How to “Transfer” Your Inherited IRA into Your Own IRA

Contributed by: Logan Dimitrie

The title might sound a little clickbait-y since only a spouse can truly treat an inherited IRA as their own; but stick with me. There are strategies that can help you accomplish something similar.

The SECURE Act and Inherited IRAs

The SECURE Act changed the rules for beneficiaries of inherited IRAs. Non-eligible designated beneficiaries must now fully distribute the IRA by December 31 of the tenth year following the original owner’s death.

Waiting until the tenth year to withdraw the entire balance can create a massive tax bill. Many people choosing to spread withdrawals evenly over the ten-year period may help to avoid that “tax bomb” at the end. However, even this approach can be challenging for those in higher income tax brackets. Some are even required to take a minimum distribution each year.

Opportunity: Money Is Fungible

Because money is fungible, you may have opportunities to accelerate your inherited IRA distributions while offsetting the additional taxable income.

Strategy: Pre-Tax Retirement Account Contributions

We feel most people already contribute to their employer retirement plan to get the company match; don’t miss out on that money! But here’s the question: Are you maxing out your contributions?

If not, this is where the opportunity lies.

If you don’t have an employer plan, you may still have options with a Traditional IRA. If your income is below the threshold for a full deduction, you can use a similar strategy; though contribution limits are lower.

How to “Transfer” Your Inherited IRA

Here’s the basic idea:

1. Increase contributions to your pre-tax retirement account to reduce your taxable income.

2. Use distributions from your inherited IRA to offset your reduced cashflow caused by the higher contributions.

Important Note: Your employer may adjust tax withholding based on your paycheck. To avoid surprises, consider withholding taxes on your inherited IRA distribution. Your IRA custodian can handle this for you.

Already Maxing Out? Consider an HSA

If you’re already maxing out your employer plan and deductible Traditional IRA, there’s one more option: the Health Savings Account (HSA). Depending on your situation, an HSA can be a powerful investment vehicle.

If you’d like to discuss this strategy or have any questions, feel free to reach out!

Logan Dimitrie is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Logan specializes in Financial Independence, Early Retirement, Financial Planning for caregivers and Longevity Planning. Logan has been featured on the Caffeinated Conversations podcast.

Opinions expressed are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Generally, if you take a distribution from a 401k prior to age 59 ½, you may be subject to ordinary income tax and a 10% penalty on the amount that you withdraw, in addition to any relevant state income tax. Contributions to a Donor Advised Fund are irrevocable. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

TCertified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Why Proactive Family Meetings Matter — And Why the Holidays Can Be the Perfect Time

Contributed by: Sandra Adams, CFP®

In our financial planning work with clients, family meetings can be scheduled for many different reasons. Often, these meetings happen because something has changed and the family needs to discuss a transition or a crisis. But as with most planning, family meetings are most effective when they’re done proactively — before a stressful life event forces the conversation.

What Does a Proactive Family Meeting Look Like?

When we talk with clients about bringing their children into a family meeting, we start with two simple questions:
What is the purpose of the meeting?
What should be on the agenda?

Purpose of the Meeting

A proactive family meeting serves several important goals:

• Introducing future decisionmakers to your advisory team.
  Adult children are often the ones who will step in as powers of attorney, trustees, or general decision‑makers if a parent’s health or cognitive abilities change. It’s incredibly helpful if they already know us, feel comfortable reaching out, and understand the role we play.

• Communicating long‑term plans and wishes.
  Depending on your comfort level, this may include reviewing your estate plan, discussing how your assets are structured, or simply sharing your broader goals and intentions for the future.

• Reducing confusion and conflict later.
  When everyone understands the plan in advance, families are better equipped to support one another during transitions.

Agenda Options

Every family meeting looks different. Some clients prefer to walk through their full financial plan, similar to an annual review. Others choose a higher‑level conversation focused on values, wishes, and the “why” behind their decisions rather than specific numbers.

There is no one right way to structure the agenda — the goal is clarity, communication, and connection.

Why the Holidays Can Be an Ideal Time

While family meetings can happen at any point in the year, the holiday season often provides a unique opportunity. Families are already gathered, routines slow down, and adult children may have the chance to observe how their parents are doing day‑to‑day. Subtle changes in health, mobility, memory, or energy levels can be easier to notice in person than over the phone.

