We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
2025 – Common Deductible Charitable Gifts in Retirement
Radon and Murs discuss the strategies and rules surrounding common deductible charitable gifts in 2025. As the new year begins, many individuals are setting charitable giving goals while seeking to maximize their tax benefits…..
2025 – Common Deductible Charitable Gifts in Retirement
Charitable giving remains a cornerstone of financial planning, offering a means to support meaningful causes while also reaping tax benefits. However, navigating the complex rules surrounding charitable tax deductions requires a clear understanding of adjusted gross income (AGI), standard deductions, and other related factors..…..
As we step into 2025, many individuals are re-evaluating their goals and aspirations for the new year. For those inclined towards philanthropy, understanding the tax implications and strategies behind charitable giving can be immensely beneficial. This guide will walk you through the key aspects of deductible charitable gifts, providing actionable insights to maximize both your contributions and their associated tax benefits.
The Importance of Charitable Tax Deductions in 2025
Charitable giving remains a cornerstone of financial planning, offering a means to support meaningful causes while also reaping tax benefits. However, navigating the complex rules surrounding charitable tax deductions requires a clear understanding of adjusted gross income (AGI), standard deductions, and other related factors. Whether you’re donating cash, appreciated assets, or taking advantage of specialized strategies like qualified charitable distributions, a thoughtful approach can make all the difference.
When it comes to donating cash to charity, many assume that a dollar donated equates to a dollar deducted. However, the tax system introduces several nuances. Cash donations are eligible for a below-the-line deduction if you itemize your taxes, meaning they’re calculated after determining your AGI.
Standard Deduction vs. Itemizing
In 2025, the standard deduction is roughly $30,000 for married couples filing jointly, slightly higher for seniors. If your total itemized deductions exceed this amount, itemizing becomes advantageous. Cash donations contribute to this total and can be deducted up to 60% of your AGI. For example, with an AGI of $100,000, you can deduct up to $60,000 in cash donations.
Carrying Forward Excess Donations
If your cash donations exceed 60% of your AGI, the excess can be carried forward for up to five years. This ensures that larger donations still yield tax benefits over time.
Donating appreciated assets, such as stocks or real estate, offers unique advantages. By donating these assets directly, you avoid capital gains taxes while still receiving a tax deduction.
Short-Term vs. Long-Term Capital Gains
Short-term capital gains: For assets held less than a year, deductions are capped at 50% of AGI.
Long-term capital gains: For assets held longer than a year, deductions are limited to 30% of AGI.
For instance, if you have $100,000 in AGI and donate long-term appreciated stock valued at $30,000, you can deduct the full amount.
Related Use Rule
When donating items like art or equipment, ensure the recipient organization uses the donation in a manner consistent with its purpose. This impacts the deductibility of the contribution, often allowing up to 50% of AGI in deductions.
For retirees aged 70½ and older, Qualified Charitable Distributions (QCDs) are an excellent strategy for maximizing charitable contributions without increasing taxable income.
Key Benefits of QCDs
Funds are transferred directly from an IRA to a qualifying charity.
QCDs count toward your required minimum distribution (RMD), reducing the taxable portion of your retirement income.
Unlike other donations, QCDs have no AGI limits, allowing substantial contributions without affecting your tax bracket.
Annual Limits
For 2025, the maximum annual QCD amount is $108,000 per individual. Over a decade, this strategy can facilitate significant charitable impact while minimizing taxes.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for January 6, 2025
Radon and Murs discuss key updates to the important financial numbers for 2025 that impact tax planning, retirement contributions, and other critical aspects of financial planning. They explain how inflation adjustments have influenced tax brackets, 401(k) and IRA contribution limits, Medicare IRMAA thresholds, and more….
Each year brings adjustments to important metrics such as tax brackets, contribution limits, and Social Security benefits. These changes are often driven by inflation and economic factors, making it crucial to understand how they affect your financial strategy. Below, we’ll break down the vital updates for 2025 to help you navigate the year with confidence.…..
As we step into 2025, it’s essential to stay informed about key financial updates that could impact your planning for the year ahead. Each year brings adjustments to important metrics such as tax brackets, contribution limits, and Social Security benefits. These changes are often driven by inflation and economic factors, making it crucial to understand how they affect your financial strategy. Below, we’ll break down the vital updates for 2025 to help you navigate the year with confidence.
Tax Brackets for 2025
The tax rates for 2025 remain the same as in 2024, with the U.S. maintaining a progressive tax system. What’s changed, however, are the income thresholds for each bracket, adjusted for inflation. Here’s an overview for married filing jointly:
10% bracket: Income up to $23,850
12% bracket: Income between $23,851 and $96,950
22% bracket: Income between $96,951 and $206,700
24% bracket and above: Brackets follow accordingly
For single filers, the thresholds are detailed in a companion document available upon request. These adjustments provide opportunities for better retirement tax planning, especially when managing withdrawals or considering Roth conversions.
Long-Term Capital Gains Tax Rates
If you’re planning to sell assets held for over a year, such as stocks or property, understanding long-term capital gains tax rates is critical:
0% rate: Income below $96,700 (married filing jointly)
15% rate: Income between $96,701 and $600,000
20% rate: Income above $600,000
Strategically planning the timing of asset sales can optimize tax outcomes, especially if your income fluctuates during retirement.
