How taxes affect retirement savings (and what to do about it)

When people think about retirement planning, they tend to focus on saving and investing so that they have a nice nest egg when they stop working. And this is a great place to start. But it’s also important to pay attention to how taxes affect your retirement savings and any other sources of income you will draw upon once you reach retirement.

Unfortunately, the taxes don’t go away when you stop receiving a salary. Even if you no longer work, you will still earn income in the form of pension account distributions, social security benefits, and possibly pension payments. And if you underestimate the bite that taxes can take – yes, even when you’re retired – you could end up losing a significant portion of your hard-earned cash.

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