The “Tax Bumps”: Why Your Marginal Rate Might Be 40% (Not 22%)
Confused by Social Security?
Because of how Social Security becomes taxable, earning $1 extra might cost you $0.40 or more in tax. This is the Tax Bump.
The Multiplier Effect
Extra income triggers tax on itself AND makes more Social Security taxable.
Year-End Planning
Withdraw just enough to stay under the bump.
About Author
Ray R. Harris
Ray R. Harris, RSSA®, partners with tax and legal professionals to provide specialized Social Security claiming analysis for high-net-worth clients aged 58–70. A former executive with an MBA and background in Finance, Ray mitigates liability for his partners by ensuring their clients optimize spousal benefits, tax efficiency, and lifetime income.
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