There’s a tax benefit in retirement that almost everyone has heard of: the 0% capital gains rate.
And on the surface, it sounds simple. If your income is low enough, you can sell appreciated investments and potentially pay no tax on the gain.
But in practice, it’s rarely that straightforward.
In this week’s video, I walk through a real example of a couple who thought they were taking advantage of that rule… and ended up with an unexpected tax bill instead.
Not because they made a bad decision, but because they didn’t realize how their IRA withdrawals, pension income, and capital gains all interact with each other.
That’s the part that often gets missed.
Capital gains don’t exist in a vacuum. They stack on top of your other income, and that can quietly push a portion of your gains out of the 0% range and into a higher tax bracket.
We also talk through a few different ways this could have been handled differently. Spreading gains across multiple years, adjusting where income comes from, or even prioritizing Roth conversions instead depending on the situation.
The bigger takeaway is this:
Most retirement tax opportunities are real, but they’re not automatic. They depend on how all the pieces fit together in a given year and over time.
If you’re retired or getting close, and especially if you have a mix of IRAs and brokerage accounts, this is one of those areas where a little planning can make a meaningful difference.
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