Myths and Facts About Social Security PC1364-Print

MYTH: IF YOU EARN MONEY AFTER YOU RETIRE, YOU’LL LOSE YOUR SOCIAL SECURITY BENEFIT. Fact: Money you earn after you retire will only affect your Social Security benefit if you’re under full retirement age. Once you reach full retirement age, you can earn as much as you want without affecting your Social Security retirement benefit. But if you’re under full retirement age, any income that you earn may affect the amount of benefit you receive:  If you’re under full retirement age, $1 in benefits will be withheld for every $2 you earn above a certain annual limit. For 2019, that limit is $17,640.  In the year you reach full retirement age, $1 in benefits will be withheld for every $3 you earn above a certain annual limit until the month you reach full retirement age. If you reach full retirement age in 2019, that limit is $46,920. Even if your monthly benefit is reduced in the short term due to your earnings, you’ll receive a higher monthly benefit later. That’s because the SSA recalculates your benefit when you reach full retirement age, and omits the months in which your benefit was reduced. MYTH: SOCIAL SECURITY BENEFITS ARE NOT TAXABLE. Fact: You may have to pay taxes on your Social Security benefits if you have other income. If the only income you had during the year was Social Security income, then your benefit generally isn’t taxable. But if you earned income during the year (either from a job or from self-employment) or had substantial investment income, then you might have to pay federal income tax on a portion of your benefit. Up to 85% of your benefit may be taxable, depending on your tax filing status (e.g., single, married filing jointly) and the total amount of income you have. For more information on this subject, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. the amount of benefit you receive: • If you're under full retirement age, $1 in benefits will be withheld for every $2 you earn above a certain annual limit. For 2016, that limit is $15,720. • In the year you reach full retirement age, $1 in benefits will be withheld for every $3 you earn above a certain annual limit until the month you reach full retirement age. If you reach full retirement age in 2016, that limit is $41,880. Even if your monthly benefit is reduced in the short term due to your earnings, you'll receive a higher monthly benefit later. That's because the SSA recalculates your benefit when you reach full retirement age, and omits the months in which your benefit was r duced. Myth: Social Security benefits are not taxable. Fact: You may have to pay taxes on your Social Security benefits if you have other income. If the only income you had during the year was Social WHAT IS YOUR FULL RETIREMENT AGE? If you were born in: Your full retirement age is: 1943-1954 66 1955 66 and 2 months 1956 66 and 4 months 1957 66 and 6 months 1958 66 and 8 months 1959 66 and 10 months 1960 and later 67 Note: If you were born on January 1 of any year, refer to the previous year to determine your full retirement age. Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable – we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Security income, then your benefit generally isn't taxable. But if you earned income during the year (either from a job or from self-employment) or had substantial investment income, then you might have to pay federal income tax on a portion of your benefit. Up to 85% of your benefit may be taxable, depending on your tax filing status (e.g., single, married filing jointly) and the total amount of income you have. For more information on this subject, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. To explore h w the preceding article could potentially impact your inv stments, please contact a Commerce Trust advisor. 1-855-295-7821 | commercetrustcompany.com

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