Subscribers Drive Spotify and Disney

In this podcast, Motley Fool analysts Andy Cross and Matt Argersinger and host Dylan Lewis discuss:

• Disney's newfound strength at the box office and in streaming.
• Spotify's subscription strength and advertising opportunity.
• Shopify's return to its winning ways.
• Why Cava and Instacart stocks are both taking a breather after their earnings reports.
• How the macro environment and housing market continue to weigh on activity for Home Depot.
• Two stocks worth watching: Nike and Papa John's.

Then, Motley Fool retirement expert Robert Brokamp runs through the key numbers to know for 401(k) accounts and IRAs for 2025 and the outlook for taxes and Social Security.

Go to breakfast.fool.com to sign up to wake up daily to the latest market news, company insights, and a bit of Foolish fun -- all wrapped up in one quick, easy-to-read email called Breakfast News.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our beginner's guide to investing in stocks. A full transcript follows the video.

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This video was recorded on Nov. 15, 2024.

Dylan Lewis: We've got the highs and lows of this week's earning slate and the money numbers for 2025. This week's Motley Money radio show starts now.

It's the Motley Fool Money Radio Show. I'm Dylan Lewis. Joining me over the airwaves Motley Fool Senior Analyst, Andy Cross and Matt Argersinger. Fools, great to have you both here.

Andy Cross: Hey, Dylan.

Dylan Lewis: We've got the key numbers you need to know for retirement accounts in 2025, the world according to Bob Iger, and stocks on our radar. Andy, we're going to start out with the world according to Bob Iger. Finally, some optimism over at the House of Mouse. Shares of Disney up over 10% this week on earnings that I think were maybe a little bit better than the market was expected.

Andy Cross: Well, we had some optimism last quarter, dealing with the streaming profit they announced and delivered, and we had more of that this quarter for the second consecutive quarter of the Disney streaming business made operating profits. This time they made 321 million versus a loss of 387 million a year ago. Basically, 180 that's great to see. When you think about the average revenue per user, that was down 1% in the US, but up 3% in international, higher new advertising subscriptions offset by the ad revenue. Half of new US subs dealing now are coming from the ad side of the business. Very similar to what we're seeing at Netflix, the advertising business continues to drive the subscriber business. Total revenues for the business up 6%, operating income up 23%, and adjusted earnings per share up 39%. The best ever quarter Bob Iger wrote for studios with Deadpool and Wolverine and Inside Out 2, which I personally enjoyed a lot that helped boost content sales by 39%. In this quarter, Dylan, Moana 2 and Mufasa, the Lion King coming in 2025, and they have a whole slate of a bunch of releases next year. The weakness, networks, Dylan, continues to be the struggle. Revenue is down 6% and profit's down 38%. The networks business is really the drag on Disney right now.

Dylan Lewis: We are about two years into Bob Iger's second term as CEO. I think it's interesting. Matt, they have announced that there is going to be a new CEO in 2026, and this quarter, Bob Iger gave some guidance for 2026 and for 2027 for Disney, writing some checks here for that future CEO to have to cash.

Matt Argersinger: Let's hope they cash them, whoever that tends to be, because they are pretty ambitious. If we start with the fiscal year that Disney just started. They're looking at 875 million. Andy mentioned the streaming business is now profitable on an operating basis. They're thinking that's going to grow operating profit, 875 million in fiscal 2025. That's a big move. By the way, they're also targeting $15 billion in cash from operations. Guys, Disney's market cap right now. I was looking at this, even with the latest move this week is just a touch over 200 billion.

Netflix, by contrast, is probably going to do about eight billion in operating cash flow this year. Its market cap is around 350 billion. That's a high disparity, and it's not quite as we know, Apples to Apples, I think Netflix has proven to be obviously, leading when it comes to streaming and also just enormously profitable within that channel. But to me, that just seems like, I don't know, I'm not paying a lot for that 15 billion in operating cash flow that Bob Iger thinks they're going to do in this fiscal year. I also like that management said they're going to target dividend growth that tracks the company's earning growth. I love that approach. By the way, since they reinitiated their dividend a year ago, Disney stock is up 20%. I think there's some correlation there as you might expect.

Andy Cross: I like the double-digit earnings-per-share growth in fiscal year '26, Dylan, and also setting out a little bit in the future with Bob Iger in 2027. It'll be very interesting, by the way, guys, to see what happens with the ESPN now is going to join the tile soon this year on Disney Plus, and then next year, ESPN will be a bigger presence on Disney plus in their streaming category as ESPN goes into the streaming world, Dylan.

