Most tax-saving ideas sound like you need a whiteboard, a CPA, and a minor in wizardry.

Fee tilting is not that.

Fee tilting is just a fancy name for paying the same fee in a more tax-smart way, especially when you have both IRA and taxable money.

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What Is Fee Tilting?

Fee tilting means:

• Same advisory fee
• Same investments
• Same plan
• Just a different “which account pays the fee” setup

Instead of paying fees proportionally from each account, we may shift more of the fee to the pre-tax bucket (traditional IRA) and less to the after-tax bucket (taxable brokerage account). The total fee stays the same. The benefit comes from changing the source.

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A Simple Example

Assume you have:

• $1,000,000 Traditional IRA
• $1,000,000 Taxable brokerage account

If the advisory fee is 0.50% on each account, that’s:

• $1,000,000 × 0.50% = $5,000
• Two accounts = $10,000 per year total

Typical Billing (Pro-Rata)

• $5,000 billed from the IRA
• $5,000 billed from the brokerage
• Total = $10,000

Fee Tilting (Same Fee, Different Source)

• $9,000 billed from the IRA
• $1,000 billed from the brokerage
• Total = $10,000

So we “tilted” $4,000 of the fee away from taxable and toward the IRA.

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Why This Can Create Tax Savings

1. Traditional IRA Dollars Are Future Taxable Dollars

Traditional IRA money is generally taxable when it comes out. And eventually, you do not get a vote.

RMDs (Required Minimum Distributions) are the IRS-required withdrawals from most tax-deferred retirement accounts once you reach a certain age. As of 2026, the starting age is 73 for most people born before 1960, and 75 for most people born in 1960 or later. If you are on track for a large IRA, RMDs can create income you do not need later, which means income you still pay taxes on.

Fee tilting can help by reducing the IRA balance a little each year before RMDs begin, which can reduce:

• future RMD amounts
• future taxable income
• the ripple effects of higher income, such as Medicare premiums, Social Security taxation, and tax bracket creep

2. It Can Help Your Heirs Too

This is the part many families miss. Taxable brokerage accounts often receive a step-up in cost basis at death, which can reduce or eliminate capital gains taxes tied to lifetime growth.

Traditional IRAs are different. Leaving an IRA to anyone other than a spouse or a charity can create a meaningful tax bill for the person inheriting it. In many cases, the beneficiary will owe ordinary income tax as they withdraw the IRA, and most non-spouse beneficiaries generally have to empty the account within 10 years.

So if we can reduce the size of the future-taxable IRA bucket over time, without intentionally triggering big taxable distributions today, that may lower taxes during your lifetime and your beneficiaries’ lifetimes.

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A Quick Charitable Note

You can give to charity at any age. But a QCD (Qualified Charitable Distribution) is a special strategy that allows certain IRA dollars to go directly to charity. QCDs generally begin at age 70½.

For clients who plan to use QCDs later, fee tilting can still help earlier by trimming the IRA balance before those tools are available.

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What About Annuities?

Some clients also have non-qualified annuities funded with after-tax dollars. These can grow tax-deferred, but the earnings are generally taxed as ordinary income when distributed.

The planning concept can be similar: if more fees are paid from the annuity over time, you may reduce the contract’s growth and therefore reduce the future taxes that may be owed on distributions.

Important nuance: annuity taxation can be tricky and depends on the contract and how withdrawals are treated. This is not a “set it and forget it” area. It is something we evaluate carefully and coordinate with your tax professional when appropriate.

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Who Fee Tilting Is Usually Best For

We tend to use fee tilting most often for clients who:

• have meaningful assets in both traditional IRAs and taxable accounts
• are likely headed toward large RMDs
• want to reduce future forced income and lifetime taxes
• care about leaving assets to kids or grandkids in a tax-smart way

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Bottom Line

Fee tilting is not a gimmick. It is a small administrative change that can improve tax efficiency, especially for households staring down large future RMDs.

If you are curious whether you are a good fit for this strategy, we would be happy to take a look. No pressure, no promises. Just thoughtful planning.

Disclosure: Examples are for illustration only. Results vary. NTX Wealth Partners does not provide legal or tax advice. Please consult your tax professional regarding your specific situation.