If you’re on the brink of retirement—or already there—market dips don’t just rattle your portfolio. They rattle your peace of mind.
Back in your 30s or 40s, a downturn was just background noise. Now in your 50s, 60s, or beyond, the stakes feel higher. Every red arrow on CNBC hits a little harder because your runway is shorter, your lifestyle is set, and your income strategy is suddenly in the hot seat.
But here’s the truth: while you can’t control the markets, you can absolutely control your tax strategy. And during volatile periods, this can be the difference between a stressed retirement and a secure one.
Let’s walk through five tax-smart, peace-of-mind-maximizing strategies that every near-retiree and retiree should know.
1. Turn Losses Into Tax Wins with Tax-Loss Harvesting
Imagine Bob, a recently retired lamp mogul. The market dips, and his tech-heavy portfolio takes a hit. Instead of panicking, Bob plays offense—with tax-loss harvesting.
Tax-loss harvesting is the practice of selling losing investments to offset capital gains elsewhere (or even regular income, up to $3,000 per year).
Why it matters:
- Offsets capital gains taxes
- Lowers your taxable income
- Lets you rebalance your portfolio without triggering a massive tax bill
Pro tip: This is not about dumping your entire portfolio. It’s about strategically trimming the losers and reinvesting in similar, IRS-approved alternatives (to avoid wash-sale rules) while reaping a real tax benefit.
2. Use “Deduction Bunching” to Outsmart the Standard Deduction
In retirement, many taxpayers find they can’t itemize anymore thanks to the increased standard deduction ($14,600 single / $29,200 married filing jointly in 2025).
Enter: deduction bunching.
Let’s say Terry, the invisible sock entrepreneur, donates to charity annually and has ongoing medical expenses. Instead of spreading out those deductions year-to-year, Terry bunches them into one calendar year—donating more in a single year, scheduling medical treatments, or prepaying property taxes.
The result: A single year where itemizing makes sense and unlocks substantial deductions. The following year? Take the standard deduction and chill.
3. Withdraw from Retirement Accounts the Smart Way
In a down market, you don’t want to sell investments at a low to fund your lifestyle. But you also can’t afford to blindly withdraw from tax-deferred accounts like IRAs and 401(k)s without creating a tax ripple effect.
Here’s what to consider:
- Balance your withdrawals between taxable, tax-deferred, and Roth accounts
- Plan your RMDs (Required Minimum Distributions) strategically—especially if you’re 73+
- Watch out for income cliffs that could spike Medicare premiums or bump you into a higher tax bracket
At JS Morlu, we help clients design multi-year withdrawal strategies tailored to their income, risk tolerance, and tax picture.
4. Make Roth Conversions While the Market Is Down
If your investments are down, your tax opportunity might be up.
Roth conversions—moving funds from a traditional IRA to a Roth IRA—can be particularly powerful when asset values drop. Why? You’re paying taxes on a smaller number now and letting it grow tax-free for the rest of your life.
Why consider it:
- Pay less tax now on depressed asset values
- Future withdrawals are tax-free
- Reduces future RMDs
But proceed with care. Converting too much in one year can spike your taxable income and ripple into higher taxes or Medicare costs. This is where a strategic partner like JS Morlu shines—we analyze your full picture before flipping any switches.
5. Make Tax Planning a Year-Round Habit, Not a Deadline Dash
Taxes don’t start in March and end on April 15. Smart tax planning is an all-year sport.
Especially in volatile economic years, it pays to:
- Adjust your strategy if income shifts
- Time large charitable gifts or deductions for max benefit
- Monitor tax law changes that affect retirees
- Reassess tax bracket creep, income thresholds, and capital gains
Think of it this way: You’ve spent decades building your nest egg. Don’t let taxes quietly erode it when proactive planning can protect it.
Bonus: Why JS Morlu Is Your Tax Planning Quarterback
At JS Morlu, we specialize in working with high-net-worth individuals, government contractors, and retirees who want strategic tax solutions, not generic advice. Whether you’re looking to reduce your tax burden, structure estate transitions, or manage multi-stream income in retirement, our CPAs tailor every plan to your unique goals.
Our promise: No jargon. Just clear, confident, and customized guidance—rooted in experience, powered by proactive strategy.
Final Word: The Market Doesn’t Control Your Future—You Do
Volatility may be the new norm, but anxiety doesn’t have to be. With the right tax moves, you can cushion downturns and build confidence into every phase of retirement.
Ready to secure your retirement tax strategy?
Contact JS Morlu today for a free consultation and let’s future-proof your finances—no matter what the markets throw your way.
