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  • What’s Your Retirement Backup Plan When The Markets Fall?

    What’s Your Retirement Backup Plan When The Markets Fall?

    Retirement isn’t just about enjoying the good years. It’s also about being ready for the unpredictable ones, the years when markets drop, inflation spikes, or the headlines feel a little too familiar. The truth is, downturns are inevitable.

    But here’s the thing, with the right backup plan, you can weather those market storms and still sleep well at night. Whether you’re living in Phoenix, near the golf courses of Scottsdale, or enjoying your home in Tucson, Chandler, or Paradise Valley, if you’re over 50 with more than $2 million saved, this question probably crosses your mind: “What if the market falls right after I retire?”

    So let’s talk about how to protect your retirement income with strategies that keep you confident, no matter what Wall Street does next.

    Step 1: Build a Cash and Cash Equivalent Buffer

    Start by keeping 1 to 3 years of your living expenses in cash, short-term bonds, or CDs. This is your breathing room when markets drop. It lets you avoid selling your investments at the wrong time. Think of it as your “sleep-well-at-night” fund. If your lifestyle costs $120,000 a year, set aside $120,000 to $360,000 in safe money. I often hear clients in Phoenix or Scottsdale say, “But Raman, I hate keeping that much cash, it’s just sitting there.” But here’s the thing, that money’s job isn’t to grow, it’s to protect. It’s what helps you stay calm while everyone else is panicking.

    Step 2: Use Guardrails for Spending

    When the market dips, you don’t need to panic, you just need to pivot a little. Cut back on discretionary spending like travel, upgrades, or big purchases by 10 to 20%. Keep essentials like housing, healthcare, and food covered by reliable income sources such as pensions or Social Security. Once markets recover, you simply ease back to your usual spending. 

    This flexibility can add years to your portfolio’s longevity. For example, if you live in Tucson and had plans for a luxury vacation, delaying it for one season could make a huge difference in keeping your plan on track. If you’ve read my article 5 Reasons You Should Consider Firing Your Advisor, you already know that a great advisor doesn’t just talk about investments. They help you build real spending guardrails that keep you protected in years like these.

    Step 3: Adjust Your Withdrawal Strategy

    Your withdrawal plan shouldn’t be rigid. It should move with you. That’s where the bucket approach comes in, keeping short-term money in cash and bonds, and long-term money in equities. You draw from safe assets when stocks are down and refill those buckets when markets recover. 

    Another smart move is to consider Roth conversions in down years. When account values drop, you pay less tax on the conversion and create future tax-free income. 

    And if you had planned a large withdrawal like a new car or home project, consider pausing that until your portfolio rebounds. In Chandler, I’ve seen retirees protect their wealth this way. A flexible withdrawal plan gives you control instead of reacting emotionally when the market dips.

    For more on the hidden costs of rigidity, see my piece Am I Paying Too Much in Advisor and Investment Fees? which explains how unnecessary fees and inflexible planning often hurt investors the most when volatility hits.

    Step 4: Tap Other Income Sources, If Available

    If markets stumble, you can always look beyond your portfolio for support. Some of my clients in Paradise Valley and Scottsdale do part-time consulting or project work, not because they have to, but because it keeps them sharp and reduces stress on their portfolio. 

    Some retirees use home equity through downsizing or a well-planned reverse mortgage. And if you own a rental property, that steady income can be your safety net when markets cool off. The point isn’t to replace your portfolio. It’s simply to give yourself options when times get rough.

    Step 5: Review Insurance and Risk Management

    If markets are down while costs are up, the right insurance coverage can save the day. Long-term care or hybrid policies can help protect against major healthcare surprises. A small fixed annuity might offer stable income if the market stays sluggish. And umbrella insurance can protect your assets from unexpected liability claims.

    In Phoenix and surrounding cities, healthcare costs keep rising each year. Reviewing your coverage and protection plan may not sound exciting, but it’s what keeps your financial foundation stable when everything else feels shaky.

    Step 6: Use Taxes as a Safety Net

    Taxes don’t just happen to you, they can be planned for. In down years, use tax-loss harvesting to offset future gains. If your income is lower because you’re drawing less from investments, it might be a perfect time to make a Roth conversion at a lower bracket. 

