Latest / HPK Provident Advisors: The Weekly Bull / Jobs Data Surprise And Market Rally

Transcript

Jobs Data Surprise And Market Rally · HPK Provident Advisors: The Weekly Bull

• 0:04
  SPEAKER_01: Welcome to Friday Live.
• 0:05
  SPEAKER_01: Every Friday, some of the partners of HVK Provident get together and discuss what we're seeing going on in the markets, the economy, and tying in some financial planning topics.
• 0:13
  SPEAKER_01: So with me today, Brian Peluso.
• 0:16
  SPEAKER_01: Brian, we missed you.
• 0:18
  SPEAKER_00: Well, I'm glad to be back.
• 0:20
  SPEAKER_00: Uh took a little uh little vacation down south.
• 0:23
  SPEAKER_00: Enjoyable, hot, well deserved.
• 0:26
  SPEAKER_00: Well, hey, I don't know about that, but I did it.
• 0:28
  SPEAKER_00: You know, you get in the ocean, get some surfing?
• 0:31
  SPEAKER_00: Uh no surfing.
• 0:33
  SPEAKER_00: Boy, the uh I was in uh southern part of South Carolina, not far from the Georgia border.
• 0:39
  SPEAKER_00: There were no waves.
• 0:41
  SPEAKER_00: It was uh really it was very I mean the east coast gets like pretty flat in summertime.
• 0:49
  SPEAKER_01: Yeah, swells coming in with storms, but overall it's it's pretty flat.
• 0:54
  SPEAKER_00: Yeah, it wasn't uh not big waves.
• 0:57
  SPEAKER_00: Uh the water was warm, warmer than I would even like it.
• 0:59
  SPEAKER_00: I'd like it to be cool and refreshing.
• 1:01
  SPEAKER_00: Uh we had a nice time.
• 1:02
  SPEAKER_00: Had a very nice time.
• 1:03
  SPEAKER_00: So I'm back, back in the saddle, as they say.
• 1:06
  SPEAKER_01: I actually scheduled uh Airbnb for a couple weeks near the coast.
• 1:11
  SPEAKER_01: Check out the Pacific and get a little bit of surfing in.
• 1:16
  SPEAKER_01: I'll probably work from there, but be nice to get away.
• 1:19
  SPEAKER_01: And then I'm I'm coming to Sarasota briefly the following week, and then we're heading up to Pennsylvania for our annual client appreciation event baseball game.
• 1:29
  SPEAKER_01: Yeah, look forward to that.
• 1:30
  SPEAKER_01: It's usually a good turnout, good time.
• 1:34
  SPEAKER_00: Yeah, we do the uh the last uh Friday regular season home game for the Washington Wild Things, Washington, Pennsylvania.
• 1:43
  SPEAKER_01: It is a great time to which this year it is on September 4th.
• 1:49
  SPEAKER_00: Friday, September 4th.
• 1:50
  SPEAKER_00: Yes, we're gonna kick off the Labor Day weekend uh with some uh some baseball, uh uh apple pie, all those good things.
• 2:00
  SPEAKER_00: Well, I don't know if I'll have apple pie.
• 2:02
  SPEAKER_00: It's gonna be a lot of ice cream and hot dogs in it.
• 2:05
  SPEAKER_01: Well, nice.
• 2:06
  SPEAKER_01: And I apologize for my camera again this week.
• 2:09
  SPEAKER_01: I don't know what's going on with it.
• 2:10
  SPEAKER_01: I need to play around with my privacy settings or something because it is not turning on.
• 2:16
  SPEAKER_01: And I'm I just use the default computer camera, so I've never had an issue with it before.
• 2:21
  SPEAKER_01: So I will figure that out by next week.
• 2:23
  SPEAKER_01: Um so you'll just have to hear me talk about economic data this week, which we had quite a bit of.
• 2:31
  SPEAKER_01: Um we had uh, I mean, pretty much everything outside of inflation and retail sales.
• 2:38
  SPEAKER_01: We had ISM manufacturing, ISM services, the job openings, ADP jobs number, and then as always, the first Friday of the month, non-farm payrolls.
• 2:49
  SPEAKER_01: So, where would you like me to start, Brian?
• 2:52
  SPEAKER_00: Ooh, let's start with the most important, most uh impactful.
• 2:58
  SPEAKER_01: And okay, jobs.
• 3:01
  SPEAKER_01: Yep.
• 3:02
  SPEAKER_01: All right.
• 3:03
  SPEAKER_01: Well, I'm gonna start with a less important one first, the ADP numbers, which came in a little weaker than expected.
