Latest / HPK Provident Advisors: The Weekly Bull / We Watch The Numbers So You Can Stay Focused

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We Watch The Numbers So You Can Stay Focused · HPK Provident Advisors: The Weekly Bull

• 0:04
  SPEAKER_00: Welcome to Friday Live.
• 0:06
  SPEAKER_00: Every Friday, some of the partners of HBK Provident get together and discuss what we're seeing going on in the markets, the economy, and covering some of our financial planning blog posts.
• 0:13
  SPEAKER_00: So with me today, Brian Peluso, good to have you.
• 0:17
  SPEAKER_00: Oh, it's a pleasure to be here.
• 0:20
  SPEAKER_00: How's your week going?
• 0:22
  SPEAKER_00: Is it starting to heat up there in in Western PA?
• 0:26
  SPEAKER_02: Uh yeah, you know, it's not it's humid.
• 0:28
  SPEAKER_02: Uh we we get the blessing of humidity.
• 0:31
  SPEAKER_02: I wouldn't say it's hot, but it feels hot.
• 0:34
  SPEAKER_02: Um not as hot as uh Europe has been.
• 0:38
  SPEAKER_02: I I have a uh loved one that's over in Paris right now.
• 0:41
  SPEAKER_02: They broke all-time uh heat records.
• 0:44
  SPEAKER_02: Oh uh and while he was there, the uh hotel lost power, so they had no air conditioning.
• 0:50
  SPEAKER_02: Uh he's coming home.
• 0:52
  SPEAKER_02: He's coming home.
• 0:53
  SPEAKER_02: So it's not quite uh Paris hot.
• 0:55
  SPEAKER_02: So uh, you know, I'm not gonna complain about our weather.
• 1:00
  SPEAKER_02: Uh certainly looking forward to uh next week, 250th anniversary of the country on Saturday, July 4th.
• 1:07
  SPEAKER_02: I'm getting ramped up for that, uh getting flags out in the yard and all that good stuff.
• 1:12
  SPEAKER_00: So nice, yeah.
• 1:14
  SPEAKER_00: And I think what is the market closed on it?
• 1:17
  SPEAKER_00: I think it's still closed one day.
• 1:19
  SPEAKER_00: Is it Friday or Monday?
• 1:20
  SPEAKER_00: Friday the third.
• 1:21
  SPEAKER_00: Uh Friday, July 3rd.
• 1:23
  SPEAKER_02: The uh market will be closed.
• 1:27
  SPEAKER_02: Next week already.
• 1:28
  SPEAKER_02: Yes, it is.
• 1:29
  SPEAKER_02: Where does the beer go?
• 1:32
  SPEAKER_02: I don't know.
• 1:34
  SPEAKER_02: I don't know.
• 1:38
  SPEAKER_02: So time flies, especially every year I get older, it seems like it goes quicker.
• 1:43
  SPEAKER_00: Yep, that is the truth.
• 1:46
  SPEAKER_02: Yes.
• 1:46
  SPEAKER_02: So what we do on uh Friday live, 12:30 p.m.
• 1:49
  SPEAKER_02: Eastern Standard Time on Fridays, most Fridays, we will not do it next Friday because the market's closed, as we just mentioned.
• 1:55
  SPEAKER_02: Mike had alluded to this.
• 1:56
  SPEAKER_02: Uh, we put out social media posts.
• 1:58
  SPEAKER_02: So that's uh LinkedIn and Facebook and uh a few other outlets uh on different topics.
• 2:06
  SPEAKER_02: Uh we have Market Monday, uh Tax Tuesday.
• 2:09
  SPEAKER_02: We kind of try to focus on tax.
• 2:10
  SPEAKER_02: We don't do taxes, we don't prepare taxes, we don't give tax advice.
• 2:14
  SPEAKER_02: Uh wealth management Wednesday, uh, and that's kind of general financial planning topics and the think ahead Thursday.
• 2:21
  SPEAKER_02: We put those social media posts out.
• 2:22
  SPEAKER_02: They're quick.
• 2:23
  SPEAKER_02: Uh we like to make them as quick and uh easily digestible as possible.
• 2:27
  SPEAKER_02: And uh we dig into them a little bit more on Fridays.
• 2:31
  SPEAKER_00: Uh is what we're doing.
• 2:32
  SPEAKER_00: And I might not be able to stay away next Friday.
• 2:34
  SPEAKER_00: There's there's a lot of data coming out.
• 2:35
  SPEAKER_00: I'm gonna have to cover it.
• 2:37
  SPEAKER_00: Well, do tell what's going on, Mike.
• 2:39
  SPEAKER_00: Let's jump right into that.
