Core Insights - The decision to withdraw from retirement accounts to pay off a mortgage can lead to significant financial consequences, including lost compounding growth and increased tax liabilities [1][2][22] - The penalties and taxes associated with early withdrawals can substantially reduce the amount available for mortgage payoff, making it a costly decision [3][4][22] - Maintaining a mortgage while allowing retirement accounts to grow can often be a more financially sound strategy, especially if the mortgage rate is lower than expected investment returns [11][12][14][22] Financial Implications - A $300,000 withdrawal could result in a loss of potential growth, compounding over 15 years at a 7% growth rate to approximately $850,000 [1] - Withdrawals can trigger Medicare premium surcharges, increasing costs by $80–$140+ per month [1] - Large withdrawals can push individuals into higher tax brackets, leading to 85% of Social Security benefits becoming taxable, resulting in effective marginal tax rates exceeding 20% [2] Withdrawal Penalties - Individuals under 59½ face a 10% early withdrawal penalty on IRA and 401(k) accounts, which can significantly diminish the amount available for mortgage payments [4][8] - The "Rule of 55" allows penalty-free withdrawals from 401(k) plans if the individual separates from their employer at age 55 or later, but this option is limited [9][10] Strategic Considerations - The math often favors keeping a mortgage, particularly if the mortgage rate is low compared to potential investment returns [11][12] - A strategy of patience, allowing retirement accounts to grow while managing mortgage payments from other income sources, can lead to better financial outcomes [12][24] - The psychological aspect of debt management is significant, as many individuals feel more secure owning their home outright, which can influence decision-making [16] Professional Guidance - Personalized financial modeling is crucial for making informed decisions regarding retirement withdrawals and mortgage management [18][20] - Financial advisors can help individuals navigate the complexities of tax implications, withdrawal strategies, and overall financial planning [21]

KEY TAKEAWAYS If you did not withhold enough federal income taxes from your paychecks throughout the year, come April 2026, you may have a significant tax bill. However, I would say, if they're just now looking at that, they're about eight months late. Tax planning should be something you're doing all along. For our clients, one of the things we recommend is…to get their withholdings right. The idea behind it is to have enough withheld from each pay period so that when you get to the end, you're at a nomina ...

Natalia Gdovskaia / Getty Images Tax surprises rarely come from a single decision, but can result from many small ones that add up. Before selling investments, withdrawing retirement funds, or filing jointly without a plan, loop in your CPA or financial advisor. Key Takeways Selling investments without considering tax timing can push you into higher brackets. Coordinating financial decisions with your CPA or advisor before acting—rather than after—prevents costly surprises.​ Required minimum distribu ...

Hall said, "Social Security has a cost-of-living adjustment [that] keeps up with inflation. Our investments will also adjust over time if we keep some growth in the mix. The real lever is spending. When prices bite, pull back on nonessentials. Maybe fewer big trips for a season. Maybe different choices than what you have always done. Keep core bills matched to steady income and let the portfolio work."We don’t marry a 3% or 4% rule [for the percentage of your retirement funds to withdraw each year ]. We set ...

Core Insights - Moneco Advisors has successfully merged with Lichtenstein Financial and its tax firm, Lichtenstein Tax Consultants, enhancing its service offerings with in-house tax professionals [1][2] Company Overview - Moneco Advisors, based in Fairfield, Connecticut, manages approximately $2 billion in client assets and has around 50 employees, including nearly 40 advisors across seven offices in Connecticut, Rhode Island, and New Jersey [4] - The firm launched Moneco Tax, the rebranded business of Lichtenstein Tax Consultants, as part of its integration process [2][3] Service Expansion - The merger allows Moneco to provide comprehensive tax preparation and planning services, integrating tax strategies into the financial planning process [3] - Moneco Tax will function as a standalone tax compliance and consulting business, led by TJ Hickey, who joined Moneco in 2023 [3] Industry Trends - The trend of Registered Investment Advisors (RIAs) building in-house tax businesses is growing, with several firms pursuing mergers and acquisitions to enhance their tax capabilities [5] - Notable examples include Mercer Advisors acquiring Beach Freeman Lim & Cleland, and Sequoia Financial Group acquiring Carlson Capital Management, which brought internal tax planning services [5]

