Nikki: If you had just 150 days to make meaningful progress towards your financial future, what would you do or what would you want to accomplish?

Nikki: Welcome to Paladin Financial Talk. I’m your host Nikki Foley and I’m joined by feature advisor Matt Bryant. Welcome Matt.

Matt: Hello Nikki. Good to be here.

Nikki: Okay, this is a big question. and you are number three in a four-part series where all our advisers here at Paladin are sharing practical strategies to help finish out the year strong. And so, each episode is focused on a little bit different area, one area where a small intentional action can create meaningful financial results for tomorrow. And so again, your number three here, we started with Mr. Jeff Quick, and he kicked off by recommending just one financial goal to realistically be accomplished by December 31st. Then Ellie went through in number two, episode number two, if we could, you know, maybe find a little bit of some hidden money. What would that look like and where might I find that in that, you know, one move to improve your financial position with that in mind? And now Matt, we’re turning to you and I want you to lend some perspective here on maybe the tax side of things. And so, if you’re making a financial decision, we’ve talked about this, you’re oftentimes making a tax decision at the same time. And so that’s why I want you to come in with some tax perspective. And so, for all our listeners today, I want you to listen closely to this episode because I’m going to assign some homework at the end. And I have been doing this. So, if you want to choose one meaningful goal and build a simple plan to accomplish before December 31st, that’s what’s my homework is going to be. So, all right. Are we ready to dig in today?

Matt: Absolutely.

Nikki: Okay. So, Matt, we’ve introduced you on the show before and so I don’t want to spend a whole lot of time going backwards but let me just ask a question so our listeners have a little bit more on who you are. Why do you do this? Why do you like what you do?

Matt: I find it very interesting to start with, but I think personal finance and investing, I could take you all the way back to when I was a kid, okay? And just watching our parents navigate that world and asking what’s a mutual fund, what are interest rates, all these different things. And when we do workshops around town, I open with the story by saying I would start I remember sitting at the breakfast table in the morning and back then you read the mutual fund quotes in the paper the next day like you didn’t really look it up in real time like you do now. So goes all the way back then just learning about it and being fascinated how you have this vehicle with the stock market and you can use it to build wealth. And then after years of doing this job, I just learn all the nuance that goes into it. And we live in a complicated financial world and so being able to help navigate that’s always fulfilling. And then the people we meet, it’s fun to be able to sit with them, build a plan, and what we do is not set it and forget it. So being able to meet with them on a regular basis and help them navigate some of the biggest questions they’ll have to answer in their life, like that’s it’s rewarding to be able to sit here and do that. Yeah.

Nikki: So, taking something that’s of interest and then being able to and I say this every time that I like to brag on you is that you take a very complex topic and you have a way of making it simple and hopefully that is one of the things that your clients most appreciate about you because I’ve seen you in action. You’ve done a nice job. I wonder if somebody was analyzing us and you were reading the mutual funds and I was reading the obituaries as one of my favorites. What would that say about us?

Matt: Well, we both wound up in the same spot.

Nikki: So, all right. So, we’ll do a question-and-answer format today if that sounds good. And one of the things that I want to start with is why is year-end planning something that you should begin well before December. So, just setting the stage for us.

Matt: Sure. So, some of the concepts that you can apply to your financial plan have hard deadlines whether it’s year-end or tax time of the following year that if you don’t do them then you’ve lost your opportunity. Now part of the reason not waiting until December if you think about all the people in our country that have a financial plan of some sort and they’re all trying to do the same sort of thing at the same time as there’s a good chance it’s not going to get done. And we get it all the time with the other financial parties that we work with, like, “Hey, sure, the deadline’s year end, but make sure you get this in by Thanksgiving or something because the last thing you want to do is have this well-thought-out plan, go to implement it, and you waited too long, and you don’t get to maximize the benefit.” So, simplest is logistics. Just give yourself time does not have to stress about it. busy time for most people when we talk about December, just with school being out, with travel, with holidays. Just give yourself the time and don’t miss that opportunity. And then the timing of the implications by December or towards the end of the year, some of the things we’ll talk about later, you’ve had a full year to analyze how things have done. And so, at that point, you’ve got a lot of data, and you can make the right decision most of the time. So those three things I’d say are probably keys. Yeah, I was looking back at some of the dates for 2025 that are often imposed by, you know, the people in the chain. So, Charles Schwab as an example is our custodian and I was looking back at the dates and we’re talking about the end of November that first week in December is when they would like to see things in simply because of busy time of year and how many people are also making changes. Yeah. And don’t and we’ve always had a good relationship with them but like don’t when people rush mistakes happen. So, let’s just avoid it since we can be diligent about it.

