Social Security

[Aswensen]

I am planning on taking out my social security benefits in February 2026. Is the tax based on our previous year’s income? 
our income will be greatly reduced in 2026 since we will be both retired but quite high in 2025. Will my benefit adjust with the lower income?

[DoninGA]

Up to 85% of Social Security Retirement/Disability/Survivors benefits becomes taxable when all your other income plus 1/2 your social security reaches:

• Married Filing Jointly - $32,000
• Single or Head of Household - $25,000
• Married Filing Separately - 0

[Opus 17]

1. Your benefit is not taxable if it is your only income.  If you have other income, up to 85% of the benefit can be taxable.  That is based on the current year income, not the previous year.   So whether or not you pay tax on your 2026 benefit will depend on your total 2026 income.  

2. If you are less than your "full retirement age", but you keep working after taking your benefit, your benefit may be reduced.  This is a past/future calculation.  For example, if you have income earned from working in 2026, and you are less than full retirement age, your 2027 benefit may be reduced.  If you take your benefit in the middle of the year when you already worked part of the year, there is a special calculation for the first year of your benefits.  And if you are past your full retirement age, your benefit is not reduced even if you keep working.

[fanfare]

according to my advisor, holding off from 62 to age 70 1/2 results in a 76% increase in your monthly check.

That amount is adjusted for inflation each year.

[Opus 17]

---

@fanfare wrote:

according to my advisor, holding off from 62 to age 70 1/2 results in a 76% increase in your monthly check.

That amount is adjusted for inflation each year.

---

Your social security statement will have those figures on it.  But, remember that if you take an early benefit, you are collecting that smaller benefit for 8 more years.  So it really depends on your health, life expectancy, genetics, other financial resources, and how much you love or hate your job.