Trump Accounts for Children: What Wealthy Parents and Grandparents Need to Know

Posted On April 3, 2026 By Scott Stratton, CFP(R), CFA In College Savings, Financial Planning / No Comments

A new savings vehicle known as Trump Accounts is set to launch in July 2026, designed to encourage children to begin investing early. I am a big fan of this idea. The US Stock market and the power of compound interest have created incredible wealth for American families and these accounts can jump start the next generation of investors.

The Trump accounts allow contributions from parents, grandparents, and employers and include a $1,000 government seed deposit for eligible newborns. For families already planning multi-generational wealth, Trump Accounts come with limitations compared with existing vehicles such as 529 college savings plans, UGMA/UTMA custodial accounts, or family trusts.

See how multi-generational planning can fit into your retirement strategy in Retirement Income Planning

What You Need to Know About Trump Accounts

Trump Accounts are tax-deferred investment accounts for children under 18, focused on long-term stock market growth. Parents or guardians must establish the account; the $1,000 government contribution is not automatic. Children born between 2025 and 2028 qualify for this deposit, which will be invested in an approved index fund once the account is open. For children born outside this window, accounts can still be opened, but they will not receive the government seed.

Link to establish account: https://trumpaccounts.gov/

Or fill out IRS form 4547 with your tax return https://www.irs.gov/forms-pubs/about-form-4547

The accounts have an annual contribution limit of $5,000 per child, which includes contributions from parents, grandparents, or employers. Employers can contribute up to $2,500 per employee, and these contributions can also fund an employee’s dependent child’s account. The employer contribution counts toward the $5,000 total annual limit.

Investment options are restricted. Trump Accounts are primarily invested in U.S. stock index funds, with very little room to diversify into bonds, international indexes, or alternative assets. For most wealthy parents and grandparents, international options will not be available. The child gains full control of the account at age 18, at which point the money can be used for any purpose.

The accounts are taxed like non-deductible IRAs. Contributions are made with after-tax dollars, growth is tax-deferred, and withdrawals must be allocated pro-rata between contributions and gains, with gains taxed as ordinary income. This can be cumbersome and an accounting headache to track your basis. For example, if an account contains $20,000, with $10,000 in contributions and $10,000 in gains, 50% of any withdrawal is taxable as ordinary income.

Self-Employment and Employer Contribution Strategies

For self-employed families, the employer contribution rules present a small but meaningful opportunity. A business can contribute up to $2,500 per employee, which can fund either a dependent child’s account or the employee if they are under age 18. Grandchildren generally do not qualify for an employer contribution unless they are legally dependent. For the business, the contribution to the Trump account is a business expense which is tax-deductible.

One idea for self-employed couples is to designate both spouses as employees of the same business. This allows each spouse to contribute $2,500 to Trump Accounts for children, effectively doubling the employer contribution potential. Note that the employer contribution counts towards the $5,000 annual limit.

It is important to note that employer contributions are subject to nondiscrimination rules. Employers cannot favor highly compensated employees while excluding rank-and-file staff. Benefits must be offered on comparable terms to all eligible employees, or the plan risks losing its tax-advantaged status.

Tax Treatment and Investment Limitations

Trump Accounts are simple in design, but this simplicity comes at the cost of flexibility. Funds are largely restricted to broad U.S. stock indexes, and active management or rebalancing options are extremely limited. While a few approved ETFs or mutual funds may be available, for the majority of families, the account essentially functions as a single U.S. stock index fund investment. We don’t yet know the details of the accounts, other than the only investment options will be broad US stock indexes.

Tax treatment is another important consideration. Because gains are taxed as ordinary income rather than long-term capital gains, wealthy families often find that UGMA/UTMA custodial accounts provide a more tax-efficient alternative. Unlike Trump Accounts, UGMA/UTMA accounts allow investment in a wide range of assets and enjoy long-term capital gains rates, which are typically lower than ordinary income rates. Additionally, UGMA/UTMA accounts have no annual contribution limit, which allows for larger, more strategic gifts to children.

Comparing Alternatives for Wealthy Families

While Trump Accounts are designed to encourage early investment, they are not necessarily the most efficient vehicle for affluent families. For families saving specifically for college, 529 plans remain superior. 529 contributions grow tax-free, and withdrawals for qualified education expenses are completely tax-free, making them more effective than Trump Accounts, where gains are taxed as ordinary income. Some states offer a state tax deduction for 529 contributions.

10 Questions Grandparents Ask About 529 Plans

For more flexible investments outside of college, UGMA/UTMA accounts offer both tax advantages and broader investment choices. These custodial accounts allow investments in individual stocks, ETFs, and other assets, with taxation at long-term capital gains rates. Like Trump Accounts, the child gains control at age 18, but contributions are not capped at $5,000 per year.

For very large estates, trusts or family limited partnerships are the most powerful vehicles. They allow substantial gifting beyond the Trump Account limits, structured control over distributions, and significant tax planning flexibility.

Using Trump Accounts Strategically

Despite limitations, Trump Accounts do have value, especially for eligible children born 2025–2028. The $1,000 government seed is effectively free money, giving every child a modest head start in the market. Even modest contributions can grow dramatically over decades due to compounding. And hopefully more parents and children will be learning about the stock market.

A practical strategy for families might include opening a Trump Account for the government deposit and supplementing it with contributions to a UGMA/UTMA account or 529 plan. Self-employed families can use the employer contribution rules strategically, including the spousal employee approach, to maximize tax benefits while staying compliant with nondiscrimination rules.

The accounts also offer a simple, low-fee introduction to investing in U.S. equities for children, potentially encouraging financial literacy from a very young age. However, parents should be mindful that the child gains full control at age 18, so significant contributions should be paired with other planning vehicles if the money needs to remain invested longer or used strategically.

The Bottom Line

Trump Accounts represent a thoughtful initiative to encourage early stock market participation. Every eligible child should receive the $1,000 government seed, and families should consider using the account as a starter investment in U.S. equities.

For wealthy parents and grandparents, however, Trump Accounts are unlikely to be the centerpiece of a multi-generational wealth strategy. Tax treatment is less favorable than UGMA/UTMA custodial accounts, contribution limits are restrictive, and investment options are narrow. For college savings, 529 plans remain the better option, and for larger transfers, trusts or family investment vehicles offer far more flexibility and tax efficiency.

Ultimately, the best approach for most families is to take the free $1,000, invest it in the market, and use other tools for additional contributions and strategic wealth planning. With thoughtful planning, Trump Accounts can complement existing strategies without replacing more effective vehicles.

