Tax-Free Retirement Income

A successful retirement requires significant planning. You must employ a comprehensive strategy to ensure that your retirement funds last through your later years. Tax-free retirement income can be essential in this effort. 


Here are some tax-free retirement income options you can incorporate into your retirement strategy.

What is a Fiduciary?

Our trusted advisors are Fiduciaries. A Fiduciary Financial Advisor has the legal duty to make investment recommendations with your best interest in mind, while other advisors who may not be a Fiduciary may recommend products for which they receive a commission or other form of payment.

A Roth Account

Setting up a Roth version of a retirement account or 401(k) plan can set you up to receive reasonably straightforward tax-free retirement income. Your contributions to such an account won’t be tax-deductible, but distributions made after 59 and a half years of age are usually tax-free. 


With Roth accounts, you avoid taxes in retirement by paying them upfront during your working years. The maximum you can contribute in a year to a Roth IRA is $6,000, but if you’re age 50 or older, the maximum is increased to $7,000. Roth 401(k) accounts are more generous, allowing you to contribute up to $19,500 and an additional $6,500 if you’re age 50 or older.

Health Savings Accounts

Health savings accounts can only be paired with high-deductible health plans. They can be used as a way to acquire tax-free retirement income. And fortunately, with HSA accounts, you don’t have to spend the money within any specific timeframe.

Contributions made to HSA accounts are tax-deductible and gains in the account grow tax-free. Withdrawals from the account that are used to pay for qualified expenses are also tax and penalty-free. You can currently contribute $3,600 to an HSA account every year. This amount is increased to $4,600 if you are age 55 or older.

Life Insurance

Life insurance policies are known to offer a death benefit at the time of the insured’s death, but many people aren’t aware that there is also a cash savings component included in most policies. Part of your premiums go to the death benefit and another portion helps build your cash savings. The money in these accounts can be leveraged tax-free in some cases.


Annuities provide an income stream in retirement in exchange for premium payments made now. If after-tax money is used to fund one, only the interest is taxable. Therefore, purchasing an annuity can lead to long-term tax savings during retirement.


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Plan For Retirement Taxes

Taxes can make or break your retirement strategy. To ensure that you have planned appropriately, contact American Family Solutions. We will help you build an effective retirement strategy.