MAKING THE MOST OF YOUR TAX REFUND

Mar 11, 2025 | Retirement Planning

Cornerstone is pleased to bring you this information by Ed Slott and Company, LLC. As a member of Ed Slott’s Elite IRA Advisor GroupTM Gordon keeps Cornerstone professionals on the cutting-edge of retirement planning, tax law, and IRA distribution strategies. Through continuous training with Ed Slott and his team of IRA Experts, we receive real-time updates on tax code changes and retirement planning regulations, and access to specialized guidance for complex cases. This is just one of the tools in our arsenal to help Cornerstone clients avoid unnecessary taxes and fees!

A Smart Strategy for Retirement Savings

If you’re expecting a tax refund, it’s tempting to spend it on something fun. But, there are ways to put it to work to strengthen your financial future.

One smart way to use it? Contribute to an IRA—boosting your retirement savings while potentially reducing your tax burden. If you’re already retired, your refund could help fund a Roth IRA for a child or grandchild, helping set them up for long-term financial success.

The deadline to contribute for the 2024 tax year is April 15, 2025.

 

Contribution Limits

For 2024 and 2025, you can contribute up to:

  • $7,000 if you’re under 50
  • $8,000 if you’re 50 or older

Your tax refund can be deposited directly into your IRA or even split among multiple retirement accounts.

  • A refund going to only one account can be done directly on IRS Form 1040.
  • Prepare IRS Form 8888, found on www.irs.gov, to direct the refund to up to three accounts. Pay close attention to IRS guidelines to avoid any common errors.
    • If the IRS adjusts your refund amount (due to math errors or past-due taxes), it could impact the deposit amount.
    • If your IRA deposit is meant for the prior tax year, confirm with your financial institution that they’ve coded it correctly.

Once your refund is deposited, verify:

  • The funds arrived in the correct account
  • The deposit was coded for the correct tax year (if applicable)
  • Any IRS adjustments haven’t affected your contribution plan

If there’s an issue, you may need to work with your financial institution or even file an amended return.

 

As always, give us a call if you have any questions!

NOT A CORNERSTONE CLIENT?

A tax refund can be an easy way to increase your own retirement savings or contribute to the next generation’s financial stability. At Cornerstone, our advisors specialize in helping clients navigate tax concerns as part of their comprehensive financial plan and make the most of every opportunity. From strategic planning to personalized guidance, we’re here to help ensure your money is working toward your goals!

Schedule a strategy session today!

Call SIOUX FALLS at 605-357-8553

Call HURON at 605-352-9490

Or email cfsteam@mycfsgroup.com

This information, developed in part by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Reprinted with permission. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article. Raymond James is not affiliated and does not endorse Ed Slott and Company, LLC. Source: © 2025 Ed Slott and Company, LLC.

Planning for Required Minimum Distributions (RMDs)

Jan 29, 2025 | Retirement Planning

If you save for retirement in a qualified plan, such as a 401(k) plan or an IRA, the government currently requires you to take withdrawals from these accounts during retirement. The withdrawals, known as required minimum distributions or RMDs, are taxable so it’s a good idea to plan ahead and avoid unexpected tax consequences.

Here is some basic information about RMDs. It is offered with the caveat that RMDs have complex rules. It’s important to talk with your financial or tax professional before taking action.

If your 73rd birthday is in 2025 , your first RMD must be taken by April 1, 2026. Your second RMD by December 31, 2026, your third RMD by December 31, 2027, and so on.1

If you delay your first distribution until April 1, 2026 , then you will need to take two RMDs in the same year.1

If you have multiple 401(k) plan and IRA accounts , you typically must calculate the RMD for each one of them. You can, however, withdraw the entire amount from a single account.2

If you’re still working at age 73 , you don’t have to take an RMD from your workplace retirement plan account (as long as the plan allows it). This exception does not apply to traditional IRAs. You must take RMDs from traditional IRAs, even if you’re still working.2

If you inherit an IRA from a spouse (after 2019) who already reached age 73, you will normally need to take an RMD for the year of death, if your spouse did not already take one. If your spouse dies before age 73, you may be able to keep the inherited account, roll it over into your IRA, or withdraw the money in a lump sum or over a period of time.2

If you inherit an IRA from someone other than your spouse (after 2019), usually the funds must be completely withdrawn from the account within 10 years. RMDs may be required if the person from whom you inherited the account was already taking RMDs.4 There are some exceptions.

