Reducing Income Tax Liability in Retirement

Income taxes in retirement can work a bit differently from how they worked throughout your career. You might have established several streams of retirement income for yourself, and they’re not all taxed the same.

For example, I recently noticed that a client was pulling money from her IRA but not from her non-qualified account. I asked why she was doing this, and she said, “I don’t know… No one told me not to”. Essentially she was pulling out too much taxable income each year, and triggering a larger tax burden than necessary. So, we stopped pulling from that IRA for a while, and used the non-qualified account instead. This dropped her taxable income back down to a more manageable range.

One of the things we do for clients is help them minimize the amount of income taxes they pay in retirement, while still abiding by the law of course! We do this by balancing taxable and non-taxable forms of income, and looking for all possible deductions to keep your income tax burden as reasonable as possible.

Give us a call to learn more, and together we’ll investigate ways to lower your income taxes.