Retirement is a critical time in an individual’s life in financial terms. A retiree’s ability to live as they want will depend on their investments, the age they retire, and the lifestyle they want to maintain. It’s beneficial to consult with an accountant to take advantage of all the ways to save.


Diversity in investments can help people manage their tax burden. Not all income is taxed the same. Some sources are taxed as long-term capital gains that don’t add to the yearly tax responsibility.

The 15 Percent

The 15 percent tax bracket is ideal for retirees. It’s possible for couples to make up to $100,000 after taking the standard deduction and still remain within the 15 percent bracket. They’ll receive zero tax on income sources as long as they qualify as long-term capital gains.

Roth IRA

This is one of the few resources that individuals can draw funds from that won’t add to taxable income, as it doesn’t involve pre-tax money. Traditional IRAs can be converted to a Roth IRA, though individuals will be taxed on the amount in the year that the IRA is converted.

Delay Withdrawals

Individuals may be able to draw on their retirement resources, but it’s best not to if they’re still working. After the age of 70, there’s no reason to delay withdrawing from retirement accounts. The SECURE Act resulted in changes to the Required Minimum Distribution. Waiting until age 72 to take the first distribution will result in paying a higher tax rate.

Social Security

Individuals may discover that up to 85 percent of their Social Security benefits are taxable, depending on the amount of money a person has from other resources.

No Tax States

Some retirees choose to relocate to states such as Florida and it’s not all about the climate. There are currently 39 states that provide tax exemptions on interest, dividends, pensions and/or Social Security benefits. Some don’t even charge state income tax.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!


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