October 13, 2025 • 38 mins
Are you ready for year-end financial planning?
In this episode of Something More with Chris Boyd, Chris and Russ Ball dive into the essential strategies you should be considering before December 31st. From navigating Required Minimum Distributions (RMDs) and Roth conversions to maximizing retirement contributions and leveraging Qualified Charitable Distributions (QCDs), this episode is packed with actionable insights.
In this episode of Something More with Chris Boyd, Chris and Russ Ball dive into the essential strategies you should be considering before December 31st. From navigating Required Minimum Distributions (RMDs) and Roth conversions to maximizing retirement contributions and leveraging Qualified Charitable Distributions (QCDs), this episode is packed with actionable insights.
Whether you're retired, still working, or managing inherited IRAs, you'll learn how to: Avoid costly RMD mistakes
Use QCDs to reduce taxable income
Harvest tax losses and manage capital gains
Maximize work plan contributions (including the new “super catch-up”!)
Plan Roth conversions strategically
Revisit Medicare Advantage options
Update beneficiaries and estate plans
Use QCDs to reduce taxable income
Harvest tax losses and manage capital gains
Maximize work plan contributions (including the new “super catch-up”!)
Plan Roth conversions strategically
Revisit Medicare Advantage options
Update beneficiaries and estate plans
Don't miss this timely conversation that could save you money and help you finish the year financially strong.
Listen now at SomethingMoreWithChrisBoyd.com or wherever you get your podcasts.
#YearEndPlanning #FinancialFreedom #RMDs #RothConversion #TaxSmart #RetirementPlanning #QCD #CapitalGains #EstatePlanning #MedicareEnrollment #FinancialAdvisor #WealthEnhancement #ChrisBoydPodcast #MoneyMattersMark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Thanks for being with us.
I'm Chris Boyd.
I'm here with Russ Ball.
We are both of the AMR team at
Wealth Enhancement and got a good show planned
(00:43):
for you.
We're going to talk about some year-end
planning issues.
It's that time of year, we're in the
final quarter of the year, and you can't
help but start thinking about the end of
the year is approaching.
Have I gotten everything, taken advantage of all
the things that I can do?
We're going to go through a little bit
(01:03):
of a list of ideas for you to
think about and help you plan for that,
ranging from some income tax and income and
tax strategies, maybe some thinking about capital gains
and charitable giving.
There's a whole range of things.
Where should we begin, Russ?
Well, I know one that's been on our
team's mind a lot lately is RMDs.
(01:25):
Yeah, definitely.
This time of year, retirees or actually anyone
who has either an IRA and then has
reached 73 and older, or an inherited IRA
where the original IRA owner was of an
(01:45):
age that they had RMDs, you will also
have to take a required distribution.
This year is different from recent years where
the IRS has been cutting some slack when
it comes to this.
I think they're trying to figure out their
own rules on how all this is going
(02:06):
to work out.
Well, I think there's been a lot of
confusion for sure about, on the one hand,
the new rules from the SECURE Act where
the stretch IRA was changed to a 10
-year clock.
Originally, people were thinking, well, I've got 10
years.
And then there was also some expectation, well,
(02:28):
you might also have to take money out
during those 10 years.
Who's which?
So if the person you inherited an IRA
from, if they were of an age that
they had yet to start their required distributions,
their required beginning date, you don't have to
take a distribution annually over that 10-year
(02:50):
period.
You can choose to take it if you
want to.
You can take a little bit each year.
You can take a 10th.
You can take it all in the first
year, all in the last year or whatever,
any combination.
But if you receive that inherited IRA from
the person who died and already started their
required beginning date, required distributions, minimum distributions, then
(03:15):
you too are expected to continue to take
RMDs.
Now, how it's calculated is different than what
the person who died that you received the
IRA from.
So it's not exactly the same calculation.
And it's not the same calculation you'd use
for your own IRA when you reach an
IRA, a required minimum distribution date.
(03:39):
But there is a minimum amount that you
have to take.
And we could probably do a show on
this alone, right?
Yeah.
But the essence of it is there's a
table you look to based on the age
you are, the year after the person died
that you received this IRA from, you have
(04:00):
to start taking distributions.
And you look up on this table what
the essentially life expectancy number would be.
It's not the uniform table.
This is the single life table in this
instance.
And then you take that number.
That's the divisor.
You take the balance from the prior year
end, the age you'd be at the end
(04:22):
of the year, and look at what the
factor is.
And you divide the balance by the factor.
That's your RMD for this year.
And every year after that, you subtract one
from that life expectancy number.
If that's not simple enough, there's a structure
(04:43):
to it.
There's calculators out there.
If you work with an advisor, they'll help
you to figure this out.
But custodians will say, well, it's up to
the individual to do the calculations.
They might give you the ingredients of how
to do it.
But if you work with a good financial
advisor, they'll help you.
And they should know the rules.
I spend a lot of time going to
(05:03):
courses, the Ed Slot Program, and things like
that.
Make sure we're up to date on how
these rules work and how to help people.
Because these are complicated.
It's complex, the idea of how to navigate
this.
But in any case, if you have an
IRA and you're over 73 today, you'll have
(05:28):
a distribution requirement placed upon you as well.
That one is calculated differently than what I
just described.
Great.
Same idea.
But instead of a single life table, you
use a uniform table.
The uniform table presumes that you're married, presumes
that you're married to someone 10 years younger.
(05:49):
It's OK if you're not married or if
you're not married to someone 10 years younger.
If you're married to someone more than 10
years younger, there's a different way to calculate
it.
But for most people, the uniform table covers
the range of possibilities.
And that gives you the best calculation for
how to do this.
And you basically have a minimum amount you
(06:13):
have to take out.
It starts out a little less than 4
% per year.
But as you get older, it goes up.
We were talking to someone in their 90s.
It's around 10%.
So it starts off pretty modest but grows
over time as a percentage you have to
withdraw.
So this is the time of year.
If you haven't dealt with it, now's the
(06:36):
time.
Some people like to do it monthly.
But a lot of people tend to wait
till year end to say, oh, I'll take
the money when I have to, thinking they'll
keep the money invested for the bulk of
the year.
This year, that would have been a good
choice.
In a year when the market goes down,
it's not.
So who knows what's going to happen when
(06:57):
you start the year.
But we do find that it used to
be that people would put this off till
December.
And we really encourage people to think about
doing this a little earlier.
What's been happening, we've noticed over the last
few years, is custodians pretty much universally have
(07:18):
this challenge where there's a glut of people
taking their distributions at year end.
And if you're going to take your distribution,
don't put it off till December.
Because there's going to be a lot of
people pulling their money in December.
And the custodians end up getting to a
point where they say, well, best efforts.
We'll try to get to it.
(07:39):
But there's so much coming in that there's
a lot of year end activity and things.
So it's the final quarter.
It's a good time to do it.
October, November, let's get to it.
Time to take those distributions.
Yeah.
And a couple points on top of that.
