For Retirees

A retiree’s tax is set less by how much income arrives than by which income arrives and in what order. Social Security is taxed on a sliding scale that other income pushes. The new senior deduction phases out above a line. Medicare premiums are set by a line two years back. Capital gains are free below a line. Required distributions start at 73 and can be sent to charity instead of the 1040. Each of those lines is a place where a dollar of income costs more than its bracket, and each is also a place where moving a dollar saves more.

These ten strategies are the ones that matter most at 65 and over. Several of them are decided in December; one of them (the beneficiary form) is decided once and matters most to the people who come after.

1. Give From the IRA, Not the Checkbook

The IRS calls it: a qualified charitable distribution, §408(d)(8)

The 2026 figure: at 70½ or older, up to $111,000 a year per person (2026, indexed) transferred directly from an IRA to a charity is excluded from income, counts toward the RMD, and requires no itemizing.

A retiree who gives $8,000 a year and takes the standard deduction gets no deduction for it. The same $8,000 sent from the IRA is never income: it lowers AGI, which lowers the taxable share of Social Security, keeps the senior deduction, and stays under the IRMAA tier. It is the single most useful strategy on this page, and it has to be a direct transfer from the custodian to the charity, not a withdrawal followed by a check. Donor-advised funds don’t qualify. Full article: RMDs and Giving From Your IRA.

2. Stay Under the Senior Deduction Line

The IRS calls it: the §63 additional deduction for seniors, 2025–2028

The 2026 figure: $6,000 per taxpayer 65 and over (on top of the age-65 standard deduction addition of $1,650 / $2,050), reduced by 6% of MAGI above $75,000 single / $150,000 joint; gone at $175,000 single, $250,000 joint with one qualifying spouse, $350,000 with two.

A couple at $160,000 of MAGI loses $600 of the deduction for every $10,000 over the line. A Roth conversion, a gain, or a large RMD in the phase-out range carries an extra effective rate of about 1.3 to 2.6 points. The deduction is scheduled through 2028; use the years it exists. Full article: The Senior Deduction and Its Phase-Out.

3. Harvest Gains at 0%

The IRS calls it: §1(h)(1)(B)

The 2026 figure: long-term gains and qualified dividends taxed at 0% while taxable income stays under $49,450 single / $98,900 joint. Sell, repurchase, reset the basis.

Retirees living on Social Security and a modest pension are the people this bracket was built for. The cost: the gain raises AGI even at 0%, which can raise the taxable share of Social Security (so the real rate isn’t quite zero), and it counts for IRMAA. The figure is computed on the whole return, not on the brokerage statement. Full article: Capital Gains Tax.

4. Spend the Accounts in the Right Order

The planners call it: withdrawal sequencing

The 2026 figure: the default is taxable accounts first (gains at 0% to 15%), then traditional IRAs, then Roth last (it grows tax-free longest and passes to heirs tax-free). The exception, and it is common: in the years before RMDs, draw from or convert the traditional IRA to fill the low brackets, so the RMDs at 73 are smaller.

A retiree who spends down the taxable account entirely while the IRA compounds arrives at 73 with an RMD that pushes into the 24% bracket and IRMAA. One who takes $30,000 a year from the IRA at 12% from 65 to 72 arrives with a smaller IRA and a basis-stepped taxable account for the heirs. The Roth is the last account touched and the first one named for the grandchildren.

5. RMD Timing, and the December Withholding Trick

The IRS calls it: §401(a)(9) and §6654(g)

The 2026 figure: the first RMD (the year you turn 73) can be delayed to April 1 of the next year, but then two come in one year; usually take it in the first year. Withholding on an IRA distribution is treated as paid evenly through the year, so a December RMD with 40% to 60% withheld covers the tax on the pension, the Social Security and the gains too, with no quarterly estimates and no penalty.

The December trick is the retiree’s W-4. Instead of four estimated payments, one distribution in December with heavy withholding, sized to the year’s total tax, satisfies the safe harbor as if it had been paid in April. Florida has no income tax, so there is no state withholding to add. Missing an RMD costs 25% of the shortfall (10% if corrected within two years). Full article: Pensions, Social Security and IRAs.

