Steve Balch, CFP®

Helping Professionals and Retirees Enjoy Life Now Without Jeopardizing Tomorrow • Tax, Retirement & Investment Planning • posts ≠ advice • schedule a fit call ⬇

[Steve Balch, CFP® @StevenBalch]

I partner with high-income earners and retirees to build, protect, and optimize their wealth. The people I work with range in age from their 30s to their 80s, but they all have one thing in common: They reached a point where they needed help, and they turned to me for expertise in financial planning, investment management, tax strategies, and estate planning.

Together, we create personalized roadmaps to achieve financial peace of mind and long-term success.

[Steve Balch, CFP® @StevenBalch]

The $2.1M retirement number probably isn't yours. Your actual target depends on your spending, your guaranteed income, and the life you want.

[Steve Balch, CFP® @StevenBalch]

Earning $450K doesn't mean you pay 32% on all of it. Your effective rate is closer to 21.5%. Here's why the difference matters.

[Steve Balch, CFP® @StevenBalch]

Being in the 32% tax bracket does not mean you pay 32% on everything you earn.

This is one of the most common, and costly, misconceptions I hear from high-income professionals.

Here is how it works for a married couple filing jointly with $450,000 in taxable income in 2026, using the official IRS brackets:

The first $24,800 is taxed at 10%.
The next $76,000 is taxed at 12%.
The next $110,600 is taxed at 22%.
The next $192,150 is taxed at 24%.
The remaining $46,450 is taxed at 32%.

The result: an effective tax rate closer to 21% not 32%.

The U.S. tax system is progressive. Every dollar moves through each bracket in order. Only the dollars above each threshold get taxed at the higher rate. Your marginal rate, the rate on your last dollar earned, is not your blended rate.

Why does this matter for you?

Because high earners often make decisions based on fear of a tax bracket rather than their actual tax picture. That fear can lead to missed opportunities in retirement contributions, equity compensation planning, and income timing strategies.

Knowing the difference between your marginal rate and your effective rate is not just a math exercise. It is the foundation of smarter planning.

[Steve Balch, CFP® @StevenBalch]

Think you pay 32% on every dollar? You don't. Learn exactly how 2026 tax brackets work for married filers earning $450K — and what it means for your tax strategy.

https://t.co/G6eWsKyzek

[Steve Balch, CFP® @StevenBalch]

A $1.5 million traditional 401(k) can quietly push a retired couple into a higher tax bracket than they ever hit during their working years.

Most people do not realize this until it is too late to do much about it.

Here is the problem:

Required Minimum Distributions eventually force you to pull a set percentage from that account each year. On a $1.5 million balance, those distributions can land squarely in the 22% or 24% bracket and potentially stay there.

But RMDs are only part of the story.

For married couples filing jointly, Medicare IRMAA surcharges begin the moment income crosses $218,000 in MAGI. Cross that line and you owe an additional $81.20 per person, per month in Part B premiums — nearly $1,950 a year in extra Medicare costs from a single year of over-converting (CMS, 2026 Medicare Parts B and D Premiums and Deductibles).

So the conversion strategy is not simply "convert as much as you can." The target is the bracket ceiling, not the IRMAA cliff.

A married couple in the 22% bracket could potentially convert $50,000 to $100,000 per year, stay safely below that $218,000 threshold, and let that money compound tax-free over a decade or more.

The window to act is between now and age 73, before RMDs begin at that age and take the decision out of your hands.

Roth conversions also interact with Social Security taxation, capital gains rates, and what your heirs ultimately inherit. That coordination is where the real planning lives.

The math is specific. The window is finite. And the default, doing nothing, is itself a choice.

If your household has meaningful pre-tax retirement savings and you are still in your peak earning years, this conversation is worth having now.

[Steve Balch, CFP® @StevenBalch]

I help retirees turn the savings they’ve accumulated over a lifetime into a reliable paycheck they can actually enjoy.

And as we approach year-end, here are 10 things we’re reviewing before December 31:

1. Run a year-end tax projection.
Add up Social Security, pension income, IRA withdrawals, RMDs, interest, dividends, and capital gains.

Knowing where your income will land can help identify planning opportunities while there's still time to act.

2. Confirm your RMD.
If you're subject to required minimum distributions, make sure the correct amount has actually been distributed, especially if you have multiple retirement accounts.

3. Evaluate a Roth conversion.
The years after retirement but before large RMDs begin can create valuable tax-planning opportunities.

The question isn't simply, “How much can I convert?”

It's, “How much SHOULD I convert?”

Consider today's tax rate, future RMDs, Medicare IRMAA, Social Security, state taxes, and your long-term plan.

4. Review Medicare coverage.
Review Part D, Medicare Advantage or Medigap coverage, prescriptions, provider networks, premiums, and out-of-pocket costs.

Don't automatically assume this year's coverage is still the best fit.

5. Watch your IRMAA exposure.
Roth conversions, IRA withdrawals, investment gains, and other income can potentially affect future Medicare premiums.

That doesn't mean avoiding income. It means understanding the tradeoffs before making decisions.

