Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Between my SS, military pension and federal pension (just interim right now), I will live on this. I would rather pinch pennies than go back to work. No way no how.
I have a good friend, more like the older brother I never had, who is 71 years old. He collects his pension, Social Security, and for 3-6 months each year he returns to his old job but as a Contract Employee making $100/hour. Between these short gigs he collects unemployment.
Maybe I am misunderstanding all the income as it sure doesn't seem right.
How does he collect unemployment when he is in a contract position? That's considered being self-employed and he would receive a 1099-MISC. W-2 employees are the ones eligible for unemployment.
As I understand it, once you hit 70 you have to start taking Social Security. Therefore, if you're lucky enough to still be working at that age it would make sense to work and collect Social Security then.
If anyone is in the know with what's REALLY happening with the economy, you'd better take SS while you can. It may not even be available within the next few years as things are/will drastically change. Get it while you can!
I remember somebody telling me the same thing in 1973.
^^^Yup, heard the same thing in ‘74 through ‘85. The sky is falling.
Quote:
Originally Posted by Hemlock140
After full retirement age (July 2018 for me) collecting SS while still working means a higher income tax bite, but still nets greater income for those last few working years. If the SS payment at 67 is $2,500, for example, and you continue working until age 70, that's $90,000 before taxes. Even with higher income tax that's money that would be left on the table. Waiting to collect at age 70 your benefit might be about $400/month more to start, but it would take many years to recover that lost $90k.
It is easy to calculate. 8% of 2500 x 3 years is $600/mo. That’s $7200/yr. so with non inclusive math it appears the break even is 12.5 years or age 82.5. But WAIT there’s more! For the same income, that $7200 could be taxed at 25% (or more) when pulled from an IRA (if other sources automatically put you over the threshold), but that 7200 is only taxed 25% of 85% of the amount so a tax bite of $1800 vs $1530. So the $7200 could be worth $7470 or a basic payback of 12 years. But there’s still more. Now the COLA increases are on $37200/yr instead of $30000/yr which also means the COLAs compound. That changes the break even point to about age 80 according to SSAnalyze with a measly 2% inflation. It comes down much much quicker if inflation goes to say 4-5%. And that compounded amount ALSO only gets taxed at 85%, so it drops about 3/4s of a year more. So do you expect to live until 79 and change and KNOW inflation will stay as low as it is? Remember the inflation of the 80s & 90s? Think that can never happen again? So Its a bit more complicated. What if you make a killing on investing that early SS? What if you lose it all? Its risk tolerance and longevity insurance. Plain and simple. Not plain math.
To the OP, yes, there are some scenarios where working and collecting make sense. If you are single, in poor health, (obese, smoke, drink, diabetes, heart disease, cancer, etc) plus have a family history of no longevity, and all your retirement income is SS, plus either tax free or below the threshold where SS is taxed. In that case, I’d collect at 62, max the Roth and IRA the SS and rollover the full SS each year in to a Roth. The idea being that you are betting on dying younger and want the most bang for the time you have left. I mean, a good portion HAS to be dying young in order to average out all of us that are living until 92....why not you?
Last edited by Perryinva; 02-13-2018 at 06:22 AM..
I am only 52 and plan on working at least the next 20 years. If things continue on as they are I would love to put in another 30 years. Work is exciting and from my perspective is only going to get better with time.
I have heard that I have to take SS when I turn 71 or is it 71 and a half?
If I am working when I am 71 with my full pay, and I take the SS, will the Government keep part of my money because I continue to work?
I am only 52 and plan on working at least the next 20 years. If things continue on as they are I would love to put in another 30 years. Work is exciting and from my perspective is only going to get better with time.
I have heard that I have to take SS when I turn 71 or is it 71 and a half?
If I am working when I am 71 with my full pay, and I take the SS, will the Government keep part of my money because I continue to work?
No you are confusing SS maximum with RMD from tax deferred accounts. RMD's start at 70 and a half. SS will not increase waiting when you reach 70. However if you are still working it will continue to increase slightly due to dropping off lower income years in your history.
They will not keep part of your money if you are working and claiming SS after 70. It will though put 85% of your SS in line for taxes. That means you will pay tax on 85% of your SS if your combined income reaches the threshold of I think 32k single and 70k married. I could be off on the number but not by a lot.
No you are confusing SS maximum with RMD from tax deferred accounts. RMD's start at 70 and a half. SS will not increase waiting when you reach 70. However if you are still working it will continue to increase slightly due to dropping off lower income years in your history.
They will not keep part of your money if you are working and claiming SS after 70. It will though put 85% of your SS in line for taxes. That means you will pay tax on 85% of your SS if your combined income reaches the threshold of I think 32k single and 70k married. I could be off on the number but not by a lot.
We are way beyond those numbers now.
Here is a thought. Could I reduce the amount I make by investing the difference in a 403B to bring me down to a lower level? What I mean is if my income is $100,000 and I invest $30,000 into a retirement account, then I would be at the $70,000 level for a couple. My wife would be 65 by then and has no plans to work past her 65th birthday. We would solely be working with my income. I don't know what I will be making in 20 years but I know what I am making now.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