Standard Deductions
The standard deduction for 2025 has increased slightly:
Married filing jointly: $30,000 (up from $29,200 in 2024)
Single filers: $15,000
Additional deductions apply for those aged 65 or older or who are blind: $1,500 for married individuals and $2,000 for single filers.
These adjustments can impact whether you choose to itemize deductions or take the standard deduction, affecting your overall tax liability.
Social Security Updates for 2025
Recipients of Social Security benefits will see a 2.5% cost-of-living adjustment (COLA) starting in January 2025. Other key considerations include:
Full Retirement Age (FRA): For individuals born in 1960 or later, the FRA is 67.
Earnings limit for early retirees: $23,400. Earnings above this amount may reduce your benefits.
Taxability of benefits: Married couples with income above $32,000 or singles above $25,000 may have up to 85% of their benefits taxed.
These updates emphasize the importance of including Social Security in your overall retirement planning strategy.
Medicare IRMAA and Premiums
Medicare IRMAA (Income-Related Monthly Adjustment Amount) affects higher-income individuals. For 2025, the income threshold for IRMAA surcharges starts at $212,000 (married filing jointly), up from $206,000 in 2024. If your income exceeds this amount:
Part B premium surcharge: Begins at an additional $74/month
Part D premium surcharge: Starts at $13.70/month
These surcharges are based on your modified adjusted gross income (MAGI) from two years prior (2023 income for 2025 premiums). Proper planning can help manage these costs, particularly if you’re executing strategies like Roth conversions.
Retirement Contribution Limits
Retirement savings accounts have seen increased contribution limits for 2025, allowing you to boost your savings:
401(k) and Similar Plans
Standard contribution limit: $23,500 (for individuals under 50)
Catch-up contribution (50 and older): Additional $7,500
Ultra catch-up contribution (ages 60-63): $11,250 (replaces the $7,500 catch-up)
Traditional and Roth IRAs
Standard contribution limit: $7,000
Catch-up contribution (50 and older): Additional $1,000
Catch-up contribution (55 and older): Additional $1,000
These increased limits are vital tools for enhancing your retirement savings strategies and securing a comfortable future.
Required Minimum Distributions (RMDs)
For individuals turning 73 in 2025, required minimum distributions (RMDs) begin. RMDs apply to traditional IRAs and 401(k)s and must be withdrawn annually to avoid significant penalties. Consulting your financial advisor to plan these distributions efficiently is critical to your retirement tax planning efforts.
Estate Tax Exemption
The estate tax exemption for 2025 is $13,990,000 per individual. This generous exemption allows most estates to avoid federal estate taxes. However, proactive estate planning ensures your assets are distributed according to your wishes.
Final Thoughts on 2025: Important Financial Numbers
Navigating the financial updates for 2025 can be complex, but staying informed is the first step in securing your financial future. From tax brackets 2025 to IRA contribution limits 2025, these adjustments offer opportunities for more strategic retirement planning and wealth management.
If you want to understand all this a little better, we offer a complimentary phone call that you can schedule with us on our website. If we can’t answer all your questions in just 15 minutes, we’ll guide you to the next steps to find the answers you need.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
What Issues in Retirement Should I Consider at The Start of the Year
Radon Stancil and Murs Tariq discuss how to approach the start of 2025 with clarity and purpose. They introduce a detailed checklist to help you organize and plan various aspects of your life, including cash flow management, estate planning updates, tax considerations, and more. This isn’t just about setting New Year financial goals or resolutions; it’s about…
What Issues in Retirement Should I Consider at The Start of the Year
As we step into 2025, it’s the perfect time to assess where you stand financially, personally, and in terms of your long-term goals. The beginning of a new year offers a unique opportunity to reflect on the past, set goals, and establish a solid plan for the future. In this blog, we’ll explore key areas to evaluate and optimize for a successful year ahead.…..
As we step into 2025, it’s the perfect time to assess where you stand financially, personally, and in terms of your long-term goals. The beginning of a new year offers a unique opportunity to reflect on the past, set goals, and establish a solid plan for the future. In this blog, we’ll explore key areas to evaluate and optimize for a successful year ahead, from cash flow management to estate planning updates. Let’s dive into your new year’s checklist for achieving financial peace of mind.
Reflecting on the Past Year
The first step in planning for the year ahead is reflecting on what went well in 2024. What were your biggest accomplishments, both personally and financially? Write these achievements down, as they serve as motivation and a benchmark for future goals. Documenting successes can also provide clarity and perspective when setting new objectives.
For retirees, this could mean reviewing how you managed your retirement income and whether your expenses stayed on track. If you’re still working, it’s a chance to celebrate milestones at work or progress toward retirement planning strategies. Journaling your reflections can help you better understand what’s important and what needs improvement.
As you move into the new year, establish clear, attainable goals. These might include:
Planning a family vacation
Completing a home improvement project
Learning a new skill or hobby
Advancing retirement planning strategies
Preparing for significant life events, such as a child’s graduation or a milestone anniversary
Writing down these goals ensures they don’t get overlooked. It’s also essential to align your personal goals with your financial planning to avoid surprises later in the year.
