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What Being a Financial Advisor Really Means · Money In Motion with Klaas Financial

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  Speaker 1: And our telephone lines they are open six eight three
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  Speaker 1: two one thirteen ten at six oh eight three two
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  Speaker 1: one thirteen ten. If you have questions for our retirement
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  Speaker 1: planning professionals from Class Financial, love to have you join
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  Speaker 1: us this week again number to get on the air
• 0:14
  Speaker 1: six oh eight three two one thirteen ten. Anything retirement
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  Speaker 1: planning related, Love to have you join us this morning,
• 0:22
  Speaker 1: joined by C. J. Claus and Eric Schwartz of Kloss Financially.
• 0:24
  Speaker 1: Are going to be talking this week about why suitable
• 0:27
  Speaker 1: may not be good enough and it's a really interesting conversation.
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  Speaker 1: I got to see some of the show notes before
• 0:33
  Speaker 1: this week's program and just kind of a look on
• 0:35
  Speaker 1: what we're going to talk about. It's going to be
• 0:37
  Speaker 1: an absolutely fantastic show. Doorf Gay can learn more about
• 0:40
  Speaker 1: Class Financial on their website Class financial dot com. That's
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  Speaker 1: class klaas financial dot com a great resource. You can
• 0:49
  Speaker 1: submit questions to be answered on the on the show,
• 0:51
  Speaker 1: you can schedule a complimentary chat. You can also listen
• 0:54
  Speaker 1: back to this in previous shows. Podcasts all available to
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  Speaker 1: you at Clossfinancial dot com. There are telephone numbers six
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  Speaker 1: eight four four two five six three seven No charge
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  Speaker 1: for that initial get to know your appointment at Loss Financial.
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  Speaker 1: It will be complimentary to you again their number six
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  Speaker 1: oh eight four four two five, six three seven as mentioned,
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  Speaker 1: Joined this week by CJ Closs and Eric Schwartz. CJ,
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  Speaker 1: how you doing this morning?
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  Speaker 2: I'm doing great. How are you, Sean?
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  Speaker 1: I'm doing really well. And happy new year to both
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  Speaker 1: of you. Eric, how was your new year so far?
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  Speaker 1: Or how's it been so far?
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  Speaker 3: You know, not too bad so far. I can't complain.
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  Speaker 3: Twenty twenty six is all right, it's.
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  Speaker 1: Uh, we've eight days into it and going well. It's uh.
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  Speaker 1: We'll keep that up. And we've got some great stuff
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  Speaker 1: to talk about this week and a couple of things
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  Speaker 1: to keep in mind. Actually, as we talk with Eric
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  Speaker 1: and CJ, don't forget the phone lines are always open.
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  Speaker 1: They really love to get your questions. Love to have
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  Speaker 1: you join us at six oh eight three two one
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  Speaker 1: thirteen ten. That's six oh eight three two one thirteen ten.
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  Speaker 1: We'll be doing the Closs Quiz Question the Week again
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  Speaker 1: this week, as we do every week on the program.
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  Speaker 1: Your chance to win a fantastic prize from our friends
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  Speaker 1: at Coss Financial this week, chance to win a twenty
• 1:59
  Speaker 1: five dollars gift card for Amazon. Little tip. Listen close
• 2:03
  Speaker 1: to the program because just about every show, the question
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  Speaker 1: and answer to the Class Quiz Question Week comes up.
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  Speaker 1: During the program. We'll get you all the details on
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  Speaker 1: how you can win a little bit later on in
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  Speaker 1: the show. And before we start talking about suitability, what
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  Speaker 1: that means, and why that not may not be good enough,
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  Speaker 1: let's actually look back to last year and get our
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  Speaker 1: Class Quiz Question Week from that program a question and
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  Speaker 1: answer there as well.
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  Speaker 3: Eric, Yes, we are looking all the way back to
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  Speaker 3: our winner from December eighteenth, three weeks ago. In a
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  Speaker 3: while since we've been on our question was true or false?
