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The Double Edged Sword of Taxing Social Security Benefits
Social Security benefits are subject to income tax for middle and upper income taxpayers. But as Liz Weston points out in this piece, when benefits were made taxable in 1983 and then further in 1993, the brackets were never indexed for…
My benefits got cut. Welcome to WEP.
It’s a little known and even less well understood provision that affects a small number of people who worked in some public sector jobs and had at least ten years of employment in the private sector. It’s the Windfall Elimination…
What’s New in 2019 for Social Security?
Tom Margeneau’s comprehensive piece here looks at all the major changes to Social Security for 2019. There are no substantive changes in the law, but there are a number of adjustments due to inflation. In addition to the across the…
Early Withdrawals from IRAs? Possible, but usually ill advised
There are some limited exceptions that allow one to withdraw money from a traditional IRA or the earnings from a Roth IRA (contributions can be taken out at any time) without paying a 10% penalty, though income tax ism still…
Social Security & Income Taxes: Know the Rules & Plan Ahead
It can be a shock to learn you have to pay income taxes on Social Security benefits. Not all people do, so knowing the thresholds is key to understanding whether tax is due or not. The IRS determines who is required…
Social Security for those who worked little or not at all
We’ve all likely heard that Social Security benefits are a product of having contributed during one’s working years, namely the highest 35 years on record. That is true. But what if you never worked? Perhaps you spent the prime working years…
A Good Social Security “Tip Sheet” Going Forward
Social Security is a complex program for sure. This piece by Selena Maranjian highlights five things one should know about this vital program, one which sends monthly benefits to 63 million Americans. First, know your full retirement age. Second, know…
Social Security succeeds as an anti-poverty program
Maurie Backman points out in this article that 15.3 million seniors live above the poverty line thanks to Social Security income. But he also notes today’s workers are often overly optimistic about the amount of income Social Security will replace,…
Social Security not going away despite its troubles
The oft cited 2018 Transamerica Center for Retirement Studies found 83 percent of Generation X workers and 80 percent of Millennials don’t think Social Security will be there for them in retirement. But, as Holly Peterson reports, this fear is overblown. …
Call it What You Will, But It’s Still an Income Tax …
… and a steadily increasing one, at that! We’re talking, of course, about the simple fact that many–make that most–Social Security beneficiaries pay federal income tax on their retirement benefits. As Nerdwallet’s Liz Weston points out, married couples with combined…