GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
you might read more about oureditorial guidelinesand our products and servicesreview methodology.
These are some of thestrategies you may want to consider to reduce your tax bill as a retiree.
Thats because withdrawals from a traditional retirement account count as ordinary income, which is a taxable event.
You should avoid making a high enough withdrawal that moves you into a higher tax bracket.
Furthermore, all withdrawals show up as taxable income for the heir.
Furthermore,Roth IRA withdrawalsare not taxed.
you might usetraditional IRA contributionsto lower your tax burden.
you could use the net losses to reduce your tax bill while entering a similar position.
Both exchange-traded funds (ETFs) generatenearly identical returnssince they mirror the S&P 500.
Move to a Tax-Friendly State
Some states are more friendly than others when it comes to taxation.
Some states have zero income taxes, but you also have to watch out for other taxes.
For instance, Texas hasno state income taxesbut has very high property taxes to compensate for it.
Downsizing in an area with lower taxes will also give your nest egg more room to stretch.
The IRS periodically adjusts this level.
More From GOBankingRates
Share This Article:
