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Taxation Of Social Security Benefits Is A Time Bomb

Thursday, July 25, 2013 - 7:26 AM
From AssetBuilder:
Q.:  Would you please explain what happens when one reaches the age of 70 1/2? I participated in 401(k) investments when I was employed, but no one prepared me for what would happen when I reached 70 1/2. I was led to believe that I would be in a different income tax bracket when I retired, so I would pay less in taxes. They never mentioned that Social Security benefits might be affected. We are paying taxes on 85 percent of our Social Security benefits. Knowing what I know now, I'm not so sure that I would have taken the same route. After the Required Minimum Distribution is added, we are in another tax bracket. ?

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The situation is similar to that with the alternative minimum tax:  every year that this part of the tax code is not indexed to inflation, more and more individuals are impacted by it. 
pearlbrownpearlbrown1,491 posts since
Nov 2, 2010
Rep Points: 6,490