For families who want to be proactive, using this natural gathering time to hold a thoughtful, structured conversation can be incredibly valuable. It doesn’t need to be formal or heavy — just intentional.

So, When Is the Right Time?

The right time for a family meeting is when it’s needed — whether that’s in response to a looming transition or, ideally, well before one. If your family values proactive communication and wants to avoid crisis‑driven decision‑making, scheduling a meeting as part of your retirement or longevity planning is a wise step.

And if your family is already together for the holidays, it may be the perfect moment to start the conversation.

We’re Here to Help

If you or someone you know is interested in scheduling a family meeting or has questions about the process, please reach out. We’re always happy to help facilitate these important conversations.

You can contact me at Sandy.Adams@CenterFinPlan.com.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

2026 Retirement Account Contribution and Eligibility Limits

Contributed by: Robert Ingram, CFP®

The IRS has rolled out the updated contribution limits for retirement plans and IRA accounts for 2026. There are some notable changes this year, including some higher ‘catch-up’ contributions for those looking to boost their savings. Here’s a quick look at some new contribution limits and adjustments to income eligibility limits for some contributions, as you plan for the year ahead.

Employer Retirement Plan Contribution Limits (401k, 403b, most 457 plans, and Thrift Saving)

• $24,500 annual employee elective deferral contribution limit (increases $1,000 from $23,500 in 2025)

• $8,000 extra “catch-up” contribution if age 50 and above (increases from $7,500 in 2025)

• Total amount that can be contributed to the defined contribution plan, including all contribution types (e.g., employee deferrals, employer matching, and profit sharing), will be $72,000 or $78,000 if age 50 and above (increased from $70,000 or $77,500 for age 50+ in 2025)

*Special additional “catch-up” contribution for ages 60, 61, 62, and 63

Under a change made in SECURE ACT 2.0 a couple of years ago, starting this year in 2025, there is a higher catch-up contribution limit for employees who are age 60, 61, 62, or 63 who participate in the above plans.

• Additional catch-up is $3,750 for 2025 in addition to the age 50 and over catch-up outlined above.  Total catch-up contribution is $11,250 for those aged 60, 61, 62, and 63.

• In 2026, this special additional catch-up contribution for those aged 60, 61, 62, or 63 remains the same as in 2025 (total catch-up of $11,250).

Traditional, Roth, SIMPLE IRA Contribution Limits:

Traditional and Roth IRA

• $7,500 annual contribution limit (increases from $7,000 in 2025)

• $1,100 “catch-up” contribution if age 50 and above (increases from $1,000 in 2025)

Note: The annual limit applies to any combination of Traditional IRA and Roth IRA contributions. (i.e. You would not be able to contribute up the maximum to a Traditional IRA and to up the maximum to a Roth IRA.)

SIMPLE IRA

• $17,000 annual elective contribution limit (increases $500 from $16,500 in 2025)

• $4,000 “catch-up” contribution if age 50 and above  (increases from $3,500 in 2025)

*SECURE Act 2.0 also sets a higher “catch-up” contribution limit to a SIMPLE for those aged 60-63 )

• Total catch-up contribution of $5,250  for ages 60, 61, 62, or 63 remains the same for 2026 as in 2025.

Traditional IRA Deductibility (income limits):

You may qualify to deduct contributions to a Traditional IRA from your taxable income. Your eligibility depends on factors such as your tax filing status, whether you or your spouse is covered by an employer-sponsored retirement plan, and your Modified Adjusted Gross Income (MAGI).  The amount of a Traditional IRA contribution that is deductible reduces (“phased out”) as your MAGI approaches the upper limits of the phase-out range.  For example,

• Filing Single

  • You are covered under an employer plan

    • Partial deduction phase-out begins at $81,000 up to $91,000 (then above this, no deduction) compared to 2025 (phase-out: $79,000 to $89,000)

• Married filing jointly

  • Spouse contributing to the IRA is covered under an employer plan

    • Phase-out begins at $129,000 to $149,000 compared to 2025 (phase-out: $126,000 to $146,000)

  • Spouse contributing is not covered by a plan, but the other spouse is covered under a plan

