Social Security is celebrating its 87th birthday. The Social Security Act was signed into law in 1935 and payouts began on January 1, 1940.
With inflation at four-decade highs, more than 48 million retired workers are receiving a monthly check that's $1,670. Social Security is a major source of income for many retirees according to a national poll. About 10% of Americans aren't reliant on Social Security during retirement.
This exclusive club has a president who falls into it.
The president is in the East Room. The official White House photo was taken by Adam Shultz.
Most US presidents have publicly filed their federal tax returns. Prior to and after Joe Biden's election victory, this has been the case.
There are many income streams to note on President Biden's tax return, which is filed with his wife, but the eye-catching income figure to note can be found on line 6a. If you're not a tax professional, line 6a is where you can list the amount of Social Security benefits you received in the previous year.
The Biden's claimed over $50,000 in Social Security income on a joint basis last year, which works out to $4,555 a month.
With the U.S. inflation rate hitting a four-decade high in June, the cost-of-living adjustment for Social Security should be large. It wouldn't be a surprise to see the Biden's take home well in excess of $60,000 a year from Social Security after a 5.9% COLA was passed along to beneficiaries.
On the other hand, the average Social Security check doled out to retired workers is $4,555/mo., which is less than the average amount of change received annually. The Bidens' income history looks a bit different.
The adjusted gross incomes for the Bidens fluctuated between 1998 and 2016 The president and his wife brought home over $11 million in both of their years in office.
The Social Security program caps monthly checks, which makes their collective payouts so low.
To calculate a retired worker's monthly check, the Social Security Administration takes an individual's 35 highest-earning years into account. The Bidens have earned so much over the years that they've probably neared or achieved the maximum monthly Social Security payment.
The maximum Social Security check was $3,148 a month in 2021. $3,148 a month was the maximum monthly benefit at full retirement age in 2021, no matter how much you earned.
The image came from the same source as the one above.
The amount of reported Social Security benefits can be found next to the figure on the Bidens' federal tax return. Line 6b shows $46,465 in social security income.
Social Security benefits are subject to tax.
In 1983, with Social Security's asset reserves diminishing, Congress passed and President Ronald Reagan signed the last sweeping reform of the program. In 1984 the taxation of benefits was introduced.
Half of an individual's Social Security income was subject to federal taxation if their modified adjusted gross income was more than $25,000.
President Clinton added a second tier of taxation in 1993 that allowed up to 85% of an individual's or couple's Social SecurityPayout to be taxed at the federal rate. For individual and joint filers, the income threshold is $34,000 and $44,000, respectively.
85% of Biden's Social Security income is exposed to federal taxation each year, because they earn more than the top-tier income threshold.
Income thresholds linked to the taxation of benefits have never been adjusted for inflation. Seniors are being exposed to some form of tax liability on their Social Security income due to the increase in monthly Social Security checks. This is likely to stay the same.
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