Cash Flow Management
One of the most critical aspects of financial health is cash flow management. The new year is an excellent time to:
Review income and expenses: Has your income increased due to a raise or new job? Have your expenses shifted due to lifestyle changes?
Evaluate subscriptions and memberships: Cancel services you no longer use to free up cash for other goals.
Adjust savings contributions: If your income has increased, consider boosting your retirement savings or emergency fund.
Plan for large expenses: Whether it’s a kitchen remodel or a vacation, coordinating these expenses with your financial advisor can help minimize tax impacts and maximize efficiency.
Effective cash flow management allows you to allocate resources strategically and achieve financial goals without unnecessary stress.
Retirement Planning Strategies
If you’re approaching retirement or already retired, the start of the year is a great time to revisit your retirement checklist. Key considerations include:
Reassessing your risk tolerance: With market performance fluctuations, your risk exposure may need adjustment. Consider rebalancing your portfolio to align with your current goals.
Evaluating Roth IRA conversion benefits: If you experienced a drop in income or have additional deductions, a Roth conversion might make sense this year.
Reviewing contribution limits: The IRS often adjusts limits for IRAs, 401(k)s, and Ensure you’re taking full advantage of tax-advantaged accounts.
Setting retirement goals: Are you planning to retire this year? Ask yourself, “Is it time to retire?” and evaluate your readiness with the help of a financial advisor.
Tax Planning
Year-end tax planning tips are crucial for minimizing tax liabilities and maximizing benefits. Consider the following:
Gather necessary documents: Start collecting W-2s, 1099s, and charitable donation receipts to simplify the filing process.
Understand your tax bracket: Know where you fall in the 2025 tax brackets to plan more effectively.
Plan for Roth conversions: Analyze whether converting pre-tax retirement funds to a Roth IRA aligns with your tax strategy.
Review withholdings: Ensure your withholdings are accurate to avoid owing a significant amount or receiving a large refund.
Evaluate capital gains: If you have a taxable brokerage account, assess your realized and unrealized gains to explore tax-loss harvesting opportunities.
By addressing these tax issues early, you can avoid surprises and make smarter financial decisions throughout the year.
Insurance Reviews
Insurance is another area to revisit at the start of the year. This includes:
Medicare planning: If you’re turning 65 in 2025, consult a Medicare specialist well in advance to ensure you understand your options.
Long-term care insurance review: Explore modern policies that provide better coverage options than traditional plans.
Property and casualty insurance: Ensure your home insurance reflects current property values, especially if your home value has risen significantly.
Health insurance for early retirees: If you plan to retire before 65, evaluate your options for bridging the gap until Medicare eligibility.
Proper insurance planning protects you from unexpected expenses and ensures you’re adequately covered as your needs evolve.
Review wills, trusts, and power of attorney documents: Ensure they reflect your current wishes and family dynamics.
Check beneficiary designations: Confirm that the beneficiaries on your accounts align with your estate plan.
Fund your trust: If you established a trust but haven’t transferred assets into it, complete this process to avoid probate complications.
Stay informed on legal changes: Be aware of any new laws or regulations that could affect your estate planning strategies.
Keeping your estate plan up-to-date ensures your assets are distributed according to your wishes and minimizes stress for your loved ones.
Assessing Assets and Debts
The start of the year is a natural time to evaluate your financial standing:
Replenish cash reserves: If you dipped into savings for year-end expenses, plan a strategy to rebuild your emergency fund.
Review investment strategies: Analyze whether your current allocations align with your financial goals and risk tolerance.
Consider debt management: If you’re nearing the end of a mortgage or other loans, decide whether to pay them off early or maintain them strategically.
Check your credit score: Regularly monitoring your credit score can alert you to potential fraud or identity theft.
Understanding your assets and liabilities provides a clear picture of your financial health and helps you make informed decisions.
Planning for Life Events
Major life events often come with financial implications. Whether it’s a child’s graduation, a wedding, or a new home purchase, planning ahead can make these milestones more enjoyable and less stressful. Coordinate with your financial advisor to ensure your plans align with your broader financial goals.
Conclusion
The beginning of a new year is a time of opportunity. By reflecting on the past, setting attainable goals, and addressing key financial areas like cash flow, retirement planning, tax strategies, insurance, and estate planning, you can set yourself up for success in 2025 and beyond.
If you want to understand all this a little better, we offer a complimentary phone call that you can schedule with us on our website. If we can’t answer all your questions in just 15 minutes, we’ll guide you to the next steps to find the answers you need.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
How to Retire at 62 – All the Numbers You Need to Know
Radon Stancil and Murs Tariq continue their discussion from Episode 292 on How to Retire at 62. In this follow-up, they welcome their team member, Taylor Wolverton, to dive into the numbers of a real-world retirement financial plan. Together, they walk through detailed retirement scenarios for someone looking to retire at 62, highlighting critical strategies…
How to Retire at 62 – All the Numbers You Need to Know
We show you all the numbers and scenarios you need to consider when planning to retire at 62. Whether you’re looking for a realistic retirement income strategy, Social Security timing advice, or answers to questions like.…..
