The “One Big Beautiful Bill”:​ Key Strategies to Improve Your Wealth and Retirement

Hi and welcome to today's webinar. I'm Kimberly Thregill, a senior wealth manager at Stanbury Asset Management and I'm here with my colleague Ryan Walker as we discuss the one big beautiful bill, key strategies to improve your wealth and retirement. Great. Thank you, Kimberly. And thank you everyone for joining us today for another installment of our wealth planning video series, our webinar series. Um, I'm a senior wealth manager here at Stanbury Asset Management. Kimberly is beaming in from the east coast from New York City, the SAM office there. And I'm beaming in from our brand new office in Cameas, Washington. So, we're going to have a coast to coast conversation today. Um, and who doesn't love a great discussion on tax reform and recent changes. So, today's key subject matter is going to be focused on that one big beautiful bill that was passed. um on July 4th and some of the key strategies to improve your wealth and retirement. Some reminders before we kick things off. Um if you are interested in viewing some of our past webinars, our website is a great resource. So navigate to stansberry.com and under the insights tab, you'll find a link to view our pre-recorded historical webinar videos. Um today's webinar is meant to cover a lot of the main critical planning topics that we believe are going to benefit most of our clients. Um but the tax bill is not going to be covered in depth. So there might be some other topics that are part of the bill that will impact you um that won't be covered during today's webinar. But we will be highlighting some of the main core strategies that are involved in uh improving your financial well-being. So, with that, let's kick things off. Um, today during the presentation, we're going to be referring, of course, to the one big beautiful bill. We'll abbreviate that throughout the slide deck just to make things more streamlined. So, you'll notice the initials OBB throughout the webinar. And Kimberly and I will refer to um the package simply as the bill throughout the webinar as well. It all means the same thing, one big beautiful bill. So, uh, one of the key things is highlighting some of the valuable strategies that we as wealth managers have identified to potentially reduce your lifetime taxes paid. Um, and who doesn't want to potentially reduce their tax liability over time, over the long term? Um, so it doesn't necessarily mean the here and now, but over the next several years, how we can uh take advantage of some key provisions within the bill to um to be additive to a client's overall financial well-being. Um, we're also going to be covering some important things to be aware of as you consider your options and your financial future. Um a quick note here as you can see at the bottom of this slide the webinar today it's intended to be educational in nature um not provide tax specific advice for um any participants um and it focuses just on the federal tax alone um state specific income tax rule of course may apply in your circumstances and um you should review those specific tax situations with your wealth manager and with your CPA. today to ensure um that you're following the proper guidance. So, with that, I'm going to pass things over to Kimberly to kick things off and and to cover uh the first topic that we have on deck here. Great. Okay. So with the OBB changes and effects, one uh point we want to touch on as we go into the details of uh this particular bill is the difference between permanent permanent and temporary. So um something to be aware of is that there are some provisions within this bill that is considered permanent. Uh now take that for what that is. I mean lawmakers can make changes over time and they certainly have but for the spirit of of this bill we are going to understand and and keep in mind that if it's stating permanent that we're not expecting this to change. Uh now the other flip side of that is uh there are certain provisions that are temporary. One um aspect of of this uh bill that I think is important to note is the senior deduction for retirees. people who are uh well just anybody who is 65 and older um that is a US citizen is entitled to um to this deduction. We'll go more into that later, but it is important to note that that is one of the temporary facets of this bill stated to be in effect uh from 2025 tax year through 2028. Another um update that I I think we both felt was very important to note we're and I think everybody's quite excited about this is the uh fact that the adjustment of the federal marginal tax rates um that were changed in 2017 with the tax cuts and jobs act. Uh if you recall that um in 2016 the highest federal marginal tax rate was 39.6 six uh that was um dropped to 37% and of course all of the other federal marginal tax rates below that um fell as well. So that was considered a temporary change that would be suns setting and um with the OBB uh this has now been made um permanent. Now it's important to note there is a a nuance here um because when you consider say for instance uh say your income your salaries is say it's 300,000 for the year that does not mean that if you fall in a 32 or 35% federal marginal tax rate that doesn't mean that all of what