Many Americans look forward to receiving a Social Security benefit once they retire. If you’re someone who only has a modest amount of retirement savings, your Social Security income could end up being a financial lifeline once you’re no longer working.

But there’s an element of Social Security that might throw your retirement finances out of whack. It’s a rule you might find extremely unfair, and understandably so.

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Are you paying taxes on your Social Security benefits?

Many Social Security recipients are surprised to learn that their benefits can be subject to taxes. But that itself isn’t necessarily a big problem. The big issue lies in the underlying rule.

Taxes on Social Security are used to help fund Social Security. For moderate or higher earners, they may not be so detrimental to seniors’ day-to-day finances.

The problem, rather, is that the income thresholds at which taxes on Social Security apply are very low. Not only that, those thresholds have not been adjusted in decades, leaving seniors with fairly low incomes to lose a chunk of their monthly benefits.

You’re liable for Social Security taxes if your combined income exceeds $25,000 as a single tax-filer or $32,000 as a married person filing taxes jointly. While combined income may be smaller than your total income, these are still very low thresholds.

Combined income is the sum of:

• 50% of your annual Social Security benefit
• Your adjusted gross income
• Your tax-exempt interest income, such as what you might earn from holding municipal bonds

Meanwhile, the average retired worker on Social Security today collects about $1,981 a month, or just under $24,000 per year. If that’s your monthly benefit, the Social Security portion of your combined income is $12,000. It’s not such a leap to go from there to $25,000 or $32,000.

At the same time, a combined income of $25,000 or $32,000 doesn’t exactly make you rich. So for many seniors with modest retirement incomes, taxes on Social Security are a huge burden.

The system isn’t fair

Making matters worse in all of this is that the thresholds for combined income have not been adjusted for decades. On the other hand, Social Security benefits have risen over time thanks to the program’s annual cost-of-living adjustments, making it more likely that a growing number of seniors have to pay taxes on their benefits year after year. And that’s really the rub.

Some advocates have called for adjusting the combined income thresholds so they’re indexed for inflation like Social Security benefits themselves are. But lawmakers don’t seem to be in a rush to do that.

Interestingly, President Donald Trump has stated that seniors should not be paying taxes on their Social Security benefits in the first place. The problem with eliminating them completely, though, is that the program will be denied a critical source of income it needs.

For now, the best anyone can probably do is understand when taxes on Social Security benefits apply, and take steps to plan around them. There are also strategies that can lessen your chances of having to pay taxes on your benefits, like housing your retirement savings in a Roth account instead of a traditional one.

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