How You Can Potentially Minimize Taxes in Retirement

When it comes to retirement planning, it’s important to consider tax-minimization strategies. Taxes can significantly impact the amount of money you have available to fund your retirement, so it’s essential to have a plan in place to help minimize them.

Tax-Advantaged Retirement Accounts

One strategy is to contribute to tax-advantaged retirement accounts such as a 401(k), IRA, or Roth IRA. These accounts offer tax benefits such as tax-deferred growth or tax-free withdrawals in retirement. By contributing to these accounts, you can help reduce your taxable income and potentially lower your tax bill.

Tax-Free Income Sources

Another strategy is to seek out tax-free income sources to supplement your income. Having both taxable and tax-free income sources can help you minimize your tax liability in retirement. If suitable, investors might consider tax-free income in the form of Roth IRA withdrawals after age 591/2 or municipal bond interest rate income, for example.

Plan for Required Minimum Distributions

It’s also important to plan for required minimum distributions (RMDs) from your retirement accounts. RMDs are mandatory distributions that begin at age 73 for traditional IRAs and 401(k)s. These distributions are often taxable, so it’s important to plan for them to avoid a significant tax bill in retirement. One strategy is to start taking distributions from retirement accounts before RMDs are required to help manage the tax impact.

Planning Retirement Account Withdrawals

Additionally, consider the timing of withdrawals from retirement accounts. By strategically timing withdrawals to make sure you don’t give yourself too much income in a tax year, you can potentially reduce your tax liability. For example, if you have a year where your income is lower than usual, consider taking a larger distribution from a retirement account to take advantage of a lower tax rate.

Finally, consider working with a financial professional or tax professional to develop a comprehensive tax-management strategy for retirement. We can work with you to ensure you don’t pay more in taxes than you should. Sign up for a complimentary review of your finances with us to get started.



Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor.

This is for informational purposes only, does not represent legal or tax advice does not indicate suitability for any particular investor, and does not constitute an offer to purchase or sell investments. Please consult the appropriate professional regarding your individual circumstance.

There are retirement account risks that could diminish investor returns, such as, but not limited to: low interest rates, market volatility, withdrawal timing and sequence of returns risk, government policy uncertainty and increased longevity. Prospective investors should perform their own due diligence carefully and review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular before considering any investment.

Municipal bonds are debt securities issued by states, cities, counties and other governmental entities to finance capital projects, such as building schools, highways or sewer systems, and to fund day-to-day obligations, in exchange for a promise of regular interest payments, usually semi-annually, and the return of the original investment, or “principal.”

Advisory services are offered through Asset Strategy Advisors, LLC (ASA). Securities are offered through representatives licensed with either Concorde Investment Services, LLC (CIS), member FINRA/SIPC, or RCX Capital Group, LLC (RCX), member FINRA. Insurance is offered through Asset Strategy Financial Group, Inc. (ASFG). ASFG and ASA are independent of CIS and RCX.

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