• 2:35
  Speaker 3: The Nasdaq Composite Index took about fifteen years to break
• 2:39
  Speaker 3: even after the technology bubble burst in March of two
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  Speaker 3: thousand and The correct answer to that, Sean is true.
• 2:45
  Speaker 1: It is true. And it's been a while. And so
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  Speaker 1: if you want to refresh yourself listen back to those programs,
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  Speaker 1: head on over to Classfinancial dot com. That's Closs Klaas
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  Speaker 1: Financial dot com. Remember it being a very very good program. Greer,
• 2:58
  Speaker 1: good show, and don't forget can describe to the podcast
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  Speaker 1: at clossfinancial dot com. They're twelve number six O eight
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  Speaker 1: four four to two five six three seven. So we're
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  Speaker 1: going to kind of pull back the curtain this week
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  Speaker 1: on something that a term that folks have probably seen,
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  Speaker 1: whether it's on a business card or somebody had said
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  Speaker 1: to them, which is the term financial advisor and CJ.
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  Speaker 1: When it comes to that title, it does mean something.
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  Speaker 1: And what should we know then about that? And why
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  Speaker 1: is there kind of an advice gap when it comes
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  Speaker 1: to financial services?
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  Speaker 2: Yeah, good question, Sean. So the advice gap, as we
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  Speaker 2: call it, is the space between what a client thinks
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  Speaker 2: they're getting and what the law actually requires an advisor
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  Speaker 2: to do. Most people think their advisor is a partner,
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  Speaker 2: but legally many are just salespeople. It comes down to
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  Speaker 2: the suitability standard versus the fiduciary standard. So let me
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  Speaker 2: provide you with a summary of the different standards and
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  Speaker 2: why they matter when it comes to someone calling themselves
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  Speaker 2: a financial advisor. Let's begin with the U Sharry standard.
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  Speaker 2: This standard is underscored by something commonly referred to as
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  Speaker 2: best interest. A FOODOO shary is legally and ethically required
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  Speaker 2: to act solely in your best interest. They must put
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  Speaker 2: your needs above their own, and the needs of their firm.
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  Speaker 2: Let's further evaluate this by a few specific criteria. Criteria
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  Speaker 2: Number one is who they are. These are usually registered
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  Speaker 2: investment advisors. Their duty of care they must provide advice
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  Speaker 2: that is most beneficial to the client based on deep
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  Speaker 2: analysis of their goals. Their duty of loyalty. They must
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  Speaker 2: avoid conflicts of interest. If a conflict exists, like receiving
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  Speaker 2: a specific incentive, they must disclose it clearly in writing
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  Speaker 2: and then compensation. Typically a fee only or fee based advisor,
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  Speaker 2: you pay them a flat fee or a percentage of assets.
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  Speaker 2: Since these individuals typically don't earn commissions from products, they
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  Speaker 2: have no incentive to sell you one fund over another.
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  Speaker 2: Their typically paid by you and not buy a product. Okay,
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  Speaker 2: so that's the fiduciary standard, what we often refer to
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  Speaker 2: as the best interest standard. Now, let's compare the fiduciary
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  Speaker 2: standard with what's called the suitability standard. This standard is
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  Speaker 2: underscored by something commonly referred to as good enough. Under
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  Speaker 2: this standard, an advisor only needs to ensure that an
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  Speaker 2: investment is suitable for your situation, meaning it fits your age,
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  Speaker 2: risk tolerance, and goals. At the time of the trade
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  Speaker 2: or the sale So let's further evaluate this criteria by
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  Speaker 2: those same kind of elements. So who are these individuals.
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  Speaker 2: They're usually broker dealers, registered representatives, or insurance agents. The
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  Speaker 2: gap that we were talking about before, they do not
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  Speaker 2: have to find the best or cheapest option. Let me
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  Speaker 2: repeat that under the suitability standard, they do. These individuals
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  Speaker 2: do not have to find the best or cheapest option.
