Smart Tax Strategies for a Fulfilling Retirement

Retirement was once synonymous with being "finished with the IRS." However, today’s retirees face the critical task of strategically managing withdrawals, timing income, and steering clear of costly tax blunders.

Alarmingly, every June, we encounter clients who aren't even aware they're committing these significant errors.

If you have recently retired—or are contemplating retirement soon—here’s the hard truth:
Tax strategizing in retirement is as imperative as during your employment phase.
Possibly even more so.

Why Mid-Year Timing is Crucial for Retirees

While summer may not typically symbolize tax planning, it’s actually the ideal period to:

  • Adjust your withdrawals before the year-end Required Minimum Distributions (RMDs)

  • Optimize your income sources to minimize tax liabilities

  • Dodge Medicare premium cliffs prompted by concealed income

Procrastinating until December may render it too late to rectify these issues effectively.Image 1

3 Common Retirement Tax Pitfalls and How You Can Correct Them Now

1. Delaying or Neglecting RMDs

If you have surpassed the age of 73, you must adhere to RMD mandates from IRAs and certain retirement plans. Failing to comply results in a 25% penalty on the undistributed amount that should have been withdrawn.

Even if the funds are unnecessary for daily expenses, a proactive strategy ensures compliance while mitigating financial consequences.

2. Drawing from Incorrect Accounts First

Retirees frequently initiate withdrawals from their IRAs or 401(k)s, overlooking Roth IRAs. Depending on your tax bracket, this approach may:

  • Elevate your tax bracket

  • Heighten Medicare premiums (IRMAA surcharges)

  • Forfeit opportunities for tax-free growth

A synchronized withdrawal plan can potentially prolong your retirement savings lifespan.Image 3

3. Ignoring Capital Gains from Secondary Sources

Selling real estate? Adjusting your investment portfolio? Engaging in side consulting work?
These activities can count as income and push you over critical financial thresholds, especially if you're also receiving Social Security benefits.

Mid-year financial planning allows for strategic harvesting of gains or losses and helps in avoiding clustering too much income within a single fiscal year.

Bonus Insight: Strategic Gifting, Legacy, and Charitable Contributions Without Tax Burden

  • Interested in supporting your children or grandchildren?

  • Considering donations to a cherished cause?

  • Need to manage estate taxes ahead of the anticipated 2026 changes?

There are intelligent approaches to achieve these objectives—without inflating your tax obligations.Image 2

Ensure Your Retirement is Stress-Free with a Comprehensive Tax Strategy

You’ve dedicated years to building your financial security. Protect what you’ve achieved from unanticipated tax setbacks.

For assistance in structuring your retirement income plan wisely, Jeanie K's Tax and Accounting is at your service. We can evaluate your existing strategy, pinpoint potential gaps, and guide you in future planning—ensuring your savings endure longer and your stress decreases.

Contact our office if you are newly retired, approaching retirement, or seeking an expert review of your tax planning strategy.

You’ve done the arduous work—now let’s ensure it serves you, not just the IRS.

Share this article...

Want tax & accounting tips and insights?

Sign up for our newsletter.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .
Jeanie K's Tax and Accounting We'd Love To Chat!
Please feel free to use our Ai chat assistant or click the contact button below.
Please fill out the form and our team will get back to you shortly The form was sent successfully