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Old 06-03-2014, 11:39 AM
 
Location: Myrtle Beach
1,501 posts, read 1,192,298 times
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Thank you all for your answers.
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Old 06-08-2014, 03:10 AM
 
466 posts, read 291,117 times
Reputation: 1809
Quote:
Originally Posted by Escort Rider View Post
Most likely your "missing" years would have been at a higher rate of pay (even adjusted for inflation) than some of your earlier years when you were younger. Is the difference fairly small? If so I bet that explains it.
No, my missing years of 0 SS-taxed income would not have been more than any of my 35 highest income years (I have been working non-stop for more than 35 years, never had a break in working), so that can't be the explanation. It wasn't a huge difference, but it was clearly a difference that showed that the more 0 SS-taxed income years I had between retirement and collecting SS, the lower my SS benefit.
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Old 06-08-2014, 04:03 AM
 
Location: Central Massachusetts
4,800 posts, read 4,852,811 times
Reputation: 6379
Quote:
Originally Posted by Kgryfon View Post
No, my missing years of 0 SS-taxed income would not have been more than any of my 35 highest income years (I have been working non-stop for more than 35 years, never had a break in working), so that can't be the explanation. It wasn't a huge difference, but it was clearly a difference that showed that the more 0 SS-taxed income years I had between retirement and collecting SS, the lower my SS benefit.

There will be a difference Kg. Even after adjusted for inflation. The statements assume that you will be working right up to the point you file. One way to mitigate that is to have some part time work to supplement your pension income. Yeah you probably don't need the income but it might be good for your health. I am in the same boat as you. Some of my early years even after adjustment will decrease my over all SS which I do not plan to take until 70. With my pension income I will not need to so a part time gig could be just the ticket in my life as well.
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Old 06-08-2014, 07:43 AM
 
Location: Maryland
282 posts, read 306,269 times
Reputation: 338
Quote:
Originally Posted by mathjak107 View Post
depending on your personal tax situation at 65 you have the standard tax deduction,a deduction for exemptions and an extra deduction for being 65 or older.

that allows a certain amount of money to pass each year tax free.

so as an example a couple can pull more than 20k tax free or up to 41k in retirement money out and pay as little as 4.5% in taxes on it.
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if you delay taking ss and live off savings you can pull as much as 320k out of your ira's and 401k's and pay near zero tax if you pull that money out of the tax deferred accounts first.
I understand the first part, but how do you pay zero taxes on $320k ? It seems to me you would pay taxes on the amount over $41k (your example couple).

My retirement income has 3 sources:
a) fully taxable pension, bank CDs, brokerage account (such as Fidelity, Schwab, etc.)
b) tax deferred (traditional IRA, 401k)
c) tax free Roth IRA
And I am single so I only get half the deductions of married people.
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