You can generate a lot of tax-free income in retirement. Here are some of your options

You can generate a lot of tax-free income in retirement. Here are some of your options

When it comes to planning for retirement, it's important to consider how taxes could gnaw away at your nest egg once you reach your golden years. Assuming you've left work earnings behind you, any amount owed to the IRS will come out of your retirement savings or income. So the more strategies you can put in place to minimize or eliminate your tax bill, the more money you'll keep. Of course, getting there involves doing some work in advance. "To generate, on a regular basis, tax-free income over a long period of time, you have to put a lot of planning in place," said certified financial planner Avani Ramnani, managing director at Francis Financial in New York. For perspective: If you want your retirement savings to generate $50,000 a year in tax-free retirement income, and you want to adhere to the so-called 4%-per-year withdrawal rule — in general, a rate intended to make your money last for at least 30 years — you'd need at least a $1.25 million portfolio. Of course, your own annual cash-flow needs from your nest egg may be higher or lower than $50,000. And, you may need to employ a combination of strategies, depending on