Protecting & Preserving Wealth

The Widow's Penalty Part 2

In Episode 85 of Protecting and Preserving Wealth, we continue the conversation about the widow’s penalty and how it can affect a surviving spouse after the death of a husband. The key issue is not that the widow’s income necessarily increases. It is that her tax status changes. While married, a couple can file jointly and benefit from wider tax brackets. After the year of death, the surviving spouse usually files as single. That can push the same income into higher tax brackets and create a larger tax burden over the rest of her life. The episode also points out that the surviving spouse may lose deductions tied to the deceased spouse, including the senior deduction discussed under the One Big Beautiful Bill. 📚 Get Bruce’s Book: Moving To Tax-Free (on Amazon) https://amzn.to/4msRo2k [https://amzn.to/4msRo2k] ⏱️ Chapters & Timestamps (00:00) Welcome + what Part 2 covers (00:27) Why taxes jump after MFJ becomes Single (03:12) RMD timing: ages + year-of-death deadline (05:00) Surviving spouse IRA options (rollover/retitle) (05:50) Under 59½: avoid the 10% penalty (08:02) Successor beneficiary inherited IRA rules (09:30) Avoid the “year 10” tax hit (10:38) IRMAA: Medicare surcharge + two-year delay (12:37) Year-of-death Roth conversion window (14:38) Contact info + wrap-up We also talk about required minimum distributions. If the deceased spouse had reached the required beginning date and had not yet taken the RMD for the year of death, the surviving spouse needs to make sure it is taken by December 31. If that gets missed, there may be a way to avoid the penalty by correcting it under the newer automatic waiver rules, but it can still create extra stress and tax planning issues. One practical strategy is to take RMDs early in the year so this problem is already handled before a death occurs. The episode then turns to IRA options for a surviving spouse. A widow can roll the IRA into her own IRA, treat the IRA as her own, or, in some cases, keep the funds in an inherited IRA. That last option is especially important for younger widows under age 59 and a half. If she moves the account into her own name and takes distributions, she may face the 10% early withdrawal penalty. If she keeps it as an inherited IRA and remains the beneficiary, distributions can avoid that penalty. We also cover successor beneficiary rules. If the husband had inherited an IRA and then dies, the widow may have to continue the existing distribution schedule. That can include the 10 year rule for inherited IRAs. Waiting until the final year to empty the account could create a major taxable event, so spreading distributions over several years may be a better plan. Finally, we look at IRMAA and Roth conversions. A widow may face Medicare premium surcharges if her income crosses certain limits, and those surcharges usually show up on a two year delay. One major planning opportunity may come in the year the spouse dies, because the surviving spouse can still file married filing jointly for that year. That may create a chance to do a large Roth conversion before future years are taxed under single brackets. The message is clear: tax planning after the loss of a spouse is complex, and professional guidance can make a major difference. For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/ [https://www.hoslerwm.com/] Contact Our Team:  https://hoslerwm.com/contact-us/ [https://hoslerwm.com/contact-us/] Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342. For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/ [https://hoslerwm.com/protectingwealthpodcast/] Limitation of Liability Disclosures:  https://www.hoslerwm.com/disclosures/ [https://www.hoslerwm.com/disclosures/] Copyright © 2022-2026 Hosler Wealth Management | All Rights Reserved.    Produced by JAG Podcast Productions - www.jagpodcastproductions.com [http://www.jagpodcastproductions.com].  #ProtectingWealthPodcast  #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