Nikki: All right. So, you gave us the why. So now let’s get into the details here. So, what tax planning opportunities are commonly overlooked until it’s too late?

Matt: Tax loss harvesting is one. That is where you have a non-qualified bucket of money or a taxable bucket of money. It’s that money that as you have gains or interest, you pay taxes as you go.

Nikki: So, not IRA money, not Roth money.

Matt: The idea there is if you own a basket of securities and just the nature of diversification says most of them might be doing well but there’s always a few that don’t. You can sell the ones that aren’t doing well for a loss and give yourself basically a write-off against the things that have done well or against your income and help reduce the taxes that you owe the next year. You must do it by the end of the year. That’s one of the things where I said you must give it time to see the data for the year. You could tax loss harvest any time throughout the year, but really you want to get to the end, see what your gains look like, see what your income looks like, and then if you have the opportunity, find those losses and sell them to offset those gains because then come next year, you’re going to have a lower tax bill and your portfolio, if you did it right, should still do well. And those are we offer those strategies. It gets very complicated and you want to make sure you’re doing it right. But that’s one thing that I think often people just overlook and they just set it and forget it and don’t think about the opportunity there. Yeah, absolutely. I feel like that’s one that you know often people as they’re accumulating wealth they start with savings and checking accounts maybe some money market or high yield savings account. they get into their 401k money or their IRA money and then after that they sometimes get a little lost with what they do with any excess and so that gets put into, you know, a brokerage account, but they don’t really understand what’s happening with that unless they need to withdraw from it and then they’re surprised potentially that they might have to pay taxes. And so, this concept is one because it’s kind of three or four steps down the road where you might put your money after you’ve accomplished some of the other ones that are in front of it. And so okay, so tax loss harvesting, if that is not a term that you’re familiar with, that’s one that we would certainly encourage you to reach out to us so we can have some additional conversations and it might be an opportunity for you to take advantage of something before the end of the year. Yep. Absolutely.

Nikki: Okay. So now, as we’ve talked about, you know, kind of one hit right there on the tax side of things, let’s get into the bigger picture with retirement planning. And I always like to point out, as a reminder, when we talk about retirement planning, that doesn’t necessarily mean you have already retired or you’re just a few years out. Retirement planning starts well before you ever get to retirement. In fact, it could start as early as the first time you make an investment into your 401k, which could be right out of school. Right. Yeah.

Matt: It’s you don’t want to start doing the planning when you’re retiring. You need to have a plan in place for years ahead of time. And there’s actually being nerding out here just a little bit, there’s actually phases that they name them as you’re in your early years, you know, first out of out of college or, you know, entering the workforce through a certain period of time, early 30s and then kind of the next phase and the next phase. And so, this really is a thing that retirement planning is much longer than right before you move into it or as you move into it. And so, with retirement planning decisions, Matt, what should people review before the end of the year? First, especially if you have variable income, is by the time you get to close to December, you should know what you’ll be making for the year. If you have a regular straight salary, then you know the whole time, but let’s say you get a bonus at the end of year, that sort of thing, you’ll have a good idea of what your income will be, which then ties into things like Roth conversions. So conversion is something that must be done in the calendar year as well. That’s where you take money from your IRA, move it to your Roth IRA, pay taxes when you do it, but the idea there is we look at your situation and see where are you forecasted to be in the future when you actually need that Roth IRA and is it more advantageous to pay taxes now when taxes are likely lower than they will be in the future. So that’s a big one. As far as the income goes, like all these decisions that you make, you mentioned earlier, affect something else. It’s not as simple as saying tax law harvest that that one stock or do a Roth conversion or a contribution because the conversion, for example, then feeds into your total income for the year. And let’s say you’re somebody who is coming up to be 65 next year.