    You can also stay mindful of IRMAA thresholds to avoid unnecessary Medicare surcharges.

    For a deeper dive, check out my articles Taxes in Retirement: Which Benefits Are Taxable and Which Aren’t and Avoid These 5 Retirement Tax Traps in 2026 Before They Drain Your Nest Egg which explain how retirees can use smart timing to avoid letting taxes quietly eat away at their income.

    Now, let’s talk about something most people overlook

    How your advisor gets paid.

    When markets fall, many percentage-based advisors still make the same pitch: “Let’s buy this product to protect you.” But as a flat-fee fiduciary, my job isn’t to sell products. It’s to help you plan smarter. At Singh PWM, each retirement plan is stress-tested against recessions, inflation, and long bear markets. Cash-flow guardrails are built, tax strategies are coordinated, and every step is designed to prepare you for both good and challenging years, all for one transparent flat fee.

    If you’ve read Arizona Retirement Math: What a $2 Million Nest Egg Actually Gets You in Chandler, Paradise Valley, and Beyond, you already know that in Arizona, cost of living, taxes, and healthcare vary drastically by region. That’s why personalized planning matters more than ever.

    Downturns are going to happen. But with the right combination of cash reserves, flexible spending, smart tax planning, and a real strategy behind your investments, you’ll be ready. If you’re in Phoenix, Scottsdale, Tucson, or Chandler and want to know how your retirement plan would perform in a real downturn, schedule your free Retirement Stress-Test today. Let’s make sure your future stays on track, no matter what the market decides to do next.

    Raman Singh, CFP®

    Your Personalized CFO

    Relatable Articles

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind.

    This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material.

    Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses.

    Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted.

    Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute

    SEO Schema

    Primary Keywords: fiduciary financial advisor Phoenix, fee-only financial planner Scottsdale, flat-fee fiduciary advisor Tucson, fiduciary financial planner Chandler, Arizona fiduciary advisor
    Author: Raman Singh CFP®, Personalized CFO | Singh PWM
    Phoenix AZ | Scottsdale AZ | Tucson AZ | Chandler AZ | Paradise Valley AZ

  • Taxes in Retirement: Which Benefits Are Taxable and Which Aren’t

    Taxes in Retirement: Which Benefits Are Taxable and Which Aren’t

    Because retirement income isn’t all taxed the same.

    Learn how Social Security, pensions, IRAs, Roth accounts, and other income sources are taxed plus find practical, tax-smart strategies to help you keep more of what you’ve earned.

    One of the most common questions I hear from people getting close to retirement is this:

    “Raman, are my retirement benefits going to be taxed?”  It’s a fair question. You’ve worked your whole life, saved carefully, and now you just want to know what’s actually yours to keep.

    But here’s the thing though,  not all retirement income is taxed the same way. Some sources are fully taxable, some are partially taxable, and some can be completely tax-free if you plan it right. And understanding which is which can make a massive difference in how long your money lasts,  and how much ends up with the IRS.

    Let’s look at Social Security Income First…

    Social Security is usually the first big surprise for retirees. A lot of people assume it’s tax-free, but that’s not always the case. Up to 85% of your Social Security benefits can be taxable depending on your total income. The IRS uses something called provisional income, which includes half of your Social Security benefits plus other income like pensions, IRA withdrawals, and investment income. If you’re a married couple with combined income over $44,000, chances are you’ll be paying taxes on 85% of those benefits.

    What you should look out for is how your withdrawals affect that calculation. The order in which you pull from your accounts directly impacts how much of your Social Security gets taxed. When it comes to my clients, I focus on coordinating withdrawals across account types so they can keep more of what they’ve earned. The difference between pulling from the wrong account first and structuring it strategically can easily mean thousands of dollars per year in additional taxes.

    And don’t forget the pension income, IRA withdrawals, and 401(k) distributions are almost always fully taxable at your ordinary income rate. That includes your required minimum distributions (RMDs) once you reach the mandated age.

    The SECURE 2.0 Act increased the RMD age to 73, and it’ll rise again to 75 in 2033. That gives you a few golden years to do proactive tax planning before RMDs start. One of the best moves you can make in that window is doing partial Roth conversions in your 60s while you still have flexibility.

