Episodes

  • Can I Contribute to My 401(k) and a Traditional IRA in the Same Tax Year?

    Can I Contribute to My 401(k) and a Traditional IRA in the Same Tax Year?
    Jan 27 2026

    A listener recently wrote in with a common and important retirement planning question: If I'm already maxing out my 401(k), can I also contribute to a traditional IRA in the same year? The short answer is yes—but whether it makes sense, and how much benefit you receive, depends on your income, tax situation, and long-term goals.

    In this episode, I break down how traditional IRA contributions work alongside employer-sponsored retirement plans, when those contributions are deductible, and what options are available if your income is too high for a deduction. We also explore alternative strategies, including Roth IRA contributions and backdoor Roth conversions, so you can decide how best to use your annual IRA "coupon."

    This episode is especially helpful if you're trying to balance tax savings today with tax flexibility in retirement and want to avoid common mistakes that can complicate your plan later.

    You will want to hear this episode if you are interested in...

    [00:00] Whether you can contribute to a 401(k) and IRA in the same tax year
    [01:55] The tax-deferral benefits of contributing to a traditional IRA
    [03:55] When a traditional IRA contribution is tax deductible
    [05:00] Income limits that affect IRA deductions
    [07:00] Using non-deductible IRA contributions correctly
    [10:00] Roth IRA contribution limits and income phaseouts
    [11:45] How a backdoor Roth IRA strategy works
    [13:30] Choosing the right IRA strategy for your situation

    Why a Traditional IRA Can Still Make Sense

    Even if you are already maxing out your 401(k), contributing to a traditional IRA can provide additional tax advantages. The primary benefit is tax deferral. Dividends, interest, and capital gains generated inside an IRA are not taxed in the year they occur. Instead, taxes are deferred until you withdraw the money, potentially years or even decades later.

    This can be especially powerful if you do not need the money right away. With required minimum distributions now starting at age 73—and increasing to age 75 for those born in 1960 or later—many investors have a long runway for tax-deferred growth.

    When IRA Contributions Are Tax Deductible

    Whether your traditional IRA contribution is deductible depends on two main factors: whether you or your spouse are covered by an employer-sponsored retirement plan, and your adjusted gross income (AGI). Coverage includes plans such as a 401(k), 403(b), 457, SIMPLE IRA, SEP IRA, or pension plan.

    For 2026, married couples filing jointly can fully deduct a traditional IRA contribution if their AGI is below $129,000, with deductions phasing out completely by $149,000. For single filers, the full deduction applies below $81,000 and phases out by $91,000. If neither spouse is covered by a workplace plan, the contribution is fully deductible regardless of income.

    Options If You Can't Deduct a Traditional IRA

    If your income is too high to deduct a traditional IRA contribution, you still have options. One approach is making a non-deductible IRA contribution. While this does not provide a tax deduction upfront, your investments can still grow tax deferred. However, this strategy requires careful recordkeeping to properly track taxable and non-taxable portions when withdrawals begin.

    Another option is contributing to a Roth IRA, if your income falls within Roth contribution limits. Roth IRAs offer tax-free growth and tax-free withdrawals, making them attractive for long-term planning. For those whose income exceeds Roth limits, a backdoor Roth IRA may be an option, provided there are no other pre-tax IRA balances that would trigger pro-rata taxation.

    Resources Mentioned
    • Retirement Readiness Review
    • Subscribe to the Retire with Ryan YouTube Channel
    • Download my entire book for FREE

    Connect With Morrissey Wealth Management

    www.MorrisseyWealthManagement.com/contact

    Subscribe to Retire With Ryan
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    15 mins
  • Top 5 Growth ETFs to Own For 2026 and Beyond, #289

    Top 5 Growth ETFs to Own For 2026 and Beyond, #289
    Jan 20 2026

    Last week, we covered the best investments to preserve your money, but this week we are shifting gears to focus on growth. For retirees, the goal is to have an income that outpaces inflation, and historically, the best way to achieve that is by having 50% to 70% of your portfolio invested in stock funds.

