Don’t Listen to the Fear Mongers

“Social Security is going bankrupt” is a common but misleading headline. The trust fund is projected to be empty in 2032, and if and when that happens, benefits will be cut between 5%–25%. People who are working will still be contributing along with their employers and the income taxes paid on Social Security benefits by seniors will continue to feed retirees, but to a limited extent. Many retirees are panicking and starting Social Security benefits earlier than they might have otherwise out of fear they will get nothing. In our opinion, you do not want to fall into this trap.

This isn’t the first time Congress has revisited this issue at the eleventh hour. Politicians in Congress know that if they do not fix this, they are likely not to be reelected. We have written extensively about the issue and discussed many possible solutions. Future beneficiaries will likely be the ones most affected by the changes, so there should be time for them to adjust and make plans. The only thing we see that might affect present beneficiaries is that 100% of Social Security benefits will become taxable at some level of income, up from 85% today.

For what it is worth, many Baby Boomers back in the 70s were planning to live without Social Security in their future, but it has turned out okay…at least so far. Don’t rush to a decision that will likely cost you significant future income by panicking and claiming before you should. Please be sure to chat with us first.

Year End Tax Planning

Beginning with this issue of the Perspective$, we are going to start talking about year-end tax planning. Given the complexities of the One Big Beautiful Bill Act (OBBBA) and its phase outs, it will be more important than ever to plan ahead while there is still time. As an example, OBBBA provides that even those that do not itemize deductions can still deduct cash charitable contributions up to $1,000 for individuals and $2,000 for married filing jointly. Good news, indeed! However, for those who do itemize there is a reduction from what you have been able to deduct in the past. The reduction is equal to 0.5% of Adjusted Gross Income (AGI). Example: suppose your AGI is $500,000, then the first $2,500 ($500,000 x 0.5) of charitable contributions will be excluded. Further, for those that are in the 37% tax bracket, they will only deduct their contributions at a 35% rate rather than the full 37%. Example: If you are in the highest tax bracket and you donate $100,000 this year, you will only save taxes by $35,000, not $37,000.

Christiana Dirks, CFP®, Promoted to Associate Financial Planner

ProVise Management Group is pleased to announce the promotion of Christiana Dirks, CFP® from Paraplanner to Associate Financial Planner. During her 16 months at ProVise, Christiana has been supporting clients through exceptional service while consistently expanding her technical knowledge and embracing opportunities to grow at the firm.

Through previous internship experience and valuable client experience here at ProVise, she has achieved the rigorous requirements to earn the CFP®, CERTIFIED FINANCIAL PLANNER®, certification — an accomplishment that reflects the highest standard of financial planning rigor and acumen. A University of Florida graduate with a degree in Wealth Management, Christiana gained early industry exposure and has dedicated herself to the profession. As an Associate Financial Planner, Christiana will continue to support the advisory team and clients through thoughtful and intelligent insights, continuing to build the foundation for her future at ProVise.

Please join us in congratulating Christiana on this well-deserved promotion.

ProVise: On Florida Trend’s 2026 Best Companies to Work for in Florida

We’re delighted to announce that ProVise Management Group has once again been named one of the Best Companies to Work for in Florida for 2026 by Florida Trend. This recognition reflects a workplace culture built around connection, thoughtful collaboration, community integration, and philanthropy. Being named to this list speaks to a firm where team members feel invested in each other’s success and serve our clients through teamwork. We believe our caring workplace and environment translate directly into the experience of working with ProVise as a valued client. We’re committed to bringing focus, consistency, and genuine care to every client relationship through a workplace grounded in insights, relationships, camaraderie, and joy.

ProVise Management Group, LLC was recognized as one of Florida Trend’s Best Companies to Work For in Florida 2026 in the Best Small Companies fifteen to forty-nine employees category. Ranked companies are chosen based on employer policies and practices as well as employee survey responses. Employers and employees voluntarily participate in the survey, and no compensation is paid to be ranked. This ranking is not indicative of current or future investment performance and should not be construed as an endorsement.​

The United States Watches Deficit Reach $40 Trillion

Governments around the world have been spending more than the revenue they collect for several years, and the United States is no exception. However, elevated debt levels do not signal an inevitable economic collapse. The U.S. has navigated similar territory before. The debt-to-GDP ratio reached 114% in 1945 following World War II, which was subsequently followed by a decade of robust economic expansion.