Dylan Lewis: I believe Iger characterized ESPN as undisruptible as a sports product. We'll have to see whether that materializes, but he's selling a pretty big bill of goods there. We'll stick with entertainment and the theme of strong results. Music streamer Spotify up 15% this week, Matt, continuing what has been an absolutely excellent 2024 for the company and shareholders.

Matt Argersinger: It really has been, Dylan. Steady goodness is how I look at Spotify's results. If you look at monthly active users, 640 million, that's up from 602 million at the end of 2023. It's climbed every single quarter this year. You've had steady growth in both premium subscribers, which make up about 39% of that 640 million and in the ad-supported subscribers. By the way, that 38 million in new premium subscribers this year, that's despite a pretty hefty price increase that the company pushed through during the year. Average revenue per user steadily climbed for both premium and ad-supported users. Best of all, Spotify's profit margins are so much higher than they were a year ago. Total gross margin up about 500 basis points since the end of 2023. When you combine those higher margins with efforts to control operating expenses, free cash flow hit 711 million euros. We got to talk euros, 711 million euros in the quarter, far away at a record and 240% higher than a year ago. As you remember, this was going to be CEO Daniel Ek's year of monetization. Clearly, Spotify is monetizing.

Dylan Lewis: I'm a shareholder, and I've been very happy to own the stock, because people are very loyal to service, but also because it's been clear over the last couple of years there are all of these adjacent markets or business operations for them to get into. We've seen them talk more and more about the advertising business, we're seeing them step a little bit more into video. When you see some of those other opportunities, Andy, where are you paying attention?

Andy Cross: The ad side is really fascinating. The ad revenues as a percent of total revenues actually fell a little bit. The ad business, the ad revenues were up 6%, premium revenues up 21% as Matt was talking about. The ad market, Dylan, I think you need the advertising business for something like Spotify, just like we're seeing on Netflix, just like we're seeing in Disney, the advertising business has to really thrive. They understand that, I think Matt said, the year of monetization, and the year of cost savings. Their operating expenses fell 8%. That's incredible. That year monetization on the ad side, they realize they have some challenges there and they're planning to spend a lot more time to fix them.

Dylan Lewis: I was happy to see what Spotify had to report, also happy to see what Shopify had to report. That is another one that is in my portfolio, and I imagine in the portfolios of many Fools, it's a widely followed one here, shares up 25% after the company's report this week. Andy, what did you say?

Andy Cross: Matt and I talked about this on a couple of different shows, and this was an incredible quarter, Dylan, by Shopify. Their gross merchandise volume, so the traffic across their platform up 24% to 70 billion. That was up almost 4% quarter over quarter. That's the fifth consecutive quarter of 20% or more growth. That lender revenues up 26%. It was 20% just a quarter ago. Their merchant solutions, that's 70% of the sales. That's things like their payment business, their shipping, their capital, their point of sale business. That was up more than 26% versus just 19% in Q2, and their monthly recurring revenue, Dylan, up 24%. But here's a kicker. Operating expenses up 7%, revenue up 26%, operating expenses up 7%. No wonder their free cash margin was up 19% is at now their margin, Dylan, at 19% versus 16% last quarter. Really impressive on their business-to-business, Dylan. That was up 145% growth in their business-to-business, gross merchandise volume, smaller part of the business, but they're really making smart investments.

Dylan Lewis: If you are a shareholder, I'm sure you're having a good time. If you're also looking at this business as a read on how the consumer is doing, I think some positive signs in this report as well. The company mentioned that they are looking to have a good November and December management forecasting that growth rate that you talked about 26%, or maybe even a little bit higher driven by strength in merchant sales on the platform. That's not them being opportunistic with any of this, that's activity they're expecting to roll through during the holiday quarter.

Andy Cross: Dylan, I think that was an exciting part, so the guidance was mid to high 20s. That was somewhere in the low to mid 20s. I think investors reacted positively to it. Again, just continues to show why Shopify is winning. But also operating expenses are expected to be between 32 and 33% versus 39% in the third quarter. Again, more effective use of what they're producing into their platform, and that's showing up in the stock price today.

Dylan Lewis: That was a rundown on who's up this week. After the break, we'll catch up on a few growth stocks that hit a snag after their reports. Stay right here. You're listening to Motley Fool Money.

