Center Clients Donate over $1 Million in Tax-Savvy QCD Strategy in 2023

Contributed by: Lauren Adams, CFA®, CFP®

We are proud to announce that The Center assisted clients in donating over $1,000,000 to charities using the Qualified Charitable Distribution (QCD) strategy in 2023!

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 as taxable income for that year. That usually results in a lower tax bill for clients and can 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 – for example, you need to be at least 70.5, and the charity must be a 501c3. There are also limits on how much you can give each year through this method, but that number is relatively high at $105,000 per person per year currently.

The Center’s mission is to improve lives through financial planning done right, and we are 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 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 that you work with your tax preparer to understand how these strategies can affect your situation. If you want to explore these strategies and more, contact your Center financial planner today! 

Lauren Adams, CFA®, CFP®, is a Partner, CERTIFIED FINANCIAL PLANNER™ professional, and Director of Operations at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

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 Lauren Adams, CFA®, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

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

Financial Resolutions to Consider for 2024

Contributed by: Kelsey Arvai, CFP®, MBA

As the year comes to a close, it is time to start thinking about the New Year and starting it off on the right foot. What better way to accomplish this than by improving your financial health in 2024? January is Financial Wellness Month and Wealth Mentality Month – which serves as a reminder to get our finances in order and plan out our financial strategies. It is also the perfect opportunity to check in with your Financial Advisor to ensure you are financially prepared both in the short and long term.

While planning your financial resolutions, remember to be specific about what you want and why. The key to success is being clear about your priorities and choosing a particular goal. Make sure your goals are attainable, write them down, and post them somewhere where you will be reminded of them often. You can ensure accountability by creating calendar reminders to check in on your goals throughout the year.  

For additional resources on Financial Planning tips going into the New Year, check out this blog from Sandy Adams. I have also provided some additional ideas below from a previous blog of mine:

Automate Savings & Debt Reduction

Establishing and maintaining a positive cash flow is a top-tier priority for your financial health. Automation is key to efficiency and effectiveness while working towards your financial goals. Prioritizing your savings contribution through automation helps hedge against the temptation to spend the funds elsewhere. Utilizing automatic payments for your credit card could help your credit score if the payment happens before your due date. After establishing an emergency fund through your automated savings, you might consider directing excess cash to your retirement and health savings plans.

Max Out Your 401(k) & Health Savings Account (HSA)

The beginning of the year is a great time to review your 401(k) and HSA contributions to ensure that you are maximizing your benefits and taking advantage of increased deferral limits for 2024. 401(k), 403(b), and most 457 plan limits are now up to $23,000 for elective employee deferral. The catch-up contribution limit for employees aged 50 allows for an additional savings of $7,500. Similarly, HSA contribution limits are up to $4,150 for individuals and $8,300 for family coverage, with an additional $1,000 for employees 55 for older. Since HSAs are not "use-it-or-lose-it" accounts, and they can be spent on any expense without penalty after 65, it is advantageous to fully fund these accounts every year.

Plan for Charitable Giving

Most people wait until December to give, but we recommend not being in such a rush that you wait until the end-of-the-year deadline and lose sight of your charitable goal. The beginning of the year is a great time to develop a plan for your year ahead.

Invest in Your Emotional and Physical Well-Being

As you take stock of your financial health this year, carving out time for your physical health is equally paramount. There is a connection between health and wealth; each should be analyzed and reviewed professionally, at least annually.

Reach Out to Your Financial Advisor 

Working with your advisor, at least annually, can provide support to keep you on track while determining and working towards financial goals.

On behalf of all of us at The Center, we wish you a happy and healthy 2024!

Kelsey Arvai, CFP®, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the Kelsey Arvai, MBA, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

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.

Giving Tuesday: What It Is and Why It Matters

Contributed by: Kelsey Arvai, CFP®, MBA

Every act of generosity counts, and everyone has something to contribute toward making the world a better place. GivingTuesday was created in 2012 with one mission: to create a day that encourages people to do good. Since then, the movement has become global, inspiring millions of people to give, collaborate, and celebrate generosity. 

The biggest celebration of generosity, GivingTuesday, is celebrated annually on the last Tuesday of November. We welcome you to join the movement this GivingTuesday, every Tuesday, or every day, whether it's time, a donation, or the power of your voice in your local community. 

