Frank is 68 years old and married. You are meeting him as part of a new marketing plan offered by your firm. The firm is offering a complementary 30-minute meeting for potential new clients. You are just getting to know Frank and have no idea of his income or his financial position. He tells you he is considering retiring before age 70 and asks you what the tax consequences are, if any, of starting to take his social security benefits. You tell him:

Social security benefits can be taxed at 0%, 50%, or 85% depending on income and filing status.

Social security benefits are always non-taxable.

Social security benefits are taxed at capital gains rates.

Social security benefits are fully taxable.