George Smith, Trust Advisor, Regions Private Wealth Management
Retirement is changing. People are working longer and relying more on various retirement accounts instead of pensions. This makes planning for taxes especially important as the working years transition to retirement and the goals people set for those years.
At Regions, our team in Private Wealth Management has worked with clients across the River Region and beyond for generations to help them prepare for retirement. No matter the need, our team of associates take a strategic approach to providing insights, collaboration and support to help clients prepare.
Here are four questions to consider.
1. Do I have to pay taxes on social security?
You might. It depends largely on how much taxable income you (and potentially your spouse) have.
If you continue working in retirement and are collecting Social Security benefits, depending on your retirement age and income, you may have to pay federal income tax on Social Security benefits above a certain threshold. The likelihood that you’ll pay taxes increases with your overall income, so if you continue working in retirement, your benefits are more likely to be taxed. That’s in addition to the taxes paid on income earned from part-time work.
2. What about taxes on my retirement account?
Whether you pay federal income tax on money you withdraw from a 401(k) or IRA depends on whether it is a traditional or Roth account.
For a traditional retirement account, withdrawals are generally subject to federal income tax based on your ordinary income tax rate. There is one exception: If some of the funds in your account were after-tax contributions, they wouldn’t be subject to a second income tax.
A distribution from a Roth IRA or Roth 401(k) is generally not subject to federal income tax if certain conditions are met. While the portion of the distribution that equals the historical contributions to the Roth IRA is not taxable, earnings might be, depending on how old you are and when you set up the account.
3. Are there potential tax credits to consider?
Some retirees, particularly those with disabilities or those with lower income, may be eligible for the Tax Credit for the Elderly or the Disabled. Eligibility depends on age, filing status and income.
4. What is the tax impact of a reverse mortgage?
Some seniors consider reverse mortgages as a source of income in retirement. If you’re thinking of doing this, there are a few tax considerations.
You will still be responsible for property taxes. However, because the income you receive from the reverse mortgage is considered a loan, it’s not considered income, and you won’t pay income taxes on it.
Taxes aren’t the only financial consideration when talking about reverse mortgages, though. It’s important to also understand associated fees and costs. Work with a financial professional to evaluate if this is a good option for you.
At Regions, our team of associates across the River Region can provide tailored guidance for people considering retirement. To learn more, stop by any Regions branch or visit regions.com to make an appointment.
© 2025 Regions Bank, member FDIC, Equal Housing Lender. This information is general education or marketing in nature and is not intended to be accounting, legal, tax, investment or financial advice. Although Regions believes this information to be accurate as of the date written, it cannot ensure that it will remain up to date. Statements of individuals are their own—not Regions’. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules.