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Welcome back to Motley Fool Money. I'm Dylan Lewis. Here on air with Andy Cross and Matt Argersinger. Beginning of the show, we talked about some earning season winners. Now over to a few companies with updates the market wasn't quite so fond of. We'll start out with one of the hottest stocks of 2024, and that's CAVA. Matt, an interesting response with the results. Stock popped 15% after hours, then fell 5% after settling out, and the market really had time to digest everything. What were investors reacting to?

Matt Argersinger: That was actually the big thing for me with this one. I'll hit the results first, another fantastic quarter from CAVA. Eighteen percent same restaurant sales growth. Guest traffic up 12.9%. Average unit sales of $2.8 million up from 2.6 million a year ago. Restaurant level profit growth of 42%, queue up the video of Ron Gross. CAVA is firing on all cylinders. But you mentioned the stock movement, Dylan, which I think is actually the more interesting part of the story. You said it. CAVA, the share price actually popped about 19% on Wednesday after the reported results, hitting a high over $172 a share. But then it fell all the way back to 147, and now it's last I checked trading below 140. We're not technicians here at the Fool, but if I could play one for a second, I might call that a false breakout or a gap fill, which is usually very negative for a stock price in the near term. But back to reality, I think this is a case where I think the stock got ahead of its fundamentals. As amazing as CAVA results were, even at the current price right now, the average CAVA store is being valued at about $45 million. I promise you, there's not one person on the planet who would put down $45 billion to own a single CAVA restaurant, despite each restaurant's incredible economics. I think it makes sense that the stock has sold off. It has just had an amazing run since its IPO.

Dylan Lewis: Now, Matt, you are a CAVA shareholder. Andy and I have been sitting on the sidelines as people who are fans of the food but do not own the stock, and maybe kicking ourselves a little bit for that. I'm curious, given the valuation and given some of the market reaction here, do we feel like we're settling out to something that's a little bit more sustainable, or is there still maybe a little bit of softness here because of the growth expectations built into this company?

Matt Argersinger: I say this as a shareholder, I do think the stock it could be set up for more disappointment. I just think the valuation is still so lofty that even a slight miss of expectations in a quarter that comes up, I can see the stock down a lot more. I say this as a person, yes, who owns the stock.

Dylan Lewis: Andy, as a non-shareholder, do you have a devil's advocate take on that?

Andy Cross: I think if you want to nibble, go right ahead. I agree with Matt. But I've been saying that for a while with CAVA, and I watched the Chipotle Grove story, so I didn't learn my lesson, Dylan.

Dylan Lewis: [laughs] There are plenty of more bowls in our future, I think, either way. Shares of Instacart also taking a little bit of a break this week down about 15% after their earnings report. This is one that has had a wonderful 2024 as well. Is it a similar story here, where we're seeing the market adjust a little bit after there has been such an incredible run for this company?

Andy Cross: I think their growth rates, their expectation for the coming quarter on their transaction volume at 8-10% was a little bit weaker. It was up 11% this quarter to 8.3 billion. Order growth was up 10% and the average order up 11%. The growth of 8% to 10% next quarter, Dylan, probably left investors wanting a little bit more, but it continues to do very well, achieved its fourth straight quarter of positive net income, adjusted EBITDA, the earnings before interest taxes depreciation, and amortization was up almost 40%, operating cash flow up 67%.

Percent it's a category for both small and big basket when you talk about shoppers and clients wanting to use grocery stores, which is really where NSACR dominates that. They're starting to build out their advertising revenue deal, which I think is really interesting. It was up 11% for the year. They're seeing some large clients that are pulling back on some of the spending, but interesting Dylan some of the emerging brands, some of the smaller food brands and consumer product company brands are starting to increase spend across the platform. That side of the business why smaller for Instacart has some really emerging properties we'd like to see.

Dylan Lewis: We look for reads on how the consumer is doing and we were talking about it before in the last segment, talking about Shopify. When we look out at what Instacart is telling us, they did mention that there was a little bit of diminished outlook, but it had nothing to do with the consumer. It had mostly an issue of we are lapping pretty tough comps. They are saying that they are still seeing very strong consumer demand, not a lot of trading down. Are you surprised to be hearing that from them?