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  Speaker 2: Who mutual funds are both suitable? They are? They being
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  Speaker 2: the individuals are allowed to recommend the one that pays
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  Speaker 2: them a higher commission, even if it costs you more.
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  Speaker 2: Conflicts of interest, they may not be required to disclose
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  Speaker 2: all conflicts or the specific commissions they earn from your purchase.
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  Speaker 2: And finally, in terms of compensation, these are often commission
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  Speaker 2: based salespeople. They get paid by the companies whose products
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  Speaker 2: they sell. So as you can see big difference between
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  Speaker 2: the fiduciary standard and the suitability standard.
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  Speaker 1: It feels like that gap is more of a trench.
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  Speaker 1: CJ agreed. I tell you pretty and those pretty different too.
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  Speaker 1: As you look at those things and you think about,
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  Speaker 1: you know, professionals abiding by the different standards and using
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  Speaker 1: that same title of financial advisor. So Eric, let's bring
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  Speaker 1: you in on this. You are a CFP, and before
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  Speaker 1: the previous explanation, I think a lot of folks would
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  Speaker 1: have thought the term suitable was a good thing. Let's
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  Speaker 1: find out then kind of get into that why suitable
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  Speaker 1: is talk about this week's program, Why suitable may not
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  Speaker 1: be is not good enough for the families that you
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  Speaker 1: guys serve at costs financial?
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  Speaker 3: Absolutely, Because I mean, on the surface, it sounds it
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  Speaker 3: sounds fine, right suitable, suitable sounds sounds good, but it's
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  Speaker 3: a surprisingly low legal bar. So I think it's easiest
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  Speaker 3: to look at this in terms of an example. If
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  Speaker 3: you go to a shoe store and the salesperson they
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  Speaker 3: sell you a pair of size twelve boots, perfect, they fit,
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  Speaker 3: that's your size. They are what we would call suitable
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  Speaker 3: in this case. But if what you actually needed was
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  Speaker 3: a pair of running shoes to finish a marathon, those
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  Speaker 3: boots are going to cause you a lot of pain
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  Speaker 3: and they're not going to be the best solution for you.
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  Speaker 3: So if we put this in in financial terms, a
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  Speaker 3: salesperson can sell you a high commission product that is
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  Speaker 3: supposedly well, that is essentially suitable for you, even if
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  Speaker 3: there's a lower cost, higher performing fiduciary option that was
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  Speaker 3: available right alongside of it. So this is why we
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  Speaker 3: suggest that listeners consider making something we call the fiduciary
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  Speaker 3: litmus test to see where they stand in relation to
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  Speaker 3: your current financial advisor and in what standard they ascribe to.
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  Speaker 3: So this is a test that everyone should consider taking
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  Speaker 3: with their financial advisor. It's basically just asking them a
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  Speaker 3: very very clear question. Are you a fiduciary for me
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  Speaker 3: one hundred percent of the time and is it in writing?
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  Speaker 3: If your advisor answers, you know, no, I'm not a fiduciary,
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  Speaker 3: I'm a registered representative, or I'm a fiduciary most of
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  Speaker 3: the time, I'm a fiduciary on your advisory accounts, but
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  Speaker 3: you know not the brokerage account you have with me,
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  Speaker 3: or that's a complicated question. You get the point, right.
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  Speaker 3: If they say anything other than yes to your question here,
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  Speaker 3: then you found a salesperson or someone who is duly
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  Speaker 3: registered as an advisor and a salesperson who can switch
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  Speaker 3: hats depending upon the circumstances. Right, you could be in
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  Speaker 3: a meeting with this advisor and when they're talking to
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  Speaker 3: you about one subject, they may be in that fiduciary category,
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  Speaker 3: but in the other three discuss they are not. And
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  Speaker 3: as you alluded to you earlier here at COSS Financial,
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  Speaker 3: our fiduciary hat never comes off. We are always acting
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  Speaker 3: in that fiduciary capacity.
