Social Security benefits are a critical part of most Americans' retirements, so it's rather important to aim to get as much as you can from the program. I've written before about various ways that you can increase your Social Security benefits, but there are also ways that you can lose them -- or just not get as much as you could.
Here's a look at three key ways you could lose your Social Security benefits. See if any might apply to you, and keep them in mind as you plan for your retirement.
No. 1: Taxes
You might think that working while collecting Social Security benefits will offer you the best of both worlds -- a little extra money from a part-time job in the early years of your retirement plus some benefits that you earned through decades of work in the past. Think again, though. You certainly could do that, but if your income passes a certain level while you're receiving Social Security benefits, those benefits may be taxed.
You'll never be taxed on more than 85% of your Social Security benefits, but you could be taxed on up to 50% or 85% of them. If Social Security benefits make up all or the vast majority of your income, you likely won't be taxed on them at all.
To determine whether you'll have to pay taxes on Social Security benefits, you need to calculate your "combined" income, which is your Adjusted Gross Income ("AGI") plus non-taxable interest plus half of your Social Security benefits. The table below shows the taxation you can expect:
Here's a look at three key ways you could lose your Social Security benefits. See if any might apply to you, and keep them in mind as you plan for your retirement.
No. 1: Taxes
You might think that working while collecting Social Security benefits will offer you the best of both worlds -- a little extra money from a part-time job in the early years of your retirement plus some benefits that you earned through decades of work in the past. Think again, though. You certainly could do that, but if your income passes a certain level while you're receiving Social Security benefits, those benefits may be taxed.
You'll never be taxed on more than 85% of your Social Security benefits, but you could be taxed on up to 50% or 85% of them. If Social Security benefits make up all or the vast majority of your income, you likely won't be taxed on them at all.
To determine whether you'll have to pay taxes on Social Security benefits, you need to calculate your "combined" income, which is your Adjusted Gross Income ("AGI") plus non-taxable interest plus half of your Social Security benefits. The table below shows the taxation you can expect:
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