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Old 03-15-2015, 06:08 PM
 
33,046 posts, read 22,072,092 times
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Quote:
Originally Posted by mathjak107 View Post
then why keep asking ? it wasn't an unfortunate event in your life that did it - it was your entire life , your choices , your path .

What bad choices? I chose to stay in school, to get great grades, to not have kids, to not do drugs, to not do crime. I think I avoided the 'culture of poverty' stuff pretty well.
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Old 03-15-2015, 06:20 PM
 
Location: Los Angeles area
14,018 posts, read 17,747,361 times
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Default Sorry, but Social Security benefits are not tax free.

Quote:
Originally Posted by nicet4 View Post
........... Husband and wife both collecting. At age 70 the husband would receive $3,000 while the wife would receive around $1,125 which is roughly 50% of what her husbands fra benefit would be. Together they receive $4,125 for $49,500 annually. Their estimated federal income tax on that would be $0.

Assume this couple saved $250,000 at age 70 1/2 they would have to withdraw 4% or $800/month.

If both took ss at their fra their combined ss would be $3,375 for $40,500 annually and they would receive an additional $9,600 ($800*12) in their IRA withdraws for a total income of $50,100.

The estimated federal income tax would also be $0.

In my part of the country if two people have a home that is paid for and can't live will on a tax free $50,000/year then they have a spending problem and not an income problem. In my part of the country $50,000 after tax is equivalent to nearly $70,000 in wages and if you can't make it on that I am not about to cry a river for you..........
Sorry, but under normal conditions 85% of Social Security benefits are subject to federal income taxation. They are only tax free IF one has no other income, or very little other income in addition to Social Security.

I can see that you are postulating a case wherein the SS would indeed be tax free. That is well and good, but I would not like other readers to skim over this and get the idea that SS is tax free as a general rule.

By the way, I agree with you 100% that if a married couple cannot live on SS alone of $50,000 a year, then they have a spending problem, not an income problem. I would even go farther and say that they should be able to live on a taxable income of $50,000 a year.
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Old 03-15-2015, 07:05 PM
 
Location: Grove City, Ohio
10,135 posts, read 12,392,750 times
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Quote:
Originally Posted by Escort Rider View Post
Sorry, but under normal conditions 85% of Social Security benefits are subject to federal income taxation. They are only tax free IF one has no other income, or very little other income in addition to Social Security.

I can see that you are postulating a case wherein the SS would indeed be tax free. That is well and good, but I would not like other readers to skim over this and get the idea that SS is tax free as a general rule.

By the way, I agree with you 100% that if a married couple cannot live on SS alone of $50,000 a year, then they have a spending problem, not an income problem. I would even go farther and say that they should be able to live on a taxable income of $50,000 a year.
For many, if not most, our social security will be tax free and yes, I am aware that up to 85% of ss might be subject to income tax but that would be the minority.

The maximum fra benefit is $2,664 for 2015 and if a couple each received the maximum their combined ss income for the year would be $63,936.

According to IRS Publication 915 the Taxable Social Security benefit would be $3,484 (5%) which would result in an estimated tax due of somewhere around $871.

$488,000 in retirement savings ranks one in the 90 percentile and taking 4% per year would result in $19,520 in annual withdrawals. With an income of $83,456 the tax on social security benefits starts to get serious.

Again, according to IRS Publication 915, the Taxable amount of your Social Security benefit would be $19,365 or 30% of the benefit. In this case you could expect a tax on your ss benefit of somewhere around $4,841 but with a total income of $83,456 I doubt anyone here would consider that earth shattering.

How high does your income have to get to have your 85% of your ss benefit taxed? If a couple received $63,936 in ss benefits and they withdrew $60,000 per year for a total retirement income of $123,936 (I got to admit over $2,000/week would be nice) then up to 84% of their ss benefit would be subjected to taxes.

Something tells me there aren't a whole lot of couples here that plan to receive a retirement income of $123,936.

For most of us, I would venture a guess of up to 75% of us, federal income taxes won't be much of an issue.

Interesting, if you have $150,000 saved (I got more than that) you're in the 75 percentile and over $10,000 you're in the 50 percentile. Given those numbers I doubt many will be subject to federal income taxes.

And if you are? I say great for you for doing a fantastic job in planning!
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Old 03-15-2015, 09:50 PM
 
Location: Where the sun always shines
1,981 posts, read 2,585,824 times
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Quote:
Originally Posted by djplourd View Post
Scary retirement income reality Bankrate, Inc.

Short article but some good points in it.

Issues:
Social Security full retirement age is rising
Medicare premiums are going up
More Social Security benefits are taxed

Steps to Take:
Work longer
Put off claiming Social Security
Save more
Tap your home equity

The only thing I didn't like was the chart on suggested retirement savings targets. I've never seen retirement savings goals shown this way.

How about this for "steps to take"
-stop having so many damm kids b/c your family or culture insist that you do
-stop buying homes and fancy cars that suck up most of your income
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Old 03-15-2015, 10:36 PM
 
11,938 posts, read 20,400,010 times
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More noise. Scary scary noise. Just did a wee little research and someone else says the average for retirement age people is 150,300.

So -- here's the thing -- people are picking and choosing the facts to prove their points. EVERYONE seems to pick and choose the facts to prove their points.

