New Tax Season, New Tax Code: What Changed In 2026 – And Why It Matters

As we approach another tax filing season, it’s a good time to take stock of the most meaningful changes that affect U.S. taxpayers for the 2026 tax year (returns you’ll file in 2027). This year’s filing period reflects not just inflation adjustments but also significant provisions of the One, Big, Beautiful Bill Act (OBBBA), the major tax law signed in 2025 that locked in and updated several key tax provisions. (IRS)

Understanding these changes can help you plan earlier in the year — not just react at tax time.

Key 2026 Tax Changes at a Glance

Below are three major areas where taxpayers will see meaningful adjustments for the 2026 tax year:

1) Updated Federal Income Tax Brackets

The IRS annually adjusts tax brackets for inflation. For 2026, the seven familiar federal income tax brackets remain (10%, 12%, 22%, 24%, 32%, 35%, 37%), but the income thresholds have shifted upward, helping many taxpayers avoid “bracket creep.”

2026 Federal Income Tax Brackets (Taxable Income) (OneDigital)

Tax Rate

Single Filers

Married Filing Jointly

10%

Up to $12,400

Up to $24,800

12%

$12,401–$50,400

$24,801–$100,800

22%

$50,401–$105,700

$100,801–$211,400

24%

$105,701–$201,775

$211,401–$403,550

32%

$201,776–$256,225

$403,551–$512,450

35%

$256,226–$640,600

$512,451–$768,700

37%

Over $640,600

Over $768,700

These adjustments don’t lower rates, but they mean you can earn more before moving into a higher bracket. That matters for retirement planning, RMD timing, Social Security taxation, and portfolio withdrawals.

2) Standard Deduction and Senior Deduction Updates

Along with bracket changes, the standard deduction rises for most taxpayers. For 2026:

  • $16,100 for single filers
  • $32,200 for married couples filing jointly
  • $24,150 for heads of households (NerdWallet)

For many taxpayers, these deduction increases reduce taxable income before rates are even applied.

Additionally, OBBBA introduced a new senior deduction lasting through 2028: taxpayers age 65 or older may be eligible for a $6,000 deduction ($12,000 if both spouses qualify), regardless of whether they itemize or take the standard deduction. (AARP)

3) Expanded Credits and Other Key Changes

The 2026 tax year also reflects broader changes that can impact refunds or tax liabilities:

Child Tax Credit: Indexed for inflation and slightly increased under the OBBBA for qualifying children. (IRS)

Itemized Deduction Changes: The bill significantly expanded the cap on state and local tax (SALT) deductions for many filers, although limits and phaseouts still apply.

Charitable Deductions: Non-itemizers can now deduct cash donations up to $1,000 (single) or $2,000 (joint) – a change that broadens tax benefits to more filers.

Preparation and Filing Notes: The IRS has updated forms, encouraged direct deposit for refunds, and provided resources and checklists for this filing season. (IRS)

Why This Matters for Your Planning

These tax changes are not just numbers on a chart – they affect when and how you plan income, retirement distributions, Social Security strategies, Roth conversions, and charitable giving.

Some actionable reminders for 2026 and beyond:

  • Review whether standard vs itemized deductions benefit you (especially with SALT changes).
  • Consider the timing of income that could push you into higher brackets.
  • Coordinate retirement distributions with Social Security claiming to manage taxable income.
  • Use expanded credits and deductions to your advantage throughout the year, not just at filing time.

Taxes are a major lifetime expense – often bigger than market returns or fees. Planning with the current tax code in mind helps you make decisions that support the life you want to live.

 

Finding Meaning In Retirement: When The Calendar Is Full But The Soul Isn’t

For many people, retirement planning starts with a number.

“How much do I need?”
“Will my money last?”
“Can I afford to stop working?”

Those questions matter. But after years of walking alongside retirees, we’ve learned something important: financial security alone does not guarantee fulfillment.

In fact, one of the most common challenges retirees face has very little to do with money. It’s the quieter, often unexpected loss of purpose, identity, and connection that can surface once work is no longer the organizing force of daily life.

The Transition No One Warns You About

Work does more than generate income. It provides structure, responsibility, and a sense of contribution. It answers questions we don’t always realize we’re asking:

Who needs me today?
What am I accountable for?
Where do I belong?

