From 24/7 Wall St. · Maurie Backman · · 1m
How Retirees Keep 100% Social Security with $3M Roth IRA
Retirees with $3 million Roth IRAs can keep full Social Security benefits tax-free.
In brief
Retirees with $3 million Roth IRAs can keep full Social Security benefits tax-free. Retirees with $3 million Roth IRAs avoid Social Security taxes by keeping 100% of benefits. Originally reported by 24/7 Wall St..
Social Security Basics
Social Security benefits require paying FICA taxes throughout your career to earn credits.
Social Security Tax Rules
Social Security taxes apply at low thresholds without inflation adjustments.
Provisional Income Calculation
Provisional income combines adjusted gross income, tax-exempt interest, and half of social security benefits.
Tax-Free Roth IRA Advantage
Roth IRA withdrawals don't count toward provisional income, avoiding social security taxes.
Example with $3 Million Roth IRA
With $3 million in a Roth IRA and $4,000 monthly social security, retirees keep 100% of benefits tax-free.
Why Roth IRAs Are Better
Roth IRAs avoid required minimum distributions and offer tax-free investment gains and withdrawals.
The essence
Retirees with $3 million Roth IRAs avoid Social Security taxes by keeping 100% of benefits.
