Gilbert Wealth Articles

Retirement Risk: Longevity (How Long You Live)

When planning for retirement, individuals often focus on investment returns, healthcare costs, and market volatility. However, one of the most significant yet frequently underestimated risks is longevity risk—the possibility of outliving one's financial resources. This risk has profound implications for retirement planning, influencing everything from savings strategies to income distribution plans. What is Longevity Risk Longevity risk arises from the uncertainty surrounding life expectancy. While advances in healthcare, improved living conditions, and healthier lifestyles have generally extended average lifespans, no one can predict exactly how long they will live. This uncertainty poses a challenge: retirement savings must be flexible enough…
Read More

Social Security Maximum Family Benefit (MFB): What You Should Know

The Maximum Family Benefit (MFB) is a critical but often overlooked aspect of Social Security. It places a cap on the total amount a family can receive based on one individual’s earnings record. This article explains how the MFB is calculated, how it applies to different Social Security benefits, which benefits count toward the limit, and what happens if the MFB is exceeded. What is the Social Security Maximum Family Benefit? The Maximum Family Benefit (MFB) is the upper limit on the total Social Security benefits that can be paid to a worker’s family based on that worker’s earnings record.…
Read More

Social Security Child-In-Care Benefits: Key Considerations

While most people think about Social Security as a retirement income source, it can play several other important benefits throughout a lifetime. One of these benefits, the Child-In-Care Benefit, applies to spouses in situations when children are under care. This guide explains who qualifies, how benefits are calculated, what happens if the worker claims early, and how the earnings test applies.In this article, you'll see references to a "Worker" and a "Spouse". The "Worker" benefit is the person whose benefit is being claimed on. The "Spouse" is the one receiving the benefit.  Who Qualifies for Child-In-Care Benefits There are two main requirements…
Read More

Stock Lending: Pros and Cons

Stock lending, also known as securities lending, is a feature offered by some brokerage platforms that allows investors to lend their shares to other market participants, primarily short sellers. In return, investors receive interest payments, offering a way to generate passive income without having to sell their holdings. Think of it like renting out your stock to someone else for a period of time.However, while this might seem like an effortless way to earn extra income, it comes with its own set of complexities and risks that investors should carefully consider. How Stock Lending Works When an investor participates in…
Read More

Guide to the IRMAA Exemption Form (SS-44)

Medicare beneficiaries with higher incomes are subject to an additional charge on their Part B and Part D premiums, known as the Income-Related Monthly Adjustment Amount (IRMAA). This surcharge is based on modified adjusted gross income (MAGI) from past tax returns. Read more about IRMAA here: Understanding IRMAA: What It Is and Its Impact on Medicare Premiums – Gilbert WealthHowever, if you've experienced a significant life-changing event, such as retirement or a reduction in income, you may qualify for a reduction in your IRMAA. Form SSA-44 allows you to report such events and request an adjustment to lower your Medicare…
Read More

Gifting and the Annual Exclusion

Lifetime gifts are a wonderful way to bless your loved ones and make a meaningful impact on their lives. Whether it's helping a child with educational expenses, supporting a family member in need, or simply sharing your wealth to enhance their financial security, gifting allows you to express your generosity while witnessing the benefits of your support firsthand. Beyond the emotional rewards, thoughtful lifetime gifting can also provide financial advantages by reducing the size of your taxable estate and taking advantage of tax-free gifting opportunities. With proper planning and an understanding of the applicable tax rules, you can ensure your gifts provide…
Read More

Smart Ways to Manage Income Increases: Avoiding Lifestyle Creep While Building Wealth

After years of hard work, dedication, and long hours, you finally receive the pay raise or promotion you’ve been striving for. It’s a well-deserved reward that reflects your effort and accomplishments. With more income at your disposal, it’s tempting to celebrate by upgrading parts of your life—nicer meals out, a bigger home, or perhaps a long-overdue vacation.There's nothing wrong with enjoying the fruits of your labor, many people fall into the subtle trap of lifestyle creep: as income grows, so do expenses. What starts as small upgrades can quickly snowball into larger financial commitments that eat away at your ability…
Read More

Understanding Step-Up in Basis at Death: Implications and Exclusions

The concept of a “step-up in basis” at death is one of the most significant—and often misunderstood—features of the U.S. tax system. For families with appreciated assets, it can dramatically reduce or even eliminate capital gains taxes for heirs. However, its application is not universal, and several important exclusions and nuances can materially impact planning decisions.This article provides a detailed examination of how the step-up in basis works, when it applies, where it does not, and how it should influence financial and estate planning strategies. What is Step-Up Basis At Death The step-up in basis refers to the adjustment of…
Read More

Annualized Return versus Cumulative Return Explained

When evaluating the performance of an investment, two common metrics often come into play: annualized return and cumulative return. Understanding the differences between these metrics is crucial for accurately interpreting your investment's growth over time and comparing it to other opportunities.What Is Cumulative Return?Cumulative return measures the total percentage change in the value of an investment over a specific period. It represents the overall growth of the investment without considering how long it took to achieve that growth.Formula:Cumulative Return = (Ending Value−Beginning Value) / Beginning ValueExample:If you invest $10,000 and its value grows to $15,000 after five years, the cumulative return is:$15,000−$10,000 =…
Read More