Retirement planning requires understanding three major tax landmines that can derail your financial strategy: Required Minimum Distributions (RMDs), the widow's penalty, and beneficiary taxes.

• RMDs are mandatory withdrawals from tax-deferred accounts starting at age 73 (increasing to 75 in the future)
• The percentage of your account that must be withdrawn increases with age, potentially pushing you into higher tax brackets
• The "widow's penalty" refers to the compressed tax brackets when filing as single rather than married filing jointly
• Beneficiaries typically have 10 years to empty inherited retirement accounts, which can create significant tax burden
• Roth conversions during lower-income years can significantly reduce future tax obligations
• Qualified Charitable Distributions (QCDs) allow donations directly from IRAs to satisfy RMD requirements without increasing taxable income
• When passing on wealth, Roth accounts are most tax-efficient, followed by taxable accounts with stepped-up basis, with pre-tax accounts being least efficient
• Opportunistic planning during market downturns can enhance tax-saving strategies
• Taking a year-by-year approach to tax planning while maintaining awareness of these landmines can save substantial money

Read Colin's article on retirement tax landmines here.