According to Maurie Backman at The Motley Fool, thanks to an outdated set of guidelines few know about, Social Security has been robbing seniors of significant income for decades. Because some seniors recognize they won’t be able to live solely on their Social Security benefits, they save for retirement and often develop other income streams.
That’s when a rule involving “provisional income” kicks in, so they wind up paying taxes on their benefits, which is money they already paid taxes on in the past. The provisional income guidelines permit seniors to earn additional income, but once a certain threshold is reached, up to 50 percent or even 85 percent of their benefits can be taxed.
The government views non-Social Security income as provisional income. If provisional income exceeds $25,000 for a single recipient or $32,000 for married couples, up to 50% of benefits are taxable. The tax bite then ramps up to 85 percent if provisional income exceeds $34,000 and $44,000, respectively.
Even though the cost of living has risen significantly, the income thresholds for Social Security taxes remain unchanged. Clearly, the rules need updating to match today’s reality.
Council of Seniors Wants More Benefits For Retirees
More income shouldn’t be provisional income. That’s why Council of Seniors is working tirelessly to get Congress to pass The SAVE Benefits Act. The Social Security annual cost of living adjustment (COLA) has been inadequate or nonexistent for years. By helping us get this legislation approved, seniors will be reimbursed $581 to make up for the missing COLAs. Keep in mind that this money is rightfully owed to seniors. They earned it.
Act right now to sign our petition. Greedy politicians need a wake-up call to take action.