529 Plans: Saving for Your Child’s Education

Contributed by: Nick Defenthaler, CFP®, RICP®

Summer has officially arrived, and with the longer days, warmer weather, and vacation plans, many Michigan families are looking forward to making the most of the season ahead. Whether you're planning trips Up North, spending weekends at the lake, or simply enjoying time with family and friends, summer is a great time to slow down and focus on what matters most.

While school may be out and education isn't top of mind for many families right now, summer can actually be an excellent time to revisit long-term goals—especially when it comes to planning for future college expenses. With fewer school-related commitments and a fresh season ahead, now is a good opportunity to review your education savings strategy and make sure you're on track.

Below is a brief refresher of the 529 plan, a popular type of account you can save into for future college expenses. Here are some caveats: 

Advantages: 

• State tax deduction on contributions up to certain annual limits (varies by state)  

• Tax-deferred growth 

• No taxation upon withdrawal if funds are used for qualified educational expenses (such as tuition, books, room and board, computers, etc.) 

• Parents have control over the account and can transfer the account to another child 

• Not subject to kiddie tax rules, unlike UGMA accounts (Uniform Gift of Minors Act) and UTMA accounts (Uniform Transfer to Minors Act) 

Disadvantages: 

• No guaranteed rate of return – subject to market risk 

• Certain taxes and penalties will apply if funds are withdrawn for non-qualified expenses 

Items to be aware of: 

• Keep records of how money was spent that was withdrawn from the 529 account in case of an audit 

• Review the asset allocation/risk profile of the account on an annual basis – typically, the closer the child is to entering college, the more conservative the account should become  

Just like saving for retirement, the sooner you can start saving for college the better. With that being said, if your children are only a few years out from college and your savings isn’t where you’d like it to be, there is still hope. Chances are you still have options and this is where good financial planning can come into play. There are also nuances with financial aid and completing the FAFSA that you want to be aware of. If we could provide guidance in this area, don’t hesitate to reach out, we would be happy to help! 

For additional insights on education planning, be sure to check out our latest webinar, The Hidden Benefits of College Savings Plans.

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.

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 Nick Defenthaler and are not necessarily those of Raymond James. 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 college 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. Asset allocation does not ensure a profit or guarantee against loss.

Tax Planning in Retirement – Social Security, Roth Conversions, Dividends, and Annuities, Oh My!

Contributed by: Logan Dimitrie, CFP®

Why is Tax Planning Important?

Tax planning in retirement is important because you are no longer accumulating … you are now in the distribution phase … or “paying yourself.”

There are tax-efficient ways to do this. There are even some pitfalls to watch out for.

Introduction: A Different Lens on Retirement Income

At our firm, one of our core values is Commitment to Financial Planning. That means going beyond investment returns and focusing on after-tax outcomes.

In retirement, taxes don’t disappear; they become more complex.

The real opportunity lies in coordinating income sources, timing decisions, and understanding how different buckets are taxed.

Today, we’re going to explore:

• Why dividend-heavy strategies can backfire

• The power of capital gains brackets

• Roth conversion opportunities (and pitfalls)

• How Social Security taxation quietly increases your effective tax rate

• Why product decisions, like annuities, can limit flexibility

1. Not All “Income” Is Created Equal

One of the biggest misconceptions we see is the idea that dividends are inherently tax-efficient.

While qualified dividends can receive favorable tax treatment, they still:

• Add to your total taxable income

• Interact with other income sources (Social Security, IRA withdrawals, new OBBBA enhanced senior deduction thresholds)

• Can push you into higher tax brackets or increase Social Security taxation

Meanwhile, other strategies (like capital gain realization) can be more controllable and tax-efficient.

The Key Distinction:

• Ordinary income: IRA withdrawals, annuities, and non-qualified dividends could be taxed up to 37%

• Capital gains / qualified dividends: taxed at 0%, 15%, or 20% depending on income

Bottom line … tax treatment matters.

2. Capital Gains Brackets: A Huge Planning Opportunity

The tax code gives retirees a powerful planning window through preferential capital gains rates.

