harbor-wealth

What Will We Owe in Taxes, and Should We Consider a Roth Conversion?

Mon, 12 Oct 2026 03:05:54 GMT

What Will We Owe in Taxes, and Should We Consider a Roth Conversion?

Retirement taxes depend on more than your tax bracket. The types of income you receive, retirement account withdrawals, Social Security, deductions, filing status, and applicable tax rules can all affect the calculation. A Roth conversion may be worth evaluating in some situations, but it isn't automatically beneficial.

Now let's talk about one of the biggest questions in retirement planning:

What are we actually going to owe in taxes?

And right behind it:

Should we consider a Roth conversion?

These questions are connected.

But they aren't the same question.

What determines your retirement tax bill?

Your tax bill depends on your overall tax situation.

That can include:

Wages or business income

Social Security

Traditional IRA or 401(k) distributions

Capital gains

Roth conversions

Deductions and credits

Filing status

Applicable federal and state tax rules

That's why looking at one account in isolation can miss the bigger picture.

Why can retirement change your tax picture?

Your income may look very different after you stop working.

Let's say someone earns $150,000 while working.

Then they retire.

Their wages disappear.

Instead, they may have Social Security, retirement account distributions, investment income, and other sources of income.

That can create a very different tax calculation.

But here's the thing:

A lower-income year doesn't automatically mean a Roth conversion is a good idea.

It means the tax calculation may be different.

That's worth analyzing.

What happens during a Roth conversion?

A Roth conversion generally involves moving money from a traditional retirement account into a Roth account.

The taxable portion of the conversion is generally included in income for the year of the conversion.

Let's say, purely as an illustration, that someone converts $25,000.

That $25,000 could increase taxable income, subject to the applicable rules and the nature of the assets being converted.

The actual tax impact depends on the person's entire tax return.

So a $25,000 conversion doesn't automatically mean a $25,000 tax bill.

The conversion is additional income.

The tax owed depends on the broader tax situation.

Why does the amount converted matter?

Because the tax system is progressive.

Adding income can cause more income to fall into higher marginal tax brackets or affect other income-based calculations.

That's why the question isn't simply:

"Should we do a Roth conversion?"

It can be:

"Would converting $10,000, $25,000, $50,000—or nothing at all—change the long-term tax picture in a meaningful way?"

Those are different questions.

What about future tax rates?

This is where people sometimes get too confident.

You may hear:

"Taxes are going up."

Or:

"Taxes are going down."

The reality is that future tax laws and your future income are uncertain.

A Roth conversion involves paying tax under today's applicable rules in exchange for changing the tax treatment of those assets going forward.

Whether that tradeoff is worthwhile depends on the circumstances.

There is no guarantee that future tax rates will be higher or lower.

What else can a Roth conversion affect?

The conversion may have implications beyond the immediate federal income tax calculation.

Depending on the circumstances, additional income can affect things such as:

State income taxes

Taxation of Social Security benefits

Medicare-related income thresholds

Other income-based calculations

That's why a conversion should be viewed as part of the broader tax picture.

How do you evaluate a Roth conversion?

Start with the timeline.

What is your income this year?

What might it look like next year?

When might Social Security begin?

When might required minimum distributions begin?

How much money is currently in traditional retirement accounts?

How much is already in Roth accounts?

What other income and deductions are expected?

Then compare scenarios.

For example:

Scenario A: No conversion.

Scenario B: A smaller conversion.

Scenario C: A larger conversion.

The goal isn't to predict exactly what your tax bill will be decades from now.

It's to understand the tradeoffs of making a tax decision today.

So, should we consider a Roth conversion?

Maybe.

And that's exactly why it's worth analyzing rather than assuming.

A Roth conversion can be useful in some circumstances and less attractive in others.

The answer depends on your tax situation, income timeline, account balances, tax rates, and the assumptions used in the analysis.

The important question isn't whether Roth conversions are "good."

It's whether the numbers make sense for the situation being evaluated.

Because good tax planning isn't about finding a magic strategy.

It's about understanding the tradeoffs before you make the decision.

Happy planning.

When Can We Retire, and Will We Have Enough Income?

Mon, 12 Oct 2026 03:01:45 GMT

When Can We Retire, and Will We Have Enough Income?

Retirement timing depends on more than the size of an investment account. It also depends on expected spending, Social Security, pensions and other income, taxes , healthcare costs, savings, and how long the money may need to last. Retirement planning is about connecting those pieces over time.

Now let's get to one of the biggest retirement questions:

When can we actually stop working?

Most people don't really want to know whether they have a certain number in their investment account.

They want to know whether the money can support the life they're planning.

That's a different question.

How much will you actually spend in retirement?

Start there.

Suppose a household expects to spend $8,000 per month.

That's $96,000 per year.

But retirement spending isn't always static.

Some expenses may decline.

Others may increase.

Healthcare costs can change. Travel may be higher in the early years. Home repairs happen. Long-term care may eventually become a consideration.

So rather than assuming one number will remain constant forever, it's useful to think about how spending might change over time.

What income will you have besides your portfolio?

This is where Social Security, pensions, rental income, and other resources come into the picture.

Let's say a household expects $45,000 of annual Social Security and pension income and expects to spend $90,000.

That creates a $45,000 gap before considering taxes and other factors.

The investment portfolio may be one source used to address that gap.

But again, this is a simplified illustration.

The actual calculation depends on the household's tax situation, investment assets, spending, inflation, Social Security decisions, and other circumstances.

When should Social Security start?

Social Security can be an important part of retirement income.

But deciding when to claim it isn't simply a question of choosing the earliest or latest possible age.

The decision can involve:

Expected retirement timing

Other income

Household circumstances

Longevity considerations

Taxes

The effect of claiming at different ages

There isn't a universal claiming age that is right for everyone.

It's another variable in the retirement-income equation.

What happens if markets fall early in retirement?

This is one reason retirement planning can't rely on a single return assumption.

Imagine someone retires with $1 million invested.

A hypothetical 20% decline would reduce the portfolio to approximately $800,000 before considering withdrawals.

Again, that's an illustration—not a prediction.

Now imagine that the household also needs to withdraw money during that period.

The combination of investment losses and withdrawals can affect the amount remaining in the portfolio.

That's why a retirement plan should be considered under different assumptions rather than only under an expected market environment.

Here's another piece that can get overlooked.

A household may have $2 million of retirement assets.

But $2 million isn't necessarily $2 million of spendable money.

Traditional retirement accounts can generally create taxable income when distributions are taken.

Roth accounts can have different tax treatment when distributions are qualified.

Taxable accounts have their own considerations.

So when you're asking, "Do we have enough?" you're really asking:

Enough after what?

After taxes?

After healthcare?

After expected spending?

After inflation?

After considering the income you already have?

Those details matter.

So, when can we retire?

There isn't one magic number.

Instead, look at the timeline.

What happens if you retire at 60?

What changes at 62?

What changes when Social Security begins?

What happens at 65?

What happens when required minimum distributions begin?

And what happens if i nvestment returns are different from what you expected?

The goal isn't to predict exactly what will happen over the next 30 years.

That's impossible.

The goal is to understand whether the retirement plan continues to make sense across a reasonable range of circumstances.

Because "Can we retire?" is really shorthand for a much bigger question:

"Can our assets and income support the life we're planning, given the risks and tradeoffs we face?"

That's the question worth answering.

Happy planning.

Is Our Investment Mix Right, Especially If Markets Fall?

Mon, 12 Oct 2026 02:57:45 GMT

Is Our Investment Mix Right, Especially If Markets Fall?

An investment mix isn't simply about how much you have in stocks and bonds. It also depends on your time horizon, spending needs, other income, ability to withstand losses, and willingness to accept investment volatility. A portfolio that fits one household may not fit another.

Now let's talk about investment risk.

Not when the market is going up.

When it's going down.

Because that's usually when you find out whether your investment mix actually fits your retirement plan.

What does "the right investment mix" mean?

It doesn't mean finding the portfolio that will produce the highest return.

We don't know which investment will perform best in advance.

Instead, the question is whether the mix of investments makes sense given what the money is supposed to do.

For someone decades away from retirement, the time horizon may be very different from someone who expects to begin withdrawals next year.

And even two retirees can have very different portfolios because their income, spending, assets, and risk tolerance can be different.

What happens if the market falls?

Let's use a simple hypothetical.

Suppose you have a $1 million portfolio.

The market declines 20%.

Before considering any withdrawals, that portfolio would be worth approximately $800,000.

That's an illustration, not a forecast.

Markets can decline by more or less, and the timing and duration of market declines are unpredictable.

Now add withdrawals.

If you're taking money out of the portfolio while its value is down, the amount remaining invested can be affected by both the market decline and the withdrawals.

That's why investment risk and retirement income planning are connected.

Is a lower-risk portfolio automatically better?

Not necessarily.

Reducing exposure to investments that can fluctuate significantly may reduce some forms of volatility, but it doesn't eliminate investment risk.

There are other risks.

Inflation can reduce purchasing power.

Interest rates can affect fixed-income investments.

