Your Guide On Getting More Money For Retirement with Taxes

The order in which you tap your retirement accounts can reshape your tax burden for decades. So can a handful of other strategies that financial professionals recommend but that many people overlook until they’ve already left money on the table.

Whether you’re years away from retirement or already in it, the playbook for minimizing taxes during this phase of life looks different from anything you’ve dealt with during your working years. Here’s what financial professionals at Merrill, TurboTax, Bankrate, and Nationwide are advising right now.

The withdrawal sequence that could save you thousands

Most people don’t think twice about the order in which they pull money from different accounts in retirement. That’s a missed opportunity.

“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.

The logic: letting tax-advantaged accounts keep growing while you draw from taxable ones first can maximize the compounding benefit of tax-sheltered growth. But Vrdoljak adds a caveat worth paying attention to: “But, depending on your circumstances, this order may not be right for every person.”

That’s the tricky part. Your ideal withdrawal order depends on your specific mix of account types, income sources, tax bracket and state of residence. There’s no universal formula.

Life changes that quietly change your tax picture

One of the least obvious triggers for a tax shift in retirement? Life events you might not associate with taxes at all.

“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 those events can shift your taxable income, your deductions, or your eligibility for certain credits. A part-time consulting gig that brings in $30,000, for example, could push Social Security benefits into taxable territory.

Tax laws themselves can also change, which means the strategy you built five years ago might need updating. “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,” she says. “The most important thing to remember is that you don’t have to make these decisions alone.”

Social Security: the income that might not be taxed

Here’s something that surprises a lot of people. According to TurboTax, if during retirement you only have income from Social Security benefits, then you will not include those benefits in your gross income. In that scenario, your gross income equals zero and you won’t have to file a federal income tax return.

That’s a narrow situation, but it matters. The moment you add other income sources (pensions, investment withdrawals, rental income), the calculation changes and a portion of your Social Security benefits may become taxable. Knowing where that threshold sits for your specific income mix is one of the highest-leverage tax planning moves you can make.

Traditional IRA withdrawals: not all are taxed equally

The tax treatment of traditional IRA withdrawals depends on whether you deducted your contributions in the years you made them. TurboTax explains it this way: 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. You already paid taxes on that money going in.

On the other hand, 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 easy to lose track of over years of saving. Keeping documentation of your contribution history can prevent you from paying taxes twice on the same dollars.

The Roth advantage retirees are leaning into

Roth accounts have gotten a lot of attention in recent years, and the retirement tax angle helps explain why.

IRS enrolled agent Brittany Brown, quoted in the TurboTax article, puts it directly: “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.”

That last point is easy to overlook. The tax code offers fewer breaks to retirees who no longer have dependents, mortgage interest deductions, or work-related expenses to claim. Roth withdrawals sidestep the problem entirely because they don’t count as taxable income.

If you aren’t retired yet, you may still be able to act on this. According to 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.”

That switch means paying taxes on contributions now rather than later, but it could reduce your tax exposure during the years when you have less control over your income sources.

Cut expenses now, cut taxes later

A strategy that gets less attention than account types and withdrawal sequences: simply needing less money in retirement.

Bankrate advises that 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. This approach also gives your money more time to compound.

Lower expenses mean smaller withdrawals. Smaller withdrawals can mean a lower tax bracket. It’s a straightforward chain, but it requires thinking about spending habits years before retirement arrives.

Charitable giving as a tax tool

If you’re already donating to qualified organizations, you may be leaving a deduction on the table. Nationwide points out that charitable donations can potentially reduce your income taxes, but you need accurate records of how much you donate and to which organizations.

The specifics matter here. For tax year 2025, you’ll need to itemize deductions on your tax return to claim charitable donations. If you make a donation of $250 or more, you’ll need paperwork from the charity confirming your gift. Beyond cash and monetary gifts, you can generally deduct the fair market value of other property you donate.

That last detail opens up some flexibility. Donating appreciated stock or other property, rather than selling it and giving cash, can be a way to avoid capital gains taxes while still claiming the deduction.

Property taxes: timing can matter

Nationwide also flags a move that homeowners should consider. Paying your property taxes before they’re due may reduce your taxable income. The key word is “may,” because it depends on your specific situation. Nationwide advises talking to your tax preparer to determine whether this strategy makes sense for you.

If you’re already itemizing deductions, accelerating a property tax payment into the current tax year could bump up your deductions. If you’re taking the standard deduction, the benefit may not apply.

What to do with all of this

The thread running through all of these strategies: retirement tax planning rewards people who pay attention to the details early. The withdrawal order, the account type, the timing of life changes, the record-keeping on charitable gifts — each one is a small lever. Pulled together, they can meaningfully change how much of your retirement income you actually keep.

As Vrdoljak puts it: “There’s no one-size-fits-all rule for managing taxes in retirement.” But the people who start asking these questions before they need the answers tend to come out ahead.

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

This story was originally published March 18, 2026 at 8:47 AM.