The Center participates in giving year-round. The Center Charitable Committee facilitates this framework for giving year-round. Our mission is to contribute time and donations to the following three areas – Financial Literacy, Community Needs (Metro Detroit), and Staff Involvement. 

In 2023, our team has donated over 102 hours and $15,020. We love helping others feel great. Below are some philanthropic efforts we have completed or plan to complete this year. Additionally, The Center offers eligible employees up to 2 days off with pay per year for engaging in organized volunteer community projects to facilitate involvement in community activities. The Center also encourages employees to make gifts to charities of their choice; each employee can request The Center to match their donation up to $100 annually. You can visit GivingTuesday.org/participate to learn more about giving time, gratitude, or support to positively affect your community and create a better tomorrow.  

2023 Events

• Capuchin

  • Center Team Members folded and displayed clothing and unloaded food boxes in Detroit.

• Gleaners’ Community Mobile Food Pantry

  • Center Team Members volunteered with Gleaners Mobile Grocery to help local seniors in our community.

• Michigan Council of Economic Education

  • The Center is delighted to co-sponsor the Michigan Council on Economic Education's 2023 Personal Finance Challenge, as it highlights the importance of making smart personal financial choices and career opportunities in the financial planning industry.

• Money Smart Week is a national campaign by the Federal Reserve Bank to encourage good financial decision-making by individuals and communities through free online education. Center for Financial Planning Inc. was excited to co-sponsor the Michigan Council on Economic Education's 2023 Personal Finance Challenge to show our support for the Money Smart Week campaign. High school students from all over Michigan were invited to compete on April 29th. Teams of 3-4 students review a personal finance case study and then provide a presentation of their financial planning advice. The competition occurs before a team of judges in person at the Macomb Intermediate School District. The winning team receives a $250 prize and will advance to a national competition.

• Greening of Detroit

  • Center Team members participated in a tree-planting event with Greening of Detroit by digging holes, planting young trees, and laying mulch. 

• Funding for the Future

  • The Center proudly supported the band Gooding through the nonprofit Funding for the Future. The event involved fun rock music, excited high schoolers, and important lessons in financial literacy. 

• Ferndale Catfé 

  • Center for Financial Planning Inc. supported the Ferndale Catfé for National Pet Month by visiting the Catfe's new location in Ferndale. We spent time in the cat room, learned about their work, and learned more about volunteering and adopting/fostering. 

• Autism Alliance of Michigan Fundraiser Walk

  • Center Team Members walked to support families affected by autism. The event at the Detroit Zoo included an autism resource fair with 50+ vendors, on-stage programming, a united community walk, and arts & crafts.

• Humble Design

  • Center Team Members will work with Humble Design to affect the lives of individuals, families, or veterans emerging from homelessness. Humble Design works to change lives and communities by custom designing and fully furnishing home interiors. 

• ALS Walk

  • Center for Financial Planning Inc. supported the march toward a treatment and, ultimately, a cure for ALS. This disease, in some manner, has affected many of our family and friends. We support the Walk to Defeat ALS and the organization's efforts to provide support groups, access to care, and advocacy. 

• Alzheimer's Walk 

  • Center for Financial Planning Inc. supported the Walk to End Alzheimer's at the Detroit Zoo. This disease, in some manner, has affected many of our family and friends. We support the Alzheimer's Association's efforts to find a cure.

• Impact100 Metro Detroit 

  • Kelsey Arvai, Jaclyn Jackson, and Kali Hassinger are all members of Impact100 Metro Detroit. Members join to award high-impact grants ($100,000) to local organizations in the tri-county area. 

• BrilliantDetroit

  • The Charitable Committee is working with BrilliantDetroit to host a drive this holiday season. BrilliantDetroit is a nonprofit dedicated to building kid success for Detroit families with children 0-8 in high-need neighborhoods to have what they need to be school-ready, healthy, and stable. 

• Baldwin Society

  • Center Team Members will help to assemble Holiday Hope Care Packages for low-income seniors.

• Fleece & Thank You Event

  • Center Team members will get into the Holiday Spirit to make blankets for the Children's Hospital.

Kelsey Arvai, CFP®, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

Raymond James is not affiliated with the above organizations.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Your 1099 Overview

Contributed by: Nick Defenthaler, CFP®, RICP®

Tax season is in full swing, and 1099s are being developed and distributed by Raymond James and other brokerage firms. The two most common accounts clients own are retirement accounts (Roth IRAs, Traditional IRAs, SEP-IRAs, etc.) or after-tax investment/brokerage accounts (Joint brokerage account, individual brokerage account, trust brokerage account, etc.). Because retirement accounts and after-tax accounts are vastly different from a tax perspective, the 1099s that are generated will be much different as well. Let’s review the differences.

