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.

Q3 2025: A Quarter of Records & Resilience in the Markets

Contributed by: Mallory Hunt

The third quarter of 2025 will be remembered as a historic chapter in the ongoing bull market, delivering a standout performance and offering a welcome boost to investor confidence and portfolio growth. Despite ongoing economic headwinds and global uncertainty, investors witnessed a powerful rally. Markets surged to record highs, driven by strong corporate earnings, a strategic rate cut from the Federal Reserve, and the continued dominance of AI-powered growth stocks. This wasn’t just a strong quarter; it was pivotal, signaling a potential turning point in the post-pandemic economic cycle and offering fresh momentum heading into the final stretch of the year. Let’s take a look at some of those record-breaking numbers:

• The S&P 500 closed above $6600 for the first time, logging 23 record highs, matching the most in any quarter since Q1 1998. Final numbers had the index up 7.79% for the quarter and over 13.72% year-to-date.

• Nasdaq Composite soared 11.24%, driven by continued momentum in AI-related stocks.

• Dow Jones Industrial Average rose 5.22%, marking its 8th record high of the year.

• Russell 2000 small-cap index jumped 12.02%, outperforming large caps and reaching its first record high since 2021.

This remarkable market performance wasn’t just pure luck; several key drivers came together to propel markets to new heights and can be credited as the fuel to this rally:

• AI Momentum: The “Magnificent 7” tech stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia & Tesla) continued to dominate, with artificial intelligence innovation driving investor enthusiasm and capital inflows

• Federal Reserve Rate Cut: The Fed delivered the first rate cut of the year in September, lowering the federal funds rate by 25 basis points and signaling a shift toward a more accommodative policy. This helped ease market concerns and boost investor sentiment.

• Strong Corporate Earnings: Over 80% of S&P 500 companies exceeded earnings expectations in the second quarter of 2025, which drove investor sentiment in the third quarter and reinforced the strength of U.S. corporations.

• Global Market Participation: International markets also rallied, with emerging markets outperforming developed ones. Easing trade tensions and supportive policy measures contributed to the global upswing.

As far as sector standouts, leading the quarter’s rally was technology, powered by AI-driven momentum, strong earnings, and expanding valuations. Healthcare demonstrated resilience amid evolving policy landscapes and ongoing innovation. Small-cap stocks outperformed their large-cap counterparts, signaling broader market strength. Growth stocks continued to outpace value stocks, particularly within consumer discretionary and communication services. Meanwhile, safe-haven assets like gold and silver also surged, with gold climbing over 15% and silver approaching its 1980 highs, as investors sought protection against inflation.

While the quarter was overwhelmingly positive, several cautionary factors remain on the radar. Inflation remains above target. Equity valuations have reached elevated levels, prompting concerns that limited earnings growth could cap future gains. Geopolitical and trade tensions persist, including ongoing tariff disputes and global instability, which pose risks to supply chains and investor confidence. Additionally, the current government shutdown will likely delay critical economic data releases, potentially complicating the Federal Reserve’s policy decisions and adding uncertainty to the market outlook.

As we transition into the fourth quarter—a period that historically favors market strength—investors have reason to remain optimistic, while staying mindful of elevated valuation levels and macroeconomic signals. While past performance is never indicative of future results, the momentum from Q3 sets a compelling stage for what could be a potentially dynamic finish to the year. Staying invested and diversified remains key, as disciplined strategies continue to benefit from long-term market trends.

Mallory Hunt is a Portfolio Administrator at Center for Financial Planning, Inc.® She holds her Series 7, 63 and 65 Securities Licenses along with her Life, Accident & Health and Variable Annuities licenses.

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. Any opinions are those of Mallory Hunt and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Q3 2025 Investment Commentary

Contributed by: Center Investment Department

The third quarter of 2025 was one for the record books. The S&P 500 hit new all-time highs 23 times during the quarter. That is the most new highs in a single quarter since 1998! Bonds and small company stocks did not want to be left behind. The Russell 2000 set its own first record high since 2021, and the Bloomberg Aggregate Bond index moved higher for the 3rd straight quarter. Developed international and emerging markets also continued their strong start to the year. For more details, check out our blog. This means that this year has been great for diversified portfolios, which have taken less risk than the S&P 500 but logged nearly as high returns for a 60% Stock/40% Bond portfolio (40% Bloomberg Aggregate Bond index, 40% S&P 500, and 20% MSCI EAFE International index).

