Retirement income question

[azanon]

I am embarressed i have to even ask this, but I really dont know the answer

When you retire, does your social security payment, and pension payment (i'll have a federal pension that pays 30% of my salary) figure as "earnings" for that year, meaning is it subject to either federal, or state taxes. I would assume neither would be subject to SS taxes as well?

 

[retire@40]

Pensions and social security benefits are income, but not earned income. Neither is subject to SS or Med taxes, but both are subject to federal income taxes, although there are income limits before your SS benefits will be taxed or reduced. Federal pensions and SS benefits may not be subject to state taxes, but I'm not familiar with all 50 state tax laws, so ask your local CPA.

 

[Cut-Throat]

Neither is subject to SS or Med taxes,

I'm not sure about this. My older friends were just telling me the other day when they got an increase in SS benefits in COLA, it was wipped out by the increase in Medicare taxes. I think SS benefits may be taxed by Medicare.

 

[Jarhead*]

I'm not sure about this. My older friends were just telling me the other day when they got an increase in SS benefits in COLA, it was wipped out by the increase in Medicare taxes. I think SS benefits may be taxed by Medicare.

Cutthroat: Retire at 40 was referring to a question about someone receive a pension, and wondering if that was subject to So. Sec. and medi-care taxes. His answer was correct. (Only earned income comes into play).
Regarding your old phart buddies and soc. sec. and medicare: The reason they were close to breaking even with cola and medicare is they had an increase in the "premium" you pay to medi-care. I think you were
confusing "premium" and taxes.
Hope you got over your post-election blues.
Regards, Jarhead

 

[cute fuzzy bunny]

The whole idea of social security being taxable just makes my head want to explode.