Retiring at 62 is a dream for many people, but it can also feel overwhelming without the right plan in place. You might be asking yourself questions like: How much do I need to retire at 62? or Will my savings last throughout retirement? These are important concerns that require clear answers and a well-thought-out financial strategy.
At 62, you’re at a unique crossroads. You may be eligible to begin receiving Social Security benefits, but should you take them early, or wait for a higher benefit later? You’ve likely spent years contributing to a 401(k) or other retirement accounts, but how do you turn those savings into reliable income? And what role does inflation play in your ability to retire comfortably?
In this blog, we’re going to show you all the numbers and scenarios you need to consider when planning to retire at 62. Whether you’re looking for a realistic retirement income strategy, Social Security timing advice, or answers to questions like How much to retire at 62? This comprehensive guide will give you the clarity you need.
Using a financial plan example, we’ll explore every critical detail: income, expenses, inflation, and even what happens if you decide to work part-time. By the end, you’ll see exactly what it takes to retire at 62 and feel confident about your future.
If retiring at 62 is your goal, it’s time to take action. Let’s dive into Cindy Martinson’s story to see how you can secure your retirement and enjoy your golden years with peace of mind.
Setting the Stage for Retirement Planning at 62
Let’s introduce Cindy Martinson, a 61-year-old professional earning $200,000 per year. She has done a great job saving for retirement, accumulating:
401(k) Balance: $1,000,000
Cash Savings: $50,000
Brokerage Account: $200,000
Cindy’s goal is to retire in June 2026, when she turns 62. Her monthly expenses are $6,000, and she wants to know: Will her retirement plan work?
To answer this, we’ll walk through her numbers step by step, showing you how to plan for retirement at 62, including Social Security at 62, 401(k) withdrawal strategy, and inflation factors.
Step 1: Retirement Income at 62
One of the first steps in building a retirement financial plan is identifying income sources. For Cindy, her income will transition as follows:
2026 – The Year She Retires
Salary Until June: $83,000 (partial year of work)
Social Security: Starts in June at $13,000 for the remainder of the year.
By 2027, Cindy will receive her full annual Social Security benefit of $27,097. While some may delay Social Security for higher payments, starting at 62 made sense for Cindy’s retirement income strategy.
Note: Social Security benefits can increase over time due to cost-of-living adjustments (COLA). However, to keep the plan conservative, we assumed no COLA increases.
Step 2: Expenses and Inflation
Cindy’s current monthly expenses are $6,000, or $72,000 annually. However, inflation means her costs will rise over time. We included a 3% annual inflation rate in her retirement financial plan. Here’s what her expenses will look like as she ages:
2026 (Age 62): $74,160
2036 (Age 72): $96,000
2046 (Age 82): Over $129,000
Inflation is often overlooked, but planning for it ensures you won’t run out of money as your cost-of-living increases.
Step 3: Retirement Portfolio and Withdrawals
With $1,000,000 in her 401(k), $200,000 in a brokerage account, and $50,000 in cash savings, Cindy’s portfolio starts strong. The question becomes: Can her withdrawals sustain her lifestyle?
Here’s a breakdown of her withdrawals:
2026: $6,000 (partial year of withdrawals)
2027: $51,000
2030: $53,000
2040: $60,000
Even with withdrawals increasing over time, Cindy’s balance holds up well. By age 90, she still has $933,000 in her portfolio – a clear sign that her retirement plan works.
The Key Assumptions:
Rate of Return: 6% annually (net of fees).
Inflation: 3% annually.
Social Security: $27,097 per year starting at 62.
Step 4: Required Minimum Distributions (RMDs)
At age 75, Cindy will face Required Minimum Distributions (RMDs). RMDs are mandatory withdrawals from tax-deferred accounts, like a 401(k) or IRA. The IRS forces you to start taking these withdrawals to collect taxes.
The good news is that Cindy’s plan already accounts for RMDs. Her portfolio balances and cash flows remain stable even after the withdrawals begin.
What If Cindy Works Part-Time?
Many people hesitate to fully retire at 62, so we ran an alternative scenario for Cindy. She asked: What if I work part-time until I’m 65?
In this scenario:
Cindy earns $50,000 per year working part-time.
She delays Social Security until age 65, increasing her annual benefit to $33,548.
The Impact on Her Retirement Plan
By age 90, Cindy’s portfolio balance grows to $1,465,000 (instead of $933,000). Working part-time gives her more flexibility and financial security.
This example shows how even a small change, like part-time work, can significantly improve your retirement plan.
The Importance of Flexibility in Retirement Planning
Retirement planning is not a one-and-done process. Life changes, goals shift, and your plan needs to adapt. For Cindy, having a live retirement financial plan allows her to:
Adjust her retirement scenarios (e.g., working one more year).
Explore different withdrawal strategies.
Account for changes in expenses, income, or market returns.
Annual reviews ensure her retirement plan stays on track, no matter what life throws her way.
Key Takeaways: How Much Do You Need to Retire at 62?
To retire comfortably at 62, here are the critical factors to consider:
Current Savings: Cindy’s $1,000,000 401(k) gave her a strong foundation.
