Now or Later: How to Weigh Giving During Life vs. Giving Through Your Will

Admin • April 12, 2024

You’ve worked hard to build wealth and hope to leave a legacy for family or friends after your death. But what if you could see those loved ones benefit from your resources while you are still alive? Let’s explore the possibilities and tax details around gifting your money or assets before you pass away. 

The Benefits of Giving

Most of us have been told at some point in our lives that “‘tis better to give than to receive.” In recent decades, several studies have explored what happens in your brain when you give a gift. 

In one study , experimenters found that happiness increased more when subjects were instructed to spend money on others than when instructed to spend on themselves. Psychologists have been able to confirm that there is indeed a neurological benefit to giving gifts.

In addition to this neurological boost, one reason you may want to give gifts during your life is to watch the benefit of your gift play out. Once your retirement and medical expenses are provided for, you stand to benefit more emotionally by giving during your lifetime.

Imagine the ability to choose how to apply your gifts. Maybe you want to share a love of travel with a family member and can enable them to take a trip they couldn’t otherwise afford. You’ll be able to hear their stories and see their pictures (or even take the trip with them) and enrich both your life and theirs through your gift.

Or if you are passionate about education, you might be able to ease the burden pursuing a higher degree often brings. Instead of watching your child or grandchild struggle to balance paid work and coursework, you could give them the gift of stability during a time of transition and changing circumstances. 

You could also give a gift that funds the start-up costs of a small business or the down payment on a home. In any of these circumstances, the joy is ongoing as you see the effects of your gift play out immediately and as time goes on.

Rules on Gifting Money to Family and Others

If giving during your life appeals to you, you may have wondered how much money can you gift tax-free. Below are some of the restrictions surrounding timing and amounts to help you plan.

  • Annual Exclusion Amounts: For 2024, the IRS has set the annual exclusion amount for gift taxes at $18,000 , meaning you do not need to report any gifts up to $18,000 for any individual donee.

This rate is from one individual to another, so if you are married, you and your spouse could each gift the same individual $18,000 for a total of $36,000 for that year. If you’re interested in gifting money to adult children or grandchildren, this type of gift allows you to give money without any party having to pay taxes on the gift. 

*If you exceed the annual exclusion amount in gifts to a single donee (whether cash or fair market value for assets such as stocks, real estate, or other property), you do need to report the gift to the IRS using Form 709 .

  • Lifetime Exclusion Amounts: In addition to the annual exclusion amount for gift taxes, you’ll also want to be aware of the lifetime exclusion amount. In 2024, the individual exclusion limit is $13.61 million per individual (again, doubled for married couples). This amount is scheduled to drop back to $5 million after 2025, so plan accordingly. 

Unlike the annual gift exclusion, the lifetime exclusion is tied to the donor, not the donee. If you decided to gift two adult children $68,000 each this year, each child would exceed the annual gift exclusion amount by $20,000, bringing your lifetime exclusion amount down to $13.51 million. You will only begin paying taxes on gifts after you have given more than $13.61 million cumulatively over the annual exclusions, including the value of your estate upon your passing. The gift tax rate varies depending on the value of the gift over the exclusion amount.

Charitable Giving 

Gifts to charities are considered donations under the tax code rather than gifts. They fall into a separate category and may be tax deductible, unlike personal gifts that will not affect your taxable income rates. This is different than donating to political parties, so if you are considering a large gift to an organization, you will want to look into their tax exemption status. 

How Lifetime Giving Fits into Estate Planning

As you plan to allocate your estate after your passing, consider the lifetime exclusion limit. This limit sets the cap on both lifetime gifts and inheritance gifts. With the cap set to drop to $5 million in 2026 , savvy investors will take stock of their total assets, including real estate, investment portfolios, and valuable property such as artwork or antiques. If the value of your total estate exceeds $5 million, it might make sense to set up a plan for lifetime giving to bring your estate’s worth under the tax-triggering amount.

These limits are for the IRS and federal taxes, but several states also levy inheritance taxes that you will need to consider. Additionally, it’s important to remember that tax rates change over time. Just because a tax rate is low now doesn’t mean it will always be, and there is no guarantee that annual exemption rates will remain high. 

Unlock the Future of Your Legacy with Five Pines Wealth Management

The team at Five Pines Wealth Management believes estate planning is more than just a financial strategy, it’s a powerful tool for shaping your legacy. We’re ready to help guide you through the complexity of gift planning to ensure every gift maximizes your happiness while minimizing your tax burden.

