taxable

Another benefit of Roth withdrawals is that they won’t increase your taxable income.

“The taxable gain is the amount received from the sale of the asset less its basis,” says the Tax Policy Center.

Consider a person who retires with only tax-deferred accounts: They lose strategic flexibility compared with those who diversify across taxable, tax-deferred, and tax-free buckets, which really allows us to optimize that lifetime tax rate.

You reduce your required minimum distribution by the amount you give, thereby reducing your taxable income.

For those who don’t, there are many strategies for reducing their tax bills, and increasingly, some newer ones for harvesting capital losses to offset taxable capital gains.