Top Strategies to Lower Your Taxes in Retirement, Ep #49

<p>I recently spoke on the phone with someone nearing retirement who was questioning what their taxes would look like in retirement. Would they be lower? Higher? What strategies can be implemented to keep your tax bill lower? I share some of my favorite strategies in this episode of Retirement Made Easy!</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[4:18] Social Security retirement income</li> <li>[6:48] Teaser: The most tax-friendly states to retire to</li> <li>[7:25] A Roth conversion strategy for Florida</li> <li>[10:44] The most tax-efficient retirement income</li> <li>[11:33] What to do with pension income</li> <li>[13:06] Take advantage of the low rate on capital gains</li> <li>[14:05] Use a 529 plan to set aside money for college</li> <li>[15:04] Come up with a forward-looking tax strategy</li> </ul> <h2>Social Security retirement income</h2> <p>Your taxable income will determine how much of your social security is subject to federal income taxes. Even the high-income earners receiving social security still receive 15% tax-free. They pay federal income tax on 85% of their benefit. Other people only pay taxes on 50% of their social security income. Why? Because their provisional income is far lower. </p> <p><em>When</em> you claim your benefit can change your tax planning as well. Many people claim it strategically, knowing that it won’t all be taxed at the Federal level (whereas a withdrawal from a 401k or IRA is taxed). </p> <p>The majority of states don’t tax social security income (Illinois is one example). However, Missouri is one of the few states that may tax your social security—but it depends on your income. Is there a way to work around that? Listen to find out!</p> <h2>Retiring to Florida? Wait on those Roth conversions</h2> <p>If you plan on living in Florida for more than 6 months a year, you’ll be a Florida resident. I have a few different couples who became Florida residents in their retirement. They wanted to do Roth conversions, so I advised them to w