Expenses: Know your monthly and annual spending needs.
Inflation: Plan for rising costs (3% annually is a safe assumption).
Social Security: Starting at 62 worked for Cindy, but delaying can increase benefits.
Withdrawal Strategy: Managing how much you withdraw ensures your portfolio lasts.
Flexibility: Consider part-time work or delaying retirement for added security.
If you’re asking yourself, How much do I need to retire at 62? the answer will depend on your unique situation. A personalized financial plan is the key to retiring comfortably and securely.
Ready to Secure Your Retirement?
If you want to understand all this a little better, we offer a complimentary phone call that you can schedule with us on our website. If we can’t answer all your questions in just 15 minutes, we’ll guide you to the next steps to find the answers you need.
Retirement at 62 is achievable with the right plan in place. Whether you’re planning your Social Security at 62, optimizing your 401(k)-withdrawal strategy, or exploring retirement income options, having a clear financial plan will give you peace of mind. Start planning today to ensure you can enjoy retirement comfortably and securely!
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for December 16, 2024
Navigating Life After Losing a Spouse: Financial and Emotional Steps
Radon Stancil and Murs Tariq discuss the difficult yet essential topic of navigating life after losing a spouse. They dive into critical financial and emotional steps to help widows and widowers during this challenging time. Losing a spouse is an emotional whirlwind, and the decisions that follow can…
Navigating Life After Losing a Spouse: Financial and Emotional Steps
Losing a spouse is one of the most devastating experiences one can endure. In addition to the emotional toll, the surviving spouse is often faced with numerous financial, legal, and logistical challenges. This guide outlines essential considerations for life after losing a spouse, covering topics like financial planning, estate management, and emotional resilience.…..
Losing a spouse is one of the most devastating experiences one can endure. In addition to the emotional toll, the surviving spouse is often faced with numerous financial, legal, and logistical challenges. The process can feel overwhelming, but taking methodical steps can help you navigate this difficult journey with more clarity and confidence.
This guide outlines essential considerations for life after losing a spouse, covering topics like financial planning, estate management, and emotional resilience. Whether you’re currently facing this situation or preparing for the future, this checklist for surviving spouses can serve as a vital resource.
One of the first challenges to address after the death of a spouse is ensuring that household expenses are accounted for. Here’s a step-by-step guide:
Understand Your Income Situation
If your spouse was earning an income or receiving Social Security benefits, there might be an immediate change in cash flow. Keep in mind:
Social Security benefits will adjust; typically, the surviving spouse receives the higher of the two benefits.
If your spouse had a pension, confirm if there is a survivorship benefit.
Track Your Monthly Expenses
Evaluate your current spending habits. Are there areas where you can reduce expenses to align with a potential decrease in income? This is especially important when planning retirement after losing a spouse.
Pay Essential Bills
Ensure critical utilities, mortgage or rent, and other recurring bills are paid promptly. Organize a checklist of payment due dates and account details for clarity.
Required Minimum Distributions (RMDs)
If your spouse was already taking RMDs from retirement accounts, you must continue these withdrawals. A financial advisor can guide you through this process.
Estate Settlement and Legal Matters
The death of a spouse often brings a host of legal and administrative tasks. Here’s a breakdown:
Retitle Accounts
Joint accounts need to be converted into individual accounts. For retirement accounts such as IRAs, you have options to either inherit the account or roll it into your own IRA.
Review the Will and Trust
If your spouse had a will or trust, work with an attorney to ensure the estate is distributed according to their wishes. If no will exists, state intestacy laws will apply.
Locate Financial Assets
Some accounts or properties may not be immediately apparent. Look through old mail, online accounts, or credit card statements for clues to unclaimed or unknown assets.
Update Your Estate Plan
Once your spouse’s estate is settled, update your own will, trust, and beneficiary designations to reflect your new circumstances. This ensures that your assets will pass according to your wishes.
Insurance Considerations
Insurance policies can provide much-needed financial relief during this time. Here’s how to assess them:
Identify All Insurance Policies
Locate life insurance policies, whether they were purchased independently or provided through an employer. Some policies may include group coverage or accidental death benefits.
Claim Benefits
Submit claims for any life insurance payouts or other death benefits. If your spouse was a veteran, there may also be burial and survivorship benefits available.
Review Your Own Coverage
Adjust your insurance needs, such as health, homeowners, or auto policies, to reflect your new household situation.
Tax Implications
Filing taxes after the death of a spouse can be complex. Here’s what to keep in mind:
Filing Status
You may need to file as a surviving spouse or head of household. A CPA can help determine the best option for your circumstances.
Step-Up in Basis
If you inherit assets like stocks or property, the “step-up in basis” provision can reduce your tax liability when selling these assets.
Seek Professional Help
This may be the right time to consult a tax advisor, even if you’ve handled taxes independently in the past. The expertise can save you time and money.
Investments and Retirement Planning
Investments and retirement accounts may require significant adjustments after losing a spouse. Here’s what to focus on:
Transfer of Assets
If you’re the designated beneficiary, you can transfer accounts like IRAs into your name. This process involves specific steps, so work with your financial advisor to avoid mistakes.