When work ends, freedom arrives – and for many, so does a subtle sense of disorientation.

Research supports this experience. Multiple studies show that retirement can lead to a measurable decline in a person’s sense of purpose if it isn’t replaced intentionally. This highlights the guidance we give to clients years in advance of retirement: make sure that you are retiring toward something and not just away from something.

One large review published in The Gerontologist highlights how meaning, not activity alone, plays a central role in how well individuals adjust to retirement. In other words, staying busy is not the same as feeling fulfilled.

Activity Is Not the Same as Meaning

We often meet retirees who are financially secure, healthy, and “doing all the right things” – traveling, golfing, volunteering, and staying active. Yet something still feels missing.

That’s because meaning tends to come from deeper sources.  These can include:

  • Contribution – being genuinely useful to others
  • Connection – relationships that go beyond surface-level social interaction…make note, fitting in is NOT the same thing as true authentic connection
  • Growth – continuing to learn, stretch, and engage with life

Psychology research consistently shows that retirees who maintain a strong sense of purpose experience better mental health, greater life satisfaction, and even improved physical outcomes.

Designing Retirement With Intention

The most fulfilling retirements we see are not accidental. They are designed with the same thoughtfulness people once applied to their careers.

That might look like:

  • Remaining involved in a part-time, advisory, or mentoring role
  • Sharing hard-earned wisdom with younger professionals or family members
  • Committing to a cause, board, or organization where presence truly matters
  • Creating weekly rhythm and responsibility, not just open time
  • Pursuing challenge and adventure, not just comfort

Research on “meaning-making” in retirement suggests that individuals who actively redefine who they are after work – rather than simply replacing work with leisure – experience a far healthier transition. The key question is not “How do I stay busy?”
It’s “Who do I want to be useful to in this season of life?”

Planning for a Meaningful Life, Not Just a Long One

Good financial planning creates margin. Great planning helps you use that margin well.

When we talk with clients about retirement, we often ask non-traditional questions:

  • What will give your days structure?
  • Who will you see regularly?
  • Where will you feel needed?
  • What are you still growing toward?

Organizations that focus on thriving in retirement, not just retiring, emphasize the same themes: purpose, connection, and intentional transition.  Money supports those answers – but it cannot replace them.

If retirement is approaching, or already here, it’s worth stepping back and asking not just “Can I retire?” but “What am I retiring to?”

That question matters more than the number if you truly want to continue to live your great life. In fact, retirement done well starts looking much more like exchanging one work purpose for a different kind of purpose. Retirement is not the Great Checkout if you want to thrive. So let’s all agree to stop using retirement as a goal to ‘be done,’ and start viewing it as financial freedom to pursue the things that make us feel most alive (Contribution, Connection, and Growth)! 

Q1 Letter to Clients

As we close the fourth quarter of 2025 and step into a new year, I want to take a moment to reflect – not just on markets and portfolios, but on the purpose behind the plan itself.

Quarterly statements naturally draw attention to short-term market movements. They are part of the story, but never the whole story. At Ridgeline, our work together has always been grounded in a longer view: helping thoughtful, capable people design financial lives that support not only security, but meaningful experiences along the way.

Many of you I would describe as Everyday Explorers – people who take responsibility seriously, but who also want to remain curious, engaged, and fully present in your lives. Financial planning, done well, should make room for both.

The Market Backdrop: Q4 2025

The final quarter of 2025 reminded investors of a familiar truth: markets are dynamic, unpredictable, and often uncomfortable in the short term.

U.S. equities experienced continued volatility as investors weighed inflation data, evolving Federal Reserve policy, geopolitical uncertainty, and questions around economic growth. Leadership rotated within the market, sentiment shifted quickly, and headlines offered no shortage of reasons to feel either optimistic or uneasy depending on the day.

This kind of environment can test confidence – especially if investing is viewed as a quarterly scorecard. But volatility is not an anomaly. It is a feature of markets, not a failure of them.  Uncertainty is not a flaw in the system – it is the system.  The real question is not whether volatility exists, but whether your plan is built to withstand it.

Why We Don’t Chase Returns or Predictions

One of the most important principles I want to reinforce – especially during uncertain periods – is that investment decisions should never be about chasing returns or predicting where markets will go next.

