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How Smart Are You About How Retirement Payments Are Taxed?

Take this quiz to find out how good a guide you can be in navigating clients through the post-retirement tax minefield.

With your guidance, your client Larry has worked toward a comfortable retirement. Maybe Larry thinks that without earned income, he no longer must worry about taxes. Many retirees are surprised—and distressed—that much of their precious retirement income continues to be eroded through taxation. How good a guide can you be in helping Larry navigate the post-retirement tax minefield? If you can correctly answer 15 of the following 20 questions, Larry will know that he is in good hands.

Consider your responses in light of the following scenario. Larry is a widower, 68, retired, with no significant earned income. He receives payments from Social Security, as well as payments from various IRAs, 401(k)s, private pensions, bonds, CDs, annuities and a reverse mortgage. Larry’s provisional income this year is $98,500. His primary residence is paid off.


Author's note: I am grateful to Donald Zidik, CPA, in Marcum’s Boston office for reviewing the quiz for accuracy.

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