6. Name the Right Beneficiaries

The IRS calls it: §401(a)(9)(H), the ten-year rule

The 2026 figure: a traditional IRA left to a child must be emptied within ten years, with annual RMDs in years one through nine if the owner had started RMDs; left to a spouse, it rolls over and is treated as the spouse’s own; left to a charity, it is never taxed; a Roth left to a child also empties in ten years but with no tax.

The planning: leave the traditional IRA to the charity and the Roth and the taxable account (with its step-up) to the children, if giving is in the plan at all. Name the children directly, not the estate (an estate beneficiary gets five years, not ten) and not a trust unless the attorney drafted it for this. Check the forms after a death, a divorce, or a move; the beneficiary form controls over the will. Full article: When a Loved One Dies.

7. Conversions After 73

The IRS calls it: §408A(d)(3), after the RMD

The 2026 figure: take the RMD first (it can’t be converted), then convert additional amounts up to the top of the current bracket or the next IRMAA tier, in years when income is low or the market is down.

The window is smaller after 73 but not closed. A widow in the single brackets, a year with a large medical deduction, a down market that shrinks the account: each is a year when converting at 12% or 22% beats leaving the money for heirs who will take it at their rates within ten years. The conversion reduces future RMDs and leaves a tax-free account for the children. Full article: Roth IRAs.

8. The Medical Deduction in a High-Cost Year

The IRS calls it: §213

The 2026 figure: medical expenses above 7.5% of AGI are deductible if you itemize: Medicare premiums (B, D, Advantage, Medigap), long-term care premiums within limits, assisted living when a plan of care certifies the need, nursing home costs, dental, hearing aids, home modifications, and mileage to appointments.

Most years the threshold swallows it. The year a spouse enters memory care at $90,000 is different: a couple with $120,000 of AGI deducts $81,000, and that is the year to pair a large Roth conversion or IRA withdrawal with the deduction, because the medical deduction offsets the income at ordinary rates. Prepaying January’s bills in December, and paying two years of a big dental plan in one, moves expenses into the year that clears 7.5%. Full article: Medical Expenses.

9. Long-Term Care Premiums

The IRS calls it: §213(d)(10) and §7702B

The 2026 figure: premiums for a qualified long-term care policy count as medical expenses up to an age-based limit (about $1,800 at 51–60, $4,800 at 61–70, $6,000 over 70 for 2026 (verify)) and can be paid tax-free from an HSA; benefits received are tax-free up to a daily cap or actual costs.

For a self-employed retiree with any business income, the premiums are deductible above the line under §162(l) within the same limits, no 7.5% floor. Hybrid life/LTC policies qualify for the LTC rider portion only if the policy separates it. Full article: Long-term care in the medical expenses page.

10. Florida: No Income Tax, and the Property Tax Breaks

Florida calls them: the homestead exemption, Save Our Homes, and the additional senior exemption

The 2026 figure: Florida has no income tax, so pensions, IRA distributions, Social Security and gains are never taxed by the state, with nothing to subtract and nothing to file. The break Florida gives a retiree is on the house: the homestead exemption removes up to $50,000 of assessed value from the primary residence you owned and lived in on January 1, Save Our Homes caps the yearly increase in assessed value at 3% or the CPI change, whichever is lower, and counties and cities may add a senior exemption of up to $50,000 for homeowners 65 and over with household income under a limit adjusted yearly (about $37,000–$38,000) (verify).

The homestead exemption is filed once with the county property appraiser, by March 1 of the first year, and renews automatically; a retiree who moves to a new Florida home can carry up to $500,000 of the Save Our Homes benefit to it on Form DR-501T, applied for within three years (verify). The senior exemption is the one Florida break with an income line, and the line is low; a QCD lowers the household income that counts for it (verify). The bill itself comes from the county tax collector in November, discounted 4% if paid that month, 3% in December, and due March 31. Full article: Florida for Retirees.