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i work 1 day a week and do a project every now and then so i made more than the 17k so it did not pay for me to file . but now that i will be 65 and have just a few months left with just 1 day a week on my schedule i can make it fine until years end . then in january ,even though i am not fra i can earn up to 45k since in 2018 i will be fra . .
^^ Thanks Math.....but for me it's still not going to happen.
I know you wouldn't think one year would make a difference. But I have no intention of working until I'm 67, just so I can 'double up' -- and work AND collect. Forget that.
From time to time I've thought -- IF my FRA had been 66, I MIGHT keep working to get to 66 -- so that I could work and collect for the one year from 66-67.
But with an FRA of 67....I have to work from 67-68! to get to my 'double up' year. Forget that. My plan is to just go ahead and retire at 65, when I can get Medicare -- and just call it a day, and live my happy non-working life.
As a late wave baby-boomer, I feel like I'm either getting scre wed or going to get scre wed by having to work longer than others did to get the same option. Heck, I'm "only" 57 and have to pray they don't change the Medicare and/or Soc Sec. rules before I get there.
Bingo for those not yet of SS age it's a moving game, as I said earlier changes are coming to SS, we don't know who will be affected so just like our 401k are related to market swings, SS/ Medicare are related to political winds.
i work 1 day a week and do a project every now and then so i made more than the 17k so it did not pay for me to file . but now that i will be 65 and have just a few months left with just 1 day a week on my schedule i can make it fine until years end . then in january ,even though i am not fra i can earn up to 45k since in 2018 i will be fra . .
I suppose what I could do is retire (take a break) at 65, get Medicare, collect the pension I have coming.
Then IF I need more money, I guess the decision would be do I go back to work part-time -- OR pinch off my retirement accounts.
I could NOT work at all from 65-67 -- and come back at 67 and double up with Soc Sec and working at that point if I want to.
My former co-workers just had so much glee about working AND collecting Soc. Sec., they've put that bug in my ear.
They practically had cartoon dollar $ign$ for eyeballs.
i work 1 day a week and do a project every now and then so i made more than the 17k so it did not pay for me to file . but now that i will be 65 and have just a few months left with just 1 day a week on my schedule i can make it fine until years end . then in january ,even though i am not fra i can earn up to 45k since in 2018 i will be fra . .
So if I turn 66/FRA in August 2018, I can make up to 45k beginning in January 2018?
yes . they may prorate though . so lets say your birthday is july instead . july is 6 months in so you can earn 22,500 . once you are fra , no limit . i know that is how it works prefra so i think it is prorated the same way .
In collecting while still working another thing to look at is federal taxes.
If I had retired at 66 my benefit was estimated to be $2,250 and I wondered what the break even point would be had I simply taken the benefits to the bank.
$2,250*48=$108,000.
By waiting to age 70 my estimated benefit will be $3,050 without a COLA so the difference is $800/month.
Based on this my break even point would be $108,000/$800=135 months or 11 years 3 months.
I have a wife and the chances of me hitting 81 appears to be a little more than 50% while the wive appears to be at least 60%. There appears to be about a 85% chance of one of us hitting the break even point.
Yeah, it would have been kind of nice to have an extra $108,000 in savings but would it really have been $108,000?
I won't count my wife's pension or social security we'll just go on my wages and if I had taken benefits at my FRA and continued working.
Wage income would be $70,000. SS benefits would have been $27,000 for a total income of $97,000 placing us in the 25% bracket.
According to the worksheet "Based on the worksheet provided in the most recent IRS Publication 915, your Social Security benefit(s) of $27,000 will be 85% taxable increasing your taxable income by $22,950 and creating a federal income tax liability of $5,738."
So that $27,000 saved every year would have been reduced to $21,263 or $1,772/month.
Instead of $108,000 my savings would have been $85,052. Based on that my "break even" point would be reduced to $85,052/$800=106.3 months or just under 9 years. The chances of either of us living to 79 appears to be better than 90% and for both of us to go that long it appears we got a 66% to 70% chance to make it.
For me it didn't make any sense at all to collect anything while I was working especially when you consider my wife is already getting benefits of 50% of my FRA benefits so that would have been hit at 25% as well! I was the very last to be able to file and suspend beating the deadline by six days. Once in a while I do get lucky.
Now to make full sense of it what happens if our combined benefits is $4,300? She has a small pension but it is wep'd. If this is all we have and I don't suffer any wage income what would be our income tax liability? "Based on the worksheet provided in the most recent IRS Publication 915, your Social Security benefit(s) of $47,300 will be 0% taxable increasing your taxable income by $0 and creating a federal income tax liability of $0."
Lemme tell you something, I sooooooooo love the idea of not paying any federal income tax I hope and pray I live to be 150 years old!
So the moral of the story is when calculating a "break even" make sure you take into account federal income taxes if you are still earning wages or other income that is subject to income taxes.
Request of MJ: I am not as good with financial numbers as you are but does this make sense to you?
yes . they may prorate though . so lets say your birthday is july instead . july is 6 months in so you can earn 22,500 . once you are fra , no limit . i know that is how it works prefra so i think it is prorated the same way .
In collecting while still working another thing to look at is federal taxes.
If I had retired at 66 my benefit was estimated to be $2,250 and I wondered what the break even point would be had I simply taken the benefits to the bank.
$2,250*48=$108,000.
By waiting to age 70 my estimated benefit will be $3,050 without a COLA so the difference is $800/month.
Based on this my break even point would be $108,000/$800=135 months or 11 years 3 months.
I have a wife and the chances of me hitting 81 appears to be a little more than 50% while the wive appears to be at least 60%. There appears to be about a 85% chance of one of us hitting the break even point.
Yeah, it would have been kind of nice to have an extra $108,000 in savings but would it really have been $108,000?
I won't count my wife's pension or social security we'll just go on my wages and if I had taken benefits at my FRA and continued working.
Wage income would be $70,000. SS benefits would have been $27,000 for a total income of $97,000 placing us in the 25% bracket.
According to the worksheet "Based on the worksheet provided in the most recent IRS Publication 915, your Social Security benefit(s) of $27,000 will be 85% taxable increasing your taxable income by $22,950 and creating a federal income tax liability of $5,738."
So that $27,000 saved every year would have been reduced to $21,263 or $1,772/month.
Instead of $108,000 my savings would have been $85,052. Based on that my "break even" point would be reduced to $85,052/$800=106.3 months or just under 9 years. The chances of either of us living to 79 appears to be better than 90% and for both of us to go that long it appears we got a 66% to 70% chance to make it.
For me it didn't make any sense at all to collect anything while I was working especially when you consider my wife is already getting benefits of 50% of my FRA benefits so that would have been hit at 25% as well! I was the very last to be able to file and suspend beating the deadline by six days. Once in a while I do get lucky.
Now to make full sense of it what happens if our combined benefits is $4,300? She has a small pension but it is wep'd. If this is all we have and I don't suffer any wage income what would be our income tax liability? "Based on the worksheet provided in the most recent IRS Publication 915, your Social Security benefit(s) of $47,300 will be 0% taxable increasing your taxable income by $0 and creating a federal income tax liability of $0."
Lemme tell you something, I sooooooooo love the idea of not paying any federal income tax I hope and pray I live to be 150 years old!
So the moral of the story is when calculating a "break even" make sure you take into account federal income taxes if you are still earning wages or other income that is subject to income taxes.
Request of MJ: I am not as good with financial numbers as you are but does this make sense to you?
I actually suck at math and it makes my hair hurt .i leave it all to the researchers i follow
it all depends if the bull continues now or if the bull peters out and starts again years later ,as to which way will be better .
spend down extra assets now delaying and missing the bull can hurt .
on the other hand spending down for 8 years and then needing 70% less from your portfolio because of the bigger check can be a plus if the bull dies out now but picks up down the road
How about spending down to age 70 and then investing your full benefit until whenever and not needing to touch your retirement account after starting full benefits other than RMD's and reinvesting that after tax amount?
It may not make sense in a lot cases . I need money to live as an example . It would be a bad idea to pay tax on social securiity . Then invest the social security and sell investments to live on and get taxed on those too
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