Even though you’re not working, you can still pay taxes in retirement.

Your spending money probably comes from sources like Social Security, a pension, and withdrawals from your retirement savings accounts. Depending on your household finances, those resources can generate enough income to result in income taxes, so you need to plan ahead.

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The more you pay in taxes, the less you have left over for spending needs. And while taxes are potentially inevitable, you may be able to manage how much you spend on taxes over your lifetime.

By understanding where your tax liability comes from, you can take steps to minimize your taxable income. For example, you might selectively pull from pre-tax or post-tax (Roth) accounts, depending on how high your income is in a given year. You might also consider Roth conversions to smooth out how much tax you pay in retirement, and when.

Retirement planning is about making sure you have enough resources to last for the rest of your life. Taxes are a big part of that, so it’s critical to understand what opportunities might be available. There are always pros and cons of pursuing tax strategies, but the first step is to learn what’s possible. Be sure to get individualized, detailed advice from a professional before you decide on anything or take any action.

Details on Social Security taxation: https://www.ssa.gov/benefits/retireme...
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Timestamps:
0:00 Yes, You Still Pay Taxes in Retirement
0:14 Why Taxes Matter During Retirement
1:00 What We'll Cover
1:24 Types of Accounts - Tax-Deferred, Tax-Free, Taxable
2:53 Will You Pay Taxes on Social Security?
3:26 Pension Income is Typically Taxable
3:37 Required Minimum Distributions (RMDs)
4:07 How to Manage Your Retirement Taxes: Choose Accounts
5:14 Roth Conversion Strategy - Smooth Out Taxes
5:46 Tax-Efficient Investing During Retirement
6:12 Wrap-Up

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Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.
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IMPORTANT:
It's impossible to cover every detail and topic in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.