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 May 19, 2025
The Peace of Mind Pathway – Step 2 – Implementation
Radon and Murs discuss the second step in the Peace of Mind Pathway—Implementation. This is where the planning becomes reality. After building your personalized retirement roadmap, it’s time to put your financial planning for retirement into motion. ...
The Peace of Mind Pathway – Step 2 – Implementation
In The Peace of Mind Pathway™: Your Roadmap , we laid the foundation. We got to know your goals. We clarified your income needs, investments, taxes, and healthcare decisions. Now, it’s time to bring that plan to life—with care, clarity, and coordination. That’s where Implementation, the second phase of our Peace of Mind Pathway™, comes in…
Retirement isn’t a single decision. It’s a series of carefully timed moves, thoughtful adjustments, and proactive strategies.
In The Peace of Mind Pathway™: Your Roadmap , we laid the foundation. We got to know your goals. We clarified your income needs, investments, taxes, and healthcare decisions. Now, it’s time to bring that plan to life—with care, clarity, and coordination.
That’s where Implementation, the second phase of our Peace of Mind Pathway™, comes in.
From Paper to Action
After the planning work in the Peace of Mind Roadmap™ phase—including your Introduction, Planning, and Strategy meetings—you now have a complete financial plan built around your goals.
Phase 2 is where that plan comes to life.
Implementation means more than just opening accounts or shifting investments. It means putting strategies into action: transitioning accounts, adjusting investments, initiating estate planning, coordinating tax strategy, and handling key retirement decisions like Medicare or long-term care. It’s the moment when your plan starts actively working for you.
We serve as your single point of contact through it all—keeping everything aligned, simplified, and fully coordinated.
What Happens During Implementation?
Implementation looks a little different for everyone, but this phase includes:
Transferring assets to your new custodian
Applying your personalized retirement income strategy
Executing your investment bucket strategy for retirees
Every part of this phase is implemented with clarity and care.
Transferring Your Assets
Once you decide to move forward, we begin by transitioning your assets into your new accounts. This includes:
Opening IRAs, Roth IRAs, and brokerage accounts as needed
Signing transfer paperwork
Moving investments “in-kind” (without selling them during the transfer)
We know this is a big decision, one we do not take lightly. We monitor and communicate every step of the process to help you feel confident and informed.
Common Question: Will I Miss Market Gains During the Transfer?
No. With in-kind transfers, your investments move as-is, so you stay fully invested and there is no disruption to your exposure in the market.
Activating Your Investment Strategy
With assets in place, we can see your full financial picture in real time and begin fine-tune and apply your investment plan using the bucket strategy discussed during the Peace of Mind Roadmap™ phase:
Cash Bucket – For near-term spending and emergency reserves
Safety & Income Bucket – Structured for reliable, predictable income and reduced risk
Growth Bucket – For long-term growth and inflation protection
This structure is designed to bring clarity and calm, by aligning your portfolio with your risk tolerance, income needs, and long-term goals— ensuring a steady stream of income, even in volatile markets.
Estate Planning (Simplified & Included)
If you don’t already have an estate plan in place, this becomes one of the top priorities in the implementation phase. Your Peace of Mind Pathway™ includes guidance on:
Wills
Powers of Attorney
Health care directives
Revocable living trusts (when appropriate)
Even better, your estate plan is flexible. If you make changes down the road, you’re not penalized. Updates are easy, quick, and all included as part of your relationship with us.
Retirement Tax Strategy: From Talk to Action
Taxes can be one of the biggest expenses in retirement, and retirement tax planning is not something to be ignored or delayed. Implementation starts a proactive approach by:
Analyzing your current and projected tax brackets
Developing multi-year tax strategies to reduce lifetime tax burden
This isn’t just a one-time meeting. Tax strategy includes year-round support from our in-house tax strategist, Taylor Wolverton, CFP®, Enrolled Agent. She helps you with:
Roth conversion planning
Withholding optimization (to avoid April 15 surprises)
Charitable giving strategies, including:
Qualified Charitable Distributions (QCDs)
Donor-Advised Funds (DAFs)
Tax strategy is ongoing, flexible, and customized to your evolving needs.
Frank and Lily came to us unsure if a Roth conversion was worth it. Five years later, their strategy reduced their lifetime tax burden by over $300,000—all from a series of quiet, confident moves that started in Implementation.
Medicare & Healthcare Coordination
Healthcare decisions matter—for both your well-being and your wallet in retirement. Whether you’re retiring before 65 or approaching Medicare eligibility, finding healthcare plan that fits your timeline and budget comes into focus in the Implementation phase.
