Extra income during retirement is commonplace for United States citizens. The Social Security benefit is not enough and in order to pay all the monthly bills it is mandatory to have extra money to help. That is why it is common to find retirees who continue to work part-time or have a business. Pension plans are also very common, such as an IRA or 401(k).
Fortunately, much of the extra income while collecting Social Security is not taxable. Therefore, we can get a good amount of monthly money without the need to have taxes deducted. It’s a nice perk to be able to have all our bills paid without affecting our savings too much.
These three main types of income help us with the family economy. They are three very common incomes, moreover, so they are a double advantage, since retirees can receive their retirement payments without the obligation of having to pay the appropriate taxes. In case you have to pay taxes, do not omit it at any time, as it is mandatory. Always consult an advisor if you have any doubts.
Retirement income on which it is not mandatory to pay taxes
There are several ways to increase our money during retirement without having to pay taxes. One of these ways is very obvious, but the others are not known to everyone. If you want to earn a good amount of money while not paying taxes, pay attention to this income during retirement from Social Security.
- The Social Security pension benefit check. In order to pay taxes on this income, it is mandatory to make a lot of money a year, as well as work at the same time. For that reason, SSA checks are tax-free.
- Roth withdrawals. Any type of retirement plan, such as an IRA or 401(k) is tax-free for one simple reason. And that is that we have already paid the taxes at the time we set up the money fund. For that reason, collecting Social Security at the same time you collect a ROTH withdrawals is possible and has no tax break.
- Inheritances. Another very important detail to keep in mind is inheritance. When we collect an inheritance it is not necessary to pay any taxes. For that reason, it is a good way to increase our wealth.
In any case, always check all the information before not paying taxes. A specialist lawyer will be able to help us to know exactly if it is possible to collect something without paying taxes. Otherwise, we may see a reduction we don’t want in our Social Security check.