Latest / HPK Provident Advisors: The Weekly Bull / Time, Not Money, Is The Real Currency Of Financial Planning

Transcript

Time, Not Money, Is The Real Currency Of Financial Planning · HPK Provident Advisors: The Weekly Bull

• 0:00
  SPEAKER_00: Welcome to HBK Provenant Advisors Friday Live.
• 0:04
  SPEAKER_00: This is Brian Peluso coming to you from the Pittsburgh, Pennsylvania area.
• 0:08
  SPEAKER_00: I'm one of the partners at HBK Provenant Advisors.
• 0:11
  SPEAKER_00: Actually, I have three partners myself, Michael Kutch, David Harper.
• 0:14
  SPEAKER_00: David Harper's on the west coast of Florida.
• 0:16
  SPEAKER_00: Michael Kutch is on the east coast of Florida.
• 0:18
  SPEAKER_00: Actually, both David and Michael are on a cruise right now because Mike got married this week on Wednesday, and I don't want to steal his thunder from any of the updates he might give us when he comes back next week.
• 0:29
  SPEAKER_00: But here is shortly after the ceremony.
• 0:32
  SPEAKER_00: So congratulations to Mike and Corinne.
• 0:34
  SPEAKER_00: Super excited for you.
• 0:36
  SPEAKER_00: And uh the best wishes for health and happiness and uh this wonderful new phase of your life.
• 0:43
  SPEAKER_00: So again, I'll let Mike give all the updates.
• 0:45
  SPEAKER_00: But what we do on uh Fridays on Facebook, 12:30 p.m.
• 0:49
  SPEAKER_00: Eastern Standard Time, is we review some of the content that we put out on social media throughout the week.
• 0:56
  SPEAKER_00: Mike does a week ahead commentary uh each Monday, which he is not going to do because of aforementioned uh uh events.
• 1:05
  SPEAKER_00: Uh he's not going to be able to put the uh week ahead out on Monday.
• 1:10
  SPEAKER_00: Uh last Monday he did though.
• 1:12
  SPEAKER_00: Uh so we'll talk a little bit about that, uh, talk a little bit about the Social Security cost of living adjustment as well.
• 1:18
  SPEAKER_00: You can find the uh content that I'm talking about right here on our webpage.
• 1:22
  SPEAKER_00: So if you go to www.hbkprovident.com, go to the resources and then go to the blog.
• 1:29
  SPEAKER_00: You can see uh this commentary.
• 1:31
  SPEAKER_00: So this was uh Mike's week ahead.
• 1:34
  SPEAKER_00: And um, you know, one of the things I would highlight, he speaks uh about it in far more in depth than I do, is that we do expect that the market would have a pullback.
• 1:43
  SPEAKER_00: And what does that that mean?
• 1:44
  SPEAKER_00: We think that uh market goes down at some point for some period of time, right?
• 1:49
  SPEAKER_00: We don't know what that's gonna be or how long that's gonna be.
• 1:52
  SPEAKER_00: Uh, but we do think the market needs to take a little bit of a breather.
• 1:56
  SPEAKER_00: It's probably ahead of where it should be.
• 1:58
  SPEAKER_00: Um, and we don't worry about that.
• 2:00
  SPEAKER_00: We kind of look forward to that actually.
• 2:02
  SPEAKER_00: Uh, it actually could get to the point uh where it goes down and you start to think, uh-oh, here it is.
• 2:08
  SPEAKER_00: Whatever you think it is, we're gonna have this uh long uh downturn in the market.
• 2:15
  SPEAKER_00: It's gonna be terrible.
• 2:16
  SPEAKER_00: We don't see that.
• 2:17
  SPEAKER_00: We do see that the market pulls back a little bit.
• 2:19
  SPEAKER_00: There's so much going on.
• 2:20
  SPEAKER_00: You know, we still have the government shut down.
• 2:22
  SPEAKER_00: Uh, we've got mixed data uh as far as jobs and interest rates and all these other things.
