Retirement Tax Planning
Retirement Tax Planning: The Complete Guide for Retirees and Pre-Retirees
Here's a number most people don't want to think about: in retirement, taxes may be the single largest expense you face. Not healthcare. Not housing. Taxes.
That's not a scare tactic — it's a planning reality. Most people spend 30 to 40 years building a retirement account and very little time thinking about what happens when they start taking money out. The IRS has been patiently waiting for that moment. How much they collect depends almost entirely on how well you planned for it.
At Nelson Financial Planning, tax coordination isn't something that gets added to the plan at the end. It's built in from the beginning. Christina Lamb, an IRS Enrolled Agent, and Kristin Kalley, a CPA, are part of our advisory team and work as Certified Financial Fiduciaries with the rest of our advisory team to make sure the investment strategy and the tax strategy are always talking to each other. That combination is rare in this industry. And it matters significantly to what clients actually keep in retirement.
This guide covers the core concepts of retirement tax planning: what's at stake, what the most common mistakes look like, and how to think about each piece of the puzzle. The in-depth articles linked throughout this page go deeper on each topic.
REVIEWED BY

Joel Garris, CFP®, Kristin Kalley, CFP®, CPA & Christina Lamb, IRS Enrolled Agent
Certified Financial Fiduciaries™ | Nelson Financial Planning
Joel has 25+ years of retirement planning experience. Christina is an IRS Enrolled Agent and Kristin is a CPA— one of the only financial planning firms in Central Florida.
The goal of retirement tax planning isn't to avoid taxes entirely. It's to pay what you owe - and not a dollar more. That requires strategy, coordination, and someone who actually understands the tax code.
Why Retirement Tax Planning is Different
During your working years, taxes were largely automatic. Your employer withheld them, sent them to the IRS, and you filed once a year to settle up. The complexity was manageable because most people had one or two income sources.
Retirement changes that entirely. Suddenly you're drawing from multiple accounts - a pre-tax IRA here, a brokerage account there, a pension or Social Security on top of that - each with different tax treatment. You're responsible for estimating and paying your own taxes. And the interactions between those income sources create ripple effects that catch a lot of people completely off guard.
Here's one that surprises people almost every time: in retirement, a seemingly small increase in income can trigger a disproportionately large tax hit. Adding $4,000 in interest income in a given year can — under current thresholds — cause an additional $4,000 of Social Security benefits to become taxable. Dollar for dollar. That's an effective marginal tax rate well above what most people expect.
Add IRMAA Medicare surcharges into the mix, and the stakes get even higher. We've seen clients pay $500 or more per month in additional Medicare premiums because of a single financial decision made without considering the income threshold.
This is why planning ahead matters so much. These outcomes are not inevitable - they're the result of a lack of coordination. When your advisor and your tax professional are the same team, working from the same plan, many of these surprises can be anticipated and managed.
$4,000
Adding $4,000 in interest income in a given year can - under current thresholds - cause an additional $4,000 of Social Security benefits to become taxable. Dollar for dollar.
$500+ / month
We've seen clients pay $500 or more per month in additional Medicare premiums because of a single financial decision made without considering the income threshold.
The Topics that Matter Most
Retirement tax planning is a broad discipline. Here's how Nelson Financial Planning's team thinks about key pieces.

FREE DOWNLOAD
Roth Conversion Decision Checklist
12 questions to ask before converting your IRA - so you don't trigger an unexpected bill.
01
Roth Conversions: The Window Most People Miss
For many retirees, the years between leaving work and age 73 - when Required Minimum Distributions begin - are the most valuable tax planning years of their lives. Income is often lower during this period than it will be once RMDs kick in. That creates an opportunity.
A Roth conversion means taking money from a pre-tax IRA, paying tax on it now, and moving it into a Roth IRA where it grows and can be withdrawn tax-free. Done at the right time and in the right amount, a Roth conversion can permanently reduce future RMDs, lower lifetime tax exposure, reduce IRMAA surcharges, and leave a more tax-efficient inheritance for your family.
Done without careful modeling? It can trigger a surprise tax bill, push you into a higher IRMAA bracket, and increase the taxable portion of your Social Security - all at once.
Joel Garris on the Dollars & Sense podcast:
"Run the numbers. The ripple effects on Medicare and Social Security are real. A conversion that looks good on the surface can cost you significantly when you factor in everything it touches."
The 12-question Roth Conversion Decision Checklist — available as a free download — walks through the key factors before converting, including MAGI exposure, IRMAA thresholds, and whether you can pay the tax bill from outside the IRA.
02
IRMAA: The Medicare Surcharge Most People Don't See Coming
IRMAA stands for Income-Related Monthly Adjustment Amount. It's a surcharge added to Medicare Part B and Part D premiums for beneficiaries whose income exceeds certain thresholds. The 2026 thresholds are $109,000 for single filers and $218,000 for joint filers.
Here's what makes it so consequential: the jump isn't gradual. Cross the threshold by a single dollar and your entire Medicare premium increases — for you and your spouse. There's no smooth ramp. It's a cliff.
Rob Field, Nelson's National Social Security Advisor and IRMAA Certified Planner, describes it this way:
"People are paying $500+ per month in additional premiums and they're genuinely blindsided. It's not because they were irresponsible — it's because nobody walked them through this before they made the income decision that triggered it."
What most people don't realize: tax-free municipal bond income is added back into MAGI for IRMAA purposes. So a portfolio strategy that was designed to minimize tax exposure can inadvertently create an IRMAA surcharge. This is exactly the kind of interaction that gets missed when the investment advisor and the tax professional aren't working together.
2026 IRMAA THRESHOLDS
Single Filers
$109,000
Joint Filers
$218,000
Cross the threshold by a single dollar and your entire Medicare premium increases — for you and your spouse.
03
Required Minimum Distributions: Forced Income You Have to Plan Around
Starting at age 73 (age 75 after 2032), the IRS requires that you begin taking distributions from most pre-tax retirement accounts, whether you need the money or not. These are Required Minimum Distributions - RMDs - and for people with substantial pre-tax savings, they can push income well above what was planned.
The stakes of a missed RMD are significant: a 25% penalty on the amount not taken, reduced to 10% if corrected within two years. But the more common problem isn't missing RMDs — it's not planning for them early enough. Large RMDs in your 70s and 80s can force you into higher tax brackets, trigger IRMAA, make more of your Social Security taxable, and disrupt an otherwise well-structured income plan.
Planning for RMDs starts years before they begin. Strategies like partial Roth conversions in your 60s, qualified charitable distributions (QCDs) after age 70½, and careful account sequencing can all reduce the long-term RMD burden.
04
Tax-Efficient Withdrawal Order: Which Account You Pull From First Matters
Most retirees have money in three different types of accounts: taxable investment accounts, pre-tax retirement accounts (Traditional IRA, 401(k)), and tax-free accounts (Roth IRA). The order in which you draw from those accounts — and in what amounts — can have a meaningful impact on lifetime taxes.
The conventional wisdom says to draw from taxable accounts first, then pre-tax, then Roth last (to maximize tax-free growth). But that's a general rule, not a strategy. The right withdrawal sequence depends on your Social Security timing, your IRMAA exposure, your expected estate, and the year-by-year interplay between all of your income sources.
This is not a calculation you do once at retirement and forget about. It needs to be revisited as tax laws change, as your income picture shifts, and as you move through different phases of retirement.
THREE ACCOUNT TYPES
Taxable investment accounts
Pre-tax retirement accounts
(traditional IRA, 401(k))
Tax-free accounts (roth IRA)
05
Social Security Taxation: More of Your Benefit May Be Taxable Than You Think
Up to 85% of Social Security benefits can be subject to federal income tax - depending on your combined income. What's counterintuitive is that even relatively modest additional income can trigger significant Social Security taxation because of the way the formula works.
The interaction between Social Security taxability and other income decisions - including Roth conversions, IRA withdrawals, and investment income - is one of the most important and most frequently overlooked areas of retirement tax planning. Managing it well requires knowing the thresholds, understanding how different income sources interact, and building a year-by-year income projection that accounts for all of it together.
Ready to stop overpaying taxes in retirement?

What Makes Nelson Financial Planning Different
Most financial planning firms outsource the tax work. A client's advisor manages the investments; a separate CPA or tax preparer handles the taxes. Those two professionals often never talk to each other — which means the investment decisions and the tax decisions aren't coordinated.
Nelson Financial Planning is built differently. Kristin Kalley is a CPA – a Certified Public Accountant with years of tax planning experience—and Christina Lamb is an IRS Enrolled Agent — a designation granted by the IRS itself, requiring passage of a comprehensive three-part exam covering individual tax, business tax, and representation. She is authorized to represent clients directly before the IRS. That combination of credentials is extremely rare in the financial service industry.
The result is a retirement plan where the investment strategy and the tax strategy are built by the same team, from the same set of numbers, toward the same goal: maximizing what clients actually keep.
No account minimums.
Legally required to act in your best interest - always.
In-Depth Guides: Retirement Tax Planning
In-depth guides in this section
ROTH
Roth Conversion Strategies: Is Converting Right for You?
Read the guide → (coming soon)
MEDICARE
IRMAA Explained: How Income Affects Your Medicare Premiums
Read the guide → (coming soon)
RMDS
Required Minimum Distributions: What Every Retiree Needs to Know
Read the guide → (coming soon)
WITHDRAWALS
Tax-Efficient Withdrawal Order: Which Accounts to Tap First
Read the guide → (coming soon)
SOCIAL SECURITY
Social Security Taxation: How Much of Your Benefit is Taxable?
