Taxation of Social Security benefits
By Steve Savant
“In 1980 a new tax law was put into place that taxed up to 50 percent of a person’s Social Security income in retirement. In later years another threshold was put into place to tax higher amounts of income at up to 85 percent. So, even though these Social Security income strategies could increase your income, they may be partially taken back by the government in the form of additional taxes. The original intent of the law was to tax the rich. The thresholds that must be reached were made high enough to achieve that goal at that time. However, inflation has watered down those thresholds to the point that most middle class people may now be affected by those rules.” - Ken Davis, CLU, ChFC, CFP, CPA.
Ken and I talk through the taxation issues that drive seniors crazy.