If you retire before 65, you have a window of opportunity to lock in lower tax rates. I call it the retirement donut because you have a hole in your taxable income between the time you leave your job and when you begin taking Required Minimum Distributions. It's a goofy name, I'll admit, but it gets the idea across. The benefit to the retirement donut is that it provides you with an opportunity for tax planning, which can lower the amount of taxes you pay overall.
Most retirees have lower taxable income their first few years of retirement, before Social Security begins and before they have Required Minimum Distributions. It often makes sense to use as an opportunity to convert Traditional IRA's to Roth at 10-12% marginal tax rates, or to harvest capital gains at the 0% long-term capital gains rate. Here's how to make it happen.