Concentrated positions can create additional risk.

And holding too much in lower-returning assets may create a different set of tradeoffs over a long retirement.

There isn't a portfolio that eliminates all risk.

The question is which risks you're taking and why.

How much does your income matter?

A retiree receiving a pension and Social Security that cover most basic expenses may have a different portfolio need from someone who expects investments to provide most of their retirement income.

Let's say two households each have $1 million invested.

Household A has $70,000 of predictable annual income and expects to spend $80,000.

Household B has $30,000 of predictable annual income and expects to spend $80,000.

They have the same portfolio value.

But they don't have the same income gap.

That doesn't tell us what either portfolio should look like.

It does tell us that portfolio risk shouldn't be evaluated without looking at the income plan.

What about your ability to stay invested?

Here's an important question:

What would you do if your portfolio declined 20%?

Not what you think you'd do today.

What would you actually do after seeing the account statement?

If a decline would cause you to sell investments because you couldn't tolerate the loss, that's relevant information.

Risk tolerance isn't just a questionnaire.

It's also your ability to financially and emotionally withstand losses.

What should you review?

A retirement investment review can start with a few basic questions:

What is each investment supposed to accomplish?

When might you need the money?

How much income needs to come from the portfolio?

What other income sources are available?

How would a significant decline affect the retirement plan?

How much volatility can you reasonably tolerate?

Are there concentrated positions or other risks worth understanding?

How does the investment mix fit with the broader income plan?

The goal isn't to predict the next market decline.

We can't.

It's to understand what could happen to the plan if markets don't behave the way we hope.

Because the most important question isn't:

"Will the market go up?"

It's:

"If the market doesn't go the way we expect, can the plan still function?"

That's a much more useful retirement-planning question.

Happy planning.

How Much Should We Withdraw, From Where, and What Happens After Withholding?

Mon, 12 Oct 2026 02:53:40 GMT

How Much Should We Withdraw, From Where, and What Happens After Withholding?

Retirement withdrawals involve more than choosing a dollar amount. You also need to consider which accounts the money comes from, the tax treatment of each withdrawal, and how much actually reaches your bank account after withholding. The right approach depends on your income needs, accounts, taxes, and timeline.

Now here's where retirement income planning gets interesting.

While you're working, your employer handles much of the mechanics.

You earn a paycheck. Taxes are withheld. The rest hits your checking account.

In retirement, you may be creating that paycheck yourself.

So the question becomes:

How much do we need, where should it come from, and how much will actually show up in the bank account?

How much do we actually need to withdraw?

Start with spending.

Let's say a household expects to spend $7,000 per month.

That's $84,000 per year.

But that doesn't necessarily mean the household needs to withdraw exactly $84,000 from its investment accounts.

Why?

Because there may already be other sources of income .

Social Security.

A pension.

Rental income.

Part-time income.

Interest or dividends.

The first step is to understand the gap between the income coming in and the amount the household expects to spend.

Why does the source of the withdrawal matter?

Retirement accounts aren't all taxed the same way.

A withdrawal from a traditional IRA generally has different tax treatment from a qualified withdrawal from a Roth IRA.

A withdrawal from a taxable investment account can have another set of tax considerations .

That means two households could both need $50,000 of portfolio income but have very different tax consequences depending on where the money comes from.

This is one reason "just withdraw 4%" doesn't tell the whole story.

The withdrawal amount matters.

But the account it comes from matters, too.

What happens after withholding?

Here's a simple example.

Suppose you need $5,000 deposited into your checking account.

If taxes are withheld from the retirement distribution, you may need to request a gross distribution larger than $5,000 to receive $5,000 after withholding.

The exact amount depends on the applicable withholding and your circumstances.

And here's the important distinction:

Tax withholding isn't necessarily the same thing as your final tax liability.

Withholding is essentially a prepayment toward taxes.

Your actual tax liability is determined when you file your tax return based on your overall income, deductions, credits, and applicable tax rules.

So if you withdraw $60,000 during the year and have $12,000 withheld, that doesn't necessarily mean your final tax bill is $12,000.

It means $12,000 was already paid toward the tax liability.

Does the order of withdrawals matter?

It can.

Suppose you have:

A taxable investment account

A traditional IRA

A Roth IRA

Cash

Social Security income

There are different ways those resources could potentially be used.

Each approach can have different implications for taxes, future account balances, and the amount of income available later.

But there isn't a universal withdrawal order that works for every retiree.

The right question is not:

"What's the one correct account to withdraw from first?"

It's:

"What are the tax and planning consequences of each available option?"

What happens when required minimum distributions begin?

For many retirement accounts, required minimum distributions, or RMDs, eventually become part of the picture.

That can change the retirement income equation.

You may have been carefully managing withdrawals for several years, and then an RMD becomes another source of taxable income.

That income may affect the amount you need to withdraw from other accounts and may also affect your broader tax picture.

The timing and calculation of RMDs depend on the account type and applicable rules.

How do you think about a retirement paycheck?

Think about it as a cash-flow system.

Start with:

How much do we spend?

Then:

How much predictable income do we have?

Then:

What's the remaining gap?

Then:

Which accounts could potentially fill that gap, and what are the tax consequences?

Finally:

How much actually reaches the bank account after withholding?

That's a much more complete conversation than simply deciding how much money to withdraw.

Because retirement income isn't just about taking money out.

It's about understanding where it comes from, how it's taxed, and how the pieces fit together.

Are Our Assets Protected, and Do Our Insurance, Trusts, and Beneficiaries Work Together?

Mon, 12 Oct 2026 02:49:13 GMT

Are Our Assets Protected, and Do Our Insurance, Trusts, and Beneficiaries Work Together?

Protecting your assets in retirement isn't just about having insurance . It's also about understanding how insurance, estate documents, account ownership, and beneficiary designations fit together. Each serves a different purpose, and gaps can exist when they aren't reviewed together.

Here's the thing.

A retirement plan can look pretty good on paper and still have gaps.

You might have a will. You might have a trust. You might have an umbrella policy. You might have beneficiaries listed on your retirement accounts.

But do all of those pieces work together?

That's the question worth asking.

What does "asset protection" actually mean?

Asset protection can mean different things depending on what you're trying to protect against.

You might be thinking about:

A lawsuit or liability claim

An automobile accident

Damage to your home or property

A serious injury involving someone else

An unexpected death

A beneficiary receiving assets in a way you didn't intend

An estate passing through a process you didn't expect

Insurance and estate planning address different risks.

Insurance generally transfers certain financial risks to an insurance company in exchange for a premium and subject to the policy's terms, conditions, exclusions, and limits.

Estate planning generally deals with what happens to your assets and decision-making authority if you die or become unable to make decisions yourself.

They're related.

But they're not the same thing.

Does having a trust mean your assets are protected?

Not necessarily.

A trust is a legal arrangement, and different types of trusts serve different purposes.

A revocable living trust, for example, is commonly used for estate-planning purposes such as managing assets and directing how assets are distributed. It isn't automatically a shield against every type of creditor or liability claim.

The details matter.

The type of trust, how it is drafted, how assets are titled, and the applicable state law can all affect the result.

That's why "we have a trust" doesn't necessarily answer every asset-protection question.

What does insurance have to do with the estate plan?

Quite a bit.

Think about your home and auto insurance first.

You may have liability coverage on those policies. You may also have an umbrella policy that provides additional liability coverage above certain underlying policies, subject to its terms and limits.

The question isn't simply whether you have an umbrella policy.

It's whether the coverage you have is appropriate for the risks you're trying to address and whether the underlying policies and umbrella policy work together.

The same concept applies to other types of insurance.

Life insurance, disability insurance, long-term care insurance, and property and casualty coverage can each address different risks.

There isn't one insurance policy that solves every problem.

What about beneficiary designations?

This is where things can get interesting.

Certain accounts pass according to their beneficiary designation rather than simply following the instructions in your will.

That can include retirement accounts and life insurance policies.

So let's say your will says one thing, but an old beneficiary designation on a retirement account says something else.

The account's governing documents and applicable law can determine how that account is distributed.

That's why beneficiary designations deserve their own review.

An estate plan isn't just the documents sitting in a drawer.

It's also how your accounts are titled and who you've named to receive them.

How often should these pieces be reviewed?

There isn't one universal schedule.

But major life changes are good reasons to revisit the plan.

For example:

Marriage or divorce

Birth or adoption of a child

Death of a beneficiary

A significant change in assets

Purchasing or selling property

Starting or selling a business

Moving to another state

Significant changes to insurance coverage

Creating or updating estate documents

Even without a major life event, beneficiary designations and insurance coverage can become outdated simply because several years have passed.

So, are our assets actually protected?

That's the question a coordinated review is designed to explore.

Start with the risks.

Then look at the insurance coverage designed to address those risks.

Then look at how your accounts are titled, who the beneficiaries are, and what your estate documents say.

The goal isn't to assume everything needs to change.

It's to identify whether the pieces still line up with what you intended.

Because having an insurance policy, a trust, or a beneficiary designation isn't necessarily the finish line.

