Most people are shocked to learn that up to 85% of Social Security benefits can be taxed. You work your whole life, pay into the system, and then Uncle Sam takes another bite out of your retirement income. The truth is, your tax bill depends on your income, investments, and even when you decide to file. With smart planning, you can reduce that burden—and keep more of your hard-earned money.

3 Key Points Up Front

1. Social Security isn’t always tax-free—your other income determines how much gets taxed.

2. The combined income formula decides if 50% or 85% of your benefits are taxable.

3. Smart timing of withdrawals and filing age can cut your tax bill dramatically.

Understanding the Tax Trap

The IRS uses a formula called combined income to determine how much of your Social Security is taxable:

Combined Income = Adjusted Gross Income (AGI) + Nontaxable Interest + ½ of Social Security.

Here’s how it works:

• Single filers with combined income between $25,000–34,000 may pay taxes on up to 50% of their benefits. Over $34,000? Up to 85%.

• Married couples with combined income between $32,000–44,000 may see 50% of benefits taxed. Over $44,000? Up to 85%.

That means a retiree with investments, pensions, or retirement account withdrawals could unknowingly hand thousands back to Uncle Sam.

How Filing Age Matters

Module II and III make it clear—when you file affects not just your check, but your taxes. If you start benefits early while still working, your income could push you into the higher taxable bracket. Waiting until your full retirement age (FRA) or even delaying until 70 may lower your taxable percentage if your other income streams shift.

Smarter Withdrawal Planning

Many retirees make the mistake of withdrawing heavily from IRAs or 401(k)s in the same years they start Social Security. This spikes combined income and drives taxes higher. By carefully timing withdrawals—either pulling more beforeSocial Security starts, or spacing distributions—you can shrink the taxable portion of your benefit.

Curiosity Teaser

Many retirees pay thousands in taxes they could have avoided—simply by adjusting when they file. This isn’t about loopholes. It’s about understanding the rules and playing them to your advantage.

Conclusion

Social Security should be a steady foundation in retirement—not a surprise tax trap. With the right strategy, you can:

• Lower how much of your benefit is taxed.

• Coordinate withdrawals for maximum efficiency.

• Keep more income in your pocket.

Don’t leave this to chance. Albert Ferrin - An RSSA® (Registered Social Security Analyst) with Senior Help And You can run the numbers for your unique situation and show you exactly how to reduce the tax bite.

👉 Book your free tax-smart Social Security strategy call today.

3 Takeaways

1. Up to 85% of Social Security benefits can be taxed if you don’t plan.

2. The combined income formula is the key to understanding your exposure.

3. Filing age and withdrawal timing can save you thousands in taxes.

References

• Social Security Administration – Taxation of Benefits

• RSSA® Education Advanced Topics & Comprehensive Retirement Planning

Author: Albert Ferrin RSSA®, Founder - Senior Help And You LLC