| Good morning from Traverse City, |
| A survey from Vanguard found that investor trust in human financial advice went UP in 2026, while trust in AI-powered advice went down. That's worth sitting with for a moment, because it cuts against the hype. This week we cover a Roth conversion mistake that costs people more than they expect, a new scam threat the SEC is formally flagging, and a car loan tax deduction most people haven't heard of yet. |
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IN THIS ISSUE
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Filling your tax bracket for Roth conversions may not be the right target |
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The SEC is putting AI phishing and deepfakes on its 2027 exam watchlist |
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The IRS just finalized rules for a new car loan interest deduction |
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Waiting to decide can carry more risk than making the wrong call |
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Around Traverse City: Trick-or-treat through downtown on Halloween, and 1 more coming up |
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The lead 路 ROTH WATCH
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Filling your tax bracket for Roth conversions may not be the right target
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| A closer look at Roth conversion strategy suggests that aiming to "fill up" your current tax bracket each year can actually cost you more over time, not less. |
| The instinct makes sense on the surface: convert just enough each year to stay under the next bracket ceiling. But according to analysis in Kitces' Weekend Reading (October 24-25), that approach ignores the real question, which is where your tax rate is headed, not just where it sits today. If tax rates rise in the future, paying a little more now at a known rate can beat deferring into an unknown one. The more useful frame is comparing your rate today against your likely rate when money comes out, whether that's your own withdrawals, required minimum distributions, or your spouse's situation after you're gone. |
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Why it matters: If you're in your early retirement years and your income is temporarily low, this is one of the better windows you may ever have for conversions, and it closes when RMDs or Social Security start pushing your rate back up.
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Read at Kitces.com →
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SCAM ALERT
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The SEC is putting AI phishing and deepfakes on its 2027 exam watchlist
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| Federal regulators are formally flagging AI-powered phishing and deepfake attacks as a priority threat for 2027, which means these scams are real enough now to draw official attention. |
| The SEC's 2027 examination priorities, reported by Wealth Management on October 23, include checking whether financial firms have defenses against AI-generated fraud, including voice cloning and fake video. From where you sit as a client, the risk isn't abstract: scammers can now fake a phone call from someone who sounds exactly like your advisor, your bank, or a family member asking for money or account access. The tell-tale signs of fraud are harder to spot when the voice on the line is convincing. |
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Why it matters: Before you act on any unexpected call or message asking you to move money or share login credentials, hang up and call back on a number you already have on file, even if the voice sounds completely familiar.
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Read at WealthManagement.com →
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TAX RULE
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The IRS just finalized rules for a new car loan interest deduction
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| The IRS has finalized the rules for deducting car loan interest under the One Big Beautiful Bill Act, and this one is worth knowing about before you file. |
| Car loan interest hasn't been deductible for most people since 1986, so this is a genuine change. The Kitces Weekend Reading summary from October 24-25 notes the IRS finished the rules this week. The deduction isn't unlimited, and the details matter, including which vehicles qualify and how it interacts with your other deductions. If you financed a car recently or are planning to, it's worth a conversation at your next review to see whether it changes anything in your planning. |
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Why it matters: A deduction you didn't know existed is one you can't claim, and the IRS finalizing the rules now means the 2026 tax year is the one to pay attention to.
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Read the full story →
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PLANNING CORNER
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Waiting to decide can carry more risk than making the wrong call
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| A framework from Kitces and Carl argues that keeping your options open on big retirement decisions, like when to retire or claim Social Security, sometimes costs more than committing. |
| The piece, published October 15, walks through how indefinite delay can lock people into a kind of holding pattern that has its own real costs: lost years of a lower-stress pace, missed Roth conversion windows, or a Social Security strategy that drifts past its optimal starting point. The argument isn't that you should rush. It's that "I'll decide later" is itself a decision, and one worth examining. Some choices get harder to reverse the longer they sit. |
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Why it matters: If there's a retirement decision you've been circling for more than a year, it may be worth naming what's actually keeping it open, not to force anything, but to make sure the delay is a real choice rather than a habit.
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Read the full story →
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Quick hits
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Around Traverse City
Trick-or-treat through downtown on Halloween
If you have grandchildren or young neighbors to bring along, the Downtown Halloween Walk on October 31 runs from 10 in the morning until 11:30, winding through participating businesses in downtown Traverse City for trick-or-treating and Halloween activities. It's a low-key way to spend a Friday morning before the weekend.
Also coming up
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Tip of the week
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Check your beneficiary designations before December 31
Year-end is a natural time to pull up your IRA, 401(k), and life insurance beneficiary designations and confirm they still reflect what you want. These designations pass assets directly to named individuals regardless of what your will says, so a form that names an ex-spouse or a deceased parent overrides everything else. It takes about ten minutes and costs nothing, and it is one of the few planning tasks you can complete entirely on your own.
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How was this issue?
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Until next week,
Tom, your planner
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| P.S. If any of the stories above raise a question about your own situation, bring it to your next review and we'll work through it together. |