• 3:09
  SPEAKER_01: Um, however, there was some bright spots.
• 3:12
  SPEAKER_01: Uh wage growth was decent in this reading, especially for job switchers, I think was around a 7% wage growth, which is very strong.
• 3:20
  SPEAKER_01: And, you know, it kind of pointed to some uh some contrary uh perspective to the K-shaped economy, where the lowest income bracket actually saw the biggest wage gains, where there was a little deceleration in the middle class and a slight increase in the upper class.
• 3:40
  SPEAKER_01: So maybe that'll kind of change the dynamics.
• 3:42
  SPEAKER_01: You know, it's been the lower income cohort that doesn't have the financial assets like stock market exposure and real estate exposure that have really been feeling the brunt of the higher inflation numbers.
• 3:54
  SPEAKER_01: Um, getting to the non-farm payrolls number, which is the BLS, the one everyone looks at, came in a bit of a surprise.
• 4:03
  SPEAKER_01: Um, I think consensus was looking for 80,000 positive, and we actually came in negative 20,000 plus jobs.
• 4:11
  SPEAKER_01: Um, there was also about 100,000 revision to the prior two months.
• 4:16
  SPEAKER_01: So seeing a little more weakness there.
• 4:18
  SPEAKER_01: Um on the positive front, unemployment rate ticked down to 4.1%.
• 4:24
  SPEAKER_01: Um, you know, there might be some seasonal dynamics with it.
• 4:28
  SPEAKER_01: There was a a pretty large decrease um in government workers.
• 4:32
  SPEAKER_01: I think it was about a$50,000 decrease, uh, not dollar people.
• 4:38
  SPEAKER_01: Um and then wage growth overall was uh weaker than expected.
• 4:43
  SPEAKER_01: So we're certainly seeing some divergence with those two metrics, the the BLS numbers and the the private ADP number.
• 4:51
  SPEAKER_01: So we'll be keeping an eye on that.
• 4:53
  SPEAKER_01: Um, what it means for uh uh future interest rate hikes, potentially, um, I think it dropped about 10% from 50% chance to about 40.
• 5:05
  SPEAKER_01: Um, so what that means is the market likes it.
• 5:09
  SPEAKER_01: We are actually up today about a half a percent as of the recording of this video.
• 5:14
  SPEAKER_01: Um, outside of that, we got a little bit weaker job openings.
• 5:18
  SPEAKER_01: Um, ADP or not ADP, ISM services came in slightly below expectation, but was expansionary.
• 5:26
  SPEAKER_01: Um, new orders looked pretty strong.
• 5:30
  SPEAKER_01: Uh, I would say some negative aspects where prices paid saw a big increase, and unemployed the employment situation saw a decrease or a deceleration.
• 5:40
  SPEAKER_01: Um, on the flip side, we're seeing a lot of strength in ISM manufacturing.
• 5:45
  SPEAKER_01: It must be due to some of this AI infrastructure build out, but I think we're about six or seven months of expansionary territory.
• 5:54
  SPEAKER_01: We beat on the top line.
• 5:57
  SPEAKER_01: Um, employment situation looks good, prices paid actually went down.
• 6:01
  SPEAKER_01: Um, so you know, good things on that front.
• 6:04
  SPEAKER_01: Um, next week it'll be a real uh important week for what in terms of what it'll mean for the Fed, because we'll get the uh CPI data, the inflation data on Wednesday, which is expected to come in higher than last month, but on an annualized basis, uh continue to see a deceleration.
• 6:22
  SPEAKER_01: And then we'll get PPI on Thursday and retail sales on Friday.
• 6:26
  SPEAKER_01: So that'll have a big impact on um the next Fed meeting.
• 6:30
  SPEAKER_01: And we don't have the official one um in August.
• 6:34
  SPEAKER_01: We have the Jackson Hole Symposium, which is usually an entertaining event, um, but typically not too market moving outside of that famous eight-minute or seven-minute Powell speech we had in uh what was that 21 or 22?
• 6:53
  SPEAKER_01: But it pretty much started the the rate hikes.
• 6:56
  SPEAKER_01: So we will keep an eye on all that and what it means for the new Fed chair.
• 7:01
  SPEAKER_01: Um, Brian, any questions on the economy or the markets?
• 7:04
  SPEAKER_01: I mean, the man, that's a lot.
• 7:06
  SPEAKER_01: The market had a nice rebound.
• 7:08
  SPEAKER_01: We're up close to 4% on the week.
• 7:11
  SPEAKER_01: Um, really broad, really healthy.