Andy Cross: Not really. I mean, I think you have to pay attention as an investor and as an analyst to what the company has done in the past and how competitive they are for those growth rates compared to what they have done and what they delivered in the past. As you mentioned Instacart is lapping some of that. They're still seeing increase in activity across their platform. They have large market share. They have this niche into working with grocers specifically to that offer much more complex ordering processes when you think about ordering groceries versus ordering from McDonald's or something like that. It's much more complex, so they specialize in that, but they're also starting to push and work more with other retailers, someone like Sephora or someone like Home Depot. I think as you think about the opportunity for them, it's still pretty immense, and I do like the profit picture and how they're investing their capital into their business.

Dylan Lewis: Bringing us home here. I almost want to go back and rerun the tape from last quarter when we talked about Home Depot Matt, because looking at their results, I feel like we got a very similar quarter from them this time around.

Matt Argersinger: What we did, Dylan. This business is still on the Struggle Bus. It's been there, I guess, for the better part of two years now, comparable sales down 1.3% in the quarter, US comps down 1.2%, and customer transactions, average ticket size, sales per square foot, all down year over year. That's like the trifecta of badness for Home Depot. Operating margin has also been trending lower. It fell again in the third quarter. It really comes down to just the sales of big-ticket items. Those that cost $1,000 or more, those massive Halloween skeletons aside [laughs] big ticket items were down 6.8% in the quarter. Customers are just still holding off on funding major renovations. Now, management did raise full-year guidance. There was better weather in the quarter. They did have some hurricane-related spending. That's feeding into the comps a little bit, so they did raise the guidance a little bit, but still turning out to be a tough year for Home Depot.

Dylan Lewis: I think you might need to trademark the trifecta of badness. I think that [laughs] is too good of an earnings framework for us to be looking at. We're going to have to pull that one back next time we're doing Home Depot next quarter. I want to dig in a little bit to some of the management commentary we got. Here's a line from Ted Decker, CEO and I want you to help me unpack this a little bit. We all know that the feds cut interest rates, two cycles here, but from the cut in September, mortgage rates have actually increased about 60 basis points. Two rate cuts, combined with 75 basis points, yet the 10 year and then therefore mortgage rates up about 60 basis points, that continues to impact housing turnover, which we're just about 3% of homes turning over, which is at a 40-year low. Matt, what is going on with the housing picture, and how it is affecting Home Depot at this point?

Matt Argersinger: That is it. That is it, Dylan. I mean, Ted Decker talked about the housing market every quarter and it seems he should because, it is at a 40 year low. Existing home sales just are not there because of the one of the reasons is because of higher mortgage rates. That's why he's fixated on rates until the existing home market gets on stock. It's really hard to see a pickup in renovations, remodeling, the activities that really feed Home Depot's business and we could be at an inflection point. I think that's something also Ted Decker might be saying is, hey, it can't get any lower. If we're at a 40 year low and the Fed is easing, our business could be at an inflection point.

You might not think about that if you look at Home Depot's share price, because it has trended higher. In fact, one of its highest points for the year, 27 times word earnings. But just remember, cyclical stocks always tend to look the most expensive prior to a boom in demand. I would say, if we get a housing turnaround, as Ted Decker expects, I mean, you're going to see a big rebound in Home Depot sales. You'll see a big rebound in their earnings. That valuation come down pretty quick, and then maybe Home Depot's off to the races if spending does turn around.

Andy Cross: Guys, the other thing, I think with Home Depot is, if tariffs do increase under a new Trump administration, large companies, very effective companies with great distribution and great supply chain logistics can tend to handle those increases a little bit better than maybe a small provider. I think some investors might be thinking that's an advantage for Home Depot, as well.

Dylan Lewis: Investors shouldn't be sweating the big picture when it comes to Home Depot. I'll come around, is what you guys are saying.

Matt Argersinger: I think so, Dylan, and that's why this stock has held up so well because I think investors are already looking ahead to a rebound in Home Depot's business.

Dylan Lewis: Matt, Andy, we're going to catch up you guys a little bit later in the show. Up next, we've got the numbers you need to know for your 401Ks and IRAs in 2025. Stay right here. You're listening to Motley Fool Money.

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Dylan Lewis: Welcome back to Motley Fool Money. I'm Dylan Lewis. Fools, we have 6.5 weeks until the end of 2024 and that means it's time to start turning our gaze to 2025. Joining me to talk through new money numbers you need to know for the new year. Robert Brokamp. Bro, thanks for joining me.

Robert Brokamp: Thank you, Dylan. Great to be here.

