Bob Carlson

Congress continues to increase the tax and estate planning benefits of 529 plans, making them a must-consider tool for parents and grandparents.

Most 401(k) plans provide a little-known tool that can increase an account's flexibility, expand the available investments and potentially increase total returns.

Annuity sales are soaring, because retirees and pre-retirees want more guaranteed income and principal protection.

The Social Security retirement trust fund is now projected to be depleted by the fourth quarter of 2032, a year earlier than previous estimates. This accelerated timeline is due to reduced tax revenue from a new senior tax deduction, lower immigration, and declining fertility rates. Once depleted, the program will only be able to pay 78% of promised benefits, resulting in a 22% across-the-board reduction. The system's costs have exceeded income for years, with the shortfall currently covered by federal general revenue through special treasury bonds. Critics suggest the official estimates are optimistic, potentially understating inflation and the true deficit. Despite repeated warnings, Congress has failed to act, increasing the likelihood of the program relying more heavily on general government funding. The author advises against claiming benefits early, as it could lead to further reductions if cuts are implemented.

RMDs can be made in either cash or property, and there might be good reasons to distribute stock or other property.

Many solid retirement plans fall apart during the solo years after one spouse passes away, because the plans do not account for key changes.

Qualified Charitable Distributions (QCDs) from traditional IRAs are increasingly valuable for those 70½ and older, especially after the One Big Beautiful Bill Act. This act made the doubled standard deduction permanent, limiting tax benefits for many charitable givers, though it introduced a small non-itemized deduction. QCDs offer significant advantages: they are excluded from gross income, reducing taxes and Medicare surcharges, and count towards Required Minimum Distributions (RMDs) tax-free. This makes them ideal for satisfying RMDs or lowering Roth conversion costs. Key rules include being 70½+, direct transfer to a public charity, and an annual limit ($115,000 in 2026). Taxpayers should maximize 2026 QCDs now and plan 2027 contributions carefully, ideally making QCDs early in the year to avoid RMD pitfalls.

Federal employees often wonder if their Thrift Savings Plan (TSP) is sufficient for retirement. Comparing individual balances to age-group averages and medians offers a valuable benchmark. Years of service can provide even more valuable data. The 2025 overall average TSP balance was $198,000, with a median of $50,000. Generally speaking, average and median balances increase by age. Younger employees should prioritize maximizing contributions and embrace growth-oriented investments, while workers in their 60s must finalize comprehensive plans. Key factors influencing TSP growth include compensation, contribution rates and investment returns. To boost savings, employees should maximize contributions, utilize catch-up options and consider appropriate investment strategies.

Social Security's trustees estimate the trust fund will run out of money earlier than they estimated last year. But the new projection still could be optimistic.

Medicare continues to change, including new Part B coverage for GLP-1 weight loss drugs starting July 1st, priced at $50 monthly until 2027. This benefit is subject to prior authorization. There are concerns it could lead to supply shortages and patients will not receive sufficient counseling. In other news, a study found the three largest Medicare Advantage plans denied inpatient rehabilitation and long-term nursing hospital requests at higher rates than other plans. After years of financial strain from surging post-pandemic care, inflation, and stricter government policies, Medicare Advantage insurers are now reporting improved financial health. More predictable demand and favorable government reimbursement rates for 2026/2027 suggest a more stable MA market is on the horizon.