2026 Retirement Tax Checklist

This is the Truth Network. Um Welcome to Finishing Well, brought to you by CardinalGuide.com with certified financial planner Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRH, long-term care, life insurance, investments, and taxes.

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Well, welcome to Finishing Well with Certified Financial Planner Hans Scheil. And today's show is the 2026 retirement tax. Checklist. And how cool is that that we get to actually give you some numbers and you can kind of go through this? As there's a lot of changes in 2026 that we want to highlight.

And as we were doing this, you know, you kind of want to think what's the purpose of it. And in the video that kind of matches this, they talk about taking the longer view and actually, you know, having an eternal. A life view is kind of what God has. And I don't know if you ever thought about this. But actually the closer that you get to God, uh the more you get a chance to step into eternity with him.

It's just like Moses was at the burning bush, right? And it says, you know, don't take, I mean, don't draw near this place until you take off your shoes because you're standing on holy ground, right? And so as you draw closer to God, you go into this sort of holy place, which is actually eternal. And so in Isaiah 57 it says, For thus says the high and lofty one who inhabits eternity. And so when we start to look at things way down the road, oh my goodness, we get such an amazing view of what God's doing and the opportunities that present themselves to us that really, if I've done this work with Hans over the years, it's just blown my mind at what the opportunities would be when you take the longer view rather than just trying to figure out how much taxes I can save in 2026.

And so with that in mind, Hans, we got some exciting stuff this year. But yeah, usually these checklists tax checklists Come out. December. You know, and I had plenty of them that I could have thrown out that just says, hey, you got a limited time left in 2025. Um You're going to file your tax return in April.

But any changes you want to make in your the the things you can affect, you better get it done by December 31st.

So they're all short-sighted and I don't usually run those things. Through the holidays. Um I mean, those are more CPA kind of things or tax prepare kind of things. And so what today is He has We're doing a 2026 retirement tax checklist, and we're showing you some things you ought to look at in February. And the reason you ought to look at them in February is you've got the whole year.

to make changes If you're going to change anything or make decisions, in front of you.

So we're going to get started on this early. Yeah. As you said earlier, we're going to take the long view: we're financial planners.

So, what we do when people come to us. is we help them make decisions. about their financial matters of decisions about their income, decisions how they're invested. decisions about how much taxes they're going to pay. what they're going to invest in.

what type of vehicles we're going to put them in, what the tax rates are.

So there's There's there's a lot of things you can do, a lot of decisions you can make. that will positively affect your taxes. But you have to take the long view when you're doing this.

So, some of the things we're going to recommend you do. If you come into us, may increase your taxes in 2026. If you're taking the long view and you're going to pay more taxes in 2026, if it's called for, to save taxes on 2027 through As long as you're alive.

So Um Anyhow, we're going to get down to it, and this show is not so much about teaching you how the tax system works. It's more like teaching you a little bit about that but What kind of decisions Can you make? to make the situation better for yourself.

So let's start with the first one. is the first question that I'm going to ask you of eight. Yes. Are you exposed? to higher future tax rates.

Question mark.

So What I mean by that is that You know, do you think Taxes are going to be higher in the future. than they are now. And, you know, when people ask me that, the answer is yes. With all the debt we got mounting up. Um which is huge in the trillions of dollars.

and all the government programs that are paid for by your tax dollars and the deficits that they have Yeah, I think that tax rates are going to be more in the future. They almost have to be. And so which says then the question is going to be is are you doing All you can. to take advantage of these lower tax rates. Does that make sense?

Yeah, because. These are historically low. I mean, again, I wouldn't have known this if I didn't do this show with you as often as I do, but that tax rates have never been this low. And even now that they've done stuff for seniors, we even got more of a tax break, right?

So we do. I can't even believe that the impact that it's made over the last, you know, since Trump originally took office and then it got pushed through this big, beautiful bill. And now with the senior stuff, yeah. Yeah, that's a big important factor when you're planning, thinking, gee, if I can take Advantage of these lower tax rates, in other words, convert money that I've going to end up paying taxes on now, you know, it's going to save me money in the long run. Yeah, the top of the 24% tax rate.

is over $400,000 for a married couple filing jointly.

So that means during 2026, You can recognize his income. Up to $400,000, let's just call it that. It's a little bit over that. Um and not pay any more than 24% federal tax. on your last dollar.