The Widow's Penalty: Part 1 of 2

In this episode, we introduce the concept of "the widow’s penalty" and explain why it is one of the most important, yet often overlooked, risks in retirement and estate planning. We focus primarily on taxes, income loss, and preparedness for surviving spouses, who are most often women. We begin by explaining that while couples are alive and filing taxes as married filing jointly, they benefit from significantly wider tax brackets. For example, we discuss how the 24% federal tax bracket allows married couples to earn far more income than single filers before moving into higher tax territory. When one spouse dies, the surviving spouse is forced into single filing status, which can effectively double their tax burden on the same level of income. 📚 Get Bruce’s Book: Moving To Tax-Free (on Amazon) https://amzn.to/4msRo2k [https://amzn.to/4msRo2k] ⏱️ Chapters & Timestamps (00:00) Intro + What Is the Widow’s Penalty (00:32) Taxes: MFJ vs Single Brackets Explained (03:20) Stats, Blind Spots & Spouse Engagement (06:49) Year-of-Death Planning Window Strategies (08:32) Social Security Loss & IRA Tax Snowball We emphasize that this tax shift often happens at the same time a widow is losing income. Social Security benefits drop from two checks to one, even though the survivor keeps the higher of the two benefits. This reduction in household income frequently pushes widows to withdraw more money from tax-deferred retirement accounts, which increases taxable income further. We explain how this can snowball into higher taxes year after year, accelerating the depletion of retirement assets. We also discuss key statistics that reinforce why this planning matters. Most spousal heirs are women, and widows often outlive their husbands by four to twelve years. Despite this, many women defer long-term financial decisions during marriage, and nearly all widows later regret not being more involved earlier. We stress the importance of both spouses understanding what they own, why they own it, and how their plan is designed to answer the most important question: “Am I going to be okay?” We explore planning strategies that can reduce the widow’s penalty, including Roth IRA conversions while both spouses are alive and in favorable tax brackets. We explain how tax-free Roth income can replace lost Social Security or pension income without increasing taxes. We also highlight planning opportunities in the year of death, such as still being able to file jointly, performing large Roth conversions, and stacking deductions through donor-advised funds. Finally, we discuss the role of life insurance and chronic care riders. We explain that life insurance death benefits are tax-free, do not impact Social Security taxation, and can provide critical income replacement. Chronic care riders can give surviving spouses independence and security by providing funds for long-term care without burdening children or draining other assets. We conclude by reinforcing that proactive, holistic planning is essential to protecting surviving spouses from financial stress and uncertainty. For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/ [https://www.hoslerwm.com/] Contact Our Team:  https://hoslerwm.com/contact-us/ [https://hoslerwm.com/contact-us/] Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342. For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/ [https://hoslerwm.com/protectingwealthpodcast/] Limitation of Liability Disclosures:  https://www.hoslerwm.com/disclosures/ [https://www.hoslerwm.com/disclosures/] Copyright © 2022-2026 Hosler Wealth Management | All Rights Reserved.    Produced by JAG Podcast Productions - www.jagpodcastproductions.com [http://www.jagpodcastproductions.com].  #ProtectingWealthPodcast  #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

Joint Accounts in Estate Planning: Key Mistakes Families Make

In this episode of Protecting & Preserving Wealth, we focus on estate planning—specifically, how often it is overlooked or improperly handled, and how good intentions can still lead to serious financial, tax, and family consequences. We walk through a real-life case involving a family that believed they had things mostly in order, only to discover after a parent’s death that the lack of proper planning created irreversible problems. 📚 Get Bruce’s Book: Moving To Tax-Free (on Amazon) https://amzn.to/4msRo2k [https://amzn.to/4msRo2k] ⏱️ Chapters & Timestamps (00:00) Intro (01:00) Real-life family estate planning scenario (02:15) Joint tenancy and unintended disinheritance (03:50) Gift tax and family conflict risks (04:45) Step-up in basis and tax consequences explained (06:30) Million-dollar tax mistake breakdown (09:40) How common estate planning failures really are (11:00) Outdated plans and digital asset issues (12:00) How to contact Hosler Wealth Management We discuss a situation where a mother passed away without a will or trust, meaning she died intestate. One of her largest assets was a brokerage account held in joint tenancy with one of her children. While the account was likely structured this way to make things easier and avoid probate, the result was that the surviving joint owner automatically inherited the account outright. This unintentionally disinherited the other siblings, regardless of the mother’s likely wishes. We explain how this setup not only caused family tension, but also created significant tax consequences. Because the account was jointly owned, only half of the assets received a step-up in cost basis at death. The other half retained a very low original cost basis. With the stock having grown dramatically in value, this resulted in millions of dollars of unrealized gains and roughly one million dollars in avoidable capital gains taxes. We emphasize that if the account had been held solely in the mother’s name or inside a revocable living trust, the entire balance would have received a full step-up in basis, potentially eliminating capital gains taxes altogether. We also explain the gift tax issue that arises when the surviving sibling tries to “do the right thing” and distribute assets to the others. Those gifts may require filing gift tax returns and using up part of her lifetime exemption, potentially harming her own long-term estate plan. Beyond taxes, we highlight how these situations create confusion, resentment, and conflict among family members that can last for years. We zoom out to show how common this problem really is. Roughly 60% of Americans have no estate plan at all, and nearly 70% of existing plans are outdated. We also discuss newer issues like digital assets, which many older estate plans fail to address. Estate planning is not a one-time task—it must be reviewed and updated as laws, technology, and family circumstances change. Our core message is simple: estate planning is not about perfection, it’s about clarity. A proactive review with a trusted advisor can prevent massive tax bills and protect family harmony. For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/ [https://www.hoslerwm.com/] Contact Our Team:  https://hoslerwm.com/contact-us/ [https://hoslerwm.com/contact-us/] Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342. For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/ [https://hoslerwm.com/protectingwealthpodcast/] Limitation of Liability Disclosures:  https://www.hoslerwm.com/disclosures/ [https://www.hoslerwm.com/disclosures/] Copyright © 2022-2026 Hosler Wealth Management | All Rights Reserved.    Produced by JAG Podcast Productions - www.jagpodcastproductions.com [http://www.jagpodcastproductions.com].  #ProtectingWealthPodcast  #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

New Tax Laws For You To Understand in 2026

Now that we are into 2026, we take a deep dive into several critical changes in tax law that will affect financial planning, estate strategy, and retirement contributions. At Hosler Wealth Management, taxes are a core focus of our work, and this episode unpacks the nuances and planning opportunities within four major updates. 📚 Get Bruce’s Book: Moving To Tax-Free (on Amazon) https://amzn.to/4msRo2k [https://amzn.to/4msRo2k] We begin with the One Big, Beautiful Bill Act, which makes tax rates for both income and estate taxes "permanent"—though in tax law, that only means until Congress changes them. For now, the extension of lower tax rates creates a prime window for Roth conversions. This is especially significant for those with large traditional IRAs and potentially taxable estates. Without conversion, those accounts could face both estate and income tax—resulting in a combined rate of 70–80%. By converting to Roth, clients can shield their heirs from that double hit, passing on assets that are not only tax-free but also less likely to drag down the estate’s overall value. We also break down new limitations on charitable deductions. Starting in 2026, a floor of 0.5% of adjusted gross income applies, meaning you can no longer deduct the first half-percent of your charitable giving. This makes Qualified Charitable Distributions (QCDs) from IRAs more appealing for those over 70½. For larger givers, we discuss strategies like bunching donations using donor-advised funds and donating appreciated assets like Apple or Nvidia stock. This approach not only avoids capital gains taxes but also front-loads deductions into one year—maximizing tax efficiency while still distributing donations over time. Next, we cover the Social Security Fairness Act, which repeals the Windfall Elimination Provision (WEP). Previously, government employees with pensions and limited Social Security work history saw reduced benefits. This change, now retroactive to January 1, 2024, restores their full Social Security entitlement. But there’s urgency—Social Security only pays retroactively for six months. So, if you're affected and haven't yet claimed, now is the time. Finally, we explain a key Roth-related shift in the Secure Act 2.0: starting in 2026, high earners making over $150,000 must make their 401(k) catch-up contributions into Roth accounts. The contribution amount increases to $8,000, with an additional $3,250 for those aged 60–63. While this change accelerates tax collection for the government, it presents long-term benefits for investors. It allows clients to build a larger tax-free retirement nest egg by leveraging the higher Roth 401(k) contribution limits, especially compared to traditional Roth IRAs. In summary, tax strategy continues to evolve, and it’s crucial to plan with both new rules and long-term goals in mind. If you need guidance navigating these changes, we’re here to help. ⏱️Chapters & Timestamps (00:00) – Intro: Welcome & Today’s Topic (00:33) – The One Big, Beautiful Bill Act: Permanent Tax Rates (01:25) – Why Roth Conversions Are More Attractive in 2026 (03:57) – New Limitations on Charitable Deductions (04:51) – Donor-Advised Funds & Tax Planning Strategy (08:28) – Social Security Fairness Act: WEP Repealed (11:48) – Secure Act 2.0: Roth Catch-Up Rules for High Earners (14:16) – Additional Catch-Up Contributions (Ages 60–63) (15:02) – How to Contact Hosler Wealth Management For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/ [https://www.hoslerwm.com/] Contact Our Team:  https://hoslerwm.com/contact-us/ [https://hoslerwm.com/contact-us/] Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342. For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/ [https://hoslerwm.com/protectingwealthpodcast/] Limitation of Liability Disclosures:  https://www.hoslerwm.com/disclosures/ [https://www.hoslerwm.com/disclosures/] Copyright © 2022-2026 Hosler Wealth Management | All Rights Reserved.    Produced by JAG Podcast Productions - www.jagpodcastproductions.com [http://www.jagpodcastproductions.com].  #ProtectingWealthPodcast  #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

