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Old 01-06-2015, 09:25 PM
 
71 posts, read 64,563 times
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I have 5 specific questions regarding social security.

I am taking early social security at 62 . I am told will be getting around $1220/month.

My wife and I will work the first 6 months then move to another country which is why I need to take my social security early. We will live on that plus some supplemental online business income we'll have. (The question is not "Should I take early social security?" (I know it's generally not advised!) but rather I have questions about how it works:

1) I can choose to leave my job and collect my Social Security at any time of my choice now that Im 62 - it is my choice to do so at any time regardless of my job, income, wife's job, wife's income or etc, correct? My wife's income has no bearing on it, right?

2) I'll be applying for my early Social Security while working the 1st 6 months of the year and making up to but not OVER the $15,720 exemption. As I understand it this will not cause Social Security to take out any of my monthly benefit since my income will be under the exemption amount for the year. Right?

But my question is:
* If I am making, say, $2k/month at my job for the 1st 6 months, while collecting my social security, that means I would make $24k for the year if I worked the whole year (but I'm actually quitting in July) which would be OVER the $15,720 exemption. HOWEVER, I will be quitting my job by July 1 so in fact my income will only be $12k for the year in this scenario.
How does SS know not to take out any income based on the $2k/month wages?

Do they wait until I have actually been paid $15,720 before they take anything out, or do they figure that since I am making $2k/month that I will be making $24k so therefore pay me less than my $1200/month Social Security benefit because it LOOKS like I'll be making $24k for the year?

3) My lump sum withdrawals of my 401k $ and Roth IRA $ ($15-22k total) will not count as part of the the $15,720 income exemption, right?

* BONUS QUESTIONS * :

4) If I have my social security benefits paid to a foreign bank is there any extra fee taken because of that or is it any way treated differently than if I have it sent to a U.S. bank? Im sure there must be an exchange rate but is there anything more than that?

5) There used to be a way that if you collected social security early and then later paid back all you got from soc. sec., you could then collect based on the age you are at the time.
i.e. You collect beginning at age 62,you then pay back all the soc. sec. payments you've collected, when you reach age 66. You could then collect beginning at age 66 at that higher benefit rate as if you'd never collected at age 62.
This option no longer exists, right?
Any talk of bringing it back? (Wish they would!)

Thanks so much for your help! I am betting there are at least a couple experts here who can answer these for me!
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Old 01-07-2015, 01:36 AM
 
71,651 posts, read 71,801,099 times
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you can have 2 issues with ss.

1-earning more than you can and giving some back.
2- having total modified income over the limits and getting ss taxed.

withdrawals that create taxable income count as well as taxable passive income . that is added to 1/2 the social security amount to determine if your ss is taxed.

so taxes are one issue.

as far as earning over the limit which is different from taxes no only your earned income counts if under fra.


there is no plan to bring back paying back ss , you only get the first year to do that.

if you go over the income limit and your checks were to big ,after you file your taxes ss will send you a letter as to what you have to send them back.
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Old 01-07-2015, 02:17 AM
 
71 posts, read 64,563 times
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Quote:
Originally Posted by mathjak107 View Post
you can have 2 issues with ss.

1-earning more than you can and giving some back.
2- having total modified income over the limits and getting ss taxed.

withdrawals that create taxable income count as well as taxable passive income . that is added to 1/2 the social security amount to determine if your ss is taxed.

so taxes are one issue.

as far as earning over the limit which is different from taxes no only your earned income counts if under fra.


there is no plan to bring back paying back ss , you only get the first year to do that.

if you go over the income limit and your checks were to big ,after you file your taxes ss will send you a letter as to what you have to send them back.
Thanks for the reply.
So if I understand you correctly you are saying that I am correct that it is fine to go ahead and apply for soc. sec. and then work half the year as long as I don't go over the $15,720 exemption with MY income (my wife's is irrelevant to this matter).
Correct?
"... only your earned income counts if under fra". What is "fra"?

