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Your email address will not be published.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

  • A warm watercolor illustration of a cozy apartment protected by a glowing golden dome, symbolizing renters insurance security. What Renters Insurance Really Covers - and What It Doesn't
  • A senior woman sits thoughtfully at a wooden table with a notebook and coffee, planning in the warm morning light. The Latest CPI Data Could Change Retirees' 2027 COLA—Here's Why
  • An illustration of a retired couple standing on their sunny porch, looking out at a garden, symbolizing financial peace of mind. Here's How Much Money Retirees Could Keep if Social Security Taxes End
  • A retired couple reviews financial papers together at their wooden dining table in warm morning light. Here's How a Proposed $2,000 Payment May Affect Social Security
  • A senior woman at a kitchen table checking a circled date on her calendar next to a laptop. Update: Social Security Is Changing How Millions Get Paid - Here’s What to Know
  • A man in his 60s reviews retirement savings charts on a tablet at his kitchen table in the morning light. Is Your 401(k) Keeping Pace? See the Average Balance by Age in 2026
  • A watercolor illustration of a garden path with signs for retirement ages 62, 67, and 70 under a bright, sunny sky. 6 Easy Steps to Estimate Your Social Security Benefits
  • A panoramic view of the twin crater lakes of Sete Cidades in the Azores, featuring one blue and one green lake surrounded by lush green hill 9 Scenic (and Cheap) Destinations That Rarely Disappoint
  • A retired couple stands amidst moving boxes in their living room, bathed in warm afternoon sunlight during their relocation process. 8 Common Relocation Mistakes Retirees Tend to Make
  • 7 Costco Items Worth Buying in Retirement Because They Actually Lower What You Spend Each Month

Newsletter

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

Related Articles

9 Retirement Statistics That Will Help You Prepare Your Nest Egg!

Retirement isn’t what it once was. You’re probably thinking of your parents and grandparents and…

Read More →

17 Ways to Make Sure Your Retirement Stays on Track

Retirement super savers know that budgeting, saving, and investing are the bread and butter of…

Read More →

14 Tips To Make The Most Of Your Social Security Check

According to data collected by the AARP Public Policy Institute, around 24 percent of people…

Read More →

11 Out of the Box Methods to Save for Retirement

The coronavirus pandemic has created more than just a health crisis around the world. In…

Read More →

9 401(k) Mistakes & Solutions All Boomers Should Be Aware Of

Baby boomers, now ages 55 to 73, are either retired or enjoying their last few…

Read More →

How To Pay Your Taxes With Your Credit Card in 2022

For this topic, it’s worth quoting Benjamin Franklin who once said: “In this world, there…

Read More →

10 Quick Ways to Earn Some Extra Cash During Retirement

Are you retired or planning to do so in the foreseeable future and want to…

Read More →

10 Effortless Ways to Make Extra Money for Retirement

Who doesn’t want to make money without putting much effort into it? After a lifetime…

Read More →

13 Key Money-Management Tips Every Retiree Should Know

Have you recently joined the new retirees’ group? If so, then you probably have a…

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.