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Back Bay Financial Planning & Investments

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Bethany Beach, DE
Back Bay Financial Planning & Investments

Fee-Only, Fiduciary, Retirement & Tax Planning Expertise on the Eastern Shore of Maryland & Delaware

10/05/2026

October is a great time to talk about Qualified Charitable Distributions (QCDs). Someday we hope legislation will be passed making this tool available to all ages! But until then, for clients and those who are over 70.5 it remains the top tactic for charitable giving.

A QCD definitively makes a charitable gift a tax savings tool. The money goes from your IRA straight to the charity and never shows up in your income. Compare that to a regular cash gift, which relies on you itemizing your return (unless it's the new $1,000 single / $2,000 joint deduction for people taking the standard deduction) and is now subject to a 0.5% of AGI floor starting in 2026. So, it's the definitive way to make your dollars go farther. You can give up to $111,000 per person this way in 2026, and the limit is indexed each year for inflation - so 2027 will be higher.

Behind that it also satisfies all or a portion of your required minimum distribution once you've reached RMD age. That is a big deal if you have significant RMDs that may be pushing you over an IRMAA threshold or phasing out your enhanced senior deduction. Using a QCD can keep your AGI below some of these thresholds. That's the exact kind of thing we're working on with our clients right now.

Maybe most importantly - we recommend doing them around October. Why? Charities are busy. They are also usually understaffed or have significant volunteer staffs. So, we see that checks may sit around and go uncashed for over 60 days. What does that mean? At least at Schwab, a check that sits uncashed for 60 days gets voided and credited back to your IRA. If you did it in November or December, that can mean the gift lands in a different tax year, or doesn't count at all, and you find out when the 1099-R shows up. Bottom line - it creates problems. Part of what we do is make sure checks get cashed and give some room if one isn't - we can reissue the check while it's still the same tax year.

Managing the logistics is not only good planning but it makes your tax time a good bit simpler. If you're planning on a QCD this year, consider giving a little bit earlier than planned.

09/28/2026

It's time for another post on..... bonds. Interest rates are the talk of financial TV and for good reason. We haven't seen rates this high in nearly 20 years. For borrowers, it isn't good news. Coming off a decade of ultra-low rates, it's a bit of a culture shock. Many of our clients will tell you their first mortgage was in the teens. We're not there yet, but rates are moving that direction.

For investors, this is the land of opportunity. Bonds are the ballast in most portfolios, but they also generate returns and cash flow. What they return is a byproduct of the rate environment. A quick reminder: a bond fund's starting yield has historically been one of the best predictors of what it returns over the following years (see our chart). If rates go up, the price drops, but the fund reinvests at the higher rates. Over a period roughly equal to the fund's duration, those two tend to cancel out. Today, many high-quality bond funds have a yield to maturity of 6-7%. We pay close attention to our bond funds yields and how the managers position as rates change. They are doing what you'd expect. Locking in higher rates.

A lower-volatility return stream in the mid-to-high single digits is a huge win for retirees living off their portfolios. It's borderline equity-like returns without the volatility. It's also a buffer against rates rising further. One reason 2022 was so bad for bonds is that rates were still near the floor. There was almost no income to cushion the price drop. We've had several years of higher rates since then, and that extra income has softened the volatility this year. So bond prices might be down, but they are now just up a few percentage points or down ever so slightly. That can happen every so often. That's what is setting up the next few years of fixed income returns, which are starting to give equities a run for their money. It's only September, but this is something to look forward to in 2027 and the next few years.

09/22/2026

Does life feel like it's speeding up? Or are you just seeing more in the rearview mirror? When I first saw this chart, it stopped me. Framing things we already know differently has that impact sometimes.

Our perspective of life changes with how much we've experienced. This has implications for financial planning. Specifically, how we prioritize goals as our perceptions change and our life experience grows.

