America’s tax system can be complicated and opaque, to say the least. After dedicating your life to a career (or several careers!) and finally reaching your hard-earned retirement, you might be wondering what parts of your retirement income are taxable. As is the case with most other tax questions, it’s complicated, and depends on a few factors.

Social Security Income

According to the Social Security Administration, around 40% of recipients must pay federal income tax on their benefits. How much they pay depends on a few factors: joint or individual filing, and income bracket within those filings. For example, if your combined income on an individual filing is between $25,000 and $34,000, you could pay taxes on up to 50% of your benefits. A quick breakdown is below:

Individual Filing
Income BracketPercentage of benefits taxable
$25,000 – $34,000Up to 50%
More than $34,000Up to 85%
Joint Filing
Income BracketPercentage of benefits taxable
$32,000 – $44,000Up to 50%
More than $44,000Up to 85%

To learn more about income taxes on your social security benefits, visit

Traditional IRAs and Roth IRAs

An individual retirement arrangement (or IRA) allows you to make tax-deferred investments after you retire. There are two main kinds of IRAs: traditional IRAs and Roth IRAs. Roth IRAs are different from Traditional IRAs in that qualified distributions from the Roth IRA may be tax free.

Long-term investments

Long-term investments can be a crucial source of income in retirement. These investments are taxable at their long-term capital gains rate, as well as a 3.8% net investment income tax in some cases. For more information, go to

If you have any concerns about your long-term investments, please give us a call at 1-800-627-2768. We are happy to help!


Social Security Administration – “Income Taxes and Your Social Security Benefit”

Internal Revenue Service – “Individual Retirement Arrangements (IRAs)”

Merrill – “Taxes in retirement: “What you need to know”


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