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Five Tax Secrets the Wealthy Use (That You Can Too)

by Eric Seyboldt, MBA

The federal tax code is thousands of pages long—not because it’s meant to be read cover to cover, but because it’s full of incentives. Many of the wealthiest Americans have learned to navigate those incentives like seasoned pilots flying through a storm. But here’s the truth that doesn’t make headlines: most of the strategies they use are available to everyday Americans. They’re not shady or secretive. They’re not reserved for billionaires or Wall Street elites. They’re simply underused. The difference isn’t money. It’s information. Below are five tax-smart strategies commonly used by the wealthy that any household can adopt with a little foresight and planning.

Strategy 1: Roth Conversions During Low-Income Years
One of the more effective plays happens in years when income is temporarily low—often after retirement but before Social Security and required minimum distributions kick in. This is when the wealthy make strategic Roth conversions. For example, consider a couple who retires at 63 with $900,000 in Traditional IRAs and only $30,000 in taxable income. They can convert $70,000 to a Roth IRA and stay within the 22% federal bracket. That $70,000—once converted—can grow completely tax-free for life, never again subject to RMDs or future tax hikes. Over time, these conversions can result in hundreds of thousands of dollars in tax-free gains. Many higher-income families make this a multi-year strategy, converting just enough each year to avoid jumping brackets. But even modest-income retirees can use the same approach. Timing is everything.

Strategy 2: Long-Term Capital Gains and the 0% Bracket
There’s a little-known opportunity in the tax code that allows lower-income households to sell appreciated assets—like stocks or real estate—and pay zero in capital gains taxes. For 2025, married couples with up to $89,250 in taxable income fall into the 0% long-term capital gains bracket. Imagine a retired couple with $28,000 in Social Security and $35,000 from part-time consulting. If they sell $20,000 in appreciated shares held longer than a year, they could owe zero federal tax on the gain. Wealthier investors use this same window by structuring income strategically, often even “harvesting” gains intentionally just to reset the cost basis and eliminate future tax. It’s a clean way to unwind a position, pay nothing in taxes, and reinvest with a fresh starting point.

Strategy 3: Health Savings Accounts (HSAs) as Stealth Retirement Tools
Most people think of Health Savings Accounts as short-term medical accounts. The wealthy know better. HSAs are the only accounts with triple tax benefits—deductible going in, tax-free growth, and tax-free coming out if used for medical expenses. A family contributing the 2025 maximum of $8,300 annually and investing that balance in a broad index fund could grow the account to over $250,000 in 20 years. Better yet, there’s no requirement to spend the money immediately. High earners often pay out-of-pocket for medical expenses and let the HSA balance grow tax-free for decades. And after age 65, non-medical withdrawals are treated like a Traditional IRA—taxed as ordinary income, but penalty-free. Whether used for Medicare premiums, long-term care, or everyday medical bills, it’s one of the most underappreciated tools in the tax toolkit.

Strategy 4: Depreciation and Real Estate Income
Rental real estate offers something stocks and bonds never can: depreciation. It’s a paper loss that shelters real income. If you buy a $300,000 rental home with $250,000 of depreciable value (excluding land), you can deduct about $9,100 per year for 27.5 years. Even if that property generates $12,000 in net income, your tax return might show only $2,900 of taxable income. In many cases, if you have other deductions—like property taxes, mortgage interest, or repairs—you may show a loss altogether. Meanwhile, your property might be appreciating and your tenants are paying off your loan. This is how many wealthy individuals generate income that is partially or entirely shielded from taxes. You don’t need to own a dozen units to benefit—just one well-managed property can offer major tax advantages.

Strategy 5: Tax Loss Harvesting to Offset Gains
Loss harvesting is a strategy used heavily by the wealthy—especially toward the end of the year—to turn market volatility into tax savings. Here’s how it works: an investor sells an asset that has lost value, realizes the capital loss, and then uses that loss to offset gains elsewhere in the portfolio. Up to $3,000 of net capital loss can also offset ordinary income each year, and any remaining losses carry forward indefinitely. For example, an investor who sells a tech stock at a $7,000 loss can use that to offset $7,000 in gains from a real estate sale or mutual fund liquidation. If there are no capital gains that year, $3,000 reduces taxable income and $4,000 rolls into next year. The trick is to avoid the wash-sale rule—buying the same or substantially identical security within 30 days—so some planning is required. But for investors with taxable accounts, it’s one of the cleanest ways to reduce a tax bill without reducing investment exposure. It’s a practice that big investment firms automate for their high-net-worth clients—but anyone can do it with the right approach and a good advisor.

