NEW YORK (AP) — Coming up with the best tax strategy in retirement can be much trickier than it seems, and tax pros agree it’s a time when people need to be especially careful to look at their entire financial picture before deciding on a things like 401(k) withdrawal amounts and timing, or when to begin taking Social Security.

“It’s the biggest change in life other than death. Don’t be so quick about deciding when to take Social Security benefits or 401 benefits. Talk to a tax professional before you make these decisions to avoid surprises. It may save you a lot in tax dollars,” says Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals.

Withdrawing a large amount to do something like pay off a mortgage could result in a dramatic increase in what percentage of your Social Security benefits will be taxed, for example.

“A $20,000 capital gain might cause an equal amount of Social Security income to be taxable. Capital gains can also have impact on the other parts of your tax return,” O’Saben says.

“Some people take a large distribution from their 401(k) to pay off the house, for example. Well, now you’ve raised your income bracket and you’ll have 85% of your Social Security that’s taxable,” he points out.

Withdrawing from a retirement account too soon could also result in hefty penalties or a surprise in taxes owed.

And taking Social Security benefits earlier than needed could result in receiving a lot less every month than if you’d waited until the maximum age of 70.

On the upside, it’s not too late for taxpayers 50 and older to make catch-up contributions to their traditional or Roth IRA for tax year 2023. Catch-up contributions to an IRA are due by the due date of your tax return (return extensions are not included).

Taxpayers about to retire can still make this catch-up contribution, which may increase their retirement benefits and decrease their taxable income for 2023, said Kathy Pickering, chief tax officer at H&R Block.

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Find more of AP’s tax season coverage here: https://apnews.com/hub/personal-finance