The important question is whether the pieces work together.

How Much Cash Should You Keep When You're About to Retire?

Mon, 21 Sep 2026 16:49:00 GMT

How Much Cash Should You Keep When You're About to Retire?

There isn't a single cash amount that fits every person approaching retirement. The amount depends on spending needs, other income sources, upcoming expenses, and how cash fits into the overall retirement plan . The key is understanding what the cash is intended to cover and the tradeoffs involved.

Here's the thing.

When you're working, your paycheck is predictable.

You work. You get paid.

Then retirement happens, and the paycheck stops.

Now we have to answer a different question:

Where does the next paycheck come from?

That's why cash becomes part of the retirement income conversation.

How much income do you need?

Let's put numbers to it.

Suppose your household expects to spend $8,000 per month.

That's $96,000 per year.

Now suppose Social Security and other income sources provide $40,000 per year.

That leaves a gap of approximately $56,000 per year before accounting for taxes, changes in spending, or other factors.

The calculation helps identify the gap. It doesn't automatically tell you how much cash to hold.

Does everyone need the same amount of cash?

No.

A household with a pension covering much of its spending has a different cash-flow picture from someone relying primarily on portfolio withdrawals.

Let's say one household expects $80,000 of annual spending and $70,000 of predictable income. Another expects the same spending but has $30,000 of predictable income.

Their estimated gaps are different.

That can affect how each household thinks about near-term cash needs. But the gap alone does not establish a specific cash target.

Is keeping more cash always safer?

Not necessarily.

Cash can provide liquidity and may reduce the need to sell investments to meet an immediate expense.

But holding more cash also means less money is invested in other assets. Depending on interest rates and inflation, cash may also lose purchasing power over time.

Cash has a role, but it doesn't eliminate investment risk or guarantee that a retirement plan will work.

How does the retirement timeline affect the answer?

Let's say you're retiring in six months.

You have an estimate of your spending. You know when you expect Social Security to begin. You may also know when a pension or another income source will start.

Now you can map the cash-flow timeline.

Maybe there's a period before another income source begins. Maybe the gap is shorter or longer than expected.

Those are different situations.

The amount of cash you may want available depends partly on what expenses need to be covered, when other income is expected, and what resources are available.

What if the market declines after retirement?

Suppose a portfolio is worth $1 million and experiences a hypothetical 20% decline. Before withdrawals, it would be worth approximately $800,000.

That is an illustration, not a prediction or a limit on possible losses.

If you also need money for living expenses during a decline, the timing of withdrawals can matter. Cash may provide a source for near-term spending, but it does not prevent the portfolio from losing value or guarantee that you won't need to sell investments.

What questions help clarify your cash needs?

Start with the cash-flow timeline:

When does your paycheck stop?

When might Social Security begin?

When might pension or other income begin?

What are your expected expenses?

How much income is reasonably predictable?

What expenses or large purchases are coming up?

What role do you want cash to play in the overall plan?

Then consider the tradeoff.

More cash may provide greater liquidity, while less cash may leave more of the portfolio invested. Neither approach is automatically right for every retiree.

The goal is to understand what the cash is intended to do.

Because retirement isn't just an investment problem.

It's also a cash-flow problem.

Should You Leave Your 401(k) With Your Former Employer or Roll It Over?

Mon, 21 Sep 2026 16:42:21 GMT

Should You Leave Your 401(k) With Your Former Employer or Roll It Over?

After leaving a job, you may have several options for your 401(k), including leaving it in the former employer’s plan, rolling it into an eligible retirement account, or considering another permitted option. The available choices and tradeoffs depend on the plan, fees, investment options, tax rules, and your circumstances.

So, you left your job.

Now you have an old 401(k).

The question is: Do you leave it there, or roll it over?

There isn't one answer that applies to everyone. The decision is about understanding your options and how each one fits into your retirement plan.

What are your options?

Depending on your plan and circumstances, you may be able to:

Leave the money in your former employer’s plan.

Roll eligible assets into an IRA.

Roll eligible assets into a new employer’s retirement plan, if the plan accepts rollovers.

Take a distribution, understanding that taxes and possible penalties may apply.

Not every option is available in every situation. Your plan’s rules and the type of account or assets involved matter.

What should you compare before deciding?

Start with the former plan's investment options and fees.

Then compare those with the available options in a potential destination account or plan.

Look beyond the investment menu. Consider account services, withdrawal rules, creditor protections, loan provisions, and other features that may apply. These can differ between employer plans and IRAs.

A rollover can change more than where the account is held.

How can fees and investment options affect the decision?

Different plans and accounts may have different administrative fees, investment expenses, and available investments.

But comparing fees alone may not tell the whole story. You also need to understand the services and features associated with those costs.

Likewise, a larger investment menu does not automatically mean a better outcome. What matters is whether the available choices fit your needs and how you plan to manage the account.

What tax issues should you understand?

A properly completed direct rollover of eligible assets to an eligible retirement account generally can avoid current taxation.

But the details matter.

An indirect rollover, a distribution paid to you, a rollover involving Roth and pre-tax assets, or a transaction involving employer stock may have different tax consequences or requirements.

Before moving money, confirm the account types, eligible assets, receiving account, and applicable rollover rules. A mistake can create an unexpected tax bill or other consequences.

Could leaving the money in the plan have advantages?

It may.

Some employer plans offer features that are not identical to those available in an IRA. Depending on the plan and your circumstances, those features may include particular investment options, withdrawal provisions, or creditor protections.

On the other hand, keeping an old account may mean managing another account with its own rules and fees.

The details of the specific plan matter.

How does the account fit into your retirement plan?

Here's the thing.

An old 401(k) is one part of your overall financial picture.

You may have other retirement accounts, taxable investments, cash, or income sources. How the 401(k) fits with those resources can affect how you think about account structure, withdrawals, and investment management.

The question isn't simply, “Should I always roll over an old 401(k)?”

A more useful question is:

“What are the available options, and what are the tradeoffs for my situation?”

That’s where the decision starts.

How Do You Know If Your Retirement Portfolio Is Too Aggressive?

Mon, 21 Sep 2026 03:35:35 GMT

How Do You Know If Your Retirement Portfolio Is Too Aggressive?

A portfolio may carry more risk than fits your r etirement plan if a significant decline could interfere with your spending needs, time horizon, or ability to stay invested. The assessment involves more than stock percentages: it also considers other income, withdrawals, and your capacity and willingness to accept losses.

How do you know if your retirement portfolio is too aggressive?

The answer isn't simply, “You have too many stocks.”

The real question is whether the portfolio's risk fits the job you need it to do.

Why does your retirement timeline matter?

Let's say you're 65 and approaching retirement.

Now compare that with someone who's 45 and saving for retirement.

They may own similar investments, but their time horizons and cash-flow needs may be very different.

Someone who expects to withdraw from a portfolio soon may be more affected by a market decline than someone who does not expect to use the money for many years.

That doesn't mean one stock allocation is automatically right or wrong. It means the timeline matters.

What happens if the portfolio declines after retirement?

Let's use a hypothetical example.

Suppose a portfolio is worth $1 million and declines by 20%. Before considering any withdrawals, the portfolio would be worth approximately $800,000.

A 20% decline is an illustration, not a forecast or a limit on possible losses. Actual investment results can be better or worse.

Now consider what happens if withdrawals are also being made during that period. The combination of investment losses and withdrawals can affect how much remains invested and available for future spending.

That's one reason retirement investment risk needs to be considered alongside the income plan.

Does having a lot of stocks automatically mean your portfolio is too aggressive?

No.

The answer depends on the full financial picture.

You may have Social Security, pension income, cash, other investments, or flexibility in your spending. Those resources can affect how much you rely on your portfolio.

For example, one retiree may need a portfolio to provide $20,000 a year, while another may need $70,000. Even if their portfolios are the same size, their withdrawal needs are different.

That doesn't determine an appropriate allocation by itself, but it helps explain why stock percentage alone doesn't answer the question.

What are the tradeoffs of different levels of investment risk?

A portfolio with greater exposure to stocks may have more opportunity for growth, but it can also experience larger declines.

A portfolio with less exposure to stocks may experience different patterns of gains and losses, but it can still lose value and may face inflation and purchasing-power risks.

There is no allocation that eliminates investment risk. Different approaches involve different tradeoffs.

What questions can help you assess portfolio risk?

Consider:

When might you need to use the money?

How much income might the portfolio need to provide?

What other income sources are available?

How would a significant decline affect your spending plan?

How might you respond emotionally and financially to a decline?

Is your spending flexible, or are most expenses fixed?

The last question is worth thinking about.

Not because we can predict when a decline will happen—we can't.

But because you can consider how different market conditions might affect your plan.

What does “too aggressive” really mean?

It means the portfolio's risk may not fit your needs, timeline, or ability to withstand losses.

For example, a $1 million portfolio expected to provide $50,000 a year has a different withdrawal requirement from a $1 million portfolio expected to provide $20,000. Those figures alone do not establish whether either plan is sustainable; taxes , inflation, investment returns, time horizon, and other income all matter.

