May 9, 2025

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Columns & Opinion, Lifestyle, Main, News
May 24, 2024
How is your retirement income taxed?
By Patrick Ford
How is your retirement income taxed?   Once you’re retired, you will likely need to draw on several types of income for your living expenses. You’ll need to know where these funds are coming from and how much you can count on, but you should also be aware of how this money is taxed - because this knowledge can help you plan and budget for your retirement years. Here’s the basic tax information on some key sources of retirement income:
  • Social Security - Many people don’t realize they may have to pay taxes on their Social Security benefits. Whether your benefits will be taxed depends on how much other taxable income you receive from various sources, such as self-employment, stock dividends and interest payments. You’ll want to check with your tax advisor to determine whether your income reaches the threshold where your Social Security benefits will be taxed. The lower your total taxable income, the lower the taxes will be on your benefits. The Social Security Administration will not automatically take out taxes from your monthly checks - to have taxes withheld, you will need to fill out Form W-4V (Voluntary Withholding Request). Again, your tax advisor can help you determine the percentage of your benefits you should withhold.
  • Retirement accounts - During your working years, you may have contributed to two basic retirement accounts: an IRA and a 401(k) or similar plan (such as a 457(b) plan for state and local government employees or a 403(b) plan for educators and employees of some nonprofits). If you invested in a “traditional” IRA or 401(k) or similar plan, your contributions may have been partially or completely deductible and your earnings grew on a tax-deferred basis. But when you start taking withdrawals from your traditional IRA or 401(k), the money is considered taxable at your normal income tax rate. However, if you chose the “Roth” option (when available), your contributions were not deductible, but your earnings and withdrawals are tax-free, provided you meet certain conditions.
  • Annuities - Many investors use annuities to supplement their retirement income. An annuity is essentially a contract between you and an insurance company in which the insurer pays you an income stream for a given number of years, or for life, in exchange for the premiums you paid. You typically purchase a “qualified” annuity with pre-tax dollars, possibly within a traditional IRA or 401(k), so your premiums may be deductible, and your earnings can grow tax deferred. Once you start taking payouts, the entire amount - your contributions and earnings - are taxable at your individual tax rate. On the other hand, you purchase “non-qualified” annuities with after-tax dollars, so your premiums aren’t deductible, but just like qualified annuities, your earnings grow on a tax-deferred basis. When you take payments, you won’t pay taxes on the principal amounts you invested but the earnings will be taxed as ordinary income.
We’ve looked at some general rules governing different sources of income, but you should consult your tax professional about your specific situation. Ultimately, factors such as your goals, lifestyle and time horizon should drive the decisions you make for your retirement income. Nonetheless, you may want to look for ways to control the taxes that result from your various income pools. And the more you know about how your income is taxed, the fewer unpleasant surprises you may experience.
VFW Post 539 partners with schools to uplift youth
A: Main
VFW Post 539 partners with schools to uplift youth
May 9, 2025
A display of patriotism, creativity and community support was on full display this spring as VFW Post 539 and its Auxiliary partnered with area schools to recognize young artists and support student o...
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A: Main
Council to hold special meeting
May 9, 2025
A special meeting of the Henryetta City Council will be held Friday at 12 noon in the Council Chambers, 115 S. 4th Street.The agenda includes a discussion and possible action on proposals by Alera Gro...
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Cool summer adventures await at Nichols Park
A: Main
Cool summer adventures await at Nichols Park
May 9, 2025
With summer around the corner, Henryetta’s Nichols Park is making waves - literally! A brand-new kayak rental option is now available for those looking to paddle into fun while staying cool on the 17-...
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Trio seeks District 8 seat in tense Senate race
A: Main, Main...
Trio seeks District 8 seat in tense Senate race
May 9, 2025
BENNETT BRINKMANNONDOCEditors Note: Early voting for the May 13 General Election is underway at the Okmulgee County Courthouse. Registered voters can cast their ballots until 6 p.m. today. On Tuesday,...
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A: Main
City-wide cleanup event underway
May 9, 2025
A city-wide cleanup is taking place from 8 a.m. to 5 p.m. today and 8-12 p.m. tomorrow. A City of Henryetta water bill will allow you to dump trash twice.The event will take place at the Public Works ...
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News
CALENDAR OF EVENTS
May 9, 2025
May 14 Fitness 4 Kids Fun & 5K Run | Preston Elementary School will hod a Fitness 4 Kids and 5K Run Wednesday, May 14, at 8:30 a.m. at the Jim Waller Sports Complex in Preston. The registration fee is...
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Henryetta FD responds to 100 calls in April
May 9, 2025
The Henryetta Fire Department had a busy month of emergency response activity in April, answering a total of 100 calls for service across a wide range of incident types. According to the department’s ...
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Milestones & Memories
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Milestones & Memories
May 9, 2025
As the final school bells prepare to ring for the last time this academic year, students across Okmulgee County are trading in their backpacks for caps and gowns, ready to step into a new chapter of l...
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Funeral Preplanning Tips
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Funeral Preplanning Tips
May 9, 2025
Planning a funeral can be an overwhelming and emotional process. However, preplanning your own funeral or that of a loved one can help alleviate stress during a difficult time. Here are some helpful t...
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Henryetta to host annual All Sports Banquet May 20
May 9, 2025
Henryetta High School will honor its student-athletes and coaches during the highly anticipated All Sports Banquet, set for Tuesday, May 20. The event will begin at 5 p.m. in the Henryetta High School...
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04/28/2025
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04/28/2025
May 9, 2025
8:00 a.m. - 9700 Block Hornbeam Rd. - RP requested to speak to a deputy in reference to an altercation that took place Saturday night.9:53 a.m. - 12100 Block Gun Club Rd. - RP stated they worked for U...
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