    In this episode, I break down five specific Exchange Traded Funds (ETFs) that can help you grow your wealth in 2026. I discuss why I prefer ETFs over mutual funds, specifically focusing on cost, transparency, and liquidity, and provide the exact ticker symbols and expense ratios for the funds I use with my own clients to build diversified, growth-oriented portfolios.

    If you are willing to accept some volatility to achieve higher long-term returns, this episode provides a blueprint for structuring the equity side of your retirement plan.

    You will want to hear this episode if you are interested in...
    • [00:00] Top 5 Growth ETFs to Own For 2026.
    • [02:55] Why ETFs are superior to mutual funds.
    • [05:23] The core holding: S&P 500 ETF.
    • [09:28] Capturing extra growth with SPYG.
    • [06:33] Small Cap stocks and the profitability factor.
    • [13:38] Investing in the Developed World ex-US.
    • [15:43] High growth potential in Emerging Markets.
    Why Choose ETFs?

    Before diving into specific funds, it is important to understand why Exchange Traded Funds (ETFs) are often a better choice than traditional mutual funds. I prefer them for four main reasons:

    • Cost: ETFs often have significantly lower expense ratios, some less than a tenth of a percent, compared to actively managed funds that can charge up to 2%.
    • Performance: Many active funds struggle to outperform their benchmarks over time.
    • Transparency: You can see exactly what an ETF holds, whereas mutual funds may only report holdings twice a year.
    • Liquidity: You can trade ETFs throughout the day while the market is open, rather than waiting for the market close price required by mutual funds.
    The US Core: S&P 500 and Growth Variations

    For the core of a growth portfolio, I look to the S&P 500, which has averaged a 15% return over the last five years.

    • State Street SPDR Portfolio S&P 500 ETF (SPYM/SPSM): This fund tracks the S&P 500 but was created to offer a lower cost (0.02% expense ratio) compared to the original SPY ETF. It is a massive fund with over $100 billion in assets, heavily weighted toward large technology companies like Nvidia, Apple, and Microsoft.
    • S&P 500 Growth ETF (SPYG): If you want to lean more aggressively into growth, this fund tracks S&P 500 companies with high sales growth and momentum. It has a 3-year average return of 29% and a very low expense ratio of 0.04%.
    Diversifying with Small Caps

    While the S&P 500 is dominant, it has had "lost decades" in the past where returns were negative. To diversify, I recommend the S&P 600 Small Cap ETF.

    • Unlike the Russell 2000, the S&P 600 index requires companies to be profitable, which filters out lower-quality stocks.
    • Although it has lagged recently, small caps may be poised for a comeback due to economic shifts and tariffs. The expense ratio for this fund is just 0.03%.
    International Opportunities

    The US has outperformed international markets recently, but that trend could reverse.

    • Developed World ex-US (SPDW): This fund invests in developed economies like Japan, the UK, and Canada. It offers exposure to major global players like Samsung and AstraZeneca with a low expense ratio of 0.03%.
    • Emerging Markets (SPEM): For higher potential growth, this fund targets countries with rapidly growing GDPs, such as China, Taiwan, and India. These economies have a growing middle class, which can drive corporate earnings. The fund holds major companies like Taiwan Semiconductor and Alibaba.
    Resources Mentioned
    • Retirement Readiness Review
    • Subscribe to the Retire with Ryan YouTube Channel
    • Download my entire book for FREE
    Connect With Morrissey Wealth Management

    www.MorrisseyWealthManagement.com/contact

    Subscribe to Retire With Ryan
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    20 mins
  • 7 Best Investment Options To Preserve Your Money in 2026, #288

