Is Your Retirement Income Leaving Money on the Table? Five Questions to Find Out.

Most people check their account balance regularly. Very few have ever checked whether their income sources are working together efficiently.

These are two different things. The balance is what you have saved. How your income sources interact is what determines how much of it you actually keep.

The five questions below cover the most common coordination gaps in retirement. Each one has a simple action step you can take today. You do not need a financial background to answer them. You need a tax return from last year, your most recent Social Security statement, and about 15 minutes.

Question 1: Do you know your provisional income for 2025?

Provisional income is the number the IRS uses to determine how much of your Social Security benefit is subject to federal income tax. Many retirees do not know this number. As a result, they do not know whether they are in the range where most of their Social Security is tax-free, or the range where up to 85% of it is taxable.

The thresholds that govern this have not been adjusted for inflation since their enactment in the mid-1980s and early 1990s. At today’s benefit levels, most retirees with any income from an IRA, pension, or savings account are closer to the upper threshold than they realize.

Question 2: Has anyone shown you what your income looks like in the year your required minimum distributions begin?

Required minimum distributions (RMDs) begin at age 73 under current law for those born between 1951 and 1959, and at age 75 for those born in 1960 or later, per the SECURE 2.0 Act. Starting at that age, the IRS requires you to withdraw a minimum amount from your traditional IRA and 401(k) each year, whether you need the money or not. That amount is added to your taxable income.

Many retirees do well managing their income between retirement and age 73. They keep their provisional income in a reasonable range. Then RMDs begin. Suddenly they have mandatory income added to the picture, often pushing them across multiple thresholds at once. Social Security becomes more taxable. Medicare premiums go up. The tax bracket shifts. All in the same year.

The best time to plan for this is several years before it happens, when Roth conversions and other strategies can reduce the size of the traditional IRA balance that will generate RMDs.

Question 3: Do you draw from your accounts in a specific order, or whichever is most convenient?

The account you draw from first may be the most consequential decision in your retirement income plan. Most people have never made it deliberately.

Traditional IRA and 401(k) withdrawals count toward your adjusted gross income and therefore toward your provisional income. Roth IRA withdrawals do not. They do not appear in your adjusted gross income, they do not affect provisional income thresholds, and they do not count toward Medicare surcharge thresholds.

This means that choosing a Roth withdrawal instead of a traditional IRA withdrawal in a given year may allow you to take the same amount of spending money while keeping more of your Social Security tax-free. The spending is identical. The tax result is not.

Question 4: Do you know whether the new $6,000 senior deduction applies to your situation?

The One Big Beautiful Bill, signed in July 2025, added a new $6,000 deduction for people age 65 and older. This deduction can reduce the amount of income tax you pay, including taxes on Social Security benefits. It applies to tax years 2025 through 2028.

The deduction begins to phase out at $75,000 for single filers and $150,000 for married couples filing jointly. Above those levels, the deduction is reduced, and at higher income levels it disappears entirely. Most retirees will not notice it until their tax preparer files their return.

But the income decisions that determine whether you qualify are made throughout the year, in every IRA withdrawal, every pension payment, and every savings account interest payment. By the time your return is filed, it is too late to change most of them.

Question 5: If you give to charity, are you writing a check or using a qualified charitable distribution?

A qualified charitable distribution (QCD) allows people age 70½ and older to transfer money directly from their IRA to a qualifying charity. The amount counts toward the required minimum distribution but does not count as taxable income. The 2026 limit is $111,000 per person per year. (Source: IRS, 2026.)

If you are already giving to charity and you are over 70½, here is the key difference between a QCD and a regular check:

How to Read Your Results

Go back and count how many questions you answered with “No” or “Not sure.”

Given What We Covered This Week: Here Is the Simplest Way to Think About It

The June CPI report, released today by the Bureau of Labor Statistics, showed headline inflation at 3.5% year-over-year, down from 4.2% in May, driven by a 9.7% drop in gasoline prices. Core inflation held steady. The CPI-W, which the Social Security Administration uses to calculate the annual COLA, also rose 3.5% year-over-year. Combined with the Fed’s continued hold on rates (meaning savings and CD interest income remains elevated), more income is flowing into retirement households than many expected. And because the thresholds that govern Social Security taxation have not been adjusted for inflation since their enactment, more of that income is becoming taxable without any new decisions being made.

Coordination is how you work with that environment instead of just absorbing the cost. It does not require earning more. It does not require taking more risk. It requires looking at the full income picture, all five of these areas together, and making intentional decisions about order, timing, and account type.

If two or more of these questions left you uncertain, that is the conversation worth having before year-end decisions become permanent. Bring this checklist with you. It gives any advisor a clear starting point for the conversation.