Want to Lower Your Taxes in Retirement? Do This 1 Thing.
Seniors are often shocked to learn that much of their income is subject to taxes. Social Security benefits, for example, are generally taxable when they're not the sole source of income in play, and retirement plan withdrawals are taxable when they come from a traditional IRA or 401(k). But if your goal is to lower your tax burden once you're no longer part of the workforce, the answer could boil down to choosing the right retirement plan to save in.
While there are a number of dedicated retirement savings plans you can choose from during your working years, it pays to favor a Roth IRA for a couple of reasons. First, investment gains in Roth IRAs are yours to enjoy tax-free, and withdrawals in retirement are tax-free as well, which means the IRS can't touch that income source.
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Source Fool.com