    7 Best Investment Options To Preserve Your Money in 2026, #288
    Jan 13 2026
    This episode is your introduction to the world of conservative investing, so it's perfect for you if you're looking to preserve your principal and grow your money at a steady pace. I'm walking you through seven standout investment choices for 2026, ranging from high-yield online money market accounts to short-term bond funds, CDs, and Treasury bonds. We'll discuss how to shop around for the best rates, the importance of keeping up with inflation in retirement, and the benefits and limitations of each strategy. There's something here for anyone who wants their money to work a little harder without taking on unnecessary risk. You will want to hear this episode if you are interested in... 00:00 Retirement Income to beat inflation.03:27 Using online banks and credit unions for high-yield savings.04:53 Automatic and manual selection of money market funds.08:23 How yield and volatility differ from money market funds with short-term bond funds.11:24 Brokered CDs vs. traditional CDs.13:39 U.S. Treasuries as highly secure investment using treasury bonds.15:11 Using a fixed annuity to invest your money.17:06 How U.S. Treasury Inflation Bonds (I Bonds) work. Seven Smart Conservative Investment Options for Growing and Preserving Your Wealth Retirement planning and conservative investing go hand in hand, particularly for those looking to preserve their hard-earned principal and ensure steady, reliable growth.. 1. High-Yield Online Money Market Accounts Keeping cash in traditional savings accounts often means missing out on higher returns so it's a great start to explore online banks that offer high-yield savings and money market accounts. Although these accounts lack physical branches and operate electronically, the tradeoff is often higher interest rates. 2. Brokerage Money Market Funds Money market funds present another secure route to saving for retirement. With Vanguard and Fidelity, your idle cash is generally swept automatically into high-yield funds, whereas Schwab offers more choices, but you may need to manually select a higher-yielding money market fund. Current yields are around 3.6% to 3.7%, but rates fluctuate weekly with market conditions. Importantly, these investments are designed to keep the value per share at $1, minimizing risk to your principal. 3. Short-Term Bond Funds If you're comfortable with a bit more fluctuation, short-term bond funds can offer higher yields than money market funds. While prices may move slightly, the key is to assess yield versus volatility and select a fund aligned with your risk tolerance. Total bond market or aggregate bond funds, such as the State Street Aggregate Bond ETF (SPAB), can yield more (sometimes above 4%), but carry higher risk and potential for loss, as evidenced by losses in years of rapidly rising interest rates. 4. Short-Term Certificates of Deposit (CDs) CDs are an old-fashioned but reliable solution. By locking in your money for a set period (often one to three years), you benefit from higher fixed rates, currently 4% for one-year CDs and slightly lower for longer terms. Watch out, though, if interest rates fall, having a longer-term CD can be advantageous, but shopping around means opening multiple accounts, which can become hard to track. 5. U.S. Treasury Bonds Tied to government backing, short-term U.S. Treasury bonds are among the safest choices. They typically yield around 3.5% to 3.6% for terms of one to three years. Besides security, their interest is exempt from state income tax, which can be a perk for residents of high-tax states. 6. Fixed Annuities For those who want higher yields and are willing to sacrifice some liquidity, fixed annuities offer insurance-backed, multi-year fixed interest rates, sometimes higher than CDs or Treasuries. Current rates above 4% for investments starting at $100,000, though smaller minimums (such as $5,000 at Fidelity) provide slightly lower yields. The main drawback is reduced access to your principal. 7. U.S. Treasury Inflation Bonds Inflation Bonds combine a fixed interest rate with added payments tied to inflation. Currently, they yield over 4%, but are capped at $10,000 per person annually. You must hold them for at least five years to avoid penalties, and taxes on the interest can be deferred. If inflation surges, these are especially attractive. Take Action to Grow Whether you're approaching retirement or simply cautious, these seven strategies equip you to earn more on your savings while keeping risk in check. Consider putting excess bank cash to work in one or more of these vehicles for better long-term outcomes. Remember, conservative investing isn't about standing still, it's about moving forward deliberately and securely. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREE FidelityCharles SchwabVanguardBankrate.comNerdwalletSchwab Value Advantage Money Market VMFXX JP Morgan Ultra Short Term Income ETF State ...
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    20 mins
  • 4 Things All Successful Retirees Do, #287

