Read about topics to help you age well, enjoy your retirement years, and navigate the intricacies of Medicare and Social Security.
Here are a few tips for trimming your tax bill in retirement . . . whether your retirement is decades away, just around the corner, or you’re already living the dream.
Many people don’t know that a portion of your Social Security benefits will likely be taxed. And money you take out of your traditional IRA and 401(k) will definitely be taxed. Choices you make now will make it easier for you to lower your taxes when you’re living on your SS benefits and money you’ve invested.
One of the most common ways to avoid taxes in retirement is to invest in a Roth IRA. You don’t get the tax break now because you put money into the account after paying taxes on it. But then the money grows tax-free, and when you withdraw the money it comes out tax-free. That’s different from a traditional IRA or 401(k), which both give you a tax break the year you invest the money.
Another way to reduce your tax bill is to contribute to an HSA. You get to put in money...