No one can consistently forecast short-term market outcomes. Acting as though we can often lead to unnecessary stress, poor timing decisions, and behavior that undermines long-term success.

Instead, our planning framework begins with a different foundation: ensuring that your future liabilities are matched or offset with safe, liquid resources.

When near-term spending needs, lifestyle costs, and known future obligations are covered by appropriate reserves and conservative assets, the long-term investment portfolio can do its job without interference. Growth assets are then free to compound over time, through inevitable cycles of optimism and uncertainty.

When this structure is in place, year-to-year market movements become background noise rather than a source of anxiety.

Planning With Intention – and With Life in Mind

One of the themes I continue to emphasize with clients is that planning should support living now, not just preparing for later.

For Everyday Explorers, that often means intentionally building room for travel, time away, outdoor pursuits, family experiences, and personal challenges that make life richer and more memorable. These experiences don’t happen accidentally. They require planning, margin, and clarity.

This is why our conversations extend beyond investments. Cash flow, liquidity, tax strategy, and risk management all play a role in creating the flexibility to say yes to meaningful experiences when the opportunity arises.

Tax and Planning Updates

As we move into 2026, several changes in the tax and legislative landscape are worth noting. Recent federal budget and benefits legislation is beginning to affect real-world planning decisions, including:

  • Adjustments to retirement contribution limits and age-based catch-up provisions
  • Ongoing evolution of required minimum distribution rules and inherited account timelines
  • Shifting income thresholds that affect deductions, credits, and phase-outs
  • The approaching sunset of certain prior tax provisions, increasing the importance of multi-year planning

None of these changes require reactive decisions. They do, however, reinforce the value of proactive coordination – aligning tax strategy, investment structure, and lifestyle goals well before deadlines appear.

Staying Grounded in What We Can Control

Market volatility tends to pull attention toward what we cannot control: headlines, forecasts, and short-term performance.

Your plan, however, is built around what is controllable:

  • Spending and savings decisions
  • Liquidity for known obligations
  • Asset allocation aligned with time horizons
  • Risk exposure that reflects your goals and temperament
  • A disciplined, long-term approach

When these elements are aligned, the plan does not rely on perfect market conditions to succeed. It relies on preparation, patience, and perspective.

Looking Ahead

As we enter the new year, my commitment to you remains unchanged. I will continue to approach planning through the lens of your life, not quarterly market noise. We will continue to design plans that prioritize resilience over prediction and flexibility over optimization.

Most importantly, we will continue to use money as it was intended to be used: as a tool that supports security, opportunity, and a life well lived along the way.

Thank you for your trust and partnership. I look forward to our upcoming conversations and to navigating the road ahead together.

Planning 2026 with intention: 10 financial and life considerations for the year ahead

The start of a new year naturally invites planning. But for most people, planning quickly turns into optimization – more efficiency, better returns, tighter projections.

The more meaningful work often starts earlier than that.

Before adjusting numbers, it’s worth stepping back to ask whether your financial life is aligned with the life you want to live. As we look ahead to 2026, with several new planning rules and legislative changes becoming active under the OBBBA framework, this is an ideal moment to reset both direction and strategy.

As a kid of the ‘90’s and a David Letterman fan, I always waited for the part of the show when he revealed his (sometimes crazy, but almost always funny) Top 10 List.  Here is my attempt and a nod to Mr. Letterman with 10 financial and life planning considerations worth reviewing as you prepare for the year ahead, with a particular emphasis on building margin, clarity, and adventure into 2026.

1. Define What You Want 2026 to Feel Like

Before reviewing accounts or projections, clarify the experience you want the year to deliver.

Do you want 2026 to feel spacious or packed? Grounded or mobile? Predictable or exploratory?

Financial plans are most effective when they support a clearly defined life vision. Without that anchor, even strong financial results can feel disconnected.

2. Plan Adventure First, Not Last

Adventure is often treated as optional – something to squeeze in if time and money allow.

In practice, that usually means it doesn’t happen.

Whether adventure for you means extended travel, meaningful family trips, endurance events, or simply more time outdoors, plan it intentionally. Block the time on the calendar. Estimate the cost. Create a dedicated savings bucket.

