The information provided is for general informational purposes only and should not be construed as personalized investment, legal, or tax advice. Additionally, this article was written on 10/04/2025. All opinions expressed are subject to change without notice based on market, economic, legislative, or political conditions. While data from third-party sources is believed to be reliable, its accuracy, completeness, or reliability cannot be guaranteed. Legislation, regulatory, tax, legal or other policies are subject to change without notice and any of those changes may affect the opinions of the article below. Investment strategies mentioned may not be suitable for all individuals. Investors should assess their own financial situations and consult with a qualified tax advisor, CPA, financial planner, or investment manager to help answer questions about specific situations or needs prior to taking any action based upon this information. Past performance is not indicative of future results. Investing involves risk, including the potential loss of principal.
Even experienced investors and disciplined savers can make financial planning mistakes that quietly erode wealth over time. From triggering higher Medicare premiums to accidentally increasing taxable income, small missteps can have large ripple effects — especially in retirement.
At Creed Evans Financial Advisory, we analyze these scenarios every day, helping clients navigate avoidable tax traps, optimize benefit eligibility, and avoid other financial inefficiencies that can undermine even the most well-built plan.
Below are 16 of the most common — and often preventable — financial planning mistakes we help clients identify and correct.
💰 1. Accidentally Moving Into a Higher Tax Bracket
Taking substantial withdrawals from retirement accounts, realizing large capital gains, or executing sizable Roth conversions in a single year can inadvertently push you into a higher marginal tax bracket. The result: higher income taxes and possible cascading effects like Medicare premium surcharges. Multi-year income modeling allows us to distribute taxable events strategically, reducing the risk of abrupt tax spikes that can significantly erode your savings and jeopardize long-term financial security.
🧾 2. Triggering IRMAA (Medicare Premium Surcharges)
Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) increases Part B and Part D premiums for individuals with Modified Adjusted Gross Income above $106,000 (single) or $212,000 (married filing jointly) in 2025. At Creed Evans Financial, we forecast clients’ income trajectories to identify and manage potential IRMAA thresholds in advance through controlled Roth conversions, charitable distributions, and tax-efficient income timing.
🧓 3. Making Social Security Benefits Taxable
Up to 85% of Social Security benefits can become taxable once provisional income exceeds specific thresholds. Common triggers include IRA withdrawals, investment income, or pension payments. With planning, for certain clients, we can structure withdrawal sequencing to keep income below critical levels, preserving more of your Social Security benefit.
💸 4. Poorly Timed Roth Conversions
While Roth conversions are a valuable long-term tax strategy, timing and magnitude matter. Converting too much in a single year can increase marginal tax rates and trigger IRMAA surcharges. Through multi-year conversion projections, we help clients balance immediate tax impact with future tax-free growth opportunities.
🕒 5. Missing Required Minimum Distributions (RMDs)
Failing to take RMDs from IRAs or 401(k)s by the deadline can result in a 25% penalty on the missed amount. We can take care of RMD calculations and withdrawals for clients to ensure compliance and integrate them seamlessly into broader income strategies.
🧠 6. Ignoring Capital Gains Timing
Realizing capital gains without reviewing your overall tax picture can lead to unnecessary taxation. For example, married couples with taxable income below $94,050 in 2025 pay 0% on long-term capital gains. We analyze income thresholds annually to help clients capture gains strategically within the most favorable tax bands.
🏠 7. Overlooking the Net Investment Income Tax (NIIT)
Taxpayers with MAGI exceeding $250,000 (married) or $200,000 (single) pay an additional 3.8% NIIT on investment income. For clients selling appreciated assets or investment properties, we conduct proactive analyses to anticipate and mitigate this surcharge.
📉 8. Mismanaging Tax-Loss Harvesting
While tax-loss harvesting can offset capital gains, executing it improperly — such as violating the wash-sale rule — can invalidate deductions. We can help coordinate transaction timing and asset selection to ensure compliance and maximize tax efficiency.