If you’d like guidance on how Trump Accounts can fit into your family’s long-term wealth and retirement plan, consider requesting an introductory conversation

FAQ: Trump Accounts for Wealthy Families

Can Trump Accounts replace a 529 plan?
No. For college savings, 529 plans remain superior because growth is tax-free and withdrawals for qualified education expenses are completely tax-free. Trump Accounts’ gains are taxed as ordinary income.
Are UGMA/UTMA accounts better than Trump Accounts?
Often yes. UGMA/UTMA accounts allow long-term capital gains treatment, no strict annual contribution limits, and broad investment flexibility, making them more efficient for wealthy families.
Should I use trusts instead?
For high-net-worth families, trusts or family limited partnerships are usually the best vehicle for larger transfers. They allow structured control over distributions, significant tax planning, and contributions well beyond Trump Account limits.
Can Trump Accounts be used together with other vehicles?
Absolutely. Many families use the $1,000 government seed as a starter investment while contributing larger amounts through 529s, UGMA/UTMAs, or trusts for more strategic, tax-efficient planning.
Are Trump Accounts suitable for all wealthy families?
They are useful as a supplement, particularly for children eligible for the government seed, but they are rarely going to be the centerpiece of a comprehensive wealth strategy for affluent parents or grandparents.

QSBS (Section 1202): A Tax Opportunity for Business Owners Planning to Retire

Posted On January 30, 2026 By Scott Stratton, CFP(R), CFA In Retirement Planning, Tax Strategies /

If you own a business and expect to sell it to fund your retirement, taxes matter — a lot.

For some owners, Qualified Small Business Stock (QSBS) can significantly reduce federal capital gains taxes when the business is sold. In some cases, you may be able to sell your business for $10 million or more and pay zero income taxes.

QSBS is powerful — but only if your business is structured correctly years before the sale.

This article explains QSBS in clear, practical terms for business owners, not accountants.

What Is QSBS — In Simple Terms?

QSBS is a tax rule that rewards people who build and own certain U.S. businesses.

If your business qualifies and you follow the rules, some or all of the profit from selling your business may not be subject to federal capital gains tax.

Although the law talks about “stock,” most owners should think of QSBS as applying to the sale of your business — whether that sale is to a buyer, private equity firm, or another company.

The One Rule That Matters Most: You Must Be a C-Corporation

To qualify for QSBS, your business must be structured as a C-Corporation. If your business is currently: an LLC, an S-Corporation, or a partnership, it does not qualify today.

The Planning Opportunity for 2026

Here’s the part many owners miss:

You can convert your business to a C-Corporation now, start the QSBS clock, and potentially sell the business tax-efficiently in the future.

For example:

Convert to a C-Corp in 2026
Operate as a C-Corp for several years (at least 3-5 years)
Sell the business later — often around retirement

QSBS is not retroactive. The clock starts when the C-Corp issues its shares. That’s why early planning matters, especially for owners who are 5–10 years from selling.

How Long Do You Have to Own the Business?

The required holding period depends on timing.

Older Rules

Historically, owners needed to hold the business more than five years to receive the full QSBS benefit.

New Rules (Effective for New Stock After July 4, 2025)

Under updated law:

Selling after 3 years may qualify for a 50% partial tax benefit
Selling after 4 years increases the benefit to 75%
Selling after 5 years provides the maximum benefit of 100%

This adds flexibility for owners whose retirement timelines may change.

How Much Tax Can QSBS Save?

If the new rules are met, QSBS may allow you to exclude up to $15 million of gain per owner from federal capital gains tax (subject to limits and specifics). For shares issued before July 2025, the limit is $10 million.

That can:

Reduce the tax impact of selling your business
Leave more capital available for retirement income
Lower exposure to surtaxes and Medicare premium surcharges

QSBS often fits naturally into broader Retirement Tax Planning discussions.

One Owner vs. Multiple Owners

Single-Owner Businesses

For solo owners, QSBS planning can be relatively straightforward:

Convert to a C-Corp
Hold long enough (ideally at least 5 years)
Sell the business
Potentially exclude all or a meaningful portion of the gain

Many owner-operators and founders fall into this category.

Businesses With Multiple Owners

Each owner is evaluated individually.

That means:

Each owner may qualify for their own QSBS exclusion
Ownership percentages and timing matter
Good planning can multiply the tax benefit across partners

This is especially relevant in closely held or family-owned businesses.

Can You Sell to a Partner or Employee?

Usually, QSBS works best when the business is sold to an outside buyer.

Selling your ownership directly to a business partner or an employee often does not qualify automatically for QSBS treatment. That said, some internal transitions can be structured carefully — but they require advance planning and coordination with tax and legal advisors.

If an internal sale is your expected exit, QSBS may still be part of the discussion, but it’s not guaranteed.

What Types of Businesses Typically Qualify?

QSBS generally applies to operating businesses, not investment vehicles.

Often eligible:

Manufacturing
Technology
Distribution
Construction
Certain service businesses

Often excluded:

Real estate holding companies
Investment, insurance, or financial businesses
Professional services such as law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or athletics.
Other businesses where personal reputation is the primary asset

Why QSBS Matters for Retirement Planning

For many business owners, selling the company is:

Their largest financial event
The primary source of retirement funding

QSBS can:

Improve after-tax sale proceeds
Support sustainable retirement income planning
Reduce pressure around timing income and taxes

This often connects directly to:

Retirement Income Planning
Medicare and surtax planning
Estate and legacy planning

Final Thought

QSBS is not a last-minute strategy.

If you’re thinking about selling your business in the next several years, 2026 may be an important planning window to ask:

Should my business be a C-Corporation?
Does QSBS align with my retirement timeline?
What are the tradeoffs today versus future tax savings?

If you’re a business owner approaching retirement and want to understand how a future business sale fits into your broader tax and retirement plan, you’re welcome to request an introductory conversation. These discussions are educational and focused on planning — not products or performance.

Advisor vs. DIY: Should You Hire a Financial Advisor?

Posted On January 6, 2026 By Scott Stratton, CFP(R), CFA In Financial Planning /

A Practical Guide for Baby Boomers and Pre-Retirees With $500,000–$5M in Investments

Deciding whether to manage your financial plan yourself or hire a financial advisor is one of the most important decisions a retiree — or soon-to-be retiree — will make. Some investors are comfortable with spreadsheets and brokerage platforms. Others prefer the confidence that comes from a trusted partner.

This article helps you answer the core question:

Do you need a financial advisor — or can you reliably manage your own financial plan?

It’s written for baby boomers and pre-retirees with $500,000 to $5 million in investable assets, many of whom are planning for retirement income, tax timing, sequence of returns risk, and healthcare decisions.

What Does “DIY” Financial Management Really Mean?

DIY (“do it yourself”) financial management means you make investment and planning decisions yourself, without ongoing professional advice.

Typical DIY responsibilities include:

Choosing and rebalancing investments
Planning for retirement income
Tax planning and filing
Social Security claiming decisions
Estate and legacy considerations
Medicare and health insurance timing

DIY may be a good fit if:

You enjoy financial strategy and research
You have time and discipline to stay current with tax law and markets
Your financial situation is relatively simple

However, DIY is not one-size-fits-all, especially as complexity rises in retirement.

When DIY Might Be Adequate

Here are situations where managing your own finances can be reasonable:

🔹 Your financial picture is straightforward

For example:

You are approaching retirement with basic investments
You want a simple 3-fund portfolio
Your income sources are predictable

🔹 You already have strong financial knowledge and interest

If you understand retirement income sequencing, tax brackets, RMDs, Social Security strategy, and risk tolerance, you may handle much of the work yourself.

🔹 You don’t want or need ongoing advice

Some people prefer autonomy and avoid professional guidance intentionally — and they do fine with discipline and research.

🔹 Your goals are limited

For example:

You simply want to minimize fees
You plan to follow a passive indexing strategy

Even then, be mindful that doing it right still requires avoiding emotional trading, understanding tax consequences, and staying informed about changes to laws and markets.

When DIY is Risky — and Why Many Retirees Choose an Advisor

Most of the biggest financial mistakes retirees make are not about picking the right funds but about when and how to act — and how to avoid costly timing and tax errors.

Here are common areas where DIY falls short:

❌ Social Security Timing Errors

Different claiming ages can result in significantly different lifetime income. Not taking advantage of delayed retirement credits, or calling them too early, can cost tens of thousands of dollars.

(See: Social Security — It Pays to Wait)

❌ Tax Inefficiencies and Missed Opportunities

Taxable income sequencing — particularly with Roth conversions, capital gains, IRA withdrawals, and RMDs — is not intuitive. Avoiding surcharges like Medicare IRMAA and optimizing your tax brackets often requires modeling across multiple years.

(See: Roth Conversions After 60 — When They Make Sense and How to Reduce IRMAA)

❌ Required Minimum Distribution (RMD) Complexity

As of 2026, most retirees must begin RMDs at age 73 or later. Planning how and when to withdraw assets without unnecessary tax drag is a deep, ongoing exercise — not a one-time event. Mistakes can cost taxes and disrupt retirement income.

(See: Can You Reduce Required Minimum Distributions??)

❌ Healthcare Cost Planning

Early retirees often spend years on the ACA marketplace. Predicting how subsidies work — and how income timing affects them — is not something most DIYers manage well on their own.

(See: Using the ACA to Retire Early)

❌ Emotional Bias and Behavioral Risk

DIY investors often make their worst decisions exactly when they matter most — during market drops or volatility. A professional can provide emotional discipline, protect against timing risk, and restore perspective.

So When Does a Financial Advisor Actually Help?

A financial advisor — especially a fiduciary planner — adds value when your situation goes beyond “simple numbers.”

Here are common retirement scenarios where advisors add measurable value:

✔ You want a comprehensive retirement plan

This includes:

Income sequencing
Tax coordination across sources
Withdrawal strategy
Estate and legacy planning

✔ You have multiple income sources

Examples:

IRA/401(k)
Roth accounts
Social Security
Pension
Rental or business income

Balancing these for tax efficiency and longevity is hard.

✔ You want ongoing planning and updates

Retirement is not static — markets change, tax laws shift, and personal priorities evolve. Advisors help adjust the plan over time.

🔹 Planning for Cognitive Changes Over Time

Most retirees plan for longevity — the possibility of living a long life — but fewer plan for the reality that managing finances can become more difficult later in life, even for very capable people.

This isn’t about intelligence or financial knowledge. It’s about recognizing that decision-making often becomes harder under stress, illness, or cognitive decline, which affects a significant portion of people as they age. The changes are often gradual and not immediately obvious.

A trusted financial advisor can provide continuity over time — monitoring accounts, helping prevent costly mistakes, and serving as a steady presence if managing finances becomes more challenging later on. For many families, this aspect of advice is less about investment returns and more about protecting independence and dignity over the long term.

This is one reason many retirees choose to establish an advisory relationship before they feel they “need” it.

🔹 Ensuring a Smooth Transition for Your Spouse and Family

In many households, one person naturally takes the lead on financial decisions. If something were to happen, the surviving spouse or beneficiaries may suddenly be responsible for complex financial choices during an emotionally difficult time.

Without an established advisor relationship, this often leads to:

Rushed decisions
Unnecessary taxes
Poor investment changes
Or a scramble to find trustworthy guidance

Working with a fiduciary advisor helps ensure continuity. Your spouse already knows who to call, understands the overall plan, and isn’t forced to make major decisions without context or support.

For many families, this is one of the most important benefits of professional advice — peace of mind that the people you care about will not be left on their own.

Advisor Costs vs. DIY Tradeoffs

When people compare DIY investing to working with an advisor, the conversation often focuses on fees. Cost matters — but it’s only one part of the equation.

For retirees and pre-retirees with $500,000 to $5 million in investments, the more relevant question is often:

What risks am I trying to manage, and who helps me manage them if life doesn’t go as planned?

Investment returns are important, but tax efficiency, income coordination, behavioral discipline, and continuity often have a larger impact on long-term outcomes.

When DIY Might Still Make Sense

You might thrive with DIY if:

You have simple finances and clear goals
You know exactly what you’re doing
You are disciplined about rebalancing, taxes, and plan updates
You are not relying on this investment strategy for major life needs (e.g., retirement income, healthcare costs, college funding)

Even in these cases, one professional review of your plan can be valuable and cost-effective.

What Good DIY Looks Like

If you choose to DIY, here’s what successful DIY retirees have in common:

✔ Clear, written retirement income plan
✔ Annual tax and withdrawal modeling
✔ Solid emergency liquidity
✔ Asset location planning
✔ Intentional Roth vs traditional mix
✔ Awareness of Medicare/ACA/IRMAA implications
✔ Annual review of goals and asset performance

If you are not doing all of these, you’re probably leaving money and peace of mind on the table.

How a Fiduciary Advisor Works With You

A fiduciary financial advisor:

Must put your interests ahead of their own
Does not “sell” you proprietary products, but offers independent, objective advice
Designs a holistic plan tailored to your goals
Communicates clearly and frequently
Helps you stay on course through market cycles

From understanding RMD timing to Roth conversion sequencing, to Social Security optimization, the value is in coordination, not just calculation.

🔹 Frequently Asked Questions

Do I need a financial advisor if I’ve managed my own investments successfully?
Possibly not — especially if your situation is simple and you enjoy managing it. However, many successful DIY investors choose an advisor later in life for help with tax coordination, retirement income planning, and continuity as circumstances change.

Is hiring an advisor about giving up control?
No. A fiduciary advisor works with you, not instead of you. You remain in control of decisions, while benefiting from experience, planning structure, and an objective second set of eyes.

What happens if I’m no longer able to manage my finances someday?
This is where having an established advisor relationship can be valuable. An advisor can help provide continuity, work with trusted family members, and help ensure your plan continues to be followed.

Can I work with an advisor remotely?
Yes. Many retirees work successfully with advisors nationwide through secure video meetings, electronic document sharing, and regular communication — without being tied to a local office.

Can You Use the ACA to Retire Early in 2026?

Posted On January 5, 2026 By Scott Stratton, CFP(R), CFA In Retirement Planning /

You can sometimes retire before age 65 if you smartly plan your health coverage and income — but 2026 brings important changes to ACA marketplace subsidies you need to understand.
For many early retirees with $500,000–$5 million in investable assets, avoiding surprise medical costs is essential to making a retirement plan work.

