Taxes are the largest expense in retirement. Learning the basics of income taxation should be at the top of retirement education. Tax management is not just during the retirement accumulation and distribution phase, but also the tax consideration of investments and savings vehicles. Here are some basic tactics to consider based on your effective tax bracket and if you can control your income. Keep in mind that the more tax diverse your portfolio is, the tactics can become more elaborate to reduce your tax bill. 1) Under the current tax code the standard deduction and personal exemptions can neutralize some of your taxable income during retirement. Non-qualified deferred monies like annuities can be designed to delay payments, i.e. forestalling a taxable event. Forestalling is just delaying taxes, it’s not eliminating taxes. But tax deferral has its own economic benefit during accumulation. HSA funds can pay for insurance premiums like long term care, disability and medical coverage, even Medicare Part B payments. HSA funds can also pay for legitimate medical expenses. Tax-free income can be generated from reverse mortgages, policy loans from TAMRA compliant cash value life insurance and Roth IRAs. So tax management can come in handy in retirement if   Read more…