In addition, the Act introduces a higher state and local taxes (SALT) deduction cap of up to $40,000 from $10,000, potentially improving deductions for many California residents. This change makes tax strategies such as Roth conversions worth re-evaluating.
It is important to stay informed about the development and detailed IRS guidance on the provisions of the Act and discuss your plan with your tax and estate planning advisors.
Read more: THE WHITE HOUSE
For decades, stock and bond returns were negatively correlated—bonds served as diversifiers during equity downturns. However, since 2021, that relationship flipped to a positive correlation, where stocks and bonds have tended to move in the same direction. This change was especially stark in 2022, when the Federal Reserve aggressively raised interest rates to combat inflation. As a result, both stock and bond markets declined—something not seen since the 1970s. This shift is attributed largely to inflation shocks and economic uncertainty. When inflation dominates market sentiment, both equities and bonds can fall simultaneously.
Since the Fed began cutting rates in September 2024, the correlation has moderated but remains positive, though not as extreme as in 2022. If the current positive stock–bond correlation persists, investors should expect elevated portfolio risk—even in balanced portfolios. Expanding diversification through international equities, commodities, and alternative strategies can help mitigate that risk and provide more resilient performance across market cycles.
At Vibrance Wealth Management, we often use a “shoe” analogy to explain diversification: Sexy shoes may look great, but they’re rarely comfortable. A diversified portfolio might seem boring, but it provides a reliable cushion—especially important for those looking to protect assets and maintain financial stability in retirement.
Read more: Morningstar
Financial planning for domestic partnership comes with challenges because both Federal and California treat domestic partnerships differently. While California recognizes Registered Domestic Partnerships (RDPs)—regardless of gender—the federal government does not. This discrepancy creates complexities in tax, retirement, and estate planning.
For taxes, RDPs must file federal returns individually, but are required to file California state taxes using the same statuses as married couples. This dual treatment can impact taxable income, credits, and withholding strategies.
For retirement, domestic partners do not qualify for certain federal spousal benefits, including Social Security spousal and survivor benefits. However, under California law, RDPs are considered to have community property rights, meaning income and property acquired during the partnership are shared equally.
Estate planning is especially challenging. Unlike marriage, dissolution of an RDP may lack federal legal consistency. Clear documentation, updated ownership titles, beneficiary designations, and properly drafted legal documents are vital to ensure that partners' wishes are honored and both joint and separate assets are protected. Domestic partners should work closely with experienced tax and estate planning advisors to avoid unintended consequences and secure full legal protection.
Read more: WIKIPEDIA
Several proposals of long-term care (LTC) payroll tax are under active review by the California Long-Term Care Insurance Task Force. Under consideration is a payroll tax ranging from 0.6% to 3%, depending on the level of benefits, with contributions potentially capped and shared between employees and employers. An opt-out provision may be available for those who purchase qualifying private LTC insurance by a specified deadline.
We are strong advocates for planning ahead for long-term care needs, especially for clients with a net worth between $2 million and $10 million. A well-structured LTC policy provides not only asset protection but also peace of mind. As we often say, “We want you to have the coverage—but we hope you never need to use the benefits.”
By securing long-term care coverage early—while you're still eligible—you can protect your retirement income and potentially qualify for future tax advantages if a state-sponsored LTC tax is implemented. Delaying planning can be costly: not only might you become subject to the payroll tax, but insurance premiums also increase with age, and you risk becoming uninsurable as health declines.
Read more: California Department of Insurance