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  Speaker 1: Nice and simple, A simple question, simple answer, and that's
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  Speaker 1: what you want to look for. As we talked this
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  Speaker 1: morning with CJ. Closs and Eric Schwartz of Colss Financial,
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  Speaker 1: they'd love to talk to you, they'd love to get
• 9:18
  Speaker 1: to know you and make it real easy. All I
• 9:19
  Speaker 1: got to do is set up that appointment, give them
• 9:20
  Speaker 1: a call six oh eight four four two five six
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  Speaker 1: three seven. Not only that, that first appointment, that first conversation,
• 9:26
  Speaker 1: that get to know you meeting. It's not going to
• 9:28
  Speaker 1: cost you a thing. It will be complimentary to you.
• 9:30
  Speaker 1: Tell phone number for Colass Financial six oh eight four
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  Speaker 1: four two five, six three seven. Learn more online Coss
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  Speaker 1: Financial dot com. That's Coss k l aas Financial dot com.
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  Speaker 1: We'll talk a little bit more about about how folks
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  Speaker 1: with you know are able to use that same title
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  Speaker 1: of financial advisor, some of the issues that that we
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  Speaker 1: run into there, and also we'll get into talk with
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  Speaker 1: CJ about a fiduciary litmus test what that means. To
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  Speaker 1: get some of the details, we will do that next
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  Speaker 1: as Money in Motion with Coss Financial continues right here
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  Speaker 1: on thirteen ten w E U I B A talking
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  Speaker 1: with our retirement planning professionals from Class Financial, CJ. Closs
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  Speaker 1: and Eric Schwartz. You can learn more about ERICCJ and
• 10:08
  Speaker 1: the whole team at Costs Financial. You can learn about
• 10:10
  Speaker 1: their separate divisions. You can also subscribe and listen back
• 10:13
  Speaker 1: to this podcast right online Cossfinancial dot com. That's Closs
• 10:17
  Speaker 1: k l Aasfinancial dot com. You can also schedule a
• 10:20
  Speaker 1: complementary conversation right from the website again, that's Cossfinancial dot Com.
• 10:25
  Speaker 1: Or you mccallf the office right here in Madison six
• 10:27
  Speaker 1: oh eight four four two five six three seven. That
• 10:30
  Speaker 1: first apployment at Coss Financial. It will be complementary to you.
• 10:33
  Speaker 1: Great chance to get that conversation again, it's not going
• 10:36
  Speaker 1: to cost you anything. They're telephone number six oh eight
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  Speaker 1: four four two five six three seven talking about UH
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  Speaker 1: that word suitable, suitable what that means?
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  Speaker 2: Is it good enough?
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  Speaker 3: Uh?
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  Speaker 1: And is your advisor, a partner or a salesperson? And
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  Speaker 1: CJ really fascinating stuff this week. And then there's that
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  Speaker 1: second part of that fiduciary list litmus test. Let's talk
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  Speaker 1: about what that is CJ.
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  Speaker 2: Yeah, so, under most circumstances, you'll know enough after asking
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  Speaker 2: the first questions that Eric was just referencing earlier. But
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  Speaker 2: if not, sometimes answers can be confusing, and the second
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  Speaker 2: fiduciary litmus test should eliminate any remaining ambiguity. So consider
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  Speaker 2: asking your advisor this second question, how are you compensated
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  Speaker 2: for the specific recommendations you give me and the products
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  Speaker 2: I purchase through you or with your help. A financial
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  Speaker 2: advisor partner who operates under a fiduciary standard will be
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  Speaker 2: clear and transparent in their response to you. They should
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  Speaker 2: say something like, you pay me directly for the advice
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  Speaker 2: I give you, or you pay me a percentage of
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  Speaker 2: the assets I manage for you, or we do not
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  Speaker 2: generate any commissions on the purchases or sales we perform
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  Speaker 2: on your behalf. That would be the fiduciary standard. If
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  Speaker 2: their response is mixed, which by the way, is by
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  Speaker 2: far the most common situation we may most people going
• 12:00
  Speaker 2: to run into, then you probably work with a duly
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  Speaker 2: registered financial advisor, which is someone who can wear either
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  Speaker 2: hat or a buye by either standard, depending upon the circumstances.
