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Old 09-06-2011, 02:23 PM
 
Location: Alexandria, VA
5 posts, read 6,872 times
Reputation: 12

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People who are still employed have another issue to consider.
The monthly benefits paid before one's full retirement age are withheld at the rate of $1 for every $2 of wages/salaries in excess of $14,160/year. For example, if you make $50,000 and apply for Social Security before full retirement age, the first $1,493.33 of your monthly payment will be withheld. If you continue to make $50,000 per year after reaching full retirement age, your monthly benefits are withheld at the rate of $1 for every $3 in earnings above $37,680. Thus, $342.22 will be withheld each month from your monthly payments. I am 99.9% certain you will not owe tax on the withheld amount because you did not actually get the money. The payments withheld between ages 62 and 66 will gradually be repaid to you when you reach full retirement age, but the publication that speaks to this issue, Social Security publication 05-10069, does not state the repayment rate or the period over which the withheld payments are fully repaid. I am fairly certain the withheld amounts after full retirement age are gradually repaid after you stop working, but the publication does not clearly state this; it only states what happens to withheld amounts between 62 to 66. I think that if you die before the withheld amounts are repaid, you forfeit them. The only way to ensure that you get all of you Social Security payments when you retire early is to stop working full time and take a part-time job that pays no more than $14,160/year.

 
Old 09-06-2011, 02:31 PM
 
4,574 posts, read 7,062,229 times
Reputation: 4222
at age 65 you can make $30K a year, at 66 you can make unlimited amount.
 
Old 09-06-2011, 05:51 PM
 
Location: Bar Harbor, ME
1,922 posts, read 3,780,331 times
Reputation: 1292
Quote:
Originally Posted by highcotton View Post
Zarathu - Your tidy little sum will fall short of the much larger sum you would accumulate if you wait until age 70. It's simple math - 25% increase from 62 to 66 and 32% increase between 66 and 70. Why in the world would you want to collect early and save 2/3 of the money and earn interest at practically zero when you could earn 6%-8% annually by waiting? It's simple math...
You are missing my point..... a much larger sum over time(which I may never live to get, or which my spouse will never have) does not trump a tidy little sum when I actually need serious money. And I may.

Why is this so hard to understand? Lets say I wait until I'm 70 to cash in on the 1/4 more. At age 71, I suddenly have my entire septic system die on my house and it has to be excavated and redone to the tune of $30,000. My tidy little sum allows me to pay this off without even thinking about it.

But suppose I didn't take it, and I don't have those kinds of reserves. Maybe I only have $30K in reserves and now my entire rainy day fund is used up. The $600 extra a month doesn't really help me and requires me to, at age 71, try to find a bank that will give me $30K for the job. Good Luck with that!

It seems like either you have never experienced the need for funds of a nature like this because you are pretty wealthy, or you are too young to understand the issues, both medical or financial, that can creep up on seniors, and the problems that someone for whom that bank has a life expectancy of only 5 more years is not going to give a loan to for something like this.

Your point of reference is a good when when you have all the time in the world and can expect to live another 40 years to make up for any money that you might need: get another higher paying job, get an extra job, etc. These options are not available for a 70 year old senior. Something like I described could be a crises that throws a senior who is doing well down the hole into poverty, having to sell their nice house, and moving into a crappy little apartment somewhere.

You just don't get it.
 
Old 09-06-2011, 05:52 PM
 
Location: Bar Harbor, ME
1,922 posts, read 3,780,331 times
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Quote:
Originally Posted by loveautumn View Post
at age 65 you can make $30K a year, at 66 you can make unlimited amount.
What???
 
Old 09-06-2011, 05:58 PM
 
Location: Bar Harbor, ME
1,922 posts, read 3,780,331 times
Reputation: 1292
Quote:
Originally Posted by Jenny the Philosopher View Post
The only way to ensure that you get all of you Social Security payments when you retire early is to stop working full time and take a part-time job that pays no more than $14,160/year.
Well.... yeah. Taking SSA at 62 means that you have to have either a defined benefit pension that can start by age 62, or enough income from you investments to give you enough living so that you can take the SSA payments as a supplemental thing.

Almost nobody can live on just SSA even if they wait until 70 to do it. Alright, lots of people do it, but its not fun, and most of them continue to work as much as they are able.

But those of us who retired at 62, do it because we can.
 
