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  1. #1
    Very Active Member Rogue Hawk's Avatar
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    Default Social Securty questions

    I am in my 50's, so I guess I had better start thinking about this. I have a few questions.

    When someone draws SS, do they have to pay SS-Federal-State taxes on that money or any new money you make?
    If you are still working and drawing SS, do they reduce the benefit?
    What age can I access my IRA and 401k without penalty?

    Oh, and one last thing. You know you better start thinking about SS when you start getting junk mail from AARP

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    Very Active Member Gwolf's Avatar
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    No easy answers...... if you pay taxes and how much you pay will depend on how much you make.

    It is all on the Internet. Just start reading.

    https://www.usa.gov/about-social-security

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    Very Active Member CopperSpyder's Avatar
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    AARP you should join, they can answer all your questions on SS and give you great discounts at hotels, restaurants, car rentals and even motorcycle insurance. So if you get all the answers to your questions on SS now; you will forget what they were by the time you will be able to collect anyway; or everything will have changed I'm sure.

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    IRA non-penalty withdrawals can begin at 59 and one-half
    If you wait on SS until your full benefit age, there is no penalty for other income.
    You do pay Federal income tax on SS if your total income is above a varying amount.
    States vary on whether they levy an income tax against SS. As with Fed the amount depends on total income.

  5. #5
    Very Active Member gkamer's Avatar
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    Quote Originally Posted by Rogue Hawk View Post
    If you are still working and drawing SS, do they reduce the benefit?
    Social Security calculates your
    average indexed monthly earnings during the 35 years in which
    you earned the most.

    You can apply for SS as early as age 62, but your benefit will be somewhat reduced. Full retirement age will depend on your year of birth. For me it was 66. You can continue to work once collecting SS with no reduction in your benefits. Remember, once you apply for Medicare Part B, SS will deduct the Part B premiums for that. For most people that will be $134.00 a month automatically deduced from your benefit.

    Don't forget to take Medicare into consideration. You should apply for Medicare Part A and B at 65. At the time you apply for Part A and are still working and covered by your employers health care, you can delay applying for Part B as long as you are covered by your employer. Once your employers health care coverage ends, you have a certain time frame in which to apply for Part B. If you don't apply for Part B in the specified time, you will incur a life long penalty. To avoid the penalty, you have to download a form and have it completed by your employer verifying you were continually covered under their health care plan from the time you were eligible for Part B and when you actually applied for Part B.

    For example in my case, I applied for Medicare Part A when I turned 65 in Feb. Since I was still covered by my employers heath care plan, I declined applying for Part B at that time. When I retired in Aug, I then applied for Part B. I had to download a form from the Social Security and have it completed by my former employer verifying I was covered by health care between Feb and Aug, and thus avoided the life long penalty it would have cost me otherwise. You can apply for benefits as soon as, I believe 90 days, prior to your full retirement age, so I did not apply until Dec.

    I don't live a state with state taxes. I am collecting a pension from my military retirement as well as from my sheriff's office retirement. Taxes are withdrawn from both those retirement plans. Just to be on the safe side I opted to have 10% of my social security benefit withheld for federal taxes. I'll have to wait until next year to see if I ended up giving Uncle Sam an interest free loan.

    Hope this helps
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    Very Active Member BoilerAnimal's Avatar
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    Quote Originally Posted by gkamer View Post
    Social Security calculates your
    average indexed monthly earnings during the 35 years in which
    you earned the most.

    You can apply for SS as early as age 62, but your benefit will be somewhat reduced. Full retirement age will depend on your year of birth. For me it was 66. You can continue to work once collecting SS with no reduction in your benefits.I'm

    There are no reductions once you reach your full retirement age.
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    Quote Originally Posted by Rogue Hawk View Post
    I am in my 50's, so I guess I had better start thinking about this. I have a few questions.

    When someone draws SS, do they have to pay SS-Federal-State taxes on that money or any new money you make?
    If you are still working and drawing SS, do they reduce the benefit?
    What age can I access my IRA and 401k without penalty?

    Oh, and one last thing. You know you better start thinking about SS when you start getting junk mail from AARP
    Seriously, the rules may have changed by the time you reach the point you are drawing SS benefits.

    They are already changing with respect to drawing from IRA and 401k. Comprehensive bill now being debated by Congress.

