When to start taking Social Security – tax issues and personal choice

Over the weekend, I met with a tax client who is deciding when to start taking her Social Security. These are always interesting discussions as so many things go into the decision, including:

  1. How long should I continue to work and how much of Social Security will be taxed?
  2.  Will my state tax Social Security?
  3. When should I start taking pension (401(k)) monies and what happens then?
  4. How much should I withhold from my Social Security for taxes?
  5. Will I have enough for living expenses?

These are usually straight-forward conversations but something that made this one unique was my client is legally blind, so I couldn’t show a graphic representation on how things work (sliding scales, graphs, etc.). Fortunately face-to-face conversation still works wonders. In addition, I think I’ll have a potential new client for a friend of mine who does financial planning…

Do you know of anyone with questions about Social Security or pension income? I’d be happy to discuss their unique situation and provide a referral for more advanced financial planning – send me a note & we’ll discuss things.

Cheers!

Tom Hodge, CPA
President

The Hodge Group 

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