• 7:14
  SPEAKER_01: Um earnings have been great.
• 7:16
  SPEAKER_01: Um, I think we're pacing for about 25% earnings growth with about an 88% beat rate.
• 7:24
  SPEAKER_01: Uh, there's still a lot of uncertainty going on with the war.
• 7:27
  SPEAKER_01: Oil keeps fluctuating, but we're kind of seeing that lower end of the crude oil prices.
• 7:33
  SPEAKER_01: Um, so we will keep an eye on all that.
• 7:35
  SPEAKER_01: Uh, getting to our blog posts.
• 7:37
  SPEAKER_00: Monday, I gotta say, you know, I will make another um in a lot of my discussions over the last month and a half, two months, I I'm starting to feel that there's a disconnect between the average American and the reality of the economy.
• 7:53
  SPEAKER_00: What I'm hearing on a regular basis is Brian, uh, how do people do this in the economy the way it is?
• 8:00
  SPEAKER_00: And uh implying very negative.
• 8:03
  SPEAKER_00: Um, you know, how are we gonna, you know, how are we gonna get out of this economy?
• 8:11
  SPEAKER_00: It's very interesting to me to hear that, because uh some of the kind of grassroots sentiment I'm getting is, and of course, you know, people use the word economy for the actual economy, they use it for the market, they use it for what they see at the grocery store.
• 8:27
  SPEAKER_00: That is the catch-all phrase, right?
• 8:29
  SPEAKER_00: That covers everything that has anything to do with money, the economy.
• 8:33
  SPEAKER_00: Um I you know, I'm kind of sensing negativity, uh, which is and there's a disconnect because what you're talking about is you know, uh not bad economic data, not great, but right, you know.
• 8:46
  SPEAKER_00: So I mean it could have yeah, everything could always be better, I suppose.
• 8:50
  SPEAKER_01: But um Yeah, and I really think that like what you were referencing, it comes down to food prices, although they're not increasing at the same level they were the past couple years.
• 9:00
  SPEAKER_01: Um, they're still elevated, they're not coming down, and then we all know it's expensive to fill up the gas tank right now.
• 9:09
  SPEAKER_00: I think, you know, that's my sense on it.
• 9:12
  SPEAKER_00: It's the grocery store and the gas pump, and it's painful.
• 9:16
  SPEAKER_00: But the but the that does not equal the economy, that does not equal the market.
• 9:21
  SPEAKER_00: Um, and so a lot of things that you were talking about, a lot of the facts, and we had talked about this uh on a previous Friday live.
• 9:29
  SPEAKER_00: Hey, let's deal with what is.
• 9:31
  SPEAKER_00: Uh, you know, let's take it the uh look at the numbers and um and get kind of the uh to the um essence of these things.
• 9:38
  SPEAKER_00: And what you're saying is it looks pretty decent overall.
• 9:42
  SPEAKER_01: Yeah, I mean, uh we're certainly seeing a slower pace in hiring.
• 9:46
  SPEAKER_01: Um, the three-month average is now about 20,000 a month with the revisions versus we were looking at a hundred thousand before.
• 9:54
  SPEAKER_01: But as you saw, the unemployment rate went down.
• 9:56
  SPEAKER_01: So you don't need as we don't need the two hundred thousand dollar print to keep um the unemployment rate stable.
• 10:04
  SPEAKER_01: We're seeing it decelerate.
• 10:05
  SPEAKER_01: So we might have to just get used to it a lower non-farm payroll number.
• 10:10
  SPEAKER_01: But I don't know, I always get a little worried when we start to see negative readings.
• 10:14
  SPEAKER_01: Um and we see year after year the annualized revisions seem to always come down.
• 10:21
  SPEAKER_01: So it's hard to get a true glimpse of the economic or the the jobs data, but you know, like they say, don't fight the trend.
• 10:30
  SPEAKER_01: The market looks good and we're at all-time highs on the SP 500.
• 10:34
  SPEAKER_01: Um, NASDAQ still has a little room to go.
• 10:36
  SPEAKER_01: Rates are too high, but you know, we don't really uh the market's not worried about that right now.
• 10:42
  SPEAKER_01: Um, it's really being fueled by this earnings growth story.
• 10:45
  SPEAKER_01: And that brings us to our uh Monday article talking about small caps having the first the best first half of the year going back to 1991.
• 10:56
  SPEAKER_01: And a lot of that is uh, I mean, it's it's a mixed thing, but it's a catch-up in valuations.
• 11:02
  SPEAKER_01: They've been deeply depressed for a long time.
• 11:05
  SPEAKER_01: Earnings growth is expected to come in at uh 35% for 2026.