2026 Federal Capital Gains Thresholds (Taxable Income)

Married Filing Jointly:

• 0% rate: up to $98,900

• 15% rate: $98,900 to $613,700

Single filers:

• 0% rate: up to $49,450

• 15% rate: $49,450 to $545,500

These brackets sit on top of ordinary income.

Important nuance:

Your ordinary income fills the bracket first, and capital gains stack on top.

Planning opportunities:

• Tax-gain harvesting at 0%

• Coordinating withdrawals across pre-tax, after-tax, and Roth accounts

• Avoiding unnecessary dividend income that fills these brackets

3. Why Dividend Investing Can Actually Hurt You

Dividend investing is often marketed as “safe income,” but from a planning perspective, it can reduce flexibility.

The problem:

Dividends are:

• Forced income

• Taxable every year

• Not easily turned off in high-income years

Compare that to:

• Selling appreciated assets (you control timing)

• Using Roth funds (tax-free)

• Managing bracket exposure

Real planning issue:

Dividends can:

• Push you out of the 0% capital gains bracket

• Increase Social Security taxation

• Reduce your ability to execute Roth conversions efficiently

This is where our company value of Education and Personal Growth matters. We want clients to understand that “income” is not always optimal.

4. Roth Conversions: Filling the 12% Bracket Strategically

One of the most valuable retirement strategies is Roth conversion planning.

2026 Ordinary Income Anchors (MFJ):

• 12% bracket top: $100,800 taxable income

This creates a window to:

• Convert IRA assets at relatively low rates

• Reduce future RMDs

• Improve long-term tax diversification

Enhanced Senior Deduction Opportunity

OBBBA adds:

• $6,000 per person age 65+ (up to $12,000 MFJ)

• Begins phase-out at $150,000 MAGI (MFJ)

Planning opportunity:

• Convert income up to that phase-out threshold

• Capture deductions & low brackets simultaneously

5. The Hidden Trap: Effective Tax Rates & Social Security

This is where planning becomes critical.

Social Security taxation creates a “tax torpedo” effect:

• 0% taxable at low income

• Up to 50% taxable

• Up to 85% taxable once thresholds are exceeded

2026 Key Thresholds (MFJ):

• $32,000 … taxation begins

• $32,000–$44,000: up to 50% taxable

• Over $44,000: up to 85% taxable

These thresholds are based on the provisional income calculation for Social Security.

Why this matters:

Every additional $1 of income can:

• Trigger more SS becoming taxable

• Create an effective marginal rate far higher than 12%

Example: A “12% bracket” Roth conversion may actually feel like:

• 18%

• 22%

• Or higher after SS inclusion

It’s not about your marginal bracket. It’s about your effective rate on the next dollar.

This is where our other company value, Teamwork and Collaboration, matters. The analysis must be coordinated across:

• Tax projections

• Retirement income sources

• Timing of Social Security

For many retirees, the most attractive window for Roth conversions is the period after you retire but before you begin Social Security. During those years, income is often temporarily lower and easier to control. Once Social Security begins, the analysis becomes more complex, and it is important to evaluate whether conversions still make sense based on your effective tax rate.

6. Annuities & Their Flexibility Trade-Off

Annuities can serve a purpose, but they come with a planning cost.

The issue:

• Income is typically fully taxable as ordinary income

• Payments are often fixed and inflexible

• Little control over timing

Planning consequences:

• Fills up lower tax brackets

• Reduces room for Roth conversions

• Can increase Social Security taxation

• Amplifies the widow’s penalty

Widow’s penalty risk:

• Surviving spouse moves to single brackets

• Same income, but at higher rates

• Fixed annuity income leaves no adjustment flexibility

Flexibility is a tax asset.

7. Bringing It Back to CENTER

This is where our team’s values come to life:

• Commitment: We go beyond surface-level strategies

• Education: Helping clients understand tax mechanics

• Nice & Kind: Explaining complex topics simply

• Teamwork: Coordinating tax, investment, and retirement plans

• Energy: Proactively identifying opportunities

• Real: Honest conversations about trade-offs

Conclusion: Tax Planning Is the Strategy

Retirement is not just about generating income; it’s about controlling how that income shows up on your tax return.

