Exploring the Benefits of Retirement Tax Planning – Preparing for a Secure Future 

senior couple discussing retirement tax planning

It’s common knowledge that the earlier you start saving for retirement, the more financially secure you’ll be.  But what can you expect regarding taxes? 

Many new retirees are surprised to discover that annual taxes still apply when it comes to retirement savings and accounts.  It can take a big chunk out of the hard-earned income that took years to accumulate. 

Tax Preparation and Planning for Retirement   

It should be a cornerstone of your savings strategy. 

Tax planning for retirement will ensure there are no surprises in your golden years and that you have a strategy to minimize your taxes as much as possible –now and decades into the future. 

Established financial advisory firms (Dallas based Saddock Advisory is a prime example) can help with the lengthy process of tax planning. Their professional tax experts are your best resource to maximize your retirement benefits. 

In the meantime, understanding the fundamentals of tax planning for retirement will go a long way in taking stock of your current saving strategies. You can also learn to identify several ways to improve your retirement game plan.  

What is Tax Planning for Retirement? 

Simply put, the process of tax planning for retirement entails examining your different avenues for retirement income. This includes everything from social security to 401(k) accounts to determine how to minimize taxes owed either now or when regular withdrawals and distributions are warranted.  

How Are Different Savings and Retirement Accounts Taxed? 

How your investments and other retirement income will be taxed can vary widely. General tax guidelines for some of the more popular types of retirement income include the following.  

Social Security 

Yearly Social Security benefits above $25,000 (0r $32,000 if you’re married and filing jointly) will typically be taxed on an annual basis. However, remember that these are the current income thresholds, which may change over time.  

401(k) Retirement Accounts 

If contributions to your 401(k) were made with pre-tax dollars, your eventual distributions would be taxed at normal income tax rates. The required minimum distributions must be taken every year once you turn 73. However, there are ways to rotate these distributions to have a minimal impact on the taxes owed, year after year.  

In addition, there may be opportunities to roll over your 401(k) to an IRA account potentially benefiting your bottom line. Your tax preparation and planning advisor will be able to help you explore your options and determine the best specific and individualized opportunities for you.   


Taxes on IRAs can differentiate widely, starting with whether your contributions were made with after—tax or pre-tax funds. Traditional IRAs are generally funded with pre-tax dollars, so annual taxes will be owed once you collect distributions. Roth IRAs, however, have tax-free distributions provided that specific holding requirements are met. Again, your tax preparation expert can help determine the right IRA options for you when minimizing the taxes owed now or well into the future.  


Distributions from investments like stocks, bonds, and mutual funds are taxed the same, regardless of whether you have capital gains now or in your retirement years. With that being said, some investments may generate lower taxes or may even be tax free, such as municipal bonds. Therefore, it’s worth exploring the different tax rates for different investment vehicles.  

How to Determine the Best Retirement Strategy for You 

Tax planning for retirement is complicated because it requires attention to the best types of savings and investments that align with your financial situation now, and your future goals.  

There are several steps you can take in the years before, during, and after your retirement date to minimize the annual taxes, you owe. For example, you may want to start your retirement year by taking out withdrawals from your taxable accounts first, allowing for other tax-free accounts to continue to grow. You will also want a plan for when and how you collect distributions. That way, your annual income during retirement remains within a specified tax bracket every year. 

Establish a Solid Retirement Strategy with a Tax Professional 

At Saddock Advisory, we’ll be your guide now and decades from now as you navigate the best ways to save money and maximize your benefits when it comes to tax planning for retirement.  

Regardless of whether you’re retiring in a year or decades from now, reach out to our team to start the conversation on the best strategies for you. With an established financial expert, you can ensure you are well prepared for a financially successful and fulfilling future long after you retire.  

Contact us today. 

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