QUESTIONS ABOUT TAXES don’t end in retirement. Your tax bracket may shift, up or down. And the order in which you tap your retirement accounts and other savings could have a big impact on how much tax you owe — and consequently, how long your retirement assets could last.

Do you know whether your withdrawals will be tax-free? If they won’t be, will they be taxed at your federal ordinary income tax rate or at the federal long-term capital gains rate? “Just as it’s sensible to pay attention to tax-efficient ways to save for retirement when you’re younger, you should start thinking about the tax effects of drawing from your retirement accounts as you approach retirement,” says David Koh, managing director and senior investment strategist, Chief Investment Office, Merrill and Bank of America Private Bank.

Consider the tips below as you work with your financial advisor and tax professional in developing an approach to help minimize your effective federal tax rate and the amount of your federal tax liability. State and local taxes are not addressed in this article, and you should consult your tax advisor about state and local taxes.

Know how different types of income are taxed

As you approach or reach retirement, identify all the sources of income you may have in retirement, which might include annuities, pensions, qualified retirement plans such as 401(k)s and IRAs, and Social Security. “Understanding how various accounts are taxed in retirement is crucial as you’re figuring out a sensible order for withdrawing from them,” says John P. Schultz, partner at Genske, Mulder & Company and chair of the California Society of Certified Public Accountants tax committee.* But making those plans without the help of a professional can be challenging.

On the other hand, withdrawals from traditional 401(k) plan accounts and certain other employer-sponsored plans, as well as traditional IRAs — basically, any retirement plans funded with pretax or tax-deductible money — will generally be subject to federal and state ordinary income taxes upon withdrawal.

In your nonretirement accounts, bond income and some of the dividends you receive from stocks and mutual funds may be taxed at your federal ordinary income rate, but qualified dividends and long-term investment gains are generally taxed at lower long-term capital gains rates. State and local tax treatment may vary. Finally, don’t forget Social Security. Depending on how much income you collect from other sources, up to 85% of your benefits may be considered taxable income. Your tax professional can work with your financial advisor to help you put in place a plan for your future retirement income.

Develop a thoughtful withdrawal strategy

“For some people, it will make sense to consider tapping taxable accounts first, then tax-deferred and finally tax-free,” says Debra Greenberg, director, Investment Solutions & Personal Retirement, Bank of America. “But, depending on your circumstances, this order may not be right for every person.” If most of your investment gains are from long-term assets held outside of IRAs and similar tax-deferred accounts, you’ll likely pay long-term capital gains taxes, which are generally lower than what you pay on distributions taxed as ordinary income from your 401(k)s, traditional IRAs and certain other tax-deferred investments. “Also, remember that if you’re not accessing your retirement funds, they’re still growing tax-deferred,” Greenberg says.

That said, if you’re an active investor, you may end up owing more in taxes than you expect when you sell investments held for one year or less in taxable accounts since those gains don’t qualify for the lower, long-term capital gains rate, says Koh. “You’ll need to decide whether to hold the asset longer as it appreciates, and your tax rate becomes more favorable, or sell it and take your gains now. It’s a delicate balance,” he notes. Keep in mind, too, that under current law, you could boost your tax-free assets by converting traditional IRAs to Roth IRAs, which offer tax-free qualified distributions when certain conditions are met and generally don’t have required minimum distribution (RMD) requirements during the account owner’s lifetime.

Even if you’re not yet retired, you’ll need to consider the impact of your retirement savings on your taxes once you reach age 73 (or age 75 after 2032). That’s when you must begin taking RMDs from some of your retirement accounts, which is likely to boost your taxable income.²

Avoid moves that could put you in a higher tax bracket

RMDs and other changes that bump up your income can result in what’s called “bracket creep” — which is, basically, unexpectedly slipping into a higher tax bracket. You might, for instance, receive an inheritance or sell a piece of real estate. You might also slip into a higher tax bracket by taking a large distribution from a taxable account to, say, renovate your home or buy a new car, Schultz notes. “When you’re in retirement, even a small change in your income can have an impact on what you pay in taxes, cutting into the amount you were expecting as cash flow,” says Schultz. He also points out that a higher income can affect the taxability of your Social Security benefits and push up your Medicare premiums.

Review your tax situation whenever your life changes

A number of life events, says Greenberg, could trigger a change in your tax circumstances: taking Social Security, deciding to stay at work or return to it part time, relocating to a more (or less) tax-friendly state, dealing with increased healthcare costs or other expenses. Whenever you see a change like this on the horizon, it’s time to check in with your advisor and your tax professional.

Another reason for periodic conversations, says Koh, is that tax laws can change. For example, increases in capital gains rates and higher rates for wealthier taxpayers were both discussed on Capitol Hill in the past year. For all these reasons, your best bet is to regularly check in with your advisor and tax pro, says Greenberg. “There’s no one-size-fits-all rule for managing taxes in retirement. The most important thing to remember is that you don’t have to make these decisions alone.”