Feb 20, 2017

Posted in Blog - "Altman Speaks"

Retirees Should Reviews Long-Term Financial Plans

Retirees Should Review Long-Term Financial Plans in Light of Proposed Tax Changes


After a contentious presidential election, many Americans are eager to place the discourse of politics far behind them. Resist that temptation and don’t put the upcoming political agenda out of your mind just yet. The president-elect campaigned on a platform of change, including significant changes to the tax code. While details regarding many of these campaign promises have yet to be articulated, recent remarks indicate some key legislative policies that may have serious impact on some retirees.

Proposed changes to deductions can impact retirees

The president-elect has proposed important changes to the standard and itemized deductions. If these or similar changes take effect, this is a good time for retires to review and reconsider the use of current deductions. In addition to significantly increasing the standard deduction – from $6,300 to $15,000 for single filers and from $12,600 to $30,000 for married couples filing jointly — proposed changes also include a ceiling on itemized deductions of $100,000 for singles and $200,000 for married couples filing jointly. If mortgage payments are no longer fully deductible, retirees may want to reconsider whether to keep a mortgage into retirement or if it is in their best interests to pay it off early. Retirees may also wish to reevaluate their charitable donations and the methods for making donations in light of the proposed itemized deduction ceiling.

High-net worth retirees can protect themselves

Donald Trump’s tax proposals include reducing the number of tax brackets from seven down to three – 12%, 25% and 33%. These lower tax rates may impact retirees’ decisions concerning the timing and amount of IRA distributions, the withdrawal of pensions, and the timing for applying for Social Security benefits. If these new brackets take effect, it is a good time to reevaluate income planning measures and discretionary income sources.

The president-elect has also proposed elimination of the estate tax. This will raise questions among retirees regarding not only the appropriate amount to leave children but also the best mechanism for doing so. Some retirees may believe estate planning will no longer be necessary in light of this change but that is not the case. Estate planning is an essential component to your long term financial plan and it also enables individuals to address asset protection from creditors or divorce.

At Altman and Associated, your goals are our priority

At Altman & Associates, your priorities are our priority. We are guided by your financial goals and understanding of your concerns. As these new tax proposals become law, it is imperative to review your long-term financial goals. Developing an estate plan requires a number of important decisions and our estate planning attorneys assist you in making these critical choices, offering customized solutions to protect you, your family, and your assets. With more than 40 years of experience, Altman & Associates is recognized as the premier estate planning firm in Maryland, Washington, D.C., and Northern Virginia. Contact a member of our team at 301-468-3220 or online to schedule a consultation.

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