So if you have IRAs that are, if
you're working with us, you might have IRAs
(07:59):
somewhere else, a bank, sometimes I've seen CD
IRAs, that sort of thing.
The RMD applies to those as well.
So sometimes your advisor might not know you
have an IRA somewhere else that also has
an RMD requirement.
Yeah.
And the way the IRS looks at your
IRAs, it doesn't matter if you have five
of them at different institutions or one of
(08:20):
them at a single place, they think of
them all as one IRA.
That is to say, if you said, I'm
going to take all of my calculated distribution
requirements in those five different accounts, you can
take it all out of one account, that
one IRA account, that's fine.
It all is considered your IRA.
(08:41):
If you prefer to take the appropriate amount
from each account, that's fine too.
Ultimately, as long as you meet that number,
I will put a caveat to that.
Don't confuse that notion that all those accounts
are connected in a sense with the idea
that if you have a 401k or 403b
(09:02):
or something like a work plan, that has
its own distribution requirement.
And each of those might have to be
addressed separately.
So you don't want to say, oh, I
took it out of my IRA.
When you have a 401k, you'll need to
take the 401k distribution from the 401k and
the IRA distribution from the IRA.
(09:24):
So this is pretty easy, right?
Easy stuff so far, right, Russ?
It's pretty heavy duty.
Oh my gosh.
There's all these rules.
I will add one more thing going back
to the inherited IRAs as well.
You might've mentioned this, but that only applies
to inherited IRAs that are from someone other
than a spouse.
Oh, that's a great point.
A spouse, that's a really great point.
(09:46):
Those circumstances have unique treatment and you don't
necessarily have, you have to make some decisions
about how you want to handle it.
But again, there's questions of, are there age
discrepancies?
Usually what happens is someone just rolls that
into their own account and then it's up
to what their age situation is.
(10:08):
Sometimes though you have someone who's like an
older spouse who dies, but a younger spouse
who's not yet eligible to withdraw from their
IRA, but they might like to have access
to that.
So there's rules that you got to pay
attention to to say, what's the right strategy
in this circumstance?
That's a great observation.
So don't want to have people worried just
(10:30):
because they have an inherited IRA that they
need to take a distribution necessarily.
It's a 10-year rule and those specific
rules are for inherited IRAs from someone other
than a spouse.
Good point.
I want to add another complicating factor.
Sorry.
It's like, how many of these do we
(10:50):
have?
But we talk often about the virtues of
a qualified charitable distribution, which is a means
of withdrawing from your IRA to give directly
to a charitable intention.
(11:11):
And it can meet some of your required
distribution figures.
So let's say for example, you're over 70
and a half, whether you have an inherited
IRA or an IRA, you can draw off
money from your IRA and have it go
directly to a charitable intention and a charitable
(11:35):
entity of your choosing, church, alma mater, nonprofit
of some kind.
And you could say, let's say you had
a $10,000 required distribution this year.
You could opt to say, I want to
give $5,000 to charity.
I'm going to give it 2x, whatever it
(11:57):
is.
And you opted to say, that's going to
go from your IRA.
You fill out a form.
It goes from your IRA directly to the
charity.
And now your required minimum distribution that you
have to pay tax on is diminished.
Now, you have to do this before you
start withdrawing money from your IRA.
If you take the $10,000, you still
(12:20):
could do a qualified charitable distribution, but it
won't diminish how much you have to take
out of your IRA because you've already done
it.
But if you do the qualified charitable distribution
before, this $5,000 in my $10,000
example, now you only have to take out
$5,000.
You just saved yourself from having $5,000
of income.
(12:41):
You don't get any kind of deduction, but
the money that was all subject to tax
goes to the charity without any tax, and
you didn't have to take it out and
pay a tax on it.
So it helps your tax planning in that
regard.
But that's something you want to do again,
like ASAP at this point, because again, it
(13:05):
has to process before the end of the
year, and it's going to get busy.
So don't delay when it comes to year
-end planning for that kind of thing, if
you have that in mind.
On that topic, I've talked to family members
about that as an idea.
And they're like, well, no, I like to
do my monthly contributions or weekly, whatever it
(13:26):
might be to a church or something like
that.
But then it's like, all right, well, how
much do you give in a year to
that charity?
Oh, it's X amount.
All right.
So let's do that all in one go
as the qualified charitable distribution, and then both
the charity and you benefit from that.
Yeah.
And there's some tax savings for you, because
(13:47):
most people don't do a lot of itemized
deductions.
And again, you might get some of that
money back when you get the deduction, but
all of that money isn't taxed when you
do it this other way.
So it's, I think, a better approach.
(14:09):
That's one of those things that changed this
year when it came to the qualified charitable
distributions, if you've ever done that in the
past, is that it used to not be
identified anywhere on your 1099.
This year, they did change some of the
rules that that will be made note of
on your 1099 going forward.
All right.
What are we thinking about if we have
(14:29):
someone come in at the end of the
year?
Another thing that's a big deal for people
to be thinking about this time of year
is capital gains.
They're trying to get a handle on how
much capital gain am I dealing with?
Is there anything I can do for harvesting
losses to mitigate some of that capital gains
exposure?
Are there funds that you might need to
(14:52):
plan for that could have embedded capital gains
that they will distribute to you as a
fund shareholder?
All of these are variables that are worth
taking a few minutes to give some thought
to and evaluate if there's anything that's a
change that you're going to do.
Is it a change you want to do
(15:12):
now, or is it a change that you
can, for example, if you're adding money into
stock, sometimes this time of year, we try
to be careful about not buying into capital
gains in a fund.
Mutual funds are notorious for capital gains distributions.
If you can, that's an example of something
(15:33):
to try to avoid.
Now, that's a big reason why when we
use funds, we try to use more exchange
-traded funds because they are better at navigating
these capital gains distributions than mutual funds tend
to be.
Let's not say we don't use mutual funds
in our portfolios, but when it comes to
(15:56):
this issue, we try to be careful about
what we'd use.
This time of year is a good time
of year to be mindful of those possibilities.
I want to talk about income tax deferral
through work plans and making sure you've maxed
out your plan or done whatever you can
(16:17):
do in your plan.
Yeah.
It's a good time of year to check
out how much you've contributed to your work
plan or to your Roth IRA, your traditional
IRA, see where you're at, and try to
maximize that before the end of the year.
Those numbers change.
Those contribution limits change every so often.
(16:38):
For IRAs, for those under 50, it's $7
,000 for a traditional IRA and a Roth
IRA.
For a 401k, it's a little bit more
complicated.
Another complication, but for 401ks, it's $23
(17:01):
,500, I believe, for people under.
Yeah, $23,500 is the maximum for people
under 50.
For those over 50, it goes up to
$31,000 as the maximum contribution for a
401k or 403b.
Then there's this new rule for those between
the 60 and 63 where there's this super
(17:22):
catch-up contribution.
Just within that window, people who are under
401k can contribute up to $34,750 per
person.
Just within that window, that's the highest contribution
that is allowed for a 401k.
