9 Tax-Free Retirement Income Sources

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1) Stimulus Payments

The Internal Revenue Service has ruled that the first two installments of coronavirus stimulus payments authorized by federal statutes enacted in 2020 are not taxable.

2) Social Security Benefits

There is no need to worry about paying taxes on your Social Security retirement benefits if your total income is below the threshold set by the Social Security Admin.

3) HSA Distributions

HSA contributions are tax-deductible, grow tax-free, and withdrawals are tax-free if used for qualified medical expenses.

4) Reverse mortgage payments

You will not be required to pay federal income taxes on these payments, regardless of whether they are received as a lump sum, monthly installments, or a line of credit.

5) Roth IRA distributions

Roth Individual Retirement Account (IRA) qualified withdrawals are not subject to taxation, as opposed to traditional Individual Retirement Account (IRA) withdrawals (IRA).

6) Life insurance proceeds

According to the Internal Revenue Service, life insurance death benefits are generally not considered taxable income.

7) Municipal bond interest

Municipal bonds are loans to municipalities and their interest should be exempt from federal income taxation.

8) Profit from Home Selling

Depending on how much money you made from the sale of the equity in your primary residence, you may be exempt from paying federal income tax on that amount.

9) Veterans benefits

Numerous benefits provided by the United States Department of Veterans Affairs (VA) are not taxable because they are not considered income.

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