Dylan Lewis: We have a lot of people that are saying maybe it's a little bit early to start thinking about the New Year. The reality is we know the holiday is going to be taken over fairly soon and we've gotten quite a bit of guidance from the IRS and from the government on some of the limits for some of the most important accounts for investors for 2025. That's why we're talking about it now. We want to make sure that people have it on their radar before things get hectic later in the month. Let's kick off with, I think, probably one of the accounts that people are most mindful of and that's 401Ks. What are we looking at for 401Ks for 2025?

Robert Brokamp: The first thing that I think to think about is, have you maxed it out for this year so far. For this year, 2024, the amount you can put in is $23,000 with another $7,500 if you'll be 50 or older by December 31st. You want to make sure you do that if you haven't yet. It's important to do that now because in most situations, you can't send a check to a 401K. You can only contribute through your payroll. Since, as you say, we only have six weeks left, you should probably do that now. Now, next year, the 401K contribution limits are going up, another $500.

The catch up contribution for most people, is going to say the same at $7,500, except there's going to be a new wrinkle that starts next year for people who are just 60-63 and their catch-up will be $11,250. This is also something to think about before the year ends because, if you want to do that higher contribution limit with the very first paycheck of January 1st, you probably have to change your contribution limit before the end of the year. Talk to your HR department or your payroll department. It's usually the last week of the year if you want to make sure you're contributing that high amount with the very first paycheck of 2025.

Dylan Lewis: Bro, if folks are like us at Motley Fool, I think we have three pay periods left, which means if you get those in early, you got time to catch up, but certainly plenty of time to make sure you're all squared away for the New Year.

Robert Brokamp: Exactly.

Dylan Lewis: Speaking with retirement, why don't we focus a little bit on what's going on with individual retirement accounts. I know that'll be a bonus level of retirement savings for some of those folks with 401Ks, but also something that is incredibly important for people who don't have that employer sponsored account.

Robert Brokamp: Yes, and that is actually not going to change, so the limit is going to be the same in 2025 as it is for 2024. The limit is $7,000. The catch up is $1,000 if you'll be 50 or older. Now, we talked about the 401K, generally, you have to have that done by December 31st. Technically, you can wait until next April 15th to contribute for 2024, but why not get that money in sooner? The sooner you invest, the better off you're going to be. Now, everyone who is working can contribute to an IRA. If you're not working, but you're married to somebody who's working, you can contribute to an IRA. But there are some wrinkles that will determine whether you can contribute to a Roth IRA or whether you can deduct your contributions to a traditional IRA. Those income limits will be changing. They'll be going up a little bit. I'm not going to go into them in detail, except for the Roth IRA because, everyone wants to know about that one. Because we are still in historically low tax rates. I do think if you're eligible for the Roth, it makes sense.

I'm just going to read it out here for 2024. It is a modified adjusted gross income. If you are single of $146,000 and then the amount you can contribute begins to gradually go down to hit $161,000. If you're married filing jointly, that's 230-240. Now, again, this is your modified adjusted gross income, not your gross, not your taxable. It's somewhere in between. It's adjusted gross income with some things added back. Look at up on the Internet. But this is a good time of year to evaluate that, because if you're on the cusp of those limits, you can decide whether you should do the Roth, maybe or if you should accelerate income this year or delay it to next year, if you can, to make you more eligible for the Roth if that's important to you.

Dylan Lewis: One of the things I wanted to get your take on Bro, was we've outlined here the allowances for these different accounts and we're used to getting a steady update from the government each year on what will be considered. What goes into the decision on the government side for the guidance that they're willing to give and the way that these programs work?

Robert Brokamp: It's pretty much all adjusted to inflation and things like these income limits for IRAs or tax brackets, it's really just tied to inflation. For the retirement account contribution limits, it's adjusted by inflation, but there has to be a step up. It's not always every year with inflation. It only goes up with the retirement accounts in $500 increments. They were triggered for 401K this year, not triggered for the IRA this year, but I suspect they will be next year.

Dylan Lewis: When you look out at most of the changes that are coming for the core retirement accounts, is it mostly current state of play continues, but we're seeing allowances move up a little bit, or is there anything new or different that people really need to be keeping in mind?

Robert Brokamp: Anything related to income is going up a little bit somewhere 2-3%, so that's good news. Same with tax brackets going up a little bit. The only major change was that those higher catch up contribution limits for those who are 60-63. That's a new thing in 2025.

Dylan Lewis: Since you mentioned tax brackets, I know a lot of people looking at their portfolios at year end, thinking a little bit about tax loss harvesting, thinking about whether to sell that loser, and maybe give themselves some offsets for income that they've generated. How are you thinking about that right now and just the general tax environment for 2024 and 2025?

