A Guide to Social Security and Taxes

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Subscribe to MONEY Magazine Have you done your taxes yet? I’m doing mine—or rather, I’m having mine done—next week. (Yep, my family uses an accountant, and I consider it money well spent.) Tax season is a good time to remind yourself that your nest egg in retirement won’t be fully your own. Some of that money belongs to Uncle Sam. The taxes you’ll pay on your retirement income will depend on a number of factors, including how much of your savings is in traditional versus Roth accounts. A portion of your Social Security benefits may be taxed, too, depending on your overall income. While we can’t forecast our exact tax bill in retirement, it’s a good practice to remember that most of us will have one. Best wishes, Elizabeth P.S. If you like this newsletter, please pass it on to a friend! And if you got it from a friend, sign up here for email delivery to make sure you don’t miss the next issue. TIMELY RETIREMENT NEWS, INSIGHTS AND ADVICE Is Social Security Taxed? Here's What You Need to Know It depends on your income. 5 Investments That Can Save You When the Stock Market Goes Haywire Here's how to protect your money. This Is the Simplest, Most Successful Way to Save Enough Money for Retirement Use your money to make more money. ASK A READER Our next question is from Erik Hendrickson, 46, of Pittsburgh, who asks: “How do you go about putting together a muni bond portfolio without an advisor?” Thanks to all who responded to Rhonda Detro’s question about the best way to find a financial advisor! Many readers recommended that she seek out someone who charges an hourly fee, rather than a fee based on a percentage of assets under management. I’ll pass along all responses received to Rhonda. Here’s a sampling: Heather Thornton, 43, of St. Paul, Minn., writes, “She’s clearly concerned about a bear market (completely understandable in today’s environment), and someone who uses a portfolio-valued based advisor is creating drag on their portfolio regardless of whether the market is up or down.” Tom Uttomark, 72, of Roman Forest, Texas, writes, “Many people need advice to get them on the right financial path, but most don’t need long-term hand-holding. The percentage advisors do a fair amount of work up front, but then they coast.” Paul Hudson, 71, of Albuquerque, N.M., recommends that Rhonda interview three to four advisors before making a selection, consider what she might need beyond portfolio management (such as estate planning), and ask the candidates how they can meet those needs as well. Vicki Van Horn, 69, a certified financial planner in Rio Rancho, N.M., writes: “I see such reprehensible behavior by brokers. People come to have their taxes prepared, and they have dozens of pages of trades if they have authorized the broker to trade on their behalf. So they are paying loads [on the funds], commissions, and fees—ugh. As a financial planner, I suggest no-load, low-expense-ratio ETFs and mutual funds.” RETIREMENT NEWS FROM AROUND THE WEB 66% of Working Millennials Have Nothing Saved for Retirement According to a new report from the National Institute on Retirement Security, two-thirds of working millennials have nothing saved for retirement; sometimes, retirement plan eligibility requirements are to blame. FORBES A Simple Equation Will Show You if You’re on Track To Save Enough for Retirement Here’s how to know if you’re saving enough. CNBC Train Your Brain to Save More and Spend Less Former MONEY editor-in-chief Diane Harris offers smart tips to hack your savings. MARKETWATCH  Unusual Medical Tax Deductions You Might Not Know About Laser eye surgery and hearing aid batteries are just two of the lesser-known medical tax deductions you can claim. CONSUMER REPORTS ABOUT ELIZABETH Elizabeth O'Brien is a senior writer at MONEY, covering retirement and health care. You can email her at elizabeth.o'brien@moneymail.com and follow her on Twitter at @elizobrien. To Unsubscribe You have received this e-mail because you are subscribed to this newsletter from MONEY.com. Unsubscribe here. Update Email Click here to update your email address. Privacy Policy Please read our Privacy Policy. MONEY may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. For Further Communication Please email retirewithmoney@moneymail.com Money Customer Service 3000 University Center Drive Tampa, FL 33612-6408 Connect with Money Find Money on Facebook Follow Money on Twitter Subscribe to more MONEY and TIME Newsletters Get Money Magazine on your Mobile Device Get MONEY on your iPad Subscribe to RSS Feed Subscribe to MONEY Magazine