The 210 Financial Blog

Tax season is upon us, bringing the stress of remembering everything we need, following all the rules, and even brushing our teeth every day. Life is already busy and challenging without the added pressure of tax season. To help, we've put together a comprehensive checklist for you to use this tax season.

Key Points – Tax Season Checklist for Pre-Retirees

1. 1. Personal Information:
2. 2. Income Sources (Forms W-2 & 1099)
3. 3. Deductions and Credits
4. 4. Final Checklist Steps
5. Conclusion:

1. Personal Information:

Collect all your personal information in advance to make handling your tax returns easier. Follow this list of some helpful documents you will need throughout the process.

• Social Security Numbers/ITINs: For yourself, spouse, and all dependents
• Valid Photo ID: Driver’s license or state ID
• Bank Account Info: Routing and account numbers for direct deposit of refunds or payments
• Last Year’s Return: Helpful as a reference

Learn More: 5 Podcasts & Articles to Help You Get Ready for Tax Season

2. Income Sources (Forms W-2 & 1099)

We’ve compiled a list of forms that detail your income sources and highlight what to focus on as tax season approaches. Income sources are the primary basis for taxation, so be prepared with the necessary documentation.

• W-2: From all employers
• 1099-INT/DIV: Interest and dividend income
• 1099-NEC/K/MISC: Self-employment, or freelance income
• 1099-R/SSA-1099: Retirement plan distributions or Social Security benefits
• 1099-B/1099-DA: Stock sales, digital assets/crypto, or NFTs
• Schedule K-1: Income from partnerships, S-corps, or trusts

As you approach or enter retirement, it's important to understand that your tax situation may change. Unlike when you were working, you won't receive a W-2 form showing your earnings because you won't have a regular paycheck. However, you will have other sources of income to consider. This is where tax planning and strategies become essential to integrate taxes into your overall financial plan.

Learn More: 6 Tax Strategies to Consider this Tax Season

3. Deductions and Credits

Everyone desires lower taxes or a break, and that's where deductions and credits come into play. It's important to keep your finances well-documented; maintaining your financial records throughout the year, whether digitally or physically, can help you during tax season.

• 1098 Mortgage Interest: Mortgage interest statement and property tax records
• Charitable Donations: Cash and non-cash donation records
• Medical Expenses: Records of unreimbursed medical/dental expenses
• Childcare Expenses: Provider tax ID or SSN, and amount paid
• Education Expenses: Form 1098-T for tuition, 1098-E for student loan interest
• Energy Credits: Receipts for qualified energy-efficient home improvements (solar, windows)
• Retirement Contributions: IRA and 401(k) contribution records (Don’t forget to contribute to your retirement accounts throughout the year)

Tax policies can change with different administrations and other influencing factors, so it’s important to stay informed. This knowledge will help you make the best decisions for yourself and your family.  

Learn More: Planning for Taxes in Your Retirement Plan

4. Final Checklist Steps

Finally, here are some parting tips before we set you free to complete your 2025 taxes!

• File Early: Wait until all documents are received, but file as early as possible to prevent identity theft
• Stay Up to Date on Policy Changes: Tax laws change, know how that affects you
• Check for Life Changes: Marriage, divorce, buying a home, or retirement
• Review for Accuracy: Ensure all names and numbers match IRS records
• Keep Records: Retain copies of filed returns and supporting documents for at least 3 years
• File Electronically: The IRS processes electronic returns faster than paper ones so you get your refund back faster
• Get Help if Needed: Talk with a tax and financial professional if you need help or have questions

Don't be afraid to reach out, ask questions, do your research, and plan for what’s best for you. Tax season can be stressful, and as much as we may not want to, it’s necessary. Embrace the concept of tax planning throughout the year! Tax planning can help you strategize your taxes so that you can save money on your tax bill not just during tax season, but for a lifetime.

Learn More: 5 Last Minute Tax-Tips

Conclusion:

Use this checklist to prepare for this year’s taxes. Don’t let April 15th catch you off guard! Reach out to a professional if you need assistance. Happy Tax Filing!

Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and 210 Wealth Management, Inc., d/b/a 210 Financial makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that 210 Financial may link to are not reviewed in their entirety for accuracy and 210 Financial assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from 210 Financial. For more information about 210 Wealth Management, Inc., d/b/a 210 Financial, including our Form ADV brochures, please visit https://adviserinfo.sec.gov or contact us at (309)263-1333.

