Most owners spend twenty years mastering the first one and zero minutes learning the second, then wonder why the number on the closing statement is so much smaller than the number they had in their head.

The cold hard fact of life is that there are owners and there are others. You already crossed that line the day you signed the first lease, hired the first employee, or wrote the first check to yourself instead of an employer.

Nobody hands you the second set of skills when you do. You have to go get them, usually the hard way.

Grab your mug, pull up a chair.

Here are the three places I see business owners quietly lose the most money, and none of them show up on a P&L.

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Leak One: The Sale You Never Structured

Most owners think the exit happens on the day they sign the papers. It actually happens years before that, in every decision that determines how the sale gets taxed.

An asset sale and a stock sale are not the same transaction wearing different clothes. One can leave you with ordinary income tax rates on a chunk of the proceeds. The other can qualify for capital gains treatment on the whole thing.

The difference between those two outcomes on a seven-figure sale is not a rounding error. It’s often a down payment on a second life.

Then there’s the installment sale, the tool almost nobody brings up until it’s too late to use it.

Structuring the payout over several years instead of taking it all in one lump sum can keep you out of the top bracket entirely, spreading the tax bill the same way you’d spread a hot pan of coffee instead of gulping it in one go.

A dollar lost in taxes on your exit is a dollar gone forever. You only get to sell this business once.

Leak Two: Running It Like It’s Still Day One

Here’s the part that stings a little. You optimized your product, your hiring, your marketing, your ops.

Most owners never once optimized the entity itself.

Are you still running as a sole proprietor or a straight S-corp with no retirement structure built in, five years after the business could clearly support one?

A cash balance plan can shelter six figures a year for a high-earning owner, and most business owners have never heard their CPA say those three words together.

That’s not a knock on your CPA. Most CPAs file returns. Very few of them build plans.

I’m not very bright, but I know enough to ask the question every year instead of assuming last year’s structure still fits this year’s revenue.

Businesses grow in stages. Tax structures don’t grow on their own. Somebody has to go move them.

If you’ve never had this conversation with your advisor, that’s the flag.

Subscribe now if you want more of these before your next tax filing instead of after.

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Leak Three: No Plan for the Business Itself

This is the leak nobody wants to talk about because it requires admitting the business might outlive your ability to run it, or you might not outlive the business.

If something happens to you tomorrow, does your business have a next chapter or a fire sale?

Most owners have an estate plan for their house and their brokerage account and completely forgot the business is usually the single largest asset they own.

No buy-sell agreement. No key person coverage. No successor identified, trained, or even aware they’re the successor.

That, ladies and gentlemen, is how a business built over twenty years gets liquidated in twenty days by a family that never wanted to run it and a buyer who knows exactly how motivated they are to sell.

Solve Three Problems with One Plan

Here’s the part I actually enjoy explaining.

These three leaks don’t require three separate fixes bolted on at three separate times.

A coordinated exit plan, a properly structured retirement and entity setup, and a succession plan for the business work together.

Structuring the sale well often depends on the entity work being done years earlier.

The succession plan protects the value you’re trying to structure a sale around in the first place.

Solve two, three, sometimes four problems with one coordinated plan instead of patching each leak separately as it springs.

Your Next Move

You don’t need to solve all three leaks this month. You need to know which one is actually leaking first.

Pull up your entity structure and your last sale-readiness conversation, if you’ve ever had one. If you haven’t, that’s your answer.

Call your CPA or advisor this week and ask directly: “If I sold this business next year, how would the proceeds actually be taxed, and who runs this if I can’t?”

You are the CEO of your wealth, and that includes the business sitting at the center of it.

How you do anything is how you do everything, and that includes whether you plan the exit or let the exit plan you.

Next week I’ll walk through how these pieces actually get sequenced, starting with the entity work that has to happen before the sale conversation makes sense.

See you soon, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

It owns a piece of every dollar sitting in your 401(k) and your traditional IRA, and here’s the part nobody tells you at the plan enrollment meeting.

It gets to decide when it collects, not you.

Most people don’t figure that out until they’re 73 years old and the government forces their hand.

Grab your mug, pull up a chair.

This one is going to save some of you six figures, if you catch the window before it closes.

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The Tax Bill You Haven’t Paid Yet

Every dollar you put into a traditional 401(k) or IRA got a tax deduction on the way in. That felt great at the time. What it actually did was create a liability, not a windfall.

You didn’t avoid the tax. You postponed it, and you let the government decide the rate later.

Here’s the part that surprises people. That balance doesn’t just sit there waiting patiently. It grows, and the tax bill grows right alongside it.

By the time you’re in your 70s, you’re often sitting on more pretax money than you ever put in, which means a bigger bill than you ever agreed to.

A dollar lost in taxes is a dollar gone forever. And the government has never once apologized for taking more than its share.

The Wrong Fix: Wait and See

Most pre-retirees do nothing about this. Not because they’re lazy, because nobody ever told them there was a window to act.

The default plan is simple. Work, save, retire, and let the required minimum distributions sort it out when the IRS says it’s time.

Here’s why that backfires. At 73, the government requires you to start pulling money out of those accounts whether you need the income or not.

Not a suggestion. A mandate, calculated by a formula, and taxed as ordinary income the year it comes out.

That forced withdrawal does three things at once, and none of them are good.

• It stacks on top of Social Security, pushing more of your benefit into taxable territory.

• It can trigger IRMAA, the surcharge that quietly raises your Medicare premiums the moment your income crosses a threshold you didn’t know existed.

• Often it pushes retirees into a higher bracket than the one they were actually planning around, at the exact moment they have the least ability to do anything about it.

Waiting isn’t neutral.

Waiting is a decision; you just don’t get to see the bill until it’s too late to negotiate.

The Right Tool: Your Gap Years

Here’s the window almost nobody uses.

The years between when you stop earning a paycheck and when RMDs kick in at 73 or 75, and often before you claim Social Security, your taxable income drops. Sometimes it drops a lot.

That’s not a problem. That’s an opportunity with an expiration date.

During those gap years, you can convert traditional IRA dollars into a Roth IRA on purpose, paying tax now while your bracket is low, instead of later when RMDs and Social Security stack up and force you into a higher one.

You’re not avoiding the tax. You’re choosing the rate.

That, ladies and gentlemen, is the entire strategy. Fill up the lower brackets on your own terms, every year, during the window when your income has the most room in it.

Time for a refill. If you’ve never heard your CPA or advisor mention this window by name, that’s worth asking about directly.

Subscribe now if you want to catch every strategy like this one before the window closes on you.

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What Six Figures Actually Looks Like

Let’s run the math on a simple example. Say you’re sitting on $800,000 in a traditional IRA at 63, freshly retired, no W-2 income yet.

Left alone, that balance keeps growing, and by 75 you could be facing RMDs in the six figures annually, taxed at 24% to 32%, on top of IRMAA surcharges and a bigger chunk of Social Security getting taxed.

Now instead, during those gap years, you convert roughly $60,000 to $80,000 a year into a Roth, deliberately filling up the 12% and 22% brackets instead of letting the IRS fill up your 24% and 32% brackets for you later.

Run that for five to twelve years and you’ve moved a meaningful chunk of that balance into tax-free territory, paid at a rate less than half of what you’d have paid on autopilot.

Over a 20-to-30-year retirement, that rate difference alone is where the six figures live.

Not from a clever investment. From choosing when you pay a bill you already owed.

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One Move, Three Problems Solved

I say this often because it’s true every time I see it play out. The best planning tools solve two, three, sometimes four problems at once.

The gap year conversion is one of those.

It lowers your future RMDs, because you’ve already moved money out of the account the IRS forces you to draw from. It reduces how much of your Social Security benefit gets taxed, because your other taxable income is lower in retirement.

It keeps you further from the IRMAA cliffs that quietly raise your Medicare premiums.

And it leaves your heirs a Roth account instead of a traditional IRA, which means the money they inherit comes to them tax-free instead of as a bill with their name on it.

You are the CEO of your wealth. Nobody at the IRS is going to call you up and offer you this window.

It closes the day RMDs start, whether you used it or not.

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Your Next Move

This isn’t a strategy you run on your own with a napkin and a tax table.

The bracket math, the IRMAA thresholds, and the sequencing of which accounts to convert first all depend on your specific numbers and getting it wrong can cost you as much as doing nothing at all.

That’s exactly what we build with clients at Revolutionary Wealth. If you’re within the age range of 59-67 and you want to know what your actual gap years look like, schedule a time below with our team and we’ll map out your conversion window before it closes.

How you do anything is how you do everything, and that includes whether you let the IRS set your tax rate or you do.

Next week I’ll walk through the specific bracket math and IRMAA thresholds so you can see how this gets built.

Start a Fiduciary Planning Conversation

Up and to the Right

Since 1928, the S&P 500 has finished positive 73% of the time. The longer you’re in the market, the more the numbers are in your favor.

Holding Periods:

1 year - 73% chance of being positive

5 years - 87% chance of being positive

10 years - 94% chance of being positive

15 years - 99%+ chance of being positive

20 years - 100% chance of being positive

If you’re under 67 reading this, you have a very high probability of having your wealth be worth the same or more by the age of 73.

You have an extremely high probability of having your wealth being worth the same or more the next thirty years. THIS IS FACTORING MARKET DOWNTURNS AND CORRECTIONS!!!!

Turn off the news, they are lying to you. “Things have never been worse.”

95%+ of you receiving these emails are over 60. You know good and well it’s been worse before.

Plan like the you have a loaded hand of cards in your favor. The game is yours to lose.

Cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest. An investment in the Fund involves risk, including possible loss of principal.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. c) If this includes fixed and indexed annuities, you can add this combined version: Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results, but they can be complemented with additional calculators and tax planning tools. Results may vary with each use and over time.

Securities and investment advisory services offered through Integrity Alliance, LLC, Member SIPC. Integrity Wealth is a marketing name for Integrity Alliance, LLC. Revolutionary Wealth LLC, is not affiliated with Integrity Wealth.

Tax and Legal services provided are separate from the Securities or Advisory services offered through Revolutionary Wealth LLC.

The world before the internet was simple. But as a kid who grew up in the country and had dial-up most of his childhood, I wouldn’t say it was better.

My mom used to say, “I could’ve bagged those groceries faster than the lady at the checkout” walking out of Walmart. Walmart said during COVID, "hold my beer.”

It turns out, we actually were better at bagging our own groceries. Having groceries delivered to your home? Better than we could have imagined.

I do miss the importance of the Walmart greeter though. They were like valet to the local lower to middle class country club. Always elderly and always smiling like the old Walmart “Always Low Prices” sticker they would give you.

These are experiences that my children will most likely never have, and I think about it often. It doesn’t make their childhood necessarily better or worse.

The only way we can take them back, is by touching nostalgia.

The Smell of Grandma’s House

I’m a 90s kid so I can’t speak for the 80s. But do you ever walk in a building or open an old box and smell that 90s smell?

It’s like teleporting through your nostrils back to the 90s. Riding around in your father or grandpa’s old truck. Your grandmother’s house when you would go over to visit.

The smell is not a good one, but man does it make you feel good inside. It reminds me of two things; watching football at my grandmother’s house on a Sunday and riding around with my Pa in his old red truck with lap seatbelts.

Every time I catch a whiff of that smell, it stops me in my tracks. It takes me back to the early days of my childhood. The smell is like a bookmark in time that I can timestamp anything before or after it.

My wife often says there’s no way I remember 9/11. I remember 9/11 vividly even though I was in pre-school. Part of me feels like it’s because I can draw the line on that 90s smell and trace memories before or after it.

Secret Wars 1984

This week I received issues #1-12 of Marvel Super Heroes Secret Wars in the mail. I won the entire lot on an eBay auction.

To say I’m a Marvel fanatic is an understatement. This comic book series has always been on my list to own because it’s so iconic. For those unaware, Marvel is kicking off this storyline in theaters with Spider-Man Brand New Day in just a few weeks.

Spider-Man Brand New Day, Avengers Doomsday, Avengers Secret Wars, possibly an Avengers Secret Wars Part 2.

How does comic nerd cope with all of this cinema delight? Buy comics!!!

Opening the package, I could smell the nostalgia before I could see it. By the time I had the bubble wrap off, I was back in the 90s. It literally smelled just like my grandmother’s house.

They aren’t in particularly great condition which makes me love them even more. I know that there’s a very high chance that someone discovered these comics at their parents’ house and just moved on from them without a thought.

After I was done thumbing through them for a few minutes, my hands smelled like the 90s. It was truly touching nostalgia.

For those in the sports card collector community reading this, I would encourage you to circle back to some of this IP that you loved as a child.

He-Man, GI Joe, Transformers, TMNT, DC, Marvel, you name it. All of these gems are untapped and overlooked. You can touch the nostalgia for a fraction of card prices today with stories to share.

Maybe it goes up in value. At the very least, it’s on outlet to detach from the pace of today’s hobby and center yourself on something with meaning to your life and childhood that can be shared with others.

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How I’m Utilizing AI This Week

This week I started using the Claude Chrome extension on my computer which allows it to click around and view areas that I give it permission to explore and give feedback on.

I put Claude to work on analyzing our AI visibility metrics, keywords, and my YouTube. In 45 minutes of work, Claude created a 7 pages report on what needs to happen or be adjusted based on our metrics and goals.

This was not an exercise that I gave free reign and took everything Claude gave me at face value. It would come back with observations and recommendations; I would give a different angle. Constantly analyzing back and forth.

AI still did 90% of the work. But my intuition and practical experience is the 10% that makes everything connect and come together.

How I Went Analog This Week

We visited the local Rogers, AR farmer’s market. Fresh sourdough bagels, the Asiago was fantastic. Farm fresh tomato, lettuce, and green beans. Local Colombian coffee that may be the best Colombian I’ve ever had.

I finished the 21 Irrefutable Laws of Leadership by John Maxwell in the time that I would have normally been on my phone putting my daughter to sleep.

Grilling out and swimming in the lake with the kids.

I don’t miss my iPhone when I don’t have it. In fact, by the time I put it up, I am ready for a break. It’s like I was yearning for this in my life.

You have to listen to your body and mind. When it’s screaming at you to take a break, it’s time to listen.

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Robles Colombian Coffee

I mentioned grabbing a bag of Colombian coffee at the farmer’s market.

Guys, I have to give Robles Colombian Coffee a shoutout. They are local to Northwest Arkansas, and it is so, so good.

I bought their Garnet, a medium roast with notes of chocolate, almond, and caramel. It is dangerously good!!! I’ve said many times in this newsletter that I’m a medium roast, Costa Rican coffee guy.

This truly rivals a lot of the medium roasts I’ve had and just might become a daily staple of mine. You can check them out on Instagram @RoblesColombianCoffee.

I’m grateful for your attention, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

“If I trade my card for one of equal value, that’s not really a sale, right? No taxes on a trade.”

I understand exactly where it comes from. Real estate investors have used 1031 exchanges for decades to defer capital gains by swapping one property for another. It is one of the most well-known tax strategies in the country.

So, when a collector hears the phrase “like-kind exchange,” it makes sense that they would want the same treatment for a card, a coin, or a piece of art.

Here is the honest answer.

You cannot 1031 exchange a collectible. Not a card, not a coin, not a bottle of wine, not a piece of art. That door closed in 2018, and it is not coming back.

Watch me explain the 1031 Exchange rule and the IRS definition behind trading.

What Changed in 2018

Before the Tax Cuts and Jobs Act, Section 1031 covered a wide range of property. Real estate, yes, but also equipment, vehicles, artwork, and other tangible personal property. If you traded one item for a like-kind item, the gain could be deferred, the same way real estate investors defer gains today.

The 2018 law rewrote Section 1031 down to one category. Real property only. Effective January 1, 2018, every other type of like-kind exchange was eliminated.

Not limited. Not restricted. Eliminated.

That means the trade at the card show, the coin swap with another collector, the art-for-art exchange between two galleries, all of it is a taxable event now. Full stop.

A dollar of gain is a dollar of gain the moment you let go of the asset, whether cash changes hands or not.

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Why the Myth Still Circulates

Most of the confusion comes from three places.

Old information. A lot of the “collectibles as an asset class” content online was written before 2018, or by people who never updated it after the law changed. Read enough of it and you will still find 1031 exchanges mentioned as a collector strategy. It has not been true for seven years.

Real estate crossover. Plenty of collectors also own investment property. They hear “like-kind exchange” at a real estate meetup, assume the same rule applies across every asset they hold, and never think to check whether collectibles got carved out.

The trade itself feels different than a sale. Handing a dealer $400 for a card feels like a purchase. Handing over a card you paid $400 for, in exchange for a different card worth $400, feels like a wash. No cash moved. Nothing to tax, right?

Wrong. The IRS does not care that cash did not change hands. A trade is two sales happening at once. You disposed of an asset at its fair market value, and that is what triggers the gain.

Time for a refill before we get into the math on that.

How a “Even Trade” Actually Gets Taxed

Say you own a card with a cost basis of $2,000. You trade it straight across for a different card, also worth $10,000 on the current market.

No cash changed hands. It felt like a lateral move.

The IRS sees it as this: you sold your $2,000-basis card for $10,000 in fair market value, recognized an $8,000 gain, and used the proceeds to immediately buy a new card.

Your new card’s basis is $10,000, the price you effectively paid for it. The $8,000 gain gets taxed at the 28% collectibles rate, the same rate we’ve covered before on outright sales. That’s $2,240 owed on a transaction where you never touched a dollar.

The trade feels free. The tax bill is not.

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Why This Rule Exists

It is worth understanding the logic, even if you do not love the outcome.

Congress built 1031 exchanges to encourage capital to stay deployed in productive real estate rather than sitting idle after a sale.

A farmer sells land, buys different land, keeps farming. A landlord sells a duplex, buys an apartment building, keeps housing tenants.