Again, these are rules that get a little
convoluted and they change from one year to
the next.
(17:43):
Don't hesitate to reach out to your financial
advisor.
Perhaps if you don't have an advisor, you
can certainly connect with us.
We'll help you navigate some of that.
There are some useful tools.
Russ, I'm just going to borrow this.
We got our handy-dandy resources that have,
I don't know if I have that upside
down there, all kinds of details where I
(18:05):
call it my cheat sheet because it has
all the numbers right at your fingertips.
You don't have to remember every aspect of
it offhand.
But if you're dealing with some of this,
am I eligible to participate in an IRA
with a deduction?
Am I eligible to contribute to a Roth
IRA?
(18:26):
Did I make too much?
One of the things we haven't talked about,
Russ, is the net investment income tax.
There are some thresholds for income that can
push you into having an additional 3.8
% tax rate on certain kinds of circumstances.
Do you want to check on that?
(18:47):
Yeah.
Basically, if you make over $200,000 as
an individual or $250,000 as a married
couple filing jointly, there's this additional tax.
You pay your income tax, then your state
income tax.
Then on top of that, there's this net
(19:07):
investment income tax, which is 3.8%. It's
calculated based on what the interest income is.
Yeah, your investment income.
That can be including capital gains and such.
Capital gains, interest, dividends, that was all included
in that.
So those categories of investment income or of
(19:31):
one type or another, there might be an
additional 3.8% hit on that if
you exceed a certain income threshold, as Russ
was saying.
So that's another reason why you may want
to be trying to max out your retirement
plan or contributing to an IRA.
Your HSA, if you are eligible at work
(19:53):
for an HSA contribution, do that.
Why not?
It goes in tax-free.
It doesn't pay taxes while it's in the
HSA.
If you take it out for healthcare expenses,
you don't pay tax.
That's even better than a Roth IRA, because
(20:14):
it's not taxed on the front end.
Take advantage of things like that.
So there's a lot of variables that we
can go into and different rules for how
does a simple IRA work?
What's the number for them?
But anyway, so depending on what you have,
there's things to be considered.
All right.
So you talked about the 62, and there's
(20:35):
all that complexity.
Did we talk about that or not?
For the super catch-up?
Yeah.
So those rules are new.
And man, that's just another number that gets
even more confusing.
But don't forget if you fall into that
age range, there's opportunity there to do a
little bit more.
What are the ages again?
60 to 63.
(20:55):
63.
Another change that this year with the extension
of the Tax Cut and Jobs Act into
the One Beautiful Bill Act, there's the issue
of the SALT tax treatment.
And that could affect your tax numbers a
little bit.
I don't know if that requires any year
(21:16):
-end planning necessarily, but it does change some
of your numbers.
And you might have more capability if you
have mortgage interest taxes on the state and
local level.
Depending on how you're paying your property taxes,
right?
So if you decide to pay, sometimes you
get charged in January of following year.
(21:40):
So depending on how you pay and when
you pay, you could decide, I want to
include those this year.
If I'm going to itemize, then have those
be part of the SALT's deduction up to
$40,000 this year.
$40,000.
That's a big difference from the $10,000
that was previously the case.
So that could make a difference.
Yeah.
(22:02):
What about this whole thing with the Social
Security?
There was this talk in the campaign that
Social Security would be tax-free.
Well, it didn't work out exactly that way,
but you talked a little bit about this,
but maybe for those seniors to reiterate some
(22:24):
of this.
Another big change is the adjustments to the
standard deduction.
So it's especially high.
So it was already higher than it had
been.
Yeah.
So what is it?
$15,000 now?
Yeah.
So the standard deduction is up to $15
,000.
Not nothing.
(22:44):
That's good.
So your first $15,000, you get that
deduction.
So it's actually $15,750.
Oh, that's what it went up to?
Yeah.
Yeah.
Yeah.
Okay.
So that's for an individual.
And that's for an individual.
So you can essentially double that for a
couple.
But if you're over a certain age, you
get a little more.
(23:05):
And if you're over another age, you get
this whole, at least for the next few
years, some additional.
So how's that all come together?
So already, if you were over 65, there's
an additional $1,600 that gets added to
the standard deduction.
So if you're married, that adds up to
(23:27):
$33,100 as the standard deduction.
If you're over 65, just as things were.
Before you even got to this new thing,
which is temporary, but who knows, maybe it'll
get extended after that.
Yeah.
And this is sort of the workaround for
the social security issue.
To change the social security taxation required a
(23:49):
much more engaged...
It needed more involvement to change the Social
Security Act or something.
And it required a different majority or something
for the way the Congress could deal with
it.
So this was their workaround, that it didn't
require as many votes to be able to
do this.
So if you're over 65 now, between now
(24:11):
and I believe...
Oh, what is it?
2020.
I think it's three this year and the
next three years.
Okay.
Is that what it is?
Something like that?
Yeah, I think that's right.
It's 2028.
At least for the time being, for those
over 65, it's a $6,000 addition to
the standard deduction for individuals and $12,000
(24:33):
for couples who are both over 65.
Now, if you're married and one person is
over 65, you get the $6,000.
Yeah, there you go.
But assuming you're both over 65, I mean...
It goes up to $46,700 as the
standard deduction for those over 65.
Wow.
So that's huge.
Yeah.
Yeah.
So these are things that might affect whether
(24:54):
you actually even have a tax in that
case, right?
Mm-hmm.
All right.
So there's a number of good tidbits as
we think about year-end planning.
What about some other considerations?
This time of year, a lot of times
people think about doing a Roth conversion.
And we talk about this quite a bit
(25:16):
to say, well, let's look at your financial
plan.
And what we find oftentimes, particularly for people
who are near retirement, looking to forecast into
retirement.
We just had this the other day, right?
While they're working, they have a 22%
or a 24% tax bracket.
(25:37):
But when they retire, that tax bracket drops
dramatically, at least until they turn on Social
Security and their RMDs kick in.
Now, so they've got a window where they
might have this opportunity to do some Roth
conversions.
Really, I mean, again, do you think taxes
(25:59):
are going to be lower than they are
today?
I think most people would agree, probably not.
The tax code was permanently changed with the
One Big Beautiful Bill Act.
But you and I both know that nothing
is permanent when it comes to taxation, right?
So with deficits and debts growing, maybe there's
(26:22):
a little less deficit from some cutting that's
been done.
But ultimately, we're looking at some pretty big
outspending what's coming in for revenues annually.
So if that's going to be the case,
you got to assume at some point Social
Security is going to run short, have a
shortfall in 2032.
(26:43):
Medicare, similar story.
There's going to be a revision at some
point in time.
This is a window for people to think
about doing some Roth conversion, pay the tax
now, choose how much, what bracket you want
to do while these brackets are low, while
you've got all these great deductions and so
forth.
(27:03):
Use this as a window and an opportunity
to decide how much tax you're to pay
now versus later when the tax rates might
be higher, or you might be pushed into
a higher bracket because RMDs, which get bigger
each year as a percentage, or because if
(27:24):
you're married, but maybe at some point you'll
be single because of death, widowed, widower, whatever
the right terminology, it could be a situation
where your taxes go up dramatically.
