Tax planning can feel most urgent when a high-income year approaches its end. Compensation, bonuses, equity vesting, investment income, and business decisions may already be in motion, leaving fewer ways to influence the current year’s result.
At Richard P. Slaughter Associates, we begin tax planning well before a year-end deadline. We build multi-year projections that can range from a few years to a few decades, mapping expected income, deductions, and major decisions across the years ahead. That timeline gives clients, their CPAs, and our advisory team room to address important elections, transactions, and retirement dates before the available options narrow.
This type of planning combines current-year opportunities with a longer-range strategy designed around the household’s actual circumstances. It can clarify which decisions should be addressed now, which can wait, and how one year’s choice may affect the years that follow.
For high W-2 earners, that longer view can be especially useful. Salary, bonus income, restricted stock, and deferred compensation often leave limited room for changes once the year is underway. The planning opportunity may sit in an election made years earlier, a charitable-giving approach, a future retirement date, or the timing of income that has not yet arrived.
A Tax Strategy Can Begin Many Years Before Retirement
An executive we advise learned that her company would offer a deferred compensation plan. The election required her to decide how much compensation to defer and how many years payments would be spread across after retirement.
Because she expected to retire in roughly 10 years, we modeled her projected income from her final working years through the start of required minimum distributions at age 73. The projection included final-year compensation, the deferred compensation payout schedule, projected portfolio income, charitable giving, and the retirement years where Roth conversions could be useful.
In her final year of employment, we coordinated with her CPA to bunch property-tax payments and combine multiple years of budgeted charitable contributions into a larger donor-advised fund contribution. Those deductions helped offset a year with significant compensation. After retirement, we structured the deferred compensation payout to spread across several years rather than concentrate in one or two, keeping more of the payments in lower tax brackets and preserving several lower-income years before RMDs began. Those years created room for planned Roth conversions. The planning began in her 50s, but the decisions were designed to support her tax picture into her 70s.
Planning Before the Deadline
A multi-year tax projection does not replace the guidance of a CPA. It gives the client, CPA, and advisory team a shared view of expected income, elections, and planning decisions across different tax years.
We coordinate with clients’ CPAs and attorneys throughout the year so the relevant information is available before an important election, planned transaction, or year-end deadline. That may include a deferred-compensation election, a charitable-giving decision, a business transition, or an investment transaction with tax consequences.
The projection is updated as income, tax law, retirement dates, and family priorities change. A plan prepared in your 50s should not be treated as a permanent instruction for your 60s or 70s. As retirement approaches, projected income becomes more specific, elections move closer, and the tradeoffs deserve another review.
Tax Planning in Service of the Full Picture
Tax planning is one part of a coordinated wealth plan. A longer view helps connect decisions made today with the income, flexibility, and legacy a household expects to carry into the future.
Richard P. Slaughter Associates has been fee-only and fiduciary since 1991. Our advisory team, where every advisor holds the CFP® certification or is an active candidate in the CFP® certification program, brings that training directly to bear on projections like this one, where a deferred compensation payout schedule or a retirement-year Roth conversion has to be modeled correctly years in advance to work as intended. We bring tax projections into planning conversations that account for your full balance sheet and the decisions most important to your family.
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If any of this resonates — whether you are considering a deferred-compensation election, approaching retirement, managing equity compensation, or preparing for a business transition — we would welcome a conversation.
CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
