Top Stories: Social Security Recipients and Advisor Newsletter

Social Security Spotlight: Taxation
NARSSA | Social Security Newsletter | January 2023

January 2023 Newsletter

Hi There. Please enjoy reading our newsletter filled with news and information on Social Security. Please reach out at info@rssa.com with any feedback on our newsletters. We are always happy to hear from you!

NARSSA Announcements

We are excited to announce that our co-founder and President, Martha Shedden, has been nominated and accepted into the National Academy of Social Insurance. The Academy is a nonprofit and nonpartisan organization made up of the nation’s leading experts on social insurance. This is a significant achievement and we are confident that Martha will make the most of this opportunity and contribute her experience and expertise towards promoting understanding of social insurance issues and programs. Learn more about the Academy here.

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Source: RSSA

The 2023 tax filing season has officially begun and the IRS is now accepting and processing 2022 tax year returns. When considering taxes, it is not uncommon for individuals to overlook the potential taxation of their Social Security income. To help you better understand the taxation of Social Security benefits, here are three key points to keep in mind.

Three Social Security Changes in 2023
Source: RSSA

Every year there are changes to the Social Security program. And with more than 65 million Social Security beneficiaries, these changes impact a lot of people. Read about three significant changes that were implemented at the beginning of this month.

As U.S. hits debt ceiling, here’s what it could mean for Social Security and Medicare

Source: CNBC

“The clock is ticking for the U.S. to avoid a default on its debt, and some are sounding the alarm about potential disruptions to Social Security and Medicare.” Read about the impact a default could have on Social Security beneficiaries and how congress should take action.

Catch up with Devin

Claiming Social Security at 62 has long been the most popular age to file, but things are starting to change. In fact they’ve been changing over the past several years and now the data is becoming more clear that fewer people are filing at 62. In this video, Devin Carroll, RSSA, tells you three reasons why we are seeing these changes and he will share some thoughts with you that may help you make a more informed decision about when to file. Watch the video.

Ask Martha

Question: My husband is in hospice. When he passes, I will be able to collect his railroad pension, but no longer mine. Can I collect my Social Security to make up for the lost?

Martha’s response: Railroad retirement benefits and Social Security benefits are similar. There are a few rules that differ, however generally the rules are the same. If your spouse passes and you are the surviving spouse, you may be eligible for a survivor benefit. The survivor benefit has many rules that complicate things sometimes, but other times it can be straight forward…Read Martha’s full response or Ask Martha your own question.

Social Security Spotlight: Taxation

Are Social Security benefits subject to taxation? Yes. Many people are unaware of this, but Social Security income may be subject to federal, and possibly even state, taxation.

How is Social Security taxed? Federal taxation does not apply to all Social Security beneficiaries as there is a special calculation used to determine if your Social Security income will be taxed. If your “combined income” exceeds a specific threshold, a portion (up to 85%) of your Social Security income will be taxed. These thresholds vary depending if you are a single filer or joint filer.

What are the thresholds that determine if your Social Security will be taxed? Up to 50 percent of your Social Security benefits are subject to federal taxation if your income is $25,000 to $34,000 for an individual or $32,000 to $44,000 for a married couple filing jointly. Up to 85 percent of your benefits are subject to federal taxation if your income is more than $34,000 for a single filer or $44,000 for joint filers.

Which states tax Social Security income? Some states currently have a Social Security income tax and these states include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Vermont, Utah and West Virginia. Some of these states use the same calculation as the federal government to determine if single or joint filers owe taxes. Some states have their own rules and regulations.

Learn more about the taxation of Social Security here.

Listen up: Social Security Podcast

In this episode Martha sits down with Nancy Altman and they deliver a thorough breakdown of how Social Security works, why it’s so important, and what’s happening politically around it. Nancy has a forty-five year background in the areas of Social Security and private pensions. She is the president of Social Security Works and chair of the Strengthen Social Security Coalition.

You can listen to Social Security Answers from the Experts on Spotify, Google, Apple or anywhere you listen to podcasts. You can even watch the live recordings on our YouTube channel. Listen here or watch on YouTube.

Case Study of the Month

A couple needed help trying to decide when to file for benefits. They have a disabled adult child (DAC) and are hoping to receive benefits for her as well as maximize their own retirement benefits. They are both 62 and are both still working, the wife making $100k and the husband works part time earning $30k. This type of case is not always immediately obvious whether it will be beneficial for one parent to file early. The husband has a high PIA from earlier work years so the benefit for their daughter will be significant even though his own retirement benefit would be reduced. He would also have earnings deductions, but it would not completely eliminate his benefit. Ultimately, his filing at 64 is the optimal decision for the family. If his PIA was significantly less, his earnings deductions would nearly wipe out his benefit and the DAC benefit wouldn’t be as significant. Each case is unique and can benefit from a comprehensive analysis to make sure clients receive every dollar they’re entitled to!

Sign up for the RSSA® eLearning program: Get immediate access to the RSSA Roadmap® Social Security software.

The RSSA® program is the only program where you will receive Social Security software, the training to use the software, and the education to become a Social Security expert. This program will teach you how to analyze and provide comprehensive reporting that will help your clients maximize their Social Security benefits. After passing the proctored national exam and earning the RSSA® designation, you’ll be positioned to help clients potentially gain tens or hundreds of thousands of dollars in incremental Social Security income. The knowledge and software training that you will gain by completing the RSSA® course will be meaningful for your practice and your clients as the demand for expert Social Security advice is unprecedented. This training program is approved by the IRS, NASBA, CFP Board, and Broadridge Fi360 Solutions for CE credits. Get Started.

Consult with an RSSA to optimize your benefits

Most people make a sub-optimal filing decision, losing out on money they are entitled to. An RSSA can help you optimize your Social Security benefits and support you in making the best decisions for your personal situation. Get help now.

RSSA Back Office

Are you a financial advisor, insurance professional, tax professional, lawyer or NARSSA member with clients that need help optimizing their Social Security? Work with an experienced partner to outsource your Social Security planning. Our team of expert Social Security advisors will help your clients take advantage of strategies that may yield hundreds of thousands of dollars in additional lifetime benefits. Learn more.

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January, 2023