you're making is taxed at that rate right there's um it's just the income that falls over a certain range is taxed at that level. So um those income ranges for each federal marginal tax bracket uh adjusts for inflation every year and interestingly in 2026 there will not be an inflationary adjustment for those income brackets except for the 10% and the 12% brackets. Now in 2027 it will resume with the um adjustments for inflation for every uh tax bracket. But something to be aware of. An interesting thing to add to that point, Kimberly, is that I researched why is it just the 10 and 12% bracket inflation adjustment. So it it actually comes down to the total cost of the bill and indexing the other brackets actually would have put the total cost of the bill over an acceptable level and it could have jeopardized the passage of the bill. So law lawmakers ultimately decided to just provide that inflation adjustment to the 10 to 12% bracket for for anyone out there who might get a pop quiz question from you know from from the from a you know local neighbor or something like that or a friend. at least uh at least you'll know why it's good to know. So, I'm going to cover here the estimated 2026 tax brackets um which there are not a lot of changes, but I highlighted here in the grade cells um in the 10 and 12% tax brackets where the adjustments were made relative to inflation. Um, one big takeaway that I just wanted to point out here, and this is how planning comes into comes into play when it comes to determining um, good opportunities to take advantage of, is that you'll notice that there are very large increases in tax brackets between the 12 and 22% bracket where you see a 10% jump and again between the 24 and 32% bracket. So, this could give us some tax bracket arbitrage opportunities to maximize what brackets you might be in. For example, if you're in the 24% bracket, you might want to take advantage of some planning techniques such as a Roth IRA conversion, for instance, to maximize that tax bracket that you're in, but without putting you at risk of going up over into that next bracket, which would be 8 percentage points higher to 32%. It's not as material when you look at the 22 to 24%. That's only a 2% adjustment. But you'll notice that they step up rather quickly when you're going from 12 to 22 and then again from 24 to 32. That that comes up a a great deal. You're right, Ryan. And I think when you're talking about something like a Roth conversion and if it's appropriate for the client, we really emphasize that a client speak with their CPA because the the difference of converting an amount that makes you go from, you know, say 12 to 22 um is something that I think certain clients may be more comfortable with and then they can even extend to the 24. to make that leap and and over, you know, or or say you convert to the point where you now fall in that 32. It's it can happen if you're not cautious and very aware of of the dollar amount of what you're converting and and really the best person to to consult with on that is going to be your CPA who's familiar with what your taxable income is. Uh so, thank this is a great slide. I think this is a lot of really helpful information for clients. And just uh one thing to note here, these are the estimated 2026 brackets. The the formal brackets are going to be released later on this year as we get closer towards the end of the year. Um but usually the brackets are pretty close to what becomes final law. So here, um I'm going to present to you some changes that may impact your family and household. They may not, but it's the um estate tax, otherwise known as the death tax. Um, as a reminder, the federal death tax is at a federal rate of 40%. However, there are exemptions in place. And one of the key things that um does impact households that are considered to be um with a high net worth would be the um extension of the prior exemptions, which is a a good thing for families that might be impacted by this. So, prior to the OBBB passage and approval, there was a scheduled um drastic sunset provision that would have reduced the exemption limit. As you can see in the table here, that exemption limit has been extended and and even slightly increased with the impact of inflation. 2026, the exemption per person is 15 million. The exemption per couple is 30 million. So if you were to leave behind an estate worth less than 30 million and you're a married couple, um there would be no federal death tax. For estates greater than that $30 million threshold, that's when the death or the estate tax um could possibly kick in. Um at the very bottom of the slide, you'll notice a a note here. Um, just a quick reminder, if you happen to be considering relocating to another state, every state has a different tax death tax law. Um, so I would just be mindful of researching what that state specific state tax rules um could be. Sometimes the state um exemption limits are as low as uh a million dollars. So if you have a net worth including a home, retirement accounts, investment accounts greater than a million dollars, it's possible depending on your state that there could be um you know a death tax or an estate tax associated with that particular uh circumstance. You know, something that I I do want to note, and this