Retirement & Tax Planning Answers
What Services Do Flat-Fee Retirement Tax Planners Typically Offer?
Quick answer
A comprehensive flat-fee retirement tax planning engagement typically includes: a multi-year Roth conversion analysis that maps the gap-year window before RMDs and Social Security begin; an IRMAA-tier projection to avoid Medicare surcharges; a withdrawal sequencing plan across taxable, pre-tax, and Roth accounts; qualified charitable distribution planning once RMDs start; capital gains and tax-loss harvesting coordinated with the rest of the portfolio; a projection of taxable income out to age 90, including RMD growth and surviving-spouse bracket compression; coordination with whoever prepares the actual tax return; and an annual update process rather than a one-time static document. Firms vary widely in how many of these they actually deliver.
The gap-year window, the years after leaving work but before Social Security and RMDs begin, is often the single highest-leverage stretch for tax planning in a person's financial life. A flat-fee retirement tax planner's core deliverable is a multi-year Roth conversion plan that uses this window deliberately, filling lower tax brackets each year rather than letting pre-tax balances grow untouched until RMDs force large, less controllable distributions later.
IRMAA-tier projections are a related but distinct service. Medicare premiums are based on income from two years prior, so a single large distribution, even a well-intentioned Roth conversion, can trigger a surcharge that lasts a full year. A planner who models IRMAA thresholds alongside the conversion strategy avoids solving one problem by creating another.
Withdrawal sequencing decides which account, taxable, pre-tax, or Roth, funds each year of spending, and it interacts directly with the tax and IRMAA planning above. Qualified charitable distributions, once RMDs begin, let a portion of the RMD go straight to charity without counting as taxable income, which only helps if it's coordinated with the rest of the plan rather than handled as an afterthought each December.
A genuinely comprehensive engagement also runs the tax projection forward, not just for the current year but out toward age 90, since RMDs grow with age and a surviving spouse eventually files as a single taxpayer at compressed brackets, often the single biggest unplanned tax increase a retired household faces. Finally, the plan needs a person actually executing the trades and filings alongside it, whether that's the planner working directly with a CPA or EA, or handling both under one roof.
Before hiring anyone, ask them to list what's actually included, not what the fee costs. The eight items above are the right checklist to compare against, and most firms will happily tell you which ones they don't do.
An annual update matters as much as the initial plan. Tax law, income, and market performance change every year, and a static plan built once and never revisited loses most of its value within a few years.
- Assuming 'tax planning' on a fee schedule means all eight of the above are included, when it may mean only a general conversation about taxes once a year.
- Overlooking the surviving-spouse tax problem entirely, since it's often the largest unplanned tax increase a household will ever face and rarely gets modeled unless specifically asked for.
- Treating IRMAA as a separate, unrelated issue from Roth conversions rather than something that has to be modeled in the same projection.