    4 Things All Successful Retirees Do, #287
    Jan 6 2026
    In this episode, I'm helping you kick off 2026 by reflecting on financial habits that pave the way for a successful retirement. As we set our goals for the year ahead, I share the four key traits I've observed in successful retirees, drawn from years of experience working with people from all walks of life. You'll hear practical advice on how to work hard and invest consistently, the importance of living within your means, and ways to avoid common investment pitfalls that can derail your progress. Whether you're just starting your retirement planning or fine-tuning your financial strategy, this episode is full of actionable tips to help you improve your financial life in 2026. If you're ready to take charge of your future and put a solid plan in place, this episode is a must-listen. You will want to hear this episode if you are interested in... 00:00 Retirement success traits revealed.05:29 Budgeting for financial growth.07:49 Invest simply and consistently.10:36 Improve and grow net worth.13:38 Keep an eye on your net worth. Four Habits of Highly Successful Retirees There's no magic bullet to achieving a comfortable retirement. Many successful retirees weren't born into wealth; in fact, about 80% of millionaires started with little and built their nest eggs from scratch. The through-line is diligence and perseverance. A powerful habit among this group is paying themselves first. Rather than saving what's left at the end of the month, successful retirees set aside a portion of their income before budgeting for other expenses. Many automate investments into employer-sponsored retirement accounts or other savings vehicles. This intentionality ensures that the priority remains on building wealth, not just sustaining a lifestyle. Budgeting plays an essential role here. I recommend reviewing your annual spending, categorizing transactions, and identifying excesses. Small changes can help you free up cash for investments and debt reduction. If you struggle with credit card overspending, consider switching to cash or debit cards, which make it easier to visualize your available funds and stay disciplined. There's also a growing temptation to "keep up with the Joneses," especially when social media showcases other people's amazing vacations! Appearances can be deceiving, you never know whether your neighbours are deeply in debt despite flashy photos. The key is to focus on your own financial journey, not someone else's highlight reel. Keep Your Investments Simple Despite the barrage of complex investment themes and "get rich quick" schemes circulating online, the most effective investors stick to the basics. Avoid speculative strategies like day trading, option contracts, and penny stocks for the bulk of your portfolio. These approaches can lead to significant losses, or even financial ruin. Successful retirees typically lean on a diversified, straightforward mix of investments: blue-chip stocks, index funds, bonds, and some real estate. A simple, repeatable investment plan not only reduces stress but also reduces the chance of costly errors. If an investment sounds complicated or "too good to be true," it likely isn't the right tool for you. Track Your Net Worth, Every Year A great habit to get into is consistently tracking your net worth. For example, every year, I take inventory and value all of my assets, subtract any liabilities, and calculate my own net worth. This exercise isn't just about patting myself on the back, it's an important annual check-in on financial progress which helps me course-correct if I'm getting off track. If you discover stagnant or shrinking net worth, it's a signal to look at spending, debt, or investment choices. For those carrying high-interest debt (over 6–7%), prioritizing repayment can yield safer and higher "returns" than most investments. Even in retirement, monitoring net worth is vital. Spending down savings is natural, but keeping an eye on the pace ensures your money lasts as long as you need it to. Take Action Today Successful retirees don't wait for luck or windfalls, they put in the work, invest with discipline, stay clear of fads, and track their progress. Start by reviewing your own budget and net worth, and set realistic, meaningful goals for the year ahead. Your future self will thank you. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREEBudget WorksheetNet Worth Spreadsheet Connect With Morrissey Wealth Management www.MorrisseyWealthManagement.com/contact Subscribe to Retire With Ryan
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    15 mins
  • 6 Stock Market Predictions For 2026, #286