Two key elements to consider are togetherness and the unthinkable. It's important to plan for your retirement or to be prepared for the uncertain future that can arrive unexpectedly when we are unprepared. Managing finances during a time when money may seem trivial—yet remains essential in life—can feel overwhelming. Therefore, create a plan with love and protection for your loved ones in mind, especially for those times when you may not be there to support them. 

Key Points – When a Spouse Dies: A Checklist to Protect Your Finances 

• A checklist of basic necessities and things that need to be done

• Updating your financial and retirement plan

• Understanding life insurance and payouts

• Understanding legacy planning

A Checklist: 

We’ve made a basic list of what you need to start doing and documents you need to gather as soon as you can.  

• Immediately notify close family and friends’

• Arrange funeral

• Gather vital documents (wills, death certificates, insurance, titles)  

• Contact authorities (Social Security Administration at +1-800-772-1213, employers, and former employers)  

• Update finances (banks, credit cards, assets)  

• Talk with professionals from financial advisor and your attorney, to help you understand the legal and financial considerations that happen after the death of a loved one.  

Financial and Retirement Planning:  

Losing a spouse is one of the most challenging experiences one can face, but remember, you are not alone and you can navigate through this. It’s important to shift your mindset regarding retirement planning, particularly when adjusting to a single income. This change can significantly impact your retirement income and necessitate an update to your financial plan. Take time to understand what sources of income you will still have available and how other factors might change. 

Financial plans are designed to be flexible and should be adjusted to serve you throughout your life. It’s advisable to consult with your financial advisor to help ensure you stay on track for retirement and make necessary adjustments. 

Life is unpredictable, so having a solid plan can help minimize stress during difficult times and empower you to move forward confidently. 

Learn More: The Heart of Any Financial Plan is Income

Understanding Life Insurance Payouts:  

Planning for your family and loved ones should occur before any unexpected events, not afterward. When choosing your life insurance, focus on the needs of those who depend on you after you are gone. Life insurance was specifically designed to support widows and families when a spouse passes away, providing supplemental income and assistance. Financial burdens are the last thing you want your family to worry about when you're no longer there; life insurance can help alleviate that stress. If you lose a spouse, it's important to check what life insurance policies they had and understand how those may help cover some of the financial responsibilities. 

A good place to start is to investigate both whole life insurance and term life insurance and which one makes more sense for you. They both offer a death benefit to the beneficiaries. The main difference is that whole life insurance offers the death benefit for the entire lifetime and term life insurance is only within a certain time frame.   

• Burial insurance is a whole-life policy to cover your future burial and other end-of-life expenses.  

• Survivorship life insurance a type of joint policy that covers two people instead of one, offering the same characteristics and benefits as individual life insurance.  

• Universal life insurance is a type of whole life insurance that offers lifetime coverage and builds cash value. It allows you to adjust premiums cheaper than traditional whole-life insurance. However, if your investments underperform, your cash value may decrease, and your premiums could increase.

The amount you receive from a life insurance policy depends on what your spouse had in place. Generally, life insurance payouts are not subject to taxes, but it's important to do your research to confirm. When considering how to access the death benefit, it's essential to approach it strategically, as you will have three options to choose from. 

• Annuity: An annuity is a financial instrument designed to provide a steady stream of income payments. You can initiate the payments at any time, including a future date of your choosing. One of the main advantages of an annuity is that the income it provides continues indefinitely.

• Lump Sum: The lump sum payment is the most popular option and typically the default choice. With this option, you receive a large amount of cash immediately. This can be beneficial if you want to pay off your mortgage, invest the money in a specific way, buy a new car, or pursue other financial goals. It's important to consult with your financial advisor before opting for the lump sum, to ensure that the additional income is used strategically.

• Installment Payments: Rather than receiving a lump sum payment all at once, you can opt to receive your funds in a series of payments, allowing you to get a monthly check. If you need a larger amount, you can increase your payments. Additionally, if you decide to pause your payments for a period, you can let the principal amount grow until you need the income again.

Nothing is ever right or wrong; it’s just what works best for you. Talk with professionals and make time and space to help you make the decision that’s best for you and your family.   

