The purpose of socking money away in a 401(k) or IRA is to help ensure that you have enough money to pay the bills during retirement. But many seniors are unaware that by tapping their retirement plans, they could end up subjecting themselves to taxes on their Social Security income.

How Social Security benefits are taxed

Whether you're taxed on your Social Security benefits or not will depend on what's known as your provisional income, which is calculated by taking 50% of your annual benefits and adding that sum to your remaining, non-Social Security income. You may be taxed on up to 50% of your benefits if your provisional income lands between $25,000 and $34,000 if you're single, or between $32,000 and $44,000 if you're married filing a joint tax return. Meanwhile, you may be taxed on up to 85% of your benefits if your provisional income exceeds $34,000 if you're single, or $44,000 if you're married filing jointly.

Here's how your retirement plan withdrawals come into play: The more money you take as a 401(k) or IRA distribution, the more your provisional income goes up. Take a large enough withdrawal, and you could wind up paying taxes on your benefits.

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Now you may be thinking "But isn't the point of retirement savings to have money to use as a senior? Why shouldn't I take funds out of my account?"

And that's a very valid point. However, there is a way for you to take retirement plan withdrawals and enjoy that income without having it affect your benefits: House your savings in a Roth IRA. While traditional retirement plan withdrawals count as income when determining whether your Social Security benefits will be taxed, Roth IRA withdrawals do not.

Furthermore, Roth IRAs are the only tax-advantaged retirement plan that not force participants to take required minimum distributions, or RMDs. RMDs come into play starting at age 72, and they're calculated based on your account balance and life expectancy. If you're old enough to be liable for RMDs, those withdrawals could easily result in taxed Social Security benefits -- and taxes due to the IRS as well.

Now if you're already retired and intend to maintain a traditional retirement plan, you may not be able to avoid getting taxed on your Social Security income once you turn 72. But if you're younger and therefore aren't liable for RMDs, be mindful of the above income thresholds when taking withdrawals.

For example, say you're a single retiree who collects $18,000 a year in Social Security benefits, of which half, or $9,000, counts toward your provisional income. Since taxes on those benefits won't come into play until your provisional income hits $25,000, you can make sure to withdraw less than $16,000 from your retirement plan to avoid losing part of your Social Security income. Of course, that assumes you don't have other income sources at your disposal, but the point is to be mindful of how retirement plan withdrawals could result in taxes on your benefits. If you want to avoid paying those taxes, time your distributions strategically and consider keeping your nest egg in a Roth IRA.