    • Phase-out begins at $242,000 to $252,000 compared to 2025 (phase-out:  $236,000 to $246,000)

Roth IRA Contribution (income limits):

Similar to making tax-deductible contributions to a Traditional IRA, being eligible to contribute to a Roth IRA depends on your tax filing status and your income.  Your allowable contribution reduces ("phased out") as your MAGI approaches the upper limits of the phase-out range.  For 2026, the limits are as follows:

• Filing Single or Head of Household

  • Partial contribution phase-out begins at $153,000 to $168,000  compared to 2025 (phase-out:  $150,000 to $165,000)

•   Married filing jointly

  • Phase-out begins at $242,000 to $252,000 compared to 2025 (phase-out: $236,000 to $246,000)

If your MAGI is below the phase-out floor, you can contribute up to the maximum.  Above the phase-out ceiling, you are ineligible for any partial contribution.

Remember, contributing to accounts such as a Traditional IRA or a Roth IRA also requires earned income.  If you’re not eligible to contribute to a Roth IRA due to income limits or lack of earned income, strategies such as a Roth IRA conversion could be a smart alternative for some situations.  Since conversions can have  different tax implications, you should consult with your financial planner and tax advisor before implementing these strategies.

As always, if you have any questions surrounding these changes, don’t hesitate to contact us!

Have a wonderful holiday season and a great start to the New Year!

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

Any opinions are those of Bob Ingram, CFP® and not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Medicare Premiums in 2026: What IRMAA Could Mean for Your Wallet

Contributed by: Nick Defenthaler, CFP®, RICP®

In 2026, Medicare Part B premiums for 95% Americans will be $206.50/mo. However, the other 5% will have to face what’s known as the Income Related Monthly Adjustment Amount or IRMAA and pay higher Part B and D premiums. Each year, the chart below (projection for 2026 – income parameters are based on 2024 Modified Adjusted Gross Income) is updated and in most cases, premiums increase gradually with inflation as do the income parameters associated with each premium tier.

Source: Kiplinger

Receiving communication that you’re subject to IRMAA and facing higher Medicare premiums is never a pleasant notification to receive. With proper planning, however, there are strategies to potentially avoid IRMAA both now and into the future.

But first, let’s do a quick refresher on the basics

Medicare bases your premium on your latest tax return filed with the IRS. For example, when your 2026 Part B and D premiums are determined, Medicare will use your 2024 tax return to track income. If you are married and your Modified Adjusted Gross Income (MAGI) was over $218,000 in 2026 ($109,000 for single filers), you’re paying more for Part B and D premiums aka subject to IRMAA. Unlike how our tax brackets function, Medicare income thresholds are a true cliff. You could be $1 over the $218,000 threshold and that’s all it takes to increase your premiums for the year! As mentioned previously, your Part B and D premiums are based off of your Modified Adjusted Gross Income or MAGI. The calculation for MAGI is slightly different and unique from the typical Adjusted Gross Income (AGI) calculation as MAGI includes certain income “add back” items such as tax-free municipal bond interest. Simply put, while muni bond interest might function as tax-free income on your return, it does get factored into the equation when determining whether or not you’re subject to IRMAA.

Navigating IRMAA with Roth IRA Conversion and Portfolio Income

Given our historically low tax environment, Roth IRA conversions are as popular as ever. Especially now, given the extension of our current tax rates as a result of the ‘One Big Beautiful Bill (OBBB)” that was passed in July 2025 (click HERE to read our comprehensive overview of the new legislation). When a Roth conversion occurs, a client moves money from his or her Traditional IRA to a Roth IRA for future tax-free growth. When the funds are converted to the Roth, a taxable event occurs, and the funds converted are considered taxable in the year the conversion takes place. Because Roth IRA conversions add to your income for the year, it’s quite common for the conversion to be the root cause of an IRMAA if proper planning does not take place. What makes this even trickier is the two-year lookback period on income. So, for clients considering Roth conversions, the magic age to begin being cognizant of the Medicare income thresholds is NOT at age 65 when Medicare begins, but rather age 63 because it’s that year’s tax return that will ultimately determine your Medicare premiums at age 65!

