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4 Amazing Retirement Tax Strategies That Work For You

4 Amazing Retirement Tax Strategies That Work For You

February 24, 2021

Taxes are a certainty of life, but that doesn’t mean you can’t find ways to reduce what you owe to the government, especially once you retire. Consider these strategies (both large and small) to help reduce your taxes every year. 

1. Choose the Right Investment Account

  • Keep yourself from being overly taxed while keeping up the principal of your account with the right type of account. 
  • Municipal stocks, dividend bonds, IRAs, and 401ks are all options for you to reduce the taxes applied to your investment income.

2. Withdrawal Options

  • Decide how you’re going to spend the funds you have in different accounts. 
  • Consider whether you’re withdrawing from taxable accounts, tax-deferred accounts, or tax-exempt accounts. 
  • And transfer money proportionate to your overall savings instead of draining one account before moving on to the next one. 

3. Move to a Tax-Friendly State

  • If you’re already planning to move during retirement, find states that have tax laws that are more beneficial for you.
  • Some states don’t have an income tax, others don’t have a sales tax, and some don’t tax your Social Security benefits. 

4. Delay Your Social Security Benefits

  • Defer your Social Security benefits for as long as you can, so you can also avoid the taxes that generally come with using your benefits. 

Contact the office if you have any questions about your strategy to reduce taxes as you move into your retirement years.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice.

10% IRS penalty may apply to withdrawals prior to age 59 ½.

Some IRA’s have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.