Post-Tax Season Tips for Pre-Retirees

Tax season is behind us, but for pre-retirees—those within 10-15 years of retirement—this is the perfect time to reassess financial strategies. The decisions you make now can significantly impact your retirement lifestyle, taxes, and financial security. Here are five key post-tax season moves to keep you on track.

1. Tax-Advantaged Retirement Contributions

If you’re still working, post-tax season is a great time to adjust your retirement savings contributions based on any tax refund or unexpected expenses.

In 2025, you can contribute up to $23,500 to a 401(k) and an additional $7,500 catch-up contribution if you’re 50 or older.

If you’re in your early 60s (ages 60-63), a new “super catch-up” limit of $11,250 applies, letting you save even more.

Consider increasing contributions to a Roth IRA or a Roth 401(k) for tax-free withdrawals in retirement.

2. Tax Buckets for Retirement

A common mistake pre-retirees make is relying too much on tax-deferred accounts (traditional 401(k)s and IRAs), which could lead to higher taxable income in retirement.

Instead, build a mix of accounts with different tax treatments:

• Tax-deferred: Traditional 401(k), IRA (taxes due on withdrawals, not on contributions)
• Tax-free: Roth 401(k), Roth IRA (tax-free withdrawals in retirement, but pay taxes on contributions)
• Taxable: Brokerage accounts (capital gains taxes apply)

Converting some traditional savings into a Roth IRA before retirement (while your tax rate is still manageable) can help reduce taxes later.

3. Social Security and Required Minimum Distributions (RMDs)

It may seem early, but how and when you take Social Security and RMDs will affect your tax bill in retirement.

• Delaying Social Security until age 70 boosts your monthly benefits. However, if you plan to retire early, withdrawing strategically from tax-deferred accounts first might be a smarter move.
• Once you turn 73 (depending on birth year), you must take RMDs from tax-deferred accounts—these withdrawals could push you into a higher tax bracket if not planned carefully.

You can use this time to run projections on your tax burden in retirement and strategize withdrawals accordingly.

4. Healthcare and HSA Strategy

If you plan to retire before age 65 (when Medicare kicks in), you should budget for healthcare. A Health Savings Account (HSA) can be a tax-smart tool if you have a high-deductible health plan:

• Contributions are tax-deductible
• Growth is tax-free
• Withdrawals for qualified medical expenses are tax-free

If you’re 55 or older, you can contribute an extra $1,000 per year to your HSA. And around retirement age, HSAs can also be used for Medicare premiums and long-term care expenses.

Be sure to check with a financial professional to understand the full rules and regulations of the HSA so you can make the most of it.

5. A Financial Professional Can Help Fine-Tune Your Plan

Your pre-retirement years are critical for tax and income planning. A financial advisor or tax professional can help:

• Identify the best accounts to withdraw from first in retirement
• Optimize Roth conversions
• Plan for tax-efficient charitable giving
• Adjust your investment risk as you near retirement

If you haven’t already, this is a great time to schedule a mid-year financial check-in to ensure your plan is on track. The years leading up to retirement are crucial for setting up a tax strategy and ensuring your income will last. Post-tax season is a great time to evaluate your progress and make adjustments. Small, informed changes today can lead to major benefits down the road, so reach out to us today to get started.