How ACA Premium Tax Credits Work (2026)

In 2026, the Affordable Care Act (ACA) still offers Premium Tax Credits (PTCs) to help reduce the cost of health insurance — but the enhanced subsidies that made them extremely generous during 2021-2025 have expired.
Under the basic ACA rules:

Premium tax credits are available for households with incomes between 100% and 400% of the Federal Poverty Level (FPL), adjusted for household size.
For 2026 coverage (based on 2025 poverty guidelines), the 100–400% FPL income ranges are approximately:

Household Size	100% FPL	400% FPL
1 person	$15,650	$62,600
2 people	$21,150	$84,600
3 people	$26,650	$106,600
4 people	$32,150	$128,600

The Premium tax credits are based on a sliding scale of expected premium contributions as a percentage of income. The lower your income, the higher your credit.

Important change for 2026:
The enhanced subsidies that lowered required contributions and removed the 400% income eligibility cap expired on December 31, 2025. This means ACA premiums are generally less subsidized in 2026 than they were in 2021-2025, and many early retirees who expected very low premiums are seeing higher premiums in 2026.

What the Subsidy Changes Mean in Practice

Higher Premiums Unless Expected Income Is Low

The enhanced tax credits made ACA plans very affordable in recent years, sometimes resulting in zero premiums for middle-income households. Those enhancements are no longer in effect for 2026 coverage unless Congress renews them.

Without enhancements, a household above 400% of FPL (~$84,600 for two people) typically does not qualify at all for premium tax credits. This means early retirees who once qualified for substantial subsidies may now face steeper costs in 2026 — a factor you must include in retirement income planning.

Managing income during early retirement requires careful coordination, which is why ACA planning fits naturally into a broader retirement income planning framework.

How ACA Coverage Can Still Support Early Retirement

Even with subsidy changes, the ACA can be part of an early retirement transition if you strategically manage your income until after the year you turn 65. Even though the credits end the month you turn 65 and enroll in Medicare, the PTCs are based on your full year household income.

1. Control Your Modified Adjusted Gross Income (MAGI)

Premium Tax Credits are based on MAGI. To maximize your credit, you have to minimize your MAGI. What counts towards your MAGI?

Income from wages, Social Security, and pensions
Interest and Capital Gains
IRA and 401(k) Distributions
Roth Conversions

What does not count towards your MAGI? Where can you access money for expenses?

Roth IRA and Roth 401(k) Distributions are non-taxable
You can use Health Savings Account (HSA) withdrawals to pay for deductibles and out of pocket expenses. It’s a great idea to build up an HSA in advance of retirement. You cannot, however, use an HSA to pay for insurance premiums, except while you are receiving unemployment benefits.
Build up cash reserves in a taxable account to avoid taking taxable distributions or starting SS or Pensions.

2. Delay Higher Income Events Where Possible

If possible:

Postpone Social Security until benefits are higher later
Delay large Traditional IRA withdrawals until after age 65
Manage capital gains timing

These steps may keep you within ACA income eligibility in the early years of retirement. It is important, however, that your income is not Zero – if your income is below 100% of the Poverty Level, you are eligible for Medicaid, but not a Premium Tax Credit.

Beware of Premium Increases

According to recent estimates, ACA marketplace premiums could climb substantially in 2026 as insurers adjust to the expiration of enhanced credits, with some plans more than doubling in net cost for enrollees who no longer receive enhanced subsidies.

What This Means for Early Retirement Planning

You should never assume ACA coverage will be inexpensive without modeling the impacts of subsidy changes, premium costs, and your projected income.
A retirement plan that works on paper without considering healthcare costs may fall short if ACA premiums rise faster than expected.

Because healthcare costs can be a substantial expense, many early retirees integrate ACA planning with:

Roth conversion strategies
Tax-efficient retirement income sequencing
Social Security optimization
Medicare transition timing
Long-term care planning

This holistic view ensures you’re not derailed by unexpected healthcare expenses. Early retirement income planning requires careful coordination between healthcare subsidies, taxes, and withdrawals.

How a Fiduciary Advisor Helps

At Good Life Wealth Management, we integrate ACA health cost planning into your broader retirement strategy. That means:

Considering ACA premiums based on your projected MAGI
Incorporating subsidy eligibility changes under current law
Coordinating retirement income sources with health coverage needs

We work with pre-retirees and retirees with $500,000–$5 million, nationwide and remotely, so you can build a plan that realistically supports early retirement. You might also find our Who We Help and Questions to Ask a Financial Advisor pages helpful if you’re evaluating guidance options.

This topic is often part of a broader retirement or tax planning conversation. If you’d like help applying these ideas to your own situation, you can request an introductory conversation here.

Frequently Asked Questions

Can I still get ACA subsidies if I retire before age 65?
Yes — if your income falls between 100% and 400% of the Federal Poverty Level, you can still qualify for premium tax credits under the ACA in 2026, though benefits may be smaller than they were with enhanced subsidies.

What counts as income for ACA eligibility?
Income for ACA subsidies is your modified adjusted gross income (MAGI) — including traditional IRA/401(k) distributions, but excluding Roth IRA withdrawals if qualified and certain other tax-free sources. Good Life Wealth Management

Investment Themes for 2026

Posted On December 28, 2025 By Scott Stratton, CFP(R), CFA In Portfolio Management /

Each year, we share our thoughts on the investment markets and where we see areas of opportunity for the year ahead. This letter is not intended as a short-term market forecast—no one knows what markets will do over the next few months. Instead, it outlines how we think about long-term expected returns and how that informs our portfolio positioning.

Our investment process is based on tactical asset allocation. We modestly overweight asset classes that appear to offer more attractive long-term expected returns and underweight those that appear more expensive and less attractive. Throughout this process, we remain fully invested in diversified, buy-and-hold portfolios. We do not try to time the market.

We continue to believe in the benefits of using low-cost, passive Exchange-Traded Funds (ETFs) and focusing on what we can control: saving consistently, keeping costs low, maintaining tax efficiency, and staying disciplined through market cycles.

(You can view last year’s investment themes here.)

Expected Returns for the Decade Ahead

We believe it is largely unproductive to try to predict where the stock market will be over the next 3–12 months. In the short run, markets move based on supply and demand—prices rise when there are more buyers than sellers and fall when the opposite occurs. Short-term price movements are often noisy and emotional, and prices do not always reflect underlying value.

What does matter to us is the outlook for long-term expected returns over the next 5–10 years. This longer time horizon helps tune out daily headlines and instead focuses on valuation—whether today’s prices are high or low relative to future growth expectations.

Today, U.S. growth stocks appear expensive by historical standards. The so-called “Magnificent 7” (Google, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) have driven much of the U.S. market’s strong performance in 2024 and 2025. These companies now represent a very large share of the S&P 500, and their outsized gains have likely pulled forward many years of anticipated earnings growth.

We do not know whether this will result in a sharp correction or simply a period of more modest returns. What history consistently shows, however, is that high starting valuations tend to lead to below-average returns over the decade that follows.

