5 Retirement Planning Moves

When investing for retirement, it’s not just a matter of how much you make but also how much you keep. The surest way to boost the returns on your retirement money is to reduce the amount that the tax man takes out of your nest egg. This will leave you not only with more income to enjoy once you stop working, but also more of your investment portfolio, so it can continue generating gains in your golden years. Here’s a look at five retirement planning strategies.

For more help protecting your assets by executing smart retirement planning moves, consider working with a vetted financial advisor.

1. Make Your 401(k) a Social Security Bridge

If you’re an early retiree looking for income until Social Security kicks in or if you want to increase your monthly benefit by delaying your benefit payments, there’s a little-known move you can make with your 401(k) plan or 403(b) workplace plan that can help.

Under the Rule of 55, workers 55 and older who leave their jobs can start taking withdrawals from their current workplace plan without being hit with the 10% early withdrawal penalty that typically applies. However, some public safety workers qualify at age 50, so check your plan details with your benefits administrator.

There are two caveats to keep in mind:

Not every plan offers this option.
You must still pay normal income tax on your withdrawals, just not the 10% penalty.

This exception applies only to your current workplace plan, not older accounts you may have left with previous employers. If you do have an older account, consider rolling your old accounts into your current employer’s account so you can access more of your savings.

Note that this exception doesn’t apply to 401(k) funds that have been rolled into an IRA.

2. Move 401(k) Money into Your HSA

There is another way to reduce your 401(k) taxes even more – as long as you meet the right conditions.

If you have a high-deductible healthcare plan that allows you to open a health savings account (HSA), you can use your potentially taxable 401(k) withdrawal to contribute to your HSA, where contributions are untaxed. This eliminates any tax due on the 401(k) funds you add to your HSA. In 2026, this can be as much as $4,400 for you individually, or up to $8,750 for a family plan.

To make this work, both the 401(k) withdrawal and the HSA contribution must occur in the same tax year.

3. Manage Your Tax Bracket on Capital Gains

If you fall within the 0% capital gains tax bracket, you’ll pay exactly that much tax on profits from your investments – 0%. This bracket applies to single taxpayers with taxable income up to $49,450 for 2026, or $98,900 for married taxpayers filing jointly.

There may be times when you are able to reduce your income below that amount. This may apply when you or your spouse leaves work, returns to school, retires or takes time off to care for children or a relative. You can also use your retirement contributions to manage your taxable income.

A couple taking the standard federal deduction of $32,200 can earn about $131,100 in gross income and still stay within the 0% capital gains bracket.

However, if the couple was $10,000 over the limit, one wage earner can contribute that amount to their 401(k) or other tax-deferred workplace account and still keep their gross earnings below the 0% capital gains limit.

The same tactic can be applied to other tax-deferral options, such as HSAs, flexible spending accounts (FSAs) and traditional IRAs.

4. Don’t Forget About Roth IRA Conversions

It is also important to consider your tax liability when converting a traditional IRA to a Roth.

If losses on stocks and other investments have significantly lowered your account value, making a conversion now reduces the tax bite . It also means that any future earnings from a market correction will be tax-free.

However, keep in mind that when you make a Roth conversion, those funds must remain in the Roth account for five years before you can take tax-free withdrawals. Earlier withdrawals will result in a 10% penalty.

As always, tax and investment decisions are complicated and depend largely on each investor’s individual situation. Therefore, consulting with a tax advisor or financial advisor is recommended.

5. Use Tax-Loss Harvesting to Offset Capital Gains

Another retirement planning strategy involves realizing losses in taxable investment accounts to reduce the taxes owed on gains. When an investment is sold for less than its purchase price, that loss can be used to offset capital gains from other asset sales during the same tax year.

If losses exceed gains, a portion of the excess can be applied against ordinary income, with any remaining losses carried forward to future years. This can be useful during retirement or the years leading up to it, when investors may sell appreciated assets to generate income or rebalance portfolios.

This strategy applies only to taxable brokerage accounts; this does not include accounts such as IRAs, 401(k)s and other tax-advantaged retirement accounts. Transactions also must comply with IRS wash-sale rules, which limit how quickly a similar investment can be repurchased after a loss is realized.

When coordinated with other tax-planning moves, using investment losses can lower capital gains taxes over time while keeping the overall investment mix largely unchanged.

Bottom Line

A couple working on their retirement plan.

The best way to boost the returns on your retirement savings depends on how much money Uncle Sam takes out of your nest egg. Building a Social Security bridge strategy, moving 401(k) money into an HSA, managing your tax bracket on capital gains and executing a Roth IRA conversion can all help. Be sure to enlist the services of a financial advisor for help with retirement planning.

Tips for Getting Retirement Ready

Industry experts say that people who work with a financial advisor are twice as likely to meet their retirement goals. SmartAsset’s free tool matches you with financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you want to set up and plan your retirement goals, SmartAsset’s retirement calculator can help you figure out how much you will need to save to retire comfortably.
Another easy way to save for retirement is by taking advantage of employer 401(k) matching. SmartAsset’s 401(k) calculator can help you figure out how much you will have based on your annual contribution and your employer’s matches.