Retirement isn’t just about how much you’ve saved—it’s also about how you withdraw those funds. A poorly timed distribution strategy can leave you with surprise tax bills and reduced income. At MB Wealth Advisors, we help retirees in North Carolina keep more of what they’ve earned through customized, tax-smart withdrawal strategies that align with evolving IRS rules and income needs.
Understand the Different Tax Buckets
Most retirement portfolios are made up of three types of accounts, each with a different tax treatment:
- Tax-deferred: Traditional IRAs, 401(k)s—taxed when withdrawn
- Tax-free: Roth IRAs, Roth 401(k)s—qualified withdrawals are tax-free
- Taxable: Brokerage accounts, CDs—subject to capital gains and interest income taxes
The order and amount you withdraw from each account type significantly impacts your overall tax liability each year. A coordinated withdrawal strategy can stretch your retirement dollars much further.
Delay Social Security Strategically
Many people begin Social Security as soon as they’re eligible, but that’s not always the best move. Delaying benefits until age 70 increases your monthly check by up to 8% per year. Plus, withdrawing from other accounts earlier may allow you to manage your taxable income more effectively.
We model Social Security strategies as part of our retirement planning services to help you make the most of your benefits.
Required Minimum Distributions (RMDs): Don’t Get Caught Off Guard
At age 73 (or 75, depending on birth year), you must begin withdrawing from tax-deferred accounts. These RMDs are fully taxable and can push you into a higher bracket if not planned for in advance. We help clients calculate, forecast, and coordinate RMDs to minimize tax surprises and avoid penalties.
Use Roth Conversions to Spread Out Taxes
Strategic Roth IRA conversions allow you to move money from a traditional IRA into a Roth, paying taxes now to enjoy tax-free growth and withdrawals later. This can be especially beneficial in low-income years between retirement and RMD age. Done right, it reduces your lifetime tax burden and gives you more flexibility down the road.
Harvest Tax Losses in Brokerage Accounts
If you hold investments in taxable accounts, we can use tax-loss harvesting to sell losing positions and offset capital gains. This technique works well during market volatility and is an important part of tax-efficient investment management.
Our financial planning services include year-round monitoring for opportunities like this to keep your tax bill low without derailing your long-term plan.
Watch Out for Medicare IRMAA Penalties
Many retirees don’t realize that Medicare premiums increase as income rises. If your modified adjusted gross income (MAGI) crosses certain thresholds, you’ll pay more for Part B and Part D coverage. We help clients manage their withdrawals to stay below IRMAA cliffs and avoid unnecessary costs.
Consider Qualified Charitable Distributions (QCDs)
If you’re charitably inclined and over age 70½, QCDs let you donate directly from your IRA to a qualified charity—without increasing your taxable income. It’s one of the most efficient ways to support causes you care about while lowering your tax bill and meeting RMD requirements.
Coordinate All Income Sources
Your retirement income could come from a variety of sources—Social Security, pensions, IRAs, Roths, investments, annuities, rental income. We coordinate all of it into a tax-smart income stream that supports your lifestyle, controls taxes, and keeps your plan on track year after year.
Let’s Build Your Tax-Efficient Income Plan
The decisions you make in retirement matter just as much as the ones you made while saving. MB Wealth Advisors helps you navigate these complex tax rules and withdrawal strategies with confidence and clarity.
Call (704) 584-9363 or book a complimentary retirement review at mbwealthadvisors.com/contact/#connect.