    If you want to understand how that sequencing works, check out my article, Finding Your Safe Withdrawal Rate in Retirement. It explains how timing, taxes, and portfolio balance all work together to help you withdraw confidently without running out of money.

    Next up Is, Roth Conversions and the Power of Tax Flexibility

    When it comes to my clients, I run detailed Roth conversion analyses every year to find the “sweet spot” and then convert enough to lower future taxes but not so much that it triggers higher Medicare premiums or pushes them into a higher bracket today. If you’d like to see how those conversions really impact your retirement, read my article Retirement Planning Without Taxes: Why It Costs So Much (and How to Fix It). It walks through real examples of how coordinated Roth conversions and bracket management can save retirees six figures over time. 

    Now, Roth IRAs and Roth 401(k)s are easily the most flexible, tax-efficient accounts in retirement. Once the account has been open for five years and you’re over 59½, your withdrawals are completely tax-free. And, here’s the thing, Roth money doesn’t increase your taxable income, it doesn’t affect your Medicare premiums, and it doesn’t make more of your Social Security taxable. It’s your tax-free paycheck, and it gives you incredible flexibility when markets or tax laws change.

    And when I’m building retirement income plans, I use Roth accounts as a stabilizer. It’s the account you can pull from in high-tax years to keep your overall liability low.

    Then we have our Investment and Brokerage Accounts which are far too often overlooked. 

    So let’s talk about your regular brokerage or investment accounts. These accounts can be surprisingly tax-friendly when used strategically. Long-term capital gains and qualified dividends are usually taxed at lower rates — 0%, 15%, or 20%, depending on your income. Municipal bond interest can even be federally tax-free. 

    So what you should look out for is WHEN you sell. Without planning, you can accidentally trigger large capital gains, bumping your taxable income and increasing Medicare costs. With planning, though, you can use tax-loss harvesting and strategic rebalancing to manage gains and minimize surprises.

    And then don’t forget the other Income Sources That Can Sneak Up on You

    Annuities, HSAs, and part-time work can all affect your retirement tax picture in different ways. 

    Annuities, for example, depend on how they were funded. If you bought one with pre-tax dollars, your withdrawals are fully taxable. If you use after-tax money, only the earnings are taxed.

    For a deep dive into when annuities actually make sense, read my article Should I Consider an Annuity to Guarantee Retirement Income? I explain when they can genuinely provide peace of mind, and when the fees and tax implications outweigh the benefits.

    HSAs, on the other hand, are a triple threat in the best way: tax-free going in, tax-free growth, and tax-free withdrawals for qualified medical expenses. But if you pull money out for non-medical expenses before age 65, you’ll face taxes and a penalty. After 65, non-medical withdrawals are just taxed as ordinary income.  And if you plan to work part-time in retirement, keep in mind that those wages are fully taxable and can push more of your Social Security into the taxable range or increase your Medicare premiums.

    Lastly…

    Most retirees underestimate how much of their “retirement paycheck” goes to taxes. I see it all the time: great portfolios, disciplined savers, but no plan for how to spend their money efficiently. But here’s the thing, without coordination, retirees with over $2Million in Pre-Taxed Savings will end up overpaying through higher Medicare premiums, bracket jumps, or unnecessary taxation on Social Security. And when it comes to my clients, I focus on proactive tax planning by coordinating Social Security timing, withdrawal order, and Roth conversions, so they keep more of what they’ve earned. Taxes are one of the few big expenses you can actually control in retirement, and small adjustments today can mean tens or even hundreds of thousands saved over a lifetime.

    That’s exactly why I built Singh PWM as a flat-fee fiduciary firm. No commissions, no percentage of assets, just transparent advice built around your best interests. My goal is simple: to help you minimize taxes, avoid costly surprises, and enjoy a confident, stress-free retirement.

    Yes, many retirement benefits are taxable, but how much you pay depends entirely on timing, coordination, and planning ahead. The difference between guessing and having a clear, tax-smart plan can easily add up to high six figures over your lifetime. If you’d like to see exactly how much of your retirement income could be taxable and what strategies can help reduce it, schedule a Retirement Tax Clarity Call today.

    Raman Singh, CFP®

    Your Personalized CFO

    Related Reads from Singh PWM

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind.

    This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material.

    Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses.

    Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted. Registration does not imply a certain level of skill or training.

  • Avoid These 5 Retirement Tax Traps in 2026 Before They Drain Your Nest Egg

    Avoid These 5 Retirement Tax Traps in 2026 Before They Drain Your Nest Egg

    Most retirees don’t realize how much they’re overpaying in taxes. Discover five hidden retirement tax traps and how to protect your income and lifestyle in 2026. Serving Phoenix, Scottsdale, Chandler, Tucson, and greater Arizona.

    Let’s Be Honest…

    You’ve worked your entire life, saved diligently, invested wisely, and now you finally get to enjoy it.  But then tax season hits and you ask yourself, “Why am I paying so much when I’m not even working anymore?”

    If that sounds familiar, you are not alone. Every week, I meet retirees across Phoenix, Scottsdale, Chandler, and Tucson who feel blindsided about how their income is taxed in retirement. The truth is, retirement taxes don’t work like paycheck taxes. You’re now in control, and how you pull money from your IRAs, Roth accounts, taxable investments, and Social Security determines how much you actually keep and how much Uncle Sam gets to keep. 

    So, let’s walk through five major retirement tax traps I see people fall into, but most importantly how you can avoid them in 2026.

    1. The Hidden Medicare Premium Tax – IRMAA

    Here’s the thing, most retirees don’t realize that Medicare premiums are income-based. The Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge on Medicare Part B and Part D premiums if your income exceeds certain thresholds. The Kiplinger article mentions, “IRMAA is a surcharge added to your Medicare Part B and Medicare Part D prescription drug coverage premiums if your income is above a certain level.” And for 2026, the base Part B premium is projected to be about $206.50 per month, and the surcharge begins if your 2024 Modified Adjusted Gross Income exceeds $107,000 (single) or $214,000 (joint). Higher-income retirees could pay more than $700 per month in total premiums.

    So here’s an example to put it in perspective –  A retired couple in Scottsdale sold a second home in 2024, triggering a large capital gain. The next year, their Medicare premiums jumped by over $3,000 because that one-time sale pushed them into a higher IRMAA bracket.

    And here’s what  you can do to avoid it – 

    • Plan large income events (like Roth conversions or property sales) over multiple years.
    • Monitor your MAGI (Modified Adjusted Gross Income), not just taxable income.
    • If your income has dropped, file Form SSA-44 to appeal your IRMAA tier.

    2. Missing the “Golden Window” for Roth Conversions

    Between the time you retire and the year you turn 73, when Required Minimum Distributions start, you have what I call your “Golden Window”. This window is your best opportunity to convert traditional IRA or 401(k) assets into Roth IRAs while your income and tax rate are temporarily lower. Once RMDs kick in, you lose that flexibility, and your tax bill can rise sharply. As Fidelity puts it pretty straightforward, “If you convert pre-tax IRA assets to a Roth IRA, you’ll owe taxes on the converted amount, but you won’t owe any taxes on qualified withdrawals in retirement.”

    I’ll tell you about my client based out of Chandler who had $2.5 million in pre-taxed savings and he waited until RMD age to take any action. And when RMDs started, his tax bracket jumped from 22% to 32%. If I had an opportunity to meet this client 10 years earlier, we would’ve started annual Roth conversions much earlier, and he could have reduced lifetime taxes and kept his Medicare premiums lower.

    And here’s what you can do to avoid those mistakes – 

    • Convert gradually each year to stay in a lower bracket.
    • Be mindful of IRMAA thresholds when converting.
    • Paying 22% tax now could save you 30%+ later.

    3. Taking Social Security Too Early

    It’s one of the most common questions I get – “Should I take Social Security at 62?” The answer isn’t just about the benefit amount; it’s also about tax timing. Up to 85% of your Social Security benefits can become taxable depending on your other income sources like IRA withdrawals or investments.

    I met a couple from Phoenix who took Social Security at 62 and they were withdrawing $90,000 from their IRAs. That year alone, most of their Social Security was taxed which increased their overall tax bracket. In their situation, if they had waited until 67, their benefit would have been about 30% higher, and they could have used the early years for Roth conversions instead.

    So how do you make sure you don’t end up making similar mistakes? 

