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Sometimes Trying to Maximize Will Minimize Your Social Security I thought I was done, at least for a while, writing columns about Social Security maximizing strategies. But as I've pointed out in past columns, probably 80 percent of the emails I get from my readers have to do with this topic de jour of the baby …Read more. Benefit Checks Are Accurate Q: I am 82 years old. My husband is 85. Based on a recent column you wrote about wives getting benefits from their husband's account, I think I am due more money from Social Security. How do I go about getting what is rightfully mine? A: I probably …Read more. Clarifying Widow's Benefits Q: In past columns, you have said that if a woman is 66 or older when her husband dies, her widow's benefit will equal what the husband was getting at the time of death. But when my husband died several months ago, I started getting slightly more …Read more. Full Retirement Age Going Up Q: You keep saying the full retirement age is 66. But as you know, many of us have to wait longer to get full Social Security benefits. For example, I was born in 1955 and I have to be 66 and 2 months. What I want to know is this: If I want to take …Read more.
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Columnist Is Right -- Most People Do Not Pay Taxes on Their Social Security


Q: In a recent column, you wrote, 'The vast majority of Social Security recipients do not pay taxes on their monthly benefits.' That is a lie. I know for a fact that just the opposite is true. The vast majority of people pay taxes on their Social Security benefits. My parents pay taxes on their benefits. Everyone I know who is getting Social Security is forced to pay taxes on their benefits. Will you please correct your gross misstatement in a future column?

A: OK, I stand corrected. From now on I promise to say, "A large majority of Social Security recipients do not pay taxes on their monthly benefits."

I will admit that for a while, you had me worried. I've been trotting out the "vast majority" line for so long that I really haven't been giving it a second thought. That is, until I got your email. It got me to wondering if I've been fibbing all these years!

I used to be the deputy press officer for the Social Security Administration. And in that role, I was asked by a thousand reporters over the years what percentage of people pay taxes on their benefits. And the answer at the time — this was about 15 years ago — was: only 10 percent. So that meant the vast majority of Social Security recipients (90 percent) did not pay taxes on their benefits. And again, that's the line I've been using ever since.

But after reading your email, I had some second thoughts. Because more and more people are retiring who have done some degree of financial planning, they have more of a nest egg — and thus more taxable income — than many older Social Security beneficiaries. So I figured that over the years, the percentage of people paying taxes on their benefits probably has gone up.

And you seem to know a lot of those people. You mentioned your parents and "everyone [you] know who is getting Social Security benefits." I know some of those folks, too. They include yours truly, my wife, my neighbors and a lot of my friends. All of us pay taxes on our Social Security benefits.

But then again, here's what I also knew: Although you and I and all of our friends have been relatively lucky and live a comfortable middle-class lifestyle (and pay taxes based on that lifestyle), there are many people in this country — especially older senior citizens — who, for a variety of reasons, have not been so lucky.

They barely have enough money coming in each month to live. Because their incomes are so low, these folks are not required to pay taxes on their Social Security benefits.

Here are a few numbers that may surprise — and even shock — you. For almost two-thirds of all senior citizens, their Social Security check represents at least 50 percent of their total monthly income. And for about one-third of older folks, their Social Security check amounts to 90 percent of their income. And finally, 20 percent of senior citizens are living on nothing but their Social Security check!

So there are a lot of people out there who aren't living anywhere near as comfortably as are you and your friends. And none of those folks is paying taxes on his or her Social Security benefits. But I guess I was still wrong to say the "vast majority" of people, but it's still a whole lot of people.

Oh ... what's the number? About 30 percent of people who get Social Security checks pay taxes on their benefits. So, of course, that means that 70 percent of people do not. That's a "big (but maybe not vast) majority," if you ask me!

Q: Why has the Social Security earnings limit been stuck at $14,160? How do they expect us to live on that small amount of money? When will they increase it?

A: Just to make sure all my readers understand what we're talking about, people who are under age 66 and are getting Social Security benefits are penalized if their income exceeds a prescribed limit. Currently, the law says the government must deduct one dollar from your Social Security benefits for each two dollars you earn over $14,160 per year.

Increases in the earnings penalty limit are tied to increases in the average national wage. So, for example, if the average national wage goes up 5 percent, then the Social Security earnings limit also goes up 5 percent.

But for the past several years, our country's average wage has not increased, so the Social Security earnings limit hasn't gone up either.

If I were king of the world, I would simply abolish the earnings penalty and let Social Security recipients of any age work without jeopardizing their benefits. But one reason that probably will never happen is the cost. Eliminating the earnings penalty would increase Social Security outlays by billions of dollars annually. And given the conservative "cut government spending" mood our country seems to be in, I don't see Congress looking for ways to add to government expenditures.

If you have a Social Security question, Tom Margenau has the answer. Contact him at To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at



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Tom Margenau
Mar. `15
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