Smart Strategies for Retirees

I saw a T-shirt recently that read "Unstressed. Refreshed. Inspired. Retired."

What a fabulous time in life! You have free days to play with your grandchildren, time to pick up old hobbies and no worries about climbing that corporate ladder.

But while you may no longer be sitting in finance meetings at work, you still have financial concerns at home. If you're relying on your retirement savings, you need to ensure you're making smart decisions. So you need to do some year-end tax planning.

The two biggest issues on retirees' tax radar screens are retirement plan distributions and Social Security payouts, so I'll tackle how to attack those matters, as well as give a few other tax-planning tips.

Donate those IRA Withdrawals

Beginning in the calendar year following the year you hit age 70 1/2, the IRS requires you to start taking a minimum amount of money out of your retirement accounts, like your IRAs, Keoghs and 401(k)s. You don't ever have to take the money out of your Roth IRA if you're lucky enough to not need it.

You need to make that withdrawal by Dec. 31. There are actuarial formulas that determine the exact amount of that the minimum distribution. Big note: If you have more than one traditional IRA, your minimum distribution is based on the total in all of your accounts, although you can take the money from whichever accounts you choose.