Tax Experts
Tax Rules on Social Security Benefits and Retirement Income
By Kevin McCormally, Editorial Director, Kiplinger.com
March 2008
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Q: If I start taking Social Security benefits after I reach my normal retirement age 65, will any of my Social Security dollars be taxable if I receive pension benefits and withdraw money from my 401(k)?
-- Kathy S.
Kevin's Answer:
That all depends on how much income you have.
If your "provisional income" (which is your adjusted gross income -- including 401(k) withdrawals and half of your Social Security benefits, plus any tax-exempt interest from mutual bonds) exceeds $25,000 ($32,000 on a joint return), then up to half of your Social Security benefits can be taxable.
If your provisional income exceeds $34,000 ($44,000 on a joint return) up to 85% of your benefits are taxable.
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Reader Comments (2)
Posted by: John G. at 01/05/2010 07:55:19 PM
deducted $14,000 thru the years in IRA, $2,000 of that was disallowed because I started pension plan at work, another $2,000 for some other reason. IRA is worth $40,000 now. What % of each withdrawal is taxable?
Posted by: Jake at 08/11/2010 05:16:10 PM
If I retire at age 62 with a pension, social security, and a monthly Immediate Annuity check, what will my taxes be if the total amount is $81K and I live in Connecticut? Also, is there a way to selter retirement income?