A question we’re commonly asked is, “Is it possible to drastically reduce taxes in retirement, or even eliminate them?”
It’s possible, but you must start planning before you retire.
Many people don’t realize that Traditional IRAs and 401(K)s are fully taxed upon withdrawal, so the key is to diversify your retirement income. You can do that by saving and investing in tax-advantaged and non-taxable accounts, such as a Roth IRA, while you’re still working.
Once you’re retired, it’s all about monitoring your adjusted gross income to control your tax bracket. You can limit the amount of taxable income you need to withdraw by pulling income from your tax-free accounts. Also, by withdrawing from non-taxable accounts, instead of selling investments that trigger taxable income, you reduce the amount of your Social Security benefits subject to income tax.
Make sure that you keep more of your hard-earned money. Taxes can be a serious detriment to your retirement income plan. To find out how you can reduce your taxes in your retirement years, reach out to me today.
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About Andy
Andrew Tapparo is a fee-only financial advisor at Tapparo Capital Management, a financial planning firm in Topsfield, MA, helping clients turn their savings into a retirement income that lasts. Inspired by the quote “Choose a job you love, and you will never work a day in your life,” Andy founded Tapparo Capital Management in 1997 with a passion for helping clients enjoy a truly worry-free and fulfilling retirement and experience financial freedom. As a Retirement Income Certified Professional (RICP®), he designs retirement strategies along with sound money management to help clients retire with confidence.
Andy holds a Bachelor of Science in Industrial Engineering from Rochester Institute of Technology in Rochester, New York, and a Master of Science in Finance from Bentley University in Waltham, Massachusetts. Specializing in retirement income planning, Andy completed a comprehensive financial industry education program at The American College of Financial Services and was awarded the Retirement Income Certified Professional® designation. He is frequently quoted in the media as a financial expert.
Andy and his wife, Susan, live in Topsfield, Massachusetts, and have two beautiful daughters. Outside of work, he is an automobile enthusiast, enjoys taking road trips, and loves the Outer Banks of North Carolina. In his spare time, he volunteers with the local high school varsity girl’s basketball team as the team statistician and runs the team’s website. He is passionate about supporting charities that serve our veterans and their families. To learn more about Andy, connect with him on LinkedIn.
