Core Insights - The conventional strategy of deferring tax-deferred retirement accounts until the end of retirement may need reevaluation, as minimizing overall taxes during retirement could be more beneficial [2][5] - Financial advisors suggest using tax-deferred accounts for living expenses or converting portions to Roth IRAs before claiming Social Security to take advantage of lower marginal tax rates [3][8] Tax Considerations in Retirement - Collecting Social Security benefits while withdrawing from tax-deferred accounts can lead to taxation on those benefits, with single filers earning between $25,000 and $34,000 taxed on 50% of benefits, and those over $34,000 taxed on up to 85% [5][6] - The income thresholds for taxation on Social Security benefits have not been adjusted for inflation or wage growth since their introduction, leading to more retirees being affected by what is termed the "tax torpedo" [7] Strategies to Minimize Taxes - One effective strategy to avoid the "tax torpedo" is to withdraw from tax-deferred accounts before claiming Social Security benefits [8] - Compounded earnings in a taxable 401(k) or traditional IRA yield less after taxes compared to tax-free Roth IRA earnings, which do not count towards combined income [9]