Federal Taxation of Social Security Benefits (supplement, state, coverage, retiree)

[NewToCA]

Originally Posted by forest beekeeper

I am on pension now. My current pension is low enough that it is not taxed. My income would need to be much higher to begin being taxed.

When I do become old enough to begin getting SS, then my pension will be reduced by the amount of my SS. My total amount received will remain the same.

So even after I begin receiving SS, I will still not be paying income taxes.

SS payments are usually not enough to put you into a high income tax bracket.

Well, if you are married you can have two folks who collect over $50K in SS benefits between them, or if one gets spousal SS payments, the combination can get into the low 40K range. If you add in some pension benefit, and/or investment income or annuity, and withdrawls from a 401K type of account this can become part of a pretty nice retirement package.

In this case, and it applies to a lot of folks, the SS tax issue can become significant.

[KevK]

Pay your taxes and quit gripin

[Submariner]

Originally Posted by NewToCA

Well, if you are married you can have two folks who collect over $50K in SS benefits between them, or if one gets spousal SS payments, the combination can get into the low 40K range. If you add in some pension benefit, and/or investment income or annuity, and withdrawls from a 401K type of account this can become part of a pretty nice retirement package.

In this case, and it applies to a lot of folks, the SS tax issue can become significant.

Yes and if you add some mutual funds;

and you can continue to add some other income streams, maybe some stocks, and a restaurant maybe.

However we were discussing SS alone.

In the example that I gave it was a military pension reduced by SS.

But go ahead and tell us what happens once you add onto all of this an additional $100k annual income.

Why stop there?

Add another $500k annual income and then whine about paying income taxes on your tiny SS income.

[Submariner]

Originally Posted by KevK

Pay your taxes and quit gripin

I agree.

[NewToCA]

Originally Posted by forest beekeeper

Yes and if you add some mutual funds;

and you can continue to add some other income streams, maybe some stocks, and a restaurant maybe.

However we were discussing SS alone.

In the example that I gave it was a military pension reduced by SS.

But go ahead and tell us what happens once you add onto all of this an additional $100k annual income.

Why stop there?

Add another $500k annual income and then whine about paying income taxes on your tiny SS income.

I think you are missing my main point here. Not sure why you are going off on this tangent.

Social Security can be an "only" income, and when it is the standard tax deduction plus the personal exemption would make it subject to little or no tax. Exempting 20% of all Social Security income from federal tax (as I proposed as an alternative to the current tax situation) would give this a further boost, lessening the probability that it would be taxed. If taxed at all, the tax would be minimal.

[Grandpa Pipes]

Originally Posted by forest beekeeper

I am on pension now. My current pension is low enough that it is not taxed. My income would need to be much higher to begin being taxed.

When I do become old enough to begin getting SS, then my pension will be reduced by the amount of my SS. My total amount received will remain the same.

So even after I begin receiving SS, I will still not be paying income taxes.

SS payments are usually not enough to put you into a high income tax bracket.

Me too! I've not paid income tax for the last 3 years (knock on wood)!

[Submariner]

Originally Posted by NewToCA

I think you are missing my main point here. Not sure why you are going off on this tangent.

Social Security can be an "only" income, and when it is the standard tax deduction plus the personal exemption would make it subject to little or no tax. Exempting 20% of all Social Security income from federal tax (as I proposed as an alternative to the current tax situation) would give this a further boost, lessening the probability that it would be taxed. If taxed at all, the tax would be minimal.

my apology.

Sometimes my PTSD kicks in, not entirely sure why. For some reason I had a rage 'attack' when I was typing that. It makes no sense. It was out of place. Again I apologize.

[NewToCA]

No problem, it gave me a chance to better explain my position anyway.

[naeem5]

Originally Posted by Tek_Freek

It should be adjusted. I am amazed at the callousness shown in this country towards those who are at the bottom of the economic scale. It's not always their fault that they've ended up there.

I think people who have an annual income of 1 million or more, and there are plenty of them, should voluntarily ask that the government keep their s.s. benefits. I know they earned them, but they do not need such pocket change.

[texdav]

Originally Posted by forest beekeeper

SS is not welfare.

SS is a voluntary insurance policy that was paid into by many people.

I pay the 85% rate and find it the best rate of all my income in retirement. Many paying nothing. The day of the free benefit as income is coming to a end to level the playing field really.Everyone wants a special break it seems.SS gets COL adjustments like some other retirement benefit palns.