Five Things to Know About Taxes in Retirement

Sep 27

When planning for expenses in retirement, it’s easy to begin thinking about travel and vacations while overlooking one significant expense – taxes. In a recent Nationwide Retirement Income Survey, 41% of retirees surveyed reported wishing they had been better prepared for taxes leading up to retirement.¹

Tax laws change frequently, and different types of income are subject to different tax treatments. Strategic, proactive tax planning can save thousands of dollars throughout an investor’s retirement, and in this article, we cover five things you need to know about taxes as you transition into retirement.

Tax Rates Aren’t Always Lower

Many retirees assume that expenses, such as spending and taxes, will go down once they leave the workforce. However, this isn’t always the case. Even though earned income will be lower, several other factors affect how much tax will be owed.

First, retirees don’t always have the same tax deductions as employed individuals do, such... ...