The difference between a good plan and a great plan often comes down to:

• Timing

• Tax characterization

• Coordination across income sources

Every decision … income, investments, products … should be evaluated through a tax lens.

If you have any questions or would like to discuss how these strategies may affect your financial plan, please use this link to schedule a complimentary introductory call with me.

Logan Dimitrie, CFP® 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.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Center for Financial Planning, Inc is not a registered broker/dealer and is independent of Raymond James Financial Services Investment advisory services are offered through Center for Financial Planning, Inc. 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 Logan Dimitrie, CFP® and not necessarily those of Raymond James.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

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.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation.

The Social Security Sweet Spot – Claiming Too Early Could Cost You Thousands

Contributed by: Josh Bitel, CFP®

When it comes to retirement planning, few decisions are as consequential as when to claim Social Security benefits. I’ve heard it dozens of times: “my paycheck has been funding this benefit for decades, it’s my money and I want it as soon as I can get it!” While I can sympathize with this, the drawback of claiming your benefits too soon could cost you thousands of dollars over your lifetime and could even impact spousal financial security.

Understanding the Claiming Window

The earliest you can claim Social Security benefits is age 62. However, taking this offer immediately comes at a significant cost – your monthly benefit will be permanently reduced by roughly 30% for folks who have a full retirement age (FRA) of 67. On the other hand, you can delay receiving your benefits beyond your FRA, up to age 70. The benefit of doing so is an increase of 8% per year for every year you delay beyond your FRA.

The mathematical difference between claiming at age 62 and delaying until age 70 results in a benefit that is 70%-80% higher for those who delay. This increased benefit is locked in for life and adjusts for inflation annually. Additionally, an often-overlooked part of this decision is that a surviving spouse can take over this larger benefit if their own benefit is lower.

Longevity Risk and Break-Even Analysis

Whenever I am asked “when should I file for Social Security?” I jokingly reply – tell me exactly how long you will live, and I will tell you exactly when to claim! Afterall, a key consideration for timing your benefits is longevity – something we can only predict. In a nutshell, if you expect to live well into your 80s or beyond, delaying your benefit will yield higher lifetime income. However, if you don’t expect to be around that long – claiming earl can result in receiving more total benefits. When we apply math to this equation, we calculate a “break-even age”, or the age at which your total benefits from delaying will equal your total benefits if claiming early. This age typically falls in your late 70s or early 80s. Therefore, if you expect to live longer than age 80 – delaying your benefits would make mathematical sense.

Spousal and Survivor Considerations

An often-overlooked factor when claiming Social Security is the effect on spouses and survivors. Benefits received by spouses and survivors are directly tied to the higher earner’s claiming age. If the higher-earning spouse delays benefits, it not only increases their own benefit but also boosts the survivor benefit the other spouse may rely on later. For married couples, coordinating claiming strategies can add significant value over time. For example, one spouse may claim earlier to provide income while the higher earner delays to maximize long-term benefits. This can be especially impactful if one spouse lives much longer than the other.

Making the “Right” Decision

While the financial math is important, the “right” time to claim Social Security is not purely a numbers decision. Health status, employment plans, lifestyle goals, and risk tolerance all play a role. Someone in poor health or with immediate income needs may benefit from claiming early, while those with longevity in their family and sufficient savings might benefit from waiting.

Importantly, Social Security is not a one-size-fits-all decision. The optimal strategy balances financial efficiency with personal priorities.

The timing of claiming Social Security benefits is one of the most impactful and irreversible decisions in retirement planning. It affects not only how much you receive each month, but also how long your assets last, your tax exposure, and the financial well-being of your spouse and survivors.

By carefully evaluating your options and considering both financial and personal factors, you can turn Social Security into a strategic advantage—one that supports a more secure and confident retirement. If you or someone you care about is struggling to put these pieces together, our team is here to help!

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

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 Josh Bitel, CFP® and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

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, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

The Mega Backdoor Roth Explained: A Powerful Tax Free Retirement Strategy for High Earners

Contributed by: Logan Dimitrie, CFP®

Is the Mega Backdoor Roth Worth Considering?

