JBL Financial Services

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𝗪𝗵𝗮𝘁 𝗶𝘀 𝗪𝗲𝗮𝘁𝗹𝗵 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗗𝗼 𝗬𝗼𝘂 𝗡𝗲𝗲𝗱 𝗜𝘁?
https://vist.ly/58nnw

It's time, once again, for our listener question of the week!

𝑄𝑢𝑒𝑠𝑡𝑖𝑜𝑛:
"Hello, would you please explain how provisional income taxation works, being 65 and working one day a week, but considering when to take Social Security?"

𝐴𝑛𝑠𝑤𝑒𝑟:
There are two key concepts to consider, so we'll outline them below...

1️⃣ 𝗣𝗿𝗼𝘃𝗶𝘀𝗶𝗼𝗻𝗮𝗹 𝗜𝗻𝗰𝗼𝗺𝗲 (𝗳𝗼𝗿 𝗧𝗮𝘅𝗮𝘁𝗶𝗼𝗻)
This formula determines how much of your Social Security benefit is taxable.

Formula: 50% of your Social Security benefit + 100% of all your other income (including non-taxable interest).

Thresholds (Married Filing Jointly):
- Under $32,000: 0% of your benefit is taxable.
- $32,000 - $44,000: Up to 50% of your benefit is taxable.
- Over $44,000: Up to 85% of your benefit is taxable.

2️⃣ 𝗜𝗻𝗰𝗼𝗺𝗲 𝗟𝗶𝗺𝗶𝘁𝗮𝘁𝗶𝗼𝗻𝘀 (𝗳𝗼𝗿 𝗧𝗮𝗸𝗶𝗻𝗴 𝗕𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗘𝗮𝗿𝗹𝘆)
Since the texter is 65 (under their full retirement age), there is a limit on how much they can earn from work without having benefits withheld.

2026 Limit: You can earn up to $24,480. For every $2 you earn above that limit, Social Security will withhold $1 of your benefits.

⚠️ 𝗖𝗔𝗨𝗧𝗜𝗢𝗡
Taking benefits early while still working can be counterproductive, as you not only have benefits withheld but you also lock in a permanently lower monthly benefit amount.