Robert Brokamp: I think tax loss harvesting can always make sense, especially if it's an investment that you just don't want to hold anymore. If it's down below a price that you paid for it, it's in your taxable brokerage accounts, not in an IRA or 401K and you really just don't want to hold onto it anymore. You might as well sell it. Take the loss. It offsets gains, and then any excess loss, it'll offset $3,000 of ordinary income and you can carry that forward to future years.

If it's an investment that you really like, then you have to be a little bit more careful because you can't buy it back again for 30 days and you can't have bought it 30 days prior. The whole wash sale rule is what this is known as. It's not just 30 days after, it's 30 days before. I think there's always the risk that you sell that investment, you wait 30 days, and then the stock takes off to a degree that it offsets any tax benefits that you had. I'm less excited about tax loss harvesting for investments that you like, totally for it for investments that you're ready to let go of.

Dylan Lewis: In addition to all of these updates, we also have a new political administration stepping into the White House in 2025. I'm curious as you think about people's money, their portfolios, and people keeping an eye on their tax bill. Is there anything that people should be expecting or thinking about in 2025?

Robert Brokamp: Yeah, tax rates are very low right now because of the Tax Cuts and Jobs Act that was passed in 2017. The way that was set up was the corporate tax breaks would mostly stay the same. But due to certain rules, the personal tax breaks were due to sunset in 2026. We only had one more year of these lower tax rates, and then they were going to go back to 2017 levels. Now that we know that we're going to have a Republican Congress and a Republican president, I think it's almost guaranteed that they will extend those tax breaks and possibly even reduce tax rates further. Why would that matter? Well, one thing that people have been doing to take advantage of low tax rates is doing more Roth conversions. That is basically taking money that's in a traditional account, turning it into a Roth.

Now, whatever you convert gets added to your taxable income. If you convert $50,000, you have to pay $50,000 added to your income, you have to pay taxes on. You pay taxes today, but then it grows tax free as long as you follow the rules. There's some debate now about, should you wait till 2025 to do some of those conversions in case tax rates are even lower in 2025. I don't have an opinion on that. You'll find opinions online about that. I always like to hedge things. If you think some conversions makes sense, maybe do some this year, maybe do some next year, I don't think there's any chance that tax rates are going up next year, so I think you'll still be in a good place. The other thing I will say, though, about these lower tax rates is it brings up a couple issues. It's going to result in deficit spending, no question about it. We're not addressing something very important and that is the Social Security trust funds are going to basically be depleted in about a decade. I recommend that everyone loves their tax cuts, but bank them, invest them, because at some point in the future, there might need to be either A, higher tax rates to pay for all this or reduce Social Security benefits because we're not doing anything yet to solve that problem and so bank any money you are saving today because of these tax cuts because you might need it later.

Dylan Lewis: Speaking of Social Security, for the retirees out there, what can they expect for their Social Security checks for 2025?

Robert Brokamp: The cost of living adjustment is going up 2.5%, which is about in line with where inflation is right now. Some people who may hear that number like. Well, that's lower than what it's been in the last few years. But that's because inflation today is lower than it was in the past few years. That's the great thing about Social Security is that it does keep up with inflation, and depending on the circumstances, the cost of living adjustment can actually be higher than overall inflation. We'll see what happens if that was the case this year or not.

But so that's the big thing for those who are getting close to the point where you would reach your full retirement age, and that's roughly 66-67 these days, depending on what year you were born. There are also other limits that change every year. It's basically if you are working still, you're not reached your full retirement age and you're taking Social Security. If you earn above a certain amount, you have to give back your benefits, and those amounts change every year, so you should look into that. The bottom line for that really is, if you are continuing to work before your full retirement age, it's probably best not to claim Social Security because you might have to forfeit some of your benefits.

Dylan Lewis: I've got a listener question for you in a second, but I want to give you a big open one here. I've asked you about some of these specific accounts and some of the specific topics that I know some of our listeners are interested in. Is there anything that you think people should have in mind as they're doing some planning this year?

Robert Brokamp: I think that one thing that you should do every year is run your retirement numbers. If that means if you are still working, you use a retirement calculator. One of my favorite calculators is a CalcXML calculator. Just do an online search for CalcXML retirement planning module. The stock market has done so well. October, we reached the two year anniversary of the current bull market. You probably are doing pretty well and you might be closer to retirement than you thought. If you are already retired, I think it makes sense to look at your portfolio every year to determine how much you can safely withdraw. When your portfolio is up, it means actually, you might be able to take out a little bit more. This is generally good news for those who are both saving for retirement and in retirement. The market is at all time highs, home prices at all time highs. Anyone who is accumulating assets is doing pretty well.

