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Old 07-08-2014, 08:34 PM
 
Location: Los Angeles area
14,018 posts, read 17,754,097 times
Reputation: 32309

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The provision of health care from the date of stopping full-time work until the onset of Medicare at age 65 is an important piece of the puzzle. I was fortunate to have an employer who kept me on their health plan from age 61 (when I retired) to age 65, after which I was completely on my own (O.K. by me). They paid 80% of the premium amounts. You can well imagine that I was delighted to pay the other 20% because it was such a good deal for me.
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Old 07-08-2014, 08:34 PM
 
Location: High Cotton
6,131 posts, read 6,447,015 times
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Wait until age 70 and reap the 8% annual increases...unless you 'really' need (not want) the money, or you expect to croak before normal life expectancy.
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Old 07-08-2014, 09:14 PM
 
Location: Talmadge, San Diego, CA
13,326 posts, read 25,323,548 times
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I took my SS at 62 because I had no choice. I was on unemployment for two years, and it was enough to live on, but the third year, it was reduced to $76 per week, so I took it early.

I turned 65 last October, and they now yank out $104.90 for Medicare, so since I'll be 66 this year, I went back to work full time, and intend to work full time for a while. After I pay off all of my bills and beef up my savings, I may cut back to part-time, but can never stop working at all.

Last edited by moved; 07-08-2014 at 10:07 PM..
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Old 07-08-2014, 09:45 PM
 
1,242 posts, read 2,813,304 times
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In general, some people are forced into early retirement for medical reasons, so "want to work" and "ability to work" are really two separate factors as not everyone can physically work well into their 60's even if the desire is there. Unplanned or involuntary sudden loss of employment during a layoff and inability to land another job in part due to invisible age discriminatory hiring practices can also impact or alter retirement plan decisions.
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Old 07-08-2014, 10:04 PM
 
Location: Ocala, FL
407 posts, read 475,321 times
Reputation: 1299
I have two years until I turn 62 and I can't wait for the day. I hate working. DH has been on SSDI for years and draws a good amount, plus we have 2 rental houses for income. I'm working part-time now and I'm not making any more working than I would by drawing SS. I work in a field that it doesn't much matter how old I am (medical/legal transcription from home) so if DH dies and I get between a rock and a hard place, I can go back to work down the line. I just want to enjoy life while I'm young enough to do so! I don't want to wait until I'm 70 and totally decrepit, unable to go to the beach or have fun, just for the almighty dollar. There's more to life than working and putting up with the c**p every day, people expecting you to be there and jump at their whim. If I could retire tomorrow, I'd quit so fast it'd make your head spin.
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Old 07-08-2014, 10:27 PM
 
Location: Kalamalka Lake, B.C.
3,044 posts, read 4,020,006 times
Reputation: 3898
Too many people my age are checking out early. And you have no way of knowing when you're going.
So these actuarial statistics don't mean anything on a one on one basis. Take it early, and take it as
often as you can.
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Old 07-09-2014, 12:24 AM
 
2,429 posts, read 3,227,603 times
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Based on what I'm seeing that counts as income in the calculation as to whether your Soc. Sec is taxed....well it seems you don't get to have much other income at all and NOT have the SS taxed.

Is there an age at which you CAN make as much as you want and not have the SS taxed OR not have the benefit reduced?

Also, IF the amount a person is 'docked' because of income is not lost, but is still "in their pot"...when and how is that every made up?

If a person retires at 62 or 65 and is 'docked' say 50 dollars a month. When and how do they see that 50.00 again? is it ever 'added back' into the monthly benefit check? I'm not talking about having it still in the pool of earned benefits, I'm talking about theme ever getting that docked 50.00 in their check.
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Old 07-09-2014, 12:41 AM
 
5,397 posts, read 6,544,082 times
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Quote:
Originally Posted by rdflk View Post
Based on what I'm seeing that counts as income in the calculation as to whether your Soc. Sec is taxed....well it seems you don't get to have much other income at all and NOT have the SS taxed.

Is there an age at which you CAN make as much as you want and not have the SS taxed OR not have the benefit reduced?

Also, IF the amount a person is 'docked' because of income is not lost, but is still "in their pot"...when and how is that every made up?

