Okay, real talk, planning for taxes in retirement hit me like a freight train last April when I opened that first RMD notice and almost threw up in my Cheerios. I’m sitting here in my messy Florida condo right now, AC blasting because it’s somehow still 88 degrees in December, staring at the same pile of paperwork that’s been haunting my kitchen table since 2023. There’s a ring from my iced coffee (oat milk, don’t judge) permanently etched into my 2024 tax organizer and I just found a Cheez-It in my IRA statements. Classy.
Why Planning for Taxes in Retirement Isn’t Optional (Even Though I Tried to Ignore It)
I genuinely thought “I’ll figure it out later” was a personality trait. Spoiler: the IRS does not accept that as a filing status. My first year taking Social Security I got slapped with an extra $9k bill because I didn’t realize 85% of my benefits were taxable once my “combined income” went over, like, the government’s definition of “combined income” is some secret handshake nobody tells you about. I literally yelled “WHAT IS PROVISIONAL INCOME” at my cat. She didn’t know either.https://www.irs.gov/taxtopics/tc551
My Biggest Retirement Tax Mistakes (So You Don’t Copy Me) Plan for Taxes in Retirement
- Thought I could just withdraw whatever I wanted from my 401(k) whenever I felt like tacos. Wrong.
- Did zero Roth conversions in my 60s because “taxes might be lower later.” Reader, they were not lower.
- Let my RMDs pile up in a checking account earning 0.01% because moving money felt hard. Uncle Sam took 37% of the next withdrawal. I’m still mad. https://www.irs.gov/taxtopics/tc551
Retirement Tax Strategies That Actually Saved My Butt Plan for Taxes in Retirement
Here’s what I do now, in no particular order because my brain is soup:
- Roth conversion ladder, but lazy version Plan for Taxes in Retirement
I do $30-40k chunks in years when the market is down and my income is artificially low. Yeah, I pay taxes now, but future me isn’t getting nuked at 73. (Check the IRS tax brackets here: https://www.irs.gov/taxtopics/tc551) - Tax-gain harvesting in taxable accounts
When the market tanks I sell losers, then turn around and sell winners at 0% capital gains because my taxable income is under ~$94k married filing jointly. It’s free money and it feels illegal but it’s not. - QCDs are my new religion
Once I hit 70½ I started sending RMDs straight from the IRA to charity. Poof, counts as my RMD but literally zero taxable income. I sleep like a baby. More on QCDs from Fidelity here: https://www.fidelity.com/learning-center/personal-finance/charitable-giving/qcds - Bunch deductions like a hoarder
Medical expenses, property taxes, whatever, I shove them all into one year so I can itemize, then standard deduction the next. It’s chaotic but it works. https://www.newretirement.com
The Withdrawal Order I Finally Landed On (After Screwing It Up) Plan for Taxes in Retirement
- Taxable accounts first (let the tax-deferred keep growing)
- Then tax-deferred (401k/IRA)
- Roth last (tax-free growth forever baby) Plan for Taxes in Retirement
I have this taped to my fridge next to a photo of me crying at the DMV.
Look, planning for taxes in retirement is never going to feel like a spa day. But I’ve gone from panic-sobbing over TurboTax to just regular sighing, which honestly feels like winning in 2025. If you’re sitting there with your own coffee-stained mess thinking “this is fine,” it’s not. But it’s also fixable. Plan for Taxes in Retirement https://www.ssa.gov/benefits/retirement/planner/taxes.html
Go run your numbers (I love https://www.newretirement.com for quick scenarios, no I’m not sponsored, I just use it drunk at 2 a.m.). Talk to an actual human CPA at least once. And maybe put the gin away before you make big decisions.
You got this. Or at least you’ll screw up less than I did.
Anyway, dropping this and going to find that Cheez-It. Plan for Taxes in Retirement
