I heard there’s a few states you can move to like South Carolina and a few others where if you’re over 65 years old you don’t have to pay property tax anymore.
You're essentially asking to slap another penalty on high income earners. What people fail to realize is that when it comes to social security benefits the bar for high income earners keeps getting lower.
The big thing you missed in this video is the fact that taxes on Social Security should be illegal in the first place. Double taxation is illegal and that is exactly what is happening. SS recipients have already paid taxes on the wages when they were working and now when retirees desperately need this income the most to live the government gives them the shaft! Retirement may become a problem for Americans
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
I completely agree; I am in my mid 40s, approaching retirement, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
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The taxing of social security does not have to change. The original idea was to tax only the high earners. The 32,000 - 44,000 numbers for couples were in 1983 dollars. Update the social security worksheet to include an inflation adjustment from 1983 until the present and the problem for almost all social security recipients will be eliminated. The federal income tax is adjusted each year for inflation. Why not the social security worksheet. That would be an easier way to handle this issue.
Why is solvency #1. Seems the American people have been brainwashed into thinking that the only line item on the federal budget that can't run a deficit is SS? Why is it we can borrow/print $250 billion to kill a million people in Ukraine but SS has to be 100% paid for from payroll taxes. It is projected after 2034 SS will have $160 billion/yr deficit. Why can't that deficit be made up from Income/Corportate taxes, monetized, borrowed..... like everything else the government does. If they want to get serious about budget cuts, why not prioritize SS as the last line item that gets cut instead of the first?
As a senior of course I would love no tax on SS...the problem is Trump and others have not said how they will fund SS for the long term without the tax. I think they will say anything for a vote. Also I have young adult children. I do not want to be like my "me generation" age group and only think about what's good for me only. SS needs to be stable for them too.
But the issue is that the original amount of money set was set over 30 years ago and never adjusted for inflation. If it were adjusted for inflation since 1980 that amount of income you would have to have to tax Social Security would be over $150,000 a year. Please get informed.
Under our current laws, when the “Trust Fund” runs out of money Social Security benefits will be automatically reduced to the current revenue from Social Security taxes. So if Congress does what it’s best at, which is nothing, Social Security benefits will be reduced dramatically in 9 to 10 years.
The biggest problem with the SS tax is you get pentlized when pulling from your retirment account. The more you pull out the more SS is taxed. Plus they force you to take RMD's. It is like taxing you twice for the withdrawl. Why include income and pension on what is taxable on SS? Just a small pension will force you to pay SS tax.
@@Satjr35031 Some people can not live of the measly amount Social Security is. That is why they saved while they were in their working years. And for that, the government punishes them for being responsible.
Most people who receive SS don’t pay taxes because they are low income. The SS tax goes into the SS trust fund. So unless Congress acts to shore up the trust fund ( like raising the FICA cap) cutting the tax will cause the trust fund and subsequent SS reductions to be larger and come sooner. This will be devastating for those who are low income as the receive no benefit from the tax cut and yet will suffer from the benefit cut.
A tax cut would be mistake. The reason is that it will accelerate the depletion of the social security fund, meaning that it will run out of money as early as 2033, and all benefits would have to be cut by about 18% to 21%. I could survive this but a lot of people that took benefits early are struggling to make ends meet.
tax cuts to corporations n rich cuts cuts where is the government goin to fund ssi and Medicare when there's no money. sorry guys we have to cut your checks
That’s so true. With potential cola raises the next eight years it will all be wiped out with the cuts. Hard to imagine someone with only $2,000/mo. living on that in 2033. I get taxed now and don’t mind.
Another handout to the rich. People who rely on social security for 100% of their income already pay NO tax on social security. Only the rich with most of their income from other sources have 85% of their social security taxed. Correct, it's a big big deal....for those that don't depend only on social security.
That is just not true. I make enough on social security alone to be taxed on it. The income limit for being taxed is not indexed to inflation and hasn't changed since Reagan so more and more people get taxed on just social security income every year.
@@michaelspurling4376 Sorry, but you are incorrect. A single person would need SS benefits in excess of $91,000 if they have no other taxable income and are under age 65. That would be over $7,500/month. That easily exceeds the maximum SS benefit even if they delayed benefits to age 70. And, if age 70, the standard deduction would be higher. A married couple with only SS income would need over $142,000 of SS benefits to owe any tax on those benefits. Again, that exceeds the maximum benefits available today.
How about an exercise in critical thinking? #1 - Approx. 50% of SS recipients rely almost solely on those SS payments to cover their daily living needs. #2 - Approx. 50% of SS recipients pay some tax on those SS payments. #3 - The tax on SS payments applies only to those SS recipients with other sources of income. #4 - The higher your other sources of income translates to a higher proportion of your SS being taxed. Therefore, the tax on Social Security benefits is a progressive tax that applies only to those recipients in item #2 above and not to those in item #1 above. So, eliminating the tax will not help the most needy SS recipients. Instead, it will help those more fortunate. Further, eliminating the SS tax (read the Trustees Report) will shorten the time to insolvency which could lead to across the board cuts to all recipients. Those more fortunate, group #2 above, will be able to partly offset their future benefit cut with the savings they got from no longer being taxed on benefits. The less fortunate, group #1 above, will simply see a cut to the future benefits they rely on to cover their daily living needs. Hmmm, great plan, eh?
Originally there was not tax on social security. If you had other income or pensions it was taxed but social security was not added to you income to be taxed.
The 2.5% COLA for 2025 provides a modest increase in benefits for Americans receiving Social Security and SSI payments, helping to offset the rising cost of living and inflation. This increase offers essential financial relief for vulnerable populations like retirees.
The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings to fall back on.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
I completely agree; I am in my mid 40s, approaching retirement, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Stacy Lynn Staples’’ for about three years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
They need to raise the income level when it kicks in, the levels have not changed since the law was introduced. How about married no tax until you make $160k and $120k if single, most retires would pay no tax then.
It seems very key to understand whether or not the taxes we pay on SS benefits are actually placed into the Trust Fund. If Trump gets SS tax eliminated, the SS fund will deplete even sooner than 2033
I'm all for eliminating SS Tax, yet, like COLA, if SS tax goes away, they'll just raise rates elsewhere. As a DoD retiree, we looked forward to the new year COLA increase, and so did our health insurance costs. The government will ALWAYS find a way to get their cut.
At first glance, it would appear that the tax money that the government receives from SS benefits does not go into the Social Security trust fund, but actually it does. Here's how it works: The income tax money that you pay on your social security benefits goes to the general federal fund, as you would expect. Then, congress is advised (by the IRS I think) how much of the income tax receipts resulted from tax on SS benefits. Then, every year, congress votes and the President approves, that that amount is transferred from the general fund to the SS trust fund.
FUN FACT: For the first time ever, the US annual interest on it’s national debt is actually larger than the annual US defense budget. STOP PRINTING MONEY.
@@Satjr35031 granted. Reducing the budget of the Dept of Def alone would not resolve the current situation, but it would be a good start. Then need to cut other wasteful gov't spending to contribute to SS. Putting Elon and Vivek in charge of Gov't Efficiency should be a big help for the US taxpaying citizens.
Sure, no tax on SS but the following year stop ss completely, then medicare, then VA disability benefits, military retirement benefits. Sure just beautiful.
I am single. My Social Security is 36K. I take 30K from retirement funds. 46% of my SS is subject to taxation. The tax rate is 6%. If it wasn't taxed it would mean ~ $998.00 p/yr more ($83.00 p/mo)
They shouldn't eliminate the tax, but rather go back to 1984 and index the thresholds for inflation. That way the tax will not be hitting the middle class like it is now. Also, if they want to raise the cap to help offset the cost, that's fine too, IMO.