Core Insights - The upcoming tax season will serve as the first evaluation of the benefits from the Trump administration's tax law, referred to as the "One Big Beautiful Bill" [2][4] - Significant changes in tax deductions and credits are expected to lead to higher income-tax refunds for households, with projections suggesting an increase of up to $1,000 in refunds for 2026 [5][14] - The new tax law introduces various deductions, including those for overtime pay, tips, and a senior bonus, which create new planning opportunities for taxpayers [4][18] Tax Breaks and Deductions - Specific income limits apply for various tax breaks, such as $75,000 for individuals aged 65 and older seeking a $6,000 senior bonus deduction, and $500,000 for households wanting the full $40,000 state and local tax deduction [1][7] - The SALT deduction has quadrupled to at least $40,000 through 2029, which will lead to an increase in itemized deductions for 5 to 7 million additional households [10][14] - Taxpayers may need to "bunch" charitable contributions to maximize itemized deductions before the eligibility for such deductions decreases in 2026 [12][13] Refunds and Withholdings - The average tax refund for the current year was $3,052, and the upcoming tax season is projected to be the largest refund season ever [5][14] - Critics argue that larger refunds indicate overpayment of taxes throughout the year, suggesting that individuals should adjust their withholdings to avoid this situation [15][16] - Changes in withholding tables in 2026 may allow taxpayers to see the benefits of tax cuts reflected in higher take-home pay [17] State Tax Implications - States may not uniformly adopt the new federal tax changes, leading to a patchwork of state tax laws that could affect the application of new federal deductions [20][21] - Some states, like Michigan, have already aligned their tax laws with the new federal tax breaks, while others are still determining their approach [22] New Tax-Advantaged Accounts - The introduction of "Trump Accounts" allows parents to open tax-deferred accounts for children under 18, with a $1,000 seed contribution for U.S. citizen babies born between 2025 and 2028 [24][25] - While parents cannot claim a tax deduction for their contributions, there may be potential tax benefits depending on employer contributions and IRS regulations [25][26]

At the same time, the study (and the growing research around estimating and communicating advisors' potential value to clients) offers some explanation into why tax planning and preparation are "elements I see time and time again among the fastest growing practices," said Shelby Nicholl, founder of advisor recruiting and consulting firm Muriel Consulting. Since early-career advisors often face difficulty generating organic growth — a problem shared by even some of the most profitable registered investment a ...

Getting ahead on your taxes isn’t just about filing early. Tax experts say the most effective moves happen right at the start of the year, long before paperwork piles up or forms go missing. By taking a few intentional steps in January, you can smooth out your tax burden, reduce errors and make the 2026 filing season far less stressful. Here are eight smart ways to build momentum now. Be Aware: 8 Ways Trump’s ‘One Big Beautiful Bill’ Could Offer Tax Relief Read Next: 9 Low-Effort Ways To Make Passive Inco ...

Core Insights - Financial advisors provide essential services that can significantly impact personal financial management and decision-making [4]. Group 1: Financial Management - Financial advisors assist in setting up sustainable household budgets and review them as circumstances change, such as income increases or new expenses [5][8]. - They help in planning for taxes year-round, employing strategies to legally minimize tax burdens and teaching clients various tactics to shield income from taxes [10]. Group 2: Major Life Decisions - Financial advisors can guide clients through significant life decisions, such as career changes, relocations for better opportunities, or considerations for early retirement, by assessing financial risks and benefits [6][8]. Group 3: Insurance Guidance - Advisors provide assistance in evaluating and obtaining the right types of insurance, including health, life, and long-term care insurance, ensuring comprehensive financial protection [9].

Keep in mind that the 50% and 85% limits are not tax rates. They simply reflect the maximum portion of your Social Security benefits that could be subject to tax. The taxable amount is then added to your other income and the regular income tax rates and brackets are applied. (A financial advisor may be able to help you plan for Social Security, and this free matching tool can help you find an advisor .)If your combined income is between $32,000 and $44,000, up to 50% of your Social Security benefits are tax ...