The deferral supports ongoing economic activity, not personal enjoyment.

Collectibles never fit that logic cleanly. A card collection is not a productive asset generating rent or crops. When Congress needed to raise revenue and simplify the tax code in 2017, personal property was the easiest category to cut.

Real estate had a bigger lobby. Collectibles did not.

That is the reality. Not a loophole waiting to be found. A closed door.

What Collectors Can Actually Do Instead

None of this means you are stuck paying 28% on every dollar with no options. It means the option has to be a real one, not a workaround that used to exist.

Sell in a lower-income year. The 28% rate is a flat rate. If your ordinary income tax rate is below 28% in a given year, it’s worth stimulating enough sales to be deemed a dealer where the sale is ordinary income instead of a capital gain.

A partial retirement year, a year between business sales, any year your taxable income drops, is worth timing a sale around.

Donate the appreciated item directly. Give the card, the coin, or the painting itself to a qualified charity instead of selling it and donating cash. You get to deduct the fair market value, and you never recognize the capital gain on the appreciation.

You will need a qualified appraisal for anything of real value, and the deduction is generally capped at 30% of your adjusted gross income for this type of donation.

But for collectors who already give, this is the closest thing to a deferral tool left on the table.

Offset gains with losses in the same tax year. If you are selling one appreciated piece, look at the rest of your collection. Anything you would sell at a loss anyway can offset the gain, dollar for dollar, in the same year.

Gift strategically, with eyes open. Gifting an appreciated collectible to a family member in a lower tax bracket can shift future gain to their rate instead of yours.

Watch the kiddie tax rules if the recipient is a minor and understand that your basis carries over to them. This is a long-game move, not a same-year fix.

That, ladies and gentlemen, is the actual toolkit. Smaller than a 1031 exchange. Still real.

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The Number to Remember

1031 exchanges have applied to real property only since January 1, 2018.

Collectibles have not qualified for like-kind deferral in over eight years, no matter how the trade is structured.

Every trade, every swap, every “not really a sale” handshake at a card show is a taxable event at fair market value. The rate on the gain if you’re not deemed a dealer is 28%, the same as an outright sale.

Grab your mug, pull up a chair, and run the basis math before your next trade, not after.

The IRS already assumes you did the sale. Make sure you did the math too.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

A healthy 65-year-old couple today has a meaningful shot at one spouse living into their mid-90s, which means the money doesn’t need to last ten years or even twenty. It might need to last thirty-two.

Most people don’t plan for that number. They plan for a savings number instead: hit $1.5 million, hit $2 million, feel safe based off a guessed percentage that is comfortable to spend.

Here’s the problem with a savings number. It tells you what you have. It doesn’t tell you what you can spend on a Tuesday in March of 2043 without running out before you run out of years.

Those are two completely different questions, and almost nobody in Bentonville, or anywhere else, gets a straight answer to the second one until they sit down and actually build it.

That’s what this is. Not a savings goal. A paycheck.

One that shows up whether the market is up 20% or down 20%, whether you’re 66 or 96.

Watch me explain the time horizon strategy that protects you from market timing or living longer than you expect.

A Savings Number Isn’t a Plan. A Paycheck Is.

A retirement income plan takes everything you’ve built, your 401(k), your IRA, your brokerage account, maybe an income annuity, and it converts it into a monthly number alongside Social Security, a pension if you have one, and any guaranteed income you set up on purpose.

Then it maps that monthly number against what you actually spend. That’s the shift.

A savings plan asks, “how will I have.” An income plan asks, “how much comes in every month, from where, and for how long.” Those two plans can have the exact same balance sheet and produce completely different retirements.

A real income plan has to answer for five things at once: outliving your money, a bad market hitting at the wrong time, inflation quietly shrinking what a dollar buys over three decades, healthcare and long-term care costs, and taxes that don’t stop just because the paycheck did.

Miss any one of those five and the other four don’t matter much.

At Revolutionary Wealth, when we build one of these for a client in their early sixties, we stress-test it out to age 95 to 100.

Not because we expect every client to get there. Because the plan has to work even if they do.

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How Long Are You Actually Planning For?

Before you touch a single number, decide how long the money has to last. Not the average. The tail end.

Plan for the version of you that’s still around at 95, because if you plan for the average and the average is wrong in your favor, you’re the one who runs short at 89.

Then get honest about two categories of spending.

Essentials: housing, food, Medicare premiums, basic transportation, property taxes.

Discretionary: travel, hobbies, the grandkids, dining out.

A couple here in Northwest Arkansas might land around $50,000 a year in essentials and another $30,000 in the stuff that makes retirement worth having.

Don’t stop there. Lumpy expenses are what actually wreck a good plan. A roof. A new vehicle every eight or ten years. A move to something smaller in your late seventies.

Those aren’t monthly line items, so people forget to plan for them, and then they show up as a surprise that has to come from somewhere.

Every Dollar Needs a Job Description

Very few retirees live off one paycheck replacement. You’re combining several, and each one has a different job to do.

Social Security is the floor almost everyone stands on. The average monthly benefit runs around $1,759.67, and when you claim, at 62, at full retirement age, or at 70, permanently changes that number.

A pension, if you’re one of the roughly 15% of workers who still has one, is worth protecting like the asset it is. Then there’s the 401(k) and IRA money, the taxable brokerage account, and for some, a business or rental property still throwing off income.

For higher-net-worth households, the less obvious pieces matter just as much: a whole life policy with real cash value sitting in it, deferred comp, stock options, or the proceeds sitting on the other side of a business sale.

Split all of it into two buckets.

Guaranteed: Social Security, a pension, any income annuities you own.

Everything else: market-dependent.

Know exactly what your guaranteed number is before you decide what the market needs to cover, because that guaranteed number is the one that doesn’t care what the S&P did last Tuesday.

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The Time Horizon Strategy That Protects You from Bad Timing

Here’s the risk nobody warns you about loudly enough: a bad market in your first five years of retirement can do permanent damage that the same bad market in year twenty never would.

It’s called sequence-of-returns risk, and it’s broken more good plans than bad investment picks ever have.

The old rule of thumb, the 4% rule, says withdraw 4% of the portfolio in year one, adjust for inflation every year after, and you’d have had roughly a 95% success rate over 30 years historically.

Recent analysis pushes that closer to 3.3% to 4% depending on how conservative you want to be in today’s environment. Either way, the number isn’t the point. The point is having a rule at all, instead of guessing every December.

A simple three-bucket structure does the heavy lifting:

Short-term (1-2 years): cash, cash alternatives, and money markets covering this year’s and next year’s living expenses.

Mid-term (3-8 years): High-quality bonds, registered-indexed linked annuities with a 15 to 20% buffer and no cap, or structured notes. Built for stability when stocks are having a bad decade.

Long-term (9+ years): equities and real assets, the growth engine that has to outpace inflation over the next 20 or 30 years.

Then sequence the withdrawals with taxes in mind too: taxable accounts first for flexibility, tax-deferred accounts next in a managed order, and let Roth money grow untouched as long as possible for the later years or for whoever inherits it.

Required Minimum Distributions start at 73 or 75, and under SECURE 2.0, income annuities held inside an IRA can now be aggregated with your other IRAs for that calculation, which matters more than most people realize when they’re deciding how to title an annuity.

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Guarantee the Bills. Let the Market Handle the Vacations.

This is the single highest leverage move in the whole plan: cover your essential expenses with income that isn’t subject to a bad Tuesday in the market.

Everything discretionary can ride the market’s ups and downs. The mortgage, the Medicare premium, and the groceries cannot.

Run the gap math. If essentials run $50,000 a year and Social Security plus a pension covers $35,000 of it, there’s a $15,000 annual hole.

That’s exactly the gap an income annuity is built to close, using fixed income annuities, immediate or deferred, or a fixed annuity with a guaranteed lifetime withdrawal benefit, so the lights stay on regardless of what the market does that year.

None of this is free. You give up liquidity on whatever you annuitize. Some of these decisions are close to irrevocable, so read the guarantees and understand the claims-paying ability of the insurance company behind the contract before you sign anything.

Optional riders, inflation adjustments, a death benefit, joint-and-survivor income, all add cost.

As a general boundary, we rarely see it make sense to put more than 30% of liquid investable assets into lifetime income annuities. This is exactly the kind of decision that should run through a fiduciary, not a product pitch.

Another great alternative to income annuities is income paying structured notes. You receive most of the benefits of an annuity but you’re receiving the guarantees from someone besides an insurance carrier.

The pro and con of structured notes is that they have less strings attached and have an earlier point that they mature, i.e. become more liquid.

The con is that because they are more flexible, it gives the institution on the other side more liquidity as well. Many times, the structured notes with the highest income yields can be called similar to a bond. So, you’re less likely to be able to just set it and forget it like you can with an annuity.

Ultimately, it comes down to your situation and what a financial plan reveals benefits you the most long-term.

Inflation and Healthcare Are Playing the Long Game Too

A dollar today doesn’t need to lose much value per year to lose half its buying power over a 30-year retirement. It just needs time, and time is the one thing a 32-year retirement has plenty of.

Keep real growth exposure in the plan, U.S. and global equities, real assets like REITs, and where it fits, an annuity option with a cost-of-living adjustment built in. The instinct to get conservative the day you retire is understandable and, for money you won’t touch for 20 years, usually wrong.

Healthcare is its own separate fight. Not long ago, average per-person healthcare spending in retirement was running well north of $12,000 a year, and Medicare was never built to cover all of it.

Here’s where the real numbers sit right now: Medicare Part B runs about $202.90 a month, Part D adds roughly $34.50 on average, and the Part A deductible per benefit period sits at $1,736. Higher earners get hit with IRMAA surcharges on top of all of it.

If you built an HSA balance before 65, that money comes out tax-free for qualified medical expenses, which makes it one of the most underused tools sitting in most retirement accounts.

Long-term care is the piece people avoid thinking about the longest. Traditional LTC insurance, hybrid life and LTC policies, or self-funding out of assets and cash value, each one changes the rest of the income plan differently.

Pick one on purpose. Don’t let the absence of a decision become the decision.

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Taxes Don’t Retire When You Do

Every dollar of income has a tax bill attached to it, and the accounts matter.

Traditional 401(k) and IRA withdrawals get taxed as ordinary income. Qualified Roth withdrawals come out tax-free. Taxable brokerage accounts get hit with capital gains and dividend taxes.

Social Security itself can become partially taxable depending on your other income, a detail that catches a lot of otherwise well-prepared retirees off guard.

The years before RMDs start are the highest-leverage tax years most people will ever see. Fill the lower brackets deliberately with IRA withdrawals or Roth conversions before RMDs force a bigger number on you at 73 or 75.

Harvest capital gains in taxable accounts while you control the timing. None of this replaces a real conversation with a tax advisor before you move real money.

And don’t stop the tax plan at your own lifetime. Under the SECURE Act’s 10-year rule, most non-spouse heirs have to empty an inherited IRA within ten years of inheriting it.

This changes how beneficiary designations on IRAs and annuities should be structured for anyone leaving real money behind.

Stress-Test It, Then Actually Update It

A plan built once and never touched again isn’t a plan. It’s a snapshot of the day you built it.

Run the bad scenarios on purpose: a 20% market drop in your first five years, inflation running hot for three or four years straight, a Social Security policy change, a major health event for one spouse.

Then decide in advance what you’ll actually do about each one. Cut discretionary travel spending in a down year. Pause large gifts to kids or grandkids if assets fall below a line you set ahead of time. Lower the withdrawal rate temporarily during an extended downturn instead of guessing under pressure.

Review it at least once a year, and again after anything major: a market shock, a health change, the sale of a business, a new tax law.

We run these structured review sessions with clients across Bentonville and around the country for exactly this reason.

The plan isn’t the document. The plan is the habit of updating the document.

The One Thing to Do This Week

Add up your essential annual expenses. Add up your guaranteed income, Social Security, any pension, anything already annuitized.

Subtract the second number from the first.

That gap is the real number. It’s more useful than your total net worth, more useful than your portfolio’s return last year, and it’s the one number almost nobody has actually written down.

Everything in this article exists to help you close it.

Hopefully this helps, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest. An investment in the Fund involves risk, including possible loss of principal.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. c) If this includes fixed and indexed annuities, you can add this combined version: Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results, but they can be complemented with additional calculators and tax planning tools. Results may vary with each use and over time.

Securities and investment advisory services offered through Integrity Alliance, LLC, Member SIPC. Integrity Wealth is a marketing name for Integrity Alliance, LLC. Revolutionary Wealth LLC, is not affiliated with Integrity Wealth.

Tax and Legal services provided are separate from the Securities or Advisory services offered through Revolutionary Wealth LLC.

Not fifteen minutes into the movie, I had a reaction I was not expecting. The premise is that kids have drifted away from playing with toys and into screens, that tech is quietly taking over childhood.

I sat there thinking about how careful we’ve been. We don’t hand our kids iPads. We hand them books in the car. We’ve done a good job.

Then the thought that actually landed: when I picture myself on the couch at home, mindlessly pulling out my phone out of boredom, half-watching, half-scrolling.

That’s me. Not my kids. Me.

I am a huge believer that AI is a net positive for society which is counterculture to what you see on the news. We are using it aggressively in our business, and I am about to spend the rest of this newsletter telling you why that’s a good thing.

But sitting in that theater, I realized I can’t preach the upside of technology to you every week while quietly modeling the exact behavior I don’t want my four-year-old picking up.

So, I’m making a change. I’m simultaneously going deeper with advanced technology to give me the space to be present in real life with those I love the most.

This is the first edition of a new series I’m calling AI and Analog. Each week I’ll explore my journey living in the extremes.

Go All in on Both Ends at Once

Here’s the barbell I’m building my life around right now: go as deep as possible into AI on the business side and go as far away from screens as possible on the personal side.

Not a middle ground. Both extremes, on purpose.

I am not retreating from AI. I’ve said it to clients for months and I’ll say it here: AI is making planning cheaper, faster, and more accessible for the people I work with, and I am not interested in sitting this out.

Every Sunday, this is where I’ll show you exactly what we’re building with it, the good and the genuinely useful, not the hype. I’ll also share with you the positive things developing from AI that the news would never dare make you aware of.

But I don’t want to wake up one day, blink, and find my kids are out of the house while I was watching my own life on a screen instead of living it. I’ve pictured that moment.

Me, older, watching old videos of my kids when they were small, and remembering that I was there physically and absent everywhere else.

That image is what moved me, not a productivity hack.

The Flip Phone

One dramatic move this week: I walked into Verizon and bought a flip phone.

It took eighteen minutes to activate. I hadn’t seen a SIM card go into a phone in almost fifteen years. The guy checking me out, after looking at what I was buying, was doing the math on why a grown man with an iPhone in his pocket was also buying a flip phone. I told him why.

His face lit up with joy, almost like he could feel a longing for himself to disconnect and go back.

Here’s the plan. Every evening and every weekend, the iPhone goes in a cubby. Not on silent next to me. Away.

If someone needs me, they call the flip phone. When I get bored, the old habit was to reach for the phone. The new habit is a book, or my kids, or actually being outside instead of narrating my life to an app.

My kids are four and a half, two and a half, and almost six months old. That window doesn’t stay open.

Time is the one asset that we all can’t get back.

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What Changed Since My Last Flip Phone

The last time I carried a flip phone was 2011. I asked myself what’s actually changed since then, and the honest answer is almost everything.

Here’s the timeline, because I think most of us have lived through it too gradually to notice how radical it’s been.

2011, where things stood:

- The iPhone 4S had just launched. Siri was brand new and, frankly, not very good yet.

- 4G was barely rolling out. Most of us were still on 3G.

- IBM’s Watson had just beaten two Jeopardy champions, and that was the AI headline of the year.

- No Uber in most cities. No Apple Watch. No AirPods. No Alexa. No Instagram Stories. TikTok didn’t exist.

- Streaming was still fighting cable for relevance. Netflix was mostly still mailing DVDs.

What happened between then and now:

- 2012: The deep learning breakthrough that quietly kicked off the modern AI era. Almost nobody outside a research lab noticed at the time.

- 2014-2016: Alexa, Google Home, and voice assistants moved into millions of living rooms. AlphaGo beat the world’s best Go player, a game experts said computers wouldn’t crack for another decade.

- 2015-2016: The Apple Watch and AirPods arrived and made wearable tech normal instead of niche.

- 2018-2020: The GPT models started appearing, each one bigger and more capable, mostly invisible to anyone outside the tech world.

- November 2022: ChatGPT launched and hit 100 million users faster than any consumer product in history. That’s the month AI stopped being a research topic and became a kitchen-table conversation.

- 2023-2026: Generative AI went from novelty to infrastructure. Image generation, voice, video, and now autonomous AI agents that can run real workflows without a person clicking every button.

Fifteen years ago, Siri could barely set a timer. Today, we all have AI systems regulating and running our devices whether we realize it or not.

That’s not a joke, and it’s not slowing down. It’s the reason I’m not backing away from AI even as I back away from my phone. Those are two different problems.

One is a tool getting radically more capable. The other is a habit that has nothing to do with the tool and everything to do with me reaching for it out of boredom instead of intention.

How I’m Utilizing AI This Week

This week I bought a Bee-Link SER9 Pro AMD Ryzen™ 7 H 255 with Open Claw pre-installed. It’s the AI that will manage my AI, literally.

I use eight AI tools to operate our business and grow our brand. This sounds insane but I’m accomplishing so much in one day with all these various tools, that I need to delegate them.

It’s intentionally separated from any client or personal information on purpose. Going deep on AI does not mean being careless with what it touches.

AI helps build our brand and routine back-office work, allowing me to be present and hands on with our clients and team members.

Most importantly, supporting AI allows Revolutionary Wealth to serve our clients 4x faster and for half the cost of other financial advisors because we aren’t wasting time and money.

