Social Security Estimator Question? (years, benefits, taxes, 401k)
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I just turned age 64 and would like to wait till FRA at age 66 to collect social security. I would like to retire in about 4 months and and live on IRA and 401k money till age 66. Will this money from the IRA and 401k counts towards social security earnings till my FRA. When I went to social security's retirement estimator and entered estimated earnings of 30,000 a year till age 66 instead of last years earnings of 68000 the benefit was reduced at my FRA by $60 a month. Does this sound about right. Thanks for any insight on this.
I just turned age 64 and would like to wait till FRA at age 66 to collect social security. I would like to retire in about 4 months and and live on IRA and 401k money till age 66. Will this money from the IRA and 401k counts towards social security earnings till my FRA. When I went to social security's retirement estimator and entered estimated earnings of 30,000 a year till age 66 instead of last years earnings of 68000 the benefit was reduced at my FRA by $60 a month. Does this sound about right. Thanks for any insight on this.
Louis
No it will not; only "earned income" counts from the sweat of your labors.
I just turned age 64 and would like to wait till FRA at age 66 to collect social security. I would like to retire in about 4 months and and live on IRA and 401k money till age 66. Will this money from the IRA and 401k counts towards social security earnings till my FRA. When I went to social security's retirement estimator and entered estimated earnings of 30,000 a year till age 66 instead of last years earnings of 68000 the benefit was reduced at my FRA by $60 a month. Does this sound about right. Thanks for any insight on this.
Louis
As mentioned earned income only. But remember that your highest 35 years of earnings are used to calculate your benefit. Thus if you do not have 35 years you will have several years of zero so your benefit will be reduced. Note earlier years earnings are adjusted for inflation so it might take a little bit of work to see how stopping work before FRA will affect your benefits.
I just turned age 64 and would like to wait till FRA at age 66 to collect social security. I would like to retire in about 4 months and and live on IRA and 401k money till age 66. Will this money from the IRA and 401k counts towards social security earnings till my FRA. When I went to social security's retirement estimator and entered estimated earnings of 30,000 a year till age 66 instead of last years earnings of 68000 the benefit was reduced at my FRA by $60 a month. Does this sound about right. Thanks for any insight on this.
Louis
Go back and plug in Zeros for those years, and see the effect. Only wages from which FICA taxes were taken count towards your "highest 35 years" of earnings.
In your case OP you will have more than 35 years of earnings though – if you’ve been working since or before age 29.
Keep in mind also that while many people’s “highest earning” years – are their “last” working years, that’s not always the case.
I also plan to retire at 65 – but not collect until my FRA of 67. So my last two years before filing, I won’t have earned income. (If it turns out that’s what I end up doing)
Many of my co-workers practically kill themselves working OT the last 1 or 2 years they work, THEY SAY -- to bump up their Soc . Sec.
But I’ve read that that OT for only 1-2 years won’t bump up the Soc Sec. that much...so while, yes, you’re earning that much for working the OT -- I wonder how much it’s really worth in Soc. Sec. to do that.
Thanks for all the replies, they are of great help and it is what I expected if I don't work in my 65th year than the benefit will take a little bit of a reduction. Oh well maybe a little part time job will make the hit not so bad.
Thanks...
Thanks for all the replies, they are of great help and it is what I expected if I don't work in my 65th year than the benefit will take a little bit of a reduction. Oh well maybe a little part time job will make the hit not so bad.
Thanks...
You might be surprised how little of a reduction you will get. Many here have mentioned how surprised they were that even if they had not worked in a year or two prior to collecting how little of a difference from the estimate on SS website to the actual numbers they got once benefits were paid out.
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