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Why Moving Retirement Cash Can Trigger a Tax Torpedo
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Subscribe22 SEP 2026 / FINANCE
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The potential tax implications for retirees investing in a 4% Certificate of Deposit (CD) have been highlighted, including the possibility of a 40% tax bite due to overlapping tax calculations on Social Security and other benefits. Taxpayers aged 65+ may be eligible for an increased senior deduction, and those exceeding certain income thresholds may see an increase in their Medicare premiums due to a higher income-related adjustment; both of these factors, along with state and local tax laws and adjustment of income (MAGI) close to an IRMAA tier, should be considered when investing and planning retirement assets.
A 4% certificate of deposit sounds almost boring, which is usually the point. Put $400,000 in, collect roughly $16,000 a year, protect the principal, and sleep a little better. Yet for a retiree living on Social Security plus other investment or retiremen...
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