Category: Financial Planning Concepts

Cybersecurity: 7 Steps to Hackproof Your Life

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In the first blog post, we covered the most common forms of cybersecurity attacks to watch for, from deepfake technology, which uses realistic video and audio to deceive, to medical insurance identity theft, where criminals impersonate victims to obtain procedures or prescriptions. Cyberattacks are an everyday reality, but there are measures you can take to protect your family, personal information, and finances. Let’s explore seven key steps to help hackproof your life and guard against fraudsters. You can also learn more about this topic in this video:

#1 Freeze Your Credit

To guard against credit identity theft, you can freeze your credit, a free and small hurdle to protect your financial life. Locking your credit file until you need to apply for a loan or new card is good practice in helping to prevent unauthorized requests, so cybercriminals won’t be able to apply for credit in your name.

You’ll need to implement a credit freeze with each of the three credit bureaus, which you can do on their websites:

#2 Enable Two-Step Multi-Factor Authentication (MFA) or Passkeys

These days, a simple password isn’t enough. If a hacker gains access to one account, their chances of accessing other information are higher. Multi-factor authentication (MFA) adds an extra layer of security before you access your accounts. For example, a passcode text to your phone or verification email can better deter criminals who don’t have access to your accounts or devices. You typically must enable the optional feature on accounts that offer it. You can also select from a range of authenticator apps to secure your accounts online.

Or, even better, you can implement passkeys on your accounts. This newer security feature offers an even higher level of protection than a traditional password with MFA. Passkeys allow you to use your device’s built-in biometrics — your face or fingerprint that you use to unlock the device — to log into sites or apps.

#3 Use a Password Manager

Even with what we know about cybersecurity, most of us may still not use the strongest passwords or update them often enough. A password manager, a tool provided on your device or desktop computer, provides highly complex, unique password suggestions that are harder to guess than simple, default passwords based on a last name or birthday. The best part is that the password manager remembers these complex strings of characters for you.

#4 Avoid Public Wi-Fi for Financial Transactions

While public Wi-Fi at the airport or hotel is convenient, it’s safer to avoid it, especially for financial transactions. Public networks are less secure, making it easier for fraudsters to intercept critical data. However, if you need to be online in public, consider using a password-protected hotspot on a personal device or a VPN (virtual private network), which scrambles your internet activity and hides it from scammers.

#5 Secure Your Personal and Business Wi-Fi

Similarly, how secure are your Wi-Fi routers at home or at your business? Create a strong, unique password instead of using the default password provided with your device, and update it if you suspect a breach. It’s also recommended to encrypt your router, regularly update your router’s software, and disable WPS, which makes adding new devices to your network easier. If you’re uncomfortable or unsure how to set up these protections, a professional can help you secure your devices and offer additional security tips.

#6 Dedicate an Email for Financial Transactions

Creating a unique email account solely for your finances may sound extreme. However, it can make it easier to spot irregular activity, phishing emails, or other suspicious behavior that might otherwise get buried in your primary inbox. Be sure to choose a reputable email provider, create a strong, unique password, and enable two-step MFA to strengthen your security.

#7 Avoid Clicking Suspicious Links

Scams like phishing emails and spoofing, in which the true sender’s information is disguised, often include links and require “urgent” action on your part. Sometimes, you can spot fakes by scrutinizing the email address and message for discrepancies and typos. For example, it can be easy to overlook an email from advlsor@bankone that should actually be advisor@bankone (the “i” in advisor has been replaced with a lowercase “l”). Illegitimate links may direct you to a fake website to capture login credentials or bank account information, or expose your device to malware. Unfortunately, we don’t know what every link is designed to do. A good rule of thumb is to avoid clicking links you receive in an email or text; instead, contact the sender or visit the official website directly to verify the message is legitimate. 

#8 Bonus Tip: Rethink What You’re Sharing on Social Media

While social media is part of most people’s everyday lives, posting about your vacation, kids, or even your birthday may be providing scammers with more information than you think. Criminals may piece together details to guess passwords, use your likeness to create deepfake content, or learn when your home and devices are most vulnerable, such as when you’re traveling. Information you post online is incredibly hard to remove, even when you’ve “deleted” it, so rethinking when and what you post is critical.