• 2:41
  SPEAKER_00: All right.
• 2:41
  SPEAKER_00: Well, next week we get uh the Jolts numbers, the job openings on Wednesday.
• 2:46
  SPEAKER_00: Uh, I believe also was ISM manufacturing also Wednesday?
• 2:52
  SPEAKER_00: That might be Thursday, actually.
• 2:53
  SPEAKER_00: And then we have the ADP payroll numbers on Thursday, and then Friday is jobs day.
• 2:58
  SPEAKER_00: So non-farm payrolls, uh headline numbers expected to come in at around 87,000, I believe.
• 3:05
  SPEAKER_00: Um, that's shot quite shy of last month.
• 3:08
  SPEAKER_00: I think we were in the 172,000 range.
• 3:11
  SPEAKER_00: Um, but these things can be pretty volatile.
• 3:14
  SPEAKER_00: Um, and then we'll be keeping an eye on unemployment rate, which is expected to stick at 4.3, and then we'll look at the wage numbers to see if there's any improvement there.
• 3:24
  SPEAKER_00: Um, but this week is pretty light economic, economic data-wise.
• 3:28
  SPEAKER_00: We had the PCE deflator numbers, which is the Fed's preferred measure.
• 3:33
  SPEAKER_00: Um, they came in all right.
• 3:35
  SPEAKER_00: Uh, on a monthly basis, both came in a little better than expectation.
• 3:39
  SPEAKER_00: The headline was 0.45 and core is 0.32, both a little better than expected.
• 3:44
  SPEAKER_00: On an annualized basis, uh, headline did tick up to 4.1 as anticipated, but that is higher than last month's 3.8%.
• 3:52
  SPEAKER_00: And then core is sitting at uh, I believe 3.4 percent.
• 3:56
  SPEAKER_00: So well above the Fed's target.
• 3:59
  SPEAKER_00: Um I am feeling much better than a couple weeks ago when oil price was at 100.
• 4:06
  SPEAKER_00: Now we're around the$70 range.
• 4:09
  SPEAKER_00: So that should be a nice catalyst to bring that headline number down.
• 4:14
  SPEAKER_00: Uh we'll just have to see if you know the core services area, you know, can moderate as well.
• 4:22
  SPEAKER_00: Um, that was a little stickier earlier in the year, so we'll just have to keep an eye on that.
• 4:26
  SPEAKER_00: The Fed meeting, I mean, we touched on it a little bit, I touched on it a little bit last week.
• 4:31
  SPEAKER_00: Um, but there was a lot more committee members willing to do a rate hike this year.
• 4:37
  SPEAKER_00: Um you know, I don't know.
• 4:38
  SPEAKER_00: It's it's it's gonna be, I think it's gonna be a coin flip.
• 4:42
  SPEAKER_00: I think they either need to raise rates at the next meeting by like 50 basis points and just go and pause for a while, or just not make any moves.
• 4:54
  SPEAKER_02: Well, uh, you know, Mike, uh that forecast went uh literally like a meteorologist forecast.
• 5:00
  SPEAKER_02: Like could rain, might rain, might not, who knows?
• 5:04
  SPEAKER_02: We'll get it 50-50.
• 5:07
  SPEAKER_02: But hey, that's the reality, right?
• 5:09
  SPEAKER_02: We can't predict the future.
• 5:11
  SPEAKER_00: Yeah, but let's see.
• 5:13
  SPEAKER_00: From uh let me show the uh can you see the my chart right now or no?
• 5:19
  SPEAKER_00: Uh not quite yet.
• 5:21
  SPEAKER_00: Let's see here.
• 5:23
  SPEAKER_00: Why isn't let me try to uh there we go.
• 5:28
  SPEAKER_02: Got it.
• 5:28
  SPEAKER_00: Yeah, so we did we are slightly below the 50-day moving average.
• 5:34
  SPEAKER_00: Um if we have a definitive breakdown, we could see further lows, but I would anticipate this is probably more of a false breakdown here.
• 5:43
  SPEAKER_00: Um got decent support right below this level that we're currently at.
• 5:47
  SPEAKER_00: Uh, we would like to see some improvement in the momentum indicators, but overall, I mean that the 10-year is trending lower.
• 5:57
  SPEAKER_00: We're below 440 for the first time in a while, so that's a good sign.
• 6:00
  SPEAKER_00: And then, like I mentioned earlier, crude oil prices down to 70 a barrel.
• 6:05
  SPEAKER_00: So all good things for in terms of the stock market.
• 6:08
  SPEAKER_00: So I I'm a little more optimistic on price action that it'll be moving higher.