Vanguard’s current estimates for annualized returns over the next decade are as follows:

U.S. Growth Stocks: 1.3% – 3.3%
U.S. Value Stocks: 5.3% – 7.3%
U.S. Small Cap Stocks: 4.3% – 6.3%
Developed Markets (ex-U.S.): 5.3% – 7.3%
Emerging Markets: 3.2% – 5.2%

How We Are Positioned for 2026

Our portfolios remain globally diversified, typically using approximately 10 ETFs. We have already been positioned toward areas of relative opportunity, so changes for 2026 are modest. Specifically, we are shifting a few percentage points from U.S. stocks toward international stocks.

We remain overweight U.S. value stocks and underweight U.S. growth stocks. Relative to global benchmarks, we are overweight international equities, including a meaningful allocation to emerging markets and a smaller allocation to international small-cap value stocks.

International stocks were our strongest performers in 2025, significantly outpacing U.S. stocks. We believe 2025 may have marked an important turning point after many years of U.S. outperformance relative to international markets.

On the fixed-income side, interest rates have declined at the short end of the yield curve as the Federal Reserve has begun cutting rates. With a new Fed Chair expected to be appointed this year, it appears likely that monetary policy may remain accommodative.

Credit spreads—the difference in yield between Treasury bonds and lower-quality corporate bonds—remain very tight. As a result, we see limited compensation today for taking additional credit risk in high-yield bonds.

Our bond portfolios are therefore unchanged for 2026. They consist primarily of a laddered portfolio of high-quality bonds with maturities ranging from one to five years, including Treasury, Agency, and A-rated corporate bonds. For investors seeking dependable income without liquidity needs, five-year fixed annuities continue to offer some of the most attractive “safe” yields available today.

Many portfolios also include smaller allocations to Treasury Inflation-Protected Securities (TIPS), emerging-market bonds, and preferred stocks. Overall, bonds continue to serve their intended purpose: providing stability and income, while equities remain the primary driver of long-term growth.

Lessons from 2025

The past year was not what most experts predicted, and it serves as an important reminder of what truly matters for investors: staying diversified, sticking to the plan, and avoiding emotional decisions.

While 2025 is ending as a very strong year—with double-digit returns in both U.S. and international stocks—it is easy to forget how challenging it felt at times. In April, markets were nearly 20% below their highs, and many economists were forecasting severe economic damage from new tariffs. Investors who panicked and sold during that period missed out on substantial subsequent gains.

The lesson is clear: long-term investors have historically been rewarded for discipline, not for reacting to short-term fears. (This applies to diversified portfolios like the ones we use; individual stocks, of course, can and do fail.)

2025 also marked a resurgence of diversification. While the S&P 500 is up roughly 19% year-to-date, international stocks (EAFE Index) are up approximately 32%. Investors who assumed 2025 would simply repeat 2024 missed out on these gains. Diversification remains one of the most reliable tools we have—because no one can consistently predict which asset class will lead in any given year.

Often, the hardest part of investing is having the patience to do nothing. In 2025, buy-and-hold investing worked exactly as intended, despite constant negative headlines. While we never ignore economic or political risks, we allow those concerns to be reflected in valuations and expected returns rather than reacting emotionally to every news cycle.

Looking Ahead

2025 was an outsized year, and it would be unrealistic to expect markets to deliver 20–30% returns every year. While we would welcome another strong year in 2026, it is more prudent to expect more modest returns and an eventual reversion toward long-term averages. Investors can still be very successful with steady, market-level returns over time—the key is remaining invested through both good years and difficult ones.

We are grateful for the trust you place in us to manage your investment portfolio. I follow the markets closely so you don’t have to, and I am always happy to discuss our investment philosophy, portfolio positioning, or any questions you may have.

We will continue to monitor portfolios carefully throughout 2026 and make adjustments as conditions warrant. Thank you for your continued confidence and partnership.

Why Baby Boomers Need a Financial Advisor

Posted On October 12, 2025 By Scott Stratton, CFP(R), CFA In Financial Planning, Retirement Planning /

For baby boomers entering or already in retirement, financial decisions have never been more complex—or more consequential. You’ve worked a lifetime to build your wealth, and the stakes are high: protecting your savings, generating reliable income, managing taxes, and leaving a meaningful legacy. The challenge isn’t just growing assets—it’s using them wisely, sustainably, and with confidence.

At Good Life Wealth Management, we understand that investors between 55 and 75 face a unique set of financial questions that require expertise, objectivity, and proactive planning. That’s where partnering with a fiduciary financial advisor and Certified Financial Planner™ (CFP®) can make a measurable difference in your family’s financial well-being.

The Challenges Facing Affluent Pre-Retirees

For individuals and couples with $1 million to $5 million in investable assets, retirement planning is both an opportunity and a challenge. While you may have more financial flexibility than most, higher net worth also brings more complexity—and greater tax exposure. Here are the most common issues affluent pre-retirees face:

Decumulation Strategy:
You’ve spent decades accumulating assets. But when and how should you begin drawing from them? Without a plan, it’s easy to pay unnecessary taxes or deplete accounts too quickly. Coordinating withdrawals from taxable, tax-deferred, and Roth accounts requires precise planning to maximize after-tax income and longevity of assets.
Tax Management and Roth Conversion Timing:
The years between retirement and age 73 (when RMDs begin) often present the best window for Roth conversions and other tax-optimization strategies. A fiduciary advisor models these moves to minimize lifetime tax liability, not just this year’s return.
Market Risk and Sequence of Returns:
Even affluent retirees can face shortfalls if markets decline early in retirement. A thoughtful investment strategy—emphasizing risk management, income diversification, and behavioral discipline—can protect against that risk.
Rising Health Care and Long-Term Care Costs:
With health care inflation outpacing general inflation, even wealthy families must plan for potentially hundreds of thousands of dollars in out-of-pocket costs. A CFP® can help evaluate insurance options, long-term care funding, and how these expenses fit into your financial plan.
Estate and Legacy Planning:
The SECURE Act has changed how beneficiaries inherit IRAs, and tax laws are constantly evolving. High-net-worth families need coordinated strategies among their advisor, attorney, and CPA to preserve wealth and ensure an efficient, meaningful transfer to the next generation.
Behavioral and Emotional Challenges:
Many successful individuals are highly capable but still feel uncertain when managing large sums in retirement. The shift from saving to spending, and from working to living off your portfolio, can feel uncomfortable. A trusted fiduciary advisor provides reassurance through data-driven planning, transparency, and accountability.

Why Work with a Fiduciary Financial Advisor?

Not all financial professionals are required to act in your best interest. Brokers and agents may recommend products that pay higher commissions, even if they’re not ideal for you. A fiduciary advisor, on the other hand, is legally and ethically bound to act solely in your best interest—without product incentives or conflicts of interest.

At Good Life Wealth Management, our fiduciary standard means:

Objective advice. We recommend strategies because they fit your goals—not because of any outside incentive.
Fee transparency. Our compensation is clear, predictable, and aligned with your success.
Comprehensive oversight. We coordinate your investments, taxes, estate plan, insurance, and retirement income strategy under one cohesive plan.

