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After a career and years spent investing your money, youre done working. Youre retired and enjoying life but now youre living on, most likely, a fixed retirement income. Its therefore important to think about how your taxes will change and how that change will impact your income. When you handle your taxes appropriately, you can minimize any money you may owe, and maximize your retirement income.

1. Understand What Youll Be Taxed On

The first step towards owing the least amount on your taxes is to understand your accounts, especially considering some of them will actually change after you retire. For example, some accounts may penalize you if you dont take out a certain amount from the account each year.

Sit down and chat with your accountant/tax preparer about this. In general, traditional IRAs, pension income, interest income, dividend income, and annuity withdrawals are all taxable, so youll want to consider that when withdrawing income. Other income might be taxed, depending on a variety of factors, and this may include social security income, and annuities purchased with after-tax money.

All that said, there is some good news: some accounts wont be taxed at all, such as ones that have been funded with after-tax money, such as Roth IRAs.

2. Limit Your Withdrawals On Certain Accounts

If some of your retirement income comes from pretax plans, keep a careful eye on how much money you make in withdrawals from these accounts. Any money you take out from, for example, a 401K, is considered income tax and will be taxed. Sometimes even traditional IRAs will be taxed, if you took a deduction on past taxes for your contributions.

Many people who oversee your retirement accounts may put money to the side for this, typically around 10%, but that often will not be enough. To limit what you may owe in taxes, limit withdrawals on these accounts to only what your budget or plan requires. (Some accounts require a minimum withdrawal each year.)

3. Minimize The Taxes You Owe

By their very definition, Roth IRAs are built through after-tax money. This means that any withdrawals are 100% tax free. To benefit from this, talk to your accountant or money manager about converting your pre-tax accounts to Roth IRAs. When you do this, youll initially have to pay a tax, but you wont in future years.

Alternatively, keep your accounts as you have them but talk to your accountant about how much to take from each account to minimize how much in taxes youll owe.

4. Determine What Works Best For You And Your 401K

If you choose not to convert your 401K into a Roth IRA, you have other options, and what works best for you will depend on a number of factors, including your age. How you distribute this income will also depend on if your past employer allows retired workers to stay with the plan. If they do allow it, you can take a lump sum distribution (best if you need cash immediately), moving the money into an IRA, get a regular stream of money by taking money out periodically, buy an annuity with your 401K money, or just leave it there. This last option works well, because advisors will often recommend withdrawing from taxable accounts first while your money and retirement income grows in your tax-deferred accounts.

When it comes to your retirement income, its all about minimizing what taxes you owe each year so that your income stays yours.

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Elizabeth SanFilippo is a freelance writer, who enjoys trying new foods from all over the world. But her favorite city for culinary treats will always be Chicago. When not writing about food, shes working part-time at a culinary vacation company, The International Kitchen, based in the Windy City. Some of her work can be found at Examiner.com .