I Asked ChatGPT How Retirees Can Lower Their Lifetime Taxes — Here’s What It Said
Written by
Andrew Lisa
Edited by
Amen Oyiboke
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With tax season in full swing, I looked ahead to retirement planning with the IRS on my mind. Unsure how April’s annual burden will change as I age, I asked ChatGPT for insight — and the artificial intelligence (AI) chatbot offered some sage advice.
It is called lowering lifetime taxes, the “quiet superpower in retirement.”
Just how super?
ChatGPT advised that a little bit of tax planning “can easily be worth six figures if done right.”
Timing Is Everything
ChatGPT wrote that the biggest key is to “control when you pay taxes” because “timing beats deductions.” That’s good news for retirees, who “often have more control over income timing than workers.”
It suggested the following “smart moves,” with the goal of “smoothing income so you never spike into higher brackets later.”
- Delay Social Security to age 70: Bigger benefit + fewer years of taxable SS
- Use taxable accounts first, tax-deferred later
- Fill lower tax brackets intentionally (don’t wait until RMDs force you)
Leverage the Advantages of Tax-Privileged Accounts
ChatGPT repeatedly stressed the importance of working retirement accounts to your advantage.
- Use Roth conversions “strategically, not aggressively,” focusing on the “gap years” after retirement but before RMDs and Social Security, up to the top of your current bracket, not more.”
- Withdraw first from taxable brokerage accounts for favorable capital gains rates, next from tax-deferred accounts such as 401(k)s, and last from Roth accounts to preserve tax-free growth and withdrawals for as long as possible.
After getting the timing right, this is the best way to “reduce lifetime marginal tax rate.”
Minimize Social Security Taxes and Medicare Premiums
Another way to “save thousands per year, every year,” is to reduce IRMAA premiums. ChatGPT reminded me that “Medicare Part B and D premiums jump when income crosses certain thresholds” — but not for all income types.
Income that counts:
- IRA withdrawals
- Capital gains
- Roth conversions
- Rental income
Income that doesn’t count:
- Roth withdrawals
- HSA reimbursements
- Qualified life insurance loans
Additionally, the bot reminded me that “85% of Social Security can be taxable — but many retirees accidentally trigger this. Common mistake: large IRA withdrawal, SS becomes taxable, higher Medicare premiums.”
Here’s how it suggested reducing Social Security taxes:
- Using Roth withdrawals instead of IRA withdrawals
- Spreading out capital gains over multiple years
- Avoiding big one-time income events after SS starts
Gains, Giving and Estate Planning
The previous strategies do most of the heavy lifting, but ChatGPT offered the following suggestions to further diminish my lifetime tax liability.
Instead of concentrating on writing off capital losses, “harvest capital gains (yes, on purpose) because “many retirees can realize gains at 0% or 15%. This is one of the most underused retiree strategies.”
If you give to charity, “donate directly from your IRA using Qualified Charitable Distributions,” which count toward RMDs but aren’t taxable income.
Retire in a tax-friendly state.
Conduct thoughtful estate planning that reduces taxes for both you and your heirs.
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