When planning for your retirement, there are two types of independent retirement accounts (IRAs). A traditional IRA receives pre-tax income, and you are taxed when you withdraw or receive distributions later on. You are also taxed on any accumulated funds from interest and investments, as income tax is applied to any funds removed from the IRA.

A Roth IRA receives post-tax money, so withdrawals and distributions are neither taxed nor treated like income for your income tax bracket.  Many would prefer to use a Roth IRA to control tax, revenue, and earnings. Especially since you can withdraw anytime, and there are no mandatory minimum distributions after retirement age. However, with the income bracket limitation, Roth IRAs are typically unavailable to individuals or spouses with an income that is too high.

Fortunately, there is a way around it called a backdoor Roth IRA.

What Is a Backdoor Roth IRA?

A "backdoor" Roth IRA allows you to transfer the balance of a traditional IRA or 401(k) to a Roth IRA without consideration for the income level restriction. This will enable people and couples with a high-income bracket to access the financial conveniences of a Roth IRA, even if your annual income is above the restricted level.

• 2024 Roth IRA income limitations are $146,000 for single filers and $230,000 for married couples filing jointly.
• 2025 Roth IRA income limitations are $150,000 for single filers and $236,000 for married couples filing jointly.

You will pay taxes on any pre-tax funds from the traditional IRA. However, as soon as your IRA funds become part of a Roth IRA, you can manage your principal, interest, and earnings in the Roth fashion without a traditional IRA's unique limitations and requirements.

Why Pursue a Backdoor Roth IRA?

• Interest and Investment Earnings
  • With a traditional IRA, earnings from interest and investments are taxed as income when distributed because the principle is pre-tax. Once the funds have entered a Roth IRA, your earnings grow tax free.
• 5 Year Access
  • Five years after you convert an IRA to a Roth IRA, you have full access to your funds without an age or distribution limitation. If the timing is right, this can also mean earlier access to IRA funds before your retirement age.
• No Mandatory Minimum Distributions
  • A Roth IRA does not have mandatory minimum distributions, so you can conserve or withdraw as you see fit for the duration of your life.
• Lesser Tax Burden
  • In general, paying one-time taxes on IRA income converted to a Roth IRA results in a lower overall tax burden than paying income tax on the IRA distributions later on.

Tax Pitfalls to Watch Out For

One of the most important things to be aware of is the potential for mistakes when performing this complex tax-related financial maneuver. Using a backdoor Roth IRA can benefit your long-term financial planning, but you'll want to do it right and avoid possible pitfalls.

• Income Tax on Transfer
  • Remember that all pre-tax funds removed from an IRA or 401(k) will go through a tax cycle during the transfer.
• Income Bracket
  • This transfer can change your income tax bracket.
• IRA Capital Gains
  • Transfer sooner rather than later to reduce the tax burden on IRA capital gains regarding interest and investments.
• One-Time Conversion
  • The backdoor Roth IRA transfer is not a one-time thing. Continue to make routine conversions to minimize taxed earnings.

Consult With Your Financial Advisor

To get the best tax advantage and control over your retirement finances, plan your backdoor Roth IRA conversion with the help of your skilled financial advisor. We are proud to provide insight and a detailed understanding of retirement financial management to help you achieve this unique and beneficial maneuver and get the most from your retirement plans. Contact us today to explore the best financial strategies for your retirement.

Any opinions are those of Dale Crossley and Evan Shear and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided in the attached article will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. 

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Unless certain criteria are met, Roth IRA owners must be 59 1/2 or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

Significant shifts in power can lead to interruptions in the government. With such a massive overturn as we experienced in the most recent election, the concern of a government shutdown is lurking in the minds of many. These events can lead to uncertainty about the impact on the economy, financial markets, and personal finances for those who rely on government paychecks or contracts.

With the headlines buzzing, it's easy for the "What if Monster" to creep in and make you worry about your financial stability. You may worry about delayed paychecks, market volatility, or economic slowdowns due to an impending shutdown. However, we can tell you from experience and long-term data that while shutdowns can cause short-term disruptions, strong financial planning provides the stability you need to navigate temporary times of uncertainty with confidence.

What Happens During a Government Shutdown?

A government shutdown is when Congress fails to pass a funding bill - typically due to voting disputes. This leads to a temporary closure of non-essential federal operations due to a lack of legal funding. Core services like Social Security, Medicare, and National Security will continue to operate. However, other acutely essential aspects can be affected by the shutdown.

• Government Employee Pay
  • Certain federal government employees may experience a delayed paycheck.
  • This is usually compensated with backpay once the shutdown is over.
• Federal Benefits
  • Some federal benefits and services may be put on hold for a temporary lack of funding.
  • These benefits will resume when the funding bill is passed.
• Economic Growth
  • If prolonged, a shutdown can impact the growth of consumer and commercial economic forces.
  • These markets recover quickly when the interruption is removed.
• Market Volatility
  • More mercurial markets and traders may become volatile during the government shutdown.
  • Long-term strategies are often unaffected by this temporary blip.