    • Coordinate Social Security timing with your overall income plan.
    • Consider using taxable savings for the first few years of retirement.
    • Potentially delaying until age 70 can increase your monthly benefit by about 8% per year after full retirement age, while lowering lifetime taxes.

    4. Stacking Too Much Income in the Same Year

    Even smart investors get caught in this one. Selling investments, taking large IRA withdrawals, or doing Roth conversions all in the same calendar year can “stack” income and push you into a much higher tax bracket. The Wall Street Journal stated that, “Retirees often underestimate how capital gains, IRA distributions, and Social Security can combine to trigger higher tax and Medicare costs.”

    Not only that, I’ll tell you about a Paradise Valley retiree who sold $400,000 in stock and withdrew $120,000 from her IRA in the same year. Her taxable income jumped to over $500,000, moving her into the 32% bracket and costing an extra $25,000 in federal taxes. Only if she had spaced those transactions across two years, she would have paid roughly half that amount.

    So how do you avoid this mistake?

    • Split major transactions across different tax years.
    • Use tax-loss harvesting to offset gains.
    • Rebalance portfolios strategically in lower-income years.

    5. Leaving Heirs a Hidden Tax Bomb

    The SECURE Act 2.0 changed how inherited IRAs work. Most non-spouse beneficiaries now must empty inherited IRAs within 10 years, which can push your children into higher tax brackets if they’re still working. The IRS states plainly: “A beneficiary who is not the owner’s spouse generally must withdraw the entire account by the end of the 10th year following the year of the original owner’s death.”

    Here’s another example –  An Oro Valley client left a $1.2 million IRA to her two adult children. Each child was forced to withdraw about $60,000 per year, during their highest earning years. Nearly half of those withdrawals went straight to taxes.

    Here’s how you can fix this now – 

    • Convert some IRA assets to Roth now while your bracket is lower.
    • Leave a mix of taxable, Roth, and traditional assets to give heirs flexibility.
    • Coordinate your estate plan and tax plan together.

    What This Means for Arizona Retirees

    If you’re over 55 and living in Phoenix, Scottsdale, Chandler, or Tucson, you can control how your retirement is taxed, but only if you plan before 2026. Once the Tax Cuts and Jobs Act sunsets, today’s lower tax brackets could rise again.

    Tax planning in retirement isn’t something you do once a year. It’s something you build into your income strategy, year after year. The goal isn’t just to pay less tax, the goal is to make your money last longer and protect your lifestyle.

    That’s exactly why I created Singh PWM, a flat-fee fiduciary firm helping Arizona retirees align their investments, taxes, and estate goals without the 1% management fee or hidden incentives.

    No products. No commissions. Just better financial planning that helps your retirement work better.

    Ready to See How Much You Can Save?

    If you’ve ever wondered, “Am I doing this right?” You owe it to yourself to find out.  Schedule your free Retirement Tax Strategy Call today, and let’s see how much you could save before 2026 sneaks up on you.

    Together, we’ll map out a plan to reduce taxes, avoid IRMAA surprises, and build tax-free income that supports the lifestyle you’ve earned right here in Arizona.

    Raman Singh, CFP®

    Your Personalized CFO

    Related Reads from Singh PWM

    Sources & References

    • Kiplinger, “What Is the IRMAA?” – “IRMAA is a surcharge added to your Medicare Part B and Part D premiums if your income is above a certain level.”
    • Fidelity Viewpoints, “Why Convert to a Roth IRA Now?” – “If you convert pre-tax IRA assets to a Roth IRA, you’ll owe taxes on the converted amount — but you won’t owe any taxes on qualified withdrawals in retirement.”
    • The Wall Street Journal, “Capital Gains, IRAs, and the Surprising Tax Traps in Retirement.”
    • IRS Publication 590-B – “A non-spouse beneficiary generally must withdraw the entire account by the end of the 10th year following the year of the original owner’s death.”

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind.

    This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material.

    Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses.

    Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted.

    Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.

    Flat Fee Fiduciary Financial Advisor Arizona, Financial Planner Phoenix, Retirement Planning Scottsdale, Tax Planning Tucson, CFP Chandler, Transparent Flat Fee Financial Advisor, Fiduciary Advisor Arizona

  • Should I Consider an Annuity to Guarantee Retirement Income?

