4 Steps for Managing Income Withdrawals in Retirement

How Roth IRA conversions can help you minimize your taxes in retirement, extending the life of your savings.

A huge golden egg sits in a bird's nest on a green hill under a blue sky.
(Image credit: Getty Images)

If you’re like most Americans nearing retirement, you’re worried about whether you have enough savings. In fact, only 22% of those approaching retirement believe they’ve saved enough to retire comfortably.

At a time when the stock market is down, inflation is rising and Americans are living longer than ever, concerns over the sustainability of retirement savings are no surprise. What you may not realize is that there are approaches that can stretch the savings you do have to position yourself more favorably in retirement.

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Row 0 - Cell 0 Taxed Later:Traditional 401(k)Taxed Now:Investment AccountTaxed Never:Roth IRATotal
Percentages100%0%0%Row 5 - Cell 4
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Row 0 - Cell 0 Without Roth ConversionsWith Roth Conversions
Social Security$60,000 taken at age 67$60,000 taken at age 67
Taxed Later$70,000 from Traditional IRA$20,000 from Traditional IRA
Taxed Never$0$40,000 from Roth IRA
Annual Gross Income$130,000$120,000
Taxable income$92,300$6,645
Federal Tax Rate22%10%
Federal Tax Due$11,540$665

This article was provided 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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Kyle Hammerschmidt, Investment Adviser
Founder and President, MOKAN Wealth Management

Kyle Hammerschmidt, founder and president of MOKAN Wealth Management, is committed to finding innovative solutions to help clients enjoy a successful retirement. Part of his mission, as an independent fiduciary adviser, is to increase financial literacy, and he regularly offers tips and guidance on the “Financially Fit with Kyle Hammerschmidt” podcast.