    Currently SS benefits typically aren't affected by other sources of income, but federal income taxes on SS benefits are.

    Medicare has no bearing on the taxability of SS benefits.

    This advice is worth what you paid for it....

    2014 RTL Platinum & 2014 RTL Cognac
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    Quote Originally Posted by UtahPete View Post
    Seriously, the rules may have changed by the time you reach the point you are drawing SS benefits.

    They are already changing with respect to drawing from IRA and 401k. Comprehensive bill now being debated by Congress.

    Currently SS benefits typically aren't affected by other sources of income, but federal income taxes on SS benefits are.

    Medicare has no bearing on the taxability of SS benefits.

    This advice is worth what you paid for it....
    im drawing at 62 and they will take a dollar for every 2 you make over 17k
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    Very Active Member JayBros's Avatar
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    You are smart to begin thinking about it now. Go to ssa.gov and start prowling; there's a wealth of information there and you're going to have to keep track of things as you draw closer to eligibility age. Mary Beth Franklin, https://www.investmentnews.com/staff/mbfranklin, is a widely respected authority on SS benefits. Were I your age I'd buy her book, $30 or so. I do not know the woman or have any connection with Investment News. You will have some important decisions to make as you draw closer.
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    Very Active Member BLUEKNIGHT911's Avatar
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    Quote Originally Posted by Rogue Hawk View Post
    I am in my 50's, so I guess I had better start thinking about this. I have a few questions.

    When someone draws SS, do they have to pay SS-Federal-State taxes on that money or any new money you make?
    If you are still working and drawing SS, do they reduce the benefit?
    What age can I access my IRA and 401k without penalty?

    Oh, and one last thing. You know you better start thinking about SS when you start getting junk mail from AARP
    Info today will more than likely change before you retire …… I re-tired at 62, and I decided to start my benefits immed. ( at 62 ) …. you need to do the Math …. because of my total financial situation waiting until I was 72, was a losing proposition …. 10 years of waiting ( with no cash from SS ) meant I would have to collect at the higher benefits they will pay …. for 12 years ( age 84 for me ) to break even. …. from 84 on it would benefit me financially. ….. If I live to be 90 it will be a miracle..... When I computed all this … I didn't even value the fact that for 10yrs I would be getting money I could invest in a ROTH account. …. IMHO the Gov't. counts on you dyeing, within a few years after 72 ….. good luck …. Mike

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    Very Active Member Rogue Hawk's Avatar
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    Sounds pretty complicated Thanks for the heads up on this stuff. For my IRA and 401K, I have 15% in stock, 85% in various corporate bonds. I hope we don't get another 2008 meltdown. Those Wall Street crooks really ran away with a bundle. I guess they are lucky they are sociopaths, otherwise they would not be able to live with themselves.

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    Very Active Member gkamer's Avatar
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    Quote Originally Posted by BoilerAnimal View Post
    There are no reductions once you reach your full retirement age.
    Correct. If you apply for benefits between age 62 and your full retirement age, your benefits will be reduced. I'm not sure by how much. Once you reach your full retirement age, you will receive what ever amount your benefit should be. You may also continue to work, and whatever you are making in your job will not effect your benefit payments.

    So for example, if you apply at full retirement age, and your benefit is say $1,564.00 a month, and you're still working at a job making $4,650 a month, your SS benefit will remain at $1,564 dollar a month on top of the $4,650.
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    Very Active Member BLUEKNIGHT911's Avatar
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    Quote Originally Posted by gkamer View Post
    Correct. If you apply for benefits between age 62 and your full retirement age, your benefits will be reduced. I'm not sure by how much. Once you reach your full retirement age, you will receive what ever amount your benefit should be. You may also continue to work, and whatever you are making in your job will not effect your benefit payments.

    So for example, if you apply at full retirement age, and your benefit is say $1,564.00 a month, and you're still working at a job making $4,650 a month, your SS benefit will remain at $1,564 dollar a month on top of the $4,650.
    Yep, your benefit will remain the same - but your TAXES on that amount WON"T ….. it can rise significantly …. that's the catch 22 ….. do the math ….. Mike

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    If you have Tricare for Life (Retired Military) that changes the whole Medicare ballgame... you don't need any supplements. I started my SSA at 62 because if I waited it was a losing proposition like Mikes (BlueKnight911)
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    Quote Originally Posted by rtotten View Post
    If you have Tricare for Life (Retired Military) that changes the whole Medicare ballgame... you don't need any supplements. I started my SSA at 62 because if I waited it was a losing proposition like Mikes (BlueKnight911)
    Amen brother !!!

