My (mother’s) biggest retirement mistake: listening to the wrong financial pro | members only

“What?” Mom replied. “Social Security is taxed?” After fretting for a few weeks, she called me, sheepish and anxious. I explained how up to 85 percent of her Social Security benefits could

be taxable if her overall income exceeded $34,000. (Up to 50 percent of benefits can be taxed if you’re a single filer and your income is $25,000 to $34,000; below $25,000, Social Security

is not taxable.) The guy who handled her rollover neglected to mention that, depending on her other income, $12,000 a year from savings withdrawals could push her over the threshold and

greatly increase her tax bill. Chastened, she contacted Joi Whitley, a local tax accountant. (She was recommended by a former VA colleague who’d also gone into private therapy practice.)

Whitley had Mom set up an S Corp, a business entity that can have tax advantages for a sole proprietor, and helped her claim work expenses on her taxes. Mom had plenty of those from her

first year of working independently — for business creation, continuing education, legal paperwork, travel costs, advertising and more. All that got her income below $34,000 and, all told,

saved her $2,500 in taxes. Whitley still works with Mom and keeps her financial anxiety in check by communicating regularly. Caryl Gobel is following her retirement dream of working as a

therapist. Cassidy Araiza “I work with your mom all year, and I send her monthly and quarterly statements. It helps her with knowing how much to put aside for taxes,” Whitley says. “If

she's made more than we expected her to make, we discuss opportunities to save on taxes to keep her from going above income levels for higher Social Security taxes, such as spending a

little bit more on business meals or networking." In my mother’s defense, she didn’t have a lot of experience with this stuff. As with many couples of their generation, my late father

had handled the family finances. “I never looked at my bank accounts until after he died,” she says. “I wanted to finally be independent, but I still should have listened to my daughter. It

doesn’t make me dependent to learn a little bit from her or my accountant.” WHAT THE PROS SAY What Mom didn’t understand is that the financial professional she was taking advice from was

probably an investment broker, not a financial planner. Brokers handle the buying and selling of investments and earn commissions on those transactions.