Retirement Accounts (Traditional IRAs, Roth IRAs, SEP-IRAs, 401k, 403b, etc.)

Retirement accounts produce what is known as a 1099-R. Yes, you guessed it – the “R” stands for retirement account! Because retirement accounts are tax-deferred vehicles, the IRS only cares about how much was withdrawn from the account and if there was any tax withheld on those distributions (the 1099-R is also accompanied by form 5498, which also shows any contributions to the retirement account). Because of the simplicity and what is captured on this tax form, I commonly refer to a client’s 1099-R as their “retirement account’s W2”. Given the tax-deferred nature of retirement accounts, portfolio income such as dividends, interest, and capital gains are completely irrelevant from a tax reporting standpoint. These income sources also do not play a role within the 1099-R, so far less accounting goes into producing the 1099-R. This means they are released early in the year – typically in late January/early February (around the same time most W2s are produced for those still working). For those over 70 ½ that have chosen to facilitate gifts to charity through their IRA by utilizing the Qualified Charitable Distribution or ‘QCD’ strategy (click here to learn more about QCDs), Raymond James now captures these gifts on the 1099-R to ensure your tax preparer is aware and factors them into your tax return.

After-Tax Investment/Brokerage Accounts (Trust accounts, joint accounts, individual accounts, etc.)

After-tax investment or ‘brokerage accounts’ are very different from retirement accounts regarding tax reporting. Because these accounts are funded with after-tax dollars and not held in a retirement account, there is no tax deferral. This means that income sources such as dividends, interest, and capital gains are taxable to clients each year – the 1099 produced for these accounts captures this data so your tax preparer can accurately complete your tax return each year. Within the 1099 summary, there are three common sections:

• 1099-Div: Reports dividends paid throughout the year

• 1099-Int: Reports interest paid throughout the year

• 1099-B: Reports capital gains or losses generated throughout the year

Unlike retirement accounts that are tax-deferred, dividends, interest, and capital gains/losses play a significant role within the 1099 because they are reportable on your tax return each year. Therefore, a significant amount of accounting from the various investments within your account is required to determine these figures captured on your 1099. Because taxes are not withheld in these accounts if distributions ever occur, withdrawals are not captured on these 1099s as they would be on a 1099-R. Given the extensive accounting that arises to ensure errors are not made on reportable income, the earliest these 1099s become available is typically mid-February. That said, it is quite common for many 1099s to be distributed closer to mid-March. Because of this, I recommend consulting with your tax professional to see if filing a tax extension is appropriate for your situation.

As you can see, there are important differences between these different tax reporting documents. Having a better understanding of each will make your upcoming tax season more manageable. If our team can be of help with your tax forms or any other areas, please feel free to reach out!

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.

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 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, CFP®, RICP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Conversions from IRA to Roth may be subject to its own five-year holding period. 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 of contributions along with any earnings are permitted. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

Financial Resolutions to Consider for 2023

Contributed by: Kelsey Arvai, MBA

As the year comes to a close, it is time to start thinking about the New Year and starting it off on the right foot. What better way to accomplish this than by improving your financial health in 2023? January is Financial Wellness Month and Wealth Mentality Month – which serves as a reminder to get our finances in order and plan out our financial strategies. It is also the perfect opportunity to check in with your Financial Advisor to ensure you are financially prepared both in the short and long term.

While planning your financial resolutions, remember to be specific about what you want and why. The key to success is being clear about your priorities and choosing a particular goal. Make sure your goals are attainable, write them down, and post them somewhere where you will be reminded of them often. You can ensure accountability by creating calendar reminders to check in on your goals throughout the year.  

For additional resources on Financial Planning tips going into the New Year, check out Sandy Adams' blog from last year. I have also provided some additional ideas below from a blog I wrote last year:  

Automate Savings & Debt Reduction

Establishing and maintaining a positive cash flow is a top-tier priority for your financial health. Automation is key to efficiency and effectiveness while working towards your financial goals. Prioritizing your savings contribution through automation helps hedge against the temptation to spend the funds elsewhere. Utilizing automatic payments for your credit card could help your credit score if the payment happens before your due date. After establishing an emergency fund through your automated savings, you might consider directing excess cash to your retirement and health savings plans.