And for a single person, that number is just over 200,000, so let's just call it 200,000.

So if you're single And you got a big IRA. Um and you're not 73 yet, and you don't have to start minimum distributions. or 75 as it's later. You're in your 60s. Early 70s.

PN You know, let's say you're single and your income is $80,000 a year. And you're you know, you're just living just fine on that, not paying a lot of taxes. You know, and some of that's Social Security. Maybe some of it's not. But it just you know you got eighty thousand dollars you're not paying a lot of taxes on eighty thousand dollars I mean, I'd have to define a lot, but If you're single and you're in this situation, You know, there's $120,000.

income that you could recognize and still keep your income at $200,000 or less, and still stay in the 24% bracket.

So, what am I talking about here? If you had a large IRA or 401k, which many people do. And I'm not proposing that everybody in this situation would do a $120,000 Roth conversion. I'm just telling you, you're leaving that money on the table. If you have a large IRA, it's going to get taxed in the future, possibly at higher rates.

You know, go ahead and convert it to a Roth now, that piece of it. And then you got tax-free on that. for the rest of your life.

Okay. Yeah, I know and believe me. The Rothschild. It's such a beautiful thing. When you get that, not only is it.

You know, become tax-free for your heirs and is tax-free for you, but it's also tax-free on the income it's making. Right? And that's the beautiful thing about the Roth is it, well, it's making money in the middle of all that time that you haven't invested. There's no tax on that either.

Somebody is going to pay tax on that money as it compounds. and they're going to be paying it most likely at higher future tax rates. And then you're Your heirs your adult children are going to inherit it at the worst possible time because They're going to be. in their higher income earning years. Probably.

when you pass away and leave it to them. And they're only going to have, you know, so we could get into all the ramifications. If you, it would be smart early in 2026. for you to look at what your income is going to be, what it was in 2025, what it's going to be in 2026. your taxable income.

and consider taking advantage of these low current tax rates.

So the next one. Are you using the years before RMDs? you know, people who are in their sixties In their late sixties, mid to late sixties, Like me. Um we're We're we're going to start RMDs, required minimum distributions, at 73. If you're in your mid-60s or below, Your required minimum distribution age is seventy five.

So that means you can take nothing out of your IRA, zero. every year until s either 73 or 75, and just let it compound. Yeah, a lot of folks just kind of feel like they're getting away with something. They're taking advantage of tax deferral, and in effect they are. Because they're they've never paid any taxes on any of that money.

But the taxes are coming. And so, what the question is, is are you using the years before RMDs? It's kind of like the first question.

So, if you're. If you're, you know, like I'm turning 68 this year.

So it means I got five years before. age 73 when I'm going to have to start taking required minimum distributions. and you don't have to take required minimum distributions Out of Araw.

So any amount that you convert before then is going to have no RMDs. And then Once you get to RMDs, And you start taking them, you can't convert the amount you take. You're going to have to pay that tax. on that distribution. The moral of the story is how many years do you have before RMDs, if we go back to our example.

of the $80,000 Single And they're converting 120,000 this year. And maybe they've got you know, a million dollars in their IRA. Uh if they have that or 800,000 or 900,000 They could do 120,000 a year. They're turning 68, they could do that for Four or five years, and they could have the lion's share of the IRA converted to a Roth. At the low tax rates before RMDs start.

And you know, it's going to sound totally ignorant, but I can assure you that before I started doing this show, I had no idea what the word distributions meant.

So, when you said required minimum distributions, I'm like, okay, what does that mean? You know, this would be a good time to. To remind you that this show is brought to you by Cardinal Guide, CardinalGuide.com, and at CardinalGuide.com. There, you're going to find. The seven worries tabs, which clearly, you know, today we're talking about taxes, which actually impact all the areas of the seven worries.

But this show, there's a wonderful video on the same thing, show notes, all that kind of information with all of these eight that you can look at the whole list and a board to go with that. It's all at cardinalguy.com again under the tax, taxes, worries tab. And then, of course, Hans's book, The Complete Cardinal Guide to Planning for Living in Retirement, and the workbook that goes with that. Ever wonderful. Contact Hans or Tom Page.

It's all there at cardinalguide.com.

So we'll be right back with a whole lot more on 2026 retirement tax checklist. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM. a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well with Certified Financial Planner Hans Scheil. Today's show 2026 retirement tax checklist.