    Should I Consider an Annuity to Guarantee Retirement Income?

    Annuities can provide lifetime income but come with costs and tradeoffs. Learn the pros, cons, and alternatives from a flat-fee fiduciary advisor.

    Why So Many Retirees Ask About Annuities

    One of the most common questions I hear from people approaching retirement is “Should I buy an annuity to guarantee income?” And honestly, it’s a good question. Annuities are advertised everywhere, usually with phrases like “pension-like income” or “peace of mind for life.” On the surface, it sounds like the perfect solution, right? A steady paycheck for as long as you live. But like most things in financial planning, the reality is more complicated.

    Here’s the thing, annuities can actually do two things really well, though there’s always a cost. First, they can guarantee you lifetime income, which means you don’t have to worry about outliving your money no matter how long you live. Second, depending on the type of annuity, they can protect your principal, sometimes all of it, sometimes a portion of it, if the stock market takes a dive. So for someone who wants certainty, an annuity can feel like a safety net.

    The Hidden Costs and Trade-Offs

    But the catch is what you give up in exchange for that safety. Fees can run high, often 2% to 4% annually, and those costs quietly eat away at your wealth over time. Flexibility is limited too. Once you hand your money to the insurance company, it’s locked up, and getting it back isn’t easy.

    I’ve seen the dangers firsthand when annuities are mis-recommended. I once worked with a client who had 90% of her wealth tied up in a growth-oriented variable annuity. The problem was that it was in a non-retirement account. On paper, it looked good because the annuity doubled in value, but here’s the painful part. Every time she makes a withdrawal, she’s paying 100% ordinary income tax. That’s pushing her into a higher tax bracket, which means more of her money is going to the IRS than necessary. If instead she had simply invested in a regular taxable brokerage account, her growth could have been more cost-efficient, and withdrawals would likely have been taxed at long-term capital gains rates, which are much lower. That’s the kind of long-term tax trap that happens when an annuity is sold as a one-size-fits-all solution rather than planned in the context of someone’s entire financial picture. For a deeper dive into how to reduce these tax burdens in retirement, read my article Retirement Planning Without Taxes: Why It Costs So Much (and How to Fix It). It explains how poor withdrawal sequencing and lack of tax planning can quietly cost retirees six figures over time and how to fix it.

    When Annuities Might Make Sense

    So when do annuities make sense? If you want a guaranteed income floor beyond Social Security, they can provide it. If you’re extremely risk-averse and the thought of market volatility keeps you up at night, putting part of your nest egg into an annuity might give you peace of mind. And if you have more than enough assets, carving out a portion for guaranteed income probably won’t hurt your long-term growth.

    But they’re far from ideal in every case. If your Social Security and pension already cover your essential expenses, adding another annuity just ties up money you could use more flexibly. If you want liquidity, control, or the ability to pass money down efficiently, locking it away inside an annuity could create bigger problems down the road. And if someone is pitching it to you as an investment rather than what it actually is, an insurance product, be cautious.

    Alternatives to Buying an Annuity

    The good news is there are alternatives. You can build predictable retirement income without locking everything into an annuity. A bucket strategy can divide your money into short, mid, and long-term pools so you always know what’s safe to spend and what’s still growing. A bond ladder can stagger maturities to generate reliable cash flow year after year. Guardrail withdrawal strategies let you adjust spending based on how markets perform, which stretches your portfolio further. And careful, tax-smart withdrawals like sequencing money between taxable accounts, Roth IRAs, and traditional IRAs can help you keep more of your income after taxes. And if you’re wondering how much you can safely withdraw each year without running out of money, check out my related article Finding Your Safe Withdrawal Rate in Retirement. It explores how portfolio size, taxes, and market conditions all interact to determine a sustainable income plan and why the old “4% rule” doesn’t always fit today’s environment.

    The real problem isn’t annuities themselves. It’s how they’re sold. Too often they’re pushed because of commissions, not because they’re the right solution. That’s not fiduciary advice. As a flat-fee fiduciary, I don’t sell annuities and I don’t earn commissions if you buy one. My role is to evaluate them objectively, side by side with other income strategies, and ask whether they really solve your problem or if there’s a smarter, more tax-efficient way. Sometimes the answer is yes, they fit. But far more often, I find that lower-cost, more flexible approaches do the job better.

