Jude Wilson: I’m doing amazing. A, it’s a new year. I’m excited. I wish everybody out there health, wealth and happiness in 2026.

Marc Killian: Absolutely. Yeah, for sure. Well, let’s start with, I guess, the tax deduction for seniors. Right. There’s still people kind of, you know, like, what is it? You know, is it, is it tax free? There still seems to be all that kind of confusion around it. So one more time, let’s talk about the changes in the Obama, uh, the one big beautiful bill and what it actually is for seniors.

Jude Wilson: Yeah, the one big beautiful bill has so many provisions in it, but the one that seems to be causing the most amount of confusion and the benefit actually is the one that’s for seniors 65 and older and basically they get an additional tax deduction of $6,000. And it’s not permanent now. It’s through 2028. So for married couples, that means $12,000 total when both spouses qualify.

Marc Killian: Yeah.

Jude Wilson: So for taxpayers to qualify, they must be turning age 65 on or before December 31st. And that deduction does phase out though. It does start to phase out at income levels of 75,000 for individuals and 150,000 for couples.

Marc Killian: Yeah, let’s talk about that phase out, Jude, because for, we’ll just go with married folks. Right. So it’s 12,000 basically for the two of you if you qualify. And from 150 to 250,000 it starts to tick down. Right. So if you make more than 250 as a couple, you don’t get the extra, you don’t get that extra, uh, deduction.

Jude Wilson: Yeah. And it’s always important to understand those phase outs because generally when you listen to something on the news, they give you the big headlines, oh, there’s a new tax deduction, $12,000 for couples. But then they don’t go into, you know, the very much into the details. So understanding the phase out is important.

Marc Killian: Yeah. And you know A lot of this stuff was centered around helping lower in, I think, middle income brackets. Right. So, again, if you’re a married couple making more than 250,000, you’re not going to get this bonus deduction. But if you are in that window, you’re talking about $12,000, which kind of makes your Social Security kind of tax free, but not exactly. What. You know, obviously the, you know, the campaign conversation was. Right.

Jude Wilson: This, exactly.

Marc Killian: This was the, uh, the middle ground, like they always do. They have to find some barter. And to your point, this only lasts until 2028 as well.

Jude Wilson: Well, that, that I think you, you. You nailed it. Because the, the campaign promise was to make Social Security, uh, income tax free. And that doesn’t quite do this, but it goes a long way for most people.

Marc Killian: Right.

Jude Wilson: And. But here’s an incredible benefit of this in our firm as we start to do planning for clients around this, what we are using it for is to look at Roth conversions or additional Roth conversions. If we already know we’re going to get this tax deduction, why not go ahead and make a conversion and basically let the government pay for it?

Marc Killian: Yeah, and it’s a pretty big number if you’re thinking about stacking all these things together. I’m just kind of look this up real quick here, Jude. Right. So the standard deduction is still, you know, 24 and some change. Right. Um, but if you stack all this stuff, that new senior deduction, if you qualify, to your point a second ago, plus the additional senior blind deduction, if you qualify, you’re talking like 40, almost $47,000 in standard deductions. It’s pretty. That’s pretty huge.

Jude Wilson: Look, what I, what I’ve been telling people in my seminars and clients that are coming to the office. Taxes are on sale now, and the sales, the sales have gotten better. And so just like any other sale, uh, it’s going to end.

Marc Killian: It’s a limited time m. Offer. I feel like it’s a limited time offer. We need that guy. But wait, there’s more, right?

Jude Wilson: Exactly. Exactly. I normally use the, the Kmart analogy. Yeah, it’s a blue light special. And when that blue light shuts off, it’s gone. But in all seriousness, you know, uh, we’ve talked about this many times before, you and I, and most people, when I ask in the seminars, where do you believe taxes are going to go in the future? If you’re going to believe they’re going up, raise your hand. I have yet to do a workshop or seminar or, uh, class where a large majority of people didn’t raise their hand and say taxes are going up. So now’s the time to, to, to, to be proactive instead of be reactive

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Jude Wilson: and really think about some Roth conversion strategies or thinking ahead of how you can protect your nest egg.

