Retired in America

Your Guide to a Confident Retirement

  • Home
  • Personal finance
  • Retirement Life
  • Saving & Spending

8 Types of Retirement Income That Are Exempt From Taxes

January 6, 2021 · Personal finance

You’ve always been a hard worker and a conscientious taxpayer, waiting for your retirement day to come so you can stop paying all those taxes and start collecting your hard-earned benefits.

But just because you are leaving the workforce, doesn’t mean Uncle Sam is done with you. Much of your retirement income, even if coming from other sources than employment, can still be taxed. Luckily, if you play by the rules and go by the IRS book, you might be able to dodge paying federal income taxes on these 8 types of retirement income. Start taking notes!

Roth IRA Distributions

When it comes to Roth IRA distributions, you are not entirely escaping taxes, but you can avoid taxation when you need it most: in retirement. Roth IRA differs from a traditional IRA in that federal taxes on Roth IRA contributions have to be paid for the tax year in which you earned the money, in contrast to the year in which you withdraw the money.

Your Roth IRA contributions will not be subjected to taxes or penalties and will continue to grow until you’ve reached the age that qualifies you to take distributions. IRS rules for tax-free qualified distributions:

  • Your account was opened at least five years prior
  • You are older than 59 ½

Compared to other investment methods, Roth IRAs allow you to leave your money in the account for as long as you want, without being forced to take the required minimum distributions (RMD) associated with traditional IRAs.

Read also: 10 Most Important Retirement Age Milestones You Need to Consider

Pages: 1 2 3 4 5 6 7 8

Share this article

Facebook Twitter Pinterest LinkedIn Email

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search

Latest Posts

  • How Retirees Can Go to College for Free (or Nearly Free) in Every State
  • Are You Paying a $54 Social Security Fee You Don't Owe?
  • Property Tax Ballot Measures in 7 States: What Homeowners Need to Know
  • Illustration of a mountain valley town with houses, a clock tower, a wooden directional sign, and lupines at sunrise. 15 Scenic and Affordable Mountain Towns to Retire In
  • An older man with drafting tools overlooks a landscape labeled with ages 60, 70, and 80 along mountain ridges. 401(k) Mistakes Retirees in Their 80s Wish They'd Avoided
  • An older couple sits on the tailgate of a pickup truck holding mugs and overlooking a small valley town at sunset. 8 States Where $250,000 Is Enough for a Comfortable Retirement
  • A smiling senior man in a life jacket paddles a green kayak across a misty lake at sunrise near a wooden dock. 15 Affordable Retirement Towns Near Lakes and Rivers
  • A smiling older man walks a brown Labrador and a black-and-white border collie along a paved park path. 10 Side Gigs for Retirees Who Love Animals
  • Older adults smiling and passing food at an outdoor community dinner in front of a brick town hall at sunset. 11 Affordable Retirement Towns With Active Social Calendars
  • Illustration of an older couple walking past kiosks for pharmacy care, public transit, and residential property savings. 11 Senior Discount Programs Launching or Expanding in 2027

Newsletter

Get retirement planning tips, savings strategies, and lifestyle insights delivered to your inbox.

Related Articles

Older couple reviewing tax returns and moving paperwork at a table with cardboard boxes stacked behind them.

7 Tax Surprises for Retirees Who Move Across State Lines

Learn 7 hidden state tax surprises that hit relocating retirees, from aggressive residency audits and…

Read More →

11 Social Security Mistakes That Could Ruin Your Retirement

Maxing out your Social Security takes effort Having a financially secure retirement takes time and…

Read More →

Avoid Using These Passwords At All Costs

If you’re an up-to-date retiree who deals with most of her/his transactions and manages accounts…

Read More →
A senior man reviews financial paperwork at a wooden table with a planner, budget sheet, and coffee mug.

5 Things Every Retiree Should Check Monthly

Keep your finances secure with our 5-point retiree monthly checklist. Track Social Security, Medicare, RMDs,…

Read More →
A senior couple happily unpacking groceries in a bright, modern kitchen.

9 Ways to Shop at Costco Without a Membership

Discover practical ways to shop at Costco without an annual membership, including how to access…

Read More →
A woman sits at a wooden library desk next to a digital tablet displaying an excellent credit report summary.

9 Reasons Retirees Are Checking Their Credit Reports This Month

Learn why retirees are checking credit reports this month to stop elder fraud, fix medical…

Read More →
Expanding file folder labeled Settlement, Renovations, and Taxes sits on a wooden desk next to a steaming coffee mug and keys.

Here’s How Long You Should Keep Tax Records If You Own a Home

Learn how long to keep tax records if you own a home, which receipts boost…

Read More →

13 Behaviors of Early Retired Millionaires That Made Them Rich

Across the board, it looks like self-made millionaires who retire early share 13 of the…

Read More →
A retired man sits at a sunlit wooden table thoughtfully reviewing an official Social Security envelope next to his reading glasses.

9 Social Security Notices You Should Never Throw Away

Protect your retirement money by saving these 9 essential Social Security notices. Learn strict deadlines,…

Read More →
Retired in America

Your Guide to a Confident Retirement

Inedit Agency S.R.L.
Bucharest, Romania

contact@retiredinamerica.com

Trust & Legal

About Us

Editorial Policy

Advertiser Disclosure

Frequently Asked Questions

Contact Us

Disclaimer

Terms and Conditions

Privacy Policy

Subscribe

Unsubscribe

Categories

  • Personal finance
  • Retirement Life
  • Saving & Spending

© 2026 Retired in America. All rights reserved.