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Old 07-11-2014, 06:17 PM
 
30,155 posts, read 47,378,519 times
Reputation: 16099

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I have a pension from my state's teachers retirement plan and have earned enough SS wages that I qualify for a small annuity---but the off-set penalty from SS regulations will take reduce the SS I have worked to earn under my own SSN--not spousal benefit--$ for $ for about 1/3 of what my personal SS will be...the government will just keep it...

I was able to retire in time to prevent losing part of my spousal benefit through a similar type regulation--I worked at a local ISD for just half a day because it pays into SS and teacher retirement...the small amount of money I earned allowed the SS deduction to protect my spousal portion of my husband's much larger SS benefit when we file to draw our SS at FRA after 12/14...
I don't care if the government keeps ALL the money from my own limited earnings since I will make 3 times my own SS annuity drawing my spousal portion...
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Old 07-11-2014, 06:23 PM
 
30,155 posts, read 47,378,519 times
Reputation: 16099
My sister taught for 15 years at a Catholic girls' school--no retirement plan except SS--
she was so stressed out doing that and trying to work at the ranch she lives on that she had to choose and left teaching--she is drawing early SS because she needs the income--
I feel for her because I know that the difference she is losing now vs at 66 or 67 does affect her lifestyle but she also has income from working to manage properties for friend of hers...
having to buy her insurance is big bite out of her monthly income.
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Old 07-11-2014, 06:28 PM
 
71,763 posts, read 71,853,273 times
Reputation: 49311
Quote:
Originally Posted by HappyTexan View Post
You already paid tax on the principal you invest though so it's not completely tax free.


Uncle Sam is going to get his taxes..either up front, when you withdraw or when you die.
Correct about the money in the taxable account but the difference is when you use it to gain access to the tax free money from the ira accounts that you got to deduct while getting a juicy pay check or pay checks.

The taxable money will be taxed regardless if you maxed out your 401k and ira's but it will help add to your income without creating huge tax implications.

It is the sum of all the parts working together that makes it work.
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Old 07-11-2014, 08:12 PM
 
Location: Baltimore, MD
3,745 posts, read 4,222,137 times
Reputation: 6866
Quote:
Originally Posted by Gandalara View Post
Yes, I know he's at 66+10.

That's why I said "(Just click on your year of birth and it will give you a month to month percentage"
They have links for
1937 and earlier
1938
1939
1940
1941
1942
1943-1954
1955
1956
1957
1958
1959 (Dave's)
1960 and later

Each one gives a month to month percentage from age 62 to whatever their FRA is.
Just wanted you to know I tried to rep you but was told I had to spread it around. But I don't want to spread it around!

I had a Duh! moment. I failed to click on the darn years, so I didn't see the additional info. (Although I have to admit that when I looked at the chart via my linked source, I was surprised at the difference in monthly benefits Dave would collect versus the benefits those of us age 60 and over will receive. So maybe my error was meant to be? LOL)
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Old 07-11-2014, 08:46 PM
 
Location: Baltimore, MD
3,745 posts, read 4,222,137 times
Reputation: 6866
Quote:
Originally Posted by mathjak107 View Post
Correct about the money in the taxable account but the difference is when you use it to gain access to the tax free money from the ira accounts that you got to deduct while getting a juicy pay check or pay checks.

The taxable money will be taxed regardless if you maxed out your 401k and ira's but it will help add to your income without creating huge tax implications.

It is the sum of all the parts working together that makes it work.
I'm going to have to find out if this ridiculously complicated tax strategizing applies to single retirees living on the median income of about $25-26 thousand/year. On one hand, my gut reaction is no. OTOH, the single retiree as described above would not want to throw away any extra bucks. On the third hand, the tax laws change frequently, so why bother? I hate this stuff.
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Old 07-11-2014, 09:00 PM
 
Location: Great State of Texas
86,093 posts, read 72,556,082 times
Reputation: 27566
Quote:
Originally Posted by mathjak107 View Post
Correct about the money in the taxable account but the difference is when you use it to gain access to the tax free money from the ira accounts that you got to deduct while getting a juicy pay check or pay checks.

