Family Focused Tax Planning
When you think about retirement planning, the first thing that usually comes to mind is: “Will I have enough saved to live comfortably?”
A close second is (or we think it should be!) about taxes: how much of my income will go to tax?
Here’s what most people don’t realize: retirement taxes don’t just affect you. They can also create big headaches for your spouse, your children, and even your grandchildren.
At Roche Wealth, we’ve walked Oklahoma families through these challenges for years, and the same common pitfalls come up again and again. Below are five common retirement tax traps and how family-focused tax planning can help you avoid them.
1. The Widow’s Penalty
When one spouse passes away, the survivor often moves from “married filing jointly” to “single” tax status. That means the same income can suddenly be taxed at a much higher rate.
For simple example: a young married couple with $120K in annual income in 2025 would likely end up with a federal tax liability of ~ $10,100. That same income as a single filer would result in a federal tax liability of ~ $17,800. That’s a difference of ~ $7,700
For many Oklahoma retirees, this shift feels like a sudden pay cut. Proactive tax planning can help smooth this transition and reduce the financial burden on your spouse.
2. The RMD Surprise
Required Minimum Distributions (RMDs) from 401(k)s and IRAs often push retirees into higher tax brackets. Even if you don’t need the income, the IRS requires you to take it, and pay taxes.
Worse still, under the SECURE Act, your children must deplete inherited retirement accounts within 10 years. If they’re in their peak earning years upon inheritance, their tax bill may be even steeper than yours. Leading us to our next point..
3. The Hidden Heir Tax Bill
Leaving a retirement account to your kids may feel like a blessing. But without the right tax strategy, it can become a burden.
Picture this: your child inherits a $1 million IRA. Sounds great.. that is until they realize they’ll owe hundreds of thousands in taxes over the next decade. Isn’t there a better way?
4. State Taxes
Many retirees move to tax-friendly states like Oklahoma, Texas, or Florida. But here’s the catch: if your heirs live in a high-tax state, their inheritance could shrink faster than expected.
That’s why family wealth transfer planning needs to consider your tax situation and theirs.
5. The Generational Ripple Effect
The most dangerous tax trap isn’t just the bill, it’s the ripple effect. Poor planning can erode wealth across multiple generations. On the other hand, smart retirement tax strategies can transform your estate into a legacy that lasts.
Retirement planning is about more than your lifetime. It’s about protecting the people you love. A strategy that minimizes your taxes today but maximizes your children’s taxes tomorrow isn’t really a strategy at all.
That’s why we encourage Oklahoma families to take a holistic approach to retirement & tax planning, looking at both your current tax bill and your future liability. With the right strategies, you can:
Minimize Required Minimum Distribution taxes
Reduce the possible Widow’s Penalty for your spouse
Protect your children from surprise inheritance tax bills
Keep more of your wealth in the family