Dylan Lewis: Bringing us home. We've got a listener question that seems tailor made for you. This one comes from Christian. Christian writes in. Hey, Fools, one question I have is which investment account makes the most sense to purchase individual stocks with. I have a 401K, a Roth IRA, and a general brokerage account, all of which are largely invested in broad ETFs or mutual funds. Few months ago, I wanted to purchase some individual stocks, and I did so in my brokerage account just because as a non retirement account, it felt less official and helped me mentally organize the purchase as an experiment.

However, I now wonder if that was the right call. Theoretically, one would sell or change positions more frequently when dealing with individual stocks versus a total market index fund, which is just a keep buying type investment. That's the case, is it wiser to hold individual stocks in retirement accounts, so I can change positions without tax penalties and leave the broad ETS in my brokerage? The example I'm citing was a small purchase of a few hundred dollars worth of cover, but I'd like to make a more informed decision on which account to choose when I next invest in individual stocks. Love the podcast, and thank you for your help. Bro, what do you think?

Robert Brokamp: Well, there's a lot here, and I can't give personalized advice, so I'll give you some things to think about. First of all, when it comes to decisions about which accounts to invest in, you start with your timeline. For money that you plan to leave until retirement, go ahead and put it in the IRA and 401K. You can't take it out generally speaking before age 59 and a half. There's some exceptions, but you want to be able to say, I'm putting this money away and I don't need it, I'm going to leave it there. If instead you bought your shares of cover because you are 30-years-old and you are investing because you want to buy a house in f5-10 years, in that situation, then you would put it in the taxable brokerage account where you can get that money sooner, and you wouldn't have to worry about the early withdrawal penalties.

The other thing to think about is if you have multiple types of accounts like a taxable brokerage, a traditional account, and a Roth, you want your Roth to grow the most because that is the tax free account. You have to look at cross your investments and say. What do I think has the most growth potential and put that in the Roth. Of course, there's no way to know for sure what's going to be the best investment, so I wouldn't put just one investment in your Roth IRA. But that is one way to think about it. You're on the right track, too, when it comes to your brokerage account, if this is an investment you don't need until retirement, you really do want to use it for something that you are going to buy today and hold for many years, perhaps decades, and an index fund is a great choice for that because you just set it and forget it. Plus, index funds in and of themselves, are relatively tax efficient, especially compared to traditional OP mutual funds. I think that's a good choice as well.

Dylan Lewis: Well, I certainly feel on track, and I'm hoping our listeners do, as well. Robert Brokamp, thanks for joining me today.

Robert Brokamp: My pleasure, Dylan.

Dylan Lewis: Listeners, you can catch Robert Brokamp talking personal finance and answering your questions each week on Tuesday episodes of our Motley Fool Money podcast. If you want his take on something, shoot us a note at podcasts at fool.com or call in our voice mail 703-254-1445. One of our favorite things to do is get listeners' voices on the show. That's 703-254-1445. We're going to head to a quick break, but we've got stocks on our radar coming up soon. Stay right here. You're listening to Motley Fool Money.

As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. Don't buy sell anything based solely on what you hear. All personal finance content follows Motley Fool Editorial standards. It's not approved by advertisers. Motley Fool only picks products it would personally recommend to friends like you. I'm Dylan Lewis, joined again by Matt Argersinger and Andy Cross. We're going to roll right into radar stocks this week, gentlemen. Our man behind the glass Rick Engdahl is going to hit you with a question. Andy, you're up first. What are you looking at this week?

Andy Cross: Team, I'm looking at Nike. By the way, Nike is a little over $100 billion company. It's about half the size of Walt Disney, as Matt just pointed out, so that's just some context theory. But Nike just boosts their dividend by 8%, Matt. I know you love that, so I'm bringing that one to you here. It fits well under the category. I think of a lumbering giant in need of that shot of adrenaline. It lost its innovative brand edge, though it still remains one of the highest profile brand in sports and sports where it got that shot of adrenaline with the rehiring of Elliott Hill, a 32 year veteran who was president of the consumer and marketplace businesses before leaving when Nike brought on John Donahoe to jump start its e-commerce business.

