Retiring Against The Headlines - Misleading Headlines Capture Attention But Often Fail To Provide Clear Understanding. Here Are Some Things You May Want To Know

As you look to transition from active investing and into harvesting retirement income, there are numerous changes in retirement planning that you should be aware of. The ever-changing landscape can be overwhelming, with headlines capturing attention but often failing to provide a clear understanding of what these changes truly mean for you. While it's essential to study and potentially update your retirement strategies, it's crucial to ensure that you're well-informed and not misled by sensationalized headlines.

Here are a few key areas that you may want to research or discuss with your financial advisor, even if you believe there's no cause for concern, as there might be important considerations to address:

Roth IRA Required Minimum Distributions (RMDs): Recent changes in the SECURE Act 2.0 have eliminated RMDs on Roth IRAs. This change makes sense since there wasn't a tax advantage for the government in the first place. However, you may come across headlines stating otherwise. It's a good idea to touch base with your advisor to confirm that you're exempt from RMDs and can enjoy the benefits of your Roth IRA without any required distributions.

The Elimination of the Stretch IRA: While the elimination of the stretch IRA is not new, it's important to discuss estate planning with your financial advisor if you haven't already. This change means that your beneficiaries will have only ten years to fully withdraw from an inherited IRA. This compressed timeline could potentially push them into higher tax brackets during their peak earning years. By addressing this issue proactively, you and your advisor can explore excellent alternatives and pathways to minimize the tax impact and ensure a smooth transition for your beneficiaries.

Estate Planning Considerations: Many advisors are now well-versed in estate planning to better serve their clients. They recognize the impact of taxes on retirement accounts and extend their expertise to encompass the transfer of assets to future generations. For comprehensive planners, protecting the families they work with involves planning for the next generation as well. By embracing the multifaceted realm of estate planning, advisors can offer more comprehensive services and cater to their clients' needs more effectively.

The evolving landscape of estate planning within the advisory field signifies a broader recognition of the dynamics involved in familial financial legacies. Many advisors are stepping up by diligently familiarizing themselves with the intricacies of estate planning. By expanding their knowledge base, advisors elevate their ability to protect the interests of the families they serve, extending their influence beyond their clients' lifetimes and into the future.

It is estimated that over the next decade, around $30 trillion will be transferred from one generation to the next, prompting the government to consider ways to maximize taxation on that wealth. This should also encourage advisors to focus not only on taxation but also on estate planning. You may want to seek a firm that focuses on tax-planning and not just investments.  Much of what you read here today comes from the ideas and passions of Christopher Dixon Jr. at Oxford Advisory Group.  They are a firm that has a strong focus on how taxes impact retirement assets.

It has been projected that nearly 90% of beneficiaries would move away from their parents advisor when assets are transferred. The speculation on this is that advisors are having trouble connecting with the next generation and showing true benefits of continuing to work with the existing firm. This relationship gets even more difficult when the beneficiaries inherit a large tax bill along with their parents’ assets.

In this transformative environment, there is a need to find advisors who focus on taxes, estate planning, and adapting to new regulations. By focusing on these areas, advisors can proactively address the challenges and uncertainties accompanying the impending wealth transfer, delivering significant value not only to current clients but also to future generations and their loved ones. Embracing this shift allows advisors to navigate the evolving landscape and help you leave a lasting legacy that spans generations.

Firms like Oxford Advisory are doing just this, embracing the shift and striving to put together plans that aim to reduce tax liabilities for their current clients as well as the generations to come.

Headlines can be potentially misleading. However, the convergence of factors such as potential beneficiary turnover, an aging advisor population, low tax rates, increasing national debt, and an impending generational wealth transfer may be signaling an imminent paradigm shift in the financial industry.

Retirees that find or work with advisors who embrace tax-planning, estate planning, and adapting to new regulations, may find potentially more benefits to working with a retirement advisor instead of an advisor solely focused on investments.

See your potential Retirement Tax Bill HERE.

Oxford Wealth Group, LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The communications of an adviser provide you with information about which you determine to hire or retain an adviser. Information about Oxford can be found by visiting the SEC site www.adviserinfo.sec.gov. and searching by our firm name.

This is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this report. The information herein was obtained from various sources. Oxford Advisory Group does not guarantee the accuracy or completeness of information provided by third parties. The information in this report is given as of the date indicated and believed to be reliable. Oxford Advisory Group assumes no obligation to update this information, or to advise on further developments relating to it.