Archives: Captivate Podcasts

I’ve talked about Health Savings Accounts (HSA’s) in the past but it was time for Matt Robison and I to revisit one of my favorite retirement accounts. You read that correctly, HSA’s are great vehicles for retirement savings. Here’s the four W’s:

1. What: What is a Health Savings account? It is an employee benefit intended to offset health care costs of high deductible insurance plans. Once opened, employees and employers can contribute to this account (more on this below). The money can be used now to pay for out of pocket medical expenses such as co-pays, prescriptions and even certain over-the-counter items such as sunscreen OR it can be saved to pay for medical expenses incurred in the future and to reimburse for expenses paid during the eligible period.
2. Why: Why open an HSA? It’s simple: Contributions made to the account are tax free. Eligible withdrawals are tax free. And all money earned in the account incurs no tax burden. That is the triple tax benefit!
3. How: How do you open an HSA? Have a chat with your company’s HR department. Evaluate your options. Choosing an insurance plan for your family that works for your current needs is the priority. If your employer offers a high deductible plan with an HSA and you have the means to cover your health care expenses, open the account. Contribute the maximum per year (often employers will contribute to these accounts as well so be sure to take advantage of FREE MONEY). Invest the money in the account in a low cost index fund. Let the money grow while you collect receipts for your eligible medical expenses. In 10-20 years, use all that cash to buy yourself a new knee or hip or reimburse yourself for all those kids’ urgent care bills and pay NOTHING to Uncle Sam.
4. Who: Who can take advantage of this amazing benefit? Anyone working for an employer that offers an HSA. Check with your HR department today!

Tune in to hear more details about this savvy retirement savings strategy.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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You don’t need a ninja suit and a broom to sneak through this clean back door and “steal” an extra $10k. 

Many of my clients see the income limit for contributing to a Roth IRA ($150k/year single; $228k/year married) and give up on this wholly beneficial retirement account. 

This year, the contribution limit is $6,500 for an individual. Since a Roth IRA grows tax free and is 100% yours, it is an account everyone should take advantage of. Unfortunately the income limits leave many to believe it is not an option. I am here to show you exactly how to get in that back door, cleanly.

1. In order for this to work, you must not have money in any other IRA accounts: traditional, rollover, SEP or SIMPLE. This does not include other types of employer accounts like 401(k), 403(b), etc.
2. Open a traditional IRA account and contribute $6,500 for 2023 (if under age 50 – $7,500 if older)
3. Wait for a few weeks/months and open a Roth IRA and transfer the money from the traditional to the Roth account. Then invest your cash into a low cost index fund and get excited about your extra $10k of tax-savings.

That’s it. Clean and simple. So what are you waiting for?

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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This podcast might not be a one-size-fits-all, but it is worth a listen in terms of understanding estates and how good financial planning can help ensure that beneficiaries suffer the fewest tax consequences.

Matt and I discuss how parents trying to lower estate taxes can take advantage of the rules and start giving money to their adult children and even grandchildren. The benefit of doling out some inheritance before death is two-fold: lower tax responsibility and the ability to watch your loved ones use the money to better their lives.

In this podcast, we cover the following:

1. Gifting Rules: DId you know that every person can gift $17k to another person with no tax ramifications? So, if both your parents are living and are so inclined, each could give $17k to every member in YOUR family. For a family of five, that could be $170k per year in tax-free gifts.
2. Education and Medical Expenses: Your parents can also pay your family’s education and medical bills directly to the institutions, tax-free. 

Not everyone is fortunate enough to have parents with millions looking for ways to pay the least in Federal and State Estate taxes but it is also something to think about with regard to your own portfolio as you get closer to retirement age. Even if your parents can’t do it for you, you might be able to take care of the next generations while you are still alive to enjoy watching the money being spent.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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Want to set your kids up for financial success? Well, you should have started 20 years ago. Before you start sputtering and scrambling, know that the next best time to do this is right now.

When time is on your side, you can afford to take on the risk of market volatility in order to reap large rewards (in the form of compounding interest) in the future. Want to know how?

It’s as easy as 1,2,3…

1. Open an account – You can do this at your current brokerage, via any robo-advisor or even with your own robo-advisor at M1 Finance. Name it “Kids Outer Space Fund” or anything you’d like to remind you it’s for the next generation.
2. Set up automatic monthly transfers to fund the account in whatever amount you deem appropriate
3. Invest 100% of the money in the stock market. There is no specific goal here except to swing for the fences. Use a low cost index fund in the total US stock market or the small cap value. Why? Because historically speaking, over the course of 40 years, the total US Stock Market average return was 10%-11% and the Small Cap Value return was 15%-16%

That’t it. So what are you waiting for? Tune in to hear all the gory details or just go open your account today.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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This week we are celebrating the 100th podcast by bringing you the top five most downloaded episodes. Join Matt Robison and I as we countdown the topics most listeners found helpful:

5. Health Savings Accounts – How you can enjoy triple tax benefits by using my favorite all-time account

4. ETF vs. Mutual Funds – This was a hot topic last year when many people were hit with an unexpected capital gains tax bill on their mutual funds. In this episode we talk about the difference between the two “wrappers,” which is best for your portfolio and the nuances and work-arounds to ensure you are getting the most from your money.

3. SEP IRA vs. Solo 401K – Another head-to-head battle, this one for small businesses. Spoiler alert: Solo 401K is the way to go! 

2. Maximizing Employer Benefits – Want to learn how to launder your money, legally and with the most benefit to you? Listen up for a strategy to use more of your paycheck to take advantage of benefits such as after-tax 401K contributions and employee stock purchase plans while spending from your brokerage account to cover your usual monthly expenses.