is just uh kind of a look back here that's noteworthy, is that it really wasn't that long ago that estates could be taxed um for when they were above say 600,000. I mean, we were talking that was 2000 20201 something like that. it was I think 675,000 was the maximum before it was uh you were subject to this. So it's amazing that that not being that long ago how much over the last you know these recent years things have amplified to the levels that we're at now. It's substantially higher than um where it's ever been before uh and something to be aware of. Right. So thanks for this is a great slide. Yeah, thank you. of course and it of course it's very relative to your personal circumstances and your legacy goals um but there there are strategies to you know take advantage of that lifetime exemption limit um as well. So, yeah, 100%. Family gifting before death and and and a lot of different aspects and nuance provisions that an estate attorney can uh you know can certainly help with and and we often work with them to to do that and to implement those plans. Um yeah, so the there's a couple things too that we want to touch on. One was the senior bonus deduction. That is 6,000 per person if you're 65 and older. Again, this is a temporary one. This is effective for the tax years of 2025 to 2028. Now, um this deduction is is allowable, but there is a phase out effective here. So, this has come up quite a bit, I have to say, Ryan, with clients because, you know, we um are aware that when they're looking at whether or not they're risking being in that phase out range for singles, it's it's their in it's modified adjusted gross income, right? So your modified adjusted gross income is going to take into effect, you know, not just the taxable part of your social security, but your entire amount is what they're going to calculate include in that figure. Uh could also include RMDs, right? Um different things that are taxable that you're including in that modified adjusted gross income to decide if you're being phased out or not. If you're single, uh you would be phased out of the 6,000 annual uh senior deduction if your income MAGI is um at 75 over 75,000 um in between 75,000 175. For married filing jointly, it's 150,000 to 250,000. And so if you have two people that are 65 or older and they're both able to have the senior deduction, you also have to look at what is their income. And this plays a part too in talking about social security and uh when you know if both of them have not both taken it taken it taken into account what that increased income is going to be. But um keep in mind that uh there is a calculation you can do to figure out if you're in the range to be phased out. 12,000 is a a substantial deduction. That's an above the line deduction um for for seniors for those years. Um, so you can calculate and take a look at what that phase out is, which would be six cents for every dollar that you're within that range. But a great I think a really great thing for seniors. This is this is very very well received from the clients I've spoken to. Agreed. And and one thing to add is that Social Security, while there was the the hope, the expectation that it may become a tax-free benefit, it wound up not making its way into the final version of the OBB. So, this was lawmakaker way to provide an additive um tax benefit for folks. So, it is an extra perk that the actual value depends on where you fall um when it comes to tax brackets because it's a deduction, not a credit. So, the $6,000 if you're in um hypothetically a 22% tax bracket, um it's going to be worth for a married couple filing jointly about just over $2,000. So you take the 12,000 deduction multiply by your tax bracket to understand what the you know what the true bottom line reduction in your tax liability is going to be. Um but as you mentioned there's you know some nuances with the phase out um some you know specific things to be aware of. So if you ever wanted to um reach out to your wealth manager to discuss the the bonus deduction in a little bit more detail you know absolutely feel free. Um so with that we'll transition to the salt cap which is also a temporary provision within the OBB. You can see in the table below through the years 2025 um up to 2029. Uh at this time it's scheduled to revert back to the $10,000 current cap or pre I should say pre one big beautiful bill cap of $10,000 starting in 2030. There are some phase outs related to this um deduction. Uh you can see the phase outs in the table on the right hand side related to your modified adjusted gross income. Um and salt simply stands for state and local tax deduction. So it allows you to combine either your um taxable um sorry your t your tax liability in whatever state that you reside in or the sales tax that you might pay. So for an individual who lives in a t a high tax state high income tax state like California or New York for instance there's going to be New York Yeah, exactly. um there's going to be a more significant amount of capital uh or income tax that might be paid in those particular states. So, it's going to be more impactful. For those who live in a lower income tax state, it might be better to to take the state um sales tax deduction. But you can also add um property taxes paid to this particular