Retirement Planning in Boston

Why Retirement in Massachusetts Requires a Different Playbook

If you've spent your career building wealth in the Boston metro area, you already know — Massachusetts doesn't make it easy to keep it. The state's flat 5% income tax applies to virtually all income in retirement: pensions, traditional IRA distributions, 401(k) withdrawals, and even Social Security benefits above certain thresholds.

What catches most retirees off guard is that Massachusetts offers no preferential capital gains rate. Long-term gains that the federal government taxes at 15–20% are taxed at the full 5% at the state level — on top of federal taxes. For a retiree sitting on appreciated stock or selling a home, that's a meaningful hit.

And then there's the cost of living. Greater Boston ranks among the most expensive metro areas in the country. Housing, healthcare, property taxes — they all eat into your retirement income faster than national projections suggest. A plan built on national averages is a plan that will fail you in Massachusetts.

The MA Tax Landscape Every Retiree Should Understand

Massachusetts has several tax rules that directly affect your retirement income strategy:

• 5% flat income tax on wages, pensions, IRA/401(k) distributions, and most investment income
• No capital gains preference — short-term and long-term gains above $1M are taxed at 9% (the "millionaire's tax" passed in 2023)
• Social Security is exempt from MA state tax — one of the few bright spots
• $2,000 pension exemption for public employee pensions (private pensions get no break)
• Property taxes averaging 1.17% statewide — higher in many Boston suburbs

This means your Roth conversion strategy matters enormously. Converting traditional IRA assets to Roth while you're still in a lower tax bracket — especially before the 2026 TCJA sunset, when federal brackets are scheduled to revert to higher pre-2017 levels — could save you six figures over a 25-year retirement.

We've seen Boston-area clients save $50,000–$150,000+ in lifetime taxes by implementing a multi-year Roth conversion ladder timed around Medicare IRMAA thresholds and the TCJA expiration.

Healthcare Costs: The Retirement Wildcard in Boston

Massachusetts has excellent healthcare — but excellence comes at a price. The state's per-capita healthcare spending is among the highest in the nation. For pre-Medicare retirees (ages 55–64), that means potentially $15,000–$25,000+ per year in health insurance premiums if you retire before age 65.

Even after Medicare kicks in, supplemental coverage (Medigap or Medicare Advantage), prescription drug plans, and potential long-term care needs require careful planning. A single health event can derail a retirement plan that didn't account for healthcare inflation running at 5–7% annually.

Our planning process models healthcare costs explicitly — not as a generic line item, but using your actual health profile, coverage needs, and the real costs of care in Massachusetts.

How Radius Wealth Helps Boston Retirees

Radius Wealth Management is an independent, fee-only registered investment advisor with deep roots in the Boston area. We custody client assets at Charles Schwab — one of the world's largest and most trusted custodians.

What does fee-only mean for you? It means we don't earn commissions. We don't sell products. Our only revenue comes from the advisory fee you pay — and at 0.75%, we're well below the industry average of 1.02%. That's not a marketing claim; it's our published rate.

Our retirement planning process includes:

• Multi-year Roth conversion analysis optimized for MA tax rules and IRMAA thresholds
• Social Security timing optimization — when to claim based on your specific situation, not generic advice
• Tax-efficient withdrawal sequencing across traditional, Roth, and taxable accounts
• Qualified Charitable Distribution (QCD) strategies for retirees over 70½
• Estate planning coordination with your attorney — MA has a $2M estate tax exemption (well below the federal $13.61M)

We start every engagement with a free AI-powered financial analysis that gives you a clear, honest snapshot of where you stand — before you ever commit to working with us.