8 Costly Tax Mistakes Retirees Make

Avoiding these errors can save retirees money when filing taxes.

Feb. 3, 2026 at 12:55pm

Got story updates? Submit your updates here. ›

Retirees need to be aware of several tax-related pitfalls that could cost them money, including not planning for pretax retirement account withdrawals, getting the timing wrong on Roth conversions, and failing to take advantage of the higher SALT deduction cap.

Why it matters

Proper tax planning is crucial for retirees who want to maximize their income and avoid unexpected tax bills. Understanding these common mistakes can help retirees save money and reduce their tax burden.

The details

The article highlights several tax mistakes retirees should avoid, including not planning for pretax retirement account withdrawals, which can lead to higher tax bills, and not timing Roth conversions correctly, which can reduce eligibility for income-based tax breaks. It also notes that the OBBB temporarily raises the SALT deduction cap to $40,000, which will lead more retirees to itemize deductions.

  • The OBBB temporarily raises the SALT cap to $40,000 for most filers from 2025 through 2029.
  • The SALT deduction cap will increase 1 percent each year through 2029, then drop back to $10,000 in 2030.

The players

Brian Schultz

Leader of the tax practice at Plante Moran Wealth Management.

Andy Evans

An Edward Jones financial adviser in Houston.

Got photos? Submit your photos here. ›

What they’re saying

“We are expecting a lot more taxpayers to itemize.”

— Brian Schultz, Leader of the tax practice at Plante Moran Wealth Management (aarp.org)

“You're accumulating a tax time bomb.”

— Brian Schultz, Leader of the tax practice at Plante Moran Wealth Management (aarp.org)

“That's where everything kind of comes back to proactive planning.”

— Andy Evans, Edward Jones financial adviser (aarp.org)

“Before the age of required distributions, we can plan ahead through Roth conversion strategies to lower those RMDs.”

— Andy Evans, Edward Jones financial adviser (aarp.org)

What’s next

Consider speaking with a financial adviser who can help you determine when it makes sense for you to make a Roth conversion.

The takeaway

Retirees need to be proactive in their tax planning to avoid costly mistakes, such as not planning for pretax retirement account withdrawals and not timing Roth conversions correctly. Understanding these common pitfalls can help retirees maximize their income and reduce their tax burden.