Smart Year-End Tax Moves for Retirees
While retirees should be tax smart year-round, certain strategies focus on year-end planning to reduce tax. Use our tips to help keep more of your money in retirement.
Nobody wants to pay more tax than necessary, especially in retirement. After years of hard work, your income may be lower and more predictable, but the cost of living keeps increasing. That’s why smart tax planning can make an impact. A few well-timed moves before year-end can help you keep more of your money for the things that matter most.
Accordingly, if you’re a retiree, you should be extra careful with how you handle your tax situation. When it comes to required distributions, Social Security benefits and investment income, effectively managing withdrawals and distributions each year could have a significant impact on the strength and viability of your financial plan.
Let’s take a look at nine ways that you, as a retiree, can be tax smart as the calendar year winds down.
1. Required minimum distributions (RMDs)
If you’re age 73 or older (phases to age 75 if born after 1959), then RMDs from your IRA or other retirement plans must be taken by December 31. Missing the deadline may trigger a 25% penalty of the amount not taken.1
Even if you don’t need the income, you have options. A qualified charitable distribution (QCD) allows you to send money directly to charity from your IRA. This will satisfy all or part of your annual RMD, while also keeping the income off your tax return.
2. Extra standard deduction for retirees
Taxpayers aged 65 or older qualify for an enhanced senior deduction. This helps reduce taxable income even if you don’t itemize. Knowing where your deductions are relative to this threshold can help you determine whether to “bunch” your expenses or simplify your filing with the standard deduction.2
3. Medical expenses
Medical expenses are deductible once they exceed 7.5% of your adjusted gross income (AGI). Retirees may bunch expenses into a single year to cross that threshold and claim the deduction. If possible, paying upcoming medical bills before December 31 can increase your total deductions if you’re itemizing.3
4. Roth conversions
Converting part of your traditional IRA to a Roth IRA captures future tax-free growth and reduces your future RMDs. A tax-bracket filing strategy can be used to convert just enough assets to reach the top of your current bracket without spilling into the next. Generally, the best time for this strategy is before RMDs or Social Security begin (i.e., when income and taxes may be lower).
5. Manage capital gains with tax-loss harvesting
Review your taxable accounts before year-end to help offset gains with losses. You may realize up to $3,000 in net losses against ordinary income. Retirees in the 0% long-term capital gains bracket can also sell appreciated assets tax free and reset the cost basis. Make sure to coordinate sales carefully to avoid “wash sale” violations that could prevent you from claiming a capital loss on the sale.
Look out for mutual fund capital gains distributions as they can be a surprise in November and December, potentially adding to your tax burden.
6. Charitable giving
Retirees can make QCDs directly from an IRA, which will help satisfy RMDs without adding to taxable income. If you want to make larger or multi-year gifts, a donor-advised fund (DAF) allows you to donate appreciated assets or cash and claim an immediate deduction.
Couple a Roth conversion with a DAF contribution to help make a tax-neutral contribution to a Roth IRA.
7. Social Security taxation
Up to 85% of Social Security benefits can be taxable, depending on income levels. Coordinating withdrawals from tax-deferred and taxable accounts may help smooth income and reduce taxes on these benefits. Small adjustments and the timing can prevent triggering higher Medicare premiums and potentially avoid the Social Security “tax torpedo” that could increase your income taxes disproportionately.
8. Asset location and withdrawal sequencing
Having the right assets in the right accounts can meaningfully reduce taxes over time. Try to move tax-inefficient investments like bonds or REITs inside an IRA, and hold tax-efficient assets like ETFs or municipal bonds in taxable accounts. You should develop a plan to coordinate withdrawals across your taxable, tax-deferred and tax-free accounts in order to manage your tax brackets and keep more of what you earn.
Be mindful when owning partnerships in IRAs. Such partnerships often generate unrelated business taxable income (UBTI). Even though an IRA is a tax-deferred account, it’s not exempt from UBTI.
9. Property and state tax deduction
A recent tax law change raised the SALT deduction cap from $10,000 to $40,000 for years 2025-2029. This means you can deduct more of your property and state taxes if you itemize. If you live in a high-tax state, you can benefit from prepaying property taxes or state-estimated payments before year-end to help maximize this deduction. Since this expanded SALT deduction cap is temporary and may go away in future years, it’s a good time to review itemized deductions and plan accordingly.
You have worked hard during your career and shouldn’t be expected to pay more than your fair share of income tax in your retirement years. The year-end tax-management strategies that we’ve explored can go a long way toward keeping more of your money where it belongs: in your pocket, so you can save, spend or invest as you see fit.
Consult with a Corient Wealth Advisor to learn more about being tax smart, now and throughout the year.
1 https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
2 https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors
3 https://www.irs.gov/taxtopics/tc502
ABOUT THE AUTHOR
Todd Youngs
Todd is an Associate Partner, Wealth Advisor in our St. Petersburg, FL, office. He has spent his entire career in the financial services industry. Prior to his time at legacy firm Doyle Wealth Management, Todd worked at PwC as a research analyst specializing in asset management companies. His work included data/market intelligence, strategy and client solutions. Before joining PwC, He was also a senior research analyst at Franklin Templeton. In addition to the CFA® designation, Todd holds a Master of Science in Finance and an MBA from the University of Tampa. He is a graduate of Furman University with a bachelor’s degree in computer science and business administration. He currently serves on the advisory board of the University of South Florida – St. Petersburg Merrill Lynch Wealth Management Center and is the chair of the finance committee at First United Methodist Church of St. Petersburg.
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5008923 – November 2025
