In February, 66.2 million people collected a Social Security benefit. While Social Security covers a wide array of individuals, including long-term disabled workers and survivors of deceased workers, it was primarily designed to provide a financial foundation for our nation's seniors once they could no longer work. Nearly 49 million retired workers collected an average payout totaling $1,830.66 in February.
What you might not realize is that President Joe Biden is one of these current beneficiaries.
President Biden delivering remarks. Image source: Official White House Photo by Adam Schultz.
Here's how much Social Security income Joe Biden received in 2022
As has been customary for much of the past 50 years, most presidential candidates and sitting presidents publicly release their federal tax returns. Due to Biden putting his hat in the ring for the 2008 Democratic presidential nomination, as well as the 2020 election, which he subsequently won, Biden has 25 years of publicly available tax returns (1998-2022).
For calendar year 2022, the Bidens -- Joe Biden files his federal taxes jointly with his wife, first lady Dr. Jill Biden -- had $579,514 in total income. While much of this income is tied to Joe Biden being president ($400,000 annual salary), the Bidens did jointly collect a notable amount of income from Social Security.
On line 6a of the couple's jointly filed Form 1040, the two reported $58,465 in Social Security benefits in 2022. This works out to an average of $4,872.08 per month and represents a roughly $317/month increase over what the Bidens received from America's top retirement program in 2021.
Although it's impossible to determine how much Joe and Jill Biden individually contributed to this $58,465 figure since they file their federal taxes jointly, what is crystal clear is that the Bidens are netting a considerably higher payout than the vast majority of retired workers.
Social Security payouts are capped for high earners
Superficially, $58,465 in Social Security income for a single year sounds like a lot of money -- especially when the average retired worker's Social Security check is $1,831. However, what the Bidens receive from Social Security doesn't represent a particularly large percentage of their total income.
According to Joe Biden's public federal tax returns, he and his wife have generated no less than $210,797 in adjusted gross incomes (AGIs) since 1998. There were two years (2017 and 2018) when the couple's AGI soared to about $11.03 million and $4.58 million, respectively. Netting $58,465 from America's top retirement program is a drop in the bucket relative to the Bidens' average AGI over the past 25 years.
What Joe and Jill Biden's tax filing suggests is that they very likely achieved, or came close to achieving the maximum Social Security payout. Although the Social Security Administration takes your 35 highest-earning, inflation-adjusted years into account when determining your retired worker benefit at full retirement age, benefits are capped if you're a high earner that regularly hits or surpasses the annual maximum taxable earnings cap.
In 2022, the maximum Social Security benefit a worker could receive at full retirement age was $3,345. This year, it increases to $3,627. Even if the Bidens generated millions of dollars in AGI, their monthly benefits from Social Security remain capped.
Image source: Getty Images.
More beneficiaries than ever are being taxed on their Social Security payout
However, the most intriguing aspect of Joe and Jill Biden's Social Security income isn't necessarily how much they received in 2022 but rather how much they owed in tax liability on those payouts. That's right, folks -- Social Security benefits can be taxable!
Based on line 6b of the president's and first lady's Form 1040, $49,695 of their $58,465 in Social Security benefits were subject to ordinary federal income tax last year.
Back in 1983, with Social Security's asset reserves dwindling and the program on the verge of needing to reduce benefits to sustain payouts, lawmakers passed and then-President Ronald Reagan signed the last major bipartisan overhaul of the program into law. The Social Security Amendments of 1983 gradually increased the full retirement age and payroll tax on working Americans, as well as introduced the taxation of benefits to generate additional revenue.
When it went into effect in 1984, the taxation of benefits allowed half of an individual's payout to be taxed at the ordinary federal rate if their modified adjusted gross income (MAGI) plus one-half of benefits paid exceeded $25,000. For couples filing jointly, this figure was $32,000.
In 1993, under the Clinton administration, a second tax tier was signed into law that allowed up to 85% of Social Security benefits to be taxed if an individual's MAGI plus one-half benefits surpassed $34,000. For couples filing jointly, the threshold is $44,000. With the Bidens far exceeding this threshold, 85% of their $58,465 in Social Security income was subjected to ordinary federal taxation.
The interesting thing to note is that the income thresholds associated with taxing Social Security payouts have never been adjusted for inflation. As time passes and cost-of-living adjustments nominally increase Social Security payouts, more single and joint filers than ever are becoming subjected to the taxation of benefits.