Learn More: Seasons Change, and so Do Your Needs: Time to Review Your Life Insurance

Understanding Legacy Planning:  

Make sure to put your legacy in writing—don't leave it to chance or guesswork. Invest the time and effort necessary to relieve your family of stress in the future. After a spouse has passed away, review your legacy plans, wills, trusts, and other important documents to determine what needs to be addressed moving forward. Keep these documents up to date, or create new ones if necessary, to ensure your loved ones can proceed in alignment with your wishes.    

Learn More: Leave a Legacy That Matters  

Conclusion: 

Loss is never easy, and we are here to help you navigate your finances as well as provide support as friends during this challenging time. Please go through the checklist to safeguard your finances and family. It's important to reach out to both your financial advisor and attorney to ensure these steps are taken and that you are well-prepared.  

Schedule Complimentary 15-Minute Call

Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and 210 Wealth Management, Inc., d/b/a 210 Financial makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that 210 Financial may link to are not reviewed in their entirety for accuracy and 210 Financial assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from 210 Financial. For more information about 210 Wealth Management, Inc., d/b/a 210 Financial, including our Form ADV brochures, please visit https://adviserinfo.sec.gov or contact us at (309)263-1333. 

Planning for a lifetime together. Retirement is a time to reconnect and enjoy each other's company. It's essential to ensure that your finances will support you throughout your retirement. With the right retirement plans and strategies, you can help secure a fulfilling future. Let’s work together to plan your dream retirement and make the most of your lives together. 

Key Points – Planning for Forever: Retirement Strategies for Married Couples 

1. Retirement Planning:
2. Income Planning:  
3. Investment Planning:  
4. Legacy Planning:  
5. Healthcare Planning:  
6. Tax Planning:  
7. Conclusion:  

Retirement Planning: 

As a couple, it’s essential to approach retirement planning together. Retirement is a significant milestone we work towards throughout our lives, and it’s something we eagerly anticipate. It encompasses various financial aspects and new experiences. Proper planning for retirement is crucial, and it’s inspiring to explore the dreams you both share for this stage of life. Keep envisioning your future and preparing for it, and we will provide you with the necessary tools and strategies to guide you through your retirement journey. 

Learn More: Plan Your Retirement Date

Income Planning:  

Income planning is your foundation of any good retirement plan so it’s important that making your way up to it together.  

1. Budgeting: Having a budget can help you and your spouse set and keep track of your spending limits, prioritize needs and wants. A budget can help you and your spouse weather your are pinching pennies or are spending lavishly, as a tool to be fiscally responsible.  

2. Saving: Create a mindset of saving together and building emergency funds, and saving for important goals like a house or retirement. Saving for retirement in your 401(k) or IRA accounts.  

3. Investing: Investing especially when everything feels like it’s getting more and more expensive thanks to inflation going up 3% and investing helps to combat it. Investing helps you build wealth and grow your money.  

4. Debt Management: According to Debt.org 90% of Americans have some form of debt its almost engrained in our financial systems but paying them down effectively is part of life.  

A reminder that your income will change in retirement. It’s important to understand that you won’t have a paycheck, and instead, what you build and plan for will support you throughout your retirement. 

Learn More: The Heart of Any Financial Plan is Income

Investment Planning:   

Throughout your life, you work hard to invest in your retirement accounts, build your savings, and grow your portfolio. While embracing risk can be beneficial when you are young and have time to recover from setbacks, it is crucial to approach your investments with caution as you near retirement. Avoid putting everything you’ve worked for at risk by seeking high-risk investments during this critical period. Instead, focus on diversifying your portfolio and exploring lower-risk options to preserve your savings as you approach or enter retirement.

Remember the rule of 100: as you age, it’s important to adopt a more conservative approach to safeguard what you’ve built. Understanding your risk score and how to manage it for retirement is important. As you age, it’s recommended that you reduce your risk exposure.

To calculate your risk score, use the formula: 100 – your age = your risk score.  Changing your mindset in retirement on risks and investments can help you keep and use the money you have saved.  

Learn More: Financial Independence Starts with Smart Investing

Legacy Planning:  

Having a legacy plan can alleviate concerns about what will happen to your assets after your passing. It can also help your family members manage future taxes for your beneficiaries. Creating a legacy plan allows you to feel reassured that your legacy matters. At 210 Financial, we emphasize the importance of planning for every aspect of your life, so you are prepared when unexpected events occur. 

