Social Security Taxation in Future Years
Why does my Social Security become more taxable over time?
The federal income thresholds used to determine how much of Social Security is taxable are not indexed for inflation.
The thresholds have remained fixed while other income amounts generally increase over time. As a result, a larger portion of Social Security benefits can become taxable in future years, even when the inflation-adjusted values appear similar to today’s income levels.
Up to 85% of Social Security benefits can be included in taxable income depending on the taxpayer’s combined income and filing status.
Because WealthTrace applies the tax rules for each projected year, federal taxes on Social Security can increase over time even when the plan is displayed in today’s dollars.
