Keats Group LLC

09/22/2026

The RMD Story Often Missed

Required Distributions (now RMDs) from qualified pre-tax retirement accounts are not new and not a byproduct of the Secure Act only, which created an unheralded tax surprise by eliminating the ‘Stretch IRA’ lifetime distribution for inherited IRAs.

Although RMDs are important, the financial services conversation often gives them more independent power than they have.

A Required Minimum Distribution is just the amount of money the tax rules require you to withdraw each year from certain retirement accounts once you reach the applicable age.

The arithmetic is straightforward, but the consequences often are not.

For the original IRA owner, the rules are generally easier to follow than they are for beneficiaries. The distribution itself is only part of the story. The larger issue is what other income it meets.

Roth accounts are another example. Most people know that Roth IRAs do not require lifetime RMDs for the original owner. Since 2024, the same is generally true for Roth accounts inside employer retirement plans. But inherited Roth accounts are still subject to beneficiary distribution rules.

The familiar 10-year rule is also more complicated than it sounds.

Suppose a father dies and leaves his IRA to his adult daughter. If she is subject to the 10-year rule, the account generally must be emptied by the end of that period. But whether she also must take distributions during those ten years can depend on whether her father had already reached his required beginning date for RMDs.

Now suppose the daughter dies four years later and leaves that inherited IRA to her son. The grandson may not get a new 10-year period. He can inherit the clock that was already running. In other circumstances, a different 10-year period can apply. The answer depends on the status of the first beneficiary and the rules already attached to the account.

There are other traps that seldom make headlines. If an IRA owner dies before taking the full RMD for the year, the beneficiary may have to finish it. A large RMD in the same year as an appreciated stock sale can add ordinary income while capital gains stack above it. Additional income can also affect the 3.8% Net Investment Income Tax, Medicare premiums two years later, taxation of Social Security, and the new senior deduction.

This is also why RMDs alone are not a complete argument for a Roth conversion.

Roth conversions can provide greater control over future taxable income and eliminate lifetime RMDs on the converted dollars. But whether they actually reduce taxes depends on what tax rate is paid today, what rate may apply later, and what other income thresholds are affected along the way.

The better planning question is not, “How do I avoid my RMD?” Instead ask, “What happens when this required income lands on the rest of my tax return?”

08/25/2026

PART 2: Want to Cut Taxes? Find Them First

Tax planning will be more successful when we’ve found the sources of pressure on household budgets. Some are obvious and others hidden.
In Part 1, we addressed actual taxes and tax sources, a category that includes many hidden expenses such as past-era Social Security tax brackets.
Second are government or regulated expenses that behave like taxes.

Health care is a good example. The average cost of employer-sponsored family health coverage has risen sharply since 2017. Family premiums, including both employee and employer contributions, average almost $27,000 annually, a stunning number and the reason why health care is the top concern of business owners for consecutive years.

Medicare Parts B and D premiums have increased substantially as well. Property-tax bills can rise even when the tax rate itself does not, if assessed home values have increased. Both are largely unavoidable claims against household income, and both are victims of government policies.

Third are expenses that are not taxes but compete for the same dollar.
Federal interest expense might be the biggest example that receives the least attention.

Net interest on the federal debt was roughly $263 billion in fiscal 2017. By fiscal 2025 it was about $970 billion and in 2026 reached $1 trillion. The cost of servicing the debt now makes up 15% of all US government spending, more than the government spends on national defense.

That money does not arrive in anyone's mailbox as an invoice. But it must be financed with tax revenue, additional borrowing or fewer dollars available for other government priorities. Like health care and state and local property tax revenue sharing.

There is also a broader cost. When the federal government must borrow enormous amounts of money, it competes for capital with businesses, homeowners and other borrowers. That does not mean federal borrowing alone determines mortgage rates or business-loan rates, but it does mean capital has a price, and government cannot consume more of it without consequences throughout the economy.

Planning for hidden taxes should go beyond tax brackets, Roth IRA conversions, and tax loss harvesting. That takes a tax strategist. Who is yours?

“Once you’ve paid the price for risk, you might as well stay around for the return” [David Booth, Dimensional Fund Advisors].

