Keep track of your income to limit taxes on capital gains
Depending on your income, you might not have to pay any federal income taxes on qualified dividends or gains from selling stocks, mutual funds or other capital assets you’ve owned for more than a year. In 2020, married couples who file jointly can qualify for the 0% Capital Gains rate if their taxable income is $80,000 or less. For single filers, the 2020 threshold is $40,000
How can proactive tax planning help you land in a lower tax bracket during those early retirement years? One move would be to delay taking your Social Security benefits for a few years while you live off your capital gains. And if you need additional income during those years, you might choose to withdraw the funds from a Roth account or IUL, since that won’t increase your taxable income.