I’m a Retirement Planner: 5 Tax Moves To Make Before You Claim Social Security
Written by
Kerra Bolton
Edited by
Rebekah Evans
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Claiming Social Security can change a tax bill for years.
For retirees, that decision does more than increase monthly income. It can affect how much of those benefits are taxed and how other income is treated.
That’s why retirement planners say the best time to prepare is tax season, before benefits begin. GOBankingRates spoke to Christopher Stroup, founder and president of Silicon Beach Financial, about the following five best tax moves to make before claiming Social Security.
Consider Roth Conversions
The years between retirement and claiming Social Security are often a retiree’s lowest-tax window. That gap can create an opportunity to convert money from traditional retirement accounts into a Roth IRA at a lower rate.
“Used wisely, it can permanently reduce lifetime taxes,” Stroup said.
Once Social Security begins, it adds another layer of income that can make up to 85% of benefits taxable.
“It may also reduce your ability to do Roth conversions efficiently,” Stroup said. “Claiming isn’t just a cash-flow decision. It reshapes your marginal tax bracket for years.”
Coordinate Withdrawals To Avoid Surprises
Many retirees focus on the size of their Social Security check without considering how withdrawals affect their broader tax picture.
“The biggest mistake is focusing only on the monthly benefit amount and ignoring the tax ripple effects. I often see retirees trigger higher Medicare premiums, phaseouts or unnecessary taxation of benefits,” Stroup said.
“Claiming early without coordinating withdrawals can quietly erode long-term after-tax wealth,” he added.
Watch Income Triggers
Seemingly small increases in income can have a huge impact once Social Security begins. Even modest withdrawals or gains can push retirees over key thresholds.
“Provisional income thresholds that determine Social Security taxation are a major trap,” Stroup explained. “Add IRMAA Medicare premium brackets and small income increases can create outsized costs. Marginal rates matter more than headline brackets.”
Plan Capital Gains Carefully
Capital gains planning is one of the essential areas clients should evaluate before claiming, Stroup said.
Selling investments before claiming Social Security can affect how much income shows up on a tax return. Realizing gains in the right year may help retirees stay within lower brackets and avoid triggering additional taxes.
Use Income Smoothing Before You Claim
Tax planning before claiming Social Security is a series of moves that position and coordinate income over several years to avoid unnecessary spikes that increase taxes and Medicare costs.
“I wish more people understood the power of intentional income smoothing. Spreading withdrawals, executing partial Roth conversions and managing capital gains before claiming can create long-term tax flexibility,” Stroup said.
“Social Security timing should be coordinated with a multi-year tax projection, not decided in isolation,” he added.
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