One of the objectives of financial planning is helping people avoid the hidden cost of waiting or deferring major decisions. Put off that trip, that boat, that thing you've been "getting around to" for five years, and you haven't just lost five years. You've spent a bigger chunk of what's left than you would have if you'd done it now.
The math only gets worse the longer you wait. Call it the someday tax. It's the one bill that goes up the longer you avoid paying it. Kind of like compounding in reverse.

I see this play out with clients and my personal life all the time. It's a natural human behavior. The plan is never the problem. The permission to actually use the money on the stuff that matters before "later" quietly becomes "never" is what we're after.

Putting tactics into play that help you move those things forward is how we define financial planning success.

09/15/2026

Can it make sense to convert to a Roth one year, and contribute to a Traditional IRA the next? Isn't that counterintuitive?

If you got that advice from a financial advisor, you might feel that way. Though from a tactical standpoint it can be the exact right thing. Tax planning isn't a straight line.

You are paying the tax on assets when it makes sense to you. That might mean moving money to Roth (paying the tax) in year 1 of retirement, but picking up some part-time work in year 2 and deferring income to max out your enhanced senior deduction or avoid IRMAA. Kick the can down the road. People's retirement plans change all the time. Many people pick up part-time work or have some income suddenly. This can change the marginal rate a conversion gets taxed at. And the reality is, that can make a conversion no longer make sense.

I think one mistake people make in planning is wanting a straight line for the next 5 years. We're human, and it's natural to think in patterns or want a baseline for what the next few years look like. Though the more I work with clients, the less I think that's the optimal solution. These decisions are annual, and to treat it as anything differently probably leaves money on the table.

09/10/2026

I recently read Vanguard's latest research paper on "Transferring Wealth with Wisdom." The premise, if you haven't read it, is on the timing of receiving an inheritance and optimizing for its impact.

One of the main findings is there is usually a mismatch between when an inheritance actually lands and when someone's biggest capital need actually hits. An inheritance at anytime is never bad, but wouldn't you rather the timing actually fill a need, instead of just landing whenever it lands? I think most people genuinely want their money to make an impact. In their own lives, and in the lives of others where applicable. Reconciling the timing of the need with a gift is an easy way to make that happen.

A number that stuck out from the study is only 3% of inheritances transfer while the person giving them is still alive. Forget the tax benefits for a second, making a gift count starts with a conversation and matching it to the moment it'll matter most. That rarely happens.

I find my clients thinking more about this, and I'm having more conversations about it as well. I think it is a huge untapped financial planning opportunity for people to really make an impact with their money in their own family just by changing the conversation.

I think it is one of the better whitepapers I've seen this year for practitioners as well as clients. You can read it here:

09/01/2026

Well, it's time to announce the big surprise for Back Bay. Please welcome Matt O'Keefe, CFP® to the firm as our newest financial planner. You can read more about Matt on our website: https://backbayfp.com/meet-our-team/

But the long and short of it is Matt and I go back to my first day in the business. Ironically, he's responsible for why I have a practice on the shore. It's a full circle moment. It shores up our firm's continuity and also allows the firm to handle some growth without any advisor being oversaturated with too long a list of clients.

We're excited for this next chapter. Please welcome Matt and his clients to the Back Bay family.

08/28/2026

Ryan Carrado was our summer intern (and first intern ever at Back Bay!) this year. Many of you know how involved I am with Salisbury University and their Financial Planning program. As part of that, I try to allow space for an intern at our firm to see and hear real world financial planning in action, along with what running a firm looks like. I consider our internship a success because Ryan told me it wasn't at all what he thought it was going to be. Financial planning can be like that.

Ryan got to sit in on over a dozen client and prospective client meetings. For those who were able to meet him, I appreciate your grace in allowing him to watch where the rubber meets the road. He's intimately familiar with our planning software, RightCapital, after helping me update all of our clients' plans, and our tax planning software, Holistiplan. He may be more familiar than he wanted to be. ;) We also got him a professional headshot for his future ventures — turns out he cleans up nice.

