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How Social Security Works With Working Couples

Social Security is a complicated program for many retirees, especially married couples. Figuring out when benefits are subject to tax or reduction can be hard to figure out for many families.

In this installment of our Social Security Q&A series, Dan Caplinger, The Motley Fool's director of investment planning, answers a question from Carol, who notes that she'll be taking Social Security while her husband is still working and asks whether she'll have her benefits forfeited or taxed based on her husband's job income. Dan notes that there are two separate factors at issue, one involving potential forfeiture of early Social Security benefits because of work income, and the other involving taxation of benefits. Dan points out that for purposes of forfeiture, only your own work income matters, not that of a spouse. For taxation, though, Dan notes that as much as 50% to 85% of your benefits can be included in taxable income, and total family income including that of a spouse would be considered for a joint tax return. Dan concludes that it's important to know all the ramifications of family finances on Social Security benefits.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Have general questions about Social Security? Email them to SocialSecurity@fool.com, and they might be the subject of a future video!


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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