Yes, your Social Security benefits can be taxed—and many retirees don’t see it coming. In this episode of Elevate Wealth, Deanne Rosso and Brian Rosso explain how Social Security taxation works and how to coordinate income streams to reduce your overall tax burden in retirement.

Little known fact, Social Security benefits can be taxed. But how does this impact your retirement income, and what can you do to prepare? We'll break it down today on Elevate Wealth. Welcome. I'm Deanne Rosso, president and CEO of Elevate Wealth Advisory. And today we're talking about the potential tax consequences of your Social Security benefits. I'm joined today by Brian Roso, Director of Operations and Wealth Adviser at Elevate. Welcome, Brian. And so today, Brian is going to help us unpack Social Security benefits and the taxation of those, and what that can mean for your retirement plan. So, thank you for being here, Brian. Let's start with this. Are Social Security benefits really taxed, and how can people plan for that? Surprisingly, yes. Social Security benefits can and usually are taxed for most and I think that can catch people off guard. It really depends on what your combined income is, which is all of your income sources plus any non-t taxable interest from things like municipal bonds. Then also 50% of your Social Security benefit. Those three added together are considered your combined income. Okay. And so what we want to do is we want to take all of our income sources without Social Security, plus our non-t taxable interest like mini bond interest, and then add back half of our Social Security and that gets your income your combined income for the calculation of Social Security taxation. So, you're correct. And if that number exceeds certain thresholds, $25,000 for individuals and $32,000 for married filing jointly, up to 85% of your Social Security benefit can potentially be taxable. And that's like a low number actually considering what we see most retirees taking for their retirement income stream. So, for most people then their Social Security is going to be taxed at the federal level. That's right. And that's why income stream planning is such an important part of the retirement strategy. It's not just about how much your benefit is, but what are your other sources of income, what types of accounts those are coming from, and when those occur. That's right. Sometimes we refer to this as the Social Security tax torpedo because it can really just blow up a tax plan in retirement. By taking one additional dollar out of an IRA or a retirement account, it can trigger taxes in other areas like Social Security. That's right. The overall goal really for income stream planning is to get you a sustainable source of income, but also put more dollars back in your pocket. Thank you, Brian. Because that's what retirement income stream planning is all about. And it's not just about what sources of income you have coming in, in retirement, but also the taxation of those sources. That can be really important. And considering the fact that your Social Security will probably be taxable to you. So, thank you as always, Brian, for joining me today. And if you have questions about Social Security, your benefit or the taxation of that benefit, we're here to help. Visit us at elevate-wealth.com and click "Let's talk." We'll see you next time.