When adventure is designed into the plan, money becomes an enabler rather than a gatekeeper.

3. Understand What’s Changing Under the OBBBA

Several provisions tied to recent federal budget and benefits legislation are now becoming relevant for 2026 planning. While the specifics vary by household, common planning areas affected include retirement contribution limits, including updated catch-up provisions for certain age ranges; required minimum distribution rules and beneficiary timelines impacting inherited retirement accounts; income thresholds for tax credits and deductions, with tighter phase-outs at higher income levels; and sunsetting provisions from earlier tax law, increasing the importance of proactive, multi-year tax planning.

The key takeaway is that understanding these changes early creates flexibility. Waiting until year-end often removes good options.

4. Revisit Your “Enough” Number

As income and assets grow, old targets often linger long after they stop serving your life.

Revisit what level of income actually supports your desired lifestyle, how much work is enough, and which trade-offs are no longer worth it.

Clarifying “enough” is often the most powerful financial decision you can make.

5. Align Cash Flow With Experience, Not Habit

Instead of asking where to cut spending, ask where your money is working well for you.

Which expenses consistently add meaning or enjoyment? Which ones feel automatic or outdated?

Redirecting cash flow toward experiences, travel, and flexibility often improves quality of life without increasing overall spending.

6. Strengthen the Safety Net

Adventure is easier to pursue when the foundation is solid.

The new year is a good time to review emergency reserves, insurance coverage, estate documents, and beneficiary designations.

These items rarely feel urgent – until suddenly they are. Proactive review reduces stress and creates confidence.

7. Simplify Where Complexity Has Crept In

Over time, financial lives naturally become more complex.

Multiple accounts serving similar purposes, legacy strategies that no longer apply, and complexity that adds confusion without value can quietly accumulate.

Simplification improves clarity, reduces friction, and makes decision-making easier when life changes quickly.

8. Use Tax Planning to Support Lifestyle Decisions

With updated thresholds and evolving rules, tax planning for 2026 should align with life choices.

This may include timing income around travel or sabbaticals, evaluating Roth strategies during lower-income years, or coordinating charitable giving with tax efficiency.

The goal is not minimizing tax in isolation, but ensuring tax decisions support the life you want to live.

9. Decide What to Stop Doing

Borrowing from the annual review approach popularized by Tim Ferriss, one of the most powerful planning exercises is deciding what to stop.

What commitments, habits, or financial behaviors create stress without meaning, consume time without return, or reflect an outdated version of you?

Stopping often creates more freedom than starting something new.

10. Build Margin Into the Plan

Finally, leave room.

Margin in your calendar allows spontaneity. Margin in your cash flow absorbs surprises. Margin in expectations builds resilience.

A plan with no margin may look efficient, but it is fragile. A plan with margin can flex and support opportunity when it appears.

Final Thought

Planning for 2026 isn’t about predicting every outcome. It’s about creating a framework strong enough to support responsibility and exploration.

When financial planning is aligned with experience, when adventure is treated as essential rather than optional, and when decisions are made intentionally rather than reactively, money becomes what it was always meant to be – a tool in service of a well-lived life.

The top 8 financial items to review before the end of the year

As the year draws to a close, many people feel an instinct to wrap things up. It’s a natural moment to pause, take inventory, and make sure nothing important is left undone.

In financial planning, year-end reviews aren’t about scrambling or chasing last-minute tactics. Done well, they’re about clarity – confirming that your financial decisions still align with the life you’re building.

Here are the most important areas worth revisiting before the calendar turns.

  1. Taxes: Reducing Regret, Not Just the Bill

    Year-end tax planning isn’t about perfection – it’s about intention. This is the time to review realized gains and losses, assess whether tax-loss harvesting makes sense, and confirm that income timing aligns with your broader strategy. For many families, charitable giving also plays a role here – not as a tax trick, but as a thoughtful extension of their values.

  2. Required Minimum Distributions (RMDs)

    For retirees and those nearing retirement, RMDs deserve careful attention. Confirming distributions are made on time, in the correct amount, and from the appropriate accounts is critical. It’s also worth reviewing how RMDs integrate with your overall cash-flow plan. This is ideally done in the first half of the year, but if you haven’t gotten to it yet, do not delay. The penalty for missing your RMD is significant!

