How Taxes Affect Retirement Savings (and What to Do About It)

How Taxes Affect Retirement Savings (and What to Do About It)

When people think about retirement planning, they tend to put their focus on saving and investing so they have a nice nest egg when they quit working. And that’s a great place to start. But it’s also important to pay attention to how taxes affect your retirement savings and any other sources of income you’ll tap into once you reach retirement.

Unfortunately, taxes don’t go away when you stop getting a paycheck. Even if you’re no longer working, you’ll still be earning income in the form of retirement account distributions, Social Security benefits and possibly pension payments. And if you underestimate the bite taxes can take — yes, even when you’re in retirement — you could end up losing a significant portion of your hard-earned money.

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