Muted Inflation and Interest Rate Cut

While inflation is tempered for now (even though it lingers above the 2% Fed target), we will likely see it rise in the coming months. Tariffs will cause upward pressure, but low energy prices, declines in shelter inflation, and global economic sluggishness should mitigate the rise.

The Federal Reserve (The Fed) began cutting interest rates again, citing a sluggish labor market.  The first cut of .25% occurred in September and is likely to be followed by 1 or 2 more .25% cuts this year. The Fed will continue to let data drive its decision-making here. The only issue with this is that some data points may be very delayed due to the government shutdown. Lower rates will mean lower money market interest rates, but should also lead to a welcome reduction in mortgage interest rates. 

Tariffs

Tariff revenue is starting to ramp up. Both August and September reports indicate that monthly revenue was over $31 billion each month. Our weighted average tariff revenue in the U.S. is sitting just over 15% compared to just 2.5% in February of this year. As an example, if a 20% average tariff rate were in place for the next 12 months, the U.S. Treasury could collect over $600 billion, which exceeds taxes received from corporations! It remains to be seen how companies will manage this, whether they absorb the hit to their bottom line or pass it along to consumers. Given enough time, companies will also find strategies to mitigate, such as onshoring production or shifting production to countries with lower tariff rates, to stay competitive.

While tariffs were ruled unlawful by lower courts, this case is now in the Supreme Court’s hands, and it could take several months before a final ruling. So they are here to stay for the time being.

Government Shutdown

As of October 1st, the U.S. government has officially entered a shutdown—its first in nearly seven years since the record-breaking 35-day standoff in 2018. The impasse stems from Congress’s failure to pass a budget, driven by partisan disagreements over healthcare funding and proposed federal spending cuts. This has led to disruptions across key agencies, such as the Bureau of Labor Statistics, which has delayed vital economic data and raised concerns about the Federal Reserve’s ability to make informed monetary policy decisions. While this shutdown carries unique weight due to the administration’s push for permanent layoffs and structural changes, investors are reminded that volatility often presents opportunity. Shutdowns are typically brief, averaging just nine days and usually create openings for disciplined investors to reassess and rebalance.

As illustrated in the chart below, the S&P 500 has consistently trended upward in the months following past shutdowns. Despite initial turbulence, markets have shown remarkable resilience, frequently rebounding once political uncertainty fades. 12-month gains following the 20 shutdowns over the past 50 years have averaged 13%, with positive performance 85% of the time! Shutdowns may feel unsettling in the moment, but history offers a reassuring perspective: portfolios anchored in strong fundamentals tend to weather political disruptions better than reactive strategies. Staying diversified and focused on long-term goals remains the most effective approach. The chart serves as a powerful visual reminder that staying the course has historically paid off, even when headlines suggest otherwise.

Investing at All-Time Highs

We are navigating this current stock market with two competing narratives. One screams, “sell!” as valuations continue to rise to historic levels despite a weakening labor market, increased tariffs, and uncertain global trade. The other screams, “buy!” as consumers remain strong, the Fed begins cutting rates, companies continue to grow earnings, and the excitement around productivity gains from A.I. continues to accelerate. Whatever your opinion on the stock market, the fact is that the S&P 500 continued to make new all-time highs this quarter – which is NOT an indicator that stocks need to fall. On the contrary, all-time highs tend to be followed by…more all-time highs. With that being said, it is understandable to be concerned or have a cautious outlook on equity markets going forward. When times feel extra uncertain, we lean on our process, historical precedent, diversification, emergency cash reserves, and strong financial planning to provide comfort and give us the conviction we need to stick to the plan.

Gold’s Strong Performance

The remarkable run-up in gold prices this year also speaks to the themes of uncertainty and opportunity in today’s investment landscape. By the end of this quarter, gold had risen above $3,800 per ounce, marking a staggering 47% gain year-to-date and setting repeated record highs amid rate cuts, rising deficits, geopolitical tensions, and government shutdowns. Will it reach a historic new level and surpass $4,000 this year? Maybe…that is only another ~5% away. Gold is a volatile investment that typically moves in bursts, and we are currently witnessing one impressive surge. Like any investment, it comes with serious risk, though. Check out the chart below to see some of gold’s historic crashes.

It has had multiple periods where it was cut in half over YEARS. It can have beneficial attributes in an investment portfolio due to its uncorrelated nature, but no investment is perfect, so consider the risks before allocating or chasing performance. Also, keep in mind the long-term performance of gold vs. stocks and bonds.

