Once you retire, the current tax laws assist you in several ways. You pay less in income taxes because generally you earn less during retirement than during your working years. You may also take a larger standard deduction if you are over age 65 when you retire. If your income is lower than certain IRS thresholds, you may be eligible for certain tax credits that are deducted directly from the amount of tax you owe. Certain states do not tax your post-retirement income, or they tax it at a greatly reduced rate. Please check with your state tax authority or accounting adviser.