Hill is a Nike person team through and through. He has degrees in kinesiology, he has a master's in sports administration, and he actually wrote a paper on Nike's brand when he was in school. He has said things like, we're going to put the athlete first in everything we do. We're going to simplify and we're going to go. Sports have been a huge part of his life. The internal employees of Nike cheered this event when he was announced. He brought a little bit of excitement back into that brand. When you think about what has happened with sales and profits both down pretty substantially this quarter, Nike is in that turnaround stage, and I'm excited to see what Elliott Hill, who's been with Nike through and through for so many years can bring back into one of the giants in sports and sportswear apparel in the world.

Dylan Lewis: Rick, a question about Nike, Ticker NKE.

Rick Engdahl: How long has this company been around?

Andy Cross: Gosh, this 1970s, I think, 1970.

Rick Engdahl: It's called what?

Andy Cross: I said it's a lumbering Giant.

Rick Engdahl: No, what's the name of the company?

Andy Cross: It's called Nike.

Rick Engdahl: How come three or four times you say Nike?

Andy Cross: Did I say that? Yes, 'cause I always used to pronounce it as Nike until I learned it's actually pronounced Nike, so yes.

Rick Engdahl: You've been covering this company for a long time, and you're still saying saying Nike.

Andy Cross: You need to exactly move on.

Dylan Lewis: Show the Greek goddess of victory some respect, Andy. Matt, what's on your radar this week?

Matt Argersinger: Domino's Pizza, which is not my Radar stock, got a bit of a bump on Friday because Berkshire Hathaway is taking a $550 million slice in the business. See what I did there. Now, nothing against Domino's. I'm certainly not the one who's going to bet against Buffett or Ted Weschler or Todd Combs, whoever is making this Domino's purchase. But if you like better pizza and more importantly, a cheaper stock price, check out Papa John's ticker PZZA, trading about 16 times earnings compared to Domino's 25 times earnings, also comes with a 3.7% dividend yield. They recently added a new CEO, Todd Penegor. He's coming over from Wendy's. He did a wonderful job for shareholders there. I think he's going to be a big boost for Papa John's sales and its margins, and you're starting from a much cheaper place as an investor buying Papa John's today than buying Domino's.

Dylan Lewis: Rick, a question about Papa John's. Ticker PZZA.

Rick Engdahl: Better pizza. Come on. his is not a difficult recipe. Why is it that chain pizza is so lousy? It's not difficult.

Matt Argersinger: Well, it's all relative.

Rick Engdahl: I can go into any pizzeria on the street in New Jersey, and there's a grumpy Italian guy with cigarettes rolled up in his white t-shirt sleeve.

Matt Argersinger: He can't scale from that dish.

Rick Engdahl: The sausage just tiny slice, it's not ground up like hamburger helper. I know it's going to fold in half nicely. It's going to drip off the back nicely. I don't know why pizza is so difficult for people.

Dylan Lewis: As a fellow New Jerseyan, I cannot agree more, Rick. I think I know what you're doing. I think you're going with Nike based on that answer.

Rick Engdahl: Yeah, I'm going to go with Nike.

Dylan Lewis: Andy, Matt, thanks for being here. That's going to do it for this week's Motley Money radio show. Show is mixed by Rick Engdahl. I'm Dylan Lewis. Thanks for listening. We'll see you next time.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Andy Cross has positions in Amazon, Berkshire Hathaway, Best Buy, Chipotle Mexican Grill, Home Depot, Netflix, Shopify, Spotify Technology, Target, and Walt Disney. Dylan Lewis has positions in Shopify and Spotify Technology. Matthew Argersinger has positions in Amazon, Cava Group, Chipotle Mexican Grill, Home Depot, Netflix, Nike, Shopify, and Walt Disney and has the following options: short December 2024 $150 calls on Cava Group, short December 2024 $390 calls on Home Depot, short December 2024 $390 puts on Home Depot, and short January 2025 $75 puts on Nike. Rick Engdahl has positions in Amazon, Berkshire Hathaway, Best Buy, Chipotle Mexican Grill, Home Depot, Netflix, Nike, Shopify, Spotify Technology, Target, and Walt Disney. Robert Brokamp has positions in McDonald's and Walt Disney. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Best Buy, Chipotle Mexican Grill, Domino's Pizza, Home Depot, Netflix, Nike, Q2, Shopify, Spotify Technology, Target, Walmart, and Walt Disney. The Motley Fool recommends Cava Group and Instacart and recommends the following options: short December 2024 $54 puts on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.