Build a Stronger Defense Online

While it’s nearly impossible to be completely secure online, there are ways to protect your online life better and avoid being the lowest-hanging fruit.

If you’d like more guidance on protecting your personal and financial information, please contact us, and we’ll be happy to discuss best practices.

5 Ways You Could Save $10,000 or More on Your Taxes This Year

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With the One Big Beautiful Bill Act reshaping parts of the tax landscape, you have a timely window to improve your after-tax planning results. The goal is not just to earn more, but to KEEP more by making portfolio, charitable, and financial planning decisions with tax efficiency in mind. Here are five strategies to save $10,000 or more each year on your income taxes:

1. Employ Proper Asset Location

Holding tax-inefficient assets, such as bonds and CDs, in tax-deferred accounts when possible, and placing tax-efficient investments, like equity index funds, in taxable accounts, improves your after-tax performance. This can reduce annual taxable income without changing your long-term investment plan. As a part of your Brown Financial investment process, we help you allocate your investments in the most tax-efficient way possible. Situations vary, but saving $5,000 or more each year on your taxes using this strategy is not unusual.

2. Employ Tax-Loss Harvesting

Realizing losses in taxable accounts while reinvesting the proceeds in similar assets can offset capital gains and, in some cases, a limited amount of ordinary income. Done consistently, this can lower current-year taxes while preserving market exposure. Offsetting even $20,000 of capital gains with harvested losses could result in tax savings of at least $3,000 each year.

3. Minimize Unnecessary Turnover

Buying and selling assets to try to improve pre-tax performance can avoid taxable gains. A low-turnover, tax-aware investment approach often produces better after-tax results than a style focused only on pre-tax returns. For example, simply avoiding $30,000 of capital gains, when possible, could result in tax savings of $4,500 or more each year.  By design, the Brown Financial portfolio management process is a tax-aware investment strategy that minimizes portfolio turnover whenever possible.

4. Coordinate Charitable Giving Strategies Like QCDs and “Bunching”

Qualified charitable distributions (QCDs), giving charitable gifts directly from IRAs, can be especially powerful for IRA owners age 70½ and older because they can satisfy part or all required distributions without increasing adjusted gross income. Additionally, for clients who itemize, donating appreciated securities directly or “bunching” several years of gifts into one year can also improve deductibility. Donor-advised funds can help you claim a deduction now while deciding on grants later. Your annual tax plan will help you determine the most tax-efficient giving strategy for your situation.

5. Watch IRMAA and Deduction Timing

When you are over 65, higher adjusted gross income can raise Medicare premiums two years later through IRMAA. Therefore, year-end decisions about Roth conversions, capital gains, bonus income, etc., are especially important. Avoiding IRMAA through proper planning can easily save you thousands of dollars each year.

The best tax plan is strategic, not reactive. Tax-sensitive portfolio design and a year-end review of your portfolio, income, charitable goals, and IRMAA exposure can uncover meaningful savings without changing your lifestyle or long-term objectives. At Brown Financial Advisory, we take a common-sense, tax-aware approach to investing and financial planning to help you identify opportunities and align investment, income, and charitable giving decisions with your goals. Contact us to learn how you can potentially reduce your tax burden and keep more of what you’ve earned.

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Cybersecurity Risks to Watch for 

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Suspicious emails, calls from unknown numbers, and convincing AI videos have become a common reality in today’s digital age. Fraudsters and hackers have also become more sophisticated, using advanced technology to access your personal and financial data. Protecting your information is crucial to help avoid costly losses and identity theft. In the first part of this two-part series, we’ll cover the common forms of identity theft you should be aware of to identify and avoid cyber threats. In this in-depth video, listen as Brown Financial Advisory President Scott McLeod shares what to watch out for and how to prevent being a victim:

Don’t Be Fooled — You Have (Probably) Already Been Hacked!

