Tax Torpedo – Avoid Paying Taxes on Social Security Income
Taking money from IRA’s and 401K’s may allow the IRS to charge taxes on your Social Security Income. In this episode, I’ll do a brief explanation of the problem we call the tax torpedo!
Included in this episode:
- If you think taxes are going to go up, all the pre-taxed money is going to be taxed at higher rates later in life
- The “Tax Torpedo” – the determination on what will be taxed on your social security income is called Provisional Income
- Every $1 you take out of the IRA, you are taxed on that dollar – but with the way taxes work, the Tax Torpedo, $1.85 is actually taken out, yet you are only holding $1
- Do not allow yourself to be in a situation where you are paying 46% extra in taxes when you take money out of the IRA
- Doug Warren’s YouTube video on the Tax Torpedo
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Charlie, your host:
“Charlie Jewett is an Author, Speaker, Podcast Host, Consumer Advocate, and Investment Advisor from San Diego, Ca. Charlie has spent the last eleven years trying to change the way the industry professionals and consumers think about Retirement. Charlie provides education materials that help people to create their own financial plans and offers services to protect consumers from the bad guys in the Financial Services Industry.”