Top Tax-Saving Strategies for Pre-Retirees: Smart Moves for High-Income Earners Approaching Retirement

As you stand at the peak of your professional life—whether as a business owner, executive, or seasoned investor—the view is impressive. You’ve built something remarkable. The question is no longer simply how to grow your wealth; it’s how to protect, transition, and enjoy it in a tax-efficient and intentional way.

At BGM, we work with high-net-worth individuals like you—people who have put in the hard work and are now ready to optimize the next chapter. In these pivotal pre-retirement years, strategic tax planning can mean the difference between preserving your legacy and giving up unnecessary dollars to the IRS.

Here’s how we help clients navigate this critical phase with clarity, confidence, and purpose.

1. Rethink Retirement Contributions: Go Beyond the Basics

It’s likely that you’re already contributing the maximum to your 401(k), including the special “catch-up contribution” provisions. For high-net-worth individuals and business owners, this is just the start of tax planning.

There are several advanced retirement plan options that allow you to contribute more than the standard 401(k) limits. Two popular examples are cash balance and defined benefit retirement plans. These plans can allow you to contribute $200,000-plus per year, saving for retirement while also making a notable reduction in taxable income.

This level of planning isn’t basic—it requires customization and careful consideration of your full financial picture. That’s where our team at BGM comes in to help with these complex strategies.

2. Roth Conversions: Fill the Buckets Strategically

As you near the end of your career or enter lower-income years during phased retirement, a window of opportunity opens for meaningful tax-saving strategies. One of the most effective? Roth IRA conversions.

This approach allows you to shift funds from traditional IRAs into Roth IRAs, forcing some tax out early—at lower rates—before required minimum distributions (RMDs) begin. When done strategically during lower-income years, Roth conversions can help manage your tax brackets and reduce overall lifetime taxes while enabling tax-free growth inside the Roth.

3. Business Transition Planning: The Emotional and Financial Exit

For business owners, the pre-retirement years aren’t just about shifting investment strategies—they’re also about transitioning a legacy.

Working with an advisor to guide you through each stage of the exit process is crucial. Here are the key steps:

• Valuating the business and preparing for the sale
• Evaluating ESOPs, management buyouts, or strategic buyers
• Navigating tax consequences and structuring proceeds efficiently
• Integrating sale proceeds into a long-term, tax-optimized investment plan

Other strategies may include family business transitions and charitable planning to reduce taxes in a liquidity event while aligning with your legacy goals.

4. Qualified Opportunity Zones: Reinvest Gains, Reduce Taxes

If you’ve recently realized a substantial capital gain—whether from a business sale or appreciated investment—you may benefit from investing in a Qualified Opportunity Zone (QOZ).

By reinvesting within 180 days, you can defer taxes on the original gain and potentially eliminate capital gains tax on the new investment if held for 10-plus years. While there are specific rules to follow, QOZs can offer powerful tax advantages for the right investor.

5. Tax-Efficient Income Planning: Longevity Meets Strategy

At this stage of life, you likely have multiple types of investment accounts. Knowing when and how to draw income from them is a critical piece of your tax strategy.

Smart withdrawal sequencing can make a meaningful difference. Consider tools such as:

• Qualified charitable distributions (QCDs)
• Roth conversions
• Asset location strategies
• Social Security and pension optimization
• Alternative investments for tax diversification and income control

This type of planning helps reduce unnecessary tax exposure and supports long-term wealth preservation.

6. Estate Planning with Purpose: More Than Just a Tax Strategy

Estate planning for high-net-worth individuals isn’t just about minimizing estate taxes—it’s about intentional legacy building.

We help clients explore meaningful questions:

• What tools will help us pass wealth to future generations?
• How do we ensure family values are passed along with the money?
• Are our charitable goals integrated into our estate plan?

For many clients, estate planning involves multiple generations. Adult children are often included in planning meetings to ensure everyone is aligned and prepared for the future.

7. Risk Management: Shielding What You’ve Built

As wealth grows, so does exposure to risk. Protecting what you’ve built is essential.

Risk management strategies may include:

• Asset protection through trusts and legal structures
• Cybersecurity tools to protect digital assets
• Umbrella and liability insurance reviews
• Long-term care planning to prepare for future health costs

These steps help ensure your financial plan remains intact and resilient—even through unexpected events.

8. The Power of Personalization

Every client has a unique financial journey. That’s why personalized planning is essential.

At BGM, we take time to understand your retirement vision, family dynamics, business story, and philanthropic passions. A customized retirement analysis—updated regularly—helps you adapt as life evolves.

By working with your existing professionals (attorneys, CPAs, and others), we help ensure every element of your plan is aligned and working toward your goals.

We focus on protecting your wealth and helping bring you lasting peace of mind.

Final Thoughts: This Is Your Summit. Let’s Navigate It Together

The pre-retirement years mark both a high point and a turning point in your financial journey. With the right strategies—tailored tax planning, thoughtful business transitions, and legacy-driven estate planning—you can move forward with clarity and confidence.

At BGM, we’re proud to partner with high-net-worth individuals and business owners as they prepare for life’s next chapter. If you’re within 5–10 years of retirement and ready to take a strategic approach, let’s start the conversation.

You’ve climbed the mountain. Now, let’s make the descent just as purposeful.

The opinion of the author is subject to change without notice and must be considered in conjunction with relevant regulation, as well as subsequent changes in the marketplace. Any information from outside resources has been deemed to be reliable but has not necessarily been verified. Each individual has unique circumstances to which this information may or may not be relevant. Under no circumstances will this information constitute an offer to buy or sell and it does not indicate strategy suitability for any particular investor.