Today we discuss a tax hurdle that nearly every retiree could be subject to… The Social Security Tax Torpedo.
This hurdle is created based on how the IRS taxes your social security benefit.
As you take income from income sources like Traditional IRAs, it forces your Social Security benefits into becoming taxable.
This creates a situation where a $1 withdrawal from an IRA can cause $0.50 or $0.85 of your Social Security benefit to become taxable as well.
Essentially you are double-taxed!
Many retirees and even financial advisors arent’ aware of or don’t plan around this tax trap.
However, missing this tax hurdle can cost you significantly.
Right now, the most aggressive part of the Social Security Tax Torpedo can cause your marginal tax rate to skyrocket to 40.70%.
In 2026, because of the Tax Cuts and Jobs Act expiring, that marginal tax rate will rise to 46.25%.
This tax trap is no joke!
In this video in our Roth Conversion series, we are going to discuss how Roth Conversions can be used to avoid the Social Security Tax Torpedo.
We will discuss:
✅ What is the Social Security Tax Torpedo and how is Social Security Taxed
✅ Roth IRA Conversion Strategies to avoid this tax trap
✅ Why a Roth Conversion in 2021 is especially powerful
✅ Social Security Tax Torpedo Calculator to determine if this will be a problem for your retirement
– – – – – – – – – – – – – – –
Always remember, “You Don’t Need More Money; You Need a Better Plan”
🍿 Subscribe to our channel: https://www.youtube.com/channel/UCVMA…
🏆 Join our ‘Retirement Mastery’ Facebook Group: https://bit.ly/retirement-mastery-group
📈 Talk with us about your retirement plan here: https://www.safeguardinvest.com/contact
📚 The New 60/40: How the Next Generation of Retirees Can Achieve Radical Financial Freedom through Better Safe Investing – https://www.amazon.com/New-60-Generation-Financial-Investing/dp/B08H6TCMFN
Safeguard Wealth Management is a Registered Investment Advisor in the State of WI. Safeguard Wealth Management is not an insurance provider. All content on Youtube is for informational purposes only and should not be taken as personal advice for your situation. You can read more disclosures at https://www.safeguardinvest.com/fiduciary