I get more done in half a day than most advisors get done in a week, period. When I client calls, I typically answer immediately. At the very least, they hear from me within a matter of minutes or hours.

Saving money is making money, Revolutionary Wealth takes the time and money we save with technology and pass those savings on to our clients instead of pocketing the difference.

How I Went Analog This Week

A trip to the park after work, coloring at the kitchen table before bed.

I enjoyed a nice dinner with a friend without my cell phone, just my flip phone.

When I put my daughter down at night, the thirty or forty minutes she takes to fall asleep used to be an educational YouTube video or reading articles on my phone.

Now it’s a physical book in my hands. Just me, learning something, holding actual pages.

None of this is complicated. It’s not a system or a five-step framework.

It’s a phone in a cubby and a book instead of a screen. That’s the whole thing.

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My children and I’s kitchen table drawing turned into a comic book. AI and Analog :)

What You Can Do This Week

Pick one window. Tonight, tomorrow night, whatever’s realistic.

Put your phone somewhere out of reach for two hours. Not on silent next to you. Physically somewhere else.

Notice how many times you reach for it anyway. That number will tell you more than this article ever could.

I’ll be back every Sunday with what we’re building on the AI side of the business, and what I’m experiencing and learning on the analog side of my life. Both halves of the barbell, every week.

Grab your mugs and pull up a chair. This is going to be fun.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

Vintage stuff, a few graded gems, the kind of collection that takes a lifetime to put together. He wanted to start handing pieces of it to his adult kids now, while he could still see them enjoy it.

It’s a generous instinct. It’s also the single most expensive mistake I see collectors make when they think about passing down what they’ve built.

Watch me visually summarize today’s article.

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The Gift That Costs Your Kids More Than It Saves

Here’s what nobody tells you at the moment the gift happens. When you give an appreciated asset to your kids while you’re alive, they don’t just inherit the card.

They inherit your cost basis, meaning the original price you paid, decades ago, for tax purposes.

That card you bought for $400 in 1998 and is worth $12,000 today? If you gift it now, your kid’s basis is still $400. When they eventually sell it, they owe capital gains tax on $11,600 of appreciation.

Every dollar of growth you watched happen over thirty years becomes their tax bill, not yours.

Wait until it passes through your estate instead, and something completely different happens.

What Cost Basis Actually Means

Cost basis is simply what the IRS considers you to have “paid” for an asset. It’s the number capital gains tax gets calculated against when you sell.

Buy a card for $185. Sell it for $350. Your gain is $165, and that’s what gets taxed. Cost basis is the anchor point every future tax calculation swings from.

Gift an asset during your lifetime, and your basis carries over to whoever receives it, untouched.

Leave that same asset in your estate instead, and at your death the basis resets, or “steps up,” to the fair market value on the date you died.

Decades of appreciation simply vanish for tax purposes. Not deferred. Erased.

That’s the entire secret. Not a loophole. A basic mechanic of how inherited property has worked in the tax code for decades.

Most parents have simply never had anyone explain it to them in the context of a card collection instead of a house or a brokerage account.

The Collectibles Wrinkle

Here’s where it gets more expensive if you get it wrong. Collectibles don’t get taxed like stocks when they’re sold at a gain.

Long-term capital gains on a stock top out around 20% for most sellers.

Long-term gains on collectibles, cards, memorabilia, coins, art, are capped at a flat 28% federal rate, regardless of your income bracket.

So, the same mistake that costs a stock investor is worse for a collector. Gift the card during your life, and your kid inherits both the carryover basis and the 28% collectibles rate on all thirty years of growth.

Let it pass through your estate instead, and the step-up erases the gain before that 28% rate ever has anything to apply to.

Two separate tax problems. One planning decision solves both.

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Why Gifting While Living Backfires

The instinct to gift early comes from a good place. Parents want to see their kids enjoy the collection.

They’ve heard vague advice about “getting assets out of the estate” to avoid estate tax, advice that made sense for a different generation with a different exemption amount.

For almost every collector reading this, estate tax isn’t the actual risk. The federal estate tax exemption is well into eight figures per person.

The real risk isn’t the IRS taxing the transfer. It’s the IRS taxing the sale, at 28%, on money your kids never should have owed in the first place.

Gifting during life doesn’t dodge that tax. It hands the entire bill to the next generation and removes the one thing that would have made it disappear.

What This Looks Like With a $185 Card

I bought my first big card purchase, a Shohei Ohtani rookie, for $185. Two months later I sold it for $350.

On a quick flip like that, the math is simple and the tax bill is small either way.

Stretch that same story across thirty years instead of two months, and the numbers change completely. A card worth $185 that appreciates to $40,000 over three decades has a $39,815 gain sitting inside it.

Gift that card, and your kid owes 28% of $39,815, or about $11,148, whenever they sell.

Let your estate pass it to them instead, and their basis steps up to $40,000 the day you die. They could sell it the next morning for exactly that price and owe nothing.

Same card. Same thirty years. An $11,148 difference.

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AI & Analog #1: Back from the Future

It took me approximately eighteen minutes to buy my $100 flip phone at Verizon this week. I’m not sure I’ve purchased a phone this fast, ever?

Tonight, I’m starting “The 21 Irrefutable Laws of Leadership” by John Maxwell while my daughter falls asleep instead of being on my phone.

Simultaneously, I’m about to buy a supercomputer.

I can’t wait to share my first week with you as I’m living in the extremes of a barbell effect. Insane, life changing AI applications in business; back to real life with my family.

Sunday morning, be ready to follow along with your coffee in hand.

Cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

Maxed the 401(k). Never touched it early. Left it alone to compound.

Their combined pre-tax balance was $1.6 million. Their taxable brokerage account held about $180,000.

The husband said something I hear almost every week: “We’re trying not to touch the IRA. We want it to keep growing.”

I understood the instinct. I told him it was the single most expensive piece of advice he had ever followed without checking the math.

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The Advice That Sounds Right and Costs a Fortune

“Leave the retirement accounts alone as long as you can” is not bad advice.

It is incomplete advice, and incomplete advice is how good savers end up with a tax problem instead of a retirement.

Here is the part almost nobody explains: the years between 59 and 67 are usually the cheapest income years a retiree will ever see again.

Paychecks have stopped or slowed. Social Security has not started. Required Minimum Distributions do not begin until 73 or 75.

For a short stretch, you control your taxable income more completely than at almost any other point in your life.

Most people spend those years withdrawing nothing from their IRA and spending down their taxable brokerage account instead, because it feels like the tax-smart move.

It is the missed opportunity, literally, of a lifetime.

Watch me explain how the sequence should work and summarize this article, on a whiteboard.

What “Leaving It Alone” Actually Costs

Every year that money sits in a traditional IRA, it compounds. So does the IRS’s share of it.

You own the balance. The IRS owns a percentage of it, and that percentage does not shrink by waiting.

The couple in my office had thirteen years until RMDs would start. If their $1.6 million grew at a conservative 6% and they touched none of it, they would arrive at 75 with a balance north of $3 million.

Their first Required Minimum Distribution, taxed entirely as ordinary income, would land somewhere around $113,000. Add Social Security. Add whatever was left in the brokerage account.

They would spend their first year of mandatory withdrawals in a higher bracket than most of their working career.

They had never run that projection. Almost nobody does, because the RMD feels like a problem for a future version of themselves to solve.

The Opportunity Almost Everyone Misses

Conventional order: Social Security first, taxable brokerage second, IRA and 401(k) last, because “it’s already tax-deferred, why rush it.”

Pulling from a taxable account, which is capital gains instead of ordinary income, between 59-67 is a great strategy. It keeps your taxable income low during this period of time, possible even zero.

What most pre-retirees or retirees miss however, is that it’s a phenomenal opportunity so show some income and pay some tax at a lower rate while they are in control.

That is not the natural instinct. It sounds backwards the first time a client hears it. But the goal in these years is not to avoid touching the IRA.

The goal is to convert it deliberately, on your own terms, at today’s known tax rates, before the IRS sets the withdrawal amount for you at 73 or 75.

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Filling the Bracket, Not Just Meeting the Need

The mechanic is simple. Every year, calculate the top of your current tax bracket. Withdraw or convert from the IRA up to that ceiling, even if you do not need the cash to live on.

If the money is not needed for spending, it moves into a Roth, where it will never be taxed again and never generates a mandatory withdrawal.

For a married couple in the 22% bracket in 2026, that ceiling sits at $211,400 of taxable income. Every dollar withdrawn or converted below that line costs less than 22 cents because you’re effective tax rate will not be 22%.

Compare that to waiting until 75, when the same dollar could be taxed at 24% or higher once RMDs, Social Security, and Medicare surcharges stack on top of each other.

The couple I mentioned started a six-year plan. Converting roughly $85,000 a year, filling their bracket precisely, paying the tax now while the rate was known and controllable.

By the time RMDs arrive, their projected pre-tax balance will be closer to $1.1 million instead of $3 million. Their mandatory withdrawal drops from six figures to something closer to $41,000.

Same couple. Same savings. Completely different tax bill for the rest of their life.

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Why 65 Complicates the Math

Medicare enrollment lands in the middle of this window, and it changes the calculation. Medicare uses your tax return from two years prior to set your Part B and Part D premiums.

A large conversion at 63 can trigger a higher Medicare premium at 65, even though the conversion itself happened two years earlier.

This is the part that trips up people who try to do this math on their own. The right conversion amount is not just about the current year’s bracket. It is about what that number does to a Medicare premium calculation that will not show up on a bill until two years later.

Filling the bracket without checking the IRMAA thresholds first can quietly erase a chunk of the tax savings the conversion was supposed to create.

The One Thing to Do This Week

Pull your most recent tax return. Find your taxable income line. Find the ceiling of your current tax bracket. Subtract one from the other.

That gap is the room you have this year to withdraw or convert from your IRA at today’s known rate, before RMDs, Social Security, and Medicare start making the decision for you.

That single number is where every conversation like this one actually starts.

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Roth Conversion Math in Detail

If you’re serious about considering Roth conversions, I would highly recommend that you go back and read one of my previous articles discussing the math behind Roth conversions from our planning work at Revolutionary Wealth.

When it makes sense, who gets the most out of the strategy, and also when you should avoid them.

Here’s the best part, it’s based on real life experience from Revolutionary Wealth actually helping people convert money from their IRA to Roth IRA.

Zero fluff, zero theory, all real numbers from real planning. Check it out.

Are you a visual learner? Check out my video Roth Conversions: The 4 Factors Most Advisor Never Bring Up

AI & Analog

Starting Sunday, July 12th, I’m going to start sharing a new personal journey. Two extremes, my life.

I’ve been a huge proponent of using and adopting AI for a while now. Our firm and I have already seen the exponential benefits of applying it to our business and lives. My belief is that I’m just getting started and I’m only going to dive deeper.

On the other extreme, I often have this image of being shown a replay of my life when I’m older (kind of like the movie Click with Adam Sandler) and I’m being shown that I’m just sitting on my phone when my kids are growing and changing in front of me.

That visualization I have haunts me, I actually think about it pretty often. I’m also willing to admit that I tend to pull my phone out from boredom more than I’d like to admit.

In response to that, I’m going completely dark on screens in front of my kids when I get home from work and the weekends.

I’m going to start carrying a flip phone!! I’ll get home and put the phone in a cubby until the kids are asleep or the weekend is over. The hope is that I can expand this time more and more.

This will break me or it will change my life. We will find out together and you’ll get to read my documented journey, every Sunday.

I appreciate your attention, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest. An investment in the Fund involves risk, including possible loss of principal.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. c) If this includes fixed and indexed annuities, you can add this combined version: Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results, but they can be complemented with additional calculators and tax planning tools. Results may vary with each use and over time.

Securities and investment advisory services offered through Integrity Alliance, LLC, Member SIPC. Integrity Wealth is a marketing name for Integrity Alliance, LLC. Revolutionary Wealth LLC, is not affiliated with Integrity Wealth.

Tax and Legal services provided are separate from the Securities or Advisory services offered through Revolutionary Wealth LLC.

A business owner, 53 years old, running his own company and billing somewhere around $410,000 a year. A mutual connection had sent him over — someone who had been through a similar process with us and had plenty of good things to say.

This consultant had been doing all the right things. He had a SEP IRA. He was maxing it out every year. He kept his books clean. He paid his quarterlies on time. He had no bad habits to point to.

And still, every April, he was writing a six-figure check to the IRS.

He said it plainly: “I just want to save as much in taxes as possible. I feel like I’m doing everything right and it’s still not enough.”

He was right. He was doing the right things. He just hadn’t been told about the bigger tool.

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The Problem With “Maxing Out”

If you’re self-employed and earning well into six figures, you’ve probably heard of two retirement vehicles: the SEP IRA and the Solo 401(k).

These are solid, legitimate tools. I use them with clients. I’m not here to dismiss them.

But here’s the number nobody leads with: the SEP IRA caps annual contributions at $70,000. The Solo 401(k) caps at roughly $69,000. At a $390,000 income, maxing out your SEP IRA still leaves $320,000 sitting in taxable income.

At the federal bracket that income hits, the effective rate pushes past 22%.

You did the right thing. You maxed your plan. And you still owed more in taxes than most Americans bring home in a year.

A dollar lost in taxes is a dollar gone forever.

The “max out your SEP IRA” advice is not wrong. It’s just incomplete. There’s a much larger vehicle available, and most CPAs and most advisors never bring it up.

Watch me visually explain today’s article.

The Plan Most People Haven’t Heard Of

I started my career at 19 and spent the first seven years growing my business collaborating with some of the top advisors across the country. Cash balance plans were never mentioned.

They’re not on most advisors’ shelves. They’re only designed properly with independent advisors working with actuarial partners and high-income clients — which means most people, at most firms, never encounter them.

Here’s the short version: a cash balance plan is a type of defined benefit pension plan. IRS-approved. Actuary-designed. Completely legitimate. Built specifically so high-income earners can contribute far beyond the limits of a 401(k) or SEP IRA.

How much more?

For this client — 53 years old, $390,000 in income — the annual contribution limit calculated out to $270,000 per year.

Every dollar of that reduces taxable income. Dollar for dollar. Same mechanics as a traditional 401(k), just at a completely different scale.

Running the numbers, we projected tax savings of approximately $110,000 per year. Not $10,000. Not $20,000. Six figures. Every year.

That, ladies and gentlemen, is what it looks like when the right tool meets the right income level.

How the Plan Actually Works

A cash balance plan runs on a 5-year planning window. Before anything moves, a third-party actuarial firm designs the plan based on your age, your income, and the tax code.

Their job is to make sure the plan stays compliant — that you’re getting the deductions you’re entitled to without breaking anything in the process.

The annual contribution limit is not invented. It comes from actuarial tables. Age-based, income-based, plan-specific. For this client: $270,000 per year.

For someone younger or at a different income level, that number shifts.

Inside the plan, the money grows conservatively. We target around 5% to 6% annually.

Here’s why: if the account grows too aggressively, the excess creates an excise tax, and now you’ve traded one problem for another. The plan is built for deductibility and savings capacity, not speculation.

Don’t let that conservative growth rate fool you. When you’re contributing 4 to 5 times more than a SEP IRA allows, the dollar volume overwhelms the growth rate differential.

Over five years, this client’s investment account is projected to reach approximately $1.4 million.

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The Two-for-One Layer

This is where the plan gets more interesting.

Cash balance plans can hold life insurance inside them — specifically designed policies tied to the plan, each with their own structure. The reason this matters: life insurance is a tax-free asset.

In this client’s case, the $270,000 annual contribution splits roughly $175,000 into the investment account and $95,000 into the life insurance policy inside the plan.

The policy builds tax-free cash value. The death benefit passes to beneficiaries tax-free. Both are funded on a tax-deductible basis.

That is the two-for-one this plan is designed around.

At the end of five years — or ten, or whenever the plan converts — the options open up. The investment account rolls into an IRA and, over time, works through Roth conversions into a tax-free environment.

The life insurance policy either continues for the death benefit or converts into an annuity. Either way, the distributions come out tax-free as long as we buy the policy out of the plan using a grantor trust.

I will write a separate article in the future detailing the unique tax arbitrage that exists by deducting the premiums and then swapping it out of the plan with a grantor trust.

We are not just solving this year’s tax bill. We are building a tax-free structure for the next 30 years.

One note for the practical question that comes up: if you already have life insurance through a separate relationship, the plan can still be structured primarily as an investment account.

You would still be contributing over $200,000 per year toward the plan. The flexibility is there.

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What Happens When Life Changes

Every client asks some version of this: what if income goes up or income drops?

The plan can be amended. If income jumps and you want to contribute more, we go back to the actuaries and redesign it upward. If income drops and the contribution target becomes a strain, we restructure downward.

If something unexpected happens overnight, there is a path to prevent the plan from creating new problems.

None of these adjustments are simple — the actuaries earn their fee — but the plan is not a rigid five-year lockup.

At the end of the window, we renew, convert, or restructure. The strategy evolves with your situation.

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The Math Side by Side

Here is the comparison I keep coming back to in these conversations.

Self-employed, $390,000 income, SEP IRA maxed:

- Annual contribution: $70,000

- Taxable income remaining: $320,000

- Estimated tax savings from the contribution: roughly $26,000

Self-employed, $390,000 income, cash balance plan:

- Annual contribution: $270,000

- Taxable income remaining: $120,000

- Estimated tax savings: approximately $110,000

The difference is $84,000 per year. Every year. Kept in your pocket rather than handed to the IRS.

Over five years, that is more than $420,000 in additional tax savings — on top of contributing $1.25 million more into a growing, tax-deferred account.

You cannot get there with a SEP IRA.

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Who This Is Actually For

Cash balance plans are not for everyone.

