Beware of the Tax Traps in Retirement

The stage is set for higher tax bills and surcharges for retirees, if they’re not careful. From RMDs to taxes on Social Security and higher Medicare premiums, watch out for these three traps.

A bear trap with a stack of $100 bills inside.
(Image credit: Getty Images)

More people are going to retire in the next 15 years than have ever retired in the history of our country. By 2030, the Census Bureau projects we’ll reach the first time that the United States will have more 65-and-older adults than children — 78 million age 65+ versus 76.4 million younger than 18.

Meanwhile, our spiraling national debt and its effect on taxpayers can’t be ignored. Consider that prior to COVID, the United States was already over $22 trillion in debt. Accelerated by the $2.2 trillion CARES Act passed in March 2020 and the $1.9 trillion coronavirus relief bill in March 2021, our national debt now stands at over $28 trillion. At some point, it’s more than likely taxes are going to increase to pay for all of the spending and borrowing.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Chris Wilbratte, Investment Adviser
Co-Founder, Echelon Financial

Chris Wilbratte has worked in the financial services industry for 30 years and is co-founder of Echelon Financial in Austin, Texas. He received his BBA in Finance and Marketing from the University of Texas.