4 Easy Ways to Reduce Taxes In Retirement

Ready For Retirement

James Conole, CFP®

Investment Planning, Bonds, Education, Stocks, Cash, Business, Dividend Investing, Retirement Planning, Retirement, Investing, Tax Planning

5 • 706 Ratings

🗓️ 14 April 2020

⏱️ 24 minutes

🔗️ Recording | iTunes | RSS

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Summary

Episode 02: Show Notes. Welcome to the first full episode of Ready for Retirement, we are so happy to have you join us here as we share some great and simple strategies for making retirement that much easier and enjoyable! A big part of doing this has to do with tax and that is our focus today. If you can optimize your taxation situation you can alleviate a lot of unnecessary strain on your finances and so we are providing you with four easy ways to reduce tax. These are guaranteed to ...

Transcript

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0:00.0	Discover the tips and strategies that will help you achieve your retirement goals.
0:09.3	I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.
0:14.6	It all starts right here on Ready for Retirement. for retirement.
0:29.4	Hi, everyone, and welcome back to the second episode of Ready for Retirement.
0:32.0	If you just listen to the intro episode, welcome back.
0:35.1	As I mentioned, three of these episodes are going to be released on the first day.
0:38.6	And this is a show about retirement. How do you win at retirement? And one of the biggest things that you can do to improve your retirement is to
0:43.9	optimize your taxes, to ensure that you're paying less than taxes when you're done working,
0:48.1	so that you can keep as much of your income at that point as possible. So in today's episode,
0:53.0	we're going to talk about four different ways
0:55.0	that you can reduce your taxes at that point. Now, some of these may apply to you. Some may not.
0:59.2	There are certainly others, but these are four common things I look at with clients to make sure
1:03.6	that they are getting the most out of their retirement income as possible. First item is this.
1:07.5	Number one, the first thing that you can do to reduce your taxes in retirement is to max your social security benefit.
1:13.7	Now, why do I say that? Okay, maxing your social security benefit, that's good. It helps you to increase your income.
1:18.9	But one thing that people often don't think about is not only are you increasing your income, but social securities tax differently than say a distribution from an IRA or a 401k is.
1:29.6	If you take a distribution from an IRA in retirement, you're paying federal taxes on that and you're paying state taxes on that,
1:35.9	depending upon whatever your federal and state tax bracket are.
1:39.2	With Social Security, though, a part of Social Security is included in your federal taxes, meaning you'll pay part of it,
1:45.9	but you're not paying taxes on the full amount. In addition to that, a lot of states don't actually
1:50.8	tax social security. So I'm in California. If you live in California, you will not have your
1:56.3	social security benefit taxed when you retire. So how does that impact you? Let's look at a couple
	...

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