They make sense for self-employed individuals or business owners earning at least $100,000 and realistically $200,000 or more for the math to move the needle. Below that threshold, the plan cost and compliance requirements eat into the benefit.

You also need an income structure where consistent contributions over five years are realistic. This works best when you can commit to a floor. The plan can be amended, but it is designed around multi-year discipline.

If you are a W-2 employee: this is not your vehicle. The plan requires self-employment or business ownership income. If you have a W2 income and some type of self-employment or ownership income, this could be your vehicle.

But if you are a consultant, a contractor, an independent professional, a business owner — pulling $200,000 or more in 1099 income — and you are still watching six-figure tax bills show up every April, knowing that you maxed your SEP IRA and still couldn’t outrun it?

This exists. It works. Most people just haven’t been told about it.

Why Revolutionary Wealth for Cash Balance Planning

Most advisors do not have an actuarial relationship set up to design these plans. Most CPAs will tell you the SEP IRA is the ceiling because that is the tool they know how to file.

Neither one is wrong to reach for what is familiar. They just are not set up to go further.

Revolutionary Wealth exists because I got tired of watching business owners max out a SEP IRA and still write a six-figure check every April.

Cash balance plans are not a side offering for us. They are one of the core tools we build around for business owners earning $200,000 or more, alongside MSO structures and life insurance layered inside the plan itself.

Solve two, three, sometimes four different tax problems with one vehicle.

We coordinate directly with the actuarial firm on your behalf, structure the life insurance layer if it fits your situation, and revisit the plan every year as your income changes. This is not a form we fill out once and forget about.

If a SEP IRA has stopped moving the needle for you, this is the conversation to have next.

Start a Fiduciary Planning Conversation

Why I Have Conviction in this Planning

When I sit down with a business owner over the age of fifty, I hear the same line repeatedly. There’s a common sense of shame in their voice every time they say it.

“I haven’t been able to put away as much as I’d have liked for retirement.”

The truth is they have nothing to be ashamed of. They’ve put all of their money back into their business, they’ve raised and educated their children, and they’ve unknowingly done their best to reduce taxes year by year.

Cash balance plans are their golden ticket opportunity. They can make up a lifetime of retirement savings over a five-year period.

Had they gone the traditional route and maxed a 401(k) for thirty years, they’d have roughly $1.8 million. They can get extremely close or way beyond that number saving anywhere from $1 million to $5 million over a five-year period.

Meanwhile, they still have their business as a retirement asset that they were able to go all-in on for that extended period of time.

Cash balance planning with Revolutionary Wealth allows for business owners to diversify their balance sheet and reduce their tax liability at a time when it matters most to them.

Saving money is making money, see you next time.

Cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest. An investment in the Fund involves risk, including possible loss of principal.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. c) If this includes fixed and indexed annuities, you can add this combined version: Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results, but they can be complemented with additional calculators and tax planning tools. Results may vary with each use and over time.

Securities and investment advisory services offered through Integrity Alliance, LLC, Member SIPC. Integrity Wealth is a marketing name for Integrity Alliance, LLC. Revolutionary Wealth LLC, is not affiliated with Integrity Wealth.

Tax and Legal services provided are separate from the Securities or Advisory services offered through Revolutionary Wealth LLC.

His father’s girlfriend is 61 years old. She’s retiring from the postal service in August.

A group that specifically works with retiring postal employees had come in, sat down with her, and presented what they called a complete financial plan.

He handed me the packet. Fifty-plus pages. Charts, risk tolerance questionnaires, investment allocations, projection graphs showing her living comfortably well into her nineties.

He said, “Before she signs anything, will you look at this?”

I started reading. By the third page, I knew exactly where this was headed.

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“Fee-Only” and “Fiduciary” Are Not the Same Thing

The first page of the presentation identified the firm as fee-only. That’s a term most people associate with trust. No commissions. No products being pushed for a kickback. Just an advisor being paid directly by the client, acting in their interest.

Here’s what fee-only actually means.

It means no commissions on securities products. Stocks, ETFs, mutual funds — they can’t earn a commission on those. But fee-only says nothing about insurance products.

Fixed indexed annuities are classified differently. A fee-only advisor can recommend an annuity and receive compensation on it without violating their fee-only status.

And sure enough, three pages in, there it was.

Of her $625,000 in retirement savings, $300,000 was going into a fixed indexed annuity projecting a 3.3% rate of return. The other $325,000 would go into their advisory account, where they assumed a 7% rate of return.

Their annual fee: 1.8% on the advisory account.

Here’s the math on that design. She has a $27,000 per year gap between her pension, her Social Security, and the $87,000 she wants to live on in retirement.

Under this plan, she pulls that $27,000 from the annuity first. The advisory account sits untouched and growing.

Meanwhile, the advisor earns 1.8% per year on $325,000 — roughly $5,850 in year one — compounding upward for fifteen years while she never touches that account.

She takes from the account that doesn’t grow their fee that they make $21,000 in commission in year one. They earn on the account she never touches.

That’s not a conflict of interest — according to how the word “fiduciary” gets applied.

It is however the exact opposite of being a fiduciary and putting the client’s interests before their own.

Watch me explain the difference between a fiduciary and a non-fiduciary financial advisor.

The Word Fiduciary Has Become Marketing

I want to be careful here, because this conversation gets oversimplified fast.

Being a fiduciary does carry a legal standard. You’re required to act in the client’s best interest. The problem is that “best interest” has a wide lane.

You can design a plan that is technically legal, technically fiduciary, and still primarily serve your own compensation structure. The plan I was holding was a textbook example.

And here’s the other side of that coin: there are fiduciaries who refuse to use annuities on principle and who are still costing their clients enormous amounts of money through poor tax planning or failure to stress test a retirement against bad market sequences. Not selling an annuity doesn’t make you a good planner.

The question is never: is this advisor a fiduciary?

The question is: does this plan look like it was designed for the client or for the advisor?

What Was Missing from Her Plan

I read the entire presentation. Cover to cover.

Here’s what I did not find.

Not one word about income taxes. Not one mention of Roth conversion strategy. No analysis of how her pension and Social Security interact to determine what tax bracket she’ll be in when Required Minimum Distributions begin at 75.

No modeling of what her Medicare premiums look like at different income levels. Zero tax risk analysis.

She is 61, retiring in August. She has more than a decade before RMDs kick in. She has a gap period before Social Security where partial Roth conversions could permanently reduce her tax burden in retirement.

Her pension creates a baseline income that changes how every other dollar she withdraws gets taxed.

All of that was invisible in this plan.

What they gave her instead was an investment allocation and a projection line that assumed markets cooperate, income stays smooth, and nothing surprises her for the next 25 years.

A dollar lost to unnecessary taxes is a dollar gone forever. And this plan hadn’t thought about that once.

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Why Sequence of Returns Risk Changes Everything

Here’s what concerns me most when I see a retirement plan that doesn’t stress test.

Sequence of returns risk is the idea that the order in which you experience market returns matters more than the average return itself.

If markets drop 30% in the first two years of your retirement while you’re pulling $27,000 a year from your portfolio, you’ve sold assets at the worst possible price. The compounding works against you from that point forward. You may never recover the ground you lost.

A 7% average return over 20 years sounds solid on paper. But if years one through three are negative and you’re withdrawing the entire time, that same 7% average can still result in a depleted portfolio.

The plan I was holding assumed a straight 7% return on $325,000 for fifteen years. No dip scenario. No stress. No preparation for the sequence that actually shows up.

When I ran her numbers through a down market in years one through three — not a crash, just a normal rough start — the plan failed. She ran out of money.

That’s what happens when a plan isn’t built to last. It works perfectly in the projections. It doesn’t work in the real world.

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What Stress-Tested, Tax-Integrated Planning Actually Looks Like

When my firm Revolutionary Wealth rebuilt her plan, we ran it through multiple scenarios. Down market in years one through three. Flat market for five years. Average market.

Different Social Security timing. Partial Roth conversions during the window before RMDs begin.

Annuity included. Annuity excluded. Different annuity structures with different sequencing.

I looked at all of her income sources together — pension, Social Security, savings — and mapped out which accounts to draw from first and in what amounts to keep her in the lowest possible tax bracket over 30 years.

That is what tax-integrated retirement planning means. It’s not just investment management. It’s sequencing every dollar to minimize what goes to the IRS and maximize how long the rest lasts.

Her best outcome did include an annuity. Not the one they pitched. Not structured the way they structured it. But there is a version of this plan where a portion in an annuity protects her against the worst-case sequence and gives her a guaranteed income floor to build around.

The difference between the right annuity design and the wrong one isn’t always the product.

It’s who benefits from the way it’s used.

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The Number That Matters

Over the course of her retirement, the redesigned plan adds over $600,000 in value compared to what she was about to sign.

The recommendations cut her fees in half versus what she was previously recommended.

And she can still retire in August like she planned.

That’s what a second opinion can do. The previously recommended plan was built around their compensation model first and her retirement second.

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The Real Difference Between a Fiduciary and Someone Who Says They Are One

It is not the products they use or refuse to use.

A fiduciary who avoids annuities on principle but never addresses tax risk is still leaving money on the table.

A fiduciary who uses annuities inside a stress-tested, tax-integrated, client-first plan can be one of the best decisions you make. The vehicle doesn’t determine the outcome. The design does.

What separates a real fiduciary from someone who uses the label is method. It’s whether the plan was built to answer one question: in every scenario, across every market cycle, is this client going to be okay?

Before you sign any retirement plan, ask your advisor to show you five things.

A down market scenario in your first three years of retirement, and what happens to your income when it hits. Sequence of returns risk is the biggest threat most new retirees never see coming.

A tax strategy — not an investment strategy, a tax strategy — showing how withdrawals from each account affect your tax bracket, your Medicare premiums, and how much of your Social Security becomes taxable.

The plan run with and without the specific products they’re recommending, so you can see the difference in outcomes and understand what each one costs you.

The fee schedule modeled against your portfolio over 20 years, so you know what you’re actually paying over time, not just per year.

A projection that runs to age 95, stress tested against a bad early sequence.

If they can’t show you those five things, you don’t have a fiduciary designed financial plan.

You have a sales pitch.

What Revolutionary Wealth Is

I founded Revolutionary Wealth in Bentonville, Arkansas based on eight years of client feedback of what our clients said they wanted as an experience.

• Down to earth, cost-effective advice from professionals with retirement planning experience, not theory.

• Tax planning that helps them plan ahead of what’s coming, not just when they go to file.

• The ability to setup an estate plan cost effectively without an attorney billing and upselling them at every turn, only to never speak with their other advisors or truly coordinate their assets.

• Advisors who aren’t going to retire before they do and work instead of golfing three days a week.

Revolutionary Wealth is a fiduciary firm. Legally, that means we’re required to act in your interest. Practically, it means every plan we build gets stress-tested across multiple market scenarios, every income source gets mapped against its actual tax consequence, and no product goes in the design because of what it pays us.

Our fees are significantly below 1.8%.

We work primarily with pre-retirees and retirees, ages 59 to 67. That window before RMDs begin is the most leveraged financial period of your life.

Partial Roth conversions. Social Security timing. Sequencing withdrawals to keep you in the lowest tax bracket you can manage for as long as possible.

That’s not an investment strategy with a tax line item attached. That’s a plan.

We’re based in Bentonville and work with clients across the country.

If you’ve already got a plan, bring it. The first conversation is just a conversation.

We’ll tell you honestly what we see.

Start a Fiduciary Planning Conversation

Standing Before the Long Green Table

A few years ago, I read the leadership book “The Wisdom of the Bullfrog” by Admiral William McRaven. Towards the end of the book, page 177 to be exact, are words that have forever stuck with me.

Admiral McRaven writes, ““Can you stand before the long green table?” Can you justify to reasonable men and women, sitting in judgment of your decisions, that the actions you are taking are moral, legal, and ethical and conform to the goals and objectives of the organization? If not, you should reconsider your actions.”

The truth is that anyone in a fiduciary capacity is truly operating in a high-stakes environment. Attorneys, physicians, CPAs, and some financial advisors are all held to a high-stakes standard.

The problem is all of these professions, not just financial advisors, gloss over the importance of the nature of their work due to routines and the mundane. The longer one tends to do it the more they lose sight of just how high stakes their role really is.

I’m human and I make mistakes just like everyone else. I don’t always professionally get it right, but I try my best. Most days I succeed, but many days I fail.

But every day and with every client, I see myself standing before that long green table. Their family, my family, God, and any advisor who could come behind my work sitting around the table judging my decisions and questioning the action I am about to take.

I do not fear much in life, but I deeply fear what could come from intentionally doing someone wrong. Life is too short to mistreat others for a short-sighted gain.

It’s easy to say that my exams, credentials, and experience make me a fiduciary but if I’m being honest, it’s sitting in front of that long green table.

See you next time, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest. An investment in the Fund involves risk, including possible loss of principal.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. c) If this includes fixed and indexed annuities, you can add this combined version: Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results, but they can be complemented with additional calculators and tax planning tools. Results may vary with each use and over time.

Securities and investment advisory services offered through Integrity Alliance, LLC, Member SIPC. Integrity Wealth is a marketing name for Integrity Alliance, LLC. Revolutionary Wealth LLC, is not affiliated with Integrity Wealth.

Tax and Legal services provided are separate from the Securities or Advisory services offered through Revolutionary Wealth LLC.

He found a specific card at a show in 2001. Paid $400 for it. Put it in a top loader, filed it away, and mostly forgot it existed. Twenty-three years later, his son mentioned it. They pulled it out, looked it up, and saw a number neither of them expected.

It was worth $100,000.

He decided to sell. He had owned it for more than two decades. He knew about capital gains. He had sold stocks before, understood the rates, and budgeted mentally for somewhere around $15,000 to $20,000 in taxes.

He didn’t realize what the IRS does differently with collectibles.

He wrote a check for $28,000.

Watch me visually summarize this article if you don’t feel like reading.

The Rate That Does Not Get Announced at Card Shows

We covered the 28% collectibles rate in a recent issue. The short version: sports cards, coins, stamps, art, and most physical collectibles are not treated as standard capital gains assets. The IRS has a separate category under Section 1(h)(5), and the maximum long-term rate for that category is 28%.

Stocks top out at 20% for long-term gains. For most middle-income investors the rate is 15%. Collectibles do not get those rates.

When I first started working with serious collectors, I made the same assumption most of them do. Capital gains are capital gains. Finding out otherwise changed how I approach every planning conversation before a sale.

For the collector with the $400 card, the math was straightforward and painful. His basis was $400. His sale price was $100,000. His gain was $99,600. At 28%, his tax was $27,888.

He had nothing to offset it with. No expenses to deduct. No business entity to run costs through. Every dollar of appreciation was fully exposed.

That is the pure collector’s tax position. Hold an asset for decades, sell it, pay 28% on the gain with no mechanism to reduce the taxable number.

Now Take a Different Collector

A card dealer operates the same market. Different rules.

He buys collections, grades select pieces, and moves inventory through eBay, conventions, and private buyers. He has been doing this for six years. He has an LLC, a dedicated business bank account, and a spreadsheet tracking every card that comes in and goes out.

He acquires the same card — same market value, same sale price of $100,000.

His income from that sale is not a capital gain.

Because he is in the business of buying and selling, the IRS treats the proceeds as ordinary business income. That sounds worse on the surface. Ordinary income rates are higher. Thirty-seven percent at the top end. Most people hear “ordinary income” and assume they would pay more.

Most people would be wrong.

Ordinary income from a business comes with something the pure collector does not have.

Deductions.

The Math That Changes the Conversation

Here is how the dealer’s $100,000 sale actually looks on paper.

He paid $65,000 for the card. That is his cost of goods. His gross profit is $35,000.

Over the course of the year, he also paid:

$1,400 in grading fees across PSA and BGS submissions.

$900 in shipping, packaging, and insurance on purchases and sales.

$1,200 in show table and convention fees.

$1,800 in storage for his inventory.

$900 in business insurance on his collection.

Total deductible business expenses for the year: $6,200.

Net taxable income from that transaction: $28,800.

At a 24% federal income rate, his tax on the sale is $6,912.

The pure collector paid $28,000 on a $100,000 sale.

The dealer paid $6,912 on the same $100,000 sale.

Same card. Same market. Same gross number on the sale receipt.

The collector’s 28% rate applied to a $99,600 gain. The dealer’s 24% rate applied to a $28,800 net profit. The rate does not tell the whole story. The deductible base is what determines the actual check.

That, ladies and gentlemen, is the difference between holding a collection and running a business.

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What Dealers Can Deduct

If your buying and selling activity qualifies as a trade or business under the IRS standard, here is what can come off your taxable income before the rate is applied:

Cost of goods sold. The price you paid for every card, coin, or piece you sell. Your first and largest deduction.

Grading and authentication fees. PSA, BGS, SGC, PCGS, NGC, CGC. Every submission you send out.

Shipping. Packaging, postage, and insurance in transit, both when acquiring inventory and when fulfilling sales.

Show and convention costs. Table fees, booth rental, and the direct travel costs for events where you are operating as a seller.

Storage. A dedicated unit, or the pro-rated share of space used exclusively for inventory.

Business insurance. Coverage for your inventory against loss, theft, or damage.

Professional services. Accounting, tax preparation, and any legal fees related to the business.

Business phone and internet. The portion of those costs tied to your buying and selling activity.

Photography and listing costs. Equipment or subscription services used specifically for cataloging and marketing inventory.

None of these exist for the pure collector. Every dollar of appreciation hits the full 28% rate. The dealer’s number comes down substantially before the rate is ever applied.

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How the IRS Decides Which One You Are

The IRS does not take your word for it. They look at the facts of your activity.