With our expertise in federal and state taxes, we tailor a customized plan that aligns with your unique circumstances. By scheduling a meeting with us, you’re taking the first step toward your future and the future of your loved ones. We can’t wait to connect with you!

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401(k) Millionaire: Proven Strategies to Reach 7 Figures in Your Retirement Account

October 17, 2025
Key Takeaways Maxing out your employer match provides an immediate 50-100% return and is the easiest way to accelerate your 401(k) growth. Reaching $1 million in your 401(k) depends more on consistent contributions over time than on being the highest earner or picking winning investments. High earners can potentially contribute up to $70,000 annually through a mega backdoor Roth conversion if their employer plan allows after-tax contributions. Hitting seven figures in your 401(k) might sound like a pipe dream, but it's more achievable than you think. With the right 401(k) investment strategies and a disciplined approach, becoming a 401(k) millionaire is within reach for many mid-career professionals. Let's walk through exactly how you can get there. The Math Behind Becoming a 401(k) Millionaire Before we discuss strategies, let's look at the numbers. Understanding the math helps you see that reaching $1 million isn't about getting lucky — it's about time, consistency, and thoughtful planning. Starting Age Annual Contribution Balance at 65* 30 $15,000 $1.5 million 30 $20,000 $2 million 40 $25,000 $1.3 million *Assumes 7% average annual return Time matters, but it's never too late to build substantial wealth if you're willing to prioritize your retirement savings. 7 Steps to Build Your 401(k) to Seven Figures Now that you understand the math, let's break down the specific strategies that will get you there. Step 1: Max Out Your Employer Match (The Easiest Money You'll Ever Make) If your employer offers a 401(k) match, contributing enough to capture it fully is the absolute first step: it’s free money that provides an immediate 50-100% return on your investment. Let's say your employer matches 50% of your contributions up to 6% of your salary. If you earn $150,000 and contribute $9,000 (6% of your salary), your employer adds $4,500. That's a guaranteed 50% return before your money even hits the market. Not taking full advantage of an employer match is like turning down a raise. Make sure you're contributing at least enough to capture every dollar your employer offers. Step 2: Gradually Increase Your Contribution Rate Once you've secured your employer match, the next step is increasing your personal contribution rate over time. For 2025, the 401(k) contribution limit is $23,500 (or $31,000 if you're 50 or older with catch-up contributions). Here's a practical approach: Every time you get a raise or bonus, direct at least half toward your 401(k). If you get a 4% raise, bump your contribution by 2%. Many plans now offer automatic annual increases. If yours does, set it to increase your contribution by 1-2% annually until you hit the maximum. You'll barely notice the change, but your future self will thank you. Step 3: Master Tax-Advantaged Retirement Accounts Through Strategic Contributions Traditional 401(k) contributions reduce your taxable income now, which is ideal if you're in a high tax bracket today. Roth 401(k) contributions don't reduce current taxes, but withdrawals in retirement are tax-free — valuable if you're earlier in your career or expect a higher income later. A hybrid approach works for many of our clients. Step 4: Optimize Your 401(k) Investment Strategies Your contribution rate matters, but so does what you're investing in. We regularly see clients who contribute aggressively but choose overly conservative investments that don't provide enough growth. Keep costs low . Target-date funds and index funds typically offer the lowest expense ratios. Every 0.5% in fees you avoid can add tens of thousands to your retirement balance over 30 years. Rebalance annually . Market movements throw your allocation off balance. Set a reminder once a year to review and rebalance your portfolio back to your target allocation. Avoid