While a shutdown can cause temporary disruptions, financial markets, and the broader economy have historically recovered once government funding resumes.

How a Shutdown Could Affect You

A government shutdown is not without impact, and awareness of how that impact can affect you can help you prepare for the tumultuous waters ahead. The effect of a government shutdown primarily depends on how long it lasts.

• Stock Market Volatility
  • The stock market may experience short-term spikes or dips in stock value. However, historical data shows that markets almost always stabilize back to normal levels.
• Federal Employee and Contractor Pay
  • Paychecks and benefits can experience a temporary delay that results in financial stress. However, if you can hold out, backpay will be granted after the shutdown concludes.
• Tax Refunds and Loan Processing
  • Essential IRS functions continue, but certain federal tax services may be delayed. This can include the processing of federally backed loans, such as mortgages and small business loans.
• Consumer Confidence and Spending
  • A prolonged government shutdown can influence the overall economic momentum.

Keeping the 'What if Monster' Quiet

A government shutdown may be an unsettling occurrence, but it is not as big a disaster as it seems. Preparation and thoughtful financial planning can help you to minimize the impact on your finances, both regarding short-term funds and long-term goals. The following steps can help you manage your finances smoothly and keep the "What if Monster" at bay.

1. Emergency Fund

• Prepare your savings to cover 3-6 months of expenses. This can provide a cushion if you rely on federally sourced income that might be disruptive.

1. Long-Term Investment

• Stick to your long-term investment strategy. While markets can fluctuate during a government shutdown, responding to this volatility can be more harmful than beneficial. Hold fast and wait for the market to re-stabilize. Your long-term goals will likely stay on course.

1. Plan for Federal Service Delays

• If you rely on federal services, be aware that delays are possible. Make plans for interim services, stock up on supplies, and contact alternative support organizations to help you get through.

1. Minimize Expenses

• If you anticipate that an imminent shutdown could impact your finances, minimize unnecessary spending to help your budget flex more efficiently according to circumstances and needs.

Final Thoughts

Government shutdowns, while upsetting, are a natural part of our democratic system. Sometimes Congress has disagreements and the Federal budget is delayed as a result. These shutdowns come and go, but greater market trends are more powerful.

Shutdowns can cause temporary financial disruption, but they should not derail a well-thought-out financial plan. By preparing for interruptions in advance and focusing on your long-term financial health, you can keep the "What if Monster" from disturbing your sleep or your household stability.

If you have concerns about how a government shutdown may affect your financial future, we're here to help. Let's review your strategy and ensure you're prepared for any uncertainty that comes your way.

Any opinions are those of Dale Crossley and Evan Shear and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided in the attached article will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. 

From the Desk of Dale Crossley and Evan Shear 

We hope your 2025 is off to a great start! To kick off the year on the right foot, we’re diving into key topics like annual reviews, estate planning, effective communication, and a few fun health tips on what else – the benefits of dancing! After all, we firmly believe that financial health and your emotional and physical health are interconnected. Financial freedom reduces stress, and good overall health promotes longevity so you can enjoy a long, happy retirement!

CrossleyShear Annual Reviews

An annual review with our clients is required to help you look deeper at your current investment portfolio. The review process will guide you through ensuring that your portfolio aligns with your investment goals. It will also help you consider your desired risk levels and any recent life changes that might have affected those objectives in the last year. Your participation is essential so we can understand your evolving financial needs and continue to provide you with the highest degree of service and support.

Please don't hesitate to contact us or schedule your review meeting here at your earliest convenience.

A Fresh Start—Is Your Estate Plan Up to Date?

The new year is also a great time to update your estate plan. Estate planning addresses the distribution of assets to key beneficiaries in the event of your demise. Of course, a person's assets and the needs of their beneficiaries often change over time. Keeping your estate plan up-to-date and keeping your beneficiaries informed is essential.

Make sure your named beneficiaries are up to date on the details of your estate plan, update your assets, and adapt your plan to your family's evolving needs.

Reminder: Compliance-Approved Texting Available – But Not for Financial Orders

As a reminder, we have compliance-approved numbers for texting, making it easier to stay in touch with your advisor. However, for security and regulatory reasons, financial orders cannot be accepted via text, email, or voicemail.

Orders can only be placed in person or over the phone.

Please continue using the designated compliance-approved numbers below for texting:

Dale Crossley Private Wealth Advisor | Branch Manager, RJFS: 321.455.0440

Evan Shear CERTIFIED FINANCIAL PLANNER® | Branch Manager, RJFS: 407.638.8675

Catalina Mejia-Hensel Financial Advisor: 321.340.6700

Shaun Jones Financial Advisor: 321.359.7709

We appreciate your cooperation in keeping our communications secure and compliant!

Dance Your Way to a Healthier, Happier 2025

If you want 2025 to be even better than 2024, prioritizing your health is a great place to start. When you feel your best, you have more energy, focus, and clarity to enjoy and optimize the year ahead. One simple yet powerful way to enhance both your physical and mental well-being? Dancing.

