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.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on aol.com ↗
Keywords
Social SecurityretireestaxesUS
Open a keyword to see other news on the same topic.
Related news
- US retirees to get another $75 a month for 2027 Social Security
Monthly checks for nearly 72 million Americans on Social Security will rise 3.6% in 2027, the largest increase in four years. The cost-of-living adjustment (COLA) takes effect in January and lifts the average retired worker's benefit by $75 a month to $2,170, the Social Security Administration said. Supplemental Security Income recipients will see higher payments starting Dec. 31. The increase matters most for retirees who rely heavily on Social Security, as older Americans increasingly tap investment accounts to fund spending; for top earners, such withdrawals equaled nearly 15% of annual spending in 2025, up from 8% in 2019, per the JPMorganChase Institute. The maximum earnings subject to Social Security tax will also rise to $192,300 from $184,500.
- What Social Security 2027 COLA Update Means for Your Future Finances
The Social Security Administration (SSA) announced on Oct. 14 a 3.6% cost-of-living adjustment (COLA) for 2027, the fifth highest in 35 years. Based on August 2026 benefit figures, the average beneficiary is projected to receive about $75 more per month in 2027, while average benefits for disabled workers and survivors are expected to rise by about $59. Medicare Part B premiums are expected to rise about 3.25% (about $6.60, to $209.50) in 2027 according to the 2026 Medicare Trustees Report, which would make 2027 the first year since 2023 that the COLA exceeds the premium increase, though the estimate is unconfirmed. Still, Social Security's reserves are projected to run out in the early 2030s without Congressional action: the OASI trust fund by late 2032, while the DI fund is projected to last through 2100.
- Social Security COLA Tracks Working Households , Not Retirees . Here How Much Bigger 2024 Raise Would Have Been .
Social Security benefit payments will rise 3.6% in January, an adjustment based on the CPI-W index, which the article argues may not fit retirees well. Retirees are considerably older than the average American, spending less on food, housing and transportation but more on healthcare, so the CPI-E index for people aged 62 and over may better reflect their costs. Using CPI-E for 2024 would have produced a 4% raise instead of the 3.2% received, meaning $62 more per month instead of $50. The Senior Citizens League says beneficiaries have lost 13.7% of their buying power since 2016, and most proposed fixes require Congress. The article suggests retirees seek more investment income or higher-yielding savings accounts for idle cash.
- Roth conversions: When the ‘juice isn't really worth the squeeze,’ according to a top-ranked advisor
Roth conversions move pretax or nondeductible IRA money into a Roth IRA, which can potentially reduce lifetime taxes but can also raise income in the conversion year, so the strategy isn't right for everyone. As of March 31, Roth conversions were up 41% from the same period in 2025, according to Fidelity data covering 19.6 million IRA accounts. Advisors warn that extra income can phase out tax benefits such as education credits, the SALT deduction worth up to $40,400 for 2026, and the $6,000 senior deduction, and can also raise Medicare premiums. For ACA marketplace enrollees, income above 400% of the federal poverty line, about $63,000 for a single person or $129,000 for a family of four in 2026, can cost them the premium tax credit, so they should proceed with caution.
- Retirees Are Paying 30 % More for Groceries Than 6 Years Ago - Why They Could Go Higher This Winter
According to the BLS, grocery prices fell 0.1% in September, but the Center for American Progress found prices have risen about 30% over six years, placing heavy strain on retirees. For example, ground chuck averaged $6.48 per pound in September, down 29 cents from August but still about $2.32 more than in September 2020. The USDA projects average grocery prices to rise 2.4% this year, with beef and veal up 9.4% while eggs fall 29.4%. Social Security benefits will rise 3.6% from January 2027, about $75 more per month for the average retired worker, against average grocery spending of about $438 a month for households headed by someone 65 or older in 2024. The increase can help, but it won't necessarily restore what years of higher prices have taken from retirees' budgets.
- The 2027 Social Security COLA Will Boost Average Benefits by $901 Annually . Will It Be Enough ?
The 2027 Social Security cost-of-living adjustment (COLA) is 3.6%, which the article calls fairly large by historical standards and the fifth-highest in 35 years. Average monthly benefits for retired workers were about $2,087.52 in August, roughly $25,050 a year, so the increase adds about $901.80 annually. The higher adjustment follows the Iran war, which pushed oil prices and inflation up and led the Federal Reserve to raise rates once, with another hike expected before year-end. The Senior Citizens League says 2026 benefits are worth only about $0.836 on the dollar compared with 2016, a 13.7% loss in purchasing power over a decade, and argues a CPI-E measure would better reflect seniors' costs. The article concludes that high COLAs may not fully solve affordability problems for retirees.
Related markets
Latest news
- Why Meta's Q3 earnings could be a little hard to interpret
Meta is reporting its third-quarter earnings after the market closes Wednesday, and Yahoo Finance's Brian Sozzi says the report will be hard to interpret. Recent good news on Meta's AI products, including new models and an AI agent, may not appear directly in the results but will likely be discussed on the earnings call. The key uncertainty is how investors will react if Meta raises its capex outlook again: it could be seen as fueling those products, or as overspending on offerings not yet reflected in financials. Sozzi expects the market to give Meta the benefit of the doubt on higher capex, as long as the increase does not shock investors.
- Zerohash rolls out a new tool to move crypto without copying wallet addresses
Zerohash launched AUTH, a service that lets users move crypto, stablecoins and blockchain-based stock tokens between linked exchange accounts or self-custody wallets without copying wallet addresses or choosing a blockchain network. To transfer, users pick an account in an app that offers AUTH, sign in and approve the move, while the service handles routing and settlement and each app sets which assets and transfer types it allows. AUTH supports more than 600 connections, including Coinbase, Robinhood, Gemini, MetaMask and Phantom, with Coinbase, Robinhood and Gemini live and Kraken in beta. The launch comes as Zerohash's application for a national trust bank charter, returned by the Office of the Comptroller of the Currency in July, remains pending after a narrower refiling on Aug. 18.
- 2 charts show why Wall Street is right to worry about tech stocks
Rising cost of capital could affect the financial statements of hyperscalers such as Oracle (ORCL) and Google (GOOG, GOOGL) in 2027, as they need fresh debt to fund AI infrastructure and free cash flow may turn negative. JPMorgan strategist Mislav Matejka forecasts hyperscaler free cash flow will turn negative in 2027, implying credit markets will drive more of the AI build-out. Consensus estimates for 2027 capital expenditures are already rising from levels experts believe are too low. Morgan Stanley sees total 2027 capex among hyperscalers reaching $1.6 trillion, up from $978 billion estimated for this year. Dan Ives of Yorkville expects capex to reach the trillions and over 1,000 datacenters to be built in the next few years.
- Update on loan rate cuts as of the evening of Oct 19: MB, VietinBank, SHB, OCB join in
SHB, MB, VietinBank and OCB have announced loan rate cuts, following Agribank, Vietcombank, BIDV, ACB, LPBank and VietBank, with typical reductions of 1.5-2% per year. MB is cutting 1.5% per year for five priority sectors, to rates from 7.9% per year, and up to 2% in some cases; VietinBank is cutting up to 2% per year, while OCB offers up to 2.25% per year on some medium- and long-term loans for OCB Priority Banking members. SHB is cutting 1.5-2% per year for businesses and households and offers rates from 5.5% per year for lecturers and students at some universities. Vietcombank commits to cutting at least 2% through year-end, BIDV applies rates from 6% per year on short-term VND loans from 15/10/2026, and VietBank runs a VND 3,000 billion package. Specific benefits depend on borrower type, loan purpose, term and program conditions, following directives from the Government and the State Bank of Vietnam.
- Nvidia wins CPU business from Modal, previously exclusive to AMD and Intel
Modal, a San Francisco-based AI cloud startup that previously ran its AI agent workloads only on Intel and AMD processors, will begin using Nvidia's new Vera CPU. Early tests showed the Nvidia chip doubled work capacity for AI agents, and Modal plans to run it alongside Intel and AMD chips, assigning each task to the most efficient hardware, though integration requires substantial software changes. Modal recently raised $750 million in a round led by Accel at a $15.75 billion valuation and expects $1 billion in sales over the next year, with usage tripled and revenue up more than 15 times year-over-year. Nvidia projects at least $20 billion in Vera chip revenue this fiscal year in a market it estimates at about $200 billion, and says OpenAI, Anthropic, Oracle and Perplexity also plan to use the chips.
- America's EV Plans Have Died
Billions of dollars went into EV factories, dealerships and marketing after President Biden set a goal for 50% of new US car sales to be zero-emission by 2030, but EV sales have since fallen sharply. US EV sales dropped 30.7% in the first nine months of 2026, after the $7,500 tax credit expired on September 30 last year, and gas prices near $4.50 per gallon have done little to lift them. According to Kelley Blue Book, the average transaction price of a new EV was $54,754 in August, above the $50,089 average for all new cars. Ford's EV sales fell 80.2% to 6,047 in the third quarter, and it has no new EV planned until its Fathom launches next year, while Tesla holds over 50% of the market and no other major automaker has even 10%. The article says EVs could recover if gas prices reach $5 and stay there for months, but that is uncertain.
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.