• 2:28
  SPEAKER_00: So it's really hard to pick a path forward, uh, which is really uh okay for us, if you will, especially in our managed portfolios.
• 2:36
  SPEAKER_00: Mike's our portfolio manager.
• 2:38
  SPEAKER_00: Uh we can make adjustments along the way, has been raising a little bit of cash, uh, which is good, buffers a little bit of the downturns, and then makes those downturns an opportunity if there's cash available to invest in things that we do like, um, that might be at a slightly better price.
• 2:55
  SPEAKER_00: Excuse me.
• 2:57
  SPEAKER_00: Uh so uh now on Wednesday, I I put out uh the third in my series uh about how financial planning is really more about time than money.
• 3:07
  SPEAKER_00: People think about financial planning and they think about dollar side, right?
• 3:10
  SPEAKER_00: What is the best use of my money at any given time?
• 3:13
  SPEAKER_00: And that is super important.
• 3:15
  SPEAKER_00: In my view, I do it a lot of the planning here.
• 3:18
  SPEAKER_00: My view, financial planning is more about time.
• 3:21
  SPEAKER_00: It's about maximizing your time, being efficient with your time, using your dollars to serve your most limited resource, which is your time.
• 3:30
  SPEAKER_00: And this uh particular one was about insurance coverages in particular.
• 3:35
  SPEAKER_00: Of course, everything in insurance is talking about, you know, what's the premium?
• 3:39
  SPEAKER_00: What's the coverage I get?
• 3:40
  SPEAKER_00: I don't care if it's your car insurance or health insurance, home insurance, uh, life insurance, disability insurance, whatever it might be.
• 3:46
  SPEAKER_00: Everybody looks, how much does it cost?
• 3:48
  SPEAKER_00: How much do I get or does somebody get uh in the event that something happens, right?
• 3:55
  SPEAKER_00: Um if you look at it from a time perspective, though, insurance really does maximize your time.
• 4:02
  SPEAKER_00: It gives you the comfort level now that if something happens, that you or your family will be covered.
• 4:10
  SPEAKER_00: Um, if you look at life insurance, for example, it can often feel very expensive.
• 4:15
  SPEAKER_00: And why do you buy life insurance?
• 4:17
  SPEAKER_00: There's a lot of different reasons in the insurance aspect of the planning that we we do.
• 4:23
  SPEAKER_00: Um, there's a lot of different ways to use insurance, and there's a lot of really interesting and creative ways, depending upon your situation.
• 4:30
  SPEAKER_00: But in the most basic sense, you buy life insurance to uh replace the income that you would have had if you're not here.
• 4:39
  SPEAKER_00: And that income could either go to pay off debts that you have, it could go to provide for other people, family, children, and that kind of thing.
• 4:47
  SPEAKER_00: So if you have life insurance, how does that help your time?
• 4:50
  SPEAKER_00: Well, it gives you the comfort now to maximize this moment in your life because if something happens, you know that your loved ones will be cared for, you know that your bills will be paid off, uh, in that very basic example.
• 5:03
  SPEAKER_00: So um it really does help you maximize your time now.
• 5:07
  SPEAKER_00: It gives you a comfort level that wherever this money is going, let's say to spouse and children or loved ones or whatever it might be, if you're not here, that their time um is bettered, if you will, even though you wouldn't be here, because if your life insurance pays out, that means you're not here.
• 5:27
  SPEAKER_00: Uh, but you do have the comfort level that their time into the future would be incrementally better because they wouldn't have finance worries.
• 5:36
  SPEAKER_00: So that was uh I've I'm doing a nine-part series on why financial planning, in my opinion, is more about maximizing time than it is dollars.
• 5:45
  SPEAKER_00: Certainly it involves dollars, but it is about maximizing time.
• 5:48
  SPEAKER_00: Uh, Mike also talked about should you max out your 401k?
• 5:52
  SPEAKER_00: Uh, the simple answer is uh that depends.
