The 13 States that Tax Your Social Security Benefits

This article was originally published on Franklin Wolfson's website. Part of his series on Retirement, you can read the entirety of the blog, here. 


If you’re not worried about your Social Security benefits…you should be.

Did you know there are currently 13 states that tax your Social Security benefits? I didn’t either. Don’t be surprised if many more adopt the same tactics.

We keep hearing stories that Social Security is in long-term trouble. This is extremely bad news for the large and growing numbers of retirees whose future is growing more dependent upon this failing system.

According to a national survey conducted on retirees, 59% rely on Social Security as a major source of their retirement income and an additional 31% cite Social Security benefits as a minor source of their income. As for non-retirees, more than one-third expect Social Security to represent a major source of their retirement income and almost half anticipate it will be a minor source of the income they depend upon. In short, without Social Security, a large number of Americans are going to struggle just to meet their basic needs.

So if you’re in or approaching retirement you need to be aware that Social Security is in trouble, real trouble. Beginning around 2020, according to a report by the Social Security Board of Trustees, the program’s cash inflow including interest earned, will turn into a cash outflow due to the increasing number of boomers leaving the workforce, a falling worker-to-beneficiary ratio and longer life expectancies. By the year 2034, per the Trustees, the program will have used up the entirety of its spare cash, potentially leading to a 21% cut in benefits.


The conclusion you should draw from this is simple. If you’re young, get prepared. If you’re older, you should be scared.

Check out Franklin's article to read the entirety of the article.