For many retirees, Social Security feels like the stable part of retirement income — the one check that arrives reliably, adjusted for inflation and largely insulated from market swings. But in 2026, more retirees may discover that even modest changes in income can alter how those benefits are taxed.
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Experts laid out why retirees could owe taxes on their Social Security benefits without any dramatic lifestyle changes.
Many retirees assume Social Security is either tax-free or only taxed at very high-income levels, said Christopher Stroup, CFP and owner of Silicon Beach Financial. These assumptions often lead to surprises after claiming.
Social Security taxation isn’t new, but the conditions surrounding retirement income have changed. “Even without major income changes, retirees may face taxes due to inflation-adjusted cost-of-living increases on benefits and investment returns,” Stroup said.
He said many retirees underestimate how small income shifts can trigger Social Security taxation. Rising interest rates, required minimum distributions (RMDs) and part-time earnings can also push total income above taxable thresholds.
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One of the core reasons more retirees owe taxes is that Social Security tax thresholds have not kept pace with inflation, Stroup explained. As benefits rise with COLAs and other income grows, he said that “total provisional income may surpass thresholds, creating unexpected tax liabilities.”
This type of bracket creep is subtle but can quietly increase the portion of Social Security benefits subject to tax over time.
The more income you have, the more likely it is that your Social Security benefits will be taxed. Required minimum distributions are one of the most consistent income sources in retirement, according to Matt Hylland, financial planner at Arnold and Mote Wealth Management, but one that retirees can forget to think of as taxable.
Because 2025 saw strong market returns and retirees are another year older, more retirees likely saw higher RMD amounts than in prior years, he explained. “That makes it much more likely that your Social Security will be subject to higher taxes.” In some cases, it may be necessary to adjust withdrawals to better balance taxes.
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The retirees most affected by Social Security taxes are often not high earners, but middle-income households, dual-income retirees or those with multiple income sources, Stroup said. These groups often underestimate their tax exposure because they don’t realize that even modest part-time work, investment gains or RMDs can push them over taxable thresholds.
It doesn’t take a large paycheck to change how Social Security is taxed. “Retirees relying solely on Social Security may be fine, but layered income sources often catch people off guard.”
“Many retirees don’t realize how these seemingly minor income sources interact with thresholds to increase their tax burden,” Stroup said.
Taxes on Social Security don’t exist in isolation. Higher income can also increase Medicare premiums, especially Part B and Part D premiums, through IRMAA (income-related monthly adjustment amount) surcharges, compounding the impact on net retirement income, Stroup pointed out.
“The result is a compounding effect — more taxes on benefits, higher premiums and reduced net retirement income — often overlooked in planning,” he said.
While taxes can’t always be avoided, planning can reduce how often and how severely they apply. The key is managing income timing rather than reacting year to year.
Hylland recommended Roth conversions to reduce long-term tax liability. “While Roth conversions do result in paying taxes now, it can significantly reduce taxes in the long run if you can avoid taxes on Social Security, or just higher tax rates in general, for future years,” he said.
For those who are charitably inclined, donating directly from an IRA through a qualified charitable distribution can also offset RMDs and potentially lower income, and therefore the tax impact on Social Security benefits, he said.
Timing matters. The years just before and after retirement often provide the most flexibility to shape future tax outcomes, but Hylland stressed that “it is never too early to start planning.”
“If you retire at age 65, you can develop a withdrawal and Roth conversion plan that works with a strategy to delay Social Security until age 70,” he advised.
Stroup recommended working with a fiduciary advisor early to ensure taxes don’t erode retirement goals and to help retirees maintain confidence and control over their financial futures.
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This article originally appeared on GOBankingRates.com: Why More Retirees Could Owe Taxes on Social Security in 2026
