Your Guide to Getting More Money for Retirement with Taxes

The retirement income decisions you make around taxes — which accounts you tap first, how you handle Roth conversions, and even where you live — can erode or enhance your Social Security benefits just as much as choosing when to claim.

Withdrawal Order Carries Real Weight

One of the most consequential tax decisions in retirement is deceptively simple: which account do you pull money from first?

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“For some people, it will make sense to consider tapping taxable accounts first, then tax-deferred and finally tax-free,” says Nevenka Vrdoljak, managing director in the Chief Investment Office for Merrill and Bank of America Private Bank, in an article from Merrill. “But, depending on your circumstances, this order may not be right for every person.”

For anyone coordinating Social Security with other income sources — a pension, part-time work, or required minimum distributions from a 401(k) — the sequencing question matters. Drawing down a taxable brokerage account in the early years of retirement could keep your taxable income low enough to affect how much of your Social Security benefit is subject to federal income tax.

Your withdrawal order depends on the full picture of your income sources, your tax bracket, and the timing of events like Social Security enrollment. There is no universal playbook.

Social Security Benefits Can Become Taxable When Other Income Enters the Picture

According to TurboTax, you should always “Pay attention to Social Security and other income amounts.”

TurboTax explains: “If you worked for an employer or had net profits from self-employment before retirement, you’ll receive Social Security benefits in retirement. If during retirement you only have income from Social Security benefits, then you will not include those benefits in your gross income. In this case, your gross income will equal zero, and you won’t have to file a federal income tax return.”

That scenario — Social Security as your only income — may sound straightforward, but it’s often not the reality for households with $80,000 or more in annual income.

When you layer in withdrawals from traditional IRAs, 401(k) distributions, part-time earnings, or investment income, your Social Security benefits can become partially taxable. The IRS uses a measure called “provisional income” to determine how much of your benefit is subject to tax. The more non-Social Security income you have, the more of your benefit gets pulled into your taxable income.

The Roth Advantage: Income That Stays Off Your Tax Return

For planners weighing how Social Security income interacts with other retirement withdrawals, the Roth IRA and Roth 401(k) deserve serious consideration.

IRS enrolled agent Brittany Brown, quoted in the TurboTax article, puts it plainly: “Roth IRA withdrawals give the best of both worlds to retirees. You get regular retirement income and no income tax. This is important for seniors because there just aren’t a lot of tax credits or deductions available for people who have unearned income and no longer have dependents to claim.”

Unlike traditional IRA or 401(k) withdrawals, qualified Roth withdrawals do not count as taxable income. They don’t push your provisional income higher, they don’t nudge more of your Social Security benefit into taxable territory, and they don’t bump you into a higher federal bracket.

For those who haven’t yet retired, there may still be time to shift the composition of savings. In an article for Bankrate, Daniel Razvi, COO of Higher Ground Financial Group in Frederick, Maryland, advises: “If you aren’t retired yet, you can change your future contributions in your 401(k) to Roth instead of traditional, so you don’t compound an already huge tax problem.”

For a dual-income household planning to coordinate two Social Security benefits alongside multiple retirement accounts, directing future contributions into Roth vehicles before retirement could meaningfully change the tax dynamics in later years.

Traditional IRA Withdrawals: Know What You Already Paid Tax On

Another area where retirees frequently leave money on the table — or pay tax they don’t owe — involves traditional IRA distributions.

TurboTax explains: “Traditional IRA contributions are usually made with after-tax dollars, so if you did not take a deduction for some or all of your contributions, the withdrawals you make from these non-deducted contributions are not taxable. That is because you already paid taxes on the money you put in the account, and you didn’t receive a tax benefit for those deposits. Similar to 401(k) plans, if you deducted traditional IRA contributions from your income in earlier tax years, you may want to limit your retirement withdrawals to reduce your potential tax burden.”

The distinction between deducted and non-deducted contributions is something many retirees and even some advisors gloss over. If you made after-tax contributions to a traditional IRA at any point in your career, a portion of each withdrawal may be tax-free.

Life Changes Reshape Your Tax Picture

The Social Security claiming decision itself is a life event that can alter your tax circumstances.

“A number of life events,” says Vrdoljak, “could trigger a change in your tax circumstances: taking Social Security, staying employed past retirement age, returning to work part-time, relocating to a more (or less) tax-friendly state or dealing with increased healthcare costs.”

Each of these events interacts with the others. Staying employed past retirement age while collecting Social Security involves both income tax consequences and, for those who claim before full retirement age, the Social Security earnings test. Relocating to a state with no income tax could change the calculus on when to begin drawing down a traditional IRA.

Tax laws themselves are also a moving target. “Your best bet is to check in regularly with your advisor and tax pro,” says Vrdoljak. “There’s no one-size-fits-all rule for managing taxes in retirement. The most important thing to remember is that you don’t have to make these decisions alone.”

Charitable Giving and Property Taxes as Levers

For retirees looking to manage taxable income — especially in years when provisional income is near a threshold — charitable giving and property tax timing offer additional tools.

Nationwide notes: “You can also potentially reduce your income taxes by making charitable donations to qualified organizations. Keep accurate records of how much you donate and to which organizations. You may be able to use those donations as a tax deduction at the end of the year.”

For homeowners, Nationwide also advises: “If you own a home, paying your property taxes before they’re due may reduce your taxable income. Be sure to talk to your tax preparer to determine whether this strategy makes sense for you.”

Cutting Expenses Before Retirement Compounds the Benefits

Bankrate offers a strategy that sounds simple but has compounding effects: cut expenses before you retire.

“One of the best ways to cut your taxes is to reduce the amount you’ll need in retirement, keeping you in a lower tax bracket if you do take withdrawals from pre-tax sources such as traditional IRAs,” Bankrate writes. “This strategy also has the extra benefit of giving your money more time to compound.”

The amount you need to withdraw from tax-deferred accounts each year is directly shaped by your spending — and your spending determines where you land on the tax bracket spectrum.

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This article was created by content specialists using various tools, including AI.

This story was originally published March 18, 2026 at 9:51 AM.