Use this as a window to get some
of that IRA money for people, especially people
who have such an abundance, a concentration of
(27:48):
wealth in their IRAs.
Use this as a window to do some
converting.
Trey Lockerbie And we've been hearing more and
more of that with some legacy planning issues
as well.
I want to leave this money for my
kids, but I don't want them to have
to pay all this tax after 10 years
while they're still working.
(28:08):
Roth IRAs don't have those same restrictions as
those other inherited IRAs you were talking about
earlier.
They still have to be taken out within
10 years, but there's no taxation when the
income comes out or when the funds come
out.
Yeah, and Roth conversions can be confusing.
So if that's something that you're considering, definitely
(28:30):
have us help you model that and see
what an optimal amount might be to start
with.
Trey Lockerbie Other things for consideration, do you
do charitable giving regularly?
Aside from whether or not you're eligible for
the qualified charitable distribution, maybe you want to
do some bundling of your charitable giving.
(28:51):
Again, there's tax-smart ways to do this.
If you have appreciated assets, those are an
attractive resource to do some of that giving.
But bundle some of your charitable giving.
Instead of doing so much per year, maybe
do a bunch of it in one year
so that you get the benefit of the
(29:12):
tax instead of a standard deduction.
Maybe you can use a itemized deduction by
doing some of this planning for when you
do your giving.
If you don't necessarily want to give it
all to the charitable intention right away, you
can always look at a donor advised fund
as a tool, a technique to maybe get
(29:35):
the donation and the charitable deduction now, but
you can dole it out to the charitable
intentions over time if you didn't want to
do it all at once.
Let's see.
What are a few other things?
Some regular stuff.
If you're a business owner, you might have
the ability to say, I'm going to defer
that income until next year.
(29:57):
Maybe hold on to that invoice or whatever
it might be.
You might be thinking that way.
Maybe you're moving some expenses up to try
to get your income lower this year and
push income next year and expenses this year.
Business owners often do that kind of thing.
We talked about Roth conversions, Russ, but we
didn't talk about mega backdoor.
(30:20):
There are some techniques for people who have
retirement plans at work that could allow them
to do excess contributions above what's considered to
be the threshold.
Not every plan allows for this and it's
a little bit convoluted, certainly more than we're
going to get into right now, but a
(30:42):
mega backdoor, what do they call that for
a Roth contribution for a qualified plan?
That's the mega backdoor.
Then of course there's the traditional IRA contribution,
do a backdoor Roth contribution.
That again, specific rules.
If you have an IRA with a balance,
(31:03):
not a good idea.
Talk to a professional, make sure they understand
these rules and can help you navigate what's
a good idea, what's not.
These are the times of year when you
think about some of those kinds of techniques.
Incidentally, we have a great tool, some software
(31:25):
that does use artificial intelligence to take a
look at your tax return and evaluate are
there observations for maybe ideas for where to
do something a little differently that might help
your tax picture.
If you need a little bit of a
second set of eyes on that, let us
(31:45):
take a look at your tax return and
put it through some software and see if
we can identify any opportunities there.
This is often a time of year when
people start thinking, gee, I might want somebody
different for my taxes.
If you're thinking you need a new tax
advisor, talk to them now.
Whoever that's going to be, have them take
(32:06):
a look at this 2024 filing, the one
you just did this year, have them take
a look at that.
See if there's any observations, anything that they
might've had to do differently.
Make sure that you've had the conversation before
the end of the year while there's time
to either file an estimated tax or whatever
(32:26):
it might be.
Keep that in mind.
If you were told on your tax return
you're going to be doing estimated taxes, don't
forget to do it.
It's not too late.
That's a good year-end thing to be
talking about.
I don't know, Russ.
I think we covered a lot, but I'm
sure there's other things we should be talking
about.
What didn't we get to?
We talked a little bit about capital gains.
(32:48):
We didn't talk a lot about tax loss
harvesting.
Good time of year to take a look
at your portfolios, in your taxable accounts.
It's been a little difficult because markets have
just gone up, but sometimes there are holdings.
Sometimes there are specific holdings.
If you've got a lot of individual stocks
(33:09):
that have lost value over the course of
the year, good opportunity to get some tax
alpha there by selling those losers and having
that count against your income taxes.
Yeah.
Up to $3,000 off your income by
doing so.
More importantly, help you with either future gains
(33:32):
or this year's gains.
Yeah.
That's just scratching the surface of the benefits
of the tax loss harvesting.
The other piece in a different angle is
the Medicare and Medicare Advantage open enrollment period
is beginning soon.
Didn't think of that.
Yeah.
That's a good point.
We're going to be hit over the head
(33:53):
with all those advertisements the next month or
month and a half or whatever it is.
Yeah.
Good point that if you are on Medicare,
you have a window annually where you can
choose to revisit, do I have the right
plan?
There are different approaches to that and we've
(34:13):
done shows on this in the past, but
I do think there is a virtue if
your health has changed or you're having changing
health needs, it's worth giving thought to what's
the right plan for me given changing health
dynamics.
Oftentimes people don't want to make changes when
(34:34):
they're going through difficulties of one health issue
or another, but there can be dramatically different
benefits between different plans.
It could be worth looking at if you've
got the right plan at a given moment
in time.
Yeah.
Just on top of that, just to make
sure that if you have a Medicare Advantage
(34:55):
plan, that your doctors that you usually see
are still covered under that plan.
Make sure your prescription drugs are covered under
your Part D supplemental plan.
A lot of things you can look at
this time of year and make changes if
necessary.
Not just yet.
I think it's the 15th of October that
it begins, but it stretches until December.
(35:17):
Another thing to be thinking about is, this
is probably not for everybody, but certain times
people have stock options available through work and
those can often create instances where you get
pushed not to a higher bracket necessarily just
because of that, but because of the alternative
(35:39):
minimum tax.
We don't talk about that as much as
we used to because it's not been as
prevalent with, I think it was the Secure
Act, but I've lost track of which tax
legislation helped to make that a little less
prominent, but that's a common instance where people
do get hit by the alternative minimum tax.
(36:01):
If you have those kinds of circumstances, pay
attention to the calculation, have your tax advisor
do a run-through of your tax picture.
One other thing that I think this time
of year lends itself to for year-end
planning is, it's a good time of year
to revisit things like, who are my beneficiaries?
(36:22):
Have you updated your beneficiaries?
We run into this.
It's incredibly surprising how often clients don't update
their beneficiaries and they have an ex-spouse
or a parent who is long deceased or
whatever it might be.
It may not always reflect who you want.
(36:45):
We had a client in recently whose spouse
had passed, a child had passed.
Sometimes you need these things updated because of
life's circumstances and so there's a need to
revise them.
Additionally, when it comes to your estate plan,
that's another circumstance that has changing dynamics from
(37:09):
different life circumstances.
Things evolve.