• 6:16
  SPEAKER_00: And it's been uh it's been a weird story since I sorry, I said I wasn't gonna talk about it at all, but the IPO that came out.
• 6:29
  SPEAKER_02: What IPO are you referencing?
• 6:31
  SPEAKER_00: It has something to do with space.
• 6:34
  SPEAKER_00: Okay.
• 6:34
  SPEAKER_00: Um since we had that IPO come out, it seems like I don't know, maybe money flowed somewhat out of the Mag 7.
• 6:42
  SPEAKER_00: They haven't really been performing very well and into SpaceX, although I think the SpaceX trade kind of unwinded a little bit.
• 6:50
  SPEAKER_00: It's trading around the level that it opened at, which, you know, I I try to stay away from IPOs for a while.
• 6:56
  SPEAKER_00: It it tends to be a while until they kind of find what price they're typically trading at.
• 7:02
  SPEAKER_00: Um a lot of times they will revert back to that that level that they're initially supposed to uh open at, which I think was uh 125, 130.
• 7:12
  SPEAKER_00: So it is I don't I don't know.
• 7:14
  SPEAKER_00: I mean it's gonna be volatile for a while.
• 7:16
  SPEAKER_02: Yeah.
• 7:17
  SPEAKER_00: But my point was that we're seeing a broadening out beyond the Mag 7.
• 7:21
  SPEAKER_00: I mean, the overall indexes really haven't moved a whole lot, um down a little lower on the week.
• 7:28
  SPEAKER_00: Um, but we've kind of just been in this tight trading range.
• 7:37
  SPEAKER_00: But overall, it's been a good year.
• 7:38
  SPEAKER_00: I mean, it's been an interesting year.
• 7:42
  SPEAKER_02: We've talked about it before.
• 7:43
  SPEAKER_02: At the beginning of the year, there uh you know, there was a period of time where folks said, here it comes, this is it, this is the you know, we're going down.
• 7:51
  SPEAKER_02: Uh, and it was down.
• 7:53
  SPEAKER_00: Yeah, I mean the growth numbers are looking real bad at the turn of the year.
• 7:57
  SPEAKER_00: Yeah.
• 7:57
  SPEAKER_00: And we've certainly seen uh an improvement there, not on the inflation front, but on the um jobs front.
• 8:04
  SPEAKER_00: They have certainly, I mean, we were you know teetering with negative numbers every month, and now I mean we'll see what happens next Friday.
• 8:12
  SPEAKER_00: But we've been averaging about 185,000 jobs over a three-month period, so pretty solid.
• 8:19
  SPEAKER_00: Yeah.
• 8:20
  unknown: Yeah.
• 8:20
  SPEAKER_00: Unemployment's been pretty sticky at 4.3.
• 8:24
  SPEAKER_02: You know, you know, look at all these uh these data points and uh talking about what data points are are are are coming up, and you know, it really does kind of highlight in it at a kind of a 10,000 foot level.
• 8:42
  SPEAKER_02: I I don't like all of those corporate uh sayings, oh, at the you know, the 10,000 foot level and all that other stuff.
• 8:49
  SPEAKER_02: But in reality, uh, you know, what we're we're doing is is you know, we're dealing with what is.
• 8:56
  SPEAKER_02: Um, you know, in financial planning and and talking to a lot of folks about the markets, uh, you often hear about the way it was, or what I think it will be, uh, as opposed to just saying here's where we're at.
• 9:08
  SPEAKER_02: This is this is actually what's going on.
• 9:10
  SPEAKER_02: These, you know, these are the jobs numbers, this is inflation, this is kind of what the market's doing.
• 9:15
  SPEAKER_02: And you know, I find that a lot of people kind of want to fight the reality of the situation.
• 9:20
  SPEAKER_02: Here's where we're at, here's who the president is, here's what the uh, you know, here's what the state of the world is, good, bad, or indifferent.
• 9:26
  SPEAKER_02: Well, it should be this or should be that.
• 9:28
  SPEAKER_02: Well, it could be, would be, but let's deal with the reality.
• 9:31
  SPEAKER_02: Um, and talking about and and Mike highlighting a lot of these numbers is it kind of emphasizes that's what we're doing.
• 9:37
  SPEAKER_01: All right, this is where we're at.
• 9:39
  SPEAKER_02: Uh it's not good, bad, or indifferent.
• 9:41
  SPEAKER_02: Uh, it is what it is, and let's figure out what we need to do uh for folks to move their financial life, their financial plan forward and and to move closer to their goals.
• 9:53
  SPEAKER_02: Um, so a lot of it sounds kind of you know, nuanced numbers and you know, and what could be, uh, but what we're really doing is saying, okay, this is where we're at, and this is where you want to be.
