What is retirement tax planning?

Retirement tax planning is the practice of looking at which income you recognize in each year of retirement, and how withdrawals, Roth conversions, required minimum distributions, Social Security taxation, and Medicare premiums may interact. It is general education, not tax advice, and the right approach depends on your own facts.

How do you keep MAGI low in retirement?

There is no single method, and a lower MAGI is not always the better result. MAGI generally reflects adjusted gross income plus tax-exempt interest, so the timing and source of withdrawals, conversions, and asset sales can all affect it. Each approach has trade-offs, such as more taxable income in later years, so please model the options with a tax professional.

Are Social Security benefits taxed in retirement?

They can be. According to the IRS, whether any of your benefit is taxable depends on your income plus one half of your benefits, compared with a base amount for your filing status. Depending on income, up to 50% or up to 85% of the benefit may be included in taxable income. Those percentages describe the portion included, not a tax rate.

Can a Roth conversion affect Medicare premiums?

It may. A converted amount is generally added to that year's income, and Medicare's income-related premium adjustment is based on MAGI from an earlier tax return, generally from two years before. A conversion is a taxable event and cannot be undone, so it is worth modeling before you act.

Do required minimum distributions change my tax picture?

They can. Required distributions from traditional IRAs and most workplace plans are generally included in taxable income, whether or not you need the money. The starting age depends on your birth year, so confirm yours on IRS.gov.

What should I bring to a tax professional?

Useful items include your last federal and North Carolina returns, recent statements for each retirement and taxable account, your Social Security statement, any Medicare premium notice, and a list of expected income for the next several years.

Retirement Tax Planning: Where to Start

By Will ArmfieldLast updated November 11, 20266 min read

We work with retirees and pre-retirees in High Point, Greensboro, Winston-Salem, and Jamestown, and the same pattern shows up often. The tax return changes shape once paychecks stop, and several rules start reading the same income figure at once. This guide is the front door to our retirement tax articles. It lays out the decisions in plain language and points to the deeper pieces. It is educational only and is not tax, legal, or investment advice.

What decisions shape taxes in retirement?

Most of a retiree's yearly tax picture comes from five levers. None of them works alone, because a change to one can move the others.

Which accounts you draw from, and in what order.
Whether you convert any pre-tax money to a Roth account.
When required minimum distributions (RMDs) begin and how large they are.
How much of your Social Security benefit becomes taxable.
Where your modified adjusted gross income (MAGI) lands against the Medicare premium thresholds.

The table below sums up each lever. It is general and illustrative, not a recommendation for any household.

Lever	What it may do	The trade-off to weigh
Withdrawal order	May change how much taxable income a given year includes	A choice that helps this year may leave more pre-tax money for later years
Roth conversion	May reduce pre-tax balances that feed future RMDs	The converted amount is taxed as ordinary income that year, and a conversion cannot be undone
RMD timing	Knowing the start age lets you plan the years before it	RMDs may add income whether or not you need the money
Social Security taxation	Understanding the tiers shows how added income may reach your benefit	Extra income can make more of the benefit taxable
MAGI and Medicare thresholds	Knowing the thresholds shows where premiums step up	Income from two years earlier sets the premium, so the effect arrives late

General and illustrative only. Each lever has trade-offs that depend on individual facts, and this is not a recommendation.

How can the order of withdrawals change taxable income?

The same spending need can create different taxable income depending on which account pays for it. Traditional IRA and 401(k) withdrawals are generally included in taxable income, except for any part that was already taxed. Qualified Roth withdrawals generally are not. (Source: IRS, Retirement plan and IRA required minimum distributions FAQs, read November 11, 2026)

There is no single order that works for every household. Drawing pre-tax money early may fill lower brackets now but shrink flexibility later, and the reverse can also be true. Our article on tax-efficient retirement withdrawal strategies walks through the account types, the questions to model, and why we do not offer a universal sequence.

What do Roth conversions do to this year's bracket?

A Roth conversion moves pre-tax money into a Roth account, and the pre-tax amount you convert is generally added to that year's income. That can push you into a higher bracket, raise how much of your Social Security is taxed, or lift your MAGI over a Medicare threshold. A conversion is a taxable event, and it cannot be undone.

Some households look at conversions in lower-income years, such as the gap between retirement and the start of RMDs. Whether that helps depends on your brackets today, your expected brackets later, and whether you can pay the tax from outside the account. Our guide to a Roth conversion in retirement covers the rules, the five-year rule, and the trade-offs in detail.

