1. Money
Dana Anspach

Retirement Taxes - How Much Will You Pay?

By October 19, 2009

Follow me on:

I'm often asked how to estimate the amount of taxes someone might pay in retirement. It's not always an easy calculation. Each type of income you receive in retirement has a different tax rule that applies to it; for example social security will be taxed differently than investment income which will be taxed differently than withdrawals from retirement accounts.

To provide a quick and easy overview, I just posted  What Kind Of Retirement Taxes Will You Pay?.

Of course, once you've calculated how your retirement income will be taxed then you must factor in your itemized deductions, which will depend on whether you have a mortgage, how much you gift to charity, how much you spend out-of-pocket on medical care... and that is why I have an accountant.

It's also why, when you shift from working to retirement, I recommend you have a tax projection done so you're not caught off guard with an unexpected tax bill at the end of your first year of retirement.

You can find online calculators to do your own tax projection, ask your accountant to run one for you, or find a qualified financial advisor to run one.

No comments yet. Leave a Comment
Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.