We connect you with our in-house Healthcare Professional specializing in Medicare, Shawn Southard, who offers:
Medicare Parts A, B, C, and D guidance
Help choosing between Supplement and Advantage plans
Private insurance strategies before age 65
These are important decisions. We make sure you don’t navigate them alone.
Long-Term Care Planning
We take a realistic, balanced approach to long-term care planning. For many, this is one of the biggest unknowns in retirement.
Fortunately, options have improved significantly in recent years:
Hybrid policies with better benefits
More affordable premiums
Flexible coverage for different levels of care
Implementation includes a thoughtful discussion about whether insurance is necessary and how much coverage fits your needs.
How Long Does Implementation Take?
Implementation is a deliberate process. It doesn’t happen overnight—and that’s by design. This means taking small, intentional steps to ensure clarity, comfort, and confidence. Every situation is different, but here’s a general timeline to help set expectations:
Day 1–10: Asset transfer begins
Day 30–45: Investment strategy finalized and deployed
Months 2–6: Address estate planning and tax strategy
Months 6–12: Dive deeper into healthcare and long-term care planning
This step-by-step process ensures thoughtful decisions at every turn.
Flexibility is Built In
Your plan is never set in stone. Implementation is just the beginning. If your goals change or life throws a curveball, we continue to adapt your Peace of Mind Pathway™ with you.
And remember: everything you see here is included in one transparent fee. You won’t get separate invoices for tax strategy, estate planning, or Medicare coordination. We keep it simple.
What Comes Next?
Implementation is not the end of the journey—it’s the beginning of your retirement lifestyle. Once your plan is in motion, we move into Phase 3: Nurture. This includes monitoring performance, adjusting to life changes, and maintaining regular communication.
Stay tuned for Phase 3: Nurture, where we walk through how we continue supporting you for the years to come. Until then, if you’re curious about what Implementation could look like for you, we offer a complimentary 15-minute call.
Schedule your call and learn how the Peace of Mind Pathway™ can help you move from planning to progress—with confidence.
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:
The Peace of Mind Pathway – Step 1 – Your Roadmap
Radon and Murs discuss the foundational first step in their three-part Peace of Mind Pathway: The Peace of Mind Roadmap. This step is all about creating a personalized retirement roadmap to help you clearly define where you are, where you want to go, and what your journey through retirement will look like....
Planning for retirement can feel overwhelming. Between income strategies, healthcare decisions, tax planning, investments, Social Security, and estate considerations, it’s easy to feel like you’re juggling too much—and risking that something important gets missed. That’s exactly why we’ve developed the Peace of Mind Pathway™. It’s a structured, step-by-step planning process designed to….
Planning for retirement can feel overwhelming. Between income strategies, healthcare decisions, tax planning, investments, Social Security, and estate considerations, it’s easy to feel like you’re juggling too much—and risking that something important gets missed.
That’s exactly why we’ve developed the Peace of Mind Pathway™.
It’s a structured, step-by-step planning process designed to bring clarity, confidence, and coordination to your retirement. Whether you’re just beginning to plan, or you’ve already made some decisions and want to be sure everything fits together, this process helps reduce stress and get you on track.
Today, we’re focusing on Phase 1: The Peace of Mind Roadmap™—a foundational part of your retirement journey.
What Is the Peace of Mind Pathway™?
The Peace of Mind Pathway™ includes three clear phases that guide you through retirement planning and beyond:
The Peace of Mind Roadmap™ – Clarifying your goals and crafting a personalized retirement plan
Implementation – Putting your plan into action
Nurture – Monitoring, adjusting, and supporting your plan as life changes
Each phase builds on the last. But it all begins with the Peace of Mind Roadmap™.
The Peace of Mind Roadmap™: Where Clarity Begins
Retirement often feels like a winding road. You know where you are now, and you may have a vision for the future—but the steps in between aren’t always clear.
The Peace of Mind Roadmap™ is designed to change that. It acts as your GPS: showing where you are today, helping you define where you want to go, and guiding you with turn-by-turn directions.
Here’s how it works:
Step 1: Your Personalized Introduction Meeting
Your journey starts with a relaxed, one-on-one conversation. We’ll ask questions about your goals, your concerns, and your current financial situation. You’ll also fill out our Confidential Financial Snapshot—a simple two-page worksheet that gives us a clear overview of your income, assets, debt, and retirement vision.
This meeting isn’t a sales pitch. It’s a two-way conversation: You’re deciding if we’re the right partner for your retirement, and we’re learning whether we can provide real value to your situation.