Old 09-06-2011, 06:26 PM
 
Location: High Cotton
6,131 posts, read 6,444,619 times
Reputation: 3657
Quote:
Originally Posted by Zarathu View Post
You are missing my point..... a much larger sum over time(which I may never live to get, or which my spouse will never have) does not trump a tidy little sum when I actually need serious money. And I may.

Why is this so hard to understand? Lets say I wait until I'm 70 to cash in on the 1/4 more. At age 71, I suddenly have my entire septic system die on my house and it has to be excavated and redone to the tune of $30,000. My tidy little sum allows me to pay this off without even thinking about it.

But suppose I didn't take it, and I don't have those kinds of reserves. Maybe I only have $30K in reserves and now my entire rainy day fund is used up. The $600 extra a month doesn't really help me and requires me to, at age 71, try to find a bank that will give me $30K for the job. Good Luck with that!

It seems like either you have never experienced the need for funds of a nature like this because you are pretty wealthy, or you are too young to understand the issues, both medical or financial, that can creep up on seniors, and the problems that someone for whom that bank has a life expectancy of only 5 more years is not going to give a loan to for something like this.

Your point of reference is a good when when you have all the time in the world and can expect to live another 40 years to make up for any money that you might need: get another higher paying job, get an extra job, etc. These options are not available for a 70 year old senior. Something like I described could be a crises that throws a senior who is doing well down the hole into poverty, having to sell their nice house, and moving into a crappy little apartment somewhere.

You just don't get it.
If you are that tight on income/assets during your tirement to make ends meet and can't handle a little unexpected expense every once in a while, then you might want to start taking SS early. You would be a borderline example...and not the retiree I was talking about. Personally, I would never 'purposely' retire if I was that on-the-edge of not having enough money to take care of unexpected expenses. However, I'm guessing there are many that do.

You did not say what time span the "1/4 more" (your 2nd paragraph) was. From age 62 to 66 it's about 25% more, but from age 66 to 70 it's 32% more. From age 62 to age 70 (only 8 years) it's 25% plus 32%...or 57% more. A 57% increase (or gain) is a tremendous amount...and it includes increase adjustments for inflation also! You cannot expect to safely earn 57% in just 8 years when investing your money! At least not recently, and no time in the near future...



Is there any time it makes sense to start taking benefits as early as possible? Maybe. If you’re in poor health, then the answer might be “yes.” The life expectancy of all 66 year olds in America is 17.8 years (83.8 years-old), so you’ve got a good chance of making out very well on the deal. If you expect to live well into your 80s or beyond 90 it's a no-brainer to delay until the latest.


Reasons Not to Delay Social Security


There are, of course, some circumstances in which it doesn’t make sense for an unmarried investor to delay taking Social Security. For instance:
  • If you need the income right now, then there’s obviously no real choice.
  • If you have reason to think that you won’t live to the average life expectancy for somebody your age.

Good article to read

Last edited by highcotton; 09-06-2011 at 06:57 PM..
 
Old 09-06-2011, 07:52 PM
 
13,773 posts, read 33,916,851 times
Reputation: 10561
Folks.. we are here to share info and to help each other. Remember we all have opinions and you are entitled to yours as long as you accept that others are entitled to their opinion too. You don't have to agree but getting upset does not help anyone
 
Old 09-06-2011, 08:11 PM
 
Location: Lakewood OH
21,697 posts, read 23,672,920 times
Reputation: 35449
Even the best laid plans.......

I had planned to retire at age 67 or maybe even later but a nasty heatlh problem caused me to retire at age 66. Sometimes we don't have complete control over what happens to us. I don't think there is one answer as to when to retire. It competely depends upon whatever situaition people find themselves in.

The important thing is to work on making do with what you have if it isn't what you thought it would be.
 
Old 09-07-2011, 07:10 AM
 
Location: Bar Harbor, ME
1,922 posts, read 3,780,331 times
Reputation: 1292
Quote:
Originally Posted by highcotton View Post
......If you are that tight on income/assets during your tirement to make ends meet and can't handle a little unexpected expense .......
So.... for you.... a $30,000 expense is "a little unexpected expense". You live in a different world than me, and I dare say from most of the retired people in the country.

If for me, a $30,000 expense was just a little unexpected thing, THEN I AGREE WITH YOUR POINT OF VIEW 100%.
 
Old 09-07-2011, 11:11 AM
 
4,484 posts, read 4,745,031 times
Reputation: 9941
Amazing...
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