Now that there are no “do overs” with Roth conversions (Roth conversion recharacterizations went away in 2018), our preference in most cases is to do Roth conversions in November or December for clients who are age 63 and older. Reason being, by this time, we will have a very clear picture of total income for the year. I can’t tell you how many times we’ve seen situations where clients confidently believe their income will be a certain amount, but it ends up being much higher due to an unexpected income event.

Another way to navigate IRMAA is by being cognizant of income from after-tax investment/brokerage accounts. Things like capital gains, dividends, interest, etc. all factor into the MAGI calculation previously mentioned. Being intentional with the asset location of accounts can potentially help save thousands in Medicare premiums.

Ways to Reduce Income to Potentially Lower Part B and D Premiums

• Qualified Charitable Distribution (QCD)

  • If you’re subject to Required Minimum Distributions (RMD), gifting funds from your IRA directly to a charity prevents income from hitting your tax return. This reduction in income could help shield you from IRMAA. QCDs can begin as early as 70.5, however, they become especially powerful in reducing income tax when RMDs begin.

• Contributing to Tax Deductible Retirement Account such as a 401k or 403b Plan

  • Depositing funds into one of these retirement accounts reduces MAGI and could help prevent IRMAA.

• Deferring Income into Another Year

  • Whether it means drawing income from an after-tax investment account for cash flow needs or holding off on selling a stock that would create a capital gain towards year-end, being strategic with the timing of income generation could prove to be wise when navigating IRMAA.

• Accelerating Business Expenses to Reduce Income

  • Small business owners who could be facing higher Medicare premiums might consider accelerating expenses in certain years which in turn drives income lower if they’re flirting with IRMAA.

Putting IRMAA into Perspective

At the end of the day, higher Medicare premiums is essentially a form of additional tax, which can help us put things into perspective. For example, if a couple (both over 65) decides to do aggressive Roth IRA conversions to maximize the 22% tax bracket and MAGI ends up being $230,000, their federal tax bill will be approximately $29,000. This translates into an effective/average tax rate of 14.78% ($34,000 / $230,000). However, if you factor in the IRMAA the clients will face, which will end up being close to $2,000 (total for the couple between the higher Part B and D premiums), this additional “tax” ends up only pushing the effective tax rate to 15.65% - less than a 1% increase! I highlight this to not trivialize a $2,000 additional cost for the year, as this is real money we’re talking about here. That said, I do feel it’s appropriate to zoom out a bit and maintain perspective on the big picture. If we forgo savvy planning opportunities to save a bit on Medicare premiums, we could end up costing ourselves much more down the line. However, not taking IRMAA into consideration is a miss in our opinion as well. Just like anything in investment and financial planning, a balanced approach is prudent when it comes to navigating IRMAA – there is never a ‘one size fits all” solution.

Fighting back on IRMAA

If you’ve received notification that your Medicare Part B and D premiums are increasing due to IRMAA, there could be ways to reverse the decision. The most common situation is when a recent retiree starts Medicare and in the latest tax return on file with the IRS, is showing a much higher level of income. Retirement is one example of what Medicare would consider a “life changing event” in which case form SSA-44 (click HERE to complete the form online or download the PDF) can be completed and submitted with supporting documentation which could lead to lower premiums. Other “life changing events” would include:

• Marriage

• Divorce

• Death of a spouse

• Work stoppage

• Work reduction

• Loss of income producing property

• Loss of pension income

• Employer settlement payment

Medicare would not consider higher income in one given year due to a Roth IRA conversion or realizing a large capital gain a life changing event that would warrant a reduction in premium. This highlights the importance to plan accordingly with these items as discussed earlier.

If you disagree with Medicare’s decision in determining your premiums, you have the ability to have a right to appeal by filing a “request for reconsideration” using form SSA-561-U2 (https://www.ssa.gov/forms/ssa-561-u2.pdf)

As you can see, the topic of IRMAA is enough to make anyone’s head spin. To learn even more, visit the Social Security administration’s website dedicated to this topic - https://www.ssa.gov/benefits/medicare/medicare-premiums.html#anchor5.  Prudent planning around your Medicare premiums is just one example of many of the work we do for clients that extends well beyond managing investments, that we believe adds real value over time.

