April 17th (the deadline to file your personal income taxes this year) is just a few days away, so I thought the following article a timely one. As much as we’d love it to be otherwise, yes you do still have to pay taxes in retirement. But what income is taxable and how? Continue reading for a refresher.

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When you’re planning for retirement, it’s fun to contemplate all the cruises, rounds of golf, and restaurant meals you have ahead of you. You've earned it!

Unfortunately, many retirees discover too late that the fun times have to be curtailed by 10%, 15% or more — the cumulative impact of federal and state taxes on withdrawals from their nest eggs. Indeed, most forms of retirement income — including Social Security benefits, as well as withdrawals from your 401(k)s and traditional IRAs — are taxed by Uncle Sam. And unless you live in one of seven states with no income taxes at all, you can expect your home state to ding you in retirement as well.

Take a look at the tax bills you're likely to face on your sources of retirement income.

Traditional IRAs, 401(k)s and 403(b)s

Savers love these tax-deferred retirement accounts, because they don't pay taxes on their contributions. Their contributions reduce their taxable incomes, saving them money on their tax bills in the current year. Their savings, dividends and investment gains continue to grow on a tax-deferred basis.

What they tend to forget is that they DO have to pay taxes down the line when they retire and start taking withdrawals, and those taxes apply to their contributions AND their gains. And at some point, you must withdraw money from the accounts: Required minimum distributions (RMDs) kick in at age 70½ for holders of traditional IRAs and 401(k)s. You’ll start out at about 3.65%, and the percentage that the IRS requires you to withdraw each year goes up as you get older.

The tax rate you pay on your traditional IRA and 401(k) and 403(b) withdrawals would be your ordinary income tax rate, which is typically higher than the more advantageous long-term capital gains tax rate.

Roth IRAs

Roth IRAs come with a big long-term tax advantage: Unlike their 401(k) and traditional IRA cousins — which are funded with pretax dollars — you pay the taxes on your contributions to Roths up front, so your Roth withdrawals are tax-free once you retire.

One important caveat is that you must have held your account for at least five years before you can take tax-free withdrawals. And while you can withdraw the amount you contributed at any time tax-free, you must be at least age 59½ to be able to withdraw the gains without facing a 10% early-withdrawal penalty.

Social Security

Once upon a time Social Security benefits were tax-free, but that all ended with the signing of the Social Security amendments in 1983. Currently, depending on your "provisional income," up to 85% of your Social Security benefits are subject to federal income taxes. To determine your provisional income, take your modified adjusted gross income, add half of your Social Security benefits and add all of your tax-exempt interest. If you’re married and file taxes jointly, here’s what you’ll be looking at:

If your provisional income is less than $32,000 ($25,000 for singles), there’s no tax on your Social Security benefits.

If your income is between $32,000 and $44,000 ($25,000 to $34,000 for singles), then up to 50% of your Social Security benefits can be taxed.

If your income is more than $44,000 ($34,000 for singles), then up to 85% of your Social Security benefits are taxable.

The IRS has a handy calculator that can help you determine whether your benefits are taxable.

Pensions

Most pensions are funded with pretax income, and that means the full amount of your pension income would be taxable. Payments from private and government pensions are usually taxable at your ordinary income rate, assuming you made no after-tax contributions to the plan.

Stocks, Bonds and Mutual Funds

Sales of stocks, bonds and mutual funds that have been held for more than a year are taxed at long-term capital gains rates. These rates can be quite favorable. For tax year 2018, if you’re single and earn up to $38,600 or married filing jointly and earn up to $77,200, gains are entirely tax-free up to a certain amount.

For higher incomes, the rates go up. The next level is 15% (singles with incomes between $38,600 and $425,800, and married couples making $77,200 to $479,000). For those with incomes above those amounts, the top level is 20%.

Short-term capital gains from sales of investments held for under a year are taxed at your ordinary income tax rate.

Annuities

There’s a good chance that some (or all) of the income you receive from any annuity you own is taxable.

If you purchased an annuity that provides income in retirement, the portion of the payment that represents your principal is tax-free; the rest is taxable. For instance, if you purchased an annuity with $100,000 and in 10 years it is worth $190,000, you would only pay tax on the $90,000 of interest earned. The insurance company that sold you the annuity is required to tell you what is taxable.

Different rules apply if you bought the annuity with pretax funds (such as from a traditional IRA). In that case, 100% of your payment will be taxed as ordinary income. In addition, be aware that you'll have to pay any taxes that you owe on the annuity at your ordinary income-tax rate, not the preferable capital gains rate.

Life Insurance

Life insurance proceeds paid to a beneficiary because of the insured person’s death are not taxable.

As for a life insurance policy with a cash value component, under IRS rules, the cash value withdrawn from a life insurance policy is tax-free as long as it is structured properly and doesn’t become a Modified Endowment Contract (MEC).

Dividends

Dividends are the profits gained from stocks. There are two types of dividends, taxed at different rates. Qualified dividends — the most common type that investors typically encounter — are taxed at long-term capital gains rates. And non-qualified dividends are taxed at your ordinary income tax rate, which is usually higher than the capital gains rate.

To be considered as “qualified,” dividends must be held for a minimum of 60 days during a 120-day period which begins 60 days previous to the ex-dividend date. The ex-dividend date is the day after a company distributes dividend payments to its shareholders.

Note that if the dividends stem from a tax-deferred account funded with pretax dollars (like a 401(k) or IRA) and the dividends are reinvested, then they aren’t subject to taxes at that time. But when you start making withdrawals, they will be taxed at your ordinary income tax rate.

Municipal Bond Interest

The interest on a municipal bond is not taxed at the federal level, but capital gains from the sale of these bonds can be taxed. Interest from bonds issued in an investor's home state is usually exempt from state income taxes, too.

Keep in mind that although municipal bonds are tax-free, interest earned will be factored into calculating Social Security taxation.

CDs, Savings accounts and Money Market Accounts

Interest payments on CDs, savings and money market accounts are taxed at your ordinary income tax rate.