    6 Stock Market Predictions For 2026, #286
    Dec 30 2025
    As we turn the calendar to 2026, I reveal my forecasts for the stock market, interest rates, and top asset classes, and take a look back at how my 2025 predictions stacked up against reality. From the S&P 500's rollercoaster performance to the ongoing rivalry between growth and value stocks, and even a showdown between bitcoin and gold, I break down what the numbers were, where I hit the mark, and where I missed. You'll also hear my insights on international versus U.S. stocks, the outlook for small caps, and what the Federal Reserve might do with interest rates in the year ahead. Get ready for smart strategies, listener thank-yous, and a dose of investing reality as I help you set expectations (and goals) for the year to come! You will want to hear this episode if you are interested in... 00:00 Happy New Year!04:34 S&P 500 Trends and Predictions.07:49 Market Trends & 2025 Predictions.08:54 Bitcoin vs Gold & Stock Returns.11:17 Importance of diversifying with international stocks.14:20 Investment Predictions for 2026.17:36 Stay invested to make the best financial gains. How did my 2025 market predictions fare? 2025 turned out to be another rollercoaster, with both triumphs and challenges for investors. Beginning with an impressive performance, the S&P 500 flirted with a 20% annual return, after two previously remarkable years (+25% in 2023 and +23% in 2024). Volatility struck early in April due to concerns about tariffs and political tensions, leading the index to drop as much as 18% year-to-date before rebounding sharply. The market often experiences significant intra-year declines, on average, 14-15% since the 1970s, so these swings are more common than many investors realize. Despite underestimating the final S&P 500 return in my 2025 prediction, it's important to stick with your plan through turbulence. Growth vs. Value One of the perennial debates in investing is whether growth stocks (think Apple, Nvidia, and Microsoft) or value stocks (like JPMorgan, Walmart, and Berkshire Hathaway) will come out on top. While value historically outperformed over the long term, the last decade and a half has belonged to growth. I predicted value would outperform in 2025, but growth eked out the win yet again, maintaining its streak. The ETF comparison, Vanguard's VONG for growth and VONV for value, shows just how close the race was, with both categories putting up strong numbers. Large vs. Small Caps: The Size Dilemma Size matters in investing, particularly when it comes to large-cap (S&P 500) versus small-cap (Russell 2000) stocks. I expected small caps to shine in 2025, but large caps led for the fifth consecutive year. The good news is that small caps narrowed the gap, hinting that a turnaround could be on the horizon as economic and regulatory shifts potentially favor these underdogs. Bitcoin vs. Gold For those seeking diversification, Bitcoin and gold are often top contenders. After years of jaw-dropping surges and gut-wrenching drops for Bitcoin, 2025 saw gold steal the spotlight with a phenomenal gain, its best showing since the 1970s, while Bitcoin stumbled. Still, I believe Bitcoin's day in the sun isn't over and predict it will bounce back in 2026. U.S. vs. International Global diversification hasn't paid off for U.S. investors in recent years, as U.S. stocks consistently outpaced their international counterparts. In 2025, the tides turned and international stocks delivered their strongest performance in 15 years, besting the S&P 500's return. It's a timely reminder not to ignore the opportunities abroad, even if I feel U.S. equities still have the edge for 2026 due to ongoing innovation and growth potential. Interest Rates and Federal Reserve Few factors move markets like interest rate decisions. Predicting three cuts and a year-end rate of 3.5–3.75%, I called it accurately for 2025. Looking to 2026, I expect another two cuts, with possible changes in leadership at the Fed adding an extra dose of uncertainty. Key Takeaways for 2026 So, what's the game plan for the coming year? I predict a tempered 8.5% return for the S&P 500, a possible value and small-cap renaissance, Bitcoin's comeback, U.S. stocks leading, and a cautious but optimistic approach to interest rates. But the most valuable advice is to stay invested. Market timing is notoriously difficult, and missing just a few of the market's best days can devastate long-term returns. For those investing for a comfortable retirement, discipline and diversification remain your best allies. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREE Berkshire HathawayJ.P. MorganExxonMobilWalmartUnited Healthcare Connect With Morrissey Wealth Management www.MorrisseyWealthManagement.com/contact Subscribe to Retire With Ryan
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    20 mins
  • Most Asked Financial Questions of 2025, #285