As the world’s largest economy, the U.S. maintains a strong track record of economic resilience. The historical precedent demonstrates that the most effective way to manage national debt is through economic growth, supported by strong infrastructure and efficient capital markets.

While several developed nations carry debt-to-GDP ratios comparable to the U.S., this environment does not point toward a systemic debt crisis or global sovereign default. Over the medium term, governments will need to moderate spending, but in the near term, investors will likely demand higher yields to offset perceived risk. Ultimately, reaching the $40 trillion milestone functions much like the progression past $39 trillion. As the broader economy continues to expand, the focus shifts toward long-term budget stabilization.

Put Your Home Equity to Work

For many people, the word loan carries a negative connotation of an endless cycle of debt, high interest rates, and burdensome monthly payments. However, perceptions have begun shifting with the growing popularity of cash-out refinancing. This strategy allows homeowners to access a portion of their home’s equity by replacing their existing mortgage with a new mortgage at a higher loan balance. 

How It Works

Lenders generally allow borrowers to access up to 80% of the home’s value. To estimate the amount available, multiply the home’s current value by 80% and then subtract the remaining mortgage balance. For example, if Johnny Appleseed’s home is worth $1,000,000 and he has a mortgage balance of $500,000, 80% of the home’s value would be $800,000. After subtracting the outstanding mortgage balance, Johnny could potentially access up to $300,000 through a cash-out refinance. Once the refinance is complete, the new loan pays off the existing mortgage and replaces it with a larger mortgage balance that includes the amount of cash withdrawn, subject to current interest rates and loan terms.

When Does It Make Sense?

Tapping into a home’s equity through a cash-out refinance can be an effective strategy when the funds are used for high-value purposes. Common uses include consolidating high-interest debt, investing in a business or real estate opportunity, or financing home improvements that may increase the property’s value. However, there are important drawbacks to consider. A cash-out refinance increases the amount owed on the home and may extend the repayment period of the mortgage. In addition, because the home serves as collateral, missed payments could put the property at risk of foreclosure. Market conditions also play an important role. Homeowners with existing low mortgage rates may be reluctant to refinance if current rates are significantly higher, even when substantial home equity is available. Conversely, when interest rates are lower, a cash-out refinance may provide a more cost-effective way to access capital. 

Sources:

Cash-Out Refinancing is Tempting. Here’s What You Need to Know First. – WSJ

Cash-Out Refinancing: What It Is, How It Works | Bankrate

Balancing Risk and Reward with Employer Stock

Today, many public companies offer stock ownership opportunities to their employees. For most workers, an employee stock purchase plan is the most common way to purchase company stock, often including a discount of up to 15% from the market price.

Offering company stock to employees can be advantageous for employers. It may be a cheaper form of compensation than bonuses or cash, while giving employees a greater sense of ownership in the organization. Employees can benefit from the potential appreciation of company stock, discounted purchase opportunities, and from the ability to obtain ownership in a business they know well.

While owning company stock offers potential advantages, employees should consider how it aligns within their retirement goals. If their company offers a 401(k) match, employees should generally try to contribute enough to receive the full match first. Employees should also consider how company stock falls within their broader investment plan and avoid letting it become too large a portion of their portfolio. Additionally, tax treatment of company stock can also be complex depending on how the stock is awarded or purchased.

Ultimately, while there are several benefits to owning stock within the company you work for, it should be considered as a part of your overall financial plan and not as a stand-alone benefit.

Source: “The Pros and Cons of Buying Employer Stock,” Barron’s, May 11, 2026.

Where Would You Like to Live in Retirement…Besides Tampa Bay?

According to Wallet Hub, the best places to live in retirement “are those that minimize taxes and expenses, as well as have good opportunities for retirees to continue paid work for extra income, if they choose to do so…in addition, the top cities provide high-quality healthcare and offer plenty of enjoyable activities for retirees.” Not too surprisingly, affordability was at the top of the list.
Here are the top 10:

Up Your Assets™

Episode 39: The Estate Planning Mistake Pet Owners Make

Today’s poignant podcast covers an often-overlooked part of the estate planning process, Our Pets! During this brief session, Ray Ferrara, CFP^® outlines some sound advice on how to care for our beloved companions. The robust resources available may surprise you… so grab your favorite fluffy companion, give them a treat, and take a listen today!

Acknowledgements and Important Disclosures

From the Up Your Assets website
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