One More Year Syndrome: Why Proactive Tax Planning is the Cure for High-Net-Worth Retirees
Episode 29
One More Year Syndrome: Why Proactive Tax Planning is the Cure for High-Net-Worth Retirees
Published on April 1st, 2026
Episode Summary
Episode 29 of Retirement Tax Matters analyzes the profound mathematical leverage found in delaying retirement, centered on the 2018 NBER study titled The Power of Working Longer[cite: 4446]. Garrett Crawford, CFP® professional, explains the non-intuitive finding that working just six months longer at age 66 can increase a retirement standard of living as much as having saved an additional 1% of annual salary for the previous 30 years[cite: 4290]. The conversation breaks down the three primary drivers of this miracle math: the 8% annual Social Security deferral boost, the preservation of portfolio assets, and the mathematical reduction of the retirement spending horizon. For high-net-worth retirees in the $2M–$8M range, the discussion shifts to the critical tax friction created by high late-career salaries, including the risk of higher tax brackets, Medicare IRMAA surcharges, and the Net Investment Income Tax. Garrett emphasizes that while working longer typically puts a family ahead financially, it requires proactive tax-return-driven planning to manage the lost golden window for low-bracket Roth conversions. Ultimately, solving One More Year Syndrome requires balancing these powerful mathematical gains against the psychological identity of a high-achiever and the diminishing marginal utility of extra wealth versus the value of time.
Key Tax Planning Questions
Question 1: How does proactive tax planning help me decide if "one more year" of work is worth it or not?
Generally speaking, as long as you have your health and the option to work, the numbers will almost always favor staying at your desk. Between the growth of delaying your Social Security filing date, the preservation of your portfolio, and the extra year of compounding, working One More Year is a financial strategy that almost always works to your benefit. Even past age 70, when the Social Security credits hit their ceiling, the simple act of not touching your investments for 12 more months provides a massive tailwind to any retirement plan.
For the self-made, high-net-worth retirees we work with, success usually doesn’t happen by accident. You reached a $2M-$8M portfolio because you mastered the discipline of living on less than you made and consistently putting money away for the future. While that skill is admirable, it can become a possible hindrance that keeps you working longer and spending less than you truly desire.
By doing proactive tax planning in advance of the December 31st deadline, we move beyond pre-tax gross numbers and focus on what actually ends up in your bank account. When you can see exactly what your after-tax net income looks like, the decision changes from optimizing the numbers to optimizing your life.
Ultimately, this level of planning helps you understand exactly how much is going to the IRS and how much is staying with you. It provides the clarity to see if your retirement plan is tight or if it is unnecessarily conservative.
Question 2: Why is Social Security so important to the One More Year concept? I was thinking about filing at age 62.
This is one of the most hotly contested topics I deal with as a financial planner, especially for clients with $2M–$8M portfolios. When you aren’t dependent on that monthly check, it’s easy to let political feelings or concerns about Social Security trust fund insolvency drive some to take their benefits early.
While I don't have a crystal ball, I lean towards Social Security being a foundational piece of our economy. Even with the current discussions around 2033 insolvency, I tend to think a benefit cut for retirees is unlikely. Especially in a climate where we just saw the passing of the Enhanced Senior Deduction, which effectively allows many retirees to shield an additional $6,000 to $12,000 of income from federal taxes.
For the high-net-worth retiree, I wanted to share two important concepts that might cause you to delay from 62 until a later date:
1. The Ultimate Survivor Benefit:
Social Security is likely one of the few assets you own that is inflation-protected and guaranteed for as long as either you or your spouse is alive. If you were the higher earner and have a shorter life expectancy than a spouse, delaying until age 70 isn't just about your check; it’s about locking in the largest possible survivor benefit for your spouse. Year-to-year, the Cost-of-Living Adjustments (COLAs) might not feel like much, but over 20 or 30 years, that compounding inflation protection on a maxed-out age 70 benefit becomes an insurance policy that is difficult to replicate.