    Most Asked Financial Questions of 2025, #285
    Dec 23 2025
    2025 has been a year of significant highs and lows, a bittersweet time marked by personal loss but also tremendous growth in our community of listeners and clients. As we wrap up the year, I wanted to take a moment to reflect and, more importantly, to give back by answering the most pressing questions on your minds. In this episode, I'm tackling the top 10 most asked financial questions I received in 2025 from both clients and listeners. From the future solvency of Social Security and the reality of rising inflation to the specifics of Bitcoin and long-term care, we are covering the topics that directly impact your retirement confidence. I also share a special thank you gift to you my listeners: a significant discount on my Retirement Readiness Review course to help you kickstart your 2026 planning. Whether you are wondering if you should pay off your mortgage or how to find a truly objective financial advisor, this episode provides the clear, direct answers you need to navigate your financial future. You will want to hear this episode if you are interested in... [00:00] Will Social Security be there for you when I retire?[06:04] How to handle rising inflation in retirement.[12:34] Should you be investing in Bitcoin in 2026?[17:37] The pros and cons of paying off your mortgage early.[21:51] Getting your children started with investing and saving.[26:01] Protecting your investments during a market downturn. Social Security Solvency: Should You Worry? One of the biggest fears retirees face is the potential expiration of Social Security. The most recent trustees' report projects that benefits can be paid at 100% until roughly 2033. If no changes are made by then, benefits could be reduced by approximately 20%. However, history suggests that Congress will act to prevent such a drastic cut, especially given how heavily the average American relies on this income. We also saw recent changes with the "Social Security Fairness Act" passed just before President Biden left office, which restored benefits for many teachers and state employees previously affected by reductions. While this adds strain to the system, it highlights the political will to support retirees. Inflation and Investment Strategy Inflation has been a persistent concern since the post-COVID stimulus era. For retirees on a fixed income, combating this is difficult because pensions and Social Security cost-of-living adjustments are automatic and out of your control. The single best hedge against inflation is your investment portfolio. Historically, stocks are the only asset class that has significantly outpaced inflation over time. While this comes with volatility, maintaining an exposure to equities (often 50–70% for many retirees) is often necessary to ensure your purchasing power lasts as long as you do. The "Retirement Number" Formula Forget the arbitrary goal of saving "$1 million" or "$2 million." Retirement planning is about paycheck replacement. To find your number: Calculate Expenses: Determine your monthly spending needs in retirement.Subtract Fixed Income: Deduct your expected Social Security and pension income from that expense number.Determine the Gap: The remaining amount must come from your portfolio (401k, IRA, brokerage).Apply the Withdrawal Rate: Using a conservative 4% withdrawal rate, determine if your savings can cover that gap. Don't forget to account for taxes! You can use online calculators or work with a CPA to estimate your after-tax income. Specific Asset Questions: Bitcoin and Mortgages Bitcoin: Despite its popularity, Bitcoin remains a highly speculative asset. In 2025, while the stock market saw gains of 15-18%, Bitcoin was down significantly, highlighting its volatility. For most retirees, the risks outweigh the benefits when a standard diversified portfolio can already meet your income needs. Mortgage Payoff: Emotional peace of mind often conflicts with financial math. If you have a low interest rate (e.g., 3%), rushing to pay off that "cheap money" rarely makes sense when you could earn 5% or more on your investments. Furthermore, taking a large lump sum from an IRA to pay off a house could trigger a massive tax bill and even IRMAA surcharges on your Medicare premiums. Tax Planning: Roth Conversions and New Legislation With the passing of the "One Big Beautiful Tax Act" in 2025, we have new opportunities for tax planning. Roth Conversions: If you expect your future tax rate to be higher than your current rate, converting traditional IRA funds to Roth can save you money long-term.New Deductions: The new legislation allows for a higher SALT (State and Local Tax) deduction cap of $40,000 until 2030, which is a huge benefit for those in high-tax states like Connecticut. This might create a unique window over the next few years to perform conversions more tax-efficiently. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREE Fidelity ...
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    30 mins
  • Top 5 Tax Benefits of 529 Plans, #284

    Top 5 Tax Benefits of 529 Plans, #284
    Dec 16 2025

    529 college savings plans are a favorite tool for families looking to fund education, but recent updates have made them even more compelling. With the passing of the One Big Beautiful Tax Act in 2025, there have been some exciting changes to what you can use 529 funds for, including expanded coverage for K-12 tuition, test fees, vocational programs, and support for learning differences.

