The government is the silent partner in your 401(k) and IRA — and the percentage they take may be higher in your retirement years than it was when you were earning. Coordination matters. Timing matters more.
Every dollar you put in a traditional 401(k) or IRA comes with an IOU to the federal government. When you pull it out in retirement, they take their cut — at whatever tax rate exists then, not the rate that existed when you contributed. IRA expert Ed Slott calls this "the retirement savings time bomb." He's not wrong.
Meanwhile, today's tax rates are historically low. The 2017 Tax Cuts and Jobs Act rates are scheduled to sunset. National debt is at record levels. It's difficult to make the case that rates 15 or 20 years from now will be lower than they are today.
David McKnight puts it plainly: "current tax rates are the sale of a lifetime." That means the smartest tax move for most savers happens BEFORE retirement, not after.
When you claim (62? 67? 70?) changes your lifetime benefit by tens of thousands of dollars. For married couples the math gets more complex — spousal benefits, survivor benefits, delayed retirement credits. We map the options.
Moving traditional IRA dollars into Roth pays tax today at known rates instead of future rates that may be higher. The math has to work — but for many households it does. We run it year by year and identify the sweet spot.
At age 73 the IRS forces you to start pulling money out of tax-deferred accounts — whether you need it or not. Planning ahead can soften the tax hit. Delaying doesn't help.
Having ALL your retirement money in one tax bucket (tax-deferred) leaves you exposed to future rate changes. A diversified plan spreads across taxable, tax-deferred, and tax-free — so you can pull from whichever bucket costs least in any given year.
Medicare premiums are income-based. Cross certain thresholds and your Part B premium can double or triple. Tax planning through your 60s can keep you under those cliffs.
The SECURE Act changed the rules on inherited IRAs — non-spouse beneficiaries now have 10 years to drain the account. Planning today prevents your kids from a tax hit later.
We're not tax attorneys or CPAs. We coordinate the strategic tax picture around your income and assets — but we don't file your return, and we always work alongside your CPA or refer you to one we trust. For anything requiring formal tax advice, that's their lane, not ours.