Nope. When you were working those employment TAXES, not a pension contribution, went to pay for then retirees’ benefits. It ceased to be your money at that point. What you got was a promise to a future benefit which will come from then workers taxes. It never went into an account with your name on name on it.
@@DeanJohnson67 The "Rich" would be in the top 40% of highest income earners receiving social security, isn't that right? Wouldn't Warren Buffet be receiving Social Security? Do you think Warren Buffet needs a tax cut on his Social Security?
I took SS at 62. I'm 68 now and my bringhome is 1959. By age 70 I'll be bringing home 2058 (est. per COLA) per month. It's about the same as if I waited until age 70.
Noooooo…delayed benefits receive COLA’s too. By claiming at 62, you got about 70% of your PIA. Delaying to 70 would have gotten you roughly 125% of your PIA adjusted for COLA’s. I am waiting until 70 and watch both my PIA and expected age 70 benefit increase by the annual COLA.
Social Security wasn't taxed until Reagan. The President who keeps on giving . Rather than lifting the cap, rather than resisting the temptation to raid the trust fund, the neoliberal state chose to penalize the elderly to further enrich the rich.
SS tax at 85% wasn't taxed until Clinton.... and biden helped to get it into law....The Presidents who keeps on giving... its the dem moto.... spend spend spend other peoples money...
Well it's income that hasn't been taxed yet as it is taken as a deduction before taxes are paid. It should be taxed. But seniors should be supported by other means. Like... Oh... Healthcare!
I believe Joe Biden was the one who cast the deciding vote in the Senate to tax Social Security. I got married in 1973 and was a teacher. My hardest years financially were during the Ford/Carter years, Bill Clinton, and Barack Obama. They severely raised taxes. Clinton said he was going to help the middle class. I have two sons that were ready to go to college. The week after Clinton took office, the House and Senate passed the largest tax hike in history. The only saving grace is that we had saved a great deal of money for our older son but he had to go to a state school because we could not afford a private one. His younger brother attended the university that my wife and I were working and he got half tuition. Bill Clinton lied. I was a dyed in the wool Democrat and I switched parties because of economics.
Yes let's eliminate the tax and give everyone a 10% benefit cut. The would be about revenue neutral. Doesn't sound so good does it! Low income retirees would especially hard hit.
A good general non-partisan presentation. I'd prefer to see it with the macro numbers. My gut feeling is that the SSTF can't afford larger drains and that Congress needs to add funding sources; not decrease the rate of outflow.
So what is going to nake up for the funding shortfall? If they eliminated the tax cap while also indexing the Social Security tax limit to inflation would make more sense - so taxation of Social Security would only occur if your annual income was over about $150k, that's when your benefits would be taxed. That makes sense to me rather than just eliminating it.
What would make up for the shortfall? How about no longer sending hundreds of billions of dollars to Ukraine, the most corrupt country in the world, to fund a war they can’t possibly win? How about that?
that's coming....too many young people are untrainable or unwilling to work so the are gonna need to get Boomers to pick up the slack. That, and Boomers have done a terrible job of saving.
The cap will never be removed. Why? Look at professional athletes. Your contract says you get 10 million a year. As a self employed person you would owe 1.5 million in social security taxes. Given most professional athletes don’t work 35 years their payback would be pitiful. But a giant thanks from the government .
The IRS has computers so they can work out which money goes where. If the amounts were indexed for inflation, there would be more money from this. But I am not a complainer. I use strategies to make it better for me.
No matter how you slice it, any change is going to make things worse than what we have today. If they cut taxes on social security benefits they will take the money from somewhere else. One option is taxing all income even if it means your benefits don't increase. Hence making this another penalty for those who have a high working income. The problem is that most people don't make more than the current taxable limit. Those who do don't make much more than the limit to make a difference. Those with the most money make their money on investments, so they were never paying much or depending on social security. Another option is to lower the benefits for everyone. So instead of paying taxes, you just get less benefits. This will suck for everyone, but will mostly impact those who were already paying little to nothing in taxes on their benefits. Can you imagine going from paying 10% of your benefits in taxes to receiving 70-80% of your benefits, but TAX FREE? That's like paying 20-30% in taxes, but most people will hear tax free and miss what really happened. Another option is to simply increase the social security tax rate, but don't increase the benefits, or make it marginal. Making taxes marginal (tax the rich) is how they get the majority to buy into something, then once it's in place it gradually expands to affect everyone.😅 Another option is to further delay full retirement age. Afterall, they can avoid paying out a lot of money if you don't live long enough to receive it.
Raise the cap and a very minimum raise the qualifying income that would require taxes to over $150,000 per year. That way Mitt Romney would have to pay taxes on his Social Security, but not me, who pays more of their income to taxes than Mitt Romney.
If we raised the payroll income tax cap on the rich from $160,000 to a million dollars we could RAISE the SS benefits for everyone and it would never go broke.
My understanding of this is that the money that is taxed goes back into the Social Security trust fund. So not taxing it actually makes it run out faster. So actually not a benefit?
Social Security trust fund return rate was only 2.387% for 2023. Of course it can't keep up with inflation etc. Maybe change something in this area? Maybe rebalance it 50% bonds and 50% stocks? I think its very possible to have 6% return rate. But our government restricts it. Why?
Then what do you do about sequence of return risk that the trust fund would be exposed to? There is a reason why the trust fund is invested in safe government bonds. It took 5 1/2 years to recover from the 2008 crash.
They need to cut the waste in government as a whole with the DOGE plan gradually cutting government each year the department of defense hasn't done an audit in 8years due to corruption and inefficiency
It us by itself, a terrible idea to cut the taxes. The reason is that doing so will make the social security trust fund run out of 3 years sooner and this means that everyone would take a cut, To fix it, they will need to do a combination of pushing back the full retirement age, raising the contribution limit, and adding maybe .25% to the individual and corporate contributions.
I’m not holding my breath and don’t see how we can pay for the loss of tax revenue (even tho I think taxing SS is wrong). I’d be glad with them indexing the brackets to determine provisional income with inflation (retro to 1983 when this started). The government is taxing the most vulnerable who are on fixed incomes.
I don’t rely on SSA totally. I do know that my investment into SSI was involuntary, the dollars were not invested to my benefit, and that the taxable benefits have not been adjusted for COLA. Another democrat bad idea. The funds collected go into the general fund, and get wasted. I AM political, and find this despicable.
When this precipitates a crisis in the solvency of SS, will benefits be cut for all recipients or just new ones going forward. In other words, Should you start collecting before this Trump engineered crisis begins or won’t it matter? 3:52
Some of you complaining that this SS tax cut only benefits the wealthy is lame at best. Every year I have to pull out around 2-3 thousand to pay my taxes. Hopefully this and the standard deduction staying will definitely account towards this crazy inflation we incurred over these four years.
Those retirees with no other sources of income pay no tax on their SS. Even some with “small” amounts of other income pay no tax either. I have a couple siblings in that category. My MIL does pay a little tax on SS because she has a combo of a modest pension, IRA withdrawals, and interest income. She can easily afford the tax on SS (less than 1k per year) and it doesn’t impact her ability to pay for daily living expenses. Clearly, those with higher amounts of other income pay tax on SS. I did not call all of them wealthy…you did. No doubt the truly wealthy can afford the tax. The others (like you?) that aren’t wealthy are still fortunate enough to be able “to pull out 2-3 thousand” to pay their taxes.
