Numerous retirees intend to enhance their retirement benefits with supplemental employment, so how much may a retired individual earn taxes-free?
The response to this question varies greatly depending on the specifics of your case. You can use the free financial adviser matching tool on SmartAsset if you need help sorting through the specifics of your situation.
Maximum Retirement Benefits
Social Security payments plus a paycheck from a job are at least two sources of income for retirees who are still employed.
If 50% of your benefits plus all your other income exceeds the precise thresholds for your filing status, your Social Security benefits may be subject to taxation. The following sums are included:
- Based on the calculations above, single filers, qualified widowers, and heads of households making more than $25,000 may be required to pay taxes on their Social Security income.
- Based on the math above, married couples filing separately who make more than $25,000 and have been apart for a full year may be required to pay taxes on their Social Security payments.
- Based on the calculations above, a married couple filing jointly who earns more than $32,000 might be required to pay taxes on their Social Security income.
As a result, depending on your other income, the benefits you receive may or may not be taxable. Let’s take the scenario where you are a single filer and got Social Security benefits totaling $20,000. In addition, you had a part-time job where you made $20,000.
When the numbers are added together, your other income and 50% of your benefits equal $30,000. That would mean that you would have to pay federal taxes on a portion of your Social Security income.
Social Security
As this is going on, Social Security is frequently changed through both procedural and statutory procedures. For instance, the cost-of-living adjustment and the different program-related restrictions normally alter automatically each year.
Beyond these pre-existing alterations, however, political and statutory changes can affect the program’s more fundamental components.
Annual adjustments for 2023 were significantly bigger than usual, partly because of the significant increase in inflation in 2022.
Although none of the Biden Administration’s legislative plans to change specific aspects of Social Security have been passed as of March 25, some of them appear to be closer to becoming law.
Read more: How to get more Social Security benefits without working longer?