6. Review charitable giving.
If you're charitably inclined, a Qualified Charitable Distribution may be worth considering once you're eligible.

Depending on your situation, appreciated investments and other giving strategies may also be worth reviewing.

7. Plan next year's retirement paycheck.
How much did you actually spend this year?

How much came from Social Security, pensions, cash, IRAs, Roth accounts, and taxable investments?

Then decide where next year's income should come from.

Retirement income should be planned, not improvised.

8. Review your portfolio.
Retirement doesn't mean eliminating investment risk.

Your allocation should reflect your spending needs, income sources, time horizon, cash reserves, and ability to handle market declines.

9. Check your cash reserves.
Make sure money needed for near-term spending is safe, liquid, and readily available.
Then make sure that cash isn't unnecessarily sitting somewhere earning next to nothing.

10. Review your estate plan and beneficiaries.
Review IRAs, insurance, annuities, TOD/POD accounts, wills, trusts, powers of attorney, and health care directives.

And make sure your family knows where important documents are located.
Retirement planning isn't just about how much you've accumulated.

It's about turning those savings into income you can rely on, and giving yourself permission to actually enjoy the money you've worked so hard to build.

[Steve Balch, CFP® @StevenBalch]

You can earn more money later. You cannot get back the years your kids are young. Here is how to stop choosing between the two.

[Steve Balch, CFP® @StevenBalch]

I help high-income individuals and families make the most of their income so they can build wealth for the future while still enjoying life today.
Here are 11 things we’re reviewing before December 31:

1. Run a year-end tax projection.
Estimate where your income will land after salary, bonuses, RSUs, stock options, investment income, and capital gains. There may still be time to make adjustments before the year closes.

2. Check your 401(k).
For 2026, the employee contribution limit is $24,500. If you’re 50+, the standard catch-up is $8,000. For those ages 60–63, the higher catch-up can be $11,250. And don't forget the employer match.

3. Build your Roth strategy.
Should you use a traditional or Roth 401(k)? Are you eligible for a direct Roth IRA? Does a backdoor Roth make sense? Does your 401(k) allow after-tax contributions and in-plan Roth conversions?
High income doesn’t necessarily mean Roth contributions are off the table.

4. Review your HSA.
If eligible, look at your contributions, employer contributions, and whether you're using the HSA primarily for current expenses or as another long-term savings vehicle.

5. Review open enrollment.
Health insurance, HSA/FSA options, disability coverage, life insurance, and other employer benefits can change. Don't automatically choose the same options as last year.

6. Use benefits that may expire.
Check FSA balances, dependent-care benefits, wellness programs, employer reimbursements, education benefits, and PTO.

7. Review company stock.
RSUs, options, ESPPs, and employer stock can quietly create a concentrated position. Having both your paycheck and a large portion of your wealth tied to one company deserves attention.

8. Review charitable giving.
If you already give to charity, consider whether appreciated investments or a donor-advised fund could be more appropriate than simply writing a check.

9. Review cash and debt.
What is your emergency fund earning? Are you carrying high-interest or variable-rate debt? Do you have an ARM or HELOC adjustment approaching?

10. Update beneficiaries and estate documents.
Marriage, divorce, children, deaths, and other life changes are all reasons to revisit your 401(k), IRAs, insurance policies, and estate plan.

11. Update your net worth and set your 2027 priorities.

Where did you make progress this year? Where didn't you?

Then identify your three biggest priorities for next year.

Maybe you need to save more.

Maybe you need to build more tax-free money.

Maybe you need to diversify company stock or pay down debt.

Or maybe you're already saving enough and can give yourself permission to enjoy more of what you've built.

Year-end planning isn't about checking boxes.

It's about making sure the money you're earning is moving you toward the life you actually want.

[Steve Balch, CFP® @StevenBalch]

The real planning opportunity:

Every dollar you can move out of the 32% bracket, through retirement contributions, deductions, or smart timing, saves you $0.32 on that dollar.

Knowing your effective rate tells you where you stand. Knowing your marginal rate tells you where to aim your strategy.

[Steve Balch, CFP® @StevenBalch]

If you’re in the 32% tax bracket, you are not paying 32% on all of your income.
That’s one of the biggest tax misconceptions I hear from high earners.
Here’s how it actually works

[Steve Balch, CFP® @StevenBalch]

Total federal income tax: about $96,912

So while their marginal tax rate is 32%, their effective federal income tax rate is only about 21.5%.

Big difference.

[Steve Balch, CFP® @StevenBalch]

If this is the kind of retirement income planning you want more of, follow me.

I cover this every week for high-income professionals and business owners who want a coordinated plan, not more complexity.

[Steve Balch, CFP® @StevenBalch]

A $1.5M traditional 401(k) can push a retired couple into a higher tax bracket than they ever hit while working.

Here is the math nobody walks you through:

[Steve Balch, CFP® @StevenBalch]

The window is open right now.

The question is whether you are moving through it deliberately or letting it close by default while the balance compounds further into RMD territory.