Step 2: Your Personalized Planning Meeting
With your information in hand, our team—comprising Certified Financial Planners—gets to work building your personalized retirement plan. This isn’t a one-size-fits-all solution. We consider:
Your income needs (essential vs. discretionary spending)
We also help you evaluate different options: Are you already on track to reach your goals? Can you retire now? Should you adjust spending? Would delaying retirement give you more flexibility? Like a GPS, we guide you and adjust your Roadmap as needed.
Retirement Goals Drive Strategy
Once the core plan is built and validated, it’s time to layer on strategy. This is where we dive deeper into tactical decisions to optimize your financial outcome:
Cash Bucket – Your emergency fund and short-term reserves
Safety & Income Bucket – Designed for predictable, low-risk income
Growth Bucket – Long-term investments designed to grow over time
The bucket strategy in retirement helps reduce stress by separating your short-term needs from long-term growth assets. It also protects you from having to withdraw funds during down markets.
Which accounts do I withdraw from first—IRA, Roth, taxable?
How much can I safely withdraw each year?
We help you answer these questions based on your plan’s goals and timelines.
Retirement Tax Strategy
Navigating taxes in retirement can be challenging on your own. Without a retirement tax strategy, many retirees pay more in taxes than they expect. Proactive tax planning can have a big impact on your long-term success.
We look at:
How your income is taxed
Whether Roth conversions can reduce your future tax burden
If you’re retiring before 65, we help bridge the healthcare gap until Medicare begins. When the time comes, our in-house Medicare specialist helps you understand enrollment, supplement options, and costs.
Estate Planning
A proper estate plan ensures that your assets pass smoothly to your heirs and that your wishes are carried out if you’re unable to make decisions. We’ll review:
Wills
Powers of Attorney
Healthcare directives
Trust structures (when appropriate)
This isn’t just about death—it’s about protecting your legacy and ensuring you remain in control of your affairs.
Step 3: Your Personalized Strategy Meeting
The roadmap phase ends with a Personalized Strategy Meeting, where we review and finalize all the strategies needed to bring your plan to life. You’ll walk away knowing:
Your retirement plan and strategy
The next steps to move forward
How your investments, taxes, healthcare, and estate planning all work together
This sets the stage for the next phase: Implementation, where your plan is put into motion.
Why the Roadmap Matters
Clients often tell us this phase of the process is the most empowering. It replaces fear with clarity. It connects scattered financial pieces into one picture. It helps you feel confident knowing you’re on the right path. And you’ll know it’s all included in one simple, transparent fee. No surprise charges. No picking and choosing. Just one coordinated plan with a strong team.
Want to understand what your Peace of Mind Roadmap™ might look like? We offer a complimentary 15-minute call to help you explore whether this process is right for you. Schedule your call and take the first step toward clarity and peace of mind.
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:
Required Minimum Distributions – RMDs
Radon and Murs discuss a crucial yet often confusing topic for retirees: Required Minimum Distributions (RMDs). Joined by their colleague Taylor Wolverton, a Certified Financial Planner and Enrolled Agent, they break down the rules surrounding what are RMDs, how they’re calculated, and the updates brought by the Secure Act RMD changes...
Folks approaching retirement or already enjoying their golden years may have heard of Required Minimum Distributions, or RMDs. Understanding RMDs and how they can impact your financial and tax planning is a key part of long-term investing and successful retirement plannin,…
Folks approaching retirement or already enjoying their golden years may have heard of Required Minimum Distributions, or RMDs. Understanding RMDs and how they can impact your financial and tax planning is a key part of long-term investing and successful retirement planning
In this blog, we’re breaking down everything you need to know: What are RMDs, how do RMDs work, the new RMD rules, tax considerations, and planning strategies that can help you retire comfortably and securely.
What Are RMDs?
RMDs, or Required Minimum Distributions are the mandatory withdrawals you take each year from most tax-deferred retirement accounts, including:
Traditional IRAs
SEP IRAs
SIMPLE IRAs
Employer-sponsored retirement plans such as 401(k), 403(b), and 457 plans
These accounts have allowed you to defer taxes while accumulating retirement savings. Eventually, the IRS wants to start collecting its share—hence the requirement to withdraw and pay income taxes on those distributions once you reach a certain age.
Keeping You Updated: New RMD Rules in 2025
Over the years, the Secure Act and Secure Act 2.0 have significantly altered the landscape for RMDs. These changes impact when you must start taking RMDs and how much you must withdraw.
