“Should I be converting to a Roth IRA?” asked John recently during our Getting Acquainted Meeting. His is the second most frequently asked question I’ve had over the past six months from both existing and potential clients, so I wasn’t surprised. The media has been focusing on the Roth conversion over the past year and everyone is wondering how they can take advantage of the opportunity.

"Ann, I did everything laid out in my plan and I’m not as far ahead as I would like," lamented my client Ross the other day. This contrasted completely with my meeting with Sylvia earlier in the week where it was I that was aggrieved, "Sylvia, you didn't do anything that I laid out in your plan last year!" To which she retorted accurately, "Yes—that’s true, but I did great financially anyway."

You can be forgiven if you’re skeptical that Congress will be able to completely overhaul our tax system after failing to overhaul our health care system, but professional advisors are studying the newly-released nine-page proposal closely nonetheless.  We only have the bare outlines of what the initial plan might look like before it goes through the Congressional sausage grinder:

 

Many of President-Elect Donald Trump’s policy proposals are too vague to analyze, but one area where he has been clear is on reforming our tax system.  Here’s a quick primer on the changes that you can expect to be introduced to Congress in the coming year.

1) A shift from seven income tax brackets to three:

Current (Married Filing Jointly)

10% bracket: $0 to $18,550

15% bracket: $18,550 to $75,300

25% bracket: $75,300 to $151,900

28% bracket: $151,900 to $231,450

Some crucial maneuvers will help soon-to-retire people avoid trouble

I recently contributed to this important Wall Street Journal article by Jane Hodges.

The size of your nest egg isn’t the only thing you should be focused on as you close in on retirement.

So say financial planners and experts, who point to several financial moves investors can make in the years before they leave work that might help them preserve their savings, reduce their tax bills and provide for loved ones and heirs.

“Would you believe Matt gave $60,000 to the school capital campaign?” said my friend Beth.  We were catching up after being out of touch for years and these were the first words out of Beth’s mouth after she learned I was a fee-only financial advisor.  She elaborated on the gift by saying that her husband Matt had just cashed in on some of his stock gains and they had a pool of cash sitting around.

Your interpretation: Wow!  Those people are lucky to have so much money that they can gift $60,000.