Q. If you trade stocks and have capital gains or sometimes losses after you retire and only one spouse trades, how does this affect your social security and health insurance costs? We collect our taxes together.
A. We are happy that you ask.
Let’s start with social security.
If you’re already retired and on social security benefits, the amount of other unearned income doesn’t affect social security benefits, said Brian Scheiss, certified financial planner at Modera Wealth Management in Westwood.
In other words, there is no other threshold undeserved income reduced social security benefits in retirement, he said.
But a couple combined income Can affect how much of the service is taxed.
Couples filing joint tax returns will pay taxes on up to 85% of their combined social security benefits if their joint income is over $ 44,000 in 2021, Scheiss said.
If their combined income is between $ 32,000 and $ 44,000, only 50% of their benefits will be taxed, he said, while if their combined income is less than $ 32,000, none of their benefits will be taxed.
The combined income is your adjusted gross income plus tax-free interest plus half of your total social security benefits, he said.
Bonuses for Medicare Parts B and D increase due to the higher income, said Scheiss.
The premiums increase in certain stages if the modified adjusted gross income (MAGI) exceeds certain thresholds. The higher premiums are known as the earnings-based monthly adjusted amount.
However, he said these thresholds will be based on combined income and both spouses’ Medicare premiums will be affected.
“Income from capital gains and other sources can have an impact Health insurance premiums, but it doesn’t matter whether one or both spouses are trading, ”he said.
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Karin Price Müller writes the Bamboo led Column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘S weekly e-newsletter.