3 taxt strategies retirementAs you prepare for the future, don’t forget to consider taxes. Your tax liability during retirement can make or break your budget — and your ability to live comfortably.

If you want to reduce your tax liability during retirement, here are 3 strategies to consider:

Evaluate Your Income Needs

Just because you’re retired doesn’t mean you aren’t going to be taxed. Consider your income needs, and try to adjust to meet them. If you can reduce your expenses so that a smaller income will do, you can save money on taxes in a number of ways.

First of all, the less you take from your Traditional retirement accounts, the less you’ll pay in taxes. Get rid of big recurring expenses, such as a mortgage or car loan. If you own these items, you’ll have fewer income needs, and withdraw less from your accounts. At some point you’ll run into required minimum distributions on Traditional accounts, which can force you into a higher tax bracket if you aren’t careful.

A lower income can also mean that you pay less in capital gains taxes on investments not in your tax-advantaged accounts, and it can also help in other areas. Don’t forget that Social Security benefits can be taxed as income as well.

Move to a New Area

You can save money on state and local taxes by considering where you want to move. There are some states where you don’t have to pay state income tax or property taxes. Many of these states also have reasonable costs of living, so you have fewer income needs as well. Look at your options. If you can reduce tax liability by moving to the next state over, it might be worth it.

It’s also possible to reduce some of your living expenses and taxes by moving to a different country. If you are interested in living abroad for at least part of your retirement, research cost of living and taxes in other countries. You’ll still be subject to federal income taxes and maybe some other taxes, but your overall tax bill might drop.

Use Accounts that Grow Tax-Free

If you anticipate higher taxes later, or you don’t want to worry about curbing your income, you might be able to reduce your tax liability in retirement with the help of accounts that grow tax-free. If you are eligible to put money in a Roth IRA or a Roth 401(k), you are taxed at today’s rates. However, the money grows tax-free, so when you withdraw, it isn’t taxed.

The same is true if you are eligible for a Health Savings Account (HSA). The HSA is especially attractive because you get a tax deduction now, and if you use the money for qualified health care expenses, the money grows tax-free. You could conceivable choose to use your HSA as a savings account for retirement health care costs, letting the money grow as another tax-advantaged retirement account over time and reaping the benefits now and later.

Research your options. With the right planning, it’s possible to use these strategies to reduce your tax liability during retirement, and live more comfortably over time.