• 10:06
  SPEAKER_02: And what can we do with the facts of our situation now to move you towards those goals?
• 10:12
  SPEAKER_02: I mean, that's kind of the simplified version of what we're trying to accomplish for folks.
• 10:16
  SPEAKER_00: Yeah, and and you're there really trying to focus on the long-term financial picture.
• 10:20
  SPEAKER_00: And I'm as well in that bucket, but I also try to do some of the short-term moves to you know, limit downside, take advantage of pullbacks, um, based on the economic data that we're seeing and where it's been, where it's going, um, how I want to be positioned in our portfolios based on that.
• 10:38
  SPEAKER_00: So that's kind of how we we overall manage the portfolios here.
• 10:43
  SPEAKER_02: Very nice, and I like it.
• 10:45
  SPEAKER_02: Uh, so what uh social posts we got out there, Mike?
• 10:48
  SPEAKER_02: Let's talk a little bit about social media.
• 10:49
  SPEAKER_00: So page here.
• 10:52
  SPEAKER_00: Um Monday we had one talking about uh like 401ks, employer-sponsored plans, just some guidelines with that, some tips, you know, volatility will happen.
• 11:03
  SPEAKER_00: Don't panic, don't be emotional, focused on the long term, like you were just talking about.
• 11:08
  SPEAKER_00: Um, it goes into kind of a ballpark of, you know, how much money do you need when you retire?
• 11:16
  SPEAKER_00: Um, when's a good time to review your allocations to make sure you're kind of marching toward your your overall long-term pitcher.
• 11:26
  SPEAKER_00: Um, do you have anything you want to add on the 401k side?
• 11:30
  SPEAKER_02: Yeah, on the 401k side, I would say um, you know, I try, and you know, we try to take what are often uh sold to the American public as very complicated concepts and simplify them.
• 11:44
  SPEAKER_02: Save as much as you can as often as you can and give yourself plenty of time uh towards your goal.
• 11:49
  SPEAKER_02: The earlier you save, the longer you have for compounding interest um and for those investments to uh to grow.
• 11:58
  SPEAKER_02: So save as much as you can as often as you can uh and give yourself plenty of time.
• 12:03
  SPEAKER_02: Uh the save until you hurt concept is well, you know, when it comes to work plans, which I'm a huge fan of, uh, then you've got the difference between traditional and Roth.
• 12:12
  SPEAKER_02: You know, in a traditional, say 401k, 403B, whatever it might be.
• 12:17
  SPEAKER_02: Uh in the traditional, you get a tax break, you you don't you don't pay taxes on the money going in, it grows tax protected, and then you pay taxes at some point when you pull it out.
• 12:26
  SPEAKER_02: Roth is you don't get a tax break on the way in.
• 12:28
  SPEAKER_02: You take money, it gets taxed in that year.
• 12:30
  SPEAKER_02: You put it into your Roth, it grows tax protected.
• 12:32
  SPEAKER_02: And if you hold it long enough and follow the rules, you take it out tax-free.
• 12:36
  SPEAKER_02: Uh, either way, uh, whatever.
• 12:38
  SPEAKER_02: And that that's all very dependent on somebody's individual circumstances.
• 12:42
  SPEAKER_02: So you can't make make a blanket recommendation.
• 12:44
  SPEAKER_02: But what I can make a blanket recommendation on is um save as much as you can.
• 12:50
  SPEAKER_02: And when I say save until it hurts, uh, nobody uh, and I have this conversation a lot with folks, uh especially younger folks, that say, well, I'm not making a ton right now.
• 13:00
  SPEAKER_02: I don't need to save a lot.
• 13:01
  SPEAKER_02: It's a lot of things I want to do.
• 13:02
  SPEAKER_02: Uh, but man, my career projection is great.
• 13:05
  SPEAKER_02: And when I'm making the big money, I'm gonna save more.
• 13:07
  SPEAKER_02: I'm here to tell you it probably won't.
• 13:10
  SPEAKER_02: Um so save as much as you can now.
• 13:13
  SPEAKER_02: When I say save it until it hurts, until it's a little uncomfortable, until you get to the point you say, man, I am not enjoying life.
• 13:18
  SPEAKER_02: I'm living on rice and beads.
• 13:20
  SPEAKER_02: Um, then pull it back.
• 13:22
  SPEAKER_02: So save a lot and then come down.
• 13:26
  SPEAKER_02: If you save a little and say, well, when I'm making the big money, or when I get the promotion or whatever, I will save more.
• 13:33
  SPEAKER_02: You probably won't.
