Retirement Spending Psychology & 2026 Tax Changes with Wes Moss

Overcoming Retirement Spending Hesitation

• 💡 The transition from a saver to a spender mindset in retirement is a significant psychological hurdle for many.
• 🎯 Retirees often struggle to spend from large lump sums, even when the math supports it, due to a lifetime of saving and budgeting.
• 🔑 This "millionaire's paradox" stems from the disconnect between accumulated wealth and a perceived middle-class monthly income.
• 🧠 A written financial plan with conservative market assumptions, inflation adjustments, and income stream projections can provide psychological comfort.
• 🚀 Understanding withdrawal strategies, like the 4% rule (or its current 4-5% range), acts as a "permission slip" to spend.
• ✅ Building a diversified portfolio and understanding its resilience can offer emotional insulation during this transition.
• ✨ Remembering that retirement wealth was earned through hard work, not luck, can help alleviate guilt and allow for deserved spending.

Advisor Value and Client Trust

• 🎯 Financial advisors help manage complexity, build sustainable long-term plans, and guide clients toward financial goals.
• 🔑 They assist in managing taxes, staying invested through volatility, and avoiding emotional financial decisions.
• 🧩 Advisors also help with bigger-picture planning, estate considerations, and the crucial transition from accumulation to distribution.
• 🤝 A key indicator of a trustworthy advisor is their fiduciary status, which aligns their interests with the client's.
• 💬 Feeling understood by your advisor and having conversations that go beyond just portfolio performance are crucial signs of a good relationship.

Key Tax Changes for 2026 & Year-End Actions

• 📈 The SALT deduction has increased from $10,000 to $40,000, offering significant tax benefits for high earners, though it phases out above $500k income.
• 💰 Charitable deduction rules are changing in 2026 with a new AGI floor and a cap on the tax benefit, making giving slightly less valuable than in 2025.
• 🏥 Health Savings Accounts (HSAs) will become eligible for individuals with ACA Bronze or Catastrophic plans, and those with subscription primary care, expanding access to these tax-advantaged accounts.
• ⚡ The $3,200 clean energy credit for energy-efficient upgrades expires at the end of the current year, requiring installation before December 31st.
• 🏢 100% bonus depreciation returns for business owners and real estate investors, allowing full deduction of assets in the year of purchase.
• 🎓 529 plans will offer more flexibility in 2026, allowing up to $20,000 for pre-college expenses like tutoring and test fees, up from $10,000.

Financial Planning for Grandchildren & Retirement Accounts

• 🎁 For gifting to a grandchild, a custodial Roth IRA is ideal if the child has earned income, as it grows tax-free.
• 🏦 A Uniform Transfer to Minor Act (UTMA) account is a strong alternative, allowing the custodian (grandparent) to control the funds and set an age for transfer (18 or 21).
• 📈 Consolidating retirement accounts into a single custodian (like Fidelity or Vanguard) simplifies management, provides better oversight, and can reduce costs.
• ⚠️ Be cautious with older TIAA plans, as some may have restrictions on annual withdrawal amounts for rollovers.