Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
Beginning Social Security Sept 1 2017
Posted by: oprater, May 11, 2017 04:45PM
I plan to stop working in August, and start Social Security beginning 1 SEPT 2017(first check in OCT). My Full Retirement Age is 66 and my current age (in Aug) is 65 (I understand the penalty - one year early). Question is, as of Aug 1 my earned income for year-to-date will be about $60,000 which is above the annual (and monthly) limits for SS earned income. Will they still deduct $1 for every $2 that I am above the limit, or does that only kick in for earned income AFTER I begin drawing my SS?

Re: Beginning Social Security Sept 1 2017
Posted by: tomd37, May 11, 2017 06:24PM
Sounds like a great question to address directly to a SSA office and get their specific reply to your situation.

Tom D.

Re: Beginning Social Security Sept 1 2017
Posted by: kaneohe, May 11, 2017 08:02PM
sounds like the latter so you should be ok
[www.investmentnews.com]

"Sometimes people who retire in midyear already have earned more than the annual earnings limit. That is why there is a special rule that applies to earnings for one year, usually the first year of retirement. Under this rule, you can get a full Social Security check for any whole month you are retired, regardless of your yearly earnings.

In 2014, a person younger than full retirement age for the entire year is considered “retired” if monthly earnings are $1,290 or less. That monthly figure is based on dividing the annual earnings limit of $15,480 by 12.

For example, let's say Mr. Milinovich's client John Smith retires at 62 on Oct. 30, 2014. He will earn $45,000 through October. Then he takes a part-time job beginning in November, earning $500 per month. Although his earnings for the year substantially exceed the 2014 annual limit of $15,480, he will receive a Social Security payment for November and December because his earnings in those months did not exceed the monthly limit of $1,290.

If, however, Mr. Smith earns more than $1,290 in either November or December, he will not receive a benefit for those months. Beginning in 2015, only the annual limit (which is increased for inflation each year) would apply to him."

Re: Beginning Social Security Sept 1 2017
Posted by: kaneohe, May 11, 2017 08:02PM
duplicate

Re: Beginning Social Security Sept 1 2017
Posted by: Alan S., May 11, 2017 08:12PM
There is a special rule for your first year. See p 4 of this brochure: [www.ssa.gov]

Re: Beginning Social Security Sept 1 2017
Posted by: Drewremedy, May 11, 2017 08:52PM
THe math for waiting to draw SS is really pretty darn attractive ....unless you have a reason to expect an early demise...lay out options on graph paper and rethink some delay and BTW even a modest delay to a year where you have lower taxable income subject less. SS to tax at your marginal rate ..,,

Re: Beginning Social Security Sept 1 2017
Posted by: oprater, September 11, 2017 04:53PM
Thanks all, except one guy whose reply was worthless...

Re: Beginning Social Security Sept 1 2017
Posted by: BruceM, September 15, 2017 03:28PM
oprater

As shown, the earning limit is determined monthly. And for the months of the year leading up to the month you attain your FRA, the penalty drops from $1 penalty per $2 earned over $1,410 per month to $1 penalty per $3 earned over $3,740 per month. At the month of FRA there is no more penalty, regardless of your earnings. There is a special rule for those under their FRA and self-employed, but you don't mention this so I won't go into it.

Also note that the penalty you pay is not forever lost. When you attain FRA the penalty will be paid back to you over your life expectancy. Not sure of the math on this.

BruceM



Sorry, only registered users may post in this forum.