• 11:11
  SPEAKER_01: And then, you know, they have a pretty decent semiconductor exposure, which has really helped fuel the rally.
• 11:17
  SPEAKER_01: So uh the Russell 2000s up about 22% year to date.
• 11:21
  SPEAKER_01: Um, you know, the SP's having a good year too, but not quite as good as that.
• 11:26
  SPEAKER_01: Um, same thing with international.
• 11:29
  SPEAKER_01: I'd say international develops having kind of they've given back a lot of the outperformance um that we saw earlier in the year.
• 11:37
  SPEAKER_01: So um developed international is about equal with the SP 500.
• 11:42
  SPEAKER_01: Uh equal weight SP is doing very well, emerging markets doing very well, bonds not so much, but we'll take what we can get, right?
• 11:50
  SPEAKER_00: Yeah, well, they'll they'll have their day too.
• 11:53
  SPEAKER_00: Anyway, so that was that was uh maybe a little minor diversion, but I think there is a disconnect uh feeling uh between the reality of the economy as we think of it and how people feel about it.
• 12:06
  SPEAKER_01: Anyway, you want to touch on this one, Brian?
• 12:08
  SPEAKER_01: Um, you deal with some clients that maybe they retire before full retirement age, and you know, it's a big change for them to have to cover that health care premium until Medic Medicare um kicks in.
• 12:24
  SPEAKER_00: Yeah, this is this is a big one.
• 12:25
  SPEAKER_00: You know, first of all, he I should tell you, we we do not provide uh healthcare policies, we don't sell healthcare policies, we don't place uh healthcare policies.
• 12:37
  SPEAKER_00: Um so most people get that from either their employer or they get it from Medicare.
• 12:44
  SPEAKER_00: Um and if you're not employed and you're not eligible for Medicare, what is that gap?
• 12:49
  SPEAKER_00: That's kind of what it's talking about.
• 12:50
  SPEAKER_00: This is a huge topic.
• 12:52
  SPEAKER_00: Uh, we say this all the time, but I'm gonna say it specifically.
• 12:55
  SPEAKER_00: It certainly would warrant its own Friday live.
• 12:58
  SPEAKER_00: It would warrant its own uh webinar at some point in time.
• 13:02
  SPEAKER_00: But I should give you the caveat that if you're hearing these things and say, well, I'm gonna go to Brian, maybe he can find me a good healthcare policy.
• 13:08
  SPEAKER_00: I don't.
• 13:09
  SPEAKER_00: That's not what we do.
• 13:10
  SPEAKER_00: However, it's incredibly important, it's absolutely critical, um, in the financial planning process.
• 13:17
  SPEAKER_00: And so, you know, most people know that in general there's exceptions to everything, especially when it comes to a government program.
• 13:25
  SPEAKER_00: There's exceptions to everything.
• 13:26
  SPEAKER_00: But in general, you qualify for Medicare uh at the age of 65.
• 13:30
  SPEAKER_00: You become eligible for Medicare, and you have to be paying into the system throughout your life.
• 13:37
  SPEAKER_00: And again, too many details for this.
• 13:40
  SPEAKER_00: Uh, but we, you know, we do have folks that say, hey, you know, I'm gonna retire at 60, 61, 62, 55, whatever it is.
• 13:46
  SPEAKER_00: And my first question is, how are you gonna cover your health care?
• 13:49
  SPEAKER_00: And that is that's the gap.
• 13:51
  SPEAKER_01: In this was my biggest takeaway from this article that the average health insurance for a family is close to 27,000.
• 14:00
  SPEAKER_01: And while working, your employer is covering about 20,000 of that.
• 14:04
  SPEAKER_01: So you got to make up that extra um amount, 14,000.
• 14:11
  SPEAKER_01: Um, so that that's a big cost.
• 14:13
  SPEAKER_01: And some of our clients, uh, we encourage them to build up their non-retirement account because if they are below the age of 59 and a half, you know, you can't really access those retirement accounts without penalty.
• 14:24
  SPEAKER_00: Well, yeah, and there's you know, there's some caveats to that.
• 14:28
  SPEAKER_00: So, yeah, I you know, I talked to a lot of folks say, Oh my gosh, my health care through work is so expensive.
• 14:34
  SPEAKER_00: Well, you should recognize that based on averages, that your employer is covering about 75% of that.
• 14:41
  SPEAKER_00: So, yeah, it's expensive for everybody.
• 14:43
  SPEAKER_00: And it's going to be super expensive if you don't have employer health coverage and you got to go into the private market.
