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Because at 62 I will not have enough in my 401K to retire. Since i will still be working, I do nto need social security.
If I took social security at 62 I would not have enough money to retire at 70 because the social security amount would be too low.
However if I could take social security at age 62 and keep working and then just invest all the social security money and make a better return than I would get by waiting, it could work out. I do not think you can take SS if you keep working full time can you?
I have to balance all of this with my belief that social security will be depleted to the pint where the amount of benefits will be meaningless some time before i retire, or they will just tax it heavily. And I think the government will find a way to heavily tax 401K funds as the huge wave f people with no retirement program other than social security begin to retire and starve. faced with letter them dies and finding a way to get at the 401K funds of those who did save, the government will obviously have to choose the latter. that might point to retiring early being the more prudent course so I might get at least some benefit out of the two retirement programs I paid into for most of my life (SS and 401K). Maybe I should just take and spend what I can and then join the hordes of broke retirees that the government has to find a way to keep alive?
Do you realize, if you keep on working and taking SS at 62, you don’t get to bank your whole SS check right?
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
Because taking it at 62/3, you're penalized, and you're stuck with the reduced rate for the rest of your life, however long that lasts. If you wait just a few years, you get the full benefit. Some people can't afford to take it at the reduced rate. They have to keep working until they're eligible for the full amount. Kind of a no-brainer, OP.
Do you realize, if you keep on working and taking SS at 62, you don’t get to bank your whole SS check right?
In discussions about "working and taking SS" Retirement benefits before FRA, remember that the "deductions" are not lost, but deferred.
Per page 1 of https://www.ssa.gov/pubs/EN-05-10069.pdfHow Work Affects Your Benefits
"The amount that your benefits are reduced, however, isn’t truly lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings."
In discussions about "working and taking SS" Retirement benefits before FRA, remember that the "deductions" are not lost, but deferred.
Per page 1 of https://www.ssa.gov/pubs/EN-05-10069.pdfHow Work Affects Your Benefits
"The amount that your benefits are reduced, however, isn’t truly lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings."
I’m not just talking about deductions, what about the added taxes.
In discussions about "working and taking SS" Retirement benefits before FRA, remember that the "deductions" are not lost, but deferred.
Per page 1 of https://www.ssa.gov/pubs/EN-05-10069.pdfHow Work Affects Your Benefits
"The amount that your benefits are reduced, however, isn’t truly lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings."
It is just recalculated at fra to reflect what you gave back in time .. so if you add up all the money you gave back and it is 6 months worth of checks you are recalculated at fra as if you filed 6 months later then you did
The taxes even out because what ever you forfeit back is subtracted off what you received either that year or the following year
Do you mean income tax? If he makes $50k, now he adds $18k, he has to pay the difference in income tax. I’m not sure I understand how he gets it back the following year.
Do you mean income tax? If he makes $50k, now he adds $18k, he has to pay the difference in income tax. I’m not sure I understand how he gets it back the following year.
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
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