This interview was originally published in The Financial Tech Times.
Chuck Oliver, founder of The Hidden Wealth Solution and a 30+ year veteran of retirement planning, on the playbook that quietly fails Baby Boomers, the exit mistake most business owners can’t afford to make, and why a Roth conversion is the wrong move for 80% of the people considering one.
For more than three decades, Chuck Oliver has worked with the same client cohort the financial services industry now describes as the largest wealth transfer in American history: Baby Boomers preparing to hand off an estimated $124 trillion to the next generation by 2048, according to Cerulli Associates. As founder and CEO of The Hidden Wealth Solution, and a two-time bestselling author whose work has been featured in The Wall Street Journal, USA Today, and Newsweek, Oliver has spent 14-plus years on the airwaves of his national program Hidden Wealth Radio, watching the standard retirement playbook collide with the realities of taxes, longevity, healthcare costs, and Washington’s appetite for new revenue.
His firm organizes its work around three pillars: tax elimination, income maximization, and legacy optimization. The order matters. Get the tax piece wrong, Oliver argues, and everything else compounds against you, including, increasingly, the inheritance you leave your children. For business owners in particular, the runway before a sale is where the most expensive mistakes get made, often quietly, and almost always irrevocably.
We sat down with Oliver to talk about where the conventional advice quietly fails, what entrepreneurs miss in the years before an exit, the conversation the industry still isn’t having with women, and what AI can and can’t do for the future of financial advice.
1. The Moment the Playbook Broke
You’ve had a front-row seat helping Baby Boomers for 30 years. Was there a specific moment early in your career that convinced you the traditional retirement playbook was fundamentally broken, and that you had to build something different?
Chuck Oliver: When we’d educate people and get specific data on what they were doing, what their questions were, what their objectives were, we started commonly hearing the same questions. Not really sure what to do about my taxes in retirement. Not really sure when I should file for Social Security. Don’t know if we need a trust instead of a will. Not sure when’s the best time to retire.
The big aha was that most of these folks had what we call a big-box brokerage relationship. It was really about assets under management. That’s where it started and stopped. It wasn’t about comprehensive planning. That’s how we knew there was a major void in transitioning from the accumulation phase to the distribution and preservation phase. Most folks in financial services hang their shingle out trying to acquire assets under management, and that’s about it.
There really was never a playbook. The playbook was: hope you did well growing your money, and good luck distributing and preserving it. We knew we could fill that void, and a big part of it was around tax. Lead with tax, and everything else filters into place. People weren’t getting that done correctly, and it was causing irrevocable choices.
Take Social Security. Once you draw your twelfth check, you cannot reverse it. You can give eleven back. You can’t give twelve. People would say, “I want to rethink this. I didn’t know 85% of my Social Security was going to be taxed, costing me $12,000 a year for the rest of my life because of a decision I didn’t know I needed to make in conjunction with other important decisions.”
2. The Pillar That Surprises People Most
Your firm organizes its work around three pillars: tax elimination, income maximization, and legacy optimization. When you sit down with a new household for the first time, which of those almost always reveals the biggest hidden gap, and why does that one tend to be the blind spot?
Chuck Oliver: Without question, tax elimination, because it impacts income maximization and legacy preservation in big ways. It’s a domino effect. If you don’t get the taxes right, everything else gets negatively impacted.
3. Business Owners and the Exit Blind Spot
A meaningful share of your client base is business owners, not just retirees. What’s the most expensive planning blind spot you see among entrepreneurs in the five years leading up to a sale or succession, and what’s the conversation you wish more of them were having earlier?
Chuck Oliver: The single most expensive expense for a business owner is taxes, and ironically, it gets the least amount of attention. Many of the owners we work with say, “I know what I do in my profession, and I’m a specialist in what I do. I didn’t realize how vitally important it was to have a specialist in tax.”
A lot of business owners end up paying quarterly estimated payments, and that’s just lost revenue. If you can mitigate that tax, in some cases eliminate or drastically reduce the quarterly estimates, that’s money they could be putting back into the business to scale it, get a higher multiple on the sale, or putting back toward their own retirement.
That’s probably the second biggest void. Most business owners rely on the sale of the business to be their retirement plan. We call it a pre-sale plan versus a post-sale plan. If somebody is within three years or less of positioning their business to sell, you don’t want to wait until you’re in the heat of it. The joke is that it becomes a corporate colonoscopy. By the time you prove all the financials to your buyer, you have no time to focus on tax strategy or what you could do to mitigate taxes on the sale itself.