In today’s age, it’s almost impossible to avoid scammers accessing your sensitive personal information online. With major hacks over the past 10 years alone, billions of people’s data — including Social Security numbers, credit card and bank account information, driver’s licenses, passwords, and more — is circulating on the dark web. On this hidden online platform, data, drugs, and more are exchanged. While you may not have experienced lost funds or credit theft directly, major hacks at companies such as Yahoo, Capital One, and Equifax mean your data is likely already being bought and sold for nefarious purposes. The fallout from a hack can lead to significant stress and financial loss as you trace the criminals, try to recoup lost funds (if ever), and rebuild damaged credit. The thought of a cyberattack is scary, but it’s part of our modern world. However, by getting informed and taking proactive steps, you can better protect yourself from being an easy target for hackers. Let’s review the common forms of identity theft to watch out for.

What are the Risks? Common Forms of Identity Theft

While emerging technology is making hacks easier and more prevalent, knowing the common threats and what to spot can help you avoid becoming low-hanging fruit for cybercriminals. 

Credit Card Theft

Credit card theft is a very common form of identity theft. If you’ve ever had to replace a card for suspicious activity or unauthorized purchases, you’ve probably already been a target. Credit card theft can occur when your card is stolen, through a data breach, or via a phishing scam. Phishing is when sensitive information is gained through illegitimate emails, links, or other communications that appear to be coming from a real company, bank, or other organization you trust. These messages often seem urgent and demand immediate action to “resolve,” which can lead you to unintentionally share sensitive information with a scammer. Credit card theft is inconvenient but generally is a low-level risk. You can typically address a hack through your credit card company, which can cancel your current card, reissue a new one, and help you recoup your funds.

Social Security Identity Theft

A far more severe threat is Social Security identity theft, in which scammers can use your Social Security number as a key identifier for financial or governmental services. A cybercriminal may use your Social Security number to apply for credit or even gain employment. They may also use your Social Security number to file fraudulent tax returns and claim your refund, also known as tax identity theft. Addressing this type of hack is much more in-depth, requiring you to file a police report, freeze and monitor your credit, and ensure your work history and taxes are accurate, which could take months or years to manage and correct.

Medical or Medicare Identity Theft

Medical identity theft is when perpetrators use your medical or Medicare details to receive medical procedures, benefits, or prescriptions. As a result, billing and medical records could be falsified, impacting your future medical care, insurance coverage, and debt you’re responsible for. Mixing your medical history with information a scammer provides could be dangerous to you in the future. If you think you’ve been a victim of medical identity theft, you should contact your insurer and verify your files and charges are accurate.

Account Takeover

Scammers may also use malware, phishing, or data breaches to take over your email, social media accounts, or bank accounts entirely. A hacked social media account can range from inconvenient to stressful, especially if the scammer contacts your friends and family impersonating you or makes demands for money. However, an email or financial account can be extremely difficult to address and untangle. Often, when fraudsters access credentials on one account, they gain access to multiple accounts by quickly changing your passwords and recovery devices, forwarding your emails to their accounts, and possibly finding other sensitive details for their use.

Ransomware

Malware is another tool scammers use to lock your accounts and essentially hold them hostage until you pay a ransom. Many individuals and business owners have fallen victim to ransomware, becoming unable to access their accounts, files, systems, and networks unless they meet financial demands, sometimes in the millions of dollars. Contact law enforcement for next steps in managing a ransomware threat, as paying immediately does not guarantee you’ll recover your data.

Deepfake Technology

Perhaps one of the most insidious threats is deepfake technology, in which scammers can create fake, yet convincing, audio or video impersonating someone else using AI and other tools. The technology often recreates a voice or image gathered from social media or other public platforms. This could be a phone call or even a video chat in which a scammer may appear as an authority, family member, or someone else you trust, requesting a financial transfer or claiming they’re in dire need, for example. As technology evolves and AI becomes more sophisticated, it’s even harder for the untrained eye to spot fakes. Treat red flags like uncharacteristic urgency, strange requests, or even lighting and voice discrepancies as suspicious, and approach them with caution.

Detecting CyberThreats

The scope of digital threats today can feel overwhelming and scary, but protecting your and your family’s information is a priority. It’s critical to stay vigilant and proactive so scammers can’t easily access your data. Our True Life Planning Cycle helps our clients maintain a comprehensive view of their finances. By addressing various facets of your financial life, the process may help identify potential issues while providing complete solutions to support keeping your money and goals on track. 