• 14:49
  SPEAKER_00: And there's a lot of different ways to do that.
• 14:51
  SPEAKER_00: And there are specialized professionals that will help you to understand uh, you know, what kind of private policy, non-work, non-government, what kind of private policy can you get?
• 15:02
  SPEAKER_00: And there's a couple of ways to do that.
• 15:04
  SPEAKER_00: Uh, you can get just a health insurance policy.
• 15:07
  SPEAKER_00: You could go to the exchange, as they call it.
• 15:10
  SPEAKER_00: Most people would recognize that as Obamacare.
• 15:13
  SPEAKER_00: Uh, in Pennsylvania, we had our exchanges called Penny, P-E-N-N-I-E.
• 15:17
  SPEAKER_00: Don't know what it stands for, but you can go on Penny, for example, in Pennsylvania and say, you know, what kind of healthcare coverage can I get?
• 15:24
  SPEAKER_00: But there's underwriting on a lot of those policies.
• 15:27
  SPEAKER_00: So it's not like an employer policy, right?
• 15:29
  SPEAKER_00: If you're an employee, you get the health plan, you're good.
• 15:32
  SPEAKER_00: Um, and it's not like Medicare.
• 15:34
  SPEAKER_00: When you sign up for Medicare at the right time within the right window, again, very detailed.
• 15:39
  SPEAKER_00: Uh, there could may not be underwriting.
• 15:41
  SPEAKER_00: Hey, whatever your health situation, we're gonna sign you up, you're good.
• 15:44
  SPEAKER_00: If you do it on your own, oftentimes there's going to be a lot of questions.
• 15:49
  SPEAKER_00: And what is your health history?
• 15:50
  SPEAKER_00: What is your current health?
• 15:52
  SPEAKER_00: Um, you know, what kind of uh good or bad habits you have, and that kind of thing.
• 15:56
  SPEAKER_00: And that's going to determine what your your premium is gonna be.
• 16:00
  SPEAKER_00: Now, on this article, and you could take a look at it, what it indicates is on the exchange, the lower level policies are about$500, the higher level policies for an individual, for an individual are around$600 a month.
• 16:13
  SPEAKER_00: But that's you know, that's on average that includes the super healthy people, that includes the people that uh maybe have some habits that uh an underwriter doesn't like as much.
• 16:25
  SPEAKER_00: You know, the point of this article is you you really um, you know, when most people think about retirement and how much money did I save, and yeah, that's incredibly important.
• 16:37
  SPEAKER_00: And can I go from my um, you know, my uh physical and my intellectual capital to have income to live, right?
• 16:47
  SPEAKER_00: That's your working life.
• 16:49
  SPEAKER_00: Uh, you're either physically working for some sort of earnings or intellectually you have some uh some abilities that uh you're are employable and people will pay you for.
• 16:58
  SPEAKER_00: But then when you switch into retirement, you're talking about what um, you know, what have I saved?
• 17:05
  SPEAKER_00: It is my capital that I have saved that becomes your paycheck, if you will.
• 17:09
  SPEAKER_00: Most people focus on that.
• 17:11
  SPEAKER_00: Uh, but in the financial planning process, we really need to look at what are those expenses.
• 17:17
  SPEAKER_00: People in retirement, they want to think about their expenses as, you know, I'm going to Europe, I get to do what I want, uh, you know, maybe I have a mortgage left over and that kind of thing.
• 17:26
  SPEAKER_00: Uh I say all the time, this is my personal uh planning approach.
• 17:29
  SPEAKER_00: I would indicate to you that there are two things really that ruin retirements.
• 17:33
  SPEAKER_00: And uh neither of these two things really as much have to do with the markets.
• 17:37
  SPEAKER_00: One is spending like a fool.
• 17:40
  SPEAKER_00: And I'm talking about overspending what your capital is, what your uh savings are.
• 17:46
  SPEAKER_00: Uh that one, that will surely uh ruin a retirement plan, especially early in retirement.
• 17:52
  SPEAKER_00: But the really the big one is uh major, uncovered, major medical events.
• 17:58
  SPEAKER_00: Uh that will ruin a retirement plan.
• 18:01
  SPEAKER_00: And for some people, regardless of what you say, if you have uncovered or not adequately covered major health events, uh, I mean, that could uh put a retirement plan into tailspin.
• 18:12
  SPEAKER_00: So if you're not eligible for uh Medicare at the age of 65, in general, there are exceptions.
• 18:20
  SPEAKER_00: Uh, but in general, if you you can't be on Medicare and you no longer uh have an employer plan, what do you do?