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  Speaker 2: So listen, we're going to talk about this as we
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  Speaker 2: go further throughout this show. But we are not saying
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  Speaker 2: that there is no place for commission based advisors. That's
• 12:21
  Speaker 2: not what we're saying. We're not saying that sales and
• 12:23
  Speaker 2: commissions are bad. They actually exist all over the world
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  Speaker 2: in different capacities, and we'll talk about that. What we
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  Speaker 2: are saying is you just need to know who you're
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  Speaker 2: working with. And unfortunately, most people, when we ask them
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  Speaker 2: how does your advisor get paid? Do you know what?
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  Speaker 2: The most common response is Sean, I don't know. I
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  Speaker 2: don't know, And that's a problem because you want to know. Listen,
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  Speaker 2: are you a partner building a long term financial plan
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  Speaker 2: or are you a salesperson trying to generate the highest commission.
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  Speaker 2: Those are two different things than you just need to know.
• 12:56
  Speaker 1: Talking this morning with CJ. Closs and ne rk Sports
• 12:58
  Speaker 1: of Class Fans website Financial dot com that's Coss k
• 13:01
  Speaker 1: l a as Financial dot com and Eric CJ there
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  Speaker 1: just mentioned you know, not all sales and commissions based
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  Speaker 1: services are bad. Are there circumstances we're working with someone
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  Speaker 1: who's a registered representative or makes money through selling products
• 13:15
  Speaker 1: and earning commissions may actually be a good idea.
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  Speaker 3: Yeah, this is a really important point here, Sean, because
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  Speaker 3: this fiduciary word has been, it's spent something of a buzzword,
• 13:27
  Speaker 3: you could say, in the last five to ten years
• 13:28
  Speaker 3: in the financial industry, and sometimes when we talk about it,
• 13:32
  Speaker 3: it can it can get a little bit you know, oh,
• 13:35
  Speaker 3: we're the only way to be the only way to
• 13:38
  Speaker 3: do good work for people is to to do that,
• 13:41
  Speaker 3: you know, to run your business a certain way. But
• 13:44
  Speaker 3: the reality is that there are plenty of situations where
• 13:49
  Speaker 3: where folks are going to be earning commissions and not
• 13:52
  Speaker 3: operating in that fiduciary capacity, but they are still really
• 13:55
  Speaker 3: important parts of the industry. So the most common, androbably
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  Speaker 3: obvious example in our industry is going to include when
• 14:03
  Speaker 3: you're purchasing a life insurance policy, or maybe you're purchasing
• 14:06
  Speaker 3: an annuity with a lifetime income stream, or a Medicare
• 14:09
  Speaker 3: supplement policy. Under almost all of these circumstances, you're going
• 14:13
  Speaker 3: to be working with someone who gets paid commissions to
• 14:16
  Speaker 3: sell you a product. And all of these are great
• 14:19
  Speaker 3: reasons to work with a registered representative or an insurance
• 14:21
  Speaker 3: agent who earns a commission to sell you a product.
• 14:24
  Speaker 3: It's just, to CJ's point, it's about the gap between
• 14:29
  Speaker 3: what you think you are getting and what you are
• 14:31
  Speaker 3: actually getting, Because to be clear, we're not saying earning
• 14:34
  Speaker 3: commissions is the problem. Instead, we're specifically worried about people
• 14:38
  Speaker 3: who think they're working with a financial advisor who always
• 14:41
  Speaker 3: operates under a fiduciary standard, which is again to work
• 14:45
  Speaker 3: in the client's best interest in not your own. But
• 14:48
  Speaker 3: then they discover that the person who's guiding their entire
• 14:51
  Speaker 3: financial lives and acting as a quarterback, so to speak,
• 14:55
  Speaker 3: for all their major financial decisions, and it's actually a salesperson.
