Originally from ticket #6139.
Hi Rebecca,
Sorry for the delay in sending this to you. I am having trouble with the Social Security portion of this client calculation. At age 70 and 76 the social security drops. I have a meeting this afternoon with the client. I had called to get help yesterday and haven't heard. Sorry to ask you to do this ASAP. Can you please explain or fix the social security problem I seem to be having?
Thank you,
Karen R.
Bothell, WA
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Karen,
If you look at the Spreadsheet and scroll all the way over to the royal blue Social Security columns, you will see one labeled "Estimated Percent of Social Security That's Taxable"... and you will see that this particular client moved from 85% taxable to 50% taxable to 0% taxable... and then back to 50% taxable. As those percentages drop... you see the net Social Security go up. But as it returns to 50% taxable, then the net Social Security seems to go down as it goes from 0% to 50% taxable.
The IRS has an algorithm and specific thresholds for single and joint filers that calculates what percentage of your Social Security is taxable. The Retirement Savings Planner implements that algorithm best it can and tried to estimate the net after tax Social Security benefit during the retirement period.