The Value a CFP® Brings to Your Financial Life

A Certified Financial Planner™ brings a level of rigor and expertise that goes beyond investment management. CFP® professionals complete advanced training and adhere to strict ethical standards, focusing on every aspect of your financial well-being.

For baby boomers, that means:

Customized Retirement Income Planning: Creating a tax-efficient withdrawal strategy that provides predictable income without depleting principal too soon.
Investment Management Tailored to Your Goals: Balancing growth, income, and preservation through a disciplined, evidence-based approach.
Tax-Aware Portfolio Construction: Using asset location and tax-loss harvesting to improve after-tax returns.
Social Security and Medicare Optimization: Timing benefits strategically and avoiding costly IRMAA surcharges.
Charitable and Legacy Planning: Aligning your wealth with your values through donor-advised funds, QCDs, and trust structures.
Behavioral Coaching: Helping clients avoid emotional mistakes during volatile markets, maintaining focus on long-term goals.

Studies by Vanguard and Morningstar have shown that working with a professional advisor can add 3% or more per year in net returns through better behavioral discipline, rebalancing, and tax efficiency. But beyond numbers, the real value of a trusted advisor is peace of mind—the confidence that you’re on track and making wise decisions.

How a Fiduciary Advisor Simplifies Complexity

Affluent families often have multiple accounts, business holdings, or real estate investments. A fiduciary advisor serves as your financial quarterback, bringing everything together into one cohesive strategy.

We help you see the full picture—net worth, cash flow, taxes, and investments—in one plan.
We coordinate with your CPA and attorney to ensure that tax and estate decisions align.
We proactively adjust your plan as tax laws, markets, and life circumstances change.

This holistic approach ensures your wealth works efficiently for you today, while positioning your legacy for tomorrow.

The True Benefit: Financial Confidence and Freedom

Ultimately, the goal of financial planning isn’t just to accumulate wealth—it’s to create the freedom to live your best life. For baby boomers entering retirement, that means:

Knowing your income is secure regardless of market conditions.
Paying only the taxes you owe—and not a dollar more.
Protecting your spouse and family from uncertainty.
Having a clear legacy plan that reflects your values and priorities.

At Good Life Wealth Management, we believe your retirement years should be a time of clarity, not confusion; of confidence, not anxiety. Working with a fiduciary CFP® ensures that every financial decision is guided by your goals, your timeline, and your values.

Take the Next Step Toward Financial Clarity

If you’re approaching retirement or already there, now is the time to build a comprehensive plan. The right guidance today can make all the difference over the next 20–30 years.

We invite you to schedule a conversation with Good Life Wealth Management to see how our fiduciary, evidence-based approach can help you protect, grow, and enjoy your wealth with confidence.

Related Retirement Income Topics
– Retirement Income Planning
– Guardrails Withdrawal Strategy
– Social Security: It Pays to Wait
– Required Minimum Distributions
– What Is a MYGA?

Falling Interest Rates: Why MYGAs Belong in Your Portfolio

Posted On September 23, 2025 By Scott Stratton, CFP(R), CFA In Financial Planning, Retirement Planning /

The Federal Reserve cut the Fed Funds rate by 0.25% this week, with more reductions likely ahead. As inflation cools and employment weakens, bond yields are already dropping. This is a problem for retirees: many bonds are callable, meaning issuers redeem them early and reissue at lower rates. Investors who held 5.5% and 5% bonds are seeing them called and replaced with yields closer to 4%.

For retirees relying on bond income—or taking RMDs—this environment means lower expected returns from balanced portfolios. And with U.S. stocks expensive and possibly due for a correction, conservative investors should not depend on equities for stable income.

Enter the MYGA

A MYGA (Multi-Year Guaranteed Annuity) is a fixed-rate annuity that behaves like a CD but often pays more. MYGAs currently offer rates in the mid-5% range and unlike many bonds or CDs, they are non-callable. That means your rate is locked for the full term (3–10 years), even if market yields fall.

Benefits of MYGAs:

Guaranteed fixed rate of return, non-callable.
Principal protection—very safe.
Tax-deferred growth until withdrawal.
Option for tax-free rollover at maturity (1035 exchange).
Creditor protection in many states.
Nearly 2% higher than comparable 5-year Treasury (5.6% versus 3.7%).

The Fine Print:

Limited liquidity; surrender charges for early withdrawals.
Some MYGAs allow interest to be withdrawn, others none.
Withdrawals before age 59½ may face a 10% IRS penalty on earnings.
Best suited for investors with sufficient liquidity elsewhere.

Why MYGAs Belong in Portfolios Now

With rates expected to trend lower, locking in today’s 5%+ yields through a MYGA can secure income for years. A callable bond at 5.5% may vanish if rates fall, but a 5.5% MYGA will not. This makes MYGAs particularly attractive for retirees and conservative investors looking for income stability.

Strategies for Using MYGAs:

Fixed Income Replacement: Substitute part of your bond allocation with a MYGA to boost yield and avoid call risk.
Laddering: Buy multiple MYGAs with staggered maturities to improve liquidity and reinvestment flexibility.
RMD Support: Use MYGA interest or partial withdrawals to help cover RMDs without tapping into equities in down markets.

Is a MYGA Right for You?

If you’re over 59 1/2, have significant fixed-income holdings, and don’t need immediate access to these funds, a MYGA may be an excellent fit. For many retirees, locking in 5%+ guaranteed and tax-deferred is far more attractive than taking chances on callable bonds or expensive equities.

Roth Conversions After 60: When They Make Sense—and When They Don’t

Posted On September 10, 2025 By Scott Stratton, CFP(R), CFA In Financial Planning, Tax Strategies /

For baby boomers and pre-retirees with $500,000 to $5 million in investable assets who want a fiduciary advisor they can work with remotely.

Roth conversions after age 60 can be a powerful tax-planning tool when used thoughtfully, but they are not automatically the best choice for every retiree. Whether a conversion makes sense depends on your current tax situation, future tax expectations, Social Security timing, Medicare implications, and retirement income goals.

What Is a Roth Conversion?

A Roth conversion moves money from a Traditional IRA or 401(k) into a Roth IRA by paying taxes now so that future growth and withdrawals are tax-free.
Traditional accounts grow tax-deferred and are taxed as ordinary income when withdrawn. In contrast, once assets are in a Roth IRA, they grow and can be withdrawn tax-free for life.

When Do Roth Conversions Make Sense?

Roth conversions generally make sense when you expect your current tax rate to be lower than your future tax rate or when tax diversification enhances your retirement plan.

Lower Tax Rates Now vs. Later

Converting in years when your income is relatively low — for example, after retiring but before taking Social Security — can result in paying less tax upfront.

Avoiding or Reducing Future RMDs

Roth IRAs do not have lifetime required minimum distributions (RMDs), unlike Traditional IRAs. Converting to a Roth can reduce future RMDs — here’s how to manage required minimum distributions.

