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Re: Taking Social Security at 63 or 66

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Message 21 of 72

@ej9567 wrote:
If l start taking SS out the first of next year and work until lm 65, which is 1 more year. Will IHave to pay taxes ony SS, for that year?

You can work while you receive Social Security retirement (or survivors) benefits. When you do, it could mean a higher benefit for you in the future.

 

Each year SS reviews the records for all working Social Security recipients. If your earnings for the prior year are higher than one of the years we used to compute your retirement benefit, we will recalculate your benefit amount. We pay the increase retroactive to January the year after you earned the money.

 

However, if you are younger than full retirement age and make more than the yearly earnings limit, your earnings may reduce your benefit amount.  So taxes are not the only thing to be concerned about - but it depends on what your earning are -

 

If you are under full retirement age for the entire year, SS deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2015, that limit is $15,720.

 

In the year you reach full retirement age, SS deducts $1 in benefits for every $3 you earn above a different limit. In 2015, the limit on your earnings is $41,880 but we only count earnings before the month you reach your full retirement age.

 

Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.

 

Social Security Retirement Planner - Getting Benefits While Working

 

Yes, taxes on a certain % of your Social Security could be applicable - while working and even after you retire - that will depend on your total income and the tax tables.

 

Benefits Planner: Income Taxes And Your Social Security Benefits

 

Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an "individual" and your combined income* is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.

Consider this to be on only the contribution portion which was not taxed while working (the employer match)

 

read more at the above  linked Social Security webpages -

* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Taking Social Security at 63 or 66

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Message 22 of 72
If l start taking SS out the first of next year and work until lm 65, which is 1 more year. Will IHave to pay taxes ony SS, for that year?
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Re: Taking Social Security at 63 or 66

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Message 23 of 72
 
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Re: Taking Social Security at 63 or 66

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Message 24 of 72
I agree thats why we should get it at 63.
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Re: Taking Social Security at 63 or 66

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Message 25 of 72
 
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Re: Taking Social Security at 63 or 66

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Message 26 of 72

Bill K., what are your options?

 

1. Keep working and retire later, and take SS later?

2. Stop working, live off savings, and take SS later?

 

If you make $20000 a year, I don't think you trigger the added SS taxes.

 

From IRS.GOV

 

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an "individual" and your combined income* is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.

 

 


Sincerely,
Peter
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Re: Taking Social Security at 63 or 66

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Message 27 of 72

Hi! My name is Bill K. and I'm confused about weather I should be on SS or not. I'm 64 and still working. I make about 20K a year. I was told i should have signed up at 62 and banked the money until I decide to stop working. My target date was 66. However, it seems that I have been wasting money that I could be getting. Right or wrong? I know that at 66, I will be getting about $400+ more a month than if I went on SS now. But, will this all break even as long as I live for a few years?

If you can help, please let me know.

Thanks,

 

Bill

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Re: Taking Social Security at 63 or 66

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Message 28 of 72

I put a posting out on the Social Security discussion, there is a "when to take Social Security" conversation. I have a link to a Google spreadsheet with Net Present Value (NPV) financial calculations.

 

Go take a look at my numbers over there. In summary, I think the conventional wisdom about taking Social Security as late as you can is totally wrong, because it ignores opportunity cost and time value of money. 

 

My calculations say take it at age 62, if you'd otherwise be pulling money out of any decently allocated investment accounts. But if your money is saved in Money Market accounts or in cash under your mattress making 0%, then take it later.

 

 

 

 


Sincerely,
Peter
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Re: Taking Social Security at 63 or 66

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Message 29 of 72
I will be 62 this year, however planning to work till I am at least 65. I am not married znd feel like I am 40.lol, not brsgging, I think the next three years will give me added years, as I am active and will be able yo travel more later and still do all the things I love, walking, gardening just getting out there and seeing new things and conversing with people! I can't take Medicare till then and would like to keep my current medical till retirement. Just living a good life, 65 for me! Smiley Wink
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Re: Taking Social Security at 63 or 66

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Message 30 of 72

Shanran1, I'm in a similar situation.  I retired from Federal Service in 2011 at age 56 after being employed for 33 years. Add my 4 years of military time and my 1+ years of accumulated sick leave and I retired with 38 years of Federal Service. While federally employed, I was under the Civil Service Retirement system (CSRS). I'm currently drawing  a CSRS annuity. I'm also working part time for United Parcel Service and am paying into SS. Also, for the past 20 years I'm worked as an independant contractor umpiring NCAA college baseball games which I also pay SS tax when I file my Federal income tax. I will be 60 years old next year. My plan is to begin drawing my SS benifits as soon as I turn 62. During my Federal service I also contributed in to the TPS (Thrift Savings Plan). In addition to that, I also have a regular IRA account. 

 

g

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