Nikki: So, there’s deductions that were passed a couple years ago that once you turn 65, you get an extra $6,000 deduction. However, there’s a phase out for depending on what your income is or Irma. We’ve talked about the monthly adjustment amount for Medicare where there’s a premium search charge. If your income stacks up too much, you’ll have to pay higher Medicare premiums or, you know, being phased out to do Roth contributions if you’re still working. So, we want to look at all those different things because anytime you run afoul of the tax law, there’s probably a penalty of some sort. So, let’s do the planning ahead of time and actually do this in a way where you’re not going to get penalized and actually works in your benefit. And then one is a conversation I have with a lot of people it seems like when we do reviews towards the end of the year is they’re retired, they have a pretty good idea of how much money they’ll need. However, maybe a one-time purchase has popped up, like I need a new car or a new roof or that sort of thing. Well, we can look ahead for the next year, see what their income situation looks like and all the different buckets of money they have. Sometimes it makes sense to take an extra IRA distribution this year. Putting that distribution on this year’s taxes and then next year you don’t have it, which may benefit you if you expect to have a higher income next year for whatever reason or we just want to keep you under a certain threshold. So, the timing of it all can matter as well. And if we have your financial plan, we’re able to sit down quickly and say, “Hey, based on what we’ve discussed in the past, it will make more sense if you took this distribution now.” Or in some cases, it’s like, “Hey, let’s spread this out between December of this year and January of next year.” And now our tax burdens are kicking further down the road. It just depends on your actual situation. Yeah. And that can become very individualized in that on that. Matt, you made a good point that I want to come back to for just a moment. the phase out piece of things. Oftentimes when you’re reading articles or you hear about something or your neighbor did this or yours, you know, your brother-in-law did something, you forget that there is this concept of phase out. And so typically when the government is going to offer you some sort of credit deduction money in some form or phase, you can also assume a majority of the time that your income is going to be potentially a key piece of whether you qualify or not. And so, if your household income is too high, they start reducing what you might be eligible for.

Nikki: Yep. And so, anytime you hear credit deduction, something where the government is going to give you something, assume that you should look in and see if you qualify based on your salary or your income. Is that fair?

Matt: Absolutely. There are rules. if you’re working and you want to do a Roth contribution, the rules for a contribution to a regular Roth IRA at Charles Schwab, for example, the rules are different there versus a Roth 401k. Yeah, a lot of people get it confused that Roth is Roth, which makes sense, but the rules are much stricter for the money that’s outside of an employer plan. And if you make too much money and you make a contribution, well, eventually you have to remove that and you get taxed or potentially penalized for having that money in there. The enhanced senior deduction passed with the One Big Beautiful bill last year and that has a phase out of $75,000 per person. So that’s not a huge income level, but with careful planning, we can usually preserve as much of that as possible, and we know it’s going to go away in a few years, so let’s maximize it while we can. But to your point, anytime taxes are involved and and the government is seemingly doing you a a solid that there’s probably some fine print that you want to navigate first. Yeah.

Nikki: So, if you’re hearing and you’re talking to your neighbor or you’re talking to your brother-in-law or whatever that might be and they say they got something, that’s a great time for you to stop and, you know, ask a few more questions along the way. High level might be a great concept. And I tell people all the time, clients, shoot me an email, tell me, send me the article, whatever you’re hearing this from, and let’s actually dig in and find the answers because oftentimes, yeah, there’s truth to it, but there’s also these other things you have to consider first.

Matt: Yeah, absolutely. and again, just the one other big piece that I pulled from what you said is how individualized a lot of this is and the decisions that you may want to make and only you know if you have a car or something happening to you and putting a little proactive planning is key. And speaking of proactive planning, Matt, how can proactive planning today really impact that long-term, you know, retirement outcome? And that’s a really broad question, but just kind of summarize that. one thing is we’ve talked about taxes, but also your contributions. And I know I discussed before, but this is something that comes up with clients all the time where they’re working and they’re setting money aside into some account that we’re helping with, whether it’s an IRA, Roth IRA, that non-qualified we talked about earlier, a trust, whatever it may be, and they say, “Hey, need to stop doing my contributions.” Or maybe they’re one that says, “I’ll just call you when I have enough money in my bank account built up and I’m like, “Hey, that’s fine if you have the diligence to actually do it because what happens and it happens to everybody where I meant to do something on Tuesday and all a sudden it’s like seven weeks from now and you still haven’t done it.” The longer your money’s actually made that contribution in your account, more likely is it’s going to grow to a bigger dollar amount.

