FREE GUIDE FOR DELAWARE & MID-ATLANTIC RETIREES
The Social Security & Taxes Guide
Most retirees assume their Social Security is either tax-free or taxable — and leave it at that. The truth is more nuanced, more controllable, and more expensive to ignore than almost anything else in you
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The number that surprises most people: If your income crosses certain IRS thresholds, up to 85% of your Social Security benefit becomes taxable — and every extra dollar you pull from a Traditional IRA can trigger $1.85 of taxable income. This guide shows you how to stay below the line, or get back below it.
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What the guide covers
How provisional income works — and why it's different from your regular income
A plain-language explanation of the IRS formula that determines how much of your Social Security is taxable — including what counts toward provisional income that most people don't expect, like tax-exempt municipal bond interest.
The IRA withdrawal tax cascade — how one account quietly taxes another
Why pulling money from a Traditional IRA doesn't just add taxable income — it can simultaneously trigger taxation on Social Security benefits, Medicare IRMAA surcharges, and bracket creep. Understanding the cascade is the first step to controlling it.
Withdrawal sequencing — which accounts to pull from first, and when
The order in which you draw down your retirement accounts has a larger effect on your lifetime tax bill than almost any other decision. This section walks through the sequencing strategies that keep provisional income in check without sacrificing lifestyle.
Roth conversions as a tax-reduction tool — the window most people miss
The years between retirement and age 73 (when RMDs begin) often represent a unique low-income window. Converting Traditional IRA funds to Roth during this period can permanently reduce provisional income — and the Social Security tax that comes with it.
How Delaware residents can use the state's tax advantages in their strategy
Delaware does not tax Social Security benefits at the state level, and offers a pension exclusion for residents over 60. This section explains how to layer state and federal tax planning to maximize what you keep.
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Michael Loftus
Founder, Loftus Wealth Strategies · Bethany Beach, DE
"The tax on Social Security is one of the most controllable costs in a retirement plan — but only if you plan for it before it happens. Most people discover it on their tax return and assume it's fixed. It's not. The right sequencing strategy, built around your specific accounts and income sources, can make a real and permanent difference."
Want to see what this means for your specific accounts?
A 30-minute call with Michael can show you exactly where your provisional income currently lands, which withdrawals are triggering unnecessary Social Security taxation, and what a different sequencing approach would save you — using your actual numbers. No cost, no obligation.
Schedule a 30 minute free call