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Old 06-06-2014, 02:57 PM
 
8,208 posts, read 11,927,697 times
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Quote:
Originally Posted by Delahanty View Post
And, as an aside, BTW, it looks like 2015 will be yet another "no Social Security COLA" year for seniors, who're continuing to take it on the chin for this administration.
Where did you come up with that nonsense? We've already "earned" 1.4% toward the next COLA and there's still five more months of inflation data to come. The only way not to receive a COLA in 2015 would be for prices to drop significantly over the next few months and that ain't happening.

Given what's transpired so far this year, Social Security's Board of Governors are estimating that the COLA will be 2.0% in 2015. It may turn out to be higher, or it may turn out to be lower, but no one in their right mind is predicting that it will be zero.

CPI-W data and COLA estimates
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Old 06-07-2014, 05:37 AM
 
198 posts, read 414,450 times
Reputation: 227
This is very interesting thread. Good work guys.
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Old 06-14-2014, 03:22 AM
 
71,779 posts, read 71,896,917 times
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michael kitces did an interesting article on the effects of taxes on your social securiy .

when to take ss and how big you want those payments to be has a lot to do with your individual tax situation.

because with ss you are dealing with 2 sliding tax bracket scales.

as you get more in ss it can become more likely your ss will be taxed and as your ss is taxed your tax bracket grows as well.

the combination of two moving targets can generate tax brackets far beyond your wildest dreams thought would ever happen.


as an example lets take a married couple with 20k each in ss or 40k.

"If you are a married couple and receive $40,000 (20k each ) in Social Security benefits:
None of your benefits are taxable if your other income is less than $12,000.
For every dollar between $12,000 and $24,000, an additional 50 cents becomes taxable.
For every dollar over $24,000, an additional 85 cents becomes taxable, up to a total other income of $56,941, which makes the maximum $34,000 taxable."

so here is what happens , assuming non ss income of 30k plus the 40k ss would make about 11k taxablei in ss money.

that agi of 41k is in the 15% bracket. but it will now see a marginal tax rate of 27.5% on every dollar of income over that point up to around 59k in taxable income.

that is a huge jump.

for singles they can see rates jump from 25 to 46.5% on certain income ranges.

this why retirement planning and when to take ss is far more complex than you know or can figure.

the ramifications of waiting and getting that larger paypent can have big tax implications especially when combined with your rmd's and other income.

poor tax planning can wipe out many times the increased benefits by planning wrong.

http://www.kitces.com/blog/the-taxat...rate-increase/

Last edited by mathjak107; 06-14-2014 at 03:45 AM..
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Old 06-14-2014, 04:38 AM
 
Location: Central Massachusetts
4,800 posts, read 4,855,118 times
Reputation: 6379
Quote:
Originally Posted by mathjak107 View Post
michael kitces did an interesting article on the effects of taxes on your social securiy .

when to take ss and how big you want those payments to be has a lot to do with your individual tax situation.

because with ss you are dealing with 2 sliding tax bracket scales.

as you get more in ss it can become more likely your ss will be taxed and as your ss is taxed your tax bracket grows as well.

the combination of two moving targets can generate tax brackets far beyond your wildest dreams thought would ever happen.


as an example lets take a married couple with 20k each in ss or 40k.

"If you are a married couple and receive $40,000 (20k each ) in Social Security benefits:
None of your benefits are taxable if your other income is less than $12,000.
For every dollar between $12,000 and $24,000, an additional 50 cents becomes taxable.
For every dollar over $24,000, an additional 85 cents becomes taxable, up to a total other income of $56,941, which makes the maximum $34,000 taxable."

so here is what happens , assuming non ss income of 30k plus the 40k ss would make about 11k taxablei in ss money.

that agi of 41k is in the 15% bracket. but it will now see a marginal tax rate of 27.5% on every dollar of income over that point up to around 59k in taxable income.

that is a huge jump.

for singles they can see rates jump from 25 to 46.5% on certain income ranges.

this why retirement planning and when to take ss is far more complex than you know or can figure.

the ramifications of waiting and getting that larger paypent can have big tax implications especially when combined with your rmd's and other income.

poor tax planning can wipe out many times the increased benefits by planning wrong.

http://www.kitces.com/blog/the-taxat...rate-increase/

Yikes!! thanks mathjak. DW and I just talked about this after I read it quickly. We are on that bubble which is why we are doing our planning now. I began this process of thinking about the end game a couple of years ago as you know.
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Old 06-14-2014, 05:35 AM
 
Location: in the miseries
3,302 posts, read 3,583,976 times
Reputation: 3810
Quote:
Originally Posted by mathjak107 View Post
michael kitces did an interesting article on the effects of taxes on your social securiy .

when to take ss and how big you want those payments to be has a lot to do with your individual tax situation.

because with ss you are dealing with 2 sliding tax bracket scales.

as you get more in ss it can become more likely your ss will be taxed and as your ss is taxed your tax bracket grows as well.

the combination of two moving targets can generate tax brackets far beyond your wildest dreams thought would ever happen.


as an example lets take a married couple with 20k each in ss or 40k.

"If you are a married couple and receive $40,000 (20k each ) in Social Security benefits:
None of your benefits are taxable if your other income is less than $12,000.
For every dollar between $12,000 and $24,000, an additional 50 cents becomes taxable.
For every dollar over $24,000, an additional 85 cents becomes taxable, up to a total other income of $56,941, which makes the maximum $34,000 taxable."

so here is what happens , assuming non ss income of 30k plus the 40k ss would make about 11k taxablei in ss money.

that agi of 41k is in the 15% bracket. but it will now see a marginal tax rate of 27.5% on every dollar of income over that point up to around 59k in taxable income.

that is a huge jump.

for singles they can see rates jump from 25 to 46.5% on certain income ranges.

this why retirement planning and when to take ss is far more complex than you know or can figure.

the ramifications of waiting and getting that larger paypent can have big tax implications especially when combined with your rmd's and other income.

poor tax planning can wipe out many times the increased benefits by planning wrong.

http://www.kitces.com/blog/the-taxat...rate-increase/
Good information! A different perspective on the controversial subject of when to take ss benefits.
Glad we took them early.
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