Nikki: So, I say, look, it’s fine to do the lump sums once a year if you want, but let’s maybe it’s better to have a little bit going in every month just to be sure in case you can’t do it or it slips your mind or whatever. Or if you need to reduce your contribution, this is one I do a lot. Hey, maybe you’re doing 500 a month, but something came up and you can only do a hundred. Often they’ll call and say, “Cancel it.” But to me, it’s like if you keep it going even at a smaller amount, you’re going to come out ahead because the likelihood of you restarting that down the road is not as likely or you’re going to delay too long and you have less money coming in. Now, we don’t want you making so many contributions that you can’t afford to live life. But there’s little things that are psychological like that that’s like automate this as much as possible because we all have a million things going on. Yeah, that’s what I was going to say, man. really love the behavioral aspect of finance and that is where people often get off track unintentionally always having the best intentions but autopilot is like your best friend when it comes to all of this and anybody that’s a client of ours knows about the paladin plan that we talk about and we have a written plan that covers the four pillars we talk about and other things where we are building a list that some of those things are hard to do or people don’t want to think about, but we put them on the list to hold each other accountable to say, “Hey, this is the third year in a row that you’ve kicked the estate plan down the road.” Like, what’s going on?

Matt: Or you told me last year you’re going to contribute an extra $10,000 and you didn’t do it. Here’s what that might be worth now and you just done it or can we set this up to be automated for you so you don’t have to think about it.

Nikki: So, I think the Paladin plan comes in big there because it is a written list that we both have access to that we’re saying, hey, this got done, this got done for the third time. You’ve told me, “Yeah, let’s do it.” But nothing happened. So, what can we do to help you get there?

Matt: You know, that’s very individualized as well is everybody behaves just a little bit differently. And so, the autopilot is a great thing. And for some people, you know, monthly might be the answer. For some people, lump sum is much more comfortable. But the whole point is to make sure that you’re you have it in in any form or fashion to get it done and that we’re doing it on repeat is what I heard you say there.

Nikki: Matt, is there anything else that you want to add to our conversation?

Matt: I think it’s being diligent about it and having a plan. We come across a lot of people that don’t feel like they’re the right fit to have an adviser or they enjoy doing it themselves, which is fine. It’s I like meeting people that are interested in this as well. But do you have somebody in your corner that is first of all holding you accountable and also navigating all these tax laws and investment changes that happen? We spend a lot of time in training and internal meetings reviewing all these different things, all the different portfolio options out there, the stock market, the bond market, tax law. Like, we’re looking at this stuff on a daily basis. Most people out there that have other jobs or have a life they’re living aren’t navigating this like we are and don’t have the repetitions that we do.

Nikki: So, I say be diligent, be transparent, know what your goals are and have somebody in your corner that can actually help work towards it. And I get I get people that call me all the time and say, “Hey, I’m thinking of doing this.” Like, should I or should I not?

Matt: Whether it’s paying off the mortgage early or when to buy the car, like all those different things that seem somewhat straightforward, like there’s a lot of things that go into this and we’re able to say, “Hey, consider this and this and this.” And then work on a decision together. Yeah, I do think you made a good point there, Matt. There is a lot of value in having a quarterback with you.

Nikki: So, a second opinion and we structure things where we want to make sure we’re at least looking at your plan once a year. But it’s really the when you’re in the moment second opinion that can be invaluable that you don’t even realize you’re buying the car, you want to pay off the mortgage, you know, you have the thoughts going through your head and knowing that you can pick up the phone and have another resource available to you is I mean it’s when you’re in the moment is that you want the answer. Yeah. And that happens every week where there’s something like that happening with one of our clients and that’s the resource we want to be. Yeah. I hate to say this, but I’ve been in this industry, we’re going on 25 years at this point, and there is not a day that I don’t have an aha moment about something that we have, you know, valuable partners around us that somebody is sharing a new piece of information that if I’m living in this all day, every day, and I’m still having aha moments about new information or how it might apply or people that I think would find value in some of the information I’m receiving. I mean, it’s hard to keep up in a whole industry when this is not what you do all day every day. Yeah. And I think all of us are comfortable saying, “Hey, I’m not 100% sure the answer there, but I know we can get the answer for you.” Versus just saying, “Yeah, that sounds good. Go ahead and do it.” Like, we’re going to spend the time to do it. And if we don’t know something, we’re going to learn about it so we don’t have to worry about it again. Yeah.