deduction amount as well. Um, the only exception to that would be if you have a rental property or real estate business properties. You can't include those property taxes. But if you have a vacation home, you can because that's considered a state and local tax that's paid. Um, however, it's not a situation where you can take the standard deduction plus the salt deduction. So, if you're taking the standard, um, you need to decide whether or not it's better to itemize and compare these extra deduction limits that you can claim against what the standard is to determine what the best um, you know, personal outcome is for your specific circumstances. Um, I think I covered most of that. Kimberly, anything you want to add there on salt? No, I think what you're pointing out is important to to note and I think it puts a lot of extra work certainly on our accountants um as we're taking into account so many of these changes especially for those who can um itemize and look at various options here. So um certainly a lot to to take into account but this is definitely these two things are coming up a lot in conversations ever since this bill was passed. So very important critical updates to to be discussing today. Agreed. Agreed. And for those clients with uh some philanthropic goals, we'll pass over to Kimberly to cover um some critical updates related to charitable deduction changes. Yeah. So um interesting this there's a notable change. Um, this is now going to be in effect in 2026, but there is now a a a floor of charitable contributions for 2026, not not 2025 tax year. Uh, a 0.5% of your adjusted gross income. So, that's uh important to to note because it is it wasn't that was not the case before. And there's also a cap for people who are in that 37% that very top federal marginal tax bracket. Uh there's a capping of the value of the itemized deductions uh to 35% of taxable income. So that being said, essentially going back to your charitable uh contributions uh if you and this is a really good example um listed here. If you have an AGI of a hundred um thousand and you're itemizing your deductions and you donated 5,000 to charity, then that there's about 500 that's related of course to your AGI. Um that's backed out of what you are getting credit for, right? So that's going to be in effect in 2026. And I expect Ryan that some of our clients who are charitably inclined might be doing some things differently uh this year in anticipation of this change for next year. Yeah, agreed. And there are some other tax efficient ways that you can donate rather than um you know a simple charitable deduction type donation. So, we'll cover um you know, a strategy called qualified charitable distributions in just a few minutes that um you could weigh out as a you know, as as an option to consider when it comes to getting your greatest um tax bang for your buck, so to speak. Um, and now that we've covered some of the major changes stemming from the one big beautiful bill, let's move on to review five of the key planning strategies that we've been talking to clients about recently. The first up is uh Roth IRA conversions. Roth IRA conversions. I mean, what more fun to talk about than these things? Uh, we see this a lot. I'm sure anybody use on LinkedIn, I've seen so many um articles and and webinars on this particular subject. It's important to say that when you're considering a Roth IRA conversion, um, one of the basic things that we talked about is look, if you've got a sizable, uh, traditional IRA, 401k, combined amount, especially if you're married, uh, filing jointly and you have two people and a couple and they're close in age, you know, what is that aggregate amount aggregate amount of tax deferred savings that the IRS is going to require you to withdraw at a certain dollar amount every year. Uh so keeping in mind if you were born in 1960 or later then uh that required minimum distribution time frame has been pushed back until uh the year that you turn 75 which allows for a lot more time for those savings to compound. So what has come up with a lot of clients is saying okay you know given the size of our tax deferred savings I may end up with a six figure RMD and if I do that at that time certainly by the time you're 75 you're already taking Medicare highly likely um and and that six figures added which is dollar for dollar like a salary added to your taxable income is is likely to uh create an what we call an Irma effect, right? Um so it's adding a premium to your um premium share Medicare premium, but it's it's making it a little bit more expensive for your premiums because your taxable income has increased. So when we are considering our Roth IRA conversion, we are looking ahead. it. The whole concept of this is delay gratification. Not the most popular thing, Ryan, in our culture today where everything is how fast can I get it, right? This is um the opposite of this. This is saying are you healthy, right? Uh do you expect to to be living for a while? Because when you do a Roth conversion, uh if if you pass away within five years, um that growth um can be taxed, right? You're the idea is is that you're taking some out of that tax deferred bucket, that IRA, that 401k, SER, whatever, and you're paying the taxes now. And um then you're moving it to