Frequency and regularity of sales. Whether you carry on the activity in a businesslike manner. Whether you maintain separate records and a dedicated business account. How much time you spend on it. Whether you depend on the income. Whether you have had profitable years. Whether there is a genuine profit motive beyond personal enjoyment.

You do not need a brick-and-mortar store. Consistent eBay sales, regular convention presence, and maintained inventory with documented cost-of-goods tracking can support dealer classification. The IRS is looking for evidence of a trade or business, not a collector who occasionally sells when the price feels right.

The line that matters: are you doing this to generate income as a trade, or are you building a collection that you sell from when the opportunity presents itself?

If you are on the trade side, ordinary income treatment applies. So do business deductions.

If you are on the collector side, capital gains treatment applies. At 28%, with nothing to offset it.

The Self-Employment Tax Reality

There is a cost to dealer classification worth addressing directly.

Self-employment income is subject to self-employment tax in addition to federal income tax. In 2025 that rate is 15.3% on net earnings up to $168,600, then 2.9% above. Half of the SE tax is deductible, which softens it, but the number is real and needs to be accounted for.

For a dealer with high net income and no business structure, the combined effect of ordinary income rates plus self-employment tax can end up close to or above what a collector would pay at 28%.

That is why the structure conversation matters as much as the classification.

A card shop or active dealer operating as an S-corporation can pay its owner a reasonable salary and distribute remaining profit as a shareholder distribution. Only the salary portion is subject to self-employment tax. The distribution is not. The business still deducts all the same expenses. The SE tax burden comes down meaningfully.

For dealers doing serious volume, the entity structure is not an afterthought. It is where a significant amount of the planning happens.

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What the Pure Collector Can Do

If you are a collector — not a dealer — and you are sitting on items with significant appreciation, a few options exist before you sell.

Installment sales. Spreading a large gain across multiple tax years keeps annual income lower and can reduce the effective rate in each year. On a $100,000 gain, splitting the recognition over three years changes the bracket math.

Donate appreciated collectibles directly to a qualified charity. Donating an item rather than selling it and donating the proceeds lets you deduct the fair market value without recognizing the capital gain.

There are limits — your deduction for tangible personal property donated to a public charity is generally capped at 30% of adjusted gross income — and you need a qualified appraisal. But for collectors who already give to charity and are holding highly appreciated items, the numbers are worth running.

Time the sale around income. The 28% collectibles rate is a ceiling, not a floor. If your ordinary income rate drops below 28% in a given year — a partial retirement year, a year when you sell a business at a loss, or any year when your taxable income is meaningfully lower — your collectibles gain may be taxed at your effective rate rather than the full 28%. A $100,000 gain in a 22% income year is taxed at 22%, not 28.

The $28,000 check was not the only possible outcome. It was the outcome of not having the conversation before he listed the card.

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The Number to Take Out of This

Two people can sell the same card for the same price and write two very different checks.

One never tracked expenses, never structured a business, and held for personal enjoyment. He pays 28% on every dollar of gain.

The other ran it as a trade, tracked every cost, and structured appropriately. He pays his ordinary rate on a net number that deductions already brought down.

The rate is 28% for collectors. But the rate is only half the equation.

Grab your mug. Pull up what you are holding. And before the next big sale — whether you are a lifelong collector or a dealer running volume — make sure the person advising you knows the difference between a long-term hold and a business transaction.

The IRS already does.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

Maxed the 401(k). Captured the employer match. Reinvested dividends. Did everything the financial media told them to do.

Their combined pre-tax balance was $1.4 million.

They sat across from me and the husband said, “We were told retirement means lower taxes. Less income, lower bracket.” He said it like a man who had been waiting to hear someone confirm it.

He stopped waiting about twenty minutes later.

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The Promise Was Half Correct

The logic is not wrong. It is incomplete. And incomplete plans have a way of becoming expensive surprises.

Here is what most people hear: contribute pre-tax, let the money compound tax-deferred, pull it out in retirement when income drops, pay a lower rate.

Simple, elegant, works perfectly on a whiteboard.

Here is what the whiteboard left out: the IRS does not let you leave that money alone forever. At age 73 or 75, three separate tax events arrive at your door. Most people never planned for any of them.

I will be the first to admit that the first time I ran the full math on all three at once, I checked my numbers twice. I was certain I had made an error.

I had not.

Watch me perfectly explain how the process actually works and summarize this article, on a whiteboard.

RMDs: The Withdrawal You Did Not Choose

Required Minimum Distributions are the government collecting what they have been patient about for decades. Every dollar sitting in a traditional IRA or 401(k) entered the account tax-free. The IRS extended credit. At 73 or 75, they call it in.

The IRS takes your December 31st account balance from the prior year and divides it by a life expectancy factor from their Uniform Lifetime Table.

You do not negotiate the amount. You do not delay it. You do not opt out.

If you fail to take the required distribution, the penalty is 25% of the amount you were supposed to withdraw.

On a $1.4 million balance, the first RMD is roughly $51,000. It hits as ordinary income. Same rate as a paycheck from a job.

The couple in my office was 63 when we sat down. With standard compounding through age 73, their $1.4 million was projected to be closer to $2.1 million. Their first RMD was going to be nearly $77,000.

They had never run that number. Nobody had ever asked them to.

The RMD does not hold steady either. The account keeps compounding. The life expectancy factor keeps shrinking.

The mandatory withdrawal grows every year, whether you need the income or not.

IRMAA: The Medicare Surcharge Nobody Warned You About

Layer in Medicare.

The standard Medicare Part B premium in 2026 runs about $185 per month. Most people know that number. What most people do not know is that Medicare uses your tax return from two years prior to calculate what you actually pay.

Cross an income threshold and your premium jumps. The program is called IRMAA, Income-Related Monthly Adjustment Amount, and it is one of the least-discussed costs in retirement planning.

For a married couple in 2026, the first IRMAA surcharge kicks in above $212,000 of modified adjusted gross income. That number can feel distant until you add $77,000 in RMDs to $36,000 in combined Social Security, some dividend income, and maybe some part-time consulting. The ceiling arrives faster than the projections suggested.

The tiers stack quickly. And because the calculation uses income from two years prior, by the time you see the higher premium on your bill, the year that triggered it is already closed. The planning has to happen before the income does.

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Social Security: 85 Cents on the Dollar, Taxable

Most people know Social Security exists. Most people do not know that up to 85% of it is taxable.

The threshold that determines how much of your benefit gets taxed has not been adjusted for inflation since 1993. That year, Congress set $44,000 of combined income as the level above which married couples owe tax on 85% of their Social Security benefit.

That threshold is still $44,000 today.

If you and your spouse collect $36,000 in combined Social Security and receive $77,000 in RMDs, your combined income is $113,000. Every dollar of your Social Security benefit that can legally be taxed will be.

The rule has never been indexed to inflation. It was never designed to be.

Three income streams. Three tax events. None of them were in the plan you made at 47.

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“I’ll Just Take Less Out”

This is the first response I hear when people start doing the math.

The problem is that with RMDs, less is not an option. The IRS sets the withdrawal amount. You take it, or you pay the 25% penalty on what you skipped. Taking out less only works if the pre-tax balance is smaller.

That is the actual fix. Not managing the withdrawal at 73 or 75. Managing the account balance before 73 or 75.

That is where the three-bucket strategy comes in.

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Bucket One: Taxable

Your brokerage or savings account. Money that has already been taxed, invested, and is now subject to capital gains rates when sold.

Capital gains rates run lower than ordinary income rates in almost every scenario. For married couples filing jointly in 2026, if your total taxable income stays below approximately $98,900, your long-term capital gains rate is 0%.

Zero. Nothing owed on the growth.

Above that threshold, most retirees land in the 15% capital gains bracket. Still meaningfully lower than the ordinary income rate on the same dollar.

The taxable bucket does not generate RMDs. It does not create a mandatory income event.

Used correctly, it produces income the IRS collects very little from. It is the most flexible pool of retirement money you can hold.

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Bucket Two: Tax-Deferred

Your traditional IRA, 401(k), SEP-IRA, and anything else pre-tax. Every dollar coming out is ordinary income.

The strategy is not to minimize withdrawals from this bucket. It is to size withdrawals to fill exactly the space the tax code already gives you for free.

In 2026, a married couple filing jointly over 60 has a standard deduction of roughly $32,200. That is income you can receive without owing a dollar in federal income tax. If your RMDs stay at or below that number, the government-mandated withdrawal becomes tax-free income by default.

There is a second tool available inside this bucket for anyone who gives to charity: the Qualified Charitable Distribution, or QCD. If you are over 70½, you can send up to $108,000 per year directly from your IRA to a qualified charity. It counts toward your RMD.

It does not count as income on your return. You satisfy the withdrawal requirement, avoid the income event, and get the full charitable benefit without needing to itemize.

The tax-deferred bucket is not the problem. An oversized tax-deferred bucket is.

The goal is to manage it down to a size where RMDs stay within the standard deduction, and strategic giving handles the rest.

Bucket Three: Tax-Free

Your Roth IRA or Roth 401(k). Contributions were made after tax. Growth is tax-free. Qualified withdrawals are tax-free. No required minimum distributions during your lifetime.

This bucket handles everything the other two cannot cover at a low rate. Major one-time expenses. Healthcare costs. Income you need beyond what the standard deduction absorbs. Legacy assets for your heirs, who inherit a tax-free account rather than a deferred tax liability.

Roth withdrawals do not show up as income on your tax return. They do not count toward the IRMAA calculation. They do not affect how much of your Social Security gets taxed.

The larger this bucket, the more control you hold over your total retirement tax picture.

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The Window That Closes at 73 or 75

The best time to build the Roth bucket is before RMDs start forcing income on you whether you need it or not.

For most pre-retirees, the years between 60 and 75 are the lowest-income years in a long time. Careers are winding down. Social Security has not started. RMDs have not kicked in. Income is often manageable and, for once in a career, controllable.

That window is where Roth conversions are most powerful.

A Roth conversion takes money from a pre-tax account, pays the tax at today’s rate, and moves it into a Roth where it grows and distributes tax-free permanently.

You are buying out the IRS’s ownership stake in your pre-tax accounts before they get to set the price at 73 or 75.

The most effective conversions happen in layers. Each year you convert enough to fill the lower tax brackets without crossing into the next tier.

If you are in the 22% bracket, you convert to the ceiling of the 22% bracket. You stop there, repeat the following year, and keep reducing the pre-tax balance year by year.

A smaller pre-tax balance means smaller RMDs. Smaller RMDs mean lower IRMAA exposure, less Social Security taxation, and more room to pull from the 0% capital gains window in the taxable bucket. All three problems shrink when the pre-tax balance does.

The three buckets work together. The Roth conversion strategy is how you rebalance between them.

PSA: Nothing is ever once-size-fits-all. Feel free to read my previous article about how someone who came to me after following internet advice lost six figures doing Roth conversions.

What Happened with the Couple

We built a seven-year Roth conversion plan. Annual conversions between $90,000 and $120,000, timed to stay within their bracket ceiling and below the IRMAA threshold triggers.

By the time RMDs arrived, their projected pre-tax balance had come down by roughly $630,000.

That $630,000 is now in a Roth. No mandatory withdrawal schedule attached to it. No ordinary income tax on distributions. No IRMAA calculation to worry about. And when they pass it to their kids, the heirs inherit a tax-free account rather than a deferred tax liability.

Three problems. One coordinated strategy. All of them smaller than they would have been without the plan.

That is what solving two, three, sometimes four different tax problems with one vehicle looks like.

If You’re New Here, Grab a Seat

My name is Drew Scott. If this is the first time something of mine has landed in your inbox or you need a refresher, here’s the short version of who I am and why I write this.

I run two firms. Revolutionary Wealth is our financial planning and wealth management practice. Blueprint Business and Tax Advisors handles tax strategy, estate planning, and business consulting for business owners who are buying, selling, or trying to structure their way to keeping more of what they build.

The clients I spend most of my time with are pre-retirees in their late 50s and 60s, retirees navigating the distribution phase, and business owners earning north of $200,000 who have realized that the person managing their investments and the person filing their taxes have never once sat in the same room together.

Coffee and Compounding is where I write about what I see every week in real planning conversations. Not theory.

The actual math, the actual tools, and the actual mistakes that show up over and over again in people who did everything right and still ended up surprised.

The article above is a good example of what this newsletter is. No fluff. Just the strategies that matter for people who are serious about what they keep, not just what they earn.

I appreciate your attention, see you in a few days. Cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest. An investment in the Fund involves risk, including possible loss of principal.

Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. c) If this includes fixed and indexed annuities, you can add this combined version: Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results, but they can be complemented with additional calculators and tax planning tools. Results may vary with each use and over time.

Securities and investment advisory services offered through Integrity Alliance, LLC, Member SIPC. Integrity Wealth is a marketing name for Integrity Alliance, LLC. Revolutionary Wealth LLC, is not affiliated with Integrity Wealth.

Tax and Legal services provided are separate from the Securities or Advisory services offered through Revolutionary Wealth LLC.

The highest grade. The lowest pop count. The piece you would never sell at any price.

A trust is the anchor card of your estate plan.

And just like the rarest card in a collection can be sitting in a binder with no sleeve, no top loader, and no documentation of what it is actually worth, a trust can exist without doing the one thing it needs to do.

Having a trust does not mean your collection is protected. Having the right trust does.

Here are three situations that show the difference.

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Case Study #1: The Wrong Appraiser

A collector passed with a collection his family knew was significant. They had a trust.

It named his wife as trustee and his two adult children as beneficiaries. The language said the collection should be appraised and proceeds distributed equally.

So far, so good.

The trustee hired a general estate appraiser. Not a collectibles appraiser. Not someone who understood grading standards or pop reports.

Someone who did what general appraisers do: pulled comparable eBay sold listings and averaged them.

The appraisal came in more than $140,000 below the actual market value of the collection. The estate filed that number with the IRS.

Two years later, the IRS audited. The correct value was established through a qualified collectibles appraisal. The estate owed taxes and penalties on the difference.

The trust was well-written for every other asset in the estate. It had nothing specific to say about how the card collection should be valued.

What the trust needed was one clause. Something that said graded cards require a PSA, Beckett, or SGC standard and a qualified collectibles appraiser, not a general estate appraiser working from public sold listings.

One provision. It would have changed the outcome entirely.

Case Study #2: Three Siblings, No Instructions

A collector passed with a collection appraised at $183,000. He had a revocable living trust. It named his three adult children as equal beneficiaries and gave the trustee authority to sell assets and distribute proceeds.

That was all it said about the collection.

One sibling had grown up collecting alongside his father. He wanted to hold the most significant pieces and let the market develop.

One sibling needed cash. She was willing to sell everything at whatever the market gave today.

One sibling had no interest in cards but wanted her equal share in dollars, not in cardboard.

Three legitimate positions. No document to settle them.

They hired a mediator. The process took 22 months. Legal and mediation fees came out of the estate. By the time they reached an agreement to sell, they were under enough financial and emotional pressure that they accepted the first reasonable offer from a local dealer.

The collection sold for 62 cents on the dollar compared to the independent appraisal done partway through the dispute.

That, ladies and gentlemen, is what happens when a trust names the heir and stops there.

What the trust needed: specific distribution language.

Which pieces went to which person, by name and by card. Which pieces got sold and through which channel.

A floor price before anything sold below a number the collector would have accepted himself.

A hold period before any significant piece moved, to prevent a panic sale at a bad price.

None of that requires a complicated trust. It requires an attorney who knows to ask the right questions about the collection before drafting.

Case Study #3: The Accounts Nobody Could Access

A collector passed with roughly $31,000 in graded inventory across two platforms: a PSA vault account and a Fanatics collect account.

His family knew he collected. They knew there were cards in the house. They did not know about the digital accounts.

They found out about the PSA vault three months after he passed when a transaction notification arrived at his email address. The Fanatics account turned up six months after that through a similar accident.

Both platforms required legal documentation and account credentials to release assets to the estate. The family had neither. They had to work through the estate attorney, file documentation with both platforms, and wait.

Total elapsed time from death to access: 14 months.

During that time, the inventory sat. Some pieces moved in value. Several pending transactions on Fanatics had to be unwound, at a cost to the estate. The family had no visibility into what was happening inside accounts they could not open.

The trust had no digital asset provision. It did not inventory the platforms. It did not designate who had authority to access them or what documentation they would need.

What the trust needed: a digital asset clause naming every platform the collection touched, authorization for a specific person to access those accounts, and a separate inventory document stored alongside the trust with login information the trustee could actually use.

That document does not need to be complicated. It needs to exist. And the person who needs to find it needs to know where it is before they need it.

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What a Collector’s Trust Actually Needs to Include

Each of the situations above was preventable. Here is what collector-specific trust language covers.

The Appraisal Standard. Graded cards require a PSA, Beckett, or SGC standard and a qualified collectibles appraiser. Not a general estate appraiser using eBay averages. This clause protects the valuation at the step-up in basis and reduces IRS exposure for the estate.

Distribution Specificity. Which pieces go to which person, by name and by card. Which pieces get sold. What auction house or dealer handles significant pieces above a stated value (Probstein, Goldin, or similar). A floor price below which no piece sells without trustee approval and a second opinion from someone with market knowledge.

The Trustee Advisor. A designated person with hobby knowledge who advises the trustee on collection decisions without holding fiduciary authority. Your trustee does not need to understand the hobby. But they should have access to someone who does before making sale or distribution decisions at scale.

The Digital Access Provision. An inventory of every platform your collection touches, authorization language for a specific person to access those accounts, and documentation your trustee can actually use to gain legal access. This should be reviewed every time you open or close a platform account.

The Hold Period. A waiting window before any significant piece sells, to let the market stabilize. This is the provision that keeps a trustee from accepting the first offer out of uncertainty or time pressure.