2. Forced Income For Surviving Spouse: In many of the families we serve, one spouse usually plays a major role in the family finances while the other plays a more passive role. I’ve seen surviving spouses with $2.5M of investments who are reserved to spend money because they don't understand how a investment statement balance can translate into monthly withdrawals. They can see withdrawals as being risky so they leave it untouched.
What started as a plan to protect a surviving spouse can often end with the survivor being unnecessarily conservative and lowering their quality of life. Delaying Social Security to 70 provides that surviving spouse with a guaranteed, familiar cash flow. It is much easier for a survivor to spend a $5,000 monthly Social Security check than it is for them to calculate a safe withdrawal rate from a fluctuating $2.5M portfolio. Delaying to 70 buys your spouse the psychological freedom to actually enjoy the money you worked so hard together to save.
Question 3: I'm 68 years old and my wife is 64. We’re very confident we have enough to retire comfortably with a retirement portfolio of $2M, but when I retire, I would sell my business which is probably worth another $2M. We have no debt, and I've been thinking about taking my Social Security. Our health is good, but the prospects of my business growing if I keep at it a few more years is alluring. I keep thinking this is the year to retire, but then I keep saying, 'If I work one more year, it will be worth it.' Do you have any thoughts? We have no debt, but aren't quite sure when it makes sense to retire.
This is a great situation to be in, but a proper answer would require many more details. For example, how much income this couple needs to live on, their legacy goals, and their actual risk tolerance.
However, this is a perfect example of a common struggle for high-net-worth retirees. Most business owners remember how lean the building process felt for decades. Now that they are seeing the fruition of their life’s work, and the business is growing at a speed that makes it hard to leave, it’s easy to see the costs of selling and overlook the benefits of retiring.
Here a few topics I would walk this couple through:
1. The Social Security Strategy
I’d likely start with Social Security. Delaying the husband’s benefit from age 68 to 70 would almost certainly make sense. He’s only two years away and has a large enough portfolio that they could afford to bridge the gap to 70 by taking income from their investments instead. Even if it means eating into principal for two years, it allows his Social Security benefit to grow by another 16% (8% each year). That is a monthly check that is inflation-protected and will last as long as either spouse is alive. The COLA inflation protection is very hard to replicate elsewhere.
2. The Business Exit and Taxation
Next, we would want to look at the business sale. We need to know if taxes on a $2M business sale would hit all in one year or be spread out. If their taxable income is going to spike significantly, they might consider a Donor Advised Fund (DAF) if they are charitably inclined. A DAF can prevent a large portion of that business sale from being taxed today, while allowing them to maintain control over those charitable gifts over time.
3. Stepping Outside the Spreadsheet
The real question here is: How do you know when it’s time to sell? This is where you may need to step away from the calculators and spreadsheets and perhaps your spouse (or other significant relationship in your life) a chance to voice their feelings. I’ve found that a spouse who isn’t as involved in driving family finances usually brings a lot to the table for the discussion of when enough is enough.
After thirty years of building a company, one spouse may be more tired of the stress than the other. They might gladly trade another million in the retirement portfolio just to see their spouse finally disconnected from the grind of entrepreneurship. Having the potential for more money can cause all of us to make decisions differently than we might ought.
I would encourage this couple to focus on their non-financial goals. If they are willing to have those honest conversations with each other or their trusted peers, I think they’ll find that whatever direction they choose will lead to a happier more at peace retirement.
Full Episode Transcript
Adam: Good morning and welcome to Retirement Tax Matters. I'm Adam Reed. This is Garrett Crawford, our resident CFP® professional. How are we doing this morning, Garrett?
Garrett: Rounding into spring, I guess. I think this morning I drove through a river of pollen to get to the office. In fact, I probably had to get out in my canoe to go up North Shore Drive here in Knoxville, but pollen is everywhere.