A crucial first step in starting your legacy plan is to create a comprehensive list of all your assets. This list should include bank accounts, 401(k) plans, life insurance policies, and any other financial documents you possess, along with their locations. Additionally, include contact information for relevant institutions or advisors. It’s important to document any debts you have so your beneficiaries are fully aware of the financial situation they will inherit. Be sure to review your retirement accounts to ensure they are current and add them to your list. 

Once you know what assets you have, it’s time to determine who your beneficiaries will be and decide where you want your assets to go. Take the time to discuss this and make thoughtful decisions. 

The next step is to meet with a financial professional and your attorney to establish both financial documents and legal documents, such as Wills and Trusts. Finally, keep these documents in a safe place, remember to review them, and make changes as necessary when life circumstances change. 

Learn More: Legacy Planning 101  

Healthcare Planning:  

There are healthcare plans available in retirement for you and your spouse, but you need to look into what plan is going to work best for you both. 

Medicare: Diving into all the complex terminology can be overwhelming, especially if you haven't discussed all your potential needs. It's essential to stay informed, so prioritize consulting with a Medicare professional and reading materials that help you better understand the available plans. 

1. Enrollment: Be aware of the seven-month enrollment window for signing up for Medicare. This period includes three months before your 65th birthday, the month of your birthday, and three months after. You’ll have another opportunity to enroll in the fall, but you may face a financial penalty if you miss the initial enrollment window.  

2. Apply on Time: It’s essential to apply for your Medicare benefits on time, especially since most retirees rely on it as their primary healthcare plan after leaving the workforce.  

3. Researching Plans: Medicare offers various plans, and everyone’s health needs are different. It’s important to research each option and consult with a financial professional to determine which plan is best for you.  

4. Seek Help: Don’t try to navigate Medicare planning and research on your own. Reach out to professionals who can help you understand your options and find the best care for your needs.  

5. Provider Participation: Keep an eye out for hospitals and healthcare providers that participate in your chosen Medicare plan and offer the services you require.  

6. Plan: Make sure to plan everything related to Medicare in advance to avoid any complications.

HSA: An HSA, or Health Savings Account, allows you to set aside tax-free money for medical expenses. While it is not exclusively for retirement, it can help cover costs that Medicare or insurance does not cover. 

Long-Term Care: Considering a nursing home or any long-term health care that involves significant expenses is an important topic to discuss. Although it may seem distant, delaying this conversation—especially if there is a history of health issues in your family—can be unwise. It’s essential to talk about your options and determine if there are necessary steps you should take together.  

Learn More: Planning for the Medical Costs You Don’t See Coming in Retirement

Tax Planning:  

Taxes are always going to be around and they don’t go away in retirement but they do look a little different. It’s also crucial to avoid paying more than your fair share simply because you didn’t plan for the taxes that may arise during your retirement.   

You might have heard of the term required minimum distributions or RMDs they begin when you turn 73. This means for most all your retirement accounts you’re required to make withdrawals. If you don’t the IRS fines you 50% of the amount you should’ve taken out.  

• IRAs: You must begin on April 1 of the year after you turn 73.  

• 401(k), profit-sharing, 403(b): Must begin on April 1 following the later of the calendar year in which you turn 73 or retire.  

If you are retired and are 591/2 or older, you should start now by taking out just enough money from your retirement accounts to stay in your current tax bracket while lowering the amount that will be subject to RMDs. Check out the IRS’s required minimum distribution calculator to know how much you will have to take out!  

Learn More: Retirement Plans and Required Minimum Distributions

Conclusion:  

Retirements are for your dreams together, to travel, garden, fish or just to be together with nothing holding you back. Retirement isn’t just about the money it’s about building and planning your way to freedom to do what you want to do. Be sure to schedule a complimentary meeting with our team or give us a call at 309.263.1333!  

Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and 210 Wealth Management, Inc., d/b/a 210 Financial makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that 210 Financial may link to are not reviewed in their entirety for accuracy and 210 Financial assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from 210 Financial. For more information about 210 Wealth Management, Inc., d/b/a 210 Financial, including our Form ADV brochures, please visit https://adviserinfo.sec.gov or contact us at (309)263-1333.