5 Strategies to Help You Hold on to More of Your Money in Retirement

Some savvy retirees could pay 0% in capital gains taxes if they manage their incomes right. Others could avoid paying hidden Medicare taxes with the help of Roth IRA conversions. It’s all about tax planning.

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Preparing for retirement requires a lot of adapting — not just emotionally, but financially. The closer you get, the more important it becomes to look at your budget, your asset allocation and where your income will come from when you’re creating your own paycheck.

It’s also critical to make tax efficiency a priority in your planning.

Taxes can take a giant bite out of retirement income year after year. And yet, even people who have done a great job of investing and saving for retirement tend to overlook the tax planning that’s necessary to hold on to more of their nest egg.

That may be because many people have been told their taxes are destined to go down in retirement. If you’re spending less, you’ll require less income, which means your taxes will be lower, right? Not always. Many people spend the same or more in retirement — at least for the first few years, when they may be doing more traveling, spending time with family and friends, or taking up new hobbies. Also, required minimum distributions for many people can force distributions above and beyond their spending levels, which can increase taxable income and create a tax nightmare.

What can you do to soften the blow? Here are a few strategies to consider:

Disclaimer

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.

Disclaimer

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.

Troy Sharpe, Certified Financial Planner
Founder and CEO, Oak Harvest Financial Group

Troy Sharpe is the founder and CEO of Texas-based Oak Harvest Financial Group. In 2023, Investopedia named Troy a top 100 adviser in the country. He holds a Series 65 license as well as a Texas life insurance license. Troy earned his bachelor’s degree in finance from Florida State University and completed his Certified Financial Planning certification at Rice University. He completed his Certified Private Wealth Advisor coursework through the Yale School of Management.