Tax Diversification and Estate Planning

Having Roth assets provides flexibility in retirement withdrawals and can reduce the tax drag that comes with RMDs, while also offering a tax-free legacy to heirs.

Conversions in Lower-Value Markets

Converting during a market downturn means you pay tax on a lower base and allow the Roth portion to grow tax-free when the market recovers.

Roth conversions rarely make sense in isolation. They should be evaluated as part of a broader tax planning for retirees strategy that coordinates income, Medicare premiums, and future Required Minimum Distributions.

When Roth Conversions May Not Make Sense

Roth conversions are not always beneficial — especially if they trigger higher taxes or costly side effects.

Higher Current Tax Brackets

If converting pushes you into a much higher marginal tax bracket, the immediate tax cost may outweigh long-term tax benefits. For example, are you subject to the 3.8% Medicare Surtax?

Medicare IRMAA Impacts

Roth conversions increase MAGI and can affect Medicare premiums — learn how to reduce IRMAA.

Social Security Tax Interactions

Higher income from conversions may increase the taxable portion of Social Security benefits or affect tax bracket thresholds.

Charitable Goals or QCDs

If a large portion of your IRA assets will go to charity, converting may not be advantageous. Qualified Charitable Distributions (QCDs) can achieve similar goals without paying tax.

Low Future Tax Expectations

If your future tax rates will be lower — due to relocation to a no-tax state or anticipated lower income — conversions may have less value.

How to Evaluate a Roth Conversion

Proper evaluation requires side-by-side tax scenario analysis over your expected retirement horizon.

Project current vs. future tax rates
Consider Medicare, Social Security, and IRMAA effects
Estimate the timing and size of RMDs
Model multi-year conversion strategies
Analyze impacts on estate planning and legacy goals

This type of analysis is best done with planning tools or with a fiduciary who runs these scenarios as part of a comprehensive plan.

What Many Advisers Miss

Conversions cannot fix every retirement issue. They are just one lever in a broader strategy that includes:

Timing Social Security benefits can affect your conversion strategy.
Managing RMDs intelligently
Balancing taxable, tax-deferred, and tax-free buckets
Integrating Roth decisions with your overall retirement income plan
If you are under 65, ACA income planning affects conversion decisions.

If you want a full set of questions to assess an advisor’s process — including how they approach tax strategies like conversions — check out our guide: Questions to Ask a Financial Advisor.

Realistic Examples (High Level)

Beneficial Scenario:
A 62-year-old retiree with moderate income converts modest amounts each year in the gap years between retirement and starting RMDs. This reduces future RMDs and grows tax-free assets.

Less Beneficial Scenario:
A 68-year-old with significant Social Security income and Medicare IRMAA thresholds may pay more in tax and premiums in the year of conversion, reducing the net benefit.

Each situation is unique and should be modeled specifically.

How We Approach Roth Conversions

We integrate Roth conversion planning into your overall retirement income strategy. That means:

Understanding your tax situation
Considering Medicare and Social Security timing
Coordinating with cash flow needs
Evaluating impacts on estate planning

We work with clients nationwide and can help you explore whether conversion strategies fit your financial goals. Roth conversions can materially improve long-term outcomes when coordinated with withdrawal strategy and cash-flow needs as part of thoughtful retirement income planning.

If this topic feels important to your retirement plan, you might also be interested in our Who We Help page to see if our approach aligns with your needs: Who We Help: Retirement Planning for Retirees and Pre-Retirees Nationwide.

This topic is often part of a broader retirement or tax planning conversation. If you’d like help applying these ideas to your own situation, you can request an introductory conversation here.

Frequently Asked Questions

Should I convert to a Roth IRA after age 60?

Roth conversions after age 60 can make sense when your current tax rate is the same or lower than your expected future tax rate, but the decision depends on Social Security timing, Medicare IRMAA, and your overall retirement income plan.

Will a Roth conversion increase my Medicare premiums?

Yes. Large conversions increase your adjusted gross income (AGI), which may trigger higher Medicare Part B and D premiums under IRMAA rules.

Related Retirement Income Topics
– Retirement Income Planning
– Guardrails Withdrawal Strategy
– Social Security: It Pays to Wait
– Required Minimum Distributions
– What Is a MYGA?

How Investors Can Thrive in 2025’s Uncertain Economy

Posted On September 1, 2025 By Scott Stratton, CFP(R), CFA In Financial Planning /

If you’ve felt like following the news this year is like trying to drink from a firehose, you’re not alone. Every headline out of Washington seems more “unprecedented” than the last. Political upheaval, tariffs, inflation fears — it all feels deeply concerning, especially for investors with significant wealth at stake.

And yet, behind the noise, the markets are quietly teaching us timeless lessons.

Yes, what happens in Washington matters. Yes, policy decisions will impact the economy, interest rates, and your portfolio. But if 2025 has proven anything, it’s this: the single biggest risk to your wealth isn’t Trump, tariffs, or the next headline — it’s how you react.

The Lessons of 2025

This year has been a masterclass in what works — and what doesn’t — when investing during turbulent times:

Market timing has been a disaster.
Buy and hold has worked beautifully.
Diversification has been your best defense.

Consider just a few examples:

At the start of 2025, U.S. stocks were dominating international markets. Many investors threw in the towel on foreign equities — just in time to miss out. Year-to-date, international stocks are up 23.3%, compared to 10.8% for the S&P 500.
In April, when tariffs were announced, U.S. stocks plunged 20%. The consensus was clear: disaster was coming. But if you sold, you locked in losses. Since that bottom, the market has rebounded 30%.
Small caps? Down slightly through July… then up nearly 9% in August alone.

The takeaway is simple: trading the headlines hasn’t worked. Staying the course has.

A Reminder From Market History

Corrections are normal. Bear markets are normal. What matters is how you position yourself before they happen.

Since the Global Financial Crisis in 2009, the S&P 500 has grown nearly 10x (including dividends). Along the way, we’ve seen terrifying headlines, recessions, pandemics, political chaos — and yet, long-term investors have been rewarded.

Even in 2025, despite fears of overvaluation, the S&P has already made 20 new all-time highs. The reason isn’t mysterious: when there are more buyers than sellers, stocks rise. Concern is healthy. Panic is not.

Investing in an Age of Uncertainty

You don’t need to “do nothing” to be successful. But you do need a disciplined strategy that keeps you from reacting emotionally. Here are the principles that matter most for protecting and growing wealth in uncertain times:

Control what you can. You can’t control the market, but you can control your saving and investing habits. Automate contributions and focus on building wealth consistently.
Use bonds for peace of mind. By building bond ladders for 5 years of income, you avoid being forced to sell stocks at the wrong time. For many investors, a mix between 80/20 and 50/50 (stocks/bonds) provides both growth and stability.
Lean into expected returns. Today, that means emphasizing international stocks, value stocks, and equal-weighted indices over pure U.S. growth and cap-weighted benchmarks.
Keep costs and taxes low. Low-cost ETFs give you broad diversification, minimal turnover, and greater tax efficiency.

