Denzel RodriguezFinancial Coach & Kingdom Builder

Tax Benefits of Treating Retirement Income as a Business

16 Jun 2026 · 1 min

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In this video, Denzel Rodriguez explains that any activity undertaken during retirement can be classified as a business for tax purposes. By treating retirement income as business income, individuals can access a range of tax deductions that lower the ordinary‑income tax rate applied to their guaranteed retirement earnings. He illustrates the impact with a side‑by‑side example: two retirees each receive $12,000 per month, but one is taxed at a low 7% rate while the other faces a 37% rate, showing how the higher‑taxed individual would need substantially more cash to achieve the same net income. Rodriguez also notes that with sufficient tax planning, it is possible to fully offset tax liability, effectively eliminating taxes on the retirement income.

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Where business comes into play is whatever activity we do in retirement, from a tax perspective, that activity should be identified as a business. Because when you have a business, you open up all of these tax deductions at play. So whatever your guaranteed income is, that we saw for retirement, if you have a business attached to that income, you're able to reduce the tax liability on that ordinary income number, which means you net more of what you make, which means you need less now. So if you're looking at two people, they have the same amount of income, $12,000 a month, $12,000 a month. Person A Making $12,000 a month is taxed at 7% gross. Person B making $12,000 a month but is taxed at 37% ordinary income, they need more money. They need more income to have the same as the person who's being only taxed 7%. Or hey, there's cases where enough tax strategy, you don't pay taxes. You completely offset tax liability through tax planning and tax strategy