Social Securty questions

[IdahoMtnSpyder]

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.

 

[IdahoMtnSpyder]

Sounds pretty complicated :shocked: 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.

 

[IdahoMtnSpyder]

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 hyea:

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!

 

[Gwolf]

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.

 

[bikerbillone]

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

 

[canamjhb]

You can plan and research now. But everything will most likely change by the time you are eligible for SS. The biggest thing to consider is how long you think you may/probably will live. Your individual past health history is different from everyone else's. Keep in mind any money you earn after drawing SS is subject to SS withholding. Even small amounts of earnings are taxed but most likely will have no effect upon your SS earnings. All earned income is subject to SS withholding unless you are exempt. It is money down a "rat hole". Several years after I retired and began drawing SS, I got a PT job just to keep busy and provide for a little farkeling money. The employer was required to withhold SS. I contacted SS and requested to "opt-out" from withholding. After all, it is MY MONEY and I will never see any return of it.... EVER. I found it that it is "the law" and I have no options. Hard pill to swallow. Just another way for the government to get our money to try to cover up for their mismanagement of our money paid into the SS system..... Jim

 

[IdahoMtnSpyder]

The employer was required to withhold SS. I contacted SS and requested to "opt-out" from withholding. After all, it is MY MONEY and I will never see any return of it.... EVER. I found it that it is "the law" and I have no options. Hard pill to swallow. Just another way for the government to get our money to try to cover up for their mismanagement of our money paid into the SS system..... Jim

I believe you may have a misunderstanding of what SS is intended to be, and is. First, it is not, never was intended to be, and never will be, a retirement savings program. But that is what politicians and anti-government commentators want you to think it is. It is an insurance program, kind of like term life insurance. You put money in a pool and when you die the beneficiary collects, if you have made all the required payments. Quit making payments and it's gone. You have no claim to it. Now, how does that apply to SS?

The official name for Social Security program is Old Age, Survivors, and Disability Insurance Program. The concept and operation is, money that goes into the fund today pays for the claims against the fund today. Income above payouts is invested in Government securities. Those securities are used to fund current government spending, hence the thinking that SS money has been absconded from the SS fund to pay for government programs. In order to collect benefits from an insurance fund you must meet specified criteria. In the case of SS that is usually reaching retirement age and be living. You can also collect benefits if you meet disability criteria. Your survivors can collect benefits when you die. There are several variations in the criteria for when a survivor qualifies for benefits. Originally the SS program included unemployment insurance but that was spun off into its own program shortly after SS was implemented.

In short SS is an insurance program that all earners pay into, and all qualified claimants draw out of. After you pay the premium from your paycheck it is no longer your money. But when you meet the criteria to be a claimant, then you are entitled to receive payments from the fund. I'll say it again. It is not, and never has been, a retirement savings program.

 

[Rogue Hawk]

Is there a maximum amount someone pays into the system and then the tax stops?

 

[LongIsland]

Is there a maximum amount someone pays into the system and then the tax stops?

It changes each year. This year the max salary is $132,900. Any earnings above that do not pay into SS. Medicare has no maximum, everyone pays no matter income.

 

[al0vely]

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.

I plan to do the same as Ann ... draw SS at 62. I feel like I have worked all my life - lived on a farm, got summer jobs from age of 14 thru HS graduation, worked thru college and ever after ... I am tired of working a real job. From 62 - 65 I will supplement my SS with non-taxable income from savings resources - estimates today say I should have enough to live on for 15-20 good years until I don't need so much money.

I must admit I am worried about the roller coaster of a stock market we have - and hope we don't take a big bath on it before I can get out of it.

 

[IdahoMtnSpyder]

I must admit I am worried about the roller coaster of a stock market we have - and hope we don't take a big bath on it before I can get out of it.

Hence the advisability and need for a balanced portfolio. As the old saying goes, don't put all your eggs in one basket! That's why target retirement funds are good. They balance your fund toward less risky investments as you get older.

 

[Jaxfann]

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.

VERY VERY good advice!

 

[Jaxfann]

Hence the advisability and need for a balanced portfolio. As the old saying goes, don't put all your eggs in one basket! That's why target retirement funds are good. They balance your fund toward less risky investments as you get older.

VANGUARD is the way to go - lowest costs and best funds - cost matters - 1% is actually 16.6% of what you expect to make with a conservative diversified portfolio - you are giving it away every month to a financial advisor and less than 20% beat the averages every year and very few do it every year for 5 years - Vanguard (not for profit - owned by you the investor) retirement funds do it all and the fees are rock bottom and the results are top tier in most funds.

 

[h0gr1der]

One thing that goes hand in hand with SSA retirement is Medicare. You are required to pay into both SSA and Medicare (FICA1 and FICA2), and there are rules that are partially obscure. After all, if you don't take your benefits, there's more to give away! Several instances I've seen that deserve mention.

First, when you become Medicare eligible, if you decide not to take the whole alphabet (Parts A, B, and D). Later you decide to get on board, and guess what? There's a penalty that you have to pay forever as long as you keep the part you opted not to take in the beginning, which pretty much amortizes (for the government) the cost over time. Lesson-Look very hard at what Medicaid package you take, the little bit of savings may not be worth it.

Second, if you refuse part D (Drug Coverage) thinking that you'll use the $4.00 prescription plan that everyone offers. I knew of an older gentlemen that didn't have part D, and guess what? The $4.00 plan doesn't cover chemotherapy, which is very expensive. His bill totaled about $200K by the time he was done.

And a final note on coverage. There are many supplemental plans that cover the 20% that Medicare doesn't pay. There are Medigap plans and Advantage plans. These help defray the cost of catastrophic illness, and they are wildly divergent in cost. The dreaded $1,000,000 illness (cancer, brain, etc) can leave you owing up to $200K. Too much to take in all at once, but you are wise to start studying it many years before you need it. https://www.investopedia.com/articl...edigap-vs-medicare-advantage-which-better.asp

 

[BLUEKNIGHT911]

SS info

Excellent advise …" Hog " …………. Mike hyea:

 

[Motorcycledave]

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:sour:

Laws vary on your retirement so if I were you I would go find a good money manager/ retirement expert
and go from there, they made me draw my 401 K at 70 if you work after retirement yo will have to pay into SSI
from that income.

 

[IdahoMtnSpyder]

they made me draw my 401 K at 70

That was done so people couldn't just accumulate money tax free and then pass it on to their survivors. Reagan's argument was essentially, "We'll let you save for retirement and not pay taxes on that money until you retire, but you WILL pay taxes on it someday!" That requirement is what led to the Roth IRAs, pay taxes now but not on the withdrawals later.

 

[Bob Denman]

Three years, and nine Months to go for me... Full benefits: baby! :clap::yes::yes::yes:

 

[srx660]

One thing i did when i retired at 66, 3 years ago, was to enroll in a humana gold plus plan to handle my medicare. For some people humana doesn't work but in my case it does. My medicare expenses are about $19 my cost, and humana pays for the rest($110). When i add in the other benefits of humana, part B and part D, The cost of medicare gets close to 0. Got tired of staying home so i started a handiman service. I do pay taxes on my income but get it all back when filing the return (haven't hit the limit yet, on purpose). Since i have Switched my retirements to a IRA i now have to take out a small percent( think its 3.2%) out of my IRA and pay taxes on it. Have to do this because i have reached the age of 70 & 1/2.

 

[Jeriatric]

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.

And all this time I thought you were in your 40's nojoke