HelloNation article explains tax rules that can affect retirement income
A HelloNation article featuring financial planning professional Julie Waitman says Social Security, retirement account withdrawals, Roth moves and Medicare costs can affect how much retirees keep.
A HelloNation article promoted by PR Newswire says retirement taxes can change when people claim benefits, take withdrawals from savings accounts or convert funds to Roth accounts.
The article features financial planning professional Julie Waitman of Richmond, Virginia, and focuses on how tax rules can shape retirement income after a person stops working. It says the timing of withdrawals and benefit claims can affect tax bills for years, which can matter for people trying to preserve savings.
According to the release, Social Security benefits may be partially taxable depending on total income, and some states tax those benefits while others do not. The article also says withdrawals from traditional accounts such as 401(k)s and IRAs are usually taxed as ordinary income, so a large withdrawal in one year could push a retiree into a higher tax bracket.
By contrast, the article describes Roth accounts as funded with after-tax dollars, with qualified withdrawals generally tax free. It says Roth conversions move money from a traditional account into a Roth account and require taxes to be paid right away. The piece says doing that during lower-income years can reduce future tax burdens.
The release also says required minimum distributions begin once a person reaches a certain age and apply to most tax-deferred accounts. Those withdrawals are taxable, it says, and can increase overall income as well as the taxable portion of Social Security benefits. It adds that higher income can lead to increased premiums for certain Medicare coverage.
The article recommends working with a tax professional or financial planner and says retirement income decisions should be viewed together with income sources, expenses, pension income, investment accounts, health care needs and long-term goals. It also says tax laws can change over time, so retirement plans should be revisited regularly.
The piece says the goal is not to avoid taxes altogether, but to make informed choices that may help preserve more savings.
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