At Center for Financial Planning, Inc., I’m often asked how high earners can save more for retirement in a tax‑efficient way. One strategy that sometimes makes sense is the Mega Backdoor Roth. It kind of sounds like a cheat code from a 90s video game, but it’s actually a powerful tool if your employer plan allows it.

What It Is

A Mega Backdoor Roth lets you put far more into Roth savings than the normal IRA limit by using after‑tax contributions inside your 401(k) or 403(b).

How It Works

1. Max out your regular 401(k)/403(b)
   ($24,500 if under 50 & $32,500 if 50+ for tax year 2026 limits)

2. Add after‑tax contributions
   Some plans let you contribute beyond the normal limit, up to the overall $72,000 total plan limit for 2026.

3. Convert those after‑tax dollars to a Roth IRA
   Your plan needs to allow in‑service rollovers for this step.

Once converted, those dollars can grow tax‑free in a Roth IRA.

Why People Use It

• You can save much more into Roth than usual.

• Tax‑free growth and tax‑free withdrawals in retirement.

• No required minimum distributions from Roth IRAs.

Before You Jump In

This strategy isn’t available, or appropriate, for everyone. You’ll want to confirm:

• Your employer plan allows after‑tax contributions and in‑service rollovers

• You’re already maxing out regular retirement contributions

• You’re comfortable with a bit of extra complexity

Is It Right for You?

For some clients, the Mega Backdoor Roth becomes a key part of long‑term tax planning. For others, simpler strategies work just as well. If you’re curious about whether this could fit into your plan, I’m happy to walk through it with you.

Logan Dimitrie, CFP® 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.

Retirement Planning Challenges for Women: How to Face Them and Take Action

Contributed by: Sandra Adams, CFP®

If we are being completely honest, planning and saving for retirement seems to be more and more challenging these days – for everyone. No longer are the days of guaranteed pensions, so it’s on us to save for our own retirement. Even though we try our best to save…life happens and we accumulate more expenses along the way. Our kids grow up (and maybe not out!). Our older adult parents may need our help (both time and money). Depending on our age, grandchildren might creep into the picture.  Add it all up and the question is: how are we are supposed to retire? We need enough to potentially last 30 to 35 years (depending on our life expectancy). Ugh! 

While these issues certainly impact both men and women, the impact on women can be tenfold. Let’s take a look at some of the major issues women face when it comes to retirement planning. 

1. Women Have Fewer Years of Earned Income Than Men 

Women tend to be the caregivers for children and other family members. This ultimately means that women have longer employment gaps as they take time off work to care for their family. The result: less earned income, retirement savings, and Social Security earnings. It can also halt career trajectory.   

Action Steps 

• Attempt to save at a higher rate during the years you ARE working. It allows you to keep pace with your male counterparts.

• If you are married you may want to save in a ROTH IRA or IRA (with spousal contributions) each year, even if you are not in the workforce. 

• If you are serving as the caregiver for a family member, consider having a Paid Caregiver Contract drawn up to receive legitimate and reportable payment for your services. This could potentially help you and help your family member work towards receiving government benefits in the future, if and when needed. 

2. Women Earn Less Than Men 

For every $1 a man makes, a woman in a similar position earns 84¢ according to the Bureau of Labor Statistics. As a result, women see less in retirement savings and Social Security benefits based on earning less.  

Action Steps 

• Again, save more during the years you are working. Attempt to maximize contributions to employer plans. Also, make annual contributions to ROTH IRA/IRAs and after-tax investment accounts. 

• Invest in an appropriate allocation for your long term investment portfolio, keeping in mind your potential life expectancy. 

• Be an advocate for yourself and your women cohorts when it comes to requesting equal pay for equal work. 

3. Women Are Less Aggressive Investors Than Men 

In general, women tend to be more conservative investors than men. Analyses of 401(k) and IRA accounts of men and women of every age range show distinctly more conservative allocations for women. Especially for women, who may have longer life expectancies, it’s imperative to incorporate appropriate asset allocations with the ability for assets to outpace inflation and grow over the long term. 

Action Steps 

• Work with an advisor to determine the most appropriate long term asset allocation for your overall portfolio, keeping in mind your potential longevity, potential retirement income needs, and risk tolerance. 

• Become knowledgeable and educated on investment and financial planning topics so that you can be in control of your future financial decisions, with the help of a good financial advisor. 