The goal is to understand the role the portfolio needs to play and the risks involved.

How Do You Create Retirement Income Before Social Security Starts?

Mon, 21 Sep 2026 03:22:27 GMT

How Do You Create Retirement Income Before Social Security Starts?

Creating retirement income before Social Security starts begins with identifying the gap between your expected spending and the income available to you. From there, you can evaluate how savings, retirement accounts, pensions, and other resources may fit into the timeline. The right approach depends on your circumstances.

Now let's build a retirement income timeline.

You retire.

Social Security hasn't started yet.

The question is: How will you cover your expenses in the meantime?

That's one of the pieces of retirement income planning.

What is the Social Security gap?

Let's say you retire at 62 and plan to claim Social Security at 67.

That's a five-year period before Social Security begins.

You still have bills. You still need cash flow.

Income during that period may come from savings, retirement accounts, taxable investments, a pension, part-time work, or other resources. Which sources are available—and how withdrawals affect your taxes—depends on your situation.

How much income do you need?

Let's put numbers to it.

Suppose your household expects to spend $6,000 per month. That's $72,000 per year.

If Social Security hasn't started, the plan needs to account for where that money will come from, including any other income you expect to receive.

This is a simplified spending illustration. Actual retirement cash flow may also include taxes, healthcare costs, inflation, and changes in spending over time.

What happens when Social Security starts?

Suppose Social Security later provides $30,000 per year.

If annual spending is $72,000, the remaining gap would be about $42,000 before accounting for taxes, changes in spending, or other income.

That's the basic calculation.

But it doesn't automatically tell you which account to use or when to claim benefits. Those decisions depend on the full retirement plan.

Should you start Social Security earlier to fill the gap?

Claiming earlier can provide income sooner, while delaying can result in a different benefit amount. The tradeoff depends on factors such as your age, work and earnings history, health and longevity considerations, household circumstances, and other income sources.

Social Security claiming is a separate decision from deciding which assets to use for spending. The two decisions can affect one another, but neither should be considered in isolation.

Why does the order of income sources matter?

Retirement income sources can have different tax treatment and different effects on your remaining assets.

For example, withdrawals from a traditional retirement account are generally treated differently for tax purposes than withdrawals of basis from a taxable account or qualified distributions from a Roth account.

That doesn't mean one account type should always be used first. The implications depend on the account, the tax situation, and the rest of the plan.

What questions help clarify the income gap?

Start with these:

When do you expect your paycheck to stop?

When might Social Security begin?

Will you have pension or other income?

What are your expected spending needs?

Which accounts and resources are available?

How might withdrawals affect taxes and future income?

How could the plan change if spending or markets differ from expectations?

The point isn't simply to withdraw money.

It's to understand how income, spending, and account withdrawals may fit together over time.

Because retirement isn't just about how much money you have.

It's also about when you need it.

When Does a Roth Conversion Make Sense If Your Income Is About to Change?

Mon, 21 Sep 2026 03:16:54 GMT

When Does a Roth Conversion Make Sense If Your Income Is About to Change?

A Roth conversion moves money from a traditional retirement account into a Roth account and generally creates taxable income in the year of the conversion. Whether it makes sense depends on the tax cost today, your future income, and how the conversion fits into your broader retirement plan.

So, when does a Roth conversion make sense?

The question isn't whether Roth accounts are good or bad.

The question is whether converting some of your tax-deferred savings makes sense given your tax situation and timeline.

What happens when your income changes?

Let's say you're approaching retirement.

You've been earning $150,000 a year. After retiring, your income may be lower.

That change can affect the tax calculation for a Roth conversion.

But here's the thing: a lower-income year doesn't automatically mean a conversion is beneficial.

A conversion generally adds the taxable portion of the amount converted to your income for that year. The effect depends on your other income, deductions, filing status, and applicable tax rules.

Why does the timing matter?

A Roth conversion is a tax decision tied to a timeline.

When is your income expected to change? How long might that period last? When might Social Security, pension income, or required minimum distributions begin?

For some people, the years between retirement and the start of other income sources may create a different tax picture. For others, the conversion may not provide a meaningful benefit after considering the current tax cost.

The point is to examine the timeline—not assume the gap is automatically an opportunity.

How much should you convert?

Let's use a simplified example.

Suppose you have $500,000 in a traditional IRA and your taxable income is $70,000 before a conversion.

If you convert $20,000, the taxable portion of that conversion is generally added to your taxable income. That does not mean your entire income is taxed at one rate. Different portions of income may be taxed at different rates, and the actual result depends on your full tax return.

A larger conversion could cause more income to fall into higher tax brackets or affect other tax-related calculations.

That's why the amount matters as much as the decision to convert.

What else can affect the tax impact?

A conversion may affect more than your federal income tax. Depending on your circumstances, it can affect state income taxes, the taxation of Social Security benefits, Medicare income-related premiums, or other income-based thresholds.

The tax treatment of a conversion and the rules that apply can change. Future tax rates and future income are also uncertain.

What should you compare before making a decision?

Start with the overall timeline:

Income before and after retirement

Expected Social Security and pension income

Traditional and Roth account balances

Potential required minimum distributions

Different possible conversion amounts

The estimated tax cost and how it would be paid

Other tax or benefit effects that may apply

Then compare the projected tax picture with and without a conversion.

The answer may be to convert some money, convert at a different time, or not convert at all.

The goal isn't to predict the future perfectly. It's to understand the tradeoffs before making a decision.

Always consult with a tax professional.

Medicare Open Enrollment 2026

Fri, 04 Sep 2026 05:00:04 GMT

Understand Medicare Open Enrollment 2026. Review plans, avoid costly mistakes & get expert help from Harbor Wealth.

Q3 investment Update

Mon, 31 Aug 2026 17:12:53 GMT

Harbor Wealth Investment Team

Elliott Vaughn, CFP®

Elliott’s background in mathematics and more than a decade of industry experience shape his analytical approach to investment management. As the advisor ultimately responsible for the firm’s investment models, Elliott takes an active role in determining the investments and strategies used across client portfolios, balancing long-term objectives, risk, tax considerations, and market conditions. His philosophy is straightforward: investment decisions should be intentional, evidence-based, and aligned with each client’s broader financial plan.

Colin Cheaney, CFA, CFP®

Colin brings a strong quantitative background and institutional investment experience to IHT Wealth Management. As an Associate Investment Analyst, he supports trading, investment research, due diligence, and portfolio management while helping implement and communicate changes to IHT’s model investment programs. A CFA charterholder with a degree in mathematics, Colin’s analytical approach helps provide the research and discipline behind the investment strategies we use for clients.

Ben brings a strong combination of financial knowledge, analytical thinking, and operational expertise to Harbor Wealth. With a degree in Business and Accounting from Roosevelt University, a Series 66 license, and CFP® certification, Ben helps ensure our investment review process is executed thoughtfully and consistently. His attention to detail and commitment to client service provide an important layer of oversight behind the work we do for clients.

Benjamin Storm, CFP®

Yussef Gheriani, CIMA

Yussef serves as Chief Investment Officer at IHT Wealth Management and brings more than a decade of experience evaluating thousands of unique client situations. As a member of the investment team, he provides institutional-level research, perspective, and oversight to help inform the investment strategies used across client portfolios. His systematic approach to solving complex problems helps ensure investment decisions are thoughtful, disciplined, and aligned with clients’ long-term objectives.

Q3 2026 Newsletter

Tue, 04 Aug 2026 16:32:22 GMT

Read our Q3 2026 Newsletter for updates on market trends & tax regulations. Get personalized strategies for your financial future.

Cybersecurity

Tue, 07 Jul 2026 19:31:18 GMT

Learn essential cybersecurity strategies to protect your financial & tax planning data. Safeguard sensitive information today!

SpaceX IPO

Fri, 12 Jun 2026 16:38:42 GMT

SpaceX Is Going Public. Do You Need To Buy It Right Away?

With SpaceX going public, a lot of investors are asking the same question:

should I buy it immediately?

Our position is fairly simple.

First, we generally don't recommend individual stocks. Financial planning isn't about finding the next hot stock. It's about building a portfolio that helps you achieve your goals while managing risk along the way.

Now, that's not a commentary on SpaceX itself.

SpaceX has accomplished some remarkable things. The company has changed the economics of space travel, built one of the largest satellite networks in the world, and continues to push innovation in ways few companies ever have.

The question becomes whether the stock price reflects those accomplishments—or whether investors are paying a significant premium for future expectations.

As is the case with every stock, there some market commentators that have raised concerns. Their view is that a tremendous amount of future success may already be built into the valuation. In other words, investors may be paying today for years of potential growth that has not happened yet.

Think about it like buying a house.

A beautiful house that is for sale, can still be overpriced. The quality of the asset and the price you pay are two different conversations.

The other side of that coin is this.

Many investors may not need to rush to buy SpaceX at all.

There is a reasonable chance it eventually finds its way into broad market indexes. And when that happens, investors who already own diversified index funds may end up owning SpaceX automatically as part of their existing investment strategy.

