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Suze Orman shared with Americans the best way to avoid the Social Security 'tax torpedo' - here's how to dodge it and retire richer

Suze Orman, a well-known financial advisor, has provided guidance on avoiding the "Social Security tax torpedo," a situation where provisional income pushes retirees into a higher tax bracket, causing a significant portion of their Social Security benefits to become taxable. In her advice, Orman suggests several strategies to mitigate this issue: firstly, she recommends understanding how provisional income is calculated, which includes adjusted gross income, non-taxable interest, and half of your Social Security benefits. To dodge the tax torpedo, she advises retirees to manage their withdrawals from retirement accounts carefully, potentially using Roth IRA conversions to keep taxable income lower. Additionally, Orman highlights the importance of tax planning, suggesting that retirees might consider delaying Social Security benefits if possible, or strategically timing the withdrawal of funds from different types of accounts to minimize tax liabilities. By planning ahead and understanding the tax implications of retirement income, retirees can effectively reduce their tax burden and enhance their financial security in retirement.

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[ https://www.msn.com/en-us/money/other/suze-orman-shared-with-americans-the-best-way-to-avoid-the-social-security-tax-torpedo-here-s-how-to-dodge-it-and-retire-richer/ar-AA1wHzxr ]