A timely gift
A client’s adult son needed to move to a larger house due to his growing family.
He and his wife found the perfect house, but hadn’t even begun to list their current home for sale.
My client, her son, and I exchanged some emails and had a conversation to explore how she might be able to help with his down payment on the new home until he sold his current home and could repay her.
We looped in my client’s CPA to ask about the pros & cons of structuring this as a gift versus a family loan.
Ultimately, we set it up as a gift. My client could afford to part with the funds for a period of time. And while many people believe you can only gift $19,000 per person (in 2026) tax-free, there’s more to it than that. Read more about how gift taxes really work here.
My client was thrilled to help her son and his growing family purchase their next home.
‘Tis the season
The Medicare annual enrollment period opened October 15th and runs through December 7th.
Affordable Care Act (ACA) open enrollment is November 1st to January 15th. However, if you need coverage starting January 1st, you’ll need to make your election by December 15th. Otherwise, coverage elected after December 15th will typically begin on February 1st.
On top of all that, many of you who are still working have your benefits open enrollment in the last quarter of the year.
With the help of Move Health plus some independent health brokers I work with, many of my clients have been having conversations to review their health insurance, including Medicare, for 2027.
As the health insurance landscape continues to evolve, it’s smart to regularly review your coverage and costs in the context of your preferred doctors, hospital, pharmacy, and medications.
And if you’re on Medicare, you also need to consider your income and its potential impact on premiums two years from now thanks to IRMAA.
If you’re also dealing with coverage after divorce, a child turning 26 and having to get their own coverage, retirement, or other scenarios, it can be a lot to navigate.
If you’d like to speak to someone to help you review your health insurance coverage for 2027 and beyond, let me know and I’ll be happy to connect you.
Good ol’ rocky top
As I shared a couple of weeks back, I’ve joined TVAMP, a wealth management firm based in Knoxville, TN.
While I’m excited to join the team of wonderful people at TVAMP, transitions like these don’t just magically happen overnight.
The TVAMP team has been super supportive in helping me and my clients make the transition with e-signature documents and much more.
It’s been a lot to juggle on top of my normal client responsibilities. Thankfully, we’re in the home stretch and most of the heavy lifting is behind us.
I’m happy to now call TVAMP home, but I have no plans to start singing “Rocky Top” and cheering on the Tennessee Volunteers. 😉
To convert or not
I’ve written about Roth conversions more than once.
And I’ve had “the Roth conversation” with several clients over the last handful of months.
It’s not a simple, straightforward decision.
And it can make sense in the future, but not today. Or vice versa.
Even if you’re comfortable with the idea of pre-paying taxes you (or your heirs) will eventually owe, it’s all additional taxable income in the year you make the conversion.
While this can help reduce your RMDs in the future, it can potentially increase your Medicare premiums 2 years from now. It can also impact the taxation of your Social Security benefits. And have other repercussions across your retirement income plan.
I don’t hold a strong opinion about Roth conversions, though some of my colleagues across the industry sure seem to.
Like many (maybe most) things in retirement planning, it depends on your situation today, your needs and wants for the future, and the trade-offs you’re willing to make along the way.
If you’d like to discuss whether Roth conversions makes sense as part of your plan, get in touch and let’s have a conversation.
Giving away your taxes
I have several clients who, around this time of year, like to make charitable gifts.
Instead of giving cash, they give away their taxes.
For clients who utilize qualified charitable distributions (QCDs), they can give money from their IRA direct to a charity. The client doesn’t pay any income tax on this gift (nor do they receive a charitable deduction), and the charity doesn’t pay any taxes to receive it. And you can use your QCD to fulfill part or all or your RMD (required minimum distribution).
Other clients will gift appreciated stock to non-profit of their choosing. I recently had a client gift shares of her former employer’s stock to multiple charities. We deliberately donated her shares with the lowest cost basis which would have resulted in the largest capital gains tax if she sold the shares herself. In this case, the client does get a charitable deduction and the charity can sell the stock without any capital gains tax.
If giving is important to you, I believe the act is more important than the technique.
But it’s worth considering ways you can fulfill your charitable giving while giving away a potential tax liability at the same time.
And much more
Everything above is something I’ve worked on with at least one client over the past few months.
But wait, there’s more…
I’ve had a client retire from a long career with a big Atlanta-based company. We’ve been having conversations about tax planning, creating her retirement paycheck, when to start Social Security benefits, and more.
With interest rates starting to rise, I’ve been working with several clients to reevaluate their savings account setup to make sure they’re earning a competitive interest rate.
I’ve started working on some 2026 and 2027 tax projections for several clients and will be doing more of these before the end of this year.
And I have a client changing jobs which involves considering benefits decisions, what to do with retirement accounts, and how all of this will impact their family financial plan.
I hope you didn’t think I was just another investment advisor! 😁
What have you been working on lately in your personal finances? Hit reply and let me know.
Until next Wednesday,
Russ
P.S. I just started an online course on Motivational Interviewing. I’m eager to learn how I might apply it in my work. I hope to share more on this in the coming weeks.