If you’re concerned about your financial information or other sensitive data, stay tuned for the second part of this series, where we’ll share seven actionable strategies to hackproof your life. We also encourage you to contact our team, as well as your other service providers, to verify your information, ensure accuracy, and strengthen your security.

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Financial Planning Concepts

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Planning For Long-Term Care

As part of your Brown Financial risk management review, we discuss the importance of protecting your wealth from the costs associated with a long-term care need. One of the biggest financial questions families face is how to pay for care later in life. The cost of aging services can vary widely depending on where in the country the care is administered, the level of support needed, the type of community chosen, and how long the care is required. Here are some important considerations as you secure your retirement plans:

Long-term care can be one of the largest retirement expenses. Across the nation, the median cost1 of assisted living is about $6,200 per month and a semi-private nursing home room is about $9,581 per month. In-home care by skilled professionals can easily exceed $10,000 per month. And while some of the costs of living outside of care are eliminated (like property taxes, homeowner’s insurance, home repairs, food, etc.), there are also other costs that are not included in the quoted cost of monthly care. Any type of care that requires professional help will result in a hefty monthly expense.

Independent living is usually the most affordable senior-housing option but it does not provide care.2 Recent national estimates put independent living at about $3,065 per month, though pricing varies by community and amenities. This option is often best for active adults who want housing, meals, social opportunities, and potential continuity of care without needing help with daily activities.

Insurance can help, but Medicare is not the answer for most custodial care.3 Medicare does not cover long-term custodial care in assisted living and nursing homes or at home, except in limited skilled-care situations. Private long-term care insurance and hybrid life- and long-term care policies may help offset these expenses and can be an important part of your retirement plan. 

The cost of long-term care insurance coverage depends on age, health, and policy design. It is important to plan early. The American Association for Long-Term Care Insurance quotes4 a very basic long-term care policy that provides only $165,000 of benefit, without inflation protection, to cost roughly $950 per year for a 55-year-old male and about $1,500 per year for a 55-year-old female. Interestingly, couples often receive a discount, so the same level of coverage for a couple may only cost $2,080 per year. But age matters and at age 60, the cost of this same coverage increases 25% to $2,600 per year for the couple. In an example where a median level of care is required today, this would only cover about two years of expenses. 

The best time to plan is before care is needed. The U.S. Department of Health and Human Services cites5 that about 48% of adults receive paid long-term care services but only 24% of adults receive more than two years of paid long-term care services and only 15% spend more than two years in a nursing home. Considering these risks, Brown Financial Advisory will care for you by helping you design a plan that works for you, your goals, and your family.

Sources: 

1  Calculate the cost of long-term care near you. (2026, March 3). CareScout. https://www.carescout.com/cost-of-care

2 Schuman, T. & Wexler, R. (2026, April 24). Independent Living Costs in 2026. Senior Living. https://www.seniorliving.org/independent-living/costs/

3 Long-term care. (n.d.). Medicare. https://www.medicare.gov/coverage/long-term-care

4 How Much Does Long-Term Care Insurance Cost and Is It Worth It? (2025, February 13). National Council on Aging.

https://www.ncoa.org/article/how-much-does-long-term-care-insurance-cost-and-is-it-worth-it

5 What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports? (2019, April 3). Office of the Assistant Secretary for Planning and Evaluation.

https://aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports-0

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Roth Conversion Concerns With The OBBB

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On July 4, 2025, President Trump signed the One Big Beautiful Bill (OBBB) into law. Now that we are about half-way through our annual client tax reviews, it has become obvious that some of the changes in the OBBB have made Roth conversions unwieldy at best and impractical at worst. Here are three things couples should consider before executing a Roth conversion under the new tax laws in 2025:

Social Security Becomes Taxable at Just $32,000, Including ½ of the Social Security Income: 

It is logical to believe that during years of low taxable income you should consider completing a Roth conversion. The expectation is that your income could be higher in the future. However, for retirees, Social Security can throw a wrench on those plans. At just $32,000, including one-half of your Social Security benefit, up to 50% of your benefits become taxable. Once you reach $44,000, 85% of your benefits become taxable. So, while you could be firmly in the 12% tax bracket, a good place to be for a conversion, if the additional income causes your Social Security to be more taxable, your effective rate for the conversion could double to 20% or more.

