Do You Pay Tax on Social Security Income in Retirement? Retirement Tax Rules

You might have to pay tax on Social Security income if you have other sources of income. For example, withdrawals from pre-tax IRAs, 401(k) plans, and other types of accounts can create income that causes your Social Security benefit to become taxable. Get free retirement planning resources: https://approachfp.com/2-downloads/ 🔑 9 Keys to Retirement Planning 🐢 6 Safest Investments Pension income, interest earnings, and other types of income can also result in some of your Social Security retirement income being brought into your taxable income. At most, you’ll pay tax on up to 85% of your Social Security benefit. For those with a high income or significant assets, that might be unavoidable. But others will pay tax on a smaller percentage, or none of their income will be taxable. The calculation that matters is your combined income. That’s generally half of your Social Security plus nontaxable income plus AGI. Some complications can apply, though. If that combined income exceeds certain levels, some of your Social Security starts to show up in your taxable income. There are strategies you can use to manage your income, including Roth conversions, strategic withdrawals from IRAs, qualified charitable distributions (QCDs), and more. Those tactics might help to reduce how much tax you pay on Social Security benefits, and there may be other benefits. For instance, you might also reduce RMDs and Medicare surcharges (IRMAA). Learn about working with me at https://approachfp.com/ ✔️ Flat-fee options ✔️ One-time projects available ✔️ Investment advice (optional) Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states. CHAPTERS: 00:00 Do You Pay Tax on Social Security? (Most Retirees Are Surprised) 00:10 It’s NOT Your Age That Matters 00:32 It All Comes Down to Your Income 00:38 What Is “Combined Income” for Social Security? 01:22 What Does “Up to 85% of Social Security Is Taxable” Really Mean? 02:08 How the 0% / 50% / 85% Taxation System Works 03:11 Example: How Social Security Becomes Taxable Step-by-Step 05:32 How the Standard Deduction Can Reduce or Eliminate the Tax 07:57 How to Legally Reduce Taxes on Social Security 08:59 Using a “Bridge Strategy” Before Claiming Social Security 09:23 Another Tax Strategy Most Retirees Miss 10:45 Final Thoughts and Practical Takeaways IMPORTANT: Always verify details with SSA and the IRS. It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. “Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section and any other third-party content contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. provides advisory services through XY Investment Solutions, LLC, an SEC-registered investment advisor.