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Old 01-05-2018, 02:21 AM
 
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delaying always makes sense if you are working and over the limit .

i waited until 65 . i work 1 day a week and was over the 1410 a month limit . but in the year you will be fra you can earn up to 45k so i filed at 65 .

the first year you collect has special rules . if you earn more than 1410 a month they didn't consider you retired and you get no check .

the earn two over the limit and give back one start after your first year so be careful .

there are 4 different rules involved .

first year you collect has no earnings cap but once you start anything over 1410 a month gets you no check that month . (2017 numbers )

starting 2nd year you have an earnings cap and give back 1 dollar for every 2 over the cap

the year you will be fra has a 45k cap . you give back 1 for every 3 over the limit . so as of jan1 i can earn 45k until my birthday the end of this year when i turn fra .

after fra no restiction .

Last edited by mathjak107; 01-05-2018 at 02:29 AM..
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Old 01-05-2018, 03:13 AM
 
Location: R.I.
970 posts, read 603,310 times
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Quote:
Originally Posted by mathjak107 View Post

the year you will be fra has a 45k cap . you give back 1 for every 3 over the limit . so as of jan1 i can earn 45k until my birthday the end of this year when i turn fra .

after fra no restiction .
I turn my FRA of 66.6 in August of 2023, plan to take my SS survivor's benefit at that time and retire at the end of December and no plans to work any further after that. I figure by May of that year I will have already earned $45,000, and from what I read on the SS web site your FRA year earnings look back is two or three months back from the month you turn FRA and not the entire year. So if I am understanding what I read correctly my look back months would be May-August which I would not have earned $45,000 over that time, so receiving my first check in August or September I would not face any give back from my benefit.

Am I understanding this correctly ?
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Old 01-05-2018, 03:41 AM
 
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no , according to what i see , you can earn up to the 45k or so right up until you are fra . if you see anything else post it but i see no specific look back other than the entire year .

so if your birthday is in july or your bithday is in november you can still earn up to the same 45k . it is not just 2 or 3 months back , it is from the start of the year until you reach fra whenever that is in that year . .


"If you will reach full retirement age in 2018, the limit on your earnings for the months before full retirement age is $45,360.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings."

https://faq.ssa.gov/link/portal/3401...ement-benefits

Last edited by mathjak107; 01-05-2018 at 03:54 AM..
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Old 01-05-2018, 04:28 AM
 
Location: R.I.
970 posts, read 603,310 times
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Quote:
Originally Posted by mathjak107 View Post
no , according to what i see , you can earn up to the 45k or so right up until you are fra . if you see anything else post it but i see no specific look back other than the entire year .

so if your birthday is in july or your bithday is in november you can still earn up to the same 45k . it is not just 2 or 3 months back , it is from the start of the year until you reach fra whenever that is in that year . .


"If you will reach full retirement age in 2018, the limit on your earnings for the months before full retirement age is $45,360.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings."

https://faq.ssa.gov/link/portal/3401...ement-benefits
That information still seems confusing to me.

I turn 66 in February and I turn my FRA of 66.6 in August. I will have earned > $45,000 from January to August, so does that mean if I were to begin collecting in my FRA month of August having already earned > $45,000 over the months leading up to August I will still be penalized and won't see a dime of that benefit until the following year when I have no earned income ? Of course fair doesn't exist, but it doesn't seem fair to me that turning FRA in the middle or the end of the year that you face the possibility of loosing benefits especially when you read the SS literature that states your can earn unlimited income after reaching FRA without penalty.
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Old 01-05-2018, 04:34 AM
 
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nooooooo you are fine . lets break it down by month .

starting in the year you turn fra , from january 1 of that year you can earn up to 45k which is about 3750 a month and give nothing back right up until you are fra when all caps go away .

my fra is 66 . so my history looks like this:

i started in sept 2017 so for sept,oct ,nov and dec i can't earn more than 1410 a month .

as of jan 1st i can earn 3750 a month up until my birthday in the last quarter. i would be able to give nothing back then all caps are gone from fra on

Last edited by mathjak107; 01-05-2018 at 04:46 AM..
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Old 01-05-2018, 02:46 PM
 
