Many retirees rely on a combination of income sources to support themselves. Social Security provides a foundational level of support, while annuities can offer guaranteed income streams. The good news is that you can typically collect both Social Security and annuity payments.
**How They Work Together:**
* **Social Security:** This is a government program that provides retirement, disability, and survivor benefits based on your earnings history.
* **Annuities:** These are contracts with insurance companies where you make payments in exchange for a future stream of income. There are different types of annuities, including fixed, variable, and indexed annuities.
**Key Considerations:**
* **Taxes:** Both Social Security benefits and annuity payments may be taxable. The amount of taxes you pay will depend on your overall income and tax bracket. Consult with a tax advisor to understand your specific situation.
* **Financial Planning:** Consider how both income sources will impact your overall retirement budget. Annuities can provide a predictable income stream to supplement Social Security, but it's important to choose the right type of annuity for your needs.
* **Spousal Benefits:** If you're married, understand how your annuity and Social Security benefits may affect your spouse's benefits.
**Conclusion:**
Receiving both Social Security and annuity payments is possible and can be a valuable strategy for diversifying your retirement income. By carefully planning and understanding the tax implications, you can create a more secure and comfortable retirement.
Social Security and Annuities: Can You Collect Both?
Planning for retirement often involves multiple income streams. Many people wonder if they can receive both Social Security benefits and payments from an annuity. The answer is generally yes, but there are important factors to consider. Understanding how these two income sources interact can help you create a more secure financial future.
Source: Read the original article at CBS