Adam: I wonder if it's a thing everywhere. At least in East Tennessee, we talk about how terrible the allergies are. We actually had a client the other day in Atlanta who said, "Oh, I'm from East Tennessee. It's even worse in Atlanta." I felt my pride and ego being attacked. I thought I had it worse than anyone else, but apparently, maybe that's a badge of honor for everyone, that my spring is the worst, my pollen is the worst.
Garrett: If anybody is from California, we'd love to hear in the comments if allergies are really bad on the Pacific coastline. Hopefully not. Hopefully, somebody is surviving this, but in California, they also say their allergies are the worst in Los Angeles. I guess they probably have other issues out there.
Adam: To put it in perspective, I have a Toyota Camry that's brownish-gold, and it is lime green right now. I need to go get it washed because our tree sits right over our driveway, and I park my car outside, so it looks snot green.
Garrett: But I will say for me, even if others wouldn't agree, the tradeoff of pollen and a little bit of sneezing is warmer weather. The hope of summer is on the horizon. I would take that, but I've also heard other people say they wish winter would last forever. We are almost there. Warmer weather is around the corner.
Adam: We wanted to dive in. We have been going through a series—I think we've done four episodes now—on early retirement. We looked at health insurance, Social Security, and different retirement vehicles, discussing how we are going to access retirement funds if we retire early. Maybe some people were watching those, or maybe some people clicked past them and said, "Well, that's not me. I am never going to retire early." I thought about that, and so here we are. We started having some conversations about this and actually came across something interesting that I hadn't heard of, but it makes a lot of sense. I have heard of the principles, but there is a name for it. It feels like we have a name for everything here in 2026. It is the "one more year" syndrome. If I can just work one more year, what does that get me in terms of my retirement? Maybe some people watching have searched that or heard of that and landed on this video. Give us a crash course. What is the one more year syndrome, and what does it mean for retirees? Then we will dive into the math of it and the mind of it.
Garrett: I think all the episodes we do are helpful, or else we wouldn't do them. But this one in particular, as I was preparing for it, I realized I've heard this stat for years, but I had never really looked for the official paper on this. This morning, as I was preparing, I wondered how many people out there truly internalize the long-term impact of working one more year. This was something I heard about many years ago, and I have it printed out here. It's 43 pages long, produced not by some fly-by-night operation, but by the National Bureau of Economic Research in 2018, which goes back to about when I first heard about this.
Adam: Isn't it funny? If you told me 2018 without prefacing it, I'd say, "Oh yeah, a couple of years ago." It's been eight years now. I had no kids in 2018.
Garrett: Life moves fast. The title of the paper is "The Power of Working Longer," authored by Gila Bronshtein, Jason Scott, John Shoven, and Sita Slavov. It is a 43-page paper on this idea of one more year. Sometimes people in our field call it the one more year syndrome. You can google that, or maybe we will link to the paper in the YouTube description or on our website. Before I get into what it says, I should give a little disclaimer. We record this podcast every Thursday morning, and between Thursday and when it comes out on Wednesday, we do a lot of other stuff. Every week we release a page on our website, Retirement Tax Matters, where we list our recently produced podcasts. This will be on the website next Wednesday. Below our video, we have three key tax planning questions. After this episode, I sit down and think about what three questions somebody listening to this podcast would find high value from, and I write answers to each of those. It will be cool to see how we weave this podcast conversation into those answers. There are two ways to get those. One, remember to go to our website and read those key tax planning questions. Two, go to our website and subscribe to the newsletter. I send those three key tax planning questions right to your inbox every week, along with another level of anecdotal experience from a financial planner on how I embrace this subject. Podcast, plus key tax planning questions, plus a more personal financial planning perspective on the topic to your inbox every week. I didn't mean to play the sales guy here, but it's free. That is a great deal.
