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Complaining about taxes is not unique to seniors or in my case maybe a super senior, but they are mighty vocal and prolific on the internet. I was curious, how much could a age 65+ couple earn in retirement before actually paying federal income taxes on their money?
I ran a couple of scenarios using AI tools. I was a bit shocked at the results. Here is an example …
I asked what a couple both age 65 + with combined SS benefits of $50,000, who use standard income tax deductions, could have in total taxable income before paying federal income tax (2026).
The answer:
They can have roughly $30,700 in other (non-SS) income before owing any federal tax.
Total combined income (SS + other), including the untaxed portion of SS, would be about $80,700.
If they had tax-free interest income the picture could change because that might change the tax on SS benefit. If they had any amount of Roth income the picture would really change. They could be sitting pretty and totally tax free, but why?
I’ll leave it to the tax experts among us to make sense of this, but it seems seniors might have a better deal than many younger folks.
The maximum Social Security benefit in 2026 for someone who made more than the taxable wage base for at least 35 years and retired at age 70 is an astounding $5,181 monthly or $62,172 annually. Ida May Fuller of Ludlow Vermont received the first Social Security benefit check in 1940. It was $22.54. Feckless politicians of all political parties caused Social Security’s problems. Now, feckless politicians of all political parties need to repair the problems their forbears caused. I don’t mind paying taxes. I wish I paid $1,000,000 annually. What I do mind is the feckless politicians continually changing the rules.
Reading the many comments complaining that Roth accounts should be taxable is pretty bizarre. 90% of all IRA $’s are traditional and 10% are Roth -similarly for 401k’s. During my working years I only had traditional 401k and IRA. The advent of Roth accounts was an opportunity to create accounts that “pay taxes in advance” so seemed very attractive -even though paying the taxes was no fun. For those that think it is unfair then convert your account and pay the unpalatable tax today. What about 529 plans, cash value life insurance, HSA accounts?
The comment that 90% of all IRA $’s are traditional and 10% are Roth just got through my head. Roth accounts became available in 1998 so obviously most Roth account holders are on the younger side and this 10% will grow over time. The support for including Roth distributions in income calculations for SS makes sense as a case of “don’t raise my taxes, raise those of these other people who bought into the tax free promise of Roth accounts.”
Bizarre indeed! Hence my earlier wondering if Roths being taxed in some way isn’t as far fetched as one might have once thought, with commenters on this very thread seeming to support it.