If you miss an RMD deadline or you don’t withdraw the full amount, penalties are steep. The penalty tax is 25 percent of the amount you failed to withdraw. If you correct the issue within two years, the penalty tax is lower.1

If you own a Roth IRA or Designated Roth account in workplace plan, you do not have to take RMDs—unless you inherited the account. In that case, RMD rules usually apply.1 Again, the rules governing RMDs are complex.

If you would like help, or if you have questions, please get in touch. Call 605-352-9490 in Huron or 605-357-8553 in Sioux Falls.

Not a Cornerstone client? 

Rules regarding Required Minimum Distributions (RMDs) can be complex, and missing a deadline can be costly. We help our clients navigate RMDs and the many other pieces of a comprehensive financial plan. How can we help you? Call 605-357-8553 or email cfsteam@mycfsgroup.com today and schedule your complimentary, no-obligation appointment.

Sources

  1. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
  2. https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans
  3. 11 https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
  4. 12 https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary

CSP #707048 (in CGC Weekly Commentary) Exp. 1.27.26

Friendship and Finances

Jan 16, 2025 | Retirement Planning

When making plans with friends:

  • Ask for ideas from everyone in the group to ensure it fits within your friends’ budgets.
  • Give plenty of heads up if there’s a big-ticket event you’d like your crew to take part in.
  • Have an open conversation about finances to remove the taboo and build understanding.

From buying gifts and eating out, to going to weddings and planning vacations, money plays a part in all relationships. And friendships are no exception.

 

Here are some do’s and don’ts for dealing with mixed-income friendships.

Do ask your friends for input. Even if you’re the unofficial events coordinator for your group, ask everyone for ideas so nobody feels backed into a corner. You can ask questions like, “How much is OK to spend on gifts?” and What do you suggest we do for our get-together.” It will be more inclusive for everyone to suggest activities that align with their budget.

 

Do extend the invite. Always ask, even if you’re pretty sure something is out of your friend’s price range.

 

Don’t make assumptions. You can’t assume anyone’s budget and financial situation.

 

Do give plenty of notice. If you’re planning something give your friends advance notice so they can budget for it. A longer lead time gives them the chance to save up for that fancy birthday dinner or night at the theater if they want to join you. Last-minute plans might not be possible if they’re working on a tight budget.

 

Don’t be upset if they take a pass. Understand that not only do your friends’ finances differ, but so do their priorities. Even if you’ve given plenty of notice, a weekend wine tasting trip with girlfriends might not be as important as visiting family for the holidays. While you might be well-positioned to do both, you shouldn’t assume that your friend is.

 

Do offer to pay if it’s in your budget and having their company is worth it to you. That doesn’t have to mean you’ll cover the cost of their flight. But, consider offering to pay for cocktails one night while you’re away or covering the cost of a rental car in your destination city. Be open about your feelings and understand if they politely decline. Which leads to the next tip…

 

Don’t be afraid to have an honest conversation. I’m not suggesting you swap bank statements. Just don’t be afraid to say if something is out of your budget or if you’re prioritizing a different expense. With communication and understanding you can make money less of a taboo topic with friends and have a better chance of making memories that fit into everyone’s budget.

 

Keeping these do’s and don’ts in mind when it comes to finances will open communication, strengthen friendships, and provide opportunities to create lasting memories.