    At the end of the day, annuities can play a role in retirement income planning, but they are not a one-size-fits-all solution. The decision should always be made in the bigger context of taxes, estate planning, healthcare, and market risk.

    So should you consider an annuity? Maybe. But the more important question is whether an annuity solves your specific income challenge or whether it’s going to create a new problem later, like higher taxes or less flexibility. That clarity doesn’t come from a brochure or a sales pitch. It comes from a plan tailored to your life. And that’s exactly why I offer a Retirement Income Clarity Call so you can see whether an annuity really belongs in your plan or if there’s a smarter path forward.

    Schedule your free Retirement Tax Strategy Call today.

    Raman Singh, CFP®

    Your Personalized CFO

     

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind. This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses. Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted. Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.

  • Retirement Planning Without Taxes: Why It Costs So Much (and How to Fix It)

    Retirement Planning Without Taxes: Why It Costs So Much (and How to Fix It)

    Why Most Retirement Plans Miss the Mark

    Retirement planning is one of the biggest financial steps you’ll ever take. But here’s what I see far too often when I review new clients’ plans: the investments are there, but the tax strategy is missing. And that gap can be costly, sometimes in the high six figures over the course of a retirement.

    The truth is, retirees overpay in both fees and taxes, not because they picked the wrong investments, but because their advisor never built taxes into the plan. That’s like building a house without considering plumbing. It might look fine at first, but sooner or later, you’ll be dealing with a very expensive problem.

    Understanding the Different Types of Advisors

    Now, let’s clear up one thing that causes a lot of confusion. The financial industry loves titles like financial advisor, wealth manager, or retirement consultant. What really matters is how that person gets paid.

    Commission-based advisors make money selling products like annuities or insurance. Variable annuities, for example, often carry stacked ongoing fees that can easily amount to 2%–3% per year (M&E charges alone often around 1.25%) plus potential surrender charges, costs that directly reduce returns.

    If you’re considering an annuity or wondering whether it makes sense to guarantee part of your retirement income, I’ve broken down the pros, cons, and fiduciary perspective in my related article: Should I Consider an Annuity to Guarantee Retirement Income?. It explains when annuities can provide genuine peace of mind — and when the hidden costs can outweigh the benefits.

    Then you have percentage-based advisors who charge around 1% of assets under management, still the dominant model in the industry according to MarketWatch and Barron’s. On a $2 million portfolio, that’s $20,000 every year, regardless of market performance. Over twenty years, that adds up to more than half a million dollars, money that could have been compounding for you instead of covering someone else’s business model.

    Oh, you also have the Fee-Based advisors who are not only charging you % of assets under management but also selling you commissioned based products.

    But here’s the thing, Flat-fee fiduciary advisors work differently. They charge one transparent fee, with no commissions, no sliding percentages, and no hidden incentives. Their advice is tied to your best interests, not to sales contests or the size of your portfolio.

    At Singh PWM, my approach is simple: one flat annual fee that includes everything like investment management, tax planning, withdrawal strategies, and estate coordination. That alignment ensures every decision serves you, not your advisor’s compensation model.

    Why Tax Planning Matters More Than Ever

    So why does tax planning matter so much? Because taxes are often your single biggest controllable expense in retirement. And unfortunately, most plans don’t integrate them properly, and that’s where tons of money is left on the table.

    You see, smart tax planning isn’t just about filing returns or doing Roth conversions. It’s about structuring your income, withdrawals, and investments in a way that maximizes what you keep. And If you’re wondering how much you can safely withdraw each year without running out of money, check out my related article: Finding Your Safe Withdrawal Rate in Retirement. It explains how portfolio size, taxes, and market conditions interact to determine a sustainable income strategy—and why the old “4% rule” may no longer apply.

     

    Vanguard’s research on “Advisor’s Alpha” shows that the value of skilled financial advice, including tax-efficient withdrawal sequencing, can add roughly 3% in net returns over time. Even Morningstar and other research groups have echoed this finding, showing that a coordinated withdrawal plan across taxable, tax-deferred, and Roth accounts can meaningfully extend portfolio longevity and reduce lifetime taxes.