Azul, we all know any tax we pay on SS is separated by the UST upon receipt and assigned to "preserve" the fund. 😅 Even if SS remains taxable (which I don't think it will), Congress should at least index and provide for annual inflation adjustments to the Base thresholds to reflect the 1985 "intent." Assuming straight CPI indexing, this would result in Base thresholds of $71,403 and $91,396 for single and married filers respectively, This would eliminate or significantly reduce income tax on SS benefits for the vast majority. Hopefully, it will simply be returned to the pre-1985 rate of 0%.
I think that we should pay tax- but it should start at a much higher income. If you look at the inflation that number would be 130k for 80% and 95k for 50%. It should follow cola from then on.
We borrow and send overseas. We borrow and waste. We borrow to defend other countries who should be paying for their own defense and the list goes on and on. How about stopping all that and pay the bill?
If I retire at 62 and take Social Security but my wife continues to work and she makes about 150 K per year are they going to tax my Social Security. Or is my Social Security separate from her money?
I really enjoy your channel. It will be a while before the full details of Trump's proposal for eliminating tax on Social Security are known and whether or not it will pass. If it does pass, will that have any impact on Roth Conversion Strategy? WIll it help keep RMD's for some from bumping them up to higher tax brackets. This might be a good idea for a topic if the law is passed by congress. Have a Merry Christmas and thanks for your informative videos.
One illegal immigrant can have a anchor baby and that birthing cost alone to taxpayers in my area is $40,000 .Medicaid pays the hospital taxpayers pay taxes to Medicaid. 😢
As long as a cut cost in many many other areas... It seems like a possibility with the two nominations to look into things.. Is one hundred thousand dollar toilets (like they joke about) et cetera..
@there is only about 1.7 trillion in discretionary spending where cuts could come from. Period. Basic math. The rest is mandatory spending. That’s social security, Medicare, interest on the debt, etc. We have about 2 trillion over every year adding to the deficit. So even if you cut every single govt agencies discretionary budget (not gonna happen because the economy would tank in a very bad way) we still don’t have enough to cover the overspending. So nooooooo cutting spending will not help cover the tax decrease because it won’t even cover the current deficit spending. Newsflash we need more revenue coming in. There is a name for that by the way but nobody wants to say it. Cutting taxes will not help. At all. Cutting spending is only marginally effective and needs revenues for it to work. Marginally in that without tax increases even with deep deep cuts the deficit will continue to grow. BASIC MATH. There will be tax increases in the future no other way to fix the problem under our current structure.
A fine video, but a little bit unclear on the annual revenue side. The limits for individual are indeed $25K - $34K 50% of SSI taxable; and above $34K 85% of SSI taxable. For a couple, the numbers are $32-$44K 50% of SSI taxable; and above $44K 85% of SSI taxable. But these are for ALL SOURCES OF INCOME, not just SSI. You have a part-time job? That money is included to calculate your payment on SSI. Dividends, interest, an inherited IRA? All that money is included. So for example, if a husband and wife receive average SSI of about $36,00/year, a part time job that pays $667/month from either spouse will make 85% of the couple's SSI taxable. This is a whopping tax for about 50% of retirees, and it falls mainly on the people who have saved well and planned for retirement. Is that fair?
Is it fair? Well, that was one of the reasons that it was started in the first place. People had annuities and pensions that were taxable but Social Security was not. By introducing the taxation of Social Security slowly over a large number of years they were trying to make it fair. And the idea of having people who make more money pay more in taxes is the way our progressive tax system has always worked.
@@johnscott2746 Not alway been that way. Reagan put SS taxation in with a time-delayed fuse of not indexing the income thresholds to inflation. Then there's the double taxation phenomenon known as the “tax torpedo” that impacts more and more people each year that passes. It occurs when your provisional income bumps you into a bracket where a higher amount of your Social Security benefit is taxable. This means that every additional dollar of income has a double impact-taxation of the additional dollar and taxation of another portion of your Social Security benefit. However, once you surpass the threshold, this double impact stops. Not always been that way. Regan's 80s unindexed taxation combined with inflation it becomes more and more unfair every year.
The $32-44k was established like 40 years ago. It needs to be adjusted for inflation and it would be like $100k before you are taxed. The index everything else to inflation like exemptions and deductions why not this?
In the past, perhaps. But how many people today have "annuities and pensions"? That is an historical period that is long gone. There is no such comparison today. As to your second argument, "progressive taxation," that was achieved when the money was first made, so it is being double taxed now. Would you praise this as "progressive progressivism"? I do not want my social security income taxed, I consider it paying a tax on money that has already been taxed, and yes, it is unfair. Not only because of double taxation, but because it penalizes people for planning and saving, which is something the tax system should not do.
Perhaps the tax will be eliminated, but will benefits be cut in the near future. It has to be paid for somehow. Of course, the next president will be blamed for that. Politics as usual.
This is about the first expert explanation I have seen explaining how the raising of the "full retirement age" is really a cut in Social Security benefits for everyone born later and not just an increased penalty for "taking Social Security early" .
So basically if your benefits are over $25,000, even if that's the only income you have, will be taxed. Those percentage numbers that you give don't state how many people actually make more than $25,000 from SS alone. Google says that number is only 6% of SS recipients. Just saying.....
Azul... don't be so worried about politics... You're from Utah we know how you swing ;) I'm sure most of us are cool with it. Politics is very involved in financial issues; that's life. If you lose some viewers because they are sensitive libs who cares?
I have heard about a "two year delay" as to the time after filing a tax return and the beginning of an IRMAA penalty assessment due to that tax return's income but it appears to me that the tax return I file by April 15 begins to affect my IRMAA for the immediately following January,not the January a year later as some commentators have been implying
What happens is they look at your income for the year that is two years prior to the current one. The limits for income that trigger the IRMAA penalties also are specific to the year so it would be lower for the two year previous income. For 2025, they look at your 2023 income and apply 2023 income limits. Hope this helps
@@johnscott2746 That's his point it is really only one year because it is the return filed in 2024 for 2023 affecting Medicare starting January 1 2025.
The way I see it is that the income you make in 2023 affects your Medicare premiums for 2025, so that is a two year gap. It doesn’t really matter when you file the return.
@@johnscott2746 I get that, but the income is as of 12/31//2023, and the IRMAA date is 1/1/2025 with Medicare providing the notice likely in early December 2024 - so it really feels like a one year look back.
"Elder tax ! Also "IRMAA" is a sort of Elder tax (not charged until you are at or over age 65 in most cases) A surcharge added to your Medicare charges. If I understand correctly your taxed Social Security Retirement benefit is added to the calculation as to whether you are assessed the IRMAA tax/Penalty and if so your liability to have to pay a higher tier of IRMAA which can penalize you more than $1000. per year for having one single dollar too much income in one tax year ! Also your IRA distributions including RMDs and IRA money moved and taxed as Roth IRA conversions also count toward your IRMAA liability.
Older folks are squeezed between Social Security taxation, Required Minimum Distributions and IRMAA. IRMAA limits this year are around $204K and I'll probably have to withdraw so that income is around that level or else I'll have huge RMDs at 72.
@@movdqa I don't know the calculation as to this but I think it might work in some people's case to pay a high IRMAA during one or two years in order to pay lower or no IRMAA during later years (making large Roth conversions) also what is called the "widow's tax" or "widower's tax" might be significant (married person loses the ability to file jointly and thus has to pay the higher "single" tax rates including IRMAA)
@@davidpowell3347 I'll take a look at it. I really should find some modeling software. We're going to pay a ton of taxes one way or another. At least we have time to plan for it.
Seems silly to give us a payout and then text us on it. They should just give us less in the first place. I guess it’s really just a trick to give the 50 or 60% who won’t owe the tax, an extra boost.
Here is my quandary. I paid in for 42 years, 37 of those years at the absolute maximum rate. I only get the max no matter how many more years I would have paid in. I was so mad after I retired that it took several months for the final payout of unused vacation, 400 hours worth and was hit another several thousand in SS tax I will never see. On top of all that, I get the lowest percentage of what I put in. Then for just another kick in the gonads, because I was paid well thru out my career, my pension puts me in a pretty high tax bracket currently making me pay 27% tax on 85% of that already lower rate. Although I was pretty highly paid, I lived and worked near San Francisco and that income was just getting by out there with a family of 3 children and a stay at home Mom. Put in more than anybody and will get the lowest percentage out. Finally, a small break if this tax free comes into play. This is not about not having enough, but about an injustice that just because I have more, you can take some and give me less and there is not a damn thing I can do about it. And you wonder why people voted Trump instead of Socialist.
News flash! This has been the way Social Security worked from day 1. It always was a progressive system designed to provide minimal support for the poorest Americans and progressively less benefits to high wage earners. You have a good problem. Quit whining
Maybe if we stop sending billions of dollars to foreign countries AND we start exporting American Energy supplies to foreign governments, we can pay down our debt and keep social security benefits?
We’re not ‘sending’ but lending or investing in national security and our weapon industry, and we do export oil and gas. In fact, the most ever in 2023. By ‘we’ I mean the US, maybe you were talking about another country?
@@pascalbruyere7108 No, I'm not. I'm frustrated with our government spending more money than they take in. I want secure borders, smaller government and my retirement secure in 10 years. I feel like our economy is on a house of cards. I don't want the dollar to be worthless in 10 years.
@@tz1592 borders secured and secured retirement might mean more government, not less. Maybe more taxes better spent. Probably securing retirement might mean more immigration. It’s complicated.
My understanding is that this would accelerate depletion of the trust much more rapidly. I would love it if this would work….but this is concerning. I think they will need to eliminate the cap for this to work. I’m 61….so I am ok with all this. LOLOL 😂
Not as good as it looks. If individuals or couples rely on only Social Security, they already don't pay taxes. In other words, Social Security is only taxed for those who live off MORE income sources. No benefit for those who really need more help income wise.
so in 10 years they will cut the social security to 70% in actual or in inflation and so that amount would be tax free. I hope they solve the actual problem with social security! When will they make ss solvent!
@@n2201 It does go up by a small amount each year. But if you had no cap then everyone would pay tax on all their wages including the wealthy it would save social security forever., Real simple fix.
Nope. When you were working you paid employment taxes which supported then retirees benefits. When you retire you get a benefit supported by then current worker taxes. Your money didn’t go into an account with your name on it. You aren’t being taxed twice on your money
As a 70 year old, my biggest burden is property tax.
Property tax is unconstitutional.
Exactly!! Property tax is way over 50% of my income. I thought I would be able to grow old in my own house, but it seems to be impossible now.
I will do a reverse mortgage to stay in my house. I rather give my house to a bank when I die than a nursing home
I heard there’s a few states you can move to like South Carolina and a few others where if you’re over 65 years old you don’t have to pay property tax anymore.
@Slaytheday388 Yup, I will have to move somewhere like that someday. Probably the mid-west because I can't take the humidity & I hate snakes LOL
I’ve said for years, they need to eliminate the SS cap.
So increase taxes then. Do people paying FICA taxes on this additional income get higher benefits or are we just giving them the shaft?
You're essentially asking to slap another penalty on high income earners. What people fail to realize is that when it comes to social security benefits the bar for high income earners keeps getting lower.
@@TheFirstRealChewy I am a high income earner. Continuing to pay SS after $165K is not going to break me. Taxes are going to go up one way or another.
Many millionaires have paid there limit into SS before the end of January....End the cap, or just by adjusting it, problem solved.
The big thing you missed in this video is the fact that taxes on Social Security should be illegal in the first place. Double taxation is illegal and that is exactly what is happening. SS recipients have already paid taxes on the wages when they were working and now when retirees desperately need this income the most to live the government gives them the shaft! Retirement may become a problem for Americans
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
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Even though this issue has bi-partisan agreement, I don't expect the idiots in Congress to do anything for us peasants.
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The taxing of social security does not have to change. The original idea was to tax only the high earners. The 32,000 - 44,000 numbers for couples were in 1983 dollars. Update the social security worksheet to include an inflation adjustment from 1983 until the present and the problem for almost all social security recipients will be eliminated. The federal income tax is adjusted each year for inflation. Why not the social security worksheet. That would be an easier way to handle this issue.
Priority should be preserving solvency of SS to ensure full payout. No other priority comes close.
Don’t fall prey to the fear mongers. The only risk to SS is grubby congressmen
Why is solvency #1. Seems the American people have been brainwashed into thinking that the only line item on the federal budget that can't run a deficit is SS? Why is it we can borrow/print $250 billion to kill a million people in Ukraine but SS has to be 100% paid for from payroll taxes. It is projected after 2034 SS will have $160 billion/yr deficit. Why can't that deficit be made up from Income/Corportate taxes, monetized, borrowed..... like everything else the government does. If they want to get serious about budget cuts, why not prioritize SS as the last line item that gets cut instead of the first?
Do your Home Work....... The SS Will Be Here In Some Form Forever. OMG...!!!
@@densnow4816 they've been talking about sunsetting not preservation. How much honest thought do you believe they've put into this.
Then quite funding the Ukrainian pensions and government salaries and fund social security with it. And don’t forget the victims of Hurricane Helene.
As a senior of course I would love no tax on SS...the problem is Trump and others have not said how they will fund SS for the long term without the tax. I think they will say anything for a vote. Also I have young adult children. I do not want to be like my "me generation" age group and only think about what's good for me only. SS needs to be stable for them too.
He never will....dt is pure BS.
But the issue is that the original amount of money set was set over 30 years ago and never adjusted for inflation. If it were adjusted for inflation since 1980 that amount of income you would have to have to tax Social Security would be over $150,000 a year. Please get informed.
Under our current laws, when the “Trust Fund” runs out of money Social Security benefits will be automatically reduced to the current revenue from Social Security taxes. So if Congress does what it’s best at, which is nothing, Social Security benefits will be reduced dramatically in 9 to 10 years.
@@5DNRGso how has Biden and his cast of 🤡 worked out for you and your retirement? Turn off your tv
@@5DNRG TDS ALERT...! You Lost.........
The biggest problem with the SS tax is you get pentlized when pulling from your retirment account. The more you pull out the more SS is taxed. Plus they force you to take RMD's. It is like taxing you twice for the withdrawl. Why include income and pension on what is taxable on SS? Just a small pension will force you to pay SS tax.
Let’s face it first RMD is at age 73 p.Nobody is forcing you to take it out earlier
While I agree since I’m pretty much in the same boat, the facts are that roughly half of retirees don’t have any pension or retirement accounts.
@@Satjr35031 Some people can not live of the measly amount Social Security is. That is why they saved while they were in their working years. And for that, the government punishes them for being responsible.
@@johnscott2746 Why don't they have a 401k plan? Almost every US employer offers them.
That's one of the reasons having your retirement funds in Roth option accounts is such a great idea.
Most people who receive SS don’t pay taxes because they are low income. The SS tax goes into the SS trust fund. So unless Congress acts to shore up the trust fund ( like raising the FICA cap) cutting the tax will cause the trust fund and subsequent SS reductions to be larger and come sooner. This will be devastating for those who are low income as the receive no benefit from the tax cut and yet will suffer from the benefit cut.
A tax cut would be mistake. The reason is that it will accelerate the depletion of the social security fund, meaning that it will run out of money as early as 2033, and all benefits would have to be cut by about 18% to 21%. I could survive this but a lot of people that took benefits early are struggling to make ends meet.
