October Quarterly Newsletter - 2025

Highlights of this Special Edition Newsletter:

• LVM’s Year-End Financial Planning Checklist

• Social Security: Why Waiting Often Pays Off

• Social Security Transitions to Electronic Payments

• LVM Staff Announcements

LVM's Year-End Financial Planning Checklist

Required Minimum Distributions (RMDs)

Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually, starting with the year that he or she reaches the age of 73. The RMD is calculated for each IRA or retirement plan account by dividing the prior December 31 balance by a life expectancy factor that the IRS publishes. LVM and most custodians encourage you to complete these distributions before December 1 to ensure distributions are made before year-end.

Qualified Charitable Distributions (QCDs)

IRA owners over the age of 70½ are allowed to satisfy all or a portion (up to $108,000) of their RMD with a direct transfer to a qualified charity. Each spouse is allowed their own QCD from their own IRA. Unlike regular IRA withdrawals, QCDs are excluded from your taxable income, which can lower overall taxes paid and may help you keep certain tax credits. Managing your tax bracket may also help reduce future Medicare premiums. The December 1 distribution timeline also applies for QCDs. If you are writing checks directly from the IRA, they must clear before year end.

Maximize Retirement Contributions

In 2025, you can contribute $23,500 to your 401k or other employer-sponsored retirement plan. An extra $7,500 in “catch-up” contributions are allowed if you will be 50 to 59 or 64+ this year. The “catch-up” contribution is $11,250 for ages 60 to 63.

Even if you do not have an employer-sponsored plan, you may still be able to contribute up to $7,000 ($8,000 if you’re 50 or older) to a traditional IRA. These rules also apply to nondeductible IRA and Roth IRA contributions. “Backdoor” Roth contributions are also available for higher income earners if you are phased out from making direct contributions to a Roth IRA.

Defined contribution plans allow higher contributions of up to $70,000 or 25% of your qualified income (whichever is less).

Tax-Loss Harvesting

Tax-loss harvesting is a strategy used to reduce overall capital gains taxes paid by selling securities you hold at a loss. Tax losses can be used to offset gains you may have in the account or gains from selling real estate or a business. Annually, you can use $3,000 of capital losses to offset income, and you can carry forward any losses above and beyond the $3,000 for future use.

Other Items to Discuss with your Financial Advisor

College education savings (contributions to 529 plans); Health Savings Account (HSA) contributions ($4,300 per person plus $1,000 for 55 and older “catch-up” provision); making gift-tax exclusion gifts to non-charitable recipients (children, grandchildren, other family or friends) of up to $19,000/recipient ($38,000/recipient from a couple); review life insurance coverage and estate planning documents including Trusts, Wills, Health Care Proxy,

and Financial Power of Attorney.

Social Security: Why Waiting Often Pays Off

One of the most important retirement decisions is when to claim Social Security. While benefits can begin as early as age 62, doing so locks in a permanently reduced monthly payment compared to waiting until full retirement age—or even better, until age 70 when benefits reach their maximum.

For many clients, patience is rewarded. Research shows that higher-income individuals often live longer, meaning a larger monthly benefit can provide meaningful income well into their 80s and 90s. Even if Congress does not act before the Social Security trust fund is projected to be depleted in the early 2030s, benefits would not disappear—payroll taxes would still cover roughly 77% of scheduled payments. That means those who wait will still enjoy higher benefits than those who claimed early.

That said, there are situations where claiming earlier makes sense. Clients with limited savings or

health issues may need the income sooner. Others may find peace of mind in knowing they have a

guaranteed source of cash flow, even if it comes at the cost of reduced lifetime income.

Our Takeaway

For most clients, delaying Social Security provides stronger long-term security and higher lifetime income. But the right decision depends on your health, other income sources, and retirement goals. Reviewing different claiming scenarios as part of your financial plan can help clarify the trade-offs and ensure you make the choice best aligned with your future.

Social Security Transitions to Electronic Payments

Effective September 30, 2025, federal benefit payments will primarily be issued electronically, with paper checks being phased out in most cases. Beneficiaries who request an exemption from the electronic payment requirement must file a waiver with the U.S. Treasury by calling 1-877-874-6347.

There are two easy ways to receive federal benefit payments electronically:

• Direct Deposit to a checking or savings account. Old-Age, Survivors, and Disability Insurance

  (OASDI) beneficiaries can use or sign up for a my Social Security online account to manage direct deposit information and access benefit details.

• Direct Express® Card, a safe and convenient prepaid debit card option for those without a bank account. To enroll, call 1-800-333-1795 or visit usdirectexpress.com.

Beneficiaries have several ways to update direct deposit with Social Security:

• ONLINE: Depending on the benefit type, bank account data may be added or updated through the beneficiary’s my Social Security account. Individuals will need to log into their account and provide the account type, routing number, and account number and select when they want the change to take effect.

• BY AUTOMATED ENROLLMENT:

  Recipients can ask their financial institution to send direct deposit information to Social Security using the Automated Enrollment (ENR) process. This allows the bank to send information to Social Security without the need to contact us. Note: Not all financial institutions participate in ENR.

• BY PHONE: Recipients will be required to access their my Social Security account to obtain a Security Authentication PIN (SAP) to verify their identity prior to any updates by phone.

CONGRATULATIONS to our Colleagues!

Celebrating 35 Years Len Harrison, CFA

Wealth Advisor

Celebrating 21 Years Jayne Vander Molen

Client Relationship Manager

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