• 18:27
  SPEAKER_00: Uh what would those costs be?
• 18:29
  SPEAKER_00: Those are huge.
• 18:30
  SPEAKER_00: That that becomes, I would submit to you, the biggest discussion for people that want to retire early, when I say early prior to Medicare age, age of 65.
• 18:39
  SPEAKER_00: How are you going to cover those expenses?
• 18:41
  SPEAKER_00: Is it going to be a private policy?
• 18:43
  SPEAKER_00: Is it going to be on the exchange?
• 18:44
  SPEAKER_00: What is your health situation?
• 18:46
  SPEAKER_00: What might that cost be?
• 18:47
  SPEAKER_00: And I would suggest to you that you make sure that you um have really good coverage for your situation.
• 18:55
  SPEAKER_00: So I mean, you know what's quoted in this article is that at an individual level, you know, if you have a kind of a gold level uh policy off the exchange, that's going to be about 600 bucks per person.
• 19:08
  SPEAKER_00: So you're easily looking at$1,500,$1,600 per person per month uh for a couple uh in those years before you qualify for, before you're eligible for Medicare.
• 19:20
  SPEAKER_00: So you want to retire at 62.
• 19:21
  SPEAKER_00: You got three years of 16, 15, 16, sometimes more.
• 19:25
  SPEAKER_00: That's just on the premiums.
• 19:26
  SPEAKER_00: That doesn't include the coinsurance, co-pays, deductibles, and things along those.
• 19:31
  SPEAKER_00: So it is um, I and again, I would submit to you outside of spending like a fool, it is the number one consideration.
• 19:39
  SPEAKER_00: Um uh when you when you're thinking about retiring, whether that's retire after the or before the age of 65.
• 19:47
  SPEAKER_00: Uh so those are things that we we look at.
• 19:49
  SPEAKER_00: We do partner with some folks that actually will place these policies for you.
• 19:53
  SPEAKER_00: We just kind of contemplate how the numbers affect your life over time.
• 19:56
  SPEAKER_00: Uh but this is big.
• 19:58
  SPEAKER_00: This is big.
• 19:59
  SPEAKER_00: People feel this intuitively, uh, but it's kind of shocking when they actually look at the numbers.
• 20:04
  SPEAKER_00: But those are things that you know we could kind of run and project.
• 20:07
  SPEAKER_00: Uh my financial planning approach is always expect the worst, hope for the, you know, hope for the best, expect the worst somewhere in between your reality.
• 20:14
  SPEAKER_00: So we do that planning uh um, you know, kind of the plan for the worst.
• 20:20
  SPEAKER_00: Uh, we we put higher premiums in there and kind of project things out that way.
• 20:24
  SPEAKER_00: And if your premiums end up to be lower, um, then so be it.
• 20:29
  SPEAKER_00: It's a big one.
• 20:30
  SPEAKER_00: I could go on and on.
• 20:31
  SPEAKER_00: We talk about this every day and something else.
• 20:33
  SPEAKER_01: And then Thursday's post was just about you know, pros and cons of working while getting social security.
• 20:39
  SPEAKER_01: Um, it there is a maximum limit before you start to get taxed on it, right?
• 20:45
  SPEAKER_00: There's an earnings limit.
• 20:46
  SPEAKER_00: Uh 2026, they change this every year, but in 2026, if you are taking any sort of social security benefit, I don't care what it is.
• 20:56
  SPEAKER_00: It could be a uh retirement benefit, it could be a spousal benefit, it could be a survivor benefit, it could be a disability benefit.
• 21:03
  SPEAKER_00: If you are receiving benefits from Social Security prior to your own full retirement age, so they're looking at you.
• 21:10
  SPEAKER_00: So uh, why do I make that distinction?
• 21:12
  SPEAKER_00: Because if you're on a spousal benefit, let's say your spouse is 70 and you're 62, um, for this metric, they're looking at your full retirement age.
• 21:24
  SPEAKER_00: So somebody who's 70, they've or they're way beyond full retirement age.
• 21:28
  SPEAKER_00: You might be collecting a spousal benefit off of that person and you're 62.
• 21:33
  SPEAKER_00: But if you make more than$24,480 because you are 62 and prior to your full retirement age, uh, they're going to start uh reducing that spousal benefit you're receiving off of your 70 uh year old spouse.
• 21:48
  SPEAKER_00: Um, so in this part of Social Security, they're looking at your age and uh how much you're making.
• 21:56
  SPEAKER_00: So this is earnings from work, by the way.
• 21:58
  SPEAKER_00: This is W2 self.