Most collectors, whether in Bentonville or anywhere else in the country, have a trust that covers the first four: a trustee, beneficiaries, an executor for probate assets, and a pour-over will to catch anything left outside the trust.

The five provisions above are almost never in a standard trust unless someone specifically asked for them.

Most people do not know to ask.

Why Collectors End Up with the Wrong Trust

Being transparent about my own experience: I paid $4,500 for our trust before I got back into collecting seriously.

At the time, neither the attorney nor our CPA had strong answers when I came back with specific questions about the collection, the digital accounts, and the appraisal standard.

I had to do most of the research myself. And I work in financial planning.

If I personally could not get the right answers without significant due diligence, what are the odds the average collector can?

That experience is what drove us to build Blueprint Business and Tax Advisors alongside Revolutionary Wealth.

An attorney who understands how collectibles work inside an estate plan. A CPA who prepares taxes for collectors and card shop owners.

A trust drafting process that covers the five provisions above, not just the standard language.

The cost of our trust setup, at the time I am writing this, is a fraction of what most collectors have tied up in their top ten cards. That math is worth doing.

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What to Do Right Now

Pull out your trust documents. Find the section that covers personal property. Read what it actually says about the collection.

If it says nothing more than the collection transfers to your beneficiaries, you have a generic trust. That is a starting point, not a finish line.

Then schedule a discovery call with us. We will walk through your current documents, your digital platforms, your distribution intentions, and your collection inventory.

We will show you exactly what the gaps are and what it takes to close them.

Every great collection has an anchor card. The piece that makes everything else worth protecting.

Make sure your estate plan has one too.

Pull up a chair. Let’s look at the numbers.

Cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

They had done estate planning three years earlier. Paid for a will. Had a trust. Thought they were covered.

What she did not know was that her husband’s IRA had his first wife listed as the beneficiary. Nobody had updated that form in 23 years. Not the attorney. Not the financial advisor who came before us. Nobody.

The new will did not help. The trust did not help. A beneficiary designation form that nobody looked at in two decades told that money exactly where to go.

It went to the ex-wife. $412,000 of it.

That is not a rare story. That is the most common kind. And if you have a will, a trust, and a binder sitting in a drawer somewhere, there is a decent chance you have the same problem.

Grab your mug. Let’s walk through it.

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The Document That Does Not Do What You Think

A will directs how your probate assets are distributed after you die. That sounds comprehensive. It is not.

Probate assets are the things sitting in your name alone, with no beneficiary designation and no joint owner. Your house, if it is titled only in your name. A bank account with no payable-on-death setup. Personal belongings. A business interest you own outright.

Here is the list of things your will does not control:

Your IRA. Your 401(k). Your Roth. Your life insurance. Your annuities. Any account with a named beneficiary. Any account with a payable-on-death registration. Anything held jointly with right of survivorship.

Those assets pass according to the form on file with the brokerage or insurer. Not the will. Not the trust. The form.

For most families in their 60s, the accounts I just listed are where the real money is. A business owner in Bentonville might have $800,000 in retirement accounts, $400,000 in life insurance, and $250,000 in a house. The will controls the house. The beneficiary designation forms control the other $1.2 million.

If those forms are out of date, the will is beside the point.

Your IRA Does Not Care What Your Will Says

The most common way estate plans fail families is not a drafting error or a legal technicality. It is a form that nobody updated.

You open a 401(k) at 32 and name your spouse. You divorce at 40 and forget to change the form. You remarry at 44. You die at 67 with a current spouse, three children, and a 401(k) that still names your first marriage.

It happens constantly.

Or this: you do everything right. You get a will. You set up a trust. Your estate planning attorney tells you to name your trust as the beneficiary on your IRA.

You do it. Three years later the trust document gets updated, and the beneficiary form on file at the brokerage still points to the old version.

Common mistakes, in plain language:

Leaving an ex-spouse on a retirement account after divorce. Naming your estate instead of a person or trust, which forces the account through probate and can accelerate income taxes significantly.

Forgetting to add a child born after the accounts were opened. Never updating forms after a death, a business sale, or a major financial change.

A will cannot fix any of these. Only the form can fix the form.

The 9-to-18-Month Wait Nobody Plans For

Even the assets your will does control have to go through probate before anyone receives anything.

In Arkansas, probate runs through the circuit court in the county where the deceased lived. It is a legal process that can take 9 to 18 months, sometimes longer for larger or more complicated estates.

Everything filed in probate becomes a public record. Creditors get notice. Assets get inventoried. Court costs, legal fees, and executor fees come out before the beneficiaries see a dollar.

None of that is fast. None of it is private. And none of it is free.

Arkansas also has specific requirements for a valid will. It must be signed and witnessed by two people. That requirement lives in Arkansas Code Section 28-25-103.

A will drafted from an online template that was never signed correctly in front of two witnesses is not an enforceable will. It is a well-intentioned piece of paper.

For families who want to avoid this process, the main tools are a revocable living trust, joint ownership with right of survivorship, transfer-on-death designations, and properly maintained beneficiary forms.

A revocable living trust is the most comprehensive option. Assets held in the trust pass to beneficiaries without court supervision. No 18-month wait. No public record.

Most families with a living trust still need a pour-over will. The pour-over will catches any assets that were never formally moved into the trust and routes them in at death.

It is a backup. It should not have to do all the heavy lifting. But it is there when you need it.

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A Will Does Not Protect You While You Are Still Alive

This is the gap that surprises almost everyone. A will only activates at death. It does nothing if you are alive but unable to make decisions.

If you are hospitalized at 71 and cannot communicate, your will gives no one authority to manage your bank accounts, pay your bills, handle your business, or direct your medical care.

That authority comes from two documents: a durable power of attorney for finances and a healthcare power of attorney.

Without those in place, your family may need to go to court to get legal authority to act on your behalf. That process is called guardianship or conservatorship, and it is slow, expensive, and emotionally exhausting for everyone involved.

A complete estate plan handles both death and incapacity. A will handles only one.

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When the Documents Contradict Each Other

The most sophisticated failure I see in estate plans is not a single missing document. It is documents that tell completely different stories.

The will says one thing. The trust says something else. The beneficiary forms point somewhere else entirely. The accounts are titled in the wrong name. The trust was funded at signing and never updated after the business sold or the second property was purchased.

These are not unusual situations. They are the norm for families who planned once and never looked at it again.

At Revolutionary Wealth, our job is to map all of it. Legal documents, accounts, beneficiary forms, business interests, life insurance, real estate. Then we look for contradictions. And we coordinate what the attorney drafts with what the accounts actually say.

That, ladies and gentlemen, is where most estate plans fall apart. Not in the drafting. In the coordination.

The strongest plans are the ones where the will, the trust, the beneficiary forms, and the account titles all tell the same story.

Most plans do not do that.

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When to Rebuild, Not Just Review

Estate plans need a review every 3 to 5 years. Certain events should trigger an immediate look regardless of timing.

Divorce. Remarriage. Death of a spouse or beneficiary. Birth of a child or grandchild. Business sale. A major inheritance. Moving to another state. Large changes in asset values.

Tax law changes matter too. The federal estate and gift tax exemption is $15,000,000 per individual in 2026 under the One Big Beautiful Bill Act. The annual gift tax exclusion is $19,000 per recipient. Arkansas has no state estate or inheritance tax, but the federal numbers still matter for business owners and high-net-worth families.

If your estate plan was built around different exemption figures, it may need to be recalibrated.

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What Actually Protects Your Family

A complete estate plan is not one document. It is a coordinated set of them.

The core, for most families:

A will, drafted and signed correctly under Arkansas law. A revocable living trust for families with meaningful assets. A durable power of attorney for finances. A healthcare power of attorney and living will. A HIPAA release. Updated, consistent beneficiary designations across every account. Account titles that match the trust and the plan.

Then someone has to implement all of it. Retitling accounts into the trust. Updating beneficiary forms at every institution. Confirming that the life insurance ownership is correct. Making sure the business succession plan lines up with what the estate documents say.

Documents in a binder do not protect anyone. Implementation does.

Where Revolutionary Wealth Fits

Most financial advisors hand you a referral and wish you luck. We do it differently.

If you already have an estate planning attorney, we work alongside them. Before documents are drafted, we model tax exposure, project cash flow for a surviving spouse, and audit every beneficiary form on every account.

We make sure your attorney has the full financial picture before anyone puts pen to paper. After signing, we help fund the trust, retitle accounts, update beneficiary designations at every institution, and make sure what the documents say and what the accounts say actually match.

If you do not have an attorney, we have solved that problem too. We established Blueprint Business and Tax Advisors specifically to give our clients a cost-effective resource for wills, trusts, powers of attorney, and healthcare directives.

It means you can handle your wealth planning, tax planning, and estate planning in one place, with people who are already talking to each other, instead of coordinating three separate professionals who have never met.

For business owners, this matters even more. A business may be the largest single asset in the estate.

Who controls it after you are gone, how value is transferred, and how heirs are treated fairly — those questions require a financial plan and a legal plan working in the same direction. We make sure that happens.

If you want to know where your current plan has gaps, start here. Pull up your last retirement account statement. Find the beneficiary designation section.

Write down who is named and when that form was last updated. Do that for every account you own.

That takes about 10 minutes. It tells you more about your actual estate plan than a document review ever will.

Then schedule a discovery call with us. We will walk through your accounts, your documents, and your beneficiary forms and show you exactly what we find.

Pull up a chair. Let’s look at the numbers.

Book an Estate Planning Call

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

You are cleaning out a closet, or going through a box in your parents’ attic, or helping settle an estate. And you find something. A card. A comic. A piece of memorabilia you completely forgot existed.

You take a photo. You look it up.

And the number on the screen is not what you expected.

This happens more than people realize. A childhood card that came in a pack for a few cents in the late eighties is now worth $10,000.

A comic your dad kept in a bag and board is worth significantly more than that. An inheritance arrives with a piece of collectible history no one bothered to appraise.

Most people in that situation think one of two things: I got lucky. And now I have to pay taxes.

Both are correct. But the taxes are where the story gets interesting — and where most collectors make an assumption that costs them.

They assume collectibles are taxed like stocks. They are not.

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The Assumption That Costs Collectors

When most people think about capital gains taxes, they think 15%. That’s the long-term capital gains rate for most Americans — the rate you pay when you sell a stock, a mutual fund, or an ETF that you’ve held for more than a year.

For higher earners it bumps to 20%, but the concept is the same: hold an investment for more than twelve months, pay a preferential rate when you sell.

Collectibles do not get that rate.

Under the tax code, collectibles are their own category. The IRS defines them broadly: art, antiques, coins, stamps, wine, gems, and — yes — trading cards, comic books, and sports memorabilia.

When you sell a collectible you’ve held for more than a year, the maximum federal capital gains rate is 28%.

Not 15%. Not 20%.

Twenty-eight.

On a $10,000 gain, that difference is $1,300 more in federal taxes compared to selling a stock with the same profit. On a $50,000 gain, it’s $6,500.

The number scales, and most collectors never see it coming because their CPA doesn’t specialize in collectibles and no one brought it up at the point of sale.

A dollar lost in taxes you didn’t know about is a dollar gone forever. And this one is worth knowing about before you sell.

Example One: The Childhood Find

You were ten years old. Your mom took you to the drugstore. You spent two dollars on a pack of cards, pulled something you thought looked cool, and stuck it in a shoebox in your closet.

Thirty years later, that card is worth $10,000.

For tax purposes, your cost basis in that card is close to zero. Maybe a few cents. The IRS doesn’t round up on your behalf.

When you sell it, your long-term capital gain is essentially $10,000. At the 28% collectibles rate, your federal tax bill on that find is $2,800.

Most people in that situation are thrilled regardless. It was free money from a shoebox.

But here’s why this matters: if that same $10,000 had come from selling a stock, someone in the 15% long-term capital gains bracket would have paid $1,500.

Same gain. $1,300 more in taxes just because of the asset category.

And that’s before your state adds its own layer. Arkansas taxes capital gains as ordinary income, which means the state gets its cut on top of the federal 28%.

Now imagine that shoebox has fifteen cards in it.

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Example Two: The Inherited Collection

This one catches people off guard in a different way, because it involves a tax concept that actually works in your favor — at first.

When you inherit property, the IRS gives you what’s called a step-up in basis. Your cost basis resets to the fair market value of the asset on the date the person passed.

It doesn’t matter what the original owner paid for it. Whatever it was worth when it came to you is what the IRS considers your starting point.

So, if your grandfather bought a card for $50 in 1985, and that card was appraised at $2,000 at the time of his death, your basis is $2,000. Not $50. That step-up erased decades of appreciation from your tax calculation.

It’s one of the most underused planning tools in estate transfers, and it applies to collectibles the same as it does to stocks or real estate.

Here’s where people get tripped up: the step-up covers what you inherited. It does not cover what happens after.

If you hold that card and it climbs from $2,000 to $10,000, the $8,000 increase happened on your watch. When you sell it, that $8,000 gain is taxable. And because it’s a collectible, it’s taxed at 28%.

Federal tax on that $8,000: $2,240.

If you had sold immediately after the step-up — while the value was still $2,000 — the gain would have been zero.

Every month you hold it after inheriting it, you are building a taxable position in an asset class with a higher rate than most people realize.

That is not an argument for selling immediately. Sometimes the right move is to hold.

But it is an argument for knowing exactly what you are holding and what it will cost you when you do decide to sell.

Dealer vs Collector: Why the IRS Cares

The 28% rate applies to collectors — people who buy and hold for personal enjoyment or long-term investment, without making it a regular business activity.

If you are regularly buying and selling cards with the intent to profit, the IRS may classify you as a dealer. Dealers don’t pay capital gains at all.

Their income from card sales is treated as ordinary business income, reported on Schedule C, and subject to self-employment tax on top of their regular rate. For most people reading this, that classification is worse.

The distinction matters because it changes the entire tax picture. A collector sells a $10,000 card and pays 28% on the gain.

A dealer sells the same card and pays their ordinary income rate — potentially 32%, 35%, or 37% — plus 15.3% in self-employment tax on the net profit.

The examples in this article apply to collectors: someone who found a card from childhood, or inherited a piece of a collection, with no pattern of regular buying and selling.

No Whatnot shows. No eBay store. No consistent inventory turnover. Just a card they owned, appreciated, and decided to sell.

If you are actively building an inventory and flipping cards as a side business, the tax picture is a different conversation — and one worth having with a CPA before you file.

What This Means for You

Knowing the rate is step one. Here’s what to do with it.

Document your basis before you sell. If you inherited a collection, get a formal appraisal done as close to the date of death as possible.

That appraisal establishes your step-up and becomes the baseline the IRS will reference if your return is ever questioned.

A formal appraisal from a qualified appraiser is the difference between a clean transaction and an uncomfortable audit conversation three years later.

If the collection came from a childhood purchase, dig up whatever documentation you have. Original receipts, old inventory lists, photos of the collection with timestamps — anything that establishes what you paid.

If your basis is zero, it’s zero. But document that intentionally, not by accident.

Consider the timing of your sale relative to your income. The 28% rate is a ceiling, not a floor. If your ordinary income tax rate is lower than 28% in a given year — say you retired mid-year, sold a business, or had an unusually low income — your collectibles gains may be taxed at your effective rate rather than the full 28%.

Timing a large collectibles sale in a low-income year can reduce the bill meaningfully.

If the collection has significant appreciated value and philanthropy is already part of your plan, donating collectibles to a qualified charity avoids capital gains entirely. You receive a deduction for the fair market value, and the IRS never gets its 28%.

This is not the right move for every situation, but for collectors with large, highly appreciated holdings who are charitably inclined, it is worth running the numbers.

Finally: make sure your CPA has actually handled collectibles before.

This is not a knock-on CPAs. It is an acknowledgment that most tax preparers process W-2s and standard investment accounts.

The collectibles tax rate is a specialty area, and a generalist who isn’t familiar with it may not flag it until after the fact — or may not flag it at all.

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Putting the Numbers into Context

When we hear or read 28%, that number can easily go over our heads. Let’s use an example and then put into perspective.

You have a $100,000 card collection that gets sold at a 28% tax rate. That’s $28,000 that the government makes off of YOUR collection appreciating in value.

At the time of this post, you could buy the following cards for $28,000:

Patrick Mahomes 2017 Optic #177 Rated Rookie Autographs - Red /50 PSA 10

Kobe Bryant 1998 Skybox E-X Century #6DG Dunk ‘N Go-Nuts PSA 10

Babe Ruth 1933 Goudey #144 PSA 4

I’m begging you, do everything you can to keep that 28% in your pocket. Hopefully someday you’ll be able to show me a PC card you bought with your compounded tax savings.

See you next time, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

She wasn’t panicking. She wasn’t overwhelmed. She was patient in the way that only comes from having already survived the worst of it.

Her husband had passed while they were still legally married. They had been separated for several years, but the divorce was never finalized. No one had updated the deed to the house during the separation.

No one had retitled the financial accounts. In the chaos of trying to untangle a marriage, that paperwork almost always falls to the bottom of the list. And when it stays there long enough, a death turns it into someone else’s emergency.

Because her name wasn’t on the deed, the state of Arkansas stepped in.

Approximately $700,000 worth of assets that she had spent decades helping to build were frozen inside the Arkansas probate system.

The final bill to get those assets released: $30,000 in attorney fees.

She didn’t do anything wrong. She didn’t miss a law. She fell into the most common estate planning trap in Arkansas, and almost no one warned her it was there.

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The Trap is the Title, Not the Marriage

Most people assume marriage is protection. They assume that if their name is on a marriage certificate, they’re covered. In many cases that’s a reasonable assumption.

Joint tenancy with right of survivorship, proper beneficiary designations, assets titled in both names — these things can pass cleanly to a surviving spouse without touching probate at all.

But the trap is this: Arkansas probate law doesn’t care about the marriage. It cares about the title.

