Although you may have already been paying taxes for most of your life, you may not be able to escape them in retirement. Once you retire, you may be subject to income taxes on your retirement account withdrawals. In addition, around 50% of seniors find themselves paying taxes on their Social Security benefits as well, according to a survey from the Senior Citizens League.

Taxes can take a substantial bite out of your savings, so minimizing them as much as you can is a wise move. And there's one action you can take right now that can significantly reduce your tax bill in retirement.

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Creating a retirement tax strategy

As you're preparing for retirement, it's not only important to think about how much you're saving, but also where you're saving. The type of retirement account you contribute to will have an impact on your retirement income, especially when it comes to taxes.

If you're investing in a 401(k) or traditional IRA, your contributions will be tax-deductible. However, you will owe income taxes on your withdrawals once you retire. By contributing to a Roth IRA, though, you'll pay taxes upfront, and your distributions will be tax-free.

Saving in a Roth IRA is a smart move if your goal is to minimize retirement taxes, because if all your savings are invested in this type of account, you may not owe income taxes at all during your senior years.

How a Roth IRA affects your Social Security benefits

In addition to reducing or even eliminating taxes on your retirement account withdrawals, a Roth IRA can also help you avoid taxes on your Social Security benefits.

Social Security benefits are subject to both state and federal income taxes. Fortunately, the majority of states do not tax benefits, so you may already be in the clear depending on where you live. However, you could still be on the hook for federal taxes.

Federal Social Security taxes depend on your provisional income, which is your adjusted gross income plus half of your annual Social Security benefit amount. If your provisional income is higher than $25,000 per year (or $32,000 per year for married couples filing jointly), you'll owe income taxes on a portion of your Social Security benefits.

However, Roth IRA withdrawals don't count toward your provisional income. So if most or all of your savings are stashed in a Roth IRA, that will reduce your combined income, and can potentially eliminate federal taxes on your benefits.

Is a Roth IRA right for you?

There are several advantages to investing in a Roth IRA, but it's a particularly smart move if you're aiming to reduce your taxes in retirement. You will have to pay taxes upfront when you make the initial contributions, but paying taxes now may be preferable to paying taxes in retirement when you're living on a fixed income.

One downside to investing in a Roth IRA is that not everyone is eligible. If you're earning more than $140,000 per year (or $208,000 per year for married couples filing jointly), you don't qualify to contribute to a Roth IRA. That said, it's possible to get around the income limits by investing in a traditional IRA and then rolling that money over into a Roth IRA -- which is called a backdoor Roth IRA.

Investing in a Roth IRA can provide greater flexibility in retirement, especially when it comes to taxes. By taking advantage of a Roth IRA now, you can reduce your future tax bill and maximize your retirement income.