Reevaluate Your Risk Tolerance
If your spouse handled investment decisions, their risk tolerance may have differed from yours. Now is the time to ensure your portfolio aligns with your comfort level and long-term goals.
Consider Future Goals
With one less person to plan for, your retirement objectives may change. Whether it’s downsizing your home, traveling, or pursuing new hobbies, ensure your financial plan reflects these new priorities.
Emotional Resilience and Practical Organization
Grieving is a personal journey, and it’s essential to prioritize self-care as you handle these administrative and financial tasks. Here are tips to ease the process:
Compile a Master Document
Create a centralized list of all accounts, insurance policies, passwords, and important documents. This will save time and reduce stress as you navigate your new normal.
Lean on Your Support System
Friends, family, and professional advisors can provide emotional and logistical support. Don’t hesitate to seek help when needed.
Work Through Grief at Your Own Pace
There’s no timeline for healing. Consider counseling or support groups to help you process your emotions.
Secure Your Retirement with a Comprehensive Plan
The loss of a spouse marks a profound life transition, both emotionally and financially. By addressing cash flow, estate settlement, insurance policies, taxes, and investments, you can take proactive steps to regain control over your financial future. Each decision you make now can contribute to retiring comfortably and maintaining long-term stability.
If you want to understand all this a little better, we offer a complimentary phone call that you can schedule with us on our website. If we can’t answer all your questions in just 15 minutes, we’ll guide you to the next steps to find the answers you need.
Navigating life after losing a spouse is undeniably challenging, but with the right financial and emotional steps, you can secure your retirement and begin to find peace of mind for the future.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
How to Retire at 62 in 2026 With Peace of Mind
Radon and Murs discuss:
How to build the foundational steps for retiring at age 62 and achieving peace of mind in retirement planning. They dive into the critical questions that need to be answered, the data required to assess retirement readiness, and the steps to create a retirement roadmap. With this episode as the first of a two-part series…
We often begin retirement planning by addressing foundational questions. This includes understanding your goals, taking an inventory of your financials, and clarifying expenses. Our Peace of Mind Roadmap process is designed to help you retire with confidence. It consists of two parts:….
Retirement is an exciting milestone, yet it comes with important questions: “Have I saved enough?” and “Can I truly retire comfortably?” If you’re planning to retire at age 62 in 2026, the steps you take now will shape your financial freedom and peace of mind. This guide, inspired by our Secure Your Retirement podcast, walks you through how to prepare, what questions to ask, and how to build your personalized Peace of Mind Roadmap.
The Peace of Mind Roadmap: A Two-Step Approach
We often begin retirement planning by addressing foundational questions. This includes understanding your goals, taking an inventory of your financials, and clarifying expenses. Our Peace of Mind Roadmap process is designed to help you retire with confidence. It consists of two parts:
Gathering Data: Collecting and organizing financial information, understanding your goals, and clarifying your spending needs.
Building Your Plan: Analyzing your data, exploring scenarios, and developing a financial plan tailored to your needs.
Let’s break these steps down so you can start preparing your Peace of Mind Roadmap.
Step 1: Gathering the Right Data for Retirement Success
The cornerstone of any effective retirement plan is accurate and comprehensive data. Here’s what you need to consider when gathering your financial information:
Assets: Building Your Financial Snapshot
We ask clients to create a financial inventory, which helps determine if retiring at 62 is feasible. Here are the key areas to assess:
Cash on Hand:
How much do you have in checking, savings, money market accounts, or CDs?
Understand the purpose of your cash: Is it for emergencies, investments, or daily expenses?
Life Insurance:
What types of policies do you have?
Is the policy term or permanent? If permanent, is it intended for income, cash value growth, or a death benefit?
Annuities and Non-Qualified Investments:
Are your annuities growth-oriented or income-generating?
Identify other investments like brokerage accounts or stock portfolios.
Retirement Accounts:
Document your IRAs, 401(k)s, and Roth accounts.
Know your employer match for current contributions.
Real Estate:
Evaluate the value and liabilities of your primary residence and investment properties.
Pensions and Deferred Compensation Plans:
Understand the income stream from pensions, including cash balance plans or deferred compensation plans.
Liabilities: Understanding Debt and Cash Flow
Taking stock of debts is essential when planning to retire comfortably:
Mortgages: Determine your payoff timeline and monthly costs.
Car Loans: Factor in when these will be paid off.
Other Debts: Include liabilities like credit cards or personal loans.
Income Sources: What’s Coming In?
Your retirement plan is only as strong as its income streams. These include:
Social Security: Get an estimate of your benefits at 62, full retirement age (67), and age 70.
Part-Time Work or Consulting: Will you continue working to supplement your retirement income?
Rental Income: Calculate how much income investment properties generate.
Expenses: Breaking Down Spending
A well-rounded retirement plan accounts for three categories of spending:
Essential Needs:
These include fixed costs like mortgage payments, utilities, and groceries.
Wants:
Travel, hobbies, dining out, and memberships fall under this category.
Legacy Giving:
Charitable donations and gifts to family are also part of your financial picture.
Tip: Focus on net spending—what you need monthly after taxes. This ensures a realistic view of your financial needs.