that Roth IRA space. And in doing so, you are creating that tax-free source of income uh or could be um inheritance for the next generation. Maybe you don't need it, but you're reducing that tax deferred total amount and and also in turn uh reducing your required minimum distribution, right? And so, um, you ideally want to be doing this ahead of the time that you're taking required minimum distributions because once those kick in, and again, if you're born in 1960 or later, it's going to be 75 years old, it's when you'll have to start doing it. You'll be doing that every year. And any Roth conversion is going to be have to be above that figure that you're required to take. So uh this is a concept that does come up a lot but but when we talk about it we are asking you know what is your federal marginal tax rate right now if you are in a very high federal marginal tax rate 32 35 37 um and you know you may also um have state taxes on top of that well then you're paying quite a bit of taxes uh in order to make that conversion so we definitely want to weigh the pros and cons I just spoke of Irma being another factor. So again, if you're already taking Medicare, then that's a factor to consider because your Medicare premium could be affected and could be higher. Now, that is in typically again if you're taking Medicare at the time. It's going to be in 2 years from the time you convert and it's temporary. It's only for that time frame that correlates to the year or years that you did the raw conversion. Uh but it's something to keep in mind. Uh and then you know we want to talk about your long-term capital gains rate and NIIT which is your net investment income tax. Um so as you convert let's say um you know $100,000 in a year you know that is adding that as income and you could if you're in a certain range um go from a 15% long-term um uh tax gain taxable gain bracket up to something perhaps um even higher because NIIT T does kick in once you have a certain amount of net investment income for the year. That adds Ryan another 3.8 on top of what is for most people they fall typically fall in the 15% of of the clients that we work with fall in that 15% range. So you really are now at 18.8. Um and and you want to keep in mind all of these factors. Um right. So, um, lastly, the senior deduction, right, that has a phase out for income. So, if you're doing a conversion, it could affect your ability to receive that um any or all of that senior deduction if uh it effectively brings up your income above the phase out range. All really, really important information as you explore whether or not this strategy could be appropriate for you. If you're in a a postretirement period of your life and and have not um been forced to take RMDs yet, you could be in a sweet spot where you happen to be in a temporarily lower tax bracket, relying on um you know on your savings on taxable assets for income and may be able to take advantage of a multi-year Roth conversion strategy to reduce your future RMD calculations. Um, and I would just suggest that you use the the three check marks below to explore what um what the impact might be in terms of a Roth conversion and if it's going to um increase your Medicare premiums, impact your capital gains or the any IIIT tax. Um, and then also that new $6,000 bonus senior deduction. So these are some of the things that um wealth managers go through with clients as they consider Roth IRA conversions and then you know usually try to get the green light from a CPA as well to confirm it's the best course of action going forward. So next up here we have qualified charitable distributions or QCDs. And if you remember a few slides ago, I mentioned that charitable gifting methods that um that can be a bit more tax efficient rather than just writing a check or trying to get a charitable deduction for that. And QCDs would fit that uh fit that mold, fit that description. Um so QCDs are eligible for folks who are age 70 and a half or older. um they can donate up to $108,000 in 2025 directly from an IRA, a traditional IRA, mind you, to a charity. And if you're of RMDH, so currently age 73 or older, um that can avoid the taxes that would otherwise be um be, you know, that you'd be liable for um if you would take just a regular RMD distribution and then write a check to that charity. So the QCD must be made payable to the charity. Um, and if the funds are withdrawn first as a distribution and then you write a check to the charity, that's not the right way to go about this QCD type approach. Um, every custodian's a little bit different. We use purging here at Stanbury Asset Management. Um, so in that case, the check for a QCD will would be mailed directly to you, made payable to the charity, and then you would forward it along to the charity. um you know either hand deliver it if it's a local charity or you know include a note in terms of um you know what what you're looking to support is a great approach to make sure that it gets into the right hands and u that the charity uses it as intended. Um quick note that it does require IRS qualification as a charity. So it needs to fall under the tax code 501c3 um as a public charity. Um, and a reminder, it's not considered a tax deduction because a QCD actually avoids the taxability of the