Retirement is a stressful financial topic for many people, since most Americans are struggling to save enough to be able to retire comfortably. One way to reduce this stress and to have enough money in retirement is to take advantage of possible and potential tax cuts in retirement. One way to reduce your tax burden in retirement is to contribute to a ROTH IRA, which uses money that is already taxed. This means you will not be taxed on money you take out of the account.
- To figure out your income, write down your take-home pay and then minus any bills and insurance premiums you have throughout the month.
- Full retirement is typically considered 66 for those born between the years of 1943 and 1954.
- Once you turn 70.5 years of age, you are required to start withdrawing from your tax-deferred accounts.
“if you don’t know how much you’re planning to spend in retirement, you don’t know how much income you’ll need to cover those expenses. And if you don’t know those two key pieces of information, any retirement plan that you have isn’t worth the paper it’s printed on.”