit Card Debt, Income Tax On Social Security, Trump’s Tax Cuts, Investor Uncertainty, Bond Sell-Off, Interest Rates, Stock Market, Cash Flow, Fiscal Stimulus, Protectionist Trade Policies, Inflation Adjustment, Special Needs Trust

SPEAKERS

Gregory Ricks, Jude Heath

Gregory Ricks 00:00
Hey, welcome. I’m your host. Gregory Ricks, a financial advisor here to answer your questions and help you win with your money. What’s primary on your mind as a result of the election? Jude,

Jude Heath 00:16
Well, you know, as as the week folded out from Tuesday, we continue to revisit the concepts that now President elect Trump has talked about, about what he’s going to make, tax free. And so some of the more exciting concepts are this brand new, something he came up with, you know, overtime, tax free. That’s going to have to be a rewriting of some payroll software and things like that, but that is an exciting time for hourly workers that that can be a little pocket of money that is not withheld on you don’t pay tax on it at the end of the year. It’s not really free, because presumably you’re going to continue to pay Social Security, but it kind of opens the gates a little bit about, hey, if I’m close to 3738 hours, or whatever you boss, you got anything else for me to do, I could pick up another shift, because what would be nice is That extra tax free money can help rebuild young families. You know, as I get around, and we have a wide range of economic levels at our firm, you know that we’ve talked to folks just we say the same thing as you Gregory, got to say for the future, you got to put money away. And younger folks with babies and whatnot, they’re all just kind of struggling. Might have picked up some credit card debt with inflation over the last few years, and so look saving for the future can begin with paying down a little bit of credit card debt, so maybe some of that tax free money on overtime could get those debts down that that would kind of be really nice for you know, struggling families, likewise, for the retired, it’s really nice to start talking about not paying income tax on Social Security. I bet in your client base, Gregor, you’ve got to see that that is a small that’s putting smile on people’s faces, that something they’ve worked for their whole life, contributed to. I hear it all the time. I paid taxes on that money. Well, this is the first president we’ve ever had that has said, well, let’s make Social Security tax free. And look, it might be means tested. He might not give that to the billionaires. I’m fine with that. I don’t think the billionaires are going to miss the taxes that they pay on Social Security. But for straw, again, struggling retirees, multi generational households where that Social Security is part of the household income. Boy, that is going to be really nice if they can get that implemented to have Social Security tax free. And of course, it goes without saying. He has said that he’s going to reinstitute his tax cuts and Jobs Act. And I can tell you, I’ve seen it. Businesses relied on that, and we know bit small business is a driver in this economy. In our economy, gets jobs going gets spending going. Greens is the wheels. And we that we’re going to see that pretty quickly, maybe even first or second quarter of 2025 get that reenacted, get get some factory orders in some equipment start rolling. Boy, it’s just going to be nice Gregory, to see the economy kind of start to hum a little bit again.