If you or someone you care about is struggling with how to put all of these pieces together to achieve a favorable outcome, we are here to help. Our team of Financial Planners offer a complimentary “second opinion meeting” to address your most pressing financial questions and concerns. In many cases, by the end of this 45–60-minute discussion, it will make sense to continue the conversation of possibly working together. Other times, it will not but our team can assure you that you will hang up the phone walking away with questions answered and a plan moving forward. We look forward to the conversation.

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) I the U.S. which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation.

The hypothetical case study is for illustrative purposes only. Individual cases will vary. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

Municipal Bonds May be subject to state, local, and alternative minimum tax.

When It’s Time for Snowbirds to Return Home to Nest

Contributed by: Sandra Adams, CFP®

For many retirees, the dream of wintering in warmer climates becomes a reality—trading Midwest snow for sunshine, golf, and year-round activity. These "snowbird" years often bring joy, vitality, and a sense of freedom. But as time passes and health needs evolve, a quiet shift begins: the desire to be closer to family.

We often see this transition occur with clients as they age – there is no "trigger" age; it depends on each client's situation. The appeal of independence and warm weather starts to give way to deeper priorities—being near children and grandchildren, needing help with medical appointments, and feeling supported as aging progresses.

This decision isn't just emotional—it's financial and logistical. Selling a second home, relocating medical care, and adjusting estate plans all require thoughtful coordination. It's also a time to revisit long-term care strategies, update legal documents, and ensure proximity to trusted professionals.

If you or a loved one are considering this move, here are a few planning tips:

• Start early: Give yourself time to explore housing options near family and understand local resources.

• Review your financial plan: Consider the impact of selling property, changing residency, and potential care costs.

• Discuss with family: Open conversations can ease transitions and clarify expectations.

• Update your documents: Ensure your healthcare directives, powers of attorney, and estate plans reflect your new location and support system.

Coming home can be the best move for your next chapter—one rooted in connection, care, and legacy. If this is something you are considering, we are here to help you navigate it with clarity and confidence. Please reach out Sandy.Adams@CenterFinPlan.com/

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandy Adams, CFP® and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc.

Center for Financial Planning

Gifting Considerations During the Holidays

Contributed by: Nick Defenthaler, CFP®, RICP®

We are officially in the thick of the holiday season, and giving is top of mind for many. While some are busy doing online shopping on Amazon or fighting the crowds at Target, you might consider other forms of gifting this year – ones that would arguably have a much larger impact on your loved one's life, both now and in the future.

Gift Tax Exclusion Refresher

The annual gift tax exclusion for 2025 is $19,000. This means you can give anyone a gift for up to $19,000 and avoid the hassle of filing a gift tax return. The gift, if made to a person and not a charitable organization, is not tax-deductible to the donor nor is it considered taxable income to the recipient of the gift. If you are single and wish to gift funds to your daughter and son-in-law, you can actually give up to $38,000, assuming the check issued is made out to both of them. Remember, the $19,000 limit is per person, not per household. For higher-net-worth clients looking to reduce their estate during their lifetime, given current estate tax rules, annual gifting to charity, friends, and family members can be a fantastic strategy. So, what are some ways this $19,000/person gift can function? Does it have to be a gift of cash to a loved one's checking or savings account? Absolutely not! Let's look at the many options you have and should consider:

Roth IRA Funding

If a loved one has sufficient earned income for the year, they may be eligible to fund a Roth IRA. What better gift to give someone than the gift of tax-free growth?! We help dozens of clients each year with gifting funds from their personal investment accounts to a child or grandchild's Roth IRA up to the maximum contribution level of $7,000 ($8,000 if over the age of 50). Click here to learn more about the power of a Roth IRA and why it could be such a beneficial retirement tool for younger folks.

529 Plan Funding

529 plans, also known as "education IRAs," are typically used to fund higher education costs. These accounts grow tax-deferred, and if funds are used for qualified expenses, distributions are completely tax-free. Many states (including Michigan) offer a state tax deduction for funds contributed to the plan; however, there is no federal tax deduction on 529 contributions. Click here to learn more about education planning and 529 accounts.

Gifting Securities (individual stock, mutual funds, exchange traded funds, etc.)