Again, we're not making a prediction about the stock price.

We're not saying SpaceX will go up- we're not saying SpaceX will go down.

We're simply saying that excitement alone is not an investment strategy.

Successful investing is often less about being first and more about being disciplined.

Sometimes the best investment decision is not asking, "How do I buy this today?"

Sometimes it's asking, "Do I already have a plan that will likely get me exposure over time without taking unnecessary risk?"

That's a very different question.

And for many investors, it may be the more important one.

Just food for thought.

This article is for educational purposes only and should not be considered investment, tax, or legal advice. Please consult your financial advisor, tax professional, and legal professional before making investment decisions.

Investment Update Q2 2026

Fri, 08 May 2026 19:37:30 GMT

Review key insights on U.S. market resilience & investment strategies. Contact us for expert financial & tax planning.

Q2 2026 Newsletter

Sat, 18 Apr 2026 16:15:00 GMT

REMINDER :

Our Office Number is (847) 954 - 7028

Our Private Client Email line is Client@harborw.com

Dear Clients, Friends and Harbor Wealth Community:

From time to time, the market reaches new highs—and with it comes a familiar feeling:

“The markets are too high and have to come down. We should sell”

That instinct is understandable. It’s also, historically, where investors tend to do the most damage to their long-term results.

Because while markets do decline—sometimes sharply, and often unexpectedly—they have also demonstrated, over more than a century, a remarkable and persistent ability to recover and advance.

The challenge is not recognizing that declines will happen. They will.

As we always say in Reviews, "Its not a question if a decline will happen, it's a question of when. "

The challenge is that no one—despite confident headlines—has consistently demonstrated the ability to predict when.

As Warren Buffett once put it:

“We’ve long felt that the only value of stock forecasters is to make fortune tellers look good.”

And so, the disciplined investor is left with a simple, if not always easy, course of action:

Remain invested. Remain diversified. Remain patient.

Of course, this long-term optimism should not be confused with being naive to risk and during our next meeting together we will review how we are preparing for when (not if) the market declines, while at the same time remaining invested in the World’s Greatest Companies (aka Equities), which have a 200+ year history of recovering from even the worst declines.

If you have not had your Spring Reviews, please email our office at client@Harborw.com or call us at (847)954-7028

we’ll walk through:

How your plan is positioned for future volatility

Where your income and tax strategy stand today

And what, if anything, needs to be adjusted

A more digestible format
You’ll notice we’ve included several short videos at the bottom of this newsletter and in our email. Topics include the current market environment, gold, long-term investing, and more.
They’re designed to be quick, practical, and easy to apply—feel free to explore what’s most relevant to you.

Quick updates

Welcome Caroline Tipton!
We’re excited to introduce Caroline Tipton, our Executive Assistant.
Caroline brings five years of experience with LPL Financial and has already become an integral part of our team. We’re fortunate to have her supporting our clients and operations.
You’ll see more of her on our website, and we’ve included a short introduction video HERE .

A big congratulations to Ben!
Ben has officially earned his CFP® designation.

To put this in perspective: while there are thousands of individuals who may call themselves financial advisors, only a small percentage meet the rigorous standards required to become a CFP® professional. Even fewer achieve this milestone early in their careers.

This represents over two years of dedicated study and the successful completion of a comprehensive, day-long examination. We’re incredibly proud of his commitment to the profession and, more importantly, to the Harbor Wealth Clients

Tax returns for planning

As you wrap up your 2025 tax return, please send us a copy if you haven’t already.

You can email it, upload it securely through our website (theharborwealth.com/clients → “Send a Document”), fax it, or mail it—whatever is easiest.

Having your return allows us to prepare more effectively for your Fall 2026 review and identify planning opportunities well in advance.

Graham is excited that summer is near. We think he's ready to welcome his little brother in May!

Events coming up:

Golf lessons in August - let us know if you are interested!
We will be having a Medicare Enrollment webinar in Late August. If you are approaching 65 or past the age of 65 - we will be emailing you with an invite
We will be recording a Cybersecurity Webinar in June - invite to follow!

Q1 2026 Newsletter

Sun, 25 Jan 2026 00:25:00 GMT

REMINDER :

Our Office Number is (847) 954 - 7028

Our Private Client Email line is Client@harborw.com (more on that below)

Dear Clients,

2025 - what an up and down year! At one point we were down nearly 20% and ended the year +17%. Needless to say, markets don’t ask our permission before they test our patience. And they don’t send invitations before they change the subject.

What they do offer—reliably, over time—is the opportunity to convert discipline into wealth. That remains true today. Still, it’s fair to want context, especially with how much you’re hearing about AI, “bubbles,” recession risks, and an economy that seems to be working well for some people and not for others.

Here’s how we see it.

1) 2025 in Review: A Strong Year—with a Narrow Story

By the numbers, 2025 was a good year for investors. But the experience of the year depended heavily on where you were invested.

A relatively small cluster of companies and sectors drove much of the market’s progress—particularly those connected to AI, data centers, semiconductors, and the infrastructure surrounding them. Meanwhile, many perfectly respectable businesses and entire segments of the market lagged, and plenty of individual stocks finished the year down.

That kind of uneven participation can feel unsettling. It shouldn’t be surprising.

Markets have always moved this way: leadership concentrates, narratives form, and the “average” investor experience differs from the headline number. It’s one of the reasons we build portfolios as portfolios—with diversification, rebalancing discipline, and a plan that isn’t dependent on a single storyline. This won't change.

2) 2026 So Far: The K-Shaped Economy and the AI Investment Cycle

As we move into 2026, two realities are becoming harder to ignore.

First: the K-shaped economy.
Some businesses are doing quite well. Others are feeling the cumulative effects of several years of higher prices and higher borrowing costs. That divergence shows up in spending patterns, company earnings, and sector performance—and it’s one reason the market can look strong on the surface while many people feel the strain underneath.

Second: the AI investment cycle remains the engine.
There is real money being spent—at scale—on chips, data centers, cloud capacity, and the power that makes all of it possible. That’s not a “story stock” phenomenon; it’s capital expenditure by some of the largest companies in the world.

At the same time, what investors are wrestling with now is not whether AI exists, but whether expectations have run ahead of reality .

Two watchpoints matter most:

Power and buildout constraints: even the best data center plans require electricity, permitting, and time.

Returns on scaling: the market is sensitive to the idea that bigger models may eventually yield smaller incremental benefits—meaning the pace of investment could slow.

None of this is a prediction. It’s simply the current landscape: strong momentum, real spending, and a market that is increasingly alert to what could change the slope of the trend.

3) Staying the Course: The Only Strategy That Works (Because It’s the Only One You Can Actually Execute)

This is the part that never changes—and never gets easier.

The investor’s greatest enemy is not inflation, recession, politics, or technology. It is the temptation to do something dramatic in response to uncertainty.

Because the truth about successful investing is almost offensively simple:

Wealth is built by time in the market, not cleverness about the next 90 days.

Great long-term returns require enduring uncomfortable short-term moments.

Headlines create urgency; disciplined plans create results.

Our job at Harbor Wealth is not to predict the next correction or chase the next theme. Our job is to keep your plan aligned with your goals, manage risks you can control, and help you stay invested long enough for markets to do what they have always done: reward patient ownership.

One of the promises we make—and take seriously—is simple: when you need us, you can reach us . Good advice only matters if it’s accessible, timely, and delivered by people who know you and your situation.

That expectation hasn’t changed.

What has changed is the pace of the work. Elliott sometimes has days or weeks that he is in back-to-back meetings—planning, reviewing, and coordinating on behalf of clients. That’s time well spent, but it does mean that a message sent only to Elliott may not be seen immediately if he’s in meetings throughout the day.

Rather than rely on luck or timing, we’ve designed a system that works consistently.

For any client-related request, the most effective way to reach us is by emailing:
client@harborw.com

That inbox goes directly to Elliott, Ben, and Ellen. It’s monitored throughout the day. Requests are reviewed, discussed, and acted on promptly—often the same day, and frequently within the hour. This allows us to coordinate internally and make sure your request gets attention even when Elliott is tied up in meetings.

Our standard is straightforward: your questions and requests deserve timely follow-through, every time.

To further support that standard, we expect to be adding another team member in the coming weeks, focused on behind-the-scenes administrative and coordination work. This is a deliberate step to improve responsiveness, reduce bottlenecks, and ensure nothing slips through the cracks—while preserving the personal relationship you have with us.

Good service doesn’t happen by accident. It’s the result of clear processes, the right people, and an intentional commitment to doing things right.

As always, we’re here—and when something matters, you’re never more than one phone call away.

Communication Update

Taxes are never anyon e’s favorite topic - ok perhaps it is Elliott's favorite topic. Ellen Jokes that if given the opportunity, Elliott would name their son Roth.

But handled calmly and methodically, they’re simply another part of the long-term discipline that supports good financial outcomes.

