Taxes don’t retire when you do.

In fact, if you’re not careful, taxes could be one of your biggest retirement expenses. Without the right strategy, you may lose more of your income than necessary to taxes—from Social Security benefits to required minimum distributions (RMDs).

At Clarity Financial, Caroline Raker helps individuals and couples understand—and avoid—the most common retirement tax traps. Here’s what you need to know as you plan for a financially secure retirement in 2025 and beyond.

1. Taxation of Social Security Benefits

Many retirees are surprised to learn that their Social Security income may be partially taxable—up to 85% in some cases. If your combined income exceeds IRS thresholds, a portion of your benefit will be taxed.

Caroline can help you:

• Structure your income sources to minimize taxable Social Security

• Coordinate withdrawals from tax-deferred vs. Roth accounts

• Delay benefits strategically to reduce tax exposure

2. Required Minimum Distributions (RMDs)

Once you reach age 73 (or 75, depending on your birth year), you’re required to begin taking minimum withdrawals from traditional IRAs, 403(b)s, and other retirement accounts. These withdrawals count as ordinary taxable income—and missing a required distribution can result in hefty penalties.

We help clients:

• Plan in advance for RMDs to avoid tax surprises

• Consider Roth conversions before RMD age

• Use annuity income to supplement or offset RMD obligations

3. Medicare Premium Surcharges (IRMAA)

Medicare premiums are based on your modified adjusted gross income (MAGI). If your income exceeds certain thresholds, you may pay an Income-Related Monthly Adjustment Amount (IRMAA) on Parts B and D.

With proper planning, Caroline helps you:

• Avoid IRMAA surcharges with strategic withdrawals

• Time income events to keep MAGI below critical levels

• Understand how annuities and tax-free income sources affect IRMAA

4. Poor Distribution Planning

Taking retirement income without a tax strategy can lead to unnecessary taxes. That’s why a withdrawal sequence strategy is key.

At Clarity Financial, we guide clients to:

• Strategically draw from tax-deferred, taxable, and Roth accounts

• Balance income to reduce tax brackets and preserve savings

• Maximize income while minimizing lifetime tax liability

5. Overlooking the Benefits of Roth Conversions

Converting funds from a traditional IRA or 403(b) to a Roth account means paying taxes now—but avoiding them later. This move can be especially smart in lower-income years or before RMDs kick in.

Caroline evaluates:

• When a Roth conversion makes sense for your income timeline

• How to phase conversions to reduce tax impact

• Future tax savings across your retirement years

Proactive Planning is the Key

Taxes may be unavoidable—but they can be managed. The earlier you plan, the more control you’ll have over how much you owe—and how long your money lasts.

Caroline Raker offers:

• Personalized tax-aware retirement income strategies

• No-fee access to retirement income tools, including Fixed Indexed Annuities

• One-on-one guidance for educators, nonprofits, and faith-based communities

Let’s Build a Retirement Plan That’s Tax-Smart

Avoiding tax traps doesn’t require a crystal ball—just a clear plan.

📞 Schedule your free consultation with Caroline Raker today.
Let’s review your accounts, income sources, and tax exposure to build a smarter, safer path to retirement.

📩 [email protected]
🌐 clarityfin.net
📱 540-858-1464

Because the more you keep, the more freedom you have to enjoy the retirement you’ve earned.