Garrett: I feel like the amount of content we are producing is really cool. I didn't have that on my agenda to talk about this morning, but this is a key topic where I think a lot of people would benefit from following up with the additional work we are doing. Let's get to the meat and potatoes. Let's dig in, as Dick Vitale might say on college basketball. The power of working longer, the one more year syndrome. Here is the crazy stat. This paper did a lot of review, and they say that if you delay retiring—if you work three to six more months—that is equivalent to one more percent of saving for your past 30 years of working. Many of you didn't have a 401k your entire lifetime, but you probably did towards the end. Sometimes an employer would do a 3% or 6% match, and maybe you put in 6%. If you delay your retirement by three to six months, it would be almost like you had put in 7% of your salary for 30 years. That is an unbelievable number.
Garrett: To make it hit home a little bit more, this paper says if you delay retirement by one year, that would be the equivalent of making an additional 3% contribution to that 401k for 30 years. If you contributed 6%, it'd be like you contributed 9% to your 401k for 30 years. As I was reviewing it this morning, I realized that is really powerful. Many people listening are probably in their fifties, sixties, or seventies, but it is something that even Adam and I in our thirties need to internalize, ensuring we are saving the right amount based on a timeline of how long we want to work. Some of that is uncontrollable, but the next step is asking how they are making these big claims. Is it made up? The 4% withdrawal rule sometimes catches heat because there are a lot of stipulations.
Adam: Being somebody in the industry, when I heard that, I rubbed my eyes wondering if I was still waking up. It seems like a lot. Tell us how they came to that conclusion.
Garrett: I think the biggest reason is people underestimate the power and amazingness of a Social Security benefit. Every year after your full retirement age, which for many of you is 67, your benefit increases. For all of you with a full retirement age of 67, every year you wait, you get an 8% increase in your Social Security benefit. Many people are familiar with that stat, but here are two things people miss. It's not just every year you wait that you get 8%; it's every month. If I did my math right this morning, every month you wait, you get a 0.67% increase in your Social Security benefit. You don't have to wait the whole year; it's credited monthly. Probably the bigger factor is that not only is it growing, but it also has a cost-of-living adjustment protection. It is inflation-adjusted every year. Inflation protection is something people often just assume Social Security has, but it is a huge feature. If you tried to buy inflation protection on a long-term care policy, an annuity, or a pension, those are expensive features to add. Back in the COVID years, inflation was sky high, and Social Security kept up with it. That Social Security lever of monthly growth is an income-producing asset you cannot outlive. That is a huge component of delaying retirement. You gain an income-producing asset that pays more each month and is cost-of-living protected.
Garrett: The second component is that by delaying retirement, you are not taking distributions from your portfolio. This has two levels. First, portfolio preservation: you are not taking any money out. If you needed to take $90,000 out of your 401k, keeping your job means you keep that $90,000 in your 401k. Second, portfolio growth: the dollars that didn't come out as distributions continue to grow. If you have $90,000 in your 401k and it grows by 5% or 10%, that is compounding growth. The final component, and arguably just as big, is that you have one less year at the end of your life where you have to distribute money from your 401k. You effectively haven't used $90,000 the first year, meaning one less year of portfolio withdrawals. So, increased Social Security, fewer distributions, and one less year of retirement. This can really compound when you have somebody who likes their job, doesn't want to retire, and has probably saved more than expected. It is a good problem to have.
Adam: A good follow-up question would be to start on the spreadsheet side. This isn't anecdotal data; it is data compiled through market ebbs and flows and different portfolio pressures. It's a good place to start, and then maybe we can move into what it really means for each of us individually. Many people listening are already handling tax efficiencies around the edges, avoiding Medicare or IRMAA surcharges with Roth conversions, and navigating the 3.8% net investment income tax. Is it really worth working one more year for people with high salaries, or will it trigger too many taxes? Help me think through the technical side. Is there anything you'd be aware of if one more year is the route you want to go?
