Will Your Pension Reduce Your Social Security Benefits? | Retirement Planning Explained
Are you thinking about retirement? Will you have a pension? If so, this video is for you! Discover how your pension might impact your Social Security benefits.
Basics:
Pension Income: Regular taxable income throughout retirement.
Social Security Benefits: Calculated based on your highest 35 'covered' years of work.
Key Provisions:
Windfall Elimination Provision (WEP): Reduces Social Security if your pension is from a job that didn’t withhold Social Security taxes. Exceptions include certain federal employees, railroad pensions, or having 30+ years of substantial earnings.
Government Pension Offset (GPO): Affects widows and widowers with a 'non-covered' pension, reducing survivor benefits by two-thirds of the pension amount. Exceptions include certain federal employees.
Taxation of Social Security Benefits:
Your pension income can make up to 85% of your Social Security benefits taxable.
Income thresholds: Over $25,000 (single) or $32,000 (joint) for 50% taxable benefits; over $34,000 (single) or $44,000 (joint) for 85% taxable benefits.
Plan Ahead:
At NextGen Wealth, we help you strategize for retirement by examining all your income sources. Our COLLAB Financial Planning Process™ ensures a smooth transition into retirement.
Ready to take control of your retirement? Contact us for a free financial assessment.
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