A few reminders to help things go smoothly:

Over the next several weeks, you’ll begin receiving important tax documents, including 1099s, 1099-Rs, and other reporting forms. These forms are required to be sent out by specific deadlines:

January 31 – 1099-R, 1099-INT, and 1099-DIV must be issued

February 15 – 1099-B must be issued

If at any point you believe you’re missing a form—or you simply want confirmation—please don’t hesitate to reach out. A quick call or email to our office is all it takes, and we’ll get what you need to you as quickly as possible.

As we’ve done in the past, we will also be working to send these tax forms directly to your tax preparer whenever appropriate, to reduce the burden on you.

As Your Return Is Prepared

Once your tax preparer has a draft of your return, we ask that you send us a copy for review. This allows us to make sure everything that should be included is included—and that nothing important is overlooked.

After your return is finalized and filed, please send us a final copy for our records.

You can do this in whatever way is easiest for you:

Upload it securely through our website

Email it to our office

Or, if you prefer paper, let us know—we’ll gladly send you a FedEx envelope with a return label included

Our goal is not to add steps, but to remove friction.

Good financial planning isn’t about reacting at the last minute. It’s about quiet preparation, done consistently, year after year.

If you have questions, need a form, or want help coordinating with your CPA, we’re here. Our role is to make this process easier—so you can focus on the parts of life that matter far more than a filing deadline.

2025 Tax Preparation! Fortune Favors the Prepared

Graham has been eagerly waiting for the start of 2026! We are glad it's here.

Events coming up:

Townhall on Feb 3rd at 5:30 CT
Spring Reviews start in March!

When the People You Care About Ask for Help

From time to time, clients ask us a simple question: What happens if a friend or family member calls you?

The answer is straightforward. We help.

Sometimes that help is as simple as pointing someone in the right direction or making sure they have access to the resources they need. Other times, they may want to explore whether a long-term advisory relationship makes sense. If so, we invite them into the same thoughtful, deliberate process we use with every prospective client—one designed to help them make a clear, informed decision, free from pressure. Just as importantly, this process gives them a framework for evaluating any advisor they might consider. Good decisions deserve good process.

Step 1: A Brief Initial Conversation
We begin with a short phone conversation, typically about fifteen minutes. This is simply a chance for both sides to confirm there’s a fit. Experience matters, and specialization matters. You wouldn’t consult the wrong professional for an important problem, and neither would we. During this call, we also explain how our process works so expectations are clear from the start.

Step 2: The First In-Depth Meeting
If it makes sense to continue, the first meeting is about listening. We focus on understanding what matters most to them—their goals, their concerns, and the realities of their financial life. The documents they share and the questions they answer allow us to do meaningful analysis, not guesswork.

Step 3: Careful Analysis
This is where experience does its quiet work. We apply decades of disciplined thinking to answer the questions that truly matter: Can they retire comfortably? Are they paying more in taxes than necessary? Is their portfolio doing the job it’s meant to do? Are there risks—obvious or hidden—that could threaten their long-term plans?

Step 4: Clear, Plain-English Recommendations
In the next meeting, we walk through what we’ve found. We explain what could be improved, why it matters, and what specific steps could move them closer to their goals. Questions are encouraged. Clarity is the objective.

Step 5: An Educated Decision
There is no urgency and no pressure. The goal is simply to make a clear, informed choice. Whether they move forward on their own, with another advisor, or with our team, the decision is theirs—and it’s exactly how we believe important decisions should be made.

Helping people make sound financial decisions—especially the people you care about—is work we take seriously. It’s not about urgency. It’s about clarity, confidence, and keeping the long view firmly in focus

Q4 2025 Newsletter

Tue, 28 Oct 2025 21:32:47 GMT

Medicare Open Enrollment!

Retirement faces two lifelong financial threats:

The rising cost of living (taxes are included in this category!).
And the rising cost of healthcare.

Medicare is the shield against the second. But only if you actively maintain it.

If you are already on Medicare — or about to enroll — the most important truth you can internalize is that Medicare is not a “set it and forget it” decision. It is a living system that is revised every year, and those revisions can materially change what you pay, which medications are covered affordably, and which physicians will continue to care for you. Standing still in a system that is constantly moving is the most predictable way to lose ground.

Original Medicare paired with a Medigap supplement — most notably Plan G — continues to provide the broadest access to care and the most reliable protection against large and unpredictable medical expenses. Clients fortunate enough to hold this combination and continue to afford the premiums generally should remain right where they are, because it represents what millions of retirees later wish they had kept.

Where the greatest financial surprises (especially this year) likely occur in Part D drug coverage. A plan that seemed irrelevant last year because you rarely filled prescriptions can suddenly become painfully expensive simply because formularies shifted or your preferred pharmacy is no longer “preferred.”

Spending just a short amount of time on Medicare.gov each year to verify drug and pharmacy pricing can provide savings that meaningfully support your long-term financial independence.

For more complex medication needs, HeyMoe.com can assist in locating lower-cost alternatives and manufacturer programs, and SHIP.org offers unbiased guidance from state-appointed counselors. Harbor Wealth has no affiliation with these organizations — our only interest is protecting you from preventable expense.

Medicare Advantage plans are heavily advertised as low-cost, all-in-one solutions, yet the low upfront premium can often obscure the potential for higher, harder-to-control costs later. Provider networks can contract without warning, prior authorizations can become barriers to care, and those who later try to return to Original Medicare may be required to medically qualify for a new Medigap policy. Too many retirees learn that last fact only after it is too late and all of us at Harbor Wealth want you to avoid that.

Premiums rise, copays move, drug coverage reshuffles, and the rules evolve — all annually. None of it arrives with fanfare or a helpful nudge from Washington. Like your Social Security timing decision, these changes are yours alone to stay ahead of.

Open Enrollment ends December 7. After that, decisions effectively lock in for another year, for better or worse.

PLEASE KNOW! Clients of Harbor Wealth do not need to navigate this alone. We maintain relationships with independent Medicare brokers whose sole purpose is to help you evaluate your current coverage and ensure that it remains aligned with your health needs and retirement plan. Their guidance comes at no cost, and their advocacy can help you avoid the silent erosion of both financial peace and access to care .But this help is only useful if it is called upon in time. Please please please, do not wait until the final days before December 7 to act.

If you or someone you love would benefit from a Medicare review before December 7, reach out to us. You have built a lifetime of financial security — and we intend to help you keep it.

On July 4th Congress passed the “One Big Beautiful Bill Act” (OBBA). While reasonable people can debate the ‘beauty’ of this bill, at hundreds of pages long, it certainly is big. While most of the Bill is legal jargon and special interest carve outs, there are 12 potential tax savings opportunities that stand out for our clients and/or their families. Please note that each opportunity requires careful planning as the proverbial ‘devil’ is in the details:

“Trump Accounts” for Minors - Yes they are really called ‘Trump Accounts’ (similar to Roth IRA) and will be available to anyone under the age of 18. Children born between Jan 1, 2025 and December 31, 2028 will receive a $1,000 addition from the US Treasury Department.
529 College Accounts Expanded - Once limited to college tuition, 529 accounts have again been expanded to include virtually all education expenses.
Standard Deduction Locked In - Set at $15,750 (Single) or $31,500 (Married), there is also a ‘bonus’ deduction of $6,000 per person ages 65+
S.A.L.T. Tax Limit Increased - For at least the next four years, State And Local Taxes can be itemized up to $20,000 (Single) or $40,000 (Married)
Charitable Donations - If you are unable to itemize your deductions (most can’t), you can still deduct $1,000 (Single) or $2,000 (Married) ‘above the line’.
Tax Brackets Locked In - The current tax rates that were set to go up in 2026 have been locked at their current lower levels.
Child Tax Credit Increased to $2,200
Car Loan Interest is now deductible - Subject to several rules, including ‘100% American assembled’, up to $10,000 of interest can be deducted.
Gambling Losses Limited to 90% - This is less of an opportunity and more of a warning that you can now lose all your money at the casino and still owe taxes.
Estate (and gift) Tax Limited Locked at $15,000,000 each - For 99.9% of people, this simply means you can gift as much as you want to family.
First $25,000 of tips are deductible - Tons of rules on this one, but some tips are now tax deductible.
Some Overtime is deductible - In certain circumstances, $12,500 (Single) or $25,000 (Married) of overtime can be deducted.

** Please Note: Despite what you may have heard, Social Security IS still taxable.**

12 Potential Tax-Savings Opportunities in O.B.B.A

Hard to believe it’s been more than 40 years since the release of Star Wars. During those decades much has changed, and much is still the same. While things like advances in technology have transformed our lives beyond anyone’s imagination, it has also transformed the ways bad guys can commit crimes.

For example, 40 years ago you may have received a physical letter (or 20-years ago an email) that was poorly written, promising you fame and fortune if you just mailed (or transferred) money to your ‘long lost cousin who is a middle eastern prince willing to send you all his wealth if you just pay the transfer fee…’

With the help of technology (including AI), thieves now know where you live, where you shop, the names of your family members, your last vacation, your date of birth and every other piece of information necessary to convince you to trust them just a little, which is all they need to steal everything.

