Is Social Security Taxable?

Is Social Security Taxable? | Northwestern Mutual
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Is Social Security Taxable?
Glenn Kirst, CFP®, WMCP®, RICP®
Feb 24, 2026
Photo credit:
Westend61
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Key takeaways
Depending on your benefit amount and other income sources, you may owe taxes on up to 85 percent of your Social Security benefit.
Though your Social Security benefit may be subject to tax, there are strategies to help reduce the impact.
A financial advisor can help you make the most of your retirement income and reduce the overall tax impact.
Glenn Kirst is a planning excellence lead consultant at Northwestern Mutual.
After working for years and paying into Social Security , retirement is when you ’ ll finally cash in your benefit. A common misconception is that your Social Security payments are yours free and clear, but a portion of this income may be subject to taxes. According to the Social Security Administration , about 40 percent of people who collect Social Security pay tax on their benefit. That ’ s an important detail when it comes to managing your retirement savings—and getting the most out of your nest egg.
Here’s how to determine whether you’ll have to pay taxes on your Social Security payments and how Social Security tax is calculated. We’ll also cover some tips about how to minimize the overall impact of taxes in retirement.
Does Social Security count as taxable income?
Your Social Security benefit is considered a form of unearned income, which is income that doesn’t come from working. Other types of income also fall into this category, including:
Investment income like capital gains, dividend payments and interest from savings accounts or certificates of deposit (CDs)
Payments from pensions or annuities
Disability benefits
Unemployment benefits
Passive income from a rental property or other sources
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Are Social Security benefits taxable?
The amount of your Social Security benefit that’s taxed at the federal level depends on a number of different factors—including your total income from other sources and how much you ’ re receiving in Social Security payments. If your income exceeds a certain threshold, up to 85 percent of your benefit could be taxable.
While you ’ ll never have to pay taxes on your full benefit amount, there ’ s a good chance that a portion of your payments will be subject to federal income tax. On the state level, only the following states tax Social Security benefits:
Colorado
Connecticut
Minnesota
Montana
New Mexico
Rhode Island
Utah
Vermont
West Virginia
Is Supplemental Security Income (SSI) taxable?
Supplemental Security Income (SSI) is a benefit from the Social Security Administration intended for people who have limited income and resources and are 65 and older, disabled or blind. One major difference between SSI and Social Security retirement benefits is that SSI is never subject to taxes.
Is Social Security Disability Insurance (SSDI) taxable?
Social Security Disability Insurance (SSDI) is a special disability insurance benefit from the Social Security Administration. It’s designed to support you and certain family members if you become disabled and are “ insured” (meaning that you’ve worked and paid into Social Security). SSDI benefits are taxed the same way as Social Security retirement benefits.
How is Social Security tax calculated?
The first step is to calculate your annual combined income:
Adjusted gross income + tax-exempt interest + 1/2 of your annual Social Security benefits = combined income
Next, look at the IRS base rates for your tax filing status. For the 2025 and 2026 tax years, if your combined income is above the threshold amounts below, your Social Security benefits may be taxed:
If your combined gross income is more than the base amount for your filing status, up to 85 percent of your benefits may be taxable:
What is the Social Security tax rate?
If you are required to pay taxes on a portion of your Social Security benefit, it will be taxed at your regular federal income tax rate, which is determined by your tax bracket . But remember: Not all of your benefit will be taxed. Your income tax return , which considers your income sources and total income (including Social Security benefits), can clarify the exact amount you’ll need to pay—and at what rate.
Every January, the SSA will send you a Social Security Benefit Statement detailing the benefits you received the prior year. You can use this document to help you estimate your taxes .
At what age is Social Security no longer taxable?
Age is not a factor in determining whether or not you need to pay taxes on your benefits. Social Security benefits are subject to tax as long as you live—regardless of your age.
How do I avoid paying taxes on Social Security?
Though you may not be able to completely avoid paying taxes on your benefits, there are some financial moves you can make to help reduce the impact of taxes.
1. Convert retirement funds to a Roth IRA or Roth 401(k)
With a Roth 401(k) or Roth IRA , you take distributions tax-free (since you’ve already paid taxes on the money you contributed). That means that any retirement income from Roth accounts doesn’t count toward your annual combined income—so, anything you withdraw from a Roth account during retirement won’t impact your Social Security benefit’s tax liability. Using a mix of taxable and non-taxable accounts can give you some flexibility, as you can withdraw enough from taxable accounts to stay in a certain tax bracket, then move to non-taxable sources to meet your needs 1 .
Roth accounts and Roth conversions are also subject to five-year rules that could trigger taxes. There’s a lot to think about when you convert to a Roth, however, so you’ll want to make sure you understand all the pieces in play (and make sure you speak with a tax advisor before taking any action).
In the year you convert the Roth, the funds will count as part of your taxable income, which means you’ll owe income tax on them in that year. That means those funds will count toward your taxable income, which could increase what you’d owe in Social Security. You’ll also want to be aware that Roth conversions can impact your Income-Related Monthly Adjustment Amount (IMRAA) threshold and what you owe for Medicare.
2. Access the cash value of a permanent life insurance policy
Cash value that you can access whenever you need it is one of the perks of a permanent life insurance policy. There are ways…

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