Tax Planning Strategies

Reducing taxes is rarely about one big strategy — it’s the sum of many small, well-timed decisions. A financial planner evaluates your entire financial picture, including your income, retirement accounts, investments, pension options, charitable giving, and future goals. From there, we identify ways to shift income into lower brackets, smooth out taxable events, or convert assets to tax-free accounts when the timing is right.

For example, we may recommend filling up lower tax brackets with partial Roth conversions, adjusting investment placement so that tax-inefficient assets sit in tax-deferred accounts, or planning withdrawals before RMDs create bracket spikes. These adjustments can reduce lifetime taxes by tens of thousands of dollars — and they’re often overlooked until someone works with a professional.

Tax preparation looks backward — it reports what already happened during the year. CPAs gather documents, file returns, and ensure compliance with federal and state rules.

Tax planning, however, looks forward. It examines how choices made today will affect your taxes this year, next year, and throughout retirement. We model long-term scenarios, identify opportunities to reduce your tax burden, and coordinate strategies with your financial plan. Together with your CPA, we help ensure your return accurately reflects a strategy that was deliberately designed — not improvised at the last minute.

Roth conversions can be extremely valuable — but only when timed correctly. Converting too late may cause a large tax bill, while converting too early could unnecessarily increase your taxable income.

We evaluate:

• Your current vs. future tax brackets

• Whether you’ll face high RMDs later

• The impact on Social Security taxation

• Medicare IRMAA thresholds

• Charitable giving goals

• Your heirs’ likely tax brackets

For example, many pre-retirees discover that performing small, strategic Roth conversions in their early 60s — after they stop working but before RMDs begin — helps them avoid large taxable distributions later. This can significantly reduce lifetime taxes and create more tax-free income.

Withdrawal sequencing determines which accounts you draw from first, next, and last. Done correctly, it can:

• Reduce your lifetime tax liability

• Prevent excessive taxation of Social Security benefits

• Lower Medicare premiums

• Support a more stable income stream

• Stretch your retirement savings further

For instance, some retirees benefit from drawing from taxable accounts early (to reduce future capital gains), then using IRAs later once tax brackets shift. Others benefit from delaying Social Security and using Roth accounts strategically. There is no one-size-fits-all approach — sequencing must be personalized to your income, assets, and life goals.

RMDs from traditional IRAs and 401(k)s begin at age 73 or 75 depending on your birth year. These forced withdrawals can push retirees into higher tax brackets, increase Medicare premiums, and cause more of their Social Security to be taxed.

A Roth conversion reduces the balance in your traditional IRA, which means lower RMDs in the future. Because Roth IRAs have no RMDs, shifting funds into a Roth can help create tax-free income later while pruning your future taxable obligations.

We model how each conversion affects your RMDs over the next 10–30 years, helping you convert only the amount that provides long-term benefit without triggering unnecessary taxes today.