Lurking Tax Burdens for Retirees

When I started working, it was commonly accepted that income taxes would lower in retirement. I was looking forward to lower taxes when I retired.  However, it didn't quite work out that way.

  

Here are some "new" or increases in taxes retirees can expect:

• Social Security Taxes.   Up to 85% of social security payments can be taxed above certain total income.   The threshold income  number hasn't been adjusted for inflation since it was implemented in the 1980s.  IMHO, there should be no tax on Social Security payments for all recipients.  First, the Federal government doesn't acknowledge that 100% of FICA payments made by an individual has already been taxed.  Thus, the Federal government is taxing the same income twice.  Seems this should have been corrected many years ago, but the Federal government allows this inequity for seniors to continue.
• IRMMA (income-related monthly adjustment amount) payments.   This is the additional payment one is required to make for Medicare part B premiums based on income.   My response is, "Since when are any insurance premium payments based on one's income?"    Do I pay homeowner/renter insurance based on income?  Do I pay car insurance based on income?   No I pay based on benefits and risk assessment.   Thus, IMHO,  IRMMA is another stealth tax on Retired Seniors. 
• RMD (Required Minimum Distributions from Retirement Accounts) taxes.   OK, Federal government expects individuals to save for retirement.  After the individual saves, the Federal government tells them they must withdraw a certain amount a year and pay taxes, even if the retiree does not need the funds.   
• Real Estate Taxes.   As home prices increase, so do local real estate taxes.  Typically, one should expect increasing and higher real estate taxes over time.

I didn't realize that tax planning would actually become more important in retirement.  However, it appears good tax planning can minimize how much a retiree owes.

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This is not financial nor tax planning advice. Please consult a professional advisor.

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