The Problem
The Decisions That Matter Most Happen Before the Money Ever Arrives
There's a job hiding inside every big financial moment, and it's usually not the one you're paying for.
It's the tax and the timing, the work that happens before a sale closes or a paycheck stops. That's where your options get decided, and it's the part that's easiest to skip.
The Gap
There Is a Difference Between Planning Your Taxes and Reporting Them
A lot of what gets called tax planning is really tax reporting. It takes a year that has already closed and asks how to owe the least on what already happened. That's necessary work, and it isn't planning.
Real planning looks forward instead of back. It's the difference between recording the score and changing it, and at the moments that matter, the two aren't close.
Tax reporting
Looks back.
Takes a year that has already closed and asks how to owe the least on what already happened. Necessary work. It records the score.
Tax planning
Looks forward.
Works on the tax and the timing before a sale closes or a paycheck stops, while the options are still open. It changes the score.
You can't plan a year that has already ended. You can only file it.
Here's why the gap survives. Your CPA assumes the forward-looking work belongs to your advisor. Your advisor assumes it belongs to your CPA. So the most valuable planning of your life sits in the space between two people who each believe the other one has it.
And the opportunity isn't spread evenly across the years. It's concentrated in a few windows. The best of them open before the moment, and a few stay open for a while after it.
A business sells
The letter of intent.
A property sells
45 days, for one route.
A career ends
The years before RMDs.
Once the wire lands, a lot of what could have been planned starts getting reported instead. That's usually when people assume it's too late, and it isn't always. And if your advisor's idea of tax strategy stops at municipal bonds and harvesting a loss in December, that's not a plan.
Harvesting a loss usually postpones the tax rather than removing it. Municipal bonds are a bandage where the situation calls for a plan.
The Tells
You Can Find the Gap Without Taking My Word for It
You don't need to become an expert to know whether the forward-looking work is happening. You need a few questions, asked out loud, of the advisor you already have. Their answers will tell you most of it.
"Have you ever asked to see my tax return?"
You can't plan around a number you've never looked at. The tax return is where the whole picture lives: the brackets, the carryforwards, the one-time events. If nobody has ever asked for it, the plan is running blind on the single largest expense of your retirement.
"When are the most important tax decisions made, before a sale or after?"
The best answer is before, in the letter of intent and the months around it. Some options stay open for a while after a sale, but there are fewer of them and each one is on a clock. An advisor who only shows up once the money is in the account missed the part with the most choices.
"What will my retirement accounts cost me in taxes when I start taking money out?"
Almost everything in a traditional IRA or 401(k) has never been taxed. So the balance on your statement isn't all yours yet; part of it is a tax bill nobody has measured. A real plan puts a number on that bill and decides when, and at what rate, it gets paid.
"This questionnaire that sorted me into conservative or aggressive, does it hold up?"
If it measured your real tolerance for risk, your answers would hold from one year to the next. They don't. People score braver when markets are up and more fearful when they're down, which means it's reading your mood, not your tolerance. It's a fear gauge with a serious name.
The Other Half
The Portfolio You Were Handed Was Built From an Old Chart
Underneath the portfolio is a mix-up about the word risk. What you're afraid of is losing money you can't get back. But what your statement measures is how much your account wobbles around its own average. It calls that wobble risk and reports it back as if it answered your question. It didn't.
That wrong measure is also what built the standard portfolio. The usual answer to safety is the sixty-forty: sixty percent stocks, forty percent bonds, on the idea that when stocks fall, the bonds carry you.
That mix was drawn up during a long stretch of falling interest rates, when bonds really did rise as stocks struggled. Sailors have a word for steering by where you used to be instead of where you are. They call it dead reckoning.
A set-and-forget sixty-forty is dead reckoning. In 2022, stocks and bonds fell together, and the thing that was supposed to protect people didn't.
It didn't fail because of bad luck. It failed because the chart was old, and a convenient answer had been standing in for a correct one for years.
From the Inside
And Yes, You Are Probably Paying for the Privilege
I spent nearly two decades on the legacy side of the industry, recommending in good faith what I was handed. So I'm not describing villains. Good people recommend the wrong thing in good faith. I did.
Most of what goes wrong traces back to a single move. The industry substitutes what's convenient to recommend for what's actually correct, and then calls it advice. It isn't malice. It's a system that pays for movement.
Two stories from my own clients
One of my favorite clients was the chief operating officer of a major bank's corporate banking group. As an employee, she was required to keep her retirement plan at that bank, on the discounted employee rate.
On top of that rate, they charged her an extra fee for a program with a polished name. What the program actually did was hire someone else to do the trading. She was a senior executive at the bank, and she was still paying twice.
If it can happen to her, the odds are good something similar is happening to you.
Jones Fiduciary Wealth Management
Two stories from my own clients
A second client came to me after selling his business, and we combed through an old retirement account together. The firm managing it was charging him a full advisory fee just to rebalance the portfolio.
Rebalancing is necessary, and it's the kind of thing a real relationship simply includes. Charging extra for it is like buying tires and getting charged to put air in them.
Jones Fiduciary Wealth Management
Convenient recommendations need impressive names. When a firm hires an outside trader to run your account and charges you for it, it doesn't call it that. It calls it:
- Private client.
- Private banking.
- Premium access.
- Portfolio manager.
- Separately managed account.
- TAMP.
Clever names that make it sound like a platform, when what you're buying is an extra fee.
So Now What
So Where Does That Leave You?
Start with what you can see. Ask the advisor you already have the questions on this page, out loud, and listen to the answers. If you like them, you're in good hands, and I'm genuinely glad.
If you don't, here's what working with me looks like instead. The tax strategy comes first, your CPA and attorney are in the room, and the portfolio is built to replace the income you're walking away from.
And if you only ask three things, ask these:
- 01What's my all-in fee, including everything charged inside the funds?
- 02Is anyone other than me paying you?
- 03What will my retirement accounts cost me in taxes when I start taking money out?
No charge. No pitch. You keep the results.