Sources: theeverygirl.com; huffpost.com; tampabay.com, morningbrew.com, Raymond James. CSP #315161-2 Exp. 1.16.26

Saving Family Memories

Jan 14, 2025 | Retirement Planning

“This cause is very close to my heart as my grandmother was diagnosed with Alzheimer’s and battled it for six years before passing. While we had known about her diagnosis for some time, it truly hit me emotionally on the day of my confirmation when she spent the entire day with my family and by the end, had forgotten why she was there. I was 14 years old, and when she hugged me goodbye, she wished me a happy birthday. It was a small moment, but it was the first time I truly felt the weight of her condition and how it was changing her. Watching her struggle and seeing the changes in her behavior was incredibly hard, but it also highlighted the importance of family. It brought my family together more often to visit her and spend time together, which I will cherish forever.”

~Sarah Micek

Experience Team Manager, Cornerstone Financial Solutions

Branch Associate, RJFS

Capturing Family Memories

If you’ve ever flipped through old photos or watched grainy home videos, you know the bittersweet feeling of wanting to freeze time—to hold on to those precious moments, relive them, and share them with future generations. Some of the most valuable aspects of a family’s legacy are intangible—traditions, shared values, and family history. Preserving those memories is an investment in what matters most.

From celebrating special events to capturing the beauty of everyday life, there are more tools than ever to help you create lasting keepsakes. The key is finding an approach that works for you and helps keep those connections alive for years to come. To help you get started, here are some ideas to preserve your cherished memories:

1. Turn Photos Into Stories: Photo Books

A picture says a thousand words, but a photo book tells the whole story. Services like Shutterfly, Mixbook, or Chatbooks make it easy to create albums to showcase your favorite photos and add captions, dates, and personal notes. Imagine your children flipping through a beautifully crafted book, laughing over silly moments, or admiring milestone memories.

2. Speak from the Heart: Digital Journals & Story Apps

For those who love storytelling, digital journals are a fantastic option. Apps like Day One allow you to pair photos and even video snippets with your written reflections. These digital entries can be shared across devices and stored in the cloud, making them easily accessible for future generations. Story apps like StoryWorth prompt family members with questions and compile answers into a book, perfect for capturing family history in a simple, engaging way. One day, your family might say, “I never knew this!” as they discover a part of your history.

3. Hold a Piece of the Past: Memory Boxes

There’s something magical about holding something tangible in your hands that brings stories to life. A memory box filled with mementos like ticket stubs, postcards, handwritten letters, or tiny artwork is like  a time capsule. Companies like Savor offer beautifully designed, curated keepsake boxes to store these items beautifully and evolve over the years.

4. Make the Everyday Extraordinary: Video Diaries

Whether you’re filming a quick chat over breakfast, capturing laughter during a family game night, or recording an interview with a parent, tools like WeVideo and iMovie make it easy to edit and store these snippets.

5. Create a Digital Family Hub

For tech-savvy families, a family website offers a modern way to stay connected no matter where life takes you. Platforms like Wix and Squarespace allow everyone to contribute photos, blog entries, and even family timelines. It’s a fun way to preserve memories and keep a family archive.

By taking small steps to preserve your memories, you’re creating more than just keepsakes. You’re building a foundation of love and connection for future generations. Let’s make those memories last.

 

Your Next Step:

Ready to begin your legacy project? Start small. Choose one idea and take the first step.  Whether you create a photo book, a memory box, or a short video, each action is a building block. And remember that even the most advanced tools are only as powerful as the people who use them – preserving your family’s memories starts with your heart.

If you’re unsure where to begin, we’re here to help you take the first step. Because at Cornerstone, we believe every great plan builds on what matters most – your family’s unique story.

Not a Cornerstone Client?

We can help you build a plan and define the legacy you’d like to pass on to future generations.

Call 605-357-8553 or email cfsteam@mycfsgroup.com today to schedule an appointment with one of our Wealth Managers.

