Will you have a lower tax rate in retirement? Maybe not, advisors say

Most Americans in retirement typically have a lower tax burden compared to their working years, due to factors such as no longer paying payroll taxes and lower household income. However, higher earners and big savers may still face significant tax impacts in retirement, especially with required minimum distributions from pre-tax retirement accounts. Some retirees choose to maintain their lifestyle by withdrawing larger sums from their accounts, leading to higher taxable income. It’s important to consider income tax assumptions and plan conservatively for retirement to avoid financial risks. While future tax rates are uncertain, most retirees are likely to experience lower tax rates compared to their working years.