Blog

Posted on

Newly Widowed? Four Financial Decisions You Should Not Rush

Facebooktwitterlinkedinmail

One of the hardest things that happens in life is losing one’s spouse. On top of emotional pain it caused to the surviving spouse, it can also create an immediate financial transition.

Although widowhood affects both men and women, women make up the majority of the population of the widowed. For many women, widowhood means becoming responsible for financial decisions that were previously shared with a spouse or handled primarily by him.

For women with significant assets, the financial picture can be especially complex. A spouse’s death may involve retirement accounts, life insurance, trusts, investment portfolios, real estate, business interests and substantial tax considerations. The good news is that NOT every decision needs to be made immediately.

Here are four areas where taking a thoughtful approach can make a meaningful difference.

1. Don’t Rush to Make Major Financial Decisions

One of the most common mistakes after losing a spouse is making major irreversible decisions too quickly.

You may suddenly find yourself considering whether to sell your home, invest insurance proceeds, pay off a mortgage, make large gifts to children, change investment accounts or relocate. Some administrative matters require prompt attention. But many major financial decisions can wait until you have had time to understand your new financial situation.

Creating a short-term financial plan can provide breathing room while you develop a longer-term strategy. Start with the basics:

  • What assets do I own?
  • What income will I have?
  • What expenses will I need to cover?
  • What debts and obligations exist?
  • Which accounts and assets pass by beneficiary designation?
  • What taxes may be due?

2. Carefully Evaluate Social Security Survivor Benefits

Social Security survivor benefits can become an important component of a widow’s retirement income.

However, the decision about when and how to claim benefits deserves careful analysis. Your age, earnings history and eligibility can affect the options available to you. In some circumstances, coordinating your survivor benefit with your own retirement benefit can also be important.

For a woman with substantial investment assets, Social Security may represent only part of the retirement-income picture—but that doesn’t make the claiming decision unimportant.

Consider Social Security as one component of a broader income strategy that also incorporates retirement accounts, taxable investments, required minimum distributions and other sources of income.

3. Don’t Let Grief Drive Investment Decisions

A portfolio designed for a married couple may no longer be appropriate for one person. But that doesn’t automatically mean you should move everything to cash. Likewise, the loss of your spouse’s future income may create anxiety about having enough money to last. That anxiety can sometimes lead investors to take more investment risk than is appropriate.

A thoughtful portfolio review should consider your new spending needs, liquidity requirements, tax situation, time horizon and tolerance for investment volatility.

The question isn’t, “What did my husband invest in?”

The more important question is:

“What investment strategy makes sense for me now?”

4. Revisit Your Estate Plan

Your spouse’s death may fundamentally change how your estate plan should work.

Review your will or revocable trust, powers of attorney, healthcare documents and beneficiary designations. Retirement accounts and life insurance deserve particular attention because beneficiary designations can determine who receives those assets.

Affluent families may also need to reconsider trust structures, estate-tax planning, charitable intentions, asset protection and how assets should ultimately pass to children and grandchildren.

If your late spouse was the person who handled the family’s estate planning, don’t assume that the existing documents automatically reflect your wishes for the future.

A Financial Planning Conversation for Your Next Chapter

If you or someone you love has recently become widowed, a comprehensive financial planning review can help bring structure to an uncertain time. A coordinated review of your financial situation can help you understand what requires immediate attention, what can wait and what decisions deserve deeper analysis. You don’t have to figure it all out at once.

A trusted financial advisor can work with you to coordinate cash flow, Social Security, investments, retirement accounts, taxes, insurance and estate planning, while collaborating with other professionals when specialized legal or tax advice is required.

For a newly widowed, the objective isn’t simply to manage the assets left behind by his or her spouse. It is to create a financial strategy for the life the surviving spouse is going to live next.

Posted on

Protecting Your Wealth in the Digital Age

Facebooktwitterlinkedinmail

Cybersecurity Best Practice Every High-Net-Worth Family Should Know

As technology continues to make our financial lives more convenient, criminals are becoming increasingly sophisticated in their attempts to steal personal information and financial assets. Cybersecurity is no longer just an IT issue—it is an essential part of protecting your financial future. Let’s take a look at the most common financial scams that target high-net-worth individuals. 

