Overview
- One featured plan, nicknamed “Take That, Uncle Sam,” suggests using Roth IRA money first during high‑spending early years, then taxable brokerage funds, then traditional IRAs, and flipping that order if bigger spending comes later in retirement.
- Tax‑deferred accounts such as traditional IRAs and 401(k)s require minimum annual withdrawals starting at age 73, which can push income into higher tax brackets.
- Roth IRAs do not have required minimum distributions and qualified withdrawals are tax‑free after the account has been open at least five years, which gives retirees more control over their taxable income.
- The IRS taxes Social Security based on “combined income,” which adds half of your benefit to other income, with taxation starting above $25,000 for single filers and $32,000 for couples and rising to as much as 85% of benefits at higher levels.
- Retirement adviser David Brooks warns that counting on a lower tax bracket in retirement often fails and that stacked effects from RMDs, taxable Social Security, and Medicare premium surcharges can create costly surprises without proactive planning.