RMD Age by Birth Year:
Born before July 1, 1949: RMDs began at age 70½
Born 1951–1959: RMDs begin at age 73
Born 1960 or later: RMDs begin at age 75
So, if you turn 73 in 2025, your first RMD year is 2025. You don’t have to wait until your actual birthday month to take your RMD—you can start as early as January 1st of the year you turn 73.
Did you know? A Special RMD Rule
RMDs must be taken by December 31 of each year, starting the year you reach your required age. However, there’s a special rule for your first RMD only:
You can delay your first RMD until April 1 of the following year.
⚠️ Caution: If you delay your first RMD until April 1 of the following year, you will need to take two RMDs in that year—your first and your second—which could have serious tax implications.
To avoid potential tax spikes, most advisors recommend not delaying your first RMD unless there’s a compelling reason.
How Do RMDs Work?
RMD amounts are based on your account balance and your age. Each year, the IRS publishes the Uniform Lifetime Table, which provides a life expectancy factor used to calculate your RMD.
Here’s a simplified example:
You are 73 years old in 2025.
Your IRA balance on December 31, 2024, is $1,000,000.
According to the table, the distribution factor is 5.
Your RMD = $1,000,000 / 26.5 = $37,736
Each year, the divisor gets smaller, which means the percentage of your account that must be withdrawn increases.
Your IRA custodian (e.g., Schwab, Fidelity, etc.) typically calculates your RMD for you, so you don’t need to worry about doing the math manually. But it’s good practice to verify that it’s done correctly.
RMD Tax Rules and Penalties
RMDs are taxed as ordinary income at both the federal and state level. Since these distributions are from tax-deferred accounts, every dollar withdrawn is fully taxable in the year it’s received.
You have two main options to handle taxes:
Withhold taxes directly from the RMD
Make estimated tax payments quarterly
Failing to plan ahead can lead to large tax bills and unnecessary stress. That’s why retirement tax planning is so important.
What if You Miss Your RMD?
Missing your RMD triggers a penalty:
25% of the amount you failed to withdraw
Reduced to 10% if corrected within two years and reasonable cause is provided
The penalty used to be 50%, so recent changes have made it less severe—but it’s still best to avoid the risk entirely by staying on top of your RMD schedule.
RMD and Charitable Giving: The Power of QCDs
If you’re charitably inclined and don’t need the RMD funds for personal spending, consider a Qualified Charitable Distribution (QCD).
A QCD allows you to directly transfer up to $100,000 per year from your IRA to a qualified charity.
The amount counts toward your RMD but is not included in your taxable income.
This strategy can lower your Adjusted Gross Income (AGI), which may reduce Medicare premiums and other tax-related thresholds. It’s an excellent tool for those who want to give back and minimize their tax liability.
What to Do with RMDs You Don’t Need
A common frustration we hear from clients is: “Ok, I satisfied my RMDs, but I don’t need this money. What do I do with it?”
Here’s three common options:
Spend it: Use it for travel, family gifts, or hobbies
Donate it: As mentioned above, use a QCD to reduce your taxable income
⚠️ Important: You cannot reinvest RMDs back into your IRA or convert them to a Roth IRA. Once the funds are withdrawn, they cannot be re-contributed.
Roth IRAs and RMDs
Unlike traditional IRAs, Roth IRAs are not subject to RMDs for the original account owner.
This is one of the reasons Roth conversions have become a powerful tax-planning tool. By moving funds from a traditional IRA to a Roth, you pay taxes now, but avoid RMDs in the future.
Work with a financial planner: Ensure your withdrawal strategy aligns with your retirement goals
For folks that work with Peace of Mind Wealth Management, RMDs and tax strategy are included in your Peace of Mind Pathway, a structured retirement planning process that simplifies investment, income, and tax decisions.
Tax strategy is a huge component of achieving peace of mind in retirement. RMDs are an important part of the retirement tax strategy conversation. Schedule your complimentary 15 minute call with us to get started on your RMD questions.
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 February 18, 2025
Radon and Murs discuss tax season preparation with their in-house tax strategist, Taylor shares expert insights on essential documents, filing strategies, and common tax mistakes to help make tax filing easy and efficient. Whether you’re planning retirement tax strategies or determining how to file taxes effectively, this episode will help you navigate tax season with confidence. …..
As April approaches, many people start preparing for their 2024 tax return. To provide expert insights, we spoke with Taylor Wolverton, an in-house tax strategist at Peace of Mind Wealth Management. Taylor specializes in helping individuals understand their tax situations and develop strategies for both short-term and long-term tax benefits…..