08/20/2026

Tax planning will only be successful when we’ve defined the problem to solve.

Roth IRA conversions and Required Minimum Distributions on traditional retirement plans are hot topics (and sales topics) in financial services right now.For most families other than those with serious health challenges, taxes are the biggest retirement risk we face. And these are important tax topi...

08/14/2026

Financial Spring Cleaning, One Room at a Time

Most of us understand risk management better than we think, but we have a harder time moving from understanding to application.

If you decide to eat better, you probably do not change your diet, start exercising five days a week, completely reorganize your schedule, go to bed two hours earlier, and eliminate every bad habit on Monday morning. You make one change, stick with it until it’s consistent ─ a habit. Then you make another.

The idea shows up in books such as The Compound Effect and Atomic Habits, and in the works of accomplished personal development speakers such as Tony Robbins and the late Jim Rohn.

Our personal bias and self-limiting beliefs get in the way of implementing.

I sometimes wonder what we mean when we ask, “Do you do comprehensive planning?” How many things is that? Is “holistic planning” the same.”

Risk management is a very human activity. We see something that could cause trouble, decide how much of it we can live with, and do something about it. There is no reason our financial lives have to be different.

Taxes are a good place to start. For many households and business owners, taxes are one of the largest financial risks they face. Yet tax planning can get pushed aside, confined by single-issue sales pitches built on bad math (Roth IRA conversions anyone?), or buried beneath complicated investment decisions.

Small business owners offer an interesting example. The NFIB’s 2024 Small Business Problems and Priorities survey found that the cost of health insurance remains their No. 1 problem, a position it has held since 1986. Federal taxes on business income ranked fourth. They are recurring financial risks that affect what owners keep, spend, and ultimately accumulate.

And solving them does not necessarily require a complicated financial product.

A business owner might begin with the CPA reviewing deductions, retirement plan contributions, depreciation, or other provisions already available under the tax code.

A family might begin by examining health care costs, the tax consequences of retirement income, and for business owners the tax opportunities found in federal tax credits for small business retirement plan contributions. We see family businesses with 50% of payroll going to families.

You don’t have to solve every financial problem now. Pick the risk that deserves attention first. Work on it, put the change in place; then move to the next room.

When something eventually happens—as it always does—you might not have a perfect plan. But you can have a plan that has already dealt with the risks you could see coming.

When the financial side is organized, there is more room to deal with the human side of life.

08/07/2026

The Cereal Box Test for Wealth Planning

In 1897, C.W. Post introduced Grape-Nuts and tucked a little pamphlet into early cereal boxes called The Road to Wellville. The claims were, by modern standards, ambitious. The cereal was promoted as a food that could cure ailments, sharpen the mind, and even make “red blood redder.”

Grape-Nuts survived its medical career. What endured instead was something less dramatic: consistency. More than 125 years later, the company reports that Grape-Nuts is still made from essentially the same ingredients and through much the same intensive baking process.

There is something fun and useful in that story for wealth management.

A portfolio can be thoughtfully constructed; a trust can be well drafted; an insurance contract, annuity or structured investment can solve a specific problem. But none of those things know what the other is doing, and why. That’s where planning begins.

Consider a trust. Signing one is only part of the job. If assets intended for the trust remain titled personally, the beautifully drafted document may never control them.

Other assets—IRAs, retirement plans, insurance contracts, and transfer-on-death accounts—follow their own beneficiary instructions. Those instructions can override what someone thought the estate plan said.

Where assets live and how they are owned matters.

Two households with identical investments can have very different outcomes because one coordinates taxable accounts, retirement accounts, and trusts with the tax characteristics of the assets inside them.

Titling is important. Individual ownership, joint ownership (with distinct types and differences across states), trust ownership and beneficiary-designated accounts can each produce different consequences at death. Even liquidity matters: an asset that passes immediately to a joint owner may no longer be available to help the estate pay taxes or expenses or provide income.

And planning does not necessarily stop at death.

A surviving spouse may have decisions involving inherited retirement accounts. An executor may need to preserve a deceased spouse's unused estate-tax exclusion by making a portability election on Form 706. A beneficiary may, under carefully defined rules, disclaim an inheritance and allow it to pass to the next beneficiary. Trust designs can continue distributing income to spouses, children or other named beneficiaries while serving longer-term family, tax, or charitable purposes.