Wire Fraud: One of the Greatest Financial Risks

Wire fraud continues to be among the costliest financial crimes affecting affluent investors.

Criminals often infiltrate email conversations or impersonate trusted professionals, including financial advisors, attorneys, title companies, trustees, accountants, or family office personnel. They then provide fraudulent wire instructions that appear completely legitimate.

Because wire transfers are typically irreversible once completed, even a brief lapse in verification can have devastating consequences.

Cybersecurity Best Practice: Never rely solely on emailed wiring instructions.

Before initiating any wire transfer:

  • Verify all instructions by telephone using a previously known phone number.
  • Be especially cautious if wiring instructions change unexpectedly.
  • Treat last-minute requests with skepticism.
  • Confirm requests involving large transfers with at least two trusted individuals whenever practical.

Account Takeover: When Criminals Gain Access

Rather than stealing funds immediately, many criminals first attempt to gain control of your online accounts.

They may obtain passwords through phishing emails, fake websites, malware, or data breaches involving unrelated companies.

Once inside an account, criminals may:

  • Change contact information
  • Add new payment destinations
  • Request distributions
  • Sell securities
  • Harvest additional personal information
  • Monitor communications before initiating fraud

Strong passwords alone are no longer enough.

Cybersecurity Best Practice: Every financial account should be protected with multi-factor authentication whenever available.

Trust and Estate Planning Fraud

Estate planning documents and trust arrangements are increasingly being targeted by fraudsters.

Common schemes include:

  • Fraudulent requests to change trust distribution instructions
  • Fake beneficiary update forms
  • Forged powers of attorney
  • Impersonation of trustees or executors
  • Attempts to redirect inherited assets
  • Identity theft following the death of a family member

Cybersecurity Best Practice: Because trust administration often involves multiple professionals—including attorneys, financial professionals, trustees, custodians, and beneficiaries—it is essential to verify instructions through established communication channels.

No significant trust transaction should be authorized solely on the basis of an email.

Protecting Elderly Family Members

Let’s be honest, as we age, our cognitive ability is deteriorating. That’s why older adults remain among the most frequently targeted victims of financial exploitation.

Scammers commonly impersonate:

  • Grandchildren
  • Government agencies
  • Banks
  • Investment firms
  • Technical support representatives
  • Medicare or insurance providers

Cybersecurity Best Practice: Consider discussing cybersecurity with parents and grandparents before a crisis occurs. Families may also benefit from establishing trusted contacts who can help verify unusual financial requests.

Deepfake Technology Is Changing the Threat Landscape

Artificial intelligence now allows criminals to create convincing voice recordings and realistic video impersonations.

Imagine receiving:

  • A phone call that sounds exactly like your child asking for emergency financial assistance.
  • A video message appearing to come from your business partner authorizing a transaction.
  • A voicemail that sounds like your financial advisor requesting an urgent wire transfer.

These technologies are becoming increasingly accessible and difficult to detect.

Cybersecurity Best Practice: Whenever an unexpected financial request is received—even from someone whose voice or appearance seems genuine—verify it independently using a trusted phone number or another established communication method.

In summary, the most effective cybersecurity strategy combines technology with disciplined habits, and planning ahead can help reducing confusion during stressful situations.

Posted on

The 10 Biggest Recent Tax Law Changes for High-Income Households

Facebooktwitterlinkedinmail

In our previous articles, we have said that the One Big Beautiful Bill Act (OBBBA) represents one of the most significant tax law updates in years. While the legislation contains hundreds of provisions, several changes are particularly relevant for high-income households, including business owners and families with substantial estates.

Below are ten of the most important changes and the planning conversations they may trigger.

1. Greater Certainty for Long-Term Tax Planning

A major theme of OBBBA is permanency. Several provisions that were previously temporary have now been extended indefinitely. This includes:

  • pass-through deductions
  • estate tax exemptions
  • certain business deductions

Planning opportunity:

Greater certainty allows families and business owners to build long-term tax strategies with fewer sunset concerns.

