Many retirees assume they understand how taxes work on their retirement income, but surprises are more common than you might think. Social Security benefits, pensions, and withdrawals from retirement accounts can be taxed in ways that vary by state and income level. Paying taxes on income that may be partially or fully exempt means losing money you worked hard to save. By understanding which portions of your retirement income could be exempt, you can potentially keep more of your money. Here’s a closer look at the types of retirement income that might be taxed unnecessarily and how to avoid it.