4. Women Tend to Live Longer Than Men 

Women have fewer years to save and more years to save for. The average life expectancy is 82.1 for women and 77.8 for men according to the Centers for Disease Control and Prevention. Since women live longer, they must factor in the health care costs that come along with those years.   

Action Steps 

• Plan to save as much as possible. 

• Invest appropriately for a long life expectancy. 

• Work with an advisor to make smart financial decisions related to potential income sources (coordinate spousal benefits, Social Security, pensions, etc.) 

• Make sure you have a strong and updated estate plan. 

• Take care of your health to lessen the cost of future healthcare. 

• Plan early for Long Term Care (look into Long Term Care insurance, if it makes sense for you and if health allows). 

5. Women Who Are Divorced Often Face Specific Challenges and Are Less Likely to Marry After “Gray Divorce” (Divorce After 50) 

From a financial perspective, divorce tends to negatively impact women far more than it does men. The average woman’s standard of living drops 27% after divorce while the man’s increases 10% according to the American Sociological Review. That’s due to various reasons such as earnings inequalities, care of children, uneven division of assets, etc. 

The rate of divorce for the 50+ population has nearly doubled since the 1990s according to the Pew Research Center. The study also indicates that a large percentage of women who experienced a gray divorce do not remarry; these women remain in a lower income lifestyle and less likely to have support from a partner as they age. 

Action Steps 

• Work with a sound advisor during the divorce process, one who specializes in the financial side of divorce such as a Certified Divorce Financial Analyst (CDFA) (Note: attorneys often do not understand the financial implications of the divorce settlement). 

6. Women Are More Likely to Be Subject to Elder Abuse 

Women live longer and are often unmarried or alone. They may not be as sophisticated with financial issues. They may be lonely and vulnerable. New reports highlight financial exploitation as the fastest-growing form of elder abuse, disproportionately affecting older women, according to the Transamerica Institute.  

Action Items 

• If you are an older adult, put safeguards in place to protect yourself from Financial Fraud and abuse. For example: check your credit report annually and utilize credit monitoring services like EverSafe.  

• Have your estate planning documents updated, particularly your Durable Powers of Attorney documents, so that those that you trust are in charge of your affairs if you become unable to handle them yourself. 

• If you are in a position of assisting an older adult friend or relative, check in on them often. Watch for changes in their situations or behavior and do background checks on anyone providing services. 

While it is unlikely that the retirement challenges facing women will disappear anytime soon, taking action can certainly help to minimize the impact they can have on women’s overall retirement planning goals. I have no doubt that with a little extra planning, and a little help from a quality financial advisor/professional partner, women will be able to successfully meet their retirement goals.   

If you or someone you know are in need of professional guidance, please give us a call. We are always happy to help. 

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.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Raymond James is not affiliated with EverSafe.

The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. These policies have exclusions and/or limitations. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

7 Ways the Planning Doesn't Stop When You Retire

Contributed by: Sandra Adams, CFP®

Most materials related to retirement planning are focused on “preparing for retirement” to help clients set goals and retire successfully. Does that mean when goals are met, the planning is done? In my work, there is often a feeling that once clients cross the retirement “finish line” it should be smooth sailing from a planning standpoint. Unfortunately, nothing could be further from the truth. For many clients, post-retirement is likely when they’ll need the assistance of a planner the most!

Here are 7 planning post-retirement issues that might require the ongoing assistance of a financial advisor:

1. Retirement Income Planning - An advisor can help you put together a year-by-year plan including income, resources, pensions, deferred compensation, Social Security and investments. The goal is to structure a tax-efficient strategy that is most beneficial to you.

2. Investments - Once you are retired, a couple of things happen to make it even more important to keep an active eye on your investments: (1) You will probably begin withdrawing from investments and will likely need to manage the ongoing liquidity of at least a portion of your investment accounts and (2) You have an ongoing shorter time horizon and less tolerance for risk.

3. Social Security - It is likely that in pre-retirement planning you may have talked in general about what you might do with your Social Security and which strategy you might implement when you reach full retirement age (which is 67). However, once you reach retirement, the rubber hits the road, and you need to navigate all of the available options and determine the best strategy for your situation – not necessarily something you want to do on your own without guidance.

