Here’s how big Joe Biden’s Social Security check will be dollar for dollar.
President Biden’s monthly Social Security check in 2023 was nearly 87% larger than the average retired worker took home in March.
For most retirees, Social Security provides an essential source of income. Between 80% and 90% of currently retired workers rely on monthly checks to cover at least some of their monthly expenses, according to a survey conducted by national pollster Gallup for the 22nd consecutive year.
The Social Security Administration is responsible for lowering the poverty rate among those 65 and older from about 38.7% without the program to 10.2% with guaranteed monthly checks, but retired worker benefits are available to all Americans, according to the Center on Budget and Policy Priorities. . Citizens who have earned the required 40 lifetime work credits regardless of income. This includes current President Joe Biden and his wife, Jill Biden.
President Biden making remarks. Image Source: Official White House Photo: Adam Schultz.
Here’s exactly how much Joe Biden will receive in every Social Security check in 2023.
For over half a century, it has been customary for sitting presidents to release their federal and/or state tax returns publicly for anyone to see. With a few exceptions (e.g. Donald Trump), every president has done so. Biden followed suit on Monday, April 15 (Tax Day). The reason I say “Biden” is because Joe Biden jointly files federal tax returns with his wife.
While most of the focus is on the Bidens’ adjusted gross income (AGI) of $619,976, it’s the couple’s Social Security benefits that will turn heads and raise eyebrows.
The Bidens’ Form 1040, page 1, line 6a, shows the couple collected $64,254 in Social Security benefits in 2023, which works out to $5,354.50 per month. But these numbers don’t provide a full accounting of how much Joe and Jill Biden received individually.
The President’s joint tax return includes a Social Security benefits worksheet (Slide 13 of the President’s PDF Tax Return, for those interested) that explains exactly how much benefits Joe and Jill Biden received last year. Joe Biden took home $42,842 (about $3,570) in 2023, while Dr. Jill Biden earned $21,412 (about $1,784 per month).
Jill Biden’s salary is only half of her husband’s, which is likely a sign that she is receiving spousal benefits. The spousal benefit limit is 50% of the spouse’s monthly payment.
The roughly 50.7 million retired worker beneficiaries who received Social Security checks in March took home an average of $1,913.31. That means Joe Biden’s 2023 Social Security check will be nearly 87% higher than what the typical retired worker earned last month in America’s top retirement program.
Social Security benefits are limited for high-income workers.
For the Bidens, generating a combined income into six figures (or more) is nothing new. Looking back over 26 years of public federal tax returns, we’ve never seen two people earn less than $210,797 in AGI in any given year. In 2017 and 2018, the duo earned $11 million and $4.6 million in AGI, respectively. Although their combined Social Security income is much higher than average, it accounts for a relatively small percentage of their total AGI.
Still, the Bidens’ federal tax filings are a good reminder that benefit caps exist for high-income workers.
For every worker eligible for Social Security retirement benefits, the Social Security Administration (SSA) uses four easy-to-understand factors to calculate the amount due each month.
The first two of these criteria are inextricably linked. SSA considers a worker’s highest earnings, 35 inflation-adjusted years, when calculating monthly payments. In theory, the more you earn in a given year, the larger your Social Security check should be when you retire.
However, there is a caveat to the above statement. If high earners regularly exceed the maximum taxable income limit ($168,600 in earned income in 2024), their monthly benefits will be limited to their full retirement age. In 2023, this limit was $3,627 per month. This year it increased to $3,822 per month.
Even though the Bidens earn millions of dollars each year in AGI, the maximum monthly payment is limited to full retirement age.
Image source: Getty Images.
More retired workers than ever are being taxed on a portion of their Social Security benefits.
Another thing worth noting about the Bidens’ much higher-than-average Social Security payments is that they are paying federal income taxes on a significant portion of the money collected. Line 6b of the Bidens’ Form 1040 shows that $54,616 of their Social Security income was subject to federal taxation.
If you’re wondering why Social Security benefits are taxed, take a look at the 1983 Social Security Amendments passed by Congress and signed by then-President Ronald Reagan.
By 1983, Social Security’s asset reserves were nearly depleted. Key proposals from both political parties that would generate additional revenue to strengthen the program and lower long-term program costs were signed into law. This included gradual increases in payroll taxes for workers, staggered increases in retirement ages over several decades, and the introduction of taxation of benefits.
Since 1984, anyone with provisional income (gross income, tax-exempt interest, and half of Social Security benefits) exceeding $25,000 has been subject to federal taxation of up to 50% of Social Security income. For married couples filing jointly, this threshold has been set at $32,000.
In 1993, the Clinton administration added a second tier of taxation using the same provisional income formula listed above. Up to 85% of benefits are taxable for single filers and married couples filing jointly if they earn more than $34,000 and $44,000, respectively.
AGI alone made the Bidens eligible for this top tier of taxation. That’s why 85% of Social Security income ($54,616 of the $64,254 collected) is subject to federal taxation for tax year 2023.
What makes federal taxation of Social Security benefits so unpleasant is that the provisional income thresholds described above have not been adjusted for inflation since they became law decades ago. As cost-of-living adjustments (COLAs) increase benefits over time, more and more retirees are becoming taxable on their benefits.
But don’t expect this tax to go away or adjust for inflation any time soon. America’s leading retirement program is facing a funding gap of $22.4 trillion by 2097 (and growing), so it needs all the revenue it can get.
