Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual.
Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative, securities offered through Cambridge Investment Research, Inc., a broker-dealer, member of FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors, Inc. A registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice.
Now here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS.
Well, this is Nate Kreinbrink. I have Mike Steigerwald here with me this morning. Mid-October, this is moving right along, but it looks like enjoy it, because…
Mike Steigerwald:
About to get a little chilly.
Nate Kreinbrink:
I think fall is definitely upon us here if you look at the next couple of days. It goes from what I think Monday we were mid to upper 80s I think for a high and Friday I think is high of maybe low 50s.
Mike Steigerwald:
50s. Yeah. My wife was telling me my kids have a soccer game on Saturday morning. Temperature is supposed to be about 35 degrees when they play and it’s quite a difference from last week.
Nate Kreinbrink:
And those Friday night football games, high school local area teams, Friday night’s going to be a little chilly.
Mike Steigerwald:
Get your blankets.
Nate Kreinbrink:
So you may need that blanket, you may need that winter coat, maybe a pair of gloves, an extra layer or something, but it is coming.
But no, it is hard to believe that October is flying kind of right by like it is and Halloween just around the corner, and someone was saying it was whatever weeks until Christmas, and…
Mike Steigerwald:
Crazy.
Nate Kreinbrink:
It’s here. It’s here. It’s coming. We know what’s here, but again, enjoy it. Leaves are starting to turn a little bit and seeing the fall colors and everything is kind of neat. So again, enjoy it and bundle up a little bit.
We get to the end of the year. I know last week we had Andy on and we talked taxes and kind of the end of the year tax planning, some of those things that you want to look at. But from just a general review area, you want to look at that from your big picture as well.
And a lot of times that has to do with your investments, your savings accounts, your 401(k), your retirement accounts at work and understanding too where you are from an income standpoint. And if you’ve had a big raise this year, what that’s going to change for your taxes.
Maybe you want to look at, again, upping what you can put into your retirement account at work because, again, those are end of the year stops as far as what you have to look at to put that in. And if your income did go up and you still have room left in your 401(k) at work, may make sense to add a extra percent or two to the rest of your paychecks throughout the course of the year to kind of have that take effect and make an impact.
Mike Steigerwald:
Certainly. And there is enough time to still do that, Nate, I think is the key point. We think that we’re getting close to the end of the year, and if people start talking holidays and things like that, well, how impactful will it be? But in reality, if we put some of these things into play right now, you almost have a full quarter of the year left.
So it may not feel like that all the time, it may not seem like that because, like I said, you get caught up and start thinking of all the year-end stuff and holidays and things like that, so. But certainly could make an impact making some of these changes and implementing certain strategies that may fit in your individual situation.
Nate Kreinbrink:
Right. And that’s where I think sometimes where the confusion comes in where your retirement accounts at work, whether it’s a 403(b), 401(k), 457 simple plan, those type of things, you’re pretty much at that end of the year deadline, that 12/31 deadline to put it in for 2026.
Where the confusion comes in is though with a traditional IRA or a Roth IRA, you actually have up until the tax deadline, April 15th, to make a prior year contribution. So again, if you start upping your 401(k) and you start getting your taxes done for ‘26 and it’s still not looking right and you’re eligible and still have room to put money into an IRA, that’s why you have that extra deadline of the tax deadline to put something into an IRA.
So again, when you’re starting to look at taxes, again, we want to look at it and not just accept kind of what the results are. We kind of want to dictate a little bit as far as what our tax situation is going to be and what we can look at with that.
So if you have room, again, talk to your accountant, talk to your tax preparer. This is the time of year that they can sit down with you and kind of give you a little direction and guidance as to where they are. Andy always says that you got me for another two months and then after that…
Mike Steigerwald:
Yeah. Nothing else you could do, right?
Nate Kreinbrink:
Yeah. Well, and they get busy too with tax filing and they just don’t have time to really do that and there’s not a lot that they can do at that point really anyway. So understanding where that is.
The other time from this time of the year, and starting to see it with a few of the area plans is that a lot of the companies are on just a straight fiscal year calendar. So they’ll start sending out within the next month or so, if they haven’t already, any changes that are going to be made to that plan that are going to go into effect January 1st with that.
So most common where we see is they’re going to change funds that are inside of the plan or if they’re going to change what you are able to put in versus via the match. So maybe they’re raising the match that they want to look at. So if that is the case, you want to definitely look at it and make sure that you’re taking advantage of anything that they’re willing to give you.
Mike Steigerwald:
Yep. And this time of year can be very easy to overlook things like that, right? We get inundated with a lot of stuff. I know we sometimes talk Medicare on the program. This is that time of year where we’re getting a lot of mailings, a lot of extra stuff coming to the house on a regular basis. And it could be easy to overlook those things, so just ask the questions. Like we always say, it’s better to ask and have an understanding, seek the help that you may need to make sure you’re maximizing your own situation.