By having a pre-sale plan before you sign a letter of intent and start providing all those documents, we’ve actually helped business owners net a higher sale price from tax mitigation, and make it a more appealing purchase price to the buyer, because of knowing how to structure the sale from a proactive tax standpoint, as opposed to reactive.
4. When a Roth Conversion Is the Wrong Move
Roth conversions are talked about almost universally as a smart move. You’ve publicly cautioned that they aren’t right for everyone. Describe the profile of a client for whom a Roth conversion would actually be a mistake, and what to do instead.
Chuck Oliver: First, you have to actually have a tax challenge. For some people, it just sounds hip to go do a Roth conversion. If you’re not going to have a sizable amount of income in retirement, a Roth conversion may not work for you.
We find through advanced software that you have to address Social Security taxes, Medicare taxes, and legacy taxes. Maybe somebody did so well in a tax-free environment, or didn’t save much in a tax-deferred environment, that it doesn’t make sense. We find in about 80 to 85% of cases that a Roth conversion does not make sense. But in that 15 to 20%, it makes all the difference in the world.
A lot of people have been led to believe you can live on 70 to 80% of your pre-retirement income. I’ve yet to meet anyone who actually wants to retire at a lesser standard of living. You want to hit your bucket list. You want to be in your go-go years. You want to travel, spoil your grandkids. Ideally, that means more income in retirement than you had leading up to it. For heavy savers in traditional 401(k)s and IRAs, they pay every bit as much tax, or more, even in their first year of retirement. People spend quite a bit more in the first five to 10 years of retirement because they have time to do the renovation, take the dream vacation, and make the rounds for holidays and birthdays.
Here’s where it gets interesting. Some people don’t need the money in their 401(k) or IRA. They may be leaving it to charity, or they don’t have a legacy aspiration, or they may not have children. In those cases, a Roth conversion can be unnecessary. But if you want a higher standard of living in retirement and want to live more and leave more, a Roth conversion can make six- or seven-figure differences.
Here’s what people miss. There’s now an inherited required minimum distribution under the Secure 2.0 Act. If the person you inherited the IRA from had already been required to take RMDs, you have to follow suit. Most people thinking, “I’ll never spend this, I’ll just leave it to my kids,” are passing on a 40 to 50% tax bill to their adult children. The great wealth transfer we refer to, rumored to be $124 trillion changing hands between now and 2048, and each generation is ill-prepared to know how to handle it.
I think of Chris, a client who reached out last year. His father left him an IRA, and he wanted to Roth convert it. The challenge: you cannot Roth convert an inherited IRA. You can only Roth convert your own IRA, which his parents never got to, which is why we’re getting more referrals to older parents with high-balance IRAs.
In Chris’s case, the first-year required distribution was going to be $10,000. He and his wife are in the highest federal and state tax brackets in Colorado. So 42%, or $4,200, of that $10,000 went right out the door to the IRS, and there wasn’t anything he could do about it other than the tax strategy we showed him to create deductions and pull roughly $300,000 out of the inherited IRA untaxed. Inherited RMDs increase every year. Ten grand becomes twelve grand becomes fifteen grand. Every year, the government gets a bigger bite of the apple, and they know it. They’ve changed the rules four times since 2019.
I encourage everyone: look at your own personal situation. See the math for yourself. Don’t listen to some CPA telling you it’s worth it or not worth it. Don’t listen to some financial professional telling you it’s worth it or not worth it. Get the numbers run for yourself, and then you can decide.
5. The Tax Shift No One’s Preparing For
With key provisions of the 2017 Tax Cuts and Jobs Act still in flux and Washington wrestling with the federal deficit, what tax or policy shift over the next five years are you most actively preparing clients for that the broader public isn’t paying attention to yet?
Chuck Oliver: Fortunately, key provisions of the Tax Cuts and Jobs Act were extended, but permanent really isn’t written in pen when it comes to tax code. It’s written in pencil.
The biggest risk is what we call legislative risk. Look at how states are responding. There are discussions around wealth taxes, rising state-level taxation, and broader efforts to generate revenue from higher earners.
There have also been discussions around restricting Roth conversions based on income levels, as well as proposals involving expanded required distribution rules tied to larger retirement account balances. Whether or not those proposals become law, the direction of the conversation matters.
