Litman Gregory Senior Advisor and Principal Gretchen Hollstein, CFP® was recently quoted in Barron’s Here are 5 Tax Moves to Consider for an Unusual Year, which offered ideas to consider for year-end tax planning.
She describes some common planning strategies we utilize with clients, such as considering Roth IRA conversions. “We’ve been helping people who are in a relatively low tax bracket with [Roth] conversions,” Gretchen says. “The key is how much to convert—we suggest partial conversions, just enough to keep people in their income-tax bracket.”
Gretchen also responded to questions about managing IRA distributions in a unique tax year. The downside to leaving assets in the IRA is that next year’s distribution—and therefore, tax bill—may be significantly bigger. She explains that to address this “we’re helping clients use IRAs for charitable giving this year.” A so-called qualified charitable distribution rule allows gifts to be made directly from IRAs to a charity without tax consequence. “It doesn’t end up as an itemized deduction, but it reduces their IRA balance.”
The article further covers some additional strategies we often use to help clients incorporate charitable giving in their tax optimization plan, and family gift planning within their estate plans. Amidst the many unknowns of the year, she notes that “some planning is about hedging your bets.”
Our advisory team at Litman Gregory has been working through a variety of tax-sensitivity and optimization strategies with clients in recent year-end planning discussions, and many of these were also covered in our recent Year-End Planning Webinar. Please contact your advisor to discuss opportunities for your situation.
Read the full article by Barron’s.
Our Thoughts on the Silicon Valley Bank Failure
Recent problems in the banking industry have increased uncertainty in the financial markets. On behalf of our clients, we have taken a close look at the situation and assessed the potential consequences. In this post we summarize the circumstances at Silicon Valley Bank that led to its failure, describe the broader implications, and review what we see as minimal impact for our clients and their portfolios.
Insight Newsletter—Winter 2023
Our Insight Newsletter is now available. Included in this edition: Investment Commentary Research Update: Trend Following with Managed Futures Tax Planning Opportunities from
Research Update: Trend Following with Managed Futures
The evidence of the long-term value that trend-following managed futures bring to a balanced portfolio is compelling, even though there are shorter periods where sharp see-saw patterns can lead to disappointing returns. However, in a year like 2022 that saw significant declines for both stocks and bonds, managed futures experienced large positive gains and were one of the only asset classes to provide meaningful downside protection. This research update serves to address many of the questions that we receive about this interesting investment strategy.