Bailey McCann

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178 appearances 3 recordings 1 series first heard Feb 2020 last heard Oct 2023

Bailey McCann’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · How to Manage Your Finances Before Tax Cuts Expire · 12 Oct 2023 podcast

There are different things that you can do to sort of make sure that you're not paying more than you need to.

So if you convert some of your retirement savings or all of it to a Roth IRA, what you're doing is sort of pre-paying the taxes in a lump sum.

And if you're doing that now, when the tax rate is lower, you're going to be paying less than if you wait and do it either in little chunks over your retirement or just in a bigger chunk, but when the tax rate is higher.

There's a few caveats about how that works.

So when you convert it, there's a rule that limits your ability to access that money for five years.

And if you are on a tight timeline or you're going to need it for whatever reason, sooner than that, it might not make sense to do that conversion.

Sometimes people only convert a portion of their retirement because they know they're not going to need it for that five years and they have another pot of money that they can use in the interim.

So if you're working with a financial advisor to kind of figure that out, that's probably going to be your best bet.

So with charitable giving, there are a couple of things to consider.

You can do it through financial gifts.

You can do it through asset donation.

You can do it through large cash donations.

It kind of depends on what your individual goals are and what you're trying to do with respect to managing the size of your estate.

But you need to be very strategic about how you approach it because you might be subject to gift tax.

You might be subject to a front end tax or something

Some other payment that you need to make and you need to make sure that, you know, paying that now still makes more sense than paying it down the line.

Working again with a financial advisor can help you identify the best options.

The tax law increased the annual deduction limit for cash contributions to public charities to 60% of your adjusted gross income.

That's up from 50%.

So if that reverts, it's going to go back down to 50.

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