The taxable money will be taxed regardless if you maxed out your 401k and ira's but it will help add to your income without creating huge tax implications.

It is the sum of all the parts working together that makes it work.
If you think about it..you spend 3/4 of your life figuring out how to save it and not get taxed.
Then you spend the last 1/4 of your life on how to take it out and not get taxed.
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Old 07-11-2014, 09:26 PM
 
Location: Sinkholeville
1,496 posts, read 1,433,515 times
Reputation: 2323
Better get it while you can, they won't pay after you're dead.

Use the break-even calculators to see how long you would have to live if you waited until 66 compared to taking the lower monthly amount starting at 62; in my case I think it was something like 15 years, or age 77. Lots of people don't live that long, and I planned to enjoy retirement before I became too elderly.
I'm glad I took the early opportunity, at lease I got to retire, unlike many.

Of course SS doesn't pay much, so if you are still feeding a 401K it might make sense to wait a year or so, depending on how comfortable you need to be. Get your money out of your house unless you're rich enough to pass it down to your heirs.

I'd lump sum any pension as well, put it with the 401k into an IRA and plan to draw against it. Some say withdrawing 4% per year preserves the principle; I'm only doing 3% per year, paid monthly, for my first year while I get used to my new lifestyle. Closer to the end I might need 10% per year for medical expenses, or just for lulz.

You can't take it with you, get out before it's too late.
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Old 07-11-2014, 09:44 PM
 
Location: Great State of Texas
86,093 posts, read 72,556,082 times
Reputation: 27566
Quote:
Originally Posted by mathjak107 View Post
Correct about the money in the taxable account but the difference is when you use it to gain access to the tax free money from the ira accounts that you got to deduct while getting a juicy pay check or pay checks.

The taxable money will be taxed regardless if you maxed out your 401k and ira's but it will help add to your income without creating huge tax implications.

It is the sum of all the parts working together that makes it work.
I do substitute teaching and all the money I earned went into a Roth this year.

So I'm playing the game as well.
I don't need to defer taxes anymore because I'm in a nice low bracket now that I'm retired.
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Old 07-11-2014, 11:05 PM
 
Location: Nebraska
1,141 posts, read 1,005,934 times
Reputation: 986
I took it at 62 because I could. I retired at 60 with a state pension. I paid into SS, so no penalty. My wife is a teacher. She is eligible to draw her full pension next year at 55. Because of HI, she will wait until she is 65. She could quit teaching and find another job with HI.

One of our friends worked for the city of Omaha. After some many of years of service,they can draw a full pension at 55 and keep their HI until they 65. She decided she would take advantage of it. In case things change. My sister lives in Kansas. She decided to retire from teaching this past year at 58. Again in case things change. My sister taught in OK for a few years. She is due a pension. She has to wait until she is 65ish to draw it.

Both are working part time. Our friend works PT at one of the nursing homes in laundry. She works one weekend a month and she covers for people who are sick and on vacation. My sister will be a nanny during the school year for three children whose parents are teachers. She will be working about 25 hrs a weeks.
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Old 07-12-2014, 02:33 AM
 
71,763 posts, read 71,853,273 times
Reputation: 49311
Quote:
Originally Posted by HappyTexan View Post
If you think about it..you spend 3/4 of your life figuring out how to save it and not get taxed.
Then you spend the last 1/4 of your life on how to take it out and not get taxed.
that is why you learn to use the real smart people in the field who figure out all this stuff for a living.

i don't figure out a thing when it comes to my own plan. i use a newsletter for my investments, smart researchers for my tactics , an estate attorney for our planning and recently a financial planner to put all the pieces together for us.

all i need to know is who those who know better than me are.
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