The Hidden Taxes in Retirement No One Warns You About, LFG Daily - January 9, 2026

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The Hidden Taxes in Retirement No One Warns You About

Most people think taxes disappear when they retire.

No more W-2.No more commuting.No more “working” income.

But here’s the harsh truth: retirement can be one of the most heavily taxed seasons of your life — if you don’t plan properly.

The problem isn’t that taxes exist.It’s that most of them are hidden.

Let’s pull back the curtain.

1. The Tax Bomb Inside Your 401(k) & IRA

That big balance in your 401(k)?It’s not all yours.

Every dollar is pre-tax money, meaning Uncle Sam owns a piece. And when you start withdrawing:

• Withdraw $50,000 → it’s taxable income• Withdraw $100,000 → it could push you into a higher bracket• Need a big chunk for a home, medical bill, or helping kids? → even more tax

The trap:You saved taxes on the front end…but you may pay more on the back end.

Especially if tax rates rise in the future (which history suggests they will).

2. Required Minimum Distributions (RMDs)

Once you hit your 70s, the government forces you to withdraw money — whether you need it or not.

That’s called an RMD.

And guess what?

• It’s taxable

• It stacks on top of Social Security

• It can push you into higher brackets

• It can trigger more Medicare costs

So even disciplined savers get punished for doing the right thing.

3. Social Security: The “Tax-Free” Myth

Most retirees are shocked by this:

Up to 85% of your Social Security can be taxable.

Yes, taxable.

It depends on your total income — including:

• Pension

• IRA withdrawals

• Investment income

Meaning the more responsible you were…the more likely you are to pay tax on your benefits.

4. Medicare Premium Surcharges (IRMAA)

This one blindsides a lot of people.

If your income crosses certain thresholds, your Medicare premiums go up.

Not a little.

Sometimes thousands more per year.

And it’s based on income from two years ago —so one big withdrawal today can cost you for years.

That’s a hidden tax most people never plan for.

5. Capital Gains You Didn’t Expect

Sell an investment?Sell a rental property?Downsize your home?

Boom.

Capital gains tax.

And it stacks on top of everything else —which can snowball into higher brackets, higher Medicare costs, and more tax on Social Security.

The Real Risk: Ignoring Tax Planning

Most financial plans focus on:

• How much you’ll save

• How much you’ll earn

• How your portfolio performs

Very few focus on:

How much you’ll actually keep.

That’s the real game.

How Smart Retirees Reduce Hidden Taxes

Here’s what proactive planning looks like:

1. Roth Conversions (Strategically)

Pay tax now at known rates

→ enjoy tax-free income later

2. Income Sequencing

Pull from the right accountsat the right timeto control tax brackets

3. Tax Diversification

Not all pre-tax

Not all Roth

Not all taxable

Balance gives you control.

4. RMD Planning

Reduce future forced incomebefore it becomes a problem.

Retirement isn’t about how much you have.

It’s about:

How much you keepHow long it lastsAnd how much control you have

The IRS is your silent retirement partner —unless you plan ahead.

And the earlier you do it,the more options you have.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

Jobless Claims were 208K vs. exp. 210K, while Continuing Claims were 1914K vs. prev. 1858K. No real trouble, there.

October Balance of Trade was -$29.4B vs. exp. -$58.9B, with exports a bit higher and imports a bit lower.

Somewhat predictably with those Q3 GDP numbers, Productivity was a huge 4.9% vs. exp. 3%, while Unit Labor Costs were -1.9% vs. exp. 1%. Great sign for corporate profitability, if very stale data.

Take the last two days of economic data, and the Atlanta Fed GDPNow is up to a 5.4% GDP for Q4. Probably worth noting the Nowcast is known to handle trade data poorly...

Trump announced a plan to purchase $200B in mortgage bonds in the hopes of driving mortgage rates down? Whispers of a mini-Quantitative Easing (QE?) Mortgage REITs (MORT) should like that, at least.

Payrolls, this morning, are the big, if volatile, number of the week. We may also get a Supreme Court decision on tariffs.

What does it all mean? Market moving news, this morning. If nothing else, hedging demand should ease after the events.

Don’t leave your financial future up to chance. Let’s build a plan that gives you confidence today and peace of mind for tomorrow. Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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