Matt: Absolutely.

Nikki: Well, here’s my challenge to everybody that’s listening today. Over the next 150 days, and why do I say 150 days?

Nikki: We’re coming out of summer and getting into fall and like holidays—when you walk in the store you see the Halloween stuff now. So, over the next 150 days as we approach December 31st don’t just listen to these episodes. I really want you and I challenge you to pick one financial goal and take one action after each show. So hopefully you too have had an aha moment as you’ve listened today. And so, by December 31st, if you take each one of these episodes, four in total, you’ll have taken four meaningful steps towards a stronger financial future. And I think we’ve done a great job of keeping these things fairly simple, digestible, something that you can do.

That’s your challenge for this week. Complete this one action before next week’s episode, and we’ll keep building on these together.

So Matt, as we wrap up today, we want to make sure that we always make a download available for our individuals, for our listeners along the way. And this is the one that we have offered this month. It’s designed to help you put action into what we’ve talked about. And today, the offer or this month, the offer is our S.M.A.R.T Goals Template.

So, what are we talking about when we say S.M.A.R.T Goals? We really do want you to take action. And sometimes deciding what action you want to take is not always easy. So, there’s this concept of S.M.A.R.T Goals, and the framework was credited to George Doran. He published this all the way back in 1981. So, this is a concept that has been out there. It was published with the article title, There’s a Smart Way to Write Management Goals and Objectives, and it was found in Management Review. This was a publication, a magazine, that was published from 1926 all the way up to 2000. But it’s a well- regarded business and management magazine.

And so, the concept of S.M.A.R.T Goals have taken off, not just in business where it was originally started, but education, government, coaching, practice development in general.

So that’s what S stands for is Specific, then Measurable, Achievable, Relevant, and Time bound. And what the reality is, is if you get going through this list and you get to one of them, there’s a chance you’re going to get to it and say, “I don’t know how to get through Measurable, or I’m not going to have somebody on board with me on some of this.” And that might throw out one of these goals fairly quickly.

So if you find some of the things that we’re talking about to be really easy and you know you’re going to get through them, great.

But if you are somebody that needs a little bit more direction and need to think through things and you have bigger goals as it relates to your finances, you might find that this SMART Goals Template is something that is helpful.

And here’s what happens with me. My brain is all over the place all the time. And I think that I want to do that or I think that I want to do something else. And the minute I force myself to do this activity of S.M.A.R.T Goals, guess what happens? A lot of those fall off because it’s just not relevant right now. A lot of clarity comes out of it.

Yep. And you don’t have to make it overly complicated, but when you force yourself to do an activity like this, we hope that it can also provide some value in what we’ve talked about.

Nikki: So, if you hear if you heard something today and you think this sounds like me or you want to get a second opinion, we offer a 15-minute, no-obligation conversation to help you get some clarity. And you can do that by going to our website at paladinfinanicial.com and clicking the booking tool in the top right corner. Or you can go to our podcast web page and that’s paladinfinantalk.com. Both of those have the booking tool. So, book 15 minutes with us if you just need a second opinion or hey this sounds like me.

With all of that, continue listening on our social media platforms. If you’re looking for insights and resources and content go to YouTube, go to Facebook, go to Instagram, LinkedIn. We’re out there so that you guys can continue learning along the way.

Matt, anything else you’d like to wrap up with?

Matt: No. And I think it’s like we’ve covered today. If you have questions, if you have concerns, be diligent, but reach out to an adviser. Yeah, absolutely. We are here to help everyone. It’s not just whatever you might have going through your mind of what you think this looks like. Take all those off the table and call because you never know or book that 15-minute session like we talked about.

Nikki: So, thanks for listening today, and we’ll see you on the next episode.