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5 Ways to Cut Your Tax Bill in Retirement

February 20, 2017

tax_bill-1Retirement is supposed to be your time to sit back, relax and enjoy spending the money you’ve spent decades earning and saving. Unfortunately, just because you’re not taking home a paycheck anymore doesn’t mean that Uncle Sam doesn’t want his cut of your income.

Many soon-to-be retirees don’t realize how big a bite taxes can take out of their nest eggs, even if they’re not paying Social Security or Medicare taxes. Ultimately, when you’re figuring out how much money you have for retirement, what really matters is how much you can actually spend.

Fortunately, some smart planning before retirement and a few strategic money moves in retirement can drastically reduce your IRS bill each year. “If you make a long-range tax plan, you can make adjustments as you go,” says Phil DeMuth, author of The Over-Taxed Investor. “If you don’t have a plan, you’ll end up getting whacked by high taxes you’re not expecting.”

Here are five tips for saving on taxes in retirement.

From → Finance

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