• 5:56
  SPEAKER_00: And there's a lot of different aspects to 401ks, and it's a very, very personal decision.
• 6:02
  SPEAKER_00: And I will re-emphasize that financial planning is a very personal thing.
• 6:08
  SPEAKER_00: Um, you could live in a neighborhood where everybody's the same age, they have the same house, they have the same white pickets, some fans, same few cars in the driveway.
• 6:15
  SPEAKER_00: You all work at the same place, and you have the same two-point uh number of children, 2.3, uh is the national average.
• 6:23
  SPEAKER_00: And you could talk to your neighbor, and your neighbor could say, Oh, I did this.
• 6:26
  SPEAKER_00: And you could look at them and say, Wow, they're the same age, they have the same kids, they have the same job, I should do what they do.
• 6:31
  SPEAKER_00: Not necessarily, not true at all, as a matter of fact.
• 6:33
  SPEAKER_00: 401k is very similar.
• 6:35
  SPEAKER_00: A couple different ways you put money into a 401k if it's available to you.
• 6:39
  SPEAKER_00: Uh, one, you could do it before taxes or after taxes.
• 6:43
  SPEAKER_00: So you can put money into a 401k where you don't pay taxes in that year, and then it goes in there, it grows tax deferred.
• 6:49
  SPEAKER_00: Then when you take it out, you pay taxes on it.
• 6:52
  SPEAKER_00: There are raw 401ks available to some of you.
• 6:55
  SPEAKER_00: So you put money in that's already been taxed, you don't get a break on it on the way in, it grows tax protected.
• 7:01
  SPEAKER_00: And then if you hold it for long enough and you live by the IRS rules, there is a point in time where you can take that out tax-free.
• 7:08
  SPEAKER_00: So that is one factor.
• 7:10
  SPEAKER_00: Uh, the other factor is do you have the cash flow?
• 7:12
  SPEAKER_00: Uh, does it make sense for you to be able to maximize your 401k?
• 7:16
  SPEAKER_00: Should you do a portion of traditional, which is the pre-tax, uh Roth, which is the post-tax.
• 7:23
  SPEAKER_00: Uh, so all of those things come into play uh when you're looking at a 401k.
• 7:28
  SPEAKER_00: Make sure you know what you're invested in uh so that you are maximizing uh your dollars going to that.
• 7:34
  SPEAKER_00: Um and also keep in mind that when you put money into a 401k, regardless of how you do it, there's gonna be restrictions around that.
• 7:43
  SPEAKER_00: There are tax breaks, and so then the IRS says, if I'm gonna give you a break, I'm gonna put some um parameters around this.
• 7:51
  SPEAKER_00: So if you can picture that at some point in the distant future that you're going to need money that is not restricted, then the 401k might not be the best place for you.
• 8:01
  SPEAKER_00: For example, if you're working for an employer and you want to go out on your own and you're gonna need a lot of money to buy into a business or start your own business, then the 401k might not be the best place because although it's tax protected right now, you might get to midlife and decide, wow, I need the liquidity right now, and you might be restricted in the 401k.
• 8:23
  SPEAKER_00: So those are the kind of things that we look at in the um uh the considerations that we go through in the financial planning.
• 8:30
  SPEAKER_00: Uh, one of the things I did want to highlight for you today, and this is a big one.
• 8:34
  SPEAKER_00: Um, this is a big one for me.
• 8:37
  SPEAKER_00: Uh, for those of you who have watched Friday Live before, uh, I enjoy the Social Security planning.
• 8:42
  SPEAKER_00: I think Social Security is very important to many.
• 8:45
  SPEAKER_00: I know it's many, very important to many people.
• 8:47
  SPEAKER_00: It's going to be very important to all of you that have put into the system.
• 8:50
  SPEAKER_00: Uh, just this morning, Social Security Administration announced the cost of living adjustment of 2.8% for 2026.
• 8:58
  SPEAKER_00: Well, what does that mean?