• 15:00
  Speaker 3: So once again it's the gap between consumers, what consumers
• 15:03
  Speaker 3: think they have with their advisor and what might actually
• 15:07
  Speaker 3: be a different reality. And at COSS Financial we really,
• 15:10
  Speaker 3: really strongly you need to work with a partner who
• 15:13
  Speaker 3: acts as the quarterback for your whole financial life, not
• 15:16
  Speaker 3: just someone who's there to sell you a single play.
• 15:20
  Speaker 1: Really really great distinctions and definitions. This week a fantastic
• 15:24
  Speaker 1: show for us understanding the difference between the fiduciary standards
• 15:27
  Speaker 1: and that suitability standards and some of the issues that
• 15:30
  Speaker 1: arise with suitability and why it may not be good enough.
• 15:33
  Speaker 1: Don't forget if you miss part today's program, you can
• 15:35
  Speaker 1: always listen back at cossfinancial dot com. That's Coss klaas
• 15:39
  Speaker 1: financial dot com. Speaking of class financial dot com. Great
• 15:41
  Speaker 1: place to submit a question to be answered here on
• 15:43
  Speaker 1: the program, we will be heading over to the mail
• 15:46
  Speaker 1: bag this morning and doing the Money in Motion listener
• 15:48
  Speaker 1: question corner. We'll head on over there next as Money
• 15:51
  Speaker 1: in Motion with Coss Financial continues right here. I'm thirteen
• 15:54
  Speaker 1: ten del Will you ibi talking this morning with our
• 15:57
  Speaker 1: retirement planning professionals from Coss Financial, CJ Claw and Eric Schwartz.
• 16:01
  Speaker 1: The website Coss financial dot com. That's Coss k l
• 16:04
  Speaker 1: Aasfinancial dot com. There're teph number six soh eight four
• 16:07
  Speaker 1: four two five six three seven. Don't forget no charge
• 16:10
  Speaker 1: for that initial get to know you appointment at Coss Financial.
• 16:13
  Speaker 1: It will be complementary to you again. They're number six
• 16:15
  Speaker 1: oh eight four four two five six three seven. Mentioned
• 16:18
  Speaker 1: the website. One of the great features of Cossfinancial dot
• 16:21
  Speaker 1: Com as an opportunity to submit a question to be
• 16:24
  Speaker 1: answered right here on air and our listener question corner,
• 16:27
  Speaker 1: and this week Jordan from Cottage Growth submitted the following question.
• 16:31
  Speaker 1: He says, I'm fifty six years old and planned to
• 16:33
  Speaker 1: work until age fifty nine and then retire. Since turning fifty,
• 16:38
  Speaker 1: I have been eligible to perform Ketchup contrib perform Ketchup
• 16:42
  Speaker 1: contributions into my company sponsored four oh one K plan. However,
• 16:47
  Speaker 1: I heard there's a new rule going to effect into
• 16:50
  Speaker 1: effect for high income earners that requires WROTH contributions on
• 16:55
  Speaker 1: anything that is considered quote unquote ketchup contributions. Do you
• 16:59
  Speaker 1: know anything about this rule and can you explain it
• 17:02
  Speaker 1: to me? That comes to us from Jordan and Cottage
• 17:05
  Speaker 1: Grove and CJ. I'll leave this one with you.
• 17:08
  Speaker 2: Yeah, I love this, Jordan. Thank you so much for
• 17:11
  Speaker 2: asking this question. And the beauty of course when you
• 17:13
  Speaker 2: submit it beforehand is that we can get prepared for it.
• 17:16
  Speaker 2: But yes, we are very aware of this new rule Jordan.
