MONTHLY NEWS AND INFORMATION FOR CURRENT AND FUTURE RETIREES
PRESENTED BY UPAL – MARCH 2022
QUOTE OF THE MONTH
“The biggest adventure you can ever take is to live the life of your dreams.”
OPRAH WINFREY
A STRATEGY FOR MONETARY GIFTS FOR FAMILY
Have you ever thought about giving financial gifts to your kids or grandkids? Many affluent retirees and pre-retirees do this, often with an eye toward furthering family wealth.
First, the basics. The Internal Revenue Service for 2022 increased the yearly gift tax exclusion to $16,000, so as an individual taxpayer, you can gift up to $16,000 this year to a child, grandchild, relative (or any other person) without any federal gift or estate tax consequences. If you are married, this applies for your spouse as well. Gifts of $16,000 or less do not count against the lifetime exclusion amount for individual estates, set at $12.06 million for 2022 ($24.12 million for a married couple).
Speaking of that $12.06 million lifetime exclusion amount, it could be halved in 2026 if the Tax Cuts and Jobs Act sunsets – so time may be of the essence for parents or grandparents who want to transfer portions of their wealth to heirs tax-free. As you think about choices for monetary gifts, you may want to have a look at your estate strategy documents to see that they are up to date. This update on monetary gifts is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax or legal professional before modifying your tax strategy.1
ON THE BRIGHT SIDE
The Internal Revenue Service updated its actuarial tables for 2022, basing them on an average life expectancy of 84.6 years, revised up from 82.4 years. This affects the formulas used to calculate mandatory annual withdrawals from retirement accounts. Yearly mandatory withdrawal amounts may now be smaller than they would have been under the old formulas. Please check with your tax or legal professional before modifying your strategy.2
Lea Ann Nunley may be reached at 918.747.5585 or lnunley@upal.com
Chauncey J. Pickering may be reached at 918.760.7241 or cpickering@upal.com
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.
CITATIONS.
1 – Forbes, November 11, 2021
2 – Yahoo! News, January 18, 2022
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