Gregory Ricks 03:52
While investors welcome the gains several set a high degree of uncertainty remains about the details of the administration’s policy. Investors will be watching closely as the new administration takes over next year, said uh Aniket, head of ETF data and analytics at CFRA research, concerns that a Trump administration’s fiscal plans and tariffs could stoke inflation, a niche initially fueled a bond sell off before treasuries rebounded in the week’s final days. On Friday, the 10 year treasury yield, which falls when bond prices rise, inched lower to a 4.307% down from more than 4.4% the day after the election. We’re still kind of in that four to four and a half percent world, which is a good world to be in. I do think interest rates may fall a little bit more here in the near future. I’m not going to kind of. Give any prediction, but what I don’t want to see, and I’m pretty sure Trump doesn’t want to see, I’m not speaking for him. I’m just speaking my take is we don’t want to be in a 1% world again. We don’t want to be in a 2% world. That’s not good. That means things are broken, and they’re having to fix it so, but we don’t mind interest rates going down, but we we’re not. We don’t want to go back to that one to 2% world that’s not a good place to be. Other investors worry that stocks are already trading at relatively high multiples of companies earnings compared with recent history. Well, stocks at this level can be high, but they may not be high in the future relative to future highs. And I’ll put this out there is, you know where stocks are going to be 20 years from now, higher than they are now. Why can I say that? Well, I’m gonna look at history, and they’re higher 20 years before that, and that period was higher than 20 years before that. And that’s when you look at investing and taking risk, that’s one of the things you have to judge, is, what is your time horizon that risk money? How far out can it be attached to that risk? So you have a good outcome with the cycles. Because if you go look at the SNP500 or DOW chart, it’s not some straight line up, is it lot of ups and downs, and some of those downs create lot of worrying and pain that time, continuing with the Wall Street article, here is still many Think indexes have room to climb from here. Some investors pointed to the record assets in cash, like money market funds, and said that as lower benchmark interest rates start to make cash look less attractive, more money will flow in the stocks and bonds, and this goes to earnings. Are we creating a profitable environment for companies to make and sell their ideas and products and services, and if the companies have earnings, then stocks are going to move higher with strong fundamentals and cash sitting on the sidelines. This new administration should have a pretty good kicker to multiple expansions and what’s already a strong bull market, said Paul Feinstein, Chief Executive of all Capital Partners elsewhere, Friday, China’s latest move to shore up its economy fell flat with investors. US listed shares of Chinese companies like Alibaba fell after Beijing extended a lifeline to local government, but held off on big fiscal stimulus measures overseas stocks mostly fell. European stocks posted weekly losses as investors braced for protectionist trade policies from new Trump administration. There’s no country on the planet like this country and the opportunity that it has China, sure as heck, isn’t it. And there’s a recent show that was had talked about all of the building and and their citizens invested in all these condominiums and real estate as their main thing, investing, and all those broken, giant buildings setting empty and completed over there that people had put their works life savings and and it’s gone. And I’ll point this out of what Jude brought up that no tax on tips, no tax on overtime, Social Security will still be taxed, some of those things, and FICA and stuff will be but what does that do that gives you some extra money, and part of that could be to pay off debt, Get rid of those credit cards. It could be, start getting an emergency savings. It could be, gosh, start putting some money in a Roth so you can start compounding all these little things help. If you look to do some good with it, you get that extra money. Don’t waste it. Don’t go close shopping. Or, Oh, now I can go buy that electric car or and get that bigger engine gas power car. Now I’ve been walking make some prudent decisions as you go along the way and get out of. Debt. So I think that’s where, gosh, if it could just help you start saving $50 a month in an and just in an investment, and do it for the next 2030, or 40 years. That’s going to be huge, but it’ll take that discipline as well. Now, the other thing you talked about was Social Security. Maybe it’s not going to be taxed. Perhaps I understand his intent, but to completely undo that, I think, is, oh my gosh, difficult, because once again, I think we have too much government, and government is very expensive, so I think there is a ridiculous amount of waste there. So I think Elon’s correct on saying that they they can shed some employees and departments and stuff, just because it’s I just can’t believe they were number two in hiring on the last jobs report, 40,000 and it’s every month or in the mix like, how is it we keep and we’re spending more than we take in, so we just keep adding to that. What’s the average salary those it’s ridiculous. So we’ve got to quit spending money. But when we start cutting revenue, it has to be made up somewhere. So is it going to be made up because we’re going to dismiss a few 100,000 employees. Wonder what the total number of employees? It is probably staggering number from that standpoint. But when you go to start cutting you got to make up for it somewhere. So if we’re going to make social security not taxed, that’s a big part of what helps Social Security goes but let’s talk about this point. Social Security benefits began being taxed in 1984 that was signed into law by President Reagan. And we go back and we talk and reference him about the tax changes and the growth that he spurred during that but also under his administration, they started taxing because that amendment 1983 allowed up to 50% of Social Security benefits to be taxed. When Social Security was introduced, they was sold to all of us as And granted, I wasn’t around then there. So I was born in 1960 so with that, said they were, were you around then? Jude, I see no, no, but they said it would never be taxed. And then they did this, and then they came back around a few years later and taxed some more of it. But here’s what they’ve never done. They’ve never adjusted it for inflation. So what’s happened is it’s evolved into most everybody that receives Social Security is paying taxes, and if it was adjusted for inflation, we’d have a lot of folks that’s not paying taxes on that. And I think that is if there, if we can’t undo that completely, we can darn sure go in, adjust this, reset it for the inflation since 1984 and have it inflation adjusted on the brackets going forward. Your thought,