If a person retires at 62 or 65 and is 'docked' say 50 dollars a month. When and how do they see that 50.00 again? is it ever 'added back' into the monthly benefit check? I'm not talking about having it still in the pool of earned benefits, I'm talking about theme ever getting that docked 50.00 in their check.
it would be my guess that taxes owed never go away no matter how old you are. perhaps if you only have SS and pay no taxes, over time them you may not have to file. such is the case with my Mom.

as to the docking, you will lose some of your SS check for money made over a certain amount from 62 to FRA. upon FRA you have no limit on what you earn. once you are docked between 62-FRA it goes back in the old communal pot but not YOUR pot.

so bottomline is 'death and taxes are certain"
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Old 07-09-2014, 02:18 AM
 
71,737 posts, read 71,853,273 times
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Quote:
Originally Posted by fumbling View Post
Let's say people have larger than expected amounts in their tax deferred retirement accounts like 401Ks and IRAs due to the good stock markets and assume the markets don't crash. Let's just use $1 million in an IRA as an example, at age 62. Assume that amount is enough "for life" for most ordinary people. Would you recommend withdrawing from the IRA from 62 to 70 so that your withdrawals are in the amounts at the lower marginal tax rates and you can get some of the money out of the IRA at relatively low tax rates, with the intention of using some of the money for immediate living expenses but also "getting extra money out" at low tax rates so you can invest or use them down the line?
your fair share of taxes is variable and the irs says whatever you can save legally and reduce taxes by doing is your fair share but we are not going to tell you how to do it.

i think folks have been brainwashed by mis-informed advice and get what you are asking wrong all the time.

uncle sam gives us all a gift. we get the ability to take every year tax free money from our retirement plan and conventional wisdom says leave the deferred money to grow and spend it last.. that can be dumb advice and in many cases that is just throwing away tax free money.

while taxes would be just slightly higher pre 65 by the time you reach 65 a 65 year old couple could be pulling out tax free as much as 22k a year and as much as 42k a year with as little tax due as 1800 bucks. that is a 4.5% effecive tax rate . that is because standard deductions,exemptions and the extra deduction at 65 you get allow quite a large amount of income through.

if you planned correctly the rest of your income pre social security should be coming from the taxable account where most taxes have already been paid on it , tax free muni's and helped by roth income.

you can muster quite a high income if you do things right and have as much as 8 years of almost tax free income.

you can pull 8 x 42,000 bucks = 336k almost tax free from ira's and reduce rmd's by that much later.

but folks listen to bad advice and spend down first the money from their taxable account where most taxes have been paid and they bypass taking the tax free money offered to them by making the first money their tax deferred stuff. many lose this tax free gift by poor planning. since if you do not use all of that deduction up you lose it each year.

Last edited by mathjak107; 07-09-2014 at 03:19 AM..
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Old 07-09-2014, 02:31 AM
 
71,737 posts, read 71,853,273 times
Reputation: 49294
Quote:
Originally Posted by rdflk View Post
Based on what I'm seeing that counts as income in the calculation as to whether your Soc. Sec is taxed....well it seems you don't get to have much other income at all and NOT have the SS taxed.

Is there an age at which you CAN make as much as you want and not have the SS taxed OR not have the benefit reduced?

Also, IF the amount a person is 'docked' because of income is not lost, but is still "in their pot"...when and how is that every made up?

If a person retires at 62 or 65 and is 'docked' say 50 dollars a month. When and how do they see that 50.00 again? is it ever 'added back' into the monthly benefit check? I'm not talking about having it still in the pool of earned benefits, I'm talking about theme ever getting that docked 50.00 in their check.
far from being the same no matter what you do. folks shoot themselves in the foot all the time by poor tax planning. especially when it comes to taking ss later and not doing other things they need to do..

that whopper of a payment can have bigger tax implications down the road.

also the way ss taxes work you are dealing with two sliding scales and a moving target.

your total taxable modified income decides how much tax on ss you pay. but as more ss gets taxed the income rises causing more ss to get taxed. you can reach a point where you go from 25% to 46% marginal rate with the next dollar.


by utilizing taxable accounts ,roths and tax free income sources there are ways of drawing a moderate income and not getting all your ss taxed up to that 85% limit.

tax free income sources? yep and since muni interest counts as taxable income for the computations of whether or not ss gets taxed you need to learn about what other sources do not count.

as an example over funding a whole life policy for income.

you know that product the misinformed love to hate can be a wonderful source of tax free income to combine with ss ,roth income and low to no tax on money from your taxable account.

you pay near zero fees and charges on over funded amounts as well as can borrow it back tax free and never pay it back. all you need to due is fund it one dollar less then whats called the mec point. that is where the irs draws the line and says this isn't really for life insurance and they call it a modified endowment contract instead and take away the tax free status.

there are so many ways to exploit what you are allowed in the tax code ,the only issue is folks hate paying for advice so they do not know the ways to do it.

i am not smart enough to know all the ways out there to reduce taxes but i am starting to work with a planner this week to guide us.

Last edited by mathjak107; 07-09-2014 at 03:21 AM..
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