These are not once-and-done decisions.

Families change. Tax laws change. Accounts move. Beneficiaries die, marry and divorce. Assets grow. A trust drafted ten years ago may still be fine—but only if the rest of the plan still connects to it.

That is the real Grape-Nuts lesson. The formula was followed, batch after batch, for generations. Keeping your plan working is timeless, too.

07/30/2026

Time to Revisit Your Fixed Income Strategy

Most of us have a short list of financial assets that have become conversation shutters. Ask about them, and we’re inclined to not only stop assessing them but to also lose trust in the conversation.



We have enough evidence to make these ‘red flag’ categories legitimate targets. Common ills are complexity, illiquidity, aggressive selling, high fees, disappointing past experiences (often failure, such as oil partnerships or private credit), or promises that sound too good to be true.



Many advisors work inside investment-only systems where every solution must resemble a stock, bond or mutual fund. Many others primarily or exclusively in annuity or life insurance business models.



Passage of time has taught me that an open mind and meaningful homework can uncover life-changing investment and risk management benefits in most asset classes, including some that are seldom in the conversation (zero dividend stocks, anyone?).



With current stock valuations screaming from the rafters, asset protection has moved up the ladder of priorities. Shifting to a higher bond allocation is the default response. That is unfortunate if it is the only action considered. Using a planned MYGA-to-SPIA sequence just might preserve flexibility today and create more income later, a practical bridge with higher return or rate guarantees.



For those who love to prosper and flounder in a stock-only world, they critique yet overlook two of the simplest contracts available, perhaps because they require more planning and generally produce less agent compensation than alternatives.



A MYGA is an insurance-company contract that pays a stated interest rate for a fixed period. It resembles a bank certificate of deposit, although it is not FDIC-insured, withdrawals may be restricted, and its guarantees depend on the insurer’s financial strength.



A SPIA converts a lump sum into monthly income, usually for life. Part of each payment is interest, part is principal coming back, and part reflects longevity pooling—the financial advantage created when people who die earlier help fund payments to those who live longer.

Money not needed for near-term emergencies is invested into a three- or five-year MYGA. It grows without market volatility at a guaranteed rate, which in most cases is considerably higher than bank CDs or high yield savings. At maturity, reassess health, income needs, interest rates and family circumstances. The owner may take the money, renew it, transfer it to another annuity or use only part of it to purchase lifetime income. That decision is made knowing the SPIA return on that date.



Research increasingly describes income annuities as “actuarial bonds.” Academic and actuarial reviews find that replacing part—not necessarily all—of a bond allocation with guaranteed lifetime income can improve spending reliability, reduce longevity risk and sometimes permit the remaining portfolio to hold more growth assets. The same research warns against over-annuitizing and leaving too little liquidity for emergencies, health costs or heirs.



Your financial roadmap will preserve choices today while preparing to purchase tomorrow’s pension with your purpose always in mind.

07/24/2026

The Widow's Tax and Tax Planning Window

One of the quiet risks in retirement planning is not just the death of a spouse. It is what happens financially after the first spouse dies.

People often call this the “widow’s penalty” or “widow’s tax.” It is not an actual IRS penalty, but the practical result of two things happening at the same time: household income might go down, while the surviving spouse might be pushed into a less favorable tax situation.

Consider a retired couple with two Social Security checks, some IRA income, and perhaps a pension. Their income plan feels on track until one spouse dies.

The survivor does not keep both Social Security checks. In most cases, the survivor receives the higher of the two benefits, not both. That is risk number one: income drops. But risk number two may be less obvious: effective taxes may rise.

In the year of death, a surviving spouse who does not remarry can usually still file a joint return. In some cases, a surviving spouse with a dependent child may use qualifying surviving spouse status for the next two years. But most retirees eventually move from married filing jointly to single filer status.

The tax brackets are narrower for single filers than for married couples filing jointly, which means similar income can be taxed at higher rates. Social Security taxation can add another layer.

The IRS looks at “combined income,” which includes other income plus one-half of Social Security. For single filers, more than $34,000 of combined income can cause up to 85% of Social Security benefits to be taxable. For married couples filing jointly, that 85% level begins above $44,000.

