6 Tax-Smart Moves to Strengthen Your Financial Safety Net
The old saying goes: it’s not what you make, it’s what you keep. Taxes can quietly eat away at wealth if you don’t plan ahead. Here are six tax-smart strategies we regularly walk clients through to help them strengthen their financial safety net.
1. Roth Conversions
Paying tax today to avoid potentially higher rates tomorrow can be a powerful move—especially in years when income is lower, or before required distributions kick in.
2. Tax-Loss Harvesting
Markets don’t always cooperate, but even downturns create opportunity. Harvesting losses in taxable accounts can offset gains and reduce your tax bill.
3. Strategic Charitable Giving
Whether it’s donor-advised funds or qualified charitable distributions from an IRA, giving can be both impactful and tax-efficient.
4. Smart Use of HSAs
Health Savings Accounts are the only triple-tax-free vehicle: deductible going in, tax-free growth, and tax-free withdrawals for healthcare. They’re often overlooked.
5. Timing Your Retirement Distributions
The order in which you tap accounts—taxable, tax-deferred, and Roth—can make a dramatic difference over decades.
6. Taking Advantage of State-Specific Deductions
Many states, including Missouri, have unique rules around 529s, retirement income, and more. Don’t leave those benefits unused.
(For a deeper dive, see our blog on our tax-smart strategies that help protect your retirement income.)