Patrick Villanova, CEPF«

That money, however, can have unintended tax consequences. Required minimum distributions (RMDs) and other withdrawals can leave you paying higher taxes on your Social Security benefits, and in turn, expose you to higher marginal tax rates, according to a new analysis from T. Rowe Price.

(A financial advisor can help you navigate challenging tax situations in retirement. Find a financial advisor today.)

There are ways to reduce this risk, though. Converting your savings into Roth assets early on is one option, as well as selling off investments with little to no capital gains, according to T. Rowe Price. Here's a closer look at this tax dilemma and some other ways to work around it.

Is Social Security Taxed?
Yes, there's a good chance you'll pay taxes on your Social Security benefits, so
it's essential to first understand how Social Security is taxed.

The IRS relies on what's called ''combined'' or ''provisional'' income to calculate the taxes on a person or a couple's Social Security benefits. You can calculate your combined income by adding half your annual Social Security benefit to your adjusted gross income and any nontaxable interest you receive.

For example, if you collect $20,000 in Social Security and have another $30,000 in other income, including 401(k) withdrawals, your combined income for the year would be $40,000.

Social Security benefits aren't taxed if combined income is:

Less than $25,000 for single filers
Less than $32,000 for joint filers
Up to 50% of benefits are taxed if combined income is:

Between $25,000 and $34,000 for single filers
Between $32,000 and $44,000 for joint filers
Up to 85% of benefits are taxed if combined income is:

More than $34,00 for single filers
More than $44,000 for joint filers
Social Security Taxes Can Raise Your Marginal Tax Rate
While your typical tax planning may revolve around the federal income tax
bracket that you're in, keep in mind that the taxes you pay on Social Security
can increase your marginal tax rate well above your tax bracket.

''In some cases, those in the 22% federal tax bracket could end up paying a marginal tax rate as high as 40.7% because additional retirement income causes more of their Social Security income to become taxable,'' writes Roger Young, a certified financial planner (CFP) and T. Rowe Price thought leadership director.

T. Rowe Price found that even withdrawing an extra $1,000 from an IRA can have significant tax consequences. The financial services company offered the example of a married couple who collects $70,000 per year in Social Security and has another $65,000 in taxable retirement income. On top of paying $220 in taxes on the extra $1,000 withdrawal, the additional income means the couple would owe taxes on $850 of Social Security benefits that would otherwise go untaxed, T. Rowe Price found.

How to Lower Your Taxes on Social Security
Here are some simple strategies that will potentially help you lower your Social
Security tax bill, and in turn, your marginal tax rate.

Use Roth conversions. Executing a Roth conversion has two benefits for people whose retirement income is hiking their marginal tax rate.