Managing your income tax in retirement is often an overlooked opportunity to help make your money last. Your retirement lifestyle often heavily depends on your income. Once you’re retired, you generally have fewer options to adjust that income.
You can’t change jobs, take on more hours, or work toward a bonus. Your Social Security and any pension benefits are fixed. You can’t control the stock market or your rate of return. But you do have some control over certain aspects of your finances. You can:
- Employ an Invest and Protect strategy to help protect your investments from down markets.
- Decide when to take Social Security for the greatest benefits to you and your family.
- Plan how and when to tap your different savings accounts.
- Create a strategy for managing taxes in retirement.
If you don’t plan well, you could end up paying taxes on all the distributions from your investments, which could drastically cut into your nest egg.