These tax strategies aren’t magic tricks. They’re practical, IRS-sanctioned tools hiding in plain sight—quietly used by the well-advised and often missed by the average household. But the real secret isn’t just knowing these rules. It’s knowing when to apply them and having the discipline to follow through. Whether you’re managing a $5 million portfolio or starting with your first Roth conversion, the principles are the same. Understand the rules, stay proactive, and align your tax strategy with your life strategy. In the end, it’s not just about paying less in taxes—it’s about keeping more of what you’ve earned and using it wisely.

You’ve worked too hard to let unnecessary taxes chip away at your retirement. If you're serious about protecting what you've built, it's time to think and plan like the wealthy do—strategically and proactively. Call 614‑943‑2265 to schedule your complimentary 10-minute consultation. We’ll walk through how tax-efficient strategies—like Roth conversions, loss harvesting, and structured income tools—can help you keep more, grow more, and worry less. Because in retirement, every dollar you keep is a dollar that works for you—not the IRS.

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The Roth Conversion Equation: When Deferring Taxes No Longer Defers Consequences

by Eric Seyboldt, MBA

Client: Eric, let’s dive deep. I understand the basic difference between a Traditional IRA and a Roth IRA. What I want to know is—under what circumstances does a Roth conversion become a mathematically optimal strategy?

Eric: It comes down to one principle: the arbitrage between marginal tax rates today versus marginal tax rates later. The Traditional IRA defers taxes—it does not eliminate them. If the future cost of liquidation (via RMDs, surcharges, or higher brackets) exceeds the cost of conversion today, the conversion wins—not emotionally, but economically.

A Framework for Decision-Making

Let’s elevate the discussion above rules of thumb. The optimal Roth conversion decision requires modeling four dynamic variables:

1. Current vs. future marginal tax brackets

2. Timing and magnitude of Required Minimum Distributions (RMDs)

3. Medicare IRMAA thresholds and Social Security taxation

4. Time horizon for tax-free compounding

Client: Walk me through a high-net-worth scenario.

Eric: Certainly. Consider:

• Married couple, age 64

• Traditional IRA: $1.2 million

• Taxable income this year: $65,000

• Retirement income projected to rise to $180,000/year by age 73 due to pensions, annuities, and RMDs

They’re currently in the 12% federal bracket, but by the time RMDs start, their effective marginal rate—factoring in Social Security taxation and IRMAA surcharges—will likely be 24%–27%. So what’s the play?

We strategically convert $100,000 annually for the next 5 years, staying within the 22% bracket ceiling (approximately $201,050 for joint filers in 2025). This prevents future RMDs from compounding the tax problem and preemptively neutralizes IRMAA costs.

• Total taxes paid on the conversion: approximately $110,000 over 5 years

• Future tax savings avoided: estimated $240,000 over 20 years, assuming 6.5% annual growth and a 24% withdrawal bracket

When Conversions Fail to Deliver

Client: So when is a Roth conversion not advisable?

Eric: Several red flags:

1. Funding the taxes from the IRA itself – This erodes principal and delays breakeven.

2. Short time horizon – If the account won’t remain invested for 10+ years, the compounding advantage wanes.

3. High-income years – Converting during your peak earning years can push you into punitive brackets and surcharge zones.

Example:
A 60-year-old executive earning $300,000 annually attempts a $200,000 Roth conversion. He ends up in the 32% federal bracket, triggers a $100/month Medicare IRMAA penalty, and increases the taxable portion of his Social Security later.

• Taxes owed: $64,000

• Break-even period: 15+ years

• Better strategy: Wait until early retirement to perform “bracket-filling” conversions at 12–22%

Roth Conversion as Tax Insurance

Client: Is there a way to think about conversions beyond just the math?

Eric: Yes. Roth conversions function as a form of tax insurance.

• They hedge against future tax rate increases, which are likely in a post-deficit world.

• They hedge against sequence-of-return risk, by allowing you to tap tax-free dollars in down markets.

• And they hedge against legislative risk, especially for beneficiaries under the 10-year inherited IRA distribution rule.

