Retirement usually means an end to your days in the workforce, but for most people, taxes last the rest of your life. You might pay less if your income has dropped compared to past years. However, retirement taxes can be more complicated because you usually don’t have an employer to help you figure out how much money to withhold for Uncle Sam each year.

Sorting this out begins with understanding which income sources the government taxes and which are tax-free. Watch for these three retirement-related taxes as you file your 2024 returns and look ahead to the rest of 2025 and beyond.

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1. Taxes on withdrawals from tax-deferred retirement accounts

Tax-deferred retirement accounts include traditional IRAs and 401(k)s. Contributions to these accounts reduce your tax liability in the years you set money aside. But as a consequence, you owe taxes on your contributions and earnings when you withdraw them later.

Though you may have invested your retirement savings for decades, you pay ordinary income tax rates on tax-deferred retirement account withdrawals instead of long-term capital gains tax rates, which are lower. You can also get slapped with a 10% early withdrawal penalty if you’re under age 59 1/2 at the time you take your money out.

Different rules apply to Roth accounts. You don’t get an upfront tax break when you put money into a Roth IRA or Roth 401(k), and as a result, the IRS allows your money to grow tax-free after you pay taxes on the initial contributions. You could still face penalties if you withdraw earnings before 59 1/2, or before you’ve had your account for five years. But if neither of those things apply, you don’t have to worry about taxes on Roth account withdrawals.

2. Taxes on pension income

Retirees receiving pension payments will also have to pay ordinary income tax. How much you’ll owe depends in part on the tax bracket you fall into. For 2024, tax brackets range from 10% to 37%, though most people fall toward the lower end of this spectrum.

The one exception to this is if you had any after-tax pension contributions. In that case, a portion of your distributions might be tax-free.

3. Social Security benefit taxes

The federal government taxes the Social Security benefits of seniors whose provisional incomes — adjusted gross income (AGI), plus nontaxable interest from municipal bonds, and half your annual Social Security benefit — exceed the following thresholds for their marital status:

Data source: IRS. Table by author.

Some people mistakenly believe the government could take up to 85% of their benefits, but the table outlines the percentage of your benefits the government could tax at ordinary income tax rates. For example, if you fall into the 50% bracket and you earn $20,000 in annual Social Security benefits, you’d owe ordinary income taxes on up to $10,000 of your benefits, while the remaining $10,000 would be tax-free.

Understanding which taxes you could owe can help you better budget for the future and avoid surprises at tax time. But no matter how you slice it, taxes are still complicated. You may want to seek advice from a local tax professional, who can give you personalized tips based on your situation.

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