2. TCJA individual tax rates made permanent

The Tax Cuts and Jobs Act (TCJA) passed in 2017 lowered top federal income tax rate to 37%. Instead of reverting to higher pre-2018 rates, the OBBBA makes it permanent, providing greater long-term planning certainty.

Planning opportunity:

Years with temporarily lower taxable income may still present opportunities to:

  • convert portions of traditional IRAs to Roth IRAs
  • reduce future required minimum distributions
  • leave tax-free assets to heirs

3. The 20% Pass-Through Income Deduction Is Now Permanent

The Internal Revenue Code Section 199A Qualified Business Income deduction allows many business owners to deduct up to 20% of pass-through income. Before OBBBA, this deduction was set to expire after 2025.

Planning opportunity:

Business owners may want to revisit –

  • S-corporation salary strategies
  • entity structure decisions
  • income timing strategies

4. Expanded Tax Benefits for Qualified Small Business Stock

The law enhances the tax advantages under Internal Revenue Code Section 1202 Qualified Small Business Stock (QSBS). Changes include:

  • Tiered capital gains exclusion
    • 50% exclusion after 3 years
    • 75% exclusion after 4 years
    • 100% exclusion after 5 years
  • Higher exclusion limit
    • Increased to $15 million
  • Expanded company eligibility
    • Asset threshold increased to $75 million

Planning opportunity:

For founders or investors expecting a business exit, entity structure and stock issuance timing may significantly affect future taxes.

5. Immediate Deduction of Domestic R&D Costs

The law restores immediate deductibility of domestic research and development expenses under Internal Revenue Code Section 174. This reverses the previous rule requiring five-year amortization.

Planning opportunity:

Technology firms, engineering companies, and innovation-driven businesses may benefit from improved cash flow and faster tax deductions.

6. More Favorable Interest Deduction Rules

Changes to Internal Revenue Code Section 163(j) increase the allowable deduction for business interest expenses. The formula once again resembles EBITDA rather than EBIT, allowing many leveraged businesses to deduct more interest.

Planning opportunity:

Real estate investors and private business owners may benefit from re-evaluating financing strategies.

7. Changes to Energy and Clean-Technology Credits

Several energy-related incentives are being phased out over the coming years. Credits affected include those related to:

  • electric vehicles
  • energy-efficient buildings
  • clean energy infrastructure

Planning opportunity:

Households and business owners planning energy projects may want to review timelines to capture remaining credits before phase-outs occur.

8. Higher Estate and Gift Tax Exemptions Made Permanent

One of the biggest changes affects estate planning. The law makes the historically high federal estate tax exemption permanent under Internal Revenue Code Section 2010. For 2025 and beyond:

  • Individuals can transfer roughly $15 million+ estate-tax-free
  • Married couples can transfer $30 million+

Without legislative action, the exemption was previously scheduled to drop roughly in half after 2025.

Planning opportunity:

Families may still benefit from strategies such as spousal lifetime access trusts (SLATs) or dynasty trusts to lock in exemption and protect assets from estate taxes in future generations.

9. Estate Planning Strategies Still Matter

Even with higher estate exemptions, many high-net-worth families still benefit from thoughtful planning using tools such as:

  • irrevocable trusts
  • dynasty trusts
  • lifetime gifting strategies
  • charitable planning

Planning opportunity:

Proper structuring can help families reduce estate taxes, protect assets, and preserve wealth across generations.

10. Expanded 529 Education Savings Plan Flexibility

Effective January 1, 2026, the federal 529 plan distribution limit for K–12 education doubles from $10,000 to $20,000 per beneficiary per year. Qualified withdrawals remain federal income tax-free. The $20,000 annual limit is per student (beneficiary), not per family. Also, the OBBBA significantly expanded the definition of qualified K–12 education expenses. In addition to private school tuition, qualifying expenses may now include:

  • Certain educational therapies and services for students with disabilities (subject to the statutory rules)
  • Tuition at public, private, or religious schools
  • Curriculum and instructional materials
  • Books
  • Online educational materials
  • Certain tutoring expenses
  • Fees for standardized tests
  • Dual-enrollment fees

Planning opportunity:

If you’re planning for private school, the combination of a 529 plan (up to $20,000/year of tax-free qualified withdrawals), and your state’s eligible education savings account could substantially reduce your family’s out-of-pocket education costs.

