Social Security is the foundation of many Americans' retirement plans. Around half of individuals aged 65 or older receive at least 50% of their household income from the government program, according to data from the Social Security Administration. So, missing out on a portion of that monthly benefits check could severely cut into many people's retirement plans.

The biggest factor cutting into benefits for most retirees is taxes. The federal government will tax Social Security income for retirees exceeding a certain level of income, but most states won't make retirees pay anything extra on their benefits. However, 12 states currently tax Social Security for at least some residents, depending on income level.

Retirees living in any of those 12 states could lose some of their Social Security checks, but that doesn't mean you should avoid living there. Here's what you need to know.

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Source Fool.com