More benefits will be taxed
Even with a meager COLA in 2020, higher benefits mean more retirees will be subject to income taxes on at least a portion of their Social Security benefits. When taxes on Social Security benefits were first imposed in 1983, the tax affected only about 10% of senior households, according to an analysis by The Senior Citizens League. Last year, nearly half of older household paid taxes on a portion of their Social Security benefits. Social Security benefits are taxable once combined income exceeds $25,000 for individuals and $34,000 for married couples — thresholds that have never been indexed for inflation.
