Retirement tax brackets 2024

In the midst of the COVID-19 pandemic and the relief measures Congress has passed to ensure the economy’s recovery, markets regained the ground they lost in 2020 and then sailed even higher.

If you’re getting ready to retire, these market gains likely help you feel more confident about the sustainability of your post-retirement finances.

Obviously, accumulating sufficient assets for retirement is a critical part of retirement income planning.

However, it’s just as important to preserve what you’ve saved over the 25 or 30 years that you may live in retirement.

How to reduce tax on pension income

That’s where proactive tax planning comes in.

Retirees are required by law to pay taxes on the money they take out from traditional retirement accounts, such as IRAs. You may be able to avoid taking money out of your traditional retirement account until age 72, but that’s when required minimum distributions kick in.

At that point, you must pay taxes on the amounts you withdraw, which will reduce the value of your pre-retirement savings.