Posts Tagged Avoiding Taxes On Social Security Benefits

Taxes on Social Security Benefits and How to Avoid Them, Continued

Taxes on Social Security Benefits and How to Avoid Them, Continued

An article on kiplinger.com offers some strategies to avoid, or at least mitigate, taxes on Social Security benefits. Withdraw money from your tax-free Roth IRAs. Tax-free withdrawals from a Roth IRA or Roth 401(k) are not included in your adjusted gross income. Rolling over money from your traditional IRA or 401(k) to a Roth IRA years before you start receiving Social Security benefits is an excellent way to avoid taxes later in retirement. Of course, you will have to pay income taxes when you make the conversion, but you can tap the account tax-free after that. Purchase a Qualified Longevity Annuity Contract. You can invest up to $130,000 from your IRA or 401(k) in a deferred-income annuity called a Qualified Longevity Annuity Contract (QLAC). The money in your QLAC is ignored when figuring your required minimum distribution, so you can reduce the size of your distribution, lower your income and

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