• 22:00
  SPEAKER_00: Employment earnings.
• 22:01
  SPEAKER_00: So if you're making more from some sort of work, more than$24,480, and collecting Social Security prior to your own full retirement age, they're going to start reducing that uh Social Security benefit$1 for every$2 over that limit.
• 22:17
  SPEAKER_00: So we do work with folks and say, hey, I'm going to retire early and you know I'm going to start my Social Security.
• 22:22
  SPEAKER_00: Sometimes good decision, sometimes bad decision.
• 22:26
  SPEAKER_00: I'm just going to start collecting.
• 22:27
  SPEAKER_00: This is what I hear all the time.
• 22:29
  SPEAKER_00: I'm not agreeing with it.
• 22:30
  SPEAKER_00: Well, I better start collecting.
• 22:32
  SPEAKER_00: I'm not full retirement age.
• 22:34
  SPEAKER_00: I better start getting any sort of money because the system's going bust.
• 22:37
  SPEAKER_00: I don't believe that, but the system's going bust.
• 22:39
  SPEAKER_00: I might as well get a few dollars for the next few years as opposed to nothing.
• 22:42
  SPEAKER_00: There's no reason for me to delay.
• 22:44
  SPEAKER_00: I'm going to collect early, but I'm going to continue to work.
• 22:48
  SPEAKER_00: So that's one of my caveats in the basics of Social Security complaining.
• 22:54
  SPEAKER_00: Be very careful about continuing to work and collect Social Security prior to your own full retirement age, because there could be a reduction.
• 23:04
  SPEAKER_00: It's alluded to in this article a little bit.
• 23:06
  SPEAKER_00: It's only a temporary reduction.
• 23:08
  SPEAKER_00: That's kind of true.
• 23:09
  SPEAKER_00: If you have an earnings test, the 24,480 reduction prior to full retirement age, and you continue to work, if they do um uh reduce your benefit because of that reduction, at your full retirement age, you start to get some of that back.
• 23:28
  SPEAKER_00: But you get it back very slowly and over a very long time.
• 23:32
  SPEAKER_00: So it's not a complete loss of those benefits, uh, but it takes a really long time to get them back if they reduce uh your benefit.
• 23:41
  SPEAKER_00: So when you turn full retirement age for most of us right now, it's the age of 67.
• 23:46
  SPEAKER_00: We turn full retirement age if you had been reduced based on this earnings test uh in years prior to that, they start to slowly increase your Social Security benefit at the age of 67 to make up for it.
• 24:00
  SPEAKER_00: But it takes a long time.
• 24:01
  SPEAKER_01: So just be very you uncover all this through the financial planning process with prospects and clients, whether they can retire with the having to now pay for health insurance, whether it makes sense for them to work with how it'll affect their social security.
• 24:16
  SPEAKER_01: You really dive into all the details and give good recommendations based on that.
• 24:21
  SPEAKER_00: Well, you know, hey, yeah, you kind of combine some of these ideas together.
• 24:24
  SPEAKER_00: Somebody says, Yeah, I'm gonna work part-time.
• 24:26
  SPEAKER_00: I'm gonna work part-time, and I'm gonna retire at 62, I'm gonna work part-time, I'm gonna collect Social Security.
• 24:31
  SPEAKER_00: Well, that's awesome.
• 24:32
  SPEAKER_00: Think about this.
• 24:33
  SPEAKER_00: You collect, let's say it does make sense for you individually.
• 24:36
  SPEAKER_00: I'm certainly not advocating everybody collect earlier or later.
• 24:39
  SPEAKER_00: It's a very individual decision.
• 24:41
  SPEAKER_00: But let's say it makes sense for the person who collects it, uh, Social Security at the age of 62.
• 24:45
  SPEAKER_00: They work part-time, they make less than 24,480, uh, so their Social Security is not reduced.
• 24:52
  SPEAKER_00: And that part-term work makes them eligible for some sort of employer health care.
• 24:57
  SPEAKER_00: That's a really great scenario, right?
• 24:59
  SPEAKER_00: You got the health care covered through the employer, you're getting some Social Security, you got some money from work, but you're not making so much Social Security's reduced.
• 25:06
  SPEAKER_00: Uh and, you know, and you get your health care.
• 25:09
  SPEAKER_00: So you get your full well.
• 25:11
  SPEAKER_00: If you take Social Security at 62, it's reduced by your retirement benefit, it's reduced by 30%.
• 25:16
  SPEAKER_00: But you're getting your reduced Social Security benefit at the age of 62, but it's not further reduced because of income, and you got this part-time work where you have healthcare.
