September 8, 2009 • June Walbert
Q: Having just turned 65, I have put off drawing Social Security in order to raise my monthly amount. How does Social Security affect my retirement check?
-John, Covington, Tenn.
A: Making all the right decisions when it comes to retirement income can be a challenge to say the least. Putting off taking Social Security to drive up the monthly benefit is generally a really good idea. So, smart move! Applying for Social Security, tapping various investment accounts, and minimizing taxes are all part of the art of creating an efficient, effective, and lasting income stream. Now that you’ve turned-on Social Security you need to be aware that your benefits could be taxed. If you file taxes jointly with your wife, and if half of your Social Security plus your other income (military retirement, retirement plan/IRA distributions, interest, dividends, etc.) exceeds $32,000, a portion of your Social Security will be included as income when you file your taxes. If you do the calculation and exceed $44,000, 85% of your Social Security will be included as income. That’s the bad news! The good news is that receipt of your Social Security should not impact your military retirement.
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June Walbert is a CERTIFIED FINANCIAL PLANNER TM practitioner with USAA Financial Planning Services, one of the USAA family of companies.
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