Lawmakers pitch removing state tax on Social Security as Utah faces growing retirement needs

Legislators and economists at the "Aging with Wealth" panel described an approaching demographic shift and debated policy options to boost retirement security for Utahns.

Representative Walt Brooks outlined incremental steps lawmakers have taken to exempt retirement income from state income tax and said the legislature is pursuing bills this session to raise the exemption threshold or remove the tax entirely. "If you're making less than $74,000 a year, there's no income tax," Brooks said of past thresholds and added that this year lawmakers aim to move the exemption to help more retirees.

Senator Wayne Harper said fully removing state income tax on Social Security would extend relief to tens of thousands more Utahns and described complementary proposals to expand the property-tax circuit breaker to provide larger credits for low-income homeowners. "If you take a look at going through and raising that 74,000 up to a 100,000 of exemption, you're helping about another 100,000 people," Harper said.

Economist Robert Spendlove summarized the fiscal context: a shift from defined-benefit to defined-contribution retirement plans and median retirement savings figures that leave many households exposed in retirement. Spendlove said the median middle-income household has about $81,000 saved, which, under a standard 4% withdrawal rule, yields about $400 per month — far short of typical expenses.

Panelists framed tax relief as part of a broader strategy including financial literacy, housing policy and budget choices; no bill received a vote at the symposium itself.