5 Sources of Retirement Income That Aren't Taxable

Just as taxes are a huge burden for working Americans, they can also be a drain on seniors' limited resources. If you're worried about affording your golden years, it pays to set yourself up with a number of income sources that the IRS can't tax you on later in life. Here are a few options that fall into this category.

When you house your retirement savings in a traditional IRA or 401(k), you get an immediate tax break for funding that account. The flip side, however, is that your withdrawals are subject to taxes during retirement. Roth IRAs and 401(k)s, though, work the opposite way. With these accounts, you don't get an immediate tax break for contributing money, but those funds are yours free and clear of taxes during your golden years. And while there are annual income limits that dictate Roth IRA eligibility, you can fund a Roth 401(k) regardless of what you earn, provided that option exists in your employer's plan.

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Source Fool.com