The Bottom Line for Wealthy Investors

The political and economic headlines of 2025 may be unsettling — even frightening. But history, data, and this year’s results all point in the same direction: wealth is built by staying invested, diversified, and disciplined.

The “smart money” isn’t chasing the news. It’s sticking to timeless strategies that preserve and grow wealth across decades, not news cycles.

At Good Life Wealth Management, we help investors like you cut through the noise and focus on what truly drives long-term success. If the headlines have you worried — about Trump, the economy, or your portfolio — let us guide you with strategies built for resilience, not reaction.

Because while Washington may feel chaotic, your financial future doesn’t have to.

Tax Strategies Under the OBBBA

Posted On August 11, 2025 By Scott Stratton, CFP(R), CFA In Tax Strategies /

The One Big Beautiful Bill Act (OBBBA) — signed into law in 2025 — made several significant changes to the U.S. tax code that create new planning opportunities for investors and retirees. While much of the legislation continues provisions from the 2017 Tax Cuts and Jobs Act, OBBBA also introduces new deductions and alters key rules that can impact how you manage income, donations, and deductions in retirement.

In this article, we focus on practical planning strategies for individual taxpayers, especially those preparing for or living in retirement, and how to think about these changes in the context of broader tax and retirement planning.

What the OBBBA Changed for Individual Taxpayers

The OBBBA made a number of tax changes that affect how retirees and near-retirees should approach income, deductions, and planning. These changes include:

Higher Standard Deduction (Permanent through 2026)

The standard deduction has been increased and is indexed for inflation. For many taxpayers, this change reduces taxable income without requiring itemizing.

Expanded SALT Deduction Cap

The deduction for state and local taxes (SALT) increased from the prior $10,000 cap to $40,000 for taxpayers who itemize. High-tax state residents — such as those in California, New York, or New Jersey — may benefit if they have enough deductions to exceed the standard deduction.

New Charitable Deduction Rules

Starting in 2026:

You can deduct up to $1,000 (single) or $2,000 (married filing jointly) of cash charitable contributions above the line without itemizing.

Itemized deductions for charitable cash gifts above these amounts are subject to a new floor based on a percentage of Adjusted Gross Income (AGI). Qualified Charitable Distributions (QCDs) from IRAs age 70½+ remain unchanged and continue to count toward RMDs while excluding the amount from taxable income.

Key Planning Opportunities Under OBBBA

1. Evaluate Itemizing vs. Standard Deduction

The expanded SALT cap and higher standard deduction mean that retirees should regularly reassess whether bunching deductions makes sense.

Example strategy:
If you usually take the standard deduction, you might:

“Bunch” two years of property tax payments plus charitable donations into one year to exceed the standard deduction, then take the standard deduction the next year.
This technique can boost deductions when combined with the higher SALT cap, especially if you have substantial state tax and mortgage interest.

This works well with broader planning, including charitable giving strategies and Qualified Charitable Distributions (QCDs) when you reach age 70 1/2 (see How to Reduce IRMAA and 9 Ways to Manage Capital Gains).

2. Leverage Above-the-Line Charitable Cash Deductions

For 2026 and beyond, you can deduct a modest amount of cash donations without itemizing.

Up to $1,000 (single)
$2,000 (married filing jointly)

Planning tip:
If your cash contributions would otherwise be below your total standard deduction, timing donations to maximize this deduction can improve your tax efficiency.

Note that donations of appreciated securities may still be more advantageous for reducing capital gains elsewhere — consider that when coordinating with 9 Ways to Manage Capital Gains and broader wealth planning.

3. Coordinate SALT Planning with Your Retirement Income

The expanded SALT deduction is a temporary windfall — it is scheduled to revert to the old $10,000 limit after tax year 2029.

This means:

If you routinely pay significant state and local taxes (property, income, etc.), consider whether timing deductions around years with higher retirement income (e.g., years you take IRA withdrawals or Roth conversions) could reduce your overall federal tax burden.

This interacts with other planning topics like:

4. Make Qualified Charitable Distributions (QCDs)

For investors age 70½ and older, QCDs remain a highly tax-efficient way to give to charity — and they continue to count toward RMDs without increasing your taxable income.

Because a QCD reduces taxable income, it can also help:

Avoid higher Medicare IRMAA surcharges
Reduce taxation of Social Security benefits
Improve tax efficiency during years of planned income spikes

For more on the income sequencing side, see:

5. Understand Credits and Deduction Expirations

Some popular tax incentives not directly part of OBBBA — such as clean energy tax credits — are expiring by the end of 2025.
If you were planning:

Solar or energy efficiency upgrades
Clean vehicle purchases for tax credits

Then 2025 may be your last year to benefit under prior rules.

While these credits may not directly impact your retirement accounts, they are part of a holistic tax plan that should be coordinated with your broader income and spending decisions.

How This Fits Into Your Retirement Tax Strategy

OBBBA changes are just one part of the evolving tax landscape for retirees. Tax planning remains about coordination, not isolated deductions. The tax code interacts with income sequencing, retirement distributions, Roth conversions, Medicare premiums, and charitable planning.

For example:

Timing larger IRA conversions during years when you can benefit from expanded SALT or senior deductions (such as a new $6,000 senior deduction) can produce real tax savings — particularly when coordinated with income years that avoid high Medicare IRMAA or Social Security taxation.
Meanwhile, beneficiaries may still benefit from step-up in basis rules on inherited assets, which affect capital gains planning (see 9 Ways to Manage Capital Gains).

Legislative changes like OBBBA reinforce the importance of ongoing tax planning for retirees, rather than reacting to tax law changes one year at a time.

Practical Action Steps for Retirees (2026)

Here are practical steps retirees and pre-retirees can take in light of the OBBBA:

Revisit your itemized vs. standard deduction strategy annually.
Evaluate the timing of charitable contributions (especially cash vs. appreciated assets).
Coordinate SALT planning with other income events like Roth conversions.
Continue using QCDs once eligible.
Complete any energy or credit-related projects before scheduled expirations.
Work income planning into RMD and Social Security timing decisions.

These should all fit into a broader tax planning framework rather than being treated as one-off tactics.

How a Fiduciary Advisor Can Help

OBBBA tax changes add complexity — and opportunity — but they also interact with many other retirement planning domains. A fiduciary advisor helps by:

Modeling tax outcomes over multiple years
Coordinating deductions, timing, and distributions
Integrating charitable and income planning
Reducing the risk of unintended consequences on Medicare or Social Security taxes

You don’t need to execute all strategies yourself — but knowing which ones matter for your situation can preserve more of your wealth.

Frequently Asked Questions

What is the expanded SALT deduction under OBBBA?
Under OBBBA, the SALT deduction cap increased to $40,000 for taxpayers who itemize, though it reverts to $10,000 after 2029.

Can I still use Qualified Charitable Distributions (QCDs)?
Yes. QCDs remain a valuable way for those age 70½+ to satisfy RMDs while excluding taxable income.

What changed for charitable deductions in 2026?
OBBBA added an above-the-line deduction for up to $1,000 (single) or $2,000 (married) in cash donations without needing to itemize.