Capital Gains Become Taxable at $96,700: 

The married filing jointly tax brackets are 10% ($0-$23,850), 12% ($23,850-96,950), and 22% ($96,950-$206,700). However, it is common to overlook the other income impacting your taxes: capital gains. In the 10% and 12% brackets, capital gains are not taxable at all (0.0% rate). This makes it very important to keep the marginal rates lower when capital gains are part of your income so you may be able to capture those gains with no tax liability. However, if a Roth conversion pushes your income above $96,700, your capital gains start to be taxed at ordinary income tax rates for short-term gains and 15% for long-term gains. Like the dynamic with Social Security, at this level every dollar you convert from an IRA may result in adding taxable capital gains. Although slightly less expensive, it could still result in almost double the effective rate for the Roth conversion.

The “Senior Enhanced Deduction” of $12,000 Starts The Phase-Out at $150,000: 

The OBBB adds the “Enhanced Senior Deduction” tax deduction of $6,000 for individuals 65 and older for tax years 2025-2028 but it phases out when modified adjusted gross income exceeds $150,000 for a couple. At this level of income, a couple will be firmly in the 22% bracket, will have to pay taxes on 85% of their Social Security benefits, and will pay 15% on their long-term capital gains. Roth conversions at this level are harder to justify due to the effective rate but almost completely impractical when you cross $150,000. At this level, you lose 6% of every deductible dollar for every dollar of conversion. The impact is not quite double but as you approach the full phaseout at $250,000, the effective rates of the conversion go from 22% to above 25%.

Roth conversions remain a valuable planning tool, but the new OBBB thresholds create considerations that may affect your retirement income and long-term tax strategy. As part of our True Planning Cycle, we review these and other changes that could influence your financial plan and help you make informed decisions throughout the year. We also encourage you to coordinate with your tax professional to help you capture available benefits while avoiding costly surprises. If you would like to explore how these rules fit into your broader goals, please contact us for personalized guidance. We’re happy to help.

“One Big Beautiful Bill Act” 2025 Key Provisions

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On July 4, 2025, President Trump signed the One Big Beautiful Bill (OBBB) into law. There were changes from the original bill that was presented by the Senate Finance Committee on June 16th, but the essence of the bill, continuing the tax benefits of the 2017 Tax Cuts and Jobs Act (TCJA), remains the same. The Tax Foundation summarizes the provisions of the OBBB1 and here are some that could directly impact you and your tax planning:

OBBB Makes Some TCJA Changes Permanent: 

  • Bracket changes for the 10, 12, and 22 percent brackets
  • The higher standard deduction ($31,500 for joint filers, $23,625 for head of household, and $15,750 for all other files in 2025)
  • The elimination of the personal exemption 
  • The child tax credit ($2,200 in 2026)
  • $750,000 limit for home mortgage interest deduction
  • Limitations on other itemized deductions, property casualty losses, the termination of the miscellaneous itemized deductions (except educator expenses), Pease limitation on itemized deductions and certain moving expenses
  • The increase in the AMT exemption ($500k for single and $1MM for joint returns)
  • Increases the estate and lifetime gift exemption to $15 million for single and $30 million for joint filers beginning in 2026.
  • For businesses, restores the 100% bonus depreciation for short-lived investments.

OBBB Makes Some New Tax Law Changes: 

  • Limits the value of itemized deductions to 35 cents on the dollar for taxpayers in the top bracket 
  • Creates a new 0.5% floor on charitable contributions
  • Creates a permanent $1,000/$2,000 (single/joint) above-the-line deduction for charitable contributions
  • Repeals green energy tax credits that include electric vehicle and energy efficiency credits after 2025 or within a year of the law’s enactment

OBBB Makes Some Temporary Tax Law Changes: 

  • Adds a senior deduction of $6,000 for each qualifying individual for 2025-2028 but it phases out when modified adjusted gross income exceeds $75,000
  • Increases the cap for state and local tax deductions (SALT) to $40,000 for 2025-2029, increasing by 1% each year through 2029, subject to phaseout for incomes above $500,000 
  • Makes up to $25,000 of tip income and $12,500 ($25,000 for joint filers) of the premium for overtime compensation deductible for tax years 2025-2028, phasing out for incomes of $150,000 for individuals and $300,000 for joint filers
  • Makes up to $10,000 of loan interest on new cars assembled in the U.S. deductible for 2025-2028, phasing out at $100k for single and $200k for joint filers.