Marc Killian: Yeah, and we’ll throw a link into the show descriptions uh here on YouTube for the US debt clock. It’s us debtclock.org uh, but we’re at 38,600, and I can’t even count that high. Uh, but it’s on the upper side heading its way towards 39 trillion. Uh, we’ll probably hit 40 trillion before this year is over. Jude. So to your point, you know, I mean even with taxes being on sale now, they at some point somebody’s got start, start paying this bill.

Jude Wilson: Uh, yeah, so, and one more thing too to help everybody that are listening if you don’t have to, to just listen to the podcast or watch us on YouTube to, to get a better, to get an understanding of this, you can go to thetaxbomb.com and we’ve got a calculator on there. We’ve been using it lately in our workshops and with uh, uh, the people that attend, you know, the courses to actually look at what their qualified accounts, their IRA, their 401k balances are and calculate what’s the potential tax liability you have in there so that you can see for yourself. This could be a big number. And using the calculator, I’ll give you a preview. It’s using the tax rates today. So imagine if you calculate that and you see a huge number, imagine what that number will be if tax rates actually, actually do go up in the future.

Marc Killian: Yeah, exactly. And to your point, maximizing your deductions, maximizing all the different things may give you some room to think about doing some other things like the Roth conversion conversation. Uh, all right, so speaking of that, our second part to talk about is the catch up contribution numbers. They change them every year, just about little, you know, little tweaks here and there. Jude. So let’s talk about what’s changed for 2026 in the old ketchup area.

Jude Wilson: So let’s set the stage for everyone. If you’re contributing to a 401k or 403b, then there’s a maximum amount that you can contribute to and for the tax year 2026 that amount is 24,500. And so in these workplace plans, 401ks, 403bs, the additional catch up provision, if you’re age 50 and above is an additional $8,000 that you can put in. But here’s the snag that pertains, uh, to this year. If you are a quote unquote high income earner, that may be different to different people, but what the IRS says is 150,000 and above that catch up that you’d like to make has to go into the Roth portion of your 401k or 403b.

Marc Killian: Yeah, that’s a great point, Jude, because that’s a little wrinkle that a lot of people aren’t aware of. So if you’re making, you know, decent money, 150,000 or up, that the catch up contribution has to go into a Roth 401K. So if you don’t have that, might be worthwhile having a conversation with your HR department. More and more companies have them, so it’s probably there. I think some of the smaller, you know, some smaller, uh, companies maybe still aren’t doing that. So it may be worthwhile to have that chat because unfortunately you can’t take advantage of that, let alone the super ketchup. Right. So I feel like we need a bottle, uh, of ketchup, uh, with a little cape on it or something here. But what’s, what’s the super ketchup? What’s that deal?

Jude Wilson: Leave it to you and I to be really corny, but that’s exactly right, the catch up provision. Not Heinz, but the catch up provision in your 401k. Um, and I want to pause a quick second because I really want the listeners to hear that, that piece that they may have missed. If your provider, if your 401k provider doesn’t have a Roth, uh, uh, election available to you and your, and your income is over 150,000, you will not be able to make that catch up provision because now that catch up must go into a Roth and there’s not a Roth there.

Marc Killian: Can’t go anywhere you can’t do it. Right. Yeah. So again, ask your HR because I mean it’s pretty easy to set up. So a lot of companies can probably get that put together and again, check, because a lot of them are. But if you didn’t know that, it’s certainly a good tip to know.

Jude Wilson: Yep. And now let’s go to the super. You know, I feel like a Marvel or DC movie. The Super Duper Catch up.

Marc Killian: Right, right.

Jude Wilson: Um, and this is weird, you know, sometimes I don’t understand the logic of our politicians, but if you’re between the ages of 60 and 63, there’s an additional amount that you can put in up to $11,250, making the total contribution up to 35,750. And here’s a couple of snags. We already said it’s between age 60 and 63. It’s also pertains to the year that you turn those ages.

Marc Killian: Yeah.

Jude Wilson: When you turn age 60, then you’re able to make that catch up provision. But the year that you turn 64, you’re no longer able to make that catch up provision. So even if you were 63 during that

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Jude Wilson: year, if you turn 64, you can’t make a dollar of the contributions in that year.

Marc Killian: Yeah, it’s a weird one too, right? Because it’s like, why don’t they just take it to 65? Right? It’s like 60 to 60 would have.