QCD Update for 2026 - Advice You Should Know

In this episode of Protecting and Preserving Wealth, we dive into key updates around Qualified Charitable Distributions (QCDs) for 2026. QCDs allow individuals age 70½ and older to make direct charitable donations from their IRA accounts, and this episode is especially relevant for clients looking to manage taxes effectively while giving charitably. 📚 Get Bruce’s Book: Moving To Tax-Free (on Amazon) https://amzn.to/4msRo2k [https://amzn.to/4msRo2k] ⏱️ Chapters & Timestamps (00:00) – Introduction (00:36) – Who qualifies for QCDs? (01:34) – QCDs for inherited IRAs (02:21) – Why timing matters: turning 70½ (03:43) – Tax advantages of QCDs (04:21) – How to properly execute a QCD (05:13) – Limits and benefits for married couples (05:42) – 401(k) rollover considerations (06:19) – No donor-advised funds or benefits allowed (07:40) – QCDs must be in cash, not stock (08:50) – Strategic tax benefits of QCDs (10:46) – New IRS Code Y on 1099-R forms (12:10) – Contact info and final thoughts  We begin by clarifying the age requirement. You must be exactly 70½ to make a QCD — not before, not even within the same tax year if you haven't reached that age yet. This often confuses clients, especially early in the year when they expect eligibility based solely on the calendar year. Importantly, you don’t need to be taking Required Minimum Distributions (RMDs) to utilize QCDs. Even if RMDs don’t kick in until 73 or 75, you can still make a QCD at 70½. Another common question we addressed is whether inherited IRA beneficiaries can make QCDs. The answer is yes — as long as they are 70½. A QCD can satisfy RMDs from an inherited IRA, but the age rule still applies. For 2026, the annual QCD limit is $111,000 per person, meaning couples could potentially give up to $222,000. We also discuss the mechanics. The distribution must be made directly from your IRA to the charity. You can’t take the money into your personal account and then donate it — doing so disqualifies the distribution from being a QCD. Additionally, you cannot direct a QCD to a donor-advised fund or receive any benefit (like a charity dinner ticket) in return. The transaction must be completely tax-neutral — for both you and the charity. We emphasize that QCDs must be made in cash; donations in-kind (like appreciated stock) from an IRA don’t qualify. We caution against using Roth IRAs for QCDs due to complexity and potential tax consequences. Traditional IRAs are the cleanest route. Jason outlines several strategic reasons to use QCDs: reducing taxable income to protect Social Security benefits, avoiding IRMAA surcharges on Medicare, qualifying for the new 2026 senior deduction (between $150,000–$250,000 AGI), and preserving room for Roth conversions. These moves can result in substantial long-term tax savings. Lastly, Alex explains a new IRS reporting feature: a “Code Y” in Box 7 of the 1099-R to identify QCDs. While optional for custodians in 2025, it becomes more prominent in 2026.  It’s a helpful safeguard to ensure QCDs are properly reported as non-taxable — but documentation remains critical. For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit us online at https://www.hoslerwm.com/ [https://www.hoslerwm.com/] Contact Our Team:  https://hoslerwm.com/contact-us/ [https://hoslerwm.com/contact-us/] Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342. For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/ [https://hoslerwm.com/protectingwealthpodcast/] Limitation of Liability Disclosures:  https://www.hoslerwm.com/disclosures/ [https://www.hoslerwm.com/disclosures/] Copyright © 2022-2026 Hosler Wealth Management | All Rights Reserved.    Produced by JAG Podcast Productions - www.jagpodcastproductions.com [http://www.jagpodcastproductions.com].  #ProtectingWealthPodcast  #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler