Delaying Social Security Allows More Taxable Money to Be Tax-free

(don’t forget to checkout the video too)

If you are trying to achieve a tax-free retirement then there is one important strategy that you might want to consider if you have a lot of taxable retirement money.

It’s delaying your social security as long as you can (or as long as it makes sense for you and your retirement income plan).

By delaying your social security you are able to take more taxable money out of your retirement accounts without having to pay taxes!

Here’s what I mean:

To retire tax-free you need to have most of your money coming out of either life insurance contracts or Roth IRAs.

But, you can still pull money from your taxable accounts (like 401k’s, IRA’s, 403b’s, etc) without owing taxes on that money…

…but you can’t pull out more than your standard deduction (or all of your other tax deductions in retirement). 🫣

So by delaying social security you are able to reduce the balance of your taxable accounts & collect a much higher tax-free income from those accounts.

You can do this until you are required to start liquidating your taxable accounts at age 72 (aka required minimum distributions).

But, once you start taking social security you are bound by a new set of rules….😲

⭐️ The provisional income threshold ⭐️

This is the sole determination for how your social security income will be taxed.

This is LOWER than your standard deduction amount because 1/2 of your social security itself counts as provisional income.

So you have to take LESS out of your taxable accounts otherwise you’ll trigger taxation on your social security.

That’s another reason to leverage a social security delay (especially if you have large amounts of taxable retirement money) 👏

Let’s chat 💬😎