What retirement income is taxable?

You must pay income tax on your pension and for withdrawals from any tax-deferred investment, such as traditional IRAs, 401 (k), s, 403 (b) and similar retirement plans, and tax-deferred annuities, in the year you receive the money. The taxes due reduce the amount you have left to spend. The taxable portion of your pension or annuity payments is generally subject to federal income tax withholding.