    I also discuss the various tax advantages of contributing to a 529 plan, like state tax deductions, tax-deferred growth, and even the ability to roll leftover funds into a Roth IRA for your child. He offers real-life examples, highlights differences across state plans, and gives practical tips on maximizing your savings and tax benefits as the year wraps up.

    If you're looking to make the most out of your child or grandchild's future education while being smart about your finances, this episode is packed with must-know information.

    You will want to hear this episode if you are interested in...
    • [00:00] 529 Plan updates and expansions.
    • [06:48] 529 Plans: taxes and benefits.
    • [08:02] 529 Plan tax-free growth.
    • [09:55] Investment considerations for 529 plans.
    • [13:49] New rules on 529-to-Roth IRA rollovers.
    The Expanded 529 Universe

    Most people know 529 plans are great for covering college tuition, room and board, and required fees. The One Big Beautiful Tax Act of 2025 has expanded what 529 distributions can cover, opening up a wider range of education-related expenses, including much earlier in a student's academic journey.

    Newly Eligible Expenses:

    • K-12 Tuition: The annual limit for K-12 tuition expenses jumps from $10,000 to $20,000 in 2026.
    • Test Fees and Credentialing: You can now use 529 funds to pay for standardized testing, college entry exams, and vocational credentialing programs.
    • Homeschool & Specialized Support: Structured homeschool curricula, academic tutoring, therapies, and materials for diagnosed learning differences (including ADHD) are now eligible.
    • Apprenticeships & Educational Equipment: Costs for apprenticeship programs and special technology or learning tools can now be covered.

    However, there are still some limitations: transportation, school-purchased health insurance, and extracurricular activity fees remain ineligible.

    State Tax Deductions

    The state tax deduction is a unique benefit offered by many states for 529 contributions, but often families overlook this: over 30 states offer a tax break, but the rules vary. In Connecticut, for example, you can deduct up to $5,000 per person or $10,000 per couple from your state taxable income. You must usually contribute to your own state's plan (though states like Arizona, Kansas, and Pennsylvania allow deductions for out-of-state plans). Be mindful of year-end deadlines, contributions must be made by December 31st to claim the deduction for that year. Even if your state benefit is modest, it's essentially "free money" for doing something you're likely planning anyway.

    Student Loan Repayment and Rollovers to Roth IRAs

    529 plans now offer more flexibility, even if the intended student doesn't use all the funds for education.

    • Student Loan Repayments: Up to $10,000 (lifetime) per beneficiary can be used to pay down qualified student loans, helping recent grads reduce their debt burden.
    • Roth IRA Rollovers: As of recent law, up to $35,000 can be rolled from a 529 plan to a Roth IRA for the beneficiary, provided the 529 is at least 15 years old, the money isn't a recent contribution, and the beneficiary has earned income. This can be an incredible jumpstart for retirement savings if college funds aren't fully used.

    All 529 plans are not created equal. Look for low-cost, direct-sold plans rather than advisor-sold plans that carry extra commissions. Every dollar saved on fees is another dollar that can grow tax-free in your account.

    Resources Mentioned
    • Retirement Readiness Review
    • Subscribe to the Retire with Ryan YouTube Channel
    • Download my entire book for FREE
    • Fidelity Investments
    Connect With Morrissey Wealth Management

    www.MorrisseyWealthManagement.com/contact

    Subscribe to Retire With Ryan
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    15 mins
  • 4 Ways To Receive A Tax Deduction For Charitable Contributions in 2025 and 2026, #283