• 13:35
  SPEAKER_02: Uh so save a lot now, come back.
• 13:38
  SPEAKER_02: Don't save a little and say, I'll save more later.
• 13:41
  SPEAKER_02: Uh, human nature says you won't.
• 13:43
  SPEAKER_02: The other uh thing about that is for most folks, when you're making the big money, you also have big expenses.
• 13:50
  SPEAKER_02: You got a bigger house, you got more cars, potentially children.
• 13:53
  SPEAKER_02: And so when you get to that point saying, Man, I am making more now than I ever have, uh, very rarely is the default I need to save more of that.
• 14:03
  SPEAKER_02: Uh it it it could be.
• 14:05
  SPEAKER_02: So it should be, maybe.
• 14:07
  SPEAKER_02: Uh, but oftentimes your expenses and your wants and your needs are uh are much higher at that point, and the savings get neglected.
• 14:15
  SPEAKER_02: So um that's why I say save at a very high level until it kind of gets uncomfortable and then pull it back a little bit.
• 14:22
  SPEAKER_02: That's a beautiful thing about most of the um workplace retirement plans, is you can make those adjustments along the way.
• 14:29
  SPEAKER_02: You know, it's not like you can only uh for most retirement plans, or workplace plans, it's not like only during enrollment period can you decide how much you're putting in, then you're locked in for the year until the next enrollment period.
• 14:42
  SPEAKER_02: Most retirement plans will let you make those adjustments online as you go.
• 14:48
  SPEAKER_02: So you decide you're gonna save 20%.
• 14:51
  SPEAKER_02: I don't know, that's a big number for a lot of folks, but let's say it's 20% save until it hurts.
• 14:55
  SPEAKER_02: Uh say 20%, you get into March, April of the next following year and say, man, this is I I'm just not enjoying life.
• 15:01
  SPEAKER_02: And uh this is rough, and it's you know getting harder and harder just to pay the bills because I'm saving everything for my future.
• 15:07
  SPEAKER_02: I can't live in the now at all.
• 15:09
  SPEAKER_02: Uh you know, a lot of times you go online, make that adjustment.
• 15:13
  SPEAKER_02: That's fine.
• 15:14
  SPEAKER_02: Um, so uh the that would be my lengthy way of taking a what is often sold to everybody as a complicated concept and simplifying it.
• 15:27
  SPEAKER_00: So and that's what makes these vehicles really nice because it is for a lot of people difficult once the money hits their bank account to say, you know, I need to invest this.
• 15:37
  SPEAKER_00: Whereas everyone I talk to about 401k is like, yeah, I'm contributing.
• 15:41
  SPEAKER_00: I I don't know, I don't worry about it.
• 15:43
  SPEAKER_00: It just comes out before I get it.
• 15:45
  SPEAKER_00: And it's a good way to save.
• 15:48
  SPEAKER_00: And you also get the benefit of dollar cost averaging in um every every month.
• 15:53
  SPEAKER_00: And actually, we're at uh a quarter turn, so we're gonna see a bigger rebalance this quarter.
• 15:58
  SPEAKER_00: Um, so you should see some more money flowing into the into the probably uh probably out of stocks and into fixed income, unfortunately.
• 16:09
  SPEAKER_00: But um yeah, but take advantage of it.
• 16:12
  SPEAKER_00: But I'd like to also make the point, you know, these things do have restrictions on them age-wise when you can take the money without penalty.
• 16:19
  SPEAKER_00: So it is important for you to still save beyond your 401k, um, maybe open up a non-retirement account in case five years down the road you want to buy a house and need liquid money, or you know, expenses come up, your AC unit breaks.
• 16:36
  SPEAKER_00: It's just it's good to have a more well-rounded bucket of investments.
• 16:42
  SPEAKER_02: Well, there's no doubt.
• 16:43
  SPEAKER_02: That's kind of uh, you know, we've talked about kind of the tax triangle.
• 16:47
  SPEAKER_02: Just think of a triangle, and there's nothing that there's none of these that are need to be at the top or on the side, just think of a triangle.
• 16:54
  SPEAKER_02: Tax triangle would be have investments that are always taxed, right?
• 16:59
  SPEAKER_02: You take money from work that's already taxed, you put it into an account of some sort, and it gets taxed along the way.
• 17:05
  SPEAKER_02: That would be what people in our business call non-qualified account.
• 17:09
  SPEAKER_02: Uh, another part of the tax triangle is tax delater.
• 17:13
  SPEAKER_02: That would be the traditional concept, right?
• 17:16
  SPEAKER_02: Um, you get a tax deduction now, tax break now, gross tax protected.
• 17:20
  SPEAKER_02: But some point um in the future, when you take that money out, you're you're gonna pay taxes on it.
• 17:26
  SPEAKER_02: Then you got this tax-free bucket, which tax-free bucket, which would be pay taxes on the way in, gross tax protected, then you don't pay taxes on the way out.
• 17:34
  SPEAKER_02: So it's important to maintain all parts of the triangle uh as much as you possibly can, uh, so that you have some always tax money, which is the most flexible.
• 17:45
  SPEAKER_02: Buy a house, buy a car, that kind of thing, with very little, if any, restrictions at all.
• 17:51
  SPEAKER_02: Uh the tax later and the tax-free, they have a lot of rules around them that you can contact us about and we can you know outline those rules.
• 17:59
  SPEAKER_02: But if you have that triangle, pieces in each of those kind of tax situation buckets, uh, it gives you the most flexibility.
• 18:08
  SPEAKER_02: Not only the most flexibility now, uh, but in the short-term, mid-term, and longer-term future as well, in my opinion.
• 18:18
  SPEAKER_00: And if throwing another one on our Thursday, you can take it away.
• 18:22
  SPEAKER_00: I'm I'd have a cough attack.
• 18:24
  SPEAKER_00: What's yeah, fair enough.
• 18:29
  SPEAKER_02: So that would be uh that's on the uh on the retirement plan space.
• 18:35
  SPEAKER_02: Uh, we also had a post on 529.
• 18:39
  SPEAKER_02: The last many years, a long time ago, when I started saving into 529s when they first came out, it was for uh college, uh, essentially.
• 18:49
  SPEAKER_02: Um and then so you know, a 529 account is for education.
• 18:55
  SPEAKER_02: It's a savings vehicle for education.
• 18:57
  SPEAKER_02: You put it in there, tax protected, could possibly get a tax break, depending on state rules and that kind of thing, a lot of nuances there.
• 19:05
  SPEAKER_02: But let's be general on this.
• 19:06
  SPEAKER_02: You put it in there kind of tax protected.
• 19:08
  SPEAKER_02: You could put any kind of investments in there.
• 19:10
  SPEAKER_02: Um, and there's a lot of choices, you know, you got stock investments, bond investments, that kind of thing.
• 19:15
  SPEAKER_02: Uh so the 529 is an education account, but has a lot of tax benefits if you follow the rules.
• 19:22
  SPEAKER_02: And the rules used to be you put money in a 529 and it grows tax protected, and if you could take it out for college expenses, um, then it comes out tax-free and it's a wonderful thing.
• 19:33
  SPEAKER_02: And then they really expanded it.
• 19:35
  SPEAKER_02: They they expanded uh the 529 concept to include, as we can see here on the screen, K through 12 education.
• 19:42
  SPEAKER_02: And it was limited in the beginning, and now it's expanded a little bit.
• 19:46
  SPEAKER_02: So you could spend more of the 529 on some K through 12.
• 19:51
  SPEAKER_02: Uh, oftentimes these are uh private schools, uh, but there are some other things.
• 19:58
  SPEAKER_02: There's some uh testing the uh materials and study materials, you might be able to use it.
• 20:03
  SPEAKER_02: Uh be very careful about these because you certainly want to follow the rules, and there are a lot of rules.
• 20:08
  SPEAKER_02: The idea here is they have expanded the concept to beyond just you got to go to college to use this 529 tax-free.
• 20:17
  SPEAKER_02: I particularly am a huge fan of the skill trades and the professional credit uh credentials uh that you can use it for.
• 20:25
  SPEAKER_02: So when you're looking at apprenticeships, uh I love this first one here, CDL.
• 20:31
  SPEAKER_02: There are so many folks that are making the wonderful decision that they are not going to go to a post-high school formal education, think college.
• 20:40
  SPEAKER_02: Um, that they're going to go right into their career path and start training on that.
• 20:45
  SPEAKER_02: So the 529s in the old world, they couldn't use it for that.
• 20:48
  SPEAKER_02: Like, are you go to college?
• 20:49
  SPEAKER_02: You can use it, you don't go to college stuff.
• 20:51
  SPEAKER_02: Like, you can't now you can't for a lot of these different things.
• 20:55
  SPEAKER_02: Um, so the you know, the folks that are leaving high school that they have this 529 that everybody's been, you know, maybe parents, grandparents have been saving you to since they were young, and they decide, hey, you know, I'm gonna go build houses for a living, and I'm gonna go and you know, um go into the carpenter's uh union or something along those lines.
• 21:15
  SPEAKER_02: A lot of that training the 529 could be used for.
• 21:22
  SPEAKER_00: In this era where in with AI taking over some of the jobs that used to be able to beat entry-level jobs and yeah, I uh I I mean these things I mean that's in the world that we're not gonna need an actual plumber.
• 21:39
  SPEAKER_00: But you know, maybe we'll have a robot one day to do that.
• 21:43
  SPEAKER_02: Well, we're gonna have a robot to do a lot of things.
• 21:45
  SPEAKER_02: You know, I did hear at a conference one time, this was a little uh a diversion.
• 21:49
  SPEAKER_02: This was like 20 years ago.
• 21:50
  SPEAKER_02: I was at a uh professional conference, and uh the speaker said the uh manufacturing plant of the future is going to have uh two employees.
• 22:00
  SPEAKER_02: It's going to be a person and a dog.
• 22:02
  SPEAKER_02: And uh the person's job is going to be to make sure that the computer that is running everything is still on.
• 22:09
  SPEAKER_02: That's what the person is there for.
• 22:11
  SPEAKER_02: The dog's job will to be to make sure the person never touches the computer.
• 22:16
  SPEAKER_02: Um so you know again, when it was 20 years ago, we all laugh very hard, but you know, some of that's coming to fruition.
• 22:24
  SPEAKER_02: But some of the trades and some of the things that folks are going to be doing, uh that you can use this 529 for, oftentimes, uh, you know, it just so much more flexibility for folks beyond just the traditional 42 or four-year uh post-high school education.
• 22:42
  SPEAKER_02: So now you do have some K through 12 expenses that you can use it for, uh for professional for the trades and professional credit um credentials.
• 22:53
  SPEAKER_02: And then beyond that, there are some provisions to say, hey, my kid's not going to go to school at all.
• 22:58
  SPEAKER_02: Uh, and no, for whatever reason.
• 23:00
  SPEAKER_02: Or they didn't need it.
• 23:02
  SPEAKER_02: They got scholarships.
• 23:04
  SPEAKER_02: And uh, you know, whatever it is, you know, mom and dad and grandparents, they build up this wonderful bucket of 529 and said, Well, geez, I don't have any of these expenses for my child.
• 23:14
  SPEAKER_02: What can I do with it?
• 23:16
  SPEAKER_02: There are some provisions now that uh, and there's a bunch of rules around this, it's got to be around for five or 15 years.
• 23:24
  SPEAKER_02: So the 529's got to be open for at least 15 years, which does argue for start saving these things earlier.
• 23:30
  SPEAKER_02: Uh contributions made in the last five years aren't eligible for this, a couple other things, but you can put up the$35,000 of that$529 into a Roth IRA, individual retirement account, which it's actually an individual retirement arrangement.
• 23:48
  SPEAKER_02: Everybody calls it an account.
• 23:49
  SPEAKER_02: Anyway, uh, but you can possibly take some of the money out of the$529 that you're not going to use and put it into a Roth uh IRA for that child, that beneficiary's uh retirement.
• 24:03
  SPEAKER_02: Um, you do have to follow the rules.
• 24:05
  SPEAKER_02: You can't put more in one year than the Roth IRA contribution limits and the maximum is$35,000.
• 24:11
  SPEAKER_02: But uh long story long, long story very long, the 529s are a really interesting consideration for parents and grandparents that want to support uh a child or grandchild and encourage their education in in the future.
• 24:29
  SPEAKER_02: Uh but even now, you know, even if that further education uh doesn't happen, they can still help them out uh now for possibly for their retirement with this uh converted to Roth idea.
• 24:42
  SPEAKER_00: So uh maybe your oldest son Billy's not going to college, but his younger sister Samantha is, you can transfer that to her.
• 24:53
  SPEAKER_00: Billy might not like it, he might prefer to have the Roth, but ultimately you make that decision.
• 25:00
  SPEAKER_02: Yeah, you can change the beneficiary.
• 25:02
  SPEAKER_02: So that's a great point, Mike.
• 25:04
  SPEAKER_02: Um, and also speaks to the flexibility of the 529s, which makes them a really interesting consideration for many people.
• 25:11
  SPEAKER_02: So, to that point, if you don't, you know, the original beneficiary, there's no education expenses, or maybe they got all their scholarships, uh, and that 529 is there, you can change the beneficiary to somebody else.
• 25:24
  SPEAKER_02: Doesn't even have to be a relative, just change the beneficiary to another person.
• 25:28
  SPEAKER_02: Uh who, you know, most likely would be a younger person who could use that into the future.
• 25:33
  SPEAKER_02: So uh, disabilities that can be now converted to an able account.
• 25:40
  SPEAKER_02: Yes, absolutely.
• 25:42
  SPEAKER_02: So flexibility, uh, which we love.
• 25:45
  SPEAKER_02: Uh, you know, we love the idea of tax benefits with flexibility.
• 25:49
  SPEAKER_02: I mean, if you got those two concepts and any when you're thinking about, hey, where can I put my money and you want some flexibility and some potential tax benefits?
• 25:58
  SPEAKER_02: Well, it's worth thinking about for sure.
• 26:03
  SPEAKER_00: Well, I mean, that pretty much covers our blog post for the week.
• 26:06
  SPEAKER_00: Um, so we have some coming out, I think every day next week.
• 26:10
  SPEAKER_00: Um, and then like Brian mentioned, we may or may not be on Friday live.
• 26:15
  SPEAKER_00: Um are we gonna do Thursday live or are we gonna uh we could possibly do Thursday live.
• 26:21
  SPEAKER_00: I will be a little sad not covering the non-part payrolls on Friday, but there's always the following week for that.
• 26:29
  SPEAKER_02: So, well, uh well, stay uh stay uh stay tuned and keep an eye out for us here.
• 26:35
  SPEAKER_02: Uh and we'll make that decision on whether it's gonna be Thursday or Friday.
• 26:39
  SPEAKER_02: Might have to do Friday early.
• 26:41
  SPEAKER_02: Um, I think a lot of folks will be starting their weekend, but it will be recorded as what our Friday lives are.
• 26:46
  SPEAKER_02: So you can get back to it and check out the uh content and see how all the jobs are worked out and what we're thinking.
• 26:51
  SPEAKER_00: Yeah.
• 26:51
  SPEAKER_00: So yeah, let's plan on doing it Thursday and and getting out there and then we'll follow up on the non-form payrolls after that.
• 26:59
  SPEAKER_02: That sounds great.
• 27:00
  SPEAKER_02: Well, the viewership is growing significantly, which we are uh which we're thrilled uh by.
• 27:06
  SPEAKER_02: And we certainly want to make this content.
• 27:08
  SPEAKER_02: Uh, you know, one of the things we talked to mentioned to folks that we aren't currently work with that just have questions, is you know, our interactions with uh with you, even if you're not an active client with us right now, our interactions with you, what we try to accomplish is that you get something out of that, something helpful, something educational, and hopefully something immediately actionable.
• 27:31
  SPEAKER_02: Will it be life-changing?
• 27:32
  SPEAKER_02: I don't know, in an initial conversation, but certainly informational.
• 27:36
  SPEAKER_02: That's what we're trying to do here.
• 27:38
  SPEAKER_02: So if there are topics that you would uh like us to address, um, you can see our website right there.
• 27:44
  SPEAKER_02: That is our phone number.
• 27:46
  SPEAKER_02: On our website, you there is a contact upper right-hand side, there's a contact us button.
• 27:50
  SPEAKER_02: Send us a question.
• 27:51
  SPEAKER_02: We'd be glad to address it in any way that we can to make it as helpful and that we could fulfill um that promise to folks is that your interactions with us at minimum, you're gonna learn something.
• 28:03
  SPEAKER_00: Um, so yeah, we're really trying to we're really trying to grow our YouTube channel.
• 28:09
  SPEAKER_00: So if you do like our content, we would really appreciate if you could like it, share it with some friends or people that might be interested in the subject.
• 28:17
  SPEAKER_00: Um, but besides that, I hope everyone has a great weekend.
• 28:20
  SPEAKER_00: Before we go, I'll flip on the disclosures and we will see you probably next Thursday.
• 28:26
  SPEAKER_01: Thanks much.
• 28:26
  SPEAKER_01: P sick.
• 28:28
  SPEAKER_01: Security is offered through LPL Financial LLC, member FINRA and SIPC.org.
• 28:33
  SPEAKER_01: Advisory services are offered through LPL Financial LLC, a registered investment advisor.
• 28:39
  SPEAKER_01: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
• 28:45
  SPEAKER_01: Content discussed is for informational purposes only and not intended as an offer or solicitation to buy or sell any security or investment strategy.
• 28:54
  SPEAKER_01: Any opinions expressed are those of the authors and do not necessarily reflect the views of LPL Financial or its affiliates.
• 29:01
  SPEAKER_01: All investments involve risk, including the possible loss of principal.
• 29:05
  SPEAKER_01: This communication may include links or references to third-party websites.
• 29:09
  SPEAKER_01: These links are provided as a convenience only.
• 29:11
  SPEAKER_01: LPL Financial and its representatives are not responsible for the accuracy or content of such sites.
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• 29:31
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• 29:35
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