Gifting shares of a stock to a loved one is another popular gifting strategy. In some cases, a client may gift a position to a child who is in a lower tax bracket than they are. If the child turns around and sells the stock, they could avoid paying capital gains tax altogether. As always, be sure to discuss creative strategies like this with your tax professional to ensure this is a good move for both you and the recipient of the gift.  

Direct Payment for Tuition or Health Care Expenses

Direct payments for certain medical and educational expenses are exempt from the $19,000 gift tax exclusion amount. For example, if a grandmother wishes to pay for her granddaughter's college tuition bill of $10,000 but also wants to gift her $19,000 as a graduation gift to be used for the down payment of a home, she can pay the $10,000 tuition bill directly to the school and still preserve the $19,000 gift exclusion amount. This same rule applies for many medical costs.

For those who are charitably inclined, gifting highly appreciated stock or securities directly to a 501(c)(3) or Donor Advised Fund is a great strategy to fulfill philanthropy goals in a very tax-efficient manner. For those over 70 ½, gifting funds through a Qualified Charitable Distribution (QCD) could also be a great fit. Gifting funds directly from one's IRA can reduce taxable income flowing through to your return, which will not only reduce your current year's tax bill, but it could also help lower your Medicare Part B & D premiums, which are determined by your income each year.  

As you can see, there are numerous ways to gift funds to individuals and charitable organizations. There is no "one size fits all" strategy when it comes to giving – the proposed solution will have everything to do with your goals and the needs of the person or organization receiving the gift. On behalf of the entire Center family, we wish you a very happy holiday season. Please reach out to us if we can assist you in crafting your gifting plan for 2025.

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals of earnings are permitted. Earnings withdrawn prior to 59 1/2 would be subject to income taxes and penalties. Contribution amounts are always distributed tax free and penalty free. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover educational costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state. Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes. To learn more about the potential risks and benefits of Donor Advised Funds, please contact us.

GivingTuesday: A 2025 Reminder

Contributed by: Kelsey Arvai, CFP®, MBA

As we approach another season of gratitude, it's a reminder that each act of kindness can make a meaningful difference, no matter how small. Since its inception in 2012, GivingTuesday has grown into a worldwide movement, inspiring millions to contribute time, resources, and compassion to strengthen our communities.

Celebrated on the Tuesday following Thanksgiving, GivingTuesday is a global call to action, but its spirit doesn't need to be limited to one day a year. At The Center, we aim to give back year-round through our Charitable Committee, which leads our mission to support three key areas: Financial Literacy, Community Needs in Metro Detroit, and Staff Involvement.

In 2024, our team contributed over 165 hours of volunteer time and raised $23,400, enhancing lives in our community and beyond. From donation drives to hands-on support, we're dedicated to building a brighter future. To further encourage giving, The Center offers eligible employees up to two paid days per year for community volunteer work and matches employee charitable donations up to $100 annually.

For those looking to join this movement, visit GivingTuesday.org/participate to discover ways to give back through time, donations, or simply using your voice to uplift those around you. Together, we can create a ripple of kindness every day.

Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

Raymond James is not affiliated with the above organizations.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through the Center for Financial Planning, Inc. The Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

This electronic communication and all contents are sent and provided by Kelsey Arvai in her individual capacity as an ACTIVITY, and not in the capacity of agent, representative or financial advisor of Raymond James Financial Services, Inc. and/or any and all of its affiliates, including Raymond James & Associates, Inc. and Raymond James Financial, Inc. (collectively “Raymond James”). Kelsey's STATUS in the ACTIVITY is independent of her activity as a financial advisor with Raymond James, and his additional use of a Raymond James email address for communications pertaining to her POSITION in the ACTIVITY is authorized. Raymond James, however, assumes no responsibility for the substance, accuracy, completeness or reliability of any content in this communication, and Raymond James’ sponsorship, endorsement, association or affiliation of/with the ORGANIZATION or its activities is not implied, nor should it be inferred.

Tax-Smart Strategies for Charitable Donations

Contributed by: Lauren Adams, CFA®, CFP®

At Center for Financial Planning, one of our favorite ways to improve lives is by helping our clients make a positive impact on the world through what we call “tax-savvy charitable giving.” While many people give charitably by writing a check, digging into their wallets for cash, or putting a donation on their credit cards, we’re here to tell you there’s a better way! There are a number of key strategies we can deploy to help our clients’ charitable dollars stretch even further while also lowering their tax burden.

