What would you recommend to a

Recomendationto client on social security benifits:

• You may be able to extend your retirement nest egg by sevenyears, on average, if you coordinate tax-efficient withdrawalstrategies with your Social Security income.
• That’s because you’re probably paying federal taxes on themoney you receive from Social Security. And the rate at which youare taxed can increase based on how you take money from otheraccounts.
• Here’s what you need to think about to keep more of your moneyin your pocket

Taxes are a certainty of life, including when it comes to yourSocial Security benefits.If you receive monthly benefit checks, itis very likely that income is taxed. In fact, a majority of peoplereceiving Social Security benefits pay income tax on some of thoseearnings.But if you are not using strategies to manage your income,you could be increasing that tax bill. And that could mean lessretirement income down the road.

William Meyer, founder of Social Security Solutions, a providerof benefits-claiming software, estimates that, on average, you canfind up to seven years’ worth of more money by creatingtax-efficient withdrawal strategies that coordinate Social Securitybenefits.

How SocialSecurity benefits are taxed

Approximately 40% of people who receive Social Security benefitspay federal income taxes on that income, according to the SocialSecurity Administration.If your income is low enough, none of yourSocial Security income may be taxed. But there are two additionaltax tiers, which means that either 50% or 85% of your benefitscould be subject to federal tax.In order to know where you fall,you need to know your “provisional,” or combined, income.

To calculate that, add your adjusted gross income plusnon-taxable interest plus half of your Social Security benefits.Those values can be found on your 1040 tax form.If you file as anindividual, you are subject to taxes on up to 50% of your SocialSecurity benefits if your combined income is between $25,000 and$34,000. But if you’re over $34,000 in combined income, up to 85%of your benefits are subject to income taxes.Many people find outwhether they owe federal income taxes on their Social Securityincome at tax time when they tally their Social Security benefitstatement and other income.