Jude Heath 13:25
Absolutely you’re right that what they could do is just index, inflation index, those brackets that Social Security is taxed on to today’s standards, and most folks would not pay income tax on their social security checks that they get every month. And so that would be a really nice benefit for those middle income to lower income folks. And what would what would help? And I talked about this in the first a first break is that it’s going to be nice, because you do have some, some combined households where they rely on that Social Security and and to your point about how big just even the Social Security Administration has gotten, and how inclusive, you know, you said, Clients come in and we talk. I had a small family in this week, and it’s a special needs trust. A man years ago must have gotten some kind of accident, and he came in, but he’s just not thinking, right? And they his trustee, his niece messed up and went to one of your competitors, and oleti, he put the CD and the man’s personal name, and you can’t do that with special needs trust that money was never there for his for his cares, for his nursing care, and so so security administration came down on him, and we’re having to go back, and it’s now going to be abi. Fight, and because you got to convince some bureaucrat that that yes, the brokerage did it wrong, but it wasn’t the intent of the trustee, and that money wasn’t available, and please don’t try to take this man’s Social Security benefits. And so we didn’t know when we went into that meeting. It’s been a long standing client. She needed an appointment. She came in. We sat down and talked about it, but that touches on everything you talked about.

Gregory Ricks 15:28
Thanks so much for listening to ask Gregory where we answer your financial questions. You can find us anywhere. A podcast can be found and on YouTube and Facebook Live every Saturday from 10 to one. If you love this podcast, tune in next time. I work in the world of helping people with their money, helping them with their investments, we use institutional guidance and we invest 5050, philosophy. But it’s not just about managing the money. I think part of what’s important that we are are a sounding board where people feel comfortable reaching out, saying, Hey, I’ve got this. I was thinking about doing this. What do you think, Gregory, that’s what we are for our clients, and our clients see us that way. For their friends, family, colleagues, they know place where you can plan. I need some help on this. I’ve got questions about this. I need to talk about this. 504832 9200 there’s only one number to call, no matter where you want to be. 504832 9200 or go to Gregory ricks.com you

Disclosure 16:42
Investment advisory products and services are made available through AE Wealth Management LLC, a registered investment advisor. Insurance products are offered through the insurance business Gregory Ricks and Associates, Inc, a wealth management does not offer insurance products. The insurance products offered by Gregory Ricks and Associates, Inc, are not subject to investment advisor requirements. Investing involves risk, including the potential loss of principal, any references to protection, safety or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strengths and claims of the paying ability of the issuing Carrier. This podcast is intended for informational purposes only. It is not intended to be used as a sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual situation? Gregory Ricks and Associates is not permitted to offer and no statement made during the show shall constitute tax or legal advice. Our firm is not affiliated with nor endorsed by the US government or any other governmental agency. The Information and opinions contained herein provided by third parties have been attained by sources believed to be reliable, but the accuracy and completeness cannot be guaranteed by Gregory Ricks and Associates, please remember that converting an employer plan account to a Roth IRA is a taxable event. Increase in taxable income from the Roth IRA conversion may have several consequences, including, but not limited to a need for additional tax withholdings or estimated tax payments, the loss of certain tax deductions and credits and higher taxes on Social Security benefits and higher Medicare premiums, be sure to consult with a qualified tax advisor before making any decisions with your IRA. Neither AE wealth management or advisors providing investment advisory services through AE Wealth Management recommend or facilitate the buying or selling of cryptocurrencies. Third parties and guests of the show are not affiliated with nor do their opinions reflect those of Gregory Ricks and Associates, or AE wealth management. Ae Wealth Management provides services without regard to political affiliation and the views of individual advisors do not necessarily reflect the views of AE wealth management. We are ask Gregory.