Location: RVA
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Nightengale, your income only affects the months you are working AND collecting SS. It is not a yearly comparison. So if you wait until August to collect, it makes no difference what you earned in Jan - July.
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Old 01-05-2018, 03:15 PM
 
Location: RVA
2,164 posts, read 1,264,598 times
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To bpollen: collecting early can make sense if it will be your only other source of income besides savings. One of the real benefits to delaying is the guaranteed amount that will be received eliminates a high level of risk for the increased amount as a low taxed income, while at the same time reducing RMDs and the taxes associated with it. This is also tied to what state you live in and tax liability. If one has a decent pension, then delaying is far easier as the withdrawals usually only last a few years, until one starts collecting, then no withdrawals arw needed. If during that time, deferred savings can be used to support income and be converted to Roth, then no or little tax will ever be paid from those deferred accounts after 70.5. The actual usefulness of delaying is entirely tied to your tax brackets, amount of tax deferred saved, Roth amounts and desired net spendable income. The lower the income and amounts saved, the more it makes sense to file early as the income tax avoidance is far less than someone that has a much higher income and higher taxes to pay on larger RMDs. In addition, the amount that SS is increased is typically much more for a higher income household.

Delaying to increase SS by $18k/yr per person, means only paying paying federal tax on 85% of that amount, and typically no state tax, instead of federal and state of 100% on deferred forever. The tax implication is far less if the increase is only $6k/yr. Also, if your objective is to die with as much saved as possible at all times, then file early. That is not being flippant or sarcastic. Using the money one worked for and saved has a tax cost, so simply looking at a balance sheet before taxes are paid is less useful, especially as the tax bracket increases.

You calculators showed no difference filing early or late. So then why is filing early better? If they are the same, then why not file later? It is an emotional reason, not financial. On all the calculators I have used, I can have a NET income of roughly $5k more per year, starting at age 62, if I retire at age 62 and delay collecting until 69, vs collecting at 62. And that does not include any of the spousal benefits for DW if I die first. The only negative is that AT age 69 my savings WILL be less than it would have been had I collected at 62. BUt since I don’t plan on needing that savings for many years after that, then if I die at 71, I will have enjoyed a higher income for the last 9 years. My spouse would have a higher guaranteed income than if I had collected at 62, but will have a smaller savings.

The amount that remains is where the decision becomes fuzzy. If I start at 1.2M, and she “only” has 1M when I die, do I really care? My objective in life is not to make my widow wealthy and more comfortable AFTER I’m dead! But if I started at $400k and died leaving her only $200k, I would care. Or should.

Last edited by Perryinva; 01-05-2018 at 03:24 PM..
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Old 01-05-2018, 03:20 PM
 
71,490 posts, read 71,674,131 times
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as i said earlier , if you put the numbers in to a proper calculator there is no way that delaying ss does not show a highr draw rate possible as well as a bigger balance at the end of a 30 year time frame .

the draw always has to be bigger because social security has zero sequence risk . it needs no dry powder kept for poor sequencing as your own investing does .

the 70% greater ss check at 70 has a whole lot less sequence risk . so i have no confidence in how those numbers mentioned above were run .
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Old 01-05-2018, 04:19 PM
 
8,187 posts, read 11,902,987 times
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Quote:
Originally Posted by Perryinva View Post
While I agree with your premise, it doesn’t change it that much for many, especially if you itemized anyway. The gain on the actual bracket is only 3%. The majority of the shift is for those MFJ that never had enough to itemize, and now have a 24k deduction.
You act like that's a big change. They had roughly a $21k deduction (standard deduction + personal exemptions) before the new tax law.


Quote:
Originally Posted by Perryinva View Post
If you already itemized close to that amount, there is little difference.
Little difference? Really?! So if they have/had roughly $24k in itemized deductions, that means that they just lost $8k in deductions due to the loss of their personal exemptions. So they've gone from $32k in deductions from their gross income to $24k in deductions.

I would say having to pay taxes on an additional $8k in income could be fairly significant to some. Not to mention that having an additional $8k in taxable income could affect the taxability of their Social Security benefit,
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Old 01-05-2018, 04:39 PM
 
71,490 posts, read 71,674,131 times
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the tristate area homeowners with families are going to be hit hard .
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