Max Out Your 401(k) & Health Savings Account (HSA)

The beginning of the year is a great time to review your 401(k) and HSA contributions to ensure that you are maximizing your benefits and taking advantage of increased deferral limits for 2023. 401(k), 403(b), and most 457 plan limits are now up to $22,500 for elective employee deferral. The catch-up contribution limit for employees aged 50 allows for an additional savings of $7,500. Similarly, HSA contribution limits are up to $3,850 for individuals and $7,750 for family coverage, with an additional $1,000 for employees 55 for older.

It is estimated that couples retiring today will face $200,000-$300,000 of out-of-pocket medical expenses over their retirement years. Since HSAs are not "use-it-or-lose-it" accounts, and they can be spent on any expense without penalty after 65, it is advantageous to fully fund these accounts every year.

Plan for Charitable Giving

Most people wait until December to give, but we recommend not being in such a rush that you wait until the end-of-the-year deadline and lose sight of your charitable goal. The beginning of the year is a great time to develop a plan for your year ahead. Consider reading the following blog posts to help you get started by picking a charity that is fulfilling for you.

How to Pick a Charity…During a Pandemic Part 1: Important Documents

How to Pick a Charity…During a Pandemic Part 2: Commitment to the Mission

How to Pick a Charity…During a Pandemic Part 3: Resources

Invest in Your Emotional and Physical Well-Being

As you take stock of your financial health this year, carving out time for your physical health is equally paramount. There is a connection between health and wealth; each should be analyzed and reviewed professionally, at least annually.

Reach Out to Your Financial Advisor 

Working with your advisor, at least annually, can provide support to keep you on track while determining and working towards financial goals.

On behalf of all of us at The Center, we wish you a happy and healthy 2023!

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the Kelsey Arvai, MBA and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

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.

Giving Tuesday: What It Is and Why It Matters

Contributed by: Kelsey Arvai, MBA

Every act of generosity counts, and everyone has something to contribute toward making the world a better place. GivingTuesday was created in 2012 with one mission; to start a day encouraging people to do good. Since then, the movement is now global, inspiring hundreds of millions of people to give, collaborate, and celebrate generosity. 

The biggest celebration of generosity, GivingTuesday, is celebrated annually on November 29th. We welcome you to join the movement this GivingTuesday, every Tuesday, or every day - whether it's time, a donation, or the power of your voice in your local community. Check out this video on Three Tax-Savvy Charitable Giving Strategies to learn more.

The Center participates in giving year-round. The Center's Charitable Committee facilitates this framework for giving year-round. Our mission is to contribute time and donations to the following three areas – Financial Literacy, Community Needs (Metro Detroit), and Staff Involvement. 

Below are some of the philanthropic works we have done or plan to do this year. Additionally, The Center offers eligible employees up to two days off with pay per year for engaging in organized volunteer community projects and facilitating involvement in community activities. The Center also encourages employees to make gifts to charities of their choice. Each employee of The Center can request The Center to match their donation up to $100 annually. You can visit Giving Tuesday’s website to learn more about how you can give time, gratitude, or support to positively impact your community and create a better tomorrow.  

Upcoming Events

• Brilliant Detroit – Tuesday, November 1st through TOMORROW, November 30th

• The Charitable Committee is working with BrilliantDetroit to host a toy drive this holiday season! To ensure the success of this drive, we’re doubling down on our efforts. If you donate a toy in the next 48hrs (today, 11/29 or tomorrow 11/30) The Center will make a financial match to your donation! See more details HERE!

• BrilliantDetroit is a nonprofit dedicated to building kid success stories for Detroit families and providing proven, year-round educational programming for students in high-need neighborhoods.

• Baldwin Society – Friday, December 9th

• Center Team Members will help to assemble Holiday Hope Care Packages for low-income seniors.

Past Events

• Gleaners Mobile Grocery - March

  • Jeanette LoPiccolo, Mallory Hunt, Logan Dimitrie, and Tim Wyman volunteered with Gleaners Mobile Grocery to help local seniors in our community.

• Battle of the Brackets – A Center Spinoff Competition - March

  • To celebrate the National Basketball Tournament this year, we set aside our favorite teams and adopted asset classes instead. You may be thinking – that sounds kooky! It is a bit. Our celebration is a mash up of education, some charitable giving, and a bit of friendly competition.

