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Retirement Planning: Be Aware of How Benefits Are Taxed
It often comes as a surprise to the newly retired to find out that a significant portion of their Social Security benefits are subject to federal income tax. And if their cash flow planning has not taken that into account, it can become a problem in making ends meet. To make matters even more severe, there are still 12 states in the U.S. that levy an income tax on Social Security benefits so, if you reside in one of those, it’s critical to plan for that as well. It can be a somewhat complicated part of one’s retirement income planning process, but being aware of the rules ahead of time can help you avoid unpleasant surprises. In a post today on fool.com, The Motley Fool’s Matthew Frankel, CFP® provides a summary of how this portion of the retirement financing process works. Check it out here.