the temptation to chase performance . Last year's top-performing fund is rarely this year's winner. Stick with broadly diversified, low-cost options. Step 5: Consider a Mega Backdoor Roth Conversion If you're a high earner who's already maxing out regular 401(k) contributions, a mega backdoor Roth conversion can accelerate your retirement savings. Here's how it works: Some employer plans allow after-tax contributions beyond the standard $23,500 limit. The total contribution limit for 2025 (including employer contributions and after-tax contributions) is $70,000 ($77,500 if you're 50+). If your plan permits, you can make after-tax contributions up to that limit, then immediately convert those contributions to a Roth 401(k) or roll them into a Roth IRA. This gives you tax-free growth on substantially more money than the regular contribution limits allow. Not all plans offer this option, and the rules can be complex. Check with your HR department to see if your plan allows after-tax contributions and in-plan Roth conversions or rollovers. Step 6: Avoid These Common 401(k) Mistakes Even with great 401(k) investment strategies, mistakes can derail your progress toward seven figures. Avoid: Taking loans from your 401(k) . While it might seem convenient, you're robbing yourself of compound growth. The money you borrow stops working for you, and you're paying yourself back with after-tax dollars. Cashing out when changing jobs . Rolling over your 401(k) to your new employer's plan or an IRA allows your money to continue growing tax-deferred. Cashing out triggers taxes and penalties that can set you back years. Panic selling during market downturns . Market volatility is normal. The clients who reach $1 million are those who stay invested through ups and downs, not those who try to time the market. Step 7: Stay Consistent (Even When It's Boring) The path to becoming a 401(k) millionaire isn't exciting (and that’s a good thing!). The most successful savers aren't those who constantly tweak their strategy or chase the latest investment trend. They're the ones who set up automatic contributions, review their allocation once a year, and otherwise leave their 401(k) alone. Let Five Pine Help You Build Your Million-Dollar Plan Reaching $1 million in your 401(k) is absolutely achievable with the right strategy and discipline. Whether you're just starting your career or playing catch-up in your 40s and 50s, the steps remain the same: maximize contributions, optimize your investments, take advantage of tax-advantaged retirement accounts, and stay consistent. At Five Pine Wealth Management , we help clients build comprehensive retirement strategies that go beyond just their 401(k). We can analyze your current contributions, recommend optimal allocation strategies, and help you coordinate your employer plan with other retirement accounts. Want to see what your path to seven figures looks like? We help clients build these roadmaps every day. Email us at info@fivepinewealth.com or give us a call at 877.333.1015. Let's talk about your specific situation. Frequently Asked Questions (FAQs) Q: Should I prioritize maxing out my 401(k) or paying off debt first? A: Start by contributing enough to capture your full employer match — that's an immediate 50-100% return you can't get anywhere else. Beyond that, prioritize high-interest debt (credit cards, personal loans) since those interest rates typically exceed investment returns. Q: Should I stop contributing during market downturns to avoid losses? A: No — continuing to contribute during downturns is actually one of the best strategies for building wealth. When prices are lower, your contributions buy more shares, setting you up for greater gains when the market recovers. Q: I'm 55 with only $300K saved. Is it too late to reach $1 million?  A : While reaching exactly $1 million by 65 might be challenging, you can still build substantial wealth. Maxing out contributions, including catch-up ($31,000/year), could get you to $750K-$850K depending on returns. Disclaimer: This is not tax or investment advice. Individuals should consult with a qualified professional for recommendations appropriate to their specific situation.