distribution altogether. So, federal and state income taxes are avoided with this. Um, I would just remind folks to keep good records um, if you are making a qualified charitable distribution and provide those records to your CPA or accountant um, when it comes time to file taxes so that you're not taxed on what is actually going to to the charity directly. Um, but a, you know, a great strategy to try to be philanthropic, which we're grateful a lot of our clients are, and they use this QCD method to, um, to, you know, both save on taxes and then also give back to charities that are very near and dear to their hearts. Yes. And I would say too that that is important to note that when they a client chooses to do a QCD that is still going they're going to receive that tax form, right? That 1099 that's going to show that required minimum distribution amount that was withdrawn. That in and of itself is not enough to have the charitable rec, you know, uh uh donation recognized, right? You've got to have also for your CPA that letter from the charitable organization or the check which note you know something to note is that check is made out directly to the charity right we do that so that it goes directly to the charity there's no way that the the client is taking those funds but these are things that you bring to your CPA that that um creates that that QCD effect if you will absolutely great reminder keep those good records make a copy of the check the letter that you received back from the charity and you should be good to go. So, now we're on to donor advised funds. So, this is Kimberly's specialty. It's just another charitable option to consider. Yes. And Sam, we do offer donor advice funds um otherwise known as DAPs. Uh we like our our anacronyms uh in the world of finance, don't we? So um so donor advised funds you can con uh contribute cash you can uh contribute um stock often you know highly appreciated stock is a is a great idea uh even crypto uh if you want and when you um this the process is really simple here at SAM uh we do have a minimum I will say we try not to start with anything less than 50,000 for a donor adise fund Um but uh what we what we do is we have a simple process of opening up the donor advice fund for the client. The assets are brought into that donor adise fund and at that point of when the assets are brought into the DAFF the client will receive in that tax year um the credit as though the these assets were given to that charitable organization. And um it's important to note that that donor adise funds um when you're working with an institution like SAM, we work with what is a sponsor organization that's also a nonprofit. And so there's some administrative um facets to this because it needs the the um sponsor just affirms that each uh grant which is easily done online by the client is going to a true 501c3. So, um they kind of managed that but uh they also know what tax year these donations were made to or granted to the the uh donor advice fund. Um that keep in mind that when you do this, this is something that we really only bring up for clients who are charitably inclined. In other words, you're already going to be giving to a charitable organization anyway. then this is something that would make sense because you can contribute any of these um assets. You can also you know consider your IRA for clients who are um have those sizable savings but when they go into the donor adise fund you you can't take that back. It is now technically outside of your control and you can only give from that donor adise fund to charities. Now, the really fun thing about this, Ryan, is that um you can get your family involved. You know, donor advice fund can outlive you and your spouse. So, if you have your your favorite alma mater or whatever it is that you want to uh to give funds to, what we do at SAM is we advise based on their liquidity needs, like how often are you granting, how soon are you going to be granting from this fund? Uh we'll determine how what strategies are best. um to invest within the fund. Um but this is something that um that a couple can continue to um create as a legacy and their kids and grown kids from there can continue to to grant. And what we try to do at SAM is work with our clients to understand what their financial goals are and to grow those funds from the amount that was originally given and um through investing in the markets and and increasing um that fund for clients. So something to to keep in mind again it is irrevocable um and there are limits to how much can be deducted um based on your AGI. Keep in mind that 0.5% of your AGI that there is that floor and that's going to kick in in 2026. So, um something always to consider that is a a thing that's going to be changing right moving forward next year. Yep. Absolutely. Um with the donation of stock or crypto that would actually be done in kind meaning that you don't need to sell the stock or sell the crypto and realize those gains. So those gains can be put into the DAFF. You'll never be responsible for ever realizing those gains. So if you happen to have a stock with a very low cost basis, that could be an ideal position to transfer over. We all know, you know, how how Bitcoin has been performing lately. So, if there's any large allocation