Who is Hans?

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Hans (John) E. Scheil, CFP®, is the CEO of North Carolina-based Cardinal Retirement Planning, Inc., and the author of “The Complete Cardinal Guide to Planning for and Living in Retirement.” In his book, “The Complete Cardinal Guide to Planning for and Living in Retirement,” John addresses the major problems retirees can face and provides simple strategies that can be put in place with the help of a qualified professional. John is a Certified Financial Planner™ professional (CFP®) as well as a Chartered Life Underwriter (CLU®), Chartered Financial Consultant®(ChFC®) and Chartered Advisor for Senior Living® (CASL®). He also holds life and health insurance licenses in all 50 states and the District of Columbia and is an investment advisor representative.

John’s career began at the age of 18, when he sold insurance while attending college full time, and his years in the insurance industry included positions as a Branch Manager, National Sales Director, and Senior Vice President for several nationally recognized insurance companies. John holds a Bachelor of Science degree from Northern Illinois University (1980) and a Master of Science in Management from The American College (2007).

John resides in Cary, North Carolina, with his wife, Ronda, and their two sons, Patrick and Stu. He is involved locally with StepUp Ministries and the Alzheimer’s Association. John enjoys golf, boating and leadership.

“A significant part of what I do is crisis planning for families that have a loved one checking into an assisted-living facility for the first time,” he says. “Their adult children are desperate for leadership through the financial maze and assisted-living decisions they have to make on behalf of their parents. That’s where I’ve stepped in to help them navigate this course.”

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Who is Hans?

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Understanding the Upcoming 2026 Income Tax Increase: What You Need to Know

A Brief History of the Tax Cuts and Jobs Act (TCJA)

In today’s Cardinal lesson, we’re discussing the significant changes coming to income tax rates in 2026. This isn’t a proposal but a law already set in motion. The Tax Cuts and Jobs Act (TCJA), passed in 2017 and effective from January 1, 2018, brought about substantial reductions in income taxes. However, these reductions were only funded for eight years, meaning they will expire at the end of 2025.

What Changes to Expect in 2026

As of January 1, 2026, the tax rates will revert to their 2017 levels, adjusted for inflation. Key changes include:

  • The 12% bracket will increase to 15%.
  • The 22% bracket will rise to 25%.
  • The top rate of 37% will revert to 39.6%.

Not Just a Proposal

It’s crucial to understand that this change is already the law. Many people mistakenly believe that the tax rate increases are still under discussion. However, unless Congress enacts new legislation, these higher rates will take effect as scheduled.

Implications for Your Financial Planning

Impact on IRAs and 401(k)s

With the current lower tax rates, now is the time to consider strategies like Roth conversions. By converting funds from a traditional IRA to a Roth IRA now, you can potentially save a significant amount in taxes over the long term.

Why Planning Ahead is Crucial

For individuals with substantial retirement savings, understanding these changes is vital for effective tax planning. The window to take advantage of the current lower tax rates is closing, and planning ahead can make a significant difference.

Case Studies and Planning Opportunities

Hans Scheil and Tom Griffith discuss specific case studies and planning strategies in our latest video. These examples illustrate how different scenarios can be managed effectively:

  • Case Study 1: A married couple with an adjusted gross income of $150,000 in 2024 can convert part of their IRA to a Roth IRA, taking advantage of the lower current tax rates.
  • Case Study 2: High-net-worth individuals with large IRAs can save substantial amounts in taxes by planning conversions over the next two years.

Estate Tax Considerations

The TCJA also doubled the estate tax exemption, which will revert in 2026. This change can significantly impact high-net-worth individuals, making estate planning more crucial than ever.

Action Steps to Take Now

  • Review Your Current Tax Situation: Analyze how the upcoming changes will affect your finances.
  • Consider Roth Conversions: Take advantage of the lower tax rates before they expire.
  • Plan for Estate Taxes: Assess your estate plans in light of the changing exemptions.

Conclusion

The changes coming in 2026 are significant, but with proper planning and informed decision-making, you can navigate these changes effectively. Watch our video for more detailed insights and personalized advice.

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Contact us today with any questions, concerns, or just to stay connected.

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