How 13 Types of Retirement Income Get Taxed

When you're planning for retirement, it's fun to contemplate all the travel and rounds of golf ahead of you, but don't forget about taxes.

picture of a retirement golden egg and piggy bank
(Image credit: Getty Images)

When you're planning for retirement, it's fun to contemplate all the travel, rounds of golf and restaurant meals you have ahead of you. You've earned it! You may also want to financially help your children and grandchildren. However, many retirees don't take into consideration the cumulative impact of federal and state income taxes on withdrawals from their nest eggs.

Most forms of retirement income — including Social Security benefits, as well as withdrawals from your 401(k)s and traditional IRAs — are taxed by Uncle Sam. And unless you live in one of nine states without a traditional income tax, you can expect your home state to ding you in retirement as well. (Taxes on retirees vary from state to state, so make sure you check our retiree tax map (opens in new tab) for each state's overall tax impact on your retirement income.) Do yourself a favor before you retire and take a look at the federal income taxes you're likely to face on 13 common sources of retirement income.

Joy Taylor
Editor, The Kiplinger Tax Letter

Joy is an experienced CPA and tax attorney with an L.L.M. in Taxation from New York University School of Law. After many years working for big law and accounting firms, Joy saw the light and now puts her education, legal experience and in-depth knowledge of federal tax law to use writing for Kiplinger. She writes and edits The Kiplinger Tax Letter and contributes federal tax and retirement stories to kiplinger.com and Kiplinger’s Retirement Report. Her articles have been picked up by the Washington Post and other media outlets. Joy has also appeared as a tax expert in newspapers, on television and on radio discussing federal tax developments.