Do You Have a Handle on Your Retirement Taxes?

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Do You Have a Handle on Your Retirement Taxes?

As you look in the rearview mirror of your career does it seem that the objects are actually getting further away? That means you are probably getting closer to retirement. Retirement can be a great thing for a lot of people, but it can also cause a lot of anxiety for those who aren’t sure they will have enough money coming in after they call it a day for the last time. Still, others who have saved up might be worried about how much of their hard-earned income they will have to give to the IRS.

Retirement Taxes

There is some good news. That’s because for many people retirement taxes aren’t as bad as they might think. However there are some important things you need to know, and do, to help ensure that your tax burden when you retire is as low as possible. These are steps that you should be taking no matter what stage of your career you find yourself in, because the best way to prepare for retirement is to start while you’re young.

Better Than Expected

Many people think that they will pay a lot of taxes when they stop working. However, there are several factors that determine your retirement taxes and in fact your taxes might actually be less than you expect. This is important because overestimating your retirement tax rate can play a big role in how you save, and how much you save. Let’s take a closer look at some of the reasons your taxes might be better than you’ve been expecting.

Lower income than expected – usually you will not need as much income to live after you retire as many of your life situations are likely to change. If your income decreases enough you might even be able to retire in a lower tax bracket.
Some retirement income is tax-free – unlike income while you’re working, not all retirement income is taxable. In fact, only income from your pension, wages, rentals or a business, as well as from withdrawals from taxable retirement accounts, is subject to tax.
Tax increases are not likely – although tax rates can change it’s more likely that any changes will mainly affect those who are in a higher tax bracket.
Planning a retirement move – many people decide to move to a different state when they retire. Some retirement-friendly states include Florida, Texas and Nevada, which don’t tax income at all. Therefore, by moving to a more tax-friendly state you could lower your tax bill in retirement.

Plan for Retirement Right

These are just a few of the reasons that you might be overestimating your retirement tax bill. Of course, you will almost assuredly have to pay some taxes on your retirement income, but there are ways you can avoid paying too much. Plus, by understanding and following these factors, you can better prepare for retirement by not saving too much or too little. You can also determine which is better for you: Roth or pre-tax contributions.

Get Help if You Need it

Whatever the case, you should start preparing now. Retirement will come quicker than you think. You can contact us if you need help planning for your financial future. You can also use some of our many financial calculators for retirement savings and planning, which can be found here.


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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4 (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

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