In summary, the One Big Beautiful Bill Act introduces significant tax changes affecting affluent households, and business owners. While many provisions provide new opportunities, their impact depends heavily on your:

  • income level
  • business structure
  • estate size
  • investment strategy

A coordinated approach between your financial professionals and attorneys can help ensure these changes are incorporated into your broader wealth plan.

Posted on

3 Estate Planning Moves You Need to Consider Now

Facebooktwitterlinkedinmail

Summer break is often a good time to review financial goals, and family priorities. It can also be an important opportunity to revisit your estate plan—especially in light of recent tax law changes. While estate planning strategies vary from family to family, the following three moves are commonly worth reviewing now or before the end of the year.

1. Review Your Estate Tax Exposure

The federal estate and gift tax exemption under Internal Revenue Code Section 2010 remains historically high. For many families:

  • Individuals may transfer over $15 million free of federal estate tax
  • Married couples may transfer over $30 million

Even with these higher limits, estate taxes can still be relevant for families with significant real estate, closely held businesses, or concentrated investment portfolios. Review whether your current estate plan still aligns with:

  • your net worth
  • projected asset growth
  • potential future estate tax exposure

2. Use Your Annual Gift Tax Exclusion

Each year, individuals can give assets to others without triggering gift tax reporting under Internal Revenue Code Section 2503. These gifts can be made to children, grandchildren, and other family members. For 2026, the annual exclusion allows gifts of approximately:

  • $19,000 per recipient
  • $38,000 per recipient for married couples

Over time, consistent gifting can reduce the size of a taxable estate while helping younger generations earlier in life. Consider whether year-end gifts could support:

  • education funding
  • home purchases
  • long-term investment accounts

3. Consider Funding or Updating Trusts

Trusts remain one of the most powerful tools for managing wealth across generations. Trusts can also help protect assets from creditors, divorce risk, and spendthrift behavior. Common trust strategies include:

  • revocable living trusts for probate avoidance
  • irrevocable trusts for estate tax planning
  • lifetime discretionary trusts for asset protection
  • dynasty trusts designed to preserve wealth across generations

Review whether existing trusts should be:

  • funded with additional assets
  • updated to reflect changes in family circumstances
  • aligned with current tax law

Estate planning is not a one-time event. As tax laws, family situations, and financial circumstances evolve, periodic reviews are absolutely critical in ensuring your money passes to the right beneficiary in an tax efficient way as you intend to.

Now is a good time to coordinate with your financial advisor and estate attorney to confirm that your estate strategy remains aligned with both current tax rules and your long-term family objectives.

Posted on

What Retirees Need to Know About the OBBBA

Facebooktwitterlinkedinmail

The One Big Beautiful Bill Act (OBBBA) is one of the most significant tax law updates in recent years, and while much of the attention has focused on business owners and high-net-worth families, retirees are not exempt from its impact. Understanding how OBBBA affects retirement income, investments, charitable giving, and estate planning can help retirees maximize tax efficiency and protect wealth for themselves and their heirs. Below are key planning considerations retirees should keep in mind.

Side Businesses and the QBI Deduction

Many retirees supplement their retirement income with part-time businesses, consulting work, or rental properties. Under OBBBA, the 20% Qualified Business Income (QBI) deduction is now permanent, and it may apply to eligible pass-through income earned from these activities.

This means that if a retiree operates an S-corp, LLC, or partnership, or even manages certain rental properties that qualify as a trade or business, they could potentially deduct up to 20% of that income on their federal tax return.

Planning tip: Retirees should review their part-time business or rental activities to confirm they meet QBI eligibility. Structuring income, managing expenses, and timing distributions can help maximize the deduction and reduce taxable income in retirement.