So the surviving spouse may face a two-sided problem: one Social Security check disappears, but a larger share of the remaining income may be taxed.

Pensions can create a similar issue. A single-life pension may pay more while both spouses are living, but stop at the first death. A joint-and-survivor pension usually pays less at the beginning but may protect income for the survivor.

The tax planning window opens for those years between retirement (age 65 for a traditional retirement), partially closes at age 70 when you claim Social Security benefits, and loses more flexibility when Required Minimum Distributions (RMDs) begin, currently at age 73.

You have many options to plan for this. Partial Roth conversions during the married years may reduce future taxable IRA income but beware of the many faulty calculations that project a rosy tax picture.

Most ignore compounded growth on investments lost to the conversion tax, ignore tax bracket inflation, the Medicare premium surcharge, and other material missteps.

Real estate and other investments with depreciation shelters, tax exempt trusts, zero dividend stocks and more can lower the tax bite.

Life insurance, when appropriate, can replace lost income. In more advanced estate planning, certain trusts may provide income, asset protection, and lower taxes for spouses.

The right mindset is to avoid building a retirement plan that only works while both spouses are alive. A durable plan doesn’t see the future, but it looks around corners. You should too.

07/16/2026

The Value of Staircase Conversations

The World Club final will host power teams Argentina and Spain in the championship match.

Years ago, our family hosted a high school student from the Basque region of Spain. He played pickup ‘soccer’ (to use the American label) with my son’s team, so we saw him dribble and play, and we can confirm the football crazy culture that is Spain.

We took our student visitor to the St. Croix River near our home, a town with a steep bluff climbed by stairs that lumberjacks (and bar patrons) used to get downtown for work, before Minnesota was a state.

The view of the historic river from the top is beautiful. The climb, three times up and down 150 stairs, provided captive time to ask our guest questions about his home country, family, culture, food, and interests. With each flight, the questions grew deeper and began to paint a picture we would otherwise miss.

The popularity of these stairs is told by the outside groups that came to the town to care for them.

Whether or not you follow the world’s game of football, do you create captive time for meaningful conversations about financial and estate planning matters with your family.

Do your advisors?

Not just opening, conventional questions, like “what are your goals” or “what income do you need to retire comfortably?” Those questions are fine, but they just scratch the surface, hardly moving the needle on relationships or change.

Meaningful conversations are often tougher. Darth Vader questions; we dare not speak his name.

Some advice, without a foundation or deeper context, can solve the wrong problem even if technically correct (and often it’s not).

It might sound like a tax question, but it might be a family relationship or estate-planning question, a health care question, or a purpose question.

A common staircase conversation these days is, “should I do a Roth IRA conversion” or variations ─ how much, when, how often? A better question, why?” Control future tax obligations? Higher lifetime wealth or income? For whom: me, my spouse, my children?

“Retirement income planning” is vegetable soup in a can. The label does not tell us whether there is a real process behind it. A retirement-income plan should be much more than a withdrawal percentage attached to an investment portfolio.

If you can’t ‘see’ this decision tree with your planning process, maybe you’re past due for a staircase conversation.

Financial guardrails can be funded, at least in part, by taxes you avoid paying. Closed-mindedness on this point—even among smart, talented CPAs—can mean missing a life-changing opportunity. Your financial roadmap is waiting. Grab it.

Congratulations, Spain and Argentina.



Visit the Lumberjack Stairs (credit to KSTP-news):

The historic Stillwater steps have been giving people a workout since 1857.

07/15/2026

Live Webinar with Keats Group, LLC
Disclaimer: Keats Group LLC is a comprehensive financial services company providing investment, asset protection, tax and estate planning, and pre-and post-sale guidance to private clients and business families. Keats Group and its agents and employees do not provide legal, accounting, or tax advice. Investment services are offered as a fiduciary Independent Advisor Representative of Advisor Share Wealth Management, a Registered Investment Advisor (RIA).

08/27/2024

August has a more unsettling side for investors. It’s a month known for surprises—and not in a good way! In the past 44 years, investors have managed through seven exogenous shocks in August. Some have been worse than others, but you get the idea.