    Hidden Tax Traps in Retirement

    Take Social Security, for example. Many people don’t realize that up to 85% of Social Security benefits can become taxable depending on total income. Combine that with distributions from IRAs or capital gains, and suddenly your “safe” retirement income can trigger higher taxes and even push you into an unexpected Medicare bracket.

    Speaking of Medicare, those brackets, known as IRMAA or income-related monthly adjustment amounts, can be brutal if you’re not proactive. For 2025, the standard Part B premium is $185 per month, but higher-income retirees can face surcharges that add hundreds of dollars per month per person. I’ve seen cases where one poorly timed IRA withdrawal or Roth conversion triggered an IRMAA surcharge lasting an entire year.

    The SECURE 2.0 Act brought new opportunities and new traps. It raised the required minimum distribution (RMD) age to 73, giving some retirees extra time to perform Roth conversions in lower tax brackets before mandatory withdrawals begin. But it also reinforced the 10-year rule for inherited IRAs, which forces non-spouse beneficiaries to deplete their inherited retirement accounts within a decade. And without proper planning, that can create a steep, “bigly” tax bill on your family.

    And then there’s the 2026 tax cliff. A lot of the provisions of the 2017 Tax Cuts and Jobs Act are set to expire after December 31, 2025. That means higher marginal rates for many households and less room to maneuver on conversions and income strategies. Acting now can help lock in today’s lower brackets before they disappear.

    Real-Life Consequences of Delayed Tax Planning

    I’ve seen what happens when people wait too long to think about taxes. One couple had $3 million and waited until RMD age to consider Roth conversions and their window to convert in lower brackets got smaller and smaller. The result was paying hundreds of thousands more in taxes than they needed to pay over their lifetime. Another client drew from IRAs first instead of taxable accounts. That decision pushed their income just high enough to trigger a Medicare premium jump that cost them an extra $2,100 year. Mistakes like this don’t look dramatic at first, but over a decade or two, the costs compound. And once you’ve missed the opportunity, you can’t go back and undo it.

    This is why flat-fee fiduciary planning works so well. The model aligns retirement and tax strategy without conflicts of interest. At Singh PWMSingh PWM, my approach is simple: one flat annual fee, integrated planning that connects investments, taxes, estate, and cash flow. Every plan includes proactive tax strategies such as Roth conversions, withdrawal sequencing, RMD planning, and tax-loss harvesting, all built on a fiduciary standard that puts your interests first.

    The payoff is big. On a $2 million portfolio, the gap between a 1% AUM advisor and a flat-fee model can be roughly $440,000 over 20 years. Add in tax-smart moves like bracket management, avoiding IRMAA cliffs, and estate structuring, and you can easily save another six figures over your lifetime. Meanwhile, fund costs themselves have fallen dramatically. The asset-weighted average fund fee across U.S. mutual funds and ETFs is now about 0.34%, according to Morningstar, which means the biggest savings opportunities today often come from outside the portfolio through better fee and tax management.

    And timing really matters. If you’re in your 50s or 60s, every year you delay closing tax gaps, your window narrows. Once RMDs start, once you’ve filed for Social Security, or once your estate documents are finalized, your flexibility is gone. Acting now means you can convert at today’s tax rates before they sunset in 2026, manage Medicare surcharges proactively, and set up your legacy to pass down more efficiently under the SECURE Act rules.

    At the end of the day, retirement planning isn’t just about investments. It’s about after-tax income and the legacy you leave behind. Working with a flat-fee fiduciary who builds taxes into every step means you keep more of your money and reduce uncertainty about your future.

    Important Disclosures

    The information provided herein was obtained from sources believed to be reliable and is believed to be accurate as of the time presented, but it is provided “as is” without any express or implied warranties of any kind. This material is intended for informational and educational purposes only and should not be construed as individualized investment, tax, or legal advice. You should consult with your own qualified investment, tax, or legal advisor before making any decisions based on this material. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Withdrawal strategies and tax outcomes will vary depending on individual circumstances, account types, tax brackets, and market conditions. No strategy can guarantee success or prevent losses. Investment advisory services are offered through Singh PWM, LLC, a registered investment adviser offering advisory services in the State of Arizona and other jurisdictions where registered or exempted. Singh PWM, LLC is a registered investment advisor offering advisory services in the State(s) of Arizona and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute.