1. Contribute to a 401(k) or traditional IRA One of the easiest and most beneficial ways to reduce your taxable income is to contribute to a pre-tax retirement account, such as an employer-sponsored401(k) or tr
“Saving for retirement helps to secure your future and offers tax benefits,” said Rozleen Giwani, a certified public accountant and partner at Grassi Advisors in New York, in an email. “By saving more from your current income, you can reduce your taxable income, thus lowering your tax ...
Understanding these tax rules is important when you select investments so you can make an accurate assessment of the amount of after-tax income they will provide during your retirement. Related retirement topics How to Save on Healthcare in Retirement ...
IRAs are another type of retirement account that offers tax advantages to boost your savings potential. With a traditional IRA, contributions may be tax-deductible, reducing your taxable income for the year. Earnings on the investments within the account grow tax-deferred, meaning you won’t pay ...
Then max out your 401(k):If you’ve maxed out your IRA and you’re still able to save more, you can turn back to your 401(k) and add more up until the maximum annual contribution. Taxable accounts:If you’re able to save even more, then you can add money to a taxable account,...
How to make investments after retirementRashmi Aich
401(k) Rollover: Is an Annuity Right? Annuities offer protection, but your 401(k) already gives you tax advantages without the fees and complexity. Kate StalterApril 29, 2025 Create an Account Create a free account to save articles, sign up for newsletters and more. ...
goals isn’t just about the amount you invest and the returns it generates. Reducing tax liabilities in your portfolio can also play a key role in helping you build wealth over the long run. As you review your income and portfolio, consider these steps to help reduce taxes on your ...
Unlike tax-deferred accounts, contributions to Roth 401(k)s and Roth IRAs are made with after-tax dollars, so they won't reduce your current taxable income. But when you withdraw the money in retirement, you won't owe taxes on appreciation, income, or withdrawals.3 ...
Delay taking retirement benefits: Wait to claim your Social Security benefits after yourfull retirement age (FRA). Every year you delay, up until age 70, your benefit increases by about 8%.10 Lower your taxable income: Reduce the taxable amount of your Social Security earnings by keeping your...