5. Pensions
When it comes to pensions, things are easy because most of them are funded with pretax income, which means that the full amount of your pension will be taxable when you receive the funds. Government pensions are usually taxable at your income rate and this is because you made no after-tax contributions to the plan.
6. Home Sales
In most cases, a house is the biggest asset a retiree owns. Usually, if you want to sell it for a good price and move to a smaller home, if you had it as your personal residence for more than two years before the sale, you can exclude up to $250,000 of the gain from income.
And if you are married, up to $500,000.
If you manage to sell it for more, any gains in excess of $250,000 or $500,000 will be taxed at long-term capital gains rates.
7. Reverse Mortgages
There’s good news! Because all the payments that you get from a reverse mortgage on your house are nontaxable. Another thing is that you can’t take away the interest you eventually pay when you satisfy the mortgage, unless you used the original procedure to build, buy, or improve your home.
What are your concerns about retirement? Are you ready for it or do you still see it as a challenging chapter in your life? If you want to find out more about this subject, we recommend you read 12 Key Dates For Retirees in 2022.
