Key Considerations:

Required Minimum Distributions (RMDs)

Once you reach age 73 (for most individuals), you’re generally required to start taking distributions from traditional IRAs and 401(k)s. These count as taxable income and may bump you into a higher bracket.

Social Security Taxation

Up to 85% of your Social Security benefits may be taxable depending on your “combined income,” which includes half of your Social Security plus other income sources.

Capital Gains

If you draw from taxable accounts, be mindful of how capital gains stack with other income.

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Tips to Help Avoid a Surprise:

Plan withdrawals strategically

Consider drawing down taxable accounts earlier in retirement or converting traditional IRAs to Roth IRAs when you’re in a lower bracket.

Understand the interplay of income sources

Layering income types in a coordinated way can potentially reduce your total tax burden over time.

Work with a financial advisor

A personalized income distribution plan can help optimize your retirement income and avoid triggering unnecessary taxes.

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Wondering if your retirement plan could trigger unnecessary taxes?

Understanding how and when to withdraw your money can make a meaningful difference. If you’d like help reviewing your distribution strategy—or aren’t sure where to start—Jason is here to help. Use the button below to schedule a call and get personalized guidance for your retirement income plan.

Disclaimer: This information is provided for educational purposes and is not tax or financial advice. Always consult with a qualified professional before making financial decisions.