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Your email address will not be published.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 tote bag filled with fresh groceries sitting on a wooden counter next to a long itemized receipt and a fountain pen. 8 Grocery Rewards Programs Worth Joining
  • Illustration of an earnings chart with a red zero missing record, accompanied by a brass ruler and fountain pen. 7 Social Security Record Errors Worth Fixing Early
  • Illustration of three senior couples dancing shag, two-step, and ballroom styles across a lit outdoor terrace at sunset. 11 Retirement Towns With Active Dance Clubs and Social Groups
  • Illustration of an older couple walking through stone arches toward a view of a city and the US Capitol at sunset. 10 Social Security Benefits Spouses Often Forget to Ask About
  • A man scans his smartphone at a grocery store self-checkout register displaying itemized savings on the screen. 9 Store Programs That Reward Frequent Shoppers
  • Older adults sculpt clay pottery at workstations in a bright art studio filled with shelves of ceramic bowls. 10 Towns With Great Senior Centers and Full Activity Calendars
  • A smiling older couple prepares bicycles mounted on the back of an SUV along a scenic coastal cliff at sunset. 11 Splurges Retirees Say They'd Make Again
  • Older woman in a green coat holding a package and looking at her smartphone beside snow-covered mailboxes outdoors. 12 Scams Targeting Retirees During the Holidays
  • A senior man in glasses opens mail marked "Important Tax Return Document Enclosed" inside a home entryway. 9 Tax Forms Retirees Should Expect in the Mail
  • A man reading a document in a woodworking shop next to a workbench and a wall calendar. 7 Signs Your Tax Bracket Will Change Next Year

Newsletter

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

Related Articles

11 Worrying 401(K) Mistakes That Will Derail Your Retirement Plans

All across the U.S., 401(k) plans have become the main ingredient to retirement savings. Them,…

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 →

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 →
Mature man reviews Social Security paperwork and a US passport at an outdoor table overlooking a coastal European city.

7 Social Security Rules for People Who Worked Overseas

Discover the 7 key Social Security rules for people who worked overseas, from totalization pacts…

Read More →
A warm gouache illustration of a retired couple looking over a vast US landscape, holding a road map under a golden sky.

The States Where SS Is Completely Exempt From State Income Tax in 2027

Discover which 42 states completely exempt Social Security from state income tax in 2027 and…

Read More →
A thoughtful 68-year-old man sitting on his porch during golden hour, holding a warm mug.

Here’s the Average Social Security Benefit of 68-Year-Old Americans (How Do You Compare?)

Discover the average Social Security benefit for 68-year-olds in 2026, learn how delayed credits impact…

Read More →
Older man in a green jacket reading a pamphlet beside a wooden arrow sign pointing toward voter information.

The Issues Voters Say Matter Most Heading Into November

Explore the key voter issues heading into November 2026, including Social Security solvency, Medicare drug…

Read More →

14 Ways to Make Your Money Last in Retirement

As you near your golden age, there’s probably no scarier thought than running out of…

Read More →

11 Social Security Mistakes You Have To Avoid Before You Retire

Some seniors lean solely on their Social Security during retirement. Others are able to supplement…

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.