Top 5 Ways to Keep Taxes Low in Retirement

If you want to keep taxes low in retirement, a handful of strategies can be used while working or when retired to keep your tax bill reasonably small.

The reasons to do so may seem obvious — most people prefer to keep more and pay less in taxes — but there are some advantages to keeping your taxable income relatively low that you might not be thinking about.

Here are the top 5 ways to keep taxes low in retirement

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In retirement, especially when retiring early, a taxable account can be a great primary source of spending. Only the gains are potentially taxable; your cost basis won’t be taxed when you sell.

Build Up a Taxable Brokerage Account

The beauty of Roth money in tax planning is that there are zero tax consequences to any Roth withdrawals you make. 

Make Roth Contributions While Working

The idea is to fill some of the lower tax brackets with income rather than let those small income tax brackets go unused.

Strategic Roth Conversions in Retirement

Most people will retire based on where they want to be, not what the tax repercussions are, but it’s important to understand that what’s considered to be a low-tax or high-tax state might flip flop in retirement.

Live in a Low-Tax State

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