Are you including Social Security income in your retirement plan? (invested, financing)

[IDtheftV]

You are being taxed on a return of capital.

( It would be better if you only quoted the text you are responding to. Quoting the whole post makes it look like you aren't smart enough to use an editor. )

Being taxed on your first SS withdrawals is like being taxed on a check that you write. It's your money already. You were just storing it at the Treasury.

[mathjak107]

social security is just means tested by income level

[Lowexpectations]

Originally Posted by IDtheftV

You are being taxed on a return of capital.

( It would be better if you only quoted the text you are responding to. Quoting the whole post makes it look like you aren't smart enough to use an editor. )

Being taxed on your first SS withdrawals is like being taxed on a check that you write. It's your money already. You were just storing it at the Treasury.

Let's bit start taking shots about perceived smarts as you are clear you don't understand what SS is. It's not a return of capital

[IDtheftV]

Originally Posted by Lowexpectations

Let's bit start taking shots about perceived smarts as you are clear you don't understand what SS is. It's not a return of capital

I certainly DO understand what it is.

And, yes, effectively, some of the payment is a return of capital. All retirement plans have that element.

Any further argument about this is way off-topic.

[Lowexpectations]

Originally Posted by IDtheftV

I certainly DO understand what it is.

Clearly you don't because what you pay into through ss/med isn't a retirement plan

Originally Posted by IDtheftV

And, yes, effectively, some of the payment is a return of capital. All retirement plans have that element.

If only it was a retirement plan you'd be on the right track. SS is an insurance program that insures against disability and poverty at old age. It's not a retirement plan

[ncole1]

Originally Posted by IDtheftV

I certainly DO understand what it is.

And, yes, effectively, some of the payment is a return of capital. All retirement plans have that element.

Any further argument about this is way off-topic.

Very little of SS benefits come from a return of the taxes you paid in. The trust fund doesn't have that much in it. Mostly it is cash-flowed from current taxes rather than from the trust fund you paid into.

[IDtheftV]

The topic of what Social Security is deserves its own thread.

This thread is a discussion of whether people are using in in retirement planning and how other stuff one does in retirement planning effects your SS.

I'll be happy to debate your preconceived notions of what it is and what the government tells you what it is if you want to start a thread on it.

In the context of this thread, no one cares what any of us thinks the SS system is. It's a rat-hole.

[Lowexpectations]

Originally Posted by IDtheftV

The topic of what Social Security is deserves its own thread.

This thread is a discussion of whether people are using in in retirement planning and how other stuff one does in retirement planning effects your SS.

I'll be happy to debate your preconceived notions of what it is and what the government tells you what it is if you want to start a thread on it.

In the context of this thread, no one cares what any of us thinks the SS system is. It's a rat-hole.

I don think ss is a rat hole. I do think FRA should have been movng further out with life expectancy but other than that it's a vital social welfare program that many people depend on to survive

[Larry Siegel]

Originally Posted by mathjak107

social security is based on not agi but magi (modified agi)

The IRS defines MAGI as:

AGI without:

Any passive loss or passive income, or
Any rental losses (whether or not allowed by IRC § 469(c)(7)), or
IRA, taxable social security or
One-half of self-employment tax (IRC § 469(i)(3)(E)) or
Exclusion under 137 for adoption expenses or
Student loan interest.
Exclusion for income from US savings bonds (to pay higher education tuition and fees)
Qualified tuition expenses (tax years 2002 and later)
Tuition and fees deduction
Any overall loss from a PTP (publicly traded partnership)

Wait, so income from municipal bonds doesn't count toward the taxation of SS?

If so, why don't financial planners advise everybody who owns bonds (or even stocks) in their taxable portfolios (IRAs or 401k's won't work) to trade them for munies before claiming SS benefits, even if in a moderate tax bracket?

Or do they?

[mathjak107]

all interest is counted even muni interest . it is not a safe haven from the MAGI only your AGI