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In effect you keep what you got and then they hold back future checks until you are even..
So he actually got 68k and kept 68k pretax ...then any thing owed back just gets checks held back.. you pay no tax of course on the checks held back since you get no money.
I think we had to give back 2 months worth of overage our first year... came the 2nd year they held back paying January and feb and checks started again in march
Yes I understand that, I think that’s what they did with my husband. But what I meant is the additional income tax he has to pay because of additional SS money he received while he’s working. Nothing free. You have to earn very little to not get any additional income tax.
Yes I understand that, I think that’s what they did with my husband. But what I meant is the additional income tax he has to pay because of additional SS money he received while he’s working. Nothing free. You have to earn very little to not get any additional income tax.
Unless he wasn’t going to get ss taxed and now is ,then it is the tax due on the money he got .. he got 68k in total and is taxed on it .....
Next year they hold back the amount of dollars he was over paid and don’t make what was held taxable income ....it isn’t like paying back a loan with after tax dollars
Last edited by mathjak107; 06-12-2019 at 05:22 PM..
I was talking to a friend the other day about Social Security and when to take it. A family member is waiting until 70 to get the maximum benefit but my friend thinks that may not be best. He noted that you are losing 7 1/2 years of income by waiting and it would take a number of years to recoup that money.
His reasoning is this. At 62 1/2 he would get $1,900 a month from SS. At 70 the benefit would be $3,600. If he starts taking it at 62, he would earn a total of $171,000 in those years between retirement and 70 ($1,900 x 12 x 7.5 = $171,000). If he waits to 70, it will take over 8 years to break even and get that $171,000 back ($3,600 - $1,900 = $1,700; $171,000/$1,700 = 100.59 months or 8 years, 4 months).
He feels he should take that money and, assuming he does not need it, invest it to get a better return. Does this make sense? Is he missing something? Jay
Just to hit the original question one more time - your friend can't find a higher no-risk rate of return as good as he would get by delaying when he takes SS. *Provided you have other money* it makes sense to delay taking SS as long as you can, up to 70 years old, in most cases. Now of course if you have real reason to think you won't make it to 70, or if you need the money sooner, go ahead and take it when you need to.
While a lot, maybe a majority take SS at 62, this is probably the least efficient way to go about it.
Ss has zero roi until breakeven ....don’t confuse the 6% growth from 62 to fra and 8% from fra to 70 with an roi ..... to get that additional growth there are checks being given up , no spousal benefits , possibly invested assets being spent and un capped Medicare premium increases.. to see a 5% real return which is on par with a balanced portfolio can take 22 years or more if spousal is involved too.
A growth rate that requires money to be given up to see ,is not the same as an roi
Just to hit the original question one more time - your friend can't find a higher no-risk rate of return as good as he would get by delaying when he takes SS. *Provided you have other money* it makes sense to delay taking SS as long as you can, up to 70 years old, in most cases. Now of course if you have real reason to think you won't make it to 70, or if you need the money sooner, go ahead and take it when you need to.
While a lot, maybe a majority take SS at 62, this is probably the least efficient way to go about it.
here is a chart showing the roi on ss when you delay … you can see it has nothing to do with the growth rate you get . if you lived to 100 the best roi you would get is a real return of 6.50%
here is a chart showing the roi on ss when you delay … you can see it has nothing to do with the growth rate you get
I guess I am using the wrong term - I thought I was quoting you, more or less, that if you take the money at 62 and then invest it, you would have little statistical chance of having more money available at age 70 than if you just delayed taking SS to 70. No?
Anyway. My plan is similar to Geoff's - I intend to use SS as a last income "kicker" that I will turn on as close to 70 as I can stand, in order to guarantee that we are not poor in my old age. Of course as you pointed out, some event may come down the road and cause me to "push the button" sooner. But I have a decent pension and a pretty decent 401k balance, so I should have some chance of being able to pull that stunt.
I guess I am using the wrong term - I thought I was quoting you, more or less, that if you take the money at 62 and then invest it, you would have little statistical chance of having more money available at age 70 than if you just delayed taking SS to 70. No?
Anyway. My plan is similar to Geoff's - I intend to use SS as a last income "kicker" that I will turn on as close to 70 as I can stand, in order to guarantee that we are not poor in my old age. Of course as you pointed out, some event may come down the road and cause me to "push the button" sooner. But I have a decent pension and a pretty decent 401k balance, so I should have some chance of being able to pull that stunt.
you have it backwards ... you stand a worse chance of living to 90 which you need delaying ss just to to see a 5% real return , then taking ss at 62 and seeing a 5% real return from a balanced fund. if by chance you made it to 90 you would pretty much do the same .
statistically you should do better with ss at 62 and the balanced fund vs having to live to 90 by delaying to see the same 5% real return
Last edited by mathjak107; 06-12-2019 at 06:01 PM..
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