For many, retirement marks the end of earning a paycheck, but it’s not the end of paying taxes. In fact, retirement often brings new complexities when it comes to managing your tax bill. From Social Security and required minimum distributions (RMDs) to shifting income sources and healthcare costs, your tax strategy must evolve with your lifestyle.

At CKS Summit Group, we help clients understand not just how much they have in retirement, but how much they keep. SMART Retirement™ tax planning can help preserve wealth, reduce unnecessary withdrawals, and support long-term financial confidence.

Why Retirement Taxes Are Different

When you’re working, tax planning is often straightforward: you earn income, contribute to tax-advantaged accounts, and aim to minimize your annual liability.

In retirement, your income might come from multiple sources, each taxed differently:

✔️ Social Security
✔️ Traditional IRAs and 401(k)s
✔️ Roth IRAs
✔️ Brokerage accounts
✔️ Pensions or annuities
✔️ Rental income or part-time work

These income sources interact in ways that can push you into higher tax brackets, increase Medicare premiums, or trigger taxes on your Social Security benefits. That’s why proactive planning is critical.

5 Key Tax Shifts to Understand in Retirement

1. Social Security Can Be Taxable

Up to 85% of your Social Security benefits may be taxed, depending on your “combined income” (which includes half of your Social Security plus other income sources). Many retirees are surprised by this. But with proper income coordination, it’s possible to reduce the tax impact.

💬 Advisor Insight: “We help clients manage withdrawals strategically so their Social Security stays as tax-efficient as possible.” – Al Caicedo, President of CKS Summit Group

2. Required Minimum Distributions (RMDs)

Once you reach age 73 (per SECURE Act 2.0), you must begin taking RMDs from traditional IRAs and 401(k)s, whether you need the money or not. These are taxed as ordinary income and can significantly impact your tax bracket.

Planning Tip: Consider Roth conversions in the early years of retirement (before RMDs kick in) to lower your future RMD liability.

3. Roth Income is Tax-Free, But It Still Needs Strategy

Withdrawals from Roth IRAs and Roth 401(k)s are tax-free, making them powerful tools for tax diversification. However, timing matters. Using Roth funds too early can prevent you from taking advantage of lower tax brackets on taxable accounts.

Planning Tip: Blend taxable, tax-deferred, and tax-free withdrawals to help keep your total tax rate low over time.

4. Capital Gains Rules Apply Differently

Selling investments in a taxable brokerage account may trigger long-term or short-term capital gains. The good news? Many retirees fall into a lower income bracket, which could mean 0% capital gains tax on some investment income.

Planning Tip: Use tax-loss harvesting or charitable giving strategies to help offset gains if needed.

5. Healthcare and Medicare Have Tax Consequences

Your modified adjusted gross income (MAGI) determines Medicare premiums. Earning “too much” can trigger Income-Related Monthly Adjustment Amounts (IRMAA), increasing your costs for Parts B and D.

Planning Tip: Monitor income thresholds and avoid surprise spikes from large one-time withdrawals.

How CKS Summit Group Can Help

Retirement tax planning is not just about saving money today. It’s about building a long-term income plan that minimizes unnecessary taxation and supports financial flexibility.

At CKS Summit Group, we help clients:

✔️ Coordinate income across multiple sources
✔️ Identify optimal timing for Social Security and RMDs
✔️ Evaluate the benefits of Roth conversions
✔️ Identify withdrawal strategies
✔️ Watch for Medicare premiums and increasing taxes

Our tax-aware approach is designed to help you keep more of what you’ve worked so hard to earn and spend it with confidence.

Final Thoughts: Don’t Let Taxes Erode Your Retirement

Even in retirement, taxes don’t go away. But with proactive planning, they don’t have to get in the way of your goals. The earlier you start coordinating income, the more control you have over your long-term tax picture.

📅 Ready to review your retirement tax strategy? Schedule a complimentary consultation with the team at CKS Summit Group today.

👉 Visit summitgp.com to get started.

FAQs

Q1: Do I still need to file taxes in retirement?
Yes. Most retirees still file annually, especially if they have taxable income, RMDs, or Social Security.

Q2: Should I convert my IRA to a Roth after retiring?
It depends on your income level, goals, and timing. Roth conversions can be powerful, but require careful planning.

Q3: How can I avoid taxes on Social Security?
You may not be able to avoid them entirely, but coordinating withdrawals from other accounts can help reduce how much is taxed.

Q4: Are healthcare costs tax-deductible?
Some are. If you itemize deductions or use a Health Savings Account (HSA), there may be tax advantages.

Q5: Can CKS work with my CPA or tax advisor?
Absolutely. We often collaborate with tax professionals to create a holistic plan that supports your broader financial goals.

Disclaimer: This content is for informational and educational purposes only and does not constitute tax or investment advice. Always consult a qualified tax advisor before making financial decisions.