CSP #684296 Exp 1.9.26

Raymond James is not affiliated with the above-mentioned digital services providers. This content was created with the assistance of artificial intelligence.

About the Markets

Aug 5, 2024 | Investing, Retirement Planning

Market Update Video – August 5, 2024

After a bright start to the year, some dark and stormy clouds have gathered above Wall Street. Friday’s weaker-than-expected jobs report raised concerns that cracks have formed in the US economy and the Fed is waiting too long to cut interest rates. Meanwhile, a group of disappointing Big Tech earnings last week showed how AI investments are not yet paying off as investors had hoped.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results.

The views and opinions expressed are not necessarily those of  Raymond James. This material is being provided for information purposes only, it not a complete description, it is not a recommendation, and it is not intended to be a substitute for specific individualized tax, legal, estate, or investment planning advice as individual situations will vary. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Expressions of opinion are as of this date and are subject to change without notice. This information does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

This material is not a recommendation to buy, sell, hold or rollover any asset, adopt an investment strategy, retain a specific investment manager or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

CSP #564884 Exp. 8.5.25

529 Plans: Smart parenting and savvy retirement planning

Jul 22, 2024 | Retirement Planning

Your dreams for your children likely include happiness, success, and perhaps the joy of raising a family. Your dreams probably don’t include them struggling in dead-end jobs, mired in debt, or living in your basement well into adulthood. If realized, concerns like these can challenge family dynamics and drain your finances – a significant problem if you’re trying to plan for retirement.

Fortunately, there are proactive steps you can take to help set your children up for success while safeguarding your financial future. One such step is investing in their education through a 529 plan or another type of education-funding account. The most common of these plans is the 529 college savings plan.

What is a 529 College Savings Plan?

A 529 College Savings Plan is a tax-advantaged savings plan allowing you to invest your money specifically for education. Funds in a 529 plan can grow tax-free, potentially allowing you to pay for more education at less cost to you.

You establish an account, choose investment options, and contribute funds that can be used for “qualified higher education expenses,” such as tuition, room and board, books, fees, and computers.

Benefits:

  • Tax Advantages: Earnings aren’t subject to federal tax. In many cases, they’re exempt from state taxes, too. Funds withdrawn solely to pay for eligible college expenses are completely tax-free.

 

  • Control: As the account holder, you maintain control over the funds, helping ensure they are used for their intended purpose.

 

  • Estate Planning: 529 Plans are not counted as part of your estate, so your family won’t owe estate taxes on the account even if you pass away.

 

  • Legacy: By helping fund their education, you’re providing financial support while also emphasizing the importance of education. Seeing that education is important to you can make it important to your children as well.

 

  • Flexibility: There are no age limits. You can invest for both children and adults, so it’s never too late to start saving for education.

 

Investing in education through a 529 plan isn’t just good parenting, it can also be good retirement planning. Depending on your overall financial plan, it can pave the way for your children’s success while helping ensure your financial stability in the years to come. Consult a financial advisor who can help you evaluate a 529 college savings plan as part of your comprehensive financial plan.

Not a Cornerstone Client?

We can help you tailor a plan that aligns with your goals and ensures your loved ones have the educational opportunities they deserve. Call 605-357-8553 or email cfsteam@mycfsgroup.com to schedule a strategy session today.

Or, if you’d simply like more information about the two types of 529 plans, call 605-357-8553 or email cfsteam@mycfsgroup.com.

Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, so long as you use withdrawals for eligible education expenses, such as tuition and room and board. However, if you withdraw money from a 529 plan and do not use it on an eligible education expense, you generally will be subject to income tax and an additional 10% federal tax penalty on earnings. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Investors should consider, before investing, whether the investor’s or the designated beneficiary’s home state offers any tax or other benefits that are only available for investment in such state’s 529 college savings plan. Such benefits include financial aid, scholarship funds, and protection from creditors. The tax implications can vary significantly from state to state.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. CSP #551286 exp 7.22.25