If you are receiving Social Security income, you will want to know how much you are scheduled to receive and how you will be taxed, so that you can budget correctly each month. This year saw a cost-of-living adjustment, or COLA, which is a welcome boost to many. 2019 saw a 2.8 percent increase for over 67 million Americans claiming SSA income each month.
As inflation rises, so does our cost of living, and this is why your Social Security income can increase. Keeping track of it can be done online these days, which makes it far easier to calculate what you are due and what your income will be each year. You can access it via your “My Social Security account” here https://www.ssa.gov/myaccount/
The 2019 COLA increase is the largest the country has seen in seven years. It sees a windfall of about $468 a year for a fifth of Americans.
It is important to know how much tax you will have to pay on your income, including your Social Security. There are both state and federal taxes to take into account unless you live in a state that does not tax your Social Security income. Thirteen states currently tax Social Security income. The IRS provides a form and worksheet to figure out what you have to pay when it comes to Social Security, and it can be found here https://www.irs.gov/pub/irs-pdf/p915.pdf#page=16 . Although it says 2018 on it, it was published in Jan 2019 and can be used this year.
Getting the most out of your money is important, so you need to know exactly how much will go to state and federal tax. If you don’t, you might get caught in a position of owing money.
One you retire, it’s even more important. Being prepared is the best way to ensure a healthy bank balance as you move forward in life. As your cost-of-living increases every year no matter what due to inflation, it is comforting to know that your benefits will also increase over time, and the fact that this year saw such a large increase is not just food for thought, it is also food on the table and a welcome boon to many.
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