Timing Retirement Account Withdrawals

OBBBA does not directly change retirement account rules, but the broader tax landscape makes strategic planning more important. Withdrawals from tax-deferred accounts such as traditional IRAs or 401(k)s are generally taxed as ordinary income. By coordinating withdrawals with income from other sources—including side business income, pensions, and Social Security—retirees can potentially:

  • Reduce overall tax liability
  • Preserve the QBI deduction on eligible business income
  • Avoid pushing themselves into higher tax brackets

Planning tip: Consider staggering withdrawals across multiple years, using Roth conversions strategically, or coordinating distributions with years of lower earned income to reduce taxes. Consulting a financial advisor can ensure that your withdrawal strategy aligns with both current needs and long-term legacy goals.

Health and Long-Term Care Planning

Medical and long-term care expenses could be prohibitively high for retirees. In fact, these costs are among the largest concerns for retirees. OBBBA does not change these rules directly, but retirees should consider integrating their healthcare planning with their overall estate and financial plan.

  • Review health insurance and long-term care funding options for coverage gaps
  • Consider trusts or other structures to protect assets from potential future healthcare costs
  • Coordinate distributions from retirement accounts and investments to cover anticipated medical expenses while maintaining tax efficiency

Planning tip: Properly structuring assets for healthcare and long-term care can help protect wealth while ensuring that funds are available when needed.

Estate and Inheritance Planning

OBBBA makes several estate-related provisions permanent, including historically high estate and gift tax exemptions. For 2025 and beyond, individuals can transfer roughly $15 million free of federal estate tax, and married couples can transfer $30 million.

Even with these high thresholds, careful planning is essential. Retirees should:

  • Confirm that their wills and trusts reflect current exemptions
  • Review ownership structures for real estate, business interests, and investment accounts
  • Ensure proper titling and beneficiary designations to avoid unintended tax consequences

Planning tip: Work with an estate attorney and a financial advisor to ensure that your estate plan is coordinated with current exemptions and your personal goals for family and heirs.

Charitable Giving Opportunities

Charitable giving continues to be a powerful tool for retirees to reduce taxable income while supporting causes they care about. OBBBA-related changes make it even more worthwhile to consider strategies like:

  • Qualified Charitable Distributions (QCDs): Retirees over 70½ can transfer up to $100,000 directly from an IRA to a qualified charity, satisfying required minimum distributions (RMDs) while avoiding additional taxable income.
  • Donor-Advised Funds (DAFs): Allow retirees to make a charitable contribution now, receive an immediate deduction, and recommend grants to charities over time.
  • Charitable Remainder Trusts (CRTs): Provide income streams to the donor while ultimately benefiting a charitable organization, reducing estate taxes and offering diversification of concentrated assets.

Planning tip: Review charitable strategies annually to coordinate donations with income timing and other deductions. Proper planning can help retirees maximize tax benefits and leave a legacy.

If you are a retiree, or are retiring soon, now is the time for you to review your income streams, charitable strategies, and estate plans in light of OBBBA’s permanent changes. By taking a proactive approach, it is possible to maximize tax efficiency, maintain financial flexibility and security, preserve more wealth for heirs while continuing your support for your charitable causes.

Posted on

Top 5 Planning Moves for Small Business Owners Now

Facebooktwitterlinkedinmail

The One Big Beautiful Bill Act (OBBBA), which was signed into law last year, represents one of the most significant tax law updates affecting entrepreneurs in years. While many provisions target large corporations, several changes create new opportunities for small business owners to reduce taxes, improve cash flow, and plan for future growth.

Below are five planning moves business owners may want to discuss with their financial advisors.

1. Re-Evaluate Your Entity Structure

The Internal Revenue Code Section 199A Qualified Business Income deduction — commonly known as the 20% pass-through deduction — is now permanent under OBBBA.This deduction applies to income from:

  • S-corporations
  • Partnerships
  • LLCs taxed as partnerships
  • Sole proprietorships

Because the deduction was previously scheduled to expire after 2025, many owners delayed structural decisions. Now that it is permanent, this may be a good time to review:

  • S-corp vs LLC tax treatment
  • Owner compensation strategies
  • Profit distribution planning

For many businesses, optimizing the 20% deduction can meaningfully reduce lifetime tax liability.