Read the guide → (coming soon)
SCAMS
IRS Tax Scams Targeting Retirees Now
Read the guide → (coming soon)
2026 LAW
2026 Tax Law Changes Every Retiree Needs to Know
Read the guide → (coming soon)
PRE-TAX VS. ROTH
Pre-Tax vs. Roth: Building a Tax-Diversified Portfolio
Read the guide → (coming soon)
MISTAKES
Tax Mistakes Retirees Make that Cost $100K - & How to Avoid Them
Read the guide → (coming soon)
COMMON QUESTIONS
Frequently Asked Questions
Q When does a Roth conversion make sense in retirement?
A Roth conversion makes the most sense during the years when your taxable income is lower than it will be once Required Minimum Distributions begin — typically the gap years between retirement and age 73. The key questions are: What is your current bracket? Will converting push you over an IRMAA threshold? Can you pay the tax bill from outside the IRA? And what's the realistic break-even horizon given your timeline? Every one of those questions interacts with the others, which is why Nelson Financial Planning runs full tax projections — not rough estimates — before recommending a conversion amount. The team uses Joel's checklist framework alongside Christina Lamb's IRS EA and Kristin Kalley’s CPA expertise to model the full return.
Q What is an IRMAA and how do I know if I'm at risk?
IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge on Medicare Part B and Part D premiums that activates when your Modified Adjusted Gross Income exceeds $109,000 (single) or $218,000 (joint) in 2026 — based on your income from two years prior. The jump is not gradual: crossing the threshold by a dollar triggers the entire surcharge for the following year. Roth conversions, property sales, large IRA withdrawals, and even tax-free municipal bond income can push you over the line. Rob Field holds both the NSSA and IRMAA Certified Planning designations and works specifically on this interaction for Nelson clients.
Q What happens if I miss an RMD?
A missed Required Minimum Distribution triggers a penalty of 25% of the amount not withdrawn — reduced to 10% if corrected within a two-year correction window under SECURE 2.0. Beyond the penalty, the compliance exposure with the IRS is a meaningful concern. Nelson Financial Planning tracks RMD obligations directly within every client's income planning process, so no one is left to remember this on their own.
Q Does Nelson Financial Planning do tax preparation?
Christina Lamb, our IRS Enrolled Agent, and Kristin Kalley, our CPA, provide tax coordination and planning as part of Nelson Financial Planning's comprehensive retirement planning service — including running actual tax projections for clients considering major income decisions. This is coordinated with the client's CPA or tax preparer as part of an integrated planning approach. The goal is to ensure the investment plan and the tax plan are never operating independently of each other. In addition, the firm does offer a separate tax preparation service for our retiree clients since our firm is qualified as an Electronic Return Originator through the Department of Treasury Internal Revenue Service.
Q How do I get started?
Visit our Free Portfolio Review page to schedule a free retirement strategy review. There are no account minimums and no obligation. Just a straightforward conversation about your situation - taxes included.
Ready to stop overpaying taxes in retirement?
Schedule a free strategy review with Nelson Financial Planning - the team with an IRS Enrolled Agent, a CPA, and 40+ years of retirement planning experience. No account minimums. No obligation.

Not quite ready?
Start with Dollars & Sense.
This is the same team, the same research, the same plain-English approach — every week on Central Florida radio and everywhere you listen to podcasts. The Morningstar X-Ray, ETF vs. mutual fund research, Social Security timing, investor psychology, tax strategy — it is all there. Ranked Top 25 in financial planning nationally, with over 50,000 downloads.
Listen to Dollars & Sense → Available on Spotify, Apple Podcasts, YouTube
Joel J. Garris is President and CEO of Nelson Financial Planning, Inc. and a FINRA Registered Representative with Nelson Ivest Brokerage Services, Inc. Investment advisory services through Nelson Advisory Services, Inc., a State of Florida registered investment advisor. Content is for informational purposes only and does not constitute personalized investment, tax, or legal advice.
Joel Garris, CFP, Certified Financial Fiduciary | Christina Lamb, IRS Enrolled Agent, Certified Financial Fiduciary | Kristin Kalley, CPA, CFP, Certified Financial Fiduciary | Rob Field, NSSA, IRMAA Certified Planning, Certified Financial Fiduciary | Zach Keister, Certified Financial Fiduciary, Chartered Retirement Planning Counselor | Chet Cowart, Certified Financial Fiduciary, Chartered Retirement Planning Counselor
www.NelsonFinancialPlanning.com | 407-307-3061 | Winter Park / Orlando, FL
Investment advice offered through Nelson Financial Planning. Past performance is not indicative of future results. The Morningstar X-Ray portfolio analysis is provided as an educational service and does not constitute investment advice or a solicitation. Nelson Financial Planning is a fiduciary firm — every advisor is a Certified Financial Fiduciary, legally required to act in the client's best interest. No account minimums.






