Let’s say you are already retired or getting close to that day, do you know what your taxable income is going to be? While we’re working, this question is much easier to answer because we’re getting a paycheck and taxes are getting taken out consistently. Social Security is a key piece to almost every income plan we build and it’s not about what you make, but what you keep.

The Good News About Social Security Tax

The good news is when it comes to Social Security taxation, no matter what your financial position is, some portion of your benefit will be tax free. The highest tax rate you can pay on Social Security right now is 85% of it taxed as ordinary income, which means 15% is tax free.

What Impacts Your Social Security Taxes?

A number of factors will ultimately determine the answer to this questions, but keep in mind that capital gains distributions, Roth IRA withdrawals, and other sources of income can all impact the amount of tax you’ll pay on your Social Security. Eric will break down the different thresholds on the show, but knowing how each piece of income impacts taxes will help you determine strategies today to help you be more efficient with what you’re able to keep.

Why Social Security Tax Planning Matters

This is a very common question that seems, on the surface, to require a pretty straightforward answer but as you can tell from the discussion today, it’s not that simple. That’s why financial planning is critical to success in retirement and our team is ready to help you through this item and all the others that we account for during the process.  

Here’s what you can expect to learn in this episode: