Retirement is an exciting time. You’ve worked all your life to enjoy the last few decades collecting your Lockheed Marin pension and your Social Security. You may have also been looking forward to a change in your tax bracket. If you can relate to this situation, then this is the blog for you. Today, we will be discussing Social Security retirement benefits and income taxes.
In general, many people assume that when they retire, they will drop down to a lower income tax bracket as they collect their pension and Social Security. Many believe their Social Security benefits won’t be taxable. In some cases, they might be correct, but in most cases, that is unfortunately not true. Some of you will have to pay federal income taxes on your Social Security benefits. This happens when you have other substantial income in addition to your benefits (such as wages, pension, self-employment, interest, dividends, and any other taxable income that must be reported on your tax return).
The good news is that only 85% of your Social Security benefits will be taxed. The 2021 Internal Revenue Service (IRS) rules state that if you file a return as:
- An “individual” with a combined income
- between $25,000 and $34,000, you may have to pay income tax on up to 50 % of your benefits.
- more than $34,000, up to 85 % of your benefits may be taxable.
- A “joint” couple with a combined income
- between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits.
- more than $44,000, up to 85% of your benefits may be taxable.
- A “separate” couple, then you probably will pay taxes on your benefits.
The bad news is that you might remain in your same tax bracket. Having an expert financial planner to help you navigate these waters is something we would highly recommend. We have Lockheed Martin specialists standing by and ready to assist. If you’d like to learn more, give us a call today at 817-210-3444 or click HERE to book a complimentary consultation.
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Be sure and check back next week for more incredibly valuable information. Cheers!
Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.
This blog is being provided and sponsored by Strittmatter Wealth Management Group, LLC. Lockheed Martin and its subsidiaries do not endorse, recommend, or make representations with respect to any information, advice, services, or products discussed in this blog.
Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.
Our Complementary consultation and free report are for informational purposes only and provided free without any obligation to utilize or retain our investment advisory services.
SMWG, LLC is not affiliated with or endorsed by Lockheed Martin Corporation. Our expertise comes from working with LMT employees for several years and helping them to retire with confidence.
Investing involves the risk of loss, including loss of principal. Past performance does not guarantee future results. Investment products are not FDIC insured, have no bank guarantee, and may gain or lose value. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable for a client’s investment portfolio.