• 17:20
  Speaker 2: As a matter of fact, I think we have a
• 17:21
  Speaker 2: show coming up with our our director of retirement plans
• 17:25
  Speaker 2: because we have a four to win K division. It's
• 17:27
  Speaker 2: actually going to be talking all about this new rule,
• 17:30
  Speaker 2: but let me kind of give it to you in
• 17:32
  Speaker 2: a nutshell. So, under the Secure Act two point zero,
• 17:35
  Speaker 2: starting on January first, twenty twenty six, which is, gosh,
• 17:40
  Speaker 2: just eight days ago, all catch up contributions for certain
• 17:44
  Speaker 2: high earning individuals must be made on a WROTH after
• 17:48
  Speaker 2: tax basis rather than a traditional pre tax basis. So
• 17:52
  Speaker 2: here's a breakdown of how the rule works and how
• 17:54
  Speaker 2: it may affect you. So, the core requirement, if you
• 17:57
  Speaker 2: meet the income threshold, you can no longer deduct your
• 18:01
  Speaker 2: catchup contributions from your taxable income. So the mandate is
• 18:05
  Speaker 2: that all catchup contributions must be deposited into a ROTH account.
• 18:09
  Speaker 2: The impact is that you're going to pay taxes on
• 18:11
  Speaker 2: that money now at your current higher tax brackets, but
• 18:15
  Speaker 2: the withdrawals and retirement will be tax free. And then
• 18:19
  Speaker 2: this rule only applies to the catchup portion, which is
• 18:22
  Speaker 2: the extra amount that you're allowed to contribute to your
• 18:24
  Speaker 2: four to one K plan above age fifty. Your base
• 18:28
  Speaker 2: four one K contribution can still be made on a
• 18:31
  Speaker 2: pre tax basis. And then, of course the question is like,
• 18:34
  Speaker 2: well that's all great, but who's affected. What's the income
• 18:37
  Speaker 2: threshold here? So The rule applies based on your prior
• 18:41
  Speaker 2: year's wages. This is critical. Everybody's ears who this might
• 18:46
  Speaker 2: impact should be listening right now. How do we know
• 18:48
  Speaker 2: if you're gonna have to do post tax wroth contributions
• 18:53
  Speaker 2: on your catchup if you're over the age of fifty
• 18:56
  Speaker 2: And the answer is, it's based upon your prior years wages.
• 19:00
  Speaker 2: So the number for the tax here twenty twenty six.
• 19:04
  Speaker 2: The rule applies if you are twenty twenty five FYCO wages,
• 19:09
  Speaker 2: which is your Social Security wages exceed one hundred and
• 19:12
  Speaker 2: fifty thousand dollars. Notably, this number is index for inflation.
• 19:16
  Speaker 2: It might vary slightly in twenty twenty six and beyond,
• 19:18
  Speaker 2: but you get the idea for twenty twenty six. You know,
• 19:22
  Speaker 2: if I'm over the age of fifty and eligible for
• 19:24
  Speaker 2: catchup contributions, will I be forced to do wroth on
• 19:28
  Speaker 2: those catchup And the answer is it depends depends on
• 19:31
  Speaker 2: what your twenty twenty five FICO wages were and if
• 19:33
  Speaker 2: they exceeded one hundred and fifty thousand dollars. Now, the
• 19:37
  Speaker 2: specific definition is the the IRS looks at box three
• 19:41
  Speaker 2: of your w two wages from the same employer sponsoring
• 19:45
  Speaker 2: the plan. This is another critical element. If you change
• 19:49
  Speaker 2: jobs mid year, you might technically fall under the threshold
• 19:53
  Speaker 2: at your new company for the first year because they
• 19:56
  Speaker 2: only look at the wages they specifically paid you. And
• 19:59
  Speaker 2: then here's a self employed no. Interestingly, because the law
• 20:03
  Speaker 2: specifies wages, faika partners and sole proprietors with only self
• 20:09
  Speaker 2: employment income are currently not subject to this mandate under
• 20:13
  Speaker 2: the current IRS guidance. And then here's a warning for
• 20:16
  Speaker 2: business owners. And this is not so much self employed individuals,
• 20:19
  Speaker 2: but think business owners of s corps and other pastor entities.