2. Consider Whether Future Growth Favors a C-Corporation

OBBBA expanded the benefits associated with Internal Revenue Code Section 1202 Qualified Small Business Stock (QSBS). If your company is structured as a C-corporation, qualifying stock may allow shareholders to exclude a large portion of capital gains when the business is eventually sold. New rules provide:

  • 50% gain exclusion after 3 years
  • 75% exclusion after 4 years
  • 100% exclusion after 5 years

The lifetime gain exclusion limit was also increased to $15 million. For founders building a high-growth company with an expected exit, the potential tax savings from QSBS could be substantial.

3. Accelerate Research and Development Spending

Recent tax law changes had required businesses to amortize research and development expenses over five years, which reduced the tax benefit of innovation spending. OBBBA restores the ability to deduct domestic R&D costs immediately. This is particularly valuable for companies investing in:

  • software development
  • engineering and product design
  • manufacturing innovation
  • technology development

Immediate deductions can improve after-tax cash flow, which may allow growing companies to reinvest more capital back into the business.

4. Revisit Your Financing Strategy

The law also adjusts the interest deduction limitation under Internal Revenue Code Section 163(j). The deduction calculation now again resembles EBITDA rather than EBIT, which generally increases the amount of interest businesses can deduct. This change may benefit businesses that rely heavily on financing, including:

  • real estate companies
  • capital-intensive businesses
  • companies funding expansion with debt

If your business uses leverage, reviewing your capital structure may uncover opportunities to improve tax efficiency.

5. Take Advantage of Workforce-Related Tax Credits

OBBBA expands several employer tax incentives designed to support hiring and employee benefits. Examples include credits related to:

  • workforce training and apprenticeships
  • employer-provided childcare programs
  • hiring employees from targeted groups through the Work Opportunity Tax Credit

These incentives can help offset the cost of recruiting and training workers; providing family-friendly employee benefits, and strengthening employee retention. For many small businesses facing a tight labor market, these credits can meaningfully reduce the cost of building a strong team.

For small business owners, the One Big Beautiful Bill Act creates several opportunities to improve tax efficiency and long-term planning. In summary, key areas worth reviewing include:

  • business entity structure
  • innovation and R&D spending
  • financing strategy
  • workforce incentives
  • long-term exit planning

Because the impact varies widely depending on income, industry, and growth plans, coordinating with financial professionals can help ensure you are making the most of these new rules.

Posted on

Why the Financial Decisions You Make in Your 50s and Early 60s Matter More Than Any Other Time

Facebooktwitterlinkedinmail

It is fair to say that in the minds of many in affluent households, retirement success is determined by market returns alone. This is not surprise given the fact that every day everywhere we are bombarded by news concerning the ups and downs of major stock market indexes. In reality, research after research shows that retirement success is determined by how taxes, RMDs, Social Security, and Medicare interact over time.

What’s more, the difference between proactive planning and “do nothing” defaults during your late 50s and early 60s routinely reaches $500,000–$1,500,000 in lifetime after-tax wealth for households with net worth ranging from $3 million to $8 million. There are numbers behind that statement.

Most pre-retirees’ households with net worth of $3 million to $8 million share a similar balance sheet like this:

Asset Type     Typical Allocation
Tax-deferred (401(k)/IRA)             45%–65%
Taxable brokerage             25%–40%
Roth             5%–15%
Home / Other    Excluded from income planning

This concentration in tax-deferred accounts is the root of most retirement tax problems. Let’s look at a hypothetical pre-retiree couple age 60 years old with a $3 million portfolio and $1.8 million in pre-tax accounts. Assume a 5% annual growth rate of their pre-tax portfolio, by the time they reach age of 73 when they start their first RMD (required minimum distribution) from their pre-tax retirement plan(s), their first RMD would be close to $98,000. Combined with Social Security, it is estimated that 85% of Social Security Benefits would be taxable, and they would pay higher Medicare premium. And their overall marginal tax rate would be pushed up to as high as 32%.

The conclusion: RMD planning is not optional.

