A retired couple receives $44,000 a year in Social Security and assumes $60,000 in annual withdrawals from a $1.1 million traditional 401(k). Because provisional income includes half the benefit plus those withdrawals, 85% of the benefit, or $37,400, becomes taxable. The joint-filer thresholds of $32,000 and $44,000, set in 1983 and 1993, have never been adjusted for inflation. Each $1,000 withdrawn in this range adds $850 of taxable Social Security, producing an effective rate of about 22% even in the 12% bracket. Municipal bond interest still counts toward provisional income, but moving balances to a Roth account before claiming benefits, since Roth withdrawals don't count, can cut the taxable benefit from $37,400 to $6,000.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on aol.com ↗
Related news
- U . S . Household Income Hits a Record $87 , 460 but This Couple Could Lose $3 , 000 a Month Even With Two Social Security Checks
The Census Bureau reports that U.S. median household income reached a record $87,460 in 2025, up 2.6% after inflation. The article uses a hypothetical couple in their early 60s, with one spouse earning most of the income, to show how much income can still fall in retirement. If the higher earner receives $2,800 a month and the spouse receives a $1,400 spousal benefit, the couple's $4,200 monthly total leaves a gap of about $3,088 a month compared with working income. Claiming at 62 permanently cuts benefits and widens the gap to about $4,418 a month, while waiting until 70 raises the worker's check to $3,472 but leaves the spousal benefit unchanged. Withdrawals from an IRA to cover the gap are taxable and can make up to 85% of Social Security benefits taxable for joint filers above $44,000.
- Social Security Taxable Earnings Limit Is Rising to $192,300 in 2027. Here's Who Pays More.
The Social Security taxable earnings limit will rise to $192,300 in 2027, up from $184,500 in 2026, because it is adjusted for inflation. Workers who exceed the limit next year would pay $483.60 in additional Social Security tax, and their employer would pay the same amount. The article notes that only about 6% of workers exceed the limit in a given year, and fewer than 20% ever do during their careers. Medicare tax has no earnings cap, and higher covered earnings can also mean a larger retirement benefit later.
- A small group of retired couples will now be able to collect over $100,000 a year in Social Security. Here's how to get closer to their number
The 2027 COLA for Social Security is 3.6%, an average increase of about $75 a month starting January 2027 that will affect 76 million Americans. The average retired worker's benefit will rise from $2,095 to $2,170 a month, and the average couple receiving benefits from $3,238 to $3,355. The Committee for a Responsible Federal Budget says the COLA adds a combined $3,600 for highest-earning couples who retired this year at full retirement age, enough to push their combined benefits above $100,000 a year. Timing matters: claiming at 62 cuts benefits by about 30% compared with full retirement age, while delaying to 70 raises them by 24% over the benefit at age 67.
- The Eight Years Between Retiring at 62 and Claiming Social Security at 70 Are the Lowest Tax Bracket Most Retirees Will Ever See. A Couple Spending $60,000 Can Convert About $70,000 a Year to a Roth at 12% and Never Pay 22% on It Again
Many new retirees live off savings from age 62 and wait until 70 to claim Social Security, filing with very little taxable income even though these years offer the lowest tax brackets they will see. For a married couple filing jointly in 2026, income taxed at 12% extends to $100,800, so a couple spending $60,000 could convert about $70,000 a year to a Roth, moving $560,000 over eight years and saving $56,000 compared with paying 22% later. Waiting until 70 can backfire, as Social Security plus required minimum distributions can make up to 85% of benefits taxable, pushing a 22%-bracket couple's effective marginal rate to 40.7%. Converting before 65 can also cost ACA premium subsidies, Medicare premiums are based on income from two years earlier, and taxes withheld from a conversion never reach the Roth.
- The Social Security Administration Has Spoken : Here the 2027 Cost - of - Living Adjustment ( COLA ) -- and What It Will Do to Your Benefit
The Social Security Administration announced on October 14 a 3.6% cost-of-living adjustment (COLA) for 2027, the highest since the 8.7% increase in 2022 and tied for the fifth-largest in the past 35 years. The average recipient will get about $75 more per month ($900 a year), against an average monthly retirement benefit of $2,088 as of August. The article argues the increase may not fully offset inflation for seniors, since COLAs use the CPI-W rather than the CPI-E, which weighs healthcare more heavily. A projected rise in the Part B Medicare premium from $202.90 to $209.50 ($6.60 more) will eat into the gain. It warns that without action, the shrinking trust fund surplus could cut benefits by about 22%, to roughly 78% of what is due, wiping out any COLA gains.
- His Social Security Deposit Will Be $2 , 808 . Medicaid Will Count the $3 , 011 Before Medicare Takes Its Premium , and That Will Put Him $29 Over the Nursing Home Income Limit
An illustrative Texas retiree whose Social Security deposit is $2,808 a month is still $29 over the state's 2026 nursing home Medicaid income cap of $2,982, because Medicaid counts the gross benefit of $3,011 before the $202.90 Medicare Part B premium is taken out. Texas applies this hard cap without deducting medical expenses, so even a small excess disqualifies an applicant. One option described is a Qualified Income Trust, an irrevocable account funded only with the applicant's income, into which the entire income source must be deposited in the same month it is received. Income properly run through the trust no longer counts against the cap and goes toward the nursing home bill, though the state can claim leftover funds up to what Medicaid paid when the person dies. The cap and Social Security benefits reset every January, so families should recheck gross income each year.
Related markets
Latest news
- Intel stock pops after JPMorgan gives a Neutral upgrade
JPMorgan (JPM) upgraded Intel (INTC) to Neutral from Underweight. The note points to improving execution under CEO Lip-Bu Tan, potential foundry customers for next-generation manufacturing, and rising earnings estimates for 2027 and 2028.
- Intel leads chip stocks higher as investors jump back into AI trade
Chip stocks rebounded on Monday as investors bought the dip after last week's steep AI trade sell-off. The PHLX Semiconductor Index (^SOX) rose 2%, reversing a recent semiconductor rout. Intel (INTC) jumped 5% after JPMorgan upgraded the stock to Buy, citing "solid execution." Nvidia (NVDA) and AMD (AMD) also gained, while a Goldman Sachs upgrade of CoreWeave (CRWV) to Buy from Neutral helped lift AI sentiment. Arm Holdings (ARM), Micron Technology (MU) and SK Hynix (SKHY) also rebounded after sharp declines last week.
- Netflix stock is down roughly 25% in 2026 as Q3 earnings loom
Netflix (NFLX) reports third-quarter results after the bell on Tuesday, with the stock down more than 25% this year and closing Friday near $70, versus $93.76 at the end of 2025. Investors are worried about slowing viewership, competition from YouTube, and live sports moving to Amazon Prime Video and HBO Max. Last week Netflix cut about 6% of its workforce (roughly 1,000 employees) and named Peter Rice its new chief content officer, and five firms lowered price targets in October. Analysts expect EPS of $0.82 on revenue of $12.88 billion, up about 12% from a year earlier, in line with Netflix's own forecast. KeyBanc's Justin Patterson wants more content investment, product changes, expense cuts and a possible first-ever dividend.
- Cleveland-Cliffs Jumps 10% on Strongest Quarter in Three Years; Nucor and Steel Dynamics Edge Higher
Cleveland-Cliffs (CLF) rose 10% to $13.29 after reporting third-quarter adjusted EBITDA of $612 million, beating its $575 million guidance and up sharply from $143 million a year earlier. Revenue of $5.61 billion missed the $5.72 billion expected, though sales rose 18.6% year over year on a higher average net selling price of $1,177 per ton and larger shipments. Management said imports remain well below historical levels, but it indefinitely idled the galvanizing lines at its Canadian unit Stelco due to oversupply. The company guided to about $715 million of adjusted EBITDA in Q4 and said 2027 adjusted EBITDA should exceed $4 billion based on current index price forecasts. Its target is to bring net debt to EBITDA below 2.5x by mid-2027.
- Tech rebounds as semiconductor stocks jump: AlphaCheck
Stocks were mostly higher on Monday as investors turned their focus to earnings season, with semiconductor stocks rebounding after last week's sharp sell-off. The Tech sector (XLK) rose, led by Nvidia (NVDA), AMD (AMD), Micron (MU) and SK Hynix (SKHY). Intel (INTC) also jumped after JPMorgan analysts upgraded the stock, while CoreWeave (CRWV), hammered last week, rebounded on a Goldman Sachs upgrade. Investors are watching this week's reports from Netflix (NFLX), SpaceX (SPCX), Tesla (TSLA) and Meta (META). The 10-year Treasury (^TNX) yield hovered near 5.1%, while Brent crude (BZ=F) dropped to $108 per barrel and WTI (CL=F) hovered below $98.
- AI capex may be Meta's biggest earnings test
Meta Platforms (META) reports third-quarter earnings after the close on Wednesday, alongside a wave of Big Tech peers. The GAAP EPS estimate is $3.54, though that figure may be messy because a legal settlement will be included and analysts differ on how it will be accounted for. Options imply a 3.2% move in either direction, the smallest since the fourth-quarter report before last. Estimates for next year's capex vary widely: Wedbush near $250 billion, Evercore ISI $210 billion, Bank of America $205 billion and Dan Ives around $194 billion. Most analysts say that spending is acceptable if Meta provides a Muse roadmap and confidence it can monetize it, and the stock is up about seven and a half percent year to date.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.