• 8:59
  SPEAKER_00: That means if you're receiving a Social Security check of any form, a retirement check, a disability check, uh, spousal, children, uh, survivor benefits, whatever it is, it's going up by 2.8% in 2026.
• 9:12
  SPEAKER_00: You will get an individual letter if you're receiving benefits right now.
• 9:15
  SPEAKER_00: You get an individual letter indicating exactly how much that means to you each month next year.
• 9:21
  SPEAKER_00: If you are not collecting, they will bake these numbers into uh your social security estimates.
• 9:27
  SPEAKER_00: Uh so you can go right on to, and they indicated here, I'll highlight that for you.
• 9:33
  SPEAKER_00: It's my social security um website.
• 9:37
  SPEAKER_00: So if you go into ssa.gov, if you have a my social security website, that's where it will show you all of your estimates and all of your benefits.
• 9:45
  SPEAKER_00: Great to have a login for that.
• 9:47
  SPEAKER_00: Uh so that's the good news is that um your social security is going up by 2.8% in 2026.
• 9:55
  SPEAKER_00: The not so good news, the trade-off, as I call it, and I put out a social media post on this this morning as well, is that for people that are still working, you may pay more into the system.
• 10:05
  SPEAKER_00: Right now, you pay 6.2% of your wages up to$176,000 100, and your employer pays 6.2% of your wages up to 176,100 in 2025.
• 10:18
  SPEAKER_00: If you're self-employed, you pay the whole 12.4%.
• 10:22
  SPEAKER_00: Next year, that limit is going up to$184,000,500.
• 10:27
  SPEAKER_00: So now you will pay 6.2% of your wages up to$184,500, and your employer will as well.
• 10:33
  SPEAKER_00: If you're self-employed, you pay 12.4% up to$184,500.
• 10:40
  SPEAKER_00: So uh take a look out for those uh statements if you're receiving Social Security.
• 10:45
  SPEAKER_00: If you're not yet receiving Social Security, wait till December.
• 10:49
  SPEAKER_00: Uh I would say go in early January, take a look at your My Social Security account and um see what these adjustments might mean to you.
• 11:00
  SPEAKER_00: The average over the last decade is 3.1% uh for cost of living adjustment in Social Security.
• 11:08
  SPEAKER_00: The lifetime of the Social Security program, it's actually a little bit higher than that.
• 11:11
  SPEAKER_00: Haven't done the calculation recently, but the lifetime average of Social Security, which started in 1935, by the way.
• 11:18
  SPEAKER_00: First checks were in 1940.
• 11:20
  SPEAKER_00: But uh it's actually higher if you take the average to the life of uh Social Security.
• 11:26
  SPEAKER_00: Um, so that those are some uh quick updates for you on uh what's happening.
• 11:31
  SPEAKER_00: Take a look at LinkedIn, uh Facebook, take a look at Instagram for posts and updates and whatnot.
• 11:38
  SPEAKER_00: And we would love to get your questions that uh you would like to hear uh covered on Friday live.
• 11:46
  SPEAKER_00: So uh you can reach us uh via our website, hbkprovident.com.
• 11:51
  SPEAKER_00: In the upper right hand side, there is a contact us and you can send uh information to us or questions directly through there.
• 11:57
  SPEAKER_00: You can call our office at 724-463-1331.
• 12:01
  SPEAKER_00: By the way, that rings to all of the locations in uh Pittsburgh, East Coast, and West Coast of Florida.
• 12:08
  SPEAKER_00: Um, so you can do that as well.
• 12:10
  SPEAKER_00: Or you can send us an email directly if you want.
• 12:12
  SPEAKER_00: Info at hpkprovenant.com.
• 12:15
  SPEAKER_00: Uh, we will be back on Halloween uh next Friday, October 31st, 2025, 12 30 p.m.
• 12:22
  SPEAKER_00: Eastern Standard Time on Facebook.
• 12:25
  SPEAKER_00: Uh hope everybody has a great weekend.
• 12:27
  SPEAKER_00: Thanks for tuning in, and we will talk with you soon.