4. Health Insurance and Medicare - It’s a challenge for clients retiring before age 65 who have employers that don’t offer retiree healthcare. There’s often a significant expense surrounding retirement healthcare pre-Medicare.

For those under their employer healthcare, switching to Medicare is no small task – there are complications involved in “getting it right” by ensuring that clients are fully covered from an insurance standpoint once they get to retirement.

5. Life Insurance and Long-Term Care Insurance - Life and long-term care insurances are items we hope to have in place pre-retirement. Especially since the cost and the ability to become insured becomes incredibly difficult, the older one gets. However, maintaining these policies, understanding them, and having assistance once it comes to time to draw on the benefits is quite another story.

6. Estate and Multigenerational Planning - It makes sense for clients to manage their estate planning even after retirement and until the end of their lives. It’s the best way to ensure that their wealth is passed on to the next generation in the most efficient way possible. This is partly why we manage retirement income so close (account titling, beneficiaries, and estate documents). We also encourage families to document assets and have family conversations about their values and intentions for how they wish their wealth to be passed on. Many planners can help to structure and facilitate these kinds of conversations.

7. Planning for Aging - For many clients just entering retirement, one of their greatest challenges is how to help their now elderly parents manage the aging process. Like how to navigate the health care system? How to get the best care? How to determine the best place to live as they age? How best to pay for their care, especially if parents haven’t saved well enough for their retirement? How to avoid digging into your own retirement pockets to pay for your parents’ care? How to find the best resources in the community? And what questions to ask (since this is likely foreign territory for most)?

Since humans are living longer lives, there will likely be an increased need and/or desire to plan. In an emergency, it could be difficult to make a decision uninformed. A planner can help you create a contingency plan for potential future health changes.

While it seems like the majority of materials, time, and energy of the financial planning world focuses on planning to reach retirement, there is so much still to do post-retirement. Perhaps as much OR MORE as there is pre-retirement. Having the help of a planner in post-retirement is likely something you might not realize you needed, but something you’ll certainly be glad you had.

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.

How Unexpected Life Events Impact Retirement

Contributed by: Sandra Adams, CFP®

The older I get, the more I realize that we should expect the unexpected. As I work with clients in the prime of their retirement planning years who are suddenly experiencing life events that weren’t “part of the plan,” this resonates more than ever.

What kinds of things am I talking about?  How about a young pre-retiree who experiences a terminal illness or becomes a caregiver for a spouse or family member? Or someone who experiences the loss of a spouse, experiences divorce after a very long marriage, but before retirement? Or even someone who, only a few short years before their planned retirement, suddenly loses their long-time job due to a layoff?

Losing a job is just one of many unexpected, pre-retirement events that can potentially throw savings goals and plans off course. Some may add that a prolonged or very negative stock market decline can also hinder retirement and, in most cases, be unexpected. As the old saying goes, you should always “expect the unexpected”.

What can you or should you do now to make sure that you can keep your retirement strategy on track, even if one of these unexpected events sneaks into your life?

1. Plan Early and Update Often. Although many folks don’t like to think about it, start digging into how much income you will need in retirement. If your income projection is significantly less than what you are bringing home now, what will change in retirement to make you need less income? Will you have significantly less debt? Will the activities you plan to do in retirement cost significantly less? Be realistic. Take stock regularly of where you are toward your savings goals versus your needs, so you stay on track and can update your strategy if you are not moving toward those goals.

2. Save, Save, and Then Save a Little More. When times are good, and while you can, stretch yourself to meet your savings goals. There is a delicate balance between spending to enjoy your life now and saving for your retirement. It makes sense to set significant retirement savings goals (especially if you didn’t start as early as you wanted to). And making it a habit to save more – even one percent each year – will help you reach or exceed your retirement savings goals. Other ways to get ahead can include allocating a portion of your annual raise or any bonus you might receive to retirement savings. Aim to save, save, and save a little more to put yourself in a position to absorb the unexpected.