Donating Directly From Your IRA

This strategy involves a concept called the Qualified Charitable Distribution (QCD). How does it work? Instead of taking a distribution from your IRA, paying taxes on the amount withdrawn, and then sending that money to your checking account, QCDs allow you to send money directly from your IRA to the charity of your choice. In essence, it’s a transfer of assets from your IRA to one or more qualified nonprofits.

 But there are some caveats: You need to be at least 70.5 years old and the charity has to be a 501(c)(3), meaning a tax-exempt nonprofit where all of its earnings support the advancement of its charitable cause. Also, there are limits on how much you can give each year—but that number is quite high (in 2025, it’s up to $108,000 per person per year).

 Usually, distributions from your IRA are taxed when they’re received. But with a QCD, they become tax-free as long as they’re transferred to an eligible nonprofit organization. Giving directly from your IRA results in those dollar amounts not being included in your gross income for that year, which results in a lower tax bill for you. It can also lower the amount you may pay for Medicare premiums and the portion of Social Security that is taxable to you, depending on your situation and your income level.

 For those of you who have reached the milestone age, a QCD also counts toward satisfying the distributions you must take each year for your Required Minimum Distribution, the amount the government makes you withdraw from your IRA each year once you hit a certain age (generally, 73-75). This is especially useful if you don’t need your full RMD to live on or if you planned to give charitably anyhow (now you’re doing so in a more tax-efficient manner!).

 Other tactics to consider are: Gifting Securities Instead of Cash and Exploring Donor Advised Funds. Check out our blog for more information on these tax-savvy strategies: https://www.centerfinplan.com/money-centered/category/Charitable+Giving.

 These are just a few of the strategies we recommend for our clients. But regardless of the strategy employed, one thing is always true for us at The Center: Helping our clients get the most bang for their charitable buck is one of the many reasons why we love what we do!

Lauren Adams, CFA®, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

Any opinions are those of the author and not necessarily those of Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making a decision, and it does not constitute a recommendation. All opinions are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Center for Financial Planning, Inc. 24800 Denso Drive Suite 300 Southfield, MI 48033 (248-948-7900)

Are You and Your Partner on the Same Retirement Page?

Contributed by: Matt Trujillo, CFP®

Retirement and Longevity

Many couples don't agree on when, where, or how they'll spend their golden years.

When Fidelity Investments asked couples how much they need to have saved to maintain their current lifestyle in retirement, 52% said they didn't know. Over half the survey respondents – 51% – disagreed on the amount needed to retire, and 48% had differing answers when asked about their planned retirement age.*

In some ways, that's not surprising – many couples disagree on financial and lifestyle matters long before they've stopped working. However, adjustments can become more complicated in retirement when you've generally stopped accumulating wealth and have to focus more on controlling expenses and dealing with unexpected events.

Ultimately, the time to talk about and resolve any differences you have about retirement is well before you need to. Let's look at some key areas where couples need to find common ground.

When and Where

Partners often have different time frames for their retirements, an issue that can be exacerbated if they are significantly older. Sometimes, differing time frames are due to policies or expectations in their respective workplaces; sometimes, it's a matter of how long each one wants – or can physically continue – to work.

The retirement nest egg is also a factor here. If you're planning to downsize or move to a warmer location or nearer your children, that will also affect your timeline. There's no numerical answer (65 as a retirement age just isn't relevant in today's world), and this may be a moving target anyway. But you both need to have a general idea on when each is going to retire.

You also need to agree on where you're going to live because a mistake on this point can be very expensive to fix. If one of you is set on a certain location, try to take a long vacation (or several) there together and discuss how you each feel about living there permanently.

Your Lifestyle in Retirement

Some people see retirement as a time to do very little; others see it as the time to do everything they couldn't do while working. While these are individual choices, they'll affect both of you as well as your joint financial planning. After all, if there's a trip to Europe in your future, there's also a hefty expense in your future.

While you may not be able to (or want to) pin everything down precisely, partners should be in general agreement on how they're going to live in retirement and what that lifestyle will cost. You need to arrive at that expense estimate long before retirement while you still have time to make any changes required to reach that financial target.

