The Hidden Tax Problem

 

YOUR RETIREMENT PLAN MAY BE COSTING YOU MORE THAN THE MARKET EVER WILL

The hidden tax problem most affluent retirees never see coming

If you have over $500,000 saved for retirement, this applies to you.

Most people believe their biggest risk is the market.

It’s not.

The bigger risk is how your money gets taxed when you start using it.

And most retirement plans are not built to handle that well.

Here’s the problem most people miss:

You can:

  • Save diligently
  • Invest wisely
  • Build a large portfolio

…and still lose a substantial portion of it to:

  • unnecessary taxes
  • poor withdrawal timing
  • inefficient account structure

It's not because you made a mistake.

Because your plan was never designed for distribution.

Where the money actually leaks:

Most retirees are exposed to:

  • IRA withdrawals taxed as ordinary income
  • Required Minimum Distributions you don’t control
  • Social Security becoming taxable
  • Medicare premiums increasing based on income
  • Tax drag inside brokerage accounts
  • Heirs inheriting accounts with forced tax consequences

Individually, these seem manageable.

Together, they compound.

For the right household, this can quietly cost hundreds of thousands of dollars over time.

Why this happens

Because most retirement plans are built backwards.

  • Advisors focus on growing assets
  • CPAs focus on filing returns
  • Attorneys focus on documents

No one is coordinating how decisions today affect taxes tomorrow.

That gap is where wealth is lost.

A simple truth most people overlook

Two families can:

  • Have the same portfolio
  • Earn the same returns
  • Take the same income

…and still end up with very different results.

The difference is not performance...it's structural.

The default path most people follow

  • Withdraw from IRAs first
  • Pay ordinary income taxes
  • Hit RMDs later
  • Push excess into taxable accounts
  • Increase long-term tax exposure
  • Leave heirs with compressed tax timelines

It’s common.

It’s familiar.
It’s often inefficient.

A more intentional approach

Instead of defaulting, some families:

  • sequence withdrawals strategically
  • evaluate Roth conversion windows
  • manage taxable vs tax-deferred assets intentionally
  • coordinate income with tax brackets and Medicare thresholds

The result is not always a bigger portfolio.

It is often a better outcome after taxes.

This is where most people underestimate the impact:

It’s not just federal income tax...it's also:

  • Medicare IRMAA surcharges
  • state taxes
  • capital gains exposure
  • inherited IRA rules
  • future tax rate risk

Layered together, these create a compounding drag that most people never measure.

Who this matters for

This tends to be most relevant if you:

  • Have $500,000+ saved
  • Have significant IRA or 401(k) balances
  • Are within 10 years of retirement or already retired
  • Care about what your family keeps, not just what you accumulate

If that’s not you, this likely isn’t relevant.

If it is, ignoring it can be expensive.

What we do differently:

At Odingard Capital Management, we focus on how all of this works together:

  • Investments
  • Income
  • Taxes
  • Estate outcomes

Not in isolation. As a coordinated strategy.

A quick way to evaluate your situation

We offer a complimentary Retire Distinctively™ Session designed to answer three questions:

1. Where are taxes likely eroding your plan?

2. Is there a more efficient structure available?

3. What adjustments would actually make a difference?

No pressure. Just clarity.

If there’s nothing to improve, you’ll know.

If there is, you’ll understand where to focus.

Next step

If you want to see whether your current plan is leaving money on the table:

Call: (800) 563-1708
Email: clientservices@OdingardCM.com

You worked too hard to build your wealth to let structure quietly erode it.