Nate Kreinbrink:
Well, and I think too, like you just said, it’s a crazy time in the mail. Again, for those that are nearing 65 or already 65, you’re getting a bunch of Medicare stuff being bombarded to your mailbox.
Mike Steigerwald:
Got political season.
Nate Kreinbrink:
We also have midterm elections coming up here in a couple weeks, so it’s getting filled with that. So it’s very easy to just be like, “Oh, all this junk again,” and just start ripping it up and throwing it away while there’s also potentially some things in there that you may need.
And so again, I just caution you to kind of still go through every piece, and especially if you’re already on a drug plan and it’s a mail from that company, there may be some changes that are coming that are going to go into effect January 1st where they’re trying to inform you of that.
Mike Steigerwald:
Absolutely.
Nate Kreinbrink:
So we want to make sure that we’re definitely looking at all those pieces before we just, as we call it, grip it and rip it and throw it away.
Mike Steigerwald:
Yeah. Yeah. Those changes and any changes that come to your Medicare plans would have hit mailboxes or should be hitting mailboxes real soon if they haven’t. So just keep an eye out on those things. Like you said, they can be important to make sure that you have what you need going into next year.
And again, we talk about year-end planning in all of these facets. The common theme is just that. How many times have you heard us talk about it on this program? But it’s making your plan, asking the questions, and not just kind of set it and forget it and hope it works out. I mean, let’s maximize the things that we could do to help you out.
Nate Kreinbrink:
Well, and I think too, when we look at it, again, we’re not that far from flipping the calendar to another year. So if you have a decent understanding as far as what your current income is, what tax bracket you’re in, between now and the end of the year if there’s an expense that may potentially come up where you may be looking to take a little bit more out of a retirement account and raising that taxable income, it’s important now that we look at it to really determine, again, for one, if we need to take it, and two, do we need to take it this year?
Nate Kreinbrink:
Based off of where we’re looking at. And again, sometimes it goes the other way too where your income’s lower than what you expected and you may have some opportunities through Roth conversions or absorbing a little bit more income this year, potentially filling up those lower tax brackets.
And this is the time of the year where we can really start kind of crunching those numbers a lot tighter rather than it’s kind of assumptions earlier on in the year to say like, “Hey, we’re assuming we’re going to be roughly around here. This is what we can do.” Well, we’re getting to that point where those numbers are becoming more of a reality.
And if we need those, maybe we can take as much as we need this year, but then kick some to the next calendar year, and then start it over and spread it out over two years. So planning time is definitely here. I know we keep saying that it’s middle of October, but that middle of December will be here very, very quickly where we need to get that stuff done.
Mike Steigerwald:
Yep. Yep. And a great point that you make there, Nate, just remembering that the more accurate the data and the more accurate the numbers are, the more accurate your results will be as well.
So the I thinks and should bes, when we think of things that we have these conversations earlier in the year, a little more difficult to implement the strategies at that point. Now is the time where, yep, we’ve thought about it, thought about it. Now let’s really get the numbers crunched and then make our decision an informed decision again to make sure that we’re putting our best foot forward regarding all of these decisions.
Nate Kreinbrink:
Well, and too, when you start looking at a lot of the stuff that is out there with some of these new tax laws and all that stuff, a lot of it is very strictly income-based. And so we may think we’re doing the right thing, but by doing it, we may jeopardize or start phasing out or losing some of the deductions and some of the credits and some of the other stuff that we have.
So again, we may not think that it’s a huge idea to go over by a little bit from a tax standpoint, but we need to look at everything else that is tied into that income and make sure that, yeah, it’s only this much from a tax standpoint, but you’re losing this much of your senior deduction. You’re paying back your premium tax credits, depending on where we’re at.
So again, we want to make sure that it’s not just a blinded decision like Mike just alluded to, but again, that we’re making sure that we’re looking at everything that it’s tied into before we make those decisions.
Mike Steigerwald:
Yeah. I mean, like we said before, Medicare premiums can be dictated on that stuff too, how much of your social security benefit is taxed. All of that matters from a taxable income standpoint.
Nate Kreinbrink:
All great stuff. Give us a call. We’d be happy to kind of go over this with you.
Did want to mention real quick before we run out of time that every month NelsonCorp is featuring a new charity of the month. The charity for the month of October is the Clinton Pereira Earthquake Relief Fund.
Again, this is Nate and Mike bringing you this week’s Financial Focus. Thanks for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual.
Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative, securities offered through Cambridge Investment Research, Inc., a broker-dealer, member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors, Inc. A registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.