If you’re within five to ten years of retirement, tax season probably feels different than it used to. You’re likely not worried about how to file your taxes. You probably already work with a CPA or tax professional you trust. What’s changed is what tax decisions mean for the rest of your life.
At this stage, taxes are no longer just an annual compliance exercise. They’re a core retirement planning variable, one that quietly affects income longevity, Medicare costs, and the legacy you leave behind. Taking control now can help you feel more confident about your future.
As we look at the 2025 tax year and beyond, many pre-retirees are asking:
Are current tax rates finally settled?
Should I be doing anything differently now that the law is clearer?
What mistakes do people make at this stage, even with a good accountant?
Those questions are exactly the right ones to be asking.
During your working years, taxes are mostly reactive. You earn income, your CPA files the return, and life goes on. But in the final stretch before retirement, taxes become strategic.
Now you are making decisions like:
When you retire
When you claim Social Security
Which accounts you withdraw from, and in what order
Whether to convert, defer, or distribute assets
What you decide can permanently affect:
Your lifetime tax burden
Medicare premium surcharges
Net spendable income in retirement
What remains for your spouse or heirs
This is where retirement planning diverges from tax filing. Your CPA ensures accuracy and compliance. Your retirement plan, developed with professional guidance, ensures coordination, foresight, and risk reduction, giving you peace of mind.
Most often, retirement planning conversations about taxes were clouded by uncertainty about legislative action, such as the expiration of the Tax Cuts and Jobs Act (TCJA). While other uncertainties will always exist, the uncertainty surrounding 2025 taxes and the TCJA has largely been resolved.
In July 2025, Congress passed, and President Trump signed, the One Big Beautiful Bill Act, which permanently extended many TCJA provisions that were originally scheduled to expire at the end of 2025. Without this legislation, tax rules would have shifted significantly beginning in 2026.
With several core elements now permanent (at least, until the next congress gets a crack at it), pre-retirees gain greater clarity, enabling more confident and effective long-term retirement planning.
For Individual tax provisions:
The current federal income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%)
The nearly doubled standard deduction
Elimination of personal and dependent exemptions
Extension (and temporary increase) of the Child Tax Credit
Business and investment provisions
The 21% flat corporate tax rate
The 20% Qualified Business Income (QBI) deduction for pass-through entities
Estate and legacy planning provisions
The increased estate and gift tax exemption amounts
A temporary increase in the SALT deduction cap
This clarity removes one of the biggest unknowns pre-retirees have faced in years.
Tax clarity does not mean tax simplicity. Even with stable tax brackets, retirement plans still fail when decisions are made in isolation, without timing awareness, or without understanding downstream consequences.
The biggest risks rarely come from tax rates themselves. They come from how income is created and coordinated.
This is an important distinction. Most pre-retirees who run into tax issues aren’t careless. They’re often well-organized and work with competent tax professionals.
The problem is usually coordination, not competence.
Making withdrawal decisions without a long-term perspective can undermine your retirement plan and increase tax risks, so strategic planning is essential.
Your CPA reports what happened. Unless you specifically ask for and pay for planning, he or she is a tax historian, not a tax planner. Your CPA typically doesn’t decide (or advise on) which account you should have used.
Pulling income from the wrong account can:
Increase taxable income unnecessarily
Trigger Medicare premium surcharges
Cause more Social Security benefits to be taxed
Social Security is not just a benefit, it’s a tax variable.
When layered on top of:
Required Minimum Distributions
Investment income
Part-time work
…it can quietly push retirees into higher effective tax brackets.
Double taxation or reporting traps don’t usually come from negligence. They come from:
Timing mismatches
Custodian reporting errors
Basis tracking issues
Withholding assumptions that don’t hold up
Leaving your tax preparer out of the loop at tax time
They’re rarely intentional and often preventable with better retirement planning.
A CPA’s job is to:
File accurately
Apply the law as written
Report what already occurred
A retirement advisor’s job is to develop a retirement plan that:
Anticipates consequences
Coordinates decisions across years
Reduces avoidable risks
Protects long-term outcomes
Both roles matter, but they are not interchangeable.
Instead of reacting to tax headlines, strong retirement planning focuses on:
Understanding where future taxable income will come from
Identifying years with planning flexibility before income stacks up
Coordinating taxes with Social Security and Medicare decisions
Pressure-testing strategies across multiple scenarios
Eliminating mistakes before they become permanent
The goal isn’t to avoid taxes entirely. It’s to avoid unnecessary taxes and irreversible decisions.
The real question isn’t: “What are the tax rates for 2025 and 2026?”
It’s: “I am using tax rules wisely in my retirement plan?”
Tax rates will evolve over time. Life will change. But the biggest retirement risks almost always come from inaction, assumptions, and poor coordination.
If tax season feels heavier than it used to, that’s not a warning sign. It’s a signal that you’ve entered the phase where retirement planning matters most.
If you’re approaching retirement and want confidence that your tax decisions are fully coordinated with your retirement plan, this is where a deeper conversation can help.
Martello Retirement & Wealth works with pre-retirees to identify avoidable tax risks, align income strategies, and eliminate costly planning gaps before they become permanent. Consider scheduling a conversation with Charlie Culver to see whether Martello’s approach is the right fit for you.
A CPA focuses on accurate tax filing and compliance based on what already happened. Retirement planning looks forward, coordinating income decisions across years to reduce long-term tax risk, Medicare premium increases, and unintended consequences. Both roles are important, but they serve different purposes.
The most common mistake is making withdrawal and timing decisions in isolation, such as withdrawing funds from the wrong account, claiming Social Security without tax coordination, or inadvertently triggering higher Medicare premiums. These mistakes often aren’t obvious until years later.
Yes. While no strategy eliminates taxes entirely, thoughtful retirement planning can help reduce unnecessary lifetime taxes by coordinating income sources, timing distributions strategically, and identifying planning opportunities before they disappear.
Ideally, retirement-focused tax planning begins five to ten years before retirement. This window often offers the most flexibility for making adjustments that can significantly impact long-term outcomes.
Social Security benefits may become partially taxable depending on your overall income. When combined with investment income, withdrawals, or part-time work, Social Security can push retirees into higher effective tax brackets if not coordinated properly within a retirement plan.
Medicare premiums are tied to income. Certain tax decisions, such as large withdrawals or conversions, can increase premiums through income-related surcharges. Coordinating taxes and Medicare is a key part of comprehensive retirement planning.
Retirement planning is especially important for individuals nearing retirement with multiple income sources, significant tax-deferred assets, or legacy goals. These situations require coordination that goes beyond basic tax preparation.
Martello Retirement and Wealth, LLC is a Registered Investment Adviser. For more information about our firm, including our services, fees, and conflicts of interest, please refer to our Form ADV Part 2A, available on our website at https://www.martelloretirement.com/l/adv.
This content is for informational and educational purposes only and is not intended to provide specific tax, legal, or investment advice. Tax laws are complex and subject to change. Always consult with a qualified tax professional or attorney regarding your specific situation before making any tax-related or estate-planning-related decisions.
Past performance or hypothetical scenarios are not indicative of future results.
There are no guarantees that any tax or estate planning strategies discussed will achieve specific outcomes or avoid future tax liabilities.
The information provided is general in nature and does not consider your individual circumstances, financial goals, or needs. Personalized financial or tax advice can only be provided after a comprehensive understanding of your personal situation.
Unless expressly stated otherwise, any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.