I talk to people all day about money and taxes, and I still have to talk to someone who wants to pay more taxes. We should all want to pay our fair share of taxes, but not many of us also want to leave a tip.
That’s why it’s so important to have a great tax strategy when you retire to make sure you can minimize your taxes as much as you can legally.
But if you still want to leave a tip to the government, feel free to donate for national debt here 
Different tax bins
There are 3 main tax bins you can have. There are bins for payment on departure, baskets for later payment and bins for payment never.
Pay-as-you-go segments include non-retirement investments, such as a brokerage account. You pay taxes on these accounts while receiving dividends or selling investments for profit.
The only advantage of this bucket is that it can be subject to long-term capital gains tax rates that are always lower than your normal tax rates. The downside is that you have to pay taxes on the go, not just when you withdraw money from your account.
The postpay basket can be a traditional IRA, a traditional savings plan account, or a traditional 401 (k) savings account. Basically, you get a tax deduction for putting money in this bucket, it grows with deferred tax and you don’t have to pay tax until you deduct it from your account.
But of the 3 types of tax bins, the bin never pays is definitely my favorite. This bucket includes Roth IRA, Roth TSP and Roth 401 (k) s. Basically, put money after tax in this bucket and it can grow tax-free. When you withdraw money, both what you originally gave and growth can come out without paying a dime.
If tax-free growth isn’t enough to convince you to start a Roth IRA (or some other Roth account), here are five more benefits:
1. Avoid the necessary minimum distributions
Starting at age 72, you must start withdrawing money from certain types of retirement accounts. For example, if you have a traditional TSP or a traditional IRA, RMDs mean that you will have to take a certain percentage of these bills each year – money on which you have to pay taxes.
However, one type of retirement account that is not subject to RMD is the Roth IRA. This means you can keep your money in the Roth IRA for as long as you want and it will continue to grow tax-free.
2. Create protection from higher taxes
It is difficult to know what changes to the tax law will be made in the future, but most people agree that tax rates are unlikely to be reduced any time soon. So, if taxes are higher in the future, paying taxes now at a lower rate (using a Roth account) can be a great way to reduce your tax burden in the long run.
3. Lower Medicare Premiums, Part B
Medicare is a big part of retirement for the vast majority of Americans, and Medicare part B is not free. You can find current premiums here. The price of Medicare Part B increases as your income grows. This means that if you have income above certain limits, your premiums will increase.
Money you withdraw from your account before tax (for example, a traditional IRA, a traditional TSP, and a traditional 401 (k)) counts as taxable income when you withdraw it, so taking too much in one year could increase your premiums. But money taken from a Roth IRA doesn’t count as taxable income – in other words, owning Roth’s money can help you save thousands of dollars in Medicare premiums.
4. Reduce taxes for your children
Having Roth money is not only good for you, but it is also good for those to whom you leave money by will. If you die and leave the traditional IRA to your children, they will have to pay taxes whenever they withdraw money from the account. But if you leave them to the Roth IRA, they will be able to access it without taxes and penalties.
5. You will have more control over your finances
The last reason you have some money after tax in retirement is that you have more options in retirement. After all, we don’t know what tax laws will look like in the future, but money in various tax packages will give you a certain amount of control over your taxable income during retirement.
