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Could You Become Too Affluent for Social Security?

Social Security has been in our country since 1935, and for some, a resource that has been counted upon at retirement.  Currently there is consideration being given to reducing the amount of Social Security that is paid out.  Congress is evaluating the use of a means test to do so.   No one knows if means testing will become a reality, but the discussions that are taking place warrant further exploration and understanding.

A means test is simply a process of looking at income, and based on certain criteria, determines if social security is needed.  For example, one plan being considered would reduce Social Security by $1,000 per month, for every $1,000 of income that is non-Social Security income received over $55,000.

The idea of the means test was originally based upon some language found in the 2015 US budget proposal. The proposal was aimed toward reducing the aggressive Social Security claims, occurring when some are claiming benefits.

A means test could have the greatest impact on those in the middle class.  Hardworking individuals, professionals, and small business owners could be hurt significantly by this proposed evaluation.

The facts are, we do not know if and when means testing will actually be enacted.  The best solution however, is to plan now.   Start saving and protecting your investments for the future.  Morris Hall can help with that process.  We're happy to discuss this with you and advise as to the best processes and procedures and a way to hold your investments, as well as how to invest them.
dan-morris Contributed by Morris Hall PLLC Phoenix Estate Planning Attorney and Senior Partner Dan R. Morris.

What Morris Hall, PLLC can do for you:
The attorneys at Morris Hall have hundreds of years of combined experience, ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down.  Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Green Valley, Prescott, Sedona, Flagstaff and Arrowhead.
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This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.


  • Richard G says:

    In the Social Security means testing example given by Dan Morris, he didn’t say whether (for example) dividend income generated from assets held in a Trust would be included, or excluded, from the means testing calculation for an individual? What would be his guess?

  • joy S says:

    Thanks for the update. I guess we knew it was coming, and indeed I have to agree that there may be an income level above which taking social security payments seems ethically inappropriate. Since I’m 85 now, and unlikely ever to reach an income level above $55,00, for me the whole question is moot. However, it does gall me somewhat to know that many residents in the expensive Country Club recently developed across the road from the small group of modest 2 bedroom homes in which I’ve lived for 25 years,, are also enjoying a couple of thousand dollars a month of Social Security to help pay their greens fees and landscaping upkeep around their 2 or 3 million dollar homes. I admire the hard work and success they have achieved, don’t get me wrong, but it seems that anyone who can afford their standard of living has already gained a level of “social security” that doesn’t need government support any more. Do keep us posted on this question. Thank you.

  • DOUG says:

    Right now in 2016 we (a married couple, filing jointly) are being hit with Modified Adjusted Gross Income (MAGI). This is legal and is in force right now. MAGI is tied to Medicare Law, which says “some people” are required to pay a higher premium for their Medicare Part B and prescription drug coverages based on their adjusted gross income (AGI) plus tax-exempt interest income (TEII). We are in that “some people” bracket.

    Our Medicare Part B Premiums doubled for 2016 over same premiums for 2015. This has lead to our monthly Social Security (SS) annuity being reduced by 11.33% for 2016, since Medicare Part B Premiums are deducted from the monthly SS annuity. Our annual “annuity loss” for a $5,832.

    As far as we are concerned, means testing is already here “making too much money in 2015 due to astute investing in the stock market”. At the same time we are being deprived of a measly $5,832 per year, it is common knowledge that hundreds of billions of dollars are being fraudulently ripped off from Social Security & Medicare by lying and cheating US citizens and non-citizens alike (aka crooks). Tens (and probably hundreds) of thousands of those crooks have AGI-TEII far greater than we do.

    It is the Republican Congress that has implement MAGI. It loves MAGI…it shows the American people how it keeps down Federal Government spending.

    As far as we are concerned, means testing is here now.

  • Kathy K says:

    Any website where we can keep track on this means testing proposal?

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