Here are some tips on how to manage taxes in retirement;
- To stay within the 15% income tax bracket: maximum annual income = single, $37,950; married filing jointly, $75,900.
- Investors can harvest capital gains with a zero tax rate as long as their income stays in or below the 15% tax bracket.
- To help reduce retirement tax liability, traditional IRA owners can conduct partial conversions to a Roth each year in amounts low enough to remain in the lower tax bracket.
- Drawing down income from taxable accounts first allows tax-deferred accounts to compound growth as long as possible.
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