One of the important financial decisions pre-retirees in their late 50s and early 60s must make is when to claim their Social Security benefits. For example, the claim timing for a married couple with net worth of $5 million and $3 million tax-deferred portfolio can mean a big difference in the range of approximately $450,000 to $600,000 in retirement income.

The conclusion: for affluent retirees, the timing of claiming Social Security benefits is often a tax and longevity hedge, not an income necessity.

As people gets older, healthcare expense gradually becomes their largest expense especially during their retirement. No planning or bad planning can significantly increase a retiree’s Medicare premium paid. For example, a married couple age 66 years old with a net worth of $8 million find out that Medicare premiums increase dramatically because their Modified AGI exceeds IRMAA thresholds due to a one-time Roth conversion at age 64. Depending on the amount of the conversion, their Medicare Part B + D surcharges could add up to $10,000 per year. Due to income stacking that persists for multiple years, their lifetime excess premium could top $120,000.

Conclusion: Medicare is not a healthcare decision—it’s a lifetime pricing contract.

Across households with net worth in the range of $3 million to $8 million, proactive planning during ages 55–65 typically delivers:

  • $250k–$600k in reduced lifetime taxes
  • $50k–$150k in avoided Medicare premiums
  • $300k–$800k in increased after-tax legacy value
  • Greater income stability in market downturns

Bottom line for high-net-worth pre-retirees: your mid-to-late 50s and early 60s are not just about investment performance – they are more about engineering outcomes. This is the final window where you can:

  •  Reshape future RMDs
  • Control tax brackets
  • Optimize Social Security
  • Lock in Medicare costs
  • Improve estate efficiency

Once RMDs and Medicare begin, most decisions become reactive.

Posted on

Why Your Income Tax May Rise in 2026

Facebooktwitterlinkedinmail

If you’re over 50 and earn a higher income, a new IRS rule could quietly increase your tax bill starting in 2026 — even if you don’t change how much you save for retirement.

The change has to do with catch-up contributions to 401(k) plans and how they must be taxed going forward. Here’s what you need to know:

What’s Changing?

The IRS has finalized new rules under the SECURE 2.0 Act that affect how certain workers can make catch-up contributions to their 401(k) retirement plans.

Beginning in 2026:

  • If you are age 50 or older, and
  • You earned FICA-taxable wages exceeding $150,000 (indexed for inflation) in the preceding calendar year

Your catch-up contributions must be made as Roth contributions — meaning after-tax, not pre-tax money.

Why This Matters for Your Taxes

Before this rule, you could usually choose whether your catch-up contributions were:

  • Pre-tax (lowering your taxable income today), or
  • Roth (taxed now, but tax-free later)

Under the new rules, higher-income workers lose that choice. If you were previously making pre-tax catch-up contributions, your taxable income will now be higher — even though you’re saving the same amount. That’s why your tax bill may increase.

What If My 401(k) Plan Doesn’t Offer a Roth Option?

If your employer’s 401(k) plan does not allow Roth contributions, then highly paid employees cannot make any catch-up contributions at all — pre-tax or Roth.

The good news is that most plans already offer Roth options. In 2023, about 93% of 401(k) plans did, and employers can add Roth features if they don’t already have them.

When Does This Take Effect?

  • The rule generally applies to tax years beginning after December 31, 2026
  • Some government and union plans have delayed timelines
  • Employers may choose to implement the rule earlier

What Should You Do Now?

If this rule may affect you, it’s worth planning ahead:

  • Review how higher taxable income could affect your overall tax picture
  • Consider whether increasing Roth savings earlier makes sense
  • Coordinate retirement contributions with broader tax planning

All in all, this change doesn’t mean Roth savings are bad — but it does remove flexibility for higher-income workers. Understanding the rule now gives you time to plan, adjust, and avoid surprises when 2026 arrives.

Posted on

Generation Y Should Prioritize Planning Now, Not Later

Facebooktwitterlinkedinmail

Generation Y, also known as Millennials, refers to the demographic cohort born between 1981 and 1996. As we usher in the year 2026, the youngest Millennials will be turning age 30, and the oldest ones will be 45.

