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At LaBarge Financial, we value supporting our community through monetary donations and volunteer hours. On November 20, we’re hosting an event with the University of Maryland Baltimore Washington Medical Center (BWMC) Foundation to educate other Marylanders on how to support the hospital, which will allow it to continue investing in its programs and innovating new ways to treat patients. It’s a cause that I’m passionate about.
The fall season is a great time to consider supporting charities before the end of the year. The holiday season provides opportunities to benefit your local community, and charity can also be a tool to benefit others and your finances. As the 2025 taxable year nears its end, it’s time to make our final moves before moving forward into 2026, but it’s important to take a holistic approach to make the best financial decisions for you.
Now is the time to make moves to impact the 2025 tax year before 2026 kicks in. Roth conversions are a tool to move money from tax-deferred accounts into Roth accounts, but they require a strategy.
Roth conversions add to your taxable income and allow you to pay taxes on your retirement funds, which is crucial as you balance taxes as 2025 winds down, but they also can impact your overall financial picture and move you up into a higher tax bracket.
It’s important to balance the amount of money you are converting each year to avoid paying a higher tax rate than anticipated. You should also have a long-term strategy for this approach.
Roth conversions can help manage the required minimum distributions (RMDs) that are needed later in retirement. RMDs are the minimum amount you are required to withdraw from tax-deferred retirement accounts after you turn 73. The exact amount is different for everyone based on factors like your age and balance, but RMDs must be made before any Roth conversions.
If you haven’t made your RMDs yet, now is a great time to consider using them to donate to a charity that you’re passionate about. Contributions are tax-deductible and can offset your taxable income while also supporting nonprofit organizations.
These decisions can not only impact taxes but also your Medicare costs. Medicare costs a base of $185 per month, but that could rise due to an income-related monthly adjustment amount (IRMAA) for Medicare Part B and Part D premiums, which is the plan a majority of Americans are enrolled in.
The higher your income is, the more you may be paying in Medicare premiums. In 2025, it applies to Medicare beneficiaries with an adjusted gross income above $106,000 for individuals and $212,000 for couples, and can cost an additional $70 to $450 per month on Part B premiums in addition to the base of $185, and up to $85.50 on Part D premiums.
This is where the overall financial picture can come into play. If you convert too much money through Roth conversions or don’t manage your RMDs properly, that could significantly impact your IRMAA surcharge.
These are all important decisions for retirees, and you need the right team of professionals to help navigate them. You may not think about your financial advisor when making Medicare decisions, but they can help navigate your holistic retirement plan to understand how each decision impacts the rest of your financial picture.
If you’re considering supporting a local charity as part of your end-of-year financial decisions, I encourage you to support the BWMC Foundation and attend our two seminars at noon and 5:00pm on November 20. You can email events@labargefinancial.com for more information.
Jason LaBarge, financial advisor and president of LaBarge Financial
7 Riggs Avenue, Severna Park, MD 21146
443-647-4321
www.labargefinancial.com
Securities offered only by duly registered individuals through Madison Avenue Securities LLC (MAS), member FINRA/SIPC. Investment advisory products and services made available through AE Wealth Management LLC (AEWM), a registered investment advisor. MAS and LaBarge Financial are not affiliated entities.
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