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    Quote Originally Posted by CopperSpyder View Post
    AARP you should join, they can answer all your questions on SS and give you great discounts at hotels, restaurants, car rentals and even motorcycle insurance. So if you get all the answers to your questions on SS now; you will forget what they were by the time you will be able to collect anyway; or everything will have changed I'm sure.
    Research that carefully, some people do not agree with the political parties AARP supports.

    AMA might be a better organization to support.

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    I’m contemplating this as well, I have a pension that I guess I can draw now and I can take SS early next year. I likely will opt to start SS at 62 because I don’t really think I’ll live long enough to make waiting for full retirement at 66 worthwhile. In my case it is $500 less per month if I draw at 62 vs 66. You can access your information online.

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    Find a reputable financial adviser in your area and pay him a visit. Most are more than willing to take time to answer your questions in hopes of landing a future client. I have a great one and he answers all my questions and takes great care of my finances including health insurance. I retired at 56 and started drawing from my 401K with ZERO penalties. There were a few hoops I had to jump through to do this, but then again, find a guy who knows the ropes. I took my SS at 62. I do pay income taxes on all of my income, but hey, I'm retired and loving it. I was fortunate enough to retire with a tidy amount and I still have that tidy amount plus more. Not everyone likes to pay an adviser, but he has done right by me so I have no problem with it. I have to pay anyone else who does work for me.

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    Very Active Member SPECTACUALR SPIDERMAN's Avatar
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    I would really recommend if you want to know what is best for you, ask your accountant or aarp for a referral of who to talk to about your specific
    questions & needs.

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    Very Active Member Rogue Hawk's Avatar
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    I am hoping I can stay in my field until I retire. I am a software engineer. Eventually Artificial Intelligence will render me obsolete. I hope I can stay in the game at lest till 70. I got a late start saving for retirement.

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    Quote Originally Posted by r1100rider View Post
    im drawing at 62 and they will take a dollar for every 2 you make over 17k
    Until you reach full retirement age, 66+ for you.

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    Very Active Member IdahoMtnSpyder's Avatar
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    Quote Originally Posted by Rogue Hawk View Post
    Sounds pretty complicated Thanks for the heads up on this stuff. For my IRA and 401K, I have 15% in stock, 85% in various corporate bonds. I hope we don't get another 2008 meltdown.
    Take a serious look at target retirement funds like those at Vanguard. The investment mix is automatically changed each year as you get closer to the retirement target date.

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    Very Active Member IdahoMtnSpyder's Avatar
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    Quote Originally Posted by BLUEKNIGHT911 View Post
    Info today will more than likely change before you retire I re-tired at 62, and I decided to start my benefits immed. ( at 62 ) . you need to do the Math . because of my total financial situation waiting until I was 72, was a losing proposition . 10 years of waiting ( with no cash from SS ) meant I would have to collect at the higher benefits they will pay . for 12 years ( age 84 for me ) to break even. . from 84 on it would benefit me financially. .. If I live to be 90 it will be a miracle..... When I computed all this I didn't even value the fact that for 10yrs I would be getting money I could invest in a ROTH account. . IMHO the Gov't. counts on you dyeing, within a few years after 72 .. good luck . Mike
    The way I see it that was the one screw up the Reagan Administration made back in 1983 when they reformed the SS system. Benefits for retiring early weren't changed enough to make the crossover age an incentive to keep working and retire later. The crossover age before and after the 1984 change stayed at around 78 - 80.

    Life expectancy has always been factored into the SS program. So yes, they do count on a certain percentage of beneficiaries dying at every age above retirement age. You don't need to opine that that is what they do, because in fact that is what they do!

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    Very Active Member Gwolf's Avatar
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    If you don't remember anything else about it, just remember that you are not gonna live very well on just social security. It might be enough to keep you alive in a cheap place and watching the budget carefully. If you want to enjoy retirement, you need other sources of income at least equal to what you will get from social security. You should think of social security as something in addition to your primary retirement plan.

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    I would recommend your accountant, aarp, not so much, your choice.

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