Federal Employee Tax Planning
The tax decisions you make before and during retirement can cost or save you tens of thousands of dollars. Get strategic guidance from advisors who understand how federal benefits affect your tax picture.
Strategic Tax Planning Services
We help you minimize taxes across your lifetime, not just in a single year. This requires coordinating your federal benefits with your broader tax situation.
Roth Conversion Analysis
Converting Traditional TSP or IRA to Roth can reduce future taxes, but timing matters. We model multi-year conversion strategies to fill lower tax brackets without triggering IRMAA surcharges or other penalties.
Withdrawal Sequencing
Which account should you draw from first, your TSP, Roth, taxable accounts, or pension? The sequence affects your tax bill dramatically. We design a withdrawal strategy that coordinates all income sources.
RMD Planning
Required Minimum Distributions from TSP and IRAs can push you into higher tax brackets. We project your RMDs and identify opportunities to reduce them before they become mandatory.
Income Tax Bracket Management
Your FERS pension, Social Security, and TSP withdrawals combine to determine your tax bracket. We help you manage income to stay in optimal brackets year after year.
Social Security Tax Optimization
Up to 85% of Social Security benefits can be taxable depending on your other income. We structure withdrawals to minimize the amount of Social Security that gets taxed.
IRMAA Avoidance Strategies
High income can trigger Medicare premium surcharges (IRMAA). We monitor your Modified Adjusted Gross Income and plan conversions and withdrawals to avoid costly IRMAA thresholds.
Tax Challenges We Solve
Large TSP Balance, Tax Time Bomb
A substantial Traditional TSP means substantial future taxes. Every dollar, plus growth, will eventually be taxed. We help you defuse this time bomb with strategic Roth conversions before RMDs begin.
Uncertain About Roth Conversions
How much should you convert each year? Convert too little and you miss the opportunity. Convert too much and you jump tax brackets or trigger IRMAA. We calculate the optimal amount for your situation.
Worried About Higher Future Taxes
With national debt rising, many expect tax rates to increase. Paying taxes now through Roth conversions could save money if rates rise. We help you evaluate this trade-off with realistic projections.
State Tax Considerations
Some states don't tax retirement income; others tax everything. If you're considering relocation, the tax implications can be significant. We factor state taxes into your planning.
Our Tax Planning Process
Tax Profile Review
We review your recent tax returns, current income sources, and projected retirement income. This gives us a baseline understanding of your tax situation.
Document collectionRetirement Income Projection
We project your income from all sources (pension, Social Security, TSP, other accounts) year by year through retirement. This shows how your tax picture evolves over time.
Detailed modelingStrategy Development
Based on projections, we develop a multi-year tax strategy including Roth conversion amounts, withdrawal sequencing, and bracket management tactics.
Strategy sessionAnnual Review and Adjustment
Tax laws change, and life circumstances evolve. We review your strategy annually and adjust conversion amounts and withdrawal sequences as needed.
Ongoing optimizationTax Planning FAQs
When is the best time to do Roth conversions?
The best time is typically between retirement and when you start Social Security and RMDs, when your income is lowest. This period, often called the "retirement gap years," offers the best opportunity to fill lower tax brackets with conversions.
How much should I convert to Roth each year?
The optimal amount depends on your current bracket, projected future brackets, and IRMAA thresholds. As a general rule, converting to the top of your current bracket makes sense if you expect to be in the same or higher bracket later. We calculate the specific amount for your situation.
Is my FERS pension taxable?
Yes, your FERS pension is generally fully taxable as ordinary income at the federal level. Some states exempt pension income from state tax. The taxable portion of your pension is determined by your contributions, most of which were pre-tax.
Will Roth conversions affect my Medicare premiums?
They can. Roth conversions count as income for IRMAA purposes. If conversions push your Modified Adjusted Gross Income above thresholds, you'll pay higher Medicare Part B and Part D premiums. We factor IRMAA into conversion recommendations.
Do you prepare tax returns?
We focus on tax planning and strategy, not tax preparation. We work alongside your CPA or tax preparer to ensure your strategy is implemented correctly. If you need a tax preparer recommendation, we can suggest professionals familiar with federal employee situations.
Ready to Minimize Your Tax Burden?
Strategic tax planning can save federal retirees tens of thousands over their lifetime. Get personalized strategies from advisors who understand your benefits.