Couples Money Management: Why Both Spouses Need to Know Where the Money Is

October 17, 2025
Key Takeaways Both spouses should understand the family’s finances, even if only one manages them, to prevent confusion or stress during life’s unexpected events. Regular money check-ins, shared account access, and attending financial planning meetings together help couples build confidence and clarity. Partnering with a fiduciary advisor ensures both spouses have support, education, and guidance for comprehensive wealth management and long-term peace of mind. Money is one of the most common sources of stress in relationships. Some couples argue about spending habits, while others quietly hand off all financial responsibilities to one spouse and never revisit the arrangement. At first glance, this setup can feel efficient: one partner pays the bills, manages investments, and handles taxes while the other takes care of different responsibilities. However, there is a risk to this method. If something unexpected happens, the spouse who hasn’t been involved in financial decisions can feel completely lost. Even highly capable, intelligent people often tell us they don’t know where accounts are located, how much income is coming in, or what investments they own. When life throws a curveball, like illness, death, or divorce, that lack of knowledge creates unnecessary anxiety during an already difficult time. The solution is not to necessarily make both partners money managers, but to ensure both understand the big picture. Let’s walk through why this matters, what it looks like in practice, and how you can start today. Financial Planning for Couples Effective financial planning for couples goes beyond having the right investment mix or adequate insurance coverage. It requires both spouses to understand the big picture of their financial life, even if only one manages the day-to-day details. This doesn't mean both partners need to become financial experts. Instead, it means creating transparency and basic literacy that protects your family's financial security regardless of what life throws at you. Here are a few essentials: Regular check-ins : Schedule monthly or quarterly “money talks” where you review accounts, upcoming expenses, and investment performance. This keeps both partners informed. Shared access : Make sure both spouses have login information for bank, investment, and retirement accounts. A secure password manager can help keep things organized. Big-picture clarity : Even if one spouse handles the details, both should know where you stand with assets, liabilities, income, and goals. Think of it as insurance against uncertainty. If one spouse suddenly has to take the reins, they aren’t starting from zero. Couples Money Management Couples' money management doesn’t have to mean “50/50 responsibility for every financial task.” Instead, think about it as defining roles while keeping communication open. Many households operate on a “primary manager” system. One person writes the checks, monitors the accounts, and interacts with financial advisors. That’s perfectly fine, as long as the other spouse has visibility. Problems arise when the "non-manager" is completely shut out. Some practical ways to stay connected: Attend meetings together : Whether it’s with your accountant, attorney, or financial planner, both spouses should be present. Hearing the same information firsthand helps prevent misunderstandings. Document everything : Create a simple household financial binder (digital or physical) that includes account numbers, insurance policies, estate documents, and contact info for professionals you work with. Ask questions : No question is too small. If you don’t understand how an investment works or why you own it, speak up. Practice decision-making together: Involve both partners in financial decisions, even small ones. This builds confidence and familiarity with your financial priorities and decision-making process. Fiduciary Financial Planning: The Professional Partnership Advantage Working with a fiduciary financial advisor creates an additional layer of protection for couples navigating financial planning together. Fiduciary advisors are legally required to act in your best interest, providing objective guidance that supports both partners' financial security. A good fiduciary advisor will insist on meeting with both spouses regularly, ensuring that financial strategies are understood and agreed upon by both partners. They can also provide education and support to help less financially-inclined spouses build confidence and understanding over time. This professional relationship becomes especially valuable during transitions. When one spouse dies or becomes incapacitated, having an advisor who knows both partners and understands the family's complete financial picture provides stability during chaos. Comprehensive Wealth Management Comprehensive wealth management goes beyond investments. It covers cash flow, taxes, estate planning, insurance, and long-term care strategies. For couples, it also means creating contingency plans. What happens if one spouse passes away? Will the survivor know how to access accounts? What if the “financial spouse” faces cognitive decline later in life? Will the other partner have the confidence to step in? These are not fun scenarios to imagine, but planning for them is an act of love. Comprehensive wealth management ensures: Estate documents are in place and up to date (wills, powers of attorney, trusts). Beneficiaries are correct on retirement accounts, insurance, and other assets. Tax planning strategies are understood by both spouses, so surprises don’t derail long-term goals. Cash flow is sustainable even if income sources shift (such as after retirement or the loss of a business owner’s salary). When couples approach wealth management together, they reduce the risk of financial upheaval during life’s transitions. When Life Changes Everything: Rebuilding Financial Confidence After Loss Despite the best preparation, losing a spouse creates emotional and financial challenges that feel overwhelming. If you find yourself suddenly managing finances alone, remember that feeling lost is normal and temporary. Start by taking inventory of your immediate needs. Focus on essential expenses and cash flow first. Most other financial decisions can wait while you process your grief and adjust to your new reality. Don't make significant financial changes immediately. Grief affects judgment, and rushed decisions often create problems later. Give yourself time to understand your new situation before making significant moves. Lean on your professional team. This is exactly when having existing relationships with financial advisors, attorneys, and accountants becomes invaluable. They can provide stability and guidance during an unstable time. Consider working with a counselor who specializes in financial therapy or grief counseling. Processing the emotional aspects of sudden financial responsibility is just as important as understanding the technical details. Taking the Next Step Together If you and your spouse have fallen into the habit of letting one person manage all the finances, it’s not too late to shift. Schedule a money talk this week. Write down your accounts. Ask questions. Set a reminder to attend your next financial planning meeting together. At Five Pine Wealth Management , we can guide couples through these conversations. Whether you’re in the wealth accumulation phase, approaching retirement, or already enjoying it, we help both partners feel equally confident in their financial picture. Don't wait until a crisis forces financial literacy upon you. Call (877.333.1015) or send us an email today at info@fivepinewealth.com to schedule a consultation and start building the financial transparency and security your family deserves. Frequently Asked Questions (FAQs) Q: What if one spouse has no interest in learning about finances? A: Start small and focus on the essentials. Your spouse doesn't need to become a financial expert, but they should know where important documents are located, understand your basic monthly expenses, and know how to contact your financial advisor. Q: How often should we review our finances together if only one person manages them day-to-day? A: Quarterly check-ins work well for most couples. Schedule a regular 30-minute conversation to review your progress toward goals, discuss any major upcoming expenses, and ensure both partners stay informed about your overall financial picture. Q: What's the most important thing for the non-financial spouse to understand first?  A: Cash flow and immediate needs. Know where your checking accounts are, how much you typically spend each month, what bills are on autopay, and how to access emergency funds. This knowledge provides immediate stability if they suddenly need to take over financial management.