I'm Getting $2,700 Monthly From Social Security. What's the Best Way to Lower Taxes?

Core Insights - Social Security benefits are crucial for retirement planning, but taxation on these benefits is often overlooked [2] - Understanding how combined income affects the taxability of Social Security benefits is essential for retirees [3][4] Taxation of Social Security Benefits - Social Security benefit taxes are based on "combined income," which includes adjusted gross income, nontaxable interest, and half of Social Security benefits [6] - Income tiers determine the percentage of benefits that may be taxable: - Combined income below $25,000: Benefits not taxable - Combined income between $25,000 and $34,000: Up to 50% taxable - Combined income above $34,000: Up to 85% taxable [6][4] Example Scenarios - A retiree receiving $2,700 per month in Social Security benefits has an annual benefit of $32,400, leading to a starting combined income of $16,200 if Social Security is the only income source [7] - If the same retiree withdraws $50,000 from a 401(k), the combined income would rise to $66,200, making up to 85% of the benefits taxable, amounting to $27,540 [8]