tax-tips-silver-foxesCongratulations! You've worked hard and planned well. And now that you've achieved retirement, take the time now to enjoy the fruits of your labor because you earned it. Plan on spending time with family, going on your favorite vacation, or spend time on your hobbies. Overall, your taxable income, if any, is much lower than in the past. Your Social Security income you are receiving is not taxable. Pensions, rentals, and other investment incomes are probably the only income that you may be taxed on. As a result, you may be in a lower tax bracket or under the filing requirement all together. Although your taxable income is lower than it has been in the past, here is some advice to keep in mind: 1. If you have assets such as a home, etc., make sure you have an estate plan (as explained below).

Estate Planning

If you haven’t already, you should seriously consider estate planning now. Consider options like gifting, living trusts, and wills. Meet with a qualified retirement planner or attorney who can advise and set up a program for you. If you already have an estate plan, great! Make sure it is revised to reflect any assets you may have acquired after your last update. 2. You cannot contribute money into an IRA account the year you reach age 70 ½, or for any later year. If you did contribute in the year you were age 70 ½ or older, there is a 6% penalty if contributions plus interest are not withdrawn by the due date of your return. 3. If you have money in a traditional IRA account, there are required minimum distribution (RMD) rules to be followed. Make sure you have started pulling money out every year. The penalty is hefty if you don’t — a 50% penalty applies for the excess you should have withdrawn. See your bank representative and talk to them about how much to withdraw to avoid any penalties. 4. SIMPLE IRAs are treated as traditional IRAs when it comes to RMD rules, except that contributions can be made into the plan if you still work. 5. If you have retirement plans from work, like 401(k) or 403(b) plans, there are RMD rules also. You need to start taking money out by April 1st (and this is no joke) of the year following the later of age 70 ½ or when you retire. Get with the plan’s agent for more information. 6. If you plan on working either full-time or part time, consider putting money into a Roth IRA. Since there is no age restriction for contributions (and distributions) to ROTH IRAs, this may be a good option for a taxpayer if they expect to work past planned retirement age. Like this and want more tax advice? As part of a series of tax planning strategies, we’ve broken down tax advice for specific age groups: Generation Y and Millennials, GenX’ers, those at the "Top of the Hill," Baby Boomers and the Silver Foxes at or nearing retirement. Prepare and manage your taxes online. Visit and get all the free technical support you need to prepare your own taxes. Sign up for a free account today. Vincent Mangiapane, EA Federal Analyst, Taxbrain