  3. Charitable Giving with Purpose

    Year-end giving often happens quickly. A pause can make it more meaningful. Review how and where you give, and whether you’re giving still reflects what matters most to you. Going back to your RMD’s, if you are over 70.5, you can consider using a Qualified Charitable Distribution (QCD) from your IRA to fund those giving goals!

  4. Portfolio Alignment and Risk Exposure

    Markets have a way of feeling louder in December. Year-end is a natural time to rebalance, reassess concentration, and confirm that your portfolio still supports your long-term plan. Have you set aside enough funds in safe cash and short-term bonds to match several years’ worth of coming expenses? If you’re not sure, we should talk.

  5. Estate Planning and Beneficiary Reviews

    Time with family has a way of surfacing important questions. Review beneficiary designations, trustee and executor choices, and guardianship decisions if applicable. Your beneficiary designations on retirement accounts, insurance policies, etc. are legal agreements between you and the financial institution. This means that what ever is on file will trump what is stated in your will, so make sure they line up!

  6. Retirement Readiness Beyond the Numbers

    For those approaching retirement, year-end reflection often brings deeper questions. Financial readiness and emotional readiness don’t always arrive at the same time. Both deserve attention. I’ve seen the emotional transition into retirement impact clients much more significantly than the financial transition. Make sure you have spent time preparing yourself for both.  If you are only focused on what you are retiring away from and haven’t spent any time thinking about what you want to retire towards, then you’re not ready.

  7. Simplification and Organization

    Many people enter a new year craving less complexity. Consolidating accounts and reducing unnecessary financial clutter can create a surprising sense of relief. Everyone has a financial ‘junk drawer’, where things accumulate over the years, but have no rhyme or reason or coordination. Spend time emptying out the junk drawer to assess what you have and then be intentional about what you keep and what you get rid of.  Does it serve you anymore? 

  8. Family Support and Legacy Planning

    Supporting adult children or aging parents requires balance. These decisions are rarely about math alone – they’re about boundaries and stewardship. I have noticed that there is no magic formula or one-size-fits-all approach. Every family dynamic is different and requires a thoughtful, intentional approach to what is best for everyone.

Closing the Year Well

A thoughtful year-end review isn’t about checking boxes. It’s about asking:
Does our financial plan still serve the life we want to live?  If it doesn’t or you’re not sure, give us a call….we’re here to help.

Q4 Letter to Clients

I could sit and watch a stream or river all day long.  There is constant movement, and yet, the water is always right there in front of me, covering the same ground, falling over the same rocks and touching the same boundary on each side.  The water isn’t in a hurry. It shapes rock by returning to the same line again and again. That felt like a useful reminder for investing but really, for life – we make real progress by showing up with purpose and relentless consistency, not by forcing outcomes.  It’s a lesson that I seemingly must learn over and over again, but also continues to inform my approach to good, sound financial planning.

Market and Economic Overview

The third quarter brought plenty of headlines around interest rates, inflation reads, and geopolitics, yet the market’s tape told a different story. U.S. stocks advanced through the quarter, with the S&P 500 posting gains in July, August, and September and notching several new record closes in September. It didn’t move in a straight line, but it did move – and more than the headlines alone might suggest. For context, late September trading steadied after inflation data came in as expected.  Day-to-day swings will keep coming, but they don’t change the core job of a long-term plan.

Developed markets outside the U.S. also showed strength. Part of their performance stems from a weaker U.S. dollar, which amplifies returns in dollar-terms for overseas equities. This has also supported returns in emerging markets, which have surpassed U.S. equities.  The theme continues to be that different markets lead at different times, and spreading risk across geographies helps steady the journey.

Planning Moves That Matter

Just like the water in my favorite stream, we’re focusing on things that compound quietly and that make meaningful changes over time:

  • Cash segmentation for spending needs – matching an appropriate amount of known withdrawals to high-quality cash vehicles (money markets, Treasuries, short-term bonds or other ladders) so the rest of the portfolio can do its long-term work.
  • Rebalance with intent – trim what has run, add to what’s lagged inside your target ranges, and redeploy new cash strategically into the asset classes most out of balance.
  • Year-end tax work – harvest losses where appropriate, manage capital gains distributions, and pair giving with taxes: direct appreciated shares to donor-advised funds, consider QCDs if you’re taking RMDs, and review state-specific opportunities before December 31.
  • Purpose-built buckets – where it fits, we’ll keep leaning into liability-driven investing that ties assets to time horizons instead of a single, generic “risk number.”