This landmark legislation creates planning opportunities and considerations, which could affect your personal and business finances for years to come. As part of our ongoing True Planning Cycle, we actively monitor these and other changes that could impact your finances to help inform your decisions and adjust as necessary. We encourage you to also discuss the changes with your tax professional to help ensure you’re capturing available benefits while avoiding costly mistakes. If you’d like to learn more about aligning these changes with your long-term strategy, please contact us for personalized guidance; we’re happy to help.

Celebrity Estate Planning Lessons

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The estate planning process is more than meeting with an attorney and receiving several pages of paper in exchange for hundreds, if not thousands, of dollars. A last will and testament, power of attorney, and advance healthcare directive are often the building blocks of a fundamental estate plan. The use of trusts may provide additional benefits, such as privacy from public review and avoidance of the probate process. However, each person has their own assets, supportive or complex personal and family relationships, and view on legacy planning, which will likely require transparent personal and professional discussions to result in tailored plans.

Estate planning mistakes can be costly in terms of time (i.e., delays in the distribution of assets to heirs) and money (i.e., higher legal fees incurred, assets subject to unnecessary taxes, etc.). The more time and money it takes to move through the probate process (i.e., validating the will before the probate judge and following its dispositive provisions), the longer the heirs have to wait to begin enjoying the assets intended for them. Similarly, not taking the time to discover assets that provide for their transfer using beneficiary designations, such as retirement plans and life insurance death proceeds, can unnecessarily force such assets into the probate process, increasing the fees and time required to receive them. 

No Will for Prince’s $156+ Million Estate

It is reported that Prince did not have an estate plan to help direct the distribution of his assets valued at over $150 million to heirs. Having to fall back on state intestacy laws, a Minnesota judge was tasked with distributing the estate to Prince’s six heirs (one sister and five half-siblings). Furthermore, a six-year legal battle ensued among the interested parties as to their share of various assets, increasing the time and costs required to pass the assets to the heirs.

FloJo’s No-Show Will

Florence Griffith-Joyner, the Olympic sprinter known as FloJo, is believed to have had a will but her family couldn’t locate the document at the time of her passing in 1998. This proved to be a costly error due to the legal battle that arose between FloJo’s husband and her mother as to the use of a condo.

Estate planning requires thoughtful preparation and personalized strategies to protect your legacy and ensure your wishes are honored. With potential delays, excessive legal fees, and other complications all possibilities, a comprehensive understanding and regular reviews of your estate plan are essential. Brown Financial Advisory is committed to providing a biennial estate planning review during the True Planning Cycle (TPC). Contact us to learn how our continuous, repeatable process guides you toward complete financial solutions.

Sources:
1. Source: Six Estate Planning Mistakes Prince and Other Celebrities Made, Kaitlin Pitsker, Kiplinger, updated 9/20/24.  See https://www.kiplinger.com/slideshow/retirement/t021-s003-estate-planning-mistakes-celebrities-made/index.html

5 Advanced Tax-Saving Strategies

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Annual tax planning is crucial for maximizing your wealth and ensuring your financial goals are met. Here are five advanced tax-saving strategies specifically tailored for you:

Donor-Advised Funds (DAFs)

Donor-advised funds offer a strategic way to manage charitable giving while maximizing tax benefits. By contributing to a DAF, you can immediately receive a tax deduction for the full amount of your donation even if distributions to charities are made over time. This allows you to bunch charitable contributions into specific years and easily give appreciated assets instead of cash.