  • Here’s how it works: Our investment portfolios contain mutual funds and ETFs from various asset classes such as U.S. Large Cap Stocks and U.S. Municipal Bonds. The asset classes are our basketball teams. Nick Boguth, our trusted portfolio manager, highlighted 28 different assets classes, then each was selected by a team member and entered into our brackets. The top four winners will receive a donation to their favorite nonprofit organization.

  • To kick off our competition, our amazing team members, Nick Boguth and Jaclyn Jackson led a presentation explaining which asset classes hold the largest concentration of investment dollars and how The Center’s investment team builds client portfolios. Each team member then selected their best guess to “win”. It was a volatile few weeks! Our lucky winners included Sarah McDonell (Real Estate), Matt Chope (Global Macro), Emily Moore (Municipal Bonds), and Raya Chope (U.S. Momentum Stocks). Center for Financial Planning is donating $1,000 total to help support 4 nonprofits of their choosing. Go team!

• Greening of Detroit - April

  • Jeanette LoPiccolo, Gerri Harmer, Logan Dimitrie, and Bob Ingram participated in a tree planting event with Greening of Detroit.

•  Michigan Council of Economic Education - April

  • The Center is delighted to co-sponsor the Michigan Council on Economic Education’s 2022 Personal Finance Challenge as it highlights the importance of making smart personal financial choices and the career opportunities in the financial planning industry.

• Money Smart Week is a national campaign by the Federal Reserve Bank to encourage good financial decision making by individuals and communities through free online education. To show our support for the Money Smart Week campaign, Center for Financial Planning Inc. is excited to co-sponsor the Michigan Council on Economic Education’s 2022 Personal Finance Challenge. High school students from all over the state of Michigan are invited to compete on April 29th. Teams of 3-4 students review a personal finance case study, then provide a presentation of their financial planning advice. The competition occurs before team of judges in-person at the Macomb Intermediate School District on April 29th. The winning team receives a $250 prize and will advance to a national competition.

• Miles for Money – September

  • Center Team Members logged their miles so that a nonprofit of their choice would receive money; a healthy WIN-WIN. For each one mile walked, biked, ran, jogged, etc. The Center donated $2 up to $100 or 50 miles for the month of September.

• Humble Design – October

• Center Team Members work with Humble Design to impact the lives of individuals, families, or veterans emerging from homelessness. Humble Design works to change lives and communities by custom designing and fully furnishing home interior.

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Three Tax-Savvy Charitable Giving Strategies

Contributed by: Lauren Adams, CFA®, CFP®

Lauren Adams, CFA®, CFP®, is a Partner, CERTIFIED FINANCIAL PLANNER™ professional, and Director of Operations at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

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 Lauren Adams, CFA®, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

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

New Guidelines May Help Retirees Retain More Savings

Contributed by: Josh Bitel, CFP®

In late 2022, the treasury department quietly updated life expectancy tables, reflecting that Americans are living longer and should have a longer time horizon for full distribution of retirement accounts.

When retirement accounts came into law via the Employee Retirement Income Security Act of 1974, required minimum distributions (RMDs) were established. This is an amount mandated by the IRS that individuals must take out of their retirement account each year (for those aged 72 and above) to avoid paying a stiff penalty. Two components make up the size of the RMD – the account holder's age and the account value. Generally speaking, the older an account holder is, the larger their distribution must be in relation to their account size (for example – assuming a $1,000,000 account, someone 72 years of age must distribute $36,496 by year-end, while an 85-year-old must distribute $62,500). These figures are gathered by taking your account balance and dividing it by your life expectancy factor, as dictated by the IRS (table shown at the end of this blog).

New RMD tables now reflect longer life expectancies, which means a reduction in yearly required distributions. So if you're someone who only takes out the minimum distribution every year, in theory, you can retain more of your savings in tax-advantaged accounts.

Of course, satisfying annual RMDs doesn't always mean taking your distributions and putting them into your bank account for spending. There are strategies available to reinvest these funds, avoid taxes by sending them to charities, and fund college savings plans, among other things to help you achieve your financial goals.

RMDs are truly in place so that account owners aren't able to defer their taxes indefinitely. Like anything else in the world of finance, it's best to fully understand the rules before making decisions. For this reason, you may be best suited to consult with a financial advisor to avoid any pitfalls.

