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Friend of Clear Harbor,

We hope this new year has started well for you and your family. As we continue our tradition of monthly newsletters in 2025, we look forward to bringing you timely wealth management insights and financial planning strategies to support your financial goals.

As we mentioned at the end of last year, our mission with these newsletters remains to simplify complex topics, spark meaningful conversations, and address the financial questions that matter most to you. Should any of the ideas we share resonate or raise additional questions, please do not hesitate to reach out to your Clear Harbor advisor.

If you'd prefer not to receive these updates, you can adjust your email preferences by selecting "Update Profile" at the bottom of this message.We always welcome your feedback as we strive to deliver content that is engaging and valuable to you, your family, and perhaps even your friends and acquaintances.

Sincerely,

The Clear Harbor Advisory Team


Key Retirement and Tax Numbers for 2025

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key adjustments for 2025.


Estate, Gift, and Generation-skipping Transfer Tax

  • The annual gift tax exclusion (and annual generation-skipping transfer tax exclusion) for 2025 is $19,000, up from $18,000 in 2024.
  • The gift and estate tax basic exclusion amount (and generation-skipping transfer tax exemption) for 2025 is $13,990,000, up from $13,610,000 in 2024.


Standard Deductions

A taxpayer can generally choose to itemize certain deductions or claim a standard deduction on the federal income tax return. In 2025, the standard deduction is:

  • $15,000 (up from $14,600 in 2024) for single filers or married individuals filing separate returns
  • $30,000 (up from $29,200 in 2024) for married joint filers
  • $22,500 (up from $21,900 in 2024) for heads of households

The additional standard deduction amount for those age 65 or older in 2025 is:

  • $2,000 (up from $1,950 in 2024) for single filers and heads of households
  • $1,600 (up from $1,550 in 2024) for all other filing statuses


Individual Retirement Accounts (IRAs)

The combined annual limit on contributions to traditional and Roth IRAs is $7,000 in 2025 (the same as in 2024), with individuals age 50 or older able to contribute an additional $1,000. The limit on contributions to a Roth IRA phases out for certain modified adjusted gross income (MAGI) ranges.

For individuals who are active participants in an employer-sponsored retirement plan, the deduction for contributions to a traditional IRA also phases out for certain MAGI ranges. The limit on nondeductible contributions to a traditional IRA is not subject to phaseout based on MAGI.


Employer-sponsored Retirement Plans

  • Employees who participate in 401(k), 403(b), and most 457 plans can defer up to $23,500 in compensation in 2025 (up from $23,000 in 2024); employees age 50 or older can defer up to an additional $7,500 in 2025 (the same as in 2024), increased to $11,250 in 2025 for ages 60 to 63.
  • Employees participating in a SIMPLE retirement plan can defer up to $16,500 in 2025 (up from $16,000 in 2024), and employees age 50 or older can defer up to an additional $3,500 in 2025 (the same as in 2024), increased to $5,250 in 2025 for ages 60 to 63.


Required Minimum Distributions (RMD)

Required Minimum Distribution rules can be a little tricky. In general, your first required distribution from a traditional IRA or employer-sponsored retirement plans is for the year you reach age 73. However, you have some flexibility as to when you actually have to take this first-year distribution:

  • You can take it during the year you reach age 73, or you can delay it until April 1 of the following year, though you will be required to take two distributions during that year — your first year's required distribution and your second year's required distribution.
  • This "double" distribution will increase your taxable income for the year and will likely cause you to pay more in federal and state income taxes.

In future years, each individual should review the tax consequences of delaying (and having double amount in one year) or taking the first RMD by 12/31 in the year they turn 73 to spread it out.

If you own a Roth IRA, you aren't required to take any distributions during your lifetime. Your funds can continue to grow tax deferred, and qualified distributions will be tax free.1


1. To qualify for tax-free and penalty-free withdrawal of earnings, a Roth IRA must meet a five-year holding requirement and the distribution must take place after age 59½, with certain exceptions.

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Disclosure: Clear Harbor Asset Management, LLC (“Clear Harbor”) is an SEC registered investment adviser with its principal place of business in the State of Connecticut. SEC registration does not imply a certain level of skill or training. Clear Harbor and its representatives are in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which Clear Harbor maintains clients. Clear Harbor may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements.

The material contained herein is intended as a general market commentary. The commentary may contain general information and views that are not directly relevant to your particular account. Opinions expressed herein are those of Clear Harbor Asset Management, LLC. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Any comparison to an index, including the S&P 500 and Russell 2000, is for comparative purposes only. An investment cannot be made directly into an index, which are unmanaged and do not reflect the deduction of advisory fees. This brochure is limited to the dissemination of general information pertaining to its investment advisory services. The current account composition is intended for informational purposes and allocations are subject to change. Clear Harbor does not offer tax or legal advice and a tax advisor or legal professional should be sought for specific tax or legal advice based on the individual's specific circumstances. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, investors are encouraged to contact their professional advisor.For information pertaining to the registration status of Clear Harbor, please contact Clear Harbor or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). For additional information about Clear Harbor, including fees and services, send for our disclosure statement as set forth on Form ADV from Clear Harbor using the contact information herein. Please read the disclosure statement carefully before you invest or send money.