If an asset is titled in your spouse’s name alone, that asset goes through probate court when they die. It doesn’t matter that you were married for 32 years.

It doesn’t matter that you helped pay for it. It doesn’t matter that everyone in the room agrees it was yours. The court moves on paperwork, not on context.

And in a separation, where most couples are managing the emotional weight of the day rather than updating estate documents, that paperwork almost never gets fixed.

Life moves forward. The deed stays the same.

That’s the trap. And it catches people who did everything else right.

What Most People Get Wrong First

Here’s the other piece no one explains clearly enough: a will does not avoid probate.

Most people in Arkansas assume that having a valid will means their estate is handled. A will guides who receives your assets, but it does not automatically transfer ownership.

It still has to be filed with the probate clerk. It still gets administered through probate court. The will tells the court who gets what. The court still runs the process.

If there is no will, Arkansas probate laws decide the heirs through intestacy — which means the state makes decisions that should have been yours.

So, when someone says, “I’ve got a will, my family is taken care of,” I try to say this gently: a will is better than nothing, but it is not a plan to avoid probate.

It’s a roadmap for a process you were hoping to skip.

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What Arkansas Probate Actually Does to Your Family

The probate process in Arkansas runs in four phases, and your family does not get to skip any of them.

Phase one: someone files a petition with the circuit court. The court appoints a personal representative — typically the surviving spouse or a named executor — to manage the estate.

Phase two: the court publishes a notice to creditors. In Arkansas, creditors have a minimum of three to four months to file claims against the estate. That clock starts from the date of publication, not the date of death. While it runs, your family cannot access or distribute the frozen assets. They wait.

Phase three: the personal representative inventories every asset in the estate, pays valid debts, and files any required state and federal tax returns. Every missing document, every complication in the titling structure, every dispute adds weeks.

Phase four: whatever remains gets distributed to beneficiaries, subject to court approval. Then it’s done.

Under the best circumstances, this process takes six to twelve months. Under complicated circumstances — a separated couple, assets titled in one name, a surviving spouse establishing her legal right to property she helped acquire — it stretches well past that. Eighteen months is not unusual.

Attorney fees in Arkansas are typically calculated as a percentage of the gross probate estate. On a $700,000 estate, a standard fee lands between $21,000 and $28,000.

Add court filing costs, publication fees, and the added complexity of the separation, and you arrive at $30,000.

There’s one more cost that most people don’t think about until it happens: privacy.

Probate filings in Arkansas are public record. Your assets, your debts, and your beneficiaries become available to anyone who looks. If that concerns you — and it should — the trust conversation becomes even more important.

That’s not a mistake or a scam. That’s the system doing exactly what it was built to do.

The only mistake was not having a plan in place before it was needed.

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The Partial Fixes - and Where They Fall Short

When I walk people through this, the first thing most of them say is some version of: “Can’t I just put my spouse on everything?”

You can. And you should start there. Joint titling and beneficiary designations solve a large portion of the exposure. For married couples, Arkansas recognizes Tenancy by the Entirety, which automatically transfers marital property to the surviving spouse when the first spouse passes.

Payable-on-death designations on bank accounts and transfer-on-death designations on brokerage accounts accomplish the same thing for those assets — they pass directly to the named beneficiary without going through probate court at all.

These tools work. They’re underused, and they’re free. If you have not reviewed your beneficiary designations recently, that’s the first call to make.

But they don’t solve all of it.

If you and your spouse own a home with right of survivorship, it passes to the survivor cleanly. Good. But when the second spouse passes, both names are off the deed.

Whoever inherits that property may be heading straight into probate anyway. You delayed the problem. You didn’t eliminate it.

More importantly, adding a child’s name to a deed to “make it easier later” creates new vulnerabilities. It can trigger gift tax exposure, complicate the capital gains calculation when the property is sold, and expose your home to that child’s creditors or a divorce proceeding.

People try to outmaneuver the system without understanding what the system is actually tracking.

The system tracks titles. Partial fixes help. But they don’t finish the job.

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What Actually Bypasses Probate

A revocable living trust does not go through probate.

Assets held inside a trust pass directly to your named beneficiaries. The court is not involved.

There is no creditor notice period. There is no attorney calculating a percentage of your gross estate. There is no eleven months. There is no $30,000.

Here’s how it works in plain language. You create the trust during your lifetime and fund it by retitling your assets into the trust’s name.

Your home, your investment accounts, your retirement accounts, any real property — they become assets of the trust rather than assets in your individual name.

You remain the trustee. You control everything exactly as you did before.

When you pass, the successor trustee you named distributes the assets to your beneficiaries according to your written instructions. No court required. No delay. No percentage off the top. No public filing.

On a $700,000 estate, a well-structured revocable trust in Arkansas typically costs between $3,000 and $5,000 to set up. One time. Compare that to the $30,000 that client paid to recover assets from a process that should never have been necessary.

That $30,000 doesn’t come back. A dollar lost in probate is a dollar gone forever. Unlike taxes, this one is completely optional.

One trust structure solves four problems at once: it avoids probate, keeps your estate private, protects against court challenges, and gives you a living document you can update as your life changes.

If you remarry, update it. If a beneficiary passes before you, update it. If your assets shift, update it. You’re in control for as long as you’re alive.

That, ladies and gentlemen, is what it looks like when a planning tool solves two, three, sometimes four problems simultaneously.

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The Part That Surprised Her Most

Here’s what caught that client off guard, and what catches almost everyone I walk through this with.

Her husband’s estate was not complicated.

There was no business to dissolve. No creditor disputes. No contested will. No blended family fighting over who gets what.

Just a separated couple, some real estate, some accounts, and a titling structure that nobody thought to update while everyone was busy living through the separation.

And it still cost her $30,000 and eleven months of her life.

She told me at the end of our call that what hurt most was not the money. The money she could eventually account for and move past.

She said the hardest part was calling that attorney every few weeks and being told, again, that the process was still moving. That she just had to wait. That there was nothing she could do to speed it up.

That her hands were tied.

A trust means your family’s hands are not tied.

The probate system in Arkansas is not broken. It is doing exactly what the legislature built it to do.

But it was built for people who didn’t plan ahead. You are reading this. That means you have time.

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What You Can Do This Week

Pull up your three largest assets: your home, your investment and retirement accounts, and any real property you own.

For each one, ask two questions. How is this asset titled? Is there a valid, current beneficiary designation on file?

If the answer to either question is no, that asset has probate exposure.

The next call you make should be to an estate planning attorney who has handled Arkansas probate cases before — someone who knows where the traps are built into the system.

That’s exactly why we built Blueprint Business and Tax Advisors. We have an estate planning attorney on staff who handles the full implementation — drafting the documents, walking you through the funding process, and notarizing everything so nothing gets left undone.

We built it to be cost effective by design. The national average for a trust setup runs around $5,000. We charge our financial planning clients $2,000.

Same attorney. Same documents. A fraction of the cost, because we believe the plan should not be the thing that stops people from getting protected.

Plus, we invest in cutting edge technology that allows you to get your estate plan in place in hours, not months.

If you are a financial planning client or want to become one, reach out. We will handle it.

Eleven months in probate and $30,000 in fees. Or 2 hours and $2,000.

Grab your coffee. Pull out your documents. Make the call.

Your family deserves to make the decisions that are theirs to make. Not the state of Arkansas.

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Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

His wife knows he had cards. She knew he had a lot of cards.

What she did not know was what any of them were worth, which ones mattered, where the receipts were, or that the two boxes in the hall closet were not the same as the seven storage bins in the garage.

She called an estate attorney. He was good at his job. He had handled hundreds of estates, knew probate law front to back, and treated her situation with care.

He had also never graded a card in his life, did not know what PSA meant, and had no frame of reference for why one cardboard rectangle was worth $12 and another was worth $4,000.

The collection went through probate. The process took eleven months. By the time it cleared, her brother-in-law had already sold three storage bins to the first dealer who knocked on the door.

He thought he got a fair price. He had no idea what fair looked like.

This version of this story happens in the hobby every year. It can happen to any of us if we don’t have a plan.

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The Collection Nobody Can Find

Here is the first problem when a collector dies without a plan: nobody knows what exists.

Not your spouse. Not your kids. Not your estate attorney.

Your brain holds the inventory. Your account on eBay or PSA holds part of the picture.

Your receipts are in a folder on a shelf somewhere, or in your email, or you stopped saving them after 2021 because you knew what you paid.

If you have never written down what you own, what you paid, and what it is currently worth, your collection is invisible to the people who will inherit it.

An estate attorney cannot protect what they cannot identify. A trustee cannot distribute what they cannot value.

Your heirs cannot make good decisions about assets they do not understand.

The card you paid $3,400 for at a show in Las Vegas looks like a cardboard rectangle to someone who does not collect.

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What Probate Does to a Collection

Most collectors assume their family will figure it out. The problem is probate does not wait for anyone to get up to speed.

In most states, collectibles that do not have a named beneficiary, are not held in a trust, and are not titled to a joint owner go through probate.

That process is public, slow, and expensive. Depending on the estate and the state, it takes anywhere from nine months to three years.

During that time, the collection is part of the estate. Your heirs may not be able to sell anything.

The card you have been holding because the comp sales are climbing does not care that your estate is in probate. The market moves without you.

Then there is the valuation problem. Probate courts require estates to be valued. For a house, that is a real estate appraisal.

For a stock portfolio, that is a brokerage statement. For a sports card collection, most appraisers have never been to a card show. If your heirs hire someone who does not understand the hobby, the valuation will be wrong.

Too low and assets sell for a fraction of market value. Too high and the estate will owe taxes on phantom value.

Neither outcome is what you spent decades building toward.

What Your Attorney Does Not Know

I paid $4,500 for a trust.

Good estate attorney. Well-regarded in the field. He had handled plenty of clients with complex portfolios, and he treated my situation with professionalism.

He had also never heard of a PSA population report, did not know what triggered the 28% collectibles capital gains rate, and had no idea how to structure a card held as a long-term investment differently from one being flipped for short-term income.

He drafted a trust that technically covered my collection. The strategy inside that trust was built for a stock portfolio. It was not built for what I actually own.

Being vulnerable, I felt ripped off. Not because the attorney was bad at his job. Because nobody who understood the hobby was in the room.

That frustration is the reason Revolutionary Wealth built Blueprint Business and Tax Advisors. Not to compete with what estate attorneys already do well. To fill the gap between standard estate planning and the specific reality of collector wealth.

Blueprint Business and Tax Advisors drafts trusts in all 50 states. Our clients get CPA services and estate planning attorney access.

More than that, they work with people who understand what they are planning around. We know what a BGS 9.5 means. We know what triggers the 28% rate.

We know how to structure a collection inside a trust so the document actually matches the asset.

That is the difference.

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The Four Things Every Collector Needs

You do not need to overhaul your entire estate to protect your collection. You need four things.

An inventory. A written, accessible record of what you own, what you paid, and what it is currently worth. This does not need to be elaborate.

A spreadsheet with card name, purchase date, purchase price, current estimated value, and physical location is enough. Update it twice a year. Keep it somewhere your family can actually find it.

A trust or named beneficiary structure. A revocable living trust keeps your collection out of probate and lets you control who receives what, on what timeline, and under what conditions.

If a trust is not right for your situation, you at minimum need to understand how your state handles personal property without a named beneficiary. Most states have a default answer. It is rarely the one you would choose.

An executor or trustee who understands the hobby. This is the step most collectors skip. If the person settling your estate has never been to a card show, cannot read a BGS label, and cannot tell a 1/1 printer plate from a base parallel, they will make decisions on your behalf that you would not have made yourself.

Name someone who collects to help with decision-making.

Documentation of your strategy. If you are holding certain cards as long-term investments and others as trading inventory, that distinction matters for tax purposes.

The IRS treats them differently. Your estate will too.

Write it down. Not for you. For the people who come after you.

Your Collection is a 1/1. Your Plan Should Be Too.

I reference Shohei Ohtani’s 2018 Batting Chrome #1 in PSA 10 condition sometimes when clients ask about the cost of planning. Pop 5,181 and it’s going for $4,513.

A collector-specific estate plan through Revolutionary Wealth and Blueprint Business and Tax Advisors costs less than that card.

Hilariously enough, that framing lands every single time. Not because the math is complicated. Because collectors understand value instantly when you put it in card terms.

Your plan for your collection and your family is a 1/1. There are no comps. There is no reprint.

You build it once, you update it as the collection grows, and the people you love do not spend eleven months in probate trying to figure out what you were building all along.

Revolutionary Wealth works with collectors across the country who are building real wealth in and outside of the hobby.

Blueprint Business and Tax Advisors handles the trust drafting, CPA work, and estate planning so the collection you spent years assembling does not get sold for a fraction of its value by someone who never understood what it was.

If you want to know what a collector-specific tax and estate plan looks like for your situation, you can start a conversation with me below.

Book a Free Collector Strategy Call

Have You Had the Talk?

Your ten-year-old self just got super anxious reading that. Get your mind out of the gutter, you sicko!!

When I mean the talk, I’m referring to calling up a buddy in the hobby and having a what-if conversation. This does not have to be super serious; it can be very lighthearted.

My good friend from college Josh and I text about cards, all the time. I’ve said to my wife, if something happens, to call Josh.

It’s because Josh and I have had this discussion around our wives interacting with the hobby from the outside looking in. Thinking we are absolutely out of our minds buying pieces of cardboard.

He is someone that I know will not take advantage of her and will immediately be able to point everything in the right direction beyond what’s on paper and written down.

Him and I don’t even collect the same things, so he definitely doesn’t want my cards ha-ha.

We all have that person in the hobby, have the conversation. It’s a free step forward towards protecting your collection and family.

See you next time, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Asset protection plans should be developed and implemented well before problems arise. Due to the fraudulent transfer laws, asset transfers that occur close in proximity to the filing of a lawsuit or bankruptcy can be interpreted by the court as a fraudulent transfer. Proper structuring of these assets is imperative please seek proper legal and tax advice prior to engaging in re-titling/structuring of any assets. Please note that laws are subject to change and can have an impact on your asset protection strategy.

• MSOs provide significant tax advantages including deductible management fees, asset depreciation, and opportunities to fund tax-advantaged retirement plans like cash balance plans

• Business owners can use MSO structures to reduce taxable income by up to $300,000+ annually through cash balance plan contributions while building long-term wealth

• The model enables rapid business scaling through centralized administrative services, economies of scale, and improved operational efficiency across multiple locations

• Proper MSO formation requires careful legal structuring to comply with industry-specific regulations while maximizing financial and operational benefits

Last week I broke down what the MSO model is and how the structure works — the separation between the professional entity and the management services organization, the Management Services Agreement, and the operational mechanics behind it.

If you missed Part 1, start there. The mechanics matter before the math makes sense.

This week: the tax benefits, the cash balance plan numbers that change the trajectory entirely, and what it actually costs to build the structure.

This is where the physical therapy practice owner’s story gets its ending.

Pull up a chair.

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Tax Benefits of the MSO Model

This is where most practice owners lean forward.

The separation of clinical and administrative functions creates multiple tax optimization opportunities that simply aren’t available in a traditional practice structure.

Management Fee Deductions Are the Foundation

The professional entity deducts management fees paid to the MSO as ordinary business expenses. This reduces the taxable income of the professional corporation or limited liability company.

The income moves to the MSO — an entity you control — where different tax planning strategies apply. You’re not eliminating the income. You’re moving it somewhere the planning tools are better.

Asset Ownership and Depreciation

When forming an MSO, non-clinical assets — medical equipment, computer systems, office furniture, real estate — can be transferred to or purchased by the MSO.

The MSO then claims depreciation deductions on those tangible assets, further reducing taxable income. Maintenance, upgrades, and replacement costs are deductible too.

Entity Structure Flexibility

MSOs can be formed as corporations, limited liability companies, or partnerships, each offering different tax treatment. Corporate MSOs may benefit from lower corporate tax rates.

LLC structures might provide pass-through taxation advantages. The right choice depends on your overall tax strategy and ownership objectives. I am not a fan of one-size-fits-all here.

Employee Benefit Plans

The MSO can establish comprehensive benefit programs — health insurance, retirement plans, and other fringe benefits — for its employees.

That includes business owners who work for the MSO in administrative capacities. These benefits are deductible to the MSO while providing real compensation to the people running it.

Here’s the practical math: a multi-location medical practice transitions to an MSO structure. The professional corporation pays $480,000 annually in management fees to the MSO. That $480,000 is deductible, reducing taxable income by $480,000.

At a combined tax rate of 35%, that’s approximately $168,000 in annual tax savings. The MSO receives the income but offsets it with operational expenses, asset depreciation, and employee benefit contributions.

Solve two, three, sometimes four different tax problems with one vehicle. That’s what the MSO structure makes possible.

Scaling and Operating Benefits with the MSO Model

The tax benefits alone justify the conversation. The operational advantages make the case even stronger.

Economies of Scale

When multiple locations share administrative services through a single MSO, per-unit costs drop across the board. Billing departments, IT systems, human resources functions — centralized instead of duplicated at every location.

The cost of one experienced billing director serving five locations is a fraction of five separate coordinators, each running their own system.

Centralized Purchasing Power

An MSO serving multiple locations negotiates from strength. Vendor contracts. Equipment purchases. Insurance policies. Technology licenses.

All of it improves when the volume is combined. Those savings flow directly to the bottom line of every practice location.

Standardized Operations

The MSO develops and implements consistent procedures, protocols, and performance standards across all locations.

This standardization cuts training costs, improves efficiency, and ensures consistent client experiences regardless of location. It’s the difference between running a franchise and managing five independent shops.

Access to Specialized Talent

Instead of each location competing for a great billing manager or IT professional, the MSO employs those specialists centrally.

