Joining me now here for our next segment is someone
to talk about personal finance saving for retirement. Just
getting a little bit easier. Congress passing this$1.7
trillion Secure Act 2.0 will change the way that Americans
save for retirement starting next year. And joining me
now is Brent. Weiss, co founder and certified
financial planner of Facet wealth Brent, thanks so much
for coming on the show. So walk me through
some of these big changes that americans need to know
about. Well, it's it's been quite 2022 has
been quite a year for everybody. We had the
great inflate highest level of inflation, 40 years.
We had record industry hikes from the Federal Reserve stock
and bond markets are down. We have the talk
of a possible recession and now we add on what
I call this legislative production coming out of Congress right
? Because they must have missed it in the midterm
elections here and they've given us This massive bill that
has defense funding, Nondefense funding and changes that are
going to change the way we think about retirement savings
for ourselves. So here's what I can tell you
, I'm going to bring down the good the not
so good and sort of the big miss in my
opinion, the good stuff is that this is going
to expand access to retirement savings. One of the
biggest challenges we have is almost 60 million people lack
access to retirement savings in this country. This is
gonna lower the cost for small business owners to set
up retirement plans and give more people access. Number
two, there's gonna be matching contributions potentially for both
student loan repayments and potentially emergency fund savings. This
is I think one of the bigger wins that we're
going to see here. Third Thirdly here for sep
iras and simple, I raise you now have the
option to make Roth contributions. That was never the
, that was never possible before this bill was passed
. And finally the the education savings plans are 5
to 9 plans which isn't really about saving for retirement
. These things have become a Swiss army knife for
setting your kids up for their future. They can
now Pay for college education costs$10,000 for student loans
and you can even convert it to Roth Iras now
real quick they're not so good. There are an
increase, there is an increase to matching or to
your catch up contributions if you're over 60, that
feels like a win. But only about 10% of
people contributing to retirement plans are actually hitting their maximum
contribution for the year. So 90% of people won't
benefit from this. Um The taxation is gonna change
from pre tax to post tax and Roth RmD ages
are increasing the 75 years old over the next couple
of years. And there's an automatic enrollment feature here
as well that's gonna allow most are new four oh
one K. Plans to get new participants to start
contributing to the 41 K. Retirement plans. Final
comment here, the big miss is really that we
aren't solving for the biggest issues that when it comes
to, why aren't more americans a able to access
high quality financial advice or be able to save for
their future. And this bill just adds more features
and I think more complexity to the retirement landscape.
Okay, so I do think for some part time
workers brand as you mentioned there according to your data
, this is going to expand access to 401k.
To 16, 60 additional 60 million additional americans,
which is pretty big. Of course if you're not
a full time employee at one of these big corporate
companies that is matching your 401k. Already. Now
for anyone who is interested obviously in contributing to a
four oh one K. Whether or not these new
rules apply to you or not next year Brent your
financial advice will be helpful here as people try to
navigate this volatile market. I mean do you think
2023 will be a good time to put money away
for retirement? The short answer is it's always a
good time to put money away for retirement. The
nuance here is really how should you be putting money
away for retirement? So the four themes that we're
discussing with our clients here in Facet are they come
down to four buckets. Number one is the economy
in this talk of a possible recession, although we
saw this in 2018, we thought of recession was
coming. One did, but because of covid,
so that's not normal economic activity. The second thing
is inflation third or interest rates and fourth are the
stock and bond markets being down. Here's how we're
addressing this with our clients. Number one, if
you have to look at your situation, understand if
we're going into a recession or there are gonna be
some economic headwinds create a very solid financial foundation for
you and your family. That means positive cash flow
right? That's money in versus money out. You
want to have a you want to have the right
emergency fund for you and your family, You want
to pay off this higher industry debt and then you
also want to protect all of that insurance and estate
planning. All right. So if we think about
investing that everybody wants to know 2023 should we do
it? Number one put your cash to work emergency
funds by the way, before we think about investing
longer term, secure your cash, high yield savings
accounts or paying between three and 3.5%. I mean
the good news with inflation and higher rates, you're
actually getting some return on your cash. And I
even said if you have shorter term savings goals 1
to 5 years. Look at by some government bonds
. Series, iron inflation bonds are paying almost 7%
Treasury bills. 6, 12 months are paying four
or 4.5%. Some really good ways against some extra
cash today now for thinking about longer term investing in
2023 beyond. Think about it this way both stocks
and bonds are down. That's hard. Number one
is we want to check or manage our emotions.
That's the number one thing that will derail your investment
success longer term. So understand it's your mindset that
sometimes matters. Think about it this way to markets
are down 20% stock markets are not 2030% bonds are
down. You're buying on discount longer term if you
have 5, 10, 20 years until retirement,
putting money away consistently called dollar cost averaging. That's
just jargon for investing consistently. Every single month will
always benefit you longer term. The final point I'll
make here as well as always understand the level of
risk in your portfolio. If this has a little
worried, you can pair back on risk a little
bit and avoid what I call the Frankenstein portfolio,
which is buying a smattering of individual investments, putting
it together and thinking you have a portfolio. There's
an art and a science to investing and just be
smart about how you manage risk in your overall investment
strategy. All right bren great advice there. That's
Brent wise co founder and certified financial planner at fast
. It well, thank you.