Social Security benefits provide some tax benefits that most of us don’t think of. For example, a maximized Social Security check can help to reduce the amount of income tax you pay each year on other income. Social security expert Brian Doherty explains how it works in this report.
Doherty says that having a relatively high percentage of your annual income consist of Social Security benefits has some real benefits. Doherty explains it with an example of someone who needs $60,000 per year to cover living expenses. Looking ahead, the person might start claiming benefits at age 62, or at age 66 (which is considered to be full retirement age) or at age 70.
”At each later age, you increase the amount you get from Social Security,” Doherty points out. Income remains at $60,000 because any shortfall has been made up by money from an IRA or other retirement account. The higher the percentage of income that is Social Security, the lower the percentage of income that is taxable. In this particular example, the person would have no tax at age 70. Doherty notes that this is just one example, but the principle is the same for any set of numbers.
The point, Doherty says, is that the contribution to total income from Social Security will reduce income tax liability. Doherty’s book has a chart that illustrates how this works. And, of course, getting a high percentage of your income from Social Security will permit your savings to last longer.
Brian Doherty is the author of a new book “Getting Paid To Wait,” which reveals his groundbreaking strategy on how to maximize Social Security benefits. He is a nationally-recognized expert on Social Security claiming strategies and a top-rated speaker and media commentator on this topic. He began his career as a financial advisor with Dean Witter. He is President of Filtech, a consulting company specializing in Social Security claiming strategies. The Legal Broadcast Network is a featured network of the Sequence Media Group.