Qualified Charitable Distributions (QCDs)

For retirees aged 70½ or older who have traditional IRAs, qualified charitable distributions (QCDs) can provide significant tax savings. QCDs allow you to transfer up to $100,000 annually from your IRA to qualified charities. This distribution counts toward your required minimum distribution (RMD) but is excluded from your taxable income, effectively reducing your adjusted gross income (AGI).

Gifting Appreciated Assets to Children

If you have appreciated assets, such as stocks or real estate, gifting them to your children or other beneficiaries can be a tax-efficient strategy. By making gifts of appreciated assets instead of cash, you may lower your taxes this year and in future years and will avoid probate at your death since the assets have been transferred out of your estate. Be mindful of gift tax implications and consult with a tax advisor or estate planning attorney for guidance.

Managing IRMAA Thresholds

Income-related monthly adjustment amounts (IRMAAs) can significantly increase Medicare premiums for retirees with higher incomes. By strategically managing your income, such as through Roth IRA conversions or minimizing taxable withdrawals from retirement accounts, you can potentially stay below IRMAA thresholds and avoid higher Medicare Part B and Part D premiums.

Charitable Bunching

Charitable bunching involves consolidating several years of charitable contributions into a single tax year to exceed the standard deduction threshold. If your charitable contributions are enough to allow you to reach but not exceed the standard deduction, this strategy allows you to itemize deductions in specific years, maximizing the tax benefits of your charitable giving and leveraging the higher standard deduction. DAFs are useful for bunching charitable contributions. 

These strategies are complex and require careful planning to ensure they align with your overall financial goals. Brown Financial Advisory is committed to providing an annual tax review that includes these strategies and more and we encourage you to discuss them with your tax advisor. By incorporating these advanced tax-saving strategies into your financial plan, you can preserve more of your wealth, have greater financial security, and achieve more peace of mind. Discover our True Planning Cycle, designed to address every area of your financial life, from taxes and estate planning to retirement and beyond.

Sources:
1.  Source: https://www.kiplinger.com/taxes/what-to-do-before-tax-cuts-and-jobs-act-tcja-provisions-sunset, https://www.taxpolicycenter.org/briefing-book/how-did-tcja-change-standard-deduction-and-itemized-deductions#:~:text=The%20TCJA%20eliminated%20or%20restricted,because%20of%20the%20tax%20overhaul.

Hack-Proof Your Life Now!

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As part of the Brown Financial Risk Management Review, we discuss the importance of protecting your identity and accounts from digital criminals. The Bureau of Justice Statistics reports that 23.9 million Americans were victims of identity theft in 20211 so it is critically important to protect yourself and avoid being an easy target. In their book, Hack-Proof Your Life Now!, Sean Bailey and Devin Kropp share strategies for ensuring you and your accounts are safe.2 Here are five basic strategies to help you improve your financial security:

#1 Use a unique email address for your financial accounts. Most people use one or two email addresses for all their communications. The longer those addresses are used, the more likely they are to be connected to other parts of your online life. As the book says, “Once a cybercrook seizes any email account linked to other logins, such as online banking, he just needs to run a “reset password” request to start causing trouble.” You should create a new email address and use it exclusively for financial accounts. Set it up with the strongest possible security settings and be sure to include 2-factor verification.

#2 Add 2-step verification to your accounts. To protect yourself, you should go into the online settings of all your bank, credit, and email accounts and set up 2-factor authentication. This additional verification method comes in many forms from a text message to your phone to an app that contains a security key. Any additional verification will help protect your accounts from attacks.

#3 Use a password manager. A password manager will store your passwords securely (so you won’t have to remember them all), allow you to generate difficult, random passwords to use on your accounts, and fill your passwords for you when you need to use them. Some of the most popular password managers are Dashlane, Last Pass, 1Password, and iCloud Keychain. Many of these password managers cost less than $40 per year. For convenience and added security, this may be the best money you will ever spend.

#4 Use public Wi-Fi cautiously and NEVER for email or conducting financial transactions. Wi-Fi connections in coffee shops, airports, and hotel rooms, even when password protected, are notoriously common places for cybercriminals to intercept and steal your information. Use your phone’s hotspot or if you must use a public Wi-Fi, consider a Virtual Private Network (VPN) to encrypt your data while you are online.

