Retirement tax calculator

The rule that decides how much of your Social Security is taxed

Social Security is not simply taxable or untaxed. How much of it counts as income depends on a figure called provisional income: everything else you receive, plus any tax-exempt interest, plus half your benefits. That number is then compared against two thresholds, and the result is the portion of your benefits that goes onto the return.

On $30,000 of benefits and $40,000 of withdrawals, provisional income is $55,000 — the $40,000 plus half of $30,000. That puts this household past the second threshold, and $15,350 of the benefits become taxable: 51.17% of them, not the 85% people expect.

That distinction matters more than almost anything else on this page. The 85% is a ceiling on how much of your benefits can ever be taxed, not a rate that applies once you cross a line. Most retirees never reach it, and a calculator that applies 85% flat overstates the bill for the majority of the people using it.

The thresholds are $25,000 and $34,000 single, $32,000 and $44,000 joint — and they have never been indexed. They were set in 1983 and 1993 and have not moved since, which means that every year, inflation pushes more retirees over them without any change in the law. When they were written, a small minority of beneficiaries paid tax on benefits. That is no longer true, and nothing was ever decided to make it so.

The practical consequence: below the first threshold none of your benefits are taxable at all, and the space beneath it is one of the few genuinely controllable things in retirement tax planning. Which order you draw from which account decides where you land.

Three kinds of account, three different tax outcomes

A traditional 401(k) or IRA was funded with money that was never taxed, so every dollar withdrawn is ordinary income. It counts toward provisional income, which means it can also make more of your Social Security taxable — a second effect that a straightforward calculation misses entirely.

A Roth account was funded with money already taxed, so qualified withdrawals are not income at all. They do not appear on the return, they do not count toward provisional income, and they therefore do not drag any Social Security into taxation. That invisibility is worth more in retirement than the headline comparison of rates suggests.

A taxable brokerage account sits in between and behaves differently again. Selling produces capital gain rather than ordinary income, taxed on its own schedule with a zero-rate band that is unusually easy to stay inside on a modest retirement income. Only the gain is taxed, not the principal being returned, which is the part people most often get wrong when estimating.

What none of them attract is FICA. Social Security and Medicare are charged on earned income, so a retiree drawing $70,000 from accounts pays none of the 7.65% that the same amount as a salary would carry. It is the largest single reason retirement income is cheaper to receive than employment income of the same size.

And the standard deduction is larger once you are 65 or over: an extra $1,650 per person per condition, or $2,050 for someone unmarried. On a joint return where both are over 65 that lifts the deduction from $32,200 to $35,500, which is a meaningful shelter at these income levels.

The order you draw from accounts changes the bill

Two retirees with identical savings and identical spending can pay very different tax, and the whole of the difference is which account they drew from first. This is the most valuable planning decision available in retirement and it costs nothing to make well.

The conventional order — taxable first, then traditional, then Roth — defers tax and is a reasonable default. Its weakness is what it does later: leaving traditional balances untouched for years means larger required distributions afterwards, arriving all at once and pushing provisional income up exactly when there is least flexibility.

The alternative that often beats it is filling the low brackets deliberately in the early years. Someone with little other income in their sixties can withdraw from a traditional account up to the top of a low bracket, pay tax at that rate on purpose, and reduce the balance that will later be forced out at a higher one. The same window is where Roth conversions do their work.

The provisional income rule turns this from a preference into arithmetic. Because a traditional withdrawal can make additional Social Security taxable, the effective marginal rate on that withdrawal is higher than the bracket suggests — in the range where each extra dollar drags 50 or 85 cents of benefits into taxation, it can be substantially higher. Drawing from a Roth in exactly that range costs nothing at all.

The mechanical check is easier than it sounds: work out where the thresholds sit for your filing status, see how far your other income is from them, and treat the remaining space as a budget to be filled from taxable accounts before touching anything else.

Where you retire changes this more than what you saved

States treat retirement income very differently from wages, and the variation is far wider than it is for salaries. Some exempt it entirely, some exempt a fixed amount, some exempt by source — a public pension untaxed while an IRA withdrawal is not — and some tax it exactly like any other income.

9 states levy no income tax at all, so nothing on this page's federal calculation is added to: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Beyond those, we have loaded specific retirement income exclusions for 34 states from each state's own publication, and identified 4 where we confirmed no general exclusion exists — which is a different claim from not having looked, and the pages say which is which.