If your cash flow, goals, or time frames have shifted recently, let’s update the map now rather than after January 1.

Money and Meaning

Optimizing your money is obviously important but not if it comes at the expense of optimizing your life (I’m speaking to myself here).  Recent On Adventure conversations offered a thread worth carrying into Q4.

  • Bob Becker spoke about finishing Badwater 135 at age 80 – not with bravado, but with gratitude, routine, and a stubborn gentleness that kept him moving when it got ugly.
  • Lisa Smith-Batchen (will be released on October 3) reminded us that the best crews and mentors hold a mirror to your ‘why’ when your legs want to quit.
  • Wells Jones talked about drawing a line in the sand – not as a dare, but as a promise to live aligned with what matters.

Nature is saying the same thing right now. The light changes. The trail looks different. The real work is to keep showing up with intention. Money is just one of the tools that helps you do that – to buy time, fund experiences with the people you love, support causes that reflect your values, and create margin for the kind of adventures that make you feel most alive.

Thank you for your trust. If something in your world has changed – a new goal, a liquidity event, a move, college bills, eldercare planning – let us know and we’ll adjust the plan together.

Q3 Letter to Clients

July 2025

The days are already getting shorter – barely noticeable, but real. And while many of us in the South still have some scorcher days ahead, the halfway point of the year is a good time to pause and reflect.

Market and Economic Overview

Feeling some whiplash from the markets lately? You’re not alone. It’s been a wild ride, and once again, it reminds us why we’re such big fans of staying in your seat. Global tensions have kept uncertainty front and center, which usually means more market volatility. In plain terms, the roller coaster gets steeper—both on the way down and the way back up.

History has shown that some of the biggest market gains come right after sharp declines. The problem is, we never know exactly when that rebound will happen. Guessing wrong can be costly – and in some cases, set a portfolio back for decades (see the chart below).

In moments like the February 19th to April 8th drawdown this year – when the S&P 500 fell nearly 19% in just a few weeks – the temptation to jump off the ride can be strong. It will take your breath away.  But staying disciplined and committed to your plan is what makes the difference. It’s time in the market, not timing the market, that leads to long-term success.

One note of caution: it’s important that money needed for near-term living expenses isn’t exposed to these kinds of market swings. Lately, we’ve become strong advocates of a liability-driven investment approach – matching your investments to specific future spending needs – rather than just thinking in terms of general asset allocation. If that’s unfamiliar, we’d love to talk more at your next meeting.

Money in Service of Values

When markets get noisy, perspective matters. Money is at its best when it serves what you truly value. That’s a theme I’ve heard repeatedly from recent guests on my On Adventure podcast—entrepreneurs, musicians, conservationists. The thread that runs through all their stories? Wealth isn’t the end goal. It’s a tool to create freedom, meaning, and impact.

What’s the point of building bigger buckets if the money never gets used to shape a better life—for yourself or someone else? When aligned with purpose, money becomes transformative. It allows us to live with integrity, build what matters, and contribute beyond ourselves. And yes, to seek out a few great adventures along the way.  In that light, money becomes more than just currency. It becomes agency.

Thank you for your continued trust. Please feel free to reach out anytime.

What the Latest Tax Bill Means for You (Without the Jargon)

A significant tax and spending package – nicknamed the One Big Beautiful Bill (OBBBA) – recently passed the U.S. House and is now being debated in the Senate. This isn’t just Capitol Hill chatter – it has direct implications for your financial plans, and I want to make sure you’re informed without getting bogged down by technical jargon.

Here are five key areas currently up for discussion:

  1. SALT Deduction Cap: House Wants $40K, Senate Uncertain

The House-approved bill proposes raising the State and Local Tax (SALT) deduction cap significantly—from $10,000 up to $40,000 (joint filers), permanently. This is a notable change for anyone living in high-tax states or dealing with substantial property taxes.