And in my scenario of working and making $2k a month for 6 months, you are saying that this is not an issue. If it goes over, i.e. say I were to work 9 months which would be $18k or $3,280 over the exemption, then they would charge me for that the following year. Again this is only my income that is at issue, not my wife's.
Do I understand you correctly?

Also: "1-earning more than you can and giving some back.
2- having total modified income over the limits and getting ss taxed."

"earning more than you can"... what does that mean? Is there a figure above which you can't make without giving some Social Security back? Do you know what that amount is? Surely my wife's and my total yearly income of $50k or so would not trigger that...?

And "total modified income over the limits" ... How do I figure total modified income over the limits?
Can you refer me to a layman's explanation of this somewhere? I'm afraid I'm not understanding some of your lingo.
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Old 01-07-2015, 02:32 AM
 
71,651 posts, read 71,801,099 times
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here is what modified income is

What Is Modified Adjusted Gross Income? | US Tax Center
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Old 01-07-2015, 04:18 PM
 
Location: In a daze
244 posts, read 219,159 times
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Not to detract from the knowledgable posters on the forum, but you may be better served by setting up an appointment at a nearby SS office and discussing your concerns with them.

That way, you can be pretty confident of their responses to your concerns.
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Old 01-07-2015, 05:21 PM
 
71 posts, read 64,563 times
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Quote:
Originally Posted by Cuzzant View Post
Not to detract from the knowledgable posters on the forum, but you may be better served by setting up an appointment at a nearby SS office and discussing your concerns with them.

That way, you can be pretty confident of their responses to your concerns.
Hi. Yes of course I will ask social security. However, I have been told by a friend who went there that they totally gave him wrong information.
So I figure the more info I have the better and if they say something different than what someone says here I can challenge them or ask someone via phone or another appointment to confirm.
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Old 01-07-2015, 05:23 PM
 
Location: In a daze
244 posts, read 219,159 times
Reputation: 918
Quote:
Originally Posted by pdsnickels View Post
Hi. Yes of course I will ask social security. However, I have been told by a friend who went there that they totally gave him wrong information.
So I figure the more info I have the better and if they say something different than what someone says here I can challenge them or ask someone via phone or another appointment to confirm.
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Old 01-07-2015, 05:33 PM
 
Location: Florida
4,366 posts, read 3,704,692 times
Reputation: 4111
Quote:
Originally Posted by Cuzzant View Post
Not to detract from the knowledgable posters on the forum, but you may be better served by setting up an appointment at a nearby SS office and discussing your concerns with them.

That way, you can be pretty confident of their responses to your concerns.
I have used two offices. One was very good and one very very bad. Yes go to the office if you can, but try to know the answers before you go.

If they give you the wrong info it is still your problem.
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Old 01-07-2015, 05:36 PM
 
71 posts, read 64,563 times
Reputation: 80
Quote:
Originally Posted by mathjak107 View Post
Here is the pertinent part of the above article to this discussion:

QUOTE:
"Taxable Social Security Benefits
Most Americans will not be taxed on their Social Security benefits, but some of your social security could be taxable. Approximately one-third of people who receive Social Security are required to pay taxes on their benefits. Your filing status and income level will determine whether your Social Security payments are subject to tax. In general, your benefits are not considered taxable as long as Social Security is your sole source of income.
Your Social Security may be taxed if you earn income from other sources and your MAGI exceeds the base amount for your filing status. To determine this, take 50% of the Social Security benefits you received and add that to all your other income. If your total is greater than the following base amount, your Social Security benefits may be taxable:
$32,000 for married filing jointly
$25,000 for single, married filing separately (who lived apart during the entire year), head of household, and qualifying widow(er) with dependent child
$0 for married filing separately (who lived together during the year) "
UNQUOTE


So basically in my case, married and filing jointly, if we make over $32k a year we will pay taxes on social security income.
Ugh.
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Old 01-07-2015, 05:47 PM
 
71,651 posts, read 71,801,099 times
Reputation: 49241
it is a horrible tax because you have 2 moving targets.

the more the modified agi the more social security gets taxed and the more ss gets taxed the higher the modified agi and the more ss gets taxed and in a circle we go until the ss gets taxed to the max.
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