How Does Retirement Tax Planning Work After You Retire?

Retirement tax planning shifts from earning and deferring to deciding which accounts to draw from, and when. Withdrawals, Social Security, investment income, and required distributions can all raise taxable income in different years. Planning seeks to manage that timing, though results depend on your tax situation and rules that can change.

For households with substantial savings, the questions get specific: how much income to show in a year, which accounts to tap first, and how today's return can affect Medicare premiums two years out. It is general education, not tax advice, and it recommends no security, fund, or product. Figures below come from the IRS and the Social Security Administration (SSA), were checked on November 13, 2026, and can change.

What are the main sources of taxable income in retirement?

Most retirees draw income from several places, each taxed under different rules. Four matter most for higher-net-worth households:

• Social Security. Benefits may be taxable once your other income passes a base amount. For tax year 2025, IRS Publication 915 (viewed November 13, 2026) sets it at $25,000 for single filers and $32,000 for joint filers, and up to 85% of benefits can be taxable.
• Pre-tax account withdrawals. Per the IRS required minimum distribution FAQs (viewed November 13, 2026), withdrawals are included in taxable income, except any part already taxed (your basis) or received tax-free, such as qualified distributions from designated Roth accounts.
• Taxable account income and gains. Interest, dividends, and gains from sales add to income in the year they are realized. IRS Topic no. 559 (viewed November 13, 2026) describes a 3.8% net investment income tax on the lesser of net investment income or the amount by which modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly).
• Business sale proceeds. A sale can create a large gain in one year, which may push income above several thresholds at once. How it is taxed depends on the entity, the deal structure, and your role in the business, so model the timing with your CPA early.

Because these sources interact, a decision that lowers one tax can raise another.

What does tax efficient retirement planning look like in practice?

Tax efficient retirement planning usually starts with a withdrawal sequence: which account types you draw from, in what order, and in what amounts each year. A common starting point is taxable accounts first, then pre-tax, then Roth. That order is a convention, not a rule, and it can be a poor fit when future income is expected to be higher than today's. Our guide on why withdrawal order matters goes deeper. Here is how the three account types compare.

Blending the three can give you room to adjust taxable income each year. It mainly changes when you pay tax, not whether you pay it.

Should you convert to a Roth before required distributions begin?

A Roth conversion moves money from a pre-tax account to a Roth account. Under IRS Publication 590-A (2025, viewed November 13, 2026), there is no income limit on conversions, and the converted amount is generally included in gross income for the year to the extent it was not already taxed. A separate five-year period can matter if you withdraw converted amounts before age 59½.

The years between retirement and required distributions are sometimes lower-income years, but not for everyone, especially after a business sale. Weigh these costs against the possible benefit:

• Tax now. You owe income tax on the converted amount in the year of conversion, usually paid from other funds.
• Ripple effects. A larger income year can make more Social Security taxable, trigger the net investment income tax, and affect Medicare premiums (see below).
• Uncertain payoff. The benefit depends on future tax rates, your future income, and how long you hold the money, none of which can be known in advance.

For more on timing, see our guides on Roth conversions after 50 and using the Roth window before RMDs.

How do required distributions and charitable giving fit in?

Required minimum distributions (RMDs) set a floor on pre-tax withdrawals. Per the IRS (retirement topics on RMDs, viewed November 13, 2026), withdrawals from IRAs and workplace plans generally must start at age 73. Under SECURE 2.0, the starting age is 75 for people born in 1960 or later, per the Congressional Research Service (viewed November 13, 2026). The IRS says an RMD not taken may be subject to an excise tax of 25%, or 10% if corrected within two years.

Large pre-tax balances can produce large RMDs and push income into higher brackets and Medicare tiers. Our article on the RMD tax bomb for $5M+ families covers that risk, and our RMD calculator can estimate a first-year amount from your own assumptions.

For charitably inclined households, one category to know is the qualified charitable distribution (QCD): a direct transfer from an IRA to an eligible charity, available from age 70½. The amount excluded from gross income is capped at $111,000 per person for 2026, per IRS Notice 2025-67 (viewed November 13, 2026). Trade-offs: the money must go directly to the charity, it comes only from IRAs, and the excluded amount generally cannot also be deducted. Fit depends on your giving goals and your CPA's view of your return.

