With just over six months left in the year, now is the perfect time to make critical retirement adjustments. As a financial advisor who works with early retirees, I’ve seen how waiting until December can lead to costly mistakes. These five retirement moves could help you avoid thousands of dollars in errors—but only if you act in time.
Leverage Last Year’s Tax Return
The most overlooked retirement planning tool is sitting in your files right now: last year’s tax return. Most people file it and forget it, but it’s not just a receipt—it’s a roadmap. This document contains line-by-line clues about how to lower this year’s taxes and optimize your retirement moves.
Your tax return reveals:
* Whether your Roth conversion strategy is working
* If your tax withholdings are properly calibrated
* Whether your withdrawal strategy is undermining your future
For early retirees, your return shows if you’re staying under ACA subsidy cliffs, if your Roth conversion plan is effective, and whether your taxable portfolio is generating excessive taxable income. Filing is only half the job—analyzing your return now prevents penalties and missed opportunities.
Check Your Portfolio’s Tax Efficiency
June serves as a halftime check-in for your investment strategy. Even a well-built portfolio can leak performance if you have the right investments in the wrong places.
Different types of investment income are taxed differently:
* Non-qualified dividends and short-term capital gains are taxed as ordinary income (higher rates)
* Qualified dividends and long-term capital gains receive preferential tax treatment (lower rates)
Depending on your tax bracket, it may be more efficient to use tax-free income vehicles like municipal bonds instead of taxable options. Your tax return also reveals if you have capital loss carry-forwards that can offset gains.
Research from Morningstar shows that smart asset location paired with tax-efficient withdrawals can boost long-term utility by 3.2%, translating to a 23 basis point increase in overall wealth. Tax-loss harvesting alone can add 20-30 basis points annually. Over decades, this can mean hundreds of thousands in tax savings throughout retirement.
Refresh Your Retirement Plan
Retirement moves isn’t “set it and forget it.” Markets move, spending changes, and goals evolve. Mid-year is the perfect time to check if you’re still on course.
When refreshing your plan, monitor:
* Your actual income versus planned income
* Whether you’re on pace with retirement withdrawals
* If investment returns are helping or hurting your timeline
* Whether your withdrawal rate aligns with your original plan
Surprisingly, many retirees are too conservative with spending. Ask yourself: Can you spend more? Are there upcoming major expenses you need to prepare for? Has portfolio performance created new tax opportunities or risks?
The investment approach that built your nest egg might not be the same one that sustains you through retirement moves. Now might be the time for adjustments to ensure you stay on track to meet your definition of “enough.”
Project Your Tax Trajectory
Tax surprises don’t happen in April—they happen now when no one is looking. Mid-year is the time to project where your income is heading and identify risk zones.
Without mid-year tax projections, you might:
* Owe the IRS more than expected (or get an unnecessarily large refund)
* Trigger Medicare surcharges or lose healthcare subsidies
* Miss your best opportunity for strategic Roth conversions before RMDs lock in
Start by projecting your current income and reviewing if your withholdings are within $1,000 of your expected tax due. Map out your current and future tax brackets to identify what many call the “Roth conversion sweet spot”—that window before RMDs and Social Security begin.
Watch for tax “torpedoes” like IRMAA cliffs that can increase Medicare premiums, or ACA subsidy thresholds where $1 over the line can cost thousands in lost benefits.
Optimize Your Charitable Giving
For those who enjoy giving to others or supporting charities, how you give matters as much as what you give. Many people leave money on the table by giving inefficiently.
Consider these strategies:
* Donate appreciated stock instead of cash to avoid capital gains while still getting the full deduction
* Set up a donor-advised fund to bunch multiple years of giving into one large deduction
* Plan for qualified charitable distributions (QCDs) after age 70½ to give directly from IRAs
Planning your giving strategy now gives you time to process paperwork and complete transfers before the year-end rush. Strategic giving often means you can give more without paying more in taxes.
These five moves aren’t about complexity—they’re about timing. Each becomes harder, more expensive, or unavailable if you wait too long. Use mid-year as your reset point, starting with your tax return, and make adjustments while the window of opportunity remains open.
Frequently Asked Questions
Q: Why is mid-year the best time to review my retirement moves?
Mid-year provides enough time to make meaningful adjustments before year-end deadlines. You can see how your plan is tracking against projections and still have six months to correct course if needed. Waiting until December often means missing opportunities for tax planning, Roth conversions, and strategic giving.
Q: How much could tax-efficient investing actually save me over time?
Research shows that proper asset location and tax-efficient withdrawals can add over 3% to your long-term financial outcomes. Tax-loss harvesting alone might add 20-30 basis points annually. Over a 20-30 year retirement, this could translate to hundreds of thousands of dollars in additional wealth or spending power.
Q: What are the most common tax thresholds retirees need to watch for?
The most significant thresholds include IRMAA Medicare premium surcharge levels, ACA subsidy cliffs for early retirees, Social Security taxation thresholds, and capital gains tax brackets. Crossing these thresholds by even $1 can trigger thousands in additional costs, making mid-year tax projections crucial.
Q: How do I know if I’m being too conservative with my retirement spending?
Many retirees underspend because they fear running out of money. Signs you might be too conservative include consistently withdrawing less than your planned rate, watching your portfolio grow substantially during retirement, or regularly postponing major discretionary expenses despite having the means. A mid-year plan review can help determine if you can safely increase spending.
Q: What’s the best way to donate to charity if I have appreciated investments?
Donating appreciated stocks or funds directly to charities is typically more tax-efficient than giving cash. You avoid capital gains tax on the appreciation while still receiving a deduction for the full market value. For larger or ongoing giving, consider a donor-advised fund to bunch deductions in high-income years, or plan for qualified charitable distributions from IRAs after age 70½.