1. ROTH IRAs for Minors – It turns out my listeners really want to set their kids up for success. In this episode you will learn how to turn your young child’s $3k in earned income (chores) into $50 million for their retirement courtesy of compounding interest. 

Didn’t see a topic that resonates with you? That’s ok. Check out my podcast page for 94 more episodes bringing you the knowledge you need to make the best decisions for your financial success. 

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Are you ready to create your ideal lifestyle? Let’s Connect.

A smart man learns from his mistakes, a wise man learns from the mistakes of others.

Many of my clients are in the tech space and thus affected (at least emotionally) by SVB’s failure in early March. On this week’s podcast I will give you the wisdom gleaned from the downfall of the bank that was not too big to fail. 

I break it down into three parts:

1. What does the collapse of SVB mean for me? 
2. First, single stocks are very risky. Use low cost index funds to reduce the risk of having all your eggs in one basket.
3. Second, go government. Don’t leave your cash sitting in a bank. Invest the cash you don’t use on the regular in a government money market fund. Why? Because it is fully backed by the United States Treasury. 
4. Lasty, be aware of who you are doing business with. Who is the producer of the financial products you use? Are they credible? What risk is associated with their brand?
5. Why did SVB fail? 

Banks are a business. They offer products to consumers, in the form of accounts and returns. SVB used its clients’ deposits to invest in other businesses and the market at large, resulting in profits for both the bank and its depositors. Until those investments took a dive. Suddenly, clients want their money back but the bank doesn’t have it to return.

1. Long-term bonds: The Golden Egg

When you buy a bond you get two things over a set period of time: an interest payment each year and the return of your principal at the end of the time period. So, here is an example of how bonds lose value:

1. Say that you buy a 10-year golden egg for $10k that pays you $100 per year in interest for 10 years, then you get your $10k back.
2. Three years later, the government raises interest rates, and a new platinum egg is released. That egg will pay you $400 in interest over ten years. Suddenly your golden egg is now only worth $9k because everyone would rather have the platinum egg.

This is what happened to the 2019 10-year US Bond that SVB bought 3 years ago. It is still paying 1% ($100 per year) but is only worth $9k today. So, if SVB is forced to sell that bond today to pay back a customer, it only has $9k to give back to the customer!

Tune in to hear more about the lessons that should be learned from SVB’s collapse. And if you were affected by the bank’s demise and have questions or just want to chat, reach out!

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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Many parents want to set their kids up for success and support them on their life journey. With the memory of establishing 529’s at the forefront, the thought of IRA’s and Roths can be overwhelming. Don’t get caught in the weeds.

Join Matt and I this week to learn how you can take the 5-minute approach to giving a small, but meaningful, boost to your kids. The bottom line is: don’t over-complicate the saving. 

1. Open an additional brokerage account wherever you do your investing. 
2. Name the account something flashy like “For the Kids” or “Kids’ Savings.” 
3. Auto-transfer $20/$50 (whatever amount you want) to the account monthly. 
4. Let it grow (next week I’ll tell you how to invest it).

This is a great way to give a little extra (if that’s your thing) toward college, a down payment on a house, backpacking in Europe… or something that will make a big difference to a young person.

The account is in your name so there are no additional tax ramifications or extra hoops to jump through (vs. setting up IRA’s in your child’s name). Keeping it simple makes it easy to give a potentially life changing gift to your kids in the future.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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Financing a new or used car is almost as frustrating as the salesperson trying to sell you that cherry red, tinted window ladies/gents magnet Prius on the lot. 🚗

Car dealers may be able to entice you with lower rate financing options than you could get at your bank of choice, but when looking at 4%-7% interest over five to seven years, it makes sense to evaluate other options.

Join Matt Robison and I as we discuss other financing options for new vehicles. For instance, HELOC’s could be a great way to get that electric vehicle in your driveway. In the end, it’s all a numbers game so tune in to learn how to save yourself the most money on a new vehicle.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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Congress’ passing of the Secure 2.0 Act at the end of 2022 provides savvy planners with many new ways to benefit from retirement savings.

Join Matt Robison and I this week as I walk through some of the changes and sprint through others to give you an overview of how this monumental piece of legislation impacts your bottom line.

1. Required Minimum Distribution (RMD) age changes – If you were born after 1960, you don’t need to worry about that until you are 75 (it used to be 70.5, this year it changes to 72 and in the next couple of years it will reach 75. Not something you need to worry about now, but it is a benefit.)
2. ROTH 401k Employer Contributions – Without getting into the weeds of the laws, the big change in the Secure Act 2.0 allows employers to contribute to an employees ROTH 401k as opposed to being restricted to only matching funds in a traditional 401K account. This strategy requires employees to pay the tax on the match up front, and allows that employer contribution to grow tax-free forever which could add up to a lot of money. 
3. 529 to Roth IRA – You can now do a one-time rollover of “extra” 529 money into your Roth IRA.  Plenty of caveats abound, but it’s a great new use of found money.
4. Honorable Mentions to be aware of in the coming months/years:

a. 401k contributions and catch-ups are increasing. As you’re planning your 401K contributions, be aware of the 2023 limits, they will be increasing over time.

b. Starter 401ks for small businesses will be getting easier to implement. 

c. Student loan payments often keep people from being able to contribute to a 401k. The new law allows matching employer contributions to the 401K for folks paying down student debt. 

d. Auto enrollment for 401Ks has been expanded.

The bottom line is there are no changes that you need to make today but be aware of the Secure Act 2.0 in order to get the most out of your retirement plan.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Are you ready to create your ideal lifestyle?  Let’s Connect.