There are many types of retirement income and each one of them is taxed differently!
Whether you still have a few years until retirement or you have already started your golden years, we are sure you have a plan. After all, a lot of Americans already have retirement bucket lists, with places they want to visit, things they would love to do, helping with grandchildren, and everything in between! In the end, everyone has worked hard, and they deserve to spend their retirement years in any way they may want.
Yet, what a lot of people who have reached retirement age do not take into consideration is the burden that federal and state income taxes will have on their retirement income. Whether you rely on a pension, Social Security benefits, have diversified your portfolio, or simply have IRA and 401(k) accounts, you should know how your retirement income will be taxed ahead of time!
When you start adding the fact that there are other types of accounts you may have that count as retirement income and thus can be taxed, you can end up in pretty deep waters. In order to make things easier for you, we have gathered the most common and important types of accounts that you will be using and how they are going to be taxed here.
Let us know if there are any other taxes for retirement income accounts you are curious about!