    4 Ways To Receive A Tax Deduction For Charitable Contributions in 2025 and 2026, #283
    Dec 9 2025
    In the season of giving, we're discussing making charitable contributions in 2025 and 2026. Americans are known for their generous donations to worthy causes, but understanding the best ways to give and maximize your tax benefits is key. This episode covers four effective strategies for making charitable contributions, from utilizing Qualified Charitable Distributions (QCDs) from your retirement accounts to cash donations, gifting highly appreciated stock or real estate, and using donor-advised funds. I also break down recent and upcoming tax law changes that impact your ability to itemize and deduct charitable donations, ensuring you avoid common pitfalls and make the most of your generosity. Whether you're planning a gift this year or thinking ahead, this episode is packed with actionable tips to help you give back and plan for a successful retirement. You will want to hear this episode if you are interested in... [00:00] Charitable giving and tax benefits.[05:01] Managing qualified charitable distributions.[08:03] Charitable deductions and rules changing in 2026.[13:17] Benefits of donor-advised funds.[16:23] Charitable contributions for tax deductions. Four Smart Strategies for Charitable Giving in 2026 Charitable giving is at the heart of American generosity, with billions donated annually to causes that matter. But did you know your generosity can also be a powerful tool in your tax strategy, especially as rules shift for 2026? 1. Qualified Charitable Distributions (QCDs): Tax Breaks from Your Retirement Account If you're 73 or older and taking required minimum distributions (RMDs) from a traditional IRA, a Qualified Charitable Distribution (QCD) can be a game-changer. Instead of taking your full RMD as income (which is taxable), you can direct some, or all, of it straight to a qualified 501(c)(3) charity. This distributed amount is excluded from your taxable income, potentially lowering your tax bill and even your Medicare premiums. But details matter: The money must transfer directly from your IRA to the charity. You can't touch the funds yourself and then donate.The charity must be a registered 501(c)(3).When you receive your year-end 1099-R tax form, it won't indicate how much was a QCD. You (or your accountant) must reduce your taxable income by the QCD amount and annotate "QCD" on your return. Forgetting to do so can result in unnecessary taxes. By leveraging QCDs, retirees not only support their favorite causes but also make the most of their hard-earned savings. 2. Cash Donations: Navigating Itemizing and New Deduction Thresholds Traditional cash donations are an easy way to support charities and reduce taxes, but the benefits depend on your ability to itemize deductions. Until recently, many households in high-tax states struggled to itemize due to the $10,000 state and local tax (SALT) deduction cap. Big change for 2026 - 2029: The SALT cap jumps to $40,000, making itemizing possible for more people.If your itemized deductions, including mortgage interest, medical expenses, property taxes, and charitable gifts, exceed the standard deduction, your donations can reduce your taxable income.In 2026, a $1,000 per individual (or $2,000 per couple) charitable deduction will be available even if you don't itemize. However, your charitable giving must exceed 1.5% of your adjusted gross income to become deductible, creating a new bar to qualify. Careful timing and documentation of donations can help maximize these new opportunities. 3. Donating Appreciated Assets: Stocks and Real Estate If you're sitting on highly appreciated stocks or real estate, donating them directly to charity can deliver a double tax benefit: You avoid paying capital gains tax on the asset's increase in value, and you can also deduct the current market value of your donation (subject to certain AGI limits: 30% for appreciated assets). To qualify: The asset must have been held for at least one year.For real estate valued above $5,000, an independent appraisal is required.Charities get the full value, and you skip the capital gains tax bill. If your donation exceeds the allowed AGI percent, you can carry the excess deduction forward up to five years. 4. Donor Advised Funds: Flexible Giving, Immediate Deductions A Donor Advised Fund (DAF) is a charitable investment account. You can donate cash, stocks, or other assets now and get an immediate tax deduction, but distribute the funds to your chosen charities later, at your own pace. Why use a DAF? It allows for strategic, larger contributions (helpful in years with unusually high income).You enjoy flexibility in choosing and timing your ultimate beneficiaries.Major brokerages like Fidelity, Schwab, and Vanguard offer DAFs, with differing minimum contributions and low-cost investment options. Keep in mind that there are administrative fees (roughly 0.60% on the first $500,000), but DAFs are simpler and less costly than setting up a private foundation. Smart Giving Starts with...
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    18 mins