• 25:24
  SPEAKER_00: Awesome.
• 25:25
  SPEAKER_00: It's a really great plan.
• 25:26
  SPEAKER_00: And but yeah, like the financial planning process is looking at each of those dials and kind of adjusting each of them.
• 25:32
  SPEAKER_00: For sure.
• 25:33
  SPEAKER_00: So aren't you glad I'm back?
• 25:35
  SPEAKER_00: You got me wound up on some of my I know.
• 25:37
  SPEAKER_01: I I brought up your uh your favorite topic, Social Security.
• 25:41
  SPEAKER_00: It's important.
• 25:42
  SPEAKER_00: It's important.
• 25:43
  SPEAKER_00: So yeah, those were the kind of the blogs for the week.
• 25:46
  SPEAKER_00: The big ones, anyway.
• 25:47
  SPEAKER_01: Well, anything else you want to add before we wrap up and flip on the disclosures?
• 25:52
  SPEAKER_01: Um thoughts, hopes, dreams, fears.
• 25:56
  SPEAKER_00: Well, you know, they you know, there's so much to cover.
• 25:58
  SPEAKER_00: I I did, you know, I I I love to look kind of what went on in this day in history.
• 26:02
  SPEAKER_00: Uh, one of the things I looked at today, this was uh in 1782, is when George Washington uh um came up with uh the Purple Heart, uh, which is you know incredible.
• 26:15
  SPEAKER_00: So uh tip of the cap to all the folks in the uh in the armed services and and certainly to the folks that uh uh have received the Purple Heart since 1782.
• 26:27
  SPEAKER_00: Uh so it was this day in history in 1782.
• 26:30
  SPEAKER_00: This this one I also like.
• 26:31
  SPEAKER_00: This is uh in 1909.
• 26:33
  SPEAKER_00: I've got to read this one because I'm fascinated by it.
• 26:35
  SPEAKER_00: This is from uh history.com.
• 26:37
  SPEAKER_00: Uh 1909.
• 26:39
  SPEAKER_00: I don't know how they determined these are the first people to do it.
• 26:41
  SPEAKER_00: Uh, an adventurous 22-year-old homemaker and three friends completed the first all-female cross-country road trip.
• 26:49
  SPEAKER_00: I I love traveling.
• 26:51
  SPEAKER_00: Um, and I think this is uh spectacular.
• 26:54
  SPEAKER_00: And I I if there is ever a movie, Thelman Louise, I guess, kind of comes close to it in some way.
• 27:00
  SPEAKER_00: Uh, but if there was ever a movie about uh uh these four folks uh in 1909 driving across the country, it took them 59 days from New York to San Francisco.
• 27:10
  SPEAKER_00: I am watching that movie.
• 27:12
  SPEAKER_00: An incredible journey, and I love the wonder lost of that crew back there in 1909.
• 27:16
  SPEAKER_00: Anyway, that's all I got.
• 27:18
  SPEAKER_01: Well, that is a fun fact.
• 27:21
  SPEAKER_01: All right, well, I will flip on the disclosures.
• 27:24
  SPEAKER_01: Everyone have a good weekend, and we will be back next Friday by 1230 Eastern time to discuss the latest inflation reports and what it means for the markets and the Fed.
• 27:34
  SPEAKER_00: Security is offered through LPL Financial LLC, member FINRA and SIPC.org.
• 27:39
  SPEAKER_00: Advisory services offered through LPL Financial LLC, a registered investment advisor.
• 27:45
  SPEAKER_00: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 27:51
  SPEAKER_00: Content discussed is for informational purposes only and not intended as an offer or solicitation to buy or sell any security or investment strategy.
• 28:00
  SPEAKER_00: Any opinions expressed are those of the authors and do not necessarily reflect the views of LPL Financial or its affiliates.
• 28:06
  SPEAKER_00: All investments involve risk, including the possible loss of principal.
• 28:11
  SPEAKER_00: This communication may include links or references to third-party websites.
• 28:14
  SPEAKER_00: These links are provided as a convenience only.
• 28:17
  SPEAKER_00: LPL Financial and its representatives are not responsible for the accuracy or content of such sites.
• 28:22
  SPEAKER_00: Brian, Mike, and David and HBK Provident Advisors may only transact business in states where they are properly registered or exempt from registration.
• 28:31
  SPEAKER_00: Please contact us directly for information regarding licensing and registration status.
• 28:37
  SPEAKER_00: Past performance is not indicative of future results.
• 28:41
  SPEAKER_00: You should consult with your financial advisor, tax professional, and or attorney regarding your specific situation before making any investment.