Retirement Taxes Explained: What You’ll Actually Pay (and How to Plan Ahead)

You’ve retired. The paycheck has stopped—but do the taxes stop too?

This is one of the most common (and misunderstood) questions we hear. Many retirees expect their tax bill to drop significantly, but in reality, retirement income often comes from multiple sources—and many of them are still taxable.

In this video, we break down how retirement income is taxed and where those unexpected tax bills can come from.Here are the key income sources to understand:

Social Security

Depending on your total income, up to 85% of your Social Security benefits may be taxable.

Capital Gains and Dividends

Selling investments or receiving dividends in a brokerage account can create taxable income, sometimes at preferential rates, but still impactful.

IRA and 401(k) Distributions

Withdrawals from pre-tax retirement accounts are taxed as ordinary income and can significantly affect your tax bracket.

Required Minimum Distributions (RMDs)

At a certain age, withdrawals from pre-tax accounts become mandatory—potentially increasing your taxable income whether you need the money or not.

Roth Accounts

Qualified withdrawals from Roth IRAs are typically tax-free, making them a powerful tool for tax flexibility in retirement.

We also explain how these income sources “stack” together and why retirees can lose control of their tax situation without a coordinated plan.

The key takeaway is this: retirement taxes aren’t just about what you earn—they’re about how and when you withdraw your money.

At PYA Waltman Capital, we help clients build tax-aware retirement strategies by coordinating income sources, investment accounts, and long-term goals—so you can focus on enjoying retirement, not worrying about surprise tax bills.