Estate Planning Essentials
A solid plan for retirement includes preparation for the unexpected. Ensure you have up to date:
Will
Power of Attorney
Healthcare directives
HIPAA release forms
These documents protect you and your loved ones in the event of unforeseen circumstances.
Step 2: Building and Analyzing Your Peace of Mind Roadmap
Once you’ve gathered the data, it’s time to analyze it and build your Peace of Mind Roadmap. This is where we apply financial modeling to answer the critical question: “Does my plan work?”
Scenario Analysis
In your Peace of Mind Roadmap, we create various scenarios to test the strength of your plan. For example:
What if inflation rises faster than expected?
How will healthcare costs impact your savings?
Can your assets sustain your lifestyle if the market underperforms?
By running these scenarios, we identify risks and opportunities in your plan.
The Importance of Regular Reviews
Even the best retirement plans require regular updates. We recommend reviewing your plan annually. By monitoring your financial picture, you can adapt to changes in the economy, taxes, or your personal goals.
Addressing Common Retirement Concerns
As you plan your retirement at 62, here are answers to some common questions:
Is Social Security Enough to Retire at 62?
Social Security alone is rarely sufficient to cover retirement expenses. By understanding your benefits and supplementing them with other income sources, you can create a balanced plan.
What Happens If I Outlive My Savings?
Longevity risk is a top concern for retirees. Solutions like annuities, disciplined withdrawals, and proper investment strategies help your assets last throughout retirement.
How Do I Plan for Market Downturns?
Diversifying your portfolio and maintaining a cash reserve are key strategies to protect your retirement savings during volatile markets.
The Role of Professional Guidance
Retiring comfortably at 62 is achievable with the right planning and guidance. A financial advisor can help you:
Align your investments with your goals.
Minimize taxes through strategies like Roth conversions or tax-efficient withdrawals.
Create a sustainable withdrawal plan that protects your principal.
Final Thoughts on Retiring at 62 in 2026
Retiring at age 62 is a dream for many, but it requires intentional planning and preparation. By gathering accurate data, understanding your expenses, and building a personalized plan, you can achieve peace of mind and enjoy the retirement you’ve worked hard for.
Schedule your complimentary call with us to ask any questions you may have from this blog. If your questions don’t all fit in a 15-minute call, we will guide you to the next steps to get some answers.
Plan wisely, stay informed, and secure your future. Remember, the key to retiring at 62 in 2026 with peace of mind is creating a comprehensive plan and sticking to it.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for December 2, 2024
Nationwide Monument Advisor For Tax Planning Strategies in Retirement
Radon Stancil and Murs Tariq discuss the Nationwide Monument Advisor, a unique variable annuity designed to optimize tax planning strategies for retirement. Learn why Radon and Murs believe this tool can be a game-changer…
Nationwide Monument Advisor For Tax Planning Strategies in Retirement
Planning for retirement requires a comprehensive approach, especially when it comes to tax-efficient strategies that allow you to maximize the growth and distribution of your investments. Enter the Nationwide Monument Advisor, a unique variable annuity that we regularly recommend as a strategic tool for tax planning. But wait…..
Planning for retirement requires a comprehensive approach, especially when it comes to tax-efficient strategies that allow you to maximize the growth and distribution of your investments. Enter the Nationwide Monument Advisor, a unique variable annuity that we regularly recommend as a strategic tool for tax planning. But wait—if you’ve ever been hesitant about variable annuities, you’re not alone. Traditionally, they come with high fees and other drawbacks that make them less attractive. However, this product breaks the mold, offering unique advantages for those looking to reduce their tax burdens while securing retirement income.
In this blog, we’ll dive into the details of how the Nationwide Monument Advisor works, why it differs from other variable annuities, and how it fits into your overall tax planning strategies. Whether you’re managing a brokerage account, optimizing retirement planning tools, or simply looking for ways to defer taxes and improve your investment returns, this innovative product could be the missing piece in your financial puzzle.
What Is the Nationwide Monument Advisor?
The Nationwide Monument Advisor is a variable annuity designed to provide tax deferral on non-IRA, non-qualified funds. Unlike traditional variable annuities, which often carry high costs, this product is affordable and highly flexible. Here’s a quick breakdown of how it works:
Tax Deferral: Contributions to this annuity grow tax-deferred, meaning you won’t pay taxes on gains or interest until you withdraw the funds.
Investment Options: The product offers over 350 fund choices, enabling you to mirror a typical brokerage account’s investment strategy.
Low Fees: At just $20 per month ($240 annually), the Monument Advisor eliminates the high administrative and rider costs typically associated with variable annuities.
Liquidity: It offers full liquidity from day one, with no surrender charges, allowing you to withdraw your funds anytime without penalty.
This combination of features makes the Nationwide Monument Advisor an attractive option for individuals seeking tax-efficient investments without the drawbacks of traditional annuities.
Why Consider a Variable Annuity for Tax Planning?
For years, variable annuities have been viewed skeptically due to their high fees, which can range from 2% to 5% annually. These fees often erode investment performance, making them less appealing compared to other investment vehicles. However, the Nationwide Monument Advisor changes the game by removing these excessive costs while retaining the benefits of tax deferral.