As April approaches, many people start preparing for their 2024 tax return. Whether you are filing your own taxes or working with a professional, having the right information and documents in place can make the process smoother. To provide expert insights, we spoke with Taylor Wolverton, an in-house tax strategist at Peace of Mind Wealth Management. Taylor specializes in helping individuals understand their tax situations and develop strategies for both short-term and long-term tax benefits.
In this guide, we’ll walk through everything you need to know about tax season preparation, including essential documents, common mistakes to avoid, and key filing strategies to help you secure your retirement while minimizing your tax burden.
Essential Tax Documents You Need to Collect
Tax season comes with a flood of documents arriving in the mail or electronically. Knowing which ones are essential can help you avoid common tax mistakes and prevent IRS issues down the road.
W-2 and 1099 Forms
W-2: If you were employed at any point in 2023, you will receive a W-2 form from your employer, detailing your income and withholdings.
1099 Forms: If you earned non-salary income, you may receive different types of 1099 forms:
1099-INT: Reports interest earned from savings accounts, CDs, or money market accounts.
1099-DIV: Shows dividends earned from investments.
1099-B: Reports capital gains or losses from selling securities.
1099-R: Issued for distributions from retirement accounts, IRAs, or pension plans.
1099-SSA: Documents Social Security benefits
1099-S: Required if you sold real estate and need to report capital gains.
Important Tip: If you don’t receive a 1099 form, reach out to the financial institution where your investments or income sources are held.
Other Crucial Tax Forms
Form 5498: Issued for IRA contributions and rollovers. This form does not impact tax filing deadlines since it arrives in May.
1098 Form: Reports mortgage interest paid, which is crucial if you are itemizing deductions.
K-1 Form: If you are part of a partnership, S-corp, or trust, expect to receive a Schedule K-1, but note that these forms often arrive later in the tax season.
Estimated Tax Payments: If you made quarterly tax payments, be sure to report them to avoid IRS penalties.
Closing Statements for Real Estate Transactions: If you sold property, keep all documentation to report gains or losses accurately.
Standard vs. Itemized Deductions – Which One is Best?
One of the biggest decisions when filing taxes is whether to take the standard deduction or itemize deductions.
Standard Deduction for 2024:
$30,000 for married couples filing jointly
$15,000 for single filers
Increased deduction available for seniors over 65
Itemized Deductions Include:
Medical expenses (subject to limitations)
State and local taxes (SALT deductions capped at $10,000)
Property taxes and mortgage interest
Charitable donations
If your total deductions exceed the standard deduction, itemizing may provide better tax savings.
Qualified Charitable Distributions (QCDs)
If you are 70 ½ or older, you can make Qualified Charitable Distributions (QCDs) directly from your IRA to a qualified charity, potentially reducing your taxable income. However, the IRS does not automatically label these distributions as non-taxable, so be sure to inform your tax preparer to claim the correct tax benefit.
Should You File Taxes Yourself or Work with a Professional?
Many individuals try self-filing to save money, but it’s essential to understand when hiring a tax professional is a smarter choice.
Common Tax Mistakes When Filing Alone
Forgetting to report 1099 income – The IRS receives a copy of all issued tax forms, and missing one can result in an IRS letter.
Incorrectly reporting rollovers – 401(k) rollovers generate a 1099-R form, but if reported incorrectly, it could appear as taxable income.
Overlooking itemized deductions – Many self-filers fail to maximize their eligible deductions, resulting in higher taxes owed.
Errors in self-employment or rental income reporting – Complex tax situations (such as rental properties, partnerships, or businesses) require specialized tax handling.
When to Consider a Professional:
If you have multiple sources of income (investments, self-employment, rental properties).
If you own a business or receive K-1 income.
If you want personalized tax-saving strategies.
How Long Should You Keep Tax Documents?
The IRS recommends keeping tax-related documents for at least three years. However, certain records, such as real estate or stock purchase history, should be retained indefinitely to establish cost basis for tax reporting.
Tax Filing Deadlines & Key Dates for 2024
Stay ahead of deadlines to avoid penalties:
April 15, 2024 – Tax filing deadline and first quarter estimated tax payment due
June 17, 2024 – Second quarter estimated tax payment due
September 16, 2024 – Third quarter estimated tax payment due
January 15, 2025 – Final quarter estimated tax payment due
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.
Schedule your complimentary call with us and learn more about 2024 Tax Filing Made Easy – Key Documents & Expert Filing Tips.
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.
