3 Reasons Your Take-Home Social Security Benefit Might Be Less Than Expected

The Social Security benefit you qualify for and the benefit that arrives in your bank account aren't always the same thing, and that doesn't mean anything has gone wrong. There are legitimate reasons why your take-home benefit might differ from the actual amount you qualify for based on your work history.

If any of the three things listed below apply to you, it's important to plan for them in advance so your budget doesn't get derailed when your checks come in lower than you expected.

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1. You've joined Medicare

Once you're on Medicare, your Part B premiums will be withheld from your Social Security checks, so you don't have to pay this bill separately. This isn't technically a decrease to your benefits, but it can result in a take-home amount that's a couple hundred dollars lower than what you got before enrolling in Medicare.

Make sure you plan for this in your budget. You may need to rely upon personal savings or income from a job to cover what your Social Security checks won't.

2. You've asked to have benefit taxes withheld

Many seniors owe Social Security benefit taxes when they file their returns. This could result in a larger tax bill than you anticipated and possibly an outstanding balance. You can budget for this on your own, or you can request that the government withhold money from your checks upfront to cover these taxes.

If you choose the latter, you can have 7%, 10%, 12%, or 22% of your checks withheld for taxes. Any excess withholding will come back to you as a refund when you file your tax return.

3. Your benefits are being garnished

The government can garnish your Social Security benefits if you owe back taxes, child support, or alimony, or if you received a Social Security overpayment that you're not able to repay in a lump sum. This can temporarily reduce your checks, possibly by 50% or more, until you've paid back what you owe.

Sometimes, you can get the garnishment reduced if you cannot afford to lose that much of your checks at once. Contact the Social Security Administration to learn more about your options. And if you have extra cash on hand, consider using it to pay back your debts so you don't lose money from your future Social Security checks.

Once you understand what your benefits will look like going forward and why your checks are lower than you expected, remember to adjust your budget accordingly. Revisit it after a month or two to make sure it's working for you and make adjustments as needed.

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