So Hans, what's next?

Okay, so Are your retirement accounts creating a tax problem for your heirs? And I'd be talking specifically about your adult children. And um a lot of people aren't spending their IRA and one of the things that's preventing that is taxes. is people like to watch that account compound and grow. and they certainly don't like paying taxes.

on money that's been taxed. or tax deferred to this point. And so w w when I ask people, so, you know, what's it for? You know, if it's obviously not for you because you're not living off any of it, you're not taking anything out. And maybe it's for your spouse.

And you know, the one of you two that survives and lives on is maybe going to need it more than you do as a couple. We're going to talk about the widow's penalty later. But the question is The default is what's left is going to go to the kids. Yeah. the kids are going to have a tax problem that they don't even know about.

Yeah. You know, that the you know, do your kids understand the ten-year rule? that was created by the Secure Act, which means that They have to empty the account and pay the taxes. in the ten years ah following your death. or from when they become a beneficiary.

Most of them don't have a lot of guidance in that. And that gets added to their income. that they're already making.

So if your kids are doing well, This is inheritance through an IRA is going to come to them. And it's going to create a very big tax problem.

So we just we got ways to address that. L let's just move on to the next question. For the next statement. And it's are Roth conversions being considered at the right time? Yeah.

Yeah. A lot of people say, well, yeah, I've looked at those.

Okay, so when did you look at them?

Well, I don't know exactly no. I kind of looked at them.

Well, You know, What this question is getting at. Yes. Is it the right time? I mean, taxes, I feel, are going to be as low as they're ever going to be. You you know, you don't want to do it all in one year.

But if you're going to do some Roth conversions, it'd be smart to get a plan. Um you know, certainly over the next four years. Or three or four years while these senior taxes are in place and senior deductions and senior credits. Um And then these low tax rates. Yes.

doing some Roth conversions.

So, and you know, it's gonna. The effect of those when we're taking the long view here, is it's going to lower your future taxes. It's going to lower your RMDs or the required minimum distributions. And it's also going to have a wonderful effect on your beneficiaries because they inherit Roth IRAs. Tax-free.

Now, they still have the same 10 years to empty the account, but they could leave it all in there. And wait till the tenth year and then pull it all out, and it's going to be tax-free later. They could pull it out a little bit by the year. It's really up to them. In any case, they're not going to pay taxes on the money.

That's a wonderful added gift to an inheritance. No way. Go ahead. The next one, giving to charity. Are you giving to charity in the most tax-efficient way?

And this is For us Christians You know, if we're doing our tithe. which we're supposed to do is If if we're over seventy and a half, Are you using Q C D's? I mean, you know, are you Yeah, because if you're if you're 70 and a half. or your spouse is. You can do your giving.

through your IRA, not pay any taxes on the distribution, PN. it all goes to the church or the other charity that you're putting it to. Yeah. it counts as your required minimum distribution. For those of you that are over 70 and a half or people in your church, The the seniors is that You know, the Um This is something that a lot of people are not aware of.

which is wonderful to take advantage of. And then there are also ways that you can Uh donate appreciated stock. Um without paying income taxes. on the capital gain.

So I don't want to get into the techniques of all this, but really the question is, is are you giving to charity? or the church or where your money's going, is it in the most tax efficient way? Yeah. In twenty twenty six, there's big news, right? Yeah.

Because If you use the standard deduction. Which Most of us do. Um you haven't been able to deduct your charitable gifts from your taxes because you're just getting a one big standard deduction.

So there was no need to keep track of all that to turn it in at tax time. Yeah. That really caused A reduction in charitable giving because a lot of people, oh, I'm not getting a tax deduction. I guess I'm not going to give it. At least, this is what they think.

So what was put into the one big beautiful bill is you can still deduct up to $2,000 and charitable deductions in addition to the standard deduction.

So Um when you're doing your tax return a year from April for 2026, you're going to be able to take a $2,000 deduction. for charitable giving. And that's new and that's fantastic. Is that two thousand when you're t when you're talking about married filing jointly? It it's two thousand either way.

All right. It's just two thousand. Yeah. For a single it's two thousand. For a couple it's two thousand.