During our recent client education event, Elliott , Sheridan Culhane from MFS and Ryan Hickel CPA shared how you can protect yourself and F.I.G.H.T. B.A.C.K. against fraud and elder abuse. If you would like the link to the recording of this event, please contact our office and we will email it to you.

Your best defense, however, is to remember the words of Admiral Ackbar in Star Wars: “IT’S A TRAP!” and whenever you see even a hint of fraud, call our office (847-954-7028) ASAP and our team will always be glad to help determine if it is legitimate

“It’s a Trap!”

-ADMIRAL ACKBAR (STAR WARS: RETURN OF THE JEDI, 1983 DOW ~ 1,100)

Big milestone for the Vaughn family: Graham, now age two, has officially started preschool. He’s growing fast, singing his ABCs, and showing off his Baby Shark performances at every opportunity — much to Elliott and Ellen’s delight, and to the amusement of their eight-year-old dog Louis.

Ben is loving life in downtown Chicago’s Old Town neighborhood and can often be found cheering on the Blackhawks, Bulls, and Bears.

Mark your Calendars!

We'll be having our Q4 Townhall on November 11th, 2025 at 5 PM CT - link is HERE
We'll have our Q1 2026 Townhall on Feb 11th at 5 PM CT

Q3 2025 Newsletter

evaughn@harborw.com (Elliott Vaughn) — Wed, 16 Jul 2025 22:00:38 GMT

The Big Beautiful Bill ACT – A Tax Perspective

President Trump has signed into law what’s being called the “ Big Beautiful Bill ”—a sweeping piece of tax legislation that touches everything from income brackets and deductions to estate taxes and energy credits.

Whenever Washington rewrites the tax code, the media machine kicks into high gear. Cable news fills with shouting heads. The internet lights up. People begin to wonder: Does this change everything for me?

The short answer is: probably not. But that doesn’t mean we shouldn’t pay attention.

We’re not here to weigh in on whether this is a good bill or a bad one. We’ll leave that to the talking heads. Our job is to help you understand how the key parts of this could affect your personal financial plan—whether you’re still earning, already retired, or planning to leave a legacy.

Take a look at our cheat sheet HERE for a breakdown of the key provisions (Big thanks to Toren Tuttle, MBA, CPA, and the team at Retirement Tax Services for their insight as I put this together)

But here’s what’s in the bill, in plain English.

The Headlines

This bill locks in many of the 2017 tax cuts:

Income tax brackets remain lower
The standard deduction is expanded
Business owners retain access to the Qualified Business Income deduction
The estate tax exemption rises to $15 million in 2026
The SALT deduction cap temporarily increases, though it’s scheduled to shrink again in 2030

In addition, the bill introduces several new deductions—for seniors, parents, tipped workers, and even car loan interest. Charitable giving rules have also changed: starting in 2026, you can deduct up to $1,000 ($2,000 if married), even if you don’t itemize.

Some provisions are going away. Electric vehicle and energy-efficiency tax credits will phase out. The 1099-K reporting threshold for apps like Venmo and PayPal will return to $20,000 and 200 transactions. Gambling loss deductions are being limited.

We’ve summarized all of these changes in the cheat sheet. Again, it’s worth keeping handy.

The Perspective

Here’s what really matters: tax law changes. Planning endures.

When tax policy shifts—as it always does—our job is not to react or guess. Our job is to help you make smart, timely decisions within the framework of a long-term plan.

We’ve seen this before. In 2001, 2003, 2010, 2017—and now, 2025. The tax code gets rewritten. Markets continue doing what they’ve always done. The political winds change. But your financial plan is built to withstand all of it—if it’s grounded in discipline and purpose.

We’ll walk through all of this in more detail at our August Client Townhall. But know this: There is no rush. The ink is barely dry. And as always, we’ll sort through it together.

Bottom Line

Most of these changes either lock in current tax cuts or introduce new, targeted deductions—especially for seniors and middle-income earners.

But many of the new benefits are temporary. So whether you’re still working or already retired, smart tax planning will matter more than ever.

What You Should Do Now?

Nothing—just yet. But, we’ll help you:

Take advantage of temporary deductions before they disappear
Maximize charitable giving in tax-smart ways
Revisit Roth conversion strategies
Coordinate with your CPA to fine-tune your tax plan
Update your estate plan while exemptions remain high

No panic. No politics. Just planning.

We'll be discussing the new Tax Law in our next Townhall on August 5th at 5:30 CT
We’ll be ready—and so will you.

One of the most important truths about life—especially as we grow older—is that the future is always uncertain. But uncertainty is not a reason to panic. It’s a reason to plan.

Aging isn’t a crisis. It’s not a surprise. It’s not something that happens to other people. It’s simply the next chapter for all of us.

And the only rational response is to face it—with eyes wide open, and with a plan.

That’s why we recently hosted a conversation with gerontologist Colleen Ceh Becvar, someone who has spent her career studying and serving individuals and families navigating the realities of aging.

This isn’t about theory. It’s not about fear. It’s about understanding the real-life decisions that shape how well we live in the years ahead:

How do we maintain our independence as we age?
How do we prepare—financially and emotionally—for healthcare and long-term care?
How do we protect our families from having to guess what we would’ve wanted?

If these are questions you’ve considered, or questions you haven’t yet faced, this conversation is for you.

The recorded webinar is now available, and I strongly encourage you to take the time to watch it.

In our Q2 newsletter , we reminded you that volatility isn’t a sign something’s wrong—it’s the toll we pay to access long-term returns.

We talked about the April market swings, the sudden drops, the fast recoveries, the noise, the emotion... and we said, “Stay the course.”

You did. And this moment is your reward as the market has gone on to set new highs.

Because make no mistake: this is what winning looks like. It’s not flashy. It’s not dramatic. There’s no closing bell that rings when your discipline pays off. But that’s what this is.

It’s the reward for refusing to panic.
Progress belongs to the patient.

We’re not celebrating a finish line.
We’re reaffirming the power of sticking to the path.

Well done. Truly - Now let’s keep going.

Insurance Costs are on the Rise!

State Farm just slammed Illinois homeowners with a 27% rate hike. The Daily Herald had a great piece(link HERE ), but this isn't just Illinois - it's everywhere.

We're reminding you about our insurance review service because we don't want to see our clients spend money unnecessarily. As a reminder : we don't sell homeowners, auto, renters, or umbrella policies. Zero commission, zero agenda.

But here's the reality - you absolutely need proper coverage . The question is whether you're going to overpay for it. These companies are hoping you'll just accept whatever rate they throw at you because shopping around feels like work.

Don't prove them right.

You need adequate coverage - that's non-negotiable. But if we can help you pay less for the same protection while maintaining your wealth-building plan, why wouldn't we? The insurance review exists because watching our clients pay more than necessary for coverage they could get cheaper elsewhere is unacceptable.

Thank you for your referrals!

Each year roughly one-third of our new clients come as a referral from our existing clients. Due to our specialty of working almost exclusively with retirees (or those close to retirement) our services are not a good fit for everyone.

That said, we are always glad to talk with any of your friends or family who have any kind of financial question. Even if we are not a good long-term fit, we will always give them our best advice and do whatever we can to get them introduced to the right specialist. In addition to having time to answer any questions from your family and friends.

On our website, www.theharborwealth.com you can find our ‘How We Work with You’ process that helps potential clients make an educated and informed decision about our firm. This process includes the requirement that before they pay us a dollar in fees or trust us with a penny of their nest egg, they sleep on the decision.

Our sincere thanks for your ongoing support of our firm

We hope everyone is having a great summer thus far!

Graham loves summer - or more specifically Ice Cream Cones (He calls them "I nee coe")

Mark the Calendar!

Shred Event and Food truck on August 12!
We will be having a cybercrime prevention webinar in September
We will be hosting a photographer at the office in Q4 for family portraits - stay tuned!

Q2 2025 Newsletter

evaughn@harborw.com (Elliott Vaughn) — Wed, 09 Apr 2025 20:40:19 GMT

Every so often, something surfaces that rattles investors’ and our financial news media confidence. A crisis, a conflict, a change in policy. It almost always arrives wrapped in the same seductive phrase: “This time it’s different.”

We heard it in 2016 with Brexit.

In 2018, it was trade war rhetoric—culminating in a Christmas Eve when the market was down 25%.

In early 2020, we endured the swiftest 30% market decline in history—followed almost immediately by the fastest recovery ever recorded.

Then came 2022, with the highest inflation in 40 years and the most aggressive interest rate hikes since the 1980s.

And now, in 2025, tariffs have once again taken center stage—evoking comparisons to the protectionist policies of the 1930s, and even further back to President McKinley’s platform of the 1890s.

So here we are again. Different headlines. Same Reaction

Let’s remind ourselves: Wall Street—and the companies it represents—do not care who the president is. Markets have advanced under Democrats and Republicans, through wars, scandals, crises, and recoveries. What matters most is not who sits in the White House, but whether you remain seated in your financial plan.

If we’ve learned anything from the past century of market history, it’s this: circumstances change, but average investor behavior stays the same. Panic. Recovery. Growth. Repeat.