3. Take Control of What You Can Control. While you cannot control what happens to the markets, your job (for the most part), or your health (other than eating right and exercising), there are things you can control. You can control your savings rate: be disciplined about saving, save regularly, and continue saving more over time. You can save in the right places: You can attempt to max out your savings within your employer retirement savings plans on a tax-deferred basis, you can have a liquid cash emergency reserve fund of at least 3-6 months of expenses “in case” something unexpected comes up, and you can have an after-tax investment account and/or ROTH IRA (if your income tax bracket allows) in case a life event causes an earlier-than-expected retirement or a temporary unemployment situation. You can keep debt under control and plan to have as much debt paid off as possible going into retirement. Reducing fixed costs during retirement allows you to use your cash flow for wants versus needs, and provides you with greater flexibility if an unexpected event occurs.

4. Put Protections and Guardrails in Place. Planners like to call this “risk management”. We are talking about protection for contingencies, so they don’t sink your retirement ship. Having a reserve or emergency savings account is a good first step. But what else might you put in place? It’s important to have the right insurance – disability, life, and long-term care. Continuing education and networking are also important protections – WHAT? Keep up your credentials and training so that if your current job is phased out, you are prepared to jump back on the horse and get re-employed quickly. Many folks become complacent and, if something unexpected happens with their company or their role, are completely unprepared to seek new employment. Unfortunately, the U.S. Government Accountability Office estimates that older workers wait more than 40 weeks to become re-employed, so being prepared can make all of the difference.

5. Seek Good Advice. This is not a time to DIY. There are way too many things that can go wrong when it comes to a potential early retirement transition. Seeking the advice of a trained professional can help you find the best course of action. In most cases, assessing your specific situation and making the best possible decisions, especially when it comes to things like pensions, Social Security, and which accounts to tap for retirement income, can make a huge difference.

“The more things change, the more things stay the same” – Jean-Baptiste Alphonse Karr

When we do an initial financial plan for a client, we like to say that something will very likely change when the client walks out the door, and we will need to adjust the plan. Life happens. A financial plan must be fluid and flexible. And so must you, as someone who is planning for retirement. Unexpected events that happen just as you are reaching for the golden doorknob to retirement can be frustrating. But if you have expected the unexpected, planned for the contingencies, and have some spending flexibility built into your plan, you will be on your way to a long and successful retirement.

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.

Opinions expressed in the attached article are those of Sandra D. Adams and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. 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. 401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax, and if taken prior to age 59 ½, may be subject to a 10% federal tax penalty. Roth 401(k) plans are long-term retirement savings vehicles. Like Traditional IRAs, contributions limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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

Center Clients Donate $1.7 Million in Tax-Savvy Qualified Charitable Distribution Strategy in 2025

Contributed by: Lauren Adams, CFA®, CFP®

We are proud to announce that The Center assisted clients in donating $1,670,000 to charities using the Qualified Charitable Distribution (QCD) strategy in 2025!

The QCD strategy allows clients with assets in an IRA account and who are over age 70.5 to donate funds directly from their retirement account to a charity. Giving directly from an IRA to charity results in those dollar amounts not being included in taxable income for that year. That usually results in a lower tax bill for our clients and can also have positive downstream effects like lowering the amount they may pay for Medicare premiums and the portion of Social Security that is taxable to them, depending on their situation and income level. For those 73 or older, QCDs also count towards the distributions they need to take each year for their Required Minimum Distribution.

Now there are some caveats for QCDs – you need to be at least 70.5. Also, the charity has to be a 501(c)(3). And there are limits on how much you can give each year through this method – but that number is actually quite high at $111,000 per person per year right now.

The Center’s mission is to improve lives through financial planning done right, and we are so proud to be able to help clients make such a positive impact on the world (bonus points for it being in a tax-savvy manner!).

Did you know that QCDs are only one of many charitable giving strategies that our team helps clients deploy? Check out this video to learn more about ways our clients make their charitable dollars stretch further for the causes they care about while also potentially lowering their tax burden.

As always, we recommend you work with your tax preparer to understand how these strategies affect your individual situation. If you want to explore these strategies and more, contact your Center financial planner today!

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 Lauren Adams and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. 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 involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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

Contributed by: Logan Dimitrie, CFP®

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.

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.