How do RMDs fit in?

RMDs are the minimum amounts you generally must withdraw each year from traditional IRAs and most workplace plans. According to the IRS, you generally must start at age 73, and your withdrawals are included in taxable income except for any part that was already taxed. Roth IRAs do not require withdrawals during the original owner's lifetime. (Source: IRS, Retirement plan and IRA required minimum distributions FAQs, read November 11, 2026)

The starting age depends on your birth year under SECURE 2.0, so confirm yours before you plan around it. Because an RMD may fill part of your taxable income whether or not you need the cash, the years before it begin are often where planning has the most room to work. Our RMD guide for retirees has the birth-year table and the IRS divisor tables.

How does Social Security become taxable?

Part of your benefit may be taxable depending on your income. The IRS adds your MAGI and one half of your benefits, then compares the total with a base amount for your filing status. For tax year 2025, the base amount is $25,000 if you are single and $32,000 if you are married filing jointly. Up to 50% of benefits may be taxable above those amounts, and up to 85% may be taxable once the total passes $34,000 (single) or $44,000 (joint). Those percentages describe how much of the benefit is counted as income, not the tax rate. (Source: IRS Publication 915 (2025) and IRS Topic no. 423, read November 11, 2026)

This is why an extra withdrawal can cost more than its bracket suggests. The dollar is taxed, and it can also make more of your benefit taxable. Our article on the tax bracket in retirement explains how those effects overlap.

What is MAGI and why does it matter for Medicare premiums (IRMAA)?

For Medicare premium purposes, the Social Security Administration describes your MAGI as your adjusted gross income plus tax-exempt interest income. If your MAGI is above certain amounts, you pay an income-related monthly adjustment amount (IRMAA) on top of the standard Part B and drug coverage premiums. (Source: SSA, Medicare premiums, read November 11, 2026)

For 2026, SSA lists the first threshold at a MAGI above $109,000 for individuals and above $218,000 for joint filers. CMS lists the 2026 standard Part B premium at $202.90 per month. (Sources: SSA, Medicare premiums and CMS, 2026 Medicare Parts A and B premiums and deductibles, read November 11, 2026)

The income year matters. SSA says its 2026 amounts generally use the tax return filed in 2025 for tax year 2024, so a large conversion or sale this year may show up in premiums two years from now. These amounts change every year, so confirm the current figures before you act.

What should we bring to our tax professional?

A tax professional can model your actual return, which an article cannot. Having these items ready makes the first meeting more useful:

Last year's federal and North Carolina returns.
Your most recent statements for each IRA, 401(k), Roth, and taxable account.
Your Social Security benefit statement, or your SSA-1099 if you already receive benefits.
Your Medicare premium notice, if you are enrolled.
A list of expected income for the next several years, including pensions and part-time work.

Questions worth asking your CPA:

What does my taxable income look like this year and over the next five years under more than one approach?
How close am I to a bracket edge, a Social Security taxation tier, or a Medicare premium threshold?
Would a Roth conversion fit this year, and how large could it be before it crosses one of those lines?
When do my RMDs start, and how large might they become?
What would change if one of us passed away and the survivor filed as a single taxpayer?
How does North Carolina treat each source of my income?

Please bring your financial professional into the same conversation. Tax choices work best when they are checked against your spending, your investments, and your estate plans, and that is how we approach tax planning for our clients. You can also see how we work with retirees.

If you would like to talk through these questions, we can set up a 30-minute conversation at /schedule.

Sources

IRS, Retirement plan and IRA required minimum distributions FAQs: irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs (read November 11, 2026)
IRS, Publication 915 (2025), Social Security and Equivalent Railroad Retirement Benefits: irs.gov/publications/p915 (read November 11, 2026)
IRS, Topic no. 423, Social Security and equivalent Railroad Retirement benefits: irs.gov/taxtopics/tc423 (read November 11, 2026)
SSA, Medicare premiums: rules for higher-income beneficiaries: ssa.gov/benefits/medicare/medicare-premiums.html (read November 11, 2026)
CMS, 2026 Medicare Parts A and B premiums and deductibles, November 14, 2025: cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles (read November 11, 2026)

This article is general information, not individualized investment, tax, or legal advice, and it does not account for your circumstances. Tax rules referenced are those in effect at the date shown and change over time. Consult a qualified professional before acting.