Tax Loss Harvesting: The $150,000 Mistake Retirees Make

Tax-loss harvesting isn't a $3,000 deduction — it's a $150,000+ wealth-building strategy when you run the full math over a 25-year retirement. Many advisors may only show you one piece of the puzzle. 👉 FREE: Download our 15 Retirement Planning Checklists — the ones we use with clients → https://www.covenantwealthadvisors.co... 🗓️ Work with Us: https://www.covenantwealthadvisors.co... Check out our Covenant Wealth Advisors Youtube Channel → / ‪@covenantwealthadvisors‬ ============== In this video, I break down the three separate mechanisms that make tax-loss harvesting one of the most powerful strategies for retirees with large taxable brokerage accounts. Using a hypothetical case study, I show how a retired couple with $1.8 million in taxable investments could generate over $150,000 in permanent, tax-free wealth — not by saving $3,000 a year, but by stacking capital gains offsets, the annual income deduction, tax-deferred compounding, and a little-known estate planning mechanism I call the "Tax Eraser." I walk through the exact dollar-by-dollar math on each mechanism, explain why the step-up in basis at death (IRC Section 1014) turns a tax deferral into permanent wealth, and cover the critical mistakes that can wipe out your savings — including the IRA wash sale trap, spousal coordination failures, and harvesting in the wrong accounts. =========== Disclosure: The hypothetical examples presented in this video, including "Jim and Linda," are for illustrative purposes only and do not represent actual client results. The scenario assumes $20,000 in annual harvested losses over 25 years, a 15% long-term capital gains rate, a 22% ordinary income tax rate, and a 5% average annual return — all of which may vary based on individual circumstances, future tax laws, and market conditions. Tax brackets referenced are based on 2026 figures per IRS Revenue Procedure 2025-32 and are subject to change. The $150,000+ wealth figure is a hypothetical projection of compounded tax savings and should not be interpreted as a guarantee of any specific outcome. The step-up in basis at death (IRC Section 1014) is current law and subject to legislative change. Covenant Wealth Advisors is a registered investment adviser. The information presented in this video is developed from sources believed to be providing accurate information and is for educational purposes only. This content should not be considered investment, tax, legal, or financial planning advice, nor a solicitation for the purchase or sale of any security. The information provided is not intended to be used for the purpose of avoiding federal tax penalties. Because we don't know your individual circumstances, this general information may not apply to your situation. Before making any financial decisions, consult with a qualified financial advisor, CPA, attorney, or other appropriate professional who can evaluate your specific needs. Investing involves risk, including the potential loss of principal. Past performance does not guarantee future results, and no investment strategy can guarantee a profit or protect against loss in periods of declining values. For more information about our firm, including our services and fees, please visit our website or review our Form ADV, available at adviserinfo.sec.gov. =========== 📌 Chapters: 0:00 The $150,000 Tax Loss Harvesting Myth vs. Reality 1:13 Meet Mark Vonville & Why Retirees Miss This 2:08 The Basic $3,000 Deduction (And Why It's Not Enough) 3:44 Meet Jim & Linda: The Hypothetical Case Study 5:54 How Compounding Turns $80K Into $153K 7:56 The Tax Eraser: Step-Up in Basis (IRC Section 1014) 10:35 The Wash Sale Rule & 3 Costly Mistakes 12:56 IRMAA: The Hidden Medicare Surcharge Trap 13:43 Your Tax Loss Harvesting Checklist (Action Items) 15:11 Share This With Your CPA + Free Strategy Session =========== Sources: 1. 2026 federal tax brackets (22% MFJ) and standard deduction: IRS Revenue Procedure 2025-32 — https://www.irs.gov/newsroom/irs-rele... 2. Long-term capital gains tax rates (0%, 15%, 20%) for 2026: IRS Topic No. 409 — https://www.irs.gov/taxtopics/tc409 3. Step-up in basis at death: IRC Section 1014 — https://www.law.cornell.edu/uscode/te... 4. Wash sale rule (61-day window): IRC Section 1091 — https://www.law.cornell.edu/uscode/te... 5. Capital loss deduction limit ($3,000/year): IRS Topic No. 409 — https://www.irs.gov/taxtopics/tc409 6. 2026 Medicare IRMAA thresholds ($218,000 MFJ): CMS 2026 Medicare Parts A & B Premiums and Deductibles — https://www.cms.gov/newsroom/fact-she... #TaxLossHarvesting #RetirementTaxPlanning #StepUpInBasis #CapitalGainsTax #WashSaleRule #TaxFreeWealth #RetirementIncomePlanning #IRMAA #CovenantWealthAdvisors #FeeOnlyAdvisor #FinancialPlanning2026