5 Sneaky Ways the Government Takes Retirees’ Money

If you've worked for years to build up a nest egg and are finally ready to quit, hold on to your money!

Uncle Sam and other government types often reach into the wallets of retirees and quietly take their share of their hard-earned savings.

Here are some sneaky ways that the federal government and state governments try to get your money.

Taxes on Social Security benefits

Taking a part of your pay in payroll taxes to help pay for Social Security for decades. When you leave, you'll be able to cash in on the money going in the opposite direction.

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Higher Medicare premiums

Many people are surprised to learn that Medicare premiums for "higher-income beneficiaries" are based on their modified adjusted gross income (MAGI).

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3. RMDs that increase over time

Most of us know that we'll have to pay taxes when we take money out of our standard IRAs and 401(k) plans, even though we've put them off for years.

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Net investment income taxes

People who are retired and make a lot of money might make enough to pay the net investment income tax. This tax of 3.8% started in 2013 to help pay for the Affordable Care Act of 2010. 

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State-based estate and inheritance taxes

It's frustrating to see the federal government take money from retirees. State-based estate and inheritance taxes are the last insult to those who have spent decades building a financial legacy.

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