The Senate, however, hasn’t fully embraced this increase yet. They’re leaning toward maintaining the current $10,000 cap, sparking intense negotiations.

What it means for you:

If you typically itemize and live in a higher-tax region, your deductions – and thus your tax bill – could swing substantially depending on the final agreement.

  1. Child Tax Credit and Family Incentives

Both chambers agree broadly on enhancing the Child Tax Credit. The proposal currently extends the credit at $2,000 per child permanently, with a temporary increase to $2,500 per child until 2028.

The House version also includes a novel initiative: $1,000 “baby bonus” accounts for newborns through 2029. The Senate is debating this component, but no firm commitments yet.

What it means for you:

Enhanced child credits or potential baby savings accounts might mean extra breathing room in your budget or additional savings opportunities.

  1. No Taxes on Tips and Overtime?

The bill includes bipartisan provisions to exempt certain tip income and overtime earnings from federal income tax, at least up to certain thresholds. This initiative targets workers in the hospitality industry, gig economy, and service sectors.

Both the House and Senate versions reflect strong support for making tips and overtime pay partially tax-exempt, potentially putting more money directly into workers’ pockets.

What it means for you:

If your income includes tips or overtime, your net earnings could rise, meaning immediate cash-flow improvements.

  1. Green Energy Credits Could Change Drastically

The House version plans significant rollbacks of existing clean-energy incentives introduced previously under the Inflation Reduction Act. The Senate prefers a more moderate path—keeping credits for geothermal, hydropower, and nuclear energy intact longer, but phasing out solar and wind incentives sooner.

What it means for you:

If you’ve planned home efficiency upgrades or renewable-energy installations, these changes might affect your timing or feasibility, depending on what incentives remain.

  1. Taxes on Social Security Income May Shift

An additional change currently debated is how Social Security income is taxed. The House bill includes proposals to raise the income thresholds at which Social Security benefits become taxable, meaning potentially fewer recipients would owe taxes on these benefits.

The Senate’s stance isn’t finalized yet, but similar adjustments are being seriously considered.

What it means for you:

Retirees—or soon-to-be retirees—might see significant shifts in their taxable income, impacting cash flow, retirement planning strategies, and possibly allowing greater flexibility in your spending plans.

Broader Implications and Timing

  • Deficit Impact:

    The Congressional Budget Office (CBO) estimates the bill could increase the federal deficit by $2.8–$3.8 trillion over the next decade. The tax cuts, expanded credits, and changes in income taxation are major drivers of this projection.
  • Medicaid and Healthcare:

The bill could also affect healthcare spending, potentially tightening Medicaid eligibility rules, which could indirectly affect financial planning for healthcare costs in retirement.

  • Timeline:

After passing the House on May 22, 2025, the Senate is aiming to finalize its version before the July 4 recess, intending to bundle it with a new debt-ceiling increase.  There is still disagreement on these even within the majority party, so the deadline is currently up in the air.

The Bottom Line (for Now)

Given these proposals are still in flux, flexibility will be essential in your financial strategy. Areas to watch closely include SALT deductions, family-related tax credits, changes in taxable income from tips and overtime, renewable-energy incentives, and especially the taxation of Social Security benefits.

We’re closely monitoring these developments. Rest assured that once the final details are clear, we’ll recalibrate your financial plan together – ensuring you’re positioned to make the most of these new opportunities or to mitigate any potential challenges.

Remember, my goal remains unchanged: helping you live your great life right now, confidently navigating whatever comes next. As always, I’m here if you have immediate questions or if any of these changes prompt you to rethink current plans.

What the Everyday Explorers of the On Adventure Podcast Have Taught Me About Making a Good Life Great

You have a solid job that covers the essentials and taps into your talents. Your relationships with your spouse, children, extended family, and close friends are meaningful and enriching. Your home offers both comfort and safety, and your golf outings or local volunteer work add enjoyable dimensions to your routine.

On paper, you’re living the ideal life. Yet many who tick these boxes still feel there’s a gap—something intangible yet deeply felt.

Recently, a compelling study published in Affective Science explored exactly what constitutes a truly “good life.” Researchers surveyed nearly 4,000 individuals from nine countries, including the U.S., asking participants to envision their ideal lives and rank various descriptors reflecting happiness, meaning, and psychological richness.