Jude Wilson: Made sense to you and me, Right.

Marc Killian: I don’t get it. But look, I mean, if you’re thinking about this, right, you know, Jude, I’ve said for a long time that, you know, we’re in, we’re in winter right now, technically, maybe not in Florida, but we’re in winter. And uh, we all look forward to spring and summer and you know, we treat Memorial Day like summer. It’s, it’s like the unofficial kickoff to summer, even though it’s not actually summer. Well, turning 50 is like the unofficial kickoff to retirement. Oh, crap. I need to get ready for, I need to get ready for retirement. So if you’re 50 and above, you got these regular catch up contributions you can do. I mean, think about it for a second. Even this is workplace plans we’re talking about. But 32,500, with the new numbers this year, you could sock away every year. If you did that for 15 years, Jude, from 50 to 65, that’s a good chunk of money you’re putting away for retirement.

Jude Wilson: Good chunk of money, right. And I will tell you from a psychological position and what my experience tells me. We work with clients that typically are, are affluent and have good income, but very rarely do I meet a, uh, potential new client that says, you know what, I’ve saved the maximum my whole career.

Marc Killian: Right?

Jude Wilson: Most people, when they come into the office, they feel that they are kind of behind a little bit. And it’s not until we do the analysis that we tell them, oh no, you’re right on pace. But psychologically, most people feel that they’re behind and, and to know that there’s this catch up provision that will allow them to, you know, supercharge their contribution. It’s a great relief to a lot of people.

Marc Killian: Yeah. You know, and they don’t. The government doesn’t often get things right, but at least they did name this one appropriately. The, the catch up contribution again, it’s been there for years. Uh, is a great tool for people to use. Um, the super ketchup. I mean it’s just simple enough. It’s weird. But hey, if you fall into it and you need some help and some guidance on that, again, reach out to Jude and to his point. And as we wrap this up, Jude, until you run the numbers, you don’t know where you stand. And most people do feel like they’re behind the eight ball and most people wind up. Not most, but I’ve talked to a lot of advisors, but a lot more people than do. Than do not find themselves in a better position. They’re like, oh, I’m pleasantly surprised to find out I’m in better shape than I thought I was. Right. But you got to get the math run so you can find out where you stand.

Jude Wilson: Yeah, I think we’ll close out by saying this. It’s not only enough to know that these provisions exist, it in combination with strategy, tax strategy, and projections about your retirement. We can use these provisions to customize a plan specifically for you. Because these numbers are great, but unless you know how they’re going to affect you and what steps you need to take, it’s just numbers on paper.

Marc Killian: Great point. Well, if you need some help getting the numbers on paper and then understanding the numbers on paper, reach out to Jude and his team. We’ll have links in the show description below. Of course, he’s serving folks all around the Florida area, but he’s got clients outside of the state as well. So if you need some help, reach out to him. Right. So we’ll have those links down below. You can go to the taxbomb.com that he mentioned earlier, thetaxbomb m.com you can also go to their main website and we’ll have all those links down below. So click on one of those, get some time, have a chat and. And don’t forget to subscribe to us on Apple, Spotify and right here on YouTube, hit that little thumbs up and that notification bell so you catch new episodes. And with that we’ll sign off. Thank you, Jude, for your time. Always appreciate it. We’ll see you next time. Here on the Roth Guide.

Walter Storholt: Financial planning and advisory services are offered through Prosperity Capital Advisors, pca, an SEC registered investment advisor with its principal place of business in the State of Ohio. Centris Financial Strategies and PCA are separate, non affiliated entities. PCA does not provide tax or legal advice. Insurance and tax services offered through Centris Financial Strategies are not affiliated with pca. Information received from this podcast should not be viewed as individual investment advice. Product discussions and illustrations are hypothetical in nature and will vary based on many factors and including but not limited to, age, health product, insurance carrier, and product design. You should consult the Insurance Carrier website and policy for detailed information. For information pertaining to the registration status of pca, please contact the firm or refer to the Investment Advisor Public Disclosure www.advisorinfo.sec.gov For additional information about PCA, including fees and services. Send for our disclosure statement as set forth on Form 80V from PCA using the contact information herein. Please read the disclosure statement carefully before you invest or send money.

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