The exclusions that exempt by source rather than by amount are the ones compiled sources handle worst. Alabama exempts defined-benefit pension income while taxing IRA withdrawals. Hawaii splits a single 401(k) depending on who contributed. Kansas treats state, federal and military pensions differently from private ones. A calculator applying a single "retirement exclusion" figure gets all three wrong.

Social Security gets its own treatment again, and most states do not tax it at all even when they tax everything else. Where a state does, the base is usually the federally taxable portion rather than the gross benefit, so the provisional income rule flows through to the state return as well.

And the property side is the half that decides more retirements than the income side. Property tax does not fall when income does — the house is worth what it is worth whether you are earning $120,000 or drawing $70,000 — so a bill that was 3% of income while working can be 9% afterwards. Several states run relief specifically for older owners, and it almost always has to be applied for.

Required minimum distributions, and the bill nobody planned for

Traditional accounts cannot be left alone indefinitely. From the required age you must withdraw a minimum each year, computed from the balance and a life expectancy factor, and it is taxed as ordinary income whether or not you needed the money.

The problem this creates is one of timing rather than of rate. Somebody who deferred successfully for decades arrives at that age with a large balance, and the required withdrawal can be bigger than their actual spending — pushing income up, dragging more Social Security into taxation, and in some cases raising Medicare premiums through the income-related surcharge two years later.

That surcharge is worth naming because it is the closest thing to a cliff in this area. Medicare premiums step up at income thresholds rather than phasing in, so a single dollar over a threshold can cost several hundred dollars in premiums for a year — and it is assessed on income from two years earlier, which means a one-off event like a property sale or a large conversion is felt long after it is forgotten.

The window to act is the years between retiring and the required age, when income is often at its lowest for the whole of adult life. Converting to Roth or drawing down traditional balances deliberately in that window is what reduces the later requirement, and it is a window that closes.

A qualified charitable distribution is the other tool: giving directly from an IRA to a charity satisfies part of the requirement without the amount appearing as income at all — which is better than taking the withdrawal and deducting the gift, because it keeps provisional income and the Medicare thresholds down as well.

Five ways a retirement tax estimate goes wrong

Assuming 85% of Social Security is taxable. It is a ceiling, not a rate. At $40,000 of other income and $30,000 of benefits, 51.17% is taxable — and below the first threshold the answer is none of it.

Counting Roth withdrawals as income. They are not income, they do not appear on the return, and crucially they do not count toward provisional income. Including them overstates both the tax and the portion of Social Security that becomes taxable.

Counting the whole of a brokerage sale. Only the gain is taxable, not the return of your own principal. Someone selling $50,000 of shares bought for $35,000 has $15,000 of gain, and at retirement income levels much of it may fall in the zero-rate band.

Forgetting the larger standard deduction. Being 65 or over adds $1,650 per person per condition. On a joint return with both over 65 the deduction is $35,500, and using the standard figure overstates taxable income by $3,300.

Comparing states on income tax alone. Retirement income exclusions vary enormously and property tax does not fall with income. A state that exempts pensions entirely and taxes property heavily can cost a retiree more than one that does the reverse — which is why both halves are on this site and linked from every page.

Roth conversions, and the window that closes

A conversion moves money from a traditional account to a Roth, and the amount converted is taxable in that year as ordinary income. Nothing else about it is forced: there is no age limit, no income limit, and no requirement to convert everything at once.

The case for it is arbitrage between rates now and rates later. Converting at a low rate today to avoid a higher one on withdrawal wins; the reverse loses. That makes the calculation genuinely personal — it depends on your bracket now, your expected bracket later, and how long the money will grow before it is needed.

The window where it works best is specific and temporary: after employment income stops and before required distributions and Social Security begin. In those years taxable income can be unusually low, and converting up to the top of a low bracket costs little while permanently removing that money from future required distributions.

The second-order effects are what make it worth modelling rather than estimating. A conversion raises provisional income, which can make more of your Social Security taxable in that year. It raises modified AGI, which can trigger the Medicare surcharge two years later. Neither is a reason not to convert; both are reasons to convert deliberately in amounts rather than all at once.

Paying the tax from outside the account is what makes a conversion work. Using converted funds to pay the tax reduces the amount that grows tax-free and, before the relevant age, can add a penalty — which turns a good decision into a mediocre one.