The answer to this is to STOP LISTENING TO THE NOISE. STOP WORRYING ABOUT EVERYONE ELSE. Take care of yourself. Do what you need to protect yourself and let the rest of the world take care of itself.

If you really feel awful about people having no retirement -- do something more substantial than post articles filled with crapola. Work with a shelter, give to a food bank, start a group to learn about budgeting and other financial matters. GIVE OF YOURSELF.....
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Old 03-16-2015, 03:43 AM
 
71,700 posts, read 71,801,099 times
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Quote:
Originally Posted by freemkt View Post
What bad choices? I chose to stay in school, to get great grades, to not have kids, to not do drugs, to not do crime. I think I avoided the 'culture of poverty' stuff pretty well.
except you never took control of your life to make things happen and took the easy way out just floating from one poor job to another.

but this aint the dr phil forum , you already know your own issues that caused you to committ financial suicide.
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Old 03-16-2015, 05:51 AM
bUU
 
Location: Georgia
11,883 posts, read 8,666,921 times
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Quote:
Originally Posted by Tallysmom View Post
Work with a shelter, give to a food bank, start a group to learn about budgeting and other financial matters. GIVE OF YOURSELF.....
Yes, and also each person can do their part to help change things on a broader scale to help mitigate the difficulties of others, if they desire. This is both a micro- and macro- concern.
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Old 03-16-2015, 07:02 AM
 
71,700 posts, read 71,801,099 times
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Quote:
Originally Posted by nicet4 View Post
For many, if not most, our social security will be tax free and yes, I am aware that up to 85% of ss might be subject to income tax but that would be the minority.

The maximum fra benefit is $2,664 for 2015 and if a couple each received the maximum their combined ss income for the year would be $63,936.

According to IRS Publication 915 the Taxable Social Security benefit would be $3,484 (5%) which would result in an estimated tax due of somewhere around $871.

$488,000 in retirement savings ranks one in the 90 percentile and taking 4% per year would result in $19,520 in annual withdrawals. With an income of $83,456 the tax on social security benefits starts to get serious.

Again, according to IRS Publication 915, the Taxable amount of your Social Security benefit would be $19,365 or 30% of the benefit. In this case you could expect a tax on your ss benefit of somewhere around $4,841 but with a total income of $83,456 I doubt anyone here would consider that earth shattering.

How high does your income have to get to have your 85% of your ss benefit taxed? If a couple received $63,936 in ss benefits and they withdrew $60,000 per year for a total retirement income of $123,936 (I got to admit over $2,000/week would be nice) then up to 84% of their ss benefit would be subjected to taxes.

Something tells me there aren't a whole lot of couples here that plan to receive a retirement income of $123,936.

For most of us, I would venture a guess of up to 75% of us, federal income taxes won't be much of an issue.

Interesting, if you have $150,000 saved (I got more than that) you're in the 75 percentile and over $10,000 you're in the 50 percentile. Given those numbers I doubt many will be subject to federal income taxes.

And if you are? I say great for you for doing a fantastic job in planning!
Maybe I am missing something in your thread but ss for a couple is fully taxed at 85% on a magi over 45k. taxes start to phase in at 33k and by 45k you reached the max before 85% is taxed,.

it is all based on your magi .

your magi is looked at . magi is your total income including 50% of ss less certain credits but before deductions.

Table 1. Calculating Modified Adjusted Gross Income (MAGI)

A Social Security Benefits (annual total)

B Calculate Half of Line A

C Adjusted Gross Income (pensions, wages, dividends, Roth conversions, etc.)

D Tax-Exempt Interest Income (e.g., interest from municipal bonds)

E Add Lines B, C, D to Determine MAGI


the amounts your ss starts to get taxed is an magi of 34k for a couple . by 44k all 85% is taxed.



< $25,000 Single ($32,000 Married) None Taxed

$25,000 to $34,000 Single ($32,000 to $44,000 Married) Up to 50%

> $34,000 Single ($44,000 Married) Up to 85%

so in your example that 63,936.00 in ss that couple gets would account for 31,968 in magi , plus just another 13k in retirement income makes all 85% taxable.

I don't think it is bracketed but I am not sure.

Last edited by mathjak107; 03-16-2015 at 07:21 AM..
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Old 03-16-2015, 11:23 AM
 
71,700 posts, read 71,801,099 times
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here is a max out situation for getting ss taxed.

a couple has an agi of 58k from assorted retirement income other than ss and receive a combined benefit of 24k in ss . so their provisional income is 58k plus 12k (1/2 ss ) or 70k .

that is 26k above the upper limit of 44k .

that means 20,400 in benefits are taxable which is the max at 85% of the 26k excess above the limit capped at 85%.

that increases agi to 58k plus 20,400 in taxable ss which is a 78,400 agi. .
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Old 03-16-2015, 11:42 AM
 
8,860 posts, read 5,141,353 times
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Quote:
Originally Posted by freemkt View Post
What bad choices? I chose to stay in school, to get great grades, to not have kids, to not do drugs, to not do crime. I think I avoided the 'culture of poverty' stuff pretty well.
Your choice to obtain no marketable job skills is the bad choice which sunk you. Every day you have the option to stop making that choice, and so far every day you just keep right on making it.
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