It's probably a good idea annually to at
least take a step back and look at,
what is my estate plan right now?
Is there anything I'd want to do differently
and have an understanding of what that is?
We've covered a lot here, Russ.
I'm sure we scratched the surface, but I
(37:30):
think we did a pretty healthy scratch on
that.
As you think about these issues, obviously, we're
here to help if you need a little
helping hand in thinking about your financial planning,
your portfolio management.
Certainly, it integrates with your tax planning and
all the rest of these kinds of issues.
Don't hesitate to reach out to us.
We're here to be a resource.
(37:53):
If we can be a help, we'd love
to serve you.
With that in mind, until next time, everybody,
keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
(38:14):
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll-free at 866
-771-8901 or send us your questions to
amr-info at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
(38:35):
provide investment advice on an individual basis to
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
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Listeners should consult their own financial advisors or
conduct their own due diligence before making any
(38:57):
financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Thanks for being with us.
I'm Chris Boyd.
I'm here with Russ Ball.
We are both of the AMR team at
Wealth Enhancement and got a good show planned
(00:43):
for you.
We're going to talk about some year-end
planning issues.
It's that time of year, we're in the
final quarter of the year, and you can't
help but start thinking about the end of
the year is approaching.
Have I gotten everything, taken advantage of all
the things that I can do?
We're going to go through a little bit
(01:03):
of a list of ideas for you to
think about and help you plan for that,
ranging from some income tax and income and
tax strategies, maybe some thinking about capital gains
and charitable giving.
There's a whole range of things.
Where should we begin, Russ?
Well, I know one that's been on our
team's mind a lot lately is RMDs.
(01:25):
Yeah, definitely.
This time of year, retirees or actually anyone
who has either an IRA and then has
reached 73 and older, or an inherited IRA
where the original IRA owner was of an
(01:45):
age that they had RMDs, you will also
have to take a required distribution.
This year is different from recent years where
the IRS has been cutting some slack when
it comes to this.
I think they're trying to figure out their
own rules on how all this is going
(02:06):
to work out.
Well, I think there's been a lot of
confusion for sure about, on the one hand,
the new rules from the SECURE Act where
the stretch IRA was changed to a 10
-year clock.
Originally, people were thinking, well, I've got 10
years.
And then there was also some expectation, well,
(02:28):
you might also have to take money out
during those 10 years.
Who's which?
So if the person you inherited an IRA
from, if they were of an age that
they had yet to start their required distributions,
their required beginning date, you don't have to
take a distribution annually over that 10-year
(02:50):
period.
You can choose to take it if you
want to.
You can take a little bit each year.
You can take a 10th.
You can take it all in the first
year, all in the last year or whatever,
any combination.
But if you receive that inherited IRA from
the person who died and already started their
required beginning date, required distributions, minimum distributions, then
(03:15):
you too are expected to continue to take
RMDs.
Now, how it's calculated is different than what
the person who died that you received the
IRA from.
So it's not exactly the same calculation.
And it's not the same calculation you'd use
for your own IRA when you reach an
IRA, a required minimum distribution date.
(03:39):
But there is a minimum amount that you
have to take.
And we could probably do a show on
this alone, right?
Yeah.
But the essence of it is there's a
table you look to based on the age
you are, the year after the person died
that you received this IRA from, you have
(04:00):
to start taking distributions.
And you look up on this table what
the essentially life expectancy number would be.
It's not the uniform table.
This is the single life table in this
instance.
And then you take that number.
That's the divisor.
You take the balance from the prior year
end, the age you'd be at the end
(04:22):
of the year, and look at what the
factor is.
And you divide the balance by the factor.
That's your RMD for this year.
And every year after that, you subtract one
from that life expectancy number.
If that's not simple enough, there's a structure
(04:43):
to it.
There's calculators out there.
If you work with an advisor, they'll help
you to figure this out.
But custodians will say, well, it's up to
the individual to do the calculations.
They might give you the ingredients of how
to do it.
But if you work with a good financial
advisor, they'll help you.
And they should know the rules.
I spend a lot of time going to
(05:03):
courses, the Ed Slot Program, and things like
that.
Make sure we're up to date on how
these rules work and how to help people.
Because these are complicated.
It's complex, the idea of how to navigate
this.
But in any case, if you have an
IRA and you're over 73 today, you'll have
(05:28):
a distribution requirement placed upon you as well.
That one is calculated differently than what I
just described.
Great.
Same idea.
But instead of a single life table, you
use a uniform table.
The uniform table presumes that you're married, presumes
that you're married to someone 10 years younger.
(05:49):
It's OK if you're not married or if
you're not married to someone 10 years younger.
If you're married to someone more than 10
years younger, there's a different way to calculate
it.
But for most people, the uniform table covers
the range of possibilities.
And that gives you the best calculation for
how to do this.
And you basically have a minimum amount you
(06:13):
have to take out.
It starts out a little less than 4
% per year.
But as you get older, it goes up.
We were talking to someone in their 90s.
It's around 10%.
So it starts off pretty modest but grows
over time as a percentage you have to
withdraw.
So this is the time of year.
If you haven't dealt with it, now's the
(06:36):
time.
Some people like to do it monthly.
But a lot of people tend to wait
till year end to say, oh, I'll take
the money when I have to, thinking they'll
keep the money invested for the bulk of
the year.
This year, that would have been a good
choice.
In a year when the market goes down,
it's not.
So who knows what's going to happen when
(06:57):
you start the year.
But we do find that it used to
be that people would put this off till
December.
And we really encourage people to think about
doing this a little earlier.
What's been happening, we've noticed over the last
few years, is custodians pretty much universally have
(07:18):
this challenge where there's a glut of people
taking their distributions at year end.
And if you're going to take your distribution,
don't put it off till December.
Because there's going to be a lot of
people pulling their money in December.
And the custodians end up getting to a
point where they say, well, best efforts.
We'll try to get to it.
(07:39):
But there's so much coming in that there's
a lot of year end activity and things.
So it's the final quarter.
It's a good time to do it.
October, November, let's get to it.
Time to take those distributions.
Yeah.
And a couple points on top of that.
So if you have IRAs that are, if
you're working with us, you might have IRAs
(07:59):
somewhere else, a bank, sometimes I've seen CD
IRAs, that sort of thing.
The RMD applies to those as well.
So sometimes your advisor might not know you
have an IRA somewhere else that also has
an RMD requirement.
Yeah.
And the way the IRS looks at your
IRAs, it doesn't matter if you have five
of them at different institutions or one of
(08:20):
them at a single place, they think of
them all as one IRA.
That is to say, if you said, I'm
going to take all of my calculated distribution
requirements in those five different accounts, you can
take it all out of one account, that
one IRA account, that's fine.
It all is considered your IRA.
(08:41):
If you prefer to take the appropriate amount
from each account, that's fine too.
Ultimately, as long as you meet that number,
I will put a caveat to that.
Don't confuse that notion that all those accounts
are connected in a sense with the idea
that if you have a 401k or 403b
(09:02):
or something like a work plan, that has
its own distribution requirement.
