How to Retire Smarter: Tax Strategies, Rental Property Tips, and Giving Back

Planning for retirement requires more than just saving—it demands strategy. From managing tax brackets to navigating charitable giving and protecting real estate investments, this article covers smart financial decisions that can help you retire with confidence.

Let’s start with Roth conversions. Alex from Massachusetts asked whether he should convert more of his traditional IRA into a Roth while staying in the 24% tax bracket. Even if he remains in that bracket, the flexibility of Roth accounts is invaluable. Roth IRAs allow for tax-free withdrawals and are not subject to required minimum distributions (RMDs), giving you more control over your income in retirement. Plus, if one spouse passes away, the surviving spouse may be taxed at a higher single rate, making Roth conversions even more compelling. Putting higher-growth investments into a Roth also means more long-term gains without added tax burdens.

Then there’s Steve from San Diego. In just five years, he grew his portfolio from $100,000 to $775,000 by following tough-love advice from Joe and Big Al. With $40,000 from work and $47,000 from Social Security, his income is nearly covering his $100,000 annual expenses. The suggestion? He may be able to retire soon, but adding a bit more to savings and shifting some investments to safer assets can help protect against sequence-of-return risk—the danger of retiring during a market downturn.

Now let’s talk about real estate. Mike asked whether forming an LLC for his three duplexes would help with taxes. The short answer is no—LLCs don’t provide tax benefits for rental properties. Their primary value lies in asset protection. If a tenant sues, the LLC can shield your personal assets. While separate LLCs for each property offer the most protection, they also come with higher administrative costs. Liability insurance can be a simpler alternative or complement.

Charitable giving is another area where strategy matters. Qualified Charitable Distributions (QCDs) allow individuals over 70½ to donate directly from their IRA to charity—up to $100,000 annually, indexed for inflation. This reduces taxable income and fulfills RMD requirements. QCDs are ideal for those who are charitably inclined and taking the standard deduction.

For larger charitable intentions, Charitable Remainder Trusts (CRTs) or specifically Charitable Remainder Unitrusts (CRUTs) may be worth exploring. Horry wanted to know if he could use his IRA to fund a CRUT. Yes, but the structure must ensure at least 10% of the trust’s value goes to charity. The trust sells assets tax-free, provides income to the donor, and then donates the remainder. However, because CRUTs have administrative costs and complex tax rules, they’re best suited for those with significant assets.

Finally, Joe and Big Al reminded us of the importance of lowering equity risk as you approach retirement. Markets fluctuate, and pulling from stocks during downturns can rapidly drain your portfolio. Keeping enough in cash or bonds to cover a few years of expenses can help ride out rough markets without touching your long-term investments.

Retirement planning isn’t one-size-fits-all. But with careful tax management, smart charitable strategies, and a balanced investment approach, you can make your money last and leave a legacy you’re proud of.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.