As Confucius, the great Chinese scholar and philosopher famously said over 2000 years ago, ‘at twenty, one comes of age; at thirty, one establishes oneself; at forty, one is free from doubts,’ the Millennials indeed are either establishing themselves professionally or raising a family of their own, or doing both at the same time. If you are one of this cohort, financial planning might feel like something for “later” — after the student loans are paid, after the house is bought, after the kids are launched. But for Millennials, delaying serious financial planning can mean missing out on opportunities new year brings that compound with time to build real security and freedom.

According to a Bankrate report, around 68% of Millennial and Generation Z student loan borrowers have delayed major financial milestones – like saving for retirement, buying a home, or paying off debt. What this means is that serious financial planning is more important now than later for Millennial because if you’re putting off saving and investing for your financial goals for another year, you’re paying a price in lost time and potential returns. For example, even though Millennials have saved more than Gen Z so far, their retirement balances still lag behind older generations. What’s more, Millennials aren’t just “behind”; they’re navigating a different landscape:

higher student loan debt, rising housing costs, heavier reliance on self-funded retirement, more job switching and gig-based income, and longer expected lifespans – money must last longer.

Many Millennials have a few common financial goals such as buy a home, save for college or childcare, and achieve financial independence. Financial planning helps you map goals to action — rather than guesswork or hope. Financial planning also helps turn uncertainty into structure. Here’s what a simple annual plan might include:

  • A monthly budget with debt payoff and savings targets
  • An emergency fund goal (e.g., 3–6 months of expenses)
  • Retirement contributions and investing (e.g., 10–15% of income)
  • A plan for short-term goals (e.g., house down payment)
  • An education savings plan (e.g., 529 plan)
  • Periodic check-ins and adjustments

Financial planning isn’t about perfection. It’s about progress. The more you delay on planning, the more uncertain your financial future will be — so start taking actions now. Here are some simple yet effective tips for getting started today: 

  • Build a Budget: Know exactly what’s coming in and going out.
  • Create an Emergency Fund: Even small monthly contributions grow over time.
  • Start Retirement Savings: Use employer plans (401(k)/IRA) — even 5% of income helps.
  • Plan for Debt Repayment: Target high-interest debt first.
  • Consider a Financial Advisor: A professional can help build a tailored plan.

It’s true that Millennials face a different financial landscape than past generations — but they also have time on their side, and the time is now for Millennials to get serious about planning for a more secured future for themselves and their family. 

Posted on

ABLE Account Becomes More Valuable for Special Needs Families

Facebooktwitterlinkedinmail

In our November article, we talked about the changes related to charitable giving that are brought by “One Big Beautiful Bill Act” (OBBBA). In this article, we are going to discuss the provisions of OBBBA that affect ABLE Account owners.

For those who are not familiar with Able Account, an ABLE account is a tax-advantaged savings plan for eligible individuals with disabilities. It was created by the federal Achieving a Better Life Experience (ABLE) Act. The account allows individuals to save and invest money for a variety of disability-related expenses without losing eligibility for certain public benefits like Medicaid and Supplemental Security Income (SSI). Contributions grow tax-free, and withdrawals are also tax-free as long as they are used for qualified disability expenses.  

Previously, Tax Cuts and Jobs Act (TCJA) passed in 2017 introduced two additional ways to contribute to ABLE accounts. One of them is for ABLE account owners to contribute additional amount in the same calendar year if they worked and but did not participate in an employer sponsored retirement plan . The other way is through the transferring of 529 plan assets to ABLE accounts, up to the contribution limit. However, the beneficiary of the 529 plan has to be the same individual as the ABLE account owner or a sibling, step-sibling or half sibling; otherwise, the transfer would be subject to tax and penalties.

These two contribution ways were supposed to terminate at the end of this year. Now, the OBBBA has indefinitely extended them. In addition, the OBBBA also extended the availability of a non-refundable saver’s credit for ABLE account contributions. The maximum credit will increase from $1,000 to $2,100 in 2027.

With the extension of these savings benefits, ABLE accounts become even more valuable for special needs planning. Families with special needs member may consider the ABLE account as part of their planning options where the accounts are suitable.