Happiness as the Foundation

The study identified foundational happiness with descriptors like:

  • Stable
  • Comfortable
  • Simple
  • Happy
  • Pleasant

This is your baseline. Achieving this level of happiness means your basic emotional and physical needs are met. From here, you have the stability and clarity needed to expand your life in meaningful ways.

Adding Layers of Meaning

The next dimension is meaning, expressed through terms such as:

  • Meaningful
  • Fulfilling
  • Virtuous
  • Sense of purpose
  • Involves devotion

This aligns perfectly with the conversations we have on the On Adventure podcast, highlighting individuals who choose purpose over mere comfort. Whether through meaningful work, volunteerism, or mentoring, creating a life of purpose enriches your emotional experience and builds a legacy.

As I’ve discussed frequently on the podcast, meaning becomes even more critical during life’s transitions, especially retirement. Those who pursue meaningful work or passions tend to continue finding fulfillment long after their career concludes.

Embracing Psychological Richness

Perhaps most intriguing—and closely related to our ongoing discussions on adventure—is the third dimension: psychological richness, characterized by:

  • Eventful
  • Dramatic
  • Interesting
  • Full of surprise
  • Psychologically rich

Adventure inherently creates psychological richness. It involves challenge, uncertainty, overcoming obstacles, and embracing curiosity. It keeps you from stagnation and boredom. Guests on the On Adventure podcast consistently affirm that embracing adventure dramatically enriches their lives, offering insights, perspective shifts, and growth opportunities they never anticipated.

The interplay between happiness, meaning, and psychological richness evolves as you journey through life. Adventure, in various forms, ensures that you continuously grow and remain energized.

So how do we balance these elements effectively, especially as our lives change over time? That’s where Life-Centered Planning comes into play—helping you strategically align your resources with the kind of life that genuinely excites and fulfills you right now. Let’s explore together how your personal adventure can guide the design of your great life right now!

Q2 Letter to Clients

As we wrap up the first quarter of 2025, I want to briefly reflect on recent market activity and share some thoughtful insights on maintaining perspective during volatile times.

Market and Economic Overview

This quarter reminded us that markets rarely move in a straight line. The S&P 500 saw a decline of a little more than 4%, driven largely by investor unease over inflation concerns and uncertainty about global trade policies. Additionally, international markets showed surprising resilience, with the MSCI All Country World Index ex-U.S. index outperforming the S&P 500 index by nearly 11 percentage points, marking the strongest first-quarter performance for international stocks since 1987, demonstrating the importance of diversification in your portfolios.  And yet, these numbers mean nothing to me, and they shouldn’t to you either.  Index returns, especially over one quarter, say nothing about whether you are on track to achieve your own personal goals or more importantly, about whether you are living your great life right now.  You should be tracking your ROL index, and the stock market has nothing to do with that!  These short-term returns are just noise, distracting you from the conversation that really matters.

Strategic Opportunities Amid Volatility

While volatility can feel uncomfortable, it’s essential to recognize the opportunities it creates for a long-term investor. We continuously monitor your portfolios for opportunities like tax-loss harvesting – turning short-term declines into meaningful tax savings – and strategic rebalancing which keeps your investments on target to your risk model.  Or better yet, if you have cash on the sidelines, putting new cash to work in your investment accounts is a great way to take advantage of lower asset prices, which has an outsized effect on your future portfolio!  Volatility coming from risk is also the price we all must pay in order to expect longer-term returns that outpace inflation. 

Great New Content

In line with our belief in tuning out short-term noise and focusing on long-term goals, Dimensional Fund Advisors recently released an exceptional documentary film called, “Tune Out the Noise,” directed by Academy award-winning filmmaker, Errol Morris. I highly recommend this impactful video, which beautifully captures the essence of remaining grounded and focused amid market distractions, spoken from the perspectives of some of the smartest people in finance over the last 60 years.  Check it out in the link below.

Above all, remember that your financial plan is built specifically for times like these – grounded in your personal goals, risk tolerance, and life’s milestones. Markets will always fluctuate, but our commitment to your financial well-being remains constant.

Thank you for your continued trust. Please feel free to reach out anytime.