Right now, if you’re born in the 1950s, your first required distribution is age 73. If you’re born in 1960 or later, age 75. Prior proposals have included means-testing retirement distributions for households with larger IRA and Roth balances.
So legislative risk is the biggest risk: rules changing at the state level, the tax level, and the retirement-planning level in ways many people are not proactively preparing for. A close second is the deficit. The interest on our debt alone now exceeds a trillion dollars. We’re approaching $40 trillion in debt as of this discussion. We’re running roughly a $2 trillion annual deficit, and the Congressional Budget Office projects close to $30 trillion of additional cumulative deficit spending over the next 10 years.
That’s not somebody making it up on the sidelines. That’s the Congressional Budget Office, the controller of the U.S. government. Somebody’s going to have to pay for that, and typically the people working hard to earn it and save it are the ones most exposed to future tax increases.
6. The Conversation We Don’t Have With Women
The statistical reality is that most married women will eventually manage household finances on their own. Setting aside the widow tax penalty itself, how does the broader “hidden wealth” conversation need to look different for women approaching, or already navigating, that transition, and where does the industry most often drop the ball?
Chuck Oliver: Even setting aside the widow tax penalty (and we see cases where joint filers in the 22% bracket jump to the 32% bracket as a single filer, which is devastating), there’s a lot more going on.
Once you’re down to a single spouse, any IRA that doesn’t get spent doesn’t transfer to a surviving spouse anymore, so the inherited IRA becomes a big challenge. Not only that, but if the surviving spouse inherits the IRA from their late partner, they now have a bigger required minimum distribution themselves. Their income can go up, even though they lose the lower of the two Social Security benefits. That’s a misnomer for a lot of people. The surviving spouse retains the higher of the two benefits, not both.
If that widow or widower is accustomed to a certain lifestyle, they start busting through the Medicare brackets too. The IRMAA surcharges (income-related monthly adjusted amounts) kick in. As a married couple, your income threshold is double the size before you start being means-tested on what gets pulled from your Social Security check. As a single filer, you bust through that much faster. It can be thousands of dollars a year in lost benefits. So you bust through the tax brackets, you bust through the Medicare brackets, and you face deeper risk of leaving sizable inherited RMDs.
Probably the biggest issue, and we see it both female-to-male and male-to-female, is that the surviving spouse tends to be the one who was not the leader on family finances. I can only imagine the emotional toll of losing a spouse. I went through that with my mother losing my father, and then on top of it, the surviving spouse isn’t really sure where things are. Not sure which account to pull from. Not sure how to retitle this. The trust wasn’t updated, the bank and brokerage accounts weren’t coordinated. There’s this overwhelming feeling of, my goodness, what am I supposed to do?
That’s why you see articles suggesting somebody who has lost a spouse should wait at least 12 months before making any major financial decisions, because of the paralysis. But the challenge is, there are things you have to do. File the death certificates and the death claims. Change the titles on the cars. Look at your cash flow. Sadly, after doing this for 31 years, we’re seeing more of this transition than ever before with our aging society.
We’re now seeing a trend, sometimes because someone has been diagnosed as terminally ill, or knows they have health issues and isn’t sure how that will affect their lifespan, where many more people are saying, “I want to get all my ducks in a row, and I want to make sure my spouse understands everything we’re doing.” It’s not the traditional model where the man makes all the decisions and the wife doesn’t know what’s going on. We see it both ways: the wife handling everything, the husband handling everything. The most important thing we tell couples: if you have a significant other, just get on the same page. Plan tomorrow today. These aren’t difficult things if you address them before they become difficult.
7. Healthcare and Long-Term Care Without the Sales Pitch
Long-term care and healthcare costs are quietly the single biggest derailer of an otherwise solid retirement plan. How do you walk clients through planning for those costs in a way that doesn’t default to the products the industry tends to push?
Chuck Oliver: If I had a room of people and asked which side of the room believes they’ll need long-term care, everybody points to the opposite side. The statistics say otherwise. Genworth’s number is that 63% of couples aged 65 or older will need some form of long-term care over their lifetime. That’s a high statistic to bet against.
