Guide To Tax Planning For The Elderly

You've been looking forward to this date for a long time when you will retire. You'll be able to live your life as you like, or even start your next job. Regardless of how you decide to spend your retirement, it is important to plan your tax strategy so you can keep your taxes as low as possible.

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Tax planning for retirement is exactly the same as the strategy you employed during your career. You are likely to have less earned income, more dividends and interest, and fewer itemized deductions. An estate tax lawyer can help you fine-tune your strategy. 

Sources of retirement income

As you retire, you may tap sources of income that you have not been able to access until now. You may receive income from Social Security, your 401(k), or other retirement saving plans, pensions, annuities, etc.

  • Social Security benefits may be tax-free or partially tax-free, depending on your total income.

  • Pension/Annuity income may be fully or partially taxable depending on whether contributions were made pre-tax or after-tax.

Tax Strategies

Even in retirement, you may still be able to take advantage of certain deductions to lower your tax bill. You may still take a standard deduction, and do not overlook itemized and personal deductions that you may be entitled to, such as mortgage interest, personal and property taxes, and medical expenses.