And each of those might have to be
addressed separately.
So you don't want to say, oh, I
took it out of my IRA.
When you have a 401k, you'll need to
take the 401k distribution from the 401k and
the IRA distribution from the IRA.
(09:24):
So this is pretty easy, right?
Easy stuff so far, right, Russ?
It's pretty heavy duty.
Oh my gosh.
There's all these rules.
I will add one more thing going back
to the inherited IRAs as well.
You might've mentioned this, but that only applies
to inherited IRAs that are from someone other
than a spouse.
Oh, that's a great point.
A spouse, that's a really great point.
(09:46):
Those circumstances have unique treatment and you don't
necessarily have, you have to make some decisions
about how you want to handle it.
But again, there's questions of, are there age
discrepancies?
Usually what happens is someone just rolls that
into their own account and then it's up
to what their age situation is.
(10:08):
Sometimes though you have someone who's like an
older spouse who dies, but a younger spouse
who's not yet eligible to withdraw from their
IRA, but they might like to have access
to that.
So there's rules that you got to pay
attention to to say, what's the right strategy
in this circumstance?
That's a great observation.
So don't want to have people worried just
(10:30):
because they have an inherited IRA that they
need to take a distribution necessarily.
It's a 10-year rule and those specific
rules are for inherited IRAs from someone other
than a spouse.
Good point.
I want to add another complicating factor.
Sorry.
It's like, how many of these do we
(10:50):
have?
But we talk often about the virtues of
a qualified charitable distribution, which is a means
of withdrawing from your IRA to give directly
to a charitable intention.
(11:11):
And it can meet some of your required
distribution figures.
So let's say for example, you're over 70
and a half, whether you have an inherited
IRA or an IRA, you can draw off
money from your IRA and have it go
directly to a charitable intention and a charitable
(11:35):
entity of your choosing, church, alma mater, nonprofit
of some kind.
And you could say, let's say you had
a $10,000 required distribution this year.
You could opt to say, I want to
give $5,000 to charity.
I'm going to give it 2x, whatever it
(11:57):
is.
And you opted to say, that's going to
go from your IRA.
You fill out a form.
It goes from your IRA directly to the
charity.
And now your required minimum distribution that you
have to pay tax on is diminished.
Now, you have to do this before you
start withdrawing money from your IRA.
If you take the $10,000, you still
(12:20):
could do a qualified charitable distribution, but it
won't diminish how much you have to take
out of your IRA because you've already done
it.
But if you do the qualified charitable distribution
before, this $5,000 in my $10,000
example, now you only have to take out
$5,000.
You just saved yourself from having $5,000
of income.
(12:41):
You don't get any kind of deduction, but
the money that was all subject to tax
goes to the charity without any tax, and
you didn't have to take it out and
pay a tax on it.
So it helps your tax planning in that
regard.
But that's something you want to do again,
like ASAP at this point, because again, it
(13:05):
has to process before the end of the
year, and it's going to get busy.
So don't delay when it comes to year
-end planning for that kind of thing, if
you have that in mind.
On that topic, I've talked to family members
about that as an idea.
And they're like, well, no, I like to
do my monthly contributions or weekly, whatever it
(13:26):
might be to a church or something like
that.
But then it's like, all right, well, how
much do you give in a year to
that charity?
Oh, it's X amount.
All right.
So let's do that all in one go
as the qualified charitable distribution, and then both
the charity and you benefit from that.
Yeah.
And there's some tax savings for you, because
(13:47):
most people don't do a lot of itemized
deductions.
And again, you might get some of that
money back when you get the deduction, but
all of that money isn't taxed when you
do it this other way.
So it's, I think, a better approach.
(14:09):
That's one of those things that changed this
year when it came to the qualified charitable
distributions, if you've ever done that in the
past, is that it used to not be
identified anywhere on your 1099.
This year, they did change some of the
rules that that will be made note of
on your 1099 going forward.
All right.
What are we thinking about if we have
(14:29):
someone come in at the end of the
year?
Another thing that's a big deal for people
to be thinking about this time of year
is capital gains.
They're trying to get a handle on how
much capital gain am I dealing with?
Is there anything I can do for harvesting
losses to mitigate some of that capital gains
exposure?
Are there funds that you might need to
(14:52):
plan for that could have embedded capital gains
that they will distribute to you as a
fund shareholder?
All of these are variables that are worth
taking a few minutes to give some thought
to and evaluate if there's anything that's a
change that you're going to do.
Is it a change you want to do
(15:12):
now, or is it a change that you
can, for example, if you're adding money into
stock, sometimes this time of year, we try
to be careful about not buying into capital
gains in a fund.
Mutual funds are notorious for capital gains distributions.
If you can, that's an example of something
(15:33):
to try to avoid.
Now, that's a big reason why when we
use funds, we try to use more exchange
-traded funds because they are better at navigating
these capital gains distributions than mutual funds tend
to be.
Let's not say we don't use mutual funds
in our portfolios, but when it comes to
(15:56):
this issue, we try to be careful about
what we'd use.
This time of year is a good time
of year to be mindful of those possibilities.
I want to talk about income tax deferral
through work plans and making sure you've maxed
out your plan or done whatever you can
(16:17):
do in your plan.
Yeah.
It's a good time of year to check
out how much you've contributed to your work
plan or to your Roth IRA, your traditional
IRA, see where you're at, and try to
maximize that before the end of the year.
Those numbers change.
Those contribution limits change every so often.
(16:38):
For IRAs, for those under 50, it's $7
,000 for a traditional IRA and a Roth
IRA.
For a 401k, it's a little bit more
complicated.
Another complication, but for 401ks, it's $23
(17:01):
,500, I believe, for people under.
Yeah, $23,500 is the maximum for people
under 50.
For those over 50, it goes up to
$31,000 as the maximum contribution for a
401k or 403b.
Then there's this new rule for those between
the 60 and 63 where there's this super
(17:22):
catch-up contribution.
Just within that window, people who are under
401k can contribute up to $34,750 per
person.
Just within that window, that's the highest contribution
that is allowed for a 401k.
Again, these are rules that get a little
convoluted and they change from one year to
the next.
(17:43):
Don't hesitate to reach out to your financial
advisor.
Perhaps if you don't have an advisor, you
can certainly connect with us.
We'll help you navigate some of that.
There are some useful tools.
Russ, I'm just going to borrow this.
We got our handy-dandy resources that have,
I don't know if I have that upside
down there, all kinds of details where I
(18:05):
call it my cheat sheet because it has
all the numbers right at your fingertips.
You don't have to remember every aspect of
it offhand.
But if you're dealing with some of this,
am I eligible to participate in an IRA
with a deduction?
Am I eligible to contribute to a Roth
IRA?
(18:26):
Did I make too much?
One of the things we haven't talked about,
Russ, is the net investment income tax.
There are some thresholds for income that can
push you into having an additional 3.8
% tax rate on certain kinds of circumstances.