Dancing is a fun and effective way to boost cardiovascular health, improve flexibility, and even enhance the quality of your sleep. Studies show that dancing helps reduce stress, elevate mood, and promote deeper, more restorative rest by releasing endorphins and lowering cortisol levels. Just a few minutes of movement each day can help you feel more refreshed, energized, and ready to take on new challenges.

At CrossleyShear, we believe in overall wellness—financial, physical, and emotional. Just as small, consistent steps can improve your health, they also lead to financial confidence and well-being. Whether you're dancing to relieve stress or setting financial goals for the future, simple, sustainable actions can help you create a more balanced and fulfilling life.

If financial stress keeps you up at night, we’re here to help you develop a strategy that allows you to focus on what matters most—your well-being and the life you’ve built. Let’s make 2025 a great year together—one step (or dance) at a time!

Any opinions are those of CrossleyShear Wealth Management and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. All opinions are as of this date and are subject to change without notice. Past performance is not a guarantee of future results.

Document shredding and food drive

Clean out your cabinets and drawers of those old documents and bring them to be safely shredded, on site, by the professionals of Shred it™ and enjoy some good food and live music!

When: May 31st

Where: Outside of the Merritt Island office 2395 N. Courtenay Parkway

Time: 11:00am-2:00pm

Please consider bringing a non-perishable food item for our Food Drive to benefit Harvest Time International

Please Donate:

Low sodium canned vegetables - Canned meats - Canned soups - Boxed oatmeal or grits - Canola or olive oil - Peanut butter - Nuts - No sugar added fruit cups - Canned beans - Granola/Protein bars - Pasta - Beans - Rice - Dry powdered milk

Questions please contact

Karin@crossleyshear.com or call 321-452-0061

Raymond James is not affiliated with Harvest Time International, Shred-it, or 4th Street Fillin Station.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

No timing needed

Help overcome market timing and loss aversion with dollar-cost averaging.

Dollar-cost averaging — regularly investing money in the market — is an age-old strategy for mitigating investment price risk. Commonly applied by 401(k) plan savers, it could also be a useful strategy for experienced investors with larger sums, especially during periods of uncertainty or when emotional reluctance is high.

Dollar-cost averaging: the theory behind the practice

Dollar-cost averaging involves regularly investing a consistent amount of money to purchase a specific asset, or group of assets, regardless of their price. For example, an employer-sponsored 401(k) plan is set up this way. With each paycheck, you invest a regular percentage of your earnings in defined assets, generally mutual funds, that you have previously selected.

This strategy helps prevent you from stressing over decisions on when to invest in the market. With the regular-investment approach, you don’t focus on whether the asset you’re purchasing is at a good price for purchase. Rather than try to time the market, you buy it each week or month or whatever the interval is.

The theory underpinning this strategy is that asset prices will go up and down in unpredictable ways, and if you buy shares regularly, the average share price you pay – that is, the dollar-cost average – won’t be too high. When prices are lower, your money will buy more shares than the same amount will buy when prices are higher, bringing down your price-per-share cost. This, in turn, can help reduce the impact of market volatility on your portfolio.

Potential benefits and limitations of dollar-cost averaging

In addition to the theoretical benefit of avoiding an overly high purchase price, dollar-cost averaging presents other potential benefits.

For relatively early savers, regularly investing in the market builds the investing habit and may help you feel more at ease with investing in general.

For those with large cash balances, it can be a way to invest – or reinvest. Cash tends to lose value over time due to inflation. Especially as interest rates go down, cutting into your cash’s return potential, dollar-cost averaging can help address the emotional challenge of loss aversion, which often has the potential to lead to inaction.

However, dollar cost averaging could also leave some returns on the table when markets are rallying, and it does not mitigate some other investment risks.

Another approach: lump-sum investing

Given that time in the market is often an advantage, investing all your money at once could be more effective than investing it incrementally over time. This all-in approach is known as lump-sum investing.

Lump-sum investing can be an effective strategy given certain market conditions. For example, in a rising market, particular assets will rise in price on average, so investing a lump sum at the outset can enable you to acquire more shares, and therefore more value, compared to investing fixed amounts over time.

But if you invest all your money at once, and the price drops, you may suffer losses that could persist for a few years or longer. Under these conditions, dollar-cost averaging would lead to owning more shares.

With dollar-cost averaging, you can avoid the risk that you’ve mistimed the market.

Choosing the right strategy for you

There’s no one-size-fits all answer when it comes to your investment strategy. Whether dollar-cost averaging is the right strategy for your investment goals depends on multiple factors, including the time horizon to your financial goal, your available cash, market conditions, and investment opportunities.

Your financial advisor can help you weigh these different considerations and make a choice that feels right for you.

There is no assurance any investment strategy will be successful. Investing involves risk including the possible loss of capital. Dollar cost averaging does not assure a profit and does not protect against loss. It involves continuous investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low-price levels..

Sources: forbes.com; cnbc.com; etrade.com; ndvr.com; aarp.org

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.