Are You Retired and Paying Too Much Tax? Discover Strategies to Maximize Your Income

Retirement once meant saying goodbye to the IRS, but those days are gone. Today, retirement involves strategically managing withdrawals, scheduling income, and sidestepping costly tax blunders.

Every June, we meet clients who unknowingly fall into these traps. Whether you're newly retired or planning it soon, here's a reality check: Effective tax planning in retirement is crucial. In fact, it may be even more critical now.

Why Summer is Ideal for Retiree Tax Planning

Though often overlooked, summer is an opportune time to:

  • Strategize your withdrawals before year-end RMDs

  • Optimize income streams to minimize taxation

  • Avoid income-driven Medicare premium hikes

By December, you'll find it's too late to mitigate many issues.

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Three Frequent Retirement Tax Errors You Can Rectify Now

1. Procrastinating on RMDs (or Neglecting Them)

If you're 73 or older, Required Minimum Distributions (RMDs) from IRAs and certain retirement plans are mandatory. Failure to comply results in a 25% penalty on the oversight.

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Even without needing the funds, a compliance strategy is vital.

2. Tapping Into Incorrect Accounts First

Many retirees start with IRAs or 401(k)s, preserving Roth IRAs. Depending on your tax bracket, this could:

  • Propel you into higher tax brackets

  • Elevate Medicare premiums (IRMAA surcharges)

  • Miss opportunities for tax-free growth

A strategic withdrawal plan can extend the longevity of your retirement savings.

3. Overlooking Side Capital Gains

Selling property, adjusting portfolios, or engaging in consulting increases income, challenging thresholds, especially when receiving Social Security.

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Mid-year adjustments allow careful gain or loss management, preventing excessive income stacking.

Bonus: Charitable Gifting and Legacy Planning

  • Supporting family and grandchildren?

  • Contributing to beloved causes?

  • Navigating estate taxes pre-2026 changes?

Execute these aspirations tax-efficiently to safeguard your finances.

A Peaceful Retirement Needs a Bulletproof Tax Strategy

After decades of hard work, don't let unforeseen tax challenges erode your nest egg.

To ensure your retirement planning is as robust as possible, Tax Time 365 is here to assist. We'll review your current strategies, pinpoint any issues, and help you plan ahead to enhance your financial longevity while reducing stress.

Reach out to our virtual office if you're newly retired, approaching retirement, or seeking a second opinion on your tax strategy.

You've done the heavy lifting—now ensure it benefits you, not just the IRS.

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