#5 Avoid clicking links in emails. Still one of the most common and successful attacks occurs when an email that is created to look legitimate contains a link to malware or directs you to a dangerous website. Even the best security measures are useless when the door is opened willingly. Always go directly to the website if you need to log in and try to avoid clicking links within the emails. 

With the prevalence of identity theft and cyber crimes, proactive measures are essential to mitigate risks. Although not an exhaustive list, these few simple but consistent strategies to protect yourself will help ensure you are not the “low-hanging fruit” and your financial information is secure. 

Additionally, our True Life Planning Cycle helps our clients maintain a comprehensive view of their finances. By addressing various facets of your financial life, the process may help identify potential issues while providing complete solutions to support keeping your money and goals on track. Contact us to learn more about our approach and how we can help you achieve financial peace of mind.

Sources:
1. https://bjs.ojp.gov/library/publications/victims-identity-theft-2021#:~:text=Data%20include%20types%20of%20identity,during%20the%20prior%2012%20months.  

2. Bailey, Sean M., and Devin Kropp. Hack-Proof Your Life Now!: The New Cybersecurity Rules: Protect Your Email, Computers, and Bank Accounts from Hacks, Malware, and Identity Theft. Horsesmouth, 2019.

Scams: What You Don’t Know Could Hurt You

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Financial Planning Concepts

Criminal strategies to steal your wealth are becoming more sophisticated, more numerous, and more successful in achieving their nefarious objectives.1 Are you prepared to defend the wealth and good financial reputation you spent a lifetime creating?

If you use a cellphone, computer, or other internet-connected device, the chances are high that you have been a target of some malicious scheme. Even if you didn’t click on a suspicious link in an email or respond to a seemingly legitimate text from your bank or credit card company, your adoption of interconnected devices and accounts is fertile ground for bad actors to attempt to steal your wealth or exploit your financial reputation to receive ill-gotten monies. 

How many scams can you name? Is it true if you can’t name a scam you are susceptible to becoming its next target and victim? The implication of this last question is unsettling; however, the U.S. Federal Trade Commission lists over two dozen categories of scams.2 To defend against them, review the FTC’s site for articles and best practices to help protect your financial reputation.

A recent FTC consumer alert is entitled “Scammers Hide Harmful Links in QR Codes to Steal Your Information.”3 QR codes can be found in restaurants (to access the menu), public parking decks (to pay), entertainment venues (to gain entrance), etc. Scammers have capitalized on this technology to further their malicious schemes. In addition to the use of strong passwords and multifactor authentication, the consumer alert recommends you inspect the URL offered up by the QR code before opening it (i.e., looking for misspelled words or misplaced letters, etc.).

Another FTC consumer alert provides a timeless best practice in defending against financial scams.4 Entitled “Give Yourself Some Credit (Reports),” FTC attorney Seena Gressin recommends you regularly check your credit reports. Once you receive your credit report, review all the accounts listed to ensure no new accounts have been opened that you don’t know anything about. Furthermore, review the list of credit applications to ensure you recognize all of them. If you discover wrong information or suspicious activities within your credit report, take action to correct it. Contact the credit bureau to correct the wrong information in your credit report.  However, if suspicious activity is found in your credit report, contact both the credit bureau and IdentityTheft.gov to report it and begin a recovery plan.

You can find more information on these topics in the links below.

Finally, if you are interested in learning more ways to defend against financial scams and identity theft, please read “Hack-Proof Your Life Now!” written by Sean M. Bailey and Devin Kropp. Some of the topics this book addresses include why you need a secret email address, how to beat the password paradox, spot ransomware with the 10-second email rule, etc. As Sean and Devin state on the back cover of this online security book, “Everyone is vulnerable. But you don’t have to be defenseless.”

Sources:
1. https://www.mcafee.com/learn/a-guide-to-identity-theft-statistics/
2. https://consumer.ftc.gov/scams, select “Filter by type of scam.”)
3. https://consumer.ftc.gov/consumer-alerts/2023/12/scammers-hide-harmful-links-qr-codes-steal-your-information)
4. https://consumer.ftc.gov/consumer-alerts/2022/04/give-yourself-some-credit-reports