in holding in crypto that um has a very low cost basis, scoot some of that over if you have philanthropic goals into a DAFF and take advantage of never having to pay those the capital gains taxes on liquidating those holdings. Yes, highly appreciated stock. I agree. Absolutely. And also too, um you don't need to stick with the same charity every single year. The awards can be given to any approved um IRS charitable organization and the sponsoring organization will of course confirm that tax eligibility. Um but when you were talking about um you know getting together with your family maybe every Thanksgiving um you know somebody from the family member can choose um an organization that's near and dear to their heart and you can you can earmark a new charity every year. It just doesn't need to be um set in stone. Just wanted to to highlight that before we move on. Yes. And I think it's great because it helps families to pass on that spirit of giving to the next generation. It's encouraging that, you know, um going forward. So, agreed 100%. Agreed. All right. So, I'm going to be covering um strategically realizing capital gains to takes take advantage of of tax opportunities. Um, one little known strategy which may not impact a vast majority of the clients that we that we work with. Um, but it's the fact that under a certain um taxable income threshold, long-term capital gains can actually be realized at a 0% tax rate. Um, and what this allows investors to do is to lock in those gains. Of course, it resets the cost basis at a higher level if you buy back the same stock that was sold or you invest in other investment opportunities. Um, and then it eliminates the future tax liability all without paying um anything towards federal taxes. um state tax may apply in your circumstance, but the below table here is meant to illustrate what kind of taxable income thresholds you need to be at. This would be after deductions after the standard or itemized deductions for tax year 2025. Um so take for instance if you're a couple um married couple filing jointly and you determine that for 2025 your taxable income may only be $50,000 after deductions. This gives you about a $46,700 buffer to realize capital gains that would be taxed at a 0% rate. You can't go over that taxable income threshold of 96,700. Otherwise, it will move up into the higher bracket, which would probably be 15%. But if you happen to be, you know, postretirement, you no longer have an earned income, maybe you're not on social security yet, you're living off of cash or um taxable asset brokerage account savings. Um it might make sense to consider this sort of arbitrage opportunities um before RMDs kick in and you happen to be in that sweet spot of being in a low tax bracket, low tax situation. um could be a great opportunity to explore with your wealth manager and your CPA. Awesome. It's it's actually a really unique strategy and something that I think um you know it's it's narrow in scope. I don't think very many people can do this often, but it is something to be aware of because when all things align, it's it's really a a great strategy to be to consider. Don't you think? I I think this is a this is a great thing to be bringing up. So, absolutely. Yeah. And Sam can be your partner in doing that. We we can certainly, you know, look at customized harvesting approaches to take advantage of this if if you happen to be um in the position where you can do so. Mhm. So our last topic here in terms of the five planning strategies that can be related in some way or another to the one big beautiful bill is this um superfunding idea of retirement contributions. And one thing to note before I bring up the meat and potatoes of the slide is that this really only applies to folks who are active participants in a 401k and a 401k that offers a unique sort of benefit or tool usually just available to employers that are very large in nature. Thinking large to mega cap type companies that have a 401k available. If you haven't heard of this strategy, it might make sense to look into your plan documents to see if this strategy is an opportunity that's present for you. Um, so just to to get into the why behind it. So, as I mentioned, some, but not all, 401k plans allow for after tax contributions, but the ones that do, you can take advantage of um some additional planning opportunities and tax reduction strategies as well over the long term because contributions for um most participants in a 401k can actually be up to $70,000 a year, not the standard um deferral pre-tax limit um which depending on your age could range but usually in the 25 to 30 $30,000 range per year. Um but the 70,000 does include the regular deferral limit. It includes the employer matching contribution as well. Um, but if your plan offers the ability to make an after tax contribution and then roll it over into a WTH, the Roth portion within your plan, um, this allows you to take advantage of of a different opportunity rather than saving through a regular taxable brokerage account. Um, and it it's really only a good option to consider if you're already maxing out on your deferral limits. Um, there are some extra catch-up provisions that actually increase the $70,000 to $77,500 if you're over age 50. And they actually go up a