Your Current Lifestyle

How much you spend and save now plays a significant role in determining how much you can accumulate and, therefore, how much you can spend in retirement. A key question: What tradeoffs (working longer, saving more, delaying Social Security) are you willing to make now to increase your odds of having the retirement lifestyle you want?

Examining your current lifestyle is also a good starting point for discussing how things might change in retirement. Are there expenses that will go away? Are there new ones that will pop up? If you're planning on working part-time or turning a hobby into a little business, should you begin planning for that now?

Retirement Finances

This is a significant topic, including items such as:

• Monitoring and managing expenses

• How much you can withdraw from your retirement portfolio annually

• What your income sources will be

• How long your money has to last (be sure to add a margin of safety)

• What level of risk you can jointly tolerate

• How much you plan to leave to others or to charity

• How much you're going to set aside for emergencies

• Who's going to manage the money, and what happens if they die first

... and the list goes on. You don't want to spend your retirement years worrying about money, but not planning ahead might ensure that you will. Talk about these subjects now.

Unknowns

"Expect the unexpected" applies all the way along the journey toward retirement, but perhaps even more strongly in our later years. What will your healthcare costs be, and how much will have to come out of your pocket? Will you or your spouse need long-term care, and should you purchase insurance to cover that? What happens if the market suffers a severe downturn right after you retire?

While you obviously can't plan precisely for an unknown, talking about what might happen and how you'd respond will make things easier if the unexpected does occur. Included here is the reality that one of you will likely outlive the other, so your estate planning should be done together, and the day-to-day manager of your finances should be sure that their counterpart can take over when needed.

Communication is vital, especially when it comes to something as important as retirement. Almost all of us will have to make some tradeoffs and adjustments (as we do throughout our relationships), and it's important to remember that the earlier you discuss and negotiate what those are going to be, the better your chances of achieving the satisfying retirement you've both worked so hard to achieve.

*2021 Fidelity Investments Couples & Money Study

Matthew Trujillo, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® A frequent blog contributor on topics related to financial planning and investment, he has more than a decade of industry experience.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author, and not necessarily those of Raymond James.

2026 Social Security and Medicare Updates Announced

Contributed by: Kali Hassinger, CFP®, CSRIC™

It was recently announced that the Social Security benefits will receive a 2.8% Cost of Living Adjustment for 2026. 

For the average retiree, this adjustment translates to an increase of approximately $56 per month, raising the average monthly benefit from $2,008 to $2,064. The COLA adjustment will be reflected in recipients’ January 2026 Social Security payment.

Why the COLA Matters

COLAs are designed to help Social Security benefits keep pace with inflation. They’re calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks the cost of everyday goods and services. However, this index doesn’t fully reflect the rising costs of essentials like healthcare, housing, and food, which tend to impact retirees more heavily.

Medicare Premiums

One key consideration is that Medicare Part B premiums are also increasing, projected to rise to $206.50 per month, which is a $21.50 increase from 2025. This means that while your Social Security check may be larger, a portion of that increase will be offset by higher healthcare costs.

Wage Base Increase: What It Means for Workers

For those still earning income, the Social Security wage base—the maximum amount of earnings subject to Social Security tax—will rise from $176,100 in 2025 to $184,500 in 2026, a 4.8% increase.

• Tax Rate: The Social Security tax rate remains at 12.4%, split evenly between employer and employee (6.2% each).

• Maximum Tax: This means the maximum Social Security tax per worker will increase by $1,041.60, totaling $22,878 in 2026.

This change affects higher-income earners and self-employed individuals, who should factor this into their tax planning and payroll budgeting.

Let’s Talk

If you’re wondering how these updates affect your personal situation—whether you're working, retired, or somewhere in between—we’re always here to help. Together, we can ensure your retirement plan is optimized for both income and tax efficiency.

Kali Hassinger, CFP®, CSRIC® is a Financial Planning Manager and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She has more than a decade of financial planning and insurance industry experience.

This material is being provided for informational purposes only and is not a complete description. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making a decision, and it does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Any opinions are those of the author and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Prior to making a decision, please consult with your financial advisor about your individual situation.