You’ve spent decades building your retirement savings. But here’s the question most people never think to ask: how much of it will you actually get to keep?
For many retirees, the answer is less than they expected. Not because they didn’t save enough but because of a handful of avoidable mistakes that quietly erode income, inflate tax bills, and permanently shrink Social Security checks.
The painful part is that most people don’t realize what happened until it’s too late to fix it.
Stephen Dissette, an investment advisor representative with Horter Investment Management, has seen these patterns repeat themselves throughout his career. According to Dissette, the strategies that protect your retirement aren’t complicated, but they do require coordination.
Here’s what every pre-retiree needs to know.
Reducing Taxes on Social Security and Retirement Accounts
Reducing taxes in retirement is often about managing your “Combined Income.”
This is the specific formula the IRS uses, which includes your Adjusted Gross Income (AGI), non-taxable interest, and half of your Social Security benefits, to decide if your benefits are taxable.
Dissette outlines three effective strategies to keep that number down and protect your retirement savings.
1. Execute a “Roth Conversion”
If most of your savings are in a Traditional IRA or 401(k), every dollar you withdraw counts as taxable income.
By converting some of those funds into a Roth IRA, you pay the tax upfront but the future benefits are significant. Qualified withdrawals from a Roth IRA are tax-free and, crucially, do not count toward the “combined income” formula.
Timing matters. It is often most effective to convert funds during the “gap years” between retirement and the start of Social Security. This reduces your future Required Minimum Distributions (RMDs), which often spike a retiree’s tax bracket later in life.
For those who haven’t already, Dissette also recommends contributing to a Roth IRA or Roth 401(k) if your plan allows it.
2. Use Qualified Charitable Distributions (QCDs)
If you are age 70½ or older, you can use a QCD to send up to $111,000 (the 2026 limit) directly from your IRA to a qualified charity. The money goes straight to the charity without ever touching your bank account.
Because it never enters your Adjusted Gross Income (AGI), it doesn’t increase the taxability of your Social Security. A QCD also counts toward your Required Minimum Distribution for the year, allowing you to meet your legal obligation without the tax hit.
3. Delay Social Security to Age 70
While it may seem counterintuitive, delaying your Social Security claim can be a powerful tax-saving move. By delaying, you can first spend down your taxable accounts, such as a Traditional IRA.
This reduces the account balances that will eventually trigger high RMDs. For every year you delay past your full retirement age, your benefit increases by 8%. A larger Social Security check later may allow you to take smaller, taxable withdrawals from other accounts, keeping your overall tax rate lower.
The Biggest Mistakes People Make With Social Security and Retirement Accounts
While there are dozens of technical errors people can make, Dissette believes the biggest mistake is claiming Social Security early without a coordinated plan for your other assets.
Most people treat Social Security and their retirement accounts as two separate buckets, but in reality, they are deeply interconnected.
When you treat them as separate, you often fall into what Dissette calls “unforced errors.”
The “Take It While I Can” Panic
The most common mistake is claiming Social Security at age 62 simply because it is available, or out of fear that the system will “go broke.” For every year you wait until age 70, your benefit increases by roughly 8%.
By claiming at 62 instead of 70, you permanently lock in a monthly check that is up to 30% smaller. Over a 20–30-year retirement, this can cost hundreds of thousands of dollars in inflation-protected income that you cannot outlive.
The “Tax Torpedo”
Many retirees spend their taxable brokerage accounts first, then their Social Security, and wait until age 73 or later to touch their Traditional IRAs or 401(k)s. This often leads to massive Required Minimum Distributions later in life.
Those large RMDs can spike your income, triggering a “tax torpedo” where up to 85% of your Social Security benefits suddenly become taxable, landing you in a much higher tax bracket at age 80 than you were at 65.
Ignoring the Spousal “Survivor” Benefit
Couples often fail to coordinate their filing ages. When the higher-earning spouse claims early, at 62 or 65, and then passes away, the surviving spouse is entitled to the larger of the two checks.
If the high earner claimed early, they have permanently shrunk the safety net for their surviving partner.
How To Avoid These Mistakes
Dissette recommends running a “break-even” analysis. For most healthy individuals, the break-even point for delaying Social Security is around age 82; if you expect to live past that, waiting usually wins.
He also recommends filling the “tax gap” by withdrawing from your Traditional IRA before you start Social Security to lower future RMDs, and doing Roth conversions while your tax bracket is low.
For married couples, the higher earner should almost always delay claiming until age 70 to maximize the survivor benefit for whichever spouse lives longer.
Strengthening Your Retirement Accounts as You Approach Retirement Age
Maximize the “Super Catch-Up” (Ages 60–63)
Thanks to the SECURE 2.0 Act, people in this specific age range now have a unique window to accelerate their savings. In 2026, those between 60 and 63 can contribute a “super catch-up” of $11,250 to their 401(k) or 403(b), on top of the standard limit.
Those who are 50 or older but outside that window can still add an extra $8,000 to their workplace plan and $1,100 to their IRA for 2026. For a 62-year-old, the total potential contribution to a workplace retirement plan reaches $35,750 ($24,500 base + $11,250 catch-up).
Be Ready for the “Mandatory Roth” Rule
Starting in 2026, high earners face a new requirement. Those who earned more than $145,000 (indexed to approximately $150,000 in 2026) in the previous year are now required to make their catch-up contributions to a Roth account (after-tax).
While the immediate tax deduction is lost, Dissette views this as a “gift” for your future self, it builds up tax-free income for retirement and helps avoid the tax torpedo described earlier.
Shore Up Your “Cash Bucket”
Market volatility is the biggest threat to a new retiree, a risk known as “Sequence of Returns Risk.” If the market crashes in the year you retire and you are forced to sell stocks to pay bills, your portfolio may never recover.
The fix: three to five years before retirement, start building a cash or short-term bond reserve that can cover one to two years of living expenses.
This allows you to leave your invested accounts alone during a market downturn, giving them time to recover while you live off your cash buffer.
Optimize Your Health Savings Account (HSA)
For those with a high-deductible health plan, the HSA is what Dissette calls “the most powerful retirement tool in existence” because it is triple tax-advantaged. His recommendation: stop using your HSA to pay current medical bills.
Pay those out of pocket if you can, and let the HSA stay invested. By retirement, you’ll have a tax-free fund specifically for healthcare costs, which are often a retiree’s largest expense.
Can People Catch Up If They Haven’t Saved Enough?
The good news is: yes, the catch-up contribution options outlined above provide meaningful opportunities for those who are behind. But Dissette also highlights a dimension that many people overlook: tax diversification.
“Many people are effective in diversifying their investments, but how many people are effectively diversifying their tax consequences?” he asks.
Consider Roth contributions and Roth conversions; these can be a great way to shore up your retirement and ensure that not all of your savings are subject to the same tax treatment in retirement.
