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To prevent yourself from facing a steep tax surprise in retirement, here are several key tax traps to be aware of:

📌 Lack of Tax Diversification: The old advice was to maximize your 401(k) savings, but having taxable accounts (such as a Roth) can help with tax planning

📌 Social Security Taxation: RMDs can push you into tax brackets where Social Security benefits are taxed

📌 Medicare Surcharges: High RMDs can also lead to costly Medicare premium increases

📌 Rethinking Contributions: For married couples, nce retirement accounts reach $1–$2 million, further tax-deferred contributions may not be ideal

📌 Tax-Bracket Creep: Growing accounts can push you into higher tax brackets over time.

📌 Surviving Spouse Pays More: After one spouse passes, the survivor may face higher taxes due to different brackets

📌 Inherited Accounts Are Taxed Faster: Kids must now withdraw inherited IRA funds within 10 years, creating higher tax burdens

Key Takeaways: Your tax plan is just as important as your investment plan. Understanding the impact of RMDs, Social Security taxes, and Medicare surcharges can help you make smarter withdrawal decisions and avoid unnecessary tax surprises.