If you love to save and you’re planning a good retirement, have you looked at what the impact of Social Security is?
“How does Social Security get impacted by my retirement plan?”
Understanding the Impact of Social Security
If you’re like most people, you’re saving money in a 401K or an IRA, anticipating that time in retirement that you’ll have an income that will give you a wonderful retirement life and you’re looking forward to your Social Security. Many people don’t realize how Social Security gets impacted by retirement.
Social Security has a level that you can receive of income and if you exceed that — and exceeding that happens any time that you take retirement monies out — then they actually begin to tax your Social Security because of any other income that you have. And not knowing that, many people put far too much money into their 401Ks or their IRAs.
Higher Tax Brackets
They find out after age seventy these required minimum distributions force them to take that money, even though, in many cases, they don’t need it. It just pushes them into higher and higher tax brackets and causes your Social Security to be taxed again and again and again.
If you love to save and plan for a great retirement, social security can impact your retirement plan in more ways than one and throw a wrinkle into anyone’s master plan. But there is good news, you can opt for alternative retirement plans that have no impact on what your Social Security is.
Finding the answers