Social Security's Big COLA Increase Next Year Could Also Become a Tax Headache
If you follow Social Security, then by now you've probably heard about the big cost-of-living adjustment (COLA) that could boost Social Security benefits by 8% or 9% in 2023. This would be the largest COLA increase retirees have seen in decades. While the boost will be welcome, retirees should be aware of its implications, such as the potential to increase the taxes you pay on your benefits. Here's why the big upcoming COLA increase also could become a tax headache if you're not careful.
The somewhat good news is that no retiree will ever have to pay taxes on all of their Social Security benefits. The bad news is that you still may have to pay taxes on half of your benefits and could possibly have to pay taxes on as much as 85% of your benefits.
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Source Fool.com
