CPA's are skilled and useful practioners, and important tools in making sure that you are compliant with the tax code and don't pay more taxes than you legally owe... this year. Many people mistake the advice of their CPA for tax planning, that is, the long-term positioning of your income, assets, and other unique circumstances to minimize your tax burden in the future. Matt reminds us that taxes in retirement are not just a one-time annual event. Taxes evolve into a whole system of interlocking parts involving Social Security, RMD's, Medicare premiums, and more. As Matt points out, tax returns look backward at the year behind you. Tax planning, on the other hand, looks forward, evaluating how all these moving parts fit together over years and even decades, to make sure you avoid major tax pitfalls during your wisdom years.

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This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

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Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

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Tax Advice Is Not Tax Planning