The cost is distributed across multiple revenue streams. The quality is higher than what any single location could afford independently.

Risk Reduction and Compliance Management

The MSO employs dedicated compliance professionals who track federal and state regulations across all locations. Centralized oversight reduces the risk of regulatory violations and the penalties that come with them.

Here’s what those numbers look like in practice: a law firm operating two offices implements an MSO structure before expanding to eight offices over three years. The MSO centralized billing, IT support, human resources, and compliance.

Operational costs dropped 30% compared to maintaining separate administrative functions at each office. Rapid expansion stayed on track because the infrastructure already existed.

Ignore revenue. Focus on the profit. The MSO structure is built to protect the profit.

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MSO Model for Business Growth and Expansion

The MSO structure is also a growth engine.

Professional practice owners face a specific challenge when they try to scale. Licensing restrictions block outside investors from buying in.

Private equity, family office capital, strategic partners — all prevented from owning the clinical side. The MSO solves that problem directly.

Investment Attraction

Private equity firms and other investors cannot directly invest in professional corporations due to licensing restrictions and corporate practice laws. They can acquire ownership stakes in MSOs.

The economic performance of the professional practice flows to the MSO — and its investors — without violating professional licensing requirements.

This opens access to capital that was previously unavailable to practice owners. Faster expansion. More ambitious growth strategies. And a broader pool of potential buyers when you eventually want to exit.

Faster Expansion

When you add a new location, the existing MSO immediately provides billing, IT, human resources, and compliance support.

No setup time. No hiring administrative staff from scratch. The timeline from location identification to revenue generation compresses significantly.

Enhanced Business Valuations

MSO structures typically produce better business valuations during exit transactions. The separation of clinical and administrative functions allows for more sophisticated valuation approaches.

Scalable administrative capabilities, standardized operations, and diversified revenue streams are all factors that sophisticated buyers assign a premium to.

Consider this: a dental MSO started with three practice locations and grew to 25 locations over five years through strategic partnerships and acquisitions.

The proven administrative platform attracted both individual practitioners and private equity investment. Standardized operations and centralized management made that growth possible without sacrificing consistency across locations.

Build the MSO correctly from the beginning and you’re not just building a practice.

You’re building a platform.

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Using MSO to Fund Cash Balance Plans for Tax Reduction

Now we get to the part that changes the math entirely.

At Revolutionary Wealth, cash balance plans are one of the core tools we deploy inside MSO structures.

These defined benefit retirement plans allow business owners to make substantially larger tax-deductible contributions than a traditional 401(k) or profit-sharing plan. Depending on age and compensation, annual contributions can reduce taxable income by $300,000 or more.

A cash balance plan is a type of defined benefit pension plan that promises participants a specific account balance at retirement.

Unlike traditional pension plans, cash balance plans define benefits in terms that resemble defined contribution plans — easier to understand, easier to communicate to participants.

The MSO structure enables business owners to maximize cash balance plan contributions by employing themselves through the MSO.

The MSO establishes the plan covering its employees, including business owners working in administrative capacities. This arrangement allows for substantial tax-deductible contributions while maintaining full compliance with employment and retirement plan regulations.

Here’s the math on a real scenario: a 50-year-old business owner implements an MSO structure and establishes a cash balance plan through the MSO. Based on age and compensation, the plan allows for annual contributions of $275,000.

That contribution is fully deductible to the MSO, reducing taxable income by $275,000. At a combined federal and state tax rate of 40%, that’s approximately $110,000 in annual tax savings.

That’s not an estimate. That’s what the numbers produce.

The contribution is deductible in the year it’s made. No deferral. No waiting. Immediate relief.

Time for a refill — because the next section is about what those contributions actually build over time.

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Building Wealth Through Cash Balance Plans

At Revolutionary Wealth, we help successful business owners implement cash balance plans inside MSO structures. The wealth-building potential of these plans extends far beyond the annual tax deduction.

Long-term wealth accumulation through cash balance plans results from the combination of large annual contributions, tax-deferred investment growth, and compound returns over time.

The 401(k) contribution limit is roughly $24,500 a year in 2026, including catch-up contributions for those over 50. Cash balance plans allow business owners in peak earning years to contribute hundreds of thousands of dollars annually.

That’s not a rounding error. That’s a fundamentally different trajectory.

All investment returns inside the plan grow tax-deferred until withdrawal. The full return compounds without annual tax drag.

That compounding effect, applied to large contributions over many years, produces results that traditional savings vehicles simply cannot match.

Here’s what the numbers look like: a business owner contributes $250,000 annually to a cash balance plan for ten years, assuming a 7% annual investment return.

After ten years, the plan contains approximately $3.45 million — about $2.5 million in contributions and nearly $1 million in investment growth.

Plan assets also carry meaningful creditor protection under federal and state law. Business liabilities, lawsuits, financial challenges — retirement plan assets are generally shielded.

For business owners with real exposure, that matters more than most financial projections account for.

At retirement, participants choose between lump-sum distributions or annuity payments. Lump-sum distributions can be rolled to IRAs for continued tax-deferred growth and flexible withdrawal options.

Here’s the complete case study: a medical practice owner implements an MSO structure at 45 and establishes a cash balance plan. Over 15 years to retirement at 60, the owner contributes an average of $225,000 annually.

At 7% annual investment return, the plan accumulates approximately $5.4 million. Tax savings during the accumulation phase total approximately $2.25 million at a 40% marginal rate.

For comparison — if that same owner had been limited to maximum 401(k) contributions of approximately $25,000 annually, the total accumulation over that same 15-year period would be about $600,000.

$600,000 versus $5.4 million.

That’s the difference.

Maple Syrup and Cream

The other day I was about to run and grab some simple syrup for my coffee to stir together with my cream. Grace stopped me and asked, “why don’t you try maple syrup?”

You would have thought she asked if I wanted to see sliced bread invented in front of my eyes. I had never entertained it as a possibility to mix well with black coffee.

Alas I ordered some organic maple syrup from Walmart and blended it with my cream. It’s amazing and dangerously good.

Plus, it has to be healthier than most flavored creamers you can buy off the shelf. Try it and let me know what you think.

See you next time, cheers!

Frequently Asked Questions

Can any business use the MSO model, or is it limited to healthcare?

While MSOs originated in healthcare, the model has expanded to legal firms, accounting practices, veterinary clinics, dental practices, and other professional services. Any business with licensed professionals providing services can potentially benefit from MSO structuring, though specific regulations vary by industry and state.

What are the typical costs associated with establishing and maintaining an MSO?

Initial MSO formation costs range from $15,000 to $50,000 in legal fees, plus state filing fees. Annual maintenance includes legal compliance reviews ($5,000 to $15,000), accounting services ($10,000 to $25,000), and potential consulting fees. Tax savings and operational efficiencies typically provide positive ROI within the first year.

How quickly can a business owner start seeing financial benefits from an MSO structure?

Tax benefits can begin immediately upon MSO formation and execution of the Management Services Agreement. Operational efficiencies typically emerge within 3 to 6 months as administrative functions transfer to the MSO. Cash balance plan contributions can commence in the first plan year, providing immediate tax deductions.

What happens if the business owner wants to sell their practice — does the MSO structure complicate the transaction?

MSO structures can actually enhance business valuations by demonstrating scalable operations and attracting a broader pool of potential buyers, including private equity firms. The separation of assets between MSO and professional entity provides flexibility in structuring transactions, though proper legal guidance is essential for the optimal deal structure.

Are there any risks associated with MSO structures that business owners should be aware of?

Primary risks include regulatory non-compliance leading to licensing issues or financial penalties, improper fee structures violating state laws, and inadequate legal documentation. These risks are mitigated through proper initial structuring with experienced legal counsel and ongoing compliance monitoring.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

My business and our affiliate were both underwater. We were 25% behind our production goal for the year.

Our affiliate was sitting at 30% short of theirs. Two months left on the calendar and the math was not friendly.

The easy response — the one most business owners make — is to keep pushing and hope the final stretch picks up. Work harder. Trust momentum. Put in more hours.

We did not do that.

We sat down and had a candid conversation about what had to happen. Not vaguely. Not “we need to close more business” or “let’s pick up the pace.”

Specifically. Which clients. Which conversations. Which decisions had to be made on which specific dates within a specific window for us to still hit the number.

We laid out the exact sequence that had to execute.

Then we ran it.

We hit our production goal with 3 business days remaining.

That is not a hustle story. That is a situational awareness story.

And the difference between those two things is the difference between success and failure in business and financial planning.

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What Situational Awareness Is

Anybody with a sports background already understands this concept intuitively.

You are playing football. It is the two-minute warning. You are down by three. You know exactly which plays you are running. You know where to line up.

You know that if a certain route doesn’t open, you go to your checkdown immediately — because time is the resource you cannot recover.

Baseball. You are on the base paths in the seventh inning with two outs. The count goes full. Before the pitch even happens, you already know what you are doing.

Every scenario is pre-processed. Speed, angle, the outfielder’s arm — you have read the situation and prepared your response before the situation demands it.

That is situational awareness. The real-time processing of where you are in the game, what the moment demands, and what has to happen next.

Elite athletes do it without thinking. The great ones make it look effortless because they have rehearsed every scenario until the right response is automatic.

The same thing is true in business. The same thing is true in your financial plan.

The question is whether you are actually doing it.

The Biggest Mistake Business Owners Make

I watch business owners work hard every day. I do not question the effort. What I question is the awareness.

There is a version of running a business that looks like this: January, full of energy and good intentions. February and March, grinding. By July, you have a general sense of whether it has been a good year or a slow one. December hits and you find out the score.

That is not a business strategy. That is hope with a calendar attached.

The biggest mistake I see — from owners I respect, people working genuinely hard — is confusing effort with situational awareness.

You can work 60 hours a week and still not know where you are relative to your goal.

You can care deeply about your business and still not have a clear read on the specific levers that determine whether December 31st is a win or a miss.

Somebody in every organization has to stop and call the moment.

Has to say out loud: this is where we are, this is where we need to be, here is the specific gap, and here is the sequence that closes it.

In most small businesses, that person is the owner. It does not have to stay there. But somebody has to play that role. When nobody does, the two-minute drill never gets called.

Subscribe now to keep reading. Each week I break down the real moves that separate the owners and retirees who win from the ones who wonder what happened.

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The Sequence That Saved November

When my business partner and I sat down the second week of November, we did not talk about effort. We did not motivate each other. We talked about math.

25% short. 30% short. Eight weeks. Here is what has to happen.

We identified which specific conversations needed to happen, with which clients, by which dates. We built a sequence. Not a general plan — a sequence.

This conversation by this date. This decision by this date. This close by this date. If these slip, here is the contingency.

Then we executed it.

Three business days left in December; we crossed the line.

The reason we hit the goal was not that we worked harder in December than we had in October.

The reason we hit the goal is that we knew exactly what had to happen and we called it with enough runway for the sequence to execute.

Situational awareness gave us a window. We used it.

Situational Awareness for Clients

Last year, a client came to me sitting on the fence about an annuity.

Rates were being cut. There was a real sense that the market could correct. The environment was moving. And she was not sure. She wanted more time. She wanted to wait and see.

We had a now-or-never conversation.

Not pressure — I want to be clear about that. It was an honest, direct read of her situation.

Where rates were going. What the market was signaling. What waiting another 30 or 60 days actually cost her in real numbers. What she was trying to protect and what the window for protecting it actually looked like.

She made the decision that day.

Eighteen months later, she is up 35% with 55% principal protection. The market has done what markets do — it has moved, shaken, created the kind of uncertainty that keeps people up at night.

She slept fine. Because she made her decision when the situation called for one, not when she finally felt completely comfortable.

Comfort is not a strategy. Comfort is a feeling. The situation demanded a response. She responded.

That is situational awareness applied to financial planning.

Three Questions Every Owner and Planner Need to Answer

Situational awareness, applied practically, comes down to three questions. Most people cannot answer all three on a given Tuesday in October. Ask yourself right now.

Where are you relative to your goal, specifically?

Not a general sense. Not “we’re doing okay” or “a little behind.”

What is the number? If your production goal is $1.4 million and it is November 7th, what do you need to close in the next eight weeks to still hit it?

Put the number on the table and look at it.

What has to happen, on which specific dates, to close the gap?

Not “we need to pick it up.” Which conversations. Which clients. Which decisions.

The sequence has to be specific enough that you can put it on a calendar. If you cannot schedule it, it is not a plan. It is wishful thinking.

Who is responsible for calling the moment?

This is the question most businesses never ask. Somebody has to hold situational awareness as their job. Somebody has to be the one who stops and reads the game.

In a small business, that is usually the owner. In a financial plan, it is your advisor — or it has to be you.

When nobody owns this role, the two-minute warning comes and goes without anyone noticing.

The Difference Between Success and Failure

My business partner and I did not discover some secret to production in November.

We sat down, called the situation as it was, built a specific sequence, and executed it.

Three business days left. Goal hit.

My client did not stumble into a 35% gain with principal protection. She made a decision when the window was open. The window is gone now.

The people who hit their goals are not smarter than the people who miss them. They are not working harder.

They are more aware of the game they are in, and they have someone — themselves or a trusted advisor — calling the moment when the moment arrives.

The two-minute drill requires someone running it.

Are you situationally aware?

That is the difference.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

She sat down on a Zoom call with me — her and her business partner, running a thriving physical therapy group across four locations. Between the two practices, they were clearing over $1.2 million a year.

She was doing almost everything right. Good revenue. Solid team. Growing locations. And writing a check to the IRS every April that made her sick.

“Drew,” she said, “every year I sit down with my CPA, and we buy equipment, max out the 401(k), and I still owe more than I can stomach.”

She wasn’t wrong to be frustrated. She was describing exactly what I see with successful practice owners: a great business trapped in the wrong structure. A dollar lost in taxes is a dollar gone forever.

What she needed was an MSO.

Grab your mug and pull up a chair. This one’s going to take a few minutes, but by the end you’ll understand exactly how the MSO model works — and why it might be the most important structure you haven’t built yet.

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What Is the MSO Model

A Management Services Organization is a business entity designed to provide administrative services and operational support to professional practices.

The MSO model creates a clear separation between the delivery of professional services and the management of business operations.

Think of it like a football team. The quarterback is on the field calling plays, making real-time decisions, and running the offense.

But there’s an entire organization behind him — the front office handling contracts, the facilities team managing the stadium, the marketing department selling tickets. They don’t run the ball. But the franchise doesn’t function without them.

That’s the MSO structure. The professional practice — your clinic, law firm, accounting practice — stays on the field. The MSO runs everything behind the scenes.

Here’s what an MSO handles: billing, human resources, payroll management, information technology, marketing, compliance oversight, and facilities management.

The licensed professionals keep full control over clinical decisions, patient care, and professional standards. The MSO runs the business of the business.

This separation solves a specific regulatory problem that trips up a lot of practice owners. In many states, corporate practice of medicine laws prohibits unlicensed individuals from owning medical practices.

Private equity, family members, business partners without a license — all blocked from owning the clinical side. But those same laws typically allow non-licensed entities to provide management services to those practices.

That’s not a loophole. That’s the structure working exactly as designed.

The MSO model was developed in the healthcare industry during the 1990s consolidation wave, when practices needed professional administrative support without surrendering clinical control.

Today it’s used in legal services, accounting firms, veterinary practices, and a growing list of other professional service businesses.

The core principle stays the same regardless of industry: separate the professional from the administrative.

How the MSO Model Works for Business Owners

The operational structure of a management services organization centers on a contractual relationship between two distinct entities: the MSO and the professional entity.

This relationship is formalized through a Management Services Agreement — the MSA — that clearly defines the scope of services, compensation structures, and operational boundaries.

Licensed professionals maintain ownership and control of the professional entity. All authority over professional decisions, patient care protocols, and service delivery standards stays with them. That doesn’t change. What changes is who runs everything else.

The MSO operates as a separate business entity providing comprehensive administrative services. Revenue cycle management. Billing and collections. Payroll. Human resources. IT support. Marketing. Facilities management. Regulatory compliance.

All of it flows through the MSO.

Here’s what this looks like in practice: a dental practice with five clinic locations implements an MSO structure to centralize administrative functions. The dental professional corporation retains ownership of clinical equipment, patient relationships, and treatment decisions.

The MSO handles appointment scheduling, insurance billing, staff payroll, marketing campaigns, lease negotiations, and compliance documentation across all five locations.

Financially, the relationship works through management fees outlined in the MSA. The professional entity pays the MSO a management fee — structured as a percentage of gross revenues, a fixed monthly amount, or a combination of both.

Patient revenues flow to the professional entity, which pays the agreed-upon fee to the MSO. The MSO covers administrative expenses and generates profits for its owners.

That fee structure is the foundation of the tax strategy. The numbers get interesting fast.

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To Be Continued…

In my next post I’m breaking down exactly where the money is.

The tax benefits of the MSO model, the cash balance plan math that lets business owners reduce taxable income by $300,000 or more annually, and what it actually costs to build this structure from the ground up.

Part 2 is where the physical therapy practice owner’s story gets its ending.

Pilgrim Coffee Lavender Honey Latte Review

I was in Kansas City for meetings last week and I stopped by one of my favorite shops, Pilgrim Coffee.

Walking in they had their seasonal board, being honest I normally ignore seasonal drinks. One of the items caught my eye, a lavender honey latte. I hadn’t had a lavender honey latte in years!!

It’s one of my favorite drinks that I don’t see that often, so I had to order it. I subbed normal milk for oat milk; I typically do these days.

That latte was fantastic; it was possibly the best lavender honey latte I’ve ever had. Both flavors were perfectly balanced and came together nicely. Often times you will see that it favors one or the other, this one was a perfect blend of the two flavors.

If you’re in the Overland Park area during the Spring, I would put this as a must try.

See you next time, cheers!

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

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