Newsletter Gets a Fresh Update

Greetings!

Our newsletter is getting a fresh update

Beginning this month, we’ll be publishing a full blog post on our website and featuring a brief introduction to it here in the newsletter. If the topic resonates with you, we invite you to click through to read the complete article. There are even links at the bottom of each article to share with someone you know who might benefit.

Everything else you enjoy will remain the same: Watercolor Wins, helpful tips and insights, and our Market Guide.

We’re excited to continue sharing content with you in this new format.

The Novel, an acrylic painting by Cass Grange

March 2026

Should You Take Social Security at 62, or Wait for a Larger Lifetime Benefit?

Clients often ask whether Social Security is going broke and whether they should claim their benefits early. These are fair questions, considering the frequent headlines predicting trouble for the system.

While we cannot predict the future, we can offer a few observations....

Charitable Giving and a New Tax Break for 2026

Beginning in 2026, taxpayers who take the standard deduction will once again receive a tax benefit for charitable giving. Under the new rule, individuals can deduct up to $1,000 in cash donations to qualified charities, and married couples filing jointly can deduct up to $2,000, even if they do not itemize deductions. For many retirees and households who no longer itemize, this provides a simple way to receive a tax benefit while supporting causes they care about.

For those over age 70½, another powerful strategy is the Qualified Charitable Distribution (QCD). A QCD allows you to transfer money directly from an IRA to a qualified charity. The annual limit is $111,000 in 2026, and the distribution is not included in your taxable income. This can help reduce taxes on Social Security benefits and potentially lower Medicare premium surcharges. QCDs also count toward required minimum distributions for those who must take them.

Another option is a Donor-Advised Fund (DAF). With a DAF, you make a charitable contribution and receive an immediate tax deduction, then recommend grants to charities over time. This can be particularly useful in higher-income years when it may make sense to group several years of charitable giving into a single tax deduction.

Strategic charitable planning can allow you to support organizations that matter to you while also improving tax efficiency. If charitable giving is part of your financial plan, we are happy to help you explore the most effective strategies.

Watercolor Wins!

We’re excited to share that our client Amy Holloway has just published a new book, Trust Builders: The Key to Thriving Communities. Drawing on more than 30 years of experience leading over 200 economic and community development initiatives across the country, Amy explores a simple but powerful question: why do communities with similar resources achieve very different results?

Her conclusion is clear. Trust among local leaders is often the difference.

In the book, Amy interviews 31 community leaders from around the United States who share real-world stories about how trust is built, repaired, and sustained, and how those relationships have helped drive meaningful progress in their communities. The book also includes tools to help readers evaluate their own trust-building strengths and strengthen connections within their networks.

Trust Builders recently reached #1 bestseller status in Public Affairs and is available on Amazon or at trustbuildersbook.com.

Watercolor Financial is not affiliated with Amy Holloway, Trust Builders, or any related podcast, newsletter, or platform. The inclusion of this content is for informational purposes only and does not constitute an endorsement, recommendation, or testimonial by Watercolor Financial. Watercolor Financial has not independently verified the information contained in the referenced materials and makes no representations regarding their accuracy or completeness. Any views or opinions expressed are solely those of the third party.

Access your reports - Visit our web page for links to Fidelity (for access to statements and tax documents) and to the Orion portal (for access to performance reports and billing statements): Watercolor Financial website.

Q1 2026: Quarterly Market Guide

Please review this quarter's market guide by clicking on the painting below. We encourage all of our clients to review the market guide written by Rafael Villagran, CIO of Genesia Investments and investment consultant for Watercolor Financial.

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