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.

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 Josh Bitel, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Examples used are for illustrative purposes only.

Battle of the Brackets…Portfolio Management Edition: A Center Spin-Off Competition

Contributed by: Nicholas Boguth, CFA®

I believe certain things make our team outstanding here at The Center, and a few of them were in the spotlight this past month amid the March College Basketball Tournament:

• We constantly practice our company values.

• We have a heavy focus on charitable giving.

• And ultimately, we are just a cool place to work.

In the spirit of education, teamwork, and some friendly competition, we ran a bracket competition with an investment focus (we did a normal bracket game too, but mine was busted the first day, so there is no need to talk about that). Every team member chose an asset class to represent their “team” in the tourney. The winner of each round is the asset class that outperformed over the week, and we are repeating for five weeks until we have our champion.

Some team members chose more stable asset classes like short-term U.S Treasuries or investment-grade bonds, while some chose more volatile options like Emerging Market stocks or commodities. Overall, it is fun for the entire team to collaborate and for all of us (not just those in investment roles) to watch how different asset classes move with economic news*.

*We all know there is no shortage of economic news lately from the U.S. and overseas. Markets have been volatile, and times like these stress the importance of having a plan in place. As always, we are here to help answer any questions you may have about your plan. One small but powerful tool in investment management that we have taken advantage of is tax-loss harvesting during volatile markets. Read more about that here.

The cherry on top of this competition is that we are playing for some of our favorite local charities. The Center’s Charitable Committee donated $1,000 to the winning four team members’ charities of choice. Check out the results from last year, as we ran the same competition using individual stocks instead of asset classes. We will continue to find new ways to collaborate, learn, and partner with charities here at The Center. We hope you follow our blog as we update along the way!

Nicholas Boguth, CFA® is a Portfolio Manager at Center for Financial Planning, Inc.® He performs investment research and assists with the management of client portfolios.

Any opinions are those of Nicholas Boguth, CFA® and not necessarily those of Raymond James. Every Investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment, Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Tips to Help You Achieve Your Financial Goals

Contributed by: Kelsey Arvai, MBA

We hope your 2022 is off to a great start! As we all know, the New Year is an opportune time to reset and reevaluate your goals. With this in mind, we have come up with some simple yet effective strategies to position yourself for a prosperous year ahead.

Automate Savings and Debt Reduction

Establishing and maintaining a positive cash flow is a top-tier priority for your financial health. Automation is key to being efficient and effective while working toward your financial goals. Prioritizing your savings contribution through automation helps hedge against the temptation to spend the funds elsewhere. Additionally, utilizing automatic payments for your credit card could help your credit score if the time the payment happens is before your due date. After establishing an emergency fund through your automated savings, you might consider directing excess cash to your retirement and health savings plans.

Max Out Your 401(k) and Health Savings Account (HSA)

The beginning of the year is a great time to review your 401(k) and HSA contributions. In doing so, you can ensure that you are maximizing your benefits and taking advantage of increased deferral limits for 2022. 401(k), 403(b), and most 457 plan contribution limits have been bumped up to $20,500 for elective employee deferral.

HSA contribution limits have also been increased to a maximum of $3,650 for individuals and $7,300 for family coverage. It is estimated that couples retiring today will face $200,000-$300,000 of out-of-pocket medical expenses over the course of their retirement years. HSA balances can build and grow over time, and these accounts can be used to offset healthcare costs in retirement.

Plan for Charitable Giving

The beginning of the year is also a great time to determine your charitable goals and budget for the year ahead. We have written extensively on how to best pick a charity, so if you are unsure of which causes or organizations you would like to support, these blogs may be helpful!

How to Pick a Charity…During a Pandemic Part 1: Important Documents

How to Pick a Charity…During a Pandemic Part 2: Commitment to the Mission

How to Pick a Charity…During a Pandemic Part 3: Resources

Invest in Your Emotional and Physical Well-Being

As you take stock of your financial health this year, carving out time for your physical health is equally paramount. There is a connection between health and wealth, and each should be reviewed by a professional, at least annually.

Reach Out to Your Financial Advisor 

Working with your advisor on an ongoing basis can provide you support to keep you on track while you are determining and working towards financial goals. If you ever have any questions, please reach out to us. We are always happy to help!

Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA and not necessarily those of Raymond James.