Excellent analysis of the tax realities.
Taxes were worse during the Clintoon years. In the mid 1990’s, I got an excellent early retirement. Our CPA advised me not to work the first year due to inability to shelter basically our income besides my wife’s maxed out 401 k and our little IRAs.
We still got hammered with taxes.
The next year I got a good paying consulting gig. My wife had gotten nice raises due to merit bowing out of her company health care cost as she was covered by retirement plan.
That was the good news. The bad news was the tax bites. Our
CPA advised us to deposit every other consulting check into a savings escrow to pay quarterly FICA both sides for me, fed and state taxes + property taxes. My wife had zero withholding deductions.
In spite of this we still owed some taxes at the end of the year.
When, I turned 62, my company’s retirement check deducted the estimated monthly FICA check, so I started drawing FICA.
Due to the tax penalties re limits of non fica income per year before penalties, my CPA advised me to retire totally and learn how to manage our IRAs and 401 Is.
I see a lot of “perverse incentives” in there, Dave...
Basically, due to the taxing structure, your accountant advised you to stop using your experience, talents and abilities to serve your fellow man because the taxation would be prohibitive.
Sad.