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How 10 Types of Retirement Income Get Taxed

June 17, 2022

From the Kiplinger website

When you’re planning for retirement, it’s fun to contemplate all the travel, rounds of golf and restaurant meals you have ahead of you. You’ve earned it! You may also want to financially help your children and grandchildren.

However, many retirees don’t take into consideration the cumulative impact of federal and state income taxes on withdrawals from their nest eggs.

Most forms of retirement income — including Social Security benefits, as well as withdrawals from your 401(k)s and traditional IRAs — are taxed by Uncle Sam. And unless you live in one of nine states without a traditional income tax, you can expect your home state to ding you in retirement as well. (Taxes on retirees vary from state to state, so make sure you check our retiree tax map for each state’s overall tax impact on your retirement income.) Do yourself a favor before you retire and take a look at the federal income taxes you’re likely to face on 10 common sources of retirement income.

From → Finance

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