Respond to the discussion answer about Social Security.

Social Security retirement benefits are calculated based off an average of your income over at least the last 35 years. You must work at enough to have earned 40 credits to receive any benefits, with a credit being earned after $1,640 (as of this year) and a maximum of 4 credits being earned in one year. The more one makes, the more one earns towards their retirement benefit. There is an upper limit to this, and after earning $160,200 you will not be taxed any further on your earnings for social security purposes.

Benefits are taxed if you have income outside of Social Security benefits and your income combined with half the value of your annual benefits is above a certain amount (established by the SSA) then you will have to pay at least some taxes on benefits. It is important to note that the SSA states that you will not have to pay taxes on anything higher than 85% of your benefits.

I personally don't think that it is fair to tax social security benefits in any situation. Of course there will always be people who will have income outside of their Social Security benefits in retirement, and we tax that income as is appropriate already. Adding taxes to existing benefits feels like double dipping since those funds were already paid for through taxes to workers in the first place. I could see the argument that taxing benefits on those who have larger incomes is a way of maintaining vertical equity and ensuring that everyone pays their fair share, but I would argue that the threshold for paying taxes on benefits is incredibly low and thinking that someone living off of $34,000 in retirement isn't living the life of the rich and fabulous. Naturally, the amount of money you have in retirement and how sufficient that will be for your lifestyle is a personal situation, and will depend on a number of factors, but at the end of the day I feel that Social Security benefits, in general should not be taxed since most retirees these days have enough problems to worry about without adding the tax bill to that list.