Here's How Big Joe Biden's Social Security Check Is -- To the Dollar
Sean Williams, The Motley Fool
6 min read
For most retirees, Social Security provides an indispensable source of income. Based on 22 consecutive years of surveys from national pollster Gallup, anywhere from 80% to 90% of then-current retired workers rely on their monthly check to cover at least some portion of their monthly expenses.
Although Social Security is responsible for reducing the poverty rate for persons aged 65 and over from an estimated 38.7% without the program to 10.2% with guaranteed monthly checks, per the Center on Budget and Policy Priorities, retired-worker benefits are available to any American citizen, regardless of income, who earns the necessary 40 lifetime work credits. This includes current President Joe Biden and his wife, First Lady Dr. Jill Biden.
President Biden delivering remarks. Image source: Official White House Photo by Adam Schultz.
Here's precisely how much Joe Biden received with every Social Security check in 2023
For more than a half-century, it's been something of a custom for sitting presidents to publicly release their federal and/or state tax returns for anyone to view. With few exceptions (e.g., Donald Trump), every president has done so. On Monday, April 15 (Tax Day), the Bidens followed suit. I say "the Bidens," because Joe Biden files a joint federal tax return with his wife.
While most of the focus might be on the Bidens' adjusted gross income (AGI) of $619,976, it's the couple's Social Security benefits that are bound to turn heads and raise eyebrows.
On the very first page of the Bidens' Form 1040, line 6a shows that the couple collected $64,254 in Social Security benefits in 2023, which works out to $5,354.50 per month. However, this figure doesn't tell the complete story of how much Joe and Jill Biden individually received.
Contained within the president's joint tax filing is a Social Security Benefits Worksheet (slide 13 of the president's PDF tax filing, for those interested) that breaks out precisely how much Joe and Jill Biden received in benefits last year. Joe Biden brought home $42,842, or roughly $3,570 per month in 2023, while Dr. Jill Biden netted $21,412, or approximately $1,784 each month.
You'll note that Jill Biden's payout is effectively half that of her husband, which likely signals that she's receiving spousal benefits. Spousal benefits cap at 50% of a spouse's monthly payout.
In March, the nearly 50.7 million retired-worker beneficiaries who received a Social Security check took home an average amount of $1,913.31. This means Joe Biden's Social Security check in 2023 is almost 87% higher than what the typical retired worker netted from America's top retirement program last month.
Social Security benefits are capped for high-earning workers
For the Bidens, generating six figures (or more) in combined income is nothing new. Looking back on 26 years of public federal tax filings, the two have never earned less than $210,797 in AGI in a given year. In 2017 and 2018, the duo generated in the ballpark of $11 million and $4.6 million in respective AGI. Although their combined Social Security income is well above average, it accounts for a relatively small percentage of their aggregate AGI.
Nevertheless, the Bidens' federal tax filing is a good reminder that benefit caps exist for high-earning workers.
For all workers who qualify for a Social Security retirement benefit, the Social Security Administration (SSA) leans on four easy-to-understand factors to calculate how much they'll be paid each month:
Work history
Earnings history
Full retirement age
Claiming age
The first two of these criteria are inextricably linked. The SSA takes a worker's 35 highest-earning, inflation-adjusted years into account when calculating their monthly payout. In theory, the more you earn in a given year, the bigger your Social Security check should be during retirement.
But there's a caveat to the above statement. When a high earner regularly surpasses the maximum taxable earnings cap ($168,600 in earned income in 2024), their monthly benefit will be capped at full retirement age. In 2023, this cap was $3,627 per month. This year, it's been increased to $3,822 per month.
Even if the Bidens were to have earned millions of dollars annually in AGI, their maximum monthly payout would be capped at full retirement age.
Image source: Getty Images.
More retired workers than ever are taxed on some portion of their Social Security benefits
The other noteworthy takeaway from the Bidens' well-above-average Social Security payout is that they're paying federal income tax on a sizable percentage of what was 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, look no further than the Social Security Amendments of 1983, which were passed by Congress and signed into law by then-President Ronald Reagan.
In 1983, Social Security's asset reserves were nearly exhausted. In order to strengthen the program, core proposals from both political parties were signed into law to generate additional revenue and lower long-term program outlays. This included a gradual increase to the payroll tax on workers, a staggered increase to the full retirement age over multiple decades, and the introduction of the taxation of benefits.
Beginning in 1984, anyone whose provisional income (gross income, plus nontaxable interest, plus one-half of Social Security benefits) exceeded $25,000 would see up to 50% of their Social Security income exposed to federal taxation. This threshold was set at $32,000 for couples filing jointly.
In 1993, the Clinton administration added a second tier of taxation that uses the same provisional income formula listed above. Up to 85% of benefits become taxable when single filers and couples filing jointly surpass $34,000 and $44,000, respectively.
Based on AGI alone, the Bidens qualified for this upper tier of taxation. This is why 85% of their Social Security income ($54,616 of the $64,254 collected) was subject to federal taxation for the 2023 tax year.
What makes the federal taxation of Social Security benefits so unpleasant is that the provisional income thresholds described above haven't been adjusted for inflation since they were signed into law decades ago. As cost-of-living adjustments (COLAs) increase benefits over time, more and more retirees are being exposed to the taxation of benefits.
But don't expect this tax to go away or be adjusted for inflation anytime soon. With America's top retirement program facing a $22.4 trillion (and growing) funding shortfall through 2097, it needs all the revenue it can get.
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