Weekend Reading: 8 Things You Need to Know About Taxes Once You Reach Age 65
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
As you age, tax planning can become more complicated. Having multiple sources of income and dealing with tax withholdings after leaving the workforce can contribute to this complexity. However, there are opportunities to help reduce your overall tax bill, such as tax deductions and credits.
READ THE ARTICLEHere are a few of the featured key points in this article to remember:
📌 Tax planning doesn't end at retirement. There are still ways to reduce taxes and stretch your retirement income over your lifetime.
📌 Your income levels can affect your Medicare premiums due to the income-related monthly adjustment amount (IRMAA). Proactive tax planning can help minimize taxable income and save money on premiums.
📌 Required Minimum Distributions (RMDs) from retirement accounts can be donated directly to charity as qualified charitable contributions, avoiding an increase in taxable income.
📌 Your Social Security benefits may be taxable starting at an income threshold of $25,000. Strategic IRA withdrawals can help reduce taxes on Social Security.
📌 Sometimes paying more taxes now can be advantageous to minimize larger tax burdens later. As past podcast guest, David McKnight says, “The tax train is coming!”
Ask yourself: Are you checking all the possible boxes to maximize your tax efficiency? Or is it time to roll up your sleeves and do some work?