Retirement income can be subject to taxes depending on the specific type of retirement account or benefit you receive and your tax bracket. Here are a few examples of common types of retirement income and how they may be taxed:
1. Social Security benefits: Social Security benefits are generally taxable if you have other substantial income in addition to your benefits. The amount of tax you pay on your benefits depends on your taxable income and tax filing status.
2. Traditional Individual Retirement Account (IRA) and 401(k) withdrawals: Withdrawals from traditional IRAs and 401(k)s are generally taxed as ordinary income at your current tax rate.
3. Roth IRA withdrawals: Withdrawals from Roth IRAs are generally tax-free if you are over the age of 59 1/2 and you have held the account for at least five years.
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Retirement tax planning should begin well before retirement. Listener Jodie, with over $2 million in assets in various types of accounts, is concerned about the high tax bracket she anticipates she be...
Listener Michael asks about how Social Security is taxed, the rationale behind the 50% and 85% tax thresholds, and the implications of these taxes on Social Security and IRA withdrawals. James respond...
David has a question about taxes in retirement: When you’re retired and no longer getting a regular paycheck from which your employer withheld tax payments on your behalf, how do you estimate th...
Mark asks a common question – What should I do regarding my withdrawal strategy? Should I first pull from my brokerage account or my IRA? There is no one-size-fits-all answer, but James provides...
Joe is planning for retirement and wants to minimize his tax burden, especially on the interest earned from his three annuities. James explains that non-qualified annuities are purchased with post-tax...
Listener Drew asks about a tax strategy for juggling capital gains and Roth conversions. While it can be a complicated question – especially when large accounts are involved – James provid...
James responds to listener Jerry’s question about the optimal time to distribute inheritance or charitable gifts: before or after passing away. James walks listeners through four important thing...
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Sammy, a 51-year-old retiree, is seeking advice on how much she should convert from her traditional IRA to a Roth IRA each year to avoid jumping tax brackets and minimize the taxation of her social se...
James explores the nuanced aspects of Roth IRAs, shedding light on intricacies that can confound even experienced investors. Through a listener question from Manfred, a retiree contemplating a $50,000...
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Learn to make smarter financial decisions with math-driven strategies. James Lange shows how Roth IRA conversions and tax planning can maximize wealth and reduce taxes....
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Knowing how an annuity might impact your tax situation can be confusing. Here are some advantages and downsides to consider....
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hello! I've entered my 50's and I need to start planning for housing...I just like to plan things and of course, I'm single, so it's good for me to plan, too. someone in a subreddit somewhere on reddi...
Today we're joined by Ed Slott, the expert’s expert on retirement planning, to talk about how to make the most of your retirement savings and avoid costly tax surprises. Ed explains why converti...
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I will be retiring sept 2024. I’m looking at this Form and don’t know what year to enter as my tax year . Do I enter 2024 ? even though it won’t be reduced by that much since I&rsquo...
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A traditional IRA is a powerful way to save for retirement. If you don't have a 401(k) it can be especially helpful....