little bit more if you happen to be between the ages of 60 and 63. Um, because you do get an extra catchup provision for those specific years. Um, but overall, you know, I would I would say look into the plan provisions. If you're maxing out on your regular deferral limits, see if your plan offers an after tax contribution opportunity and allows you to move that over intrayear into a Roth conversion. Um, and then, you know, feel free to, you know, run the numbers and see if it makes sense to, uh, to take advantage of these higher limits that are built into the 401k plan provisions. Um, anything that you'd like to add to to this? Yes. Well, as we were, you know, preparing for this webinar and I was like, this is great. But how often, you know, we do so we do a lot of financial plans at SAM and I have yet to see a client that has actually saved this much in their 401k. Lots that will max, but I haven't seen this figure. So we really did didn't we in preparation really drill into the well like okay how does this work you know and we did some due diligence to find that indeed there it is a matter of going and and double-checking your particular plan because I don't know that it's uh advertised very well and I wonder if some of the clients that I have are just unaware that they may be able to have this extra amount of savings because if you can save within your retirement plan after tax and manually shift that to a Roth upwards of close to 70 to 77,000 in a year. These are typically going to be the kind of clients that are, you know, retirement is on the horizon and they're really focused on it. This is a very welcome thing to be aware of. So, um, I thought it was great as we were preparing for this, really looking into it. Of course, we were checking out our own plan and all of that fun stuff, but um I I always say whenever you know uh the government is providing ways for you to say whether it's through HSAs or increasing um catchups, even like this 60 to 63, it's it's we're they're telling us something, aren't they? They're saying that there's not enough people saving and and if you're getting a break, it's it's because they're seeing some things they're thinking that we need to be doing and paying attention to this. So, um if if you're out there and you uh find that you are eligible for this kind of a 401k, we would urge you to um you know, if if you have the liquidity to be able to to fund that um you know, net of expenses to to really consider it. Agreed. Yep. Great thing to add. Um, and just one other thing before we move on to the wrapup here is that um, this sounds a lot like a backdoor Roth IRA contribution, and it is in concept, but it allows you to take advantage of these Roth contributions in an indirect way, in a backdoor type of way, but through your 401k in an automated way, and at much higher contribution levels than what's available within an IRA, especially through a backdoor Roth contribution. Substantially more. Yeah, agreed. So, one thing to make note of, as we have um at the beginning of the webinar, but we'll do so again, is that we aren't disclaimers. Yes. Um so, always speak to your CPA to clarify what makes the most sense for you relative to your unique circumstances. You could talk to your SAM wealth manager to help establish a donor advised fund or DAFF or to explore this idea of a qualified charitable distribution or QCD. We also added on this slide here some um hopefully helpful tips on where to search for charities and to understand how they stack up against industry averages. Um so charitywatch.org is a great website. their charity watch watchdog group. Um, givewell.org um is another one where folks can research on uh charities on where to give and they're they're scored based on how well they use um those donations and contributions for their actual cause. And then charity navigator.org org is another one which again has a lot of access to data on uh public charities that could be eligible for either a QCD or uh you know other aspects of charitable giving and your philanthropic goals. So, next steps. If you are interested in evaluating any of these strategies, feel free to scan the QR code uh on this slide, whether you are a client or a prospective client, and an automatic email will come to you to schedule uh some time with either your wealth manager or with somebody else from our team if you're a prospective client uh where we can also offer you a complimentary review. And we also would love to have you follow us on social media. We are very active on LinkedIn, on Facebook, on X. You could see our handles listed below the icons here on the screen. But it's a great way to um stay on on top of, you know, everything related to the one big beautiful bill, other aspects of some of the um the webinar topics that we've covered in the past. Um, and you know, we we love to have our our clients and prospective clients follow us on social media. So, feel free to we we love love to have you join us on the social media family there. And uh make sure that you catch our next uh webinar. The topic will be um on Medicare and long-term care planning in September. So, thanks for joining us today. Have a good one. Yeah. Thanks so much for joining everybody. Thanks. We'll see you at the the next month's webinar. Take care.