Tax Planning in Retirement: Keeping More of Your Hard-Earned Money
You’ve spent decades building your retirement savings.
Most of the focus along the way was simple:
Earn. Save. Invest.
But as retirement gets closer, something starts to change.
Not in your accounts.
In your questions.
You start to wonder:
“How much of this will actually go to taxes?”
Because for many people, taxes don’t go down in retirement.
They just change – maybe not for the better.
And if you’re not thinking about it ahead of time, it’s easy to end up paying more than you need to—without even realizing it.
Where Retirement Tax Surprises Comes From
During your working years, taxes are fairly predictable.
You earn income.
You pay taxes.
You move on.
In retirement, it’s different.
Now your income comes from multiple places:
- Social Security
- Retirement accounts
- Investment accounts
- Maybe a pension
And each one is taxed differently.
More importantly:
You control where your income comes from.
That sounds like a good thing.
But it also means:
The decisions you make can increase—or reduce—your taxes over time.
What Tax Planning in Retirement Really Means
Tax planning in retirement isn’t about finding one trick.
It’s about making a series of decisions over time that work together.
At its core, it answers this question:
How do I take income from my accounts in a way that helps me keep more of it?
That includes:
- Which accounts you take money from first
- When you take income
- How your different types of income affect your tax bracket
- How Social Security is taxed
- Whether to shift money from Traditional to Roth accounts over time
None of these decisions stand alone.
They build on each other.
That’s why good tax planning isn’t about this year.
It’s about how your decisions play out over the next 10, 20, even 30 years.
The Tax Shift Most People Miss
Before retirement, tax strategy is limited.
You earn income.
You contribute to accounts.
You take the deductions available.
strong>After retirement, you have more control over taxes than you ever have before.
You decide:
- When to take income
- Where to take it from
- How much to take
That creates opportunity.
But it also creates risk.
Because without a plan, it’s easy to:
- Take too much from one account too early
- Push yourself into higher tax brackets later
- Increase how much of your Social Security is taxed
- Create larger required minimum distributions down the road
Most of these don’t show up right away.
They show up years later.
A Quick Example
Let’s say you’re 64 and planning to retire this year.
You’ve saved well. You’re about to start taking income.
And you’re trying to figure out how it all fits together.
If you simply start taking withdrawals from your IRA…
turn on Social Security…
and deal with taxes as they come…
you might not notice anything wrong at first.
But over time, that approach can lead to:
- Higher taxes later
- More of your Social Security being taxed
- Larger required minimum distributions
- And less flexibility down the road
That’s the difference a coordinated plan can make.
How Tax Planning Fits Into Your Retirement Plan
In our 5-step Retirement Master Plan processs, this is the 3rd step - “Keep.”
It’s not about what you make.
It’s about what you actually get to keep.
Because two people with the same income can end up with very different outcomes…
depending on how their income is structured.
If you’ve read Jeremy Keil’s book, Retire Today, this is where we focus on reducing taxes over time—not just in a single year.
Tax planning doesn’t happen once.
It happens alongside your income decisions, year after year.
The Retirement Decisions That Shape Your Taxes
This is where tax planning becomes real.
Not in theory—but in the decisions you make.
Where Should You Take Retirement Income From?
Most retirees have multiple types of accounts:
- Tax-deferred (like traditional IRA or 401(k))
- Tax-free (like Roth accounts)
- Taxable brokerage accounts
- Savings accounts
The order you use these accounts affects:
- Your current tax bill
- Your future tax exposure
- How long your money lasts
A thoughtful approach helps you spread taxes out over time so that you get more choice over which tax bracket they fall in.
How Do Roth Conversions Fit In to Tax Planning?
For some people, there are opportunities to shift money from tax-deferred accounts into Roth accounts.
Done thoughtfully, this can:
- Reduce future required minimum distributions
- Create more tax flexibility later
- Smooth out your tax brackets over time
- Reduce the tax burden on your inheritance
This is one of the areas where we often see high-income savers miss opportunities—simply because the focus is stuck on this year, instead of projecting across multiple years.
How Does Social Security Affect Taxes?
Many people are surprised to learn that Social Security can be taxed.
What matters isn’t just your benefit.
It’s your total income.
Where you take income from can change:
- How much of your Social Security is taxable
- Your effective tax rate
- Your overall retirement income
How Do My Taxes Change Throughout Retirement?
One of the biggest mistakes we see is focusing only on this year.
But retirement tax planning is long-term.
Your tax picture changes as:
- Income sources turn on
- Required minimum distributions begin
- Account balances shift
- You become widowed, and file as a Single taxpayer, instead of Married Filing Joint
That’s why we look at how your decisions today affect your taxes later.
Where Some Tax Planning May Fall Short
A lot of tax advice focuses on single-year strategies.
Things like:
- “What can I deduct this year?”
- “How do I lower this year’s bill?”
That matters.
But it misses the bigger picture.
Because decisions that reduce taxes today can increase them later.
We often see people:
- Delay decisions that would have helped long-term
- Take income in a way that creates larger future tax bills
- Overlook how different accounts interact
Individually, these choices can seem reasonable.
But over time, they can cost more than expected.
Who This Is For
This type of retirement planning is typically a good fit if:
- You want to retire within the next five years, even within the next 12 months.
- You’ve built retirement savings of $500k–$5M+
- You have a pension, 401(k), or both
- You want to make informed decisions—not guesses
Most of the people we work with are thoughtful and analytical.
They’ve been successful in their careers.
They’re used to being the expert.
But retirement is different.
You only do it once. You’ve never done it before.
And you want to make sure you don’t pay more in taxes than absolutely necessary.
Tax Planning in Retirement (Based in Milwaukee, Working Nationwide)
If you’re searching for retirement tax planning, you’ll find plenty of general information.
But most of it doesn’t apply directly to your situation.
Keil Financial Partners is based in the Milwaukee area, and we work with individuals and couples both locally and across the country who are:
- Planning how to take income from their accounts
- Evaluating Roth conversion opportunities
- Coordinating taxes with Social Security and retirement income
- And trying to make sure everything works together
Retirement Tax Planning
FAQ
A Simple Way to Get Started
You don’t need to have this figured out before you reach out.
Most people don’t.
The first step is a conversation.
We’ll help you understand:
- How taxes could affect your plan
- What decisions matter most
- What your next step should be