Garrett: One thing I know about the crowd listening is that most of them hate taxes. You have paid a lot of taxes in your life, and paying more doesn't sit well. You'd love to minimize that. From a technical calculator perspective, yes, if you work longer past Social Security age—say you are 70 and love your job—you will have more money. But questions arise: if I keep working with a high salary, won't my Social Security benefits be taxed at a higher rate? What happens if I move from the 24% bracket up to the 32% bracket? That seems like a bad idea. I have a scenario right now where clients over 70 are still working, collecting $60,000 in Social Security, and moving from married filing jointly to single pushed them into the 32% bracket. That is not ideal. However, if you run the numbers, if you like your job and find fulfillment, you will have more money at the end of the year even with additional taxes. Retirees sometimes have pensions dangled in front of them, and people get cute with the math. Generally speaking, working a job you love and making money will leave you with a better after-tax income. I highly encourage running the numbers. As a financial planner, the part that feels like a dagger to the heart is the missed opportunity during the golden window of Roth conversions. This is often the period between when you retire and when Social Security kicks in at 70, or when RMDs begin at 73 or 75. If you keep working, make a lot of money, and collect Social Security, you are reducing that golden window. That is the fun period where we get to help people convert money from an IRA to a Roth. Working likely puts you ahead financially, but tax return driven financial planning is a big deal to review every year.
Adam: I think we talked about the math now, kind of the mind. There are generally two camps: the optimizer who wants to pull every lever, press every button, and says, "Let's go, babe, cancel retirement, we're working 10 more years." And then you have the time-value person who realizes time is their most limited, maybe most precious resource. They want to maximize their time and don't want to work more. How do you help both see the pros and cons and land on what really works best for them and their family?
Garrett: The one more year syndrome impacts more people than others. I would start with the identity crisis of a high achiever. The people we work with have amassed sizable wealth. Many are self-made because they know how to spend less than they earn and build businesses. For a high achiever, hearing a podcast like this can be dangerous because they are always looking to optimize the equation. Prudence can turn into never wanting to let an extra cent go to the IRS. You have to be careful not to make life solely a mathematical equation. Check yourself. Are you listening to a spouse who wishes you would just retire and enjoy life? At some point, you must figure out when your accumulation hits a point where more money has a negligible return of happiness value. When can you say your time is worth more than hours spent at work away from family and hobbies? Having a wealth psychology conversation is crucial when transitioning from accumulation to spending, preservation, or legacy planning. Have that conversation before you hit that point, so you don't find yourself working extra years needlessly instead of enjoying your time.
Adam: I think maybe the place we'll land the plane today is a practical application. Let's say I'm a high-earning 60-year-old. What are some specific things I could do heading into the fall this year? Tax return driven financial planning is what we're all about. What would you recommend them doing, or what are we doing with clients in that boat to help them decide if 2026 or 2027 should be the year they call it quits?
Garrett: It is the end of March 2026. This is an all-year conversation, especially as you get closer to retirement. Tax planning is an important ingredient to solving the one more year syndrome. Spring is the time we file and review our tax returns, and make basic projections for where our income will end up. Make a high-level projection of where your income will be. Prudent decisions are based on the information you have. Walk through creating a tax projection, evaluating capital gains, making a Social Security and estate plan, and executing at year-end to see if a Roth conversion makes sense without triggering negative tax consequences. Consider what your "enough number" is, and get into the habit of annual tax projections.
Adam: I think that last 30 seconds was power-packed full of good financial advising tips as we talk about tax return driven finance. That was almost a whole episode condensed into 30 seconds. Make sure you're doing this, this, this, and this. Clip it, send it out as a YouTube short! But I think this is a good conversation meant to get the ball rolling. Some couples will agree that working more is great; others will say they have plenty and are ready to enjoy the fruits of their labor. Our job is to help people find peace of mind to make that call. Thank you guys for joining us. Like, subscribe, and follow us on YouTube, Apple Podcasts, and Spotify. Check out the website and the newsletter. It's incredible what Garrett is doing and the value he's adding. We appreciate you joining us. I'm Adam Reed. This is Garrett Crawford, CFP® professional. We are Retirement Tax Matters.
Garrett: See you next time.