Number six, the 2026 tax rule changes, how do they affect you? See ya. you know, there there's this catch-up contributions need to be as a Roth now. Yeah. Um You know, I could I could spend two or three shows talking about this.

So if you contribute to your 401k. or through salary deduction. Your contribution. You can do that the way you've always done it. up to the age 50 plus.

amount but if you're going to pay in extra or contribute extra, which is a lot of people that are over fifty. Um that extra you contribute needs to be done as a Roth contribution. and not as a traditional IRA contribution.

So that's more of a you need to know and really anybody that wants to talk about that, give me a call. Because if you think that is bad, And maybe you're going to think about not contributing. I'd like to shed some light on that. separately and maybe we'll do another show on that. Um Number seven is Do do you own a business?

And if you do own a business, are the tax strategies personally and the business coordinated?

So, not going to spend a lot of time on this one, but I see this. Often where people are 65, they're coming in, they're doing Medicare, and then we're talking to them about long-term care, we're talking about their IRA, their 401k, and then they've got this business And maybe they've owned it all their life. And they're going to consider selling it. Maybe they're going to turn it over to the kids, and there's one set of tax strategies in the business. and another set of tax strategies personally.

you know, 2026 would be a good year for you to get those in alignment. Um Especially if you own the business. Um And the last one. Are you prepared for the widow's penalty? And I mentioned this earlier.

But these people that have a large IRA And they're in their 60s. and maybe early 70s. And they're not. planning for distributions, they're just not taking them or they're taking minimal amounts. Getting to minimum distributions.

And then they're further taken. Only the minimum, required minimum distribution. They're creating what amounts to a tax bomb. Later, that's going to be affected by the widower, it's going to affect the widower widower because. You know, if the first one of them dies at eighty, and the other one lives on to 93, they're going to have 13 years of single tax filing.

And those required minimum distributions are going to be larger. Yeah. They're going to be. Excuse me, they're going to be the same. on a single person, but the tax rates are much higher in the tax brackets.

the jumps happen at lower amounts, It's called the widow's penalty. You need to tie the widow's penalty. to your tax and your required minimum distribution planning. Make sense? Oh yeah, the widow penalty is, you know, something That really a lot of people don't see coming, and it's absolutely critical to think about when you start talking about a long-term view, right?

That this is something. That really you want to make sure that your widow s you know is is taken care of and this doesn't come along as a big surprise, right? Oh, it does. And especially for people with big IRA balances that become even bigger. At the first death, which a lot of times is going to happen in the late 70s and the early 80s.

Yeah, it's a big surprise. for that now single taxpayer. And the planning along with this now. is to start doing Roth conversions. and to consider the life insurance.

Because life insurance You know, we've done some videos on comparing. paying a life insurance premium over four, five, six years. and comparing that to a Roth conversion strategy over four, five, six years. And then comparing the effects of that many years later, Yeah. It's it's very helpful with this issue.

of the will to get a tax-free Um A life insurance payment. Um To to come in and mitigate this thing. Yeah. Yeah, or even in my case, I've thought long and hard about that situation because It's not just But also my wife's social security check is not going to be what, you know, we're not going to have the income. That we once had.

So it's kind of like a double whammy.

Well, as often, we run out of show before, I mean, ran out of time before we ran out of show. But this is a good time to remind you that our show is brought to you by CardinalGuide, CardinalGuide.com. And if you go to CardinalGuide.com, as always, we talk about these seven worries menu tabs. And at the one for taxes, is where you're going to find this show. There is a wonderful video that has a board.

It goes over all eight of these that we have on the checklist today. And that's all there at CardinalGuide.com under, again, the taxes tab, as well as Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement, and a mighty workbook, really, that's amazing that goes along with that, that really can help you get a foundation on these ideas of retirement. And then, as always, the easiest thing to do is just contact Hans or Tom and begin this whole idea of helping them give you the longer view on your taxes. It's all there at Cardinal Guard. CardinalGuide.com.

Thank you, Hans. Great show. Thank you, and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.

Any statements or opinions are subject to change without notice. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you.

Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation. Finishing Well is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstrone Capital Management LLC, abbreviated BC. BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other.

Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. We hope you enjoyed Finishing Well, brought to you by CardinalGuide.com. Visit CardinalGuide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Han's best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement and the Workbook. Once again, for dozens of free resources, past shows, or to get Han's book, go to CardinalGuide.com.

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