Higher Estate Tax Exemptions

For a retirement plan, inflation is an implacable enemy, eroding the value of your dollars over time. Your investment goal is always to try to beat the constant, insidious reduction of your money’s value—which is why you never hear a financial advisor recommend an all-cash portfolio.

But every once in a while, inflation brings a bit of good news along with the bad. Case in point: the Internal Revenue Service has raised estate tax exemptions due to higher inflation. In 2019, individuals will be able to give a total of $11.4 million to their heirs before 40% estate taxes kick in, up from $11.18 million in 2018.

The annual exclusion for gift taxes—that is, the amount that Americans can give away to individuals without paying gift taxes—remains at $15,000 a year.

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