Dec 16, 2021
After paying into the system throughout your working career, many people believe that their Social Security benefits will be tax-free income in retirement. But the truth is you could end up owing quite a bit more depending on what other income you are generating.
We recently received a question from a couple that was trying to decide when to claim their Social Security if the other spouse wants to continue working. It’s a great question and one that needs time and attention so we’re glad this came into the show.
So the question is essentially this: will a spouse’s income impact the Social Security benefits for the other partner? Throughout this episode, we will dive into the different considerations and help you understand how the taxes are calculated. There are many different factors and it can get pretty complex.
One thing we want to make sure you know about is provisional income. It’s a word you’ll be using quite often once you start receiving Social Security so you’ll become more familiar with this. Nancy will explain it all in the show so listen through it, but once you determine provisional income, then you can determine how much of a person’s Social Security will be subject to tax.
One thing to remember is that 15% of your Social Security will always be tax-free and the rest of the benefit will be subject to tax based on the other income you have coming in. The key is having someone that can do the calculations and help you make the best decisions with income planning.
There’s a lot to this conversation so you’ll want to listen to the show but if you have any additional questions about what we discuss, please let us know.
What we discuss in this episode:
1:41 – Garden update
4:27 – Email question about Social Security
6:45 – Provisional income and what it means for taxes
10:11 – Another Social Security question
13:05 – Income scenarios and tax brackets
16:29 – Question about working into retirement
18:55 – Christmas memories
For more, visit us online at http://flemingfinancialservices.com