The industry kind of defaults to traditional long-term care, and a lot of carriers are out of the business because they so grossly mispriced their products against higher than anticipated healthcare costs. As a result, you’ve got a smaller pool of carriers trying to cover a much greater percentage of the population, especially now, with over 4 million people turning 65 a year for the foreseeable future. That’s over 11,200 people a day. If you wait until age 60 or older to buy traditional coverage, the cost is often prohibitive. I actually implemented long-term care for myself in my 30s, which you can’t even do anymore.
So the industry has created some really good hybrid options: annuity-like products that double the payout if somebody can’t perform two or more of the six daily living activities. Things you and I probably take for granted. Taking my mother through assisted living and long-term care, I can assure you I don’t take those things for granted. Anyone who’s had a family member go through it views it very differently from people who’ve only heard the rumors.
Some people self-insure, which I think is really risky, especially with people living longer than they may have calculated, plus 10 to 15 more years of taxes and inflation compounding.
The other angle getting a lot of interest today: most people have built a lot of their wealth in their real estate. You can sometimes use real estate to cover long-term care costs without borrowing against the property. We always ask people, “Do you think your kids want the house, or do you think they want cash?” There are ways to structure it so they get both. They retain the real estate and end up with more of the inheritance, because the parents didn’t have to spend down assets to take care of one spouse who developed dementia or Alzheimer’s.
A lot of people don’t realize Medicaid healthcare (not Medicaid welfare) is where the state pretty much forces you to become destitute. You can have a burial plot, you can have a car, but you can’t keep much in savings. They become the primary beneficiary on your assets, so whatever they outlaid to cover you, you may have nothing left after.
I look at long-term care like the spare tire on a car. The dealership doesn’t put a price on the spare tire, but when you have a flat, you’re really glad it’s there. Done right, long-term care is just a line item you didn’t count on buying with the car. Better to have it and not need it than need it and not have it.
I practice what I preach. I paid for my mother’s long-term care, and yes, we wrote those premium checks every year, but it saved our family a tremendous amount of financial turmoil. Unfortunately, unless you’ve been close to that experience, it’s easy to point the finger and say, “No, that side of the room will need it. Our side won’t.” I wouldn’t try to bet against that stat.
8. The Advice That Backfires
What’s a piece of standard, well-meaning financial advice you see retirees follow religiously that quietly works against them, and what’s the better question they should be asking instead?
Chuck Oliver: The line I hear most often: “I’m going to pay less tax once I retire than I paid when I was working.” For most heavy savers, that’s just not true.
The second is a knee-jerk reaction on Social Security. People hear that the system is going to become insolvent, so they turn it on early. In many cases, that’s the higher of the two wage earners, and not to be male-chauvinistic, but over 31 years, that’s typically been the husband. He files early when he could have delayed. Then, if the wife outlives him (and statistically she does, by about 5.6 years on average), she’s left with the lower of two diminished Social Security benefits, rather than what could have been available if he’d waited.
If I had to list the biggest regrets we hear: not saving as much as they wished, not planning their taxes as proactively, not planning their Social Security as proactively, and, very apropos to this discussion, not paying close enough attention to the Roth IRA.
9. AI and the Future of Advice
You’ve watched the financial planning industry transform over more than three decades. AI is now reshaping the advice business in real time. Where do you think AI genuinely makes a great advisor more valuable, where does it expose mediocre advice, and what part of your own work will it never replace?
Chuck Oliver: Relationship and interpersonal communication. I use AI every day, and I use it for a lot of great things. But it never replaces the knee-to-knee or eye-to-eye, and really taking the time to know somebody.
You hear all this talk about AI advisors: you don’t need an advisor anymore, AI can do that for you. And look, if that’s what somebody wants, that’s fine. But it goes back to the biggest dilemma most people have: they have a portfolio and don’t fully understand the vital importance of having a plan. They’ve never really comprehensively looked at all the moving pieces. AI has its place. If you want it to pick stocks for you, maybe. But it doesn’t know how to time up your Social Security benefits, how to do strategic Roth conversions, how to get rid of inherited RMDs, how all these various things (long-term care, hybrid versus traditional coverage comparisons) tie together.
What AI is doing is separating the sheep from the goats. The comprehensive planner who can look at everything and leverage AI for efficiency wins. But AI just doesn’t replace the relationship, sitting with the surviving spouse when one passes away, and making sure they know all the ducks are in a row. Well, never say never. AI today doesn’t appear to be able to replace that, but maybe there will be really talented robots in the future. The thought process, the content, the research: AI is remarkable. But the human element of a relationship? I don’t think it’ll ever replace that.