Overall, I hope it was a great experience for him. It's always one for me, as I find teaching to be one of the easiest ways to keep sharp on so many aspects of our business. He has a bright future ahead of him, one that hopefully has the CFP Board marks behind it sooner rather than later.

EDIT: I totally forgot to mention as part of Ryan's internship, I asked him to guest write a blog post detailing his experience. You know there was going to be some work involved. You can read about his time in his own words here: https://backbayfp.com/my-summer-at-back-bay-guest-post/

08/17/2026

I hear alot about people who are worried about Required Minimum Distributions, or paying taxes in retirement. Something like: "I don't want a big pre-tax balance, RMDs are going to crush me in taxes later."

The instinct to avoid forced taxes is right. But when you run the numbers, it usually doesn't hold up. And that fear is quietly pushing a lot of pre-retirees to over-Roth. The youth are calling it "Roth-maxxing"

What most people miss: you save on the way in at your marginal rate. You pay on the way out at your effective rate. Those are not the same number.

Take someone earning $150,000 a year, married filing jointly. Every dollar they defer into a 401(k) or traditional IRA saves them 22 cents in federal tax, off the top, at their marginal rate.

Now fast-forward to retirement. Say RMDs force that same person to pull, oh, $150,000–$175,000 out of the account in a given year. That withdrawal fills up the 10%, 12%, and part of the 22% bracket starting from zero, landing at roughly a 10–12% effective federal rate.

22% saved going in. 10–12% paid coming out. That's a real, durable tax edge as good as a market return. It comes purely from understanding how brackets work, not from any clever strategy.

For scale: to actually reach a 22% effective rate (not marginal) on withdrawals, a married couple would need to pull something like $565,000+ out of pre-tax accounts in a single year, under today's brackets. Most RMDs don't come close. Ironically, over "Roth-maxxing" via Roth conversions in retirement erodes the edge from making pre-tax deferrals in the first place!

None of this is a knock on Roth accounts, they absolutely have a place. But "I'm afraid of RMDs" isn't, on its own, a reason to pay more tax today than you have to. Understood correctly, this math should make you less afraid of a pre-tax balance, not more.

Marginal vs. effective. Not exciting. Might be the most underrated (and misunderstood!) concept in retirement tax planning.

08/09/2026

White Marlin Open 2026 in the books. Got to take our kids to the scales to see the 600 pound blue marlin, which my kids think is a dinosaur. It's about as close as it gets nowadays.

Anyways, some big money handed out, congratulations to the winners.

Interesting question hopefully they are thinking about (you know I am) - how is this taxed? Since I've never won (or participated) I can only guess they'll be receiving 1099-MISC income. Which means, no taxes withheld. But these prizes are indeed taxable. These individuals will want to make sure they have a plan to pay estimated taxes (the win falls in the quarter due September 15, so that's the one that matters most), and should consider other strategies to minimize their income this year.

Unless they plan on winning every year (as we talked about, statistically unlikely) they should be looking to maximize their available deferrals through their 401(k)s, HSAs or other tools. Pushing portfolio management decisions that would capture gains until next year, or looking for opportunities to create losses such as direct indexing their winnings or using a tax aware long-short strategy if they have big gains coming into the year. For those with philanthropic goals, a donor advised fund might be a great thing to start.

Unfortunately, while it is an awesome gesture that many do, I don't think donating the fish meat to the food bank counts. Despite how much that fish was "worth." Would be a fascinating case for the tax court.

Good tax planning can help those lucky anglers with more of their hard earned prize money!

Address

39682 Sunrise Court #303
Bethany Beach, DE
19930

Opening Hours

Monday	9am - 4pm
Tuesday	9am - 4pm
Wednesday	9am - 4pm
Thursday	9am - 4pm
Friday	9am - 4pm

Telephone

(302)3161820

Website

http://www.backbayfp.com/

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