At 73 and Still Working, Can You Dodge Taxes on Social Security?
Working past 70 while collecting Social Security can trigger an unexpected tax bill. Here's what every senior earner needs to know.
Still punching the clock at 73 and pulling in more money than ever? Good for you — but the IRS isn't cheering from the sidelines. When you combine wages with Social Security benefits, you can quickly cross the income thresholds that make a chunk of those benefits taxable. That's a trap a lot of working seniors walk right into without realizing it.
The core issue is something called "combined income" — your adjusted gross income, plus any nontaxable interest, plus half your Social Security benefits. Once that number clears certain limits, up to 85% of your Social Security becomes fair game for federal income tax. The more you earn at work, the higher that combined income climbs, and the bigger the potential bill.
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So what can you actually do about it? The playbook isn't empty. Strategies like routing money into a Roth IRA or Roth 401(k) can reduce your taxable income over time, since qualified Roth withdrawals don't count toward that combined income calculation. Timing matters too — understanding which accounts to pull from, and when, is the kind of move that can shift real dollars away from the IRS and back into your pocket.
The concern here is legitimate and relatable: nobody wants to grind five days a week only to get blindsided at tax time. If your employer offers a traditional 401(k), maxing out those pre-tax contributions directly lowers your AGI, which could keep your combined income below the threshold where benefits get hit hardest. At 73, required minimum distributions from retirement accounts are also in the picture, adding yet another income layer to manage carefully.
The bottom line — working seniors face a genuinely complex tax situation, and ignoring it is expensive. A fee-only tax advisor or CPA who specializes in retirement income can run the numbers for your specific situation before next April sneaks up on you. Continue reading at MarketWatch.com.