How do Medicare premiums connect to your tax return?

Higher-income Medicare enrollees pay more for Part B and prescription drug coverage. SSA (viewed November 13, 2026) calls this the income-related monthly adjustment amount. It is based on modified adjusted gross income (MAGI), which is adjusted gross income plus tax-exempt interest.

Two points matter for planning. First, SSA says its 2026 determinations generally use the tax return from two years earlier, so 2026 premiums generally reflect tax year 2024. Income you create this year can affect premiums in 2028. Second, the surcharge is tiered. For 2026, SSA lists a standard Part B premium of $202.90 a month. The first surcharge applies when MAGI is above $109,000 for single filers or $218,000 for married couples filing jointly, and it adds $81.20 to the Part B premium and $14.50 to the drug coverage premium each month. Higher tiers add more.

SSA allows a new determination after certain life-changing events, such as retiring, using Form SSA-44.

A hypothetical example

Hypothetical example for illustration only. It is not a projection, a recommendation, or a client outcome, and individual results differ. Assume a married couple, both enrolled in Medicare, with $190,000 of joint MAGI before any conversion. They consider converting $40,000 from a pre-tax IRA, which would raise joint MAGI to $230,000, above SSA's $218,000 threshold. Using the 2026 surcharge amounts above as a stand-in, the first tier adds $81.20 plus $14.50, or $95.70 a month per person. For two people over 12 months, that is $2,296.80, or about $2,300 a year, on top of the income tax owed on the conversion itself.

Limitations: thresholds and premiums change over time. The example ignores income tax on the conversion, Social Security taxation, and the net investment income tax. A smaller conversion under the threshold would avoid this surcharge, and a larger one might still be reasonable for other reasons.

Does living in Florida change retirement tax planning?

It can change one part of the picture. The Florida Department of Revenue states that Florida does not impose a personal income tax (viewed November 13, 2026), so there is no state income tax filing on retirement withdrawals or conversions. Federal rules still apply in full, Florida has other taxes and fees, and residency for tax purposes depends on your facts and circumstances. If you are considering a move, talk to your CPA and an attorney first.

Do you need a tax advisor for retirement planning, and who coordinates what?

Retirement tax decisions cut across tax, investment, and legal work. A tax advisor for retirement planning, whether a CPA or a planner working with one, helps keep those pieces consistent. Here is a typical division of work.

At Integrity Wealth, in-house CPAs and in-house estate planning attorneys work alongside the advisors, which may make coordination easier. Many households also keep outside professionals, and we work with them. Coordination depends on everyone having current information, and it does not remove the tax cost or market risk of a decision. Our guide on CPA vs. financial advisor explains how the roles differ.

Frequently asked questions

What is retirement tax planning?

Retirement tax planning is deciding which accounts to draw from, when, and how much, with attention to Social Security, pre-tax withdrawals, investment income, and Medicare premiums together. It seeks to manage when tax is paid and does not promise a lower total.

When do required minimum distributions start?

The IRS says withdrawals from IRAs and workplace plans generally must start at age 73 (viewed November 13, 2026). Under SECURE 2.0, the age is 75 for people born in 1960 or later. Roth IRAs have no required withdrawals during the owner's lifetime.

Is Social Security taxable?

It can be. Under IRS Publication 915 for tax year 2025, benefits may be taxable when half of your benefits plus your other income, including tax-exempt interest, exceeds $25,000 for single filers or $32,000 for joint filers. Up to 85% of benefits can be included in income.

What is the Medicare two-year lookback?

SSA generally uses the tax return from two years earlier to set Medicare surcharges. For 2026 premiums, that is generally tax year 2024. A high-income year, such as a business sale, can therefore affect premiums two years later.

Can a Roth conversion raise my Medicare premiums?

It can. A conversion adds to adjusted gross income for the year it occurs, and SSA's thresholds are based on that income. For 2026, the first surcharge starts above $109,000 (single) or $218,000 (joint). Ask your CPA to project your MAGI first.

What is a sensible next step?

If you are within a few years of retirement, or have recently sold a business, a discovery conversation is one way to start. Book a discovery conversation and bring your most recent tax return and account statements, or read more about our tax planning and financial and retirement planning services first. Planning of this kind seeks to make decisions more deliberate and does not promise a particular tax result.