As we enter the final stretch of 2025, your financial plan is prepared for what the markets may throw our way. Six months ago, on April 2nd, Liberation Day, the tariff plan was rolled out. This caused a sharp correction in markets, but almost as sharp a recovery. If you blinked, you probably missed it. It is an important reminder not to make knee-jerk reactions with your portfolio during these times of volatility, as you could quickly be left on the sidelines waiting for your re-entry point, especially when markets soar to new highs, as they have this year. If you have any questions, we are always here for you. Please don’t hesitate to reach out to us!

Any opinions are those of Angela Palacios, CFP®, AIF®, Nick Boguth, CFA®, CFP®, and Mallory Hunt and not necessarily those of Raymond James. 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. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Investing in gold carries special risks, including wide price fluctuations, a limited market, concentrated sources in potentially unstable countries, and an unregulated market.

Why Retirees Should Consider Renting

Contributed by: Nick Defenthaler, CFP®, RICP®

“Why would you ever rent?  It’s a waste of money!  You don’t build equity by renting.  Home ownership is just what successful people do.”  Sound familiar?  I’ve heard various versions of these statements over the years and every time I do, the frustration of these words makes my face turns red.  I guess I don’t have a very good poker face! As a society, we have conditioned ourselves over decades to believe that homeownership is always the best route and that renting is only for young folks.  If you ask me, this mindset and philosophy is just flat out wrong and short sighted. 

Below, I’ve outlined the various reasons retirees might consider renting if you’ve recently sold a home or planning on doing so in the near future: 

Higher Mortgage Rates

The current rate on a 30 year mortgage is still close to 7%. “Cheap money” and seeing rates below 3% have simply come and gone and might not ever return. Other financing tools such as a Securities Based Line of Credit and Home Equity Line of Credit also still have elevated rates and are variable.

Interest Deductibility

It’s estimated that roughly 92% of Americans now take the standard deduction. In 2025, the standard deduction for single filers is $15,000 ($17,000 for those 65 or older) and $30,000 for married filers ($33,200 for a couple 65 or older…and possibly another $12k depending on income level due to the new, additional ‘senior deduction’!). This means that if a married couple (both age 60) adds up all their deductions for the year (ex. mortgage interest, property tax, charitable contributions, etc.) and they do NOT exceed $30,000, they will then take the standard deduction. If your deductions don’t exceed this threshold, there is no economic benefit of the ‘deduction’.  

Maintenance Costs

Very few of us move into a new home and keep everything the same.  Home improvements aren’t cheap and should be taken into consideration when deciding whether it makes more sense to rent or buy. A general rule of thumb is to expect spending 1% - 4% of your home value each year for maintenance/improvements (ex. $500,000 home, you can expect $5,000 - $20,000 each year).

Housing Market “Timing”

Home prices have increased significantly over the past 10 years (especially since the pandemic). In 2015, the median sales price of a home in the U.S. was $289,000. Today, the median sales price is $417,000 (source: click HERE). Many professionals suggest homes are fully valued so don’t bank on your new residence to provide stock market like returns anytime soon.

Tax-Free Equity

In most cases, there are no tax consequences when you sell your home.  The tax-free proceeds from selling your home could be a great way to help fund your spending goal in retirement. If using home proceeds for a portion of your retirement income needs, you open up the possibility to convert funds from Traditional IRAs to Roth IRAs and while attempting to strategically maximize historically low tax brackets.

Flexibility

There are some things you simply can’t put a price tag on. Maintaining flexibility with your housing situation is certainly one of them. For many of us, renting and the flexibility it provides is a tremendous value-add compared to home ownership. 

Quick Decisions

Rushing into a home purchase in a new area can be a costly mistake. If you think renting is a “waste of money” because you aren’t building equity in a home, just look at how much it costs to move, what closing cost are (even if you won’t have a mortgage) and the level of interest you pay early on in a mortgage. Prior to buying in a brand new area, consider renting for 1-2 years if you wish to move to a new area to make darn sure it’s somewhere you want to be long-term. 

While every situation is different, if you’re nearing retirement or currently in retirement and are considering selling your home, I would encourage you to consider all options when it comes to housing. Be sure to reach out to your advisor when thinking through this large financial decision to make sure it is aligned with your long-term goals and objectives.

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.

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. 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. Investing involves risk and you may incur a profit or loss regardless of strategy selected. 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. Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 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. 24800 Denso Dr. Ste 300 Southfield, MI 48033 248.948.7900.