A $500,000 Roth left to a child in a high tax bracket avoids tens—if not hundreds—of thousands in forced income taxation. That’s not just estate efficiency. That’s intergenerational optimization.

Layered Conversions, Not One-Off Moves

Client: So it’s not all or nothing?

Eric: Never. The most effective strategy is a multi-year Roth conversion ladder, performed with precision each year, guided by:

• Bracket ceilings (e.g., stop at the 12% or 22% line)

• IRMAA cliffs ($103,000 for singles / $206,000 for couples in 2025)

• Social Security thresholds ($32,000 joint / $25,000 single)

Each year becomes its own tax-engineered opportunity. The ladder also gives flexibility—if markets are down, you convert more shares for the same dollar amount. If Congress raises rates, you’ve pre-paid your taxes at a discount.

"The real cost of Traditional IRAs isn’t the taxes you saved—it’s the trap they create in retirement."

Traditional IRAs gave Americans a way to defer taxes during their peak earning years. But today’s retirees face a different landscape—one shaped by taxable Social Security, Medicare surcharges, SECURE Act distribution limits, and unpredictable tax policy.

That’s why Roth conversions aren’t just a tactic—they’re a strategic asset reclassification tool. When executed properly, they transform future tax burdens into present tax certainty—and turn deferral into long-term freedom.

Call Eric Seyboldt at 614‑943‑2265 to schedule your complimentary Roth strategy session. Smart retirement planning isn’t just about how much you saved. It’s about how much you keep—and how efficiently you pass it on.

Disclosures: This material is for informational purposes only and should not be construed as tax or legal advice. All tax calculations are illustrative. Clients should consult with a qualified tax advisor regarding their personal situation. Tax laws are subject to change.

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Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning.

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Please feel free to call Eric at 614-943-2265 if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy

Why Private Capital Is Repositioning into Real Assets Like Gold

For decades, the American retirement playbook relied on a familiar formula: buy equities, hold bonds, trust the Fed, and let time do the work.

But the landscape has changed—and serious investors know it.

Inflation is no longer theoretical. The dollar is no longer untouchable. And the system itself is beginning to show its seams. The liquidity era that fueled record market highs has quietly morphed into something far more fragile: inflated valuations with little margin for error.

In this new reality, smart capital isn’t waiting for a headline to justify a move. It’s already made one.

Gold Isn’t Nostalgia. It’s Discipline.

Real wealth isn’t reactive—it’s anticipatory. That’s why sophisticated investors aren’t chasing returns. They’re insulating against structural risk.

And gold has re-emerged—not as a speculative bet—but as a measured allocation to permanence.

• It has functioned as a neutral reserve of value across currencies, wars, and political cycles.
• It does not rely on boardrooms, quarterly earnings, or policy pivots.
• It is outside the system by design—unmoved by liquidity traps and digital distortions.

This is not about fear. It’s about architecture.

The Role of Gold in an Intelligent Portfolio

Gold doesn’t generate income, and that’s precisely why it matters—it doesn’t need a counterparty to deliver on its promise. It exists, holds, and stores purchasing power. That’s it.

During periods of fiscal overextension or debt monetization, that function becomes critical.

Real assets—gold in particular—are increasingly viewed not as “alternative,” but as essential. Not as “hedges,” but as counterweights to fragility.

Wealthy Investors Aren’t Guessing. They’re Rebalancing.

They’ve seen the data: asset bubbles don’t announce themselves. Currency regimes don’t collapse overnight—but when they do, it’s always “sudden.”

They’ve seen the quiet decline in bond reliability. They’ve watched equity markets detach from economic fundamentals. They’ve read the central bank minutes, and more importantly—they’ve stopped believing in magic.

The wealthy aren’t waiting to see if gold “outperforms.” That misses the point.

They're using it to reduce exposure to systems built on leverage, algorithms, and confidence.

If you’re building a retirement strategy that’s meant to endure—not just survive—you don’t need a forecast. You need a foundation.

And it may be time to revisit the simplest, most time-tested one available.

Ask yourself:

🧠 Are you truly diversified?
🧠 What happens to your retirement if inflation stays elevated?
🧠 If the dollar weakens, what asset in your portfolio gets stronger?

If you don’t have a good answer, it’s time for a new conversation.

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To a GOLD IRA (see link below) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

Office: 614-943-2265

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Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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