TRANSCRIPT:

What if I told you there’s a tax trap costing retirees hundreds of thousands of dollars, and most people don’t even see it coming?

I’m Hunter Brockway, founder of Boca Retirement Strategies. Today, we’re going to expose the single worst tax mistake I see professionals make before retirement, and how you can avoid paying an extra $250,000 over your lifetime.

At Boca Retirement Strategies, we help busy professionals take the mystery out of retirement tax rules so you can keep more of what you’ve built. In the next few minutes, I’ll walk you through exactly what the trap is, why it hits so many people, and how you can protect yourself. Let’s dive right in.

The trap I’m talking about is when you assume you’ll fall into a lower tax bracket in retirement, and you don’t.

Here’s how it plays out. You’re nearing retirement. You think you’ll be drawing down your savings at, say, a 10% tax bracket. You’ve planned your lifestyle around that. What many don’t consider is the stacking of different income sources like a pension, Social Security, IRA distributions, maybe a rental or a side business. These add up and push you into a much higher tax bracket without you realizing it.

For example, one of our clients, let’s call her Sue, thought she’d be in the 12% bracket after retirement. Because she had a pension, plus her IRA, plus a small rental property, she ended up in the 22% bracket. That difference alone cost her more than $250,000 across her retirement.

Don’t assume your tax bracket drops just because you stop working.

Now, why does this happen so often? When you retire, your income mix changes. Social Security, pension, RMDs, taxable rentals, they all stack. And if you plan on a 10% bracket but forget about a surcharge like the IRMAA premium for Medicare, or forget that your state taxes still kick in, that number creeps up.

Let’s call our annual enemy “Aunt IRMAA.” She shows up uninvited and raises your Medicare premiums. It’s real. For example, a married couple filing jointly, just a few thousand dollars of extra modified adjusted gross income can trigger that IRMAA surcharge, costing thousands more annually.

Second takeaway: map out all of your income sources and how they interact. Don’t just focus on the nest egg number.

Think of your plan like a garden. You don’t plant it once and walk away. You check back each season, pull weeds, and harvest smartly.

If you take a more active approach, you’re much less likely to overpay and more likely to keep your retirement vision intact.

Thank you for watching. I’m Hunter Brockway with Boca Retirement Strategies. Enjoy your retirement with more money, less stress, and fewer taxes.