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"employee wages are subject to social security
and Medicare taxes regardless of the employee’s age or whether he or
she is receiving social security benefits."
So does that mean if you are working after age 70, and FICA is still deducted, you are essentially giving that money away? Or does it come back to you when you file with the IRS for federal taxes.
So does that mean if you are working after age 70, and FICA is still deducted, you are essentially giving that money away? Or does it come back to you when you file with the IRS for federal taxes.
FICA taxes are taxes on wages earned, pure and simple. Same as IRS income taxes, except they (supposedly) go into a different "pot". Remember, SS is an insurance plan, not an investment plan.
However, if those "after 70 wages" are high enough to replace a lower one of the base 35 years, they could result in a (slightly) higher, recalculated benefit payment.
FICA taxes are taxes on wages earned, pure and simple. Same as IRS income taxes, except they (supposedly) go into a different "pot". Remember, SS is an insurance plan, not an investment plan.
However, if those "after 70 wages" are high enough to replace a lower one of the base 35 years, they could result in a (slightly) higher, recalculated benefit payment.
No, there is no credit.
That seems reasonable. I plan to work a few years past 70, God willing, and I ask because of some "creative accounting" for several years while I was working. I was married at the time, filing jointly. Our accountant and my former spouse saw some advantage in listing my income as $0 and attributing my earnings to him for several years (maybe 5 or 6) while both of us in partnership. Neither of them can remember why, but, no, I don't think any plan to cheat me. It just gives that many rather low income years! I'm not sure how much difference it would make to my benefits to go back and try to reconstruct my file--or even if they'd allow it And certainly not worth it if it will make a couple dollar difference.
That seems reasonable. I plan to work a few years past 70, God willing, and I ask because of some "creative accounting" for several years while I was working. I was married at the time, filing jointly. Our accountant and my former spouse saw some advantage in listing my income as $0 and attributing my earnings to him for several years (maybe 5 or 6) while both of us in partnership. Neither of them can remember why, but, no, I don't think any plan to cheat me. It just gives that many rather low income years! I'm not sure how much difference it would make to my benefits to go back and try to reconstruct my file--or even if they'd allow it And certainly not worth it if it will make a couple dollar difference.
Remember, you may be able to claim benefits on your ex-spouses record, assuming it would be higher than your own.
Sure you can file several months ahead to begin your benefit at age 70. However, I would not do so. I would wait until I am 70 and then file for benefits. Why? Because SSA sometimes mistakenly awards 6 months of retroactive benefits to those who are not yet 70 years old, effectively erasing part of the final year's delayed credits. As noted in a prior post, 6 months of retroactive benefits is available even if you wait until you are 70 1/2 years old before you apply.
I'd wait maybe a week or two after my 70th birthday and then file. I like to keep things simple.
When I filed on-line for my own benefit 3 months ahead of age 70, I was asked in the phone interview if I wanted the 6 months retro. I told them no, and that part was OK. What did happen was my first payment came as my FRA (age 66) amount, not my age 70 amount. I had to file an appeal. Thankfully that only took 2 months to get approved, and get the amount adjusted with credit for the 2 months in error.
OK so IF, you FILE -- AFTER you're 70th birthday…and they ask you if you want the 6 months of retro….and you say "Yes"….that 6 months of retro and your current benefit going forward are still paid at your "waiting to age 70" benefit amount. Right??
I'm only ask because with a big bureaucracy like Soc Soc. -- where sometimes the workers don't know and/or don't volunteer when a decision could be counter intuitive to common sense -- how they DON'T tell you about things like this.
OK so IF, you FILE -- AFTER you're 70th birthday…and they ask you if you want the 6 months of retro….and you say "Yes"….that 6 months of retro and your current benefit going forward are still paid at your "waiting to age 70" benefit amount. Right??
I'm only ask because with a big bureaucracy like Soc Soc. -- where sometimes the workers don't know and/or don't volunteer when a decision could be counter intuitive to common sense -- how they DON'T tell you about things like this.
Simple answer: You do NOT want any retroactive benefits that would include the month(s) before you turn 70. If you receive even one month of pre-70 benefits, your "waiting to age 70" benefit amount WILL be reduced.
simple answer: You do not want any retroactive benefits that would include the month(s) before you turn 70. If you receive even one month of pre-70 benefits, your "waiting to age 70" benefit amount will be reduced.
thank you! I suspected that. And of course anyone should confirm that.
I can see people so busy trying to get every dollar, they'll fool around and inadvertently skrew themselves.
Just wait until after 70 and not take the chance. Or apply a couple of months before 70 and be damned sure your paperwork/documentation/application is correct about the benefits start date. What's so hard to understand about that?
For example benefits are paid in arrears…April benefit is paid in May. So make sure when you say you want benefits to BEGIN or START in APRIL that you and the SSA are clear about what you mean. Because the benefit you GET in April is for March…will you be 70 by then? You don't want to mess yourself up because you didn't know what the heck you were talking about…YOU meant one thing…but to SSA that meant ANOTHER thing.
Last edited by selhars; 03-02-2016 at 09:37 PM..
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