Many people don’t realize that retirees with multiple sources of income may have to pay taxes on their Social Security benefits. That is why we support right number 5 of The Senior Citizens Bill of Rights.
Right Number 5
Right number 5 reads as follows:
“Senior citizens who are receiving Social Security benefits will no longer be penalized and taxed at a higher rate for choosing to work after retiring from their career.”
To get a better understanding of what right number 5 would guarantee senior citizens, we need to take a closer look at what the right refers to—the income threshold.
A Closer Look
Right number 5 is related to the income threshold set for Social Security beneficiaries. This threshold is dependent on the individual’s age, allowing individuals who are at or over the full retirement age (FRA) to have a higher threshold.
Currently, the Social Security Administration puts the income threshold for those under FRA at $18,960. After earning more than the income threshold, beneficiaries have their benefits reduced by $1 for every $2 over.
And with the average benefits giving beneficiaries $18,170 annually, individuals who choose to earn additional income but not go over the threshold will have annual earnings of around $37,130.
The Problem
However, the problem comes into play when we look at the average retiree household spending each year — over $50,000. In order to earn enough to equal this amount, retirees are forced to play a numbers game.
With the SSA taking away $1 for every $2 over $18,960, retirees cannot simply earn the additional $12,870 over the threshold; they would not take it all home. Therefore, in order to have annual earnings around the average annual spending, individuals need to earn an additional $16,891. And this is on top of the $18,960 threshold.
You Can Help Create Change
It is unjust to ask retirees to choose between compromising their security and comfort or getting their benefits taxed more. That is why we need your help. Help us create a more financially secure future for all retirees by acting now.
