There are certain expenses that are pretty much unavoidable during retirement. You'll need a roof over your head, a means of transportation, food, and access to utilities. You'll also need to absorb the oft-astronomical cost of healthcare.

But while all of these expenses may be obvious, here's one that tends to catch seniors off-guard: taxes. In fact, in a Nationwide Retirement Institute survey of U.S. adults over 50 who are either currently retired or are aiming to leave the workforce within 10 years, 35% did not factor taxes into their retirement planning.

The result? A good 32% regret not better accounting for them, and 38% of future retirees are actually terrified of what taxes will do to their retirement income.

Older man and woman with serious expressions at table with laptop and documents

Image source: Getty Images.

If you're worried about the impact of taxes on your senior years, here are a few strategies for minimizing that potential blow.

1. House your savings in a Roth IRA or 401(k)

Many workers are motivated to contribute to a traditional IRA or 401(k) because they get an immediate tax break out of it. Roth savings plans, by contrast, don't offer any up-front tax benefits. On the other hand, Roth IRA and 401(k) withdrawals are taken tax-free in retirement, and that's a huge perk to enjoy as a senior. That way, any money you remove is yours to keep in full.

2. Save for healthcare expenses in a health savings account

Though not everyone can participate in a health savings account (HSA), if you're on a high-deductible health insurance plan, you may be eligible. And if so, it pays to fund an HSA, because not only do contributions go in tax-free, but withdrawals are taken tax-free as well, provided they're used to cover qualified medical expenses. That's another retirement income source the IRS can't touch.

3. Move to a state that doesn't tax Social Security benefits

Many seniors are shocked to learn that their Social Security benefits are subject to taxes at both the federal and state level. But you may be able to avoid the latter by retiring someplace that doesn't impose that tax. There are 13 states that tax Social Security income to some degree:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

Of these, Minnesota, North Dakota, Vermont, and West Virginia are the only ones that don't offer an exemption for low or moderate earners.

4. Generate tax-free interest income with municipal bonds

Investing in bonds is a smart move for seniors who'd like to continue generating income, albeit without the risks associated with stocks. And if you choose municipal bonds over corporate bonds, taxes will be less of an issue. The reason? Municipal bond interest is always exempt from federal taxes, and if you buy bonds issued by your home state, you'll avoid state and local tax on that interest as well.

Just as taxes are generally unavoidable during your working years, so too are they hard to get out of during retirement. But if you make the above moves, you may find that your IRS burden is kept to minimum once your senior years kick off.