If you’re a typical retirement saver, you look forward to the dayyou receive that treasured gold watch and retirement. Gone will be the days waking up toa demanding alarm clock, wrestling with the morning (and afternoon)traffic, and seeing a huge chunk of your paycheck go to thegovernment.

Wait a minute. Rewind that.

Unfortunately, much to the surprise of new retirees, the partabout paying the government, that stays (see “Retirement Savers’ Most Taxing Misconceptions,”FiduciaryNews.com, April 25, 2017). For a number of yearsnow, smart financial advisers have been recommending acomplimentary mix of both tax-deferred savings (e.g., IRAs and401(k) plans) and tax-free savings (e.g.,Roths).

Such a strategy offers greater flexibility in retirement yearsregarding the source of funding. (I use the term “funding” hererather than “income” because not all funding is income.) Using someportion of the tax-free savings to pay retirement expenses canlower – or even delay – certain taxes.

But let’s digress for a second and talk about the heart of thematter – psychological framing. A recent mass media article (albeitin a financial publication) spoke of how people moving fromemployment to retirement are often flummoxed. For their entirecareer (if they do things correctly) they’ve been living alifestyle geared towards saving. All of the sudden, when they getthat gold watch, now they’ve got to quit thinking about saving and start thinking aboutspending. (After all, you can’t take it with you.) Such atransition can wreak havoc on the mental conditioning of the newlyminted retiree.

Similarly, retirement savers are conditioned to maketax-deferral strategies the primary priority. Once they retire, theprimary vehicle for tax deferral – shifting earned income intoretirement plans – instantly evaporates. They must thereforetransition from avoiding taxes to paying taxes (hopefully at alower rate).

Note: This is not saying retirees shouldn’t consider taxreduction strategies (we’ll get to that in a moment). What I amsaying is that the retiree’s mindset regarding taxes mustnecessarily be different than the retirement saver’s mindsetregarding taxes.

Many retirees will need the deft hand of a human coach to guidethem through this changeover. Guess which humans are most likely topossess such deftness of hand-ness?

We can liken paying taxes in retirement to squeezing a tube oftoothpaste. At any moment in time, while you can sometimes delay acertain taxable event, the culmination of all inevitable taxableevents will result in the same net tax in the end. It’s likesqueezing a tube of toothpaste. You can rearrange the toothpasteany way you want, but no matter how you squeeze the tube, there’sstill the same amount of toothpaste in the tube.

Now, here’s the difference between taxes and toothpaste. Whileat any moment in time the net tax is the same no matter how yousqueeze the taxable events, over time the order in which you chooseto squeeze can change that net tax.

It’s like saying when you squeeze the toothpaste one way, itcauses a reaction within the tube that dissolves some of thetoothpaste, while when you squeeze the toothpaste another way, itcauses a reaction within the tube that causes the toothpaste togrow.

Here’s a very simple example of how this applies to the order ofsqueezing the taxes. Some people choose to take Social Security at62 in order to allow their IRA to grow tax free for another nineyears. This results in a much higher required minimum distribution (RMD) at age70½.

Since Social Security is means tested, the higher RMD makes itmore likely their Social Security will be subject to a higher tax.The combination of Social Security and the RMD might even push thetotal tax rate into a higher tax bracket.

If you’re following my convoluted tax math, you’re concludingthis is a “not good” situation.

Let’s squeeze that tax tube a little differently. Let’s say,instead of taking Social Security out at 62, we defer until age 70and fund the retirement with the IRA.

Yes we’ll have to pay an income tax on the IRA withdrawal, butthe net effect will be a smaller IRA at age 70½ and a smallerRMD.

If the RMD is small enough, the greater Social Security payoutat age 70 will not suffer from a means-test. The retiree, thoughpaying more in taxes in the early retirement years, now pays lessin taxes in the later retirement years.

This is a necessarily over simplistic example. When you startlayering on Roth plans, taxable savings, and other funding sources,the tax savings scenarios broaden considerably.

Retirees may be surprised to discover they’re still on the hookfor paying taxes, but they may also be surprised to learn that,just because they’re out of their tax-deferred retirement savingsammo, there’s still a few tricks up their sleeve they can use.

And the money they save on these post-retirement tax savingsstrategies can buy an awful lot of toothpaste.