Retirement can trigger complex tax issues, including large required minimum distributions raising income into higher tax brackets, increased taxable Social Security benefits, and Medicare surcharges. A small income increase can cause significant Medicare premium hikes. The senior bonus deduction phases out above certain incomes, causing marginal rate spikes. Capital gains may incur additional taxes, and selling rental property can trigger high depreciation recapture taxes. Multi-year income planning is essential to manage these risks.
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