Do you want to check on that?
(18:47):
Yeah.
Basically, if you make over $200,000 as
an individual or $250,000 as a married
couple filing jointly, there's this additional tax.
You pay your income tax, then your state
income tax.
Then on top of that, there's this net
(19:07):
investment income tax, which is 3.8%. It's
calculated based on what the interest income is.
Yeah, your investment income.
That can be including capital gains and such.
Capital gains, interest, dividends, that was all included
in that.
So those categories of investment income or of
(19:31):
one type or another, there might be an
additional 3.8% hit on that if
you exceed a certain income threshold, as Russ
was saying.
So that's another reason why you may want
to be trying to max out your retirement
plan or contributing to an IRA.
Your HSA, if you are eligible at work
(19:53):
for an HSA contribution, do that.
Why not?
It goes in tax-free.
It doesn't pay taxes while it's in the
HSA.
If you take it out for healthcare expenses,
you don't pay tax.
That's even better than a Roth IRA, because
(20:14):
it's not taxed on the front end.
Take advantage of things like that.
So there's a lot of variables that we
can go into and different rules for how
does a simple IRA work?
What's the number for them?
But anyway, so depending on what you have,
there's things to be considered.
All right.
So you talked about the 62, and there's
(20:35):
all that complexity.
Did we talk about that or not?
For the super catch-up?
Yeah.
So those rules are new.
And man, that's just another number that gets
even more confusing.
But don't forget if you fall into that
age range, there's opportunity there to do a
little bit more.
What are the ages again?
60 to 63.
(20:55):
63.
Another change that this year with the extension
of the Tax Cut and Jobs Act into
the One Beautiful Bill Act, there's the issue
of the SALT tax treatment.
And that could affect your tax numbers a
little bit.
I don't know if that requires any year
(21:16):
-end planning necessarily, but it does change some
of your numbers.
And you might have more capability if you
have mortgage interest taxes on the state and
local level.
Depending on how you're paying your property taxes,
right?
So if you decide to pay, sometimes you
get charged in January of following year.
(21:40):
So depending on how you pay and when
you pay, you could decide, I want to
include those this year.
If I'm going to itemize, then have those
be part of the SALT's deduction up to
$40,000 this year.
$40,000.
That's a big difference from the $10,000
that was previously the case.
So that could make a difference.
Yeah.
(22:02):
What about this whole thing with the Social
Security?
There was this talk in the campaign that
Social Security would be tax-free.
Well, it didn't work out exactly that way,
but you talked a little bit about this,
but maybe for those seniors to reiterate some
(22:24):
of this.
Another big change is the adjustments to the
standard deduction.
So it's especially high.
So it was already higher than it had
been.
Yeah.
So what is it?
$15,000 now?
Yeah.
So the standard deduction is up to $15
,000.
Not nothing.
(22:44):
That's good.
So your first $15,000, you get that
deduction.
So it's actually $15,750.
Oh, that's what it went up to?
Yeah.
Yeah.
Yeah.
Okay.
So that's for an individual.
And that's for an individual.
So you can essentially double that for a
couple.
But if you're over a certain age, you
get a little more.
(23:05):
And if you're over another age, you get
this whole, at least for the next few
years, some additional.
So how's that all come together?
So already, if you were over 65, there's
an additional $1,600 that gets added to
the standard deduction.
So if you're married, that adds up to
(23:27):
$33,100 as the standard deduction.
If you're over 65, just as things were.
Before you even got to this new thing,
which is temporary, but who knows, maybe it'll
get extended after that.
Yeah.
And this is sort of the workaround for
the social security issue.
To change the social security taxation required a
(23:49):
much more engaged...
It needed more involvement to change the Social
Security Act or something.
And it required a different majority or something
for the way the Congress could deal with
it.
So this was their workaround, that it didn't
require as many votes to be able to
do this.
So if you're over 65 now, between now
(24:11):
and I believe...
Oh, what is it?
2020.
I think it's three this year and the
next three years.
Okay.
Is that what it is?
Something like that?
Yeah, I think that's right.
It's 2028.
At least for the time being, for those
over 65, it's a $6,000 addition to
the standard deduction for individuals and $12,000
(24:33):
for couples who are both over 65.
Now, if you're married and one person is
over 65, you get the $6,000.
Yeah, there you go.
But assuming you're both over 65, I mean...
It goes up to $46,700 as the
standard deduction for those over 65.
Wow.
So that's huge.
Yeah.
Yeah.
So these are things that might affect whether
(24:54):
you actually even have a tax in that
case, right?
Mm-hmm.
All right.
So there's a number of good tidbits as
we think about year-end planning.
What about some other considerations?
This time of year, a lot of times
people think about doing a Roth conversion.
And we talk about this quite a bit
(25:16):
to say, well, let's look at your financial
plan.
And what we find oftentimes, particularly for people
who are near retirement, looking to forecast into
retirement.
We just had this the other day, right?
While they're working, they have a 22%
or a 24% tax bracket.
(25:37):
But when they retire, that tax bracket drops
dramatically, at least until they turn on Social
Security and their RMDs kick in.
Now, so they've got a window where they
might have this opportunity to do some Roth
conversions.
Really, I mean, again, do you think taxes
(25:59):
are going to be lower than they are
today?
I think most people would agree, probably not.
The tax code was permanently changed with the
One Big Beautiful Bill Act.
But you and I both know that nothing
is permanent when it comes to taxation, right?
So with deficits and debts growing, maybe there's
(26:22):
a little less deficit from some cutting that's
been done.
But ultimately, we're looking at some pretty big
outspending what's coming in for revenues annually.
So if that's going to be the case,
you got to assume at some point Social
Security is going to run short, have a
shortfall in 2032.
(26:43):
Medicare, similar story.
There's going to be a revision at some
point in time.
This is a window for people to think
about doing some Roth conversion, pay the tax
now, choose how much, what bracket you want
to do while these brackets are low, while
you've got all these great deductions and so
forth.
(27:03):
Use this as a window and an opportunity
to decide how much tax you're to pay
now versus later when the tax rates might
be higher, or you might be pushed into
a higher bracket because RMDs, which get bigger
each year as a percentage, or because if
(27:24):
you're married, but maybe at some point you'll
be single because of death, widowed, widower, whatever
the right terminology, it could be a situation
where your taxes go up dramatically.
Use this as a window to get some
of that IRA money for people, especially people
who have such an abundance, a concentration of
(27:48):
wealth in their IRAs.
Use this as a window to do some
converting.
Trey Lockerbie And we've been hearing more and
more of that with some legacy planning issues
as well.
I want to leave this money for my
kids, but I don't want them to have
to pay all this tax after 10 years
while they're still working.
(28:08):
Roth IRAs don't have those same restrictions as
those other inherited IRAs you were talking about
earlier.
They still have to be taken out within
10 years, but there's no taxation when the
income comes out or when the funds come
out.
Yeah, and Roth conversions can be confusing.