A decade-by-decade sequence

In your fifties, while still working, the priority is deduction: contributions to traditional accounts reduce income at what is likely your highest lifetime marginal rate, and catch-up contributions raise the limits. This is also the moment to know what you hold in each type of account, because the next twenty years of planning depends on that mix.

The years immediately after stopping work are the planning window, and they are short. Income is at its lowest, Social Security has not started, required distributions have not started, and the space beneath the low brackets and beneath the provisional income thresholds is at its widest. Conversions and deliberate withdrawals belong here.

Deciding when to claim Social Security interacts with all of it. Delaying increases the benefit permanently, and it also extends the low-income window in which conversions are cheap — two effects pointing the same way, which is why the tax analysis and the claiming analysis should not be done separately.

Once required distributions begin, flexibility narrows sharply. The amount is set by the balance and a life expectancy factor rather than by what you need, and it is what the earlier decade of planning was for. Qualified charitable distributions are the main remaining lever for anyone giving anyway.

Throughout, the state question runs alongside and is easy to defer too long. Retirement income exclusions vary enormously between states, property tax does not fall when income does, and a move made for tax reasons after the fact is far more expensive than one planned before.

Where the retirement tax figures come from

Everything computed here rests on IRC § 86, IRC § 63(f), read off the law and the IRS revenue procedure rather than off a summary of either. Where a figure is indexed to inflation it comes from Rev. Proc. 2025-32, the same document that sets the brackets used across this site.

The indexed figures on this page are the standard deduction and its additional amount for being 65 or over, the federal brackets — all published for 2026 and all checked on 2 September 2026. Each carries that date because a tax figure without one is unverifiable, and the commonest error in this category is a correct figure from the wrong year.

The two provisional income thresholds have never been indexed — they were set in 1983 and 1993 and have not moved since, which is why a steadily larger share of retirees crosses them each year. Thresholds that are not indexed are the ones compiled sources most often present as though they were current when they have simply never moved — which is a different kind of staleness and harder to spot.

What this page does not model is stated in full under the calculator rather than buried here: it applies the provisional income rule and the over-65 deduction, and does not model required minimum distributions, Roth conversions in detail, or the Medicare income-related surcharge. Where a case falls outside what the engine handles, we would rather say so than return a confident number for a situation we did not compute.

The arithmetic itself is deterministic — rates in, result out, with no model deciding anything. The AI explanation available on this site describes figures it was given and never produces one, which is the only arrangement in which a language model belongs anywhere near a tax calculation.

Questions

Is Social Security taxable?

Sometimes, and rarely all of it. It depends on provisional income — other income plus tax-exempt interest plus half your benefits. Below $25,000 single or $32,000 joint, none of it is taxable. Above the second threshold, up to 85% can be — but 85% is a ceiling, not a rate. At $40,000 of withdrawals and $30,000 of benefits, 51.17% is taxable.

How much tax will I pay on a 401(k) withdrawal?

It is taxed as ordinary income at your marginal rate, with no preferential treatment and no FICA. The part people miss is the second effect: because it counts toward provisional income, a withdrawal can also make more of your Social Security taxable, so the true cost of the last dollar withdrawn is often higher than your bracket suggests.

Do I pay Social Security and Medicare tax in retirement?

No. FICA is charged on earned income, so withdrawals, pensions and benefits carry none of the 7.65% that wages do. It is the main reason the same amount of money costs less to receive in retirement than it did as a salary. Employment income in retirement is still subject to it.

Which states do not tax retirement income?

9 states levy no income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Many others exempt retirement income specifically — some by amount, some by source, with a public pension exempt while an IRA withdrawal is not. Each state page here carries its own rule, read off that state's own publication, and says plainly where we have not yet checked.

Should I withdraw from my Roth or my 401(k) first?

Generally traditional first up to the top of a low bracket, then Roth beyond it — the reverse of the usual advice. Filling the low brackets deliberately reduces the balance that will later be forced out by required distributions, and drawing from Roth in the range where each extra dollar drags Social Security into taxation costs nothing at all.

What is the retirement tax cliff people talk about?

Two of them. The provisional income thresholds, where each extra dollar of income can make 50 or 85 cents of benefits taxable — raising your effective marginal rate well above your bracket. And the Medicare income-related surcharge, which steps up at thresholds rather than phasing in, and is assessed on income from two years earlier.