Now—and this is essential—the enduring 10%+ average annual return of the equity market and its frequent, temporary declines are not two unrelated phenomena. They are part of one indivisible whole. The volatility is not just normal; it is necessary. It is the emotional toll we pay for participating in the long-term wealth-creating miracle of capitalism.

Please understand: I do not believe you are the average investor. What I am saying is this: volatility is part of the journey. We planned for it, it's been part of every client review I have conducted. We expect it.

A Case in Point: April 7th

On April 7th, the market opened down 2%. Then, on the strength of a rumor—a potential 90-day delay in newly announced tariffs—the market surged 8%. Moments later, when the rumor was denied, the gains disappeared just as quickly. Nearly $2.4 trillion in market value evaporated in the space of a few hours, all driven by speculation.

I mentioned in our April 3rd email to clients " Market recoveries often happen swiftly, and missing just a handful of the best days can significantly reduce long-term returns " And then, as if to underline the point: on April 9th, the 90 day delay was officially confirmed. The market responded with another sudden move—this time up 9%—even as long-term questions about trade policy remained unresolved.

This is not investing. This is emotional voting, fueled by headlines and hearsay. This is what markets do in the short term—they fluctuate, sometimes violently, based on narrative and noise.

But over time, markets stop voting and start weighing. They weigh earnings, innovation, productivity, and progress. And those who remain invested in that process—not just through the quiet stretches, but through the storms—are the ones who capture the long-term rewards.

The market’s premium return has always been the compensation for enduring this volatility. The declines are not just inevitable—they are indispensable. You cannot have one without the other. (Just look at the S&P 500’s intra-year declines compared to its annual returns graph below.)

So no, we will not attempt to time the market. We will not allow momentary fear to dictate lifelong decisions. We will stay the course—because every time we have done so in the past, we’ve been rewarded with what this journey is ultimately about: peace of mind, prosperity, and progress.

“This Time Is Different”… Again

Taxes, Taxes and you guessed it... Taxes!

One of the most significant tax laws in recent history—the Tax Cuts and Jobs Act (TCJA)—is set to expire at the end of 2025. This means that, barring new legislation, many of the tax benefits individuals and families have enjoyed since 2018 will disappear, and higher tax rates will return.

If nothing changes, income tax brackets are set to rise, the standard deduction will shrink, and key deductions will be altered. In short, many Americans will see their tax bills increase. The question isn’t if taxes are going up—it’s by how much.

What This Means for You

For those in higher tax brackets, this could mean thousands of dollars in additional taxes owed each year. Business owners, retirees, and high-income earners may be particularly affected by the reversal of lower rates and deductions. Estate tax exemptions are also scheduled to be cut in half, making proactive planning even more essential.

While tax laws are always subject to change, waiting until the last minute is not a strategy. Now is the time to take a proactive approach and assess how these changes could impact your financial future.

What You Should Do Now

The first step is to understand your current tax situation. Please send us a copy of your most recent tax return so we can evaluate how these changes may affect you and identify strategies to mitigate the impact. You can send it to us via our website https://www.theharborwealth.com/clients -> send us a document, send it via email to Ellen, ellenv@harborw.com , or request a FedEx envelope to send us a physical copy.

Whether it’s accelerating income, making strategic Roth conversions, or revisiting estate planning, there are steps you can take now to prepare for the future.

Mark Your calendar!

Elliott will be having a webinar with Collen Ceh Becvar, Owner of Trinity Advocacy Group and Gernotologist In June. The discussion will focus on how to plan for care as we age, how to find care, what the best kind of planning entails and when to start. Their website is https://trinityadvocacygroup.com
Please submit any questions to hello@harborw.com beforehand!
Shred Event and Food truck on August 12!

Need Something Notarized?

Our Client Relationship Manager, Ellen, Is in the process of becoming notary!
Give us a call and we'll happily notarize what you need!

We hope everyone has a great start to the spring!

Graham is excited for warm weather!.

4.3.25 Market Reaction

evaughn@harborw.com (Elliott Vaughn) — Thu, 03 Apr 2025 22:50:10 GMT

4.3.25 Market Reaction

Reposted from Email that was sent out to clients

Dear Clients and Friends,

As we begin this Thursday, the headlines are painting a picture of doom: “Dow Craters 1,300 Points...” and “U.S. Stocks Plunge Just Minutes into Trading as Tariffs Wreak Global Havoc.”

Let me provide a bit of calm amidst the chaos.

Market Declines Are a Part of Investing

Market corrections, while uncomfortable, are completely normal. The problem is not the downturns themselves—it is how we respond to them. As I write this, the S&P 500 is down -3.85% today and -11.37% from the all-time highs set on February 19th. However, over the last five years, the S&P 500 is still up 118%.

So, the stock market is doing just fine. Please remember to think in terms of years, not short-term periods. This is a marathon, not a sprint.

The Real Risk: Missing the Best Days

One of the greatest dangers to any investor is exiting the market at the first sign of trouble. Market recoveries often happen swiftly, and missing just a handful of the best days can significantly reduce long-term returns, as we discussed in our Q1 Newsletter . The only way to ensure participation in these rebounds is to remain invested, regardless of short-term concerns.

Looking Ahead

We will be discussing this topic further in our upcoming Q2 newsletter, but given today's market opening, we wanted to provide this immediate update to keep you informed. As always, if you have any questions or concerns, we are here to guide you through market volatility and keep you focused on your long-term financial success.

Resources

A recent piece from Seeking Alpha ( here ) highlights the historical recurrence of tariff-driven uncertainty, drawing comparisons between today’s economic policies and those of the late 19th century under President McKinley. While protectionist trade measures can create short-term volatility, history reminds us that markets have weathered such periods before and continued their long-term ascent.

Additionally, this morning’s episode of Bloomberg Surveillance ( here ) was very well done and help put today’s upcoming events into perspective.

Stay the course. Stay invested. And remember, this too shall pass.

Q1 2025 Newsletter

evaughn@harborw.com (Elliott Vaughn) — Fri, 24 Jan 2025 18:42:07 GMT

harbor-wealth

What Will We Owe in Taxes, and Should We Consider a Roth Conversion?

What Will We Owe in Taxes, and Should We Consider a Roth Conversion?

Now let's talk about one of the biggest questions in retirement planning:

What are we actually going to owe in taxes?

And right behind it:

Should we consider a Roth conversion?

These questions are connected.

But they aren't the same question.

What determines your retirement tax bill?

Your tax bill depends on your overall tax situation.

That can include:

Wages or business income

Social Security

Pension income

Traditional IRA or 401(k) distributions

Investment income

Capital gains

Roth conversions

Deductions and credits

Filing status

Applicable federal and state tax rules

That's why looking at one account in isolation can miss the bigger picture.

Why can retirement change your tax picture?

Your income may look very different after you stop working.

Let's say someone earns $150,000 while working.

Then they retire.

Their wages disappear.

Instead, they may have Social Security, retirement account distributions, investment income, and other sources of income.

That can create a very different tax calculation.

But here's the thing:

A lower-income year doesn't automatically mean a Roth conversion is a good idea.

It means the tax calculation may be different.

That's worth analyzing.

What happens during a Roth conversion?

A Roth conversion generally involves moving money from a traditional retirement account into a Roth account.

The taxable portion of the conversion is generally included in income for the year of the conversion.

Let's say, purely as an illustration, that someone converts $25,000.

That $25,000 could increase taxable income, subject to the applicable rules and the nature of the assets being converted.

The actual tax impact depends on the person's entire tax return.

So a $25,000 conversion doesn't automatically mean a $25,000 tax bill.

The conversion is additional income.

The tax owed depends on the broader tax situation.

Why does the amount converted matter?

Because the tax system is progressive.

Adding income can cause more income to fall into higher marginal tax brackets or affect other income-based calculations.

That's why the question isn't simply:

"Should we do a Roth conversion?"

It can be:

"Would converting $10,000, $25,000, $50,000—or nothing at all—change the long-term tax picture in a meaningful way?"

Those are different questions.

What about future tax rates?

This is where people sometimes get too confident.

You may hear:

"Taxes are going up."

Or:

"Taxes are going down."

The reality is that future tax laws and your future income are uncertain.

A Roth conversion involves paying tax under today's applicable rules in exchange for changing the tax treatment of those assets going forward.

Whether that tradeoff is worthwhile depends on the circumstances.

There is no guarantee that future tax rates will be higher or lower.

What else can a Roth conversion affect?

The conversion may have implications beyond the immediate federal income tax calculation.

Depending on the circumstances, additional income can affect things such as:

State income taxes

Taxation of Social Security benefits

Medicare-related income thresholds

Other income-based calculations

That's why a conversion should be viewed as part of the broader tax picture.

How do you evaluate a Roth conversion?

Start with the timeline.

What is your income this year?

What might it look like next year?

When might Social Security begin?

When might required minimum distributions begin?

How much money is currently in traditional retirement accounts?

How much is already in Roth accounts?

What other income and deductions are expected?

Then compare scenarios.

For example: