Will You Pay Higher Taxes in Retirement?
Let us first talk about Social Security tax, which is unique. And keep in mind that before 1983, Social Security benefits were not taxed. Unfortunately, Social Security has been in trouble because people are living longer, and a big portion of our population is entering into the phase of needing Social Security; therefore, the rules have changed in the past to keep Social Security alive, and they will likely change in the future. It is just simple math.
However, you can avoid paying tax on Social Security. If your income is low enough, you will not have to pay taxes on the money you have worked hard for all your life. If your income is not low enough, let’s see how we can get Social Security tax-free!