So if that's something that you're considering, definitely
(28:30):
have us help you model that and see
what an optimal amount might be to start
with.
Trey Lockerbie Other things for consideration, do you
do charitable giving regularly?
Aside from whether or not you're eligible for
the qualified charitable distribution, maybe you want to
do some bundling of your charitable giving.
(28:51):
Again, there's tax-smart ways to do this.
If you have appreciated assets, those are an
attractive resource to do some of that giving.
But bundle some of your charitable giving.
Instead of doing so much per year, maybe
do a bunch of it in one year
so that you get the benefit of the
(29:12):
tax instead of a standard deduction.
Maybe you can use a itemized deduction by
doing some of this planning for when you
do your giving.
If you don't necessarily want to give it
all to the charitable intention right away, you
can always look at a donor advised fund
as a tool, a technique to maybe get
(29:35):
the donation and the charitable deduction now, but
you can dole it out to the charitable
intentions over time if you didn't want to
do it all at once.
Let's see.
What are a few other things?
Some regular stuff.
If you're a business owner, you might have
the ability to say, I'm going to defer
that income until next year.
(29:57):
Maybe hold on to that invoice or whatever
it might be.
You might be thinking that way.
Maybe you're moving some expenses up to try
to get your income lower this year and
push income next year and expenses this year.
Business owners often do that kind of thing.
We talked about Roth conversions, Russ, but we
didn't talk about mega backdoor.
(30:20):
There are some techniques for people who have
retirement plans at work that could allow them
to do excess contributions above what's considered to
be the threshold.
Not every plan allows for this and it's
a little bit convoluted, certainly more than we're
going to get into right now, but a
(30:42):
mega backdoor, what do they call that for
a Roth contribution for a qualified plan?
That's the mega backdoor.
Then of course there's the traditional IRA contribution,
do a backdoor Roth contribution.
That again, specific rules.
If you have an IRA with a balance,
(31:03):
not a good idea.
Talk to a professional, make sure they understand
these rules and can help you navigate what's
a good idea, what's not.
These are the times of year when you
think about some of those kinds of techniques.
Incidentally, we have a great tool, some software
(31:25):
that does use artificial intelligence to take a
look at your tax return and evaluate are
there observations for maybe ideas for where to
do something a little differently that might help
your tax picture.
If you need a little bit of a
second set of eyes on that, let us
(31:45):
take a look at your tax return and
put it through some software and see if
we can identify any opportunities there.
This is often a time of year when
people start thinking, gee, I might want somebody
different for my taxes.
If you're thinking you need a new tax
advisor, talk to them now.
Whoever that's going to be, have them take
(32:06):
a look at this 2024 filing, the one
you just did this year, have them take
a look at that.
See if there's any observations, anything that they
might've had to do differently.
Make sure that you've had the conversation before
the end of the year while there's time
to either file an estimated tax or whatever
(32:26):
it might be.
Keep that in mind.
If you were told on your tax return
you're going to be doing estimated taxes, don't
forget to do it.
It's not too late.
That's a good year-end thing to be
talking about.
I don't know, Russ.
I think we covered a lot, but I'm
sure there's other things we should be talking
about.
What didn't we get to?
We talked a little bit about capital gains.
(32:48):
We didn't talk a lot about tax loss
harvesting.
Good time of year to take a look
at your portfolios, in your taxable accounts.
It's been a little difficult because markets have
just gone up, but sometimes there are holdings.
Sometimes there are specific holdings.
If you've got a lot of individual stocks
(33:09):
that have lost value over the course of
the year, good opportunity to get some tax
alpha there by selling those losers and having
that count against your income taxes.
Yeah.
Up to $3,000 off your income by
doing so.
More importantly, help you with either future gains
(33:32):
or this year's gains.
Yeah.
That's just scratching the surface of the benefits
of the tax loss harvesting.
The other piece in a different angle is
the Medicare and Medicare Advantage open enrollment period
is beginning soon.
Didn't think of that.
Yeah.
That's a good point.
We're going to be hit over the head
(33:53):
with all those advertisements the next month or
month and a half or whatever it is.
Yeah.
Good point that if you are on Medicare,
you have a window annually where you can
choose to revisit, do I have the right
plan?
There are different approaches to that and we've
(34:13):
done shows on this in the past, but
I do think there is a virtue if
your health has changed or you're having changing
health needs, it's worth giving thought to what's
the right plan for me given changing health
dynamics.
Oftentimes people don't want to make changes when
(34:34):
they're going through difficulties of one health issue
or another, but there can be dramatically different
benefits between different plans.
It could be worth looking at if you've
got the right plan at a given moment
in time.
Yeah.
Just on top of that, just to make
sure that if you have a Medicare Advantage
(34:55):
plan, that your doctors that you usually see
are still covered under that plan.
Make sure your prescription drugs are covered under
your Part D supplemental plan.
A lot of things you can look at
this time of year and make changes if
necessary.
Not just yet.
I think it's the 15th of October that
it begins, but it stretches until December.
(35:17):
Another thing to be thinking about is, this
is probably not for everybody, but certain times
people have stock options available through work and
those can often create instances where you get
pushed not to a higher bracket necessarily just
because of that, but because of the alternative
(35:39):
minimum tax.
We don't talk about that as much as
we used to because it's not been as
prevalent with, I think it was the Secure
Act, but I've lost track of which tax
legislation helped to make that a little less
prominent, but that's a common instance where people
do get hit by the alternative minimum tax.
(36:01):
If you have those kinds of circumstances, pay
attention to the calculation, have your tax advisor
do a run-through of your tax picture.
One other thing that I think this time
of year lends itself to for year-end
planning is, it's a good time of year
to revisit things like, who are my beneficiaries?
(36:22):
Have you updated your beneficiaries?
We run into this.
It's incredibly surprising how often clients don't update
their beneficiaries and they have an ex-spouse
or a parent who is long deceased or
whatever it might be.
It may not always reflect who you want.
(36:45):
We had a client in recently whose spouse
had passed, a child had passed.
Sometimes you need these things updated because of
life's circumstances and so there's a need to
revise them.
Additionally, when it comes to your estate plan,
that's another circumstance that has changing dynamics from
(37:09):
different life circumstances.
Things evolve.
It's probably a good idea annually to at
least take a step back and look at,
what is my estate plan right now?
Is there anything I'd want to do differently
and have an understanding of what that is?
We've covered a lot here, Russ.
I'm sure we scratched the surface, but I
(37:30):
think we did a pretty healthy scratch on
that.
As you think about these issues, obviously, we're
here to help if you need a little
helping hand in thinking about your financial planning,
your portfolio management.
Certainly, it integrates with your tax planning and
all the rest of these kinds of issues.
Don't hesitate to reach out to us.
We're here to be a resource.
(37:53):
If we can be a help, we'd love
to serve you.
With that in mind, until next time, everybody,
keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
(38:14):
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll-free at 866
-771-8901 or send us your questions to
amr-info at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
(38:35):
provide investment advice on an individual basis to
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
(38:57):
financial decisions.
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