Retirement Account Strategies

How and when you pull money out of your accounts determines your tax bracket. Mastering the rules surrounding 401(k)s and IRAs is crucial for wealth preservation.

“Risk comes from not knowing what you’re doing.” — Warren Buffett, Chairman and CEO of Berkshire Hathaway

10. Qualified Charitable Distributions (QCDs)

Once you reach age 70½, you gain access to the Qualified Charitable Distribution. A QCD allows you to transfer up to $105,000 directly from your Traditional IRA to an eligible charity without paying any income tax on the transaction. The brilliance of this strategy lies in how it interacts with your Required Minimum Distributions (RMDs). A QCD satisfies your RMD for the year but never shows up on your tax return as Adjusted Gross Income. Keeping your AGI low prevents your Medicare premiums from spiking (via IRMAA surcharges) and keeps your Social Security benefits from crossing taxation thresholds.

11. SECURE 2.0 Super Catch-Up Contributions

If you are still working in your early 60s, recent legislation has dramatically increased your ability to stash cash away. Under the SECURE 2.0 Act, workers aged 60 through 63 enjoy a “super catch-up” limit for workplace retirement plans like 401(k)s and 403(b)s. This limit is significantly higher than the standard catch-up contribution allowed for workers aged 50 and older. Leveraging these super catch-ups during your peak earning years drastically reduces your current tax liability while padding your final retirement balances.

12. Health Savings Account (HSA) Catch-Ups

If you participate in a high-deductible health plan, funding a Health Savings Account offers a triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free. Once you turn 55, the IRS allows you to contribute an extra $1,000 per year as a catch-up contribution. However, you must stop contributing to an HSA the month you enroll in any part of Medicare (including Part A).

13. Roth IRA Conversions in Low-Income Years

The gap between retiring and claiming Social Security—often between ages 60 and 70—usually represents the lowest income years of your life. Savvy retirees use this low-tax window to perform Roth conversions. By moving money from a Traditional IRA to a Roth IRA, you pay taxes on the converted amount at your currently low bracket. Once the money is in the Roth IRA, it grows tax-free, and all future withdrawals are tax-free. Furthermore, Roth IRAs do not have Required Minimum Distributions during the original owner’s lifetime.