The income tax you pay on your SS goes into the general fund which the just give away to foreign countries anyway.
Nah
tax cuts to corporations n rich cuts cuts where is the government goin to fund ssi and Medicare when there's no money. sorry guys we have to cut your checks
That’s so true. With potential cola raises the next eight years it will all be wiped out with the cuts. Hard to imagine someone with only $2,000/mo. living on that in 2033. I get taxed now and don’t mind.
Actually, thats not true. Taxes on ss benifits must be rolled back into the fund. SS tax on income has been robbed for years@rogerhollon5009
Thanks for explaining where all these numbers (thresholds, percentages of tax) come from!
Nobody who has busted their ass for 50 years paying for others should have to be taxed twice for their earnings. EVER
Another handout to the rich.
People who rely on social security for 100% of their income already pay NO tax on social security.
Only the rich with most of their income from other sources have 85% of their social security taxed.
Correct, it's a big big deal....for those that don't depend only on social security.
That is just not true. I make enough on social security alone to be taxed on it. The income limit for being taxed is not indexed to inflation and hasn't changed since Reagan so more and more people get taxed on just social security income every year.
I'm taxed on my ss
@@michaelspurling4376 Sorry, but you are incorrect. A single person would need SS benefits in excess of $91,000 if they have no other taxable income and are under age 65. That would be over $7,500/month. That easily exceeds the maximum SS benefit even if they delayed benefits to age 70. And, if age 70, the standard deduction would be higher.
A married couple with only SS income would need over $142,000 of SS benefits to owe any tax on those benefits. Again, that exceeds the maximum benefits available today.
Laughable. Your rightful-benefit will be cut and you will still be taxed. In that order.
The Social Security “Trust Fund” is really the Federal Government’s General Budget.
How about an exercise in critical thinking? #1 - Approx. 50% of SS recipients rely almost solely on those SS payments to cover their daily living needs. #2 - Approx. 50% of SS recipients pay some tax on those SS payments. #3 - The tax on SS payments applies only to those SS recipients with other sources of income. #4 - The higher your other sources of income translates to a higher proportion of your SS being taxed. Therefore, the tax on Social Security benefits is a progressive tax that applies only to those recipients in item #2 above and not to those in item #1 above. So, eliminating the tax will not help the most needy SS recipients. Instead, it will help those more fortunate. Further, eliminating the SS tax (read the Trustees Report) will shorten the time to insolvency which could lead to across the board cuts to all recipients. Those more fortunate, group #2 above, will be able to partly offset their future benefit cut with the savings they got from no longer being taxed on benefits. The less fortunate, group #1 above, will simply see a cut to the future benefits they rely on to cover their daily living needs. Hmmm, great plan, eh?
Bingo!
Trump has a concept of a plan. Seen this song and dance before.
Originally there was not tax on social security. If you had other income or pensions it was taxed but social security was not added to you income to be taxed.
You can thank Reagan for that.
Several States do not tax social security benefits. At least a small savings for those recipients.
@@DWS1435 originally there was no income tax either.
@@bdtn342 TRUE. Good luck seeing them take that away.
The 2.5% COLA for 2025 provides a modest increase in benefits for Americans receiving Social Security and SSI payments, helping to offset the rising cost of living and inflation. This increase offers essential financial relief for vulnerable populations like retirees.
The thought of retirement makes me cry. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings to fall back on.
True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.
I completely agree; I am in my mid 40s, approaching retirement, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
This is exactly how i wish to get my finances coordinated ahead of retirement. Can you recommend the financial advisor you used to get ahead?
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Stacy Lynn Staples’’ for about three years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
They need to raise the income level when it kicks in, the levels have not changed since the law was introduced. How about married no tax until you make $160k and $120k if single, most retires would pay no tax then.
How about no tax on anyone 65 and over .
Hahahahahahah... Um no...
Yes and also for anyone raising a family. Make it zero.
@@deepblue523fl Well at this point lets just not have taxes... what could possibly go wrong...
Only if those of us over 65 quit using government services. So good luck with that
Between my Medicare Irma charge and 22% SS they take 1000 a month. What a scam
It seems very key to understand whether or not the taxes we pay on SS benefits are actually placed into the Trust Fund. If Trump gets SS tax eliminated, the SS fund will deplete even sooner than 2033
Good point. I assumed they went back in. They should.
I'm all for eliminating SS Tax, yet, like COLA, if SS tax goes away, they'll just raise rates elsewhere. As a DoD retiree, we looked forward to the new year COLA increase, and so did our health insurance costs. The government will ALWAYS find a way to get their cut.
At first glance, it would appear that the tax money that the government receives from SS benefits does not go into the Social Security trust fund, but actually it does. Here's how it works: The income tax money that you pay on your social security benefits goes to the general federal fund, as you would expect. Then, congress is advised (by the IRS I think) how much of the income tax receipts resulted from tax on SS benefits. Then, every year, congress votes and the President approves, that that amount is transferred from the general fund to the SS trust fund.
Is that your opinion? Or can you actually reference the sources that verify what you say?
@@davidk.3133 It is not my opinion. I'm sure if you search the web a bit you will find it to be substantiated.
@@davidk.3133 Not my opinion. I'm sure if you search the web a bit you will find information that substantiates my statement.
Sad that people didn’t plan for retirement.
Need to reduce the budget from the Dept of Defense and fund Social Security, problem solved.
FUN FACT: For the first time ever, the US annual interest on it’s national debt is actually larger than the annual US defense budget. STOP PRINTING MONEY.
Math doesn’t compute. SS pays out $108 billion a month.
@@Satjr35031 granted. Reducing the budget of the Dept of Def alone would not resolve the current situation, but it would be a good start. Then need to cut other wasteful gov't spending to contribute to SS. Putting Elon and Vivek in charge of Gov't Efficiency should be a big help for the US taxpaying citizens.
I’ll believe it when I see it🤞🏻
Sure, no tax on SS but the following year stop ss completely, then medicare, then VA disability benefits, military retirement benefits. Sure just beautiful.
I am single. My Social Security is 36K. I take 30K from retirement funds. 46% of my SS is subject to taxation. The tax rate is 6%. If it wasn't taxed it would mean ~ $998.00 p/yr more ($83.00 p/mo)
So you’re paying an effective tax rate of roughly 1.5%
There won't be a tax because there won't be any Social Security.
They shouldn't eliminate the tax, but rather go back to 1984 and index the thresholds for inflation. That way the tax will not be hitting the middle class like it is now. Also, if they want to raise the cap to help offset the cost, that's fine too, IMO.
Why did we ever pay taxes on money that was ours to begin with. So criminal they need to pay everybody back who pay taxes on Social Security😢
Nope. When you were working those employment TAXES, not a pension contribution, went to pay for then retirees’ benefits. It ceased to be your money at that point. What you got was a promise to a future benefit which will come from then workers taxes. It never went into an account with your name on name on it.
The richest retirees don't need tax cuts. PERIOD
What is “rich”?
thie "richest" don't "need" social security....and define Rich, given the VAST cost of living cost differences across the Country.
@@DeanJohnson67 The "Rich" would be in the top 40% of highest income earners receiving social security, isn't that right? Wouldn't Warren Buffet be receiving Social Security? Do you think Warren Buffet needs a tax cut on his Social Security?
It’s not up to you to decide what an individual needs, comrade.
@@seanm3226 Rich people paying their fair share of taxes isn't "communism". Why am I paying 24% tax rates, while Bezos or Trump are getting welfare?
Is this before of after they reduce SS like has been publicly talked about last week? Medicare too.
I took SS at 62. I'm 68 now and my bringhome is 1959. By age 70 I'll be bringing home 2058 (est. per COLA) per month. It's about the same as if I waited until age 70.
Noooooo…delayed benefits receive COLA’s too. By claiming at 62, you got about 70% of your PIA. Delaying to 70 would have gotten you roughly 125% of your PIA adjusted for COLA’s. I am waiting until 70 and watch both my PIA and expected age 70 benefit increase by the annual COLA.
Some people just don’t understand how SS works.
No cap and Look at the ssd payments. Too many people are collecting at young ages. Also no 85%. Max 50%
Social Security wasn't taxed until Reagan. The President who keeps on giving . Rather than lifting the cap, rather than resisting the temptation to raid the trust fund, the neoliberal state chose to penalize the elderly to further enrich the rich.
SS tax at 85% wasn't taxed until Clinton.... and biden helped to get it into law....The Presidents who keeps on giving... its the dem moto.... spend spend spend other peoples money...
Well it's income that hasn't been taxed yet as it is taken as a deduction before taxes are paid. It should be taxed. But seniors should be supported by other means. Like... Oh... Healthcare!
I believe Joe Biden was the one who cast the deciding vote in the Senate to tax Social Security. I got married in 1973 and was a teacher. My hardest years financially were during the Ford/Carter years, Bill Clinton, and Barack Obama. They severely raised taxes. Clinton said he was going to help the middle class. I have two sons that were ready to go to college. The week after Clinton took office, the House and Senate passed the largest tax hike in history. The only saving grace is that we had saved a great deal of money for our older son but he had to go to a state school because we could not afford a private one. His younger brother attended the university that my wife and I were working and he got half tuition. Bill Clinton lied. I was a dyed in the wool Democrat and I switched parties because of economics.
@thomascook4318 the voting was bipartisan and overwhelming in favour. It's not like one person was the deciding factor. Give it up
@@laundrygoddess4 Reagan could've vetoed it!
Good news: No tax on Social Security.
Bad news: No Social Security
Yes let's eliminate the tax and give everyone a 10% benefit cut. The would be about revenue neutral. Doesn't sound so good does it! Low income retirees would especially hard hit.
A good general non-partisan presentation. I'd prefer to see it with the macro numbers. My gut feeling is that the SSTF can't afford larger drains and that Congress needs to add funding sources; not decrease the rate of outflow.
Doesn't that tax money go back into the trust fund? Everything Trump will do will make the trust fund run out sooner.
So what is going to nake up for the funding shortfall? If they eliminated the tax cap while also indexing the Social Security tax limit to inflation would make more sense - so taxation of Social Security would only occur if your annual income was over about $150k, that's when your benefits would be taxed. That makes sense to me rather than just eliminating it.
What would make up for the shortfall? How about no longer sending hundreds of billions of dollars to Ukraine, the most corrupt country in the world, to fund a war they can’t possibly win? How about that?
They aren’t cutting FICA, they would cut income tax. Two different things.
@@silentnot4812 the tax on social security benefits goes back into the social security fund.
No tax on benefits and get rid of the earnings cap!
Amen!
that's coming....too many young people are untrainable or unwilling to work so the are gonna need to get Boomers to pick up the slack. That, and Boomers have done a terrible job of saving.
The earnings cap is a good idea. Now if you want to raise it to a more reasonable figure, I think most people would sign off on that.
The cap will never be removed. Why? Look at professional athletes. Your contract says you get 10 million a year. As a self employed person you would owe 1.5 million in social security taxes. Given most professional athletes don’t work 35 years their payback would be pitiful. But a giant thanks from the government .
@Dinosaur123-i8j they would pay 6.2% 620k....There are around 30 pro athletes in America (according to Google) that earn 1 million or more a year.
The IRS has computers so they can work out which money goes where. If the amounts were indexed for inflation, there would be more money from this. But I am not a complainer. I use strategies to make it better for me.
No matter how you slice it, any change is going to make things worse than what we have today.
If they cut taxes on social security benefits they will take the money from somewhere else.
One option is taxing all income even if it means your benefits don't increase. Hence making this another penalty for those who have a high working income. The problem is that most people don't make more than the current taxable limit. Those who do don't make much more than the limit to make a difference. Those with the most money make their money on investments, so they were never paying much or depending on social security.
Another option is to lower the benefits for everyone. So instead of paying taxes, you just get less benefits. This will suck for everyone, but will mostly impact those who were already paying little to nothing in taxes on their benefits. Can you imagine going from paying 10% of your benefits in taxes to receiving 70-80% of your benefits, but TAX FREE? That's like paying 20-30% in taxes, but most people will hear tax free and miss what really happened.
Another option is to simply increase the social security tax rate, but don't increase the benefits, or make it marginal. Making taxes marginal (tax the rich) is how they get the majority to buy into something, then once it's in place it gradually expands to affect everyone.😅
Another option is to further delay full retirement age. Afterall, they can avoid paying out a lot of money if you don't live long enough to receive it.
I hope so!!!! If any change I will be happy with taxing 50%? Not 85%😡
Raise the cap and a very minimum raise the qualifying income that would require taxes to over $150,000 per year. That way Mitt Romney would have to pay taxes on his Social Security, but not me, who pays more of their income to taxes than Mitt Romney.
Isn't SS currently taxed in about a dozen states, the rest aren't taxed?
Down to 9 States next year.
Tax ALL earned income and scrap the tax on benefits. ✅
If we raised the payroll income tax cap on the rich from
$160,000 to a million dollars we could RAISE the SS benefits for everyone and it would never go broke.
My understanding of this is that the money that is taxed goes back into the Social Security trust fund. So not taxing it actually makes it run out faster. So actually not a benefit?
Social Security trust fund return rate was only 2.387% for 2023. Of course it can't keep up with inflation etc. Maybe change something in this area? Maybe rebalance it 50% bonds and 50% stocks? I think its very possible to have 6% return rate. But our government restricts it. Why?
Then what do you do about sequence of return risk that the trust fund would be exposed to? There is a reason why the trust fund is invested in safe government bonds. It took 5 1/2 years to recover from the 2008 crash.
@james1527 6% risk?!
Social security is essentially a pay as you go system which is no longer in surplus. There is no money to invest
@@byronbuck1762 There is currently over 2 trillion in the SS trust fund invested in government bonds.
@byronbuck1762 it's not true. Social Security Trust Fund is invested into US bonds. It will run out of money as investment by 2034 or so.
They need to cut the waste in government as a whole with the DOGE plan gradually cutting government each year the department of defense hasn't done an audit in 8years due to corruption and inefficiency
This is a good start. Next step is to not tax our 401k / 403b / retirement IRAs distributions. Everything shoumd be treated as a roth IRA.
Or, no income tax for seniors 65 and older.
Yes but eventually the govt will want to tax Roths as well....😢
It us by itself, a terrible idea to cut the taxes. The reason is that doing so will make the social security trust fund run out of 3 years sooner and this means that everyone would take a cut, To fix it, they will need to do a combination of pushing back the full retirement age, raising the contribution limit, and adding maybe .25% to the individual and corporate contributions.
That would be awesome but it will NEVER happen
Keep dreaming guys.
The GOP continue to tax on the poor for everything and little tax on the multi millionaires and billionaires.
I’m not holding my breath and don’t see how we can pay for the loss of tax revenue (even tho I think taxing SS is wrong). I’d be glad with them indexing the brackets to determine provisional income with inflation (retro to 1983 when this started).
The government is taxing the most vulnerable who are on fixed incomes.
I stopped believing in fairytails, when I was 10 years old. And, stopped believing millionaire narcissist politicians, when I was 18 years old.
I don’t rely on SSA totally. I do know that my investment into SSI was involuntary, the dollars were not invested to my benefit, and that the taxable benefits have not been adjusted for COLA. Another democrat bad idea. The funds collected go into the general fund, and get wasted. I AM political, and find this despicable.
You never invested in SSI You invested in SS big difference
@ I didn’t say SSI, I said SSA. READ IT.
When this precipitates a crisis in the solvency of SS, will benefits be cut for all recipients or just new ones going forward. In other words, Should you start collecting before this Trump engineered crisis begins or won’t it matter? 3:52
Some of you complaining that this SS tax cut only benefits the wealthy is lame at best. Every year I have to pull out around 2-3 thousand to pay my taxes. Hopefully this and the standard deduction staying will definitely account towards this crazy inflation we incurred over these four years.
Those retirees with no other sources of income pay no tax on their SS. Even some with “small” amounts of other income pay no tax either. I have a couple siblings in that category. My MIL does pay a little tax on SS because she has a combo of a modest pension, IRA withdrawals, and interest income. She can easily afford the tax on SS (less than 1k per year) and it doesn’t impact her ability to pay for daily living expenses. Clearly, those with higher amounts of other income pay tax on SS. I did not call all of them wealthy…you did. No doubt the truly wealthy can afford the tax. The others (like you?) that aren’t wealthy are still fortunate enough to be able “to pull out 2-3 thousand” to pay their taxes.
These four years have increased my accounts significantly.
Azul, we all know any tax we pay on SS is separated by the UST upon receipt and assigned to "preserve" the fund. 😅 Even if SS remains taxable (which I don't think it will), Congress should at least index and provide for annual inflation adjustments to the Base thresholds to reflect the 1985 "intent." Assuming straight CPI indexing, this would result in Base thresholds of $71,403 and $91,396 for single and married filers respectively, This would eliminate or significantly reduce income tax on SS benefits for the vast majority. Hopefully, it will simply be returned to the pre-1985 rate of 0%.
I think that we should pay tax- but it should start at a much higher income. If you look at the inflation that number would be 130k for 80% and 95k for 50%. It should follow cola from then on.
Someone's got to pay the bills. Right now we borrow the money .
36 trillion dollars in debt and going higher.
We borrow and send overseas. We borrow and waste. We borrow to defend other countries who should be paying for their own defense and the list goes on and on. How about stopping all that and pay the bill?
If I retire at 62 and take Social Security but my wife continues to work and she makes about 150 K per year are they going to tax my Social Security. Or is my Social Security separate from her money?
If you file a joint return then yes your SS will be taxed With her income 85% of your SS Will be subject to tax.
I really enjoy your channel. It will be a while before the full details of Trump's proposal for eliminating tax on Social Security are known and whether or not it will pass. If it does pass, will that have any impact on Roth Conversion Strategy? WIll it help keep RMD's for some from bumping them up to higher tax brackets. This might be a good idea for a topic if the law is passed by congress. Have a Merry Christmas and thanks for your informative videos.
They will lower the benefit by the amount of tax that’s all
Migrants getting far more in benefits than do retirees shows that government has a spending problem rather than a taxing problem.
One illegal immigrant can have a anchor baby and that birthing cost alone to taxpayers in my area is $40,000 .Medicaid pays the hospital taxpayers pay taxes to Medicaid. 😢
That is bogus. Illegal immigrants are a huge net positive to social security as they pay billions in employment taxes and get NOTHING in benefits.
Are you opining based on first hand experience or repeating what you’ve heard in media?
@@youngtimer964 you still believing the media these days?
@ rarely watch or listen. I’ll ask another way - how many “migrants” do you know personally that are getting far more in benefits than retirees on SS?
I am being the 80 percent. I would love to pay no tax. However, I doubt this will happen. From my limited understanding it will bankrupt the system.
As long as a cut cost in many many other areas... It seems like a possibility with the two nominations to look into things.. Is one hundred thousand dollar toilets (like they joke about) et cetera..
Half of what they grifted to Ukraine would be enough to shore up Social Security for a long time
@@coastalhillbilly3419 Did that got from the same pot?
@there is only about 1.7 trillion in discretionary spending where cuts could come from. Period. Basic math. The rest is mandatory spending. That’s social security, Medicare, interest on the debt, etc. We have about 2 trillion over every year adding to the deficit. So even if you cut every single govt agencies discretionary budget (not gonna happen because the economy would tank in a very bad way) we still don’t have enough to cover the overspending. So nooooooo cutting spending will not help cover the tax decrease because it won’t even cover the current deficit spending. Newsflash we need more revenue coming in. There is a name for that by the way but nobody wants to say it. Cutting taxes will not help. At all. Cutting spending is only marginally effective and needs revenues for it to work. Marginally in that without tax increases even with deep deep cuts the deficit will continue to grow. BASIC MATH. There will be tax increases in the future no other way to fix the problem under our current structure.
@@kingston24-x2h no, it didn’t, but some people either don’t understand or don’t care 🤷♀️
A fine video, but a little bit unclear on the annual revenue side. The limits for individual are indeed $25K - $34K 50% of SSI taxable; and above $34K 85% of SSI taxable. For a couple, the numbers are $32-$44K 50% of SSI taxable; and above $44K 85% of SSI taxable. But these are for ALL SOURCES OF INCOME, not just SSI. You have a part-time job? That money is included to calculate your payment on SSI. Dividends, interest, an inherited IRA? All that money is included. So for example, if a husband and wife receive average SSI of about $36,00/year, a part time job that pays $667/month from either spouse will make 85% of the couple's SSI taxable. This is a whopping tax for about 50% of retirees, and it falls mainly on the people who have saved well and planned for retirement. Is that fair?
Is it fair? Well, that was one of the reasons that it was started in the first place. People had annuities and pensions that were taxable but Social Security was not. By introducing the taxation of Social Security slowly over a large number of years they were trying to make it fair. And the idea of having people who make more money pay more in taxes is the way our progressive tax system has always worked.
It’s SS not SSI. Two different programs.
@@johnscott2746 Not alway been that way. Reagan put SS taxation in with a time-delayed fuse of not indexing the income thresholds to inflation. Then there's the double taxation phenomenon known as the “tax torpedo” that impacts more and more people each year that passes. It occurs when your provisional income bumps you into a bracket where a higher amount of your Social Security benefit is taxable.
This means that every additional dollar of income has a double impact-taxation of the additional dollar and taxation of another portion of your Social Security benefit. However, once you surpass the threshold, this double impact stops. Not always been that way. Regan's 80s unindexed taxation combined with inflation it becomes more and more unfair every year.
The $32-44k was established like 40 years ago. It needs to be adjusted for inflation and it would be like $100k before you are taxed. The index everything else to inflation like exemptions and deductions why not this?
In the past, perhaps. But how many people today have "annuities and pensions"? That is an historical period that is long gone. There is no such comparison today. As to your second argument, "progressive taxation," that was achieved when the money was first made, so it is being double taxed now. Would you praise this as "progressive progressivism"? I do not want my social security income taxed, I consider it paying a tax on money that has already been taxed, and yes, it is unfair. Not only because of double taxation, but because it penalizes people for planning and saving, which is something the tax system should not do.
Perhaps the tax will be eliminated, but will benefits be cut in the near future. It has to be paid for somehow. Of course, the next president will be blamed for that. Politics as usual.
This is about the first expert explanation I have seen explaining how the raising of the "full retirement age" is really a cut in Social Security benefits for everyone born later and not just an increased penalty for "taking Social Security early" .
So basically if your benefits are over $25,000, even if that's the only income you have, will be taxed. Those percentage numbers that you give don't state how many people actually make more than $25,000 from SS alone. Google says that number is only 6% of SS recipients. Just saying.....
Azul... don't be so worried about politics... You're from Utah we know how you swing ;) I'm sure most of us are cool with it. Politics is very involved in financial issues; that's life. If you lose some viewers because they are sensitive libs who cares?
I have heard about a "two year delay" as to the time after filing a tax return and the beginning of an IRMAA penalty assessment due to that tax return's income but it appears to me that the tax return I file by April 15 begins to affect my IRMAA for the immediately following January,not the January a year later as some commentators have been implying
What happens is they look at your income for the year that is two years prior to the current one. The limits for income that trigger the IRMAA penalties also are specific to the year so it would be lower for the two year previous income. For 2025, they look at your 2023 income and apply 2023 income limits. Hope this helps
@@johnscott2746 That's his point it is really only one year because it is the return filed in 2024 for 2023 affecting Medicare starting January 1 2025.
The way I see it is that the income you make in 2023 affects your Medicare premiums for 2025, so that is a two year gap. It doesn’t really matter when you file the return.
@@johnscott2746 I get that, but the income is as of 12/31//2023, and the IRMAA date is 1/1/2025 with Medicare providing the notice likely in early December 2024 - so it really feels like a one year look back.
If you believe Trump will follow thru on this I’ve got a bridge I’ll sell ya cheap. 🤦🏻♂️
Only if it’s in Brooklyn
You have to make over 25,000 on SS before its taxed I'm not even close
That’s not exactly how it works
"Elder tax !
Also "IRMAA" is a sort of Elder tax (not charged until you are at or over age 65 in most cases) A surcharge added to your Medicare charges.
If I understand correctly your taxed Social Security Retirement benefit is added to the calculation as to whether you are assessed the IRMAA tax/Penalty and if so your liability to have to pay a higher tier of IRMAA which can penalize you more than $1000. per year for having one single dollar too much income in one tax year ! Also your IRA distributions including RMDs and IRA money moved and taxed as Roth IRA conversions also count toward your IRMAA liability.
Older folks are squeezed between Social Security taxation, Required Minimum Distributions and IRMAA. IRMAA limits this year are around $204K and I'll probably have to withdraw so that income is around that level or else I'll have huge RMDs at 72.
@@movdqa I don't know the calculation as to this but I think it might work in some people's case to pay a high IRMAA during one or two years in order to pay lower or no IRMAA during later years (making large Roth conversions)
also what is called the "widow's tax" or "widower's tax" might be significant (married person loses the ability to file jointly and thus has to pay the higher "single" tax rates including IRMAA)
@@davidpowell3347 I'll take a look at it. I really should find some modeling software. We're going to pay a ton of taxes one way or another. At least we have time to plan for it.
RMD is at age 73 not 72 pay attention
Taking away an income stream for the program to remain solvent?
If theres no social security then it can't be taxed. Thats how i interpret what he said.
Azul, you are smarter than to take at face value the taxed SS benefits goes back into the SS fund. NO WAY.
Seems silly to give us a payout and then text us on it. They should just give us less in the first place. I guess it’s really just a trick to give the 50 or 60% who won’t owe the tax, an extra boost.
Just a FYI you can have a 65 year old couple next year receive $60,000 in SS and another $20,000 from a IRA 401K etc and pay $0 Federal tax.
Here is my quandary. I paid in for 42 years, 37 of those years at the absolute maximum rate. I only get the max no matter how many more years I would have paid in. I was so mad after I retired that it took several months for the final payout of unused vacation, 400 hours worth and was hit another several thousand in SS tax I will never see. On top of all that, I get the lowest percentage of what I put in. Then for just another kick in the gonads, because I was paid well thru out my career, my pension puts me in a pretty high tax bracket currently making me pay 27% tax on 85% of that already lower rate. Although I was pretty highly paid, I lived and worked near San Francisco and that income was just getting by out there with a family of 3 children and a stay at home Mom.
Put in more than anybody and will get the lowest percentage out.
Finally, a small break if this tax free comes into play.
This is not about not having enough, but about an injustice that just because I have more, you can take some and give me less and there is not a damn thing I can do about it. And you wonder why people voted Trump instead of Socialist.
My heart bleeds for the poor guy who is making so much money in retirement that his tax rate is at 27%. 🤨
Same situation, but since the cap the max income subject to SS tax it seems only fair to cap max payments.
News flash! This has been the way Social Security worked from day 1. It always was a progressive system designed to provide minimal support for the poorest Americans and progressively less benefits to high wage earners. You have a good problem. Quit whining
The government is great at setting tax thresholds that don’t change with inflation.
Yes they do
There will still be a state tax on Social Security which varies from state to state.
Only nine States
There is a way to have no tax on Social Security. Get rid of Social Security.
There is no tax on SS if that’s your only income regardless of how much you receive.
All that extra pocket money will end up going to Costco 😂
Maybe if we stop sending billions of dollars to foreign countries AND we start exporting American Energy supplies to foreign governments, we can pay down our debt and keep social security benefits?
We’re not ‘sending’ but lending or investing in national security and our weapon industry, and we do export oil and gas. In fact, the most ever in 2023. By ‘we’ I mean the US, maybe you were talking about another country?
We export over 10 million barrels of oil a day.
@@tz1592 the facts on this are easily available, it looks like you’re a bot, or trolling.
@@pascalbruyere7108 No, I'm not. I'm frustrated with our government spending more money than they take in. I want secure borders, smaller government and my retirement secure in 10 years. I feel like our economy is on a house of cards. I don't want the dollar to be worthless in 10 years.
@@tz1592 borders secured and secured retirement might mean more government, not less. Maybe more taxes better spent. Probably securing retirement might mean more immigration.
It’s complicated.
My understanding is that this would accelerate depletion of the trust much more rapidly. I would love it if this would work….but this is concerning. I think they will need to eliminate the cap for this to work. I’m 61….so I am ok with all this. LOLOL 😂
Not as good as it looks. If individuals or couples rely on only Social Security, they already don't pay taxes. In other words, Social Security is only taxed for those who live off MORE income sources. No benefit for those who really need more help income wise.
Hello , What about state tax?
What about it? Only nine States tax it next year.
Thanks!
That would be good but then aren't they also talking about cutting Social Security?
TRUMP ...... The New Golden Age of America Incoming!!
so in 10 years they will cut the social security to 70% in actual or in inflation and so that amount would be tax free. I hope they solve the actual problem with social security! When will they make ss solvent!
When the rich pay their fair share it will become solvent forever. Their fair share pay ss on all their wages with no cap stop.
@@DWS1435 shouldn't the cap at the least keep up with inflation?
SS is about 20% of the economy. A 70% cut in SS payouts would hit the economy hard and perhaps cause a recession or depression.
@@n2201 It does go up by a small amount each year. But if you had no cap then everyone would pay tax on all their wages including the wealthy it would save social security forever., Real simple fix.
Trump has promised a lot of things, let’s see what he actually does. Musk will have to approve 😂
We Need More SS For The Illegals Benefits....!!!! Right..??
Illegals pay billions into Social Security and get no benefits
They have to meet the same requirements as you do.
The best retirement income is from free social security videos, just like the flying car videos & the AI mouse trap videos.
1st no tax on SSA; then no SSA...
They tax on the gross and not the 85%. Also, they are taxing already taxed income.
That’s not exactly how it works
Nope. When you were working you paid employment taxes which supported then retirees benefits. When you retire you get a benefit supported by then current worker taxes. Your money didn’t go into an account with your name on it. You aren’t being taxed twice on your money