There are many retirement planners who focus on factors that can help their clients minimize their taxes. This column discusses the most appropriate time for a person to start taking distributions from an IRA. Estate planners will have to figure out when a client will have to start taking required minimum distributions (RMDs). Some retirees might consider taking a part-time job to place money into a Roth IRA. “This will lower the amount of RMDs that you must take and declare as income, and it will also help you to build or enlarge a pool of tax-free dollars.” Retirement planners might also consider thinking locally by investing in municipal bonds that generate tax-free interest. It is also important to remember that the file-and-suspend strategy for Social Security will soon be unavailable, so people who qualify should look into the strategy.
See Mark P. Cussen, Pay the Lowest Possible Taxes on Retirement Assets, Investopedia, March 1, 2016.
