[header] How to reduce taxes in retirement [title] Understand irs rules affecting earned income in retirement. [step] Retired people working part time are taxed at regular income rates just like everyone else. However, they also may be receiving social security benefits and taxable retirement income. 
All of these sources count towards your income in retirement and, accordingly, are used to determine your tax bracket. A retiree still working part-time may find themselves in a higher tax bracket than expected if they are receiving income from all of these sources at the same time.