🧾 9. Overlooking the Widow’s Tax Trap
When one spouse passes away, the surviving spouse moves from “Married Filing Jointly” to “Single” filing status, often doubling their effective tax rate even if income remains similar. Through partial Roth conversions and income-smoothing strategies, we help mitigate this future tax exposure.
🏦 10. Ignoring State Tax Implications
State taxation varies widely — some states tax pensions and Social Security benefits, while others don’t. Our analyses incorporate state-level projections to help clients evaluate the after-tax impact of relocation or retirement decisions.
💼 11. Claiming Social Security Too Early or Too Late
Claiming Social Security at 62 reduces lifetime benefits by as much as 30%, whereas delaying until age 70 can significantly enhance long-term income, but reduces availability of cash flow today. Creed Evans Financial performs breakeven and longevity modeling to help clients determine the optimal claiming strategy based on their health, income needs, and life expectancy, to avoid depleting retirement savings.
🧩 12. Holding Tax-Inefficient Investments in Taxable Accounts
Assets such as REITs, bond funds, mutual funds and high-dividend stocks generate regular taxable income. We design portfolios to align investment placement with account type — holding income-producing assets in tax-deferred accounts and tax-efficient equities in taxable accounts to optimize after-tax returns.
📊 13. Ignoring Sequence of Returns Risk
If the market drops early in retirement, it can quickly eat into your savings and shorten how long your portfolio lasts. At Creed Evans Financial, we run simulations of different market scenarios and use flexible withdrawal plans and cash reserves to help keep your income steady, even during turbulent times.
🧾 14. Failing to Coordinate Estate and Tax Planning
Inconsistent estate documents, outdated beneficiary designations, or uncoordinated strategies can trigger avoidable taxes and delays in estate distributions. Creed Evans Financial collaborates with estate attorneys and tax professionals to create cohesive, tax-efficient estate plans that align with clients’ wealth transfer goals.
⏳ 15. Overlooking Future Tax Law Changes
Current tax rates under the 2017 Tax Cuts and Jobs Act are scheduled to expire after 2025. We proactively evaluate the impact of potential higher future rates, identifying opportunities to realize income or perform Roth conversions under today’s lower brackets.
🧭 16. Taking Social Security While Still Working
Claiming Social Security before full retirement age while continuing to earn wages can lead to temporary benefit reductions under the earnings test. We integrate Social Security timing decisions with income planning to minimize these offsets and optimize lifetime benefits.
💡 The Bottom Line
Effective financial planning is as much about tax efficiency and timing as it is about saving and investing. Many of the most expensive mistakes arise not from poor intent, but from lack of coordination between investment, tax, and income strategies.
At Creed Evans Financial Advisory, we help clients anticipate tax thresholds, time their income wisely, and coordinate the various parts of their financial life for long-term efficiency and stability. By making smart adjustments today, you can achieve significant tax savings, smoother cash flow, and a stronger financial foundation for the years ahead.
Withdrawal rules, penalties, and distribution requirements vary depending on the type of account. It is important to understand these provisions before opening a specific account. Tax laws may change at any time, with effects that may be prospective or retroactive. Please consult with your legal counsel and tax advisor about your particular circumstances.The policy analysis provided by Creed Evans Financial does not constitute, and should not be interpreted as, an endorsement of any political party. Relying on any one or any combination of investment strategies or methods of analysis does not ensure a profit and does not protect against losses in declining markets. Illustrative examples are hypothetical and not intended to represent actual or expected results.
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Fixed income securities may lose value during periods of rising interest rates. These investments are also subject to other risks, including changes in credit quality, market valuation, liquidity, prepayments, early redemption, corporate actions, tax implications, and additional economic or issuer-specific factors.All company names and market data are for illustrative purposes only and do not constitute a recommendation, offer to sell, or solicitation to buy any security.