This is a new one on me. I spend a good bit of time keeping up with SS benefit news and info, and it can get pretty complicated quick. Just came across a CNBC article detailing the very real possibility of having to deal with what they dub the 'tax torpedo' for social security retirees.
Basically, it has to do with how much the government CAN tax your SS benefits once you retire, depending on 2 factors: what age you retire and how much other income you are drawing.
Surprise, surprise, if you retire at max retirement age, age 70, and if you are not making more than $25-32K a year in additional income, you will get hit the least. I think. Again, it's a bit confusing.. if you understand this, please chime in and clarify.
But my understanding is that if you retirement early, or even at FRA (full retirement age) your benefits can fall under higher tax %s quickly. And it gets worse when you have other steady streams of earned income coming in.
This honestly makes me annoyed and somewhat angry and dismayed to read. You pay into this mandatory retirement account all your working life. And on the backend, if you need the money early, and/or if you have managed to set up other solid income streams, they punish you for it. Is that about the take of it in your opinion? Or does this 'tax torpedo' make sense economically speaking?