As a parent, if you consider transferring your property to your children, you need to pay attention to one thing: the transfer of property during your lifetime is a gift, which not only has gift restrictions but also has value-added tax. For example, the value of parents' purchase of property is 500,000. After 15 years, the value of the house increases to 1,500,000. If the house is given to the child at this time, the value of the property received by the child is 1,500,000 of which 1,000,000 value-added needs to be taxed.

To solve this problem, the best practice is to use the provisions of the inheritance's "step-up in tax basis", put the property into the Living Trust, and designate the child as the beneficiary of the trust. In this way, when inheriting property, the value of the property will be subject to the value of the child's acquisition, which can avoid the problem of value-added tax. Note that irrevocable trust does not enjoy this benefit.

Are you considering retirement? One of the top priorities should be securing adequate medical insurance. How to purchase medical insurance after retirement varies based on when you retire.

If you retire before age 65, you will need to obtain general insurance before you can apply for Medicare at age 65. A current option for this is to enroll in the Affordable Care Act (commonly referred to as Obama Care), as you are required to have insurance coverage. You may also check your company policy who normally offers you to buy company insurance when retiring after certain age and until 65. 

Retiring after age 65 is generally more economical. At 65, individuals become eligible for Medicare, the government-sponsored medical insurance. Medicare is divided into three parts:

• Part A: Hospitalization – No premium required.
• Part B: Doctor visits – The monthly fee varies based on the insured’s income, currently ranging between $170 and $578 (as of 2024)
• Part D: Prescription drug coverage – The average monthly cost is approximately $33 (as of 2024)

Keep in mind that Medicare patients are responsible for their own medical expenses, and there is no cap on these costs. For this reason, many opt to purchase additional Medicare Supplement Insurance, such as United Healthcare Supplement, to cover serious illnesses. Details should be discussed with the insurance company directly.

In summary, if you calculate the approximate monthly expenditures, you have about $578 (Part B) + $33 (Part D) + around $98.31 for supplementary coverage, totaling approximately $700 per month, which amounts to $8,400 per year per person.

A Roth IRA (Individual Retirement Account) is a retirement savings account that allows your investments to grow tax-free. Unlike traditional IRAs, contributions to a Roth IRA are made with after-tax dollars, meaning you won’t get a tax deduction upfront. However, when you withdraw the money in retirement, both your contributions and investment earnings are tax-free, provided certain conditions are met. 

Key Features of a Roth IRA

• Tax-Free Growth: Your investments grow tax-free, and qualified withdrawals are not subject to taxes. The growth withdraw without penalty has to be after age 59.5 and the Roth IRA account is opened for more than 5 years. 
• Contribution Limits:  In 2025, the annual contribution limit is $6,500 (or $7,500 if you’re aged 50 or older).
• The income Limits: Eligibility phases out for individuals with a Modified Adjusted Gross Income (MAGI) above $153,000 (single) or $228,000(married filing jointly).
• No Required Minimum Distributions (RMDs): Unlike traditional IRAs, you are not required to withdraw funds during your lifetime.
• The backdoor Roth IRA conversion is a legal strategy in U.S. tax law that allows individuals to contribute to a Roth IRA even if their income exceeds the limits for direct contribution. Note: make conversion as quickly as you can to avoid paying growth tax, and avoid preallocating tax during conversion to avoid penalty. 
• Advantages of estate planning: Roth IRA can be passed on to heirs duty-free, which is a valuable tool for wealth transfer.​

How to Invest in a Roth IRA

• Open an Account: Choose a brokerage or financial institution that offers Roth IRAs, such as Vanguard, Fidelity, or Charles Schwab. Complete the application process and designate beneficiaries for your account.
• Choose Your Investments: because there is no further tax nor minimum withdrawal requirement, You can choose more aggressive investments such as stocks or investments with more taxable activities like mutual funds. You can leave the traditional 401K to buy bonds or conservative ETFs. 
• Making regular contributions is an effective strategy.
• Monitor and Adjust: Periodically review your investments and rebalance your portfolio to align with your financial goals and market conditions.

Backdoor Conversion 
It is well-known that there are contribution limits for Roth IRAs, particularly for individuals or families with high incomes. For these high-income earners, the only way to invest in a Roth IRA is through a backdoor conversion. This involves first transferring funds to a Traditional IRA or a company-sponsored Roth 401(k), and then converting that amount to a Roth IRA account. It’s important to ensure that this transfer avoids realizing any capital gains in the Traditional IRA; otherwise, the so-called “pro-rata rule” may be triggered, resulting in additional taxes on the capital gains. 

For example, In 2025, the annual contribution limit for Roth or Traditional IRAs is expected to be $7,000 if you're under 50, $8000 if above 50. For a couple above 50, each can use backdoor conversion to the IRA for $8000. So total is $16,000. 

Please remember that transferring assets is considered a taxable event. This means the transferred amount will be counted as income and will be subject to income tax for that year. To minimize taxes, it's advisable to choose a year when your income is lower to perform the conversion.

Mega Backdoor Conversion 
If your company's benefits include a Roth 401(k), you can perform a Mega Backdoor Conversion by adding post-tax dollars to the Roth 401(k) and then converting it to a Roth IRA tax-free. 

For example, if you have an income of $200,000 in 2025, the combined employer and employee contribution limit is $70,000. If you are above 50, you have additional 7500 catch up. If you are between 60-63, you have additional 11,250  catch up. The individual traditional 401(k) contribution limit is $23,500. If your company contributes $12,000 (which is 6% of your income), the maximum amount you can convert post-tax is calculated as follows: 

• $70,000 (total limit) - $23,500 (traditional 401(k) contribution) - $12,000 (company contribution) = $34,500 (post-tax conversion amount)
• After 50 or older than 64, 34,500+7500 (catch up after 50) =41,000(post-tax conversion amount) 
• Between 60-63:  34,500+11,250=45,750 (post-tax conversion amount) 

Combining both Backdoor and Megaback door, a couple after 50 can maximize the contribution up to: 34,500+7500+8000+8000= 57,000!