You worked hard. You saved. You retired.

But now Uncle Sam wants a slice of what you set aside.

If you’re like many Utah retirees, you’re starting to realize that retirement isn’t a tax-free zone — far from it. In fact, without the right strategy, you could end up paying more in taxes during retirement than you ever did while working.

Let’s talk about how to keep more of your retirement income in your own pocket — and out of the IRS’s.

The retirement tax trap: What most people miss

Here’s what surprises a lot of folks: When you retire, your paycheck may stop, but your tax bill doesn’t.

In fact, retirement brings a whole new set of tax rules — and missteps can be expensive. Here are a few common culprits:

• Required Minimum Distributions, or RMDs
• Taxable Social Security benefits
• IRAs and 401(k) withdrawals
• Capital gains from brokerage accounts
• Medicare premium surcharges (thanks to IRMAA)

And unlike during your working years, you don’t have W-2 withholding or payroll taxes to “force” your planning. Now you’re in charge of managing how and when you pay — and that means smart planning matters more than ever.

Start with a tax map — not just a balance sheet

When I meet with retirees, I don’t just ask, “How much do you have saved?”

I ask, “How much of this is actually yours after taxes?”

It’s a completely different way to look at your money. That $500,000 in your traditional IRA? Depending on your tax bracket, a chunk of it may actually belong to the IRS.

That’s why tax diversification — having assets in different “tax buckets” — is so important.

There are three basic types:

1. Taxable (brokerage accounts, savings, CDs)
2. Tax-deferred (traditional IRA, 401(k), annuities)
3. Tax-free (Roth IRA, Roth 401(k), certain life insurance strategies)

The key is knowing when and how much to pull from each bucket to keep your taxes low — not just this year, but across your entire retirement.

Strategy No. 1: Get ahead of RMDs

At age 73 (or 75, depending on your birth year), the IRS requires you to start withdrawing from your traditional retirement accounts — whether you need the income or not. These Required Minimum Distributions, or RMDs, are fully taxable and can push you into a higher tax bracket, increase your Medicare premiums and even make more of your Social Security taxable.

Solution? Start planning early.

Consider:

• Strategic withdrawals before RMD age (especially in low-income years)
• Roth conversions to shrink your future RMDs
• Using those withdrawals to fund long-term care planning or tax-free vehicles

Don’t wait until the IRS sends you a reminder letter. By then, your options are limited.

Strategy No. 2: Roth conversions — done right

A Roth conversion means moving money from a traditional IRA or 401(k) into a Roth IRA — paying taxes now so you can enjoy tax-free income later.

This isn’t a one-size-fits-all solution, but for many retirees, it’s one of the smartest long-term plays — especially if:

• You expect to be in a higher tax bracket later
• You want to reduce RMDs
• You plan to leave assets to heirs

But here’s the trick: timing matters. Converting too much in one year can bump you into a higher bracket or increase your Medicare premiums (thanks again, IRMAA).

That’s why we recommend partial conversions, done gradually over several years — especially between retirement and age 73.

Strategy No. 3: Make Social Security work for you

Did you know that up to 85% of your Social Security benefits can be taxed?

It depends on something called your “provisional income” — a calculation that includes your adjusted gross income, nontaxable interest, and half of your Social Security.

By managing when and how you withdraw from other accounts, you can reduce the portion of your benefits that gets taxed.

Sometimes that means delaying Social Security a few years. Other times, it means drawing from tax-free or low-tax sources to keep your income under the thresholds.

Either way, it’s not just about “when to take it” — it’s about how everything fits together.

Strategy No. 4: Don’t forget about Utah taxes

While Utah is known for its mountains and national parks, it also taxes retirement income — including Social Security (though with credits), pensions and IRA/401(k) withdrawals.

That makes state-level tax planning just as important.

The right strategy can reduce both your federal and state taxes. And every dollar you save is one you can spend on grandkids, road trips or golf fees instead.

Strategy No. 5: Use tax-efficient investments

Not all investments are taxed the same.

• Interest from CDs and savings accounts? Taxed at your regular income rate.
• Long-term capital gains and qualified dividends? Usually taxed at a lower rate.
• Municipal bonds? Often tax-free (especially at the state level).

By structuring your portfolio with tax efficiency in mind — especially in your taxable accounts — you can increase your after-tax income without increasing your risk.

Final thought: It’s not about avoiding taxes; it’s about controlling them

You can’t eliminate taxes in retirement. But with the right plan, you can control when and how much you pay.

That means:

• Keeping more of what you earned
• Stretching your savings further
• Minimizing unpleasant surprises

If your advisor isn’t talking to you about taxes, it’s time to find one who will. Because at this stage in life, what you keep matters more than what you make.

If you’re ready to explore how a tax-efficient retirement plan can work for you — one that’s safe, simple and built for Utah retirees — we should talk.

You earned this chapter. Let’s make sure more of it stays in your pocket.

Lyle Boss, The REAL BOSS Financial, endorsed by Glenn Beck as the premier retirement advisor for Utah and the Mountain West States. Boss Financial, 955 Chambers St. Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.