• 20:23
  Speaker 2: If your company plan doesn't currently offer a WROTH option,
• 20:27
  Speaker 2: your high earning employees and likely you as the owner,
• 20:31
  Speaker 2: will be locked out of making any catchup contributions once
• 20:35
  Speaker 2: this rule has kicked in, which is now you have
• 20:38
  Speaker 2: to add that WROTH feature now to keep that door open.
• 20:41
  Speaker 2: Since the IRS has recently clarified that if a four
• 20:44
  Speaker 2: to one K plan does not offer a WROTH feature,
• 20:48
  Speaker 2: then no one who earned over one hundred and fifty
• 20:51
  Speaker 2: thousand dollars can make catchup contributions. So, given that I
• 20:55
  Speaker 2: don't know your exact income or circumstances, Jordan, I can't
• 20:58
  Speaker 2: say if this change will impact you. Nevertheless, I hope
• 21:01
  Speaker 2: that you can figure this out on your own based
• 21:04
  Speaker 2: upon what I said to you or by by all means,
• 21:06
  Speaker 2: feel free to give our office a call and we
• 21:07
  Speaker 2: can dig into it with you. But but Jordan love
• 21:10
  Speaker 2: this question. Thanks so much.
• 21:11
  Speaker 1: That was a fantastic question, a great answer. As always,
• 21:14
  Speaker 1: great opportunity as mentioned b Like Jordan, you can submit
• 21:18
  Speaker 1: a question right online at Cossfinancial dot com that's Coss
• 21:21
  Speaker 1: k l Aasfinancial dot com. You can also schedule complimentary
• 21:25
  Speaker 1: chat right from the website, or even better, pick up
• 21:27
  Speaker 1: the phone give them a call. They'd love to talk
• 21:29
  Speaker 1: with you at Costs Financial. Their telephone number six oh
• 21:31
  Speaker 1: eight four four two five six three seven. Don't forget
• 21:34
  Speaker 1: that initial get to know you appointment. It will be
• 21:36
  Speaker 1: complementary to you. It's not going to cost you anything.
• 21:38
  Speaker 1: All I gotta do is give them a call six
• 21:40
  Speaker 1: oh eight four four two five six three seven. Hold
• 21:42
  Speaker 1: on to that number because it's time now for the
• 21:44
  Speaker 1: Closs Quiz Question of the week. It works like this,
• 21:46
  Speaker 1: In just a moment, I'll ask you the Coss Quiz
• 21:48
  Speaker 1: question a week. You'll then have thirty minutes from the
• 21:50
  Speaker 1: en today's program to call the Coss Financial Office right
• 21:52
  Speaker 1: here in Madison at six oh eight four four two
• 21:55
  Speaker 1: five six three seven. If you are the first call
• 21:58
  Speaker 1: correct answer, you will win this week's prize, which say
• 22:00
  Speaker 1: twenty five dollars gift card to Amazon. This week's Closs
• 22:03
  Speaker 1: Quiz question the week is this, which is correct? The
• 22:07
  Speaker 1: fiduciary standard is underscored by something commonly referred to as
• 22:12
  Speaker 1: quote best interest or quote good enough. Which is correct?
• 22:18
  Speaker 1: Telful number six oh eight four four two five, six
• 22:21
  Speaker 1: three seven. First call correct answer went that twenty five
• 22:23
  Speaker 1: dollars gift card to Amazon. And don't forget that's Closs
• 22:25
  Speaker 1: Financials Office right here in Madison, that number six oh
• 22:28
  Speaker 1: eight four four two five six three seven. CJ and Eric.
• 22:32
  Speaker 1: It's always great chatting with both of you. I feel
• 22:34
  Speaker 1: like we're probably gonna hear from Forests soon.
• 22:36
  Speaker 2: Program.
• 22:37
  Speaker 1: Great to talk with both of you guys this morning.
• 22:39
  Speaker 1: Happy New Year and thanks for joining us. Thanks Sean,
• 22:42
  Speaker 1: take care guys. News comes your way next right here
• 22:44
  Speaker 1: on thirteen ten. Wuiba