Who Should Consider This Product?
If you have a brokerage account with significant unrealized gains or are managing non-qualified assets, this product could simplify your tax situation. It’s particularly beneficial if:
You want to avoid paying taxes on dividends, interest, or capital gains.
You’re considering Roth conversions and need to reduce taxable income.
You’re looking for flexibility in managing your portfolio without triggering taxable events.
How Does Tax Deferral Work?
Imagine you’ve invested $100,000 in a brokerage account. Over time, it grows to $200,000. In a traditional account, you’d owe taxes on dividends, interest, and any gains realized during rebalancing. However, by moving these assets into the Nationwide Monument Advisor, you can defer taxes on that growth until withdrawal. This tax deferral allows your investments to grow more efficiently, compounding returns without the drag of annual tax payments.
Additionally, the product offers significant advantages for retirement income planning, as you can control when and how you withdraw funds to manage your tax liability strategically.
The Costs: A Game-Changer in the Annuity World
Traditional variable annuities come with several layers of fees, including:
Administrative charges
Mortality and expense risk fees
Rider fees for optional benefits
Investment management fees
These costs often total 2%–4% annually, significantly reducing your net returns. By contrast, the Nationwide Monument Advisor charges a flat $20 per month—regardless of your account balance. Whether you invest $50,000 or $1 million, your cost remains $240 per year, making it one of the most cost-effective options in the industry.
Liquidity and Flexibility
Another standout feature of this product is its 100% liquidity from day one. Unlike most annuities, which impose surrender charges for early withdrawals, the Nationwide Monument Advisor allows you to access your funds anytime without penalty. This flexibility ensures your money remains available for unexpected expenses or changes in your financial strategy.
Fixed vs. Variable Annuities: Understanding the Differences
When discussing annuities, it’s essential to understand the differences between fixed and variable annuities. Here’s a quick comparison:
Feature
Fixed Annuity
Variable Annuity (Monument Advisor)
Risk
Low (guaranteed principal)
Moderate to High (market-dependent)
Fees
Low
Minimal ($240 annually)
Tax Deferral
Yes
Yes
Liquidity
Limited (surrender charges)
Full liquidity from day one
Investment Growth
Fixed interest rate
Market-driven, with higher growth potential
For those seeking growth potential and tax efficiency without high fees, the Nationwide Monument Advisor offers the best of both worlds.
Case Studies: Real-Life Applications
To illustrate how this product can work for you, let’s explore two common scenarios:
1. Managing Embedded Gains in a Brokerage Account
A client with $500,000 in a brokerage account had significant unrealized gains in several long-held stocks. Selling these positions would trigger substantial capital gains taxes, so the client felt “handcuffed” to underperforming investments. By transferring the funds into the Nationwide Monument Advisor, the client gained the freedom to rebalance their portfolio without immediate tax consequences. This flexibility allowed them to shift into higher-performing investments while deferring taxes on the gains.
2. Reducing Taxable Income for Roth Conversions
Another client wanted to execute Roth conversions but was concerned about the additional taxable income generated by dividends and capital gains from their brokerage account. By moving these assets into the Monument Advisor, they eliminated these taxable events, creating a cleaner tax return and allowing them to optimize their Roth conversion strategy.
Advantages for Beneficiaries
One question we often receive is, “What happens to this account when I pass away?” The answer is simple: Your beneficiaries inherit the funds and have options for managing their tax liability. They can take the entire balance as a lump sum, paying taxes on the gains immediately, or opt for a more tax-efficient approach by withdrawing the funds over several years. Unlike IRAs, there’s no mandatory 10-year withdrawal rule, providing greater flexibility for estate planning.
Who Should Avoid This Product?
While the Nationwide Monument Advisor offers numerous advantages, it may not be suitable for everyone. For example:
Investors under age 59½ may face a 10% penalty on early withdrawals, per IRS rules.
Those seeking guaranteed principal protection should consider fixed annuities
If you have no need for tax deferral (e.g., if all your assets are in IRAs or 401(k)s), this product may not add value.
Is the Nationwide Monument Advisor Right for You?
The Nationwide Monument Advisor is an innovative tool for tax planning strategies, particularly for those managing brokerage account taxes or seeking tax-efficient investments. Its low costs, tax deferral benefits, and flexibility make it a powerful option for improving your retirement income planning and ensuring you’re prepared to retire comfortably.
If you want to understand all this a little better, we offer a complimentary phone call that you can schedule with us on our website. If we can’t answer all your questions in just 15 minutes, we’ll guide you to the next steps to find the answers you need.
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for November 25, 2024
Radon and Murs discuss the fascinating journey of transitioning into retirement with special guest Dr. Ridley Moynes, author of The Four Phases of Retirement. This episode dives deep into the emotional, mental, and financial aspects of retirement, addressing the critical question: “Is retirement only about money, or is there more to finding purpose in retirement?”…
We talked to Dr. Riley Moynes, author of The Four Phases of Retirement, and he takes a unique approach to understanding this pivotal stage of life. While money remains a critical component of retirement planning, Moynes emphasizes the need to address the deeper, often-overlooked challenges…..
