How Will Your Social Security Benefits Be Taxed in Retirement?
Social Security benefits are a major source of income for many retirees, with roughly half of baby boomers saying their benefits are going to be their primary income source once they retire, according to a survey from American Advisors Group.
However, your benefits are only designed to replace around 40% of your pre-retirement income, and the average check comes out to just $1,461 per month. So if you are going to rely on Social Security to make ends meet in retirement, you'll need to squeeze every dollar you can out of your benefits.
If you've worked and paid Social Security taxes for at least 10 years, you're eligible to receive Social Security benefits as soon as you reach age 62. But even though you've been paying taxes for years to receive that money, your monthly checks may still be subject to federal income taxes -- which can throw off your retirement plan if you're not accounting for it.
Source Fool.com
