Retiring in Boerne, Texas, often feels like a reward for decades of hard work. Between the mornings spent on the Hill Country Mile and afternoons watching the sunset over the Guadalupe River, the lifestyle here is undeniably peaceful. However, for many retirees and pre-retirees transitioning into this new chapter, the financial landscape can feel a bit more complex than the winding roads of Kendall County.
One of the most significant shifts in retirement is moving from the "accumulation phase": where you were focused on saving: to the "distribution phase," where you are strategically spending down your assets. In this phase, how much you keep is just as important as how much you earn. Taxes, specifically capital gains taxes, become a central focus.
As we move through 2026, understanding how to navigate capital gains brackets and utilize strategies like tax-loss harvesting can make a substantial difference in your net retirement income. While Retire in Boerne is your lifestyle resource, professional guidance from a firm like Mau Sanchez Capital can help you implement these strategies within a comprehensive investment plan.
The 2026 Capital Gains Landscape
Before diving into strategies, it is essential to understand the "rules of the road" for the current tax year. Long-term capital gains: profits from investments held for more than one year: are taxed at preferential rates compared to ordinary income.
For 2026, the federal long-term capital gains tax brackets are structured to reward lower taxable income. If you are married and filing jointly, you could potentially pay 0% in capital gains taxes if your total taxable income is below $98,900. For single filers, that threshold is approximately $49,450. Once you cross those markers, the rate jumps to 15%, and eventually 20% for high earners (plus the potential 3.8% Net Investment Income Tax).
"In retirement, your tax bracket is no longer a fixed number dictated by a salary; it is a variable you can often control through strategic withdrawals and asset management."
Tax-Loss Harvesting: Making the Best of a Down Market
No one likes to see a "red" day in the markets, but for the savvy retiree, a dip in asset prices can actually be a tax-saving opportunity. This is known as tax-loss harvesting.
The process involves selling an investment that is currently worth less than what you paid for it. By "realizing" that loss, you create a tax asset that can be used to:
- Offset Capital Gains: If you sold a winning stock or a piece of real estate earlier in the year, your harvested losses can cancel out those gains dollar-for-dollar.
- Offset Ordinary Income: If your losses exceed your gains, you can use up to $3,000 of the excess loss to reduce your ordinary taxable income (like your pension or IRA distributions).
- Carry Forward: If you have more than $3,000 in excess losses, you don't lose them. They carry forward to future tax years indefinitely.
At Mau Sanchez Capital, the focus is often on maintaining a disciplined, publicly traded portfolio. Tax-loss harvesting is a core part of risk management and portfolio construction, ensuring that rebalancing doesn't result in an unnecessary tax bill.
A Note on the Wash-Sale Rule: It’s important to remember the IRS "wash-sale" rule. You cannot sell a security for a loss and buy the same or a "substantially identical" security within 30 days before or after the sale. If you do, the loss is disallowed for tax purposes.
The 0% Opportunity: Tax-Gain Harvesting
While most people focus on avoiding taxes, some Boerne retirees find themselves in a unique "sweet spot" where they should intentionally trigger taxes. This is called tax-gain harvesting.
If your taxable income in 2026 is low: perhaps you've retired but haven't yet started Social Security or Required Minimum Distributions (RMDs): you might fall into that 0% capital gains bracket. In this scenario, you could sell appreciated assets, realize the gain at a 0% tax rate, and immediately buy them back.
This effectively "resets" your cost basis to a higher level for free. If you need to sell those assets later when your income is higher, your taxable gain will be much smaller.
Step-Up in Basis: The Hill Country Legacy
Many families moving to Boerne are thinking about the legacy they will leave behind. When it comes to appreciated assets held in a taxable brokerage account, the "step-up in basis" is one of the most powerful tools in the tax code.
Under current law, when you pass away, the cost basis of your taxable assets is "stepped up" to the fair market value on the date of your death.
Example: If you bought shares of a company 30 years ago for $10,000 and they are worth $500,000 when you pass away, your heirs can sell them immediately for $500,000 and owe zero capital gains tax.
This is why, at Mau Sanchez Capital, the philosophy often leans toward holding highly appreciated, low-basis stocks in taxable accounts while using other sources for retirement spending. It’s a way to maximize the wealth that actually reaches the next generation. You can read more about the nuances of relocating and the financial questions involved in our post on Buying in Boerne.
Selling Assets to Fund Your Boerne Move
If you are currently in the process of relocating to the Texas Hill Country, you may be facing the decision of which assets to sell to fund your new home or lifestyle. Texas is famously tax-friendly with no state income tax, which is a major draw for retirees. However, property taxes in Kendall County are a factor that requires careful budgeting, as discussed in our Property Taxes 101 guide.
When raising cash for a home purchase or a renovation:
- Sell High-Basis Shares First: Look for shares where the current price is closest to what you paid. This minimizes the realized gain.
- Spread it Out: If you need a large sum, consider selling half in December and half in January. This spreads the capital gains across two tax years, potentially keeping you in a lower bracket each year.
- Watch the NIIT: For high-net-worth families, large capital gains can trigger the 3.8% Net Investment Income Tax. Careful timing is required to stay below the thresholds ($250,000 for married couples).
Precision Planning for the Long Term
Managing capital gains isn't a one-time event; it’s an ongoing process of monitoring your portfolio and the ever-changing tax landscape. A "buy and hold" strategy is great for growth, but a "buy, hold, and harvest" strategy is often better for your bottom line.
Mau Sanchez Capital specializes in this type of retirement income planning and wealth management. Their investment philosophy favors transparency, liquidity, and cost efficiency: avoiding the high fees and "lock-ups" often found in complex alternative investments. By focusing on publicly traded markets and proper asset allocation, they help retirees in Boerne navigate these tax strategies with clarity.
As you enjoy the slower pace of life in the Hill Country, let the technical details of portfolio construction be handled by a fiduciary who understands your goals.
Schedule a private meeting with a fiduciary financial advisor today by calling (512) 593-8380 or by visiting: https://calendly.com/portafoliocapital/15min
Portafolio Capital Management dba Mau Sanchez Capital is a Registered Investment Adviser. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Advisory services are provided only pursuant to a written advisory agreement.
This article may include stories, scenarios, and perspectives created or assisted by artificial intelligence. Although the individuals and circumstances described may be fictional, the topics are intended to reflect real financial, personal, and lifestyle issues that retirees and individuals commonly face.
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