INSIGHTS

Since the end of January, #YOLO has been a rallying cry on internet message boards where amateur investors have driven up stock prices for video game retailer GameStop and movie theatre chain AMC. While everyone does have opportunities to build wealth via the markets, this particular group of fresh investors are only half-right about their investment strategy.

Attached is a summary of key tax and personal planning numbers for 2021.

Retirement plan compensation and contribution limits are subject to annual cost-of-living adjustments. On Oct. 26, 2020, the Internal Revenue Service (IRS) announced updated limits for retirement plans in 2021, reflecting cost-of-living adjustments for the coming tax year.

This year has been one of unprecedented challenges. The coronavirus pandemic and other natural disasters have resulted in significant disruptions to both our businesses and our personal lives.

We are pleased to announce Sarah Charles has been promoted to Director. A veteran of the financial services industry with more than 20 years of experience, Sarah is a dynamic, relationships-driven leader who is passionate about helping people and advising her clients to discover financial clarity and peace of mind.

The Medicare Open Enrollment Period is the time during which Medicare beneficiaries can make new choices and pick plans that work best for them. Each year, Medicare plan costs and coverage typically change. In addition, your health-care needs may have changed over the past year. The open enrollment period is your opportunity to switch Medicare health and prescription drug plans to better suit your needs. Please see the attached article for a complete breakdown of Medicare Open Enrollment including what is new for 2021. 

We’ve all seen the headlines: “Cancellations, Opt-Outs, and Virus Cases Put Heat on College Football” (The New York Times) “5 Ways COVID-19 Will Change Higher Education Forever – and How Colleges Can Adapt” (USA Today) “On Campus But Under Lockdown — a Day in the Life of a College Student During Covid-19” (CNBC)

On November 3rd, 2020 Americans will elect our next President. But even though the election is several months away, there is already a lot of speculation about what the stock market will do if either candidate gets elected. Unfortunately, much of that speculation is wrapped in fear with investors worrying that if the other guy (i.e. the candidate they don’t support) wins then the stock market will collapse or the economy will stagnate or taxes will go sky high or some other terrible calamity will occur that will wipe out wealth and destroy capitalism.

Saving money for retirement in a tax-deferred account has many benefits – but you can only defer taxes so long before they must be paid, which is why U.S. tax law requires a Required Minimum Distribution (RMD). An RMD is the amount of money that must be withdrawn annually from a tax deferred account (including traditional IRAs, SEP IRAs, and Simple IRAs) once the owner reaches a certain age. RMDs are taxed as ordinary income.

Over the past few years, tax law changes have created planning challenges and opportunities for owners of IRAs looking to maximize the after-tax value of their legacy.  We covered one key strategy, Roth conversions, in our DHG Insights feature Examining Roth Conversions in the Current Legislative Landscape.  For charitably inclined IRA owners over 70 ½, Qualified Charitable Distributions (QCDs) often provide the most tax efficient way of funding charitable goals.